Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 30, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-36739 | |
Entity Registrant Name | STORE CAPITAL CORP | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 45-2280254 | |
Entity Address, Address Line One | 8377 East Hartford Drive | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85255 | |
City Area Code | 480 | |
Local Phone Number | 256-1100 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | STOR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 234,804,102 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Central Index Key | 0001538990 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Real estate investments: | ||
Land and improvements | $ 2,490,943 | $ 2,280,280 |
Buildings and improvements | 5,293,880 | 4,888,440 |
Intangible lease assets | 76,241 | 85,148 |
Total real estate investments | 7,861,064 | 7,253,868 |
Less accumulated depreciation and amortization | (694,153) | (585,913) |
Real estate investments, net | 7,166,911 | 6,667,955 |
Real estate investments held for sale, net | 15,857 | |
Operating ground lease assets | 24,493 | |
Loans and financing receivables | 473,175 | 351,202 |
Net investments | 7,680,436 | 7,019,157 |
Cash and cash equivalents | 27,553 | 27,511 |
Other assets, net | 105,438 | 67,303 |
Total assets | 7,813,427 | 7,113,971 |
Liabilities: | ||
Credit facility | 135,000 | |
Unsecured notes and term loans payable, net | 1,262,044 | 916,720 |
Non-recourse debt obligations of consolidated special purpose entities, net | 2,025,082 | 2,008,592 |
Dividends payable | 82,181 | 72,954 |
Operating lease liabilities | 30,042 | |
Accrued expenses, deferred revenue and other liabilities | 104,987 | 117,204 |
Total liabilities | 3,504,336 | 3,250,470 |
Stockholders' equity: | ||
Common stock, $0.01 par value per share, 375,000,000 shares authorized, 234,804,102 and 221,071,838 shares issued and outstanding, respectively | 2,348 | 2,211 |
Capital in excess of par value | 4,586,521 | 4,129,082 |
Distributions in excess of retained earnings | (277,405) | (267,651) |
Accumulated other comprehensive loss | (2,373) | (141) |
Total stockholders' equity | 4,309,091 | 3,863,501 |
Total liabilities and stockholders' equity | $ 7,813,427 | $ 7,113,971 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common shares, authorized shares | 375,000,000 | 375,000,000 |
Common shares, issued shares | 234,804,102 | 221,071,838 |
Common shares, outstanding shares | 234,804,102 | 221,071,838 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Rental revenues | $ 129,778 | $ 374,091 | ||
Rental revenues. | $ 157,965 | $ 462,920 | ||
Interest income on loans and financing receivables | 9,594 | 6,867 | 24,066 | 18,667 |
Other income | 4,275 | 360 | 5,273 | 1,294 |
Total revenues | 171,834 | 137,005 | 492,259 | 394,052 |
Expenses: | ||||
Interest | 39,325 | 31,833 | 116,822 | 93,097 |
Property costs | 3,162 | 755 | 7,760 | 2,837 |
General and administrative | 13,566 | 11,509 | 39,815 | 33,212 |
Depreciation and amortization | 55,919 | 45,781 | 164,635 | 132,307 |
Provisions for impairment | 7,341 | 9,951 | 2,608 | |
Total expenses | 119,313 | 89,878 | 338,983 | 264,061 |
Net gain on dispositions of real estate | 59,290 | 1,261 | 72,395 | 30,852 |
Income from operations before income taxes | 111,811 | 48,388 | 225,671 | 160,843 |
Income tax expense | 193 | 163 | 533 | 457 |
Net income | $ 111,618 | $ 48,225 | $ 225,138 | $ 160,386 |
Net income per share of common stock-basic and diluted: | ||||
Net income per share of common stock-basic and diluted | $ 0.48 | $ 0.23 | $ 0.99 | $ 0.80 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 232,052,007 | 207,165,838 | 227,349,158 | 200,501,376 |
Diluted (in shares) | 232,645,531 | 207,932,531 | 227,882,523 | 201,039,328 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income | $ 111,618 | $ 48,225 | $ 225,138 | $ 160,386 |
Other comprehensive (loss) income: | ||||
Unrealized (losses) gains on cash flow hedges | (78) | 296 | (1,246) | 6,538 |
Cash flow hedge gains reclassified to interest expense | (169) | (474) | (986) | (956) |
Total other comprehensive (loss) income | (247) | (178) | (2,232) | 5,582 |
Total comprehensive income | $ 111,371 | $ 48,047 | $ 222,906 | $ 165,968 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Capital in Excess of Par Value | Distributions in Excess of Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total |
Balance at Dec. 31, 2017 | $ 1,938 | $ 3,381,090 | $ (214,845) | $ 2,759 | $ 3,170,942 |
Balance (in shares) at Dec. 31, 2017 | 193,766,854 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 160,386 | 160,386 | |||
Other comprehensive income (loss) | 5,582 | 5,582 | |||
Issuance of common stock, net of costs of $2,532 and $7,244 for 2019, $3,017 and $7,857 for 2018 | $ 179 | 473,387 | 473,566 | ||
Issuance of common stock, net of costs (shares) | 17,908,951 | ||||
Equity-based compensation | $ 3 | 5,947 | 31 | 5,981 | |
Equity-based compensation (shares) | 293,373 | ||||
Shares repurchased under stock compensation plan | $ (1) | (2,008) | (826) | (2,835) | |
Shares repurchased under stock compensation plan (in shares) | (113,948) | ||||
Common dividends declared | (194,920) | (194,920) | |||
Balance at Sep. 30, 2018 | $ 2,119 | 3,858,416 | (250,174) | 8,341 | 3,618,702 |
Balance (in shares) at Sep. 30, 2018 | 211,855,230 | ||||
Balance at Jun. 30, 2018 | $ 2,052 | 3,668,964 | (228,487) | 8,519 | 3,451,048 |
Balance (in shares) at Jun. 30, 2018 | 205,205,239 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 48,225 | 48,225 | |||
Other comprehensive income (loss) | (178) | (178) | |||
Issuance of common stock, net of costs of $2,532 and $7,244 for 2019, $3,017 and $7,857 for 2018 | $ 67 | 187,169 | 187,236 | ||
Issuance of common stock, net of costs (shares) | 6,651,049 | ||||
Equity-based compensation | 2,283 | 1 | 2,284 | ||
Equity-based compensation (shares) | (1,058) | ||||
Common dividends declared | (69,913) | (69,913) | |||
Balance at Sep. 30, 2018 | $ 2,119 | 3,858,416 | (250,174) | 8,341 | 3,618,702 |
Balance (in shares) at Sep. 30, 2018 | 211,855,230 | ||||
Balance at Dec. 31, 2018 | $ 2,211 | 4,129,082 | (267,651) | (141) | 3,863,501 |
Balance (in shares) at Dec. 31, 2018 | 221,071,838 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 225,138 | 225,138 | |||
Other comprehensive income (loss) | (2,232) | (2,232) | |||
Issuance of common stock, net of costs of $2,532 and $7,244 for 2019, $3,017 and $7,857 for 2018 | $ 134 | 452,546 | 452,680 | ||
Issuance of common stock, net of costs (shares) | 13,448,509 | ||||
Equity-based compensation | $ 5 | 8,077 | 14 | 8,096 | |
Equity-based compensation (shares) | 450,898 | ||||
Shares repurchased under stock compensation plan | $ (2) | (3,184) | (1,846) | (5,032) | |
Shares repurchased under stock compensation plan (in shares) | (167,143) | ||||
Common dividends declared | (233,060) | (233,060) | |||
Balance at Sep. 30, 2019 | $ 2,348 | 4,586,521 | (277,405) | (2,373) | 4,309,091 |
Balance (in shares) at Sep. 30, 2019 | 234,804,102 | ||||
Balance at Jun. 30, 2019 | $ 2,303 | 4,424,885 | (306,573) | (2,126) | 4,118,489 |
Balance (in shares) at Jun. 30, 2019 | 230,330,323 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 111,618 | 111,618 | |||
Other comprehensive income (loss) | (247) | (247) | |||
Issuance of common stock, net of costs of $2,532 and $7,244 for 2019, $3,017 and $7,857 for 2018 | $ 44 | 158,623 | 158,667 | ||
Issuance of common stock, net of costs (shares) | 4,442,863 | ||||
Equity-based compensation | $ 1 | 3,324 | 3,325 | ||
Equity-based compensation (shares) | 46,903 | ||||
Shares repurchased under stock compensation plan | (311) | (232) | (543) | ||
Shares repurchased under stock compensation plan (in shares) | (15,987) | ||||
Common dividends declared | (82,218) | (82,218) | |||
Balance at Sep. 30, 2019 | $ 2,348 | $ 4,586,521 | $ (277,405) | $ (2,373) | $ 4,309,091 |
Balance (in shares) at Sep. 30, 2019 | 234,804,102 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Stockholders Equity | ||||
Stock issuance costs | $ 2,532 | $ 3,017 | $ 7,244 | $ 7,857 |
Dividends declared per common share (in dollars per share) | $ 0.35 | $ 0.33 | $ 1.01 | $ 0.95 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net income | $ 225,138 | $ 160,386 |
Adjustments to net income: | ||
Depreciation and amortization | 164,635 | 132,307 |
Amortization of deferred financing costs and other noncash interest expense | 6,452 | 5,971 |
Amortization of equity-based compensation | 8,083 | 5,949 |
Provisions for impairment | 9,951 | 2,608 |
Net gain on dispositions of real estate | (72,395) | (30,852) |
Loss (gain) on defeasance/extinguishment of debt | 735 | (814) |
Noncash revenue and other | (1,455) | 949 |
Payments (made) received in settlement of cash flow hedges | (6,735) | 4,288 |
Changes in operating assets and liabilities: | ||
Other assets | (3,868) | (3,100) |
Accrued expenses, deferred revenue and other liabilities | 5,133 | 5,381 |
Net cash provided by operating activities | 335,674 | 283,073 |
Investing activities | ||
Acquisition of and additions to real estate | (1,020,961) | (1,053,730) |
Investment in loans and financing receivables | (143,885) | (87,109) |
Collections of principal on loans and financing receivables | 6,820 | 3,457 |
Proceeds from dispositions of real estate | 409,939 | 167,533 |
Net cash used in investing activities | (748,087) | (969,849) |
Financing activities | ||
Borrowings under credit facility | 521,100 | 709,000 |
Repayments under credit facility | (656,100) | (640,000) |
Borrowings under unsecured notes and term loans payable | 347,410 | 348,303 |
Borrowings under non-recourse debt obligations of consolidated special purpose entities | 41,690 | |
Repayments under non-recourse debt obligations of consolidated special purpose entities | (28,930) | (25,974) |
Financing and defeasance costs paid | (4,627) | (5,908) |
Proceeds from the issuance of common stock | 459,924 | 481,424 |
Stock issuance costs paid | (7,282) | (7,795) |
Shares repurchased under stock compensation plans | (5,032) | (2,835) |
Dividends paid | (224,975) | (185,660) |
Net cash provided by financing activities | 443,178 | 670,555 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 30,765 | (16,221) |
Cash, cash equivalents and restricted cash, beginning of period | 43,017 | 49,178 |
Cash, cash equivalents and restricted cash, end of period | 73,782 | 32,957 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Total cash, cash equivalents and restricted cash | 43,017 | 49,178 |
Supplemental disclosure of noncash investing and financing activities: | ||
Accrued tenant improvements included in real estate investments | 20,522 | 39,188 |
Net real estate assets surrendered to lender | 12,573 | |
Acquisition of collateral property securing a mortgage note receivable | 13,574 | |
Non-recourse debt obligation assumed by purchaser of real estate | 20,845 | |
Non-recourse debt forgiven by lender in exchange for collateral assets | 12,874 | |
Accrued financing and stock issuance costs | 322 | 1,363 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest, net of amounts capitalized | 108,295 | 82,339 |
Cash paid during the period for income and franchise taxes | $ 2,114 | $ 1,785 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization | |
Organization | 1. Organization STORE Capital Corporation (STORE Capital or the Company) was incorporated under the laws of 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 manufacturing sectors of the United States economy. From time to time, it also provides mortgage financing to its customers. On November 21, 2014, the Company completed the initial public offering of its common stock. The shares began trading on the New York Stock Exchange on November 18, 2014 under the ticker symbol “STOR”. 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 | 9 Months Ended |
Sep. 30, 2019 | |
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, 2018. These condensed 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 September 30, 2019 and December 31, 2018, these special purpose entities held assets totaling $6.7 billion and $6.1 billion, respectively, and had third-party liabilities totaling $2.1 billion. These assets and liabilities are included in the accompanying condensed 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 Investment Portfolio STORE Capital invests in real estate assets through three primary transaction types as summarized below. Effective January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) ● Real Estate Investments – investments are generally made through sale-leaseback transactions in which the Company acquires the real estate from the owner-operators and then leases the real estate back to them through long-term leases which are generally classified as operating leases; the operators become the Company’s long-term tenants (its customers). Certain of the lease contracts that are associated with a sale-leaseback transaction may contain terms, such as a tenant purchase option, which will result in the transaction being accounted for as a financing arrangement due to the adoption of ASC Topic 842 rather than as an investment in real estate subject to an operating lease. ● Mortgage Loans Receivable – investments are made by issuing mortgage loans to the owner-operators of the real estate that serve as the collateral for the loans and the operators become long-term borrowers and customers of the Company. On occasion, the Company may also make other types of loans to its customers, such as equipment loans. ● Hybrid Real Estate Investments – investments are made through modified sale-leaseback transactions, where the Company acquires land from the owner-operators, leases the land back through long-term leases and simultaneously issues mortgage loans to the operators secured by the buildings and improvements on the land. Prior to 2019, these hybrid real estate investment transactions were generally accounted for as direct financing leases. Subsequent to the adoption of ASC Topic 842, new or modified hybrid real estate transactions are expected to be accounted for as operating leases of the land and mortgage loans on the buildings and improvements . Accounting for Real Estate Investments Classification and Cost 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. Intangible assets and liabilities acquired may include the value of existing in-place leases, above-market or below-market lease value of in-place leases and ground lease-related intangibles, as applicable. 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. Certain of the Company’s lease contracts allow its tenants the option, at their election, to purchase the leased property from the Company at a specified time or times (generally at the greater of the then- fair market value or the Company’s cost, as defined in the lease contracts). Subsequent to the adoption of ASC Topic 842, for real estate assets acquired through a sale-leaseback transaction and subject to a lease contract which contains a purchase option, the Company will account for such acquisition as a financing arrangement and record the investment in loans and financing receivables on the condensed consolidated balance sheet. 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 or below-market lease 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 generally 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. Revenue Recognition STORE Capital leases real estate to its tenants under long- term net leases that are predominantly classified as operating leases. 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, straight-line operating lease receivables, calculated as the aggregate difference between the rental revenue recognized on a straight-line basis and scheduled rents, represent unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the leases; these receivables are included in other assets, net on the condensed consolidated balance sheets. Prior to 2019, the Company provided for an estimated reserve for uncollectible straight-line operating lease receivables based on management’s assessment of the risks inherent in those lease contracts, giving consideration to industry default rates for long-term receivables. At December 31, 2018, there was $25.7 million of straight-line operating lease receivables, net of an allowance of $4.3 million. Subsequent to the adoption of ASC Topic 842 in 2019, the Company reviews its straight-line operating lease receivables for collectibility on a contract by contract basis and any amounts not considered substantially collectible are written off against rental revenues. The Company had $26.5 million of straight-line operating lease receivables at September 30, 2019. 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. In addition to base rental revenue, certain leases also 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 2.5% 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; historically, contingent rent recognized has generally been less than 0.1% of rental revenues. The Company reviews its operating lease 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 not probable, a direct write-off of the receivable is made and any future rental revenue is recognized only when the tenant makes a rental payment. Direct costs incremental to successful lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. The Company periodically commits to fund the construction of new properties for its customers; rental revenue collected during the construction period is deferred and amortized over the remaining lease term when the construction project is complete. Substantially all of the Company’s leases are triple net, which means that the lessees are directly responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. For a few lease contracts, the Company collects property taxes from its customers and remits those taxes to governmental authorities. Subsequent to the adoption of ASC Topic 842, these property tax payments are presented on a gross basis as part of both rental revenues and property costs in the condensed consolidated statements of income. 