Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 1,558,235 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Registrant Name | Corporate Property Associates 18 Global Incorporated | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 106,427,840 | |
Class C | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 30,261,048 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Investments in real estate: | ||
Real estate, at cost | $ 1,001,699 | $ 986,574 |
Operating real estate, at cost | 556,237 | 490,852 |
Accumulated depreciation | (63,059) | (42,194) |
Net investments in properties | 1,494,877 | 1,435,232 |
Real estate under construction | 195,459 | 131,930 |
Net investment in direct financing leases | 50,484 | 51,966 |
Note receivable | 28,000 | 28,000 |
Net investments in real estate | 1,768,820 | 1,647,128 |
Equity investments in real estate | 14,538 | 12,588 |
Cash and cash equivalents | 76,912 | 117,453 |
In-place lease intangible assets, net | 200,905 | 212,420 |
Other intangible assets, net | 31,161 | 31,421 |
Goodwill | 24,381 | 23,389 |
Other assets, net | 85,177 | 90,284 |
Total assets | 2,201,894 | 2,134,683 |
Liabilities: | ||
Non-recourse debt, net | 963,449 | 865,327 |
Bonds payable, net | 141,609 | 133,886 |
Deferred income taxes | 49,023 | 47,313 |
Accounts payable, accrued expenses and other liabilities | 74,942 | 71,397 |
Due to affiliate | 33,118 | 43,974 |
Distributions payable | 20,569 | 20,078 |
Total liabilities | 1,282,710 | 1,181,975 |
Commitments and contingencies (Note 11) | ||
CPA®:18 – Global stockholders’ equity: | ||
Preferred stock, $0.001 par value; 50,000,000 shares authorized; none issued | 0 | 0 |
Additional paid-in capital | 1,200,209 | 1,178,990 |
Distributions and accumulated losses | (301,229) | (247,995) |
Accumulated other comprehensive loss | (49,767) | (50,316) |
Total CPA®:18 – Global stockholders’ equity | 849,348 | 880,812 |
Noncontrolling interests | 69,836 | 71,896 |
Total equity | 919,184 | 952,708 |
Total liabilities and equity | 2,201,894 | 2,134,683 |
Class A common stock | ||
CPA®:18 – Global stockholders’ equity: | ||
Common stock | 105 | 103 |
Total equity | 105 | 103 |
Class C common stock | ||
CPA®:18 – Global stockholders’ equity: | ||
Common stock | 30 | 30 |
Total equity | $ 30 | $ 30 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
CPA®:18 – Global stockholders’ equity: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Class A | ||
CPA®:18 – Global stockholders’ equity: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 320,000,000 | 320,000,000 |
Common stock, shares outstanding | 105,240,501 | 103,214,083 |
Class C | ||
CPA®:18 – Global stockholders’ equity: | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares outstanding | 29,920,244 | 29,536,899 |
Consolidated Statement of Opera
Consolidated Statement of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Lease revenues: | ||||
Rental income | $ 22,974 | $ 18,338 | $ 46,267 | $ 35,427 |
Interest income from direct financing leases | 1,150 | 1,012 | 2,321 | 2,031 |
Total lease revenue | 24,124 | 19,350 | 48,588 | 37,458 |
Other real estate income | 17,842 | 8,891 | 33,479 | 15,024 |
Other operating income | 3,039 | 1,521 | 6,026 | 3,753 |
Other interest income | 710 | 710 | 1,420 | 1,410 |
Total revenues | 45,715 | 30,472 | 89,513 | 57,645 |
Operating Expenses | ||||
Depreciation and amortization | 21,392 | 14,532 | 41,895 | 26,651 |
Other real estate expenses | 7,837 | 3,687 | 14,627 | 6,280 |
Property expenses (inclusive of $2,468, $1,729, $4,877, and $3,146, respectively, to a related party) | 6,471 | 4,174 | 12,730 | 8,091 |
Acquisition expenses (inclusive of $2,322, $13,219, $3,484, and $18,681, respectively, to a related party) | 2,816 | 17,180 | 4,711 | 23,780 |
General and administrative (inclusive of $740, $949, $1,609, and $1,608, respectively, to a related party) | 1,514 | 1,840 | 3,550 | 3,724 |
Operating Expenses | 40,030 | 41,413 | 77,513 | 68,526 |
Other Income and Expenses | ||||
Interest expense (inclusive of $188, $96, $428, and $173, respectively, to a related party) | (10,320) | (8,009) | (20,680) | (16,095) |
Other income and (expenses) | (2,952) | 568 | 1,033 | (1,931) |
Other Income and Expenses | (13,272) | (7,441) | (19,647) | (18,026) |
Loss before income taxes and loss on sale of real estate | (7,587) | (18,382) | (7,647) | (28,907) |
Benefit from (provision for) income taxes | 133 | 119 | (200) | (208) |
Loss before loss on sale of real estate | (7,454) | (18,263) | (7,847) | (29,115) |
Loss on sale of real estate, net of tax | 0 | 0 | (63) | 0 |
Net Loss | (7,454) | (18,263) | (7,910) | (29,115) |
Net income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $2,380, $1,422, $3,657, and $2,316, respectively) | (2,758) | (1,644) | (4,499) | (3,005) |
Net Loss Attributable to CPA®:18 – Global | (10,212) | (19,907) | (12,409) | (32,120) |
Class A | ||||
Other Income and Expenses | ||||
Interest expense (inclusive of $188, $96, $428, and $173, respectively, to a related party) | (100) | (200) | ||
Net Loss Attributable to CPA®:18 – Global | $ (7,882) | $ (14,961) | $ (9,485) | $ (24,673) |
Basic and diluted weighted-average shares outstanding | 105,182,645 | 101,460,830 | 104,577,599 | 101,053,789 |
Net loss per share (in dollars per share) | $ (0.07) | $ (0.15) | $ (0.09) | $ (0.24) |
Distributions declared per share (in dollars per share) | $ 0.1563 | $ 0.1562 | $ 0.3126 | $ 0.3124 |
Class C | ||||
Other Income and Expenses | ||||
Net Loss Attributable to CPA®:18 – Global | $ (2,330) | $ (4,946) | $ (2,924) | $ (7,447) |
Basic and diluted weighted-average shares outstanding | 29,928,571 | 29,033,036 | 29,843,149 | 25,729,488 |
Net loss per share (in dollars per share) | $ (0.08) | $ (0.17) | $ (0.10) | $ (0.29) |
Distributions declared per share (in dollars per share) | $ 0.1376 | $ 0.1329 | $ 0.2713 | $ 0.2658 |
Consolidated Statement of Oper5
Consolidated Statement of Operations (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Expenses | ||||
Acquisition expenses | $ 2,816 | $ 17,180 | $ 4,711 | $ 23,780 |
General and administrative expense | 1,514 | 1,840 | 3,550 | 3,724 |
Interest expense, related party | 188 | 96 | 428 | 173 |
Distributions of available cash | 2,380 | 1,422 | 3,657 | 2,316 |
Related Party | ||||
Operating Expenses | ||||
Property expense | 2,468 | 1,729 | 4,877 | 3,146 |
Acquisition expenses | 2,322 | 13,219 | 3,484 | 18,681 |
General and administrative expense | $ 740 | $ 949 | $ 1,609 | $ 1,608 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (7,454) | $ (18,263) | $ (7,910) | $ (29,115) |
Other Comprehensive (Loss) Income | ||||
Foreign currency translation adjustments | (10,788) | 12,152 | 5,776 | (21,478) |
Change in net unrealized gain (loss) on derivative instruments | 95 | 252 | (3,750) | 2,278 |
Other Comprehensive Loss | (10,693) | 12,404 | 2,026 | (19,200) |
Comprehensive Loss | (18,147) | (5,859) | (5,884) | (48,315) |
Amounts Attributable to Noncontrolling Interests | ||||
Net income | (2,758) | (1,644) | (4,499) | (3,005) |
Foreign currency translation adjustments | 1,193 | (1,888) | (1,477) | 4,180 |
Comprehensive (income) loss attributable to noncontrolling interests | (1,565) | (3,532) | (5,976) | 1,175 |
Comprehensive Loss Attributable to CPA®:18 – Global | $ (19,712) | $ (9,391) | $ (11,860) | $ (47,140) |
Consolidated Statements of Equi
Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Distributions and Accumulated Losses | Accumulated Other Comprehensive Loss | Total CPA 18 - Global Stockholders | Noncontrolling Interests | Class A | Class C |
Beginning equity balance, value at Dec. 31, 2014 | $ 1,000,228 | $ 1,055,342 | $ (111,878) | $ (20,941) | $ 922,641 | $ 77,587 | $ 100 | $ 18 |
Beginning equity balance, shares at Dec. 31, 2014 | 99,924,009 | 18,026,013 | ||||||
Statements of Equity | ||||||||
Shares issued net of offering cost, value | 114,245 | 114,232 | 114,245 | $ 2 | $ 11 | |||
Shares issued net of offering cost, shares | 1,671,421 | 11,045,353 | ||||||
Shares issued to affiliate, value | 2,879 | 2,879 | 2,879 | |||||
Shares issued to affiliate, shares | 287,951 | |||||||
Contributions from noncontrolling interests | 2,300 | 2,300 | ||||||
Distributions to noncontrolling interests | (5,349) | (5,349) | ||||||
Distributions declared | (38,379) | (38,379) | (38,379) | |||||
Net Loss | (29,115) | (32,120) | (32,120) | 3,005 | ||||
Other comprehensive loss: | ||||||||
Foreign currency translation adjustments | (21,478) | (17,298) | (17,298) | (4,180) | ||||
Change in net unrealized gain on derivative instruments | 2,278 | 2,278 | 2,278 | |||||
Repurchase of shares, value | (3,268) | (3,268) | (3,268) | |||||
Repurchase of shares, shares | (327,739) | (15,347) | ||||||
Ending equity balance, value at Jun. 30, 2015 | 1,024,341 | 1,169,185 | (182,377) | (35,961) | 950,978 | 73,363 | $ 102 | $ 29 |
Ending equity balance, shares at Jun. 30, 2015 | 101,555,642 | 29,056,019 | ||||||
Beginning equity balance, value at Mar. 31, 2015 | (46,476) | |||||||
Statements of Equity | ||||||||
Net Loss | (18,263) | |||||||
Other comprehensive loss: | ||||||||
Foreign currency translation adjustments | 12,152 | |||||||
Change in net unrealized gain on derivative instruments | 252 | |||||||
Ending equity balance, value at Jun. 30, 2015 | 1,024,341 | 1,169,185 | (182,377) | (35,961) | 950,978 | 73,363 | $ 102 | $ 29 |
Ending equity balance, shares at Jun. 30, 2015 | 101,555,642 | 29,056,019 | ||||||
Beginning equity balance, value at Dec. 31, 2015 | 952,708 | 1,178,990 | (247,995) | (50,316) | 880,812 | 71,896 | $ 103 | $ 30 |
Beginning equity balance, shares at Dec. 31, 2015 | 103,214,083 | 29,536,899 | ||||||
Statements of Equity | ||||||||
Shares issued net of offering cost, value | 21,477 | 21,475 | 21,477 | $ 2 | $ 0 | |||
Shares issued net of offering cost, shares | 1,851,942 | 599,187 | ||||||
Shares issued to affiliate, value | 4,906 | 4,906 | 4,906 | $ 0 | ||||
Shares issued to affiliate, shares | 599,386 | |||||||
Contributions from noncontrolling interests | 41 | 41 | ||||||
Distributions to noncontrolling interests | (8,077) | (8,077) | ||||||
Distributions declared | (40,825) | (40,825) | (40,825) | |||||
Net Loss | (7,910) | (12,409) | (12,409) | 4,499 | ||||
Other comprehensive loss: | ||||||||
Foreign currency translation adjustments | 5,776 | 4,299 | 4,299 | 1,477 | ||||
Change in net unrealized gain on derivative instruments | (3,750) | (3,750) | (3,750) | |||||
Repurchase of shares, value | (5,162) | (5,162) | (5,162) | |||||
Repurchase of shares, shares | (424,910) | (215,842) | ||||||
Ending equity balance, value at Jun. 30, 2016 | 919,184 | 1,200,209 | (301,229) | (49,767) | 849,348 | 69,836 | $ 105 | $ 30 |
Ending equity balance, shares at Jun. 30, 2016 | 105,240,501 | 29,920,244 | ||||||
Beginning equity balance, value at Mar. 31, 2016 | (40,267) | |||||||
Statements of Equity | ||||||||
Net Loss | (7,454) | |||||||
Other comprehensive loss: | ||||||||
Foreign currency translation adjustments | (10,788) | |||||||
Change in net unrealized gain on derivative instruments | 95 | |||||||
Ending equity balance, value at Jun. 30, 2016 | $ 919,184 | $ 1,200,209 | $ (301,229) | $ (49,767) | $ 849,348 | $ 69,836 | $ 105 | $ 30 |
Ending equity balance, shares at Jun. 30, 2016 | 105,240,501 | 29,920,244 |
Consolidated Statements of Equ8
Consolidated Statements of Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Class A | |||||
Statements of Equity | |||||
Distributions declared per share (in dollars per share) | $ 0.1563 | $ 0.1563 | $ 0.1562 | $ 0.3126 | $ 0.3124 |
Class C | |||||
Statements of Equity | |||||
Distributions declared per share (in dollars per share) | $ 0.1376 | $ 0.1337 | $ 0.1329 | $ 0.2713 | $ 0.2658 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash Flows — Operating Activities | ||
Net Cash Provided by Operating Activities | $ 32,293 | $ 15,303 |
Cash Flows — Investing Activities | ||
Acquisitions of real estate, net of cash acquired | (55,328) | (496,489) |
Funding and advances for build-to-suit projects | (54,001) | (9,515) |
Value added taxes paid in connection with acquisition of real estate | (4,687) | (2,931) |
Deposits for investments | 4,000 | 0 |
Capital contributions to equity investment | (3,596) | (5,255) |
Capital expenditures on real estate | (3,410) | (2,485) |
Payment of deferred acquisition fees to an affiliate | (3,409) | (2,107) |
Value added taxes refunded in connection with acquisition of real estate | 2,814 | 0 |
Return of capital from equity investments in real estate | 2,175 | 33 |
Change in investing restricted cash | 579 | 6,051 |
Proceeds from sale of real estate | 40 | 0 |
Other investing activities, net | 37 | (35) |
Net Cash Used in Investing Activities | (114,786) | (512,733) |
Cash Flows — Financing Activities | ||
Proceeds from mortgage financing | 72,290 | 338,267 |
Distributions paid | (40,334) | (36,298) |
Proceeds from issuance of shares, net of issuance costs | 20,166 | 114,677 |
Distributions to noncontrolling interests | (8,077) | (5,349) |
Repurchase of shares | (5,162) | (3,268) |
Change in financing restricted cash | 4,941 | (29) |
Scheduled payments and prepayments of mortgage principal | (1,526) | (43,143) |
Payment of deferred financing costs and mortgage deposits | (798) | (2,875) |
Contributions from noncontrolling interests | 41 | 2,300 |
Other financing activities, net | 0 | (50) |
Proceeds from bond financing | 0 | 66,328 |
Net Cash Provided by Financing Activities | 41,541 | 430,560 |
Change in Cash and Cash Equivalents During the Period | ||
Effect of exchange rate changes on cash and cash equivalents | 411 | (3,420) |
Net decrease in cash and cash equivalents | (40,541) | (70,290) |
Cash and cash equivalents, beginning of period | 117,453 | 429,548 |
Cash and cash equivalents, end of period | $ 76,912 | $ 359,258 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Organization Corporate Property Associates 18 – Global Incorporated, or CPA ® :18 – Global, and, together with its consolidated subsidiaries, we, us, or our, is a publicly-owned, non-listed real estate investment trust, or REIT, that invests primarily in a diversified portfolio of income-producing commercial real estate properties leased to companies and other real estate related assets, both domestically and internationally. We were formed in 2012 and are managed by W. P. Carey Inc., or WPC, through one of its subsidiaries, or collectively our Advisor. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income and the level of our distributions, among other factors. We earn revenue primarily by leasing the properties we own to single corporate tenants, predominantly on a triple-net lease basis, which requires the tenant to pay substantially all of the costs associated with operating and maintaining the property. Revenue is subject to fluctuation due to the timing of new lease transactions, lease terminations, lease expirations, contractual rent adjustments, tenant defaults, sales of properties, and changes in foreign currency exchange rates. Substantially all of our assets and liabilities are held by CPA ® :18 Limited Partnership, or the Operating Partnership, and at June 30, 2016 we owned 99.97% of general and limited partnership interests in the Operating Partnership. The remaining interest in the Operating Partnership is held by a subsidiary of WPC. At June 30, 2016 , our portfolio was comprised of full or partial ownership interests in 59 properties, the majority of which were fully-occupied and triple-net leased to 99 tenants totaling 9.5 million square feet. The remainder of our portfolio was comprised of our full or partial ownership interests in 67 self-storage properties and eight multi-family properties totaling 6.5 million square feet. We raised aggregate gross proceeds in our initial public offering of approximately $1.2 billion through April 2, 2015, which is the date we closed our offering. We operate in two reportable business segments: Net Lease and Self Storage. Our Net Lease segment includes our investments in net-leased properties, whether they are accounted for as operating leases or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. In addition, we have an All Other category that includes our multi-family investments and our investment in a note receivable ( Note 13 ). Our reportable business segments and All Other category are the same as our reporting units. |
Revisions of Previously-Issued
