Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 10, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36739 | |
Entity Registrant Name | STORE CAPITAL LLC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 88-4051712 | |
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 | None | |
No Trading Symbol Flag | true | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,125 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Central Index Key | 0001538990 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Real estate investments: | ||
Land and improvements | $ 3,669,596 | $ 3,455,443 |
Buildings and improvements | 9,231,726 | 7,743,454 |
Intangible lease assets | 619,901 | 61,968 |
Total real estate investments | 13,521,223 | 11,260,865 |
Less accumulated depreciation and amortization | (96,015) | (1,438,107) |
Real estate investments, net | 13,425,208 | 9,822,758 |
Operating ground lease assets | 52,666 | 31,872 |
Loans and financing receivables, net | 958,639 | 787,106 |
Net investments | 14,436,513 | 10,641,736 |
Cash and cash equivalents | 42,917 | 35,137 |
Other assets, net | 74,102 | 158,097 |
Total assets acquired | 14,553,532 | 10,834,970 |
Liabilities: | ||
Credit facility | 361,000 | 555,000 |
Unsecured notes and term loans payable, net | 2,106,348 | 2,397,406 |
Secured term loan facility, net | 1,446,658 | |
Non-recourse debt obligations of consolidated special purpose entities, net | 2,049,168 | 2,238,470 |
Intangible lease liabilities, net | 146,068 | 0 |
Operating lease liabilities | 50,414 | 36,873 |
Accrued expenses, deferred revenue and other liabilities | 141,042 | 180,903 |
Total liabilities assumed | 6,300,698 | 5,408,652 |
Equity: | ||
Members' equity | 8,290,585 | |
Predecessor common stock, $0.01 par value per share, 375,000,000 shares authorized, 282,684,998 shares issued and outstanding as of December 31, 2022 | 2,827 | |
Capital in excess of par value | 6,003,331 | |
Accumulated deficit | (35,542) | (609,361) |
Accumulated other comprehensive (loss) income | (2,209) | 29,521 |
Total equity | 8,252,834 | |
Total equity | 5,426,318 | |
Total liabilities and equity | $ 14,553,532 | $ 10,834,970 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) | Dec. 31, 2022 $ / shares shares |
Condensed Consolidated Balance Sheets | |
Common stock, par value per share | $ / shares | $ 0.01 |
Common shares, authorized shares | 375,000,000 |
Common shares, issued shares | 282,684,998 |
Common shares, outstanding shares | 282,684,998 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Feb. 02, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | |||
Rental revenues | $ 75,008 | $ 155,753 | $ 202,061 |
Interest income on loans and financing receivables | 5,326 | 11,762 | 14,930 |
Other income | 850 | 1,239 | 5,125 |
Total revenues | 81,184 | 168,754 | 222,116 |
Expenses: | |||
Interest | 19,080 | 67,219 | 43,999 |
Property costs | 1,348 | 2,080 | 4,241 |
General and administrative | 5,679 | 9,226 | 17,016 |
Merger-related | 895 | ||
Depreciation and amortization | 27,789 | 95,603 | 72,639 |
Provisions for impairment | 5,677 | 912 | |
Total expenses | 54,791 | 179,805 | 138,807 |
Other (loss) income: | |||
(Loss) gain on dispositions of real estate | 97 | (213) | 6,076 |
Loss on extinguishment of debt | (24,580) | ||
Loss from non-real estate, equity method investments | (2,157) | ||
(Loss) income before income taxes | 26,490 | (35,844) | 87,228 |
Income tax (benefit) expense | 703 | (302) | 206 |
Net (loss) income | $ 25,787 | $ (35,542) | $ 87,022 |
Net income per share of common stock-basic | $ 0.09 | $ 0.32 | |
Net income per share of common stock-diluted | $ 0.09 | $ 0.32 | |
Weighted average common shares outstanding: | |||
Basic (in shares) | 282,238,151 | 275,003,273 | |
Diluted (in shares) | 282,338,405 | 275,003,273 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Feb. 02, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | |||
Net (loss) income | $ 25,787 | $ (35,542) | $ 87,022 |
Other comprehensive income (loss): | |||
Unrealized (losses) gains on cash flow hedges | (10,531) | (517) | |
Cash flow hedge (gains) losses reclassified to interest expense | (894) | (1,692) | 61 |
Total other comprehensive income (loss) | (11,425) | (2,209) | 61 |
Total comprehensive (loss) income | $ 14,362 | $ (37,751) | $ 87,083 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Members' Equity - 2 months ended Mar. 31, 2023 - USD ($) $ in Thousands | Common Members' Units | Preferred Members' Units | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Feb. 02, 2023 | |||||
Balance (in shares) at Feb. 02, 2023 | |||||
Increase (Decrease) in Members' Equity | |||||
Members' contributions | $ 8,351,845 | $ 125 | 8,351,970 | ||
Members' contributions (in shares) | 1,000 | 125 | |||
Members' distributions | $ (50,000) | (50,000) | |||
Net loss | (35,542) | (35,542) | |||
Other comprehensive (loss) income | (2,209) | (2,209) | |||
Non-cash distribution to members | (11,385) | (11,385) | |||
Balance at Mar. 31, 2023 | $ 8,290,460 | $ 125 | $ (35,542) | $ (2,209) | $ 8,252,834 |
Balance (in shares) at Mar. 31, 2023 | 1,000 | 125 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Capital in Excess of Par Value | Distributions in Excess of Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2021 | $ 2,738 | $ 5,745,692 | $ (602,137) | $ (2,164) | $ 5,144,129 |
Balance (in shares) at Dec. 31, 2021 | 273,806,225 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net (loss) income | 87,022 | 87,022 | |||
Other comprehensive (loss) income | 61 | 61 | |||
Issuance of common stock, net of costs | $ 55 | 166,107 | 166,162 | ||
Issuance of common stock, net of costs (shares) | 5,539,138 | ||||
Equity-based compensation | $ 3 | 3,065 | 81 | 3,149 | |
Equity-based compensation (shares) | 439,314 | ||||
Shares repurchased under stock compensation plan | (4,008) | (1,880) | (5,888) | ||
Shares repurchased under stock compensation plan (in shares) | (188,826) | ||||
Common dividends declared | (107,644) | (107,644) | |||
Balance at Mar. 31, 2022 | $ 2,796 | 5,910,856 | (624,558) | (2,103) | 5,286,991 |
Balance (in shares) at Mar. 31, 2022 | 279,595,851 | ||||
Balance at Dec. 31, 2022 | $ 2,827 | 6,003,331 | (609,361) | 29,521 | 5,426,318 |
Balance (in shares) at Dec. 31, 2022 | 282,684,998 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net (loss) income | 25,787 | 25,787 | |||
Other comprehensive (loss) income | (11,425) | (11,425) | |||
Equity-based compensation | 975 | 975 | |||
Balance at Feb. 02, 2023 | $ 2,827 | $ 6,004,306 | $ (583,574) | $ 18,096 | $ 5,441,655 |
Balance (in shares) at Feb. 02, 2023 | 282,684,998 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) $ / shares | |
Condensed Consolidated Statements of Stockholders' Equity | |
Stock issuance costs | $ | $ 2,269 |
Common dividends declared per common share (in dollars per share) | $ / shares | $ 0.385 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Feb. 02, 2023 | Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Operating activities | |||||
Net (loss) income | $ 25,787 | $ (35,542) | $ 87,022 | ||
Adjustments to net (loss) income: | |||||
Depreciation and amortization | 27,789 | 93,011 | 72,639 | ||
Amortization of debt discounts, deferred financing costs and other noncash interest expense | 715 | 15,882 | 2,161 | ||
Amortization of equity-based compensation | 975 | 3,068 | |||
Provisions for impairment | 5,677 | 912 | |||
Net (loss) gain on dispositions of real estate | (97) | 213 | (6,076) | ||
Loss from non-real estate, equity method investments | 2,157 | ||||
Loss on extinguishment of debt | 24,580 | ||||
Noncash revenue and other | (77) | 1,655 | (1,945) | ||
Changes in operating assets and liabilities: | |||||
Other assets | (2,876) | (1,726) | 1,798 | ||
Accrued expenses, deferred revenue and other liabilities | 7,164 | 423 | (849) | ||
Net cash provided by operating activities | 59,380 | 104,173 | 160,887 | ||
Investing activities | |||||
Acquisition of and additions to real estate | (48,063) | (182,612) | (467,495) | ||
Investment in loans and financing receivables | (82,112) | (15,044) | (45,721) | ||
Collections of principal on loans and financing receivables | 468 | 558 | 5,090 | ||
Proceeds from dispositions of real estate | 682 | 6,906 | 52,109 | ||
Acquisition of STORE Capital Corporation | (10,547,219) | ||||
Net cash used in investing activities | (129,025) | (10,737,411) | (456,017) | ||
Financing activities | |||||
Borrowings under credit facility | 70,000 | 432,000 | 266,000 | ||
Repayments under credit facility | (25,000) | (71,000) | (37,000) | ||
Borrowings under unsecured notes and term loans payable | 40,000 | 800,000 | |||
Repayments under unsecured notes and term loans payable | (185,600) | ||||
Borrowings under secured term loan facility | 1,957,750 | ||||
Repayments under secured term loan facility | (515,000) | ||||
Repayments under non-recourse debt obligations of consolidated special purpose entities | (15,906) | (3,791) | (16,075) | ||
Financing and prepayment penalties paid | (1,106) | (35,211) | (45) | ||
Members' contributions | 8,351,970 | ||||
Members' distributions | (50,000) | ||||
Proceeds from the issuance of common stock | 168,431 | ||||
Stock issuance costs paid | (2,252) | ||||
Shares repurchased under stock compensation plans | (5,888) | ||||
Dividends paid | (106,686) | ||||
Net cash provided by financing activities | 67,988 | 10,681,118 | 266,485 | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | (1,657) | 47,880 | (28,645) | ||
Cash, cash equivalents and restricted cash, beginning of period | 39,804 | 38,147 | $ 39,804 | 70,049 | |
Cash, cash equivalents and restricted cash, end of period | 38,147 | 47,880 | 47,880 | 41,404 | |
Reconciliation of cash, cash equivalents and restricted cash: | |||||
Cash and cash equivalents | 33,096 | 42,917 | 42,917 | 39,340 | $ 35,137 |
Restricted cash included in other assets | 5,051 | 4,963 | 4,963 | 2,064 | 4,700 |
Total cash, cash equivalents and restricted cash | 38,147 | 47,880 | $ 47,880 | 41,404 | $ 39,804 |
Supplemental disclosure of noncash investing and financing activities: | |||||
Accrued tenant improvements included in real estate investments | 7,346 | 14,951 | |||
Accrued financing and stock issuance costs | 50 | 17 | |||
Noncash distribution to members | 11,385 | ||||
Supplemental disclosure of cash flow information: | |||||
Cash paid during the period for interest, net of amounts capitalized | 11,488 | 48,830 | 40,084 | ||
Cash paid during the period for income and franchise taxes | $ 20 | $ 246 | $ 100 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2023 | |
Organization | |
Organization | 1. Organization STORE Capital Corporation 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, service-oriented retail and manufacturing sectors of the United States economy. From time to time, it also provided mortgage financing to its customers. On November 21, 2014, the Company completed the initial public offering of its common stock. The shares traded on the New York Stock Exchange from November 18, 2014 through the Closing Date, as defined below, under the ticker symbol “STOR”. On September 15, 2022, STORE Capital Corporation, Ivory Parent, LLC, a Delaware limited liability company (“Parent”) and Ivory REIT, LLC, a Delaware limited liability company (“Merger Sub” and, together with Parent, the “Parent Parties”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Parent Parties are affiliates of GIC, a global institutional investor, and Oak Street Real Estate Capital, a division of Blue Owl Capital, Inc. On February 3, 2023 (the “Closing Date”), pursuant to the terms and subject to the conditions set forth in the Merger Agreement, STORE Capital Corporation merged with and into Merger Sub (the “Merger”) with Merger Sub surviving (the “Surviving Entity”) and the separate existence of STORE Capital Corporation ceased. Immediately following the completion of the Merger, the Surviving Entity changed its name to STORE Capital LLC. References herein to “we,” “us,” “our,” the “Company,” or “STORE Capital” are references to STORE Capital Corporation prior to the Merger and to STORE Capital LLC upon and following the Merger. As of the Closing Date of the Merger, the common equity of the Company is no longer publicly traded. STORE Capital Corporation elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes beginning with its initial taxable year ended December 31, 2011. STORE Capital LLC has made an election to qualify, and believes it is operating in a manner to continue to qualify, as a REIT for federal income tax purposes beginning with its initial taxable year ended December 31, 2022. As a REIT, the Company will generally not be subject to federal income taxes to the extent that it distributes all of its taxable income to its members and meets other specific requirements. |
Summary of Significant Accounti
Summary of Significant Accounting Principles | 3 Months Ended |
Mar. 31, 2023 | |
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, 2022. These condensed consolidated statements include the accounts of STORE Capital Corporation and its subsidiaries for the periods prior to the Merger and the accounts of STORE Capital LLC and its subsidiaries for the period after the Merger. Subsidiaries of STORE Capital Corporation and STORE Capital LLC are wholly owned and controlled by the Company through its voting interests. 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 March 31, 2023 and December 31, 2022, these special purpose entities held assets totaling $12.9 billion and $9.5 billion, respectively, and had third-party liabilities totaling $3.8 billion and $2.4 billion, respectively. These assets and liabilities are included in the accompanying condensed consolidated balance sheets. Accounting for the Merger Business Combinations (“ASC Topic 805”), which requires that the cost of an acquisition be allocated on a relative fair value basis to the assets purchased and the liabilities assumed. Direct transaction costs incurred by STORE Capital LLC as the acquirer and amounts transferred to reimburse STORE Capital Corporation for costs incurred as the acquiree to sell the business are included in the consideration transferred and capitalized as a component of the cost of the assets acquired. An assembled workforce intangible asset is recorded at the acquisition date if it is part of the asset group acquired. Goodwill is not recognized in an asset acquisition and consideration transferred in excess over the fair value of the net assets acquired, if any, is allocated on a relative fair value basis to the identifiable assets and liabilities. 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 FASB’s 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 in one of two ways, either 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, or through acquisitions from third-party sellers in connection with which a new lease is entered into with the tenant. Both approaches result in long-term leases which are generally classified as operating leases and, in both cases, the operators become the Company’s long-term tenants (its customers). In certain instances, the terms of the lease result in classification as a finance lease instead of an operating lease. Furthermore, certain of the lease contracts that are specifically 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 Company’s adoption of ASC Topic 842, rather than as an investment in real estate subject to an operating or finance lease. ● Mortgage Loans Receivable – investments are made by issuing mortgage loans to the owner-operators of the real estate that serves 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. 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 that 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 contractual renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations. The Company’s real estate portfolio is depreciated using the straight-line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is generally 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated selling costs. Any properties classified as held for sale are not depreciated. Revenue Recognition STORE Capital leases real estate to its tenants under long-term net leases that are predominantly classified as operating leases. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, straight-line operating lease receivables, calculated as the aggregate difference between the rental revenue recognized on a straight-line basis and scheduled rents, represent unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the leases; these receivables are included in other assets, net on the condensed consolidated balance sheets. 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 March 31, 2023 and December 31, 2022, the Company had $1.8 million and $46.9 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 In addition to base rental revenue, certain leases also have contingent rentals that are based on a percentage of the tenant’s gross sales; the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Approximately 2.9% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales; historically, contingent rent recognized has 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 operations. 