Document And Entity Information
Document And Entity Information - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2016 | May. 09, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Carter Validus Mission Critical REIT II, Inc. | |
Entity Central Index Key | 1,567,925 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,822 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Real estate: | ||
Land | $ 58,741 | $ 48,882 |
Buildings and improvements, less accumulated depreciation of $7,955 and $5,262, respectively | 419,863 | 361,632 |
Construction in progress | 8,520 | 0 |
Total real estate, net | 487,124 | 410,514 |
Cash and cash equivalents | 50,964 | 31,262 |
Acquired intangible assets, less accumulated amortization of $3,189 and $2,007, respectively | 59,620 | 54,633 |
Other assets | 12,270 | 10,218 |
Total assets | 609,978 | 506,627 |
Liabilities: | ||
Credit facility, net of deferred financing costs of $98 and $103, respectively | 109,902 | 89,897 |
Accounts payable due to affiliates | 875 | 741 |
Accounts payable and other liabilities | 9,369 | 8,244 |
Intangible lease liabilities, less accumulated amortization of $232 and $98, respectively | 7,275 | 7,409 |
Total liabilities | $ 127,421 | $ 106,291 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding | ||
Common stock, $0.01 par value per share, 500,000,000 shares authorized; 58,516,023 and 48,488,734 shares issued, respectively; 58,448,510 and 48,457,191 shares outstanding, respectively | $ 585 | $ 485 |
Additional paid-in capital | 514,919 | 425,910 |
Accumulated deficit | (32,949) | (26,061) |
Total stockholders’ equity | 482,555 | 400,334 |
Noncontrolling interests | 2 | 2 |
Total equity | 482,557 | 400,336 |
Total liabilities and stockholders’ equity | $ 609,978 | $ 506,627 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Buildings and improvements, accumulated depreciation | $ 7,955 | $ 5,262 |
Acquired intangible assets, accumulated amortization | 3,189 | 2,007 |
Credit facility, deferred financing costs | 98 | 103 |
Intangible lease liabilities, accumulated amortization | $ 232 | $ 98 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 58,516,023 | 48,488,734 |
Common stock, shares outstanding | 58,448,510 | 48,457,191 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Rental revenue | $ 10,021 | $ 2,223 |
Tenant reimbursement revenue | 1,403 | 87 |
Total revenue | 11,424 | 2,310 |
Expenses: | ||
Rental expenses | 1,684 | 135 |
General and administrative expenses | 765 | 479 |
Acquisition related expenses | 1,665 | 716 |
Asset management fees | 955 | 205 |
Depreciation and amortization | 3,866 | 684 |
Total expenses | 8,935 | 2,219 |
Income from operations | 2,489 | 91 |
Interest expense, net | 879 | 370 |
Net income (loss) attributable to common stockholders | $ 1,610 | $ (279) |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 53,666,785 | 11,612,028 |
Diluted (in shares) | 53,679,723 | 11,612,028 |
Net income (loss) per common share attributable to common stockholders: | ||
Basic (in dollars per share) | $ 0.03 | $ (0.02) |
Diluted (in dollars per share) | 0.03 | (0.02) |
Distributions declared per common share (in dollars per share) | $ 0.16 | $ 0.16 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid in Capital [Member] | Accumulated Deficit [Member] | Total Stockholders' Equity [Member] | Noncontrolling Interests [Member] |
Balance, (in shares) at Dec. 31, 2015 | 48,457,191 | 48,457,191 | ||||
Balance, at Dec. 31, 2015 | $ 400,336 | $ 485 | $ 425,910 | $ (26,061) | $ 400,334 | $ 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 9,540,188 | |||||
Issuance of common stock | 93,868 | $ 95 | 93,773 | 93,868 | 0 | |
Issuance of common stock under the distribution reinvestment plan (in shares) | 487,101 | |||||
Issuance of common stock under the distribution reinvestment plan | 4,626 | $ 5 | 4,621 | 4,626 | 0 | |
Commissions on sale of common stock and related dealer manager fees | (8,004) | (8,004) | (8,004) | 0 | ||
Distribution and servicing fees | (22) | (22) | (22) | 0 | ||
Other offering costs | (1,032) | (1,032) | (1,032) | 0 | ||
Repurchase of common stock (in shares) | (35,970) | |||||
Repurchase of common stock | (338) | $ 0 | (338) | (338) | 0 | |
Stock-based compensation | 11 | 11 | 11 | 0 | ||
Distributions declared to common stockholders | (8,498) | (8,498) | (8,498) | 0 | ||
Net income | $ 1,610 | 1,610 | 1,610 | 0 | ||
Balance, (in shares) at Mar. 31, 2016 | 58,448,510 | 58,448,510 | ||||
Balance, at Mar. 31, 2016 | $ 482,557 | $ 585 | $ 514,919 | $ (32,949) | $ 482,555 | $ 2 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,610 | $ (279) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 3,866 | 684 |
Amortization of deferred financing costs | 202 | 132 |
Amortization of above-market leases | 9 | 6 |
Amortization of intangible lease liabilities | (134) | 0 |
Straight-line rent | (1,166) | (315) |
Stock-based compensation | 11 | 6 |
Changes in operating assets and liabilities: | ||
Accounts payable and other liabilities | 891 | 1,337 |
Accounts payable due to affiliates | 97 | 294 |
Other assets | (755) | (278) |
Net cash provided by operating activities | 4,631 | 1,587 |
Cash flows from investing activities: | ||
Investment in real estate | (85,403) | (28,383) |
Capital expenditures | (247) | (12) |
Escrow funds, net | 230 | (2) |
Real estate deposits | (400) | 0 |
Net cash used in investing activities | (85,820) | (28,397) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 93,868 | 103,191 |
Proceeds from credit facility | 20,000 | 2,000 |
Payments on credit facility | 0 | (39,500) |
Payments of deferred financing costs | (206) | (112) |
Repurchases of common stock | (338) | 0 |
Offering costs on issuance of common stock | (9,074) | (12,070) |
Distributions to stockholders | (3,359) | (534) |
Net cash provided by financing activities | 100,891 | 52,975 |
Net change in cash and cash equivalents | 19,702 | 26,165 |
Cash and cash equivalents - Beginning of period | 31,262 | 3,694 |
Cash and cash equivalents - End of period | 50,964 | 29,859 |
Supplemental cash flow disclosure: | ||
Interest paid | 595 | 157 |
Supplemental disclosure of non-cash transactions: | ||
Common stock issued through distribution reinvestment plan | $ 4,626 | $ 776 |
Organization and Business Opera
Organization and Business Operations | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | Organization and Business Operations Carter Validus Mission Critical REIT II, Inc., or the Company, is a Maryland corporation that was formed on January 11, 2013, which elected to be taxed as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with its taxable year ended December 31, 2014. The Company commenced principal operations on July 3, 2014 when it satisfied the minimum offering requirement and issued approximately 213,333 shares of Class A common stock for gross proceeds of $2,000,000 . Substantially all of the Company’s business is conducted through Carter Validus Operating Partnership II, LP, a Delaware limited partnership, or the Operating Partnership, formed on January 10, 2013. The Company is the sole general partner of the Operating Partnership and Carter Validus Advisors II, LLC, or the Advisor, is the initial limited partner of the Operating Partnership. The Company is offering for sale a maximum of $2,350,000,000 in shares of common stock, consisting of up to $2,250,000,000 in shares in its primary offering and up to $100,000,000 in shares of common stock to be made available pursuant to the Company’s distribution reinvestment plan, or the DRIP, on a “best efforts” basis, or the Offering, pursuant to a registration statement on Form S-11, or the Registration Statement, filed with the Securities and Exchange Commission, or the SEC, under the Securities Act of 1933, as amended, or the Securities Act, which was declared effective on May 29, 2014. The Company has registered for offering shares of Class A common stock and shares of Class T common stock, in any combination with a dollar value up to the maximum primary offering amount. The initial offering price for the shares in the primary offering is $10.00 per Class A share and $9.574 per Class T share. As of March 31, 2016 , the Company had accepted investors’ subscriptions for and issued approximately 58,514,000 shares of Class A and Class T common stock (including shares of common stock issued pursuant to the DRIP) in the Offering, resulting in receipt of gross proceeds of approximately $580,052,000 , before selling commissions and dealer manager fees of approximately $52,643,000 , distribution and servicing fees of approximately $22,000 and other offering costs of approximately $11,290,000 . As of March 31, 2016 , the Company had approximately $1,769,948,000 in Class A shares and Class T shares of common stock remaining in the Offering. Substantially all of the Company’s business is managed by the Advisor. Carter Validus Real Estate Management Services II, LLC, or the Property Manager, an affiliate of the Advisor, serves as the Company’s property manager. The Advisor and the Property Manager have received, and will continue to receive, fees for services related to the acquisition and operational stages. The Advisor will also be eligible to receive fees during the liquidation stage. SC Distributors, LLC, an affiliate of the Advisor, or the Dealer Manager, serves as the dealer manager of the Offering. The Dealer Manager has received and will continue to receive fees for services related to the Offering. The Company was formed to invest primarily in quality income-producing commercial real estate, with a focus on data centers and healthcare properties, preferably with long-term net leases to investment grade and other creditworthy tenants, as well as to make other real estate-related investments that relate to such property types. Real estate-related investments may include equity or debt interests, including securities, in other real estate entities. The Company also may originate or invest in real estate-related debt. The Company expects real estate-related debt originations and investments to be focused on first mortgage loans, but also may include real estate-related bridge loans, mezzanine loans and securitized debt. As of March 31, 2016 , the Company owned 26 real estate investments, consisting of 38 properties, located in 21 metropolitan statistical areas, or MSAs, and one micropolitan statistical area, or µSA. Except as the context otherwise requires, “we,” “our,” “us,” and the “Company” refer to Carter Validus Mission Critical REIT II, Inc., the Operating Partnership and all wholly-owned subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes thereto are the representation of management. These accounting policies conform to accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal and recurring nature considered for a fair presentation have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date but does not include all the information and notes required by GAAP for complete financial statements. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements as of and for the year ended December 31, 2015 and related notes thereto set forth in the Company's Annual Report on Form 10-K, filed with the SEC on March 28, 2016. Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. On January 1, 2016, the Company adopted Accounting Standards Update, or ASU, ASU 2015-02, Amendments to the Consolidation Analysis, which amends the current consolidation guidance affecting both the variable interest entity (VIE) and voting interest entity (VOE) consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The Operating Partnership meets the criteria as a VIE, the Company is the primary beneficiary and, accordingly, the Company continues to consolidate the Operating Partnership. The Company’s sole asset is its investment in the Operating Partnership, and consequently, all of the Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Company’s debt is an obligation of the Operating Partnership. Use of Estimates The preparation of the condensed consolidated financial statements and accompanying notes in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. Concentration of Credit Risk and Significant Leases As of March 31, 2016 , the Company had cash on deposit in certain financial institutions which were in excess of current federally insured levels. The Company limits its cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has experienced no loss or lack of access to cash in its accounts. Concentration of credit risk with respect to accounts receivable from tenants is limited. As of March 31, 2016 , the Company owned real estate investments in 21 MSAs and one µSA, four MSAs of which accounted for 10.0% or more of rental revenue. Real estate investments located in the Houston-The Woodlands-Sugar Land, Texas MSA, the Dallas-Fort Worth-Arlington, Texas MSA, the Oklahoma City, Oklahoma MSA, and the Cincinnati, Ohio-Kentucky-Indiana MSA accounted for 15.7% , 12.8% , 11.6% , and 10.4% , respectively, of rental revenue for the three months ended March 31, 2016 . As of March 31, 2016 , the Company had one tenant's exposure concentration that accounted for 10.0% or more of rental revenue. The leases with tenants under common control of the guarantor Post Acute Medical, LLC accounted for 13.6% of rental revenue for the three months ended March 31, 2016 . Deferred Financing Costs Deferred financing costs are loan fees, legal fees and other third-party costs associated with obtaining financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. On January 1, 2016, the Company adopted ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, and ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements, or ASUs 2015-03 and 2015-15. According to ASUs 2015-03 and 2015-15, deferred financing costs related to a recognized debt liability in connection with term loans, including the term loan portion of the Company's credit facility, are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Deferred financing costs related to the revolving line of credit portion of the Company's secured credit facility are presented in the balance sheet as an asset, which is included in other assets on the condensed consolidated balance sheet. As required, the Company retrospectively applied the guidance in ASUs 2015-03 and 2015-15 to the prior period presented, which resulted in a decrease of $103,000 in other assets and credit facility on the condensed consolidated balance sheet as of December 31, 2015. Comprehensive Income (Loss) For the periods presented, comprehensive income (loss) equaled net income (loss); therefore, a separate statement of comprehensive income (loss) is not included in the accompanying condensed consolidated financial statements. Share Repurchase Program The Company’s share repurchase program allows for repurchases of shares of the Company’s common stock when certain criteria are met. The share repurchase program provides that all repurchases during any calendar year, including those redeemable upon death or a qualifying disability of a stockholder, are limited to those that can be funded with equivalent proceeds raised from the DRIP Offering during the prior calendar year and other operating funds, if any, as the board of directors, in its sole discretion, may reserve for this purpose. Repurchases of shares of the Company’s common stock are at the sole discretion of the Company’s board of directors. In addition, the Company’s board of directors, in its sole discretion, may amend, suspend, reduce, terminate or otherwise change the share repurchase program upon 30 days ' prior notice to the Company’s stockholders for any reason it deems appropriate. The share repurchase program provides that the Company will limit the number of shares repurchased during any calendar year to 5.0% of the number of shares of common stock outstanding on December 31 st of the previous calendar year. In addition, the share repurchase program provides that all redemptions during any calendar year, including those upon death or a qualifying disability of a stockholder, are limited to those that can be funded with equivalent proceeds raised from the DRIP Offering during the prior calendar year and other operating funds, if any, as the board of directors, in its sole discretion, may reserve for this purpose. During the three months ended March 31, 2016 , the Company received valid repurchase requests related to 35,970 Class A shares of common stock, all of which were redeemed in full for an aggregate purchase price of approximately $338,000 (an average of $9.40 per share). During the three months ended March 31, 2016 and 2015 , no Class T shares qualified for repurchase under the share repurchase program. During the three months ended March 31, 2015 , no Class A shares qualified for repurchase under the share repurchase program. Earnings Per Share The Company calculates basic earnings per share by dividing net income (loss) attributable to common stockholders for the period by the weighted average shares of its common stock outstanding for that period. Diluted earnings per share are computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Shares of non-vested restricted common stock give rise to potentially dilutive shares of common stock. For the three months ended March 31, 2016 , diluted earnings per share reflected the effect of approximately 13,000 of non-vested shares of restricted common stock that were outstanding as of such period. During the three months ended March 31, 2015 , there were 9,000 shares of non-vested restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during this period. Recently Issued Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board, or the FASB, issued ASU 2014-09, Revenue from Contracts with Customers , or ASU 2014-09. The objective of ASU 2014-09 is to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle, which may require more judgment and estimates within the revenue recognition process than are required under existing GAAP. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date , or ASU 2015-14. ASU 2015-14 defers the effective date of ASU 2014-09 by one year to fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted as of the original effective date, which was annual reporting periods beginning after December 15, 2016, and the interim periods within that year. The Company is in the process of evaluating the impact ASU 2014-09 will have on the Company’s condensed consolidated financial statements. On March 17, 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Principal versus Agent Considerations), or ASU 2016-08, which improves the implementation guidance on principal versus agent considerations. ASU 2016-08 clarifies that an entity is a principal when it controls the specified good or service before that good or service is transferred to the customer, and is an agent when it does not control the specified good or service before it is transferred to the customer. The effective date of this update is the same as the effective date of ASU 2015-14. The Company is in the process of evaluating the impact ASU 2016-08 will have on the Company’s condensed consolidated financial statements. Reclassifications Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company’s condensed consolidated financial position or results of operations. |
Real Estate Investments
Real Estate Investments | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Real Estate Investments | Real Estate Investments During the three months ended March 31, 2016 , the Company completed five real estate acquisitions, of which three were determined to be business combinations and two were determined to be asset acquisitions. See Note 4 —"Business Combinations" for further discussion of business combinations. The following table summarizes the consideration transferred for all investments in real estate acquired during the three months ended March 31, 2016 (amounts in thousands): Three Months Ended Investments in real estate: Purchase price of business combinations $ 55,150 Purchase price of asset acquisitions 30,253 Total purchase price of real estate investments acquired $ 85,403 Acquisition fees and expenses in connection with the acquisition of properties determined to be business combinations are expensed as incurred, including investment transactions that are no longer under consideration, and are included in acquisition related expenses in the accompanying condensed consolidated statements of income (loss) . Acquisition fees and expenses associated with transactions determined to be asset acquisitions are capitalized. The Company expensed acquisition fees and expenses of approximately $1,529,000 and $622,000 for the three months ended March 31, 2016 and 2015 , respectively. The Company capitalized acquisition fees and expenses of approximately $1,387,000 for the three months ended March 31, 2016 . The total amount of all acquisition fees and costs is limited to 6.0% of the contract purchase price of a property. The contract purchase price is the amount actually paid or allocated in respect of the purchase, development, construction or improvement of a property exclusive of acquisition fees and costs. For the three months ended March 31, 2016 and 2015 , acquisition fees and costs did not exceed 6.0% of the contract purchase price of the Company's acquisitions during such period. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations During the three months ended March 31, 2016 , the Company completed the acquisition of 100% of the interests in three real estate investments, consisting of eight properties ( two data centers and six healthcare properties) that were determined to be business combinations, comprised of eight buildings. The aggregate purchase price of the acquisitions determined to be business combinations was $55,150,000 , plus closing costs. The following table summarizes the acquisitions determined to be business combinations during the three months ended March 31, 2016 : Property Description Date Acquired Ownership Percentage HPI — Edmond 01/20/2016 100% HPI — Oklahoma City III 01/27/2016 100% HPI — Oklahoma City IV 01/27/2016 100% Alpharetta Data Center III 02/02/2016 100% Flint Data Center 02/02/2016 100% HPI — Newcastle 02/03/2016 100% HPI — Oklahoma City V 02/11/2016 100% HPI — Oklahoma City VI 03/07/2016 100% Results of operations for the acquisitions determined to be business combinations are reflected in the accompanying condensed consolidated statement of income for three months ended March 31, 2016 for the period subsequent to the acquisition date of each property. For the period from the acquisition date through March 31, 2016 , the Company recorded $713,000 in revenues and a net loss of $1,212,000 for its business combination acquisitions. The following table summarizes management’s allocation of the fair value of the acquisitions determined to be business combinations during the three months ended March 31, 2016 (amounts in thousands): Total Land $ 6,970 Buildings and improvements 40,684 In-place leases 6,170 Tenant improvements 1,326 Total assets acquired $ 55,150 Assuming the business combinations described above had occurred on January 1, 2015, pro forma revenues and net income attributable to common stockholders would have been as follows for the periods listed below (amounts in thousands, unaudited): Three Months Ended 2016 2015 Pro forma basis: Revenues $ 11,855 $ 9,541 Net income attributable to common stockholders $ 3,798 $ 3,286 Net income per common share attributable to common stockholders: Basic $ 0.07 $ 0.06 Diluted $ 0.07 $ 0.06 The pro forma information for the three months ended March 31, 2016 and 2015 was adjusted to exclude approximately $1,529,000 and $622,000 , respectively, of acquisition fees and costs recorded related to the Company’s real estate investments. The pro forma information may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2015, nor is it necessarily indicative of future operating results. |