Revisions of Previously-Issued Financial Statements | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Revisions of Previously-Issued Financial Statements | Revisions of Previously-Issued Financial Statements Error Associated with Financing Costs During the second quarter of 2015, we identified an error related to the capitalization of financing costs associated with the refinancing of a mortgage loan, which should have been recorded as Interest expense within our consolidated statement of operations for the three months ended March 31, 2015. We have revised our consolidated statement of operations, which increased Interest expense, Loss before income taxes, Net loss, and Net loss attributable to CPA ® :18 – Global by $0.9 million and Net loss per share for Class A and Class C common stock by $0.01 . This also resulted in a corresponding decrease of $0.9 million to Other assets, Total assets, Distributions and accumulated losses, and Total equity within the consolidated balance sheet and, where applicable, within the consolidated statement of equity. In addition, the amounts for Net loss, Comprehensive loss and Comprehensive loss attributable to CPA ® :18 – Global on the consolidated statement of comprehensive loss for the three months ended March 31, 2015 increased by $0.9 million . Revision of Share Repurchases During the year ended December 31, 2015 , we determined that our presentation of common shares repurchased should be classified as a reduction to Common stock, for the par amount of the common shares repurchased and as a reduction to Additional paid-in capital for the excess over the amount allocated to common stock, as well as included as shares unissued within the consolidated financial statements. We previously classified common shares repurchased as Treasury stock in our consolidated financial statements. We evaluated the impact of this correction on previously-issued financial statements and concluded they were not materially misstated. In order to conform previous financial statements to the current period, we elected to revise previously-issued financial statements the next time such financial statements are filed. The correction eliminates Treasury stock of $4.8 million as of June 30, 2015 and results in corresponding reductions of Common stock and Additional paid-in capital, but has no impact on total equity within the consolidated balance sheets as of June 30, 2015 and consolidated statements of equity for the six months ended June 30, 2015 . The accompanying consolidated statement of equity for the six months ended June 30, 2015 has been revised accordingly. In addition, we will revise the consolidated statement of changes in equity for the period ended September 30, 2015, as this financial statement is presented in a future filing. The misclassification had no impact on the previously-reported consolidated statements of operations, consolidated statements of comprehensive loss, or condensed consolidated statements of cash flows. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States, or GAAP. In the opinion of management, the unaudited financial information for the interim periods presented in this Report reflects all normal and recurring adjustments necessary for a fair statement of financial position, results of operations, and cash flows. Our interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2015, which are included in the 2015 Annual Report, as certain disclosures that would substantially duplicate those contained in the audited consolidated financial statements have not been included in this Report. Operating results for interim periods are not necessarily indicative of operating results for an entire year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Basis of Consolidation Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. On January 1, 2016, we adopted the Financial Accounting Standards Board’s, or FASB’s, Accounting Standards Update, or ASU, 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis , as described in the Recent Accounting Pronouncements section below, which amends the current consolidation guidance, including introducing a separate consolidation analysis specific to limited partnerships and other similar entities. When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or VIE, and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. We performed this analysis on all of our subsidiary entities following the guidance in ASU 2015-02 to determine whether they qualify as VIEs and whether they should be consolidated or accounted for as equity investments in an unconsolidated venture. As a result of this change in guidance, we determined that eight entities that were previously classified as voting interest entities should now be classified as VIEs as of January 1, 2016 and therefore included in our VIE disclosures. However, there was no change in determining whether or not we consolidate these entities as a result of the new guidance. We elected to retrospectively adopt ASU 2015-02, which resulted in changes to our VIE disclosures within the consolidated balance sheets. There were no other changes to our consolidated balance sheets or results of operations for the periods presented. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets, except for the financing arrangement of our sole equity method investment, for which we have provided the lender with a guarantee of amounts due primarily of principal and interest payments. At June 30, 2016 , we considered 13 entities VIEs, 12 of which we consolidated as we are considered the primary beneficiary. The following table presents a summary of selected financial data of the consolidated VIEs included in the consolidated balance sheets (in thousands): June 30, 2016 December 31, 2015 Net investments in properties $ 363,786 $ 360,049 Real estate under construction 169,727 119,115 Net investments in direct financing leases 11,556 12,684 Cash and cash equivalents 11,400 18,356 In-place lease intangible assets, net 71,412 73,487 Other intangible assets, net 22,414 22,316 Other assets, net 43,499 52,915 Total assets $ 693,794 $ 658,922 Non-recourse debt, net $ 196,274 $ 196,436 Bonds payable, net 59,258 56,259 Deferred income taxes 22,385 21,577 Accounts payable, accrued expenses and other liabilities 27,617 29,163 Total liabilities $ 305,534 $ 303,435 As of June 30, 2016 and December 31, 2015, we had one unconsolidated VIE, which we account for under the equity method of accounting. We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence but does not give us power over decisions that significantly affect the economic performance of the entity. As of June 30, 2016 and December 31, 2015, the net carrying amount of our equity investment was $14.5 million and $12.6 million , respectively, and our maximum exposure to loss in this entity is limited to our investment. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Our consolidated balance sheets at June 30, 2016 and December 31, 2015, include a separate classification of our Equity investments in real estate for the amounts of $14.5 million and $12.6 million , respectively, which was previously classified in Other assets, net in our historical quarterly and annual reports. On January 1, 2016, we adopted ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) as described in the Recent Accounting Pronouncements section below. ASU 2015-03 changes the presentation of debt issuance costs, which were previously recognized as an asset and requires that they be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. As a result of adopting this guidance, we reclassified $9.0 million of deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, but will apply to reimbursed tenant costs and revenues generated from our operating properties. Additionally, this guidance modifies disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all entities by one year, beginning in 2018, with early adoption permitted but not before 2017, the original public company effective date. We are currently evaluating the impact of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810). ASU 2015-02 amends the current consolidation guidance, including modification of the guidance for evaluating whether limited partnerships and similar legal entities are VIEs or voting interest entities. The guidance does not amend the existing disclosure requirements for VIEs or voting interest model entities. The guidance, however, modified the requirements to qualify under the voting interest model. Under the revised guidance, ASU 2015-02 requires an entity to classify a limited liability company or a limited partnership as a VIE unless the partnership provides partners with either substantive kick-out rights or substantive participating rights over the managing member or general partner. Refer to the discussion in the Basis of Consolidation section above. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30). ASU 2015-03 changed the presentation of debt issuance costs, which were previously recognized as a deferred charge (that is, an asset) and required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 does not affect the recognition and measurement guidance for debt issuance costs. ASU 2015-03 is effective for periods beginning after December 15, 2015, early adoption is permitted and retrospective application is required. We adopted ASU 2015-03 on January 1, 2016 and have disclosed the reclassification of our debt issuance costs in the Reclassifications section above. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for measurement period adjustments retrospectively. Instead, an acquirer will recognize a measurement period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, early adoption is permitted and prospective application is required for adjustments that are identified after the effective date of this update. We elected to early adopt ASU 2015-16 and implemented the standard prospectively beginning July 1, 2015. The adoption and implementation of the standard did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchanged from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new standard also replaces existing sale-leaseback guidance with a new model applicable to both lessees and lessors. Additionally, the new standard requires extensive quantitative and qualitative disclosures. ASU 2016-02 is effective for U.S. GAAP public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; for all other entities, the final lease standard will be effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early application will be permitted for all entities. The new standard must be adopted using a modified retrospective transition of the new guidance and provides for certain practical expedients. Transition will require application of the new model at the beginning of the earliest comparative period presented. We are evaluating the impact of the new standard and have not yet determined if it will have a material impact on our business or our consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships. ASU 2016-05 clarifies that a change in counterparty to a derivative contract in and of itself, does not require the dedesignation of a hedging relationship. ASU 2016-05 is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. Early adoption is permitted and entities have the option of adopting this guidance on a prospective basis to new derivative contracts or on a modified retrospective basis. We elected to early adopt ASU 2-16-05 on January 1, 2016 on a prospective basis and there was no impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323). ASU 2016-07 simplifies the transition to the equity method of accounting. ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. Instead the equity method of accounting will be applied prospectively from the date significant influence is obtained. The new standard should be applied prospectively for investments that qualify for the equity method of accounting in interim and annual periods beginning after December 15, 2016. Early adoption is permitted and we elected to early adopt this standard as of January 1, 2016. The adoption of this standard had no impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. ASU 2016-03 introduces a new model for estimating credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements. |
Agreements and Transactions wit
Agreements and Transactions with Related Parties | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Agreements and Transactions with Related Parties | Agreements and Transactions with Related Parties Transactions with Our Advisor We have an advisory agreement with our Advisor whereby our Advisor performs certain services for us under a fee arrangement, including the identification, evaluation, negotiation, purchase, and disposition of real estate and related assets and mortgage loans; day-to-day management; and the performance of certain administrative duties. We also reimburse our Advisor for general and administrative duties performed on our behalf. The advisory agreement has a term of one year and may be renewed for successive one-year periods. We may terminate the advisory agreement upon 60 days’ written notice without cause or penalty. The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our Advisor and other affiliates, which excludes the fees that impact equity as further disclosed below the tables, in accordance with the terms of the relevant agreements (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Amounts Included in the Consolidated Statements of Operations Asset management fees $ 2,468 $ 1,729 $ 4,877 $ 3,146 Available Cash Distributions 2,380 1,422 3,657 2,316 Acquisition expenses 2,322 13,219 3,484 18,681 Personnel and overhead reimbursements 740 284 1,609 443 Interest expense on deferred acquisition fees and accretion of interest on annual distribution and shareholder servicing fee 188 96 428 173 Annual distribution and shareholder servicing fee (a) — 665 — 1,165 $ 8,098 $ 17,415 $ 14,055 $ 25,924 Acquisition Fees Capitalized Current acquisition fees $ 452 $ 2,909 $ 1,821 $ 6,375 Deferred acquisition fees 362 2,327 1,457 5,100 Capitalized personnel and overhead reimbursements 73 — 248 — $ 887 $ 5,236 $ 3,526 $ 11,475 ___________ (a) For the three and six months ended June 30, 2016 , we paid $0.6 million and $1.3 million , respectively, related to the annual distribution and shareholder servicing fee, which, beginning in the fourth quarter of 2015, is accounted for as a reduction in our shareholder servicing fee liability. The following table presents a summary of amounts included in Due to affiliate in the consolidated financial statements (in thousands): June 30, 2016 December 31, 2015 Due to Affiliate Deferred acquisition fees, including interest $ 20,969 $ 26,747 Shareholder servicing fee liability 8,301 9,394 Accounts payable and other 3,064 3,872 Asset management fees payable 784 813 Current acquisition fees — 3,148 $ 33,118 $ 43,974 Organization and Offering Costs Pursuant to the advisory agreement, we were liable for certain expenses related to our initial public offering, including filing, legal, accounting, printing, advertising, transfer agent, and escrow fees, which were deducted from the gross proceeds of the offering. We reimbursed Carey Financial LLC, or Carey Financial, our dealer manager and an affiliate of our Advisor (who may then reimburse selected dealers) for reasonable bona fide due diligence expenses incurred that were supported by a detailed and itemized invoice. Total underwriting compensation paid in connection with our offering, including selling commissions and the dealer manager fee, and reimbursements made by Carey Financial to selected dealers and investment advisors, did not exceed the limitations prescribed by the Financial Industry Regulatory Authority, Inc., the regulator for broker-dealers like Carey Financial, which limit underwriting compensation to 10% of gross offering proceeds. Our Advisor agreed to be responsible for the repayment of organization and offering expenses (excluding selling commissions and dealer manager fees paid to Carey Financial and selected dealers and fees paid and expenses reimbursed to selected dealers) that exceeded, in the aggregate, 1.5% of the gross proceeds from our initial public offering. From inception and through June 30, 2016 , our Advisor incurred organization and offering costs of $8.7 million on our behalf, all of which we were obligated to pay because such costs did not exceed 1.5% of the gross proceeds from our initial public offering. As a result, we have fully repaid our Advisor for such costs, which we have charged to stockholders’ equity in our consolidated financial statements. Loans from WPC In January 2013, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us of up to $100.0 million , in the aggregate, at a rate equal to the rate at which WPC was able to borrow funds under its senior credit facility, for the purpose of facilitating acquisitions approved by our Advisor’s investment committee that we would not otherwise have had sufficient available funds to complete. All loans were made solely at the discretion of WPC’s management. This line of credit with WPC was terminated in January 2016. We did not borrow any funds from WPC during the three and six months ended June 30, 2016 or 2015 , nor did we have any amounts outstanding at June 30, 2016 or December 31, 2015 . In July 2016, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us of up to $50.0 million , in the aggregate, at a rate equal to the rate at which WPC can to borrow funds under its senior credit facility ( Note 14 ). Asset Management Fees Pursuant to the advisory agreement, our Advisor is entitled to an annual asset management fee ranging from 0.5% to 1.5% , depending on the type of investment and based on the average market value or average equity value, as applicable, of our investments. We amended the advisory agreement in 2015, so that the asset management fees are payable in cash or shares of our Class A common stock at our option, after consultation with our Advisor. If our Advisor receives all or a portion of its fees in shares, the number of shares issued is determined by dividing the dollar amount of fees by our most recently published estimated net asset value per share, or NAV, which was published in May 2016 and estimated to be $7.90 for Class A common stock as of March 31, 2016 (before our initial NAV was published in March 2016, as was the case at December 31, 2015 , we used the offering price of our Class A shares of $10.00 per share). For both the three and six months ended June 30, 2016 and 2015 , our Advisor received its asset management fees in shares of our Class A common stock, which is a non-cash financing activity. At June 30, 2016 , our Advisor owned 1,575,163 shares, or 1.2% , of our Class A common stock outstanding. Asset management fees are included in Property expenses in the consolidated financial statements. Selling Commissions and Dealer Manager Fees Pursuant to our dealer manager agreement, Carey Financial received a selling commission in connection with our initial public offering of $0.70 and $0.14 per share sold and a dealer manager fee of $0.30 and $0.21 per share sold for the Class A and Class C common stock, respectively. Our initial public offering closed on April 2, 2015. These amounts were recorded in Additional paid-in capital in the consolidated financial statements. We recorded selling commissions and dealer manager fees of $107.9 million on a cumulative basis through June 30, 2016 . Annual Distribution and Shareholder Servicing Fee Carey Financial also receives an annual distribution and shareholder servicing fee in connection with our Class C common stock, which it may re-allow to selected dealers. The amount of the annual distribution and shareholder servicing fee was initially 1.0% of the offering price per share of our Class C common stock, but is now 1.0% of the most recently published NAV of our Class C common stock, which was published in May 2016 and estimated to be $7.90 for Class C common stock as of March 31, 2016. The annual distribution and shareholder servicing fee accrues daily and is payable quarterly in arrears. We will no longer incur the annual distribution and shareholder servicing fee beginning on the date at which, in the aggregate, underwriting compensation from all sources, including the annual distribution and shareholder servicing fee, any organizational and offering fee paid for underwriting and underwriting compensation paid by WPC and its affiliates, reaches 10.0% of the gross proceeds from our initial public offering, which it has not yet reached. At June 30, 2016 and December 31, 2015 , we had a liability of $8.3 million and $9.4 million , respectively, within Due to affiliate to reflect the present value of the estimated future payments that we expect to pay Carey Financial. Acquisition and Disposition Fees Our Advisor receives acquisition fees, a portion of which is payable upon acquisition, while the remaining portion is subordinated to a preferred return of a non-compounded cumulative distribution of 5.0% per annum (based initially on our invested capital). The initial acquisition fee and subordinated acquisition fee are 2.5% and 2.0% , respectively, of the aggregate total cost of our portion of each investment for all investments, other than those in readily-marketable real estate securities purchased in the secondary market, for which our Advisor will not receive any acquisition fees. Deferred acquisition fees are scheduled to be paid in three equal annual installments following the quarter in which a property was purchased and are subject to