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, capitalization and discount rates, terminal value, tenant improvements, 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 For the period from February 3, 2023 through March 31, 2023, the Company recognized aggregate provisions for the impairment of real estate of $1.3 million. For the assets impaired in 2023, the estimated aggregate fair value of the impaired real estate assets at the time of impairment was $6.8 million. No impairment of real estate was recognized during the period from January 1, 2023 through February 2, 2023. million during the three months ended March 31, 2022. 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 March 31, 2023 and December 31, 2022, the Company had loans receivable with an aggregate outstanding principal balance of $33.8 million and $31.8 million, respectively, on nonaccrual status. Sales-Type and Direct Financing Receivables – Classification, Cost and Revenue Recognition Sales-type lease receivables are recorded at their net investment, determined as the present value of both the aggregate minimum lease payments and the estimated residual value of the leased property. 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 The Company accounts for provision of credit losses in accordance with ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 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. Loans are written off against the allowance for credit loss when all or a portion of the principal amount is determined to be uncollectible. For the period from February 3, 2023 through March 31, 2023, the Company recognized an estimated 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 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 $5.0 million and $4.7 million of restricted cash at March 31, 2023 and December 31, 2022, respectively, which are included in other assets, net, on the condensed consolidated balance sheets. Deferred Financing and Other Debt 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. Costs paid to a lender as part of a debt issuance are recorded as a debt discount 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. Financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets. Derivative Instruments and Hedging Activities The Company may enter into derivative contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of March 31, 2023, the Company had 11 interest rate swap agreements in place. Eight of the interest rate swap agreements have an aggregate notional amount of $800.0 million and are designated as cash flow hedges of the Company’s $800.0 million floating-rate bank term loan due in April 2027. Of these, one has a notional amount of $200.0 million and matures in April 2029 and seven, with an aggregate notional amount of $600.0 million, mature in April 2027. The remaining three interest rate swap agreements have a notional amount of $250.0 million each billion as of March 31, 2023 (Note 4). These interest rate swap agreements mature in August 2023, November 2023 and February 2024, respectively. In May 2023, the Company entered into two interest rate swap agreements with an aggregate notional amount of $325.0 million (Note 4); these swaps were designated as cash flow hedges of the Company’s floating-rate unsecured revolving credit facility which matures in February 2027. 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 Historically, directors and employees of the Company had been granted long-term incentive awards, including restricted stock awards (“RSAs”) and restricted stock unit awards (“RSUs”), which provided such directors and employees with equity interests as an incentive to remain in the Company’s service and aligned their interests with those of the Company’s stockholders. On February 3, 2023, we closed the Merger. Under the terms of the Merger Agreement, effective immediately prior to the merger effective time: ● each outstanding award of restricted stock automatically became fully vested and all restrictions and repurchase rights thereon lapsed, with the result that all shares of common stock represented thereby were considered outstanding for all purposes under the merger agreement and received an amount in cash equal to $32.25 per share (the ‘Merger Consideration”), less required withholding taxes. ● outstanding awards of performance-based RSUs automatically became earned and vested with (a) approximately 53% of the maximum number of shares of common stock subject to the award vesting for performance-based RSUs granted in 2020, (b) approximately 50% of the maximum number of shares of common stock subject to the award vesting for performance-based RSUs granted in 2021 and (c) approximately 33% of the maximum number of shares of common stock subject to the award vesting for performance-based RSUs granted in 2022, and thereafter were cancelled and, in exchange therefor, each holder of any such cancelled vested performance-based RSUs ceased to have any rights with respect thereto, except the right to receive as of the merger effective time, in consideration for the cancellation of such vested performance unit and in settlement therefor, an amount in cash equal to the product of (1) the Merger Consideration and (2) the number of so-determined earned performance shares subject to such vested performance-based RSUs, without interest, less required withholding taxes. In addition, on the Closing Date, each holder of performance-based RSUs received an amount equivalent to all cash dividends that would have been paid on the number of so-determined earned shares of the Company’s common stock subject to such performance-based RSUs as if they had been issued and outstanding from the date of grant up to, and including, the merger effective time, less required withholding taxes. In conjunction with the accelerated vesting of outstanding equity awards, the compensation expense for equity-based payments was $16.4 million which was presented “on-the-line” at the closing of the Merger. 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. Following the Merger, the Company's new ownership structure and status as a privately held REIT caused multiple state income tax jurisdictions to view the Company as a captive REIT. Within the jurisdictions where the Company is treated as a captive REIT, the dividends paid deduction may be disallowed, resulting in state income tax liabilities to which the Company was not previously subject when it was publicly traded. 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 2018 and tax returns filed for 2019 through 2022 are subject to examination by these jurisdictions. As of March 31, 2023, 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 March 31, 2023 or December 31, 2022. Net Income Per Common Share Net income per common share has been computed for STORE Capital Corporation pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share Predecessor Period from January 1, 2023 through February 2, 2023 Three Months Ended March 31, 2022 Numerator: Net income $ 25,787 $ 87,022 Less: Earnings attributable to unvested restricted shares (41) (102) Net income used in basic and diluted income per share $ 25,746 $ 86,920 Denominator: Weighted average common shares outstanding 282,684,998 275,463,866 Less: Weighted average number of shares of unvested restricted stock (446,847) (460,593) Weighted average shares outstanding used in basic income per share 282,238,151 275,003,273 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 100,254 — Weighted average shares outstanding used in diluted income per share 282,338,405 275,003,273 (a) For the period from January 1, 2023 to February 2, 2023, excludes 197,026 shares, and for the three months ended March 31, 2022, excludes 144,661 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 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2023 | |
Investments. | |
Investments | 3. Investments At March 31, 2023, STORE Capital had investments in 3,134 property locations representing 3,086 owned properties (of which 105 are accounted for as financing arrangements and 22 are accounted for as sales-type and direct financing receivables), 24 properties where all the related land is subject to an operating ground lease and 24 properties which secure mortgage loans. The gross investment portfolio totaled $14.38 billion at March 31, 2023 and consisted of real estate investments totaling $13.4 billion offset by intangible lease liabilities, totaling $148.7 million, loans and financing receivables with an aggregate carrying amount of $958.6 million and operating ground lease assets totaling $52.7 million. As of March 31, 2023, approximately 57% 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 three months ended March 31, 2023, the Company had the following gross real estate and other investment activity (dollars in thousands): Successor Predecessor Number of Dollar Number of Dollar Investment Amount of Investment Amount of Locations Investments Locations Investments Gross investments, December 31, 2022 3,084 $ 12,079,843 Acquisition of and additions to real estate (a) 19 42,452 Investment in loans and financing receivables 1 82,112 Sales of real estate (1) (760) Principal collections on loans and financing receivables (2) (468) Net change in operating ground lease assets (c) (125) Other 4,430 Gross investments, February 2, 2023 3,101 $ 12,207,484 Gross investments, February 3, 2023 3,101 $ 14,201,731 Acquisition of and additions to real estate (b) 35 184,156 Investment in loans and financing receivables 2 15,044 Sales of real estate (4) (7,148) Principal collections on loans and financing receivables — (558) Net change in operating ground lease assets (c) (139) Provisions for impairment (5,677) Other (3,541) Gross investments, March 31, 2023 (d) 14,383,868 Less accumulated depreciation and amortization (d) (93,423) Net investments, March 31, 2023 3,134 $ 14,290,445 (a) Excludes $5.2 million of tenant improvement advances disbursed from January 1, 2023 to February 2, 2023 which were accrued as of December 31, 2022. (b) Excludes $5.8 million of tenant improvement advances disbursed from February 3, 2023 to March 31, 2023 which were accrued as of February 2, 2023. (c) Represents amortization recognized on operating ground lease assets during the period from January 1, 2023 through February 2, 2023 and the period from February 3, 2023 through March 31, 2023. (d) Includes the below-market lease liabilities ( $148.7 million) and the accumulated amortization ( $2.6 million) of the liabilities recorded on the condensed consolidated balance sheets as intangible lease liabilities as of March 31, 2023. The following table summarizes the revenues the Company recognized from its investment portfolio (in thousands): Successor Predecessor Period from February 3, 2023 through March 31, 2023 Period from January 1, 2023 through February 2, 2023 Three Months Ended March 31, 2022 Rental revenues: Operating leases (a) $ 153,339 $ 75,005 $ 201,892 Sublease income - operating ground leases (b) 348 234 703 Amortization of lease related intangibles and costs 2,066 (231) (534) Total rental revenues $ 155,753 $ 75,008 $ 202,061 Interest income on loans and financing receivables: Mortgage and other loans receivable $ 4,803 $ 2,434 $ 7,879 Sale-leaseback transactions accounted for as financing arrangements 4,897 2,444 5,327 Sales-type and direct financing receivables 2,062 448 1,724 Total interest income on loans and financing receivables $ 11,762 $ 5,326 $ 14,930 (a) For the period from February 3, 2023 through March 31, 2023, the period from January 1, 2023 through February 2, 2023 and the three months ended March 31, 2022, includes $508,000 , $252,000 and $654,000 , respectively, of property tax tenant reimbursement revenue and includes $129,000 , $24,000 and $447,000 , 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. 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 592 customers who operate their businesses across 129 industries geographically dispersed throughout 49 states. The primary sectors of the U.S. economy and their proportionate dollar amount of STORE Capital’s investment portfolio at March 31, 2023 are service at 63%, service-oriented retail at 15% and manufacturing at 22%. Only one industry group, restaurants (11%), and only one state, Texas (11%), accounted for 10% or more of the total dollar amount of STORE Capital’s investment portfolio at March 31, 2023. None of the Company’s customers represented more than 10% of the Company’s investment portfolio at March 31, 2023, with the largest customer representing 2.6% of the total investment portfolio. On an annualized basis, as of March 31, 2023, the largest customer represented 2.7% of the Company’s total investment portfolio revenues. Real Estate Investments The weighted average remaining noncancelable lease term of the Company’s operating leases with its tenants at March 31, 2023 was approximately 13.1 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 March 31, 2023, 15 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 March 31, 2023, are as follows (in thousands): Remainder of 2023 $ 697,269 2024 923,579 2025 919,947 2026 913,541 2027 901,628 2028 881,686 Thereafter 6,788,224 Total future minimum rentals (a) $ 12,025,874 (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 Intangible Lease Assets The following details intangible lease assets and related accumulated amortization (in thousands): Successor Predecessor March 31, December 31, 2023 2022 In-place leases $ 581,884 $ 42,519 Ground lease-related intangibles — 19,449 Above-market leases 38,017 — Total intangible lease assets 619,901 61,968 Accumulated amortization (9,544) (27,278) Net intangible lease assets $ 610,357 $ 34,690 Aggregate lease intangible asset amortization included in expense was $9.0 million, $0.3 million and $0.9 million during the period from February 3, 2023 through March 31, 2023, the period from January 1, 2023 through February 2, 2023 and the three months ended March 31, 2022, respectively. The amount amortized as a decrease to rental revenue for capitalized above-market lease intangibles was $0.5 million during the period from February 3, 2023 through March 31, 2023. For both the period from January 1, 2023 through February 2, 2023 and the three months ended March 31, 2022, there was Based on the balance of the intangible assets at March 31, 2023, the aggregate amortization expense is expected to be $40.3 million for the remainder of 2023, $52.3 million in 2024, $51.0 million in 2025, $49.4 million in 2026, $47.6 million in 2027, $45.1 million in 2028 and $287.2 million thereafter. The amount expected to be amortized as a decrease to rental revenue is expected to be $2.3 million for the remainder of 2023, $2.9 million in 2024, $2.8 million in 2025, $2.8 million in 2026, $2.8 million in 2027, $2.6 million in 2028 and $21.3 million thereafter. The weighted average remaining amortization period is approximately 13 years for the in-place lease intangibles and approximately 15 years for the above-market lease intangibles. Intangible Lease Liabilities The following details intangible lease liabilities and related accumulated amortization (in thousands) as of March 31, 2023. There were Successor March 31, 2023 Below-market leases $ 148,660 Accumulated amortization (2,592) Net intangible lease liabilities $ 146,068 Lease intangible liabilities are amortized as an increase to rental revenue. Operating Ground Lease Assets As of March 31, 2023, STORE Capital had operating ground lease assets aggregating $52.7 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 $571,000, $273,000 and $755,000 during the period from February 3, 2023 through March 31, 2023, the period from January 1, 2023 through February 2, 2023 and the three months ended March 31, 2022, respectively. The Company also recognized, in rental revenues, sublease revenue associated with its operating ground leases of $348,000, $234,000 and $703,000 for the period from February 3, 2023 through March 31, 2023, the period from January 1, 2023 through February 2, 2023 and the three months ended March 31, 2022, respectively. The future minimum lease payments to be paid under the operating ground leases as of March 31, 2023 were as follows (in thousands): Ground Ground Leases Leases Paid by Paid by STORE Capital's STORE Capital Tenants (a) Total Remainder of 2023 $ 185 $ 2,103 $ 2,288 2024 55 2,711 2,766 2025 57 2,725 2,782 2026 57 2,731 2,788 2027 57 2,731 2,788 2028 57 2,761 2,818 Thereafter 3,316 100,262 103,578 Total lease payments 3,784 116,024 119,808 Less imputed interest (3,020) (70,565) (73,585) Total operating lease liabilities - ground leases $ 764 $ 45,459 $ 46,223 (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 $116.0 million commitment, $79.6 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): Successor Predecessor Interest Maturity March 31, December 31, Type Rate (a) Date 2023 2022 Three mortgage loans receivable 8.05 % 2023 - 2026 $ 101,364 $ 104,069 Three mortgage loans receivable 8.81 % 2032 - 2036 9,954 9,967 Seventeen mortgage loans receivable (b) 8.46 % 2042 - 2062 237,774 231,639 Total mortgage loans receivable 349,092 345,675 Equipment and other loans receivable 7.98 % 2023 - 2036 14,121 15,842 Total principal amount outstanding—loans receivable 363,213 361,517 Unamortized loan origination costs — 1,011 Unamortized loan premium 10,177 — Sale-leaseback transactions accounted for as financing arrangements (c) 7.58 % 2034 - 2048 448,867 369,604 Sales-type and direct financing receivables 140,759 60,899 Allowance for credit and loan losses (d) (4,377) (5,925) Total loans and financing receivables $ 958,639 $ 787,106 (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 and 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 2048 and the purchase options expire between 2024 and 