Document and Entity Information
Document and Entity Information - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Aug. 07, 2020 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Carter Validus Mission Critical REIT II, Inc. | |
Entity Central Index Key | 0001567925 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Class A shares [Member] | ||
Entity Common Stock, Shares Outstanding | 166,053 | |
Class I shares [Member] | ||
Entity Common Stock, Shares Outstanding | 12,542 | |
Class T shares [Member] | ||
Entity Common Stock, Shares Outstanding | 39,205 | |
Class T2 shares [Member] | ||
Entity Common Stock, Shares Outstanding | 3,457 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Real estate: | ||
Land | $ 338,340 | $ 343,444 |
Buildings and improvements, less accumulated depreciation of $162,790 and $128,304, respectively | 2,372,309 | 2,422,102 |
Construction in progress | 12,762 | 2,916 |
Total real estate, net | 2,723,411 | 2,768,462 |
Cash and cash equivalents | 74,782 | 69,342 |
Acquired intangible assets, less accumulated amortization of $80,977 and $64,164, respectively | 264,357 | 285,459 |
Right-of-use assets - operating leases | 29,154 | 29,537 |
Notes receivable, net | 31,419 | 2,700 |
Other assets, net | 95,255 | 84,034 |
Total assets | 3,218,378 | 3,239,534 |
Liabilities: | ||
Notes payable, net of deferred financing costs of $2,040 and $2,500, respectively | 453,562 | 454,845 |
Credit facility, net of deferred financing costs of $6,560 and $7,385, respectively | 931,440 | 900,615 |
Accounts payable due to affiliates | 8,149 | 9,759 |
Accounts payable and other liabilities | 65,773 | 45,354 |
Acquired intangible liabilities, less accumulated amortization of $15,089 and $12,332, respectively | 56,781 | 59,538 |
Operating lease liabilities | 31,103 | 31,004 |
Total liabilities | 1,546,808 | 1,501,115 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value per share, 510,000,000 shares authorized; 233,203,373 and 231,416,123 shares issued, respectively; 220,865,308 and 221,912,714 shares outstanding, respectively | 2,209 | 2,219 |
Additional paid-in capital | 1,972,886 | 1,981,848 |
Accumulated distributions in excess of earnings | (277,349) | (240,946) |
Accumulated other comprehensive loss | (26,178) | (4,704) |
Total stockholders’ equity | 1,671,568 | 1,738,417 |
Noncontrolling interests | 2 | 2 |
Total equity | 1,671,570 | 1,738,419 |
Total liabilities and stockholders’ equity | $ 3,218,378 | $ 3,239,534 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Buildings and improvements, accumulated depreciation | $ 162,790 | $ 128,304 |
Acquired intangible assets, accumulated amortization | 80,977 | 64,164 |
Notes payable, deferred financing costs | 2,040 | 2,500 |
Credit facility, deferred financing costs | 6,560 | 7,385 |
Acquired intangible liabilities, accumulated amortization | $ 15,089 | $ 12,332 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 510,000,000 | 510,000,000 |
Common stock, shares issued (in shares) | 233,203,373 | 231,416,123 |
Common stock, shares outstanding (in shares) | 220,865,308 | 221,912,714 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue: | ||||
Rental revenue | $ 68,875 | $ 46,937 | $ 138,060 | $ 93,404 |
Expenses: | ||||
Rental expenses | 10,922 | 10,142 | 22,410 | 19,270 |
General and administrative expenses | 4,099 | 1,535 | 7,787 | 2,938 |
Asset management fees | 5,969 | 3,493 | 11,925 | 6,987 |
Depreciation and amortization | 25,294 | 15,610 | 52,359 | 33,856 |
Total expenses | 46,284 | 30,780 | 94,481 | 63,051 |
Gain on real estate disposition | 2,703 | 0 | 2,703 | 0 |
Income from operations | 25,294 | 16,157 | 46,282 | 30,353 |
Interest and other expense, net | 14,199 | 9,893 | 29,518 | 19,728 |
Net income attributable to common stockholders | 11,095 | 6,264 | 16,764 | 10,625 |
Other comprehensive loss: | ||||
Unrealized loss on interest rate swaps, net | (1,140) | (7,552) | (21,474) | (11,163) |
Other comprehensive loss | (1,140) | (7,552) | (21,474) | (11,163) |
Comprehensive income (loss) attributable to common stockholders | $ 9,955 | $ (1,288) | $ (4,710) | $ (538) |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 220,992,009 | 136,135,710 | 221,285,475 | 136,157,406 |
Diluted (in shares) | 221,029,409 | 136,161,037 | 221,319,218 | 136,182,819 |
Net income per common share attributable to common stockholders: | ||||
Basic (in dollars per share) | $ 0.05 | $ 0.05 | $ 0.08 | $ 0.08 |
Diluted (in dollars per share) | 0.05 | 0.05 | 0.08 | 0.08 |
Distributions declared per common share (in dollars per share) | $ 0.12 | $ 0.16 | $ 0.24 | $ 0.31 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Distributions in Excess of Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Stockholders’ Equity [Member] | Noncontrolling Interests [Member] |
Balance, (in shares) at Dec. 31, 2018 | 136,466,242 | ||||||
Balance, beginning at Dec. 31, 2018 | $ 1,047,385 | $ 1,364 | $ 1,192,340 | $ (152,421) | $ 6,100 | $ 1,047,383 | $ 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 2,255,937 | ||||||
Issuance of common stock under the distribution reinvestment plan | 20,866 | $ 23 | 20,843 | 20,866 | |||
Vesting of restricted stock (in shares) | 2,250 | ||||||
Vesting of restricted stock | 46 | 46 | 46 | ||||
Distribution and servicing fees | 94 | 94 | 94 | ||||
Other offering costs | (289) | (289) | (289) | ||||
Repurchase of common stock (in shares) | (2,325,715) | ||||||
Repurchase of common stock | (21,513) | $ (23) | (21,490) | (21,513) | |||
Distributions to common stockholders | (42,616) | (42,616) | (42,616) | ||||
Other comprehensive loss | (11,163) | (11,163) | (11,163) | ||||
Net income | 10,625 | 10,625 | 10,625 | ||||
Balance, (in shares) at Jun. 30, 2019 | 136,398,714 | ||||||
Balance, ending at Jun. 30, 2019 | 1,003,435 | $ 1,364 | 1,191,544 | (184,515) | (4,960) | 1,003,433 | 2 |
Balance, (in shares) at Mar. 31, 2019 | 136,428,375 | ||||||
Balance, beginning at Mar. 31, 2019 | 1,026,661 | $ 1,364 | 1,192,062 | (169,359) | 2,592 | 1,026,659 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 1,133,525 | ||||||
Issuance of common stock under the distribution reinvestment plan | 10,481 | $ 11 | 10,470 | 10,481 | |||
Vesting of restricted stock (in shares) | 2,250 | ||||||
Vesting of restricted stock | 23 | 23 | 23 | ||||
Distribution and servicing fees | 42 | 42 | 42 | ||||
Other offering costs | (284) | (284) | (284) | ||||
Repurchase of common stock (in shares) | (1,165,436) | ||||||
Repurchase of common stock | (10,780) | $ (11) | (10,769) | (10,780) | |||
Distributions to common stockholders | (21,420) | (21,420) | (21,420) | ||||
Other comprehensive loss | (7,552) | (7,552) | (7,552) | ||||
Net income | 6,264 | 6,264 | 6,264 | ||||
Balance, (in shares) at Jun. 30, 2019 | 136,398,714 | ||||||
Balance, ending at Jun. 30, 2019 | $ 1,003,435 | $ 1,364 | 1,191,544 | (184,515) | (4,960) | 1,003,433 | 2 |
Balance, (in shares) at Dec. 31, 2019 | 221,912,714 | 221,912,714 | |||||
Balance, beginning at Dec. 31, 2019 | $ 1,738,419 | $ 2,219 | 1,981,848 | (240,946) | (4,704) | 1,738,417 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 1,785,000 | ||||||
Issuance of common stock under the distribution reinvestment plan | 15,442 | $ 18 | 15,424 | 15,442 | |||
Vesting of restricted stock (in shares) | 2,250 | ||||||
Vesting of restricted stock | 57 | 57 | 57 | ||||
Distribution and servicing fees | 59 | 59 | 59 | ||||
Other offering costs | (9) | (9) | (9) | ||||
Repurchase of common stock (in shares) | (2,834,656) | ||||||
Repurchase of common stock | (24,521) | $ (28) | (24,493) | (24,521) | |||
Distributions to common stockholders | (53,167) | (53,167) | (53,167) | ||||
Other comprehensive loss | (21,474) | (21,474) | (21,474) | ||||
Net income | $ 16,764 | 16,764 | 16,764 | ||||
Balance, (in shares) at Jun. 30, 2020 | 220,865,308 | 220,865,308 | |||||
Balance, ending at Jun. 30, 2020 | $ 1,671,570 | $ 2,209 | 1,972,886 | (277,349) | (26,178) | 1,671,568 | 2 |
Balance, (in shares) at Mar. 31, 2020 | 221,387,100 | ||||||
Balance, beginning at Mar. 31, 2020 | 1,692,666 | $ 2,214 | 1,977,360 | (261,872) | (25,038) | 1,692,664 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 891,257 | ||||||
Issuance of common stock under the distribution reinvestment plan | 7,711 | $ 9 | 7,702 | 7,711 | |||
Vesting of restricted stock (in shares) | 2,250 | ||||||
Vesting of restricted stock | 30 | 30 | 30 | ||||
Distribution and servicing fees | 26 | 26 | 26 | ||||
Other offering costs | (2) | (2) | (2) | ||||
Repurchase of common stock (in shares) | (1,415,299) | ||||||
Repurchase of common stock | (12,244) | $ (14) | (12,230) | (12,244) | |||
Distributions to common stockholders | (26,572) | (26,572) | (26,572) | ||||
Other comprehensive loss | (1,140) | (1,140) | (1,140) | ||||
Net income | $ 11,095 | 11,095 | 11,095 | ||||
Balance, (in shares) at Jun. 30, 2020 | 220,865,308 | 220,865,308 | |||||
Balance, ending at Jun. 30, 2020 | $ 1,671,570 | $ 2,209 | $ 1,972,886 | $ (277,349) | $ (26,178) | $ 1,671,568 | $ 2 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net income attributable to common stockholders | $ 16,764 | $ 10,625 |
Adjustments to reconcile net income attributable to common stockholders to net cash provided by operating activities: | ||
Depreciation and amortization | 52,359 | 33,856 |
Amortization of deferred financing costs | 1,893 | 1,229 |
Amortization of above-market leases | 1,500 | 311 |
Amortization of below-market leases | (2,757) | (2,464) |
Amortization of origination fee | 26 | 0 |
Reduction in the carrying amount of right-of-use assets - operating leases, net | 467 | 224 |
Gain on real estate disposition | (2,703) | 0 |
Straight-line rent | (10,911) | (5,656) |
Stock-based compensation | 57 | 46 |
Changes in operating assets and liabilities: | ||
Accounts payable and other liabilities | (543) | (358) |
Accounts payable due to affiliates | 21 | (205) |
Other assets | (433) | 963 |
Net cash provided by operating activities | 55,740 | 38,571 |
