Document And Entity Information
Document And Entity Information - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Nov. 10, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
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 | 78,134 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Real estate: | ||
Land | $ 89,857 | $ 48,882 |
Buildings and improvements, less accumulated depreciation of $14,240 and $5,262, respectively | 527,802 | 361,632 |
Construction in progress | 13,701 | 0 |
Total real estate, net | 631,360 | 410,514 |
Cash and cash equivalents | 49,090 | 31,262 |
Acquired intangible assets, less accumulated amortization of $6,003 and $2,007, respectively | 67,621 | 54,633 |
Other assets | 22,815 | 10,218 |
Total assets | 770,886 | 506,627 |
Liabilities: | ||
Credit facility, net of deferred financing costs of $294 and $103, respectively | 134,706 | 89,897 |
Accounts payable due to affiliates | 5,760 | 741 |
Accounts payable and other liabilities | 12,979 | 8,244 |
Intangible lease liabilities, less accumulated amortization of $500 and $98, respectively | 7,007 | 7,409 |
Total liabilities | 160,452 | 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; 75,580,055 and 48,488,734 shares issued, respectively; 75,333,847 and 48,457,191 shares outstanding, respectively | 753 | 485 |
Additional paid-in capital | 659,651 | 425,910 |
Accumulated distributions in excess of earnings | (49,959) | (26,061) |
Accumulated other comprehensive loss | (13) | 0 |
Total stockholders’ equity | 610,432 | 400,334 |
Noncontrolling interests | 2 | 2 |
Total equity | 610,434 | 400,336 |
Total liabilities and stockholders’ equity | $ 770,886 | $ 506,627 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Buildings and improvements, accumulated depreciation | $ 14,240 | $ 5,262 |
Acquired intangible assets, accumulated amortization | 6,003 | 2,007 |
Credit facility, deferred financing costs | 294 | 103 |
Intangible lease liabilities, accumulated amortization | $ 500 | $ 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 | 75,580,055 | 48,488,734 |
Common stock, shares outstanding | 75,333,847 | 48,457,191 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue: | ||||
Rental revenue | $ 12,183 | $ 6,230 | $ 33,092 | $ 11,419 |
Tenant reimbursement revenue | 1,411 | 654 | 4,129 | 842 |
Total revenue | 13,594 | 6,884 | 37,221 | 12,261 |
Expenses: | ||||
Rental expenses | 1,794 | 827 | 5,055 | 1,149 |
General and administrative expenses | 836 | 439 | 2,358 | 1,366 |
Acquisition related expenses | 1,821 | 3,760 | 5,432 | 7,287 |
Asset management fees | 1,227 | 639 | 3,240 | 1,133 |
Depreciation and amortization | 4,782 | 2,438 | 12,948 | 4,048 |
Total expenses | 10,460 | 8,103 | 29,033 | 14,983 |
Income (loss) from operations | 3,134 | (1,219) | 8,188 | (2,722) |
Interest expense, net | 626 | 542 | 2,237 | 1,203 |
Net income (loss) attributable to common stockholders | 2,508 | (1,761) | 5,951 | (3,925) |
Other comprehensive income (loss): | ||||
Unrealized income (loss) on interest rate swaps, net | 88 | 0 | (13) | 0 |
Other comprehensive income (loss) attributable to common stockholders | 88 | 0 | (13) | 0 |
Comprehensive income (loss) attributable to common stockholders | $ 2,596 | $ (1,761) | $ 5,938 | $ (3,925) |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 71,852,230 | 34,794,832 | 63,044,148 | 23,573,522 |
Diluted (in shares) | 71,866,949 | 34,794,832 | 63,060,086 | 23,573,522 |
Net income (loss) per common share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.03 | $ (0.05) | $ 0.09 | $ (0.17) |
Diluted (in dollars per share) | 0.03 | (0.05) | 0.09 | (0.17) |
Distributions declared per common share (in dollars per share) | $ 0.16 | $ 0.16 | $ 0.47 | $ 0.48 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Distributions in Excess of Earnings [Member] | Accumulated Other Comprehensive Loss [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) | $ 0 | $ 400,334 | $ 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock (in shares) | 25,368,284 | ||||||
Issuance of common stock | 248,251 | $ 253 | 247,998 | 248,251 | 0 | ||
Issuance of common stock under the distribution reinvestment plan (in shares) | 1,718,538 | ||||||
Issuance of common stock under the distribution reinvestment plan | 16,285 | $ 17 | 16,268 | 16,285 | 0 | ||
Vesting of restricted common stock (in shares) | 4,500 | ||||||
Vesting of restricted common stock | 41 | 41 | 41 | ||||
Commissions on sale of common stock and related dealer manager fees | (19,938) | (19,938) | (19,938) | 0 | |||
Distribution and servicing fees | (4,462) | (4,462) | (4,462) | 0 | |||
Other offering costs | (4,125) | (4,125) | (4,125) | 0 | |||
Repurchase of common stock (in shares) | (214,666) | ||||||
Repurchase of common stock | (2,043) | $ (2) | (2,041) | (2,043) | 0 | ||
Distributions declared to common stockholders | (29,849) | (29,849) | (29,849) | 0 | |||
Other comprehensive loss | (13) | (13) | (13) | 0 | |||
Net income | $ 5,951 | 5,951 | 5,951 | 0 | |||
Balance, (in shares) at Sep. 30, 2016 | 75,333,847 | 75,333,847 | |||||
Balance, at Sep. 30, 2016 | $ 610,434 | $ 753 | $ 659,651 | $ (49,959) | $ (13) | $ 610,432 | $ 2 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 5,951 | $ (3,925) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 12,948 | 4,048 |
Amortization of deferred financing costs | 703 | 481 |
Amortization of above-market leases | 27 | 20 |
Amortization of intangible lease liabilities | (402) | (44) |
Straight-line rent | (4,344) | (1,549) |
Stock-based compensation | 41 | 23 |
Ineffectiveness of interest rate swap | (49) | 0 |
Changes in operating assets and liabilities: | ||
Accounts payable and other liabilities | 1,042 | 3,380 |
Accounts payable due to affiliates | 230 | 266 |
Other assets | (610) | (1,800) |
Net cash provided by operating activities | 15,537 | 900 |
Cash flows from investing activities: | ||
Investment in real estate | (239,729) | (257,138) |
Capital expenditures | (4,380) | (640) |
Escrow funds, net | (2,490) | 478 |
Real estate deposits, net | (5,287) | (281) |
Net cash used in investing activities | (251,886) | (257,581) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 248,251 | 311,955 |
Proceeds from credit facility | 115,000 | 72,000 |
Payments on credit facility | (70,000) | (39,500) |
Payments of deferred financing costs | (767) | (581) |
Repurchases of common stock | (2,043) | (155) |
Offering costs on issuance of common stock | (23,979) | (36,618) |
Distributions to stockholders | (12,285) | (3,759) |
Net cash provided by financing activities | 254,177 | 303,342 |
Net change in cash and cash equivalents | 17,828 | 46,661 |
Cash and cash equivalents - Beginning of period | 31,262 | 3,694 |
Cash and cash equivalents - End of period | 49,090 | 50,355 |
Supplemental cash flow disclosure: | ||
Interest paid, net of interest capitalized of $293 and $0, respectively | 1,887 | 600 |
Supplemental disclosure of non-cash transactions: | ||
Common stock issued through distribution reinvestment plan | 16,285 | 5,795 |
Distribution and servicing fees accrued | 4,226 | 0 |
Liability assumed at acquisition | 1,236 | 0 |
Accrued capital expenditures | 1,469 | 0 |
Net unrealized loss on interest rate swap | $ (13) | $ 0 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 293 | $ 0 |
Organization and Business Opera
Organization and Business Operations | 9 Months Ended |
Sep. 30, 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. As of September 30, 2016 , the Company had issued approximately 75,573,000 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 $746,094,000 , before selling commissions and dealer manager fees of approximately $64,577,000 , distribution and servicing fees of approximately $4,462,000 and other offering costs of approximately $14,383,000 . As of September 30, 2016 , the Company had approximately $1,603,906,000 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 notes receivable. The Company expects real estate-related notes receivable originations and investments to be focused on first mortgage loans, but also may include real estate-related bridge loans, mezzanine loans and securitized notes receivable. As of September 30, 2016 , the Company owned 30 real estate investments, consisting of 43 properties, located in 24 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 | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 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, or VIE, and voting interest entity, or 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 September 30, 2016 , the Company had cash on deposit, including restricted cash, in certain financial institutions that had deposits in excess of current federally insured levels; however, the Company has not experienced any losses in such accounts. The Company limits its cash investments to financial institutions with high credit standings; 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 of or lack of access to cash in its accounts. Concentration of credit risk with respect to accounts receivable from tenants is limited. As of September 30, 2016 , the Company owned real estate investments in 24 MSAs and one µSA, three MSAs of which accounted for 10.0% or more of contractual rental revenue. Real estate investments located in the Oklahoma City, Oklahoma MSA, the Houston-The Woodlands-Sugar Land, Texas MSA, and the Dallas-Fort Worth-Arlington, Texas MSA accounted for 15.9% , 14.5% , and 11.9% , respectively, of contractual rental revenue for the nine months ended September 30, 2016 . As of September 30, 2016 , the Company had two exposures to tenant concentration that accounted for 10.0% or more of contractual rental revenue. The leases with tenants under common control of the guarantor Post Acute Medical, LLC and the leases with Healthcare Partners Investments, LLC accounted for 12.6% and 11.4% , respectively, of contractual rental revenue for the nine months ended September 30, 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. 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. 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 repurchases of shares of common stock 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 nine months ended September 30, 2016 , the Company received valid repurchase requests related to 214,666 Class A shares of common stock, all of which were repurchased in full for an aggregate purchase price of approximately $2,043,000 (an average of $9.52 per share). During the nine months ended September 30, 2015 , the Company received valid repurchase requests related to 15,511 Class A shares of common stock, all of which were repurchased in full for an aggregate purchase price of approximately $155,000 (an average of $9.99 per share) . During the nine months ended September 30, 2016 and 2015 , the Company did not receive repurchase requests related to Class T shares. Fair Value Accounting Standards Codification, or ASC, 820, Fair Value Measurements and Disclosures , or ASC 820, defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. ASC 820 emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement. Fair value is defined by ASC 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). Level 3—Unobservable inputs, only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability. The following describes the methods the Company used to estimate the fair value of the Company’s financial assets and liabilities: Cash and cash equivalents, other assets, accounts payable due to affiliates and accounts payable and other liabilities —The Company considers the carrying values of these financial instruments, assets and liabilities to approximate fair value because of the short period of time between origination of the instruments and their expected realization. Secured credit facility —The outstanding principal of the secured credit facility – variable was $110,000,000 and $90,000,000 , which approximated its fair value as of September 30, 2016 and December 31, 2015 , respectively. The interest on the