Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 03, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-36739 | |
Entity Registrant Name | STORE CAPITAL CORPORATION | |
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 | 272,674,305 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
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, 2021 | Dec. 31, 2020 |
Real estate investments: | ||
Land and improvements | $ 3,025,429 | $ 2,807,153 |
Buildings and improvements | 6,565,092 | 6,059,513 |
Intangible lease assets | 54,971 | 61,634 |
Total real estate investments | 9,645,492 | 8,928,300 |
Less accumulated depreciation and amortization | (1,098,560) | (939,591) |
Real estate investments, net | 8,546,932 | 7,988,709 |
Real estate investments held for sale, net | 26,553 | 22,304 |
Operating ground lease assets | 33,653 | 34,683 |
Loans and financing receivables, net | 649,414 | 650,321 |
Net investments | 9,256,552 | 8,696,017 |
Cash and cash equivalents | 37,018 | 166,381 |
Other assets, net | 131,428 | 141,942 |
Total assets | 9,424,998 | 9,004,340 |
Liabilities: | ||
Credit facility | 109,000 | |
Unsecured notes and term loans payable, net | 1,411,239 | 1,509,612 |
Non-recourse debt obligations of consolidated special purpose entities, net | 2,517,136 | 2,212,634 |
Dividends payable | 104,801 | 95,801 |
Operating lease liabilities | 38,499 | 39,317 |
Accrued expenses, deferred revenue and other liabilities | 131,931 | 131,198 |
Total liabilities | 4,312,606 | 3,988,562 |
Stockholders' equity: | ||
Common stock, $0.01 par value per share, 375,000,000 shares authorized, 272,211,360 and 266,112,676 shares issued and outstanding, respectively | 2,722 | 2,661 |
Capital in excess of par value | 5,682,456 | 5,475,889 |
Distributions in excess of retained earnings | (570,560) | (459,977) |
Accumulated other comprehensive loss | (2,226) | (2,795) |
Total stockholders' equity | 5,112,392 | 5,015,778 |
Total liabilities and stockholders' equity | $ 9,424,998 | $ 9,004,340 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
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 | 272,211,360 | 266,112,676 |
Common shares, outstanding shares | 272,211,360 | 266,112,676 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Rental revenues | $ 184,083 | $ 163,325 | $ 533,575 | $ 482,669 |
Interest income on loans and financing receivables | 12,973 | 11,021 | 37,196 | 34,374 |
Other income | 2,069 | 877 | 2,661 | 4,357 |
Total revenues | 199,125 | 175,223 | 573,432 | 521,400 |
Expenses: | ||||
Interest | 43,367 | 42,090 | 126,904 | 127,816 |
Property costs | 4,267 | 3,309 | 14,098 | 14,603 |
General and administrative | 17,456 | 14,729 | 58,551 | 35,742 |
Depreciation and amortization | 67,123 | 61,119 | 195,725 | 180,753 |
Provisions for impairment | 3,400 | 2,772 | 17,350 | 10,972 |
Total expenses | 135,613 | 124,019 | 412,628 | 369,886 |
Other income: | ||||
Net gain on dispositions of real estate | 10,721 | 3,537 | 32,271 | 6,814 |
Income from non-real estate, equity method investment | 1,872 | 804 | ||
Income before income taxes | 76,105 | 54,741 | 193,879 | 158,328 |
Income tax expense | 169 | 111 | 552 | 438 |
Net income | $ 75,936 | $ 54,630 | $ 193,327 | $ 157,890 |
Net income per share of common stock-basic and diluted | $ 0.28 | $ 0.21 | $ 0.72 | $ 0.63 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 271,273,253 | 255,308,189 | 269,329,141 | 248,999,635 |
Diluted (in shares) | 271,273,253 | 255,610,628 | 269,329,141 | 248,999,635 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income | $ 75,936 | $ 54,630 | $ 193,327 | $ 157,890 |
Other comprehensive income (loss): | ||||
Unrealized losses on cash flow hedges | (7) | (3) | (1,428) | |
Cash flow hedge losses reclassified to interest expense | 61 | 363 | 572 | 613 |
Total other comprehensive income (loss) | 61 | 356 | 569 | (815) |
Total comprehensive income | $ 75,997 | $ 54,986 | $ 193,896 | $ 157,075 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Cumulative Effect, Period of Adoption, AdjustmentDistributions in Excess of Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Capital in Excess of Par Value | Distributions in Excess of Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balance at Dec. 31, 2019 | $ 2,398 | $ 4,787,932 | $ (302,609) | $ (2,336) | $ 4,485,385 | ||
Balance (in shares) at Dec. 31, 2019 | 239,822,900 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 157,890 | 157,890 | |||||
Other comprehensive income (loss) | (815) | (815) | |||||
Issuance of common stock, net of costs | $ 209 | 540,299 | 540,508 | ||||
Issuance of common stock, net of costs (shares) | 20,928,023 | ||||||
Equity-based compensation | $ 6 | 1,638 | 5 | 1,649 | |||
Equity-based compensation (shares) | 732,511 | ||||||
Shares repurchased under stock compensation plan | (2,745) | (2,340) | (5,085) | ||||
Shares repurchased under stock compensation plan (in shares) | (134,980) | ||||||
Common dividends declared and dividend equivalents on restricted stock units | (268,343) | (268,343) | |||||
Balance at Sep. 30, 2020 | $ (2,465) | $ (2,465) | $ 2,613 | 5,327,124 | (417,862) | (3,151) | 4,908,724 |
Balance (in shares) at Sep. 30, 2020 | 261,348,454 | ||||||
Balance at Jun. 30, 2020 | $ 2,533 | 5,109,408 | (378,308) | (3,507) | 4,730,126 | ||
Balance (in shares) at Jun. 30, 2020 | 253,298,352 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 54,630 | 54,630 | |||||
Other comprehensive income (loss) | 356 | 356 | |||||
Issuance of common stock, net of costs | $ 80 | 214,972 | 215,052 | ||||
Issuance of common stock, net of costs (shares) | 8,033,069 | ||||||
Equity-based compensation | 2,744 | 2,744 | |||||
Equity-based compensation (shares) | 17,033 | ||||||
Common dividends declared and dividend equivalents on restricted stock units | (94,184) | (94,184) | |||||
Balance at Sep. 30, 2020 | $ (2,465) | $ (2,465) | $ 2,613 | 5,327,124 | (417,862) | (3,151) | 4,908,724 |
Balance (in shares) at Sep. 30, 2020 | 261,348,454 | ||||||
Balance at Dec. 31, 2020 | $ 2,661 | 5,475,889 | (459,977) | (2,795) | 5,015,778 | ||
Balance (in shares) at Dec. 31, 2020 | 266,112,676 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 193,327 | 193,327 | |||||
Other comprehensive income (loss) | 569 | 569 | |||||
Issuance of common stock, net of costs | $ 56 | 188,329 | 188,385 | ||||
Issuance of common stock, net of costs (shares) | 5,665,358 | ||||||
Equity-based compensation | $ 5 | 24,156 | 24,161 | ||||
Equity-based compensation (shares) | 716,724 | ||||||
Shares repurchased under stock compensation plan | (5,918) | (3,427) | (9,345) | ||||
Shares repurchased under stock compensation plan (in shares) | (283,398) | ||||||
Common dividends declared and dividend equivalents on restricted stock units | (300,483) | (300,483) | |||||
Balance at Sep. 30, 2021 | $ 2,722 | 5,682,456 | (570,560) | (2,226) | 5,112,392 | ||
Balance (in shares) at Sep. 30, 2021 | 272,211,360 | ||||||
Balance at Jun. 30, 2021 | $ 2,717 | 5,657,123 | (541,717) | (2,287) | 5,115,836 | ||
Balance (in shares) at Jun. 30, 2021 | 271,688,122 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 75,936 | 75,936 | |||||
Other comprehensive income (loss) | 61 | 61 | |||||
Issuance of common stock, net of costs | $ 5 | 18,866 | 18,871 | ||||
Issuance of common stock, net of costs (shares) | 534,267 | ||||||
Equity-based compensation | 6,467 | 6,467 | |||||
Equity-based compensation (shares) | (11,029) | ||||||
Common dividends declared and dividend equivalents on restricted stock units | (104,779) | (104,779) | |||||
Balance at Sep. 30, 2021 | $ 2,722 | $ 5,682,456 | $ (570,560) | $ (2,226) | $ 5,112,392 | ||
Balance (in shares) at Sep. 30, 2021 | 272,211,360 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Condensed Consolidated Statements of Stockholders' Equity | ||||
Stock issuance costs | $ 351 | $ 3,361 | $ 3,209 | $ 7,116 |
Common dividends declared per common share (in dollars per share) | $ 0.385 | $ 0.36 | $ 1.105 | $ 1.06 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net income | $ 193,327 | $ 157,890 |
Adjustments to net income: | ||
Depreciation and amortization | 195,725 | 180,753 |
Amortization of deferred financing costs and other noncash interest expense | 7,396 | 6,310 |
Amortization of equity-based compensation | 24,161 | 1,645 |
Provisions for impairment | 17,350 | 10,972 |
Net gain on dispositions of real estate | (32,271) | (6,814) |
Income from non-real estate, equity method investment | (804) | |
Noncash revenue and other | (6,931) | (57,098) |
Changes in operating assets and liabilities: | ||
Other assets | 15,821 | (1,265) |
Accrued expenses, deferred revenue and other liabilities | 1,004 | 6,259 |
Net cash provided by operating activities | 414,778 | 298,652 |
Investing activities | ||
Acquisition of and additions to real estate | (953,453) | (561,913) |
Investment in loans and financing receivables | (70,744) | (69,165) |
Collections of principal on loans and financing receivables | 13,903 | 32,125 |
Proceeds from dispositions of real estate | 270,897 | 100,955 |
Net cash used in investing activities | (739,397) | (497,998) |
Financing activities | ||
Borrowings under credit facility | 416,000 | 600,000 |
Repayments under credit facility | (307,000) | (600,000) |
Repayments under unsecured notes and term loans payable | (100,000) | |
Borrowings under non-recourse debt obligations of consolidated special purpose entities | 514,785 | |
Repayments under non-recourse debt obligations of consolidated special purpose entities | (207,823) | (26,783) |
Financing costs paid | (10,872) | (84) |
Proceeds from the issuance of common stock | 191,595 | 547,624 |
Stock issuance costs paid | (3,272) | (7,106) |
Shares repurchased under stock compensation plans | (9,345) | (5,085) |
Dividends paid | (293,182) | (259,119) |
Net cash provided by financing activities | 190,886 | 249,447 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (133,733) | 50,101 |
Cash, cash equivalents and restricted cash, beginning of period | 176,576 | 111,381 |
Cash, cash equivalents and restricted cash, end of period | 42,843 | 161,482 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 37,018 | 144,478 |
Restricted cash included in other assets | 5,825 | 17,004 |
Total cash, cash equivalents and restricted cash | 42,843 | 161,482 |
Supplemental disclosure of noncash investing and financing activities: | ||
Accrued tenant improvements included in real estate investments | 18,428 | 22,055 |
Seller financing provided to purchaser of real estate sold | 3,176 | |
Acquisition of real estate assets from borrowers under loans and financing receivables | 42,782 | 23,408 |
Accrued financing and stock issuance costs | 101 | 81 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest, net of amounts capitalized | 120,575 | 124,997 |
Cash paid during the period for income and franchise taxes | $ 2,134 | $ 2,109 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021 | |
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, 2020. 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, 2021 and December 31, 2020, these special purpose entities held assets totaling $8.1 billion and $7.7 billion, respectively, and had third-party liabilities totaling $2.6 billion and $2.3 billion, respectively. 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. At the beginning of 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 results 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 investment transactions are generally accounted for as operating leases of the land and mortgage loans on the buildings and improvements. Impact of the COVID-19 Pandemic Since the beginning of the novel coronavirus (COVID-19) pandemic in early 2020, the Company has provided to certain tenants rent deferral arrangements in the form of both short-term notes and lease modifications. The FASB provided accounting relief under which concessions provided to tenants in direct response to the COVID-19 pandemic are not required to be evaluated or accounted for as lease modifications in accordance with ASC Topic 842. The Company elected to apply this accounting relief to the rent deferral arrangements it has entered into with its tenants, which primarily affected the timing (but not the amount) of lease and loan payments due to the Company under its contracts; net revenue recognized under these deferral arrangements results in a corresponding increase in receivables that are included in other assets, net on the condensed consolidated balance sheets. For the three and nine months ended September 30, 2021, the Company recognized an additional $0.8 million and $5.8 million, respectively, of net revenue and collected $8.0 million and $19.2 million, respectively, of the receivables associated with these deferral arrangements. For the three and nine months ended September 30, 2020, the Company recognized $13.0 million and $51.2 million, respectively, of net revenue associated with deferral arrangements . 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 accounts for such an acquisition as a financing arrangement and records the investment in loans and financing receivables on the condensed consolidated balance sheet; should the purchase option later expire or be removed from the lease contract, the Company would derecognize the asset accounted for as a financing arrangement and recognize the transferred leased asset in real estate investments. 