Cash flows from investing activities: | ||
Investment in real estate | (5,030) | 0 |
Proceeds from real estate disposition | 6,129 | 0 |
Capital expenditures | (13,610) | (6,169) |
Payments of deal costs | (126) | (857) |
Real estate deposit | 100 | (10) |
Net cash used in investing activities | (12,537) | (7,036) |
Cash flows from financing activities: | ||
Payments on notes payable | (1,743) | (717) |
Proceeds from credit facility | 95,000 | 15,000 |
Payments on credit facility | (65,000) | 0 |
Payments of deferred financing costs | (32) | (1,465) |
Repurchase of common stock | (24,521) | (21,513) |
Offering costs on issuance of common stock | (1,608) | (1,886) |
Distributions to common stockholders | (38,065) | (21,993) |
Net cash used in financing activities | (35,969) | (32,574) |
Net change in cash, cash equivalents and restricted cash | 7,234 | (1,039) |
Cash, cash equivalents and restricted cash - Beginning of period | 80,230 | 79,527 |
Cash, cash equivalents and restricted cash - End of period | 87,464 | 78,488 |
Supplemental cash flow disclosure: | ||
Interest paid, net of interest capitalized of $281 and $56, respectively | 29,083 | 18,907 |
Supplemental disclosure of non-cash transactions: | ||
Common stock issued through distribution reinvestment plan | 15,442 | 20,866 |
Accrued capital expenditures | 885 | 0 |
Accrued deal costs | 0 | 322 |
Origination of note receivable related to real estate disposition | $ 28,000 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 281 | $ 56 |
Organization and Business Opera
Organization and Business Operations | 6 Months Ended |
Jun. 30, 2020 | |
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. The Company elected, and currently qualifies, to be taxed as a real estate investment trust, or a REIT, under the Internal Revenue Code of 1986, as amended, or the Code, for federal income tax purposes. 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 special limited partner of the Operating Partnership. 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 leases to creditworthy tenants, as well as to make other real estate-related investments in such property types, which may include equity or debt interests in other real estate entities. During the six months ended June 30, 2020, the Company sold one real estate property. See Note 3—"Acquisitions and Dispositions" for additional information. As of June 30, 2020 , the Company owned 152 real estate properties. The Company raised the equity capital for its real estate investments through two public offerings, or the Offerings, from May 2014 through November 2018, and the Company has offered shares pursuant to its distribution reinvestment plan, or the DRIP, pursuant to two Registration Statements on Form S-3 (each, a “DRIP Offering” and together the "DRIP Offerings") since November 2017. On October 4, 2019 , the Company completed its merger, or the REIT Merger, with Carter Validus Mission Critical REIT, Inc., or REIT I, pursuant to which REIT I merged with and into Lightning Merger Sub, LLC, a wholly owned subsidiary of the Company. In accordance with the applicable provisions of the Maryland General Corporation Law, the separate existence of REIT I ceased. The combined company after the REIT Merger retained the name “Carter Validus Mission Critical REIT II, Inc.” On July 28, 2020, the Company and the Operating Partnership entered into a Membership Interest Purchase Agreement, or the Purchase Agreement, intended to provide for the internalization of the Company’s external management functions, or the Internalization Transaction. The Internalization Transaction is expected to close on September 30, 2020, subject to the satisfaction or waiver of certain conditions in the Purchase Agreement. On July 28, 2020, John E. Carter agreed, pursuant to the Purchase Agreement and as a closing condition therein, to resign from the Company’s board of directors at and upon the closing of the Internalization Transaction. In addition, on July 28, 2020, pursuant to the Purchase Agreement, Mr. Carter resigned as the Chairman of the board of directors, effective immediately. On July 28, 2020, the board of directors elected Jonathan Kuchin, a current independent director of the board of directors and the Chairman of the Audit Committee, as Chairman of the board of directors, effective immediately. Further, on July 28, 2020, CV Manager, LLC, or Manager Sub, in its post-closing capacity as the Company’s indirect subsidiary, the Company and the Operating Partnership entered into an employment agreement with each of Michael A. Seton and Kay C. Neely, which set forth the terms and conditions of Mr. Seton’s and Ms. Neely’s service as the Company’s Chief Executive Officer and Chief Financial Officer, respectively. Such employment agreements will be effective at and upon the closing of the Internalization Transaction. For more information regarding the proposed Internalization Transaction, see Note 17—"Subsequent Events." Except as the context otherwise requires, the “Company” refers 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 | 6 Months Ended |
Jun. 30, 2020 | |
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 United States generally accepted accounting principles, 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 a normal and recurring nature considered for a fair presentation, have been included. Operating results for the three and six months ended June 30, 2020 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The condensed consolidated balance sheet at December 31, 2019, has been derived from the audited consolidated financial statements at that date but does not include all of 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, 2019, and related notes thereto set forth in the Company’s Annual Report on Form 10-K, filed with the SEC on March 27, 2020. 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. 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 condensed consolidated 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. Restricted Cash Restricted cash consists of restricted cash held in escrow and restricted bank deposits. Restricted cash held in escrow includes cash held by lenders in escrow accounts for tenant and capital improvements, repairs and maintenance and other lender reserves for certain properties, in accordance with the respective lender’s loan agreement. Restricted bank deposits consist of tenant receipts for certain properties which are required to be deposited into lender-controlled accounts in accordance with the respective lender's loan agreement. Restricted cash held in escrow and restricted bank deposits are reported in other assets, net in the accompanying condensed consolidated balance sheets . See Note 8—"Other Assets, Net." The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the totals shown in the condensed consolidated statements of cash flows (amounts in thousands): Six Months Ended 2020 2019 Beginning of period: Cash and cash equivalents 69,342 68,360 Restricted cash 10,888 11,167 Cash, cash equivalents and restricted cash $ 80,230 $ 79,527 End of period: Cash and cash equivalents 74,782 66,049 Restricted cash 12,682 12,439 Cash, cash equivalents and restricted cash $ 87,464 $ 78,488 Notes Receivable Notes receivable are recorded at their outstanding principal balance, net of any unearned income, unamortized deferred fees and costs and allowances for loan losses. The Company defers notes receivable origination costs and fees and amortizes them as an adjustment of yield over the term of the related note receivable. Amortization of the notes receivable origination costs and fees are recorded in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income (loss) . During the six months ended June 30, 2020, in connection with the sale of a healthcare property, a wholly-owned subsidiary of the Company issued a note receivable in the principal amount of $28,000,000 . See Note 7—"Notes Receivable, Net" for further discussion. The Company evaluates the collectability of both interest and principal on each note receivable to determine whether it is collectible, primarily through the evaluation of credit quality indicators, such as the tenant's financial condition, collateral, evaluations of historical loss experience, current economic conditions and other relevant factors, including contractual terms of repayments. Evaluating a note receivable for potential impairment requires management to exercise judgment. The use of alternative assumptions in evaluating a note receivable could result in a different determination of the note's estimated fair value and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the note receivable. See " Recently Adopted Accounting Pronouncements- Measurement of Credit Losses on Financial Instruments" section below for further discussion. Impairment of Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets may not be recoverable, the Company assesses the recoverability of the asset group by estimating whether the Company will recover the carrying value of the asset group through its undiscounted future cash flows and their eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the asset group, the Company will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the asset group. When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental rates subsequent to the expiration of current lease arrangements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in the future cash flow analysis could result in a different determination of the property’s future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate and related assets. In addition, the Company estimates the fair value of the assets by applying a market approach using comparable sales for certain properties. The use of alternative assumptions in the market approach analysis could result in a different determination of the property’s estimated fair value and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate and related assets. Impairment of Real Estate During the three and six months ended June 30, 2020 and 2019 , no impairment losses were recorded on real estate assets. Impairment of Acquired Intangible Assets and Acquired Intangible Liabilities During the three months ended June 30, 2020 and 2019 , the Company did not record impairment of acquired intangible assets or acquired intangible liabilities. During the six months ended June 30, 2020 , the Company recognized impairments of an in-place lease intangible asset in the amount of approximately $1,484,000 and an above-market lease intangible asset in the amount of approximately $344,000 , by accelerating the amortization of the acquired intangible assets related to a healthcare tenant of the Company that was experiencing financial difficulties and vacated the property on June 19, 2020. During the six months ended June 30, 2019 , the Company recognized an impairment of an in-place lease intangible asset in the amount of approximately $2,658,000 , by accelerating the amortization of an acquired intangible asset related to a healthcare tenant of the Company that was experiencing financial difficulties and for which the associated lease terminated on June 25, 2019 . Concentration of Credit Risk and Significant Leases As of June 30, 2020 , the Company had cash on deposit, including restricted cash, in certain financial institutions that had deposits in excess of current federally insured levels. 