secured credit facility – variable is calculated at the London Interbank Offered Rate, or LIBOR, plus an applicable margin. The interest rate resets to market on a monthly basis. The fair value of the Company's secured credit facility – variable is estimated based on the interest rates currently offered to the Company by financial institutions. The estimated fair value of the secured credit facility – variable rate fixed through an interest rate swap agreement (Level 2) was approximately $24,777,000 as of September 30, 2016 as compared to the outstanding principal of $25,000,000 as of September 30, 2016 . Derivative instruments —Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amount the Company could realize, or be liable for, on disposition of the financial instruments. The Company has determined that the majority of the inputs used to value its interest rate swaps fall within Level 2 of the fair value hierarchy. The credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the respective counterparty. However, as of September 30, 2016 , the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions, and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy. In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2016 (amounts in thousands): September 30, 2016 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 36 $ — $ 36 Total assets at fair value $ — $ 36 $ — $ 36 Liabilities: Derivative liabilities $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — The Company did not have financial assets and liabilities required to be measured at fair value as of December 31, 2015 . Derivative Instruments and Hedging Activities As required by ASC 815, Derivatives and Hedging , or ASC 815, the Company records all derivative instruments as assets and liabilities in the statement of financial position at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For derivative instruments not designated as hedging instruments, the income or loss is recognized in the condensed consolidated statements of comprehensive income (loss) during the current period. The Company is exposed to variability in expected future cash flows that are attributable to interest rate changes in the normal course of business. The Company’s primary strategy in entering into derivative contracts is to add stability to future cash flows by managing its exposure to interest rate movements. The Company utilizes derivative instruments, including interest rate swaps, to effectively convert some its variable rate debt to fixed rate debt. The Company does not enter into derivative instruments for speculative purposes. In accordance with ASC 815, the Company designates interest rate swap contracts as cash flow hedges of floating-rate borrowings. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the income or loss on the derivative instrument is reported as a component of other comprehensive income (loss) in the condensed consolidated statements of comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transaction and the same period during which the hedged transaction affects earnings. The ineffective portion of the income or loss on the derivative instrument is recognized in the condensed consolidated statements of comprehensive income (loss) during the current period. In accordance with the fair value measurement guidance ASU 2011-04, Fair Value Measurement , the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. 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 and nine months ended September 30, 2016 , diluted earnings per share reflected the effect of approximately 15,000 and 16,000 , respectively, of non-vested shares of restricted Class A common stock that were outstanding as of such period. For the three and nine months ended September 30, 2015 , there were 15,750 shares of non-vested restricted Class A 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. 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 ASUs 2014-09 and 2016-08 will have on the Company’s condensed consolidated financial statements. On June 16, 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses, or ASU 2016-13. ASU 2016-13 requires more timely recording of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology in current GAAP. ASU 2016-13 is effective for fiscal years beginning after, and interim periods within, December 15, 2019. Early adoption is permitted for fiscal years beginning after, and interim periods within, December 15, 2018. The Company is in the process of evaluating the impact ASU 2016-13 will have on the Company’s condensed consolidated financial statements. On August 26, 2016, the FASB issued ASU 2016-15, Statement of Cash Flows , or ASU 2016-15. ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 addresses eight classification issues related to the statement of cash flows: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon bonds; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Entities should apply this ASU using a retrospective transition method to each period presented. The Company is in the process of evaluating the impact ASU 2016-15 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 | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Real Estate Investments | Real Estate Investments During the nine months ended September 30, 2016 , the Company purchased 15 real estate properties, of which 12 were determined to be business combinations and three 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 real estate properties acquired during the nine months ended September 30, 2016 (amounts in thousands): Nine Months Ended Investments in real estate: Purchase price of business combinations (1) $ 207,447 Purchase price of asset acquisitions 33,518 Total purchase price of real estate investments acquired $ 240,965 (1) In connection with one business combination, the Company assumed a $1,236,000 contractual liability during the nine months ended September 30, 2016 . 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 comprehensive 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 $1,684,000 and $3,760,000 for the three months ended September 30, 2016 and 2015 , respectively, and $5,052,000 and $7,287,000 for the nine months ended September 30, 2016 and 2015 , respectively. The Company capitalized acquisition fees and expenses of approximately $2,037,000 and $234,000 for the nine months ended September 30, 2016 and 2015 , respectively. The Company did not capitalize any acquisition fees and expenses for the three months ended September 30, 2016 and 2015 . 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 nine months ended September 30, 2016 and 2015 , acquisition fees and costs did not exceed 6.0% of the contract purchase price of the Company's acquisitions during such periods. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations During the nine months ended September 30, 2016 , the Company completed the acquisition of 100% of the interests in 12 real estate properties ( four data centers and eight healthcare properties) that were determined to be business combinations. The aggregate purchase price of the acquisitions determined to be business combinations was $207,447,000 , plus closing costs. The following table summarizes the acquisitions determined to be business combinations during the nine months ended September 30, 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% HPI — Oklahoma City VII 06/22/2016 100% Somerset Data Center 06/29/2016 100% Integris Lakeside Women's Hospital 06/30/2016 100% AT&T Hawthorne Data Center 09/27/2016 100% Results of operations for the acquisitions determined to be business combinations are reflected in the accompanying condensed consolidated statements of comprehensive income (loss) for three and nine months ended September 30, 2016 for the period subsequent to the acquisition date of each property. For the period from the first acquisition date through September 30, 2016 , the Company recorded $4,588,000 in revenues and a net loss of $3,286,000 for its business combination acquisitions. The following table summarizes management’s preliminary allocation of the fair value of the acquisitions determined to be business combinations during the nine months ended September 30, 2016 (amounts in thousands): Total Land $ 29,012 Buildings and improvements 162,340 In-place leases 14,664 Tenant improvements 1,431 Total assets acquired $ 207,447 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, except per share amounts, unaudited): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Pro forma basis: Revenues $ 15,017 $ 13,050 $ 43,538 $ 37,081 Net income attributable to common stockholders $ 4,471 $ 4,929 $ 13,383 $ 1,792 Net income per common share attributable to common stockholders: Basic $ 0.06 $ 0.07 $ 0.18 $ 0.03 Diluted $ 0.06 $ 0.07 $ 0.18 $ 0.03 The condensed pro forma consolidated financial statements for the three and nine months ended September 30, 2016 and 2015 include pro forma adjustments related to the acquisitions during 2016 and 2015 . The pro forma information for the three and nine months ended September 30, 2016 was adjusted to exclude approximately $1,684,000 and $5,052,000 , 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2016 and December 31, 2015 (amounts in thousands, except weighted average life amounts): September 30, 2016 December 31, 2015 In-place leases, net of accumulated amortization of $5,935 and $1,967, respectively (with a weighted average remaining life of 13.1 years and 14.5 years, respectively) $ 66,791 $ 53,776 Above-market leases, net of accumulated amortization of $52 and $32, respectively (with a weighted average remaining life of 7.7 years and 8.4 years, respectively) 202 222 Ground lease interest, net of accumulated amortization of $16 and $9, respectively (with a weighted average remaining life of 67.0 years and 67.8 years, respectively) 628 635 $ 67,621 $ 54,633 The aggregate weighted average remaining life of the acquired intangible assets was 13.6 years and 15.1 years as of September 30, 2016 and December 31, 2015 , respectively. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2016 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands): September 30, 2016 December 31, 2015 Deferred financing costs, related to the revolver portion of the secured credit facility, net of accumulated amortization of $1,488 and $802, respectively $ 2,590 $ 2,717 Real estate escrow deposits 5,730 443 Restricted cash held in escrow 4,417 1,927 Tenant receivables 2,107 2,065 Straight-line rent receivable 6,806 2,462 Prepaid and other assets 1,129 604 Derivative assets 36 — $ 22,815 $ 10,218 |
Future Minimum Rent
Future Minimum Rent | 9 Months Ended |
Sep. 30, 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 rent to be received from the Company’s investments in real estate assets under non-cancelable operating leases for the three 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 Three months ending December 31, 2016 $ 12,009 2017 48,533 2018 49,396 2019 50,013 2020 49,153 Thereafter 494,425 $ 703,529 |