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. Events or changes in circumstances may also include an expectation to sell certain assets in accordance with the Company’s long-term strategic plans. 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, discussed in Fair Value Measurements During the nine months ended September 30, 2019, the Company recognized an aggregate provision for the impairment of real estate of $9.9 million, of which $2.6 million was recognized in the first quarter and $7.3 million was recognized during the third quarter. The estimated fair value of the impaired real estate assets at September 30, 2019 was $12.4 million. The estimated fair value of the impaired real estate assets at the time of impairment on March 31, 2019 was $10.0 million. No impairment of real estate was recognized during either the three or nine months ended September 30, 2018. Accounting for Loans Receivable Classification and Cost STORE Capital holds its loans receivable, which are primarily mortgage loans secured by real estate, 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 more than 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 September 30, 2019 and December 31, 2018, the Company had loans receivable with an aggregate outstanding principal balance of $3.0 million and $8.5 million, respectively, 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. At both September 30, 2019 and December 31, 2018, there was $2.5 million of allowance for loan losses. Accounting for Direct Financing Receivables Direct financing receivables include hybrid real estate investment transactions completed prior to 2019. The Company recorded 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. Subsequent to the adoption of ASC Topic 842, existing direct financing receivables will continue to be accounted for in the same manner, unless the underlying contracts are modified. Accounting for Operating Ground Lease Assets As part of certain real estate investment transactions, the Company may enter into long-term operating ground leases as a lessee. As a result of the adoption of ASC Topic 842, the Company is required to recognize an operating ground lease (or right-of-use) asset and related operating lease liability for each of these operating ground leases. Operating ground lease assets and operating lease liabilities are recognized based on the present value of the lease payments. The Company uses its estimated incremental borrowing rate, which is the estimated rate at which the Company could borrow on a collateralized basis with similar payments over a similar term, in determining the present value of the lease payments. Many of these operating lease contracts include options for the Company to extend the lease; the option periods are included in the minimum lease term only if it is reasonably likely the Company will exercise the option(s). Rental expense for the operating ground lease contracts is recognized in property costs on a straight-line basis over the lease term. Some of the contracts have contingent rent escalators indexed to future increases in the CPI and a few contracts have contingent rentals that are based on a percentage of the gross sales of the property; these payments are recognized in expense as incurred. The payment obligations under these contracts are typically the responsibility of the tenants operating on the properties, in accordance with the Company’s leases with the respective tenants. As a result, the Company also recognizes sublease rental revenue on a straight-line basis over the term of the Company’s sublease with the tenant; the sublease income is included in rental revenues. 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 Restricted cash may include reserve account deposits held by lenders, including deposits required to be used for future investment in real estate assets, escrow deposits and cash proceeds from the sale of assets held by a qualified intermediary to facilitate tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code. The Company had $46.2 million and $15.5 million of restricted cash at September 30, 2019 and December 31, 2018, respectively, which were included in other assets, net, on the condensed consolidated balance sheets. Deferred Costs Financing costs related to the issuance of the Company’s long-term debt are deferred and amortized as an increase to interest expense over the term of the related debt instrument using the effective-interest method and are reported as a reduction of the related debt balance on the condensed consolidated balance sheets. Deferred financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets. Derivative Instruments and Hedging Activities The Company may enter into derivative 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 use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures. 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 changes in the fair value of derivatives designated and that qualify as cash flow hedges are 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 September 30, 2019, the Company had one interest rate floor and two interest rate swap agreements in place. The two interest rate swaps and related interest rate floor transaction have an aggregate notional amount of $100 million and were designated as a cash flow hedge of the Company’s $100 million variable-rate bank term loan due in 2021 (Note 4). In December 2018, the Company entered into two treasury lock agreements which were designated as cash flow hedges associated with the expected public offering of the senior unsecured notes issued by the Company at the end of February 2019 (Note 4). The agreements were settled in accordance with their terms in February 2019 and the Company made an aggregate payment of $6.7 million to the counterparties which was recognized as a deferred loss in accumulated other comprehensive loss. Fair Value Measurement The Company estimates the 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 Directors and key employees of the Company have been granted long-term incentive awards, including restricted stock awards (RSAs) and restricted stock unit awards (RSUs), which provide such directors and employees with equity interests as an incentive to remain in the Company’s service and to align their interests with those of the Company’s stockholders. The Company estimates the fair value of RSAs based on the closing price per share of the common stock on 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. During the nine months ended September 30, 2019, the Company granted RSAs representing 131,158 shares of restricted common stock to its directors and key employees. During the same period, RSAs representing 162,315 shares of restricted stock vested and RSAs representing 7,038 shares were forfeited. In connection with the vesting of RSAs, the Company repurchased 47,104 shares as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plans. As of September 30, 2019, the Company had 292,806 shares of restricted common stock outstanding. The Company’s RSUs granted in 2015 through 2017 contain both a market condition and a service condition and RSUs granted in 2018 and 2019 contain both a market condition and a performance condition as well as a service condition. The Company values the RSUs with a market condition using a Monte Carlo simulation model and values the RSUs with a performance condition based on the fair value of the awards expected to be earned and recognizes those amounts in general and administrative expense on a tranche by tranche basis ratably over the vesting periods. During the nine months ended September 30, 2019, the Company awarded 628,909 RSUs to its executive officers. During the same period, 37,222 RSUs vested and 156,977 RSUs were forfeited. In connection with the vesting of 326,778 RSUs (of which 289,556 vested on December 31, 2018), the Company repurchased 120,039 shares during the nine months ended September 30, 2019 as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plan. As of September 30, 2019, there were 1,450,571 RSUs outstanding. Income Taxes As a REIT, the Company generally will not be subject to federal income tax. It is still subject, however, 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. Certain state tax returns filed for 2015 and tax returns filed for 2016 through 2018 are subject to examination by these jurisdictions. As of September 30, 2019 and December 31, 2018, 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 general and administrative expenses. There was no accrual for interest or penalties at September 30, 2019 or December 31, 2018. 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 Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 111,618 $ 48,225 $ 225,138 $ 160,386 Less: earnings attributable to unvested restricted shares (139) (109) (316) (289) Net income used in basic and diluted income per share $ 111,479 $ 48,116 $ 224,822 $ 160,097 Denominator: Weighted average common shares outstanding 232,342,323 207,498,560 227,647,353 200,849,404 Less: Weighted average number of shares of unvested restricted stock (290,316) (332,722) (298,195) (348,028) Weighted average shares outstanding used in basic income per share 232,052,007 207,165,838 227,349,158 200,501,376 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 593,524 766,693 533,365 537,952 Weighted average shares outstanding used in diluted income per share 232,645,531 207,932,531 227,882,523 201,039,328 (a) For the three months ended September 30, 2019 and 2018, excludes 112,784 shares and 110,592 shares, respectively, and for the nine months ended September 30, 2019 and 2018, excludes 111,802 shares and 99,495 shares, respectively, related to unvested restricted shares as the effect would have been 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, results of operations or cash flows upon adoption. In February 2016, the FASB issued ASC Topic 842 to amend the accounting for leases. The new standard requires lessees and lessors to classify leases as either finance or operating leases and for lessees to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. The standard also eliminates current real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, lease modifications, recognition of a lease-related receivables allowance and lease executory costs for all entities. The Company adopted ASC Topic 842 on January 1, 2019, using the modified retrospective approach in accordance with the provisions of ASU 2018-11, Leases (Topic 842), Targeted Improvements ● a package of practical expedients allowing the Company to not reassess the classification of existing lease contracts, whether existing or expired contracts contain a lease or whether a portion of initial direct costs for existing leases should have been expensed. ● a practical expedient allowing the Company to not evaluate land easements that existed prior to or at the time of adoption, as leases in accordance with Topic 842. The new standard requires that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in obtaining a lease. Although there have been changes in the manner in which initial direct costs are recorded, the amount recorded has remained materially consistent. While primarily a lessor, the Company is also a lessee under several operating ground lease contracts and under its corporate office lease. Upon adoption of ASC Topic 842, the Company recorded a right-of-use asset and a lease liability of approximately $24.9 million and $25.5 million, respectively, in relation to these leases. For most of the operating ground leases, the sublessees, or the Company’s tenants, are responsible for making payment directly to the ground lessors. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments: | |
Investments | 3. Investments At September 30, 2019, STORE Capital had investments in 2,417 property locations representing 2,368 owned properties (of which 17 are accounted for as financing arrangements and 57 are accounted for as direct financing receivables), 21 properties where all the related land is subject to an operating ground lease and 28 properties which secure mortgage loans. The gross investment portfolio totaled $8.4 billion at September 30, 2019 and consisted of the gross acquisition cost of the real estate investments totaling $7.9 billion, loans and financing receivables with an aggregate carrying amount of $473.2 million and operating ground lease assets totaling $24.5 million. As of September 30, 2019, approximately 33% 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). The gross dollar amount of the Company’s 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 financing receivables and operating ground lease assets. During the nine months ended September 30, 2019, the Company had the following gross real estate and other investment activity (dollars in thousands): Number of Dollar Investment Amount of Locations Investments Gross investments, December 31, 2018 2,255 $ 7,605,070 Acquisition of and additions to real estate (a) 232 1,022,515 Investment in loans and financing receivables 18 143,885 Sales of real estate (80) (382,610) Principal collections on loans and financing receivables (b) (8) (20,395) Operating ground lease assets, net (c) — 24,493 Provisions for impairment (9,951) Other (6,507) Gross investments, September 30, 2019 (d) 8,376,500 Less accumulated depreciation and amortization (d) (696,064) Net investments, September 30, 2019 2,417 $ 7,680,436 (a) Excludes $35.6 million of tenant improvement advances disbursed in 2019 which were accrued as of December 31, 2018 and includes $1.2 million of interest capitalized to properties under construction. (b) Includes $13.6 million of non-cash principal collections primarily related to loans receivable transactions in which the Company acquired three underlying mortgaged properties and leased them back to the borrowers. (c) Includes $20.0 million of operating ground lease (or right-of-use) assets recognized upon initial adoption of ASC Topic 842 and $4.5 million of activity (new operating ground lease assets recognized net of asset amortization) during the nine months ended September 30, 2019. (d) Includes the dollar amount of investments ($17.8 million) and the accumulated depreciation ($1.9 million) related to real estate investments held for sale at September 30, 2019. The following table summarizes the revenues the Company recognized from its investment portfolio (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Rental revenues: Operating leases (a) $ 158,023 $ 130,288 $ 462,959 $ 375,604 Sublease income - operating ground leases (b) 572 — 1,644 — Amortization of lease related intangibles and costs (630) (510) (1,683) (1,513) Total rental revenues $ 157,965 $ 129,778 $ 462,920 $ 374,091 Interest income on loans and financing receivables: Mortgage and other loans receivable $ 3,772 $ 3,193 $ 10,102 $ 9,049 Sale-leaseback transactions accounted for as financing arrangements 2,281 — 3,328 — Direct financing receivables 3,541 3,674 10,636 9,618 Total interest income on loans and financing receivables $ 9,594 $ 6,867 $ 24,066 $ 18,667 (a) For the three and nine months ended September 30, 2019, includes $595,000 and $1.9 million, respectively, of property tax tenant reimbursement revenue and includes variable lease revenue of $29,000 and $253,000 for the three months ended September 30, 2019 and 2018, respectively, and $94,000 and $344,000 for the nine months ended September 30, 2019 and 2018, respectively. (b) Represents total revenue recognized for the sublease of properties subject to operating ground leases to the related tenants; includes both payments made by the tenants to the ground lessors and straight-line revenue recognized for scheduled increases in the sublease rental payments. In connection with the adoption of ASC Topic 842 in 2019, the Company elected to combine qualifying lease and nonlease components and will not allocate the consideration in its lease contracts to the lease and nonlease components; it will instead account for them as a single component if the timing and pattern of transfer for the separate components are the same and, if accounted for separately, the lease component would classify as an operating lease. Significant Credit and Revenue Concentration STORE Capital’s real estate investments are leased or financed to more than 460 customers geographically dispersed throughout all 50 states. Only one state, Texas (11%), accounted for 10% or more of the total dollar amount of STORE Capital’s investment portfolio at September 30, 2019. None of the Company’s customers represented more than 10% of the Company’s real estate investment portfolio at September 30, 2019, with the largest customer representing 2.9% of the total investment portfolio. On an annualized basis, the largest customer represented 2.8% of the Company’s total annualized investment portfolio revenues as of September 30, 2019. The Company’s customers operate their businesses across approximately 680 concepts and the largest of these concepts represented 2.8% of the Company’s total annualized investment portfolio revenues as of September 30, 2019. 