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 not experienced a loss or lack of access to cash in its accounts. As of June 30, 2020 , the Company owned real estate investments in two micropolitan statistical areas and 67 metropolitan statistical areas, or MSAs, two MSAs of which accounted for 10.0% or more of rental revenue. Real estate investments located in the Atlanta-Sandy Springs-Roswell, Georgia MSA and the Houston-The Woodlands-Sugar Land, Texas MSA accounted for 11.6% and 10.3% , respectively, of rental revenue for the six months ended June 30, 2020 . As of June 30, 2020 , the Company had one exposure to tenant concentration that accounted for 10.0% or more of rental revenue for the six months ended June 30, 2020 . The leases with tenants under common control of Post Acute Medical, LLC accounted for 10.1% of rental revenue for the six months ended June 30, 2020 . Share Repurchase Program The Company’s share repurchase program, or SRP, allows for repurchases of shares of the Company’s common stock when certain criteria are met. The SRP provides that all repurchases during any calendar year, including those redeemable upon death or a Qualifying Disability of a stockholder, are limited to those that can be funded with equivalent proceeds raised from the DRIP during the prior calendar year and other operating funds, if any, as the board of directors, in its sole discretion, may reserve for this purpose. Repurchases of shares of the Company’s common stock are at the sole discretion of the Company’s board of directors, provided, however, 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 as of December 31 st of the previous calendar year. Subject to the terms and limitations of the SRP, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation and DRIP funding limitations, the SRP is available to any stockholder as a potential means of interim liquidity. In addition, the Company’s board of directors, in its sole discretion, may suspend (in whole or in part) the SRP at any time, and may amend, reduce, terminate or otherwise change the SRP upon 30 days' prior notice to the Company’s stockholders for any reason it deems appropriate. The Company generally honors valid repurchase requests approximately 30 days following the end of the applicable quarter. The Company reached the DRIP funding limitation, and was not able to fully accommodate all repurchase requests for the second quarter repurchase date of 2020, which was April 30, 2020. See Part II, Item 2. "Unregistered Sales of Equity Securities" for further information for the second quarter repurchase date of 2020. On April 30, 2020 , due to the uncertainty surrounding the ongoing coronavirus, or COVID-19, pandemic and any impact it may have on the Company, the Company's board of directors decided to temporarily suspend share repurchases under the SRP, effe ctive wit h repurchase requests that would otherwise be processed on the third quarter repurchase date of 2020, which was July 30, 2020 . However, the Company will continue to process repurchases due to death in accordance with the terms of its SRP. See Part II, Item 2. "Unregistered Sales of Equity Securities" for more information on the Company's SRP. During the six months ended June 30, 2020 , the Company repurchased 2,834,656 Class A shares, Class I shares, Class T shares and Class T2 shares of common stock ( 2,197,452 Class A shares, 395,334 Class I shares, 238,206 Class T shares and 3,664 Class T2 shares) for an aggregate purchase price of approximately $24,521,000 (an average of $8.65 per share). During the six months ended June 30, 2019 , the Company repurchased 2,325,715 Class A shares, Class I shares, Class T shares and Class T2 shares of common stock ( 1,749,624 Class A shares, 188,680 Class I shares, 382,012 Class T shares and 5,399 Class T2 shares) for an aggregate purchase price of approximately $21,513,000 (an average of $9.25 per share). Distribution Policy and Distributions Payable In order to maintain its status as a REIT, the Company is required to make distributions each taxable year equal to at least 90% of its REIT taxable income, computed without regard to the dividends paid deduction and excluding capital gains. To the extent funds are available, the Company intends to continue to pay regular distributions to stockholders. Distributions are paid to stockholders of record as of the applicable record dates. Distributions are payable to stockholders from legally available funds therefor. Earnings Per Share The Company calculates basic earnings per share by dividing net income 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. During the three and six months ended June 30, 2020 , diluted earnings per share reflected the effect of approximately 37,000 and 34,000 of non-vested shares of restricted common stock that were outstanding as of each period, respectively. During the three and six months ended June 30, 2019, diluted earnings per share reflected the effect of approximately 25,000 of non-vested shares of restricted common stock that were outstanding as of each period. Reportable Segments Accounting Standards Codification, or ASC, 280, Segment Reporting , establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. As of June 30, 2020 and December 31, 2019 , the Company operated through two reportable business segments— real estate investments in data centers and healthcare. With the continued expansion of the Company’s portfolio, segregation of the Company’s operations into two reportable segments is useful in assessing the performance of the Company’s business in the same way that management reviews performance and makes operating decisions. See Note 12—"Segment Reporting" for further discussion on the reportable segments of the Company. Derivative Instruments and Hedging Activities As required by ASC 815, Derivatives and Hedging , or ASC 815, the Company records all derivative instruments at fair value as assets and liabilities on its condensed consolidated balance sheets . 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 such period. In accordance with the fair value measurement guidance Accounting Standards Update, or 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. 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 of 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 gains or losses on the derivative instruments are reported as a component of other comprehensive loss in the condensed consolidated statements of comprehensive income (loss) and are reclassified into earnings in the same line item associated with the forecasted transaction in the same period during which the hedged transactions affect earnings. See additional discussion in Note 14—"Derivative Instruments and Hedging Activities." Recently Adopted Accounting Pronouncements Leases—Rent Concessions The ongoing COVID-19 pandemic has forced the temporary closure, changes to the operating hours or other temporary changes to the business of certain healthcare and data center tenants of the Company. In response, some tenants are seeking rent concessions, including decreased rent and rent deferrals for COVID-19 affected periods. To provide operational clarity, on April 8, 2020, the Financial Accounting Standards Board, or FASB, issued practical expedients to the lease modification guidance in ASC 842, Leases , in the context of the COVID-19 crisis for leases where the total lease cash flows will remain substantially the same or less than those after the COVID-19 related effects. Entities may choose to forgo the evaluation of the enforceable rights and obligations of the original lease agreements in accordance with ASC 842, Leases . An entity may elect to account for rent concessions either: • as if they are part of the enforceable rights and obligations of the parties under the existing lease contracts; or • as a lease modification. As a lessor, for leases impacted by COVID-19, the Company elected t o account for any rent concessions as if they were part of the enforceable rights and obligations under the existing lease. During the three months ended June 30, 2020, the Company granted rent deferrals to a certain number of tenants impacted by COVID-19 with immaterial impact to the Company's condensed consolidated financial statements and no impact on the collectability of tenant receivables over their respective term of the lease. During the six months ended June 30, 2020, the Company entered into 29 rent concessions and lease modifications impacted by COVID-19 and collected approximately 97% of rental revenue originally contracted for such period. As a lessee, the Company did not elect the practical expedient and will apply the lease modification guidance in accordance with ASC 842, Leases , if changes to ground lease agreements occur. The Company had not modified any of its ground lease agreements as of June 30, 2020 . Measurement of Credit Losses on Financial Instruments On January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses , or ASU 2016-13. ASU 2016-13 requires a new model for estimating credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities and net investments in direct financing leases, among other financial instruments. The new model for estimated credit losses is applicable to the Company's notes receivable. Other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the estimated credit loss model have some amount of credit loss reserve. The reserve is to reflect the GAAP principal underlying the estimated credit loss model that all loans, debt securities, and similar assets have an inherent risk of loss, regardless of credit quality, subordinate capital or other mitigating factors. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for credit losses. The standard does not apply to receivables arising from operating leases, which are within the scope of ASC 842, Leases . The adoption of ASU 2016-13 did not have any impact to the Company’s consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848), or ASU 2020-04 . ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time through, December 31, 2022, as reference rate reform activities occur. During the six months ended June 30, 2020 , the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact the guidance may have on its condensed consolidated financial statements and may apply other elections, as applicable, as additional changes in the market occur. 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. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions 2020 Acquisition During the six months ended June 30, 2020 , the Company purchased one real estate property, or the 2020 Acquisition, which was determined to be an asset acquisition. Upon the completion of the 2020 Acquisition, the Company allocated the purchase price of the real estate property to acquired tangible assets, consisting of land and buildings and improvements and acquired intangible assets, consisting of an in-place lease, based on the relative fair value method of allocating all accumulated costs. The following table summarizes the consideration transferred for the 2020 Acquisition during the six months ended June 30, 2020 : Property Description Date Acquired Ownership Percentage Purchase Price Grimes Healthcare Facility 2/19/2020 100% $ 5,030 The following table summarizes the Company's purchase price allocation of the 2020 Acquisition during the six months ended June 30, 2020 (amounts in thousands): Total Land $ 831 Buildings and improvements 3,690 In-place lease 509 Total assets acquired $ 5,030 Acquisition fees and costs associated with transactions determined to be asset acquisitions are capitalized. The Company capitalized acquisition fees and costs of approximately $205,000 related to the 2020 Acquisition, which are included in the Company's allocation of the real estate acquisition presented above. The total amount of all acquisition fees and costs is limited to 6.0% of the contract purchase price of a property, unless the Company’s board of directors determines a higher transaction fee to be commercially competitive, fair and reasonable to the Company. 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. During the six months ended June 30, 2020 , acquisition fees and costs did not exceed 6.0% of the contract purchase price of the 2020 Acquisition during such period. 2020 Disposition and Origination of Note Receivable On May 28, 2020, the Company sold one healthcare property, the San Antonio Healthcare Facility II, for an aggregate sale price of $35,000,000 , which generated net proceeds of $6,129,000 , or the 2020 Disposition. The Company recognized an aggregate gain on sale of $2,703,000 , in gain on real estate disposition in the condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2020 . The sale price of $35,000,000 consisted of $7,000,000 cash and a $28,000,000 investment in note receivable. See Note 7—"Notes Receivable, Net" for additional information. |
Acquired Intangible Assets, Net
Acquired Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Acquired Intangible Assets, Net | Acquired Intangible Assets, Net Acquired intangible assets, net, consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands, except weighted average remaining life amounts): June 30, 2020 December 31, 2019 In-place leases, net of accumulated amortization of $77,942 and $62,252, respectively (with a weighted average remaining life of 9.9 years and 10.4 years, respectively) $ 247,829 $ 266,856 Above-market leases, net of accumulated amortization of $3,035 and $1,912, respectively (with a weighted average remaining life of 9.7 years and 10.5 years, respectively) 16,528 18,603 $ 264,357 $ 285,459 The aggregate weighted average remaining life of the acquired intangible assets was 9.9 years and 10.4 years as of June 30, 2020 and December 31, 2019 , respectively. Amortization of the acquired intangible assets was $8,254,000 and $5,100,000 for the three months ended June 30, 2020 and 2019 , respectively. Amortization of the acquired intangible assets was $18,801,000 and $12,895,000 for the six months ended June 30, 2020 and 2019 , respectively. Of the $18,801,000 recorded for the six months ended June 30, 2020 , $1,828,000 was attributable to accelerated amortization due to the impairment of one in-place lease intangible asset and one above-market lease intangible asset. Of the $12,895,000 recorded for the six months ended June 30, 2019 , $2,658,000 was attributable to accelerated amortization due to the impairment of an in-place lease intangible asset. Amortization of the in-place leases is included in depreciation and amortization and amortization of the above-market leases is recorded as an adjustment to rental revenue in the accompanying condensed consolidated statements of comprehensive income (loss) . |
Acquired Intangible Liabilities
Acquired Intangible Liabilities, Net | 6 Months Ended |
Jun. 30, 2020 | |
Intangible Lease Liabilities, Net [Abstract] | |
Acquired Intangible Liabilities, Net | Acquired Intangible Liabilities, Net Acquired intangible liabilities, net, consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands, except weighted average remaining life amounts): June 30, 2020 December 31, 2019 Below-market leases, net of accumulated amortization of $15,089 and $12,332, respectively (with a weighted average remaining life of 15.6 years and 16.1 years, respectively) $ 56,781 $ 59,538 Amortization of the below-market leases was $1,371,000 and $1,232,000 for the three months ended June 30, 2020 and 2019 , respectively, and $2,757,000 and $2,464,000 for the six months ended June 30, 2020 and 2019 , respectively. Amortization of below-market leases is recorded as an adjustment to rental revenue in the accompanying condensed consolidated statements of comprehensive income (loss) . |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases Lessor Rental Revenue The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases 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 properties leased to tenants. Future rent to be received from the Company's investments in real estate assets under the terms of non-cancelable operating leases in effect as of June 30, 2020 , including optional renewal periods, for the six months ending December 31, 2020, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Six months ending December 31, 2020 $ 110,167 2021 228,670 2022 233,625 2023 233,547 2024 229,008 Thereafter 1,619,684 Total (1) $ 2,654,701 (1) The total future rent amount of $2,654,701,000 includes approximately $47,642,000 in rent to be received in connection with two leases executed as of December 31, 2019, at two development properties with estimated lease start dates of December 1, 2020 and March 1, 2021 . Lessee Rental Expense The Company has 17 ground leases, for which four do not have corresponding operating lease liabilities because the Company did not have future payment obligations at the acquisition of these leases. The ground lease obligations generally require fixed annual rental payments and may also include escalation clauses. The weighted average remaining lease term for the Company's operating leases was 50.1 years and 50.7 years as of June 30, 2020 and December 31, 2019 , respectively. The Company's ground leases do not provide an implicit interest rate. In order to calculate the present value of the remaining ground lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, the Company's credit rating and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying ground lease. As a result, the IBRs ranged between 5.0% and 6.6% . The future rent payments, discounted by the Company's adjusted incremental borrowing rates, under non-cancelable ground leases, as of June 30, 2020 , for the six months ending December 31, 2020, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Six months ending December 31, 2020 $ 817 2021 1,634 2022 1,634 2023 1,638 2024 1,687 Thereafter 136,719 Total undiscounted rental payments 144,129 Less imputed interest (113,026 ) Total operating lease liabilities $ 31,103 |