Acquired Intangible Assets, Net
Acquired Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2016 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Acquired Intangible Assets, Net | Acquired Intangible Assets, Net Acquired intangible assets, net, consisted of the following as of March 31, 2016 and December 31, 2015 (amounts in thousands, except weighted average life amounts): March 31, 2016 December 31, 2015 In-place leases, net of accumulated amortization of $3,139 and $1,967, respectively (with a weighted average remaining life of 13.9 years and 14.5 years, respectively) $ 58,772 $ 53,776 Above-market leases, net of accumulated amortization of $39 and $32, respectively (with a weighted average remaining life of 8.2 years and 8.4 years, respectively) 215 222 Ground lease interest, net of accumulated amortization of $11 and $9, respectively (with a weighted average remaining life of 67.6 years and 67.8 years, respectively) 633 635 $ 59,620 $ 54,633 The aggregate weighted average remaining life of the acquired intangible assets was 14.4 years and 15.1 years as of March 31, 2016 and December 31, 2015 , respectively. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2016 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets consisted of the following as of March 31, 2016 and December 31, 2015 (amounts in thousands): March 31, 2016 December 31, 2015 Deferred financing costs, related to the revolver portion of the secured credit facility, net of accumulated amortization of $999 and $802, respectively $ 2,726 $ 2,717 Real estate escrow deposits 843 443 Restricted cash held in escrow 1,697 1,927 Tenant receivable 2,566 2,065 Straight-line rent receivable 3,628 2,462 Prepaid and other assets 810 604 $ 12,270 $ 10,218 |
Future Minimum Rent
Future Minimum Rent | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Future Minimum Rent | Future Minimum Rent The Company’s real estate assets are leased to tenants under operating leases with varying terms. The leases frequently have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. The future minimum rental income from the Company’s investments in real estate assets under non-cancelable operating leases for the nine months ending December 31, 2016 and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Nine months ending December 31, 2016 $ 27,647 2017 37,361 2018 37,996 2019 38,403 2020 37,327 Thereafter 395,572 $ 574,306 |
Credit Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2016 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility Significant activity regarding the secured credit facility since December 31, 2015 includes: • During the three months ended March 31, 2016 , the Company made a draw of $20,000,000 on the secured credit facility. • During the three months ended March 31, 2016 , the Company increased the borrowing base availability under the secured credit facility by $57,555,000 by adding nine properties to the aggregate pool availability. • As of March 31, 2016 , the Company had a total pool availability under the secured credit facility of $248,162,000 and an aggregate outstanding principal balance of $110,000,000 . As of March 31, 2016 , $138,162,000 remained to be drawn on the secured credit facility. |
Intangible Lease Liabilities, N
Intangible Lease Liabilities, Net | 3 Months Ended |
Mar. 31, 2016 | |
Intangible Lease Liabilities, Net [Abstract] | |
Intangible Lease Liabilities, Net | Intangible Lease Liabilities, Net Intangible lease liabilities, net, consisted of the following as of March 31, 2016 and December 31, 2015 (amounts in thousands, except weighted average life amounts): March 31, 2016 December 31, 2015 Below-market leases, net of accumulated amortization of $232 and $98, respectively (with a weighted average remaining life of 14.3 years and 14.5 years, respectively) $ 7,275 $ 7,409 $ 7,275 $ 7,409 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation In the ordinary course of business, the Company may become subject to litigation or claims. As of March 31, 2016 , there were, and currently there are, no material pending legal proceedings to which the Company is a party. |
Related-Party Transactions and
Related-Party Transactions and Arrangements | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions and Arrangements | Related-Party Transactions and Arrangements The Company reimburses the Advisor and its affiliates for organization and offering expenses it incurs on the Company’s behalf, but only to the extent the reimbursement would not cause the selling commissions, dealer manager fees, distribution and servicing fees and other organization and offering expenses to exceed 15% of the gross proceeds of the Offering. The Company expects that organization and offering expenses (other than selling commissions, dealer manager fees and distribution and servicing fees) will be approximately 1.25% of the gross proceeds. As of March 31, 2016 , the Advisor and its affiliates incurred approximately $9,206,000 on the Company’s behalf in offering costs. The Company accrued approximately $287,000 of other organization and offering expenses as of March 31, 2016 . Other organization expenses are expensed as incurred and offering expenses are charged to stockholders’ equity as incurred or as such amounts are reimbursed to the Advisor. The Company pays to the Advisor 2.0% of the contract purchase price of each property or asset acquired and 2.0% of the amount advanced with respect to a mortgage loan. For the three months ended March 31, 2016 and 2015 , the Company incurred approximately $2,233,000 and $568,000 , respectively, in acquisition fees to the Advisor or its affiliates. In addition, the Company reimburses the Advisor for acquisition expenses incurred in connection with the selection and acquisition of properties or other real estate-related investments (including expenses relating to potential investments that the Company does not close), such as legal fees and expenses, costs of real estate due diligence, appraisals, non-refundable option payments on properties not acquired, travel and communications expenses, accounting fees and expenses and title insurance premiums, whether or not the property was acquired. The Company expects these expenses will be approximately 0.75% of the purchase price of each property or real estate-related investment. The Company pays to the Advisor an asset management fee calculated on a monthly basis in an amount equal to 1/12t h of 0.75% of gross assets (including amounts borrowed), which is payable monthly in arrears. The Advisor may, in its sole discretion, choose to take any monthly asset management fee in the form of subordinated restricted Class B Units of the Operating Partnership. In the event the Advisor chooses to be compensated in Class B Units, then the Operating Partnership will, within 30 days after the end of the applicable month (subject to the approval of the board of directors), issue a number of restricted Class B Units to the Advisor equal to: (i) the cost of assets multiplied by 0.0625% (or the lower of the cost of assets and the applicable net asset value, or NAV, multiplied by 0.0625% , once the Company begins calculating NAV) divided by (ii) the value of one share of common stock as of the last day of such calendar month, which will be the offering price, less selling commissions and dealer manager fees, until such time as the Company calculates NAV, when it will then be the per share NAV for common shares. The Advisor will be entitled to receive certain distributions of net sales proceeds on the vested and unvested Class B Units it receives in connection with its assets management services at the same rate as distributions received on the Company’s common stock. Such distributions will be in addition to the incentive fees the Advisor and its affiliates may receive from the Company, including, without limitation the subordinated participation in net sales proceeds, the subordinated incentive listing distribution or the subordinated distribution upon termination of the advisory agreement, as applicable. Class B Units are subject to forfeiture until such time as: (a) the value of the Operating Partnership’s assets plus all distributions made equals or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pretax, non-compounded annual return thereon, or the economic hurdle; (b) any one of the following events occurs concurrently with or subsequently to the achievement of the economic hurdle described above: (i) a listing of the Company’s common stock on a national securities exchange; (ii) a transaction to which the Company or the Operating Partnership shall be a party, as a result of which operating partnership units or common stock shall be exchanged for or converted into the right, or the holders of such securities shall otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause; and (c) the Advisor pursuant to the advisory agreement is providing services to the Company immediately prior to the occurrence of an event of the type described in clause (b) above, unless the failure to provide such services is attributable to the termination without cause of the advisory agreement by an affirmative vote of a majority of the Company’s independent directors after the economic hurdle described above has been met. Any outstanding Class B Units will be forfeited immediately if the advisory agreement is terminated for any reason other than a termination without cause. Any outstanding Class B Units will be forfeited immediately if the advisory agreement is terminated without cause by an affirmative vote of a majority of the Company’s board of directors before the economic hurdle described above has been met. For the three months ended March 31, 2016 and 2015 , the Company incurred approximately $955,000 and $205,000 , respectively, in asset management fees. As of March 31, 2016 and 2015 , the Company did not issue any Class B Units. In connection with the rental, leasing, operation and management of the Company’s properties, the Company pays the Property Manager and its affiliates aggregate fees equal to 3.0% of gross revenues from the properties managed, or property management fees. The Company will reimburse the Property Manager and its affiliates for property-level expenses that any of them pay or incur on the Company’s behalf, including salaries, bonuses and benefits of persons employed by the Property Manager and its affiliates except for the salaries, bonuses and benefits of persons who also serve as one of its executive officers. The Property Manager and its affiliates may subcontract the performance of their duties to third parties and pay all or a portion of the property management fee to the third parties with whom they contract for these services. If the Company contracts directly with third parties for such services, it will pay them customary market fees and may pay the Property Manager an oversight fee equal to 1.0% of the gross revenues of the properties managed. In no event will the Company pay the Property Manager or any affiliate both a property management fee and an oversight fee with respect to any particular property. The Company also will pay the Property Manager a separate fee for the one-time initial rent-up, leasing-up of newly constructed properties or re-leasing to existing tenants