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 September 30, 2019 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments Investments Restaurants 794 $ 1,293,476 15 % Furniture stores 61 475,228 6 Early childhood education centers 205 461,201 6 Health clubs 84 450,516 5 Automotive repair and maintenance 168 419,473 5 Farm and ranch supply stores 43 402,001 4 Metal fabrication 73 365,461 4 All other service industries 722 2,728,571 33 All other retail industries 124 825,147 10 All other manufacturing industries 143 955,426 12 2,417 $ 8,376,500 100 % Real Estate Investments The weighted average remaining noncancelable lease term of the Company’s operating leases with its tenants at September 30, 2019 was approximately 14 years. Substantially all of the leases are triple net, which means that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance; therefore, the Company is generally not responsible for repairs or other capital expenditures related to the properties while the triple-net leases are in effect. At September 30, 2019, eight 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 in place as of September 30, 2019, were as follows (in thousands): Remainder of 2019 $ 159,628 2020 637,868 2021 636,678 2022 636,965 2023 634,877 2024 631,274 Thereafter 5,719,251 Total future minimum rentals (a) $ 9,056,541 (a) Excludes future minimum rentals to be received under lease contracts associated with sale-leaseback transactions accounted for as financing arrangements. See Loans and Financing Receivables section below. Substantially all the Company’s leases include one or more renewal options (generally two to four five-year options). 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 presented above do not include any contingent rentals such as lease escalations based on future changes in CPI. Intangible Lease Assets The following table details intangible lease assets and related accumulated amortization (in thousands): September 30, December 31, 2019 2018 In-place leases (a) $ 47,559 $ 54,293 Ground lease-related intangibles 19,449 21,363 Above-market leases 9,492 9,492 Total intangible lease assets 76,500 85,148 Accumulated amortization (a) (30,523) (29,223) Net intangible lease assets $ 45,977 $ 55,925 (a) Includes the dollar amount of in-place lease intangibles ($0.3 million) and the related accumulated amortization ($0.1 million) associated with the real estate investments held for sale at September 30, 2019. Aggregate lease intangible amortization included in expense was $1.3 million and $1.4 million during the three months ended September 30, 2019 and 2018, respectively, and was $4.3 million and $4.4 million during the nine months ended September 30, 2019 and 2018, respectively. The amount amortized as a decrease to rental revenue for capitalized above-market lease intangibles was $0.3 million during both the three months ended September 30, 2019 and 2018 and was $0.8 million during both the nine months ended September 30, 2019 and 2018. Based on the balance of the intangible assets at September 30, 2019, the aggregate amortization expense is expected to be $1.2 million for the remainder of 2019, $4.3 million in 2020, $4.0 million in 2021, $3.9 million in 2022, $3.4 million in 2023 and $2.8 million in 2024; the amount expected to be amortized as a decrease to rental revenue is expected to be $0.3 million for the remainder of 2019, $1.1 million in 2020, $0.6 million in 2021 and $0.4 million in each of the years 2022 through 2024. The weighted average remaining amortization period is approximately nine years for the in-place lease intangibles, approximately 44 years for the amortizing ground lease-related intangibles and approximately six years for the above-market lease intangibles. Operating Ground Lease Assets As of September 30, 2019, STORE Capital had operating ground lease assets aggregating $24.5 million. Typically, the lease payment obligations for these leases are the responsibility of the tenants operating on the properties, in accordance with the Company’s leases with those respective tenants. The Company recognized total lease cost for these operating ground lease assets of $592,000 and $5,000 during the three months ended September 30, 2019 and 2018, respectively, and $1.7 million and $19,000 during the nine months ended September 30, 2019 and 2018, respectively. For the three and nine months ended September 30, 2019, the Company also recognized in rental revenues $572,000 and $1.6 million, respectively, of sublease revenue associated with its operating ground leases. The Company’s ground leases have remaining terms ranging from one year to 92 years , some of which have one or more options to extend the lease for terms ranging from three years to ten years . The weighted average remaining non-cancelable lease term for the ground leases was 23 years at September 30, 2019. The weighted average discount rate used in calculating the operating lease liabilities was 6.0%. The future minimum lease payments to be paid under the operating ground leases as of September 30, 2019 were as follows (in thousands): Ground Ground Leases Leases Paid by Paid by STORE Capital's STORE Capital Tenants (a) Total Remainder of 2019 $ 8 $ 1,019 $ 1,027 2020 31 2,332 2,363 2021 31 2,347 2,378 2022 31 2,302 2,333 2023 31 6,052 6,083 2024 31 1,981 2,012 Thereafter 3,075 32,597 35,672 Total lease payments 3,238 48,630 51,868 Less imputed interest (2,627) (24,268) (26,895) Total operating lease liabilities - ground leases $ 611 $ 24,362 $ 24,973 (a) STORE Capital’s tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. In the event the tenant fails to make the required ground lease payments, the Company would be primarily responsible for the payment, assuming the Company does not re-tenant the property or sell the leasehold interest. Of the total $48.6 million commitment, $16.5 million is due for periods beyond the current term of the Company’s leases with the tenants. Amounts exclude contingent rent due under three leases where the ground lease payment, or a portion thereof, is based on the level of the tenant’s sales. Loans and Financing Receivables The Company’s loans and financing receivables are summarized below (dollars in thousands): Amount Outstanding Interest Maturity September 30, December 31, Type Rate (a) Date 2019 2018 Five mortgage loans receivable 8.13 % 2019 - 2022 $ 33,143 $ 49,934 Five mortgage loans receivable 8.39 % 2032 - 2038 18,803 17,666 Ten mortgage loans receivable (b) 8.55 % 2051 - 2059 120,369 88,019 Total mortgage loans receivable 172,315 155,619 Equipment and other loans receivable 8.69 % 2019 - 2026 14,817 12,013 Total principal amount outstanding—loans receivable 187,132 167,632 Unamortized loan origination costs 1,201 1,249 Allowance for loan losses (2,538) (2,538) Sale-leaseback transactions accounted for as financing arrangements (c) 7.91 % 2034 - 2043 116,889 — Direct financing receivables 170,491 184,859 Total loans and financing receivables $ 473,175 $ 351,202 (a) Represents the weighted average interest rate as of the balance sheet date. (b) Four of these mortgage loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment. (c) In accordance with ASC Topic 842, represents transactions accounted for as financing arrangements rather than as investments in real estate subject to operating leases. Interest rate shown is the weighted average initial rental or capitalization rate on the leases; the leases mature between 2034 and 2043 and the purchase options expire between 2028 and 2039. Loans Receivable At September 30, 2019, the Company held 39 loans receivable with an aggregate carrying amount of $185.8 million. Twenty of the loans are mortgage loans secured by land and/or buildings and improvements on the mortgaged property; the interest rates on 11 of the mortgage loans are subject to increases over the term of the loans. Five of the mortgage loans are shorter-term loans (maturing prior to 2023) that generally require monthly interest-only payments for an established period and then monthly principal and interest 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 or earlier upon the occurrence of certain other events. The equipment and other loans receivable generally require the borrower to make monthly interest-only payments with a balloon payment at maturity. The long-term mortgage loans receivable generally allow for prepayments in whole, but not in part, without penalty or with penalties ranging from 1% to 20%, 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 Principal Balloon Total Payments Payments Payments Remainder of 2019 $ 1,384 $ 14,361 $ 15,745 2020 2,411 9,851 12,262 2021 1,761 8,515 10,276 2022 1,570 6,974 8,544 2023 1,515 1,203 2,718 2024 1,553 — 1,553 Thereafter 116,622 19,412 136,034 Total principal payments $ 126,816 $ 60,316 $ 187,132 Sale-Leaseback Transactions Accounted for as Financing Arrangements As of September 30, 2019, the Company had $116.9 million of investments acquired through sale-leaseback transactions accounted for as financing arrangements rather than as investments in real estate subject to an operating lease; revenue from these arrangements is recognized in interest income rather than as rental revenue. The scheduled future payments (excluding any contingent payments) to be received under these agreements as of September 30, 2019, were as follows (in thousands): Remainder of 2019 $ 2,307 2020 9,246 2021 9,278 2022 9,314 2023 9,352 2024 9,429 Thereafter 127,712 Total future scheduled payments $ 176,638 Direct Financing Receivables As of September 30, 2019 and December 31, 2018, the Company had $170.5 million and $184.9 million, respectively, of investments accounted for as direct financing leases under previous accounting guidance; the components of these investments were as follows (in thousands): September 30, December 31, 2019 2018 Minimum lease payments receivable $ 382,781 $ 424,305 Estimated residual value of leased assets 22,610 24,053 Unearned income (234,900) (263,499) Net investment $ 170,491 $ 184,859 As of September 30, 2019, the future minimum lease payments to be received under the direct financing lease receivables are expected to be $4.1 million for the remainder of 2019 and average approximately $16.8 million for each of the next five years. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt | |
Debt | 4. Debt Credit Facility The Company has an unsecured revolving credit facility with a group of lenders that is used to partially fund real estate acquisitions pending the issuance of long-term, fixed-rate debt. The credit facility has immediate availability of $600 million and an accordion feature of $800 million, which allows the size of the facility to be increased up to $1.4 billion. The facility matures in February 2022 and includes two six-month extension options, subject to certain conditions and the payment of a 0.075% extension fee. At September 30, 2019, the Company had no borrowings outstanding on the facility. Borrowings under the facility require monthly payments of interest at a rate selected by the Company of either (1) LIBOR plus a credit spread ranging from 0.825% to 1.55%, or (2) the Base Rate, as defined in the credit agreement, plus a credit spread ranging from 0.00% to 0.55%. The credit spread used is based on the Company’s credit rating as defined in the credit agreement. The Company is required to pay a facility fee on the total commitment amount ranging from 0.125% to 0.30% . Currently, the applicable credit spread for LIBOR-based borrowings is 1.00% and the facility fee is 0.20%. Under the terms of the facility, the Company is subject to various restrictive financial and nonfinancial covenants which, among other things, require the Company to maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios and a minimum level of tangible net worth. Certain of these ratios are based on the Company’s pool of unencumbered assets, which aggregated approximately $5.3 billion at September 30, 2019. The facility is recourse to the Company and, as of September 30, 2019, the Company was in compliance with the covenants under the facility. At September 30, 2019 and December 31, 2018, unamortized financing costs related to the Company’s credit facility totaled $2.4 million and $3.1 million, respectively, and are included in other assets, net, on the condensed consolidated balance sheets. Unsecured Notes and Term Loans Payable, net In both March 2018 and February 2019, the Company completed public offerings of $350 million in aggregate principal amount of senior unsecured notes (Public Notes). The Public Notes have coupon rates of 4.50% and 4.625%, respectively, and interest is payable semi-annually in arrears in March and September of each year. The notes were issued at 99.515% and 99.260%, respectively, of their principal amounts. The supplemental indentures governing the Public Notes contain various restrictive covenants, including limitations on the Company’s ability to incur additional secured and unsecured indebtedness. As of September 30, 2019, the Company was in compliance with these covenants. The Public Notes can be redeemed, in whole or in part, at par within three months of their maturity date or at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus accrued and unpaid interest and (ii) the make-whole premium, as defined in the supplemental indentures governing these notes. The Company has entered into Note Purchase Agreements (NPAs) with institutional purchasers that provided for the private placement of three series of senior unsecured notes aggregating $375 million (the Notes). Interest on the Notes is payable semi-annually in arrears in May and November of each year. On each interest payment date, the interest rate on each series of Notes may be increased by 1.0% should the Company’s Applicable Credit Rating (as defined in the NPAs) fail to be an investment-grade credit rating; the increased interest rate would remain in effect until the next interest payment date on which the Company obtains an investment grade credit rating. The Company may prepay at any time all, or any part, of any series of Notes, in an amount not less than 5% of the aggregate principal amount of the series then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus a Make-Whole Amount (as defined in the NPAs). The Notes are senior unsecured obligations of the Company. The NPAs contain a number of financial covenants that are similar to the Company’s unsecured credit facility as summarized above. Subject to the terms of the NPAs and the Notes, upon certain events of default, including, but not limited to, (i) a payment default under the Notes, and (ii) a default in the payment of certain other indebtedness by the Company or its subsidiaries, all amounts outstanding under the Notes will become due and payable at the option of the purchasers. As of September 30, 2019, the Company was in compliance with its covenants under the NPAs. In April 2016, the Company entered into a $100 million floating-rate, unsecured five-year term loan and, in March 2017, the Company entered into a second $100 million floating-rate, unsecured term loan. This second loan was originally a two-year loan; in March 2019, the Company amended the related credit agreement and extended the original loan for one year to March 2020, while retaining the three one-year extension options. The interest rate on these loans resets monthly at one-month LIBOR plus a credit rating-based credit spread ranging from 0.90% to 1.75%; the credit spread currently applicable to the Company is 1.10% for the 2016 loan and 1.00 % for the amended 2017 loan. The Company has entered into interest rate swap agreements that effectively convert the variable interest rate on the 2016 term loan to a fixed rate. The term loans were arranged with lenders who also participate in the Company’s unsecured revolving credit facility. The financial covenants of the term loans match the covenants of the unsecured credit facility. The term loans are senior unsecured obligations of the Company and may be prepaid at any time without penalty. The Company’s senior unsecured notes and term loans payable are summarized below (dollars in thousands): Maturity Interest September 30, December 31, Date Rate 2019 2018 Notes Payable: Series A issued November 2015 Nov. 2022 4.95 % $ 75,000 $ 75,000 Series B issued November 2015 Nov. 2024 5.24 % 100,000 100,000 Series C issued April 2016 Apr. 2026 4.73 % 200,000 200,000 Public Notes issued March 2018 Mar. 2028 4.50 % 350,000 350,000 Public Notes issued February 2019 Mar. 2029 4.625 % 350,000 — Total notes payable 1,075,000 725,000 Term Loans: Term Loan issued March 2017 Mar. 2020 3.10 % (a) 100,000 100,000 Term Loan issued April 2016 Apr. 2021 2.44 % (b) 100,000 100,000 Total term loans 200,000 200,000 Unamortized discount (3,873) (1,563) Unamortized deferred financing costs (9,083) (6,717) Total unsecured notes and term loans payable, net $ 1,262,044 $ 916,720 (a) Loan is a variable-rate loan which resets monthly at one-month LIBOR + the applicable credit spread which was 1.00% at September 30, 2019. (b) Loan is a variable-rate loan which resets monthly at one-month LIBOR + the applicable credit spread which was 1.10% at September 30, 2019. The Company has entered into interest rate swap agreements that effectively convert the floating rate to the fixed rate noted above as of September 30, 2019. Non-recourse Debt Obligations of Consolidated Special Purpose Entities, net 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 and related leases (collateral) owned by these entities. 