Leases | Leases Lessor Rental Revenue The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases 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 properties leased to tenants. Future rent to be received from the Company's investments in real estate assets under the terms of non-cancelable operating leases in effect as of June 30, 2020 , including optional renewal periods, for the six months ending December 31, 2020, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Six months ending December 31, 2020 $ 110,167 2021 228,670 2022 233,625 2023 233,547 2024 229,008 Thereafter 1,619,684 Total (1) $ 2,654,701 (1) The total future rent amount of $2,654,701,000 includes approximately $47,642,000 in rent to be received in connection with two leases executed as of December 31, 2019, at two development properties with estimated lease start dates of December 1, 2020 and March 1, 2021 . Lessee Rental Expense The Company has 17 ground leases, for which four do not have corresponding operating lease liabilities because the Company did not have future payment obligations at the acquisition of these leases. The ground lease obligations generally require fixed annual rental payments and may also include escalation clauses. The weighted average remaining lease term for the Company's operating leases was 50.1 years and 50.7 years as of June 30, 2020 and December 31, 2019 , respectively. The Company's ground leases do not provide an implicit interest rate. In order to calculate the present value of the remaining ground lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, the Company's credit rating and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying ground lease. As a result, the IBRs ranged between 5.0% and 6.6% . The future rent payments, discounted by the Company's adjusted incremental borrowing rates, under non-cancelable ground leases, as of June 30, 2020 , for the six months ending December 31, 2020, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Six months ending December 31, 2020 $ 817 2021 1,634 2022 1,634 2023 1,638 2024 1,687 Thereafter 136,719 Total undiscounted rental payments 144,129 Less imputed interest (113,026 ) Total operating lease liabilities $ 31,103 |
Notes Receivable, Net
Notes Receivable, Net | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Notes Receivable, Net | Notes Receivable, Net As of June 30, 2020, the Company had two notes receivable outstanding in the amount of $31,419,000 secured by real estate properties. The following summarizes the notes receivable balances as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Interest Rate (1) Maturity Date Note receivable $ 2,700 $ 2,700 6.0% 11/05/2020 Note receivable 28,719 — 7.0% 06/01/2022 Total notes receivable $ 31,419 $ 2,700 (1) As of June 30, 2020. As described in Note 3—"Acquisitions and Dispositions" , in connection with the sale of the San Antonio Healthcare Facility II on May 28, 2020, a wholly-owned subsidiary of the Company entered into a note receivable agreement in the principal amount of $28,000,000 . The note receivable is secured by a first mortgage lien on San Antonio Healthcare Facility II and matures on June 1, 2022, or the Maturity Date. The interest rate of the note receivable is 7.0% per annum for the period commencing May 28, 2020 through May 31, 2021, and 8.0% per annum for the period commencing on June 1, 2021 through the Maturity Date. Monthly payments are interest only, with the outstanding principal due and payable on the Maturity Date; however, the outstanding principal and any unpaid accrued interest can be prepaid at any time without penalty or charge. In connection with the note receivable, the Company incurred a loan origination fee in the amount of $560,000 . During the three and six months June 30, 2020, the Company recognized $185,000 of interest income on notes receivable, offset by amortization of loan origination fee in the amount of $26,000 , which were recorded in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income (loss). As of June 30, 2020, the Company had unamortized loan origination fee in the amount of $534,000 , which was recorded in notes receivable, net, in the accompanying condensed consolidated balance sheets . Expected Credit Losses As of June 30, 2020, the Company had two notes receivable, one of which was determined to be a collateral dependent loan and the other the Company does not expect to incur a loss because it is secured by collateral that the Company believes has sufficient value to cover the note receivable in the event of a default by the borrower. The Company's evaluation considered factors such as the potential future value of the collateral, adjustments for current conditions and supportable forecasts for the collateral. As a result of the evaluation, the Company did no t record any estimated credit losses for its notes receivable for the three and six months ended June 30, 2020, because the Company believes that the collateral for these loans was sufficient to cover its investment. |
Other Assets, Net
Other Assets, Net | 6 Months Ended |
Jun. 30, 2020 | |
Other Assets [Abstract] | |
Other Assets, Net | Other Assets, Net Other assets, net, consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands): June 30, 2020 December 31, 2019 Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $6,272 and $5,696, respectively $ 2,050 $ 2,623 Leasing commissions, net of accumulated amortization of $422 and $240, respectively 11,125 10,288 Restricted cash 12,682 10,888 Tenant receivables 6,365 6,116 Straight-line rent receivable, net 59,437 48,526 Accounts receivable due from affiliates 21 — Prepaid and other assets 3,575 4,709 Derivative assets — 884 $ 95,255 $ 84,034 |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Accounts payable and other liabilities consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands): June 30, 2020 December 31, 2019 Accounts payable and accrued expenses $ 12,247 $ 11,448 Accrued interest expense 4,318 5,185 Accrued property taxes 4,479 3,537 Distributions payable to stockholders 8,753 9,093 Tenant deposits 1,014 1,500 Deferred rental income 8,784 9,003 Derivative liabilities 26,178 5,588 $ 65,773 $ 45,354 |
Notes Payable and Credit Facili
Notes Payable and Credit Facility | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable and Credit Facility | Notes Payable and Credit Facility The Company's debt outstanding as of June 30, 2020 and December 31, 2019 , consisted of the following (amounts in thousands): June 30, 2020 December 31, 2019 Notes payable: Fixed rate notes payable $ 218,997 $ 219,567 Variable rate notes payable fixed through interest rate swaps 236,605 237,778 Total notes payable, principal amount outstanding 455,602 457,345 Unamortized deferred financing costs related to notes payable (2,040 ) (2,500 ) Total notes payable, net of deferred financing costs 453,562 454,845 Credit facility: Variable rate revolving line of credit 138,000 108,000 Variable rate term loan fixed through interest rate swaps 400,000 250,000 Variable rate term loans 400,000 550,000 Total credit facility, principal amount outstanding 938,000 908,000 Unamortized deferred financing costs related to the term loan credit facility (6,560 ) (7,385 ) Total credit facility, net of deferred financing costs 931,440 900,615 Total debt outstanding $ 1,385,002 $ 1,355,460 Significant debt activity during the six months ended June 30, 2020 and subsequent, excluding scheduled principal payments, includes: • During the six months ended June 30, 2020 , the Company drew $95,000,000 on its credit facility, $20,000,000 of which was related to the 2020 Acquisition (discussed in Note 3—"Acquisitions and Dispositions" ) and the funding of share repurchases, and $75,000,000 was drawn to provide additional liquidity due to the uncertainty in overall economic conditions created by the COVID-19 pandemic. During the six months ended June 30, 2020 , the Company repaid $65,000,000 on its credit facility. • During the six months ended June 30, 2020 , three interest rate swap agreements, which the Company entered into in December 2019, with an effective date of January 1, 2020, effectively fixed LIBOR related to $150,000,000 of the term loans of the credit facility. • During the six months ended June 30, 2020 , the Company entered into two interest rate swap agreements, with an effective date of July 1, 2020 , which will effectively fix LIBOR related to $100,000,000 of the term loans of the credit facility. • F or the quarter ended June 30, 2020, the Company was not in compliance with one of its mortgage loan agreements as a result of a covenant requiring the tenant at the property to maintain a certain rent coverage ratio. The tenant at the property is a healthcare tenant that experienced a temporary reduction in patient volume as a result of the COVID-19 pandemic and has not missed any rental payments. The lenders waived compliance with the covenant through June 30, 2020. Consequently, as of June 30, 2020, the Company was in compliance with all covenants in the loan agreement. The mortgage note payable balance was approximately $30,812,000 as of June 30, 2020, and the Company is in discussion with its lenders to amend the loan agreement for this covenant. In the event the Company is not in compliance with the covenants in future periods and is unable to obtain a waiver, the lenders may choose to pursue remedies under the loan agreements, which could include, at the lenders' discretion, declaring the loan to be immediately due and payable, among other remedies. • On July 10, 2020, the Company amended its credit facility. See Note 17—"Subsequent Events" for information. The principal payments due on the notes payable and credit facility as of June 30, 2020 , for the six months ending December 31, 2020 , and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Six months ending December 31, 2020 $ 2,181 2021 146,026 2022 304,209 2023 282,710 2024 547,360 Thereafter 111,116 $ 1,393,602 |
Related-Party Transactions and