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 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. 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. As of September 30, 2021 and December 31, 2020, the Company had $37.3 million and $34.6 million, respectively, of straight-line operating lease receivables. 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. As of September 30, 2021, approximately 6.2% 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 (for most of these leases, the contingent rent payment is for a temporary period); historically, contingent rent recognized has been less than 2.0% 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 lease payments 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 or when collectibility is again deemed probable. 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. Such events or changes in circumstances may 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, discount rates, 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 Measurement During the three and nine months ended September 30, 2021, the Company recognized aggregate provisions for the impairment of real estate of $3.4 million and $15.4 million, respectively. For the assets impaired in 2021, the estimated fair value of the impaired real estate assets at the time of impairment was $59.2 million. The Company recognized an aggregate provision for the impairment of real estate of $2.0 million and $10.2 million during the three and nine months ended September 30, 2020, respectively. Accounting for Loans and Financing Receivables Loans Receivable – Classification, Cost and Revenue Recognition 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. 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, 2021 and December 31, 2020, the Company had loans receivable with an aggregate outstanding principal balance of $29.0 million and $39.9 million, respectively, on nonaccrual status. Direct Financing Receivables – Classification, Cost and Revenue Recognition 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. Impairment and Provision for Credit Losses Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC Topic 326) which changed how the Company measures credit losses for loans and financing receivables. In accordance with ASC Topic 326, the Company evaluates the collectibility of its loans and financing receivables at the time each financing receivable is issued and subsequently on a quarterly basis utilizing an expected credit loss model based on credit quality indicators. The primary credit quality indicator is the implied credit rating associated with each borrower, utilizing two categories, investment grade and non-investment grade. The Company computes implied credit ratings based on regularly received borrower financial statements using Moody’s Analytics RiskCalc. The Company considers the implied credit ratings, loan and financing receivable term to maturity and underlying collateral value and quality, if any, to calculate the expected credit loss over the remaining life of the receivable. For the nine months ended September 30, 2021, the Company recognized an estimated $2.0 million of provisions for credit losses related to its loans and financing receivables; the provision for credit losses is included in provisions for impairment on the condensed consolidated statements of income. 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. 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 $5.8 million and $10.2 million of restricted cash at September 30, 2021 and December 31, 2020, respectively, which are included in other assets, net, on the 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 is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of September 30, 2021, the Company had no derivative instruments in place. 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, 2021, the Company granted RSAs representing 179,931 shares of restricted common stock to its directors and key employees. During the same period, RSAs representing 228,106 shares of restricted stock vested and RSAs representing 11,029 shares were forfeited. In connection with the vesting of RSAs, the Company repurchased 63,341 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, 2021, the Company had 580,350 shares of restricted common stock outstanding. The Company’s RSUs granted in 2018 through 2021 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, 2021, the Company awarded 744,840 RSUs to its executive officers, 170,861 RSUs vested and 65,718 previously awarded RSUs were considered not earned. In connection with the vesting of 547,822 RSUs, the Company repurchased 220,057 shares during the nine months ended September 30, 2021 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, 2021, there were 1,806,436 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 2017 and tax returns filed for 2018 through 2021 are subject to examination by these jurisdictions. As of September 30, 2021, 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 expense. There was no accrual for interest or penalties at September 30, 2021 or December 31, 2020. 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, 2021 2020 2021 2020 Numerator: Net income $ 75,936 $ 54,630 $ 193,327 $ 157,890 Less: earnings attributable to unvested restricted shares (223) (234) (663) (546) Net income used in basic and diluted income per share $ 75,713 $ 54,396 $ 192,664 $ 157,344 Denominator: Weighted average common shares outstanding 271,859,415 255,942,052 269,937,837 249,479,941 Less: Weighted average number of shares of unvested restricted stock (586,162) (633,863) (608,696) (480,306) Weighted average shares outstanding used in basic income per share 271,273,253 255,308,189 269,329,141 248,999,635 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) — 302,439 — — Weighted average shares outstanding used in diluted income per share 271,273,253 255,610,628 269,329,141 248,999,635 (a) For the three months ended September 30, 2021 and 2020, excludes 212,808 shares and 127,940 shares and, for the nine months ended September 30, 2021 and 2020, excludes 226,652 and 77,076 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 March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur |
Investments
Investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments. | |
Investments | 3. Investments At September 30, 2021, STORE Capital had investments in 2,788 property locations representing 2,735 owned properties (of which 53 are accounted for as financing arrangements and 23 are accounted for as direct financing receivables), 24 properties where all the related land is subject to an operating ground lease and 29 properties which secure mortgage loans. The gross investment portfolio totaled $10.36 billion at September 30, 2021 and consisted of the gross acquisition cost of the real estate investments totaling $9.67 billion, loans and financing receivables with an aggregate carrying amount of $649.4 million and operating ground lease assets totaling $33.7 million. As of September 30, 2021, approximately 37% 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, 2021, 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, 2020 2,634 $ 9,639,766 Acquisition of and additions to real estate (a) (b) 229 995,391 Investment in loans and financing receivables (b) 7 70,744 Sales of real estate (82) (261,431) Principal collections on loans and financing receivables (b) — (56,685) Net change in operating ground lease assets (c) (1,030) Provisions for impairment (17,350) Other (11,477) Gross investments, September 30, 2021 (d) 10,357,928 Less accumulated depreciation and amortization (d) (1,101,376) Net investments, September 30, 2021 2,788 $ 9,256,552 (a) Excludes $20.0 million of tenant improvement advances disbursed in 2021 which were accrued as of December 31, 2020 and includes $0.6 million of interest capitalized to properties under construction. (b) Includes $42.8 million relating to three receivables which were repaid in full through a non-cash property acquisition/principal collection transaction in which the Company acquired the underlying collateral property (buildings and improvements); excludes the impact of the change in the presentation for certain financing receivables during the period. (c) Represents amortization recognized on operating ground lease assets during the nine months ended September 30, 2021. (d) Includes the dollar amount of investments ( $29.4 million) and the accumulated depreciation ( $2.8 million) related to real estate investments held for sale at September 30, 2021. 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, 2021 2020 2021 2020 Rental revenues: Operating leases (a)(c) $ 183,878 $ 163,394 $ 533,198 $ 482,882 Sublease income - operating ground leases (b) 702 496 2,107 1,600 Amortization of lease related intangibles and costs (497) (565) (1,730) (1,813) Total rental revenues $ 184,083 $ 163,325 $ 533,575 $ 482,669 Interest income on loans and financing receivables: Mortgage and other loans receivable (c) $ 6,796 $ 4,056 $ 17,916 $ 13,182 Sale-leaseback transactions accounted for as financing arrangements 4,459 3,940 13,019 11,329 Direct financing receivables 1,718 3,025 6,261 9,863 Total interest income on loans and financing receivables $ 12,973 $ 11,021 $ 37,196 $ 34,374 (a) For the three months ended September 30, 2021 and 2020, includes $681,000 and $618,000 , respectively, of property tax tenant reimbursement revenue and includes $3.3 million and $867,000 , respectively, of variable lease revenue. For the nine months ended September 30, 2021 and 2020, includes $1.9 million of property tax tenant reimbursement revenue and includes $9.5 million and $1.0 million, respectively, of variable lease revenue. (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. (c) For the three and nine months ended September 30, 2021, includes $0.8 million and $5.8 million, respectively, of revenue that has been deferred related to rent and financing relief arrangements granted as a result of the COVID-19 pandemic with a corresponding increase in receivables which are included in other assets, net on the condensed consolidated balance sheet. For the three and nine months ended September 30, 2020, includes $13.0 million and $51.2 million, respectively, of revenue related to COVID-19 rent and financing relief arrangements. The Company has elected to account for the lease and nonlease components in its lease contracts 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 approximately 540 customers geographically dispersed throughout 49 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, 2021. None of the Company’s customers represented more than 10% of the Company’s real estate investment portfolio at September 30, 2021, with the largest customer representing 3.1% of the total investment portfolio. On an annualized basis, as of September 30, 2021, the largest customer also represented 3.1% of the Company’s total investment portfolio revenues and the Company’s customers operated their businesses across approximately 830 concepts; the largest of these concepts represented 2.3% of the Company’s total investment portfolio revenues. 