Credit Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility The Company's debt outstanding as of September 30, 2016 and December 31, 2015 consisted of the following (amounts in thousands): September 30, 2016 December 31, 2015 Secured credit facility: Revolving line of credit $ 85,000 $ 65,000 Term loan 50,000 25,000 Total secured credit facility, principal amount outstanding 135,000 90,000 Unamortized deferred financing costs related to the term loan secured credit facility (294 ) (103 ) Total secured credit facility, net of deferred financing costs $ 134,706 $ 89,897 Significant activities regarding the secured credit facility since December 31, 2015 include: • During the nine months ended September 30, 2016 , the Company drew $115,000,000 and repaid $70,000,000 on the secured credit facility. • During the nine months ended September 30, 2016 , the Company increased the borrowing base availability under the secured credit facility by $81,120,000 by adding 14 properties to the aggregate pool availability. • During the nine months ended September 30, 2016 , the Company entered into an interest rate swap agreement to effectively fix LIBOR on $25,000,000 of the term loan of the secured credit facility. • On September 30, 2016, the Operating Partnership and certain of the Company's subsidiaries amended certain agreements related to the secured credit facility to increase the maximum commitments available under the secured credit facility from $265,000,000 to an aggregate of up to $315,000,000 , consisting of a $265,000,000 revolving line of credit, with a maturity date of December 22, 2018, subject to the Operating Partnership’s right for two 12 -month extension periods, and a $50,000,000 term loan, with a maturity date of December 22, 2019, subject to the Operating Partnership’s right for one 12 -month extension period. Subject to certain conditions, the secured credit facility can be increased to $550,000,000 . • As of September 30, 2016 , the Company had a total pool availability under the secured credit facility of $252,479,000 and an aggregate outstanding principal balance of $135,000,000 . As of September 30, 2016 , $117,479,000 remained to be drawn on the secured credit facility. The principal payments due on the secured credit facility for the three 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 Three months ending December 31, 2016 $ — 2017 — 2018 85,000 2019 50,000 2020 — Thereafter — $ 135,000 |
Intangible Lease Liabilities, N
Intangible Lease Liabilities, Net | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Lease Liabilities, Net [Abstract] | |
Intangible Lease Liabilities, Net | Intangible Lease Liabilities, Net Intangible lease liabilities, net, consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands, except weighted average life amounts): September 30, 2016 December 31, 2015 Below-market leases, net of accumulated amortization of $500 and $98, respectively (with a weighted average remaining life of 13.8 years and 14.5 years, respectively) $ 7,007 $ 7,409 $ 7,007 $ 7,409 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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 September 30, 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2016 , the Advisor and its affiliates incurred approximately $11,732,000 on the Company’s behalf in offering costs. The Company accrued approximately $549,000 of other organization and offering expenses as of September 30, 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 September 30, 2016 and 2015 , the Company incurred approximately $1,590,000 and $2,673,000 , respectively, and for the nine months ended September 30, 2016 and 2015 , the Company incurred approximately $5,760,000 and $5,144,000 , 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 September 30, 2016 and 2015 , the Company incurred approximately $1,227,000 and $639,000 , respectively, and for the nine months ended September 30, 2016 and 2015 , the Company incurred approximately $3,240,000 and $1,133,000 , respectively, in asset management fees. As of September 30, 2016 , 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 monthly 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. For the three months ended September 30, 2016 and 2015 , the Company incurred approximately $353,000 and $174,000 , respectively, and for the nine months ended September 30, 2016 and 2015 , the Company incurred approximately $964,000 and $314,000 , respectively, in property management fees to the Property Manager, which are recorded in rental expenses in the accompanying condensed consolidated statements of comprehensive income (loss) . 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. As of September 30, 2016 , the Company has not incurred any leasing commissions to the Property Manager. For acting as general contractor and/or construction manager to supervise or coordinate projects or to provide major repairs or rehabilitation on our properties, the Company may pay the Property Manager up to 5.0% of the cost of the projects, repairs and/or rehabilitation, as applicable, or construction management fees. For the three and nine months ended September 30, 2016 , the Company incurred $265,000 in construction management fees to the Property Manager. For the three and nine months ended September 30, 2015 , the Company did not incur construction management fees to the Property Manager. Construction management fees are capitalized in real estate, net in the accompanying condensed consolidated balance sheets . 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 September 30, 2016 and 2015 , the Advisor allocated approximately $337,000 and $223,000 , respectively, and for the nine months ended September 30, 2016 and 2015 , the Advisor allocated approximately $935,000 and $586,000 , respectively, in operating expenses to the Company, which are included as part of general and administrative expenses in the accompanying condensed consolidated statements of comprehensive 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. As of September 30, 2016 , the Company has not incurred 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. As of September 30, 2016 , the Company has not incurred 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, 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. As of September 30, 2016 , the Company has not incurred 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. As of September 30, 2016 , the Company has not incurred 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 September 30, 2016 and 2015 , the Company incurred approximately $4,994,000 and $8,285,000 , respectively, and for the nine months ended September 30, 2016 and 2015 , the Company incurred approximately $19,938,000 and $29,606,000 , respectively, in 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 most recent offering price per Class T share sold in the primary offering on a continuous basis from year to year; provided, however, that upon the termination of the primary offering, the distribution and servicing fee will accrue daily in an amount equal to 1/365th of 1.0% of the most recent estimated NAV per Class T share 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 quarter 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 and nine months ended September 30, 2016 , the Company incurred approximately $1,420,000 and $4,462,000 , respectively, in distribution and servicing fees to the Dealer Manager. For the three and nine months ended September 30, 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 September 30, 2016 and December 31, 2015 (amounts in thousands): Entity Fee September 30, 2016 December 31, 2015 Carter Validus Advisors II, LLC and its affiliates Asset management fees $ 443 $ 290 Carter Validus Real Estate Management Services II, LLC Property management fees 140 101 Carter Validus Real Estate Management Services II, LLC Construction management fees 265 — Carter Validus Advisors II, LLC and its affiliates General and administrative costs 134 96 Carter Validus Advisors II, LLC and its affiliates Offering costs 549 250 SC Distributors, LLC Distribution and servicing fees 4,226 — Carter Validus Advisors II, LLC and its affiliates Acquisition expenses and fees 3 4 $ 5,760 $ 741 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 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 and nine months ended September 30, 2016 and 2015 , is as follows (amounts in thousands): Data Centers Healthcare Three Months Ended Revenue: Rental and tenant reimbursement revenue $ 2,497 $ 11,097 $ 13,594 Expenses: Rental expenses (440 ) (1,354 ) (1,794 ) Segment net operating income $ 2,057 $ 9,743 11,800 Expenses: General and administrative expenses (836 ) Acquisition related expenses (1,821 ) Asset management fees (1,227 ) Depreciation and amortization (4,782 ) Income from operations 3,134 Interest expense, net (626 ) Net income attributable to common stockholders $ 2,508 Data Centers Healthcare Three Months Ended Revenue: Rental and tenant reimbursement revenue $ 543 $ 6,341 $ 6,884 Expenses: Rental expenses (90 ) (737 ) (827 ) Segment net operating income $ 453 $ 5,604 6,057 Expenses: General and administrative expenses (439 ) Acquisition related expenses (3,760 ) Asset management fees (639 ) Depreciation and amortization (2,438 ) Loss from operations (1,219 ) Interest expense, net (542 ) Net loss attributable to common stockholders $ (1,761 ) Data Centers Healthcare Nine Months Ended Revenue: Rental and tenant reimbursement revenue $ 6,211 $ 31,010 $ 37,221 Expenses: Rental expenses (1,011 ) (4,044 ) (5,055 ) Segment net operating income $ 5,200 $ 26,966 32,166 Expenses: General and administrative expenses (2,358 ) Acquisition related expenses (5,432 ) Asset management fees (3,240 ) Depreciation and amortization (12,948 ) Income from operations 8,188 Interest expense, net (2,237 ) Net income attributable to common stockholders $ 5,951 Data Centers Healthcare Nine Months Ended Revenue: Rental and tenant reimbursement revenue $ 724 $ 11,537 $ 12,261 Expenses: Rental expenses (98 ) (1,051 ) (1,149 ) Segment net operating income $ 626 $ 10,486 11,112 Expenses: General and administrative expenses (1,366 ) Acquisition related expenses (7,287 ) Asset management fees (1,133 ) Depreciation and amortization (4,048 ) Loss from operations (2,722 ) Interest expense, net (1,203 ) Net loss attributable to common stockholders $ (3,925 ) Assets by each reportable segment as of September 30, 2016 and December 31, 2015 are as follows (amounts in thousands): September 30, 2016 December 31, 2015 Assets by segment: Data centers $ 179,629 $ 44,207 Healthcare 533,786 427,878 All other 57,471 34,542 Total assets $ 770,886 $ 506,627 Capital additions and acquisitions by reportable segments for the nine months ended September 30, 2016 and 2015 are as follows (amounts in thousands): Nine Months Ended 2016 2015 Capital additions and acquisitions by segment: Data centers $ 134,831 $ 33,114 Healthcare 109,278 224,664 Total capital additions and acquisitions $ 244,109 $ 257,778 |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Accounts payable and other liabilities, as of September 30, 2016 and December 31, 2015 , were comprised of the following (amounts in thousands): September 30, 2016 December 31, 2015 Accounts payable and accrued expenses $ 4,245 $ 2,283 Accrued interest expense 290 221 Accrued property taxes 1,456 505 Distributions payable to stockholders 3,826 2,548 Tenant deposits 1,765 1,848 Deferred rental income 1,397 839 $ 12,979 $ 8,244 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated, and that qualify, as cash flow hedges is recorded in accumulated other comprehensive loss in the accompanying condensed consolidated statement of stockholders' equity and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2016 , the Company's derivative instrument was used to hedge the variable cash flows associated with variable rate debt. The ineffective portion of changes in fair value of the derivative is recognized directly in earnings. During the three and nine months ended September 30, 2016 , the Company recognized income of $71,000 and $49,000 , respectively, due to ineffectiveness of its hedge of interest rate risk, which was recorded in interest expense, net in the accompanying condensed consolidated statements of comprehensive income (loss) . Amounts reported in accumulated other comprehensive loss related to the derivative will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. During the next twelve months, the Company estimates that an additional $56,000 will be reclassified from accumulated other comprehensive loss as an increase to interest expense. See Note 2—"Summary of Significant Accounting Policies" for a further discussion of the fair value of the Company’s derivative instruments. The following table summarizes the notional amount and fair value of the Company’s derivative instrument (amounts in thousands): Derivative Balance Effective Maturity September 30, 2016 December 31, 2015 Outstanding Fair Value of Outstanding Fair Value of Asset (Liability) Asset (Liability) Interest rate swap Other assets 07/01/2016 12/22/2020 $ 25,000 $ 36 $ — $ — $ — $ — The notional amount under the agreement is an indication of the extent of the Company’s involvement in the instrument at the time, but does not represent exposure to credit, interest rate or market risks. Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company designated the interest rate swap as a cash flow hedge to hedge the variability of the anticipated cash flows on its variable rate secured credit facility. The change in fair value of the effective portion of the derivative instrument that is designated as a hedge is recorded in other comprehensive income (loss), or OCI, in the accompanying condensed consolidated statements of comprehensive income (loss) . The table below summarizes the amount of income and loss recognized on the interest rate derivative designated as a cash flow hedge for the three and nine months ended September 30, 2016 and 2015 (amounts in thousands): Derivative in Cash Flow Hedging Relationship Amount of (Loss) Income Recognized Location of (Loss) Income Amount of (Loss) Income Three Months Ended September 30, 2016 Interest rate swap $ 62 Interest expense, net $ (26 ) Total $ 62 $ (26 ) Three Months Ended September 30, 2015 Interest rate swap $ — Interest expense, net $ — Total $ — $ — Nine Months Ended September 30, 2016 Interest rate swap $ (39 ) Interest expense, net $ (26 ) Total $ (39 ) $ (26 ) Nine Months Ended September 30, 2015 Interest rate swap $ — Interest expense, net $ — Total $ — $ — Credit Risk-Related Contingent Features The Company has an agreement with its derivative counterparty that contains cross-default provisions, whereby if the Company defaults on certain of its indebtedness, then the Company could also be declared in default on its derivative obligation, resulting in an acceleration of payment thereunder. In addition, the Company is exposed to credit risk in the event of non-performance by its derivative counterparty. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. The Company records credit risk valuation adjustments on its interest rate swaps based on the respective credit quality of the Company and the counterparty. As of September 30, 2016 , the fair value of the derivative in a net asset position, including accrued interest but excluding any adjustment for nonperformance risk related to the agreement, was $23,000 . As of September 30, 2016 , there were no termination events or events of default related to the interest rate swap. Tabular Disclosure Offsetting Derivatives The Company has elected not to offset its derivative asset position in its condensed consolidated financial statements. The following table presents the effect on the Company’s financial position had the Company made the election to offset its derivative asset position as of September 30, 2016 (amounts in thousands): Offsetting of Derivative Assets Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net September 30, 2016 $ 36 $ — $ 36 $ — $ — $ 36 The Company did not have any financial instruments hedged through interest rate swaps as of December 31, 2015. The Company reports the derivative in the accompanying condensed consolidated balance sheets as other assets. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table presents a rollforward of amounts recognized in accumulated other comprehensive loss by component for the nine months ended September 30, 2016 (amounts in thousands): Unrealized Loss on Derivative Accumulated Other Balance as of December 31, 2015 $ — $ — Other comprehensive loss before reclassification (39 ) (39 ) Amount of loss reclassified from accumulated other comprehensive loss to net income (effective portion) 26 26 Other comprehensive loss (13 ) (13 ) Balance as of September 30, 2016 $ (13 ) $ (13 ) The following table presents reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2016 and 2015 (amounts in thousands): Details about Accumulated Other Amounts Reclassified from Affected Line Items in the Consolidated Statements of Comprehensive Income (Loss) Nine Months Ended 2016 2015 Interest rate swap contracts $ 26 — Interest expense, net |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Distributions to Stockholders Paid On October 3, 2016 , the Company paid aggregate distributions of approximately $3,441,000 to Class A stockholders ( $1,569,000 in cash and $1,872,000 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 September 1, 2016 through September 30, 2016. On November 1, 2016, the Company paid aggregate distributions of approximately $3,646,000 to Class A stockholders ( $1,676,000 in cash and $1,970,000 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 October 1, 2016 through October 31, 2016. On October 3, 2016 , the Company paid aggregate distributions of approximately $385,000 to Class T stockholders ( $136,000 in cash and $249,000 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 September 1, 2016 through September 30, 2016. On November 1, 2016, the Company paid aggregate distributions of approximately $444,000 to Class T stockholders ( $159,000 in cash and $285,000 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 October 1, 2016 through October 31, 2016. Distributions Declared Class A Shares On November 3, 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 December 1, 2016 and ending on February 28, 2017. The distributions for December 2016 will be calculated based on 366 days in the calendar year and will be equal to $0.001762273 per share of Class A common stock, which will be equal to an annualized distribution rate of 6.4% , assuming a purchase price of $10.078 per share of Class A common stock. The distributions for January 2017 and February 2017 will be calculated based on 365 days in the calendar year and will be equal to $0.001767101 per share of Class A common stock, which will be equal to an annualized distribution rate of 6.4% , assuming a purchase price of $10.078 . The distributions declared for each record date in December 2016, January 2017 and February 2017 will be paid in January 2017, February 2017 and March 2017, respectively. The distributions will be payable to stockholders from legally available funds therefor. Class T Shares On November 3, 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 December 1, 2016 and ending February 28, 2017. The distributions for December 2016 will be calculated based on 366 days in the calendar year and will be equal to $0.001497440 per share of Class T common stock, which will be equal to an annualized distribution rate of 5.68% , assuming a purchase price of $9.649 per share. The distributions for January 2017 and February 2017 will be calculated based on 365 days in the calendar year and will be equal to $0.001501543 , which will be equal to an annualized distribution rate of 5.68% , assuming a purchase price of $9.649 per share. The distributions declared for each record date in December 2016, January 2017 and February 2017 will be paid in January 2017, February 2017 and March 2017, respectively. The distributions will be payable to stockholders from legally available funds therefor. Status of the Offering As of November 10, 2016 , the Company had accepted investors’ subscriptions for and issued approximately 78,401,000 shares of Class A and Class T common stock in the Offering, resulting in receipt of gross proceeds of approximately $773,692,000 including shares of its common stock issued pursuant to the DRIP. As of November 10, 2016 , the Company had approximately $1,576,308,000 in Class A shares and Class T shares of common stock remaining in the Offering. Acquisition of the McLean Data Center Portfolio On October 17, 2016, the Company acquired 100% of the interest in a data center portfolio consisting of two properties, or the McLean Data Center Portfolio, for an aggregate purchase price of $85,000,000 , plus closing costs. The Company financed the purchase of the McLean Data Center using net proceeds from the Offering and proceeds from the secured credit facility. The McLean Data Center Portfolio is leased to multiple tenants. Acquisition of the Select Medical Rehabilitation Facility On November 1, 2016, the Company acquired 100% of the interest in a healthcare facility, or the Select Medical Rehabilitation Facility, for an aggregate purchase price of $63,580,000 , plus closing costs. The Company financed the purchase of the Select Medical Rehabilitation Facility using net proceeds from the Offering and proceeds from the secured credit facility. The Select Medical Rehabilitation Facility is leased to a single tenant. Acquisition of the Andover Data Center II On November 8, 2016, the Company acquired 100% of the interest in a data center property, or the Andover Data Center II, for an aggregate purchase price of $37,000,000 , plus closing costs. The Company financed the purchase of the Andover Data Center II using net proceeds from the Offering and proceeds from the secured credit facility. The Andover Data Center II is leased to multiple tenants. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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, or VIE, and voting interest entity, or 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 September 30, 2016 , the Company had cash on deposit, including restricted cash, in certain financial institutions that had deposits in excess of current federally insured levels; however, the Company has not experienced any losses in such accounts. The Company limits its cash investments to financial institutions with high credit standings; 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 of or lack of access to cash in its accounts. Concentration of credit risk with respect to accounts receivable from tenants is limited. |
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. |
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. 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 repurchases of shares of common stock 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 nine months ended September 30, 2016 , the Company received valid repurchase requests related to 214,666 Class A shares of common stock, all of which were repurchased in full for an aggregate purchase price of approximately $2,043,000 (an average of $9.52 per share). During the nine months ended September 30, 2015 , the Company received valid repurchase requests related to 15,511 Class A shares of common stock, all of which were repurchased in full for an aggregate purchase price of approximately $155,000 (an average of $9.99 per share) . During the nine months ended September 30, 2016 and 2015 , the Company did not receive repurchase requests related to Class T shares. |