the preferred return described above. The preferred return was achieved as of the cumulative periods ended June 30, 2016 and December 31, 2015 . Unpaid deferred acquisition fees are included in Due to affiliate in the consolidated financial statements. The total acquisition fees to be paid (initial and subordinated, and including interest thereon) may not exceed 6.0% of the aggregate contract purchase price of all investments and loans. In addition, pursuant to the advisory agreement, our Advisor may be entitled to receive a disposition fee equal to the lesser of (i) 50.0% of the competitive real estate commission (as defined in the advisory agreement) or (ii) 3.0% of the contract sales price of the investment being sold. Personnel and Overhead Reimbursements Under the terms of the advisory agreement, our Advisor allocates a portion of its personnel and overhead expenses to us and the other publicly-owned, non-listed REITs that are managed by our Advisor, including Corporate Property Associates 17 – Global Incorporated, or CPA ® :17 – Global, or, together with us, the CPA ® REITs, Carey Watermark Investors Incorporated, or CWI 1, and Carey Watermark Investors 2 Incorporated, or CWI 2. Our Advisor allocates these expenses to us on the basis of our trailing four quarters of reported revenues and those of WPC and other entities managed by WPC and its affiliates. We reimburse our Advisor for various expenses it incurs in the course of providing services to us. We reimburse certain third-party expenses paid by our Advisor on our behalf, including property-specific costs, professional fees, office expenses, and business development expenses. In addition, we reimburse our Advisor for the allocated costs of personnel and overhead in managing our day-to-day operations, including accounting services, stockholder services, corporate management, and property management and operations. We do not reimburse our Advisor for the cost of personnel if these personnel provide services for transactions for which our Advisor receives a transaction fee, such as acquisitions and dispositions. Under the advisory agreement currently in place, the amount of applicable personnel costs allocated to us is capped at 2.4% for 2015 and 2.2% for 2016 of pro rata lease revenues for each year. Beginning in 2017, the cap decreases to 2.0% of pro rata lease revenues for that year. Costs related to our Advisor’s legal transactions group are based on a schedule of expenses relating to services performed for different types of transactions, such as financing, lease amendments, and dispositions, among other categories, and includes 0.25% of the total investment cost of an acquisition. In general, personnel and overhead reimbursements are included in General and administrative expenses in the consolidated financial statements. However, we capitalize certain of the costs related to our Advisor’s legal transactions group if the costs relate to a transaction that is not considered to be a business combination. Excess Operating Expenses Our Advisor is obligated to reimburse us for the amount by which our operating expenses exceeds the “2%/25% guidelines” (the greater of 2% of average invested assets or 25% of net income) as defined in the advisory agreement for any 12-month period, subject to certain conditions. For the most recent four trailing quarters, our operating expenses were below this threshold. Available Cash Distributions WPC’s interest in the Operating Partnership entitles it to receive distributions of 10.0% of the available cash generated by the Operating Partnership, referred to as the Available Cash Distribution, which is defined as cash generated from operations, excluding capital proceeds, as reduced by operating expenses and debt service, excluding prepayments and balloon payments. Available Cash Distributions are included in Net income attributable to noncontrolling interests in the consolidated financial statements. Jointly-Owned Investments and Other Transactions with our Affiliates At June 30, 2016 , we owned interests ranging from 50% to 97% in jointly-owned investments, with the remaining interests held by affiliates or by third parties. We consolidate all of these joint ventures because we are either the majority equity holder and/or we control the significant activities of the ventures. Additionally, no other parties hold any rights that overcome our control. We account for the minority share of these investments as noncontrolling interests. |
Net Investments in Properties a
Net Investments in Properties and Real Estate Under Construction | 6 Months Ended |
Jun. 30, 2016 | |
Real Estate [Abstract] | |
Net Investments in Properties and Real Estate Under Construction | Net Investments in Properties and Real Estate Under Construction Real Estate Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, is summarized as follows (in thousands): June 30, 2016 December 31, 2015 Land $ 176,416 $ 173,094 Buildings 825,283 813,480 Less: Accumulated depreciation (44,500 ) (31,467 ) $ 957,199 $ 955,107 The carrying value of our Real estate increased by $13.3 million from December 31, 2015 to June 30, 2016 , due to the weakening of the U.S. dollar relative to foreign currencies (primarily the euro) during the period. Operating Real Estate Operating real estate, which consists of our self-storage and multi-family properties, at cost, is summarized as follows (in thousands): June 30, 2016 December 31, 2015 Land $ 97,612 $ 86,016 Buildings 458,625 404,836 Less: Accumulated depreciation (18,559 ) (10,727 ) $ 537,678 $ 480,125 Acquisitions of Real Estate and Operating Real Estate During 2016 Asset Acquisition On February 19, 2016, we invested in a build-to-suit joint venture with a third party for a university complex development site located in Accra, Ghana for $6.5 million , which includes capitalized acquisition costs of $2.6 million . Upon completion of this project, which is estimated to be in 2018, our total investment is expected to be approximately $65.7 million . We deemed this investment to be a VIE since the joint venture does not have sufficient equity at risk. Additionally, we consolidate the entity, since we currently wholly own and control the joint venture. See Real Estate Under Construction below for more details. In connection with the above project, during the three months ended March 31, 2016, the joint venture obtained third-party financing, which is subject to the tenant obtaining a letter of credit, in an amount up to $41.0 million with an estimated interest rate based on the U.S. treasury rate plus 300 basis points. If the tenant is unable to obtain the letter of credit, we have the right to rescind our future commitments. As of June 30, 2016 , we had no amount outstanding under the financing arrangement. In addition, the joint venture has procured a policy of political risk insurance on its equity investment, which is subject to coverage-specific limits and other conditions. Business Combinations — Self-Storage Properties During the six months ended June 30, 2016 , we acquired the following four self-storage investments, for a total of $43.0 million : • $20.3 million for five facilities, including three in Delaware, one in Milford, Massachusetts, and one in Washington D.C. on April 11, 2016; • $11.0 million for a facility in Gilroy, California on February 17, 2016; • $5.6 million for a facility in Avondale, Louisiana on January 14, 2016; and • $6.1 million for a facility in Kissimmee, Florida on January 14, 2016. In connection with these self-storage property transactions, we incurred acquisition expenses totaling $4.7 million , which are included in Acquisition expenses in the consolidated financial statements. During the six months ended June 30, 2016 , we obtained non-recourse mortgage loans totaling $73.3 million , of which $13.8 million relate to our 2016 acquisitions and the remainder related to our 2015 acquisitions. In addition, we assumed certain non-recourse mortgage loans totaling $27.9 million , which related to the properties we acquired on April 11, 2016 ( Note 10 ). Summary of Assets Acquired and Liabilities Assumed The following tables present a summary of assets acquired and liabilities assumed in our business combinations at the date of acquisition, and revenues and earnings thereon since their respective dates of acquisition through June 30, 2016 (in thousands): Self-Storage Properties (a) Cash consideration $ 43,023 Assets acquired at fair value: Land $ 11,573 Buildings 51,231 In-place lease intangible assets 8,158 Other assets acquired 447 71,409 Liabilities assumed at fair value: Mortgages assumed (27,925 ) Other liabilities assumed (461 ) (28,386 ) Total identifiable net assets $ 43,023 Self-Storage Properties Respective Acquisition dates through June 30, 2016 Revenues $ 2,107 Net loss $ (5,333 ) Net loss attributable to CPA ® :18 – Global $ (5,333 ) ___________ (a) The purchase price for each transaction was allocated to the assets acquired and liabilities assumed based upon their preliminary fair values. The information in this table is based on the best estimates of management as of the date of this Report. We are in the process of finalizing our assessment of the fair value of the assets acquired and liabilities assumed. Accordingly, the fair value of these assets acquired and liabilities assumed are subject to change. Real Estate Under Construction The following table provides the activity of our Real estate under construction (in thousands): Six Months Ended June 30, 2016 Beginning balance $ 131,930 Capitalized funds 63,474 Capitalized interest 3,402 Foreign currency translation adjustments (2,118 ) Placed into service (1,229 ) Ending balance $ 195,459 Capitalized Funds — During the six months ended June 30, 2016 , total capitalized funds primarily related to our build-to-suit projects, which were comprised primarily of initial funding of $6.5 million and construction draws of $54.3 million , which include accrued costs of $3.6 million and is a non-cash investing activity. Capitalized Interest — Capitalized interest includes amortization of the mortgage discount and deferred financing costs and interest incurred during construction, which totaled $3.4 million during the six months ended June 30, 2016 and is a non-cash investing activity. Placed into Service — During the six months ended June 30, 2016 , we placed into service one build-to-suit expansion project totaling $1.2 million , which is a non-cash investing activity. Ending Balance — At June 30, 2016 , we had six open build-to-suit projects and two open build-to-suit expansion projects with aggregate unfunded commitments totaling approximately $194.3 million , which included $24.7 million related to our equity investment. At June 30, 2016 , the aggregate unfunded commitments related to our VIEs totaled $181.8 million . Equity Investment in Real Estate $2.0 million , which is based on the exchange rate of the Canadian dollar at the date of acquisition. This parcel of land will be the site of our third self-storage development in Canada as a part of our joint venture. At June 30, 2016 , the total equity investment balance for these properties was $14.5 million . The joint venture also had total third-party recourse debt of $6.9 million as of June 30, 2016 . |
Finance Receivables
Finance Receivables | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Financing Receivables | Finance Receivables Assets representing rights to receive money on demand or at fixed or determinable dates are referred to as finance receivables. Our finance receivables portfolio consists of our Net investments in direct financing leases and our Note receivable. Operating leases are not included in finance receivables in the consolidated financial statements. Net Investments in Direct Financing Leases Interest income from direct financing leases was $1.2 million and $1.0 million for the three months ended June 30, 2016 and 2015 , respectively, and $2.3 million and $2.0 million for the six months ended June 30, 2016 and 2015 , respectively. Credit Quality of Finance Receivables We generally seek investments in facilities that we believe are critical to a tenant’s business and that we believe have a low risk of tenant default. At both June 30, 2016 and December 31, 2015 , we had no significant balances of our finance receivables that were past due and we had not established any allowances for credit losses. Additionally, there were no modifications of finance receivables during the six months ended June 30, 2016 or the year ended December 31, 2015 . We evaluate the credit quality of our finance receivables utilizing an internal five-point credit rating scale, with one representing the highest credit quality and five representing the lowest. The credit quality evaluation of our finance receivables was last updated in the second quarter of 2016. A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands): Number of Tenants/Obligors at Carrying Value at Internal Credit Quality Indicator June 30, 2016 December 31, 2015 June 30, 2016 December 31, 2015 1 1 1 $ 11,556 $ 12,684 2 1 1 9,111 9,065 3 4 4 57,817 58,217 4 — — — — 5 — — — — 0 $ 78,484 $ 79,966 |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 6 Months Ended |
Jun. 30, 2016 | |
Intangible Assets And Liabilities [Abstract] | |
Intangible Assets and Liabilities | Intangible Assets and Liabilities In connection with our acquisitions of properties ( Note 5 ) during the six months ended June 30, 2016 , we have recorded In-place lease intangibles of $8.2 million that are being amortized over a period of approximately two years. In-place lease intangibles are included in In-place lease intangible assets, net in the consolidated financial statements. Below-market ground lease intangibles and above-market rent intangibles are included in Other intangible assets, net in the consolidated financial statements. Below-market rent intangibles and above-market ground lease intangibles are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements. Goodwill represents the consideration exceeding the fair value of the identifiable assets acquired and liabilities assumed for certain of our previously acquired investments that were deemed to be business combinations. Goodwill resulted primarily from recognizing deferred tax liabilities in connection with the acquisition of certain of our foreign investments. The following table presents a reconciliation of our goodwill, which is included in our Net Lease reporting unit (in thousands): Six Months Ended June 30, 2016 Balance at January 1, 2016 $ 23,389 Foreign currency translation 992 Balance at June 30, 2016 $ 24,381 Intangible assets, intangible liabilities, and goodwill are summarized as follows (in thousands): June 30, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable Intangible Assets In-place lease $ 265,445 $ (64,540 ) $ 200,905 $ 255,510 $ (43,090 ) $ 212,420 Below-market ground lease 21,304 (537 ) 20,767 20,894 (325 ) 20,569 Above-market rent 12,272 (1,878 ) 10,394 12,174 (1,322 ) 10,852 299,021 (66,955 ) 232,066 288,578 (44,737 ) 243,841 Unamortizable Intangible Assets Goodwill 24,381 — 24,381 23,389 — 23,389 Total intangible assets $ 323,402 $ (66,955 ) $ 256,447 $ 311,967 $ (44,737 ) $ 267,230 Amortizable Intangible Liabilities Below-market rent $ (15,296 ) $ 2,597 $ (12,699 ) $ (15,439 ) $ 1,546 $ (13,893 ) Above-market ground lease (110 ) 2 (108 ) (121 ) 2 (119 ) Total intangible liabilities $ (15,406 ) $ 2,599 $ (12,807 ) $ (15,560 ) $ 1,548 $ (14,012 ) Net amortization of intangibles, including the effect of foreign currency translation, was $10.9 million and $7.2 million for the three months ended June 30, 2016 and 2015 , respectively, and $21.2 million and $13.3 million for the six months ended June 30, 2016 and 2015 , respectively. Amortization of below-market and above-market rent intangibles is recorded as an adjustment to Rental income, amortization of below-market and above-market ground lease intangibles is included in Property expenses, and amortization of in-place lease intangibles is included in Depreciation and amortization expense. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions. Items Measured at Fair Value on a Recurring Basis The methods and assumptions described below were used to estimate the fair value of each class of financial instrument. For significant Level 3 items, we have also provided the unobservable inputs along with their weighted-average ranges. Derivative Assets — Our derivative assets, which are included in Other assets, net in the consolidated financial statements, are comprised of foreign currency forward contracts, interest rate caps, and foreign currency collars ( Note 9 ). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, are comprised of interest rate swaps and foreign currency collars ( Note 9 ). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. Rent Guarantees — Our rent guarantees, which are included in Other assets, net in the consolidated financial statements, are related to three of our international investments. These rent guarantees were measured at fair value using a discounted cash flow model, and were classified as Level 3 because the model uses unobservable inputs. At June 30, 2016 and December 31, 2015 , our rent guarantees had a fair value of $1.0 million and $1.3 million , respectively. We determined the fair value of the rent guarantees based on an estimate of discounted cash flows using a discount rate that ranged from 7% to 9% and a growth rate of 2% , which are considered significant unobservable inputs. Significant increases or decreases to these inputs in isolation would result in a significant change in the fair value measurement. During the three and six months ended June 30, 2016 , we recognized $1.0 million and $0.8 million , respectively, of mark-to-market gains related to these rent guarantees within Other income and (expenses) on our consolidated financial statements. We did not have any transfers into or out of Level 1, Level 2, and Level 3 category of measurements during the three and six months ended June 30, 2016 and 2015. Gains and losses (realized and unrealized) included in earnings are reported in Other income and (expenses) in the consolidated financial statements. Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands): June 30, 2016 December 31, 2015 Level Carrying Value Fair Value Carrying Value Fair Value Debt (a) (b) 3 $ 1,105,058 $ 1,148,255 $ 999,213 $ 1,022,641 Note receivable (c) 3 28,000 28,400 28,000 28,400 ___________ (a) In accordance with ASU 2015-03, as of December 31, 2015 we reclassified deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net for the amounts of $8.3 million and $0.7 million , respectively ( Note 3 ). (b) We determined the estimated fair value of our non-recourse debt and bonds payable using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates take into account interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity. (c) We determined the estimated fair value of our note receivable using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, order of payment tranches, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate. We estimated that our other financial assets and liabilities (excluding net investments in direct financing leases) had fair values that approximated their carrying values at both June 30, 2016 and December 31, 2015 . |