in an amount not to exceed the fee customarily charged in arm’s length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area. For the three months ended March 31, 2016 and 2015 , the Company incurred approximately $298,000 and $60,000 , respectively, in property management fees to the Property Manager. For the three months ended March 31, 2016 and 2015 , the Company did not incur any leasing commissions to the Property Manager. The Company reimburses the Advisor for all expenses it paid or incurred in connection with the services provided to the Company, subject to certain limitations. Expenses in excess of the operating expenses in the four immediately preceding quarters that exceeds the greater of (a) 2.0% of average invested assets or (b) 25% of net income, subject to certain adjustments, will not be reimbursed unless the independent directors determine such excess expenses are justified. The Company will not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives an acquisition fee or a disposition fee. For the three months ended March 31, 2016 and 2015 , the Advisor allocated approximately $278,000 and $163,000 , respectively, in operating expenses to the Company, which are included as part of general and administrative expenses in the accompanying condensed consolidated statements of income (loss). The Company will pay its Advisor, or its affiliates, if it provides a substantial amount of services (as determined by a majority of the Company’s independent directors) in connection with the sale of properties, a disposition fee, up to the lesser of 1.0% of the contract sales price and one-half of the total brokerage commission paid if a third party broker is also involved, without exceeding the lesser of 6.0% of the contract sales price or a reasonable, customary and competitive real estate commission. For the three months ended March 31, 2016 and 2015 , the Company did not incur any disposition fees to the Advisor or its affiliates. The Advisor will receive 15% of the remaining net sale proceeds after return of capital contributions plus payment to investors of a 6.0% annual cumulative, non-compounded return on the capital contributed by investors. For the three months ended March 31, 2016 and 2015 , the Company did not incur any subordinated participation in net sale proceeds to the Advisor or its affiliates. Upon the listing of the Company’s shares on a national securities exchange, which the Company has no intention to do at this time, the Advisor will receive 15.0% of the amount by which the sum of the Company’s adjusted market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to a 6.0% annual cumulative, non-compounded return to investors, or the subordinated incentive listing fee. For the three months ended March 31, 2016 and 2015 , the Company did not incur any subordinated incentive listing fees to the Advisor or its affiliates. Upon termination or non-renewal of the advisory agreement, with or without cause, the Advisor will be entitled to receive distributions from the Operating Partnership equal to 15% of the amount by which the sum of the Company’s adjusted market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to an annual 6.0% cumulative, non-compounded return to investors. In addition, the Advisor may elect to defer its right to receive a subordinated distribution upon termination until either shares of the Company’s common stock are listed and traded on a national securities exchange or another liquidity event occurs. For the three months ended March 31, 2016 and 2015 , the Company did not incur any subordinated termination fees to the Advisor or its affiliates. Certain affiliates of the Company receive fees in connection with the Offering and will continue to receive fees during the acquisition, management and sale of assets of the Company. The Company pays the Dealer Manager selling commissions of up to 7.0% of the gross offering proceeds per Class A share and up to 3.0% of gross offering proceeds per Class T share. All selling commissions are expected to be re-allowed to participating broker-dealers. The Company will not pay selling commissions with respect to shares of any class sold pursuant to the DRIP. In addition, the Company pays the Dealer Manager a dealer manager fee of up to 3.0% of gross offering proceeds from the sale of Class A and Class T shares.The dealer manager fee may be partially re-allowed to participating broker-dealers. No dealer manager fees will be paid in connection with purchases of shares made pursuant to the DRIP. For the three months ended March 31, 2016 and 2015 , the Company incurred approximately $8,004,000 and $9,889,000 , respectively, for selling commissions and dealer manager fees in connection with the Offering to the Dealer Manager. The Company pays the Dealer Manager a distribution and servicing fee with respect to its Class T shares that are sold in the primary offering that accrues daily in an amount equal to 1/365t h of 1.0% of the amount of the purchase price per share (or, once reported, the NAV per share for such day) on a continuous basis from year to year. Termination of such payment will commence on the earliest to occur of the following: (i) a listing of the Class T shares on a national securities exchange, (ii) following the completion of the Offering, total underwriting compensation in the Offering equaling 10% of the gross proceeds from the primary portion of the Offering, (iii) there are no longer any Class T shares outstanding, or (iv) the fourth anniversary of the last day of the fiscal year in which the primary offering terminates. The Dealer Manager may re-allow the distribution and servicing fee to participating broker-dealers and servicing broker-dealers. The distribution and servicing fee will be paid monthly in arrears. The distribution and servicing fee will not be payable with respect to Class T shares issued under the DRIP. The Company will not pay a distribution and servicing fee with respect to Class A shares. For the three months ended March 31, 2016 , the Company incurred approximately $22,000 for distribution and servicing fees to the Dealer Manager. For the three months ended March 31, 2015, the Company did not incur distribution and servicing fees to the Dealer Manager because it had not sold any Class T shares. Accounts Payable Due to Affiliates The following amounts were outstanding due to affiliates as of March 31, 2016 and December 31, 2015 (amounts in thousands): Entity Fee March 31, 2016 December 31, 2015 Carter Validus Advisors II, LLC and its affiliates Asset management fees $ 363 $ 290 Carter Validus Real Estate Management Services II, LLC Property management fees 107 101 Carter Validus Advisors II, LLC and its affiliates General and administrative costs 112 96 Carter Validus Advisors II, LLC and its affiliates Offering costs 287 250 Carter Validus Advisors II, LLC and its affiliates Acquisition expenses and fees 6 4 $ 875 $ 741 |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Management reviews the performance of individual properties and aggregates individual properties based on operating criteria into two reportable segments—commercial real estate investments in data centers and healthcare, and makes operating decisions based on these two reportable segments. The Company’s commercial real estate investments in data centers and healthcare are based on certain underwriting assumptions and operating criteria, which are different for data centers and healthcare. There were no intersegment sales or transfers during the three months ended March 31, 2016 and 2015 . The Company evaluates performance based on net operating income of the individual properties in each segment. Net operating income, a non-GAAP financial measure, is defined as total revenues, less rental expenses, which excludes depreciation and amortization, general and administrative expenses, acquisition related expenses, asset management fees and interest expense, net. The Company believes that segment net operating income serves as a useful supplement to net income (loss) because it allows investors and management to measure unlevered property-level operating results and to compare operating results to the operating results of other real estate companies between periods on a consistent basis. Segment net operating income should not be considered as an alternative to net income (loss) determined in accordance with GAAP as an indicator of financial performance, and accordingly, the Company believes that in order to facilitate a clear understanding of the consolidated historical operating results, segment net operating income should be examined in conjunction with net income (loss) as presented in the accompanying condensed consolidated financial statements and data included elsewhere in this Quarterly Report on Form 10-Q . General and administrative expenses, acquisition related expenses, asset management fees, depreciation and amortization and interest expense, net are not allocated to individual segments for purposes of assessing segment performance. Non-segment assets primarily consist of corporate assets, including cash and cash equivalents, real estate and escrow deposits, deferred financing costs attributable to the revolving line of credit portion of the Company's secured credit facility and other assets not attributable to individual properties. Summary information for the reportable segments during the three months ended March 31, 2016 and 2015 , is as follows (amounts in thousands): Data Centers Healthcare Three Months Ended Revenue: Rental and tenant reimbursement revenue $ 1,537 $ 9,887 $ 11,424 Expenses: Rental expenses (254 ) (1,430 ) (1,684 ) Segment net operating income $ 1,283 $ 8,457 9,740 Expenses: General and administrative expenses (765 ) Acquisition related expenses (1,665 ) Asset management fees (955 ) Depreciation and amortization (3,866 ) Income from operations 2,489 Interest expense, net (879 ) Net income attributable to common stockholders $ 1,610 Data Centers Healthcare Three Months Ended Revenue: Rental and tenant reimbursement revenue $ — $ 2,310 $ 2,310 Expenses: Rental expenses — (135 ) (135 ) Segment net operating income $ — $ 2,175 2,175 Expenses: General and administrative expenses (479 ) Acquisition related expenses (716 ) Asset management fees (205 ) Depreciation and amortization (684 ) Income from operations 91 Interest expense, net (370 ) Net loss attributable to common stockholders $ (279 ) Assets by each reportable segment as of March 31, 2016 and December 31, 2015 are as follows (amounts in thousands): March 31, 2016 December 31, 2015 Assets by segment: Data centers $ 88,048 $ 44,207 Healthcare 467,367 427,878 All other 54,563 34,542 Total assets $ 609,978 $ 506,627 Capital additions and acquisitions by reportable segments for the three months ended March 31, 2016 and 2015 are as follows (amounts in thousands): Three Months Ended 2016 2015 Capital additions and acquisitions by segment: Data centers $ 44,161 $ — Healthcare 41,489 28,395 Total capital additions and acquisitions $ 85,650 $ 28,395 |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Accounts payable and other liabilities, as of March 31, 2016 and December 31, 2015 , were comprised of the following (amounts in thousands): March 31, 2016 December 31, 2015 Accounts payable and accrued expenses $ 1,854 $ 2,283 Accrued interest expense 326 221 Accrued property taxes 764 505 Distributions payable to stockholders 3,060 2,548 Tenant deposits 2,423 1,848 Deferred rental income 942 839 $ 9,369 $ 8,244 |
Economic Dependency
Economic Dependency | 3 Months Ended |