Fair Value | Fair Value Accounting Standards Codification, or ASC, 820, Fair Value Measurements and Disclosures , or ASC 820, defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosures about fair value measurements. ASC 820 emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement. Fair value is defined by ASC 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows: Level 1—Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2—Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs). Level 3—Unobservable inputs, only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability. The following describes the methods the Company used to estimate the fair value of the Company’s financial assets and liabilities: Cash and cash equivalents, other assets, accounts payable due to affiliates and accounts payable and other liabilities —The Company considers the carrying values of these financial instruments, assets and liabilities to approximate fair value because of the short period of time between origination of the instruments and their expected realization. Secured credit facility —The outstanding principal of the secured credit facility – variable was $110,000,000 and $90,000,000 , which approximated its fair value as of September 30, 2016 and December 31, 2015 , respectively. The interest on the secured credit facility – variable is calculated at the London Interbank Offered Rate, or LIBOR, plus an applicable margin. The interest rate resets to market on a monthly basis. The fair value of the Company's secured credit facility – variable is estimated based on the interest rates currently offered to the Company by financial institutions. The estimated fair value of the secured credit facility – variable rate fixed through an interest rate swap agreement (Level 2) was approximately $24,777,000 as of September 30, 2016 as compared to the outstanding principal of $25,000,000 as of September 30, 2016 . Derivative instruments —Considerable judgment is necessary to develop estimated fair values of financial instruments. Accordingly, the estimates presented herein are not necessarily indicative of the amount the Company could realize, or be liable for, on disposition of the financial instruments. The Company has determined that the majority of the inputs used to value its interest rate swaps fall within Level 2 of the fair value hierarchy. The credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and the respective counterparty. However, as of September 30, 2016 , the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions, and has determined that the credit valuation adjustments are not significant to the overall valuation of its interest rate swaps. As a result, the Company determined that its interest rate swaps valuation in its entirety is classified in Level 2 of the fair value hierarchy. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As required by ASC 815, Derivatives and Hedging , or ASC 815, the Company records all derivative instruments as assets and liabilities in the statement of financial position at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge or a hedge of a net investment in a foreign operation. For derivative instruments not designated as hedging instruments, the income or loss is recognized in the condensed consolidated statements of comprehensive income (loss) during the current period. The Company is exposed to variability in expected future cash flows that are attributable to interest rate changes in the normal course of business. The Company’s primary strategy in entering into derivative contracts is to add stability to future cash flows by managing its exposure to interest rate movements. The Company utilizes derivative instruments, including interest rate swaps, to effectively convert some its variable rate debt to fixed rate debt. The Company does not enter into derivative instruments for speculative purposes. In accordance with ASC 815, the Company designates interest rate swap contracts as cash flow hedges of floating-rate borrowings. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the income or loss on the derivative instrument is reported as a component of other comprehensive income (loss) in the condensed consolidated statements of comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transaction and the same period during which the hedged transaction affects earnings. The ineffective portion of the income or loss on the derivative instrument is recognized in the condensed consolidated statements of comprehensive income (loss) during the current period. In accordance with the fair value measurement guidance ASU 2011-04, Fair Value Measurement , the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. |
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. |
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. 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 ASUs 2014-09 and 2016-08 will have on the Company’s condensed consolidated financial statements. On June 16, 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses, or ASU 2016-13. ASU 2016-13 requires more timely recording of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments in ASU 2016-13 require the Company to measure all expected credit losses based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology in current GAAP. ASU 2016-13 is effective for fiscal years beginning after, and interim periods within, December 15, 2019. Early adoption is permitted for fiscal years beginning after, and interim periods within, December 15, 2018. The Company is in the process of evaluating the impact ASU 2016-13 will have on the Company’s condensed consolidated financial statements. On August 26, 2016, the FASB issued ASU 2016-15, Statement of Cash Flows , or ASU 2016-15. ASU 2016-15 is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 addresses eight classification issues related to the statement of cash flows: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon bonds; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Entities should apply this ASU using a retrospective transition method to each period presented. The Company is in the process of evaluating the impact ASU 2016-15 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. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2016 (amounts in thousands): September 30, 2016 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 36 $ — $ 36 Total assets at fair value $ — $ 36 $ — $ 36 Liabilities: Derivative liabilities $ — $ — $ — $ — Total liabilities at fair value $ — $ — $ — $ — |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Real Estate [Abstract] | |
Schedule of Consideration Transferred For Investments In Real Estate | The following table summarizes the consideration transferred for all real estate properties acquired during the nine months ended September 30, 2016 (amounts in thousands): Nine Months Ended Investments in real estate: Purchase price of business combinations (1) $ 207,447 Purchase price of asset acquisitions 33,518 Total purchase price of real estate investments acquired $ 240,965 (1) In connection with one business combination, the Company assumed a $1,236,000 contractual liability during the nine months ended September 30, 2016 . |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Combinations | The following table summarizes the acquisitions determined to be business combinations during the nine months ended September 30, 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% HPI — Oklahoma City VII 06/22/2016 100% Somerset Data Center 06/29/2016 100% Integris Lakeside Women's Hospital 06/30/2016 100% AT&T Hawthorne Data Center 09/27/2016 100% |
Schedule of Allocation of Fair Value of Business Combinations | The following table summarizes management’s preliminary allocation of the fair value of the acquisitions determined to be business combinations during the nine months ended September 30, 2016 (amounts in thousands): Total Land $ 29,012 Buildings and improvements 162,340 In-place leases 14,664 Tenant improvements 1,431 Total assets acquired $ 207,447 |
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, except per share amounts, unaudited): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Pro forma basis: Revenues $ 15,017 $ 13,050 $ 43,538 $ 37,081 Net income attributable to common stockholders $ 4,471 $ 4,929 $ 13,383 $ 1,792 Net income per common share attributable to common stockholders: Basic $ 0.06 $ 0.07 $ 0.18 $ 0.03 Diluted $ 0.06 $ 0.07 $ 0.18 $ 0.03 |
Acquired Intangible Assets, N29
Acquired Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of Acquired Intangible Assets, Net | Acquired intangible assets, net, consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands, except weighted average life amounts): September 30, 2016 December 31, 2015 In-place leases, net of accumulated amortization of $5,935 and $1,967, respectively (with a weighted average remaining life of 13.1 years and 14.5 years, respectively) $ 66,791 $ 53,776 Above-market leases, net of accumulated amortization of $52 and $32, respectively (with a weighted average remaining life of 7.7 years and 8.4 years, respectively) 202 222 Ground lease interest, net of accumulated amortization of $16 and $9, respectively (with a weighted average remaining life of 67.0 years and 67.8 years, respectively) 628 635 $ 67,621 $ 54,633 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands): September 30, 2016 December 31, 2015 Deferred financing costs, related to the revolver portion of the secured credit facility, net of accumulated amortization of $1,488 and $802, respectively $ 2,590 $ 2,717 Real estate escrow deposits 5,730 443 Restricted cash held in escrow 4,417 1,927 Tenant receivables 2,107 2,065 Straight-line rent receivable 6,806 2,462 Prepaid and other assets 1,129 604 Derivative assets 36 — $ 22,815 $ 10,218 |
Future Minimum Rent (Tables)
Future Minimum Rent (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Rent to be Received from Non-Cancelable Operating Leases | The future minimum rent to be received from the Company’s investments in real estate assets under non-cancelable operating leases for the three 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 Three months ending December 31, 2016 $ 12,009 2017 48,533 2018 49,396 2019 50,013 2020 49,153 Thereafter 494,425 $ 703,529 |
Credit Facility (Tables)
Credit Facility (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company's debt outstanding as of September 30, 2016 and December 31, 2015 consisted of the following (amounts in thousands): September 30, 2016 December 31, 2015 Secured credit facility: Revolving line of credit $ 85,000 $ 65,000 Term loan 50,000 25,000 Total secured credit facility, principal amount outstanding 135,000 90,000 Unamortized deferred financing costs related to the term loan secured credit facility (294 ) (103 ) Total secured credit facility, net of deferred financing costs $ 134,706 $ 89,897 |
Schedule of Future Principal Payments Due on Secured Credit Facility | The principal payments due on the secured credit facility for the three 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 Three months ending December 31, 2016 $ — 2017 — 2018 85,000 2019 50,000 2020 — Thereafter — $ 135,000 |
Intangible Lease Liabilities,33
Intangible Lease Liabilities, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Lease Liabilities, Net [Abstract] | |
Schedule of Intangible Lease Liabilities, Net | Intangible lease liabilities, net, consisted of the following as of September 30, 2016 and December 31, 2015 (amounts in thousands, except weighted average life amounts): September 30, 2016 December 31, 2015 Below-market leases, net of accumulated amortization of $500 and $98, respectively (with a weighted average remaining life of 13.8 years and 14.5 years, respectively) $ 7,007 $ 7,409 $ 7,007 $ 7,409 |
Related-Party Transactions an34