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, 2021 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments Investments Restaurants 748 $ 1,292,551 12 % Early childhood education centers 262 607,089 6 Health clubs 90 536,197 5 Automotive repair and maintenance 207 528,672 5 Metal fabrication 97 500,754 5 Furniture stores 59 414,351 4 Farm and ranch supply stores 41 377,293 4 All other service industries 958 3,707,188 36 All other retail industries 140 1,044,191 10 All other manufacturing industries 186 1,349,642 13 Total (a) 2,788 $ 10,357,928 100 % (a) Includes the dollar amount of investments ( $29.4 million) related to real estate investments held for sale at September 30, 2021. Real Estate Investments The weighted average remaining noncancelable lease term of the Company’s operating leases with its tenants at September 30, 2021 was approximately 13.5 years. Substantially all 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, 2021, 16 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, 2021, are as follows (in thousands): Remainder of 2021 $ 189,569 2022 780,079 2023 776,880 2024 768,707 2025 764,831 2026 757,641 Thereafter 6,351,290 Total future minimum rentals (a) $ 10,388,997 (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 details intangible lease assets and related accumulated amortization (in thousands): September 30, December 31, 2021 2020 In-place leases $ 35,522 $ 37,440 Ground lease-related intangibles 19,449 19,449 Above-market leases — 4,745 Total intangible lease assets 54,971 61,634 Accumulated amortization (24,449) (27,935) Net intangible lease assets $ 30,522 $ 33,699 Aggregate lease intangible amortization included in expense was $0.9 million and $1.0 million during the three months ended September 30, 2021 and 2020, respectively, and was $2.6 million and $3.1 million during the nine months ended September 30, 2021 and 2020, respectively. The amount amortized as a decrease to rental revenue for capitalized above-market lease intangibles was $0.3 million during the three months ended September 30, 2020, and was $0.2 million and $0.8 million during the nine months ended September 30, 2021 and 2020, respectively. Based on the net balance of the intangible assets at September 30, 2021, the aggregate amortization expense is expected to be $0.8 million for the remainder of 2021, $3.2 million in 2022, $2.8 million in 2023, $2.3 million in 2024, $1.8 million in 2025 and $1.7 million in 2026. The weighted average remaining amortization period is approximately seven years for the in-place lease intangibles and approximately 43 years for the amortizing ground lease-related intangibles. Operating Ground Lease Assets As of September 30, 2021, STORE Capital had operating ground lease assets aggregating $33.7 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 $830,000 and $609,000 during the three months ended September 30, 2021 and 2020, respectively, and $2.5 million and $1.8 million during the nine months ended September 30, 2021 and 2020, respectively. The Company also recognized, in rental revenues, sublease revenue associated with its operating ground leases of $702,000 and $496,000 for the three months ended September 30, 2021 and 2020, respectively, and $2.1 million and $1.6 million for the nine months ended September 30, 2021 and 2020, respectively. The future minimum lease payments to be paid under the operating ground leases as of September 30, 2021 were as follows (in thousands): Ground Ground Leases Leases Paid by Paid by STORE Capital's STORE Capital Tenants (a) Total Remainder of 2021 $ 100 $ 1,107 $ 1,207 2022 401 2,606 3,007 2023 4,149 2,628 6,777 2024 55 2,709 2,764 2025 57 2,394 2,451 2026 57 2,231 2,288 Thereafter 3,071 44,491 47,562 Total lease payments 7,890 58,166 66,056 Less imputed interest (2,988) (28,691) (31,679) Total operating lease liabilities - ground leases $ 4,902 $ 29,475 $ 34,377 (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 $58.2 million commitment, $19.0 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): Interest Maturity September 30, December 31, Type Rate (a) Date 2021 2020 Five mortgage loans receivable 7.97 % 2021 - 2023 $ 94,382 $ 101,793 Four mortgage loans receivable 8.55 % 2032 - 2037 14,502 14,673 Fifteen mortgage loans receivable (b) 8.60 % 2051 - 2060 214,529 185,525 Total mortgage loans receivable 323,413 301,991 Equipment and other loans receivable 8.21 % 2021 - 2027 26,644 31,636 Total principal amount outstanding—loans receivable 350,057 333,627 Unamortized loan origination costs 1,005 1,206 Sale-leaseback transactions accounted for as financing arrangements (c) 7.84 % 2034 - 2043 227,666 204,469 Direct financing receivables 78,714 117,047 Allowance for credit and loan losses (d) (8,028) (6,028) Total loans and financing receivables $ 649,414 $ 650,321 (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 sale-leaseback 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 2024 and 2039. (d) Balance includes $2.5 million of loan loss reserves recognized prior to December 31, 2019, $2.5 million of credit loss reserves recognized upon the adoption of ASC Topic 326 on January 1, 2020 and $3.0 million of credit losses recognized since the adoption of ASC Topic 326. Loans Receivable At September 30, 2021, the Company held 45 loans receivable with an aggregate carrying amount of $344.7 million. Twenty-four 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 2024) that generally require monthly interest-only payments with a balloon payment at maturity. The remaining mortgage loans receivable generally require the borrowers to make monthly principal and interest payments based on a 40-year amortization period with balloon payments, if any, at maturity or earlier upon the occurrence of certain other events. The equipment and other loans 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 2021 $ 842 $ 26,136 $ 26,978 2022 1,826 9,201 11,027 2023 1,786 81,631 83,417 2024 1,857 — 1,857 2025 1,748 510 2,258 2026 1,794 359 2,153 Thereafter 172,134 50,233 222,367 Total principal payments $ 181,987 $ 168,070 $ 350,057 Sale-Leaseback Transactions Accounted for as Financing Arrangements As of September 30, 2021 and December 31, 2020, the Company had $227.7 million and $204.5 million, respectively, 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 minimum rentals to be received under these agreements (which will be reflected in interest income) as of September 30, 2021, were as follows (in thousands): Remainder of 2021 $ 4,610 2022 18,208 2023 18,284 2024 18,419 2025 18,559 2026 18,653 Thereafter 233,667 Total future scheduled payments $ 330,400 Direct Financing Receivables As of September 30, 2021 and December 31, 2020, the Company had $78.7 million and $117.0 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, 2021 2020 Minimum lease payments receivable $ 161,330 $ 242,694 Estimated residual value of leased assets 8,938 14,800 Unearned income (91,554) (140,447) Net investment $ 78,714 $ 117,047 As of September 30, 2021, the future minimum lease payments to be received under the direct financing lease receivables are expected to be $2.0 million for the remainder 2021, average million Provision for Credit Losses In accordance with ASC Topic 326, the Company evaluates the collectibility of its loans and financing receivables at the time each financing receivable is issued and subsequently on a quarterly basis utilizing an expected credit loss model based on credit quality indicators. The Company groups individual loans and financing receivables based on the implied credit rating associated with each borrower. Based on credit quality indicators as of September 30, 2021, $97.2 million of loans and financing receivables were categorized as investment grade and $559.2 million were categorized as non-investment grade. During the nine months ended September 30, 2021, there were $2.0 million of provisions for credit losses recognized, no write-offs charged against the allowance and no recoveries of amounts previously written off. As of September 30, 2021, the year of origination for loans and financing receivables with a credit quality indicator of investment grade was none in 2021 and 2020 million prior to 2017. The year of origination for loans and financing receivables with a credit quality indicator of non-investment grade was $64.8 million in 2021, $137.9 million in 2020, $181.7 million in 2019, $27.5 million in 2018, $10.3 million in 2017 and $137.0 million prior to 2017. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
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. In June 2021, the Company amended the credit facility; the amended facility has an immediate availability of $600 million and an accordion feature of $1.0 billion, which allows the size of the facility to be increased up to $1.6 billion. The facility matures in June 2025 and includes two six-month extension options, subject to certain conditions and the payment of a 0.0625% extension fee. At September 30, 2021, the Company had $109 million of 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 0.70% to 1.40%, or (2) the Base Rate, as defined in the credit agreement, plus a credit spread ranging from 0.00% to 0.40%. 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 0.10% to 0.30 %. Currently, the applicable credit spread for LIBOR-based borrowings is 0.85% 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 and secured borrowing ratios. Certain of these ratios are based on the Company’s pool of unencumbered assets, which aggregated approximately $6.5 billion at September 30, 2021. The facility is recourse to the Company and, as of September 30, 2021, the Company was in compliance with the covenants under the facility. At September 30, 2021 and December 31, 2020, unamortized financing costs related to the Company’s credit facility totaled $4.0 million and $1.1 million, respectively, and are included in other assets, net, on the condensed consolidated balance sheets. Unsecured Notes and Term Loans Payable, net In March 2018, February 2019 and November 2020, the Company completed public offerings of $350 million each in aggregate principal amount of ten-year, senior unsecured notes (Public Notes). The Public Notes have coupon rates of 4.50%, 4.625% and 2.75%, respectively, and interest is payable semi-annually in arrears in March and September of each year for the 2018 and 2019 Public Notes and May and November of each year for the 2020 Public Notes. The notes were issued at 99.515%, 99.260% and 99.558%, 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, 2021, 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, 2021, 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. The Company repaid the term loan at maturity in April 2021 and the related swap agreements expired. The Company’s senior unsecured notes and term loans payable are summarized below (dollars in thousands): Maturity Interest September 30, December 31, Date Rate 2021 2020 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 % 350,000 350,000 Public Notes issued November 2020 Nov. 2030 2.75 % 350,000 350,000 Total notes payable 1,425,000 1,425,000 Term Loans: Term Loan issued April 2016 — 100,000 Total term loans — 100,000 Unamortized discount (4,430) (4,867) Unamortized deferred financing costs (9,331) (10,521) Total unsecured notes and term loans payable, net $ 1,411,239 $ 1,509,612 Non-recourse Debt Obligations of Consolidated Special Purpose Entities, net During 2012, the Company implemented its 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 issued under this program are generally segregated into Class A amortizing notes and Class B non-amortizing notes. The Company has retained the Class B notes which aggregate $190.0 million at September 30, 2021. 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 In conjunction with the June 2021 issuance of the STORE Master Funding Series 2021-1 notes, the Company prepaid, without penalty, the Series 2013-1, Class A-2 notes in May 2021 and the Series 2013-2, Class A-2 notes in July 2021; these notes had an aggregate outstanding balance of $170.0 million at the time of prepayment, were scheduled to mature in 2023, and bore interest rates of 4.65% and 5.33%, respectively. During the three and nine months ended September 30, 2021, the Company recognized $0.6 million and $1.1 million, respectively, of accelerated amortization of deferred financing costs associated with the Series 2013-1 and Series 2013-2 debt prepayments. 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 $325.4 million at September 30, 2021. 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. 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 2021 2020 Non-recourse net-lease mortgage notes: $102,000 Series 2013-1, Class A-2 4.65 % $ — $ 87,607 $97,000 Series 2013-2, Class A-2 5.33 % — 84,473 $100,000 Series 2013-3, Class A-2 Nov. 2023 5.21 % 86,209 87,775 $140,000 Series 2014-1, Class A-2 Apr. 2024 5.00 % 134,867 135,392 $150,000 Series 2018-1, Class A-1 Oct. 2024 3.96 % 142,426 143,552 $50,000 Series 2018-1, Class A-3 Oct. 2024 4.40 % 49,042 49,417 $270,000 Series 2015-1, Class A-2 Apr. 2025 4.17 % 261,337 262,350 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 3.96 % 181,246 184,350 $82,000 Series 2019-1, Class A-1 Nov. 2026 2.82 % 78,906 80,172 $46,000 Series 2019-1, Class A-3 Nov. 2026 3.32 % 45,578 45,751 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 4.32 % 123,745 125,798 $228,000 Series 2018-1, Class A-2 Oct. 2027 4.29 % 216,488 218,198 $164,000 Series 2018-1, Class A-4 Oct. 2027 4.74 % 160,857 162,087 $168,500 Series 2021-1, Class A-1 Jun. 2028 2.12 % 168,289 — $89,000 Series 2021-1, Class A-3 Jun. 2028 2.86 % 88,889 — $168,500 Series 2021-1, Class A-2 Jun. 2033 2.96 % 168,289 — $89,000 Series 2021-1, Class A-4 Jun. 2033 3.70 % 88,889 — $244,000 Series 2019-1, Class A-2 Nov. 2034 3.65 % 234,793 238,559 $136,000 Series 2019-1, Class A-4 Nov. 2034 4.49 % 134,753 135,263 Total non-recourse net-lease mortgage notes 2,364,603 2,040,744 Non-recourse mortgage notes: $16,100 note issued February 2014 4.83 % — 13,539 $13,000 note issued May 2012 May 2022 5.195 % 10,062 10,355 $26,000 note issued August 2012 Sept. 2022 5.05 % 20,285 20,867 $6,400 note issued November 2012 Dec. 2022 4.707 % 4,988 5,133 $11,895 note issued March 2013 Apr. 2023 4.7315 % 9,400 9,666 $17,500 note issued August 2013 Sept. 2023 5.46 % 14,336 14,695 $10,075 note issued March 2014 Apr. 2024 5.10 % 8,858 9,004 $65,000 note issued June 2016 Jul. 2026 4.75 % 59,527 60,409 $41,690 note issued March 2019 Mar. 2029 4.80 % 41,445 41,690 $6,944 notes issued March 2013 Apr. 2038 4.50 % (a) 5,405 5,549 $6,350 notes issued March 2019 (assumed in December 2020) Apr. 2049 4.64 % 6,134 6,215 Total non-recourse mortgage notes 180,440 197,122 Unamortized discount (530) (386) Unamortized deferred financing costs (27,377) (24,846) Total non-recourse debt obligations of consolidated special purpose entities, net $ 2,517,136 $ 2,212,634 (a) Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate. Long-term Debt Maturity Schedule As of September 30, 2021, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are as follows (in thousands): Scheduled Principal Balloon Payments Payments Total Remainder of 2021 $ 7,563 $ — $ 7,563 2022 26,661 109,114 135,775 2023 25,492 103,721 129,213 2024 22,331 426,914 449,245 2025 20,037 256,612 276,649 2026 17,926 532,142 550,068 Thereafter 40,208 2,381,322 2,421,530 $ 160,218 $ 3,809,825 $ 3,970,043 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity | |
Stockholders' Equity | 5. Stockholders’ Equity In November 2020, the Company established its fifth “at the market” equity distribution program, or ATM program, pursuant to which, from time to time, it may offer and sell up to $900 million of registered shares of common stock through a group of banks acting as its sales agents (the 2020 ATM Program). The following tables outline the common stock issuances under the 2020 ATM Program (in millions except share and per share information): Three Months Ended September 30, 2021 Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds 534,267 $ 35.98 $ 19.2 $ (0.3) $ - $ 18.9 Nine Months Ended September 30, 2021 Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds 5,665,358 $ 33.82 $ 191.6 $ (2.9) $ (0.3) $ 188.4 Inception of Program Through September 30, 2021 Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds 9,184,418 $ 33.17 $ 304.6 $ (4.6) $ (0.5) $ 299.5 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
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, 2021, the Company had commitments to its customers to fund improvements to owned or mortgaged real estate properties totaling approximately $143.9 million, of which $128.7 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 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, 2021 | |
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 a liability of $0.4 million at December 31, 2020; the Company had no derivatives outstanding at September 30, 2021. 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, 2021 and December 31, 2020. 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, 2021, these debt obligations had a carrying value of $3,928.4 million and an estimated fair value of $4,243.9 million. At December 31, 2020, these debt obligations had an aggregate carrying value of $3,722.2 million and an estimated fair value of $4,047.6 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
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, 2020. 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, 2021 and December 31, 2020, these special purpose entities held assets totaling $8.1 billion and $7.7 billion, respectively, and had third-party liabilities totaling $2.6 billion and $2.3 billion, respectively. 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. At the beginning of 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 results 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 investment transactions are generally accounted for as operating leases of the land and mortgage loans on the buildings and improvements. |
Impact of the COVID-19 Pandemic | Impact of the COVID-19 Pandemic Since the beginning of the novel coronavirus (COVID-19) pandemic in early 2020, the Company has provided to certain tenants rent deferral arrangements in the form of both short-term notes and lease modifications. The FASB provided accounting relief under which concessions provided to tenants in direct response to the COVID-19 pandemic are not required to be evaluated or accounted for as lease modifications in accordance with ASC Topic 842. The Company elected to apply this accounting relief to the rent deferral arrangements it has entered into with its tenants, which primarily affected the timing (but not the amount) of lease and loan payments due to the Company under its contracts; net revenue recognized under these deferral arrangements results in a corresponding increase in receivables that are included in other assets, net on the condensed consolidated balance sheets. For the three and nine months ended September 30, 2021, the Company recognized an additional $0.8 million and $5.8 million, respectively, of net revenue and collected $8.0 million and $19.2 million, respectively, of the receivables associated with these deferral arrangements. For the three and nine months ended September 30, 2020, the Company recognized $13.0 million and $51.2 million, respectively, of net revenue associated with deferral arrangements . |
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 accounts for such an acquisition as a financing arrangement and records the investment in loans and financing receivables on the condensed consolidated balance sheet; should the purchase option later expire or be removed from the lease contract, the Company would derecognize the asset accounted for as a financing arrangement and recognize the transferred leased asset in real estate investments. 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 |
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. 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. As of September 30, 2021 and December 31, 2020, the Company had $37.3 million and $34.6 million, respectively, of straight-line operating lease receivables. 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. As of September 30, 2021, approximately 6.2% 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 (for most of these leases, the contingent rent payment is for a temporary period); historically, contingent rent recognized has been less than 2.0% 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 lease payments 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 or when collectibility is again deemed probable. 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. Such events or changes in circumstances may 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, discount rates, 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 Measurement During the three and nine months ended September 30, 2021, the Company recognized aggregate provisions for the impairment of real estate of $3.4 million and $15.4 million, respectively. For the assets impaired in 2021, the estimated fair value of the impaired real estate assets at the time of impairment was $59.2 million. The Company recognized an aggregate provision for the impairment of real estate of $2.0 million and $10.2 million during the three and nine months ended September 30, 2020, respectively. |
Accounting for Loans and Financing Receivables | Accounting for Loans and Financing Receivables Loans Receivable – Classification, Cost and Revenue Recognition 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. 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, 2021 and December 31, 2020, the Company had loans receivable with an aggregate outstanding principal balance of $29.0 million and $39.9 million, respectively, on nonaccrual status. Direct Financing Receivables – Classification, Cost and Revenue Recognition 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. Impairment and Provision for Credit Losses Effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASC Topic 326) which changed how the Company measures credit losses for loans and financing receivables. In accordance with ASC Topic 326, the Company evaluates the collectibility of its loans and financing receivables at the time each financing receivable is issued and subsequently on a quarterly basis utilizing an expected credit loss model based on credit quality indicators. The primary credit quality indicator is the implied credit rating associated with each borrower, utilizing two categories, investment grade and non-investment grade. The Company computes implied credit ratings based on regularly received borrower financial statements using Moody’s Analytics RiskCalc. The Company considers the implied credit ratings, loan and financing receivable term to maturity and underlying collateral value and quality, if any, to calculate the expected credit loss over the remaining life of the receivable. For the nine months ended September 30, 2021, the Company recognized an estimated $2.0 million of provisions for credit losses related to its loans and financing receivables; the provision for credit losses is included in provisions for impairment on the condensed consolidated statements of income. |
Direct Financing Receivables - Classification, Cost and Revenue Recognition | Direct Financing Receivables – Classification, Cost and Revenue Recognition 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 | 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. 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 $5.8 million and $10.2 million of restricted cash at September 30, 2021 and December 31, 2020, respectively, which are included in other assets, net, on the 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 is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of September 30, 2021, the Company had no derivative instruments in place. |
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, 2021, the Company granted RSAs representing 179,931 shares of restricted common stock to its directors and key employees. During the same period, RSAs representing 228,106 shares of restricted stock vested and RSAs representing 11,029 shares were forfeited. In connection with the vesting of RSAs, the Company repurchased 63,341 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, 2021, the Company had 580,350 shares of restricted common stock outstanding. The Company’s RSUs granted in 2018 through 2021 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, 2021, the Company awarded 744,840 RSUs to its executive officers, 170,861 RSUs vested and 65,718 previously awarded RSUs were considered not earned. In connection with the vesting of 547,822 RSUs, the Company repurchased 220,057 shares during the nine months ended September 30, 2021 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, 2021, there were 1,806,436 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 2017 and tax returns filed for 2018 through 2021 are subject to examination by these jurisdictions. As of September 30, 2021, 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 expense. There was no accrual for interest or penalties at September 30, 2021 or December 31, 2020. |
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, 2021 2020 2021 2020 Numerator: Net income $ 75,936 $ 54,630 $ 193,327 $ 157,890 Less: earnings attributable to unvested restricted shares (223) (234) (663) (546) Net income used in basic and diluted income per share $ 75,713 $ 54,396 $ 192,664 $ 157,344 Denominator: Weighted average common shares outstanding 271,859,415 255,942,052 269,937,837 249,479,941 Less: Weighted average number of shares of unvested restricted stock (586,162) (633,863) (608,696) (480,306) Weighted average shares outstanding used in basic income per share 271,273,253 255,308,189 269,329,141 248,999,635 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) — 302,439 — — Weighted average shares outstanding used in diluted income per share 271,273,253 255,610,628 269,329,141 248,999,635 (a) For the three months ended September 30, 2021 and 2020, excludes 212,808 shares and 127,940 shares and, for the nine months ended September 30, 2021 and 2020, excludes 226,652 and 77,076 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 March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Summary of Significant Accounting Principles | |
Reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net income $ 75,936 $ 54,630 $ 193,327 $ 157,890 Less: earnings attributable to unvested restricted shares (223) (234) (663) (546) Net income used in basic and diluted income per share $ 75,713 $ 54,396 $ 192,664 $ 157,344 Denominator: Weighted average common shares outstanding 271,859,415 255,942,052 269,937,837 249,479,941 Less: Weighted average number of shares of unvested restricted stock (586,162) (633,863) (608,696) (480,306) Weighted average shares outstanding used in basic income per share 271,273,253 255,308,189 269,329,141 248,999,635 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) — 302,439 — — Weighted average shares outstanding used in diluted income per share 271,273,253 255,610,628 269,329,141 248,999,635 (a) For the three months ended September 30, 2021 and 2020, excludes 212,808 shares and 127,940 shares and, for the nine months ended September 30, 2021 and 2020, excludes 226,652 and 77,076 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments. | |