Risk Management and Use of Deri
Risk Management and Use of Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk Management and Use of Derivative Financial Instruments | Risk Management and Use of Derivative Financial Instruments Risk Management In the normal course of our ongoing business operations, we encounter economic risk. There are four main components of economic risk that impact us: interest rate risk, credit risk, market risk, and foreign currency risk. We are primarily subject to interest rate risk on our interest-bearing assets and liabilities. Credit risk is the risk of default on our operations and our tenants’ inability or unwillingness to make contractually required payments. Market risk includes changes in the value of our properties and related loans, as well as changes in the value of our other investments due to changes in interest rates or other market factors. We own international investments, primarily in Europe, and are subject to risks associated with fluctuating foreign currency exchange rates. Derivative Financial Instruments When we use derivative instruments, it is generally to reduce our exposure to fluctuations in interest rates and foreign currency exchange rate movements. We have not entered into, and do not plan to enter into financial instruments for trading or speculative purposes. In addition to entering into derivative instruments on our own behalf, we may also be a party to derivative instruments that are embedded in other contracts and we may be granted common stock warrants by lessees when structuring lease transactions, which are considered to be derivative instruments. The primary risks related to our use of derivative instruments include a counterparty to a hedging arrangement defaulting on its obligation and a downgrade in the credit quality of a counterparty to such an extent that our ability to sell or assign our side of the hedging transaction is impaired. While we seek to mitigate these risks by entering into hedging arrangements with large financial institutions that we deem to be creditworthy, it is possible that our hedging transactions, which are intended to limit losses, could adversely affect our earnings. Furthermore, if we terminate a hedging arrangement, we may be obligated to pay certain costs, such as transaction or breakage fees. We have established policies and procedures for risk assessment and the approval, reporting, and monitoring of derivative financial instrument activities. We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated and that qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive (loss) income until the hedged item is recognized in earnings. For a derivative designated and that qualified as a net investment hedge, the effective portion of the change in its fair value and/or the net settlement of the derivative are reported in Other comprehensive (loss) income as part of the cumulative foreign currency translation adjustment. Amounts are reclassified out of Other comprehensive (loss) income into earnings when the hedged investment is either sold or substantially liquidated. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings. All derivative transactions with an individual counterparty are governed by a master International Swap and Derivatives Association agreement, which can be considered as a master netting arrangement; however, we report all our derivative instruments on a gross basis on our consolidated financial statements. At both June 30, 2016 and December 31, 2015 , no cash collateral had been posted or received for any of our derivative positions. The following table sets forth certain information regarding our derivative instruments (in thousands): Derivatives Designated as Hedging Instruments Balance Sheet Location Asset Derivatives Fair Value at Liability Derivatives Fair Value at June 30, 2016 December 31, 2015 June 30, 2016 December 31, 2015 Foreign currency forward contracts and collars Other assets, net $ 5,913 $ 7,471 $ — $ — Interest rate caps Other assets, net 1 17 — — Foreign currency collars Accounts payable, accrued expenses and other liabilities — — (68 ) (28 ) Interest rate swaps Accounts payable, accrued expenses and other liabilities — — (3,886 ) (1,568 ) $ 5,914 $ 7,488 $ (3,954 ) $ (1,596 ) The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) Three Months Ended June 30, Six Months Ended June 30, Derivatives in Cash Flow Hedging Relationships 2016 2015 2016 2015 Foreign currency forward contracts and collars $ 930 $ (1,019 ) $ (1,421 ) $ 1,789 Interest rate swaps (832 ) 1,284 (2,313 ) 502 Interest rate caps (3 ) (13 ) (16 ) (13 ) Derivatives in Net Investment Hedging Relationship (a) Foreign currency forward contracts and collars 76 10 (140 ) 90 Total $ 171 $ 262 $ (3,890 ) $ 2,368 ___________ (a) The effective portion of the change in fair value and the settlement of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive (loss) income until the underlying investment is sold, at which time we reclassify the gain or loss to earnings. The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion) Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Foreign currency forward contracts and collars Other income and (expenses) $ 296 $ 306 $ 668 $ 562 Interest rate swaps Interest expense (218 ) (299 ) (430 ) (600 ) Total $ 78 $ 7 $ 238 $ (38 ) Amounts reported in Other comprehensive (loss) income related to our interest rate swaps will be reclassified to Interest expense as interest payments are made on our variable-rate debt. Amounts reported in Other comprehensive (loss) income related to foreign currency derivative contracts will be reclassified to Other income and (expenses) when the hedged foreign currency contracts are settled. At June 30, 2016 , we estimated that an additional $0.9 million and $1.4 million will be reclassified as Interest expense and Other income and (expenses), respectively, during the next 12 months. The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) on Derivatives Recognized in Income Derivatives Not in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Foreign currency collars Other income and (expenses) $ 3 $ — $ (10 ) $ — Derivatives in Cash Flow Hedging Relationships Interest rate swaps (a) Interest expense (5 ) — (5 ) — $ (2 ) $ — $ (15 ) $ — __________ (a) Relates to the ineffective portion of the hedging relationship. Interest Rate Swaps and Caps We are exposed to the impact of interest rate changes primarily through our borrowing activities. To limit this exposure, we attempt to obtain mortgage financing on a long-term, fixed-rate basis. However, from time to time, we or our investment partners may obtain non-recourse variable-rate mortgage loans and, as a result, may enter into interest rate swap agreements or interest rate cap agreements with counterparties. Interest rate swaps, which effectively convert the variable-rate debt service obligations of a loan to a fixed rate, are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flow over a specific period. The notional, or face, amount on which the swaps are based is not exchanged. Interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates. Our objective in using these derivatives is to limit our exposure to interest rate movements. The interest rate swaps and caps that our consolidated subsidiaries had outstanding at June 30, 2016 are summarized as follows (currency in thousands): Interest Rate Derivatives Number of Instruments Notional Fair Value at June 30, 2016 Interest rate swaps 7 54,454 USD $ (3,886 ) Interest rate caps 2 22,000 USD 1 $ (3,885 ) Foreign Currency Contracts and Collars We are exposed to foreign currency exchange rate movements, primarily in the euro and, to a lesser extent, the Norwegian krone. We manage foreign currency exchange rate movements by generally placing our debt service obligation on an investment in the same currency as the tenant’s rental obligation to us. This reduces our overall exposure to the net cash flow from that investment. However, we are subject to foreign currency exchange rate movements to the extent that there is a difference in the timing and amount of the rental obligation and the debt service. Realized and unrealized gains and losses recognized in earnings related to foreign currency transactions are included in Other income and (expenses) in the consolidated financial statements. In order to hedge certain of our foreign currency cash flow exposures, we enter into foreign currency forward contracts and collars. A foreign currency forward contract is a commitment to deliver a certain amount of currency at a certain price on a specific date in the future. By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency collar guarantees that the exchange rate of the currency will not fluctuate beyond the range of the options’ strike prices and consists of a written call option and a purchased put option to sell the foreign currency. These instruments lock the range in which a foreign currency exchange rate may fluctuate. Our foreign currency forward contracts and foreign currency collars have maturities of 76 months or less. The following table presents the foreign currency derivative contracts we had outstanding and their designations at June 30, 2016 (currency in thousands): Foreign Currency Derivatives Number of Instruments Notional Fair Value at Designated as Cash Flow Hedging Instruments Foreign currency forward contracts and collars 69 29,754 EUR $ 3,708 Foreign currency forward contracts and collars 50 97,565 NOK 1,833 Designated as Net Investment Hedging Instruments Foreign currency forward contracts and collars 8 31,077 NOK 304 $ 5,845 Credit Risk-Related Contingent Features We measure our credit exposure on a counterparty basis as the net positive aggregate estimated fair value of our derivatives, net of any collateral received. No collateral was received as of June 30, 2016 . At June 30, 2016 , our total credit exposure was $5.7 million and the maximum exposure to any single counterparty was $3.3 million . Some of the agreements we have with our derivative counterparties contain cross-default provisions that could trigger a declaration of default on our derivative obligations if we default, or are capable of being declared in default, on certain of our indebtedness. At June 30, 2016 , we had not been declared in default on any of our derivative obligations. The estimated fair value of our derivatives in a net liability position was $4.0 million and $1.6 million at June 30, 2016 and December 31, 2015, respectively, which included accrued interest and any nonperformance risk adjustments. If we had breached any of these provisions at June 30, 2016 or December 31, 2015, we could have been required to settle our obligations under these agreements at their aggregate termination value of $4.5 million and $1.7 million , respectively. |
Non-Recourse Debt and Bonds Pay
Non-Recourse Debt and Bonds Payable | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Non-Recourse Debt and Bonds Payable | Non-Recourse Debt and Bonds Payable Debt consists of non-recourse mortgage notes and bonds payable. At June 30, 2016 , our debt bore interest at fixed annual rates ranging from 1.6% to 5.8% and variable contractual annual rates ranging from 2.1% to 5.1% , with maturity dates from 2017 to 2039 . During the six months ended June 30, 2016 , we obtained or assumed several non-recourse mortgage financings totaling $101.2 million , with a weighted-average annual interest rate of 4.7% and term of eight years. In addition, during the six months ended June 30, 2016 , we obtained third-party mortgage loans related to the following investments, which had no amounts outstanding as of June 30, 2016 : • $41.0 million related to the university complex development site located in Accra, Ghana ( Note 5 ), which is subject to the tenant obtaining a letter of credit and will bear an estimated interest rate based on the U.S. treasury rate plus 300 basis points upon draw down; • €15.2 million related to development of a hotel located in Hamburg, Germany, which will bear an interest rate of 2.1% upon draw down; • €12.8 million related to the expansion of an industrial facility located in Michalovce, Slovakia, which will bear an estimated interest rate based upon the Euro Interbank Offered Rate plus 3.1% upon draw down; • €48.0 million related to the development of an office building located in Eindhoven, the Netherlands, which will bear an estimated interest rate based upon the Euro Interbank Offered Rate plus 2.5% upon draw down; and • €17.2 million related to a net-leased hotel located in Stuttgart, Germany that was previously acquired on December 30, 2015, which will bear an estimated fixed rate of 1.8% upon draw down. Scheduled Debt Principal Payments Scheduled debt principal payments during the remainder of 2016, each of the next four calendar years following December 31, 2016 , and thereafter are as follows (in thousands): Years Ending December 31, Total 2016 (remainder) $ 1,962 2017 22,110 2018 26,803 2019 5,150 2020 115,354 Thereafter through 2039 943,223 1,114,602 Unamortized discount, net (28 ) Deferred financing costs (a) (9,516 ) Total $ 1,105,058 ___________ (a) In accordance with ASU 2015-03, we reclassified deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015 ( Note 3 ). Certain amounts in the table above are based on the applicable foreign currency exchange rate at June 30, 2016 . The carrying value of our Non-recourse debt, net and Bonds payable, net increased by $8.4 million from December 31, 2015 to June 30, 2016 , reflecting the impact of the weakening of the U.S. dollar relative to certain foreign currencies (primarily the euro) during the same period. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies At June 30, 2016 , we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us. The results of these proceedings are not expected to have a material adverse effect on our consolidated financial position or results of operations. See Note 5 for unfunded construction commitments. |
Loss Per Share and Equity
Loss Per Share and Equity | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Loss Per Share and Equity | Loss Per Share and Equity Basic and Diluted Loss Per Share The following table presents loss per share (in thousands, except share and per share amounts): Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Basic and Diluted Weighted-Average Shares Outstanding Allocation of Loss Basic and Diluted Loss Class A common stock 105,182,645 $ (7,882 ) $ (0.07 ) 101,460,830 $ (14,961 ) $ (0.15 ) Class C common stock 29,928,571 (2,330 ) (0.08 ) 29,033,036 (4,946 ) (0.17 ) Net loss attributable to CPA ® :18 – Global $ (10,212 ) $ (19,907 ) Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 (a) Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Basic and Diluted Weighted-Average Shares Outstanding Allocation of Loss Basic and Diluted Loss Class A common stock 104,577,599 $ (9,485 ) $ (0.09 ) 101,053,789 $ (24,673 ) $ (0.24 ) Class C common stock 29,843,149 (2,924 ) (0.10 ) 25,729,488 (7,447 ) (0.29 ) Net loss attributable to CPA ® :18 – Global $ (12,409 ) $ (32,120 ) ___________ (a) As discussed in Note 3 , we revised our consolidated statement of operations for the three months ended March 31, 2015. The allocation of Net loss attributable to CPA ® :18 – Global is calculated based on the basic and diluted weighted-average shares outstanding for Class A and Class C common stock for each respective period. For the three and six months ended June 30, 2016 , the allocation for Class A common stock excludes $0.1 million and $0.2 million , respectively, of interest expense related to the accretion of interest on our annual distribution and shareholder servicing fee liability, which is only applicable to Class C common stock ( Note 4 ). For the three and six months ended June 30, 2015 , the allocation for Class A common stock excludes the annual distribution and shareholder servicing fee of $0.7 million and $1.2 million , respectively, which is only allocated to Class C common stock ( Note 4 ). Distributions During the first quarter of 2016, our board of directors declared quarterly distributions of $0.1563 per share for our Class A common stock and $0.1337 per share for our Class C common stock for the quarter ending March 31, 2016. Distributions in the aggregate amount of $20.3 million were paid on April 15, 2016 to stockholders of record on March 31, 2016. During the second quarter of 2016, our board of directors declared quarterly distributions of $0.1563 per share for our Class A common stock and $0.1376 per share for our Class C common stock for the quarter ending June 30, 2016 . Distributions in the aggregate amount of $20.6 million were paid on July 15, 2016 to stockholders of record on June 30, 2016 . Distributions are declared at the discretion of our board of directors and are not guaranteed. Until we fully invest the net proceeds of our initial public offering, we expect that a significant portion of our distributions will be paid primarily from offering proceeds, which reduces amounts available to invest in properties and could lower our overall return. Reclassifications Out of Accumulated Other Comprehensive Loss The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands): Three Months Ended June 30, 2016 Gains and Losses on Derivative Instruments Foreign Currency Translation Adjustments Total Beginning balance $ 1,515 $ (41,782 ) $ (40,267 ) Other comprehensive loss before reclassifications 173 (10,788 ) (10,615 ) Amounts reclassified from accumulated other comprehensive loss to: Interest expense 218 — 218 Other income and (expenses) (296 ) — (296 ) Net current-period Other comprehensive loss 95 (10,788 ) (10,693 ) Net current-period Other comprehensive loss attributable to noncontrolling interests — 1,193 1,193 Ending balance $ 1,610 $ (51,377 ) $ (49,767 ) Three Months Ended June 30, 2015 Gains and Losses Foreign Currency Translation Adjustments Total Beginning balance $ 3,178 $ (49,654 ) $ (46,476 ) Other comprehensive income before reclassifications 259 12,152 12,411 Amounts reclassified from accumulated other comprehensive income (loss) to: Interest expense 299 — 299 Other income and (expenses) (306 ) — (306 ) Net current-period Other comprehensive income 252 12,152 12,404 Net current-period Other comprehensive income attributable to noncontrolling interests — (1,889 ) (1,889 ) Ending balance $ 3,430 $ (39,391 ) $ (35,961 ) Six Months Ended June 30, 2016 Gains and Losses on Derivative Instruments Foreign Currency Translation Adjustments Total Beginning balance $ 5,360 $ (55,676 ) $ (50,316 ) Other comprehensive income before reclassifications (3,512 ) 5,776 2,264 Amounts reclassified from accumulated