Mar. 31, 2016 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency The Company is dependent on the Advisor and its affiliates for certain services that are essential to the Company, including the sale of the Company’s shares of common and preferred stock available for issuance; the identification, evaluation, negotiation, purchase and disposition of real estate investments and other investments; the management of the daily operations of the Company’s real estate portfolio; and other general and administrative responsibilities. In the event that the Advisor and its affiliates are unable to provide the respective services, the Company will be required to obtain such services from other sources. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Distributions to Stockholders Paid On April 1, 2016, the Company paid aggregate distributions of approximately $2,979,000 to Class A stockholders ( $1,293,000 in cash and $1,686,000 in shares of the Company’s Class A common stock pursuant to the DRIP), which related to distributions declared for each day in the period from March 1, 2016 through March 31, 2016. On May 2, 2016, the Company paid aggregate distributions of approximately $3,006,000 to Class A stockholders ( $1,303,000 in cash and $1,703,000 in shares of the Company’s Class A common stock issued pursuant to the DRIP), which related to distributions declared for each day in the period from April 1, 2016 through April 30, 2016. On April 1, 2016, the Company paid aggregate distributions of approximately $81,000 to Class T stockholders ( $28,000 in cash and $53,000 in shares of the Company's Class T common stock pursuant to the DRIP), which related to distributions declared for each day in the period from March 1, 2016 through March 31, 2016. On May 2, 2016, the Company paid aggregate distributions of approximately $132,000 to Class T stockholders ( $43,000 in cash and $89,000 in shares of the Company’s Class T common stock issued pursuant to the DRIP), which related to distributions declared for each day in the period from April 1, 2016 through April 30, 2016. Distributions Declared Class A On May 5, 2016, the board of directors of the Company approved and declared a distribution to the Company’s Class A stockholders of record as of the close of business on each day of the period commencing on June 1, 2016 and ending on August 31, 2016. The distributions will be calculated based on 366 days in the calendar year and will be equal to $0.001748634 per share of Class A common stock, which will be equal to an annualized distribution rate of 6.4% , assuming a purchase price of $10.00 per share of Class A common stock. The distributions declared for each record date in June 2016, July 2016 and August 2016 will be paid in July 2016, August 2016 and September 2016, respectively. The distributions will be payable to stockholders from legally available funds therefor. Class T On May 5, 2016, the board of directors of the Company approved and declared a daily distribution to the Company’s Class T stockholders of record as of the close of business on each day of the period commencing on June 1, 2016 and ending August 31, 2016. The distributions will be calculated based on 366 days in the calendar year and will be equal to $0.001487402 per share of Class T common stock, which will be equal to an annualized distribution rate of 5.68% , assuming a purchase price of $9.574 per share. The distributions declared for each record date in June 2016, July 2016 and August 2016 will be paid in July 2016, August 2016 and September 2016, respectively. The distributions will be payable to stockholders from legally available funds therefor. Status of the Offering As of May 9, 2016 , the Company had accepted investors’ subscriptions for and issued approximately 62,930,000 shares of Class A and Class T common stock in the Offering, resulting in receipt of gross proceeds of approximately $623,045,000 including shares of its common stock issued pursuant to its DRIP. As of May 9, 2016 , the Company had approximately $1,726,955,000 in Class A shares and Class T shares of common stock remaining in the Offering. Renewal of the Management Agreement On May 5, 2016, the board of directors, including all independent directors of the Company, after review of the Property Manager's performance during the last year, authorized the Company to execute a mutual consent to renew the management agreement by and among the Company, the Operating Partnership and the Property Manager, dated May 19, 2014, as amended and renewed. The renewal will be for a one -year term and will be effective as of May 19, 2016 . Renewal of the Advisory Agreement On May 5, 2016, the board of directors, including all independent directors of the Company, after review of the Advisor's performance during the last year, authorized the Company to execute a mutual consent to renew the amended and restated advisory agreement, by and among the Company, the Operating Partnership and the Advisor, dated June 10, 2014, as amended and renewed. The renewal will be for a one -year term and will be effective as of June 10, 2016 . |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, and all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. On January 1, 2016, the Company adopted Accounting Standards Update, or ASU, ASU 2015-02, Amendments to the Consolidation Analysis, which amends the current consolidation guidance affecting both the variable interest entity (VIE) and voting interest entity (VOE) consolidation models. The standard does not add or remove any of the characteristics in determining if an entity is a VIE or VOE, but rather enhances the way the Company assesses some of these characteristics. The Operating Partnership meets the criteria as a VIE, the Company is the primary beneficiary and, accordingly, the Company continues to consolidate the Operating Partnership. The Company’s sole asset is its investment in the Operating Partnership, and consequently, all of the Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Company’s debt is an obligation of the Operating Partnership |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements and accompanying notes in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates. |
Concentration of Credit Risk and Significant Leases | Concentration of Credit Risk and Significant Leases As of March 31, 2016 , the Company had cash on deposit in certain financial institutions which were in excess of current federally insured levels. The Company limits its cash investments to financial institutions with high credit standing; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has experienced no loss or lack of access to cash in its accounts. Concentration of credit risk with respect to accounts receivable from tenants is limited. As of March 31, 2016 , the Company owned real estate investments in 21 MSAs and one µSA, four MSAs of which accounted for 10.0% or more of rental revenue. Real estate investments located in the Houston-The Woodlands-Sugar Land, Texas MSA, the Dallas-Fort Worth-Arlington, Texas MSA, the Oklahoma City, Oklahoma MSA, and the Cincinnati, Ohio-Kentucky-Indiana MSA accounted for 15.7% , 12.8% , 11.6% , and 10.4% , respectively, of rental revenue for the three months ended March 31, 2016 . As of March 31, 2016 , the Company had one tenant's exposure concentration that accounted for 10.0% or more of rental revenue. The leases with tenants under common control of the guarantor Post Acute Medical, LLC accounted for 13.6% of rental revenue for the three months ended March 31, 2016 . |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are loan fees, legal fees and other third-party costs associated with obtaining financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. On January 1, 2016, the Company adopted ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, and ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated With Line-of-Credit Arrangements, or ASUs 2015-03 and 2015-15. According to ASUs 2015-03 and 2015-15, deferred financing costs related to a recognized debt liability in connection with term loans, including the term loan portion of the Company's credit facility, are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Deferred financing costs related to the revolving line of credit portion of the Company's secured credit facility are presented in the balance sheet as an asset, which is included in other assets on the condensed consolidated balance sheet. As required, the Company retrospectively applied the guidance in ASUs 2015-03 and 2015-15 to the prior period presented, which resulted in a decrease of $103,000 in other assets and credit facility on the condensed consolidated balance sheet as of December 31, 2015. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) For the periods presented, comprehensive income (loss) equaled net income (loss); therefore, a separate statement of comprehensive income (loss) is not included in the accompanying condensed consolidated financial statements. |
Share Repurchase Program | Share Repurchase Program The Company’s share repurchase program allows for repurchases of shares of the Company’s common stock when certain criteria are met. The share repurchase program provides that all repurchases during any calendar year, including those redeemable upon death or a qualifying disability of a stockholder, are limited to those that can be funded with equivalent proceeds raised from the DRIP Offering during the prior calendar year and other operating funds, if any, as the board of directors, in its sole discretion, may reserve for this purpose. Repurchases of shares of the Company’s common stock are at the sole discretion of the Company’s board of directors. In addition, the Company’s board of directors, in its sole discretion, may amend, suspend, reduce, terminate or otherwise change the share repurchase program upon 30 days ' prior notice to the Company’s stockholders for any reason it deems appropriate. The share repurchase program provides that the Company will limit the number of shares repurchased during any calendar year to 5.0% of the number of shares of common stock outstanding on December 31 st of the previous calendar year. In addition, the share repurchase program provides that all redemptions during any calendar year, including those upon death or a qualifying disability of a stockholder, are limited to those that can be funded with equivalent proceeds raised from the DRIP Offering during the prior calendar year and other operating funds, if any, as the board of directors, in its sole discretion, may reserve for this purpose. During the three months ended March 31, 2016 , the Company received valid repurchase requests related to 35,970 Class A shares of common stock, all of which were redeemed in full for an aggregate purchase price of approximately $338,000 (an average of $9.40 per share). During the three months ended March 31, 2016 and 2015 , no Class T shares qualified for repurchase under the share repurchase program. During the three months ended March 31, 2015 , no Class A shares qualified for repurchase under the share repurchase program. |