2042. (d) Balance includes $4.4 million of credit losses recognized during the period from February 3, 2023 through March 31, 2023. Loans Receivable At March 31, 2023, the Company held 36 loans receivable with an aggregate carrying amount of $371.4 million. Twenty-three 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. Three of the mortgage loans are shorter-term loans (maturing prior to 2027) 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 a balloon payment, 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 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 2023 $ 1,921 $ 88,709 $ 90,630 2024 2,264 — 2,264 2025 2,071 — 2,071 2026 2,045 20,371 22,416 2027 1,767 548 2,315 2028 1,930 — 1,930 Thereafter 211,735 29,852 241,587 Total principal payments $ 223,733 $ 139,480 $ 363,213 Sale-Leaseback Transactions Accounted for as Financing Arrangements As of March 31, 2023 and December 31, 2022, the Company had $448.9 million and $369.6 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 March 31, 2023, were as follows (in thousands): Remainder of 2023 $ 22,925 2024 30,694 2025 30,863 2026 30,987 2027 31,120 2028 31,262 Thereafter 349,049 Total future scheduled payments $ 526,900 Sales-Type and Direct Financing Receivables As of March 31, 2023 and December 31, 2022, the Company had $140.8 million and $60.9 million, respectively, of investments accounted for as sales-type leases and as direct financing leases under previous accounting guidance; the components of these investments were as follows (in thousands): Successor Predecessor March 31, December 31, 2023 2022 Minimum lease payments receivable $ 332,733 $ 119,839 Estimated residual value of leased assets 8,898 6,889 Unearned income (200,872) (65,829) Net investment $ 140,759 $ 60,899 As of March 31, 2023, the future minimum lease payments to be received under the sales-type and direct financing lease receivables are expected to be $9.8 million for the remainder 2023, 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 March 31, 2023, $230.7 million of loans and financing receivables were categorized as investment grade and $722.1 million were categorized as non-investment grade. During the period from February 3, 2023 through March 31, 2023, there were recoveries of amounts previously written off. There were As of March 31, 2023, the year of origination for loans and financing receivables with a credit quality indicator of investment grade was $14.6 million in 2023, $14.8 million in 2022, $46.5 million in 2021, none in 2020, $141.8 million in 2019 and $13.0 million prior to 2019. The year of origination for loans and financing receivables with a credit quality indicator of non-investment grade was $82.7 million in 2023, $148.6 million in 2022, $68.4 million in 2021, $91.2 million in 2020, $143.3 million in 2019 and $187.9 million prior to 2019. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt | |
Debt | 4. Debt Credit Facility In connection with the completion of the Merger on February 3, 2023, the Company repaid all amounts outstanding and terminated, the previous revolving credit facility agreement. At the time of repayment, the outstanding balance on the previous unsecured revolving credit facility was $600.0 million. Concurrently, the Company entered into a credit agreement (the “Unsecured Credit Agreement”) with a group of lenders which initially provided for a senior unsecured revolving credit facility of up to $500.0 million (the “Unsecured Revolving Credit Facility”) and an unsecured, variable-rate term loan which is discussed in more detail in the section titled “Unsecured Notes and Term Loans Payable, net” below. In March 2023, the Company entered into an amendment of the Unsecured Credit Agreement which increased the Unsecured Revolving Credit Facility by $150.0 million to an immediate borrowing availability of $650.0 million. The facility matures in February 2027 and includes two six-month extension options, subject to certain conditions and the payment of a 0.075% extension fee. At March 31, 2023, the Company had $361.0 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) SOFR plus an adjustment of 0.10% plus a spread ranging from 1.00% to 1.45%, or (2) the Base Rate, as defined in the Unsecured Credit Agreement, plus a spread ranging from 0.00% to 0.45%. The spread used is based on the Company’s consolidated total leverage ratio as defined in the Unsecured Credit Agreement. The Company is required to pay a facility fee on the total commitment amount ranging from 0.15% to 0.30% based on our consolidated total leverage ratio. Currently, the applicable spread for SOFR-based borrowings is . In May 2023, the Company entered into Under the terms of the Unsecured Credit Agreement, 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 $6.1 billion at March 31, 2023. The facility is recourse to the Company and, as of March 31, 2023, the Company was in compliance with the covenants under the facility. The Unsecured Credit Agreement also includes capacity for uncommitted incremental term loans and revolving commitments, whether in the form of additional facilities or an increase to the existing facilities, up to an aggregate amount for all revolving commitments and term loans under the Unsecured Credit Agreement of At March 31, 2023 and December 31, 2022, unamortized financing costs related to the Company’s credit facility totaled $7.1 million and $2.6 million, respectively, and are included in other assets, net, on the condensed consolidated balance sheets. Unsecured Notes and Term Loans Payable, net Prior to the Merger, the Company completed four public offerings of ten-year unsecured notes (“Public Notes”). In March 2018, February 2019 and November 2020, the Company completed public offerings of $350.0 million each in aggregate principal amount. In November 2021, the Company completed a public offering of $375.0 million in aggregate principal amount. The Public Notes have coupon rates of 4.50%, 4.625%, 2.75% and 2.70%, respectively, and interest is payable semi-annually in arrears in March and September of each year for the 2018 and 2019 Public Notes, May and November of each year for the 2020 Public Notes, and June and December of each year for the 2021 Public Notes. 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 March 31, 2023, 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 initially aggregating $375.0 million (the “Notes”). In November 2022, the Company repaid its $75.0 million Series A senior unsecured notes at maturity which bore an interest rate of 4.95%. Upon completion of the Merger and pursuant to the NPAs, the Company was required to offer to prepay the remaining $300.0 million in outstanding aggregate principal amounts of Notes. Following the closing of the repurchase offer period in March 2023, the Company repurchased $185.6 million in aggregate principal amounts of such Notes. The Company recognized $4.8 million of accelerated amortization of debt discounts as a result of the repurchases which is included in the loss on extinguishment of debt on the condensed consolidated statements of operations. At March 31, 2023, the Company had $114.4 million of Notes outstanding. 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 Revolving 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 March 31, 2023, the Company was in compliance with its covenants under the NPAs. In April 2022, the Company entered into a term loan agreement under which the Company borrowed an aggregate $600.0 million of floating-rate, unsecured term loans; the loans consisted of a $400.0 million five-year loan and a $200.0 million seven-year loan (“April 2022 Term Loans”). On February 3, 2023, in connection with the completion of the Merger, the Company repaid all indebtedness, liabilities and other obligations outstanding under, and terminated, the April 2022 Term Loans. At the time of repayment, the aggregate borrowings under the April 2022 Term Loans were $600.0 million. The Company also incurred a $0.7 million prepayment penalty at the time of repayment which is included in the loss on extinguishment of debt on the condensed consolidated statements of operations. In December 2022, the Company entered into a term loan agreement with a total initial commitment of $100.0 million of unsecured, floating-rate, short-term term borrowings (the “December 2022 Term Loan”) The December 2022 Term Loan matured at the earlier of March 31, 2023 or the consummation of the Merger. The term loan agreement included an incremental borrowing feature that allowed the Company to request up to an additional $100.0 million of term borrowings after December 31, 2022. In connection with the completion of the Merger, on February 3, 2023, the Company repaid As discussed above, in connection with the completion of the Merger, the Company entered into the Unsecured Credit Agreement, which provided for the Company’s Unsecured Revolving Credit Facility, as discussed above, and an unsecured, variable-rate term loan with initial borrowings of $600.0 million (the “Unsecured Term Loan”). In March 2023, the Company entered into an amendment to the Unsecured Credit Agreement which provided for an increase to the Unsecured Term Loan in an amount of $200.0 million for total term loan borrowings of $800.0 million. The Unsecured Term Loan matures in April 2027 and the interest rate resets daily at Daily Simple SOFR plus an adjustment of 0.10% plus a spread ranging from 1.10% to 1.70% based on the Company’s consolidated total leverage ratio as defined in the Unsecured Credit Agreement. At March 31, 2023, the spread applicable to the Company was 1.25%. Seven of the Company’s cash flow hedges, with an aggregate notional amount of $600.0 million were redesignated as cash flow hedges of the Unsecured Term Loan and effectively convert the initial $600.0 million of borrowings to a fixed rate of 3.88% for the remaining term of the loan. In connection with the amendment, the Company entered into one interest rate swap agreement with a notional amount of $200.0 million that effectively converts the incremental borrowings to a fixed interest rate of 5.17% for the remaining term of the loan. As noted above, under the terms of the Unsecured Credit Agreement, 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. As of March 31, 2023, the Company was in compliance with these covenants. The Unsecured Term Loans are senior unsecured obligations of the Company, require monthly interest payments and may be prepaid without premium or penalty at any time. The Company’s senior unsecured notes and term loans payable are summarized below (dollars in thousands): Successor Predecessor Maturity Interest March 31, December 31, Date Rate 2023 2022 Notes Payable: Series B issued November 2015 Nov. 2024 5.24 % 32,400 100,000 Series C issued April 2016 Apr. 2026 4.73 % 82,000 200,000 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 Public Notes issued November 2021 Dec. 2031 2.70 % 375,000 375,000 Total notes payable 1,539,400 1,725,000 Term Loans: Term Loan issued December 2022 — 90,000 Term Loan issued April 2022 — 400,000 Term Loan issued April 2022 — 200,000 Term Loan issued February 2023 (a) Apr. 2027 4.2042 % (b) 800,000 — Total term loans 800,000 690,000 Unamortized discount (224,514) (4,113) Unamortized deferred financing costs (8,538) (13,481) Total unsecured notes and term loans payable, net $ 2,106,348 $ 2,397,406 (a) Term loan was issued in February 2023 with initial borrowings of $600.0 million and amended in March 2023 to increase the total term loan borrowings to $800.0 million. (b) Loan is a floating-rate loan which resets daily at Daily Simple SOFR + an adjustment of 0.10% + the applicable spread which was 1.25% at March 31, 2023. The Company has entered into eight interest rate swap agreements that effectively convert the floating rate to the weighted-average fixed rate noted as of March 31, 2023. Secured Term Loan Facility, net On February 3, 2023, in connection with the completion of the Merger, the Company and certain of its consolidated special purpose entities entered into a credit agreement (the “Credit Agreement”) which provided for a secured term loan of $2.0 billion (the “Secured Term Loan Facility”). Borrowings outstanding under the Secured Term Loan Facility require monthly payments of interest at a floating-rate equal to one-month Term SOFR, plus a spread of 2.75%. Upon repayment of the Secured Term Loan Facility, the Company is subject to a 1% exit fee of the amount repaid. In March 2023, the Company paid down $515.0 million in aggregate principal amount of indebtedness under the Credit Agreement. In conjunction with the paydown, the Company paid a $5.2 million exit fee and recognized $3.5 million and $10.4 million of accelerated amortization of deferred financing costs and debt discounts, respectively, associated with the repayment. The exit fee and accelerated amortization are included in the loss on extinguishment of debt on the condensed consolidated statements of operations. In connection with entering into the Secured Term Loan Facility, the Company entered into three interest rate swap agreements with an aggregate notional amount of $750.0 million that effectively converted a portion of the borrowings to a fixed interest rate of 7.60%. The Secured Term Loan Facility is secured by a collateral pool of properties owned by consolidated special purpose entities of the Company and is generally non-recourse to the Company, subject to certain customary limited exceptions. Collateral may be released upon repayments made on the Secured Term Loan Facility. As of March 31, 2023, the aggregate collateral pool securing the Secured Term Loan Facility was comprised primarily of single-tenant commercial real estate properties with an aggregate investment amount of approximately $3.5 billion. The consolidated special purpose entities and the Company are subject to certain restrictive covenants under the Credit Agreement, including with respect to the type of business they may conduct and other customary covenants for a bankruptcy-remote special purpose entity. The Credit Agreement permits substitution of real estate collateral from time to time for assets securing the Secured Term Loan Facility, subject to certain conditions and limitations. The Secured Term Loan Facility is guaranteed by the Company. The Company’s secured term loan facility is summarized below (dollars in thousands): Successor Maturity Interest March 31, Date Rate 2023 Secured Term Loan Facility Secured Term Loan issued February 2023 Feb. 2025 7.5078 % (a) 1,485,000 Unamortized discount (28,756) Unamortized deferred financing costs (9,586) Total secured term loan facility, net $ 1,446,658 a) Loan is a floating-rate loan which resets at one-month Term SOFR + an adjustment of 0.10% + the applicable spread which was 2.75% at March 31, 2023. The Company has entered into three interest rate swap agreements with an aggregate notional amount of $750.0 million that effectively convert a portion of the borrowings to a fixed interest rate of 7.60% . 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 March 31, 2023. The Class A notes require monthly principal and interest payments with a balloon payment due at maturity and these notes may be prepaid at any time, subject to a yield maintenance prepayment premium if prepaid more than 24 or 36 months prior to maturity. As of March 31, 2023, the aggregate collateral pool securing the net-lease mortgage notes was comprised primarily of single-tenant commercial real estate properties with an aggregate investment amount of approximately $4.4 billion. A number of additional consolidated special purpose entity subsidiaries of the Company have financed their real estate properties with traditional first mortgage debt. The notes generally require monthly principal and interest payments with balloon payments due at maturity. In general, these mortgage notes payable can be prepaid in whole or in part upon payment of a yield maintenance premium. The mortgage notes payable are collateralized by real estate properties owned by these consolidated special purpose entity subsidiaries with an aggregate investment amount of approximately $288.6 million at March 31, 2023. 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): Successor Predecessor Maturity Interest March 31, December 31, Date Rate 2023 2022 Non-recourse net-lease mortgage notes: $150,000 Series 2018-1, Class A-1 Oct. 2024 (b) 3.96 % $ 140,177 $ 140,552 $50,000 Series 2018-1, Class A-3 Oct. 2024 (b) 4.40 % 48,292 48,417 $270,000 Series 2015-1, Class A-2 Apr. 2025 (b) 4.17 % 259,313 259,650 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 (b) 3.96 % 174,751 175,861 $82,000 Series 2019-1, Class A-1 Nov. 2026 (b) 2.82 % 78,078 78,180 $46,000 Series 2019-1, Class A-3 Nov. 2026 (b) 3.32 % 45,233 45,291 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 (b) 4.32 % 119,448 120,182 $228,000 Series 2018-1, Class A-2 Oct. 2027 (c) 4.29 % 213,068 213,638 $164,000 Series 2018-1, Class A-4 Oct. 2027 (c) 4.74 % 158,397 158,807 $168,500 Series 2021-1, Class A-1 Jun. 2028 (b) 2.12 % 167,026 167,236 $89,000 Series 2021-1, Class A-3 Jun. 2028 (b) 2.86 % 88,221 88,333 $168,500 Series 2021-1, Class A-2 Jun. 2033 (c) 2.96 % 167,026 167,236 $89,000 Series 2021-1, Class A-4 Jun. 2033 (c) 3.70 % 88,221 88,333 $244,000 Series 2019-1, Class A-2 Nov. 2034 (c) 3.65 % 232,329 232,634 $136,000 Series 2019-1, Class A-4 Nov. 2034 (c) 4.49 % 133,733 133,903 Total non-recourse net-lease mortgage notes 2,113,313 2,118,253 Non-recourse mortgage notes: $6,944 notes issued March 2013 (a) 4.50 % — 5,103 $11,895 note issued March 2013 (a) 4.7315 % — 8,935 $17,500 note issued August 2013 Sept. 2023 (d) 5.46 % 13,565 13,701 $10,075 note issued March 2014 Apr. 2024 (d) 5.10 % 8,547 8,602 $65,000 note issued June 2016 Jul. 2026 (d) 4.75 % 57,650 57,980 $41,690 note issued March 2019 Mar. 2029 (e) 4.80 % 40,493 40,662 $6,350 notes issued March 2019 (assumed in December 2020) Apr. 2049 (d) 4.64 % 5,964 5,993 Total non-recourse mortgage notes 126,219 140,976 Unamortized discount (190,364) (395) Unamortized deferred financing costs — (20,364) Total non-recourse debt obligations of consolidated special purpose entities, net $ 2,049,168 $ 2,238,470 (a) Mortgage notes were repaid, without penalty, in January 2023 (b) Prepayable, without penalty, 24 months prior to maturity. (c) Prepayable, without penalty, 36 months prior to maturity. (d) Prepayable, without penalty, three months prior to maturity. (e) Prepayable, without penalty, four months prior to maturity. Credit Risk Related Contingent Features The Company has agreements with derivative counterparties, which provide generally that the Company could be declared in default on its derivative obligations if the Company defaults on the underlying indebtedness. As of March 31, 2023, the termination value of the Company’s interest rate swaps that were in a liability position was approximately Long-term Debt Maturity Schedule As of March 31, 2023, 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 2023 $ 16,872 $ 13,343 $ 30,215 2024 21,908 226,198 248,106 2025 19,777 1,741,613 1,761,390 2026 17,728 414,142 431,870 2027 9,221 1,260,472 1,269,693 2028 4,711 598,595 603,306 Thereafter 22,097 1,697,255 1,719,352 $ 112,314 $ 5,951,618 $ 6,063,932 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity | |
Stockholders' Equity | 5. Equity Stockholders’ Equity (Predecessor) 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 could offer and sell up to $900.0 million of registered shares of common stock through a group of banks acting as its sales agents (the “2020 ATM Program”). For the period from January 1, 2023 to February 2, 2023, there were no common stock issuances under the 2020 ATM Program. Upon closing of the Merger, on February 3, 2023, the 2020 ATM Program was terminated. Pursuant to the terms and conditions of the Merger Agreement, at or immediately prior to, as applicable, the effective time of the Merger, each share of common stock of the Company, par value $0.01 per share (“Common Stock”), other than shares of Common Stock held by STORE Capital, the Parent Parties or any of their respective wholly-owned subsidiaries, issued and outstanding immediately prior to the merger effective time, was automatically cancelled and converted into the right to receive an amount in cash equal to the Merger Consideration, without interest. Members’ Equity (Successor) In connection with the Merger, the Company issued 1,000 common units (“Common Units”) to its members for an aggregate cash amount of $8.3 billion. Prior to the Merger, Ivory REIT, LLC issued In accordance with the Company’s operating agreement, members holding Preferred Units (“Preferred Members”) receive distributions bi-annually and Members holding Common Units (“Common Members”) may receive distributions monthly. Common Members may be subject to capital calls. Except for their initial capital contribution, no Preferred Members may make any additional capital contributions. Additionally, no Preferred Member has the right to demand a withdrawal, reduction or return of its capital contributions or receive interest thereon. The Preferred Units rank senior to the Common Units of the Company and to all other membership interests and equity securities issued by the Company with respect to distribution and redemption rights and rights upon liquidation, dissolution or winding up of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023, the Company had commitments to its customers to fund improvements to owned or mortgaged real estate properties totaling approximately 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 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 and continuation of healthcare benefits under the terms of the employee agreements. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
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. At March 31, 2023, the fair value of the Company’s derivative instruments was an asset of million. The derivative assets are included in other assets, net, and the derivative liabilities are included in accrued expenses, deferred revenue and other liabilities on the condensed consolidated balance sheets. At December 31, 2022, the aggregate fair value of the Company’s derivative instruments was an asset of 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 March 31, 2023 and December 31, 2022. 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 current 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 March 31, 2023, these debt obligations had an aggregate carrying value of $5.6 billion and an estimated fair value of $5.5 billion. At December 31, 2022, these debt obligations had an aggregate carrying value of $4.6 billion and an estimated fair value of $4.1 billion. |
Merger
Merger | 3 Months Ended |
Mar. 31, 2023 | |
Merger | |
Merger | 8. Merger On February 3, 2023, pursuant to the terms and subject to the conditions set forth in the Merger Agreement, STORE Capital Corporation merged with and into Merger Sub and the separate existence of STORE Capital Corporation ceased. Immediately following the completion of the Merger, the Surviving Entity changed its name to STORE Capital LLC. As a result of the Merger and subsequent delisting of the Company’s Common Stock from the New York Stock Exchange, the common equity of the Company is no longer publicly traded. Consideration and Purchase Price Allocation The Merger was accounted for using the asset acquisition method of accounting in accordance with ASC Topic 805 which requires that the cost of an acquisition be allocated on a relative fair value basis to the assets acquired and the liabilities assumed. The following table summarizes the total consideration transferred in the purchase of STORE Capital Corporation (amounts in thousands): Consideration Type Cash paid to former shareholders and equity award holders $ 9,142,744 Extinguishment of historical debt 1,331,698 Capitalized transaction costs 110,924 Total consideration $ 10,585,366 The following table summarizes the estimated fair values assigned to the assets acquired and liabilities assumed (amounts in thousands): Assets acquired: Land and improvements $ 3,620,509 Buildings and improvements 9,105,004 Intangible lease assets 620,034 Operating ground lease assets 52,805 Loans and financing receivables 952,039 Cash and cash equivalents 33,096 Other assets 71,209 Total assets acquired 14,454,696 Liabilities assumed: Unsecured notes and term loans payable 1,725,000 Non-recourse debt obligations of consolidated special purpose entities 2,243,323 Below market value of debt (430,908) Intangible lease liabilities 148,660 Operating lease liabilities 50,516 Other liabilities 132,739 Total liabilities assumed 3,869,330 Fair value of net assets acquired $ 10,585,366 Fair Value Measurement The estimated fair values of assets acquired and liabilities assumed were primarily based on information that was available as of the Closing Date. The methodology used to estimate the fair values to apply purchase accounting and the ongoing financial statement impact, if any, are summarized below. ● Real estate investments, including sale-leaseback transactions accounted for as financing arrangements, investments in sales-type leases and direct financing receivables – the Company engaged third party valuation specialists to calculate the fair value of the real estate acquired by the Company using standard valuation methodologies, including the cost and market approaches. The remaining useful lives for real estate assets, excluding land, were reset based on the effective age of an asset compared to its overall average life, as determined by the valuation specialists. ● Intangible lease assets and liabilities – the Company engaged third party valuation specialists to calculate the fair value of in-place lease assets based on estimated costs the Company would incur to replace the lease. In-place lease assets are amortized to expense over the remaining life of the lease. Above-market lease assets and below-market lease liabilities were recorded at the discounted difference between the contractual cash flows and the market cash flows for each lease using a market-based, risk related discount rate. Above-market and below-market lease assets and liabilities are amortized as a decrease and increase to rental revenue, respectively, over the remaining life of the lease. ● Operating ground lease assets and liabilities – the Company engaged third party valuation specialists to calculate the fair value of operating ground lease assets and liabilities based on the present value of future lease payments and an adjustment for the off-market component by comparing market to contract rent. ● Loans receivable – the Company engaged third party valuation specialists to calculate the fair value of loans receivable based on the net present value of future payments to be received discounted at a market rate. The above-market value of the loans receivable is recorded as a loan premium and reported as an increase of the related loan balance on the condensed consolidated balance sheets. The premium is amortized as a decrease to interest income over the remaining term of the loan receivable. ● Assumed debt – the Company engaged third party valuation specialists to calculate the fair value of the outstanding debt assumed using standard valuation methodology, including the market approach. The below-market value of debt is recorded as a debt discount and reported as a reduction of the related debt balance on the condensed consolidated balance sheets. The discount is amortized as an increase to interest expense over the remaining term of the related debt instrument. ● Other assets and liabilities – the carrying values of cash, restricted cash, accounts receivable, prepaids and other assets, accounts payable, accrued expenses and other liabilities represented the fair values. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2022. These condensed consolidated statements include the accounts of STORE Capital Corporation and its subsidiaries for the periods prior to the Merger and the accounts of STORE Capital LLC and its subsidiaries for the period after the Merger. Subsidiaries of STORE Capital Corporation and STORE Capital LLC are wholly owned and controlled by the Company through its voting interests. 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 March 31, 2023 and December 31, 2022, these special purpose entities held assets totaling $12.9 billion and $9.5 billion, respectively, and had third-party liabilities totaling $3.8 billion and $2.4 billion, respectively. These assets and liabilities are included in the accompanying condensed consolidated balance sheets. |
Accounting for the Merger | Accounting for the Merger Business Combinations (“ASC Topic 805”), which requires that the cost of an acquisition be allocated on a relative fair value basis to the assets purchased and the liabilities assumed. Direct transaction costs incurred by STORE Capital LLC as the acquirer and amounts transferred to reimburse STORE Capital Corporation for costs incurred as the acquiree to sell the business are included in the consideration transferred and capitalized as a component of the cost of the assets acquired. An assembled workforce intangible asset is recorded at the acquisition date if it is part of the asset group acquired. Goodwill is not recognized in an asset acquisition and consideration transferred in excess over the fair value of the net assets acquired, if any, is allocated on a relative fair value basis to the identifiable assets and liabilities. |
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 FASB’s 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 in one of two ways, either 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, or through acquisitions from third-party sellers in connection with which a new lease is entered into with the tenant. Both approaches result in long-term leases which are generally classified as operating leases and, in both cases, the operators become the Company’s long-term tenants (its customers). In certain instances, the terms of the lease result in classification as a finance lease instead of an operating lease. Furthermore, certain of the lease contracts that are specifically 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 Company’s adoption of ASC Topic 842, rather than as an investment in real estate subject to an operating or finance lease. ● Mortgage Loans Receivable – investments are made by issuing mortgage loans to the owner-operators of the real estate that serves 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. |
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 that 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 contractual renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations. The Company’s real estate portfolio is depreciated using the straight-line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is generally 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated selling costs. Any properties classified as held for sale are not depreciated. |
Revenue Recognition | Revenue Recognition STORE Capital leases real estate to its tenants under long-term net leases that are predominantly classified as operating leases. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight-line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, straight-line operating lease receivables, calculated as the aggregate difference between the rental revenue recognized on a straight-line basis and scheduled rents, represent unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the leases; these receivables are included in other assets, net on the condensed consolidated balance sheets. 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 March 31, 2023 and December 31, 2022, the Company had $1.8 million and $46.9 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 In addition to base rental revenue, certain leases also have contingent rentals that are based on a percentage of the tenant’s gross sales; the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Approximately 2.9% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales; historically, contingent rent recognized has 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 operations. |
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, capitalization and discount rates, terminal value, tenant improvements, 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 For the period from February 3, 2023 through March 31, 2023, the Company recognized aggregate provisions for the impairment of real estate of $1.3 million. For the assets impaired in 2023, the estimated aggregate fair value of the impaired real estate assets at the time of impairment was $6.8 million. No impairment of real estate was recognized during the period from January 1, 2023 through February 2, 2023. million during the three months ended March 31, 2022. |
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 March 31, 2023 and December 31, 2022, the Company had loans receivable with an aggregate outstanding principal balance of $33.8 million and $31.8 million, respectively, on nonaccrual status. Sales-Type and Direct Financing Receivables – Classification, Cost and Revenue Recognition Sales-type lease receivables are recorded at their net investment, determined as the present value of both the aggregate minimum lease payments and the estimated residual value of the leased property. 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 The Company accounts for provision of credit losses in accordance with ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments 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. Loans are written off against the allowance for credit loss when all or a portion of the principal amount is determined to be uncollectible. For the period from February 3, 2023 through March 31, 2023, the Company recognized an estimated |
Sales-Type and Direct Financing Receivables - Classification, Cost and Revenue Recognition | Sales-Type and Direct Financing Receivables – Classification, Cost and Revenue Recognition Sales-type lease receivables are recorded at their net investment, determined as the present value of both the aggregate minimum lease payments and the estimated residual value of the leased property. 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 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 $5.0 million and $4.7 million of restricted cash at March 31, 2023 and December 31, 2022, respectively, which are included in other assets, net, on the condensed consolidated balance sheets. |