Related-Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Accounts Payable Due to Affiliates | The following amounts were outstanding due to affiliates as of September 30, 2016 and December 31, 2015 (amounts in thousands): Entity Fee September 30, 2016 December 31, 2015 Carter Validus Advisors II, LLC and its affiliates Asset management fees $ 443 $ 290 Carter Validus Real Estate Management Services II, LLC Property management fees 140 101 Carter Validus Real Estate Management Services II, LLC Construction management fees 265 — Carter Validus Advisors II, LLC and its affiliates General and administrative costs 134 96 Carter Validus Advisors II, LLC and its affiliates Offering costs 549 250 SC Distributors, LLC Distribution and servicing fees 4,226 — Carter Validus Advisors II, LLC and its affiliates Acquisition expenses and fees 3 4 $ 5,760 $ 741 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Information for Reportable Segments | Summary information for the reportable segments during the three and nine months ended September 30, 2016 and 2015 , is as follows (amounts in thousands): Data Centers Healthcare Three Months Ended Revenue: Rental and tenant reimbursement revenue $ 2,497 $ 11,097 $ 13,594 Expenses: Rental expenses (440 ) (1,354 ) (1,794 ) Segment net operating income $ 2,057 $ 9,743 11,800 Expenses: General and administrative expenses (836 ) Acquisition related expenses (1,821 ) Asset management fees (1,227 ) Depreciation and amortization (4,782 ) Income from operations 3,134 Interest expense, net (626 ) Net income attributable to common stockholders $ 2,508 Data Centers Healthcare Three Months Ended Revenue: Rental and tenant reimbursement revenue $ 543 $ 6,341 $ 6,884 Expenses: Rental expenses (90 ) (737 ) (827 ) Segment net operating income $ 453 $ 5,604 6,057 Expenses: General and administrative expenses (439 ) Acquisition related expenses (3,760 ) Asset management fees (639 ) Depreciation and amortization (2,438 ) Loss from operations (1,219 ) Interest expense, net (542 ) Net loss attributable to common stockholders $ (1,761 ) Data Centers Healthcare Nine Months Ended Revenue: Rental and tenant reimbursement revenue $ 6,211 $ 31,010 $ 37,221 Expenses: Rental expenses (1,011 ) (4,044 ) (5,055 ) Segment net operating income $ 5,200 $ 26,966 32,166 Expenses: General and administrative expenses (2,358 ) Acquisition related expenses (5,432 ) Asset management fees (3,240 ) Depreciation and amortization (12,948 ) Income from operations 8,188 Interest expense, net (2,237 ) Net income attributable to common stockholders $ 5,951 Data Centers Healthcare Nine Months Ended Revenue: Rental and tenant reimbursement revenue $ 724 $ 11,537 $ 12,261 Expenses: Rental expenses (98 ) (1,051 ) (1,149 ) Segment net operating income $ 626 $ 10,486 11,112 Expenses: General and administrative expenses (1,366 ) Acquisition related expenses (7,287 ) Asset management fees (1,133 ) Depreciation and amortization (4,048 ) Loss from operations (2,722 ) Interest expense, net (1,203 ) Net loss attributable to common stockholders $ (3,925 ) |
Schedule of Assets by Reportable Segments | Assets by each reportable segment as of September 30, 2016 and December 31, 2015 are as follows (amounts in thousands): September 30, 2016 December 31, 2015 Assets by segment: Data centers $ 179,629 $ 44,207 Healthcare 533,786 427,878 All other 57,471 34,542 Total assets $ 770,886 $ 506,627 |
Schedule of Capital Additions and Acquisitions by Reportable Segments | Capital additions and acquisitions by reportable segments for the nine months ended September 30, 2016 and 2015 are as follows (amounts in thousands): Nine Months Ended 2016 2015 Capital additions and acquisitions by segment: Data centers $ 134,831 $ 33,114 Healthcare 109,278 224,664 Total capital additions and acquisitions $ 244,109 $ 257,778 |
Accounts Payable and Other Li36
Accounts Payable and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Other Liabilities | Accounts payable and other liabilities, as of September 30, 2016 and December 31, 2015 , were comprised of the following (amounts in thousands): September 30, 2016 December 31, 2015 Accounts payable and accrued expenses $ 4,245 $ 2,283 Accrued interest expense 290 221 Accrued property taxes 1,456 505 Distributions payable to stockholders 3,826 2,548 Tenant deposits 1,765 1,848 Deferred rental income 1,397 839 $ 12,979 $ 8,244 |
Derivative Instruments and He37
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of the Notional Amount and Fair Value of Derivative Instruments | The following table summarizes the notional amount and fair value of the Company’s derivative instrument (amounts in thousands): Derivative Balance Effective Maturity September 30, 2016 December 31, 2015 Outstanding Fair Value of Outstanding Fair Value of Asset (Liability) Asset (Liability) Interest rate swap Other assets 07/01/2016 12/22/2020 $ 25,000 $ 36 $ — $ — $ — $ — |
Schedule of Income and Losses Recognized on Derivative Instruments | The table below summarizes the amount of income and loss recognized on the interest rate derivative designated as a cash flow hedge for the three and nine months ended September 30, 2016 and 2015 (amounts in thousands): Derivative in Cash Flow Hedging Relationship Amount of (Loss) Income Recognized Location of (Loss) Income Amount of (Loss) Income Three Months Ended September 30, 2016 Interest rate swap $ 62 Interest expense, net $ (26 ) Total $ 62 $ (26 ) Three Months Ended September 30, 2015 Interest rate swap $ — Interest expense, net $ — Total $ — $ — Nine Months Ended September 30, 2016 Interest rate swap $ (39 ) Interest expense, net $ (26 ) Total $ (39 ) $ (26 ) Nine Months Ended September 30, 2015 Interest rate swap $ — Interest expense, net $ — Total $ — $ — |
Schedule of Offsetting of Derivative Assets | The following table presents the effect on the Company’s financial position had the Company made the election to offset its derivative asset position as of September 30, 2016 (amounts in thousands): Offsetting of Derivative Assets Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net September 30, 2016 $ 36 $ — $ 36 $ — $ — $ 36 |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Amounts Recognized in Accumulated Other Comprehensive Loss | The following table presents a rollforward of amounts recognized in accumulated other comprehensive loss by component for the nine months ended September 30, 2016 (amounts in thousands): Unrealized Loss on Derivative Accumulated Other Balance as of December 31, 2015 $ — $ — Other comprehensive loss before reclassification (39 ) (39 ) Amount of loss reclassified from accumulated other comprehensive loss to net income (effective portion) 26 26 Other comprehensive loss (13 ) (13 ) Balance as of September 30, 2016 $ (13 ) $ (13 ) |
Reclassification out of Accumulated Other Comprehensive Loss | The following table presents reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2016 and 2015 (amounts in thousands): Details about Accumulated Other Amounts Reclassified from Affected Line Items in the Consolidated Statements of Comprehensive Income (Loss) Nine Months Ended 2016 2015 Interest rate swap contracts $ 26 — Interest expense, net |
Organization and Business Ope39
Organization and Business Operations (Details) | Jul. 03, 2014USD ($)shares | Sep. 30, 2016USD ($)real_estate_investmentmetropolitanmicropolitanpropertyshares | May 29, 2014USD ($) |
Organization and Business Operations [Line Items] | |||
Selling commissions and dealer manager fees | $ 19,938,000 | ||
Distribution and servicing fees | 4,462,000 | ||
Other offering costs | $ 4,125,000 | ||
Number of Company owned real estate investments | real_estate_investment | 30 | ||
Number of Company owned properties | property | 43 | ||
Number of metropolitan statistical areas in which Company owns rental property | metropolitan | 24 | ||
Number of micropolitan statistical areas in which Company owns rental property | micropolitan | 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 | $ 64,577,000 | ||
Distribution and servicing fees | 4,462,000 | ||
Other offering costs | $ 14,383,000 | ||
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 | ||
Offering [Member] | Class A and T shares [Member] | Common Stock [Member] | |||
Organization and Business Operations [Line Items] | |||
Common stock offering, shares issued | shares | 75,573,000 | ||
Common stock offering, gross proceeds raised | $ 746,094,000 | ||
Common stock offering, value remaining | $ 1,603,906,000 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)metropolitanmicropolitantenantshares | Sep. 30, 2015shares | Sep. 30, 2016USD ($)metropolitanmicropolitantenant$ / sharesshares | Sep. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||||
Number of metropolitan statistical areas in which Company owns rental property | metropolitan | 24 | 24 | |||
Number of micropolitan statistical areas in which Company owns rental property | micropolitan | 1 | 1 | |||
Deferred financing costs, net | $ 2,590 | $ 2,590 | $ 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 | $ 2,043 | ||||
Credit facility, outstanding principal balance | $ 135,000 | $ 135,000 | |||
Diluted earnings per share outstanding adjustment (in shares) | shares | 15,000 | 16,000 | |||
Anti-dilutive shares excluded from computation of diluted earnings per share (in shares) | shares | 15,570 | 15,750 | |||
Variable Rate Debt [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Credit facility, outstanding principal balance | $ 110,000 | $ 110,000 | 90,000 | ||
Variable Rate Debt, Subject To Interest Rate Swap [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Credit facility, outstanding principal balance | 25,000 | 25,000 | |||
Variable Rate Debt, Subject To Interest Rate Swap [Member] | Significant Other Observable Inputs (Level 2) [Member] | Estimate of Fair Value Measurement [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Credit facility, fair value disclosure | $ 24,777 | $ 24,777 | |||
Common Stock [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Repurchase of common stock (in shares) | shares | 214,666 | ||||
Repurchase of common stock | $ 2 | ||||
Common Stock [Member] | Class A shares [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Repurchase of common stock (in shares) | shares | 214,666 | 15,511 | |||
Repurchase of common stock | $ 2,043 | $ 155 | |||
Repurchase of common stock, average price per share (in dollars per share) | $ / shares | $ 9.52 | $ 9.99 | |||
Common Stock [Member] | Class T shares [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Repurchase of common stock (in shares) | shares | 0 | 0 | |||
ASU 2015-03 [Member] | Other Assets [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Deferred financing costs, net | (103) | ||||
ASU 2015-03 [Member] | Credit Facility [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Deferred financing costs, net | $ 103 | ||||
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 | 3 | 3 | |||
Rental Revenue [Member] | Geographic Concentration Risk [Member] | Oklahoma City, Oklahoma MSA [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 15.90% | ||||
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 | 14.50% | ||||
Rental Revenue [Member] | Geographic Concentration Risk [Member] | Dallas-Fort Worth-Arlington, Texas MSA [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 11.90% | ||||
Rental Revenue [Member] | Customer Concentration Risk [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Number of tenants | tenant | 2 | 2 | |||
Rental Revenue [Member] | Customer Concentration Risk [Member] | Post Acute Medical, LLC [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 12.60% | ||||
Rental Revenue [Member] | Customer Concentration Risk [Member] | Healthcare Partners Investments, LLC [Member] | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 11.40% |
Summary of Significant Accoun41
Summary of Significant Accounting Policies (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Derivative assets | $ 36,000 | |
Recurring Basis [Member] | ||
Assets: | ||
Derivative assets | 36,000 | |
Total assets at fair value | 36,000 | $ 0 |
Liabilities: | ||
Derivative liabilities | 0 | |
Total liabilities at fair value | 0 | $ 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Recurring Basis [Member] | ||
Assets: | ||
Derivative assets | 0 | |
Total assets at fair value | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | |
Total liabilities at fair value | 0 | |
Significant Other Observable Inputs (Level 2) [Member] | Recurring Basis [Member] | ||
Assets: | ||
Derivative assets | 36,000 | |
Total assets at fair value | 36,000 | |
Liabilities: | ||
Derivative liabilities | 0 | |
Total liabilities at fair value | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Recurring Basis [Member] | ||
Assets: | ||
Derivative assets | 0 | |
Total assets at fair value | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | |
Total liabilities at fair value | $ 0 |
Real Estate Investments (Narrat
Real Estate Investments (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)real_estate_investment | Sep. 30, 2015USD ($) | |
Real Estate Properties [Line Items] | ||||
Number of real estate acquisitions | real_estate_investment | 15 | |||
Liability assumed at acquisition | $ 1,236 | $ 0 | ||
Acquisition fees and expenses | $ 1,821 | $ 3,760 | 5,432 | 7,287 |