Earnings Per Share | Earnings Per Share The Company calculates basic earnings per share by dividing net income (loss) attributable to common stockholders for the period by the weighted average shares of its common stock outstanding for that period. Diluted earnings per share are computed based on the weighted average number of shares outstanding and all potentially dilutive securities. Shares of non-vested restricted common stock give rise to potentially dilutive shares of common stock. For the three months ended March 31, 2016 , diluted earnings per share reflected the effect of approximately 13,000 of non-vested shares of restricted common stock that were outstanding as of such period. During the three months ended March 31, 2015 , there were 9,000 shares of non-vested restricted common stock outstanding, but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during this period. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board, or the FASB, issued ASU 2014-09, Revenue from Contracts with Customers , or ASU 2014-09. The objective of ASU 2014-09 is to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle, which may require more judgment and estimates within the revenue recognition process than are required under existing GAAP. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date , or ASU 2015-14. ASU 2015-14 defers the effective date of ASU 2014-09 by one year to fiscal years and interim periods beginning after December 15, 2017. Early adoption is permitted as of the original effective date, which was annual reporting periods beginning after December 15, 2016, and the interim periods within that year. The Company is in the process of evaluating the impact ASU 2014-09 will have on the Company’s condensed consolidated financial statements. On March 17, 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Principal versus Agent Considerations), or ASU 2016-08, which improves the implementation guidance on principal versus agent considerations. ASU 2016-08 clarifies that an entity is a principal when it controls the specified good or service before that good or service is transferred to the customer, and is an agent when it does not control the specified good or service before it is transferred to the customer. The effective date of this update is the same as the effective date of ASU 2015-14. The Company is in the process of evaluating the impact ASU 2016-08 will have on the Company’s condensed consolidated financial statements. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company’s condensed consolidated financial position or results of operations. |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Real Estate [Abstract] | |
Schedule Of Consideration Transferred For Investments In Real Estate | The following table summarizes the consideration transferred for all investments in real estate acquired during the three months ended March 31, 2016 (amounts in thousands): Three Months Ended Investments in real estate: Purchase price of business combinations $ 55,150 Purchase price of asset acquisitions 30,253 Total purchase price of real estate investments acquired $ 85,403 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Combinations | The following table summarizes the acquisitions determined to be business combinations during the three months ended March 31, 2016 : Property Description Date Acquired Ownership Percentage HPI — Edmond 01/20/2016 100% HPI — Oklahoma City III 01/27/2016 100% HPI — Oklahoma City IV 01/27/2016 100% Alpharetta Data Center III 02/02/2016 100% Flint Data Center 02/02/2016 100% HPI — Newcastle 02/03/2016 100% HPI — Oklahoma City V 02/11/2016 100% HPI — Oklahoma City VI 03/07/2016 100% |
Schedule of Allocation of Fair Value of Business Combinations | The following table summarizes management’s allocation of the fair value of the acquisitions determined to be business combinations during the three months ended March 31, 2016 (amounts in thousands): Total Land $ 6,970 Buildings and improvements 40,684 In-place leases 6,170 Tenant improvements 1,326 Total assets acquired $ 55,150 |
Schedule of Business Combinations on a Pro Forma Basis | Assuming the business combinations described above had occurred on January 1, 2015, pro forma revenues and net income attributable to common stockholders would have been as follows for the periods listed below (amounts in thousands, unaudited): Three Months Ended 2016 2015 Pro forma basis: Revenues $ 11,855 $ 9,541 Net income attributable to common stockholders $ 3,798 $ 3,286 Net income per common share attributable to common stockholders: Basic $ 0.07 $ 0.06 Diluted $ 0.07 $ 0.06 |
Acquired Intangible Assets, N25
Acquired Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of Acquired Intangible Assets, Net | Acquired intangible assets, net, consisted of the following as of March 31, 2016 and December 31, 2015 (amounts in thousands, except weighted average life amounts): March 31, 2016 December 31, 2015 In-place leases, net of accumulated amortization of $3,139 and $1,967, respectively (with a weighted average remaining life of 13.9 years and 14.5 years, respectively) $ 58,772 $ 53,776 Above-market leases, net of accumulated amortization of $39 and $32, respectively (with a weighted average remaining life of 8.2 years and 8.4 years, respectively) 215 222 Ground lease interest, net of accumulated amortization of $11 and $9, respectively (with a weighted average remaining life of 67.6 years and 67.8 years, respectively) 633 635 $ 59,620 $ 54,633 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following as of March 31, 2016 and December 31, 2015 (amounts in thousands): March 31, 2016 December 31, 2015 Deferred financing costs, related to the revolver portion of the secured credit facility, net of accumulated amortization of $999 and $802, respectively $ 2,726 $ 2,717 Real estate escrow deposits 843 443 Restricted cash held in escrow 1,697 1,927 Tenant receivable 2,566 2,065 Straight-line rent receivable 3,628 2,462 Prepaid and other assets 810 604 $ 12,270 $ 10,218 |
Future Minimum Rent (Tables)
Future Minimum Rent (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Income from Non-Cancelable Operating Leases | The future minimum rental income from the Company’s investments in real estate assets under non-cancelable operating leases for the nine months ending December 31, 2016 and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Nine months ending December 31, 2016 $ 27,647 2017 37,361 2018 37,996 2019 38,403 2020 37,327 Thereafter 395,572 $ 574,306 |
Intangible Lease Liabilities,28
Intangible Lease Liabilities, Net (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Intangible Lease Liabilities, Net [Abstract] | |
Schedule of Intangible Lease Liabilities, Net | Intangible lease liabilities, net, consisted of the following as of March 31, 2016 and December 31, 2015 (amounts in thousands, except weighted average life amounts): March 31, 2016 December 31, 2015 Below-market leases, net of accumulated amortization of $232 and $98, respectively (with a weighted average remaining life of 14.3 years and 14.5 years, respectively) $ 7,275 $ 7,409 $ 7,275 $ 7,409 |
Related-Party Transactions an29
Related-Party Transactions and Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Accounts Payable Due to Affiliates | The following amounts were outstanding due to affiliates as of March 31, 2016 and December 31, 2015 (amounts in thousands): Entity Fee March 31, 2016 December 31, 2015 Carter Validus Advisors II, LLC and its affiliates Asset management fees $ 363 $ 290 Carter Validus Real Estate Management Services II, LLC Property management fees 107 101 Carter Validus Advisors II, LLC and its affiliates General and administrative costs 112 96 Carter Validus Advisors II, LLC and its affiliates Offering costs 287 250 Carter Validus Advisors II, LLC and its affiliates Acquisition expenses and fees 6 4 $ 875 $ 741 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Information for Reportable Segments | Summary information for the reportable segments during the three months ended March 31, 2016 and 2015 , is as follows (amounts in thousands): Data Centers Healthcare Three Months Ended Revenue: Rental and tenant reimbursement revenue $ 1,537 $ 9,887 $ 11,424 Expenses: Rental expenses (254 ) (1,430 ) (1,684 ) Segment net operating income $ 1,283 $ 8,457 9,740 Expenses: General and administrative expenses (765 ) Acquisition related expenses (1,665 ) Asset management fees (955 ) Depreciation and amortization (3,866 ) Income from operations 2,489 Interest expense, net (879 ) Net income attributable to common stockholders $ 1,610 Data Centers Healthcare Three Months Ended Revenue: Rental and tenant reimbursement revenue $ — $ 2,310 $ 2,310 Expenses: Rental expenses — (135 ) (135 ) Segment net operating income $ — $ 2,175 2,175 Expenses: General and administrative expenses (479 ) Acquisition related expenses (716 ) Asset management fees (205 ) Depreciation and amortization (684 ) Income from operations 91 Interest expense, net (370 ) Net loss attributable to common stockholders $ (279 ) |
Schedule of Assets by Reportable Segments | Assets by each reportable segment as of March 31, 2016 and December 31, 2015 are as follows (amounts in thousands): March 31, 2016 December 31, 2015 Assets by segment: Data centers $ 88,048 $ 44,207 Healthcare 467,367 427,878 All other 54,563 34,542 Total assets $ 609,978 $ 506,627 |
Schedule of Capital Additions and Acquisitions by Reportable Segments | Capital additions and acquisitions by reportable segments for the three months ended March 31, 2016 and 2015 are as follows (amounts in thousands): Three Months Ended 2016 2015 Capital additions and acquisitions by segment: Data centers $ 44,161 $ — Healthcare 41,489 28,395 Total capital additions and acquisitions $ 85,650 $ 28,395 |
Accounts Payable and Other Li31
Accounts Payable and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Other Liabilities | Accounts payable and other liabilities, as of March 31, 2016 and December 31, 2015 , were comprised of the following (amounts in thousands): March 31, 2016 December 31, 2015 Accounts payable and accrued expenses $ 1,854 $ 2,283 Accrued interest expense 326 221 Accrued property taxes 764 505 Distributions payable to stockholders 3,060 2,548 Tenant deposits 2,423 1,848 Deferred rental income 942 839 $ 9,369 $ 8,244 |
Organization and Business Ope32
Organization and Business Operations (Details) | Mar. 31, 2016USD ($)micropolitanpropertyreal_estate_investmentmetropolitanshares | Jul. 03, 2014USD ($)shares | Mar. 31, 2016USD ($)micropolitanpropertyreal_estate_investmentmetropolitan | May. 29, 2014USD ($)$ / shares |
Organization and Business Operations [Line Items] | ||||
Selling commissions and dealer manager fees | $ 8,004,000 | |||
Distribution and servicing fees | 22,000 | |||
Other offering costs | $ 1,032,000 | |||
Number of Company owned real estate investments | real_estate_investment | 26 | 26 | ||
Number of Company owned properties | property | 38 | 38 | ||
Number of metropolitan statistical areas in which Company owns rental property | metropolitan | 21 | 21 | ||
Number of micropolitan statistical areas in which Company owns rental property | micropolitan | 1 | 1 | ||
Offering [Member] | ||||
Organization and Business Operations [Line Items] | ||||
Common stock offering including DRIP, value | $ 2,350,000,000 | |||
Common stock offering, value | 2,250,000,000 | |||
Common stock offering pursuant to DRIP, value | $ 100,000,000 | |||
Selling commissions and dealer manager fees | $ 52,643,000 | |||
Distribution and servicing fees | 22,000 | |||
Other offering costs | $ 11,290,000 | |||
Offering [Member] | Class A shares [Member] | Common Stock [Member] | ||||
Organization and Business Operations [Line Items] | ||||
Common stock offering, minimum offering requirement, shares | shares | 213,333 | |||
Common stock offering, minimum offering requirement, value | $ 2,000,000 | |||
Common stock offering, price per share (in dollars per share) | $ / shares | $ 10 | |||
Offering [Member] | Class T shares [Member] | Common Stock [Member] | ||||
Organization and Business Operations [Line Items] | ||||
Common stock offering, price per share (in dollars per share) | $ / shares | $ 9.574 | |||
Offering [Member] | Class A and T shares [Member] | Common Stock [Member] | ||||
Organization and Business Operations [Line Items] | ||||
Common stock offering, shares issued | shares | 58,514,000 | |||
Common stock offering, gross proceeds raised | $ 580,052,000 | |||