Deferred Financing and Other Debt Costs | Deferred Financing and Other Debt 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. Costs paid to a lender as part of a debt issuance are recorded as a debt discount 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. Financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company may enter into derivative contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of March 31, 2023, the Company had 11 interest rate swap agreements in place. Eight of the interest rate swap agreements have an aggregate notional amount of $800.0 million and are designated as cash flow hedges of the Company’s $800.0 million floating-rate bank term loan due in April 2027. Of these, one has a notional amount of $200.0 million and matures in April 2029 and seven, with an aggregate notional amount of $600.0 million, mature in April 2027. The remaining three interest rate swap agreements have a notional amount of $250.0 million each billion as of March 31, 2023 (Note 4). These interest rate swap agreements mature in August 2023, November 2023 and February 2024, respectively. In May 2023, the Company entered into two interest rate swap agreements with an aggregate notional amount of $325.0 million (Note 4); these swaps were designated as cash flow hedges of the Company’s floating-rate unsecured revolving credit facility which matures in February 2027. |
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 Historically, directors and employees of the Company had been granted long-term incentive awards, including restricted stock awards (“RSAs”) and restricted stock unit awards (“RSUs”), which provided such directors and employees with equity interests as an incentive to remain in the Company’s service and aligned their interests with those of the Company’s stockholders. On February 3, 2023, we closed the Merger. Under the terms of the Merger Agreement, effective immediately prior to the merger effective time: ● each outstanding award of restricted stock automatically became fully vested and all restrictions and repurchase rights thereon lapsed, with the result that all shares of common stock represented thereby were considered outstanding for all purposes under the merger agreement and received an amount in cash equal to $32.25 per share (the ‘Merger Consideration”), less required withholding taxes. ● outstanding awards of performance-based RSUs automatically became earned and vested with (a) approximately 53% of the maximum number of shares of common stock subject to the award vesting for performance-based RSUs granted in 2020, (b) approximately 50% of the maximum number of shares of common stock subject to the award vesting for performance-based RSUs granted in 2021 and (c) approximately 33% of the maximum number of shares of common stock subject to the award vesting for performance-based RSUs granted in 2022, and thereafter were cancelled and, in exchange therefor, each holder of any such cancelled vested performance-based RSUs ceased to have any rights with respect thereto, except the right to receive as of the merger effective time, in consideration for the cancellation of such vested performance unit and in settlement therefor, an amount in cash equal to the product of (1) the Merger Consideration and (2) the number of so-determined earned performance shares subject to such vested performance-based RSUs, without interest, less required withholding taxes. In addition, on the Closing Date, each holder of performance-based RSUs received an amount equivalent to all cash dividends that would have been paid on the number of so-determined earned shares of the Company’s common stock subject to such performance-based RSUs as if they had been issued and outstanding from the date of grant up to, and including, the merger effective time, less required withholding taxes. In conjunction with the accelerated vesting of outstanding equity awards, the compensation expense for equity-based payments was $16.4 million which was presented “on-the-line” at the closing of the Merger. |
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. Following the Merger, the Company's new ownership structure and status as a privately held REIT caused multiple state income tax jurisdictions to view the Company as a captive REIT. Within the jurisdictions where the Company is treated as a captive REIT, the dividends paid deduction may be disallowed, resulting in state income tax liabilities to which the Company was not previously subject when it was publicly traded. 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 2018 and tax returns filed for 2019 through 2022 are subject to examination by these jurisdictions. As of March 31, 2023, 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 March 31, 2023 or December 31, 2022. |
Net Income Per Common Share | Net Income Per Common Share Net income per common share has been computed for STORE Capital Corporation pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share Predecessor Period from January 1, 2023 through February 2, 2023 Three Months Ended March 31, 2022 Numerator: Net income $ 25,787 $ 87,022 Less: Earnings attributable to unvested restricted shares (41) (102) Net income used in basic and diluted income per share $ 25,746 $ 86,920 Denominator: Weighted average common shares outstanding 282,684,998 275,463,866 Less: Weighted average number of shares of unvested restricted stock (446,847) (460,593) Weighted average shares outstanding used in basic income per share 282,238,151 275,003,273 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 100,254 — Weighted average shares outstanding used in diluted income per share 282,338,405 275,003,273 (a) For the period from January 1, 2023 to February 2, 2023, excludes 197,026 shares, and for the three months ended March 31, 2022, excludes 144,661 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 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Principles | |
Reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share | The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per common share (dollars in thousands): Predecessor Period from January 1, 2023 through February 2, 2023 Three Months Ended March 31, 2022 Numerator: Net income $ 25,787 $ 87,022 Less: Earnings attributable to unvested restricted shares (41) (102) Net income used in basic and diluted income per share $ 25,746 $ 86,920 Denominator: Weighted average common shares outstanding 282,684,998 275,463,866 Less: Weighted average number of shares of unvested restricted stock (446,847) (460,593) Weighted average shares outstanding used in basic income per share 282,238,151 275,003,273 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 100,254 — Weighted average shares outstanding used in diluted income per share 282,338,405 275,003,273 (a) For the period from January 1, 2023 to February 2, 2023, excludes 197,026 shares, and for the three months ended March 31, 2022, excludes 144,661 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Investments. | |
Schedule of gross real estate and loan activity | Successor Predecessor Number of Dollar Number of Dollar Investment Amount of Investment Amount of Locations Investments Locations Investments Gross investments, December 31, 2022 3,084 $ 12,079,843 Acquisition of and additions to real estate (a) 19 42,452 Investment in loans and financing receivables 1 82,112 Sales of real estate (1) (760) Principal collections on loans and financing receivables (2) (468) Net change in operating ground lease assets (c) (125) Other 4,430 Gross investments, February 2, 2023 3,101 $ 12,207,484 Gross investments, February 3, 2023 3,101 $ 14,201,731 Acquisition of and additions to real estate (b) 35 184,156 Investment in loans and financing receivables 2 15,044 Sales of real estate (4) (7,148) Principal collections on loans and financing receivables — (558) Net change in operating ground lease assets (c) (139) Provisions for impairment (5,677) Other (3,541) Gross investments, March 31, 2023 (d) 14,383,868 Less accumulated depreciation and amortization (d) (93,423) Net investments, March 31, 2023 3,134 $ 14,290,445 (a) Excludes $5.2 million of tenant improvement advances disbursed from January 1, 2023 to February 2, 2023 which were accrued as of December 31, 2022. (b) Excludes $5.8 million of tenant improvement advances disbursed from February 3, 2023 to March 31, 2023 which were accrued as of February 2, 2023. (c) Represents amortization recognized on operating ground lease assets during the period from January 1, 2023 through February 2, 2023 and the period from February 3, 2023 through March 31, 2023. (d) Includes the below-market lease liabilities ( $148.7 million) and the accumulated amortization ( $2.6 million) of the liabilities recorded on the condensed consolidated balance sheets as intangible lease liabilities as of March 31, 2023. |
Schedule of revenue recognized from investment portfolio | The following table summarizes the revenues the Company recognized from its investment portfolio (in thousands): Successor Predecessor Period from February 3, 2023 through March 31, 2023 Period from January 1, 2023 through February 2, 2023 Three Months Ended March 31, 2022 Rental revenues: Operating leases (a) $ 153,339 $ 75,005 $ 201,892 Sublease income - operating ground leases (b) 348 234 703 Amortization of lease related intangibles and costs 2,066 (231) (534) Total rental revenues $ 155,753 $ 75,008 $ 202,061 Interest income on loans and financing receivables: Mortgage and other loans receivable $ 4,803 $ 2,434 $ 7,879 Sale-leaseback transactions accounted for as financing arrangements 4,897 2,444 5,327 Sales-type and direct financing receivables 2,062 448 1,724 Total interest income on loans and financing receivables $ 11,762 $ 5,326 $ 14,930 (a) For the period from February 3, 2023 through March 31, 2023, the period from January 1, 2023 through February 2, 2023 and the three months ended March 31, 2022, includes $508,000 , $252,000 and $654,000 , respectively, of property tax tenant reimbursement revenue and includes $129,000 , $24,000 and $447,000 , 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. |
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 March 31, 2023, are as follows (in thousands): Remainder of 2023 $ 697,269 2024 923,579 2025 919,947 2026 913,541 2027 901,628 2028 881,686 Thereafter 6,788,224 Total future minimum rentals (a) $ 12,025,874 (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): Successor Predecessor March 31, December 31, 2023 2022 In-place leases $ 581,884 $ 42,519 Ground lease-related intangibles — 19,449 Above-market leases 38,017 — Total intangible lease assets 619,901 61,968 Accumulated amortization (9,544) (27,278) Net intangible lease assets $ 610,357 $ 34,690 |
Schedule of intangible lease liabilities | The following details intangible lease liabilities and related accumulated amortization (in thousands) as of March 31, 2023. There were Successor March 31, 2023 Below-market leases $ 148,660 Accumulated amortization (2,592) Net intangible lease liabilities $ 146,068 |
Summary of future minimum lease payments | The future minimum lease payments to be paid under the operating ground leases as of March 31, 2023 were as follows (in thousands): Ground Ground Leases Leases Paid by Paid by STORE Capital's STORE Capital Tenants (a) Total Remainder of 2023 $ 185 $ 2,103 $ 2,288 2024 55 2,711 2,766 2025 57 2,725 2,782 2026 57 2,731 2,788 2027 57 2,731 2,788 2028 57 2,761 2,818 Thereafter 3,316 100,262 103,578 Total lease payments 3,784 116,024 119,808 Less imputed interest (3,020) (70,565) (73,585) Total operating lease liabilities - ground leases $ 764 $ 45,459 $ 46,223 (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 $116.0 million commitment, $79.6 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): Successor Predecessor Interest Maturity March 31, December 31, Type Rate (a) Date 2023 2022 Three mortgage loans receivable 8.05 % 2023 - 2026 $ 101,364 $ 104,069 Three mortgage loans receivable 8.81 % 2032 - 2036 9,954 9,967 Seventeen mortgage loans receivable (b) 8.46 % 2042 - 2062 237,774 231,639 Total mortgage loans receivable 349,092 345,675 Equipment and other loans receivable 7.98 % 2023 - 2036 14,121 15,842 Total principal amount outstanding—loans receivable 363,213 361,517 Unamortized loan origination costs — 1,011 Unamortized loan premium 10,177 — Sale-leaseback transactions accounted for as financing arrangements (c) 7.58 % 2034 - 2048 448,867 369,604 Sales-type and direct financing receivables 140,759 60,899 Allowance for credit and loan losses (d) (4,377) (5,925) Total loans and financing receivables $ 958,639 $ 787,106 (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 and 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 2048 and the purchase options expire between 2024 and 2042. (d) Balance includes $4.4 million of credit losses recognized during the period from February 3, 2023 through March 31, 2023. |
Schedule of maturities of loans receivable | Scheduled Principal Balloon Total Payments Payments Payments Remainder of 2023 $ 1,921 $ 88,709 $ 90,630 2024 2,264 — 2,264 2025 2,071 — 2,071 2026 2,045 20,371 22,416 2027 1,767 548 2,315 2028 1,930 — 1,930 Thereafter 211,735 29,852 241,587 Total principal payments $ 223,733 $ 139,480 $ 363,213 |
Schedule of sale-leaseback transactions | Remainder of 2023 $ 22,925 2024 30,694 2025 30,863 2026 30,987 2027 31,120 2028 31,262 Thereafter 349,049 Total future scheduled payments $ 526,900 |
Schedule of the components of the investments accounted for as direct financing receivables | As of March 31, 2023 and December 31, 2022, the Company had $140.8 million and $60.9 million, respectively, of investments accounted for as sales-type leases and as direct financing leases under previous accounting guidance; the components of these investments were as follows (in thousands): Successor Predecessor March 31, December 31, 2023 2022 Minimum lease payments receivable $ 332,733 $ 119,839 Estimated residual value of leased assets 8,898 6,889 Unearned income (200,872) (65,829) Net investment $ 140,759 $ 60,899 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Schedule of maturities of long-term debt | As of March 31, 2023, 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 2023 $ 16,872 $ 13,343 $ 30,215 2024 21,908 226,198 248,106 2025 19,777 1,741,613 1,761,390 2026 17,728 414,142 431,870 2027 9,221 1,260,472 1,269,693 2028 4,711 598,595 603,306 Thereafter 22,097 1,697,255 1,719,352 $ 112,314 $ 5,951,618 $ 6,063,932 |
Secured Term Loan Facility | |
Schedule of debt | The Company’s secured term loan facility is summarized below (dollars in thousands): Successor Maturity Interest March 31, Date Rate 2023 Secured Term Loan Facility Secured Term Loan issued February 2023 Feb. 2025 7.5078 % (a) 1,485,000 Unamortized discount (28,756) Unamortized deferred financing costs (9,586) Total secured term loan facility, net $ 1,446,658 a) Loan is a floating-rate loan which resets at one-month Term SOFR + an adjustment of 0.10% + the applicable spread which was 2.75% at March 31, 2023. The Company has entered into three interest rate swap agreements with an aggregate notional amount of $750.0 million that effectively convert a portion of the borrowings to a fixed interest rate of 7.60% . |
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): Successor Predecessor Maturity Interest March 31, December 31, Date Rate 2023 2022 Notes Payable: Series B issued November 2015 Nov. 2024 5.24 % 32,400 100,000 Series C issued April 2016 Apr. 2026 4.73 % 82,000 200,000 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 Public Notes issued November 2021 Dec. 2031 2.70 % 375,000 375,000 Total notes payable 1,539,400 1,725,000 Term Loans: Term Loan issued December 2022 — 90,000 Term Loan issued April 2022 — 400,000 Term Loan issued April 2022 — 200,000 Term Loan issued February 2023 (a) Apr. 2027 4.2042 % (b) 800,000 — Total term loans 800,000 690,000 Unamortized discount (224,514) (4,113) Unamortized deferred financing costs (8,538) (13,481) Total unsecured notes and term loans payable, net $ 2,106,348 $ 2,397,406 (a) Term loan was issued in February 2023 with initial borrowings of $600.0 million and amended in March 2023 to increase the total term loan borrowings to $800.0 million. (b) Loan is a floating-rate loan which resets daily at Daily Simple SOFR + an adjustment of 0.10% + the applicable spread which was 1.25% at March 31, 2023. The Company has entered into eight interest rate swap agreements that effectively convert the floating rate to the weighted-average fixed rate noted as of March 31, 2023. |
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): Successor Predecessor Maturity Interest March 31, December 31, Date Rate 2023 2022 Non-recourse net-lease mortgage notes: $150,000 Series 2018-1, Class A-1 Oct. 2024 (b) 3.96 % $ 140,177 $ 140,552 $50,000 Series 2018-1, Class A-3 Oct. 2024 (b) 4.40 % 48,292 48,417 $270,000 Series 2015-1, Class A-2 Apr. 2025 (b) 4.17 % 259,313 259,650 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 (b) 3.96 % 174,751 175,861 $82,000 Series 2019-1, Class A-1 Nov. 2026 (b) 2.82 % 78,078 78,180 $46,000 Series 2019-1, Class A-3 Nov. 2026 (b) 3.32 % 45,233 45,291 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 (b) 4.32 % 119,448 120,182 $228,000 Series 2018-1, Class A-2 Oct. 2027 (c) 4.29 % 213,068 213,638 $164,000 Series 2018-1, Class A-4 Oct. 2027 (c) 4.74 % 158,397 158,807 $168,500 Series 2021-1, Class A-1 Jun. 2028 (b) 2.12 % 167,026 167,236 $89,000 Series 2021-1, Class A-3 Jun. 2028 (b) 2.86 % 88,221 88,333 $168,500 Series 2021-1, Class A-2 Jun. 2033 (c) 2.96 % 167,026 167,236 $89,000 Series 2021-1, Class A-4 Jun. 2033 (c) 3.70 % 88,221 88,333 $244,000 Series 2019-1, Class A-2 Nov. 2034 (c) 3.65 % 232,329 232,634 $136,000 Series 2019-1, Class A-4 Nov. 2034 (c) 4.49 % 133,733 133,903 Total non-recourse net-lease mortgage notes 2,113,313 2,118,253 Non-recourse mortgage notes: $6,944 notes issued March 2013 (a) 4.50 % — 5,103 $11,895 note issued March 2013 (a) 4.7315 % — 8,935 $17,500 note issued August 2013 Sept. 2023 (d) 5.46 % 13,565 13,701 $10,075 note issued March 2014 Apr. 2024 (d) 5.10 % 8,547 8,602 $65,000 note issued June 2016 Jul. 2026 (d) 4.75 % 57,650 57,980 $41,690 note issued March 2019 Mar. 2029 (e) 4.80 % 40,493 40,662 $6,350 notes issued March 2019 (assumed in December 2020) Apr. 2049 (d) 4.64 % 5,964 5,993 Total non-recourse mortgage notes 126,219 140,976 Unamortized discount (190,364) (395) Unamortized deferred financing costs — (20,364) Total non-recourse debt obligations of consolidated special purpose entities, net $ 2,049,168 $ 2,238,470 (a) Mortgage notes were repaid, without penalty, in January 2023 (b) Prepayable, without penalty, 24 months prior to maturity. (c) Prepayable, without penalty, 36 months prior to maturity. (d) Prepayable, without penalty, three months prior to maturity. (e) Prepayable, without penalty, four months prior to maturity. |