Acquisition fees and expenses capitalized | 0 | 0 | $ 2,037 | $ 234 |
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 | 12 | |||
Acquisition fees and expenses | $ 1,684 | $ 3,760 | $ 5,052 | $ 7,287 |
Asset Acquisitions [Member] | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate acquisitions | real_estate_investment | 3 |
Real Estate Investments (Schedu
Real Estate Investments (Schedule of Consideration Transferred For Investments In Real Estate) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Real Estate Properties [Line Items] | |
Total purchase price of real estate investments acquired | $ 240,965 |
Business Combinations [Member] | |
Real Estate Properties [Line Items] | |
Total purchase price of real estate investments acquired | 207,447 |
Asset Acquisitions [Member] | |
Real Estate Properties [Line Items] | |
Total purchase price of real estate investments acquired | $ 33,518 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)real_estate_investmentproperty | Sep. 30, 2015USD ($) | |
Business Acquisition [Line Items] | ||||
Total purchase price of real estate investments acquired | $ 240,965 | |||
Revenues | 4,588 | |||
Net loss | 3,286 | |||
Acquisition fees and expenses | $ 1,821 | $ 3,760 | $ 5,432 | $ 7,287 |
Business Combinations [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership percentage | 100.00% | 100.00% | ||
Number of properties acquired | real_estate_investment | 12 | |||
Total purchase price of real estate investments acquired | $ 207,447 | |||
Acquisition fees and expenses | $ 1,684 | $ 3,760 | $ 5,052 | $ 7,287 |
Data Centers [Member] | Business Combinations [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of properties acquired | property | 4 | |||
Healthcare [Member] | Business Combinations [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of properties acquired | property | 8 |
Business Combinations (Schedule
Business Combinations (Schedule of Business Combinations) (Details) | 9 Months Ended |
Sep. 30, 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% |
HPI - Oklahoma City VII [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Jun. 22, 2016 |
Ownership Percentage | 100.00% |
Somerset Data Center [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Jun. 29, 2016 |
Ownership Percentage | 100.00% |
Integris Lakeside Women's Hospital [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Jun. 30, 2016 |
Ownership Percentage | 100.00% |
AT&T Hawthorne Data Center [Member] | |
Business Acquisition [Line Items] | |
Date Acquired | Sep. 27, 2016 |
Ownership Percentage | 100.00% |
Business Combinations (Schedu46
Business Combinations (Schedule of Allocation of Fair Value of Business Combinations) (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Business Combinations [Abstract] | |
Land | $ 29,012 |
Buildings and improvements | 162,340 |
In-place leases | 14,664 |
Tenant improvements | 1,431 |
Total assets acquired | $ 207,447 |
Business Combinations (Schedu47
Business Combinations (Schedule of Business Combinations on a Pro Forma Basis) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pro forma basis: | ||||
Revenues | $ 15,017 | $ 13,050 | $ 43,538 | $ 37,081 |
Net income attributable to common stockholders | $ 4,471 | $ 4,929 | $ 13,383 | $ 1,792 |
Net income per common share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.06 | $ 0.07 | $ 0.18 | $ 0.03 |
Diluted (in dollars per share) | $ 0.06 | $ 0.07 | $ 0.18 | $ 0.03 |
Acquired Intangible Assets, N48
Acquired Intangible Assets, Net (Schedule of Acquired Intangible Assets, Net) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Acquired Intangible Assets, Net [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 67,621 | $ 54,633 |
Acquired intangible asset, accumulated amortization | $ 6,003 | $ 2,007 |
Acquired intangible asset, weighted average remaining life | 13 years 7 months 6 days | 15 years 1 month 6 days |
In-place leases [Member] | ||
Acquired Intangible Assets, Net [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 66,791 | $ 53,776 |
Acquired intangible asset, accumulated amortization | $ 5,935 | $ 1,967 |
Acquired intangible asset, weighted average remaining life | 13 years 1 month 6 days | 14 years 6 months |
Above-market leases [Member] | ||
Acquired Intangible Assets, Net [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 202 | $ 222 |
Acquired intangible asset, accumulated amortization | $ 52 | $ 32 |
Acquired intangible asset, weighted average remaining life | 7 years 8 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 | $ 628 | $ 635 |
Acquired intangible asset, accumulated amortization | $ 16 | $ 9 |
Acquired intangible asset, weighted average remaining life | 67 years | 67 years 9 months 18 days |
Other Assets (Schedule of Other
Other Assets (Schedule of Other Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 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 $1,488 and $802, respectively | $ 2,590 | $ 2,717 |
Real estate escrow deposits | 5,730 | 443 |
Restricted cash held in escrow | 4,417 | 1,927 |
Tenant receivables | 2,107 | 2,065 |
Straight-line rent receivable | 6,806 | 2,462 |
Prepaid and other assets | 1,129 | 604 |
Derivative assets | 36 | 0 |
Total other assets | 22,815 | 10,218 |
Deferred financing costs, accumulated amortization | $ 1,488 | $ 802 |
Future Minimum Rent (Schedule o
Future Minimum Rent (Schedule of Future Minimum Rent to be Received from Non-Cancelable Operating Leases) (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Leases [Abstract] | |
Three months ending December 31, 2016 | $ 12,009 |
2,017 | 48,533 |
2,018 | 49,396 |
2,019 | 50,013 |
2,020 | 49,153 |
Thereafter | 494,425 |
Total | $ 703,529 |
Credit Facility (Schedule of De
Credit Facility (Schedule of Debt Outstanding) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total secured credit facility, principal amount outstanding | $ 135,000 | $ 90,000 |
Unamortized deferred financing costs related to the term loan secured credit facility | (294) | (103) |
Total secured credit facility, net of deferred financing costs | 134,706 | 89,897 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total secured credit facility, principal amount outstanding | 50,000 | 25,000 |
Revolving Line of Credit [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Total secured credit facility, principal amount outstanding | $ 85,000 | $ 65,000 |
Credit Facility (Narrative) (De
Credit Facility (Narrative) (Details) | Sep. 30, 2016USD ($)extension | Sep. 30, 2016USD ($)property | Sep. 30, 2015USD ($) | Sep. 29, 2016USD ($) |
Debt Instrument [Line Items] | ||||
Proceeds from credit facility | $ 115,000,000 | $ 72,000,000 | ||
Payments on credit facility | 70,000,000 | $ 39,500,000 | ||
Credit facility, increase in borrowing base availability | $ 81,120,000 | |||
Credit facility, number of properties added to aggregate pool availability | property | 14 | |||
Credit facility, outstanding principal balance | $ 135,000,000 | $ 135,000,000 | ||
Credit facility, total pool availability | 252,479,000 | 252,479,000 | ||
Credit facility, amount remaining to be drawn | 117,479,000 | 117,479,000 | ||
Variable Rate Debt, Subject To Interest Rate Swap [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility, outstanding principal balance | 25,000,000 | 25,000,000 | ||
Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 315,000,000 | 315,000,000 | $ 265,000,000 | |
Maximum amount credit facility may be increased to | 550,000,000 | 550,000,000 | ||
Revolving Line of Credit [Member] | Line of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 265,000,000 | 265,000,000 | ||
Number of maturity extension periods | extension | 2 | |||
Extension period | 12 months | |||
Line of Credit [Member] | Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | ||
Number of maturity extension periods | extension | 1 | |||
Extension period | 12 months |
Credit Facility (Schedule of Fu
Credit Facility (Schedule of Future Principal Payments Due on Secured Credit Facility) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
Three months ending December 31, 2016 | $ 0 | |
2,017 | 0 | |
2,018 | 85,000 | |
2,019 | 50,000 | |
2,020 | 0 | |
Thereafter | 0 | |
Total | $ 135,000 | $ 90,000 |
Intangible Lease Liabilities,54
Intangible Lease Liabilities, Net (Schedule of Intangible Lease Liabilities, Net) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Intangible Lease Liabilities, Net [Abstract] | ||
Below-market leases, net of accumulated amortization of $500 and $98, respectively (with a weighted average remaining life of 13.8 years and 14.5 years, respectively) | $ 7,007 | $ 7,409 |
Below-market leases, accumulated amortization | $ 500 | $ 98 |
Below market leases, weighted average remaining life | 13 years 9 months 18 days | 14 years 6 months |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Sep. 30, 2016case |
Commitments and Contingencies Disclosure [Abstract] | |
Number of pending legal proceedings to which the Company is a party | 0 |
Related-Party Transactions an56
Related-Party Transactions and Arrangements (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Accounts payable due to affiliates | $ 5,760,000 | $ 5,760,000 | $ 741,000 | ||
Period needed to issue Class B Units | 30 days | ||||
Cumulative, pretax, non-compounded annual return rate to investors (as a percent) | 6.00% | ||||
Asset management fees | 1,227,000 | $ 639,000 | $ 3,240,000 | $ 1,133,000 | |
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 | 11,732,000 | $ 11,732,000 | |||
Acquisition fees incurred | 1,590,000 | 2,673,000 | $ 5,760,000 | 5,144,000 | |
Maximum brokerage fees paid by Company, as percentage of contract sales price | 6.00% | ||||
Disposition fees incurred | $ 0 | ||||
Percentage of remaining net sales proceeds Advisor will receive after investors receive return | 15.00% | ||||
Subordinated sale fees | $ 0 | ||||
Listing fee, percentage | 15.00% | ||||
Subordinated incentive listing fees | $ 0 | ||||
Distribution percentage upon termination of Advisory agreement | 15.00% | ||||
Subordinated termination fee | $ 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 | 549,000 | $ 549,000 | 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 | 1,227,000 | 639,000 | $ 3,240,000 | 1,133,000 | |
Class B units issued (in shares) | 0 | ||||
Operating expenses allocated to the Company by the advisor | 337,000 | 223,000 | $ 935,000 | 586,000 | |
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 | 353,000 | 174,000 | $ 964,000 | 314,000 | |
Construction management fee, as a percent of project costs | 5.00% | ||||
Construction management fees | 265,000 | 0 | $ 265,000 | 0 | |
Leasing commissions incurred | 0 | ||||
SC Distributors, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Selling commissions and dealer manager fees | 4,994,000 | 8,285,000 | $ 19,938,000 | 29,606,000 | |
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 | 1,420,000 | $ 0 | $ 4,462,000 | $ 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% | ||||
SC Distributors, LLC [Member] | Distribution and Servicing Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accounts payable due to affiliates | $ 4,226,000 | $ 4,226,000 | $ 0 |
Related-Party Transactions an57
Related-Party Transactions and Arrangements (Schedule of Accounts Payable Due to Affiliates) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | $ 5,760 | $ 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 | 443 | 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 | 134 | 96 |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Offering Costs [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | 549 | 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 | 3 | 4 |
Carter Validus Real Estate Management Services II, LLC [Member] | Property Management Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | 140 | 101 |
Carter Validus Real Estate Management Services II, LLC [Member] | Construction Management Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | 265 | 0 |