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 $147.0 million at September 30, 2019. 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 if prepaid more than 24 or 36 months prior to maturity. As of September 30, 2019, the aggregate collateral pool securing the net-lease mortgage notes was comprised primarily of single-tenant commercial real estate properties with an aggregate investment amount of approximately $2.7 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 $353.3 million at September 30, 2019. The mortgage notes payable, which are obligations of the consolidated special purpose entities 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. In March 2019, in connection with the pending disposition of a property that served as collateral for a note payable, the Company, through an indirect wholly owned subsidiary, entered into an agreement to defease the remaining outstanding principal balance of $6.7 million under the note payable. As a result of this agreement, the Company made a $7.4 million defeasance payment (including expenses), the collateral was released, and the Company was released from all obligations associated with the note payable. The Company recognized a $0.7 million loss associated with the defeasance, which is included in interest expense on the condensed consolidated statement of income. The Company’s non-recourse debt obligations of consolidated special purpose entity subsidiaries are summarized below (dollars in thousands): Maturity Interest September 30, December 31, Date Rate 2019 2018 Non-recourse net-lease mortgage notes: $77,000 Series 2013-3, Class A-1 Nov. 2020 4.24 % $ 69,498 $ 70,589 $120,000 Series 2014-1, Class A-1 Apr. 2021 4.21 % 116,800 117,250 $95,000 Series 2015-1, Class A-1 Apr. 2022 3.75 % 92,902 93,258 $102,000 Series 2013-1, Class A-2 Mar. 2023 4.65 % 90,300 91,841 $97,000 Series 2013-2, Class A-2 Jul. 2023 5.33 % 86,922 88,320 $100,000 Series 2013-3, Class A-2 Nov. 2023 5.21 % 90,258 91,675 $140,000 Series 2014-1, Class A-2 Apr. 2024 5.00 % 136,267 136,792 $150,000 Series 2018-1, Class A-1 Oct. 2024 3.96 % 147,159 149,484 $50,000 Series 2018-1, Class A-3 Oct. 2024 4.40 % 49,771 49,958 $270,000 Series 2015-1, Class A-2 Apr. 2025 4.17 % 264,038 265,050 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 3.96 % 189,321 192,187 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 4.32 % 129,088 130,984 $228,000 Series 2018-1, Class A-2 Oct. 2027 4.29 % 223,682 227,215 $164,000 Series 2018-1, Class A-4 Oct. 2027 4.74 % 163,248 163,863 Total non-recourse net-lease mortgage notes 1,849,254 1,868,466 Non-recourse mortgage notes: $7,750 note issued February 2013 — 6,723 $6,500 note issued December 2012 Dec. 2019 4.806 % 5,425 5,560 $16,100 note issued February 2014 Mar. 2021 4.83 % 14,079 14,388 $13,000 note issued May 2012 May 2022 5.195 % 10,818 11,081 $26,000 note issued August 2012 Sept. 2022 5.05 % 21,789 22,315 $6,400 note issued November 2012 Dec. 2022 4.707 % 5,364 5,496 $11,895 note issued March 2013 Apr. 2023 4.7315 % 10,087 10,328 $17,500 note issued August 2013 Sept. 2023 5.46 % 15,261 15,583 $10,075 note issued March 2014 Apr. 2024 5.10 % 9,233 9,365 $65,000 note issued June 2016 Jul. 2026 4.75 % 61,807 62,609 $41,690 note issued March 2019 Mar. 2029 4.80 % 41,690 — $6,944 notes issued March 2013 Apr. 2038 4.50 % (a) 5,825 5,957 Total non-recourse mortgage notes 201,378 169,405 Unamortized discount (399) (455) Unamortized deferred financing costs (25,151) (28,824) Total non-recourse debt obligations of consolidated special purpose entities, net $ 2,025,082 $ 2,008,592 (a) Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate. Credit Risk Related Contingent Features The Company has agreements with derivative counterparties, which provide generally that the Company could be declared in default on its derivative obligations if the Company defaults on the underlying indebtedness following acceleration of the indebtedness by the lender. Long-term Debt Maturity Schedule As of September 30, 2019, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are expected to be as follows (in thousands): Scheduled Principal Balloon Payments Payments Total Remainder of 2019 $ 7,501 $ 5,394 $ 12,895 2020 29,607 167,848 197,455 2021 26,282 229,366 255,648 2022 26,114 200,829 226,943 2023 21,799 265,357 287,156 2024 17,094 426,914 444,008 Thereafter 37,342 1,864,185 1,901,527 $ 165,739 $ 3,159,893 $ 3,325,632 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | 5. Stockholders’ Equity In November 2018, the Company established its third “at the market” equity distribution program, or ATM program, pursuant to which, from time to time, it may offer and sell registered shares of its common stock through a group of banks acting as its sales agents. Under this program, the Company can offer and sell up to a maximum amount of $750 million of common stock (the 2018-2 ATM Program). The following tables outline the common stock issuances under the 2018-2 ATM Program (in millions except share and per share information): Three Months Ended September 30, 2019 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $750 million 2018-2 ATM Program 4,442,863 $ 36.28 $ 161.2 $ (2.4) $ (0.1) $ 158.7 Total 4,442,863 $ 36.28 $ 161.2 $ (2.4) $ (0.1) $ 158.7 Nine Months Ended September 30, 2019 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $750 million 2018-2 ATM Program 13,448,509 $ 34.20 $ 459.9 $ (6.9) $ (0.3) $ 452.7 Total 13,448,509 $ 34.20 $ 459.9 $ (6.9) $ (0.3) $ 452.7 Inception of Program Through September 30, 2019 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $750 million 2018-2 ATM Program 21,681,251 $ 32.52 $ 705.1 $ (10.6) $ (0.7) $ 693.8 Total 21,681,251 $ 32.52 $ 705.1 $ (10.6) $ (0.7) $ 693.8 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Management believes that the final outcome of such matters will not have a material adverse effect on the Company’s financial position or results of operations. 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. As of September 30, 2019, the Company had commitments to its customers to fund improvements to owned or mortgaged real estate properties totaling approximately $107.5 million, of which $101.8 million is expected to be funded in the next twelve months. These additional investments will generally result in increases to the rental revenue or interest income due under the related contracts. The Company has a lease agreement with an unrelated third party for its corporate office space that will expire in July 2027; the lease allows for one five-year renewal period at the option of the Company. During both the three and nine months ended September 30, 2019 and 2018, total rent expense was $181,000 and $541,000, respectively, which is included in general and administrative expense on the condensed consolidated statements of income. At September 30, 2019, the Company’s future minimum rental commitment under this noncancelable operating lease, excluding the renewal option period, was approximately $186,000 for the remainder of 2019, $748,000 in 2020, $762,000 in 2021, $776,000 in 2022, $790,000 in 2023, $804,000 in 2024 and $2.1 million thereafter. Upon adoption of ASC Topic 842, the Company recorded a right-of-use asset and lease liability related to this lease; at September 30, 2019, the balance of the right-of-use asset was $4.5 million, which is included in other assets, net on the condensed consolidated balance sheet, and the balance of the related lease liability was $5.1 million, using a discount rate of 5.3%. The Company has employment agreements with each of its executive officers that provide for minimum annual base salaries, and annual cash and equity 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 the event an executive officer’s employment terminates under certain circumstances, the Company would be liable for cash severance, continuation of healthcare benefits and, in some instances, accelerated vesting of equity awards that he or she has been awarded as part of the Company’s incentive compensation program. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 7. 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 derivative instruments was an asset of $342,000 at September 30, 2019 and an asset of $253,000 and a liability of $4.3 million at December 31, 2018; derivative assets are included in other assets, net, and derivative liabilities are included in accrued expenses, deferred revenue and other liabilities on the condensed 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 on market conditions and perceived risks at September 30, 2019 and December 31, 2018. 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, 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. The Company believes the carrying value of the borrowings on its credit facility approximate fair value based on their nature, terms and variable interest rate. 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 analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. The estimated fair values of the Company’s aggregate long-term debt obligations 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 September 30, 2019, these debt obligations had a carrying value of $3,287.1 million and an estimated fair value of $3,541.8 million. At December 31, 2018, these debt obligations had an aggregate carrying value of $2,925.3 million and an estimated fair value of $2,988.8 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2018. These condensed 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 September 30, 2019 and December 31, 2018, these special purpose entities held assets totaling $6.7 billion and $6.1 billion, respectively, and had third-party liabilities totaling $2.1 billion. These assets and liabilities are included in the accompanying condensed 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 |
Investment Portfolio | Investment Portfolio STORE Capital invests in real estate assets through three primary transaction types as summarized below. Effective January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) ● Real Estate Investments – investments are generally made through sale-leaseback transactions in which the Company acquires the real estate from the owner-operators and then leases the real estate back to them through long-term leases which are generally classified as operating leases; the operators become the Company’s long-term tenants (its customers). Certain of the lease contracts that are associated with a sale-leaseback transaction may contain terms, such as a tenant purchase option, which will result in the transaction being accounted for as a financing arrangement due to the adoption of ASC Topic 842 rather than as an investment in real estate subject to an operating lease. ● Mortgage Loans Receivable – investments are made by issuing mortgage loans to the owner-operators of the real estate that serve as the collateral for the loans and the operators become long-term borrowers and customers of the Company. On occasion, the Company may also make other types of loans to its customers, such as equipment loans. ● Hybrid Real Estate Investments – investments are made through modified sale-leaseback transactions, where the Company acquires land from the owner-operators, leases the land back through long-term leases and simultaneously issues mortgage loans to the operators secured by the buildings and improvements on the land. Prior to 2019, these hybrid real estate investment transactions were generally accounted for as direct financing leases. Subsequent to the adoption of ASC Topic 842, new or modified hybrid real estate transactions are expected to be accounted for as operating leases of the land and mortgage loans on the buildings and improvements . |
Accounting for Real Estate Investments | Accounting for Real Estate Investments Classification and Cost 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. Intangible assets and liabilities acquired may include the value of existing in-place leases, above-market or below-market lease value of in-place leases and ground lease-related intangibles, as applicable. 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. Certain of the Company’s lease contracts allow its tenants the option, at their election, to purchase the leased property from the Company at a specified time or times (generally at the greater of the then- fair market value or the Company’s cost, as defined in the lease contracts). Subsequent to the adoption of ASC Topic 842, for real estate assets acquired through a sale-leaseback transaction and subject to a lease contract which contains a purchase option, the Company will account for such acquisition as a financing arrangement and record the investment in loans and financing receivables on the condensed consolidated balance sheet. 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 or below-market lease 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 generally 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. |
Revenue Recognition | Revenue Recognition STORE Capital leases real estate to its tenants under long- term net leases that are predominantly classified as operating leases. 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, straight-line operating lease receivables, calculated as the aggregate difference between the rental revenue recognized on a straight-line basis and scheduled rents, represent unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the leases; these receivables are included in other assets, net on the condensed consolidated balance sheets. Prior to 2019, the Company provided for an estimated reserve for uncollectible straight-line operating lease receivables based on management’s assessment of the risks inherent in those lease contracts, giving consideration to industry default rates for long-term receivables. At December 31, 2018, there was $25.7 million of straight-line operating lease receivables, net of an allowance of $4.3 million. Subsequent to the adoption of ASC Topic 842 in 2019, the Company reviews its straight-line operating lease receivables for collectibility on a contract by contract basis and any amounts not considered substantially collectible are written off against rental revenues. The Company had $26.5 million of straight-line operating lease receivables at September 30, 2019. 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. In addition to base rental revenue, certain leases also 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 2.5% 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; historically, contingent rent recognized has generally been less than 0.1% of rental revenues. The Company reviews its operating lease 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 not probable, a direct write-off of the receivable is made and any future rental revenue is recognized only when the tenant makes a rental payment. Direct costs incremental to successful lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. The Company periodically commits to fund the construction of new properties for its customers; rental revenue collected during the construction period is deferred and amortized over the remaining lease term when the construction project is complete. Substantially all of the Company’s leases are triple net, which means that the lessees are directly responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. For a few lease contracts, the Company collects property taxes from its customers and remits those taxes to governmental authorities. Subsequent to the adoption of ASC Topic 842, these property tax payments are presented on a gross basis as part of both rental revenues and property costs in the condensed consolidated statements of income. |
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. Events or changes in circumstances may also include an expectation to sell certain assets in accordance with the Company’s long-term strategic plans. 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, discussed in Fair Value Measurements During the nine months ended September 30, 2019, the Company recognized an aggregate provision for the impairment of real estate of $9.9 million, of which $2.6 million was recognized in the first quarter and $7.3 million was recognized during the third quarter. The estimated fair value of the impaired real estate assets at September 30, 2019 was $12.4 million. The estimated fair value of the impaired real estate assets at the time of impairment on March 31, 2019 was $10.0 million. No impairment of real estate was recognized during either the three or nine months ended September 30, 2018. |
Accounting for Loans Receivable | Accounting for Loans Receivable Classification and Cost STORE Capital holds its loans receivable, which are primarily mortgage loans secured by real estate, 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 more than 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 September 30, 2019 and December 31, 2018, the Company had loans receivable with an aggregate outstanding principal balance of $3.0 million and $8.5 million, respectively, 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. At both September 30, 2019 and December 31, 2018, there was $2.5 million of allowance for loan losses. |
Accounting for Direct Financing Receivables | Accounting for Direct Financing Receivables Direct financing receivables include hybrid real estate investment transactions completed prior to 2019. The Company recorded 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. Subsequent to the adoption of ASC Topic 842, existing direct financing receivables will continue to be accounted for in the same manner, unless the underlying contracts are modified. |