Schedule of gross real estate and loan activity | During the nine months ended September 30, 2021, 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, 2020 2,634 $ 9,639,766 Acquisition of and additions to real estate (a) (b) 229 995,391 Investment in loans and financing receivables (b) 7 70,744 Sales of real estate (82) (261,431) Principal collections on loans and financing receivables (b) — (56,685) Net change in operating ground lease assets (c) (1,030) Provisions for impairment (17,350) Other (11,477) Gross investments, September 30, 2021 (d) 10,357,928 Less accumulated depreciation and amortization (d) (1,101,376) Net investments, September 30, 2021 2,788 $ 9,256,552 (a) Excludes $20.0 million of tenant improvement advances disbursed in 2021 which were accrued as of December 31, 2020 and includes $0.6 million of interest capitalized to properties under construction. (b) Includes $42.8 million relating to three receivables which were repaid in full through a non-cash property acquisition/principal collection transaction in which the Company acquired the underlying collateral property (buildings and improvements); excludes the impact of the change in the presentation for certain financing receivables during the period. (c) Represents amortization recognized on operating ground lease assets during the nine months ended September 30, 2021. (d) Includes the dollar amount of investments ( $29.4 million) and the accumulated depreciation ( $2.8 million) related to real estate investments held for sale at September 30, 2021. |
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, 2021 2020 2021 2020 Rental revenues: Operating leases (a)(c) $ 183,878 $ 163,394 $ 533,198 $ 482,882 Sublease income - operating ground leases (b) 702 496 2,107 1,600 Amortization of lease related intangibles and costs (497) (565) (1,730) (1,813) Total rental revenues $ 184,083 $ 163,325 $ 533,575 $ 482,669 Interest income on loans and financing receivables: Mortgage and other loans receivable (c) $ 6,796 $ 4,056 $ 17,916 $ 13,182 Sale-leaseback transactions accounted for as financing arrangements 4,459 3,940 13,019 11,329 Direct financing receivables 1,718 3,025 6,261 9,863 Total interest income on loans and financing receivables $ 12,973 $ 11,021 $ 37,196 $ 34,374 (a) For the three months ended September 30, 2021 and 2020, includes $681,000 and $618,000 , respectively, of property tax tenant reimbursement revenue and includes $3.3 million and $867,000 , respectively, of variable lease revenue. For the nine months ended September 30, 2021 and 2020, includes $1.9 million of property tax tenant reimbursement revenue and includes $9.5 million and $1.0 million, respectively, of variable lease revenue. (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. (c) For the three and nine months ended September 30, 2021, includes $0.8 million and $5.8 million, respectively, of revenue that has been deferred related to rent and financing relief arrangements granted as a result of the COVID-19 pandemic with a corresponding increase in receivables which are included in other assets, net on the condensed consolidated balance sheet. For the three and nine months ended September 30, 2020, includes $13.0 million and $51.2 million, respectively, of revenue related to COVID-19 rent and financing relief arrangements. |
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, 2021 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments Investments Restaurants 748 $ 1,292,551 12 % Early childhood education centers 262 607,089 6 Health clubs 90 536,197 5 Automotive repair and maintenance 207 528,672 5 Metal fabrication 97 500,754 5 Furniture stores 59 414,351 4 Farm and ranch supply stores 41 377,293 4 All other service industries 958 3,707,188 36 All other retail industries 140 1,044,191 10 All other manufacturing industries 186 1,349,642 13 Total (a) 2,788 $ 10,357,928 100 % (a) Includes the dollar amount of investments ( $29.4 million) related to real estate investments held for sale at September 30, 2021. |
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, 2021, are as follows (in thousands): Remainder of 2021 $ 189,569 2022 780,079 2023 776,880 2024 768,707 2025 764,831 2026 757,641 Thereafter 6,351,290 Total future minimum rentals (a) $ 10,388,997 (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 details intangible lease assets and related accumulated amortization (in thousands): September 30, December 31, 2021 2020 In-place leases $ 35,522 $ 37,440 Ground lease-related intangibles 19,449 19,449 Above-market leases — 4,745 Total intangible lease assets 54,971 61,634 Accumulated amortization (24,449) (27,935) Net intangible lease assets $ 30,522 $ 33,699 |
Summary of future minimum lease payments | The future minimum lease payments to be paid under the operating ground leases as of September 30, 2021 were as follows (in thousands): Ground Ground Leases Leases Paid by Paid by STORE Capital's STORE Capital Tenants (a) Total Remainder of 2021 $ 100 $ 1,107 $ 1,207 2022 401 2,606 3,007 2023 4,149 2,628 6,777 2024 55 2,709 2,764 2025 57 2,394 2,451 2026 57 2,231 2,288 Thereafter 3,071 44,491 47,562 Total lease payments 7,890 58,166 66,056 Less imputed interest (2,988) (28,691) (31,679) Total operating lease liabilities - ground leases $ 4,902 $ 29,475 $ 34,377 (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 $58.2 million commitment, $19.0 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): Interest Maturity September 30, December 31, Type Rate (a) Date 2021 2020 Five mortgage loans receivable 7.97 % 2021 - 2023 $ 94,382 $ 101,793 Four mortgage loans receivable 8.55 % 2032 - 2037 14,502 14,673 Fifteen mortgage loans receivable (b) 8.60 % 2051 - 2060 214,529 185,525 Total mortgage loans receivable 323,413 301,991 Equipment and other loans receivable 8.21 % 2021 - 2027 26,644 31,636 Total principal amount outstanding—loans receivable 350,057 333,627 Unamortized loan origination costs 1,005 1,206 Sale-leaseback transactions accounted for as financing arrangements (c) 7.84 % 2034 - 2043 227,666 204,469 Direct financing receivables 78,714 117,047 Allowance for credit and loan losses (d) (8,028) (6,028) Total loans and financing receivables $ 649,414 $ 650,321 (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 sale-leaseback 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 2024 and 2039. (d) Balance includes $2.5 million of loan loss reserves recognized prior to December 31, 2019, $2.5 million of credit loss reserves recognized upon the adoption of ASC Topic 326 on January 1, 2020 and $3.0 million of credit losses recognized since the adoption of ASC Topic 326. |
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 2021 $ 842 $ 26,136 $ 26,978 2022 1,826 9,201 11,027 2023 1,786 81,631 83,417 2024 1,857 — 1,857 2025 1,748 510 2,258 2026 1,794 359 2,153 Thereafter 172,134 50,233 222,367 Total principal payments $ 181,987 $ 168,070 $ 350,057 |
Schedule of future payments to be received under sale-leaseback transactions accounted for as financing arrangements | The scheduled future minimum rentals to be received under these agreements (which will be reflected in interest income) as of September 30, 2021, were as follows (in thousands): Remainder of 2021 $ 4,610 2022 18,208 2023 18,284 2024 18,419 2025 18,559 2026 18,653 Thereafter 233,667 Total future scheduled payments $ 330,400 |
Schedule of the components of the investments accounted for as direct financing receivables | As of September 30, 2021 and December 31, 2020, the Company had $78.7 million and $117.0 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, 2021 2020 Minimum lease payments receivable $ 161,330 $ 242,694 Estimated residual value of leased assets 8,938 14,800 Unearned income (91,554) (140,447) Net investment $ 78,714 $ 117,047 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Schedule of maturities of long-term debt | As of September 30, 2021, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are as follows (in thousands): Scheduled Principal Balloon Payments Payments Total Remainder of 2021 $ 7,563 $ — $ 7,563 2022 26,661 109,114 135,775 2023 25,492 103,721 129,213 2024 22,331 426,914 449,245 2025 20,037 256,612 276,649 2026 17,926 532,142 550,068 Thereafter 40,208 2,381,322 2,421,530 $ 160,218 $ 3,809,825 $ 3,970,043 |
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 2021 2020 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 % 350,000 350,000 Public Notes issued November 2020 Nov. 2030 2.75 % 350,000 350,000 Total notes payable 1,425,000 1,425,000 Term Loans: Term Loan issued April 2016 — 100,000 Total term loans — 100,000 Unamortized discount (4,430) (4,867) Unamortized deferred financing costs (9,331) (10,521) Total unsecured notes and term loans payable, net $ 1,411,239 $ 1,509,612 |
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 2021 2020 Non-recourse net-lease mortgage notes: $102,000 Series 2013-1, Class A-2 4.65 % $ — $ 87,607 $97,000 Series 2013-2, Class A-2 5.33 % — 84,473 $100,000 Series 2013-3, Class A-2 Nov. 2023 5.21 % 86,209 87,775 $140,000 Series 2014-1, Class A-2 Apr. 2024 5.00 % 134,867 135,392 $150,000 Series 2018-1, Class A-1 Oct. 2024 3.96 % 142,426 143,552 $50,000 Series 2018-1, Class A-3 Oct. 2024 4.40 % 49,042 49,417 $270,000 Series 2015-1, Class A-2 Apr. 2025 4.17 % 261,337 262,350 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 3.96 % 181,246 184,350 $82,000 Series 2019-1, Class A-1 Nov. 2026 2.82 % 78,906 80,172 $46,000 Series 2019-1, Class A-3 Nov. 2026 3.32 % 45,578 45,751 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 4.32 % 123,745 125,798 $228,000 Series 2018-1, Class A-2 Oct. 2027 4.29 % 216,488 218,198 $164,000 Series 2018-1, Class A-4 Oct. 2027 4.74 % 160,857 162,087 $168,500 Series 2021-1, Class A-1 Jun. 2028 2.12 % 168,289 — $89,000 Series 2021-1, Class A-3 Jun. 2028 2.86 % 88,889 — $168,500 Series 2021-1, Class A-2 Jun. 2033 2.96 % 168,289 — $89,000 Series 2021-1, Class A-4 Jun. 2033 3.70 % 88,889 — $244,000 Series 2019-1, Class A-2 Nov. 2034 3.65 % 234,793 238,559 $136,000 Series 2019-1, Class A-4 Nov. 2034 4.49 % 134,753 135,263 Total non-recourse net-lease mortgage notes 2,364,603 2,040,744 Non-recourse mortgage notes: $16,100 note issued February 2014 4.83 % — 13,539 $13,000 note issued May 2012 May 2022 5.195 % 10,062 10,355 $26,000 note issued August 2012 Sept. 2022 5.05 % 20,285 20,867 $6,400 note issued November 2012 Dec. 2022 4.707 % 4,988 5,133 $11,895 note issued March 2013 Apr. 2023 4.7315 % 9,400 9,666 $17,500 note issued August 2013 Sept. 2023 5.46 % 14,336 14,695 $10,075 note issued March 2014 Apr. 2024 5.10 % 8,858 9,004 $65,000 note issued June 2016 Jul. 2026 4.75 % 59,527 60,409 $41,690 note issued March 2019 Mar. 2029 4.80 % 41,445 41,690 $6,944 notes issued March 2013 Apr. 2038 4.50 % (a) 5,405 5,549 $6,350 notes issued March 2019 (assumed in December 2020) Apr. 2049 4.64 % 6,134 6,215 Total non-recourse mortgage notes 180,440 197,122 Unamortized discount (530) (386) Unamortized deferred financing costs (27,377) (24,846) Total non-recourse debt obligations of consolidated special purpose entities, net $ 2,517,136 $ 2,212,634 (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, 2021 | |
Stockholders' Equity | |
Common stock issuance | The following tables outline the common stock issuances under the 2020 ATM Program (in millions except share and per share information): Three Months Ended September 30, 2021 Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds 534,267 $ 35.98 $ 19.2 $ (0.3) $ - $ 18.9 Nine Months Ended September 30, 2021 Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds 5,665,358 $ 33.82 $ 191.6 $ (2.9) $ (0.3) $ 188.4 Inception of Program Through September 30, 2021 Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds 9,184,418 $ 33.17 $ 304.6 $ (4.6) $ (0.5) $ 299.5 |
Summary of Significant Accoun_4
Summary of Significant Accounting Principles (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segmentitem | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Basis of Accounting and Principles of Consolidation | |||||
Assets owned | $ 9,424,998 | $ 9,424,998 | $ 9,004,340 | ||
Liabilities owed | 4,312,606 | $ 4,312,606 | 3,988,562 | ||
Segment Reporting | |||||
Number of reportable segments | segment | 1 | ||||
Investment portfolio | |||||
Number of transaction types | item | 3 | ||||
Revenue Recognition | |||||
Accrued straight-line rental revenue, net of allowance | $ 37,300 | $ 37,300 | 34,600 | ||
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) | 6.20% | 6.20% | |||
Contingent rent as a percentage of rental revenue, historical | 2.00% | 2.00% | |||
Impairments | |||||
Provisions for impairment | $ 3,400 | $ 2,000 | $ 15,400 | $ 10,200 | |
Estimate fair value of impaired real estate assets | 59,200 | ||||
Loans Receivable | |||||
Non accrual status loan receivables | 29,000 | $ 29,000 | 39,900 | ||
Number of classes in portfolio of loans and financing receivables | item | 2 | ||||
Restricted cash | |||||
Restricted cash included in other assets | $ 5,825 | 17,004 | $ 5,825 | 17,004 | 10,200 |
Derivative Instruments and Hedging Activities | |||||
Number of agreements | segment | 0 | 0 | |||
Provision For Impairment | |||||
Loans Receivable | |||||
Provision for loan losses | $ 2,000 | ||||
Payment deferral due to COVID-19 | |||||
Revenue Recognition | |||||
Revenue associated with deferral arrangements | $ 800 | $ 13,000 | 5,800 | $ 51,200 | |
Receivables collections | 8,000 | $ 19,200 | |||
Loans receivable | |||||
Loans Receivable | |||||
Maximum past due period for loans payments causing nonaccrual status | 60 days | ||||
Buildings | Maximum | |||||
Accounting for Real Estate Investments | |||||
Estimated useful life | 40 years | ||||