Merger (Tables)
Merger (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Merger | |
Schedule of asset acquisition consideration | The Merger was accounted for using the asset acquisition method of accounting in accordance with ASC Topic 805 which requires that the cost of an acquisition be allocated on a relative fair value basis to the assets acquired and the liabilities assumed. The following table summarizes the total consideration transferred in the purchase of STORE Capital Corporation (amounts in thousands): Consideration Type Cash paid to former shareholders and equity award holders $ 9,142,744 Extinguishment of historical debt 1,331,698 Capitalized transaction costs 110,924 Total consideration $ 10,585,366 |
Schedule of assets acquired and liabilities assumed under asset acquisition | The following table summarizes the estimated fair values assigned to the assets acquired and liabilities assumed (amounts in thousands): Assets acquired: Land and improvements $ 3,620,509 Buildings and improvements 9,105,004 Intangible lease assets 620,034 Operating ground lease assets 52,805 Loans and financing receivables 952,039 Cash and cash equivalents 33,096 Other assets 71,209 Total assets acquired 14,454,696 Liabilities assumed: Unsecured notes and term loans payable 1,725,000 Non-recourse debt obligations of consolidated special purpose entities 2,243,323 Below market value of debt (430,908) Intangible lease liabilities 148,660 Operating lease liabilities 50,516 Other liabilities 132,739 Total liabilities assumed 3,869,330 Fair value of net assets acquired $ 10,585,366 |
Summary of Significant Accoun_4
Summary of Significant Accounting Principles (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Feb. 02, 2023 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2023 segment item | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | May 12, 2023 USD ($) agreement | Mar. 31, 2023 USD ($) | Mar. 31, 2023 | Mar. 31, 2023 instrument | Mar. 31, 2023 agreement | |
Basis of Accounting and Principles of Consolidation | ||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | Successor | Predecessor | |||||||
Assets owned | $ 10,834,970 | $ 14,553,532 | ||||||||
Liabilities owed | 5,408,652 | 6,300,698 | ||||||||
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 | 46,900 | 1,800 | ||||||||
Leases indexed to increases in the CPI, minimum adjustment period | 1 year | |||||||||
Leases indexed to increases in the CPI, minimum multiplier increasing rent (in multipliers) | 1 | |||||||||
Leases indexed to increases in the CPI, maximum multiplier increasing rent (in multipliers) | 1.25 | |||||||||
Portion of investment portfolio subject to contingent rent based upon tenant sales (as a percent) | 2.90% | |||||||||
Contingent rent as a percentage of rental revenue, historical | 2% | |||||||||
Impairments | ||||||||||
Provisions for impairment | $ 0 | $ 1,300 | $ 1,200 | |||||||
Estimate fair value of impaired real estate assets | $ 6,800 | |||||||||
Loans Receivable | ||||||||||
Non accrual status loan receivables | 31,800 | 33,800 | ||||||||
Number of classes in portfolio of loans and financing receivables | item | 2 | |||||||||
Restricted cash | ||||||||||
Restricted cash included in other assets | 5,051 | 2,064 | $ 4,700 | 4,963 | ||||||
Restricted Cash and Cash Equivalents, Statement of Financial Position [Extensible Enumeration] | Other assets, net | Other assets, net | Other assets, net | |||||||
Derivative Instruments and Hedging Activities | ||||||||||
Carrying amount | 6,063,932 | |||||||||
Provision For Impairment | ||||||||||
Loans Receivable | ||||||||||
Provision for loan losses | $ 0 | $ (4,400) | $ 300 | |||||||
Loans receivable | ||||||||||
Loans Receivable | ||||||||||
Maximum past due period for loans payments causing nonaccrual status | 60 days | |||||||||
Term loan was issued in February 2023 | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Carrying amount | 800,000 | |||||||||
Interest rate swaps | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Number of agreements | 2 | 11 | 1 | |||||||
Current notional amounts | $ 325,000 | 200,000 | ||||||||
Interest rate swaps | Designated as hedging instrument | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Current notional amounts | 800,000 | |||||||||
Interest rate swap, due in 2029 | Designated as hedging instrument | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Number of agreements | instrument | 1 | |||||||||
Current notional amounts | 200,000 | |||||||||
Interest rate swap, due in 2027 | Designated as hedging instrument | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Number of agreements | instrument | 8 | |||||||||
Number of remaining agreements | instrument | 7 | |||||||||
Current notional amounts | 600,000 | |||||||||
Interest rate swap, due in 2027 | Designated as hedging instrument | Term loan was issued in February 2023 | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Carrying amount | 800,000 | |||||||||
Interest rate swap, due in 2025 | Designated as hedging instrument | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Carrying amount | 1,500,000 | |||||||||
Interest rate swap, mature in August 2023, November 2023 and February 2024 | Designated as hedging instrument | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Number of agreements | instrument | 3 | |||||||||
Current notional amounts | 750,000 | |||||||||
Interest rate swap, mature in August 2023 | Designated as hedging instrument | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Current notional amounts | 250,000 | |||||||||
Interest rate swap, mature in November 2023 | Designated as hedging instrument | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Current notional amounts | 250,000 | |||||||||
Interest rate swap, mature in February 2024 | Designated as hedging instrument | ||||||||||
Derivative Instruments and Hedging Activities | ||||||||||
Current notional amounts | 250,000 | |||||||||
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 | $ 9,500,000 | 12,900,000 | ||||||||
Liabilities owed | $ 2,400,000 | $ 3,800,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Principles - Share Based Compensation and Other (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Feb. 03, 2023 | Feb. 02, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Sharebased Compensation | |||||
Compensation expense for equity-based payments | $ 16,400,000 | ||||
Income Tax Examination, Penalties and Interest Accrued | |||||
Uncertain income tax positions | $ 0 | ||||
Accrual for interest or penalties | 0 | $ 0 | |||
Numerator: | |||||
Net (loss) income | $ 25,787,000 | $ (35,542,000) | $ 87,022,000 | ||
Less: Earnings attributable to unvested restricted shares | (41,000) | (102,000) | |||
Net income used in basic and diluted income per share | $ 25,746,000 | $ 86,920,000 | |||
Denominator: | |||||
Weighted average common shares outstanding | 282,684,998 | 275,463,866 | |||
Less: Weighted average number of shares of unvested restricted stock (in shares) | (446,847) | (460,593) | |||
Weighted average shares outstanding used in basic income per share (in shares) | 282,238,151 | 275,003,273 | |||
Effects of dilutive securities: | |||||
Add: Treasury stock method impact of potentially dilutive securities (in shares) | 100,254 | ||||
Weighted average shares outstanding used in diluted income per share (in shares) | 282,338,405 | 275,003,273 | |||
Antidilutive unvested restricted shares (in shares) | 197,026 | 144,661 | |||
Merger Agreement | |||||
Sharebased Compensation | |||||
Merger consideration (per share) | $ 32.25 | ||||
Restricted stock units | Share-Based Awards Issued in 2020 | |||||
Sharebased Compensation | |||||
Vesting percentage (as a percent) | 53% | ||||
Restricted stock units | Share-Based Awards Issued in 2021 | |||||
Sharebased Compensation | |||||
Vesting percentage (as a percent) | 50% | ||||
Restricted stock units | Share-Based Awards Issued in 2022 | |||||
Sharebased Compensation | |||||
Vesting percentage (as a percent) | 33% |
Investments - Locations (Detail
Investments - Locations (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||||
Feb. 02, 2023 USD ($) property | Mar. 31, 2023 USD ($) property | Mar. 31, 2023 USD ($) property | Mar. 31, 2022 USD ($) | Feb. 03, 2023 property | Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) | |
Number of property locations of investments (in locations) | property | 3,101 | 3,134 | 3,134 | 3,101 | 3,084 | ||
Number of owned properties (in properties) | property | 3,086 | 3,086 | |||||
Number of properties accounted as financing arrangements | property | 105 | 105 | |||||
Number of properties owned as direct financing receivables | property | 22 | 22 | |||||
Number of ground lease interests (in properties) | property | 24 | 24 | |||||
Number of properties which secure certain mortgage loans (in properties) | property | 24 | 24 | |||||
Gross acquisition cost of real estate investments | $ 13,400,000 | $ 13,400,000 | |||||
Loans and financing receivables, net | 958,639 | 958,639 | $ 787,106 | ||||
Operating ground lease assets | $ 52,666 | $ 52,666 | 31,872 | ||||
Investments assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non-recourse obligations of these special purpose entities | 57% | ||||||
Number of Investment Locations | |||||||
Gross investments | property | 3,084 | 3,101 | 3,084 | ||||
Acquisition of and additions to real estate | property | 19 | 35 | |||||
Investment in loans and financing receivables | property | 1 | 2 | |||||
Sales of real estate | property | (1) | (4) | |||||
Principal collections on loans and direct financing receivables | property | (2) | ||||||
Gross investments | property | 3,101 | 3,134 | 3,134 | ||||
Dollar Amount of Investments | |||||||
Adoption of ASC Topic 326, cumulative adjustment | $ 5,441,655 | $ 5,286,991 | 5,426,318 | $ 5,144,129 | |||
Gross investments | 12,079,843 | $ 12,207,484 | $ 12,079,843 | ||||
Acquisition of and additions to real estate | 42,452 | 184,156 | |||||
Investment in loans and financing receivables | 82,112 | 15,044 | |||||
Sales of real estate | (760) | (7,148) | |||||
Principal collections on loans and direct financing receivables | (468) | (558) | |||||
Operating ground lease assets, net | 52,666 | 52,666 | 31,872 | ||||
Net change in operating ground lease assets | (139) | ||||||
Provisions for impairment | (5,677) | $ (912) | |||||
Other | 4,430 | (3,541) | |||||
Gross investments | 12,207,484 | 14,383,868 | 14,383,868 | ||||
Less accumulated depreciation and amortization | (93,423) | (93,423) | |||||
Net investments | 14,290,445 | 14,290,445 | |||||
Tenant improvement advances disbursed | 5,200 | 5,800 | |||||
Intangible lease liabilities | 148,660 | 148,660 | |||||
Intangible lease liabilities, net | 146,068 | 146,068 | 0 | ||||
Below-market lease liabilities | 148,700 | 148,700 | |||||
Accumulated amortization | 2,592 | 2,592 | |||||
Sale-leaseback transactions accounted for as financing arrangements | 448,900 | 448,900 | $ 369,600 | ||||
Ground leases | |||||||
Operating ground lease assets | 52,700 | 52,700 | |||||
Dollar Amount of Investments | |||||||
Operating ground lease assets, net | $ 52,700 | $ 52,700 | |||||
Net change in operating ground lease assets | $ (125) |
Investments - Revenue Recognize
Investments - Revenue Recognized from Investment Portfolio (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended |
Feb. 02, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Rental revenues: | |||
Operating leases | $ 75,005,000 | $ 153,339,000 | $ 201,892,000 |
Sublease income - operating ground lease assets | 234,000 | 348,000 | 703,000 |
Amortization of lease related intangibles and costs | (231,000) | 2,066,000 | (534,000) |
Total rental revenues | 75,008,000 | 155,753,000 | 202,061,000 |
Interest income on loans and financing receivables: | |||
Mortgage and other loans receivable | 2,434,000 | 4,803,000 | 7,879,000 |
Sale-leaseback transactions accounted for as financing arrangements | 2,444,000 | 4,897,000 | 5,327,000 |
Sales-type and direct financing receivables | 448,000 | 2,062,000 | 1,724,000 |
Total interest income on loans and financing receivables | 5,326,000 | 11,762,000 | 14,930,000 |
Property tax tenant reimbursement revenue | 252,000 | 508,000 | 654,000 |
Variable lease revenue | $ 24,000 | $ 129,000 | $ 447,000 |
Investments - Significant Credi
Investments - Significant Credit and Revenue Concentration (Details) | 3 Months Ended |
Mar. 31, 2023 customer item state | |
Significant Credit and Revenue Concentration | |
Number of industries | 129 |
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% |
Real estate investment portfolio | Geographic concentration | Minimum | |
Significant Credit and Revenue Concentration | |
Number of customers | customer | 592 |
Real estate investment portfolio | Geographic concentration | Texas | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 11% |
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% |
Number of customers representing more than 10% | 0 |
Real estate investment portfolio | Customer concentration | Largest customer, investment portfolio | Maximum | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 2.60% |
Real estate investment portfolio | Product Concentration Risk | Service | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 63% |
Real estate investment portfolio | Product Concentration Risk | Service Oriented Retail | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 15% |
Real estate investment portfolio | Product Concentration Risk | Manufacturing | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 22% |
Real estate investment portfolio | Industry | |
Significant Credit and Revenue Concentration | |
Number of industries | 1 |
Real estate investment portfolio | Industry | Restaurants | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 11% |
Investment portfolio revenues | Customer concentration | Largest customer, investment portfolio revenues | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 2.70% |
Investments - Portfolio Diversi
Investments - Portfolio Diversification (Details) $ in Thousands | Mar. 31, 2023 USD ($) property | Feb. 03, 2023 USD ($) property | Feb. 02, 2023 USD ($) property | Dec. 31, 2022 USD ($) property |
Investments. | ||||
Number of Investment Locations | property | 3,134 | 3,101 | 3,101 | 3,084 |
Dollar Amount of Investments | $ | $ 14,383,868 | $ 14,201,731 | $ 12,207,484 | $ 12,079,843 |
Investments - Intangible Lease
Investments - Intangible Lease Assets and Real Estate Investments (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||||
Mar. 31, 2023 USD ($) Options | Feb. 28, 2023 USD ($) | Feb. 02, 2023 USD ($) | Mar. 31, 2023 USD ($) Options | Mar. 31, 2023 USD ($) Options item property | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Accounting for Real Estate Investments | |||||||
Remaining noncancelable lease term | 13 years 1 month 6 days | ||||||
Number of real estate properties vacant not subject to lease | property | 15 | ||||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||||
Remainder of 2023 | $ 697,269 | $ 697,269 | $ 697,269 | ||||
2024 | 923,579 | 923,579 | 923,579 | ||||
2025 | 919,947 | 919,947 | 919,947 | ||||
2026 | 913,541 | 913,541 | 913,541 | ||||
2027 | 901,628 | 901,628 | 901,628 | ||||
2028 | 881,686 | 881,686 | 881,686 | ||||
Thereafter | 6,788,224 | 6,788,224 | 6,788,224 | ||||
Total future minimum rentals | 12,025,874 | 12,025,874 | $ 12,025,874 | ||||
Option to extend | true | ||||||
Term of renewal options | 5 years | ||||||
Intangible lease assets | 619,901 | 619,901 | $ 619,901 | $ 61,968 | |||
Accumulated amortization | (9,544) | (9,544) | (9,544) | (27,278) | |||
Net intangible lease assets | 610,357 | 610,357 | 610,357 | 34,690 | |||
Amortization in the next five years | |||||||
Remainder of 2023 | 40,300 | 40,300 | 40,300 | ||||
2024 | 52,300 | 52,300 | 52,300 | ||||
2025 | 51,000 | 51,000 | 51,000 | ||||
2026 | 49,400 | 49,400 | 49,400 | ||||
2027 | 47,600 | 47,600 | 47,600 | ||||
2028 | 45,100 | 45,100 | 45,100 | ||||
Thereafter | $ 287,200 | $ 287,200 | $ 287,200 | ||||
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 | 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 | 4 | ||||
Amortization expense | |||||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||||
Amount amortized | $ 9,000 | $ 9,000 | $ 300 | $ 900 | |||
In -place leases | |||||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||||
Intangible lease assets | 581,884 | $ 581,884 | $ 581,884 | 42,519 | |||
Amortization in the next five years | |||||||