Accounting for Ground Lease Assets | Accounting for Operating Ground Lease Assets As part of certain real estate investment transactions, the Company may enter into long-term operating ground leases as a lessee. As a result of the adoption of ASC Topic 842, the Company is required to recognize an operating ground lease (or right-of-use) asset and related operating lease liability for each of these operating ground leases. Operating ground lease assets and operating lease liabilities are recognized based on the present value of the lease payments. The Company uses its estimated incremental borrowing rate, which is the estimated rate at which the Company could borrow on a collateralized basis with similar payments over a similar term, in determining the present value of the lease payments. Many of these operating lease contracts include options for the Company to extend the lease; the option periods are included in the minimum lease term only if it is reasonably likely the Company will exercise the option(s). Rental expense for the operating ground lease contracts is recognized in property costs on a straight-line basis over the lease term. Some of the contracts have contingent rent escalators indexed to future increases in the CPI and a few contracts have contingent rentals that are based on a percentage of the gross sales of the property; these payments are recognized in expense as incurred. The payment obligations under these contracts are typically the responsibility of the tenants operating on the properties, in accordance with the Company’s leases with the respective tenants. As a result, the Company also recognizes sublease rental revenue on a straight-line basis over the term of the Company’s sublease with the tenant; the sublease income is included in rental revenues. |
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 | Restricted Cash Restricted cash may include reserve account deposits held by lenders, including deposits required to be used for future investment in real estate assets, escrow deposits and cash proceeds from the sale of assets held by a qualified intermediary to facilitate tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code. The Company had $46.2 million and $15.5 million of restricted cash at September 30, 2019 and December 31, 2018, respectively, which were included in other assets, net, on the condensed consolidated balance sheets. |
Deferred Costs | Deferred Costs Financing costs related to the issuance of the Company’s long-term debt are deferred and amortized as an increase to interest expense over the term of the related debt instrument using the effective-interest method and are reported as a reduction of the related debt balance on the condensed consolidated balance sheets. Deferred financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company may enter into derivative 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 use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures. 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 changes in the fair value of derivatives designated and that qualify as cash flow hedges are 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 September 30, 2019, the Company had one interest rate floor and two interest rate swap agreements in place. The two interest rate swaps and related interest rate floor transaction have an aggregate notional amount of $100 million and were designated as a cash flow hedge of the Company’s $100 million variable-rate bank term loan due in 2021 (Note 4). In December 2018, the Company entered into two treasury lock agreements which were designated as cash flow hedges associated with the expected public offering of the senior unsecured notes issued by the Company at the end of February 2019 (Note 4). The agreements were settled in accordance with their terms in February 2019 and the Company made an aggregate payment of $6.7 million to the counterparties which was recognized as a deferred loss in accumulated other comprehensive loss. |
Fair Value Measurement | Fair Value Measurement The Company estimates the 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 Directors and key employees of the Company have been granted long-term incentive awards, including restricted stock awards (RSAs) and restricted stock unit awards (RSUs), which provide such directors and employees with equity interests as an incentive to remain in the Company’s service and to align their interests with those of the Company’s stockholders. The Company estimates the fair value of RSAs based on the closing price per share of the common stock on 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. During the nine months ended September 30, 2019, the Company granted RSAs representing 131,158 shares of restricted common stock to its directors and key employees. During the same period, RSAs representing 162,315 shares of restricted stock vested and RSAs representing 7,038 shares were forfeited. In connection with the vesting of RSAs, the Company repurchased 47,104 shares as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plans. As of September 30, 2019, the Company had 292,806 shares of restricted common stock outstanding. The Company’s RSUs granted in 2015 through 2017 contain both a market condition and a service condition and RSUs granted in 2018 and 2019 contain both a market condition and a performance condition as well as a service condition. The Company values the RSUs with a market condition using a Monte Carlo simulation model and values the RSUs with a performance condition based on the fair value of the awards expected to be earned and recognizes those amounts in general and administrative expense on a tranche by tranche basis ratably over the vesting periods. During the nine months ended September 30, 2019, the Company awarded 628,909 RSUs to its executive officers. During the same period, 37,222 RSUs vested and 156,977 RSUs were forfeited. In connection with the vesting of 326,778 RSUs (of which 289,556 vested on December 31, 2018), the Company repurchased 120,039 shares during the nine months ended September 30, 2019 as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plan. As of September 30, 2019, there were 1,450,571 RSUs outstanding. |
Income Taxes | Income Taxes As a REIT, the Company generally will not be subject to federal income tax. It is still subject, however, 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. Certain state tax returns filed for 2015 and tax returns filed for 2016 through 2018 are subject to examination by these jurisdictions. As of September 30, 2019 and December 31, 2018, 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 general and administrative expenses. There was no accrual for interest or penalties at September 30, 2019 or December 31, 2018. |
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 Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 111,618 $ 48,225 $ 225,138 $ 160,386 Less: earnings attributable to unvested restricted shares (139) (109) (316) (289) Net income used in basic and diluted income per share $ 111,479 $ 48,116 $ 224,822 $ 160,097 Denominator: Weighted average common shares outstanding 232,342,323 207,498,560 227,647,353 200,849,404 Less: Weighted average number of shares of unvested restricted stock (290,316) (332,722) (298,195) (348,028) Weighted average shares outstanding used in basic income per share 232,052,007 207,165,838 227,349,158 200,501,376 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 593,524 766,693 533,365 537,952 Weighted average shares outstanding used in diluted income per share 232,645,531 207,932,531 227,882,523 201,039,328 (a) For the three months ended September 30, 2019 and 2018, excludes 112,784 shares and 110,592 shares, respectively, and for the nine months ended September 30, 2019 and 2018, excludes 111,802 shares and 99,495 shares, respectively, related to unvested restricted shares as the effect would have been 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, results of operations or cash flows upon adoption. In February 2016, the FASB issued ASC Topic 842 to amend the accounting for leases. The new standard requires lessees and lessors to classify leases as either finance or operating leases and for lessees to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. The standard also eliminates current real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, lease modifications, recognition of a lease-related receivables allowance and lease executory costs for all entities. The Company adopted ASC Topic 842 on January 1, 2019, using the modified retrospective approach in accordance with the provisions of ASU 2018-11, Leases (Topic 842), Targeted Improvements ● a package of practical expedients allowing the Company to not reassess the classification of existing lease contracts, whether existing or expired contracts contain a lease or whether a portion of initial direct costs for existing leases should have been expensed. ● a practical expedient allowing the Company to not evaluate land easements that existed prior to or at the time of adoption, as leases in accordance with Topic 842. The new standard requires that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in obtaining a lease. Although there have been changes in the manner in which initial direct costs are recorded, the amount recorded has remained materially consistent. While primarily a lessor, the Company is also a lessee under several operating ground lease contracts and under its corporate office lease. Upon adoption of ASC Topic 842, the Company recorded a right-of-use asset and a lease liability of approximately $24.9 million and $25.5 million, respectively, in relation to these leases. For most of the operating ground leases, the sublessees, or the Company’s tenants, are responsible for making payment directly to the ground lessors. Prior to the new standard, these amounts were presented on a net basis; however, such amounts are now presented on a gross basis in the consolidated statements of income as both rental revenue and property costs. ASC Topic 842 also requires the Company to assess the probability of collecting substantially all of its rental revenue and make direct adjustments to rental revenue for operating lease receivables that are not believed to be collectible. As such, the Company will no longer recognize an allowance for doubtful accounts. The new standard had no impact on the Company’s cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, Codification Improvements to Topic 326, Financial Instruments – Credit Losses , which clarified that receivables arising from operating leases are within the scope of the leasing standard (ASC Topic 842) discussed above. This new standard will be adopted by the Company on January 1, 2020. The Company has investments in loans, certain leases that are accounted for as loans and direct financing receivables which will be directly impacted by the new guidance. The adoption is not expected to materially impact the consolidated financial statements. The Company is continuing to evaluate the final impact this new standard will have on its consolidated financial statements as well as its internal control framework. |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 net income per common share (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income $ 111,618 $ 48,225 $ 225,138 $ 160,386 Less: earnings attributable to unvested restricted shares (139) (109) (316) (289) Net income used in basic and diluted income per share $ 111,479 $ 48,116 $ 224,822 $ 160,097 Denominator: Weighted average common shares outstanding 232,342,323 207,498,560 227,647,353 200,849,404 Less: Weighted average number of shares of unvested restricted stock (290,316) (332,722) (298,195) (348,028) Weighted average shares outstanding used in basic income per share 232,052,007 207,165,838 227,349,158 200,501,376 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 593,524 766,693 533,365 537,952 Weighted average shares outstanding used in diluted income per share 232,645,531 207,932,531 227,882,523 201,039,328 (a) For the three months ended September 30, 2019 and 2018, excludes 112,784 shares and 110,592 shares, respectively, and for the nine months ended September 30, 2019 and 2018, excludes 111,802 shares and 99,495 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments: | |
Schedule of gross real estate and loan activity | During the nine months ended September 30, 2019, the Company had the following gross real estate and other investment activity (dollars in thousands): Number of Dollar Investment Amount of Locations Investments Gross investments, December 31, 2018 2,255 $ 7,605,070 Acquisition of and additions to real estate (a) 232 1,022,515 Investment in loans and financing receivables 18 143,885 Sales of real estate (80) (382,610) Principal collections on loans and financing receivables (b) (8) (20,395) Operating ground lease assets, net (c) — 24,493 Provisions for impairment (9,951) Other (6,507) Gross investments, September 30, 2019 (d) 8,376,500 Less accumulated depreciation and amortization (d) (696,064) Net investments, September 30, 2019 2,417 $ 7,680,436 (a) Excludes $35.6 million of tenant improvement advances disbursed in 2019 which were accrued as of December 31, 2018 and includes $1.2 million of interest capitalized to properties under construction. (b) Includes $13.6 million of non-cash principal collections primarily related to loans receivable transactions in which the Company acquired three underlying mortgaged properties and leased them back to the borrowers. (c) Includes $20.0 million of operating ground lease (or right-of-use) assets recognized upon initial adoption of ASC Topic 842 and $4.5 million of activity (new operating ground lease assets recognized net of asset amortization) during the nine months ended September 30, 2019. (d) Includes the dollar amount of investments ($17.8 million) and the accumulated depreciation ($1.9 million) related to real estate investments held for sale at September 30, 2019. |
Schedule of revenue recognized from investment portfolio | The following table summarizes the revenues the Company recognized from its investment portfolio (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Rental revenues: Operating leases (a) $ 158,023 $ 130,288 $ 462,959 $ 375,604 Sublease income - operating ground leases (b) 572 — 1,644 — Amortization of lease related intangibles and costs (630) (510) (1,683) (1,513) Total rental revenues $ 157,965 $ 129,778 $ 462,920 $ 374,091 Interest income on loans and financing receivables: Mortgage and other loans receivable $ 3,772 $ 3,193 $ 10,102 $ 9,049 Sale-leaseback transactions accounted for as financing arrangements 2,281 — 3,328 — Direct financing receivables 3,541 3,674 10,636 9,618 Total interest income on loans and financing receivables $ 9,594 $ 6,867 $ 24,066 $ 18,667 (a) For the three and nine months ended September 30, 2019, includes $595,000 and $1.9 million, respectively, of property tax tenant reimbursement revenue and includes variable lease revenue of $29,000 and $253,000 for the three months ended September 30, 2019 and 2018, respectively, and $94,000 and $344,000 for the nine months ended September 30, 2019 and 2018, respectively. (b) Represents total revenue recognized for the sublease of properties subject to operating ground leases to the related tenants; includes both payments made by the tenants to the ground lessors and straight-line revenue recognized for scheduled increases in the sublease rental payments. |
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 September 30, 2019 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments Investments Restaurants 794 $ 1,293,476 15 % Furniture stores 61 475,228 6 Early childhood education centers 205 461,201 6 Health clubs 84 450,516 5 Automotive repair and maintenance 168 419,473 5 Farm and ranch supply stores 43 402,001 4 Metal fabrication 73 365,461 4 All other service industries 722 2,728,571 33 All other retail industries 124 825,147 10 All other manufacturing industries 143 955,426 12 2,417 $ 8,376,500 100 % |
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 in place as of September 30, 2019, were as follows (in thousands): Remainder of 2019 $ 159,628 2020 637,868 2021 636,678 2022 636,965 2023 634,877 2024 631,274 Thereafter 5,719,251 Total future minimum rentals (a) $ 9,056,541 (a) Excludes future minimum rentals to be received under lease contracts associated with sale-leaseback transactions accounted for as financing arrangements. See Loans and Financing Receivables section below. |
Schedule detailing intangible lease assets and related accumulated amortization | The following table details intangible lease assets and related accumulated amortization (in thousands): September 30, December 31, 2019 2018 In-place leases (a) $ 47,559 $ 54,293 Ground lease-related intangibles 19,449 21,363 Above-market leases 9,492 9,492 Total intangible lease assets 76,500 85,148 Accumulated amortization (a) (30,523) (29,223) Net intangible lease assets $ 45,977 $ 55,925 |