Buildings | Minimum | |||||
Accounting for Real Estate Investments | |||||
Estimated useful life | 30 years | ||||
Land improvements | |||||
Accounting for Real Estate Investments | |||||
Estimated useful life | 15 years | ||||
Consolidated special purpose entities | |||||
Basis of Accounting and Principles of Consolidation | |||||
Assets owned | 8,100,000 | $ 8,100,000 | 7,700,000 | ||
Liabilities owed | $ 2,600,000 | $ 2,600,000 | $ 2,300,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Principles - Share Based Compensation and Other (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Examination, Penalties and Interest Accrued | |||||
Uncertain income tax positions | $ 0 | $ 0 | |||
Accrual for interest or penalties | 0 | 0 | $ 0 | ||
Numerator: | |||||
Net income | 75,936,000 | $ 54,630,000 | 193,327,000 | $ 157,890,000 | |
Less: earnings attributable to unvested restricted shares | (223,000) | (234,000) | (663,000) | (546,000) | |
Net income used in basic and diluted income per share | $ 75,713,000 | $ 54,396,000 | $ 192,664,000 | $ 157,344,000 | |
Denominator: | |||||
Weighted average common shares outstanding | 271,859,415 | 255,942,052 | 269,937,837 | 249,479,941 | |
Less: Weighted average number of shares of unvested restricted stock (in shares) | (586,162) | (633,863) | (608,696) | (480,306) | |
Weighted average shares outstanding used in basic income per share (in shares) | 271,273,253 | 255,308,189 | 269,329,141 | 248,999,635 | |
Effects of dilutive securities: | |||||
Add: Treasury stock method impact of potentially dilutive securities (in shares) | 302,439 | ||||
Weighted average shares outstanding used in diluted income per share (in shares) | 271,273,253 | 255,610,628 | 269,329,141 | 248,999,635 | |
Antidilutive unvested restricted shares (in shares) | 212,808 | 127,940 | 226,652 | 77,076 | |
Restricted Stock | |||||
Sharebased Compensation | |||||
Granted in period (in shares) | 179,931 | ||||
Shares vested (shares) | 228,106 | ||||
Forfeited in period (in shares) | 11,029 | ||||
Shares repurchased in connection with tax withholding obligations (in shares) | 63,341 | ||||
Outstanding (in shares) | 580,350 | 580,350 | |||
Restricted Stock Units | |||||
Sharebased Compensation | |||||
Shares vested (shares) | 547,822 | ||||
Shares repurchased in connection with tax withholding obligations (in shares) | 220,057 | ||||
Restricted Stock Units | Executive Officer | |||||
Sharebased Compensation | |||||
Shares vested (shares) | 170,861 | ||||
Not earned in period (in shares) | 65,718 | ||||
Restricted Stock Units | Executive Officer | Vesting Based On Service And Market Conditions | |||||
Sharebased Compensation | |||||
Granted in period (in shares) | 744,840 | ||||
Outstanding (in shares) | 1,806,436 | 1,806,436 |
Investments - Locations (Detail
Investments - Locations (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)property | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)propertyitem | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)property | |
Number of property locations of investments (in locations) | property | 2,788 | 2,788 | 2,634 | ||
Number of owned properties (in properties) | property | 2,735 | 2,735 | |||
Number of properties accounted as financing arrangements | property | 53 | 53 | |||
Number of properties owned as direct financing receivables | property | 23 | 23 | |||
Number of ground lease interests (in properties) | property | 24 | 24 | |||
Number of properties which secure certain mortgage loans (in properties) | property | 29 | 29 | |||
Gross acquisition cost of real estate investments | $ 9,670,000 | $ 9,670,000 | |||
Loans and financing receivables, net | 649,414 | 649,414 | $ 650,321 | ||
Operating ground lease assets | $ 33,653 | $ 33,653 | 34,683 | ||
Investments assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non-recourse obligations of these special purpose entities | 37.00% | ||||
Number of Investment Locations | |||||
Gross investments | property | 2,634 | ||||
Acquisition of and additions to real estate | property | 229 | ||||
Investment in loans and financing receivables | property | 7 | ||||
Sales of real estate | property | (82) | ||||
Gross investments | property | 2,788 | 2,788 | |||
Dollar Amount of Investments | |||||
Gross investments | $ 9,639,766 | ||||
Acquisition of and additions to real estate | 995,391 | ||||
Investment in loans and financing receivables | 70,744 | ||||
Sales of real estate | (261,431) | ||||
Principal collections on loans and direct financing receivables | 56,685 | ||||
Provisions for impairment | $ (3,400) | $ (2,772) | (17,350) | $ (10,972) | |
Other | (11,477) | ||||
Gross investments | 10,357,928 | 10,357,928 | |||
Less accumulated depreciation and amortization | (1,101,376) | (1,101,376) | |||
Net investments | 9,256,552 | 9,256,552 | 8,696,017 | ||
Tenant improvement advances disbursed | 20,000 | ||||
Interest capitalized | 600 | ||||
Acquisition of collateral property securing a mortgage note receivable | $ 42,782 | $ 23,408 | |||
Number of receivables repaid in full | item | 3 | ||||
Sale-leaseback transactions accounted for as financing arrangements | 227,700 | $ 227,700 | $ 204,500 | ||
Investment in real estate held for sale | 29,400 | 29,400 | |||
Accumulated depreciation of real estate investments held for sale | 2,800 | 2,800 | |||
Ground leases | |||||
Operating ground lease assets | $ 33,700 | 33,700 | |||
Dollar Amount of Investments | |||||
Net change in operating ground lease assets | $ (1,030) |
Investments - Revenue Recognize
Investments - Revenue Recognized from Investment Portfolio (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Rental revenues: | ||||
Operating leases | $ 183,878,000 | $ 163,394,000 | $ 533,198,000 | $ 482,882,000 |
Sublease income - operating ground lease assets | 702,000 | 496,000 | 2,107,000 | 1,600,000 |
Amortization of lease related intangibles and costs | (497,000) | (565,000) | (1,730,000) | (1,813,000) |
Total rental revenues | 184,083,000 | 163,325,000 | 533,575,000 | 482,669,000 |
Interest income on loans and financing receivables: | ||||
Mortgage and other loans receivable | 6,796,000 | 4,056,000 | 17,916,000 | 13,182,000 |
Sale-leaseback transactions accounted for as financing arrangements | 4,459,000 | 3,940,000 | 13,019,000 | 11,329,000 |
Direct financing receivables | 1,718,000 | 3,025,000 | 6,261,000 | 9,863,000 |
Total interest income on loans and financing receivables | 12,973,000 | 11,021,000 | 37,196,000 | 34,374,000 |
Property tax tenant reimbursement revenue | 681,000 | 618,000 | 1,900,000 | 1,900,000 |
Variable lease revenue | 3,300,000 | 867,000 | 9,500,000 | 1,000,000 |
Payment deferral due to COVID-19 | ||||
Rental revenues: | ||||
Total rental revenues | $ 800,000 | $ 13,000,000 | $ 5,800,000 | $ 51,200,000 |
Investments - Significant Credi
Investments - Significant Credit and Revenue Concentration (Details) | 9 Months Ended |
Sep. 30, 2021itemstate | |
Real estate investment portfolio | Geographic concentration | |
Significant Credit and Revenue Concentration | |
Number of states over which real estate investments are dispersed (in states) | state | 49 |
Concentration Percentage for threshold | 10.00% |
Real estate investment portfolio | Geographic concentration | Minimum | |
Significant Credit and Revenue Concentration | |
Number of customers | 540 |
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 | 3.10% |
Real estate investment portfolio | Concept concentration | |
Significant Credit and Revenue Concentration | |
Number of concepts (in categories) | 830 |
Investment portfolio revenues | Customer concentration | Largest customer, investment portfolio revenues | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 3.10% |
Investment portfolio revenues | Concept concentration | Maximum | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 2.30% |
Investments - Portfolio Diversi
Investments - Portfolio Diversification (Details) $ in Thousands | Sep. 30, 2021USD ($)property | Dec. 31, 2020USD ($)property |
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 2,788 | 2,634 |
Dollar Amount of Investments | $ 10,357,928 | $ 9,639,766 |
Percentage of Total Dollar Amount of Investments | 100.00% | |
Investment in real estate held for sale | $ 29,400 | |
Restaurants | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 748 | |
Dollar Amount of Investments | $ 1,292,551 | |
Percentage of Total Dollar Amount of Investments | 12.00% | |
Early childhood education centers | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 262 | |
Dollar Amount of Investments | $ 607,089 | |
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 | 90 | |
Dollar Amount of Investments | $ 536,197 | |
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 | 207 | |
Dollar Amount of Investments | $ 528,672 | |
Percentage of Total Dollar Amount of Investments | 5.00% | |
Metal fabrication | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 97 | |
Dollar Amount of Investments | $ 500,754 | |
Percentage of Total Dollar Amount of Investments | 5.00% | |
Furniture stores | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 59 | |
Dollar Amount of Investments | $ 414,351 | |
Percentage of Total Dollar Amount of Investments | 4.00% | |
Farm and ranch supply stores | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 41 | |
Dollar Amount of Investments | $ 377,293 | |
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 | 958 | |
Dollar Amount of Investments | $ 3,707,188 | |
Percentage of Total Dollar Amount of Investments | 36.00% | |
All other retail industries | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 140 | |
Dollar Amount of Investments | $ 1,044,191 | |
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 | 186 | |
Dollar Amount of Investments | $ 1,349,642 | |
Percentage of Total Dollar Amount of Investments | 13.00% |
Investments - Intangible Lease
Investments - Intangible Lease Assets and Real Estate Investments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)Options | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)Optionspropertyitem | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Accounting for Real Estate Investments | |||||
Remaining noncancelable lease term | 13 years 6 months | ||||
Number of real estate properties vacant not subject to lease | property | 16 | ||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Remainder of 2021 | $ 189,569 | $ 189,569 | |||
2022 | 780,079 | 780,079 | |||
2023 | 776,880 | 776,880 | |||
2024 | 768,707 | 768,707 | |||
2025 | 764,831 | 764,831 | |||
2026 | 757,641 | 757,641 | |||
Thereafter | 6,351,290 | 6,351,290 | |||
Total future minimum rentals | 10,388,997 | $ 10,388,997 | |||
Term of renewal options | 5 years | ||||
Intangible lease assets | 54,971 | $ 54,971 | $ 61,634 | ||
Accumulated amortization | (24,449) | (24,449) | (27,935) | ||
Net intangible lease assets | 30,522 | 30,522 | 33,699 | ||
Amortization in the next five years | |||||
Remainder of 2021 | 800 | 800 | |||
2022 | 3,200 | 3,200 | |||
2023 | 2,800 | 2,800 | |||
2024 | 2,300 | 2,300 | |||
2025 | 1,800 | 1,800 | |||
2026 | $ 1,700 | $ 1,700 | |||
Minimum | |||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Typical number of renewal options | item | 1 | ||||
Number of renewal periods at the option of the Company | Options | 2 | 2 | |||
Maximum | |||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Number of renewal periods at the option of the Company | Options | 4 | 4 | |||
Amortization expense | |||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Amount amortized | $ 900 | $ 1,000 | $ 2,600 | $ 3,100 | |
In -place leases | |||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Intangible lease assets | 35,522 | $ 35,522 | 37,440 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 7 years | ||||
Ground lease interests | |||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Intangible lease assets | $ 19,449 | $ 19,449 | 19,449 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 43 years | ||||
Above-market leases | |||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Intangible lease assets | $ 4,745 | ||||
Above-market leases | Decrease to rental revenue | |||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Amount amortized | $ 300 | $ 200 | $ 800 |
Investments - Operating Lease A
Investments - Operating Lease Asset (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)lease | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Operating ground lease assets | $ 33,653,000 | $ 33,653,000 | $ 34,683,000 | ||
Rental revenue | 702,000 | $ 496,000 | 2,107,000 | $ 1,600,000 | |
Future minimum lease payments | |||||
Total operating lease liabilities - ground leases | 38,499,000 | 38,499,000 | $ 39,317,000 | ||
Ground lease by STORE capital | |||||
Future minimum lease payments | |||||
Long-term lease commitment | 19,000,000 | $ 19,000,000 | |||
Ground lease by STORE capital tenants | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Number of ground lease payments based on level of tenant's sales | lease | 3 | ||||
Ground leases | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Operating ground lease assets | 33,700,000 | $ 33,700,000 | |||
Lease costs | 830,000 | 609,000 | 2,500,000 | 1,800,000 | |