other comprehensive loss to: Interest expense 430 — 430 Other income and (expenses) (668 ) — (668 ) Net current-period Other comprehensive income (3,750 ) 5,776 2,026 Net current-period Other comprehensive income attributable to noncontrolling interests — (1,477 ) (1,477 ) Ending balance $ 1,610 $ (51,377 ) $ (49,767 ) Six Months Ended June 30, 2015 Gains and Losses Foreign Currency Translation Adjustments Total Beginning balance $ 1,152 $ (22,093 ) $ (20,941 ) Other comprehensive loss before reclassifications 2,240 (21,478 ) (19,238 ) Amounts reclassified from accumulated other comprehensive loss to: Interest expense 600 — 600 Other income and (expenses) (562 ) — (562 ) Net current-period Other comprehensive loss 2,278 (21,478 ) (19,200 ) Net current-period Other comprehensive loss attributable to noncontrolling interests — 4,180 4,180 Ending balance $ 3,430 $ (39,391 ) $ (35,961 ) |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We operate in two reportable business segments: Net Lease and Self Storage. Our Net Lease segment includes our investments in net-leased properties, whether they are accounted for as operating leases or direct financing leases. Our Self Storage segment is comprised of our investments in self-storage properties. In addition, we have an All Other category that includes our multi-family investments and our investment in a note receivable ( Note 1 ). The following tables present a summary of comparative results and assets for these business segments (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net Lease Revenues $ 27,169 $ 20,878 $ 54,631 $ 41,232 Operating expenses (15,438 ) (19,788 ) (30,722 ) (30,920 ) Interest expense (7,263 ) (6,995 ) (14,580 ) (12,770 ) Other income and expenses, excluding interest expense 640 (156 ) 711 97 Benefit from (provision for) income taxes 405 (811 ) 226 (1,137 ) Loss on sale of real estate, net of tax — — (63 ) — Net income attributable to noncontrolling interests (376 ) (276 ) (835 ) (772 ) Net income (loss) attributable to CPA ® :18 – Global $ 5,137 $ (7,148 ) $ 9,368 $ (4,270 ) Self Storage Revenues $ 12,397 $ 5,615 $ 22,706 $ 8,976 Operating expenses (16,500 ) (11,852 ) (30,248 ) (18,054 ) Interest expense (2,734 ) (1,218 ) (4,995 ) (1,893 ) Other income and expenses, excluding interest expense (9 ) 11 (17 ) 11 Provision for income taxes (56 ) (15 ) (91 ) (23 ) Net loss attributable to CPA ® :18 – Global $ (6,902 ) $ (7,459 ) $ (12,645 ) $ (10,983 ) All Other Revenues $ 6,149 $ 3,979 $ 12,176 $ 7,437 Operating expenses (4,131 ) (5,930 ) (8,048 ) (12,440 ) Interest expense (1,211 ) (648 ) (2,419 ) (1,259 ) (Provision for) benefit from income taxes (51 ) 9 (79 ) 16 Net (income) loss attributable to noncontrolling interests (2 ) 54 (7 ) 83 Net income (loss) attributable to CPA ® :18 – Global $ 754 $ (2,536 ) $ 1,623 $ (6,163 ) Corporate Unallocated Corporate Overhead (a) $ (6,821 ) $ (1,342 ) $ (7,098 ) $ (8,388 ) Net income attributable to noncontrolling interests – Available Cash Distributions $ (2,380 ) $ (1,422 ) $ (3,657 ) $ (2,316 ) Total Company Revenues $ 45,715 $ 30,472 $ 89,513 $ 57,645 Operating expenses (40,030 ) (41,413 ) (77,513 ) (68,526 ) Interest expense (10,320 ) (8,009 ) (20,680 ) (16,095 ) Other income and expenses, excluding interest expense (2,952 ) 568 1,033 (1,931 ) Benefit from (provision for) income taxes 133 119 (200 ) (208 ) Loss on sale of real estate, net of tax — — (63 ) — Net income attributable to noncontrolling interests (2,758 ) (1,644 ) (4,499 ) (3,005 ) Net loss attributable to CPA ® :18 – Global $ (10,212 ) $ (19,907 ) $ (12,409 ) $ (32,120 ) Total Long-Lived Assets Total Assets June 30, 2016 December 31, 2015 June 30, 2016 December 31, 2015 (b) Net Lease $ 1,154,348 $ 1,105,237 $ 1,475,975 $ 1,446,865 Self Storage 372,921 314,247 424,081 363,284 All Other 241,551 227,644 249,725 238,240 Corporate — — 52,113 86,294 Total Company $ 1,768,820 $ 1,647,128 $ 2,201,894 $ 2,134,683 __________ (a) Included in unallocated corporate overhead are asset management fees and general and administrative expenses. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance. (b) In accordance with ASU 2015-03, we reclassified deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015 ( Note 3 ). |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In July 2016, our board of directors and the board of directors of WPC approved unsecured loans from WPC to us, at the sole discretion of WPC’s management, of up to $50.0 million , in the aggregate, at a rate equal to the rate at which WPC is able to borrow funds under its senior credit facility, for the purpose of providing us financial flexibility as we execute our capital plan . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not necessarily include all information and footnotes necessary for a fair statement of our consolidated financial position, results of operations, and cash flows in accordance with generally accepted accounting principles in the United States, or GAAP. |
Basis of Consolidation | Basis of Consolidation Our consolidated financial statements reflect all of our accounts, including those of our controlled subsidiaries. The portions of equity in consolidated subsidiaries that are not attributable, directly or indirectly, to us are presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated. |
Recently Adopted Accounting Policy | On January 1, 2016, we adopted ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30) as described in the Recent Accounting Pronouncements section below. ASU 2015-03 changes the presentation of debt issuance costs, which were previously recognized as an asset and requires that they be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. As a result of adopting this guidance, we reclassified $9.0 million of deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015. On January 1, 2016, we adopted the Financial Accounting Standards Board’s, or FASB’s, Accounting Standards Update, or ASU, 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis , as described in the Recent Accounting Pronouncements section below, which amends the current consolidation guidance, including introducing a separate consolidation analysis specific to limited partnerships and other similar entities. When we obtain an economic interest in an entity, we evaluate the entity to determine if it should be deemed a variable interest entity, or VIE, and, if so, whether we are the primary beneficiary and are therefore required to consolidate the entity. We apply accounting guidance for consolidation of VIEs to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Fixed price purchase and renewal options within a lease, as well as certain decision-making rights within a loan or joint-venture agreement, can cause us to consider an entity a VIE. Limited partnerships and other similar entities that operate as a partnership will be considered a VIE unless the limited partners hold substantive kick-out rights or participation rights. Significant judgment is required to determine whether a VIE should be consolidated. We review the contractual arrangements provided for in the partnership agreement or other related contracts to determine whether the entity is considered a VIE and to establish whether we have any variable interests in the VIE. We then compare our variable interests, if any, to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE based on whether the entity (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. We performed this analysis on all of our subsidiary entities following the guidance in ASU 2015-02 to determine whether they qualify as VIEs and whether they should be consolidated or accounted for as equity investments in an unconsolidated venture. As a result of this change in guidance, we determined that eight entities that were previously classified as voting interest entities should now be classified as VIEs as of January 1, 2016 and therefore included in our VIE disclosures. However, there was no change in determining whether or not we consolidate these entities as a result of the new guidance. We elected to retrospectively adopt ASU 2015-02, which resulted in changes to our VIE disclosures within the consolidated balance sheets. There were no other changes to our consolidated balance sheets or results of operations for the periods presented. The liabilities of these VIEs are non-recourse to us and can only be satisfied from each VIE’s respective assets, except for the financing arrangement of our sole equity method investment, for which we have provided the lender with a guarantee of amounts due primarily of principal and interest payments. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 does not apply to our lease revenues, but will apply to reimbursed tenant costs and revenues generated from our operating properties. Additionally, this guidance modifies disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for all entities by one year, beginning in 2018, with early adoption permitted but not before 2017, the original public company effective date. We are currently evaluating the impact of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810). ASU 2015-02 amends the current consolidation guidance, including modification of the guidance for evaluating whether limited partnerships and similar legal entities are VIEs or voting interest entities. The guidance does not amend the existing disclosure requirements for VIEs or voting interest model entities. The guidance, however, modified the requirements to qualify under the voting interest model. Under the revised guidance, ASU 2015-02 requires an entity to classify a limited liability company or a limited partnership as a VIE unless the partnership provides partners with either substantive kick-out rights or substantive participating rights over the managing member or general partner. Refer to the discussion in the Basis of Consolidation section above. In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30). ASU 2015-03 changed the presentation of debt issuance costs, which were previously recognized as a deferred charge (that is, an asset) and required that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 does not affect the recognition and measurement guidance for debt issuance costs. ASU 2015-03 is effective for periods beginning after December 15, 2015, early adoption is permitted and retrospective application is required. We adopted ASU 2015-03 on January 1, 2016 and have disclosed the reclassification of our debt issuance costs in the Reclassifications section above. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for measurement period adjustments retrospectively. Instead, an acquirer will recognize a measurement period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years, early adoption is permitted and prospective application is required for adjustments that are identified after the effective date of this update. We elected to early adopt ASU 2015-16 and implemented the standard prospectively beginning July 1, 2015. The adoption and implementation of the standard did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 outlines a new model for accounting by lessees, whereby their rights and obligations under substantially all leases, existing and new, would be capitalized and recorded on the balance sheet. For lessors, however, the accounting remains largely unchanged from the current model, with the distinction between operating and financing leases retained, but updated to align with certain changes to the lessee model and the new revenue recognition standard. The new standard also replaces existing sale-leaseback guidance with a new model applicable to both lessees and lessors. Additionally, the new standard requires extensive quantitative and qualitative disclosures. ASU 2016-02 is effective for U.S. GAAP public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years; for all other entities, the final lease standard will be effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early application will be permitted for all entities. The new standard must be adopted using a modified retrospective transition of the new guidance and provides for certain practical expedients. Transition will require application of the new model at the beginning of the earliest comparative period presented. We are evaluating the impact of the new standard and have not yet determined if it will have a material impact on our business or our consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships. ASU 2016-05 clarifies that a change in counterparty to a derivative contract in and of itself, does not require the dedesignation of a hedging relationship. ASU 2016-05 is effective for fiscal years beginning after December 15, 2016, including interim periods within those years. Early adoption is permitted and entities have the option of adopting this guidance on a prospective basis to new derivative contracts or on a modified retrospective basis. We elected to early adopt ASU 2-16-05 on January 1, 2016 on a prospective basis and there was no impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323). ASU 2016-07 simplifies the transition to the equity method of accounting. ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. Instead the equity method of accounting will be applied prospectively from the date significant influence is obtained. The new standard should be applied prospectively for investments that qualify for the equity method of accounting in interim and annual periods beginning after December 15, 2016. Early adoption is permitted and we elected to early adopt this standard as of January 1, 2016. The adoption of this standard had no impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. ASU 2016-03 introduces a new model for estimating credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities, and net investments in direct financing leases, amongst other financial instruments. ASU 2016-13 also modifies the impairment model for available-for-sale debt securities and expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for losses. ASU 2016-13 will be effective for public business entities in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early application of the guidance permitted. We are in the process of evaluating the impact of adopting ASU 2016-13 on our consolidated financial statements. |
Intangible Assets and Liabilities | Amortization of below-market and above-market rent intangibles is recorded as an adjustment to Rental income, amortization of below-market and above-market ground lease intangibles is included in Property expenses, and amortization of in-place lease intangibles is included in Depreciation and amortization expense. |
Fair Value Measurements | The fair value of an asset is defined as the exit price, which is the amount that would either be received when an asset is sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance establishes a three-tier fair value hierarchy based on the inputs used in measuring fair value. These tiers are: Level 1, for which quoted market prices for identical instruments are available in active markets, such as money market funds, equity securities, and U.S. Treasury securities; Level 2, for which there are inputs other than quoted prices included within Level 1 that are observable for the instrument, such as certain derivative instruments including interest rate caps, interest rate swaps, foreign currency forward contracts and foreign currency collars; and Level 3, for securities that do not fall into Level 1 or Level 2 and for which little or no market data exists, therefore requiring us to develop our own assumptions. Derivative Assets — Our derivative assets, which are included in Other assets, net in the consolidated financial statements, are comprised of foreign currency forward contracts, interest rate caps, and foreign currency collars ( Note 9 ). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 as these instruments are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. Derivative Liabilities — Our derivative liabilities, which are included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements, are comprised of interest rate swaps and foreign currency collars ( Note 9 ). These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates, and were classified as Level 2 because they are custom, over-the-counter contracts with various bank counterparties that are not traded in an active market. |
Derivatives | We measure derivative instruments at fair value and record them as assets or liabilities, depending on our rights or obligations under the applicable derivative contract. Derivatives that are not designated as hedges must be adjusted to fair value through earnings. For a derivative designated and that qualified as a cash flow hedge, the effective portion of the change in fair value of the derivative is recognized in Other comprehensive (loss) income until the hedged item is recognized in earnings. For a derivative designated and that qualified as a net investment hedge, the effective portion of the change in its fair value and/or the net settlement of the derivative are reported in Other comprehensive (loss) income as part of the cumulative foreign currency translation adjustment. Amounts are reclassified out of Other comprehensive (loss) income into earnings when the hedged investment is either sold or substantially liquidated. The ineffective portion of the change in fair value of any derivative is immediately recognized in earnings. |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | At June 30, 2016 , we considered 13 entities VIEs, 12 of which we consolidated as we are considered the primary beneficiary. The following table presents a summary of selected financial data of the consolidated VIEs included in the consolidated balance sheets (in thousands): June 30, 2016 December 31, 2015 Net investments in properties $ 363,786 $ 360,049 Real estate under construction 169,727 119,115 Net investments in direct financing leases 11,556 12,684 Cash and cash equivalents 11,400 18,356 In-place lease intangible assets, net 71,412 73,487 Other intangible assets, net 22,414 22,316 Other assets, net 43,499 52,915 Total assets $ 693,794 $ 658,922 Non-recourse debt, net $ 196,274 $ 196,436 Bonds payable, net 59,258 56,259 Deferred income taxes 22,385 21,577 Accounts payable, accrued expenses and other liabilities 27,617 29,163 Total liabilities $ 305,534 $ 303,435 |
Agreements and Transactions w26