Weighted average remaining amortization period | 13 years | ||||||
Ground lease interests | |||||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||||
Intangible lease assets | $ 19,449 | ||||||
Above-market leases | |||||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||||
Intangible lease assets | 38,017 | 38,017 | $ 38,017 | ||||
Amortization in the next five years | |||||||
Remainder of 2023 | 2,300 | 2,300 | 2,300 | ||||
2024 | 2,900 | 2,900 | 2,900 | ||||
2025 | 2,800 | 2,800 | 2,800 | ||||
2026 | 2,800 | 2,800 | 2,800 | ||||
2027 | 2,800 | 2,800 | 2,800 | ||||
2028 | 2,600 | 2,600 | 2,600 | ||||
Thereafter | $ 21,300 | 21,300 | $ 21,300 | ||||
Weighted average remaining amortization period | 15 years | ||||||
Above-market leases | Decrease to rental revenue | |||||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||||
Amount amortized | $ 0 | $ 500 | $ 0 |
Investments - Intangible Leas_2
Investments - Intangible Lease Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Investments. | ||
Below-market leases | $ 148,660 | |
Accumulated amortization | (2,592) | |
Net intangible lease liabilities | 146,068 | $ 0 |
Lease intangible liabilities amortization | 2,600 | |
Remainder of 2023 | 5,700 | |
2024 | 8,900 | |
2025 | 8,900 | |
2026 | 8,800 | |
2027 | 8,700 | |
2028 | 8,400 | |
Thereafter | $ 96,700 | |
Weighted average remaining amortization period | 24 years |
Investments - Operating Lease A
Investments - Operating Lease Asset (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Feb. 02, 2023 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) lease | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Operating ground lease assets | $ 52,666,000 | $ 52,666,000 | $ 31,872,000 | ||
Rental revenue | $ 234,000 | 348,000 | $ 703,000 | ||
Option to extend | true | ||||
Future minimum lease payments | |||||
Total operating lease liabilities - ground leases | 50,414,000 | $ 50,414,000 | $ 36,873,000 | ||
Ground lease by STORE capital | |||||
Future minimum lease payments | |||||
Long-term lease commitment | 79,600,000 | $ 79,600,000 | |||
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 | 52,700,000 | $ 52,700,000 | |||
Lease costs | 273,000 | 571,000 | 755,000 | ||
Rental revenue | $ 234,000 | 348,000 | $ 703,000 | ||
Future minimum lease payments | |||||
Remainder of 2023 | 2,288,000 | 2,288,000 | |||
2024 | 2,766,000 | 2,766,000 | |||
2025 | 2,782,000 | 2,782,000 | |||
2026 | 2,788,000 | 2,788,000 | |||
2027 | 2,788,000 | 2,788,000 | |||
2028 | 2,818,000 | 2,818,000 | |||
Thereafter | 103,578,000 | 103,578,000 | |||
Total lease payments | 119,808,000 | 119,808,000 | |||
Less imputed interest | (73,585,000) | (73,585,000) | |||
Total operating lease liabilities - ground leases | 46,223,000 | 46,223,000 | |||
Ground leases | Ground lease by STORE capital | |||||
Future minimum lease payments | |||||
Remainder of 2023 | 185,000 | 185,000 | |||
2024 | 55,000 | 55,000 | |||
2025 | 57,000 | 57,000 | |||
2026 | 57,000 | 57,000 | |||
2027 | 57,000 | 57,000 | |||
2028 | 57,000 | 57,000 | |||
Thereafter | 3,316,000 | 3,316,000 | |||
Total lease payments | 3,784,000 | 3,784,000 | |||
Less imputed interest | (3,020,000) | (3,020,000) | |||
Total operating lease liabilities - ground leases | 764,000 | 764,000 | |||
Ground leases | Ground lease by STORE capital tenants | |||||
Future minimum lease payments | |||||
Remainder of 2023 | 2,103,000 | 2,103,000 | |||
2024 | 2,711,000 | 2,711,000 | |||
2025 | 2,725,000 | 2,725,000 | |||
2026 | 2,731,000 | 2,731,000 | |||
2027 | 2,731,000 | 2,731,000 | |||
2028 | 2,761,000 | 2,761,000 | |||
Thereafter | 100,262,000 | 100,262,000 | |||
Total lease payments | 116,024,000 | 116,024,000 | |||
Less imputed interest | (70,565,000) | (70,565,000) | |||
Total operating lease liabilities - ground leases | $ 45,459,000 | $ 45,459,000 |
Investments - Loans and Financi
Investments - Loans and Financing Receivables (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Feb. 02, 2023 USD ($) | Jan. 01, 2023 USD ($) | Mar. 31, 2023 USD ($) loan | Dec. 31, 2022 USD ($) loan | |
Loans and direct financing receivables | ||||
Number of mortgage loans | loan | 23 | |||
Total principal payments | $ 363,213 | |||
Unamortized loan origination costs | $ 1,011 | |||
Unamortized loan premium | 10,177 | |||
Sales-type and direct financing receivables | 140,759 | 60,899 | ||
Allowance for credit and loan losses (d) | (4,377) | (5,925) | ||
Total loans and direct financing receivables | 958,639 | $ 787,106 | ||
Credit loss reserves recognized | 4,400 | |||
ASU 2016-13 | ||||
Loans and direct financing receivables | ||||
Write-offs charged against allowance | $ 0 | $ 0 | $ 0 | |
Mortgage Loans Receivable With Maturity Range 2023 To 2026 | ||||
Loans and direct financing receivables | ||||
Number of mortgage loans | loan | 3 | 3 | ||
Mortgage loans receivable with maturity range 2032 to 2036 | ||||
Loans and direct financing receivables | ||||
Number of mortgage loans | loan | 3 | 3 | ||
Mortgage Loans Receivable With Maturities Ranging From 2042 To 2062 | ||||
Loans and direct financing receivables | ||||
Number of mortgage loans | loan | 17 | 17 | ||
Number of mortgage loans allowing for prepayment in whole | loan | 4 | |||
Mortgage Loans Receivable With Maturities Ranging From 2042 To 2062 | Minimum | ||||
Loans and direct financing receivables | ||||
Prepayment penalties (as a percent) | 20% | |||
Mortgage Loans Receivable With Maturities Ranging From 2042 To 2062 | Maximum | ||||
Loans and direct financing receivables | ||||
Prepayment penalties (as a percent) | 70% | |||
Loans receivable | ||||
Loans and direct financing receivables | ||||
Total principal payments | $ 363,213 | $ 361,517 | ||
Mortgage Loans Receivable | ||||
Loans and direct financing receivables | ||||
Mortgage loans receivable | $ 349,092 | 345,675 | ||
Mortgage Loans Receivable | Mortgage Loans Receivable With Maturity Range 2023 To 2026 | ||||
Loans and direct financing receivables | ||||
Stated Interest Rate (as a percent) | 8.05% | |||
Mortgage loans receivable | $ 101,364 | 104,069 | ||
Mortgage Loans Receivable | Mortgage loans receivable with maturity range 2032 to 2036 | ||||
Loans and direct financing receivables | ||||
Stated Interest Rate (as a percent) | 8.81% | |||
Mortgage loans receivable | $ 9,954 | 9,967 | ||
Mortgage Loans Receivable | Mortgage Loans Receivable With Maturities Ranging From 2042 To 2062 | ||||
Loans and direct financing receivables | ||||
Stated Interest Rate (as a percent) | 8.46% | |||
Mortgage loans receivable | $ 237,774 | 231,639 | ||
Equipment And Other Loans Receivable | Equipment And Other Loans Receivable Maturity Range 2023 To 2036 [Member] | ||||
Loans and direct financing receivables | ||||
Equipment and other loans receivable | $ 14,121 | 15,842 | ||
Interest rate of equipment and other loans | 7.98 | |||
Sale-leaseback Transactions | ||||
Loans and direct financing receivables | ||||
Interest rate of sale-leaseback transactions and investment in sales-type leases | 7.58% | |||
Sale-leaseback transactions accounted for as financing arrangements (c) | $ 448,867 | 369,604 | ||
Direct Financing Receivables | ||||
Loans and direct financing receivables | ||||
Sales-type and direct financing receivables | $ 140,759 | $ 60,899 |
Investments - Loans Receivable
Investments - Loans Receivable (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) loan | Dec. 31, 2022 USD ($) | |
Scheduled loan receivable maturities | ||
Number of loans receivable | loan | 36 | |
Gross carrying amount of loans receivable | $ 371,400 | |
Number of mortgage loans | loan | 23 | |
Number of mortgage loans subject to interest rate increases | loan | 11 | |
Number of short-term mortgage loans | loan | 3 | |
Amortization period of long-term mortgage loans | 40 years | |
Remainder of 2023 | $ 90,630 | |
2024 | 2,264 | |
2025 | 2,071 | |
2026 | 22,416 | |
2027 | 2,315 | |
2028 | 1,930 | |
Thereafter | 241,587 | |
Total principal payments | 363,213 | |
Sale-Leaseback Transactions Accounted for as Financing Arrangements | ||
Sale-leaseback transactions accounted for as financing arrangements | 448,900 | $ 369,600 |
Remainder of 2023 | 22,925 | |
2024 | 30,694 | |
2025 | 30,863 | |
2026 | 30,987 | |
2027 | 31,120 | |
2028 | 31,262 | |
Thereafter | 349,049 | |
Total future scheduled payments | 526,900 | |
Components of investments accounted for as sales-type direct financing receivables | ||
Minimum lease payments receivable | 332,733 | 119,839 |
Estimated residual value of leased assets | 8,898 | 6,889 |
Unearned income | (200,872) | (65,829) |
Net investment | 140,759 | $ 60,899 |
Future minimum lease payments to be received under the direct financing lease receivables | ||
Remainder of 2023 | 9,800 | |
2024 | 6,400 | |
2025 | 6,400 | |
2026 | 6,400 | |
2027 | 13,400 | |
2028 | 6,400 | |
Thereafter | 256,100 | |
Scheduled Principal Payments | ||
Scheduled loan receivable maturities | ||
Remainder of 2023 | 1,921 | |
2024 | 2,264 | |
2025 | 2,071 | |
2026 | 2,045 | |
2027 | 1,767 | |
2028 | 1,930 | |
Thereafter | 211,735 | |
Total principal payments | 223,733 | |
Balloon Payments | ||
Scheduled loan receivable maturities | ||
Remainder of 2023 | 88,709 | |
2026 | 20,371 | |
2027 | 548 | |
Thereafter | 29,852 | |
Total principal payments | $ 139,480 | |
Minimum | ||
Scheduled loan receivable maturities | ||
Long-term mortgage loans receivable prepayment penalty rate (as a percent) | 1% | |
Maximum | ||
Scheduled loan receivable maturities | ||
Long-term mortgage loans receivable prepayment penalty rate (as a percent) | 20% |
Investments - Provision for Cre
Investments - Provision for Credit Losses (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Feb. 02, 2023 | Jan. 01, 2023 | Feb. 02, 2023 | Mar. 31, 2023 | |
Investment Grade | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Origination for gross loan and financing receivables in 2023 | $ 14,600 | |||
Origination for gross loan and financing receivables in 2022 | 14,800 | |||
Origination for gross loan and financing receivables in 2021 | 46,500 | |||
Origination for gross loan and financing receivables in 2020 | 0 | |||
Origination for gross loan and financing receivables in 2019 | 141,800 | |||
Origination for gross loan and financing receivables in prior to 2019 | 13,000 | |||
Non Investment Grade | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Origination for gross loan and financing receivables in 2023 | 82,700 | |||
Origination for gross loan and financing receivables in 2022 | 148,600 | |||
Origination for gross loan and financing receivables in 2021 | 68,400 | |||
Origination for gross loan and financing receivables in 2020 | 91,200 | |||
Origination for gross loan and financing receivables in 2019 | 143,300 | |||
Origination for gross loan and financing receivables in prior to 2019 | 187,900 | |||
ASU 2016-13 | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Provision for credit losses | $ 0 | 4,400 | ||
Write-offs charged against allowance | $ 0 | $ 0 | 0 | |
Recoveries of amounts previously written off | $ 0 | $ 0 | 0 | |
ASU 2016-13 | Investment Grade | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans and financing receivables | 230,700 | |||
ASU 2016-13 | Non Investment Grade | ||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||
Loans and financing receivables | $ 722,100 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |||||||||||
Mar. 31, 2023 USD ($) | Feb. 03, 2023 USD ($) Options | Mar. 31, 2023 USD ($) | Apr. 30, 2022 USD ($) | Jun. 30, 2021 | Mar. 31, 2023 USD ($) | May 12, 2023 USD ($) agreement | Mar. 31, 2023 instrument | Mar. 31, 2023 agreement | Mar. 31, 2023 | Mar. 31, 2023 loan | Feb. 28, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Credit facilities | |||||||||||||
Outstanding balance | $ 361,000 | $ 361,000 | $ 361,000 | $ 555,000 | |||||||||
Consolidated special purpose entities | |||||||||||||
Credit facilities | |||||||||||||
Unamortized financing costs related to all debt | 20,364 | ||||||||||||
Revolving credit facility | |||||||||||||
Credit facilities | |||||||||||||
Unsecured loan facility | 650,000 | $ 500,000 | 650,000 | 650,000 | |||||||||
Number of extension options | Options | 2 | ||||||||||||
Increase in debt | 150,000 | ||||||||||||
Extension option term | 6 months | ||||||||||||
Extension fee (as a percent) | 0.075% | ||||||||||||
Unamortized financing costs related to all debt | 7,100 | 7,100 | $ 7,100 | 2,600 | |||||||||
Revolving credit facility | SOFR | |||||||||||||
Credit facilities | |||||||||||||
Adjustment to floating rate | 0.10% | ||||||||||||
Senior Unsecured Notes | |||||||||||||
Unsecured Term Notes Payable | |||||||||||||
Contingent periodic interest rate increase for failure to maintain investment grade credit rating | 1% | ||||||||||||
Prepayment applied to principal plus make-whole amount (as a percent) | 100% | ||||||||||||
Principal amount | 375,000 | 375,000 | $ 375,000 | ||||||||||
Number of loans | loan | 3 | ||||||||||||
Senior Unsecured Notes | Minimum | |||||||||||||
Unsecured Term Notes Payable | |||||||||||||
Prepayment threshold (as a percent) | 5% | ||||||||||||
Unsecured Credit Agreement | |||||||||||||
Credit facilities | |||||||||||||
Potential maximum amount of the revolving commitments and term loans | $ 2,500,000 | ||||||||||||
Interest rate swaps | |||||||||||||
Credit facilities | |||||||||||||
Current notional amounts | 200,000 | 200,000 | $ 200,000 | $ 325,000 | |||||||||
Number of agreements | 2 | 11 | 1 | ||||||||||
Unsecured Term Notes Payable | |||||||||||||
Fixed rate | 4.524% | ||||||||||||
Interest rate swaps | Designated as hedging instrument | |||||||||||||
Credit facilities | |||||||||||||
Current notional amounts | 800,000 | 800,000 | 800,000 | ||||||||||
Interest rate swaps | Cash Flow Hedging [Member] | Designated as hedging instrument | |||||||||||||
Credit facilities | |||||||||||||
Current notional amounts | 600,000 | 600,000 | 600,000 | ||||||||||
Number of agreements | agreement | 7 | ||||||||||||
New unsecured credit facility | Revolving credit facility | |||||||||||||
Credit facilities | |||||||||||||
Eligible unencumbered assets (in dollars) | 6,100,000 | 6,100,000 | 6,100,000 | ||||||||||
Amended unsecured revolving credit facility | Revolving credit facility | |||||||||||||
Credit facilities | |||||||||||||
Outstanding balance | 361,000 | 361,000 | $ 361,000 | ||||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Minimum | |||||||||||||
Credit facilities | |||||||||||||
Facility fee (as a percent) | 0.15% | ||||||||||||
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 | SOFR | |||||||||||||
Credit facilities | |||||||||||||
Debt Instrument interest rate description | SOFR | ||||||||||||
Credit spread (as a percent) | 1.10% | ||||||||||||
Facility fee (as a percent) | 0.20% | ||||||||||||
Amended unsecured revolving credit facility | Revolving credit facility | SOFR | Minimum | |||||||||||||
Credit facilities | |||||||||||||
Credit spread (as a percent) | 1% | ||||||||||||
Amended unsecured revolving credit facility | Revolving credit facility | SOFR | Maximum | |||||||||||||
Credit facilities | |||||||||||||
Credit spread (as a percent) | 1.45% | ||||||||||||
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% | ||||||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Maximum | |||||||||||||
Credit facilities | |||||||||||||
Credit spread (as a percent) | 0.45% | ||||||||||||
Unsecured Term Loan | |||||||||||||
Credit facilities | |||||||||||||
Unsecured loan facility | $ 600,000 | $ 100,000 | |||||||||||
Increase in debt | 200,000 | ||||||||||||
Unsecured Term Notes Payable | |||||||||||||
Principal amount | $ 800,000 | 800,000 | $ 600,000 | $ 800,000 | |||||||||
Fixed rate | 3.88% | ||||||||||||
Unsecured Term Loan | SOFR | |||||||||||||
Credit facilities | |||||||||||||
Adjustment to floating rate | 0.10% | 0.10% | |||||||||||
Credit spread (as a percent) | 1.25% | 2.75% | |||||||||||
Unsecured Term Loan | Interest rate swaps | Cash Flow Hedging [Member] | Designated as hedging instrument | |||||||||||||
Unsecured Term Notes Payable | |||||||||||||
Principal amount | $ 600,000 | 600,000 | $ 600,000 | ||||||||||
Unsecured Five Year Term Loan | |||||||||||||
Credit facilities | |||||||||||||
Number of agreements | agreement | 8 | ||||||||||||
Unsecured Term Notes Payable | |||||||||||||
Principal amount | $ 400,000 | ||||||||||||
Initial term | 5 years | ||||||||||||
Unsecured Five Year Term Loan | SOFR | |||||||||||||
Credit facilities | |||||||||||||
Adjustment to floating rate | 0.10% | ||||||||||||
Credit spread (as a percent) | 1.25% | ||||||||||||
Unsecured Five Year Term Loan | SOFR | Minimum | |||||||||||||
Credit facilities | |||||||||||||
Credit spread (as a percent) | 1.10% | ||||||||||||
Unsecured Five Year Term Loan | SOFR | Maximum | |||||||||||||
Credit facilities | |||||||||||||
Credit spread (as a percent) | 1.70% | ||||||||||||
Unsecured Seven Year Term Loan | |||||||||||||
Unsecured Term Notes Payable | |||||||||||||
Principal amount | $ 200,000 | ||||||||||||
Initial term | 7 years | ||||||||||||
Previous unsecured revolving credit facility | Revolving credit facility | |||||||||||||
Credit facilities | |||||||||||||
Outstanding balance | $ 600,000 | ||||||||||||
Term loan was issued in February 2023 | |||||||||||||
Credit facilities | |||||||||||||
Effective fixed rate | 4.2042% | ||||||||||||
Unsecured Term Notes Payable | |||||||||||||
Principal amount | $ 800,000 | $ 800,000 | $ 800,000 | $ 600,000 |
Debt - Carrying Amount (Details