Rental revenue | 702,000 | $ 496,000 | 2,100,000 | $ 1,600,000 | |
Future minimum lease payments | |||||
Remainder of 2021 | 1,207,000 | 1,207,000 | |||
2022 | 3,007,000 | 3,007,000 | |||
2023 | 6,777,000 | 6,777,000 | |||
2024 | 2,764,000 | 2,764,000 | |||
2025 | 2,451,000 | 2,451,000 | |||
2026 | 2,288,000 | 2,288,000 | |||
Thereafter | 47,562,000 | 47,562,000 | |||
Total lease payments | 66,056,000 | 66,056,000 | |||
Less imputed interest | (31,679,000) | (31,679,000) | |||
Total operating lease liabilities - ground leases | 34,377,000 | 34,377,000 | |||
Ground leases | Ground lease by STORE capital | |||||
Future minimum lease payments | |||||
Remainder of 2021 | 100,000 | 100,000 | |||
2022 | 401,000 | 401,000 | |||
2023 | 4,149,000 | 4,149,000 | |||
2024 | 55,000 | 55,000 | |||
2025 | 57,000 | 57,000 | |||
2026 | 57,000 | 57,000 | |||
Thereafter | 3,071,000 | 3,071,000 | |||
Total lease payments | 7,890,000 | 7,890,000 | |||
Less imputed interest | (2,988,000) | (2,988,000) | |||
Total operating lease liabilities - ground leases | 4,902,000 | 4,902,000 | |||
Ground leases | Ground lease by STORE capital tenants | |||||
Future minimum lease payments | |||||
Remainder of 2021 | 1,107,000 | 1,107,000 | |||
2022 | 2,606,000 | 2,606,000 | |||
2023 | 2,628,000 | 2,628,000 | |||
2024 | 2,709,000 | 2,709,000 | |||
2025 | 2,394,000 | 2,394,000 | |||
2026 | 2,231,000 | 2,231,000 | |||
Thereafter | 44,491,000 | 44,491,000 | |||
Total lease payments | 58,166,000 | 58,166,000 | |||
Less imputed interest | (28,691,000) | (28,691,000) | |||
Total operating lease liabilities - ground leases | $ 29,475,000 | $ 29,475,000 |
Investments - Loans and Financi
Investments - Loans and Financing Receivables (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)loan | Dec. 31, 2020USD ($)loan | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | |
Loans and direct financing receivables | ||||
Number of mortgage loans | loan | 24 | |||
Total principal payments | $ 350,057 | |||
Unamortized loan origination costs | 1,005 | $ 1,206 | ||
Sale-leaseback transactions accounted for as financing arrangements | 227,700 | 204,500 | ||
Direct financing receivables | 78,714 | 117,047 | ||
Allowance for credit and loan losses | (8,028) | (6,028) | ||
Total loans and direct financing receivables | 649,414 | $ 650,321 | ||
Credit loss reserves recognized | $ 3,000 | $ 2,500 | ||
ASU 2016-13 | ||||
Loans and direct financing receivables | ||||
Credit loss reserve | $ 2,500 | |||
Mortgage loans receivable with maturity range 2021 to 2023 | ||||
Loans and direct financing receivables | ||||
Number of mortgage loans | loan | 5 | 5 | ||
Mortgage loans receivable with maturity range 2032 to 2037 | ||||
Loans and direct financing receivables | ||||
Number of mortgage loans | loan | 4 | 4 | ||
Mortgage loans receivable with maturity range 2051 to 2060 | ||||
Loans and direct financing receivables | ||||
Number of mortgage loans | loan | 15 | 15 | ||
Number of mortgage loans allowing for prepayment in whole | loan | 4 | |||
Mortgage loans receivable with maturity range 2051 to 2060 | Minimum | ||||
Loans and direct financing receivables | ||||
Prepayment penalties (as a percent) | 20.00% | |||
Mortgage loans receivable with maturity range 2051 to 2060 | Maximum | ||||
Loans and direct financing receivables | ||||
Prepayment penalties (as a percent) | 70.00% | |||
Loans receivable | ||||
Loans and direct financing receivables | ||||
Total principal payments | $ 350,057 | $ 333,627 | ||
Mortgage Loans Receivable [Member] | ||||
Loans and direct financing receivables | ||||
Mortgage loans receivable | $ 323,413 | 301,991 | ||
Mortgage Loans Receivable [Member] | Mortgage loans receivable with maturity range 2021 to 2023 | ||||
Loans and direct financing receivables | ||||
Stated Interest Rate (as a percent) | 7.97% | |||
Mortgage loans receivable | $ 94,382 | 101,793 | ||
Mortgage Loans Receivable [Member] | Mortgage loans receivable with maturity range 2032 to 2037 | ||||
Loans and direct financing receivables | ||||
Stated Interest Rate (as a percent) | 8.55% | |||
Mortgage loans receivable | $ 14,502 | 14,673 | ||
Mortgage Loans Receivable [Member] | Mortgage loans receivable with maturity range 2051 to 2060 | ||||
Loans and direct financing receivables | ||||
Stated Interest Rate (as a percent) | 8.60% | |||
Mortgage loans receivable | $ 214,529 | 185,525 | ||
Equipment And Other Loans Receivable [Member] | Equipment and other loans receivable maturity range 2021 to 2027 | ||||
Loans and direct financing receivables | ||||
Equipment and other loans receivable | $ 26,644 | 31,636 | ||
Interest rate of equipment and other loans | 8.21 | |||
Sale Leaseback Financing Arrangements [Member] | Sale-leaseback transactions accounted for financing arrangements with maturities ranging from 2034 - 2043 | ||||
Loans and direct financing receivables | ||||
Stated Interest Rate (as a percent) | 7.84% | |||
Sale-leaseback transactions accounted for as financing arrangements | $ 227,666 | 204,469 | ||
Direct Financing Receivables [Member] | ||||
Loans and direct financing receivables | ||||
Direct financing receivables | $ 78,714 | $ 117,047 |
Investments - Loans Receivable
Investments - Loans Receivable (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)loan | Dec. 31, 2020USD ($) | |
Scheduled loan receivable maturities | ||
Number of loans receivable | loan | 45 | |
Gross carrying amount of loans receivable | $ 344,700 | |
Number of mortgage loans | loan | 24 | |
Number of mortgage loans subject to interest rate increases | loan | 11 | |
Number of short-term mortgage loans | loan | 5 | |
Amortization period of long-term mortgage loans | 40 years | |
Remainder of 2021 | $ 26,978 | |
2022 | 11,027 | |
2023 | 83,417 | |
2024 | 1,857 | |
2025 | 2,258 | |
2026 | 2,153 | |
Thereafter | 222,367 | |
Total principal payments | 350,057 | |
Sale-Leaseback Transactions Accounted for as Financing Arrangements | ||
Sale-leaseback transactions accounted for as financing arrangements | 227,700 | $ 204,500 |
Remainder of 2021 | 4,610 | |
2022 | 18,208 | |
2023 | 18,284 | |
2024 | 18,419 | |
2025 | 18,559 | |
2026 | 18,653 | |
Thereafter | 233,667 | |
Total future scheduled payments | 330,400 | |
Components of investments accounted for as direct financing receivables | ||
Minimum lease payments receivable | 161,330 | 242,694 |
Estimated residual value of leased assets | 8,938 | 14,800 |
Unearned income | (91,554) | (140,447) |
Net investment | 78,714 | $ 117,047 |
Future minimum lease payments to be received under the direct financing lease receivables | ||
Remainder of 2021 | 2,000 | |
2022 | 7,900 | |
2023 | 7,900 | |
2024 | 7,900 | |
2025 | 7,900 | |
2026 | 7,900 | |
Thereafter | 119,600 | |
Scheduled Principal Payments | ||
Scheduled loan receivable maturities | ||
Remainder of 2021 | 842 | |
2022 | 1,826 | |
2023 | 1,786 | |
2024 | 1,857 | |
2025 | 1,748 | |
2026 | 1,794 | |
Thereafter | 172,134 | |
Total principal payments | 181,987 | |
Balloon Payments | ||
Scheduled loan receivable maturities | ||
Remainder of 2021 | 26,136 | |
2022 | 9,201 | |
2023 | 81,631 | |
2025 | 510 | |
2026 | 359 | |
Thereafter | 50,233 | |
Total principal payments | $ 168,070 | |
Minimum | ||
Scheduled loan receivable maturities | ||
Long-term mortgage loans receivable prepayment penalty rate (as a percent) | 1.00% | |
Maximum | ||
Scheduled loan receivable maturities | ||
Long-term mortgage loans receivable prepayment penalty rate (as a percent) | 20.00% |
Investments - Provision for Cre
Investments - Provision for Credit Losses (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Investment Grade | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Origination for gross loan and financing receivables in 2021 | $ 0 |
Origination for gross loan and financing receivables in 2020 | 0 |
Origination for gross loan and financing receivables in 2019 | 60.2 |
Origination for gross loan and financing receivables in 2018 | 0 |
Origination for gross loan and financing receivables in 2017 | 2.2 |
Origination for gross loan and financing receivables in prior to 2017 | 34.8 |
Non Investment Grade | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Origination for gross loan and financing receivables in 2021 | 64.8 |
Origination for gross loan and financing receivables in 2020 | 137.9 |
Origination for gross loan and financing receivables in 2019 | 181.7 |
Origination for gross loan and financing receivables in 2018 | 27.5 |
Origination for gross loan and financing receivables in 2017 | 10.3 |
Origination for gross loan and financing receivables in prior to 2017 | 137 |
ASU 2016-13 | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Provision for credit losses | 2 |
Write-offs charged against allowance | 0 |
Recoveries of amounts previously written off | 0 |
ASU 2016-13 | Investment Grade | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Loans and financing receivables | 97.2 |
ASU 2016-13 | Non Investment Grade | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Loans and financing receivables | $ 559.2 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2021USD ($)Options | Apr. 30, 2016USD ($) | Sep. 30, 2021USD ($)loan | Dec. 31, 2020USD ($) | |
Credit facilities | ||||
Borrowings outstanding (in dollars) | $ 109,000 | |||
Unamortized financing costs related to all debt | 9,331 | $ 10,521 | ||
Revolving credit facility | ||||
Credit facilities | ||||
Unamortized financing costs related to all debt | $ 4,000 | $ 1,100 | ||
Term Loan Payable | ||||
Credit facilities | ||||
Initial term | 5 years | |||
Unsecured Term Notes Payable | ||||
Principal amount | $ 100,000 | |||
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 | |||
Number of loans | loan | 3 | |||
Senior Unsecured Notes | Minimum | ||||
Unsecured Term Notes Payable | ||||
Prepayment threshold (as a percent) | 5.00% | |||
New unsecured credit facility | Revolving credit facility | ||||
Credit facilities | ||||
Eligible unencumbered assets (in dollars) | $ 6,500,000 | |||
Amended unsecured revolving credit facility | Revolving credit facility | ||||
Credit facilities | ||||
Unsecured loan facility | $ 600,000 | |||
Size of the facility with the accordion feature (in dollars) | $ 1,600,000 | |||
Number of extension options | Options | 2 | |||
Maturity date | Jun. 1, 2025 | |||
Extension option term | 6 months | |||
Extension fee (as a percent) | 0.0625% | |||
Borrowings outstanding (in dollars) | $ 109,000 | |||
Amended unsecured revolving credit facility | Revolving credit facility | Minimum | ||||
Credit facilities | ||||
Facility fee (as a percent) | 0.10% | |||
Amended unsecured revolving credit facility | Revolving credit facility | Maximum | ||||
Credit facilities | ||||
Facility fee (as a percent) | 0.30% | |||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | ||||
Credit facilities | ||||
Debt Instrument interest rate description | LIBOR | |||
Credit spread (as a percent) | 0.85% | |||
Facility fee (as a percent) | 0.20% | |||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Minimum | ||||
Credit facilities | ||||
Credit spread (as a percent) | 0.70% | |||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Maximum | ||||
Credit facilities | ||||
Credit spread (as a percent) | 1.40% | |||
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) | 0.40% | |||
Amended unsecured revolving credit facility | Senior Unsecured Notes | ||||
Credit facilities | ||||
Accordion feature | $ 1,000,000 |
Debt - Carrying Amount (Details
Debt - Carrying Amount (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 33 Months Ended | |||
Apr. 30, 2016 | Sep. 30, 2021 | Sep. 30, 2021 | Nov. 30, 2020 | Dec. 31, 2020 | Feb. 28, 2019 | Mar. 31, 2018 | |
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Unamortized discount | $ (4,430) | $ (4,430) | $ (4,867) | ||||
Unamortized deferred financing costs | (9,331) | (9,331) | (10,521) | ||||
Total unsecured notes and term loans payable, net | 1,411,239 | 1,411,239 | 1,509,612 | ||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Remainder of 2021 | 7,563 | 7,563 | |||||
2022 | 135,775 | 135,775 | |||||
2023 | 129,213 | 129,213 | |||||
2024 | 449,245 | 449,245 | |||||
2025 | 276,649 | 276,649 | |||||
2026 | 550,068 | 550,068 | |||||
Thereafter | 2,421,530 | 2,421,530 | |||||
Long-term Debt | 3,970,043 | 3,970,043 | |||||
Public Notes issued March 2018 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Note issue price | 99.515% | ||||||
Stated interest rate (as a percent) | 4.50% | ||||||
Public Notes Issued February 2019 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Note issue price | 99.26% | ||||||
Stated interest rate (as a percent) | 4.625% | ||||||
Public Notes Issued November 2020 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Note issue price | 99.558% | ||||||
Stated interest rate (as a percent) | 2.75% | ||||||
Series 2013 1 Class 1 Due March 2020 And Series 2013 2 Class 1 Due July 2020 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 170,000 | 170,000 | |||||
Series 2013.1, Class A.2 Notes Due May 2021 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Amortization of deferred financing costs | 600 | ||||||