Agreements and Transactions with Related Parties (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following tables present a summary of fees we paid, expenses we reimbursed, and distributions we made to our Advisor and other affiliates, which excludes the fees that impact equity as further disclosed below the tables, in accordance with the terms of the relevant agreements (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Amounts Included in the Consolidated Statements of Operations Asset management fees $ 2,468 $ 1,729 $ 4,877 $ 3,146 Available Cash Distributions 2,380 1,422 3,657 2,316 Acquisition expenses 2,322 13,219 3,484 18,681 Personnel and overhead reimbursements 740 284 1,609 443 Interest expense on deferred acquisition fees and accretion of interest on annual distribution and shareholder servicing fee 188 96 428 173 Annual distribution and shareholder servicing fee (a) — 665 — 1,165 $ 8,098 $ 17,415 $ 14,055 $ 25,924 Acquisition Fees Capitalized Current acquisition fees $ 452 $ 2,909 $ 1,821 $ 6,375 Deferred acquisition fees 362 2,327 1,457 5,100 Capitalized personnel and overhead reimbursements 73 — 248 — $ 887 $ 5,236 $ 3,526 $ 11,475 ___________ (a) For the three and six months ended June 30, 2016 , we paid $0.6 million and $1.3 million , respectively, related to the annual distribution and shareholder servicing fee, which, beginning in the fourth quarter of 2015, is accounted for as a reduction in our shareholder servicing fee liability. The following table presents a summary of amounts included in Due to affiliate in the consolidated financial statements (in thousands): June 30, 2016 December 31, 2015 Due to Affiliate Deferred acquisition fees, including interest $ 20,969 $ 26,747 Shareholder servicing fee liability 8,301 9,394 Accounts payable and other 3,064 3,872 Asset management fees payable 784 813 Current acquisition fees — 3,148 $ 33,118 $ 43,974 |
Net Investments in Properties27
Net Investments in Properties and Real Estate Under Construction (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | Real estate, which consists of land and buildings leased to others, at cost, and which are subject to operating leases, is summarized as follows (in thousands): June 30, 2016 December 31, 2015 Land $ 176,416 $ 173,094 Buildings 825,283 813,480 Less: Accumulated depreciation (44,500 ) (31,467 ) $ 957,199 $ 955,107 Operating real estate, which consists of our self-storage and multi-family properties, at cost, is summarized as follows (in thousands): June 30, 2016 December 31, 2015 Land $ 97,612 $ 86,016 Buildings 458,625 404,836 Less: Accumulated depreciation (18,559 ) (10,727 ) $ 537,678 $ 480,125 |
Schedule of Assets Acquired in Business Combination | The following tables present a summary of assets acquired and liabilities assumed in our business combinations at the date of acquisition, and revenues and earnings thereon since their respective dates of acquisition through June 30, 2016 (in thousands): Self-Storage Properties (a) Cash consideration $ 43,023 Assets acquired at fair value: Land $ 11,573 Buildings 51,231 In-place lease intangible assets 8,158 Other assets acquired 447 71,409 Liabilities assumed at fair value: Mortgages assumed (27,925 ) Other liabilities assumed (461 ) (28,386 ) Total identifiable net assets $ 43,023 Self-Storage Properties Respective Acquisition dates through June 30, 2016 Revenues $ 2,107 Net loss $ (5,333 ) Net loss attributable to CPA ® :18 – Global $ (5,333 ) ___________ (a) The purchase price for each transaction was allocated to the assets acquired and liabilities assumed based upon their preliminary fair values. The information in this table is based on the best estimates of management as of the date of this Report. We are in the process of finalizing our assessment of the fair value of the assets acquired and liabilities assumed. Accordingly, the fair value of these assets acquired and liabilities assumed are subject to change. |
Schedule Of Revenues and Net Income From Business Combination | Self-Storage Properties Respective Acquisition dates through June 30, 2016 Revenues $ 2,107 Net loss $ (5,333 ) Net loss attributable to CPA ® :18 – Global $ (5,333 ) |
Real Estate Under Construction | The following table provides the activity of our Real estate under construction (in thousands): Six Months Ended June 30, 2016 Beginning balance $ 131,930 Capitalized funds 63,474 Capitalized interest 3,402 Foreign currency translation adjustments (2,118 ) Placed into service (1,229 ) Ending balance $ 195,459 |
Finance Receivables (Tables)
Finance Receivables (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Receivables [Abstract] | |
Financing Receivable Credit Quality Indicators | A summary of our finance receivables by internal credit quality rating is as follows (dollars in thousands): Number of Tenants/Obligors at Carrying Value at Internal Credit Quality Indicator June 30, 2016 December 31, 2015 June 30, 2016 December 31, 2015 1 1 1 $ 11,556 $ 12,684 2 1 1 9,111 9,065 3 4 4 57,817 58,217 4 — — — — 5 — — — — 0 $ 78,484 $ 79,966 |
Intangible Assets and Liabili29
Intangible Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Intangible Assets And Liabilities [Abstract] | |
Schedule of Goodwill | The following table presents a reconciliation of our goodwill, which is included in our Net Lease reporting unit (in thousands): Six Months Ended June 30, 2016 Balance at January 1, 2016 $ 23,389 Foreign currency translation 992 Balance at June 30, 2016 $ 24,381 |
Schedule Of Intangible Assets and Liabilities | Intangible assets, intangible liabilities, and goodwill are summarized as follows (in thousands): June 30, 2016 December 31, 2015 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable Intangible Assets In-place lease $ 265,445 $ (64,540 ) $ 200,905 $ 255,510 $ (43,090 ) $ 212,420 Below-market ground lease 21,304 (537 ) 20,767 20,894 (325 ) 20,569 Above-market rent 12,272 (1,878 ) 10,394 12,174 (1,322 ) 10,852 299,021 (66,955 ) 232,066 288,578 (44,737 ) 243,841 Unamortizable Intangible Assets Goodwill 24,381 — 24,381 23,389 — 23,389 Total intangible assets $ 323,402 $ (66,955 ) $ 256,447 $ 311,967 $ (44,737 ) $ 267,230 Amortizable Intangible Liabilities Below-market rent $ (15,296 ) $ 2,597 $ (12,699 ) $ (15,439 ) $ 1,546 $ (13,893 ) Above-market ground lease (110 ) 2 (108 ) (121 ) 2 (119 ) Total intangible liabilities $ (15,406 ) $ 2,599 $ (12,807 ) $ (15,560 ) $ 1,548 $ (14,012 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Other Financial Instruments In Carrying Values And Fair Values | Our other financial instruments had the following carrying values and fair values as of the dates shown (dollars in thousands): June 30, 2016 December 31, 2015 Level Carrying Value Fair Value Carrying Value Fair Value Debt (a) (b) 3 $ 1,105,058 $ 1,148,255 $ 999,213 $ 1,022,641 Note receivable (c) 3 28,000 28,400 28,000 28,400 ___________ (a) In accordance with ASU 2015-03, as of December 31, 2015 we reclassified deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net for the amounts of $8.3 million and $0.7 million , respectively ( Note 3 ). (b) We determined the estimated fair value of our non-recourse debt and bonds payable using a discounted cash flow model that estimates the present value of the future loan payments by discounting such payments at current estimated market interest rates. The estimated market interest rates take into account interest rate risk and the value of the underlying collateral, which includes quality of the collateral, the credit quality of the tenant/obligor, and the time until maturity. (c) We determined the estimated fair value of our note receivable using a discounted cash flow model with rates that take into account the credit of the tenant/obligor, order of payment tranches, and interest rate risk. We also considered the value of the underlying collateral, taking into account the quality of the collateral, the credit quality of the tenant/obligor, the time until maturity, and the current market interest rate. |
Risk Management and Use of De31
Risk Management and Use of Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table sets forth certain information regarding our derivative instruments (in thousands): Derivatives Designated as Hedging Instruments Balance Sheet Location Asset Derivatives Fair Value at Liability Derivatives Fair Value at June 30, 2016 December 31, 2015 June 30, 2016 December 31, 2015 Foreign currency forward contracts and collars Other assets, net $ 5,913 $ 7,471 $ — $ — Interest rate caps Other assets, net 1 17 — — Foreign currency collars Accounts payable, accrued expenses and other liabilities — — (68 ) (28 ) Interest rate swaps Accounts payable, accrued expenses and other liabilities — — (3,886 ) (1,568 ) $ 5,914 $ 7,488 $ (3,954 ) $ (1,596 ) |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion) Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Foreign currency forward contracts and collars Other income and (expenses) $ 296 $ 306 $ 668 $ 562 Interest rate swaps Interest expense (218 ) (299 ) (430 ) (600 ) Total $ 78 $ 7 $ 238 $ (38 ) The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) Three Months Ended June 30, Six Months Ended June 30, Derivatives in Cash Flow Hedging Relationships 2016 2015 2016 2015 Foreign currency forward contracts and collars $ 930 $ (1,019 ) $ (1,421 ) $ 1,789 Interest rate swaps (832 ) 1,284 (2,313 ) 502 Interest rate caps (3 ) (13 ) (16 ) (13 ) Derivatives in Net Investment Hedging Relationship (a) Foreign currency forward contracts and collars 76 10 (140 ) 90 Total $ 171 $ 262 $ (3,890 ) $ 2,368 ___________ (a) The effective portion of the change in fair value and the settlement of these contracts are reported in the foreign currency translation adjustment section of Other comprehensive (loss) income until the underlying investment is sold, at which time we reclassify the gain or loss to earnings. |
Derivative Instruments, Gain (Loss) | The following table presents the impact of our derivative instruments in the consolidated financial statements (in thousands): Amount of Gain (Loss) on Derivatives Recognized in Income Derivatives Not in Cash Flow Hedging Relationships Location of Gain (Loss) Recognized in Income Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Foreign currency collars Other income and (expenses) $ 3 $ — $ (10 ) $ — Derivatives in Cash Flow Hedging Relationships Interest rate swaps (a) Interest expense (5 ) — (5 ) — $ (2 ) $ — $ (15 ) $ — __________ (a) Relates to the ineffective portion of the hedging relationship. |
Schedule of Derivative Instruments | The interest rate swaps and caps that our consolidated subsidiaries had outstanding at June 30, 2016 are summarized as follows (currency in thousands): Interest Rate Derivatives Number of Instruments Notional Fair Value at June 30, 2016 Interest rate swaps 7 54,454 USD $ (3,886 ) Interest rate caps 2 22,000 USD 1 $ (3,885 ) The following table presents the foreign currency derivative contracts we had outstanding and their designations at June 30, 2016 (currency in thousands): Foreign Currency Derivatives Number of Instruments Notional Fair Value at Designated as Cash Flow Hedging Instruments Foreign currency forward contracts and collars 69 29,754 EUR $ 3,708 Foreign currency forward contracts and collars 50 97,565 NOK 1,833 Designated as Net Investment Hedging Instruments Foreign currency forward contracts and collars 8 31,077 NOK 304 $ 5,845 |
Non-Recourse Debt and Bonds P32
Non-Recourse Debt and Bonds Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Maturities | Scheduled debt principal payments during the remainder of 2016, each of the next four calendar years following December 31, 2016 , and thereafter are as follows (in thousands): Years Ending December 31, Total 2016 (remainder) $ 1,962 2017 22,110 2018 26,803 2019 5,150 2020 115,354 Thereafter through 2039 943,223 1,114,602 Unamortized discount, net (28 ) Deferred financing costs (a) (9,516 ) Total $ 1,105,058 ___________ (a) In accordance with ASU 2015-03, we reclassified deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015 ( Note 3 ). |
Loss Per Share and Equity (Tabl
Loss Per Share and Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss Per Share | The following table presents loss per share (in thousands, except share and per share amounts): Three Months Ended June 30, 2016 Three Months Ended June 30, 2015 Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Basic and Diluted Weighted-Average Shares Outstanding Allocation of Loss Basic and Diluted Loss Class A common stock 105,182,645 $ (7,882 ) $ (0.07 ) 101,460,830 $ (14,961 ) $ (0.15 ) Class C common stock 29,928,571 (2,330 ) (0.08 ) 29,033,036 (4,946 ) (0.17 ) Net loss attributable to CPA ® :18 – Global $ (10,212 ) $ (19,907 ) Six Months Ended June 30, 2016 Six Months Ended June 30, 2015 (a) Basic and Diluted Weighted-Average Allocation of Loss Basic and Diluted Loss Basic and Diluted Weighted-Average Shares Outstanding Allocation of Loss Basic and Diluted Loss Class A common stock 104,577,599 $ (9,485 ) $ (0.09 ) 101,053,789 $ (24,673 ) $ (0.24 ) Class C common stock 29,843,149 (2,924 ) (0.10 ) 25,729,488 (7,447 ) (0.29 ) Net loss attributable to CPA ® :18 – Global $ (12,409 ) $ (32,120 ) ___________ (a) As discussed in Note 3 , we revised our consolidated statement of operations for the three months ended March 31, 2015. |
Reclassification out of Accumulated Other Comprehensive Income | The following tables present a reconciliation of changes in Accumulated other comprehensive loss by component for the periods presented (in thousands): Three Months Ended June 30, 2016 Gains and Losses on Derivative Instruments Foreign Currency Translation Adjustments Total Beginning balance $ 1,515 $ (41,782 ) $ (40,267 ) Other comprehensive loss before reclassifications 173 (10,788 ) (10,615 ) Amounts reclassified from accumulated other comprehensive loss to: Interest expense 218 — 218 Other income and (expenses) (296 ) — (296 ) Net current-period Other comprehensive loss 95 (10,788 ) (10,693 ) Net current-period Other comprehensive loss attributable to noncontrolling interests — 1,193 1,193 Ending balance $ 1,610 $ (51,377 ) $ (49,767 ) Three Months Ended June 30, 2015 Gains and Losses Foreign Currency Translation Adjustments Total Beginning balance $ 3,178 $ (49,654 ) $ (46,476 ) Other comprehensive income before reclassifications 259 12,152 12,411 Amounts reclassified from accumulated other comprehensive income (loss) to: Interest expense 299 — 299 Other income and (expenses) (306 ) — (306 ) Net current-period Other comprehensive income 252 12,152 12,404 Net current-period Other comprehensive income attributable to noncontrolling interests — (1,889 ) (1,889 ) Ending balance $ 3,430 $ (39,391 ) $ (35,961 ) Six Months Ended June 30, 2016 Gains and Losses on Derivative Instruments Foreign Currency Translation Adjustments Total Beginning balance $ 5,360 $ (55,676 ) $ (50,316 ) Other comprehensive income before reclassifications (3,512 ) 5,776 2,264 Amounts reclassified from accumulated other comprehensive loss to: Interest expense 430 — 430 Other income and (expenses) (668 ) — (668 ) Net current-period Other comprehensive income (3,750 ) 5,776 2,026 Net current-period Other comprehensive income attributable to noncontrolling interests — (1,477 ) (1,477 ) Ending balance $ 1,610 $ (51,377 ) $ (49,767 ) Six Months Ended June 30, 2015 Gains and Losses Foreign Currency Translation Adjustments Total Beginning balance $ 1,152 $ (22,093 ) $ (20,941 ) Other comprehensive loss before reclassifications 2,240 (21,478 ) (19,238 ) Amounts reclassified from accumulated other comprehensive loss to: Interest expense 600 — 600 Other income and (expenses) (562 ) — (562 ) Net current-period Other comprehensive loss 2,278 (21,478 ) (19,200 ) Net current-period Other comprehensive loss attributable to noncontrolling interests — 4,180 4,180 Ending balance $ 3,430 $ (39,391 ) $ (35,961 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | (a) Included in unallocated corporate overhead are asset management fees and general and administrative expenses. These expenses are calculated and reported at the portfolio level and not evaluated as part of any segment’s operating performance. The following tables present a summary of comparative results and assets for these business segments (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net Lease Revenues $ 27,169 $ 20,878 $ 54,631 $ 41,232 Operating expenses (15,438 ) (19,788 ) (30,722 ) (30,920 ) Interest expense (7,263 ) (6,995 ) (14,580 ) (12,770 ) Other income and expenses, excluding interest expense 640 (156 ) 711 97 Benefit from (provision for) income taxes 405 (811 ) 226 (1,137 ) Loss on sale of real estate, net of tax — — (63 ) — Net income attributable to noncontrolling interests (376 ) (276 ) (835 ) (772 ) Net income (loss) attributable to CPA ® :18 – Global $ 5,137 $ (7,148 ) $ 9,368 $ (4,270 ) Self Storage Revenues $ 12,397 $ 5,615 $ 22,706 $ 8,976 Operating expenses (16,500 ) (11,852 ) (30,248 ) (18,054 ) Interest expense (2,734 ) (1,218 ) (4,995 ) (1,893 ) Other income and expenses, excluding interest expense (9 ) 11 (17 ) 11 Provision for income taxes (56 ) (15 ) (91 ) (23 ) Net loss attributable to CPA ® :18 – Global $ (6,902 ) $ (7,459 ) $ (12,645 ) $ (10,983 ) All Other Revenues $ 6,149 $ 3,979 $ 12,176 $ 7,437 Operating expenses (4,131 ) (5,930 ) (8,048 ) (12,440 ) Interest expense (1,211 ) (648 ) (2,419 ) (1,259 ) (Provision for) benefit from income taxes (51 ) 9 (79 ) 16 Net (income) loss attributable to noncontrolling interests (2 ) 54 (7 ) 83 Net income (loss) attributable to CPA ® :18 – Global $ 754 $ (2,536 ) $ 1,623 $ (6,163 ) Corporate Unallocated Corporate Overhead (a) $ (6,821 ) $ (1,342 ) $ (7,098 ) $ (8,388 ) Net income attributable to noncontrolling interests – Available Cash Distributions $ (2,380 ) $ (1,422 ) $ (3,657 ) $ (2,316 ) Total Company Revenues $ 45,715 $ 30,472 $ 89,513 $ 57,645 Operating expenses (40,030 ) (41,413 ) (77,513 ) (68,526 ) Interest expense (10,320 ) (8,009 ) (20,680 ) (16,095 ) Other income and expenses, excluding interest expense (2,952 ) 568 1,033 (1,931 ) Benefit from (provision for) income taxes 133 119 (200 ) (208 ) Loss on sale of real estate, net of tax — — (63 ) — Net income attributable to noncontrolling interests (2,758 ) (1,644 ) (4,499 ) (3,005 ) Net loss attributable to CPA ® :18 – Global $ (10,212 ) $ (19,907 ) $ (12,409 ) $ (32,120 ) |
Reconciliation of Assets from Segment to Consolidated | Total Long-Lived Assets Total Assets June 30, 2016 December 31, 2015 June 30, 2016 December 31, 2015 (b) Net Lease $ 1,154,348 $ 1,105,237 $ 1,475,975 $ 1,446,865 Self Storage 372,921 314,247 424,081 363,284 All Other 241,551 227,644 249,725 238,240 Corporate — — 52,113 86,294 Total Company $ 1,768,820 $ 1,647,128 $ 2,201,894 $ 2,134,683 (b) In accordance with ASU 2015-03, we reclassified deferred financing costs from Other assets, net to Non-recourse debt, net and Bonds payable, net as of December 31, 2015 ( Note 3 ). |
Organization (Narratives) (Deta
Organization (Narratives) (Details) $ in Thousands, ft² in Millions | 6 Months Ended | 39 Months Ended | |
Jun. 30, 2016USD ($)ft²segmentpropertytenant | Jun. 30, 2015USD ($) | Apr. 02, 2015USD ($) | |
Public Offering | |||
Capital interest ownership in operating partnership | 99.97% | ||
Proceeds from Issuance Initial Public Offering | $ | $ 20,166 | $ 114,677 | $ 1,200,000 |
Additional Disclosures | |||
Number of properties | 59 | ||
Number of tenants | tenant | 99 | ||
Area of real estate property | ft² | 9.5 | ||
Number of reportable segments | segment | 2 | ||
Operating Real Estate | |||