Summary of future minimum lease payments | The future minimum lease payments to be paid under the operating ground leases as of September 30, 2019 were as follows (in thousands): Ground Ground Leases Leases Paid by Paid by STORE Capital's STORE Capital Tenants (a) Total Remainder of 2019 $ 8 $ 1,019 $ 1,027 2020 31 2,332 2,363 2021 31 2,347 2,378 2022 31 2,302 2,333 2023 31 6,052 6,083 2024 31 1,981 2,012 Thereafter 3,075 32,597 35,672 Total lease payments 3,238 48,630 51,868 Less imputed interest (2,627) (24,268) (26,895) Total operating lease liabilities - ground leases $ 611 $ 24,362 $ 24,973 (a) STORE Capital’s tenants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases. In the event the tenant fails to make the required ground lease payments, the Company would be primarily responsible for the payment, assuming the Company does not re-tenant the property or sell the leasehold interest. Of the total $48.6 million commitment, $16.5 million is due for periods beyond the current term of the Company’s leases with the tenants. Amounts exclude contingent rent due under three leases where the ground lease payment, or a portion thereof, is based on the level of the tenant’s sales. |
Schedule summarizing loans and direct financing receivables | The Company’s loans and financing receivables are summarized below (dollars in thousands): Amount Outstanding Interest Maturity September 30, December 31, Type Rate (a) Date 2019 2018 Five mortgage loans receivable 8.13 % 2019 - 2022 $ 33,143 $ 49,934 Five mortgage loans receivable 8.39 % 2032 - 2038 18,803 17,666 Ten mortgage loans receivable (b) 8.55 % 2051 - 2059 120,369 88,019 Total mortgage loans receivable 172,315 155,619 Equipment and other loans receivable 8.69 % 2019 - 2026 14,817 12,013 Total principal amount outstanding—loans receivable 187,132 167,632 Unamortized loan origination costs 1,201 1,249 Allowance for loan losses (2,538) (2,538) Sale-leaseback transactions accounted for as financing arrangements (c) 7.91 % 2034 - 2043 116,889 — Direct financing receivables 170,491 184,859 Total loans and financing receivables $ 473,175 $ 351,202 (a) Represents the weighted average interest rate as of the balance sheet date. (b) Four of these mortgage loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment. (c) In accordance with ASC Topic 842, represents transactions accounted for as financing arrangements rather than as investments in real estate subject to operating leases. Interest rate shown is the weighted average initial rental or capitalization rate on the leases; the leases mature between 2034 and 2043 and the purchase options expire between 2028 and 2039. |
Schedule of maturities of loans receivable | Absent prepayments, scheduled maturities are expected to be as follows (in thousands): Scheduled Principal Balloon Total Payments Payments Payments Remainder of 2019 $ 1,384 $ 14,361 $ 15,745 2020 2,411 9,851 12,262 2021 1,761 8,515 10,276 2022 1,570 6,974 8,544 2023 1,515 1,203 2,718 2024 1,553 — 1,553 Thereafter 116,622 19,412 136,034 Total principal payments $ 126,816 $ 60,316 $ 187,132 |
Schedule of future payments to be received under sale-leaseback transactions accounted for as financing arrangements | The scheduled future payments (excluding any contingent payments) to be received under these agreements as of September 30, 2019, were as follows (in thousands): Remainder of 2019 $ 2,307 2020 9,246 2021 9,278 2022 9,314 2023 9,352 2024 9,429 Thereafter 127,712 Total future scheduled payments $ 176,638 |
Schedule of the components of the investments accounted for as direct financing receivables | As of September 30, 2019 and December 31, 2018, the Company had $170.5 million and $184.9 million, respectively, of investments accounted for as direct financing leases under previous accounting guidance; the components of these investments were as follows (in thousands): September 30, December 31, 2019 2018 Minimum lease payments receivable $ 382,781 $ 424,305 Estimated residual value of leased assets 22,610 24,053 Unearned income (234,900) (263,499) Net investment $ 170,491 $ 184,859 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule of maturities of long-term debt | As of September 30, 2019, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are expected to be as follows (in thousands): Scheduled Principal Balloon Payments Payments Total Remainder of 2019 $ 7,501 $ 5,394 $ 12,895 2020 29,607 167,848 197,455 2021 26,282 229,366 255,648 2022 26,114 200,829 226,943 2023 21,799 265,357 287,156 2024 17,094 426,914 444,008 Thereafter 37,342 1,864,185 1,901,527 $ 165,739 $ 3,159,893 $ 3,325,632 |
Senior Unsecured Notes And Term Loans Payable | |
Schedule of debt | The Company’s senior unsecured notes and term loans payable are summarized below (dollars in thousands): Maturity Interest September 30, December 31, Date Rate 2019 2018 Notes Payable: Series A issued November 2015 Nov. 2022 4.95 % $ 75,000 $ 75,000 Series B issued November 2015 Nov. 2024 5.24 % 100,000 100,000 Series C issued April 2016 Apr. 2026 4.73 % 200,000 200,000 Public Notes issued March 2018 Mar. 2028 4.50 % 350,000 350,000 Public Notes issued February 2019 Mar. 2029 4.625 % 350,000 — Total notes payable 1,075,000 725,000 Term Loans: Term Loan issued March 2017 Mar. 2020 3.10 % (a) 100,000 100,000 Term Loan issued April 2016 Apr. 2021 2.44 % (b) 100,000 100,000 Total term loans 200,000 200,000 Unamortized discount (3,873) (1,563) Unamortized deferred financing costs (9,083) (6,717) Total unsecured notes and term loans payable, net $ 1,262,044 $ 916,720 (a) Loan is a variable-rate loan which resets monthly at one-month LIBOR + the applicable credit spread which was 1.00% at September 30, 2019. (b) Loan is a variable-rate loan which resets monthly at one-month LIBOR + the applicable credit spread which was 1.10% at September 30, 2019. The Company has entered into interest rate swap agreements that effectively convert the floating rate to the fixed rate noted above as of September 30, 2019. |
Non-recourse debt obligations | |
Schedule of debt | The Company’s non-recourse debt obligations of consolidated special purpose entity subsidiaries are summarized below (dollars in thousands): Maturity Interest September 30, December 31, Date Rate 2019 2018 Non-recourse net-lease mortgage notes: $77,000 Series 2013-3, Class A-1 Nov. 2020 4.24 % $ 69,498 $ 70,589 $120,000 Series 2014-1, Class A-1 Apr. 2021 4.21 % 116,800 117,250 $95,000 Series 2015-1, Class A-1 Apr. 2022 3.75 % 92,902 93,258 $102,000 Series 2013-1, Class A-2 Mar. 2023 4.65 % 90,300 91,841 $97,000 Series 2013-2, Class A-2 Jul. 2023 5.33 % 86,922 88,320 $100,000 Series 2013-3, Class A-2 Nov. 2023 5.21 % 90,258 91,675 $140,000 Series 2014-1, Class A-2 Apr. 2024 5.00 % 136,267 136,792 $150,000 Series 2018-1, Class A-1 Oct. 2024 3.96 % 147,159 149,484 $50,000 Series 2018-1, Class A-3 Oct. 2024 4.40 % 49,771 49,958 $270,000 Series 2015-1, Class A-2 Apr. 2025 4.17 % 264,038 265,050 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 3.96 % 189,321 192,187 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 4.32 % 129,088 130,984 $228,000 Series 2018-1, Class A-2 Oct. 2027 4.29 % 223,682 227,215 $164,000 Series 2018-1, Class A-4 Oct. 2027 4.74 % 163,248 163,863 Total non-recourse net-lease mortgage notes 1,849,254 1,868,466 Non-recourse mortgage notes: $7,750 note issued February 2013 — 6,723 $6,500 note issued December 2012 Dec. 2019 4.806 % 5,425 5,560 $16,100 note issued February 2014 Mar. 2021 4.83 % 14,079 14,388 $13,000 note issued May 2012 May 2022 5.195 % 10,818 11,081 $26,000 note issued August 2012 Sept. 2022 5.05 % 21,789 22,315 $6,400 note issued November 2012 Dec. 2022 4.707 % 5,364 5,496 $11,895 note issued March 2013 Apr. 2023 4.7315 % 10,087 10,328 $17,500 note issued August 2013 Sept. 2023 5.46 % 15,261 15,583 $10,075 note issued March 2014 Apr. 2024 5.10 % 9,233 9,365 $65,000 note issued June 2016 Jul. 2026 4.75 % 61,807 62,609 $41,690 note issued March 2019 Mar. 2029 4.80 % 41,690 — $6,944 notes issued March 2013 Apr. 2038 4.50 % (a) 5,825 5,957 Total non-recourse mortgage notes 201,378 169,405 Unamortized discount (399) (455) Unamortized deferred financing costs (25,151) (28,824) Total non-recourse debt obligations of consolidated special purpose entities, net $ 2,025,082 $ 2,008,592 (a) Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity | |
Common stock issuance | The following tables outline the common stock issuances under the 2018-2 ATM Program (in millions except share and per share information): Three Months Ended September 30, 2019 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $750 million 2018-2 ATM Program 4,442,863 $ 36.28 $ 161.2 $ (2.4) $ (0.1) $ 158.7 Total 4,442,863 $ 36.28 $ 161.2 $ (2.4) $ (0.1) $ 158.7 Nine Months Ended September 30, 2019 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $750 million 2018-2 ATM Program 13,448,509 $ 34.20 $ 459.9 $ (6.9) $ (0.3) $ 452.7 Total 13,448,509 $ 34.20 $ 459.9 $ (6.9) $ (0.3) $ 452.7 Inception of Program Through September 30, 2019 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $750 million 2018-2 ATM Program 21,681,251 $ 32.52 $ 705.1 $ (10.6) $ (0.7) $ 693.8 Total 21,681,251 $ 32.52 $ 705.1 $ (10.6) $ (0.7) $ 693.8 |
Summary of Significant Accoun_4
Summary of Significant Accounting Principles (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($)segment | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)agreement | |
Basis of Accounting and Principles of Consolidation | ||||||
Assets owned | $ 7,813,427 | $ 7,813,427 | $ 7,113,971 | |||
Liabilities owed | 3,504,336 | $ 3,504,336 | 3,250,470 | |||
Segment Reporting | ||||||
Number of reportable segments | segment | 1 | |||||
Impairments | ||||||
Provisions for impairment | 7,300 | $ 2,600 | $ 0 | $ 9,900 | $ 0 | |
Estimate fair value of impaired real estate assets | $ 10,000 | 12,400 | ||||
Revenue Recognition | ||||||
Accrued straight-line rental revenue, net of allowance | $ 26,500 | $ 26,500 | 25,700 | |||
Accrued straight-line rental revenue, allowance | 4,300 | |||||
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) | 2.50% | 2.50% | ||||
Contingent rent as a percentage of rental revenue, historical | 0.10% | 0.10% | ||||
Loans Receivable | ||||||
Allowance for loan losses | $ 2,538 | $ 2,538 | 2,538 | |||
Non accrual status loan receivables | 3,000 | 3,000 | 8,500 | |||
Restricted Cash and Escrow Deposits | ||||||
Restricted cash included in other assets | 46,229 | $ 7,359 | 46,229 | $ 7,359 | 15,500 | |
Derivative Instruments and Hedging Activities | ||||||
Outstanding balance | 3,325,632 | 3,325,632 | ||||
Aggregate payment to counterparties recognized as a deferred loss in other comprehensive loss | $ (6,700) | |||||
Loans receivable | ||||||
Loans Receivable | ||||||
Maximum past due period for loans payments causing nonaccrual status | 60 days | |||||
Allowance for loan losses | 2,500 | $ 2,500 | 2,500 | |||
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 | 6,700,000 | $ 6,700,000 | 6,100,000 | |||
Liabilities owed | $ 2,100,000 | $ 2,100,000 | $ 2,100,000 | |||
Interest rate swaps | ||||||
Derivative Instruments and Hedging Activities | ||||||
Number of agreements | segment | 2 | 2 | ||||
Interest rate floor | ||||||
Derivative Instruments and Hedging Activities | ||||||
Number of agreements | segment | 1 | 1 | ||||
Treasury lock agreement | ||||||
Derivative Instruments and Hedging Activities | ||||||
Number of agreements | agreement | 2 | |||||
Senior Unsecured Notes | ||||||
Derivative Instruments and Hedging Activities | ||||||
Outstanding balance | $ 1,075,000 | $ 1,075,000 | $ 725,000 | |||
Designated as hedging instrument | Interest rate swap contract four | ||||||
Derivative Instruments and Hedging Activities | ||||||
Current notional amounts | 100,000 | 100,000 | ||||
Outstanding balance | $ 100,000 | $ 100,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Principles - Share Based Compensation and Other (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 21 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2019 | |
Income Tax Examination, Penalties and Interest Accrued | ||||||
Uncertain income tax positions | $ 0 | $ 0 | $ 0 | $ 0 | ||
Accrual for interest or penalties | 0 | 0 | $ 0 | $ 0 | ||
Numerator: | ||||||
Net income | 111,618,000 | $ 48,225,000 | 225,138,000 | $ 160,386,000 | ||
Less: earnings attributable to unvested restricted shares | (139,000) | (109,000) | (316,000) | (289,000) | ||
Net income used in basic and diluted income per share | $ 111,479,000 | $ 48,116,000 | $ 224,822,000 | $ 160,097,000 | ||
Denominator: | ||||||
Weighted average common shares outstanding | 232,342,323 | 207,498,560 | 227,647,353 | 200,849,404 | ||
Less: Weighted average number of shares of unvested restricted stock (in shares) | (290,316) | (332,722) | (298,195) | (348,028) | ||
Weighted average shares outstanding used in basic income per share (in shares) | 232,052,007 | 207,165,838 | 227,349,158 | 200,501,376 | ||
Effects of dilutive securities: | ||||||
Add: Treasury stock method impact of potentially dilutive securities (in shares) | 593,524 | 766,693 | 533,365 | 537,952 | ||
Weighted average shares outstanding used in diluted income per share (in shares) | 232,645,531 | 207,932,531 | 227,882,523 | 201,039,328 | ||
Antidilutive unvested restricted shares (in shares) | 112,784 | 110,592 | 111,802 | 99,495 | ||
Restricted Stock | ||||||
Sharebased Compensation | ||||||
Granted in period (in shares) | 131,158 | |||||
Vested in period (in shares) | 162,315 | |||||
Shares repurchased in connection with tax withholding obligations (in shares) | 47,104 | |||||
Forfeited in period (in shares) | (7,038) | |||||
Outstanding (in shares) | 292,806 | 292,806 | 292,806 | |||
Restricted Stock Units | ||||||
Sharebased Compensation | ||||||
Vested in period (in shares) | 37,222 | 289,556 | 326,778 | |||
Shares repurchased in connection with tax withholding obligations (in shares) | 120,039 | |||||
Forfeited in period (in shares) | (156,977) | |||||
Restricted Stock Units | Executive Officer | Vesting Based On Service And Market Conditions | ||||||
Sharebased Compensation | ||||||
Granted in period (in shares) | 628,909 | |||||
Outstanding (in shares) | 1,450,571 | 1,450,571 | 1,450,571 |
Summary of Significant Accoun_6
Summary of Significant Accounting Principles - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Use of package of practical expedients | true | |
Lease, Practical Expedient, Land Easement [true false] | true | |
Right-of-use asset | $ 24,493 | |
Total lease liabilities - ground leases | $ 30,042 | |
Adjustment | ASU 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use asset | $ 24,900 | |
Total lease liabilities - ground leases | $ 25,500 |
Investments - Locations (Detail
Investments - Locations (Details) $ in Thousands | Jan. 01, 2019USD ($)property | Sep. 30, 2019USD ($)property | Sep. 30, 2019USD ($)property | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)property | Dec. 31, 2018USD ($)property |
Investments: | ||||||
Number of property locations of investments (in locations) | property | 2,255 | 2,417 | 2,417 | 2,417 | 2,255 | |
Number of owned properties (in properties) | property | 2,368 | |||||
Number of properties accounted as financing arrangements | property | 17 | |||||
Number of properties owned as direct financing receivables | property | 57 | |||||
Number of ground lease interests (in properties) | property | 21 | |||||
Number of properties which secure certain mortgage loans (in properties) | property | 28 | |||||
Gross acquisition cost of real estate investments | $ 7,900,000 | |||||
Loans and financing receivables | 473,175 | $ 351,202 | ||||
Operating ground lease assets | 24,493 | |||||
Investments assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non-recourse obligations of these special purpose entities | 33.00% | |||||
Number of Investment Locations | ||||||
Gross investments | property | 2,255 | 2,255 | ||||
Acquisition of and additions to real estate | property | 232 | |||||
Investment in loans and financing receivables | property | 18 | |||||
Sales of real estate | property | (80) | |||||
Principal collections on loans and direct financing receivables | property | (8) | |||||
Gross investments | property | 2,417 | 2,417 | ||||
Dollar Amount of Investments | ||||||
Gross investments | $ 7,605,070 | $ 7,605,070 | ||||
Acquisition of and additions to real estate | 1,022,515 | |||||
Investment in loans and financing receivables | 143,885 | |||||
Sales of real estate | (382,610) | |||||
Principal collections on loans and direct financing receivables | 20,395 | |||||
Operating ground lease assets capitalized, net | $ 20,000 | 24,493 | ||||
Provisions for impairment | $ (7,341) | (9,951) | $ (2,608) | |||
Other | (6,507) | |||||
Gross investments | $ 8,376,500 | 8,376,500 | ||||
Less accumulated depreciation and amortization | (696,064) | |||||
Net investments | 7,680,436 | $ 7,019,157 | ||||
Tenant improvement advances disbursed | 35,600 | |||||
Interest capitalized | 1,200 | |||||
Non-cash principal collections related to loans receivable | $ 13,600 | |||||
Number of mortgage properties acquired and leased back | property | 3 | |||||
Investment in real estate held for sale | 17,800 | |||||
Accumulated depreciation of real estate investments held for sale | $ 1,900 | |||||
The amount of operating ground leases originated during the period, net of amortization | $ 4,500 |
Investments - Revenue Recognize
Investments - Revenue Recognized from Investment Portfolio (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Rental revenues: | ||||
Operating leases (a) | $ 158,023,000 | $ 130,288,000 | $ 462,959,000 | $ 375,604,000 |
Sublease income - operating ground lease assets | 572,000 | 1,644,000 | ||
Rental revenues | 129,778,000 | 374,091,000 | ||
Total rental revenues | 157,965,000 | 462,920,000 | ||
Interest income on loans and financing receivables: | ||||
Mortgage and other loans receivable | 3,772,000 | 3,193,000 | 10,102,000 | 9,049,000 |