SC Distributors, LLC [Member] | Distribution and Servicing Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable due to affiliates | $ 4,226 | $ 0 |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable business segments | segment | 2 | |||
Revenues | $ 13,594,000 | $ 6,884,000 | $ 37,221,000 | $ 12,261,000 |
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 | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Rental expenses | $ (1,794) | $ (827) | $ (5,055) | $ (1,149) |
Income (loss) from operations | 3,134 | (1,219) | 8,188 | (2,722) |
General and administrative expenses | (836) | (439) | (2,358) | (1,366) |
Acquisition related expenses | (1,821) | (3,760) | (5,432) | (7,287) |
Asset management fees | (1,227) | (639) | (3,240) | (1,133) |
Depreciation and amortization | (4,782) | (2,438) | (12,948) | (4,048) |
Interest expense, net | (626) | (542) | (2,237) | (1,203) |
Net income (loss) attributable to common stockholders | 2,508 | (1,761) | 5,951 | (3,925) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental and tenant reimbursement revenue | 13,594 | 6,884 | 37,221 | 12,261 |
Rental expenses | (1,794) | (827) | (5,055) | (1,149) |
Income (loss) from operations | 11,800 | 6,057 | 32,166 | 11,112 |
Operating Segments [Member] | Data Centers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental and tenant reimbursement revenue | 2,497 | 543 | 6,211 | 724 |
Rental expenses | (440) | (90) | (1,011) | (98) |
Income (loss) from operations | 2,057 | 453 | 5,200 | 626 |
Operating Segments [Member] | Healthcare [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental and tenant reimbursement revenue | 11,097 | 6,341 | 31,010 | 11,537 |
Rental expenses | (1,354) | (737) | (4,044) | (1,051) |
Income (loss) from operations | $ 9,743 | $ 5,604 | $ 26,966 | $ 10,486 |
Segment Reporting (Schedule o60
Segment Reporting (Schedule of Assets by Reportable Segments) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets by segment [Line Items] | ||
Total assets | $ 770,886 | $ 506,627 |
Operating Segments [Member] | Data Centers [Member] | ||
Assets by segment [Line Items] | ||
Total assets | 179,629 | 44,207 |
Operating Segments [Member] | Healthcare [Member] | ||
Assets by segment [Line Items] | ||
Total assets | 533,786 | 427,878 |
All Other [Member] | ||
Assets by segment [Line Items] | ||
Total assets | $ 57,471 | $ 34,542 |
Segment Reporting (Schedule o61
Segment Reporting (Schedule of Capital Additions and Acquisitions by Reportable Segments) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Capital additions and acquisitions by segment [Line Items] | ||
Total capital additions and acquisitions | $ 244,109 | $ 257,778 |
Operating Segments [Member] | Data Centers [Member] | ||
Capital additions and acquisitions by segment [Line Items] | ||
Total capital additions and acquisitions | 134,831 | 33,114 |
Operating Segments [Member] | Healthcare [Member] | ||
Capital additions and acquisitions by segment [Line Items] | ||
Total capital additions and acquisitions | $ 109,278 | $ 224,664 |
Accounts Payable and Other Li62
Accounts Payable and Other Liabilities (Schedule of Accounts Payable and Other Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 4,245 | $ 2,283 |
Accrued interest expense | 290 | 221 |
Accrued property taxes | 1,456 | 505 |
Distributions payable to stockholders | 3,826 | 2,548 |
Tenant deposits | 1,765 | 1,848 |
Deferred rental income | 1,397 | 839 |
Total accounts payable and other liabilities | $ 12,979 | $ 8,244 |
Derivative Instruments and He63
Derivative Instruments and Hedging Activities (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015instrument | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Income (loss) recognized due to ineffectiveness of hedges of interest rate risk | $ 71 | $ 49 | $ 0 | |
Additional amount expected to be reclassified from AOCI into earnings during next twelve months | 56 | 56 | ||
Fair value of derivatives in a net asset position | $ 23 | $ 23 | ||
Number of financial instruments hedged through interest rate swaps | instrument | 0 |
Derivative Instruments and He64
Derivative Instruments and Hedging Activities (Schedule of the Notional Amount and Fair Value of Derivative Instruments) (Details) - Interest Rate Swap [Member] - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | ||
Effective Date | Jul. 1, 2016 | |
Maturity Date | Dec. 22, 2020 | |
Outstanding Notional Amount | $ 25,000 | $ 0 |
Fair Value of (Liability) | 0 | 0 |
Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Asset | $ 36 | $ 0 |
Derivative Instruments and He65
Derivative Instruments and Hedging Activities (Schedule of Gains and Losses Recognized on Derivative Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Income Recognized in OCI on Derivative (Effective Portion) | $ 62 | $ 0 | $ (39) | $ 0 |
Amount of (Loss) Income Reclassified From Accumulated Other Comprehensive Loss to Net Income (Effective Portion) | (26) | 0 | (26) | 0 |
Interest Rate Swap [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Income Recognized in OCI on Derivative (Effective Portion) | 62 | 0 | (39) | 0 |
Interest Rate Swap [Member] | Interest Expense, Net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Income Reclassified From Accumulated Other Comprehensive Loss to Net Income (Effective Portion) | $ (26) | $ 0 | $ (26) | $ 0 |
Derivative Instruments and He66
Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Assets) (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gross Amounts of Recognized Assets | $ 36 |
Gross Amounts Offset in the Balance Sheet | 0 |
Net Amounts of Assets Presented in the Balance Sheet | 36 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral | 0 |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | 0 |
Net Amount | $ 36 |
Accumulated Other Comprehensi67
Accumulated Other Comprehensive Loss (Schedule of Amounts Recognized in Accumulated Other Comprehensive Loss) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | $ 400,334 |
Ending Balance | 610,432 |
Unrealized Loss on Derivative Instruments [Member] | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 0 |
Other comprehensive loss before reclassification | (39) |
Amount of loss reclassified from accumulated other comprehensive loss to net income (effective portion) | (26) |
Other comprehensive loss | (13) |
Ending Balance | (13) |
Accumulated Other Comprehensive Loss [Member] | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning Balance | 0 |
Other comprehensive loss before reclassification | (39) |
Amount of loss reclassified from accumulated other comprehensive loss to net income (effective portion) | (26) |
Other comprehensive loss | (13) |
Ending Balance | $ (13) |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Loss (Reclassifications from AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense, net | $ 626 | $ 542 | $ 2,237 | $ 1,203 |
Interest Rate Swap [Member] | Unrealized Loss on Derivative Instruments [Member] | Amounts Reclassified from Accumulated Other Comprehensive Loss to Net Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense, net | $ 26 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, shares in Thousands, $ in Thousands | Nov. 10, 2016USD ($)shares | Nov. 08, 2016USD ($) | Nov. 03, 2016$ / shares | Nov. 01, 2016USD ($) | Oct. 17, 2016USD ($)property | Oct. 03, 2016USD ($) | Sep. 30, 2016USD ($)$ / shares | Sep. 30, 2015$ / shares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($)$ / shares |
Subsequent Event [Line Items] | ||||||||||
Distributions paid in cash | $ 12,285 | $ 3,759 | ||||||||
Common stock issued through distribution reinvestment plan | $ 16,285 | $ 5,795 | ||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0.16 | $ 0.16 | $ 0.47 | $ 0.48 | ||||||
Aggregate purchase price | $ 240,965 | |||||||||
Common Stock [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Common stock issued through distribution reinvestment plan | $ 17 | |||||||||
Class A and T shares [Member] | Common Stock [Member] | Offering [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Common stock offering, shares issued | shares | 75,573 | |||||||||
Common stock offering, gross proceeds raised | $ 746,094 | |||||||||
Common stock offering, value remaining | $ 1,603,906 | $ 1,603,906 | ||||||||
Subsequent Event [Member] | Class A and T shares [Member] | Common Stock [Member] | Offering [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Common stock offering, shares issued | shares | 78,401 | |||||||||
Common stock offering, gross proceeds raised | $ 773,692 | |||||||||
Common stock offering, value remaining | $ 1,576,308 | |||||||||
Subsequent Event [Member] | September 1, 2016 To September 30, 2016 [Member] | Class A shares [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate distributions paid | $ 3,441 | |||||||||
Distributions paid in cash | 1,569 | |||||||||
Common stock issued through distribution reinvestment plan | 1,872 | |||||||||
Subsequent Event [Member] | September 1, 2016 To September 30, 2016 [Member] | Class T shares [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate distributions paid | 385 | |||||||||
Distributions paid in cash | 136 | |||||||||
Common stock issued through distribution reinvestment plan | $ 249 | |||||||||
Subsequent Event [Member] | October 1, 2016 To October 31, 2016 [Member] | Class A shares [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate distributions paid | $ 3,646 | |||||||||
Distributions paid in cash | 1,676 | |||||||||
Common stock issued through distribution reinvestment plan | 1,970 | |||||||||
Subsequent Event [Member] | October 1, 2016 To October 31, 2016 [Member] | Class T shares [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Aggregate distributions paid | 444 | |||||||||
Distributions paid in cash | 159 | |||||||||
Common stock issued through distribution reinvestment plan | $ 285 | |||||||||
Subsequent Event [Member] | December 1, 2016 To December 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) | $ / shares | $ 0.001762273 | |||||||||
Annualized distribution rate | 6.40% | |||||||||
Common stock offering, price per share (in dollars per share) | $ / shares | $ 10.078 | |||||||||
Subsequent Event [Member] | December 1, 2016 To December 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) | $ / shares | $ 0.001497440 | |||||||||
Annualized distribution rate | 5.68% | |||||||||
Common stock offering, price per share (in dollars per share) | $ / shares | $ 9.649 | |||||||||
Subsequent Event [Member] | January 1, 2017 to February 28, 2017 [Member] | Class A shares [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of days, distribution calculation | 365 days | |||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0.001767101 | |||||||||
Annualized distribution rate | 6.40% | |||||||||
Common stock offering, price per share (in dollars per share) | $ / shares | $ 10.078 | |||||||||
Subsequent Event [Member] | January 1, 2017 to February 28, 2017 [Member] | Class T shares [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Number of days, distribution calculation | 365 days | |||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0.001501543 | |||||||||
Annualized distribution rate | 5.68% | |||||||||
Common stock offering, price per share (in dollars per share) | $ / shares | $ 9.649 | |||||||||
McLean Data Center Portfolio [Member] | Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Ownership interest acquired (as a percent) | 100.00% | |||||||||
Number of properties acquired | property | 2 | |||||||||
Aggregate purchase price | $ 85,000 | |||||||||
Select Medical Rehabilitation Facility [Member] | Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Ownership interest acquired (as a percent) | 100.00% | |||||||||
Aggregate purchase price | $ 63,580 | |||||||||
Andover Data Center II [Member] | Subsequent Event [Member] | ||||||||||
Subsequent Event [Line Items] | ||||||||||
Ownership interest acquired (as a percent) | 100.00% | |||||||||
Aggregate purchase price | $ 37,000 |