Additional Disclosures | |||
Area of real estate property | ft² | 6.5 | ||
Self Storage | Operating Real Estate | |||
Additional Disclosures | |||
Number of properties | 67 | ||
Multi-family | Operating Real Estate | |||
Additional Disclosures | |||
Number of properties | 8 |
Revisions of Previously-Issue36
Revisions of Previously-Issued Financial Statements (Narratives) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | |
Interest expense | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | $ 0.9 | |
Loss before income taxes | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | (0.9) | |
Net loss | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | (0.9) | |
Net loss attributable to CPA 18 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | $ (0.9) | |
Net loss attributable to CPA 18 | Class A | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Impact on net loss per share from adjustments to prior period financial statements | $ (0.01) | |
Net loss attributable to CPA 18 | Class C | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Impact on net loss per share from adjustments to prior period financial statements | $ (0.01) | |
Other assets | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | $ (0.9) | |
Total assets | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | (0.9) | |
Distributions and accumulated losses | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | (0.9) | |
Total equity | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | (0.9) | |
Comprehensive loss | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | (0.9) | |
Comprehensive loss attributable to CPA 18 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Adjustment to prior period financial statements | $ (0.9) | |
Additional Paid-In Capital | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prior period adjustment | $ (4.8) | |
Common Stock | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prior period adjustment | (4.8) | |
Treasury Stock | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Prior period adjustment | $ (4.8) |
Basis of Presentation Basis o37
Basis of Presentation Basis of Presentation (Narratives) (Details) $ in Thousands | Jun. 30, 2016USD ($)vie | Dec. 31, 2015USD ($)vie |
Variable Interest Entity | ||
Variable interest entities, count | vie | 13 | |
Variable interest entities consolidated, count | vie | 12 | |
Variable interest entities unconsolidated, count | vie | 1 | |
Equity investments in real estate maximum loss exposure | $ | $ 14,500 | $ 12,600 |
Deferred financing costs | $ | $ 9,516 | |
ASU 2015-02 | ||
Variable Interest Entity | ||
Variable interest entities, count | vie | 8 | |
ASU 2015-03 | Other assets | ||
Variable Interest Entity | ||
Deferred financing costs | $ | (9,000) | |
ASU 2015-03 | Non recourse debt an bond payable | ||
Variable Interest Entity | ||
Deferred financing costs | $ | $ 9,000 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Assets | ||||
Net investments in properties | $ 1,494,877 | $ 1,435,232 | ||
Real estate under construction | 195,459 | 131,930 | ||
Net investment in direct financing leases | 50,484 | 51,966 | ||
Cash and cash equivalents | 76,912 | 117,453 | $ 359,258 | $ 429,548 |
In-place lease intangible assets, net | 200,905 | 212,420 | ||
Other intangible assets, net | 31,161 | 31,421 | ||
Other assets, net | 85,177 | 90,284 | ||
Total assets | 2,201,894 | 2,134,683 | ||
Liabilities | ||||
Non-recourse debt, net | 963,449 | 865,327 | ||
Bonds payable, net | 141,609 | 133,886 | ||
Deferred income taxes | 49,023 | 47,313 | ||
Accounts payable, accrued expenses and other liabilities | 74,942 | 71,397 | ||
Total liabilities | 1,282,710 | 1,181,975 | ||
VIE | ||||
Assets | ||||
Net investments in properties | 363,786 | 360,049 | ||
Real estate under construction | 169,727 | 119,115 | ||
Net investment in direct financing leases | 11,556 | 12,684 | ||
Cash and cash equivalents | 11,400 | 18,356 | ||
In-place lease intangible assets, net | 71,412 | 73,487 | ||
Other intangible assets, net | 22,414 | 22,316 | ||
Other assets, net | 43,499 | 52,915 | ||
Total assets | 693,794 | 658,922 | ||
Liabilities | ||||
Non-recourse debt, net | 196,274 | 196,436 | ||
Bonds payable, net | 59,258 | 56,259 | ||
Deferred income taxes | 22,385 | 21,577 | ||
Accounts payable, accrued expenses and other liabilities | 27,617 | 29,163 | ||
Total liabilities | $ 305,534 | $ 303,435 |
Agreements and Transactions w39
Agreements and Transactions with Related Parties (Narratives) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2016 | Mar. 31, 2015 | Jun. 30, 2016 | Jul. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Jan. 31, 2013 | |
Related Party Transaction | ||||||||
Payment of shareholder servicing fees | $ 600,000 | $ 1,300,000 | ||||||
Underwriting compensation limit | 10.00% | 10.00% | ||||||
Aggregate gross proceeds from offering threshold (percentage) | 1.50% | 1.50% | ||||||
Organizational costs incurred | $ 8,700,000 | |||||||
Maximum line of credit approved by directors | $ 100,000,000 | |||||||
Due to Related Party | ||||||||
Cumulative selling commissions and Deal manager fees Incurred | $ 107,900,000 | 107,900,000 | ||||||
Estimated future payments | $ 8,301,000 | $ 8,301,000 | $ 9,394,000 | |||||
Preferred return | 5.00% | |||||||
Maximum personnel and overhead reimbursement, percentage | 2.20% | 2.20% | 2.40% | |||||
Legal fee reimbursement rate | 0.25% | 0.25% | ||||||
2,017 | ||||||||
Due to Related Party | ||||||||
Maximum personnel and overhead reimbursement, percentage | 2.00% | 2.00% | ||||||
Contract sales price of investment | ||||||||
Due to Related Party | ||||||||
Percentage of subordinated disposition fees | 3.00% | |||||||
Adjusted net income | ||||||||
Due to Related Party | ||||||||
Percentage of operating expense reimbursement | 25.00% | |||||||
Average invested asset | ||||||||
Due to Related Party | ||||||||
Percentage of operating expense reimbursement | 2.00% | |||||||
Real estate commission | ||||||||
Due to Related Party | ||||||||
Percentage of subordinated disposition fees | 50.00% | |||||||
Current | ||||||||
Due to Related Party | ||||||||
Percentage of acquisition fees | 2.50% | |||||||
Deferred | ||||||||
Due to Related Party | ||||||||
Percentage of acquisition fees | 2.00% | |||||||
Class A common stock | ||||||||
Related Party Transaction | ||||||||
Net asset value (per share) | $ 7.90 | |||||||
Common stock initial public offering par or stated value per share | $ 10 | |||||||
Number of shares held by advisor | 105,240,501 | 105,240,501 | 103,214,083 | 101,555,642 | 99,924,009 | |||
Due to Related Party | ||||||||
Selling commission per share sold | $ 0.70 | $ 0.70 | ||||||
Dealer manager fee per share sold | $ 0.30 | $ 0.30 | ||||||
Class A common stock | Advisor | ||||||||
Related Party Transaction | ||||||||
Number of shares held by advisor | 1,575,163 | 1,575,163 | ||||||
Advisor owned percentage of common stock | 1.20% | 1.20% | ||||||
Class C common stock | ||||||||
Related Party Transaction | ||||||||
Net asset value (per share) | $ 7.90 | |||||||
Number of shares held by advisor | 29,920,244 | 29,920,244 | 29,536,899 | 29,056,019 | 18,026,013 | |||
Due to Related Party | ||||||||
Selling commission per share sold | $ 0.14 | $ 0.14 | ||||||
Dealer manager fee per share sold | $ 0.21 | $ 0.21 | ||||||
Shareholder servicing fee | 1.00% | 1.00% | ||||||
Minimum | ||||||||
Due to Related Party | ||||||||
Equity method investments ownership percentage | 50.00% | 50.00% | ||||||
Minimum | Average market value of investment | ||||||||
Related Party Transaction | ||||||||
Percentage of asset management fees | 0.50% | |||||||
Maximum | ||||||||
Due to Related Party | ||||||||
Percentage of acquisition fees | 6.00% | |||||||
Equity method investments ownership percentage | 97.00% | 97.00% | ||||||
Maximum | Average equity value of investment | ||||||||
Related Party Transaction | ||||||||
Percentage of asset management fees | 1.50% | |||||||
Maximum | W.P. Carey | ||||||||
Due to Related Party | ||||||||
Available cash distribution, percentage | 10.00% | |||||||
Subsequent Events | ||||||||
Related Party Transaction | ||||||||
Maximum line of credit approved by directors | $ 50,000,000 |
Agreements and Transactions w40
Agreements and Transactions with Related Parties (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Amounts Included in the Consolidated Statements of Operations | ||||
Available Cash Distributions | $ 2,380 | $ 1,422 | $ 3,657 | $ 2,316 |
Acquisition expenses | 2,816 | 17,180 | 4,711 | 23,780 |
Personnel and overhead reimbursements | 740 | 284 | 1,609 | 443 |
Interest expense on deferred acquisition fees and accretion of interest on annual distribution and shareholder servicing fee | 188 | 96 | 428 | 173 |
Annual distribution and shareholder servicing fee | 0 | 665 | 0 | 1,165 |
Operating expenses | 8,098 | 17,415 | 14,055 | 25,924 |
Acquisition Fees Capitalized | ||||
Current acquisition fees | 452 | 2,909 | 1,821 | 6,375 |
Deferred acquisition fees | 362 | 2,327 | 1,457 | 5,100 |
Capitalized personnel and overhead reimbursements | 73 | 0 | 248 | 0 |
Transaction fees incurred | 887 | 5,236 | 3,526 | 11,475 |
Related Party | ||||
Amounts Included in the Consolidated Statements of Operations | ||||
Asset management fees | 2,468 | 1,729 | 4,877 | 3,146 |
Acquisition expenses | $ 2,322 | $ 13,219 | $ 3,484 | $ 18,681 |
Agreements and Transactions w41
Agreements and Transactions with Related Parties (Details 2) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Due to Related Parties [Abstract] | ||
Deferred acquisition fees, including interest | $ 20,969 | $ 26,747 |
Shareholder servicing fee liability | 8,301 | 9,394 |
Accounts payable and other | 3,064 | 3,872 |
Asset management fees payable | 784 | 813 |
Current acquisition fees | 0 | 3,148 |
Due to affiliate | $ 33,118 | $ 43,974 |
Net Investments in Properties42
Net Investments in Properties and Real Estate Under Construction (Narratives) (Details) $ in Thousands | May 02, 2016USD ($) | Apr. 11, 2016USD ($)property | Feb. 19, 2016USD ($) | Feb. 17, 2016USD ($) | Jan. 14, 2016USD ($) | Jun. 30, 2016USD ($)property | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)property | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($)property |
Acqusition | ||||||||||
Effect of exchange rate fluctuation | $ (10,788) | $ 12,152 | $ 5,776 | $ (21,478) | ||||||
Acquisition expenses | 2,816 | $ 17,180 | 4,711 | $ 23,780 | ||||||
Non-recourse debt, net | 963,449 | 963,449 | $ 865,327 | |||||||
Capitalized funds | 63,474 | |||||||||
Construction loan | 54,300 | 54,300 | ||||||||
Capitalized interest | 3,402 | |||||||||
Placed into service | 1,229 | |||||||||
Equity investments in real estate maximum loss exposure | 14,500 | 14,500 | $ 12,600 | |||||||
Debt | 1,105,058 | 1,105,058 | ||||||||
Equity method investments | ||||||||||
Acqusition | ||||||||||
Debt | 6,900 | 6,900 | ||||||||
Noncash investing | ||||||||||
Acqusition | ||||||||||
Capitalized interest | 3,600 | |||||||||
Initial Funding | ||||||||||
Acqusition | ||||||||||
Capitalized funds | 6,500 | |||||||||
Land in Vaughan, Ontario, Canada | Equity method investments | ||||||||||
Acqusition | ||||||||||
Investment purchase price | $ 2,000 | |||||||||
Total BTS | ||||||||||
Acqusition | ||||||||||
Number of properties acquired | property | 9 | |||||||||
Real Estate | ||||||||||
Acqusition | ||||||||||
Effect of exchange rate fluctuation | $ 13,300 | |||||||||
Build To Suit Project | ||||||||||
Acqusition | ||||||||||
Number of BTS projects | property | 6 | |||||||||
Unfunded commitment | 194,300 | $ 194,300 | ||||||||
Build To Suit Project | Equity method investments | ||||||||||
Acqusition | ||||||||||
Unfunded commitment | $ 24,700 | $ 24,700 | ||||||||
Build To Suit Project | University in Accra, Ghana | ||||||||||
Acqusition | ||||||||||
Investment purchase price | $ 6,500 | |||||||||
Capitalized acquisition cost | 2,600 | |||||||||
Capital commitment | 65,700 | |||||||||
Non-recourse debt, net | $ 41,000 | |||||||||
Build To Suit Project | University in Accra, Ghana | US Treasury | ||||||||||
Acqusition | ||||||||||
Variable interest rate on debt | 3.00% | |||||||||
Build To Suit Expansion | ||||||||||
Acqusition | ||||||||||
Number of BTS projects | property | 2 | |||||||||
Business Combinations | ||||||||||
Acqusition | ||||||||||
Investment purchase price | $ 43,000 | |||||||||
Number of properties acquired | property | 4 | 4 | ||||||||
Acquisition expenses | $ 4,700 | |||||||||
Business Combinations | Various self-storage facilities in Delaware, Massachusetts, and Washington D.C. | ||||||||||
Acqusition | ||||||||||
Investment purchase price | $ 20,300 | |||||||||
Number of properties acquired | property | 5 | |||||||||
Business Combinations | Self-storage facility in Gilroy, CA | ||||||||||
Acqusition | ||||||||||
Investment purchase price | $ 11,000 | |||||||||
Business Combinations | Self-storage facility in Avondale, LA | ||||||||||
Acqusition | ||||||||||
Investment purchase price | $ 5,600 | |||||||||
Business Combinations | Self -storage facility in Kissimmee, FL | ||||||||||
Acqusition | ||||||||||
Investment purchase price | $ 6,100 | |||||||||
VIE | ||||||||||
Acqusition | ||||||||||
Non-recourse debt, net | $ 196,274 | 196,274 | $ 196,436 | |||||||
Unfunded commitment | 181,800 | 181,800 | ||||||||
Operating Real Estate | Business Combinations | ||||||||||
Acqusition | ||||||||||
Investment purchase price | 43,023 | |||||||||
Non-recourse debt, net | 73,300 | 73,300 | ||||||||
Mortgages assumed | 27,925 | 27,925 | ||||||||
Operating Real Estate | Business Combinations | 2016 Acquisitions | ||||||||||
Acqusition | ||||||||||
Non-recourse debt, net | $ 13,800 | $ 13,800 |
Net Investments in Properties43
Net Investments in Properties and Real Estate Under Construction (Details 1) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Investments in real estate: | ||
Less: Accumulated depreciation | $ (63,059) | $ (42,194) |
Net investments in properties | 1,494,877 | 1,435,232 |
Real Estate | ||
Investments in real estate: | ||
Land | 176,416 | 173,094 |
Buildings | 825,283 | 813,480 |
Less: Accumulated depreciation | (44,500) | (31,467) |
Net investments in properties | 957,199 | 955,107 |
Operating Real Estate | ||
Investments in real estate: | ||
Land | 97,612 | 86,016 |
Buildings | 458,625 | 404,836 |
Less: Accumulated depreciation | (18,559) | (10,727) |
Net investments in properties | $ 537,678 | $ 480,125 |
Net Investments in Properties44
Net Investments in Properties and Real Estate Under Construction (Details 2) - Business Combinations $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Acquisition consideration | |
Investment purchase price | $ 43,000 |
Operating Properties | |
Acquisition consideration | |
Investment purchase price | 43,023 |
Assets acquired at fair value: | |
Land | 11,573 |
Buildings | 51,231 |
In-place lease intangible assets | 8,158 |
Other assets acquired | 447 |
Total assets acquired in business combination | 71,409 |
Liabilities assumed at fair value: | |
Mortgages assumed | (27,925) |
Other liabilities assumed | (461) |
Total liabilities acquired in business combination | (28,386) |
Net assets acquired including goodwill less noncontrolling interest | $ 43,023 |
Net Investments in Properties45
Net Investments in Properties and Real Estate Under Construction (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues from acquired properties | ||||
Revenues | $ 45,715 | $ 30,472 | $ 89,513 | $ 57,645 |
Net Loss | (7,454) | (18,263) | (7,910) | (29,115) |
Net Loss Attributable to CPA®:18 – Global | $ (10,212) | $ (19,907) | (12,409) | $ (32,120) |
Operating Real Estate | Business Combinations | ||||
Revenues from acquired properties | ||||
Revenues | 2,107 | |||
Net Loss | (5,333) | |||
Net Loss Attributable to CPA®:18 – Global | $ (5,333) |
Net Investments in Properties46
Net Investments in Properties and Real Estate Under Construction (Details 4) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Real Estate Under Construction | |
Beginning balance | $ 131,930 |
Capitalized funds | 63,474 |
Capitalized interest | 3,402 |
Foreign currency translation adjustments | (2,118) |
Placed into service | (1,229) |
Ending balance | $ 195,459 |
Finance Receivables (Narratives
Finance Receivables (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Receivables [Abstract] | ||||
Interest income from direct financing leases | $ 1,150 | $ 1,012 | $ 2,321 | $ 2,031 |
Finance Receivables (Details 1)
Finance Receivables (Details 1) $ in Thousands | Jun. 30, 2016USD ($)tenant | Dec. 31, 2015USD ($)tenant |
Credit Quality Of Finance Receivables | ||
Carrying Value | $ 78,484 | $ 79,966 |
Internally Assigned Grade 1 | ||
Credit Quality Of Finance Receivables | ||
Number of tenants and obligors | tenant | 1 | 1 |
Carrying Value | $ 11,556 | $ 12,684 |
Internally Assigned Grade 2 | ||
Credit Quality Of Finance Receivables | ||
Number of tenants and obligors | tenant | 1 | 1 |
Carrying Value | $ 9,111 | $ 9,065 |
Internally Assigned Grade 3 | ||
Credit Quality Of Finance Receivables | ||
Number of tenants and obligors | tenant | 4 | 4 |
Carrying Value | $ 57,817 | $ 58,217 |
Internally Assigned Grade 4 | ||
Credit Quality Of Finance Receivables | ||
Number of tenants and obligors | tenant | 0 | 0 |
Carrying Value | $ 0 | $ 0 |
Internally Assigned Grade 5 | ||
Credit Quality Of Finance Receivables | ||
Number of tenants and obligors | tenant | 0 | 0 |
Carrying Value | $ 0 | $ 0 |
Intangible Assets and Liabili49
Intangible Assets and Liabilities (Narratives) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Acquired Finite-Lived Intangible Assets and Liabilities | ||||
Net amortization of intangibles | $ 10.9 | $ 7.2 | $ 21.2 | $ 13.3 |
In-place lease | ||||
Acquired Finite-Lived Intangible Assets and Liabilities | ||||
Intangible assets acquired | $ 8.2 | |||
Finite-lived intangible asset, useful life | 2 years |
Intangible Assets and Liabili50
Intangible Assets and Liabilities (Details 1) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Goodwill | |
Goodwill - beginning balance | $ 23,389 |
Foreign currency translation | 992 |
Goodwill - ending balance | $ 24,381 |
Intangible Assets and Liabili51
Intangible Assets and Liabilities (Details 2) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Amortizable Intangible Assets | ||
Finite-lived intangible assets, gross | $ 299,021 | $ 288,578 |
Less: accumulated amortization | (66,955) | (44,737) |
Finite-lived intangible assets, net | 232,066 | 243,841 |
Goodwill | 24,381 | 23,389 |
Total intangible assets, gross | 323,402 | 311,967 |
Total intangible assets, net | 256,447 | 267,230 |
Amortizable Intangible Liability | ||
Finite-Lived Intangible Liabilities, Gross | (15,406) | (15,560) |
Finite Lived Intangible Liabilities Accumulated Amortization | 2,599 | 1,548 |
Finite Lived Intangible Liabilities Net | (12,807) | (14,012) |
Below-market rent | ||
Amortizable Intangible Liability | ||
Finite-Lived Intangible Liabilities, Gross | (15,296) | (15,439) |