Sale-leaseback transactions accounted for as financing arrangements | 2,281,000 | 3,328,000 | ||
Direct financing receivables | 3,541,000 | 3,674,000 | 10,636,000 | 9,618,000 |
Total interest income on loans and financing receivables | 9,594,000 | 6,867,000 | 24,066,000 | 18,667,000 |
Property tax tenant reimbursement revenue | 595,000 | 1,900,000 | ||
Variable lease revenue | 29,000 | 253,000 | 94,000 | 344,000 |
Rental Revenues [Member] | ||||
Rental revenues: | ||||
Amortization of lease related intangibles and costs | $ (630,000) | $ (510,000) | $ (1,683,000) | $ (1,513,000) |
Investments - Significant Credi
Investments - Significant Credit and Revenue Concentration (Details) | 9 Months Ended |
Sep. 30, 2019itemstate | |
Real estate investment portfolio | Geographic concentration | |
Significant Credit and Revenue Concentration | |
Number of customers | 460 |
Number of states over which real estate investments are dispersed (in states) | state | 50 |
Concentration Percentage for threshold | 10.00% |
Real estate investment portfolio | Geographic concentration | Texas | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 11.00% |
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 | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 2.90% |
Real estate investment portfolio | Concept concentration | Minimum | |
Significant Credit and Revenue Concentration | |
Number of concepts (in categories) | 680 |
Investment portfolio revenues | Customer concentration | Largest customer, investment portfolio revenues | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 2.80% |
Investment portfolio revenues | Concept concentration | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 2.80% |
Investments - Portfolio Diversi
Investments - Portfolio Diversification (Details) $ in Thousands | Sep. 30, 2019USD ($)property | Dec. 31, 2018USD ($)property |
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 2,417 | 2,255 |
Dollar Amount of Investments | $ | $ 8,376,500 | $ 7,605,070 |
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 Investment Locations | property | 794 | |
Dollar Amount of Investments | $ | $ 1,293,476 | |
Percentage of Total Dollar Amount of Investments | 15.00% | |
Furniture stores | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 61 | |
Dollar Amount of Investments | $ | $ 475,228 | |
Percentage of Total Dollar Amount of Investments | 6.00% | |
Early childhood education centers | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 205 | |
Dollar Amount of Investments | $ | $ 461,201 | |
Percentage of Total Dollar Amount of Investments | 6.00% | |
Health clubs | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 84 | |
Dollar Amount of Investments | $ | $ 450,516 | |
Percentage of Total Dollar Amount of Investments | 5.00% | |
Automotive repair and maintenance | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 168 | |
Dollar Amount of Investments | $ | $ 419,473 | |
Percentage of Total Dollar Amount of Investments | 5.00% | |
Farm and ranch supply stores | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 43 | |
Dollar Amount of Investments | $ | $ 402,001 | |
Percentage of Total Dollar Amount of Investments | 4.00% | |
Metal fabrication | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 73 | |
Dollar Amount of Investments | $ | $ 365,461 | |
Percentage of Total Dollar Amount of Investments | 4.00% | |
All other service industries | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 722 | |
Dollar Amount of Investments | $ | $ 2,728,571 | |
Percentage of Total Dollar Amount of Investments | 33.00% | |
All other retail industries | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 124 | |
Dollar Amount of Investments | $ | $ 825,147 | |
Percentage of Total Dollar Amount of Investments | 10.00% | |
All other manufacturing industries | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 143 | |
Dollar Amount of Investments | $ | $ 955,426 | |
Percentage of Total Dollar Amount of Investments | 12.00% |
Investments - Intangible Lease
Investments - Intangible Lease Assets and Real Estate Investments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)Options | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)itemOptionsproperty | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Intangible Lease Assets | |||||
Intangible lease assets | $ 76,500 | $ 76,500 | $ 85,148 | ||
Accumulated amortization | (30,523) | (30,523) | (29,223) | ||
Net intangible lease assets | 45,977 | 45,977 | 55,925 | ||
Amortization in the next five years | |||||
Remainder of 2019 | 1,200 | 1,200 | |||
2020 | 4,300 | 4,300 | |||
2021 | 4,000 | 4,000 | |||
2022 | 3,900 | 3,900 | |||
2023 | 3,400 | 3,400 | |||
2024 | 2,800 | $ 2,800 | |||
Typical number of renewal options | item | 1 | ||||
Term of renewal options | 5 years | ||||
Accounting for Real Estate Investments | |||||
Remaining noncancelable lease term | 14 years | ||||
Number of real estate properties vacant not subject to lease | property | 8 | ||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Remainder of 2019 | 159,628 | $ 159,628 | |||
2020 | 637,868 | 637,868 | |||
2021 | 636,678 | 636,678 | |||
2022 | 636,965 | 636,965 | |||
2023 | 634,877 | 634,877 | |||
2024 | 631,274 | 631,274 | |||
Thereafter | 5,719,251 | 5,719,251 | |||
Total future minimum rentals | $ 9,056,541 | $ 9,056,541 | |||
Minimum | |||||
Amortization in the next five years | |||||
Typical number of renewal options | item | 1 | ||||
Number of renewal periods at the option of the Company | Options | 2 | 2 | |||
Maximum | |||||
Amortization in the next five years | |||||
Number of renewal periods at the option of the Company | Options | 4 | 4 | |||
Decrease to rental revenue | |||||
Amortization in the next five years | |||||
Remainder of 2019 | $ 300 | $ 300 | |||
2020 | 1,100 | 1,100 | |||
2021 | 600 | 600 | |||
2022 | 400 | 400 | |||
2023 | 400 | 400 | |||
2024 | 400 | 400 | |||
Amortization expense | |||||
Intangible Lease Assets | |||||
Amount amortized | 1,300 | $ 1,400 | 4,300 | $ 4,400 | |
In -place leases | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 47,559 | $ 47,559 | 54,293 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 9 years | ||||
In-place leases related to real estate held for sale | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 300 | $ 300 | |||
Accumulated amortization | 100 | 100 | |||
Ground lease interests | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 19,449 | $ 19,449 | 21,363 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 44 years | ||||
Above-market leases | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 9,492 | $ 9,492 | $ 9,492 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 6 years | ||||
Above-market leases | Decrease to rental revenue | |||||
Intangible Lease Assets | |||||
Amount amortized | $ 300 | $ 300 | $ 800 | $ 800 |
Investments - Loans and Financi
Investments - Loans and Financing Receivables (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | |
Loans and direct financing receivables | ||
Number of loans receivable | loan | 39 | |
Gross carrying amount of loans receivable | $ 185,800 | |
Number of mortgage loans | loan | 20 | |
Number of short-term mortgage loans | loan | 5 | |
Amortization period of long-term mortgage loans | 40 years | |
Mortgage loans receivable | $ 172,315 | $ 155,619 |
Number of mortgage loans subject to interest rate increases | loan | 11 | |
Total principal outstanding - loans receivable | $ 187,132 | 167,632 |
Unamortized loan origination costs | 1,201 | 1,249 |
Allowance for loan losses | (2,538) | (2,538) |
Sale-leaseback transactions accounted for as financing arrangements | 116,900 | |
Direct financing receivables | 170,491 | 184,859 |
Direct financing receivables. | 170,491 | |
Total loans and direct financing receivables | 473,175 | $ 351,202 |
Non Cash acquisition of collateral property securing a mortgage note receivable | $ 13,574 | |
Minimum | ||
Loans and direct financing receivables | ||
Long-term mortgage loans receivable prepayment penalty rate (as a percent) | 1.00% | |
Maximum | ||
Loans and direct financing receivables | ||
Long-term mortgage loans receivable prepayment penalty rate (as a percent) | 20.00% | |
Mortgage loan receivable 0.0813 interest rate maturity range 2019 to 2022 | ||
Loans and direct financing receivables | ||
Number of mortgage loans | loan | 5 | 5 |
Stated Interest Rate (as a percent) | 8.13% | 8.13% |
Mortgage loans receivable | $ 33,143 | $ 49,934 |
Mortgage loan receivable 0.0839 interest rate maturity range 2032 to 2038 | ||
Loans and direct financing receivables | ||
Number of mortgage loans | loan | 5 | 5 |
Stated Interest Rate (as a percent) | 8.39% | 8.39% |
Mortgage loans receivable | $ 18,803 | $ 17,666 |
Mortgage loan receivable 0.0855 interest rate maturity range 2051 to 2059 | ||
Loans and direct financing receivables | ||
Number of mortgage loans | loan | 10 | 10 |
Stated Interest Rate (as a percent) | 8.55% | 8.55% |
Mortgage loans receivable | $ 120,369 | $ 88,019 |
Number of mortgage loans allowing for prepayment in whole | loan | 4 | |
Mortgage loan receivable 0.0855 interest rate maturity range 2051 to 2059 | Minimum | ||
Loans and direct financing receivables | ||
Prepayment penalties (as a percent) | 20.00% | |
Mortgage loan receivable 0.0855 interest rate maturity range 2051 to 2059 | Maximum | ||
Loans and direct financing receivables | ||
Prepayment penalties (as a percent) | 70.00% | |
Mortgage loan receivable 0.0869 interest rate maturity range 2019 to 2026 | ||
Loans and direct financing receivables | ||
Stated Interest Rate (as a percent) | 8.69% | 8.69% |
Equipment and other loans receivable | $ 14,817 | $ 12,013 |
Sale-leaseback transactions accounted for financing arrangements 0.0791 interest rate maturity range 2034 to 2043 | ||
Loans and direct financing receivables | ||
Stated Interest Rate (as a percent) | 7.91% | 7.91% |
Sale-leaseback transactions accounted for as financing arrangements | $ 116,889 |
Investments - Loans Receivable
Investments - Loans Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Scheduled loan receivable maturities | ||
Remainder of 2019 | $ 15,745 | |
2020 | 12,262 | |
2021 | 10,276 | |
2022 | 8,544 | |
2023 | 2,718 | |
2024 | 1,553 | |
Thereafter | 136,034 | |
Total principal outstanding - loans receivable | 187,132 | $ 167,632 |
Components of investments accounted for as direct financing receivables | ||
Minimum lease payments receivable | 382,781 | 424,305 |
Estimated residual value of leased assets | 22,610 | 24,053 |
Unearned income | (234,900) | (263,499) |
Net investment | 170,491 | $ 184,859 |
Future minimum lease payments to be received | ||
Remainder of 2019 | 4,100 | |
2020 | 16,800 | |
2021 | 16,800 | |
2022 | 16,800 | |
2023 | 16,800 | |
2024 | 16,800 | |
Sale Leaseback Transactions Accounted For As Financing Arrangements Investments And Fiscal Maturity Abstract | ||
Sale-Leaseback Transactions Accounted For as Financing Arrangements | 116,900 | |
Remainder of 2019 | 2,307 | |
2020 | 9,246 | |
2021 | 9,278 | |
2022 | 9,314 | |
2023 | 9,352 | |
2024 | 9,429 | |
Thereafter | 127,712 | |
Total future scheduled payments | 176,638 | |
Scheduled principal | ||
Scheduled loan receivable maturities | ||
Remainder of 2019 | 1,384 | |
2020 | 2,411 | |
2021 | 1,761 | |
2022 | 1,570 | |
2023 | 1,515 | |
2024 | 1,553 | |
Thereafter | 116,622 | |
Total principal outstanding - loans receivable | 126,816 | |
Balloon payments | ||
Scheduled loan receivable maturities | ||
Remainder of 2019 | 14,361 | |
2020 | 9,851 | |
2021 | 8,515 | |
2022 | 6,974 | |
2023 | 1,203 | |
Thereafter | 19,412 | |
Total principal outstanding - loans receivable | $ 60,316 |
Investments - Operating Lease A
Investments - Operating Lease Asset (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Right-of-use asset | $ 24,493,000 | $ 24,493,000 | ||
Lease costs | 592,000 | $ 5,000 | 1,700,000 | $ 19,000 |
Rental revenue | $ 572,000 | $ 1,644,000 | ||
Typical number of renewal options | item | 1 | |||
Option to extend | true | |||
Weighted average remaining non-cancelable lease term | 23 years | 23 years | ||
Weighted average discount rate | 6.00% | 6.00% | ||
Future minimum lease payments | ||||
Total lease liabilities - ground leases | $ 30,042,000 | $ 30,042,000 | ||
Long-term lease commitment | 16,500,000 | 16,500,000 | ||
Ground leases | ||||
Future minimum lease payments | ||||
Remainder of 2019 | 1,027,000 | 1,027,000 | ||
2020 | 2,363,000 | 2,363,000 | ||
2021 | 2,378,000 | 2,378,000 | ||
2022 | 2,333,000 | 2,333,000 | ||
2023 | 6,083,000 | 6,083,000 | ||
2024 | 2,012,000 | 2,012,000 | ||
Thereafter | 35,672,000 | 35,672,000 | ||
Total lease payments | 51,868,000 | 51,868,000 | ||
Less imputed interest | (26,895,000) | (26,895,000) | ||
Total lease liabilities - ground leases | 24,973,000 | 24,973,000 | ||
Ground lease by STORE capital | Ground leases | ||||
Future minimum lease payments | ||||
Remainder of 2019 | 8,000 | 8,000 | ||
2020 | 31,000 | 31,000 | ||
2021 | 31,000 | 31,000 | ||
2022 | 31,000 | 31,000 | ||
2023 | 31,000 | 31,000 | ||
2024 | 31,000 | 31,000 | ||
Thereafter | 3,075,000 | 3,075,000 | ||
Total lease payments | 3,238,000 | 3,238,000 | ||
Less imputed interest | (2,627,000) | (2,627,000) | ||
Total lease liabilities - ground leases | 611,000 | 611,000 | ||
Ground lease by STORE capital tenants | Ground leases | ||||
Future minimum lease payments | ||||
Remainder of 2019 | 1,019,000 | 1,019,000 | ||
2020 | 2,332,000 | 2,332,000 | ||
2021 | 2,347,000 | 2,347,000 | ||
2022 | 2,302,000 | 2,302,000 | ||
2023 | 6,052,000 | 6,052,000 | ||
2024 | 1,981,000 | 1,981,000 | ||
Thereafter | 32,597,000 | 32,597,000 | ||
Total lease payments | 48,630,000 | 48,630,000 | ||
Less imputed interest | (24,268,000) | (24,268,000) | ||
Total lease liabilities - ground leases | $ 24,362,000 | $ 24,362,000 | ||
Minimum | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Ground lease remaining terms | 1 year | 1 year | ||
Typical number of renewal options | item | 1 | |||
Renewal period | 3 years | 3 years | ||
Maximum | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Ground lease remaining terms | 92 years | 92 years | ||
Renewal period | 10 years | 10 years |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) $ in Thousands | Feb. 09, 2018Options | Feb. 28, 2018 | Mar. 31, 2017USD ($) | Apr. 30, 2016USD ($) | Sep. 30, 2019USD ($)itemloansegment | Sep. 30, 2019USD ($)loansegment | Feb. 28, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) |
Credit facilities | |||||||||
Borrowings outstanding (in dollars) | $ 135,000 | ||||||||
Unamortized financing costs related to all debt | $ 9,083 | $ 9,083 | 6,717 | ||||||
Unsecured Term Notes Payable | |||||||||
Principal amount | $ 350,000 | $ 350,000 | |||||||
Revolving credit facility | |||||||||
Credit facilities | |||||||||
Unamortized financing costs related to all debt | $ 2,400 | 2,400 | $ 3,100 | ||||||
Term Loan Payable | |||||||||
Credit facilities | |||||||||
Initial term | 2 years | 5 years | |||||||
Number of extension options | item | 3 | ||||||||
Original loan term | 1 year | ||||||||
Extension option term | 1 year | ||||||||
Unsecured Term Notes Payable | |||||||||
Principal amount | $ 100,000 | $ 100,000 | |||||||
Term Loan Payable | One-Month LIBOR | |||||||||
Credit facilities | |||||||||
Debt Instrument interest rate description | one-month LIBOR | ||||||||
Credit spread (as a percent) | 1.00% | 1.10% | |||||||
Term Loan Payable | One-Month LIBOR | Minimum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 0.90% | ||||||||
Term Loan Payable | One-Month LIBOR | Maximum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 1.75% | ||||||||
Senior Unsecured Notes | |||||||||
Unsecured Term Notes Payable | |||||||||
Contingent periodic interest rate increase for failure to maintain investment grade credit rating | 1.00% | ||||||||
Prepayment applied to principal plus make-whole amount (as a percent) | 100.00% | ||||||||
Principal amount | $ 375,000 | $ 375,000 | |||||||
Number of loans | loan | 3 | 3 | |||||||
Senior Unsecured Notes | Minimum | |||||||||
Unsecured Term Notes Payable | |||||||||
Prepayment threshold (as a percent) | 5.00% | ||||||||
Interest rate swaps | |||||||||
Credit facilities | |||||||||
Number of agreements | segment | 2 | 2 | |||||||
New unsecured credit facility | Revolving credit facility | |||||||||
Credit facilities | |||||||||
Eligible unencumbered assets (in dollars) | $ 5,300,000 | $ 5,300,000 | |||||||
Amended unsecured revolving credit facility | Revolving credit facility | |||||||||
Credit facilities | |||||||||
Unsecured loan facility | 600,000 | 600,000 | |||||||
Size of the facility with the accordion feature (in dollars) | 1,400,000 | 1,400,000 | |||||||
Accordion feature | 800,000 | ||||||||
Number of extension options | Options | 2 | ||||||||
Maturity date | Feb. 1, 2022 | ||||||||
Extension option term | 6 months | ||||||||
Extension fee (as a percent) | 0.075% | ||||||||
Borrowings outstanding (in dollars) | $ 0 | $ 0 | |||||||
Amended unsecured revolving credit facility | Revolving credit facility | Minimum | |||||||||
Credit facilities | |||||||||
Facility fee (as a percent) | 0.125% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Maximum | |||||||||
Credit facilities | |||||||||
Facility fee (as a percent) | 0.30% | 0.30% | |||||||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | |||||||||
Credit facilities | |||||||||
Debt Instrument interest rate description | LIBOR | ||||||||
Credit spread (as a percent) | 1.00% | ||||||||