Debt - Carrying Amount (Details) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Feb. 03, 2023 USD ($) | Nov. 30, 2022 USD ($) | Apr. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) loan | Mar. 31, 2023 USD ($) loan | Dec. 31, 2022 USD ($) | May 12, 2023 | Feb. 28, 2023 USD ($) | Nov. 30, 2021 USD ($) | Nov. 30, 2020 USD ($) | Feb. 28, 2019 USD ($) | Mar. 31, 2018 USD ($) | |
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Loss on extinguishment of debt | $ (24,580) | |||||||||||
Interest rate swaps that were in a liability position | 3,600 | $ 3,600 | ||||||||||
Credit Risk Related Contingent Features | ||||||||||||
Derivative liabilities | 3,600 | 3,600 | ||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Remainder of 2023 | 30,215 | 30,215 | ||||||||||
2024 | 248,106 | 248,106 | ||||||||||
2025 | 1,761,390 | 1,761,390 | ||||||||||
2026 | 431,870 | 431,870 | ||||||||||
2027 | 1,269,693 | 1,269,693 | ||||||||||
2028 | 603,306 | 603,306 | ||||||||||
Thereafter | 1,719,352 | 1,719,352 | ||||||||||
Long-term Debt | $ 6,063,932 | $ 6,063,932 | ||||||||||
Interest rate swaps | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Fixed rate | 4.524% | |||||||||||
Term Loan issued December 2022 | ||||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | $ 90,000 | |||||||||||
Term Loan issued April 2022 | ||||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | 400,000 | |||||||||||
Term Loan issued April 2022 | ||||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | $ 200,000 | |||||||||||
Term Loan issued February 2023 | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Effective fixed rate | 4.2042% | 4.2042% | ||||||||||
Principal amount | $ 800,000 | $ 800,000 | $ 600,000 | |||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | 800,000 | $ 800,000 | ||||||||||
Various Debt, Prepayable Twenty-Four Months Prior to Maturity | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Debt prepayment period without penalty | 24 months | 24 months | ||||||||||
Various Debt, Prepayable Thirty-Six Months Prior to Maturity | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Debt prepayment period without penalty | 36 months | 36 months | ||||||||||
Various Debt, Prepayable Three Months Prior to Maturity | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Debt prepayment period without penalty | 3 months | 3 months | ||||||||||
Various Debt, Prepayable Four Months Prior to Maturity | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Debt prepayment period without penalty | 4 months | 4 months | ||||||||||
Unsecured Term Loan | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Amount repaid | $ 130,000 | |||||||||||
Principal amount | $ 600,000 | $ 800,000 | $ 800,000 | |||||||||
Fixed rate | 3.88% | 3.88% | ||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | $ 800,000 | $ 800,000 | $ 690,000 | |||||||||
Unsecured Term Loan | Merger Agreement | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Amount outstanding | $ 300,000 | $ 114,400 | $ 114,400 | |||||||||
Unsecured Five Year Term Loan | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Expected repayment term of receivables | 5 years | |||||||||||
Principal amount | $ 400,000 | |||||||||||
Unsecured Seven Year Term Loan | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Expected repayment term of receivables | 7 years | |||||||||||
Principal amount | $ 200,000 | |||||||||||
Secured Term Loan Facility | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Stated interest rate (as a percent) | 7.5078% | 7.5078% | ||||||||||
Amount outstanding | $ 1,446,658 | $ 1,446,658 | ||||||||||
Unamortized discount | (28,756) | (28,756) | ||||||||||
Unamortized deferred financing costs | (9,586) | (9,586) | ||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | 1,485,000 | 1,485,000 | ||||||||||
Notes Payable and Term Loan | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Unamortized discount | (224,514) | (224,514) | (4,113) | |||||||||
Unamortized deferred financing costs | (8,538) | (8,538) | (13,481) | |||||||||
Total unsecured notes and term loans payable, net | 2,106,348 | 2,106,348 | 2,397,406 | |||||||||
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 | (190,364) | (190,364) | (395) | |||||||||
Unamortized deferred financing costs | (20,364) | |||||||||||
Total unsecured notes and term loans payable, net | 2,049,168 | 2,049,168 | 2,238,470 | |||||||||
Scheduled Principal Payments | ||||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Remainder of 2023 | 16,872 | 16,872 | ||||||||||
2024 | 21,908 | 21,908 | ||||||||||
2025 | 19,777 | 19,777 | ||||||||||
2026 | 17,728 | 17,728 | ||||||||||
2027 | 9,221 | 9,221 | ||||||||||
2028 | 4,711 | 4,711 | ||||||||||
Thereafter | 22,097 | 22,097 | ||||||||||
Long-term Debt | 112,314 | 112,314 | ||||||||||
Balloon Payments | ||||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Remainder of 2023 | 13,343 | 13,343 | ||||||||||
2024 | 226,198 | 226,198 | ||||||||||
2025 | 1,741,613 | 1,741,613 | ||||||||||
2026 | 414,142 | 414,142 | ||||||||||
2027 | 1,260,472 | 1,260,472 | ||||||||||
2028 | 598,595 | 598,595 | ||||||||||
Thereafter | 1,697,255 | 1,697,255 | ||||||||||
Long-term Debt | 5,951,618 | 5,951,618 | ||||||||||
Senior Unsecured Notes | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Loss on extinguishment of debt | 700 | |||||||||||
Principal amount | 375,000 | 375,000 | ||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | $ 1,539,400 | $ 1,539,400 | 1,725,000 | |||||||||
Senior Unsecured Notes | Merger Agreement | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Principal amount | $ 600,000 | |||||||||||
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% | |||||||||||
Amount repaid | $ 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 | $ 32,400 | $ 32,400 | 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 | $ 82,000 | $ 82,000 | 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 | |||||||||
Senior Unsecured Notes | Public Notes Issued November 2021 | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Stated interest rate (as a percent) | 2.70% | 2.70% | ||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | $ 375,000 | $ 375,000 | 375,000 | |||||||||
Senior Unsecured Notes | Notes Issued March 2018 99.515 Percent Of Par | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Stated interest rate (as a percent) | 4.50% | |||||||||||
Senior Unsecured Notes | Notes Issued February 2019 99.260 Percent Of Par | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Stated interest rate (as a percent) | 4.625% | |||||||||||
Senior Unsecured Notes | Notes Issued November 2020 99.558 Percent Of Par | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Stated interest rate (as a percent) | 2.75% | |||||||||||
Senior Unsecured Notes | Notes Issued November 2021 99.877 Percent Of Par | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Stated interest rate (as a percent) | 2.70% | |||||||||||
Public notes | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Number of facilities | loan | 4 | 4 | ||||||||||
Expected repayment term of receivables | 10 years | |||||||||||
Principal amount | $ 375,000 | $ 350,000 | $ 350,000 | $ 350,000 | ||||||||
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 | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Aggregate investment amount | 4,400,000 | 4,400,000 | ||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | 2,113,313 | 2,113,313 | 2,118,253 | |||||||||
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 | 140,177 | $ 140,177 | 140,552 | |||||||||
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 | 48,292 | $ 48,292 | 48,417 | |||||||||
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 | 259,313 | $ 259,313 | 259,650 | |||||||||
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 | 174,751 | $ 174,751 | 175,861 | |||||||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-1 Due Nov 2026 | ||||||||||||
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 | 78,078 | $ 78,078 | 78,180 | |||||||||
Non-recourse net-lease mortgage notes: | Consolidated special purpose entities | Series 2019-1, Class A-3 Due Nov 2026 | ||||||||||||
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 | 45,233 | $ 45,233 | 45,291 | |||||||||
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 | 119,448 | $ 119,448 | 120,182 | |||||||||
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 | 213,068 | $ 213,068 | 213,638 | |||||||||
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 | 158,397 | $ 158,397 | 158,807 | |||||||||
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 | 232,329 | $ 232,329 | 232,634 | |||||||||
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 | 133,733 | $ 133,733 | 133,903 | |||||||||
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 | 167,026 | $ 167,026 | 167,236 | |||||||||
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 | 88,221 | $ 88,221 | 88,333 | |||||||||
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 | 167,026 | $ 167,026 | 167,236 | |||||||||
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 | 88,221 | $ 88,221 | 88,333 | |||||||||
Nonrecourse mortgage notes payable: | Consolidated special purpose entities | ||||||||||||
Summary of nonrecourse debt obligations of consolidated special purpose entity subsidiaries | ||||||||||||
Aggregate investment amount | 288,600 | 288,600 | ||||||||||
Scheduled maturities, including balloon payments, on the nonrecourse debt obligations | ||||||||||||
Long-term Debt | 126,219 | 126,219 | 140,976 | |||||||||
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 | 5,103 | |||||||||||
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 | 8,935 | |||||||||||
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 | 13,565 | $ 13,565 | 13,701 | |||||||||
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 | 8,547 | $ 8,547 | 8,602 | |||||||||
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 | 57,650 | $ 57,650 | 57,980 | |||||||||
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 | 40,493 | $ 40,493 | 40,662 | |||||||||
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 | 5,964 | $ 5,964 | $ 5,993 | |||||||||
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 |
Debt - Secures Term Loan (Detai
Debt - Secures Term Loan (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||||
Mar. 31, 2023 USD ($) | Feb. 03, 2023 USD ($) Options agreement | Mar. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | May 12, 2023 USD ($) agreement | Mar. 31, 2023 instrument | Mar. 31, 2023 agreement | Dec. 31, 2022 USD ($) | Nov. 30, 2022 USD ($) | Apr. 30, 2022 USD ($) | |
Credit facilities | ||||||||||
Accelerated amortization of deferred financing costs | $ 3,500 | |||||||||
Accelerated amortization of debt discounts | 10,400 | |||||||||
Exit fee | 5,200 | |||||||||
Outstanding balance | $ 361,000 | 361,000 | $ 361,000 | $ 555,000 | ||||||
Carrying amount | 6,063,932 | 6,063,932 | 6,063,932 | |||||||
Secured Term Loan Facility | ||||||||||
Credit facilities | ||||||||||
Carrying amount | 1,485,000 | 1,485,000 | 1,485,000 | |||||||
Unamortized discount | (28,756) | (28,756) | (28,756) | |||||||
Unamortized deferred financing costs | (9,586) | (9,586) | (9,586) | |||||||
Total nonrecourse debt obligations | 1,446,658 | 1,446,658 | 1,446,658 | |||||||
Unsecured Term Loan | ||||||||||
Credit facilities | ||||||||||
Principal amount | 800,000 | 800,000 | 800,000 | $ 600,000 | ||||||
Carrying amount | $ 800,000 | 800,000 | $ 800,000 | $ 690,000 | ||||||
Unsecured Term Loan | SOFR | ||||||||||
Credit facilities | ||||||||||
Spread (as a percent) | 1.25% | 2.75% | ||||||||
Interest rate swaps | ||||||||||
Credit facilities | ||||||||||
Number of agreements | 2 | 11 | 1 | |||||||
Notional amount of interest rate swap agreements | $ 200,000 | 200,000 | $ 200,000 | $ 325,000 | ||||||
Merger Agreement | Unsecured Term Loan | ||||||||||
Credit facilities | ||||||||||
Repayment of term loan | 185,600 | |||||||||
Accelerated amortization of deferred financing costs | 4,800 | |||||||||
Total nonrecourse debt obligations | 114,400 | 114,400 | 114,400 | $ 300,000 | ||||||
Credit Agreement | Secured Term Loan Facility | ||||||||||
Credit facilities | ||||||||||
Number of extension options | Options | 2 | |||||||||
Principal amount | $ 2,000,000 | |||||||||
Repayment of term loan | 515,000 | |||||||||
Extension option term | 6 months | |||||||||
Extension fee (as a percent) | 0.25% | |||||||||
Exit fee (as a percent) | 1% | |||||||||
Number of agreements | agreement | 3 | |||||||||
Notional amount of interest rate swap agreements | $ 750,000 | |||||||||
Fixed rate of interest rate swap agreements effectively convert a portion of the borrowings | 7.60% | |||||||||
Credit Agreement | Secured Term Loan Facility | SOFR | ||||||||||
Credit facilities | ||||||||||
Spread (as a percent) | 2.75% | |||||||||
Credit Agreement | Interest rate swaps | Secured Term Loan Facility | ||||||||||
Credit facilities | ||||||||||
Number of agreements | agreement | 3 | |||||||||
Notional amount of interest rate swap agreements | $ 750,000 | $ 750,000 | $ 750,000 | |||||||
Fixed rate of interest rate swap agreements effectively convert a portion of the borrowings | 7.60% | |||||||||
Unsecured Credit Agreement | Unsecured Term Loan | ||||||||||
Credit facilities | ||||||||||
Fixed rate of existing cash flow hedges effectively convert the variable-rate on the loan | 5.17% |
Equity (Details)
Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Feb. 03, 2023 | Feb. 02, 2023 | Feb. 02, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Nov. 30, 2020 | |
Common stock. | ||||||
Gross Proceeds | $ 168,431,000 | |||||
Common stock, par value per share | $ 0.01 | |||||
Common Units, Issued (in shares) | 1,000 | |||||
Proceeds from issuance of common units | $ 8,300,000,000 | |||||
Preferred stock | ||||||
Issuance of common stock, net of costs | $ 166,162,000 | |||||
Affiliates of GIC and Oak Street Real Estate Capital | STORE Capital | ||||||
Common stock. | ||||||
Common stock, par value per share | $ 0.01 | |||||
Series A Preferred Units | SeriesA Preferred Units | ||||||
Common stock. | ||||||
Preferred Units Issued | 125 | |||||
Issuance of preferred units. | $ 125,000 | |||||
2020 ATM Program | ||||||
Common stock. | ||||||
Shares Sold | 0 | |||||
Maximum value of shares that can be offered and sold | $ 900,000,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Commitments to fund improvements to real estate properties $ in Millions | Mar. 31, 2023 USD ($) |
Commitments and Contingencies | |
Real estate property improvement commitments | $ 138.3 |
Real estate property improvement commitments, in Next Twelve Months | $ 114 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) $ in Millions | May 12, 2023 agreement | Mar. 31, 2023 instrument | Mar. 31, 2023 agreement | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Derivatives [Line items] | |||||
Fair value of derivative assets | $ 21.2 | $ 31.4 | |||
Fair value of derivative liability | 3.4 | ||||
Interest rate swaps | |||||
Derivatives [Line items] | |||||
Derivative liability, number of instruments held | 2 | 11 | 1 | ||
Level 2 Fair Value | Carrying value | |||||
Derivatives [Line items] | |||||
Long-term debt obligations | 5,600 | 4,600 | |||
Level 2 Fair Value | Fair value | |||||
Derivatives [Line items] | |||||
Long-term debt obligations | $ 5,500 | $ 4,100 |
Merger - Asset acquisition cons
Merger - Asset acquisition consideration (Details) - Store capital corporation $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Consideration type | |
Cash paid to former shareholders and equity award holders | $ 9,142,744 |
Extinguishment of historical debt | 1,331,698 |
Capitalized transaction costs | 110,924 |
Total consideration | $ 10,585,366 |
Merger - Assets acquired and li
Merger - Assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Feb. 02, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Assets. | ||||
Land and improvements | $ 3,669,596 | $ 3,455,443 | ||
Buildings and improvements | 9,231,726 | 7,743,454 | ||
Intangible lease assets | 619,901 | 61,968 | ||
Operating ground lease assets | 52,666 | 31,872 | ||
Loans and financing receivables, net | 958,639 | 787,106 | ||
Cash and cash equivalents | 42,917 | $ 33,096 | 35,137 | $ 39,340 |
Other assets, net | 74,102 | 158,097 | ||
Total assets acquired | 14,553,532 | 10,834,970 | ||
Liabilities: | ||||
Unsecured notes and term loans payable, net | 2,106,348 | 2,397,406 | ||
Non-recourse debt obligations of consolidated special purpose entities, net | 2,049,168 | 2,238,470 | ||
Intangible lease liabilities, net | 146,068 | 0 | ||
Operating lease liabilities | 50,414 | 36,873 | ||
Total liabilities assumed | 6,300,698 | $ 5,408,652 | ||
Store capital corporation | ||||
Assets. | ||||
Land and improvements | 3,620,509 | |||
Buildings and improvements | 9,105,004 | |||
Intangible lease assets | 620,034 | |||
Operating ground lease assets | 52,805 | |||
Loans and financing receivables, net | 952,039 | |||
Cash and cash equivalents | 33,096 | |||
Other assets, net | 71,209 | |||
Total assets acquired | 14,454,696 | |||
Liabilities: | ||||
Unsecured notes and term loans payable, net | 1,725,000 | |||
Non-recourse debt obligations of consolidated special purpose entities, net | 2,243,323 | |||
Below market value of debt | (430,908) | |||
Intangible lease liabilities, net | 148,660 | |||
Operating lease liabilities | 50,516 | |||
Other Liabilities | 132,739 | |||
Total liabilities assumed | 3,869,330 | |||
Fair value of net assets acquired | $ 10,585,366 |