Finite Lived Intangible Liabilities Accumulated Amortization | 2,597 | 1,546 |
Finite Lived Intangible Liabilities Net | (12,699) | (13,893) |
Above-market ground lease | ||
Amortizable Intangible Liability | ||
Finite-Lived Intangible Liabilities, Gross | (110) | (121) |
Finite Lived Intangible Liabilities Accumulated Amortization | 2 | 2 |
Finite Lived Intangible Liabilities Net | (108) | (119) |
In-place lease | ||
Amortizable Intangible Assets | ||
Finite-lived intangible assets, gross | 265,445 | 255,510 |
Less: accumulated amortization | (64,540) | (43,090) |
Finite-lived intangible assets, net | 200,905 | 212,420 |
Below-market ground lease | ||
Amortizable Intangible Assets | ||
Finite-lived intangible assets, gross | 21,304 | 20,894 |
Less: accumulated amortization | (537) | (325) |
Finite-lived intangible assets, net | 20,767 | 20,569 |
Above-market rent | ||
Amortizable Intangible Assets | ||
Finite-lived intangible assets, gross | 12,272 | 12,174 |
Less: accumulated amortization | (1,878) | (1,322) |
Finite-lived intangible assets, net | $ 10,394 | $ 10,852 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Fair Value | |||
Rent guarantees, fair value | $ 1,000 | $ 1,000 | $ 1,300 |
Growth rate | 2.00% | ||
Assets fair value adjustment | 1,000 | $ 800 | |
Deferred financing costs | $ 9,516 | $ 9,516 | |
Minimum | |||
Fair Value | |||
Discount rate on rent guarantee | 7.00% | ||
Maximum | |||
Fair Value | |||
Discount rate on rent guarantee | 9.00% | ||
Non recourse debt | ASU 2015-03 | |||
Fair Value | |||
Deferred financing costs | 8,300 | ||
Bonds payable | ASU 2015-03 | |||
Fair Value | |||
Deferred financing costs | $ 700 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Level 3 - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Carrying Value | ||
Liabilities | ||
Debt | $ 1,105,058 | $ 999,213 |
Note receivable | 28,000 | 28,000 |
Fair Value | ||
Liabilities | ||
Debt | 1,148,255 | 1,022,641 |
Note receivable | $ 28,400 | $ 28,400 |
Risk Management and Use of De54
Risk Management and Use of Derivative Financial Instruments (Narratives) (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Derivative | ||
Derivative instrument remaining maturity period | 6 years 3 months 29 days | |
Total credit exposure | $ 5.7 | |
Derivative in net liability position | 4 | $ 1.6 |
Termination value of assets | 4.5 | $ 1.7 |
Interest expense | ||
Derivative | ||
Estimated amount of derivative income loss to be reclassified to interest expense in the next 12 months | 0.9 | |
Other income | ||
Derivative | ||
Estimated amount of derivative income loss to be reclassified to interest expense in the next 12 months | 1.4 | |
Individual Counterparty | ||
Derivative | ||
Total credit exposure | $ 3.3 |
Risk Management and Use of De55
Risk Management and Use of Derivative Financial Instruments (Details 1) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value | ||
Derivative asset fair value | $ 5,914 | $ 7,488 |
Derivative liability, fair value | (3,954) | (1,596) |
Foreign currency forward contracts and collars | Designated as Hedging Instrument | Other assets, net | ||
Derivatives, Fair Value | ||
Derivative asset fair value | 5,913 | 7,471 |
Interest rate caps | Designated as Hedging Instrument | Other assets, net | ||
Derivatives, Fair Value | ||
Derivative asset fair value | 1 | 17 |
Foreign currency collars | Designated as Hedging Instrument | Accounts payable, accrued expenses and other liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | (68) | (28) |
Interest rate swaps | Designated as Hedging Instrument | Accounts payable, accrued expenses and other liabilities | ||
Derivatives, Fair Value | ||
Derivative liability, fair value | $ (3,886) | $ (1,568) |
Risk Management and Use of De56
Risk Management and Use of Derivative Financial Instruments (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | $ 171 | $ 262 | $ (3,890) | $ 2,368 |
Foreign currency forward contracts and collars | Derivatives in Cash Flow Hedging Relationships | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | 930 | (1,019) | (1,421) | 1,789 |
Foreign currency forward contracts and collars | Net Investment Hedging | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | 76 | 10 | (140) | 90 |
Interest rate swaps | Derivatives in Cash Flow Hedging Relationships | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | (832) | 1,284 | (2,313) | 502 |
Interest rate caps | Derivatives in Cash Flow Hedging Relationships | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | ||||
Amount of Gain (Loss) Recognized on Derivatives in Other Comprehensive (Loss) Income (Effective Portion) | $ (3) | $ (13) | $ (16) | $ (13) |
Risk Management and Use of De57
Risk Management and Use of Derivative Financial Instruments (Details 3) - Derivatives in Cash Flow Hedging Relationships - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion) | ||||
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion) | $ 78 | $ 7 | $ 238 | $ (38) |
Foreign currency forward contracts and collars | Other income and (expenses) | ||||
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion) | ||||
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion) | 296 | 306 | 668 | 562 |
Interest rate swaps | Interest expense | ||||
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion) | ||||
Amount of Gain (Loss) on Derivatives Reclassified from Other Comprehensive (Loss) Income into Income (Effective Portion) | $ (218) | $ (299) | $ (430) | $ (600) |
Risk Management and Use of De58
Risk Management and Use of Derivative Financial Instruments (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Amount of Gain (Loss) on Derivatives Recognized in Income | ||||
Amount of Gain (Loss) on Derivatives Recognized in Income | $ (2) | $ 0 | $ (15) | $ 0 |
Foreign currency collars | Other income and (expenses) | Derivatives Not in Cash Flow Hedging Relationships | ||||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||||
Amount of Gain (Loss) on Derivatives Recognized in Income | 3 | 0 | (10) | 0 |
Interest rate swaps | Interest expense | Designated as Hedging Instrument | ||||
Amount of Gain (Loss) on Derivatives Recognized in Income | ||||
Amount of Gain (Loss) on Derivatives Recognized in Income | $ (5) | $ 0 | $ (5) | $ 0 |
Risk Management and Use of De59
Risk Management and Use of Derivative Financial Instruments (Details 5) $ in Thousands | Jun. 30, 2016USD ($)instrument |
Derivative | |
Fair value | $ (3,885) |
Interest rate swaps | USD | |
Derivative | |
Number of Instruments | instrument | 7 |
Notional Amount | $ 54,454 |
Fair value | $ (3,886) |
Interest rate caps | USD | |
Derivative | |
Number of Instruments | instrument | 2 |
Notional Amount | $ 22,000 |
Fair value | $ 1 |
Risk Management and Use of De60
Risk Management and Use of Derivative Financial Instruments (Details 6) - Designated as Hedging Instrument - Foreign currency forward contracts and collars € in Thousands, NOK in Thousands, $ in Thousands | Jun. 30, 2016USD ($)instrument | Jun. 30, 2016NOKinstrument | Jun. 30, 2016EUR (€)instrument |
Derivative | |||
Fair value | $ 5,845 | ||
Derivatives in Cash Flow Hedging Relationships | Euro | |||
Derivative | |||
Number of Instruments | instrument | 69 | 69 | 69 |
Notional Amount | € | € 29,754 | ||
Fair value | $ 3,708 | ||
Derivatives in Cash Flow Hedging Relationships | NOK | |||
Derivative | |||
Number of Instruments | instrument | 50 | 50 | 50 |
Notional Amount | NOK | NOK 97,565 | ||
Fair value | $ 1,833 | ||
Net Investment Hedging | NOK | |||
Derivative | |||
Number of Instruments | instrument | 8 | 8 | 8 |
Notional Amount | NOK | NOK 31,077 | ||
Fair value | $ 304 |
Non-Recourse Debt and Bonds P61
Non-Recourse Debt and Bonds Payable (Narratives) (Details) $ in Thousands, € in Millions | Feb. 19, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016EUR (€) | Dec. 31, 2015USD ($) |
Debt Instruments | |||||||
Mortgage loan on real estate, interest rate | 4.70% | ||||||
Debt instrument, maturity date range, start | Dec. 31, 2017 | ||||||
Debt instrument, maturity date range, end | Dec. 31, 2039 | ||||||
Mortgage loan | $ 101,200 | $ 101,200 | |||||
Secured Debt | 963,449 | $ 963,449 | $ 865,327 | ||||
Mortgage loan term | 8 years | ||||||
Effect of exchange rate fluctuation | $ (10,788) | $ 12,152 | $ 5,776 | $ (21,478) | |||
Long-term debt | |||||||
Debt Instruments | |||||||
Effect of exchange rate fluctuation | $ 8,400 | ||||||
Fixed Interest Rate | Minimum | |||||||
Debt Instruments | |||||||
Mortgage loan on real estate, interest rate | 1.60% | ||||||
Fixed Interest Rate | Maximum | |||||||
Debt Instruments | |||||||
Mortgage loan on real estate, interest rate | 5.80% | ||||||
Variable Interest Rate | Minimum | |||||||
Debt Instruments | |||||||
Mortgage loan on real estate, interest rate | 2.10% | ||||||
Variable Interest Rate | Maximum | |||||||
Debt Instruments | |||||||
Mortgage loan on real estate, interest rate | 5.10% | ||||||
University in Accra, Ghana | Build To Suit Project | |||||||
Debt Instruments | |||||||
Secured Debt | $ 41,000 | ||||||
University in Accra, Ghana | Build To Suit Project | US Treasury | |||||||
Debt Instruments | |||||||
Variable interest rate on debt | 3.00% | ||||||
Hotel in Hamburg Germany | |||||||
Debt Instruments | |||||||
Debt instrument, stated interest rate | 2.05% | 2.05% | 2.05% | ||||
Secured Debt | € | € 15.2 | ||||||
Industrial facility in Michalovce, Slovakia | |||||||
Debt Instruments | |||||||
Secured Debt | € | 12.8 | ||||||
Industrial facility in Michalovce, Slovakia | EURIBOR | |||||||
Debt Instruments | |||||||
Variable interest rate on debt | 3.10% | ||||||
Office Building in Eindhoven, the Netherlands | |||||||
Debt Instruments | |||||||
Secured Debt | € | € 48 | ||||||
Office Building in Eindhoven, the Netherlands | EURIBOR | |||||||
Debt Instruments | |||||||
Variable interest rate on debt | 2.50% | ||||||
Hotel in Stuttgart, Germany | |||||||
Debt Instruments | |||||||
Debt instrument, stated interest rate | 1.80% | 1.80% | 1.80% | ||||
Secured Debt | € | € 17.2 |
Non-Recourse Debt and Bonds P62
Non-Recourse Debt and Bonds Payable (Details 1) $ in Thousands | Jun. 30, 2016USD ($) |
Long-term Debt, Fiscal Year Maturity | |
2016 (remainder) | $ 1,962 |
2,017 | 22,110 |
2,018 | 26,803 |
2,019 | 5,150 |
2,020 | 115,354 |
Thereafter through 2039 | 943,223 |
Long term debt gross | 1,114,602 |
Unamortized discount, net | (28) |
Deferred financing costs | (9,516) |
Total | $ 1,105,058 |
Loss Per Share and Equity (Narr
Loss Per Share and Equity (Narratives) (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 15, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 |
Distributions Declared | |||||||
Interest expense | $ 10,320 | $ 8,009 | $ 20,680 | $ 16,095 | |||
Shareholder servicing fee incurred | 0 | $ 665 | 0 | 1,165 | |||
Distributions paid | $ 20,300 | 40,334 | $ 36,298 | ||||
Distributions payable | 20,569 | $ 20,569 | $ 20,078 | ||||
Dividend payable, date | Apr. 15, 2016 | Jul. 15, 2016 | |||||
Class A | |||||||
Distributions Declared | |||||||
Interest expense | $ 100 | $ 200 | |||||
Distributions declared per share (in dollars per share) | $ 0.1563 | $ 0.1563 | $ 0.1562 | $ 0.3126 | $ 0.3124 | ||
Class C | |||||||
Distributions Declared | |||||||
Distributions declared per share (in dollars per share) | $ 0.1376 | $ 0.1337 | $ 0.1329 | $ 0.2713 | $ 0.2658 |
Loss Per Share and Equity (Deta
Loss Per Share and Equity (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Basic and Diluted | ||||
Net Loss Attributable to CPA®:18 – Global | $ (10,212) | $ (19,907) | $ (12,409) | $ (32,120) |
Class A common stock | ||||
Basic and Diluted | ||||
Weighted-Average Shares Outstanding | 105,182,645 | 101,460,830 | 104,577,599 | 101,053,789 |
Net Loss Attributable to CPA®:18 – Global | $ (7,882) | $ (14,961) | $ (9,485) | $ (24,673) |
Loss Per Share (in dollars per share) | $ (0.07) | $ (0.15) | $ (0.09) | $ (0.24) |
Class C common stock | ||||
Basic and Diluted | ||||
Weighted-Average Shares Outstanding | 29,928,571 | 29,033,036 | 29,843,149 | 25,729,488 |
Net Loss Attributable to CPA®:18 – Global | $ (2,330) | $ (4,946) | $ (2,924) | $ (7,447) |
Loss Per Share (in dollars per share) | $ (0.08) | $ (0.17) | $ (0.10) | $ (0.29) |
Loss Per Share and Equity (De65
Loss Per Share and Equity (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Reconciliation Of Accumulated Comprehensive Income | ||||
Beginning equity balance, value | $ 952,708 | $ 1,000,228 | ||
Amounts reclassified from accumulated other comprehensive income (loss) to: | ||||
Interest expense | $ 10,320 | $ 8,009 | 20,680 | 16,095 |
Net current-period Other comprehensive income | (10,693) | 12,404 | 2,026 | (19,200) |
Ending equity balance, value | 919,184 | 1,024,341 | 919,184 | 1,024,341 |
Accumulated Other Comprehensive Loss | ||||
Reconciliation Of Accumulated Comprehensive Income | ||||
Beginning equity balance, value | (40,267) | (46,476) | (50,316) | (20,941) |
Other comprehensive income (loss) before reclassifications | (10,615) | 12,411 | 2,264 | (19,238) |
Amounts reclassified from accumulated other comprehensive income (loss) to: | ||||
Net current-period Other comprehensive income | (10,693) | 12,404 | 2,026 | (19,200) |
Net current-period Other comprehensive (income) loss attributable to noncontrolling interests | 1,193 | (1,889) | (1,477) | 4,180 |
Ending equity balance, value | (49,767) | (35,961) | (49,767) | (35,961) |
Gains and Losses on Derivative Instruments | ||||
Reconciliation Of Accumulated Comprehensive Income | ||||
Beginning equity balance, value | 1,515 | 3,178 | 5,360 | 1,152 |
Other comprehensive income (loss) before reclassifications | 173 | 259 | (3,512) | 2,240 |
Amounts reclassified from accumulated other comprehensive income (loss) to: | ||||
Net current-period Other comprehensive income | 95 | 252 | (3,750) | 2,278 |
Net current-period Other comprehensive (income) loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Ending equity balance, value | 1,610 | 3,430 | 1,610 | 3,430 |
Foreign Currency Translation Adjustments | ||||
Reconciliation Of Accumulated Comprehensive Income | ||||
Beginning equity balance, value | (41,782) | (49,654) | (55,676) | (22,093) |
Other comprehensive income (loss) before reclassifications | (10,788) | 12,152 | 5,776 | (21,478) |
Amounts reclassified from accumulated other comprehensive income (loss) to: | ||||
Net current-period Other comprehensive income | (10,788) | 12,152 | 5,776 | (21,478) |
Net current-period Other comprehensive (income) loss attributable to noncontrolling interests | 1,193 | (1,889) | (1,477) | 4,180 |
Ending equity balance, value | (51,377) | (39,391) | (51,377) | (39,391) |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Loss | ||||
Amounts reclassified from accumulated other comprehensive income (loss) to: | ||||
Interest expense | 218 | 299 | 430 | 600 |
Other income and (expenses) | (296) | (306) | (668) | (562) |
Reclassification out of Accumulated Other Comprehensive Income | Gains and Losses on Derivative Instruments | ||||
Amounts reclassified from accumulated other comprehensive income (loss) to: | ||||
Interest expense | 218 | 299 | 430 | 600 |
Other income and (expenses) | $ (296) | $ (306) | $ (668) | $ (562) |
Segment Reporting (Narratives)
Segment Reporting (Narratives) (Details) | 6 Months Ended |
Jun. 30, 2016segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Reporting (Details 1)
Segment Reporting (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information, Profit (Loss) | ||||
Revenues | $ 45,715 | $ 30,472 | $ 89,513 | $ 57,645 |
Operating expenses | (40,030) | (41,413) | (77,513) | (68,526) |
Interest expense | (10,320) | (8,009) | (20,680) | (16,095) |
Other income and expenses, excluding interest expense | (2,952) | 568 | 1,033 | (1,931) |
Benefit from (provision for) income taxes | 133 | 119 | (200) | (208) |
Loss on sale of real estate, net of tax | 0 | 0 | (63) | 0 |
Net loss attributable to noncontrolling interests | (2,758) | (1,644) | (4,499) | (3,005) |
Net Loss Attributable to CPA®:18 – Global | (10,212) | (19,907) | (12,409) | (32,120) |
Operating Segments | Net Lease | ||||
Segment Reporting Information, Profit (Loss) | ||||
Revenues | 27,169 | 20,878 | 54,631 | 41,232 |
Operating expenses | (15,438) | (19,788) | (30,722) | (30,920) |
Interest expense | (7,263) | (6,995) | (14,580) | (12,770) |
Other income and expenses, excluding interest expense | 640 | (156) | 711 | 97 |
Benefit from (provision for) income taxes | 405 | (811) | 226 | (1,137) |
Loss on sale of real estate, net of tax | 0 | 0 | (63) | 0 |
Net loss attributable to noncontrolling interests | (376) | (276) | (835) | (772) |
Net Loss Attributable to CPA®:18 – Global | 5,137 | (7,148) | 9,368 | (4,270) |
Operating Segments | Self Storage | ||||
Segment Reporting Information, Profit (Loss) | ||||
Revenues | 12,397 | 5,615 | 22,706 | 8,976 |
Operating expenses | (16,500) | (11,852) | (30,248) | (18,054) |
Interest expense | (2,734) | (1,218) | (4,995) | (1,893) |
Other income and expenses, excluding interest expense | (9) | 11 | (17) | 11 |
Benefit from (provision for) income taxes | (56) | (15) | (91) | (23) |
Net Loss Attributable to CPA®:18 – Global | (6,902) | (7,459) | (12,645) | (10,983) |
Operating Segments | All Other | ||||
Segment Reporting Information, Profit (Loss) | ||||
Revenues | 6,149 | 3,979 | 12,176 | 7,437 |
Operating expenses | (4,131) | (5,930) | (8,048) | (12,440) |
Interest expense | (1,211) | (648) | (2,419) | (1,259) |
Benefit from (provision for) income taxes | (51) | 9 | (79) | 16 |
Net loss attributable to noncontrolling interests | (2) | 54 | (7) | 83 |
Net Loss Attributable to CPA®:18 – Global | 754 | (2,536) | 1,623 | (6,163) |
Corporate | ||||
Segment Reporting Information, Profit (Loss) | ||||
Unallocated Corporate Overhead | (6,821) | (1,342) | (7,098) | (8,388) |
Net loss attributable to noncontrolling interests | $ (2,380) | $ (1,422) | $ (3,657) | $ (2,316) |
Segment Reporting (Details 2)
Segment Reporting (Details 2) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Segment Reporting Information, Additional Information | ||
Long-Lived Assets | $ 1,768,820 | $ 1,647,128 |
Assets | 2,201,894 | 2,134,683 |
Corporate | ||
Segment Reporting Information, Additional Information | ||
Long-Lived Assets | 0 | 0 |
Assets | 52,113 | 86,294 |
Net Lease | Operating Segments | ||
Segment Reporting Information, Additional Information | ||
Long-Lived Assets | 1,154,348 | 1,105,237 |
Assets | 1,475,975 | 1,446,865 |
Self Storage | Operating Segments | ||
Segment Reporting Information, Additional Information | ||
Long-Lived Assets | 372,921 | 314,247 |
Assets | 424,081 | 363,284 |
All Other | Operating Segments | ||
Segment Reporting Information, Additional Information | ||
Long-Lived Assets | 241,551 | 227,644 |
Assets | $ 249,725 | $ 238,240 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - USD ($) | Jul. 31, 2016 | Jan. 31, 2013 |
Subsequent Events | ||
Maximum line of credit approved by directors | $ 100,000,000 | |
Subsequent Events | ||
Subsequent Events | ||
Maximum line of credit approved by directors | $ 50,000,000 |