Common stock offering, value remaining | $ 1,769,948,000 | $ 1,769,948,000 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016USD ($)tenantsmicropolitanmetropolitan$ / sharesshares | Mar. 31, 2015shares | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||
Number of metropolitan statistical areas in which Company owns rental property | metropolitan | 21 | ||
Number of micropolitan statistical areas in which Company owns rental property | micropolitan | 1 | ||
Deferred financing costs, net | $ | $ 2,726 | $ 2,717 | |
Period of notice required for changes to share repurchase program | 30 days | ||
Maximum number of shares available for repurchase during any calendar year, as percentage of common stock outstanding at end of prior year | 5.00% | ||
Repurchase of common stock | $ | $ 338 | ||
Diluted earnings per share outstanding adjustment (in shares) | shares | 13,000 | ||
Anti-dilutive shares excluded from computation of diluted earnings per share (in shares) | shares | 9,000 | ||
ASU 2015-03 [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Deferred financing costs, net | $ | $ 103 | ||
Common Stock [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Repurchase of common stock (in shares) | shares | 35,970 | ||
Repurchase of common stock | $ | $ 0 | ||
Class A shares [Member] | Common Stock [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Repurchase of common stock (in shares) | shares | 35,970 | 0 | |
Repurchase of common stock | $ | $ 338 | ||
Repurchase of common stock, average price per share (in dollars per share) | $ / shares | $ 9.40 | ||
Class T shares [Member] | Common Stock [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Repurchase of common stock (in shares) | shares | 0 | 0 | |
Rental Revenue [Member] | Geographic Concentration Risk [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Number of metropolitan statistical areas in which Company owns rental property | metropolitan | 4 | ||
Rental Revenue [Member] | Geographic Concentration Risk [Member] | Houston-the Woodlands-Sugar Land, Texas MSA [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 15.70% | ||
Rental Revenue [Member] | Geographic Concentration Risk [Member] | Dallas-Fort Worth-Arlington, Texas MSA [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 12.80% | ||
Rental Revenue [Member] | Geographic Concentration Risk [Member] | Oklahoma City, Oklahoma MSA[Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 11.60% | ||
Rental Revenue [Member] | Geographic Concentration Risk [Member] | Cincinnati, Ohio-Kentucky-Indiana MSA [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 10.40% | ||
Rental Revenue [Member] | Customer Concentration Risk [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Number of tenants | tenants | 1 | ||
Rental Revenue [Member] | Customer Concentration Risk [Member] | Post Acute Medical, LLC [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 13.60% |
Real Estate Investments (Narrat
Real Estate Investments (Narrative) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)real_estate_investment | Mar. 31, 2015USD ($) | |
Real Estate Properties [Line Items] | ||
Number of real estate acquisitions | real_estate_investment | 5 | |
Acquisition fees and expenses | $ | $ 1,665 | $ 716 |
Acquisition fees and expenses capitalized | $ | $ 1,387 | |
Maximum [Member] | ||
Real Estate Properties [Line Items] | ||
Acquisition fee and expense reimbursement, as percentage of purchase price of properties | 6.00% | 6.00% |
Business Combinations [Member] | ||
Real Estate Properties [Line Items] | ||
Number of real estate acquisitions | real_estate_investment | 3 | |
Acquisition fees and expenses | $ | $ 1,529 | $ 622 |
Asset Acquisitions [Member] | ||
Real Estate Properties [Line Items] | ||
Number of real estate acquisitions | real_estate_investment | 2 |
Real Estate Investments (Schedu
Real Estate Investments (Schedule of Consideration Transferred For Investments In Real Estate) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Real Estate Properties [Line Items] | ||
Total purchase price of assets acquired | $ 85,403 | $ 28,383 |
Business Combinations [Member] | ||
Real Estate Properties [Line Items] | ||
Total purchase price of assets acquired | 55,150 | |
Asset Acquisitions [Member] | ||
Real Estate Properties [Line Items] | ||
Total purchase price of assets acquired | $ 30,253 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)buildingspropertyreal_estate_investment | Mar. 31, 2015USD ($) | |
Business Acquisition [Line Items] | ||
Number of real estate acquisitions | real_estate_investment | 5 | |
Total purchase price of assets acquired | $ 85,403 | $ 28,383 |
Revenues | 713 | |
Net loss | 1,212 | |
Acquisition fees and expenses | $ 1,665 | 716 |
Business Combinations [Member] | ||
Business Acquisition [Line Items] | ||
Ownership percentage | 100.00% | |
Number of real estate acquisitions | real_estate_investment | 3 | |
Number of properties acquired | property | 8 | |
Number of buildings acquired | buildings | 8 | |
Total purchase price of assets acquired | $ 55,150 | |
Acquisition fees and expenses | $ 1,529 | $ 622 |
Data Centers [Member] | Business Combinations [Member] | ||
Business Acquisition [Line Items] | ||
Number of properties acquired | property | 2 | |
Healthcare [Member] | Business Combinations [Member] | ||
Business Acquisition [Line Items] | ||
Number of properties acquired | property | 6 |
Business Combinations (Schedule
Business Combinations (Schedule of Business Combinations) (Details) | 3 Months Ended |
Mar. 31, 2016 | |
HPI - Edmond [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Jan. 20, 2016 |
Ownership Percentage | 100.00% |
HPI - Oklahoma City III [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Jan. 27, 2016 |
Ownership Percentage | 100.00% |
HPI - Oklahoma City IV [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Jan. 27, 2016 |
Ownership Percentage | 100.00% |
Alpharetta Data Center III [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Feb. 2, 2016 |
Ownership Percentage | 100.00% |
Flint Data Center [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Feb. 2, 2016 |
Ownership Percentage | 100.00% |
HPI - Newcastle [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Feb. 3, 2016 |
Ownership Percentage | 100.00% |
HPI - Oklahoma City V [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Feb. 11, 2016 |
Ownership Percentage | 100.00% |
HPI - Oklahoma City VI [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Mar. 7, 2016 |
Ownership Percentage | 100.00% |
Business Combinations (Schedu38
Business Combinations (Schedule of Allocation of Fair Value of Business Combinations) (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Business Combinations [Abstract] | |
Land | $ 6,970 |
Buildings and improvements | 40,684 |
In-place leases | 6,170 |
Tenant improvements | 1,326 |
Total assets acquired | $ 55,150 |
Business Combinations (Schedu39
Business Combinations (Schedule of Business Combinations on a Pro Forma Basis) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Pro forma basis: | ||
Revenues | $ 11,855 | $ 9,541 |
Net income attributable to common stockholders | $ 3,798 | $ 3,286 |
Net income per common share attributable to common stockholders: | ||
Basic (in dollars per share) | $ 0.07 | $ 0.06 |
Diluted (in dollars per share) | $ 0.07 | $ 0.06 |
Acquired Intangible Assets, N40
Acquired Intangible Assets, Net (Schedule of Acquired Intangible Assets, Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Acquired Intangible Assets, Net [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 59,620 | $ 54,633 |
Acquired intangible asset, accumulated amortization | $ 3,189 | $ 2,007 |
Acquired intangible asset, weighted average remaining life | 14 years 4 months 24 days | 15 years 1 month 6 days |
In-place leases [Member] | ||
Acquired Intangible Assets, Net [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 58,772 | $ 53,776 |
Acquired intangible asset, accumulated amortization | $ 3,139 | $ 1,967 |
Acquired intangible asset, weighted average remaining life | 13 years 10 months 24 days | 14 years 6 months |
Above-market leases [Member] | ||
Acquired Intangible Assets, Net [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 215 | $ 222 |
Acquired intangible asset, accumulated amortization | $ 39 | $ 32 |
Acquired intangible asset, weighted average remaining life | 8 years 2 months 12 days | 8 years 4 months 24 days |
Ground lease interest [Member] | ||
Acquired Intangible Assets, Net [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 633 | $ 635 |
Acquired intangible asset, accumulated amortization | $ 11 | $ 9 |
Acquired intangible asset, weighted average remaining life | 67 years 7 months 6 days | 67 years 9 months 18 days |
Other Assets (Schedule of Other
Other Assets (Schedule of Other Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Other Assets [Abstract] | ||
Deferred financing costs, related to the revolver portion of the secured credit facility, net of accumulated amortization of $999 and $802, respectively | $ 2,726 | $ 2,717 |
Real estate escrow deposits | 843 | 443 |
Restricted cash held in escrow | 1,697 | 1,927 |
Tenant receivable | 2,566 | 2,065 |
Straight-line rent receivable | 3,628 | 2,462 |
Prepaid and other assets | 810 | 604 |
Total other assets | 12,270 | 10,218 |
Deferred financing costs, accumulated amortization | $ 999 | $ 802 |
Future Minimum Rent (Schedule o
Future Minimum Rent (Schedule of Future Minimum Rental Income from Non-Cancelable Operating Leases) (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Leases [Abstract] | |
Nine months ending December 31, 2016 | $ 27,647 |
2,017 | 37,361 |
2,018 | 37,996 |
2,019 | 38,403 |
2,020 | 37,327 |
Thereafter | 395,572 |
Total | $ 574,306 |
Credit Facility (Details)
Credit Facility (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)property | Mar. 31, 2015USD ($) | |
Line of Credit Facility [Abstract] | ||
Proceeds from credit facility | $ 20,000 | $ 2,000 |
Credit facility, increase in borrowing base availability | $ 57,555 | |
Credit facility, number of properties added to aggregate pool availability | property | 9 | |
Credit facility, total pool availability | $ 248,162 | |
Credit facility, outstanding balance | 110,000 | |
Credit facility, amount remaining to be drawn | $ 138,162 |
Intangible Lease Liabilities,44
Intangible Lease Liabilities, Net (Schedule of Intangible Lease Liabilities, Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Intangible Lease Liabilities, Net [Abstract] | ||
Below-market leases, net of accumulated amortization of $232 and $98, respectively (with a weighted average remaining life of 14.3 years and 14.5 years, respectively) | $ 7,275 | $ 7,409 |
Below-market leases, accumulated amortization | $ 232 | $ 98 |
Below market leases, weighted average remaining life | 14 years 3 months 18 days | 14 years 6 months |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Mar. 31, 2016case |
Commitments and Contingencies Disclosure [Abstract] | |
Number of pending legal proceedings to which the Company is a party | 0 |
Related-Party Transactions an46
Related-Party Transactions and Arrangements (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Accounts payable due to affiliates | $ 875,000 | $ 741,000 | |
Period needed to issue Class B Units | 30 days | ||
Cumulative, pretax, non-compounded annual return rate to investors | 6.00% | ||
Asset management fees | $ 955,000 | $ 205,000 | |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | |||
Related Party Transaction [Line Items] | |||
Estimated organization and offering costs reimbursement, as percentage of gross offering proceeds | 1.25% | ||
Offering costs incurred by Advisor on Company's behalf | $ 9,206,000 | ||
Acquisition fees incurred | $ 2,233,000 | 568,000 | |