Series 2013.2, Class A.2 Notes Due July 2021 [Member] | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Amortization of deferred financing costs | 1,100 | ||||||
Consolidated special purpose entities | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Aggregate investment amount | 3,500,000 | 3,500,000 | |||||
Unamortized discount | (530) | (530) | (386) | ||||
Unamortized deferred financing costs | (27,377) | (27,377) | (24,846) | ||||
Total unsecured notes and term loans payable, net | 2,517,136 | 2,517,136 | 2,212,634 | ||||
Scheduled Principal Payments | |||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Remainder of 2021 | 7,563 | 7,563 | |||||
2022 | 26,661 | 26,661 | |||||
2023 | 25,492 | 25,492 | |||||
2024 | 22,331 | 22,331 | |||||
2025 | 20,037 | 20,037 | |||||
2026 | 17,926 | 17,926 | |||||
Thereafter | 40,208 | 40,208 | |||||
Long-term Debt | 160,218 | 160,218 | |||||
Balloon Payments | |||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
2022 | 109,114 | 109,114 | |||||
2023 | 103,721 | 103,721 | |||||
2024 | 426,914 | 426,914 | |||||
2025 | 256,612 | 256,612 | |||||
2026 | 532,142 | 532,142 | |||||
Thereafter | 2,381,322 | 2,381,322 | |||||
Long-term Debt | 3,809,825 | 3,809,825 | |||||
Senior Unsecured Notes | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 375,000 | 375,000 | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 1,425,000 | $ 1,425,000 | 1,425,000 | ||||
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% | 4.95% | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 75,000 | $ 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% | 5.24% | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 100,000 | $ 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% | 4.73% | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 200,000 | $ 200,000 | 200,000 | ||||
Senior Unsecured Notes | Public Notes issued March 2018 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.50% | 4.50% | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 350,000 | $ 350,000 | 350,000 | ||||
Senior Unsecured Notes | Public Notes Issued February 2019 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.625% | 4.625% | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 350,000 | $ 350,000 | 350,000 | ||||
Senior Unsecured Notes | Public Notes Issued November 2020 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 2.75% | 2.75% | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | $ 350,000 | $ 350,000 | 350,000 | ||||
Public notes | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 350,000 | $ 350,000 | $ 350,000 | ||||
Expected repayment term of receivables | 10 years | ||||||
Term Loan Payable | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 100,000 | ||||||
Expected repayment term of receivables | 5 years | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 100,000 | ||||||
Term Loan Payable | Term Loan issued April 2016 | |||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 100,000 | ||||||
Non-recourse net-lease mortgage notes: | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Retained non-amortizing notes | 190,000 | 190,000 | |||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | |||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 2,364,603 | 2,364,603 | 2,040,744 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2013-1, Class A-2 Due March 2023 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 102,000 | $ 102,000 | |||||
Interest Rate | 4.65% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 87,607 | ||||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2013-2, Class A-2 Due July 2023 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 97,000 | $ 97,000 | |||||
Interest Rate | 5.33% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 84,473 | ||||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2013-3, Class A-2 Due November 2023 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 100,000 | $ 100,000 | |||||
Interest Rate | 5.21% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 86,209 | $ 86,209 | 87,775 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 20141, Class A2 Due April 2024 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 140,000 | $ 140,000 | |||||
Interest Rate | 5.00% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 134,867 | $ 134,867 | 135,392 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2018-1 Class A-1 Due October 2024 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 150,000 | $ 150,000 | |||||
Interest Rate | 3.96% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 142,426 | $ 142,426 | 143,552 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2018-1 Class A-3 Due October 2024 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 50,000 | $ 50,000 | |||||
Interest Rate | 4.40% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 49,042 | $ 49,042 | 49,417 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2015-1, Class A-2 Due April 2025 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 270,000 | $ 270,000 | |||||
Interest Rate | 4.17% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 261,337 | $ 261,337 | 262,350 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | 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 | $ 200,000 | |||||
Interest Rate | 3.96% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 181,246 | $ 181,246 | 184,350 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-1 Due Nov 2026 [Member] | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 82,000 | $ 82,000 | |||||
Interest Rate | 2.82% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 78,906 | $ 78,906 | 80,172 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-3 Due Nov 2026 [Member] | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 46,000 | $ 46,000 | |||||
Interest Rate | 3.32% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 45,578 | $ 45,578 | 45,751 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | 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 | $ 135,000 | |||||
Interest Rate | 4.32% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 123,745 | $ 123,745 | 125,798 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2018-1 Class A-2 Due October 2027 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 228,000 | $ 228,000 | |||||
Interest Rate | 4.29% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 216,488 | $ 216,488 | 218,198 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2018-1 Class A-4 Due October 2027 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 164,000 | $ 164,000 | |||||
Interest Rate | 4.74% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 160,857 | $ 160,857 | 162,087 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-2 Due Nov 2034 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 244,000 | $ 244,000 | |||||
Interest Rate | 3.65% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 234,793 | $ 234,793 | 238,559 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-4 Due Nov 2034 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 136,000 | $ 136,000 | |||||
Interest Rate | 4.49% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 134,753 | $ 134,753 | 135,263 | ||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2021.1, Class A.1 Notes Due June 2028 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 168,500 | $ 168,500 | |||||
Interest Rate | 2.12% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 168,289 | $ 168,289 | |||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2021.1, Class A.3 Notes Due June 2028 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 89,000 | $ 89,000 | |||||
Interest Rate | 2.86% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 88,889 | $ 88,889 | |||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2021.1, Class A.2 Notes Due June 2033 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 168,500 | $ 168,500 | |||||
Interest Rate | 2.96% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 168,289 | $ 168,289 | |||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2021.1, Class A.4 Notes Due June 2033 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 89,000 | $ 89,000 | |||||
Interest Rate | 3.70% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 88,889 | $ 88,889 | |||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Aggregate investment amount | 325,400 | 325,400 | |||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 180,440 | 180,440 | 197,122 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $16,100 note issued February 2014 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 16,100 | $ 16,100 | |||||
Interest Rate | 4.83% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 13,539 | ||||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $13,000 note issued May 2012 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 13,000 | $ 13,000 | |||||
Interest Rate | 5.195% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 10,062 | $ 10,062 | 10,355 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $26,000 note issued August 2012 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 26,000 | $ 26,000 | |||||
Interest Rate | 5.05% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 20,285 | $ 20,285 | 20,867 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $6,400 note issued November 2012 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 6,400 | $ 6,400 | |||||
Interest Rate | 4.707% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 4,988 | $ 4,988 | 5,133 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $11,895 note issued March 2013 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 11,895 | $ 11,895 | |||||
Interest Rate | 4.7315% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 9,400 | $ 9,400 | 9,666 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $17,500 note issued August 2013 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 17,500 | $ 17,500 | |||||
Interest Rate | 5.46% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 14,336 | $ 14,336 | 14,695 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $10,075 note issued March 2014 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 10,075 | $ 10,075 | |||||
Interest Rate | 5.10% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 8,858 | $ 8,858 | 9,004 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $65,000 note issued June 2016 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 65,000 | $ 65,000 | |||||
Interest Rate | 4.75% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 59,527 | $ 59,527 | 60,409 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $41,690 note issued March 2019 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 41,690 | $ 41,690 | |||||
Interest Rate | 4.80% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 41,445 | $ 41,445 | 41,690 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $6,944 notes issued March 2013 | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 6,944 | $ 6,944 | |||||
Interest Rate | 4.50% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 5,405 | $ 5,405 | 5,549 | ||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | $6,350 notes issued March 2019 (assumed in December 2020) | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Interest Rate | 4.64% | ||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | |||||||
Long-term Debt | 6,134 | $ 6,134 | $ 6,215 | ||||
Non-recourse debt obligations | Consolidated special purpose entities | $6,350 notes issued March 2019 (assumed in December 2020) | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 6,350 | $ 6,350 | |||||
Minimum | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Maximum number of months | 24 months | ||||||
Maximum | |||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Maximum number of months | 36 months |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 11 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Nov. 30, 2020 | |
Common stock. | |||||
Gross Proceeds | $ 191,595 | $ 547,624 | |||
2020 ATM Program | |||||
Common stock. | |||||
Shares Sold | 534,267 | 5,665,358 | 9,184,418 | ||
Weighted Average Price per Share | $ 35.98 | $ 33.82 | $ 33.17 | ||
Gross Proceeds | $ 19,200 | $ 191,600 | $ 304,600 | ||
Sales Agents' Commissions | (300) | (2,900) | (4,600) | ||
Other Offering Expenses | (300) | (500) | |||
Net Proceeds | $ 18,900 | $ 188,400 | $ 299,500 | ||
Maximum value of shares that can be offered and sold | $ 900,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Commitments to fund improvements to real estate properties $ in Millions | Sep. 30, 2021USD ($) |
Commitments and Contingencies | |
Real estate property improvement commitments | $ 143.9 |
Real estate property improvement commitments, in Next Twelve Months | $ 128.7 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Level 2 Fair Value | Carrying value | ||
Derivatives [Line items] | ||
Long-term debt obligations | $ 3,928.4 | $ 3,722.2 |
Level 2 Fair Value | Fair value | ||
Derivatives [Line items] | ||
Long-term debt obligations | 4,243.9 | 4,047.6 |
Accrued expenses deferred revenue and other liabilities | ||
Derivatives [Line items] | ||
Fair value of derivative liability | $ 0 | $ 0.4 |