Facility fee (as a percent) | 0.20% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Minimum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 0.825% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Maximum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 1.55% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | |||||||||
Credit facilities | |||||||||
Debt Instrument interest rate description | Base Rate | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Minimum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 0.00% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Maximum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 0.55% | ||||||||
Series A issued November 2015 | Senior Unsecured Notes | |||||||||
Unsecured Term Notes Payable | |||||||||
Stated interest rate (as a percent) | 4.95% | 4.95% | |||||||
Series B issued November 2015 | Senior Unsecured Notes | |||||||||
Unsecured Term Notes Payable | |||||||||
Stated interest rate (as a percent) | 5.24% | 5.24% | |||||||
Term Loan Issued March 2017 | Term Loan Payable | |||||||||
Unsecured Term Notes Payable | |||||||||
Stated interest rate (as a percent) | 3.10% | 3.10% | |||||||
Term Loan Issued March 2017 | Term Loan Payable | One-Month LIBOR | |||||||||
Credit facilities | |||||||||
Debt Instrument interest rate description | one-month LIBOR | ||||||||
Credit spread (as a percent) | 1.00% |
Debt - Carrying Amount (Details
Debt - Carrying Amount (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |||||
Mar. 31, 2017USD ($) | Apr. 30, 2016USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | Feb. 28, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | |
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Gain on extinguishment of debt | $ (735) | $ 814 | |||||
Principal amount | $ 350,000 | $ 350,000 | |||||
Percentage of face amount of debt issued | 99.515% | 99.26% | |||||
Unamortized original issue discount | (3,873) | $ (1,563) | |||||
Unamortized deferred financing costs | (9,083) | (6,717) | |||||
Total unsecured notes and term loans payable, net | 1,262,044 | 916,720 | |||||
Interest rate swaps that were in a liability position | 0 | ||||||
Credit Risk Related Contingent Features | |||||||
Derivative liabilities | 0 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Remainder of 2019 | 12,895 | ||||||
2020 | 197,455 | ||||||
2021 | 255,648 | ||||||
2022 | 226,943 | ||||||
2023 | 287,156 | ||||||
2024 | 444,008 | ||||||
Thereafter | 1,901,527 | ||||||
Long-term Debt | 3,325,632 | ||||||
Scheduled principal | |||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Remainder of 2019 | 7,501 | ||||||
2020 | 29,607 | ||||||
2021 | 26,282 | ||||||
2022 | 26,114 | ||||||
2023 | 21,799 | ||||||
2024 | 17,094 | ||||||
Thereafter | 37,342 | ||||||
Long-term Debt | 165,739 | ||||||
Balloon payments | |||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Remainder of 2019 | 5,394 | ||||||
2020 | 167,848 | ||||||
2021 | 229,366 | ||||||
2022 | 200,829 | ||||||
2023 | 265,357 | ||||||
2024 | 426,914 | ||||||
Thereafter | 1,864,185 | ||||||
Long-term Debt | 3,159,893 | ||||||
Interest expense | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Gain on extinguishment of debt | $ 700 | ||||||
Interest rate swaps | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Number of agreements | segment | 2 | ||||||
Senior Unsecured Notes | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 375,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 1,075,000 | 725,000 | |||||
Senior Unsecured Notes | Series A issued November 2015 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.95% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 75,000 | 75,000 | |||||
Senior Unsecured Notes | Series B issued November 2015 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 5.24% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 100,000 | 100,000 | |||||
Senior Unsecured Notes | Series C issued April 2016 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.73% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 200,000 | 200,000 | |||||
Senior Unsecured Notes | Notes Issued March 2018 99.515 Percent Of Par | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.50% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 350,000 | 350,000 | |||||
Senior Unsecured Notes | Notes Issued February 2019 99.260 Percent Of Par | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.625% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 350,000 | ||||||
Term Loan Payable | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 100,000 | $ 100,000 | |||||
Term of notes | 2 years | 5 years | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 200,000 | 200,000 | |||||
Term Loan Payable | One-Month LIBOR | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | ||||||
Credit spread (as a percent) | 1.00% | 1.10% | |||||
Term Loan Payable | Term Loan Issued March 2017 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 3.10% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 100,000 | 100,000 | |||||
Term Loan Payable | Term Loan Issued March 2017 | One-Month LIBOR | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | ||||||
Credit spread (as a percent) | 1.00% | ||||||
Term Loan Payable | Term Loan issued April 2016 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 2.44% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 100,000 | 100,000 | |||||
Term Loan Payable | Term Loan issued April 2016 | One-Month LIBOR | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | ||||||
Credit spread (as a percent) | 1.10% | ||||||
Non-recourse net-lease mortgage notes: | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Retained non-amortizing notes | $ 147,000 | ||||||
Non-recourse net-lease mortgage notes: | Series 2018-1 Class A-3 Due October 2024 | |||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 49,771 | 49,958 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.40% | ||||||
Consolidated special purpose entities | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Aggregate investment amount | $ 2,700,000 | ||||||
Unamortized original issue discount | (399) | (455) | |||||
Unamortized deferred financing costs | (25,151) | (28,824) | |||||
Total unsecured notes and term loans payable, net | 2,025,082 | 2,008,592 | |||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | |||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 1,849,254 | 1,868,466 | |||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-3, Class A-1 Due November 2020 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 77,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 69,498 | 70,589 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.24% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 20141, Class A1 Due April 2021 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 120,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 116,800 | 117,250 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.21% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2015-1, Class A-1 Due April 2022 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 95,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 92,902 | 93,258 | |||||
Mortgage Loans on Real Estate, Interest Rate | 3.75% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-1, Class A-2 Due March 2023 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 102,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 90,300 | 91,841 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.65% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-2, Class A-2 Due July 2023 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 97,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 86,922 | 88,320 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.33% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-3, Class A-2 Due November 2023 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 100,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 90,258 | 91,675 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.21% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 20141, Class A2 Due April 2024 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 140,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 136,267 | 136,792 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.00% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2018-1 Class A-1 Due October 2024 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 150,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 147,159 | 149,484 | |||||
Mortgage Loans on Real Estate, Interest Rate | 3.96% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2018-1 Class A-3 Due October 2024 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 50,000 | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2015-1, Class A-2 Due April 2025 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 270,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 264,038 | 265,050 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.17% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2016-1, Class A-1 (2016) Due Oct 2026 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 200,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 189,321 | 192,187 | |||||
Mortgage Loans on Real Estate, Interest Rate | 3.96% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2016-1, Class A-2 (2017) Due April 2027 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 135,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 129,088 | 130,984 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.32% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2018-1 Class A-2 Due October 2027 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 228,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 223,682 | 227,215 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.29% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2018-1 Class A-4 Due October 2027 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 164,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 163,248 | 163,863 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.74% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Aggregate investment amount | $ 353,300 | ||||||
Defeased outstanding principal balance | 6,700 | ||||||
Defeasance payment (including expenses) | 7,400 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 201,378 | 169,405 | |||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $7,750 note issued February 2013 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 7,750 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 6,723 | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $6,500 note issued December 2012 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 6,500 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 5,425 | 5,560 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.806% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $16,100 note issued February 2014 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 16,100 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 14,079 | 14,388 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.83% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $13,000 note issued May 2012 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 13,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 10,818 | 11,081 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.195% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $26,000 note issued August 2012 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 26,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 21,789 | 22,315 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.05% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $6,400 note issued November 2012 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 6,400 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 5,364 | 5,496 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.707% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $11,895 note issued March 2013 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 11,895 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 10,087 | 10,328 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.7315% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $17,500 note issued August 2013 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 17,500 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 15,261 | 15,583 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.46% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $10,075 note issued March 2014 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 10,075 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 9,233 | 9,365 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.10% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $65,000 note issued June 2016 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 65,000 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 61,807 | 62,609 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.75% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $41,690 note issued March 2019 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 41,690 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 41,690 | ||||||
Mortgage Loans on Real Estate, Interest Rate | 4.80% | ||||||
Consolidated special purpose entities | Nonrecourse mortgage notes payable: | $6,944 notes issued March 2013 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 6,944 | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 5,825 | $ 5,957 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.50% | ||||||
Minimum | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Maximum number of months | 24 months | ||||||
Minimum | Term Loan Payable | One-Month LIBOR | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Credit spread (as a percent) | 0.90% | ||||||
Maximum | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Maximum number of months | 36 months | ||||||
Maximum | Term Loan Payable | One-Month LIBOR | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Credit spread (as a percent) | 1.75% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 11 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Nov. 30, 2018 | |
Common stock. | |||||
Gross proceeds from issuance of shares | $ 459,924 | $ 481,424 | |||
At the market | |||||
Common stock. | |||||
Shares issued and sold | 4,442,863 | 13,448,509 | 21,681,251 | ||
Weighted average share price | $ 36.28 | $ 34.20 | $ 32.52 | ||
Gross proceeds from issuance of shares | $ 161,200 | $ 459,900 | $ 705,100 | ||
Sales agents' commissions | (2,400) | (6,900) | (10,600) | ||
Other offering expenses | (100) | (300) | (700) | ||
Net proceeds from issuance of common stock | $ 158,700 | $ 452,700 | $ 693,800 | ||
2018-2 ATM Program | |||||
Common stock. | |||||
Shares issued and sold | 4,442,863 | 13,448,509 | 21,681,251 | ||
Weighted average share price | $ 36.28 | $ 34.20 | $ 32.52 | ||
Gross proceeds from issuance of shares | $ 161,200 | $ 459,900 | $ 705,100 | ||
Sales agents' commissions | (2,400) | (6,900) | (10,600) | ||
Other offering expenses | (100) | (300) | (700) | ||
Net proceeds from issuance of common stock | 158,700 | 452,700 | 693,800 | ||
Maximum value of shares that can be offered and sold | $ 750,000 | $ 750,000 | $ 750,000 | $ 750,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)period | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)period | Sep. 30, 2018USD ($) | |
Future minimum rental commitment | ||||
Right-of-use asset | $ 24,493,000 | $ 24,493,000 | ||
Other assets, net | us-gaap:OtherAssets | us-gaap:OtherAssets | ||
Operating lease liabilities | $ 30,042,000 | $ 30,042,000 | ||
Discount rate | 6.00% | 6.00% | ||
Lease agreement with unrelated third party | ||||
Commitments and Contingencies | ||||
Number of renewal periods at the option of the Company | period | 1 | 1 | ||
Renewal period | 5 years | 5 years | ||
Rent expense | $ 181,000 | $ 181,000 | $ 541,000 | $ 541,000 |
Future minimum rental commitment | ||||
Remainder of 2019 | 186,000 | 186,000 | ||
2020 | 748,000 | 748,000 | ||
2021 | 762,000 | 762,000 | ||
2022 | 776,000 | 776,000 | ||
2023 | 790,000 | 790,000 | ||
2024 | 804,000 | 804,000 | ||
Thereafter | 2,100,000 | 2,100,000 | ||
Right-of-use asset | 4,500,000 | 4,500,000 | ||
Operating lease liabilities | $ 5,100,000 | $ 5,100,000 | ||
Discount rate | 5.30% | 5.30% | ||
Ground leases | ||||
Future minimum rental commitment | ||||
Remainder of 2019 | $ 1,027,000 | $ 1,027,000 | ||
2020 | 2,363,000 | 2,363,000 | ||
2021 | 2,378,000 | 2,378,000 | ||
2022 | 2,333,000 | 2,333,000 | ||
2023 | 6,083,000 | 6,083,000 | ||
2024 | 2,012,000 | 2,012,000 | ||
Thereafter | 35,672,000 | 35,672,000 | ||
Operating lease liabilities | 24,973,000 | 24,973,000 | ||
Commitments to fund improvements to real estate properties | ||||
Commitments and Contingencies | ||||
Real estate property improvement commitments | 107,500,000 | 107,500,000 | ||
Real estate property improvement commitments, in Next Twelve Months | $ 101,800,000 | $ 101,800,000 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Derivatives [Line items] | ||
Fair value of derivative assets | $ 342,000 | |
Level 2 Fair Value | Carrying value | ||
Derivatives [Line items] | ||
Long-term debt obligations | 3,287,100,000 | $ 2,925,300,000 |
Level 2 Fair Value | Fair value | ||
Derivatives [Line items] | ||
Long-term debt obligations | $ 3,541,800,000 | 2,988,800,000 |
Other assets | ||
Derivatives [Line items] | ||
Fair value of derivative assets | 253,000 | |
Accrued expenses deferred revenue and other liabilities | ||
Derivatives [Line items] | ||
Fair value of derivative liability | $ 4,300,000 |