Maximum brokerage fees paid by Company, as percentage of contract sales price | 6.00% | ||
Disposition fees incurred | $ 0 | 0 | |
Percentage of remaining net sales proceeds Advisor will receive after investors receive return | 15.00% | ||
Subordinated sale fees | $ 0 | 0 | |
Listing fee, percentage | 15.00% | ||
Subordinated incentive listing fees | $ 0 | 0 | |
Distribution percentage upon termination of Advisory agreement | 15.00% | ||
Subordinated termination fee | $ 0 | 0 | |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Reimbursable organization and offering costs, as percentage of gross offering proceeds | 15.00% | ||
Disposition fee, as percentage of contract sales price | 1.00% | ||
Percentage of brokerage commission paid by Company for properties sold that required a substantial amount of services | 50.00% | ||
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Offering Costs [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts payable due to affiliates | $ 287,000 | $ 250,000 | |
Carter Validus Advisors II, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Acquisition fee, as percentage of contract purchase price of each property or asset acquired | 2.00% | ||
Acquisition fee, as percentage of amount advanced on mortgage loan | 2.00% | ||
Estimated acquisition expense reimbursement, as percentage of purchase price of property and real estate-related investments | 0.75% | ||
Monthly asset management fee, as percentage of gross assets | 0.0625% | ||
Asset management fees | $ 955,000 | $ 205,000 | |
Class B units issued | 0 | 0 | |
Operating expenses allocated to the Company by the advisor | $ 278,000 | $ 163,000 | |
Carter Validus Advisors II, LLC [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Operating expense reimbursement, percentage of average invested assets | 2.00% | ||
Operating expense reimbursement, percentage of net income | 25.00% | ||
Carter Validus Real Estate Management Services II, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Property management and leasing fees, as percentage of gross revenues from properties managed | 3.00% | ||
Oversight fee, as percentage of gross revenues from properties managed | 1.00% | ||
Property management fees incurred | $ 298,000 | 60,000 | |
Leasing commissions incurred | 0 | 0 | |
SC Distributors, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Selling commissions and dealer manager fees | $ 8,004,000 | 9,889,000 | |
Total underwriting compensation percentage that will terminate distribution fees, as percentage of gross proceeds from primary portion of offering | 10.00% | ||
Distribution and servicing fees incurred | $ 22,000 | $ 0 | |
SC Distributors, LLC [Member] | Class A shares [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Selling commission, as percentage of gross offering proceeds | 7.00% | ||
SC Distributors, LLC [Member] | Class T shares [Member] | |||
Related Party Transaction [Line Items] | |||
Daily distribution and servicing fee accrued, as percentage of purchase price per share | 0.00274% | ||
SC Distributors, LLC [Member] | Class T shares [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Selling commission, as percentage of gross offering proceeds | 3.00% | ||
SC Distributors, LLC [Member] | Class A and T shares [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Dealer manager fee, as percentage of gross offering proceeds | 3.00% |
Related-Party Transactions an47
Related-Party Transactions and Arrangements (Schedule of Accounts Payable Due to Affiliates) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | $ 875 | $ 741 |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Asset Management Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | 363 | 290 |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | General And Administrative Costs [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | 112 | 96 |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Offering Costs [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | 287 | 250 |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Acquisition Expenses and Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | 6 | 4 |
Carter Validus Real Estate Management Services II, LLC [Member] | Property Management Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | $ 107 | $ 101 |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 3 Months Ended | |
Mar. 31, 2016USD ($)segment | Mar. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable business segments | segment | 2 | |
Revenues | $ 11,424,000 | $ 2,310,000 |
Intersegment Elimination [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 0 | $ 0 |
Segment Reporting (Schedule of
Segment Reporting (Schedule of Information for Reportable Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Rental expenses | $ (1,684) | $ (135) |
Income from operations | 2,489 | 91 |
General and administrative expenses | (765) | (479) |
Acquisition related expenses | (1,665) | (716) |
Asset management fees | (955) | (205) |
Depreciation and amortization | (3,866) | (684) |
Interest expense, net | (879) | (370) |
Net income (loss) attributable to common stockholders | 1,610 | (279) |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Rental and tenant reimbursement revenue | 11,424 | 2,310 |
Rental expenses | (1,684) | (135) |
Income from operations | 9,740 | 2,175 |
Operating Segments [Member] | Data Centers [Member] | ||
Segment Reporting Information [Line Items] | ||
Rental and tenant reimbursement revenue | 1,537 | 0 |
Rental expenses | (254) | 0 |
Income from operations | 1,283 | 0 |
Operating Segments [Member] | Healthcare [Member] | ||
Segment Reporting Information [Line Items] | ||
Rental and tenant reimbursement revenue | 9,887 | 2,310 |
Rental expenses | (1,430) | (135) |
Income from operations | $ 8,457 | $ 2,175 |
Segment Reporting (Schedule o50
Segment Reporting (Schedule of Assets by Reportable Segments) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets by segment [Line Items] | ||
Total assets | $ 609,978 | $ 506,627 |
Operating Segments [Member] | Data Centers [Member] | ||
Assets by segment [Line Items] | ||
Total assets | 88,048 | 44,207 |
Operating Segments [Member] | Healthcare [Member] | ||
Assets by segment [Line Items] | ||
Total assets | 467,367 | 427,878 |
All Other [Member] | ||
Assets by segment [Line Items] | ||
Total assets | $ 54,563 | $ 34,542 |
Segment Reporting (Schedule o51
Segment Reporting (Schedule of Capital Additions and Acquisitions by Reportable Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Capital additions and acquisitions by segment [Line Items] | ||
Total capital additions and acquisitions | $ 85,650 | $ 28,395 |
Operating Segments [Member] | Data Centers [Member] | ||
Capital additions and acquisitions by segment [Line Items] | ||
Total capital additions and acquisitions | 44,161 | 0 |
Operating Segments [Member] | Healthcare [Member] | ||
Capital additions and acquisitions by segment [Line Items] | ||
Total capital additions and acquisitions | $ 41,489 | $ 28,395 |
Accounts Payable and Other Li52
Accounts Payable and Other Liabilities (Schedule of Accounts Payable and Other Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 1,854 | $ 2,283 |
Accrued interest expense | 326 | 221 |
Accrued property taxes | 764 | 505 |
Distributions payable to stockholders | 3,060 | 2,548 |
Tenant deposits | 2,423 | 1,848 |
Deferred rental income | 942 | 839 |
Total accounts payable and other liabilities | $ 9,369 | $ 8,244 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | May. 09, 2016 | May. 05, 2016 | May. 02, 2016 | Apr. 01, 2016 | Mar. 31, 2016 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | May. 29, 2014 |
Subsequent Event [Line Items] | |||||||||
Distributions paid in cash | $ 3,359 | $ 534 | |||||||
Common stock issued through distribution reinvestment plan | $ 4,626 | $ 776 | |||||||
Distributions declared per common share (in dollars per share) | $ 0.16 | $ 0.16 | |||||||
Common stock, shares outstanding | 58,448,510 | 58,448,510 | 48,457,191 | ||||||
Common Stock [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock issued through distribution reinvestment plan | $ 5 | ||||||||
Common stock, shares outstanding | 58,448,510 | 58,448,510 | 48,457,191 | ||||||
Class A shares [Member] | Common Stock [Member] | Offering [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock offering, price per share (in dollars per share) | $ 10 | ||||||||
Class T shares [Member] | Common Stock [Member] | Offering [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock offering, price per share (in dollars per share) | $ 9.574 | ||||||||
Class A and T shares [Member] | Common Stock [Member] | Offering [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock offering, shares issued | 58,514,000 | ||||||||
Common stock offering, gross proceeds raised | $ 580,052 | ||||||||
Common stock offering, value remaining | $ 1,769,948 | $ 1,769,948 | |||||||
Subsequent Event [Member] | Carter Validus Real Estate Management Services II, LLC [Member] | Management Agreement [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Term of agreement from effective date | 1 year | ||||||||
Effective date of agreement | May 19, 2016 | ||||||||
Subsequent Event [Member] | Carter Validus Advisors II, LLC [Member] | Advisory Agreement [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Term of agreement from effective date | 1 year | ||||||||
Effective date of agreement | Jun. 10, 2016 | ||||||||
Subsequent Event [Member] | Class A and T shares [Member] | Common Stock [Member] | Offering [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock offering, shares issued | 62,930,000 | ||||||||
Common stock offering, gross proceeds raised | $ 623,045 | ||||||||
Common stock offering, value remaining | $ 1,726,955 | ||||||||
Subsequent Event [Member] | March 1, 2016 To March 31, 2016 [Member] | Class A shares [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate distributions paid | $ 2,979 | ||||||||
Distributions paid in cash | 1,293 | ||||||||
Common stock issued through distribution reinvestment plan | 1,686 | ||||||||
Subsequent Event [Member] | March 1, 2016 To March 31, 2016 [Member] | Class T shares [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate distributions paid | 81 | ||||||||
Distributions paid in cash | 28 | ||||||||
Common stock issued through distribution reinvestment plan | $ 53 | ||||||||
Subsequent Event [Member] | April 1, 2016 To April 30, 2016 [Member] | Class A shares [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate distributions paid | $ 3,006 | ||||||||
Distributions paid in cash | 1,303 | ||||||||
Common stock issued through distribution reinvestment plan | 1,703 | ||||||||
Subsequent Event [Member] | April 1, 2016 To April 30, 2016 [Member] | Class T shares [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate distributions paid | 132 | ||||||||
Distributions paid in cash | 43 | ||||||||
Common stock issued through distribution reinvestment plan | $ 89 | ||||||||
Subsequent Event [Member] | June 1, 2016 To August 31, 2016 [Member] | Class A shares [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of days, distribution calculation | 366 days | ||||||||
Distributions declared per common share (in dollars per share) | $ 0.001748634 | ||||||||
Annualized distribution rate | 6.40% | ||||||||
Common stock offering, price per share (in dollars per share) | $ 10 | ||||||||
Subsequent Event [Member] | June 1, 2016 To August 31, 2016 [Member] | Class T shares [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of days, distribution calculation | 366 days | ||||||||
Distributions declared per common share (in dollars per share) | $ 0.001487402 | ||||||||
Annualized distribution rate | 5.68% | ||||||||
Common stock offering, price per share (in dollars per share) | $ 9.574 |