Related-Party Transactions and Arrangements | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions and Arrangements | Related-Party Transactions and Arrangements The Company has no direct employees. Substantially all of the Company's business is managed by the Advisor. The employees of the Advisor and other affiliates provide services to the Company related to acquisitions, property management, asset management, accounting, investor relations, and all other administrative services. On July 28, 2020, the Company and the Operating Partnership entered into the Purchase Agreement, which is intended to provide for the internalization of the Company’s external management functions. The Internalization Transaction is expected to close on September 30, 2020, subject to the satisfaction or waiver of certain conditions in the Purchase Agreement. See further discussion in Note 17—"Subsequent Events." Distribution and Servicing Fees Through the termination of the Offering on November 27, 2018, the Company paid SC Distributors, LLC, an affiliate of the Advisor that served as the dealer manager of the Offerings, or the Dealer Manager, selling commissions and dealer manager fees in connection with the sale of shares of certain classes of common stock. The Company continues to pay the Dealer Manager a distribution and servicing fee with respect to its Class T and Class T2 shares of common stock that were sold in the Initial Offering (primary Offering only) and the Offering. Distribution and servicing fees are recorded in the accompanying condensed consolidated statements of stockholders' equity as a reduction to equity as incurred. Acquisition Fees and Expenses 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 loans and similar assets (including without limitation mezzanine loans). In addition, the Company reimburses the Advisor for acquisition expenses incurred in connection with the selection and acquisition of properties or 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. Since the Company's formation through June 30, 2020 , the Company reimbursed the Advisor expenses of approximately 0.01% of the aggregate purchase price all of properties acquired. Acquisition fees and expenses associated with the acquisition of properties determined to be business combinations are expensed as incurred, including investment transactions that are no longer under consideration. Acquisition fees and expenses associated with transactions determined to be asset acquisitions are capitalized in total real estate, net, in the accompanying condensed consolidated balance sheets . Asset Management Fees The Company pays to the Advisor an asset management fee calculated on a monthly basis in an amount equal to 1/12th of 0.75% of aggregate asset value, which is payable monthly, in arrears. Operating Expense Reimbursement The Company reimburses the Advisor for all operating 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 exceed the greater of (a) 2% 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. Operating expenses incurred on the Company’s behalf are recorded in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income (loss) . Property Management Fees In connection with the rental, leasing, operation and management of the Company’s properties, the Company pays Carter Validus Real Estate Management Services II, LLC, a wholly-owned subsidiary of the Sponsor, or the Property Manager, and its affiliates, aggregate fees equal to 3.0% of gross revenues from the properties managed, or property management fees. The Company reimburses the Property Manager and its affiliates for property-level expenses that any of them pay or incur on the Company’s behalf, including certain 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 such third parties 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. Property management fees are recorded in rental expenses in the accompanying condensed consolidated statements of comprehensive income (loss) . Leasing Commission Fees The Company pays the Property Manager a separate fee in connection with leasing properties to new tenants or renewals or expansions of existing leases with existing tenants in an amount not to exceed the fee customarily charged in arm’s-length transactions by others rendering similar services in the same geographic area for similar properties as determined by a survey of brokers and agents in such area and which is typically less than $1,000 . Leasing commission fees are capitalized in other assets, net, in the accompanying condensed consolidated balance sheets and amortized over the terms of the related leases. Construction Management Fees For acting as general contractor and/or construction manager to supervise or coordinate projects or to provide major repairs or rehabilitation on the Company's 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. Construction management fees are capitalized in real estate, net, in the accompanying condensed consolidated balance sheets . Disposition Fees The Company pays its Advisor, or its affiliates, if the Advisor or its affiliate provide 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, equal to the lesser of 1.0% of the contract sales price or 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. Special Limited Partner Interest of Advisor The Advisor, as the special limited partner of the Operating Partnership, may be entitled to: (i) certain cash distributions upon the disposition of certain of the Operating Partnership’s assets; or (ii) a one-time payment in the form of cash, shares or promissory note or a combination of the forms of payment in connection with the redemption of the special limited partnership interests upon the occurrence of a listing of the Company’s shares of common stock on a national stock exchange or certain events that result in the termination or non-renewal of the advisory agreement. The Advisor would only become entitled to the compensation after stockholders have, in the aggregate, cumulative distributions equal to their invested capital plus an 8.0% cumulative, non-compounded annual return on such invested capital. No such compensation has been paid to the Advisor to date. The Advisor's special limited partnership interest in the Operating Partnership will be redeemed and cancelled at and upon the closing of the Internalization Transaction (as defined and discussed further in Note 17—"Subsequent Events." ) and the Advisor will not be entitled to any compensation as a special limited partner of the Operating Partnership. The following table details amounts incurred in connection with the Company's related-party transactions as described above for the three and six months ended June 30, 2020 and 2019 (amounts in thousands): Incurred Three Months Ended Six Months Ended Fee Entity 2020 2019 2020 2019 Distribution and servicing fees (1) SC Distributors, LLC $ (26 ) $ (42 ) $ (59 ) $ (94 ) Acquisition fees and costs Carter Validus Advisors II, LLC and its affiliates — — 97 — Asset management fees Carter Validus Advisors II, LLC and its affiliates 5,969 3,493 11,925 6,987 Property management fees Carter Validus Real Estate Management Services II, LLC 1,792 1,228 3,588 2,437 Operating expense reimbursement Carter Validus Advisors II, LLC and its affiliates 1,386 1,750 2,664 2,480 Leasing commission fees Carter Validus Real Estate Management Services II, LLC 244 95 483 98 Construction management fees Carter Validus Real Estate Management Services II, LLC 162 35 338 164 Disposition fees Carter Validus Advisors II, LLC and its affiliates 350 — 350 — Loan origination fees Carter Validus Advisors II, LLC and its affiliates 560 — 560 — Total $ 10,437 $ 6,559 $ 19,946 $ 12,072 (1) Reduction of distribution and servicing fees is a result of repurchases of Class T and Class T2 shares of common stock for the three and six months ended June 30, 2020 and June 30, 2019 . The following table details amounts payable to affiliates in connection with the Company's related-party transactions as described above as of June 30, 2020 and December 31, 2019 (amounts in thousands): Payable June 30, 2020 December 31, 2019 Fee Entity Distribution and servicing fees SC Distributors, LLC $ 4,591 $ 6,210 Asset management fees Carter Validus Advisors II, LLC and its affiliates 1,991 2,100 Property management fees Carter Validus Real Estate Management Services II, LLC 528 433 Operating expense reimbursement Carter Validus Advisors II, LLC and its affiliates 479 518 Leasing commission fees Carter Validus Real Estate Management Services II, LLC 373 299 Construction management fees Carter Validus Real Estate Management Services II, LLC 187 199 Total $ 8,149 $ 9,759 Additionally, as of June 30, 2020 , the Company recorded $21,000 due from Carter Validus Advisors II, LLC for a representations and warranties insurance policy in connection with the Internalization Transaction, the cost of which is shared with the Advisor and was paid by the Company. The receivable due from Carter Validus Advisors II, LLC was recorded in other assets, net, in the accompanying condensed consolidated balance sheets . |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2020 | |
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. The Company evaluates performance based on the net operating income of the individual properties in each segment. Net operating income, a non-GAAP financial measure, is defined as rental revenue, less rental expenses, w hich excludes depreciation and amortization, general and administrative expenses, asset management fees, gain on real estate disposition and interest and other expense, net. The Company believes that segment net operating income serves as a useful supplement to net income 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 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 as presented in the accompanying condensed consolidated financial statements and data included elsewhere in this Quarterly Report on Form 10-Q . Non-segment assets primarily consist of corporate assets, including cash and cash equivalents, real estate and escrow deposits, notes receivable and deferred financing costs attributable to the revolving line of credit portion of the Company's credit facility not attributable to individual properties. Summary information for the reportable segments during the three and six months ended June 30, 2020 and 2019 is as follows (amounts in thousands): Data Centers Healthcare Three Months Ended Revenue: Rental revenue $ 27,144 $ 41,731 $ 68,875 Expenses: Rental expenses (7,027 ) (3,895 ) (10,922 ) Segment net operating income $ 20,117 $ 37,836 57,953 Expenses: General and administrative expenses (4,099 ) Asset management fees (5,969 ) Depreciation and amortization (25,294 ) Gain on real estate disposition 2,703 Income from operations 25,294 Interest and other expense, net (14,199 ) Net income attributable to common stockholders $ 11,095 Data Centers Healthcare Three Months Ended Revenue: Rental revenue $ 27,838 $ 19,099 $ 46,937 Expenses: Rental expenses (8,137 ) (2,005 ) (10,142 ) Segment net operating income $ 19,701 $ 17,094 36,795 Expenses: General and administrative expenses (1,535 ) Asset management fees (3,493 ) Depreciation and amortization (15,610 ) Income from operations 16,157 Interest and other expense, net (9,893 ) Net income attributable to common stockholders $ 6,264 Data Centers Healthcare Six Months Ended June 30, 2020 Revenue: Rental revenue $ 54,903 $ 83,157 $ 138,060 Expenses: Rental expenses (14,176 ) (8,234 ) (22,410 ) Segment net operating income $ 40,727 $ 74,923 115,650 Expenses: General and administrative expenses (7,787 ) Asset management fees (11,925 ) Depreciation and amortization (52,359 ) Gain on real estate disposition 2,703 Income from operations 46,282 Interest and other expense, net (29,518 ) Net income attributable to common stockholders $ 16,764 Data Centers Healthcare Six Months Ended Revenue: Rental revenue $ 54,515 $ 38,889 $ 93,404 Expenses: Rental expenses (15,102 ) (4,168 ) (19,270 ) Segment net operating income $ 39,413 $ 34,721 74,134 Expenses: General and administrative expenses (2,938 ) Asset management fees (6,987 ) Depreciation and amortization (33,856 ) Income from operations 30,353 Interest and other expense, net (19,728 ) Net income attributable to common stockholders $ 10,625 There were no intersegment sales or transfers during the three and six months ended June 30, 2020 and 2019 . Assets by each reportable segment as of June 30, 2020 and December 31, 2019 are as follows (amounts in thousands): June 30, 2020 December 31, 2019 Assets by segment: Data centers $ 975,230 $ 989,953 Healthcare 2,142,284 2,184,450 All other 100,864 65,131 Total assets $ 3,218,378 $ 3,239,534 Capital additions, acquisitions and dispositions, on a cash basis, by reportable segments for the six months ended June 30, 2020 and 2019 are as follows (amounts in thousands): Six Months Ended 2020 2019 Capital additions by segment: Data centers $ 3,450 $ 6,019 Healthcare 10,160 150 Total 13,610 6,169 Acquisitions by segment: Healthcare 5,030 — Total 5,030 — Proceeds from Dispositions by segment: Healthcare (6,129 ) — Total (6,129 ) — Net cash outflows from capital additions, acquisitions and dispositions $ 12,511 $ 6,169 |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Notes payable—Fixed Rate —The estimated fair value of notes payable — fixed rate measured using observable inputs from similar liabilities (Level 2) was approximately $233,833,000 and $222,816,000 as of June 30, 2020 and December 31, 2019 , respectively, as compared to the outstanding principal of $218,997,000 and $219,567,000 as of June 30, 2020 and December 31, 2019 , respectively. The estimated fair value of notes payable — variable rate fixed through interest rate swap agreements (Level 2) was approximately $243,136,000 and $238,555,000 as of June 30, 2020 and December 31, 2019 , respectively, as compared to the outstanding principal of $236,605,000 and $237,778,000 as of June 30, 2020 and December 31, 2019 , respectively. Credit facility — Variable Rate —The outstanding principal of the credit facility—variable rate was $538,000,000 and $658,000,000 , which approximated its fair value as of June 30, 2020 and December 31, 2019 , respectively. The fair value of the Company's variable rate credit facility is estimated based on the interest rates currently offered to the Company by financial institutions. Credit facility — Fixed Rate —The estimated fair value of the credit facility—variable rate fixed through interest rate swap agreements (Level 2) was approximately $419,760,000 and $251,907,000 as of June 30, 2020 and December 31, 2019 , respectively, as compared to the outstanding principal of $400,000,000 and $250,000,000 as of June 30, 2020 and December 31, 2019 , respectively. Notes receivable —The outstanding principal balance of the notes receivable in the amount of $30,700,000 and $2,700,000 approximated the fair value as of June 30, 2020 and December 31, 2019 , respectively. The fair value was determined based on its respective collateral and measured using significant other observable inputs (Level 2), which requires certain judgments to be made by management. 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 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 June 30, 2020 , the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions, and 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. See Note 14—"Derivative Instruments and Hedging Activities" for further discussion of the Company's derivative instruments. The following tables show 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 June 30, 2020 and December 31, 2019 (amounts in thousands): June 30, 2020 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Liabilities: Derivative liabilities $ — $ 26,178 $ — $ 26,178 Total liabilities at fair value $ — $ 26,178 $ — $ 26,178 December 31, 2019 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 884 $ — $ 884 Total assets at fair value $ — $ 884 $ — $ 884 Liabilities: Derivative liabilities $ — $ 5,588 $ — $ 5,588 Total liabilities at fair value $ — $ 5,588 $ — $ 5,588 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2020 | |
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. Changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in accumulated other comprehensive (loss) income in the accompanying condensed consolidated statements of stockholders' equity and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest and other expense, net , as interest payments are made on the Company’s variable rate debt. During the next twelve months, the Company estimates that an additional $10,113,000 will be reclassified from accumulated other comprehensive loss as an increase to interest and other expense, net. See Note 13—"Fair Value" for 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 instruments (amounts in thousands): Derivatives Balance Effective Maturity June 30, 2020 December 31, 2019 Outstanding Fair Value of Outstanding Fair Value of Asset (Liability) Asset (Liability) Interest rate swaps Other assets, net/ 07/01/2016 to 12/22/2020 to $ 736,605 (1) $ — $ (26,178 ) $ 637,778 $ 884 $ (5,588 ) (1) Outstanding notional amount includes two interest rate swap agreements the Company entered into d uring the six months ended June 30, 2020 , with an effective date of July 1, 2020 , which will effectively fix LIBOR related to $100,000,000 of the term loans of the credit facility. The notional amount under the agreements is an indication of the extent of the Company’s involvement in each 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 swaps as cash flow hedges to hedge the variability of the anticipated cash flows on its variable rate credit facility and notes payable. The change in fair value of the derivative instruments that are designated as hedges are recorded in other comprehensive loss in the accompanying condensed consolidated statements of comprehensive income (loss) . The table below summarizes the amount of loss recognized on the interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2020 and 2019 (amounts in thousands): Derivatives in Cash Flow Amount of Loss Recognized Location of Loss Amount of (Loss) Income Total Amount of Interest and Other Expense, Net Presented in Condensed Consolidated Statements of Comprehensive Income (Loss) Three Months Ended June 30, 2020 Interest rate swaps $ (3,261 ) Interest and other expense, net $ (2,121 ) $ 14,199 Total $ (3,261 ) $ (2,121 ) Three Months Ended June 30, 2019 Interest rate swaps $ (6,846 ) Interest and other expense, net $ 706 $ 9,893 Total $ (6,846 ) $ 706 Six Months Ended June 30, 2020 Interest rate swaps $ (23,854 ) Interest and other expense, net $ (2,380 ) $ 29,518 Total $ (23,854 ) $ (2,380 ) Six Months Ended June 30, 2019 Interest rate swaps $ (9,801 ) Interest and other expense, net $ 1,362 $ 19,728 Total $ (9,801 ) $ 1,362 Credit Risk-Related Contingent Features T he Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. The Company records credit risk valuation adjustments on its interest rate swaps based on the respective credit quality of the Company and the counterparty. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. As of June 30, 2020 , the fair value of derivatives in a net liability position was $28,024,000 , inclusive of accrued interest but excluding any adjustment for nonperformance risk related to the agreement. As of June 30, 2020 , there were no termination events or events of default related to the interest rate swaps. Tabular Disclosure Offsetting Derivatives The Company has elected not to offset derivative positions in its condensed consolidated financial statements. The following tables present the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of June 30, 2020 and December 31, 2019 (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 December 31, 2019 $ 884 $ — $ 884 $ (5 ) $ — $ 879 Offsetting of Derivative Liabilities Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net June 30, 2020 $ 26,178 $ — $ 26,178 $ — $ — $ 26,178 December 31, 2019 $ 5,588 $ — $ 5,588 $ (5 ) $ — $ 5,583 The Company reports derivative assets and derivative liabilities in the accompanying condensed consolidated balance sheets as other assets, net , and accounts payable and other liabilities , respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income The following table presents a rollforward of amounts recognized in accumulated other comprehensive (loss) income by component for the six months ended June 30, 2020 and 2019 (amounts in thousands): Unrealized Loss on Derivative Balance as of December 31, 2019 $ (4,704 ) Other comprehensive loss before reclassification (23,854 ) Amount of loss reclassified from accumulated other comprehensive loss to net income 2,380 Other comprehensive loss (21,474 ) Balance as of June 30, 2020 $ (26,178 ) Unrealized Loss on Derivative Balance as of December 31, 2018 $ 6,100 Cumulative effect of accounting change 103 Balance as of January 1, 2019 6,203 Other comprehensive loss before reclassification (9,801 ) Amount of income reclassified from accumulated other comprehensive income to net income (1,362 ) Other comprehensive loss (11,163 ) Balance as of June 30, 2019 $ (4,960 ) The following table presents reclassifications out of accumulated other comprehensive (loss) income for the six months ended June 30, 2020 and 2019 (amounts in thousands): Details about Accumulated Other Amounts Reclassified from Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income (Loss) Six Months Ended 2020 2019 Interest rate swap contracts $ 2,380 $ (1,362 ) Interest and other expense, net |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of business, the Company may become subject to litigation or claims. As of June 30, 2020 , there were, and currently there are, no material pending legal proceedings to which the Company is a party. While the resolution of a lawsuit or proceeding may have an impact to the Company's financial results for the period in which it is resolved, the Company believes that the final resolution of the lawsuits or proceedings in which it is currently involved, either individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations or liquidity. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Distributions Paid to Stockholders The following table summarizes the Company's distributions paid to stockholders on July 1, 2020 , for the period from June 1, 2020 through June 30, 2020 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution July 1, 2020 Class A $ 5,258 $ 1,542 $ 6,800 July 1, 2020 Class I 306 206 512 July 1, 2020 Class T 648 676 1,324 July 1, 2020 Class T2 53 64 117 $ 6,265 $ 2,488 $ 8,753 The following table summarizes the Company's distributions paid to stockholders on August 3, 2020, for the period from July 1, 2020 through July 31, 2020 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution August 3, 2020 Class A $ 5,442 $ 1,592 $ 7,034 August 3, 2020 Class I 314 216 530 August 3, 2020 Class T 680 691 1,371 August 3, 2020 Class T2 55 66 121 $ 6,491 $ 2,565 $ 9,056 Distributions Authorized The following tables summarize the daily distributions approved and authorized by the board of directors of the Company subsequent to June 30, 2020 : Authorization Date (1) Common Stock Daily Distribution Rate (1) Annualized Distribution Per Share July 22, 2020 Class A $ 0.001366120 $ 0.50 July 22, 2020 Class I $ 0.001366120 $ 0.50 July 22, 2020 Class T $ 0.001129781 $ 0.41 July 22, 2020 Class T2 $ 0.001129781 $ 0.41 (1) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on August 1, 2020 and ending on August 31, 2020. The distributions will be calculated based on 366 days in the calendar year. The distributions declared for each record date in August 2020 will be paid in September 2020. The distributions will be payable to stockholders from legally available funds therefor. Internalization Transaction On July 28, 2020, the Company and the Operating Partnership entered into the Purchase Agreement, which is intended to provide for the internalization of the Company’s external management functions. The Purchase Agreement was entered into with the Advisor and various affiliates of the Advisor, or the Seller Parties, and Manager Sub. The Internalization Transaction is expected to close on September 30, 2020, subject to the satisfaction or waiver of certain conditions in the Purchase Agreement. A special committee comprised entirely of independent and disinterested members of the Company’s board of directors, negotiated the Internalization Transaction and, after consultation with its independent legal and financial advisors, determined that the Internalization Transaction is advisable, fair and reasonable to and in the best interests of the Company and on terms and conditions no less favorable to the Company than those available from unaffiliated third parties, and recommended that the board of directors authorize and approve the Internalization Transaction. Upon the recommendation from the special committee, the board of directors unanimously authorized and approved the Internalization Transaction. Approval by the Company’s stockholders is not required under Maryland law or the Company's governing documents for the execution of the Purchase Agreement or the consummation of the Internalization Transaction. Under the Purchase Agreement and related agreements, immediately prior to the closing of the Internalization Transaction, or the Closing, the Sellers will assign or cause to be assigned to Manager Sub all of the assets necessary to operate the business of the Company and its subsidiaries, or the Business, and will delegate all obligations of the Sellers in connection with the Business to Manager Sub pursuant to an assignment and acceptance agreement. Immediately thereafter, under the Purchase Agreement, the Operating Partnership will (i) acquire 100% of the membership interests in Manager Sub for an aggregate cash purchase price of $40,000,000 , subject to certain adjustments, or the Purchase Price, and (ii) cause the redemption of the Advisor’s limited partner interest (including special limited partner interest) in the Operating Partnership. The Purchase Price will be paid as follows, subject to certain acceleration provisions: (i) $25,000,000 will be paid at the Closing, (ii) $7,500,000 will be due and payable on March 31, 2021, and (iii) $7,500,000 will be due and payable on March 31, 2022. The Closing is expected to occur on September 30, 2020, subject to the satisfaction or waiver of certain conditions in the Purchase Agreement. Concurrently with, and as a condition to the execution and delivery of the Purchase Agreement, the Company entered into an employment agreement with each of Michael A. Seton and Kay C. Neely, pursuant to which Mr. Seton and Ms. Neely shall serve from and after the Closing as Chief Executive Officer and Chief Financial Officer of the Company, respectively. The consummation of the Internalization Transaction is also subject to customary closing conditions, including receipt of certain third party consents and the absence of certain legal impediments to the consummation of the Internalization Transaction. Additionally, the Company shall have paid to the Sellers all accrued, earned and unpaid (a) asset management fees, disposition fees and reimbursable expenses pursuant to the Purchase Agreement and (b) monthly property management and leasing fees, each net of costs and expenses charged to the Company for such period, at and from Effective Date through (but not including) the Closing date. In general, in the event the Closing fails to occur by September 30, 2020, the Purchase Price would be reduced by any fees and reimbursable expenses earned and accrued under the Advisory Agreement and various property management agreements with the Property Manager and its affiliates from October 1, 2020 through (but not including) the Closing date, net of all costs and expenses charged to the Company for such period. The parties have made certain customary representations, warranties and covenants in the Purchase Agreement as well as indemnification obligations of each of the parties. For more information regarding the International Transaction, refer to the Company’s Current Report on Form 8-K filed with the SEC on July 29, 2020. Future Resignation of John E. Carter from Board of Directors On July 28, 2020, John E. Carter agreed, pursuant to the Purchase Agreement and as a closing condition therein, to resign as a director of the Company's board of directors at and upon the Closing. In addition, on July 28, 2020, pursuant to the Purchase Agreement, Mr. Carter resigned as the Chairman of the Company’s board of directors, effective immediately. On July 28, 2020, the Company’s board of directors elected Jonathan Kuchin, a current independent director of the board of directors and the Chairman of the Audit Committee, as Chairman of the Company’s board of directors, effective immediately. Employment Agreements Further, on July 28, 2020, Manager Sub, in its post-Closing capacity as the Company’s indirect subsidiary, the Company and the Operating Partnership entered into an employment agreement with each of Michael A. Seton and Kay C. Neely, which set forth the terms and conditions of Mr. Seton’s and Ms. Neely’s service as the Company’s Chief Executive Officer and Chief Financial Officer, respectively. Such employment agreements will be effective at and upon the Closing. Amendments to Credit Facility Agreements On July 10, 2020, the Company, the Operating Partnership, certain of the Company's subsidiaries, KeyBank National Association, or KeyBank, and the other lenders listed as lenders in the Company’s credit agreement and term loan agreement entered into second amendments to such agreements due to certain rent concessions provided to tenants as a result of the COVID-19 pandemic and their impact on the amount available to be drawn under the Company’s credit facility. In particular, the second amendments (i) modify the calculation of Adjusted Net Operating Income, or ANOI, such that beginning with the second quarter of 2020 and continuing thereafter, ANOI will be calculated using a trailing 12 month accrual method, rather than a trailing six month annualized cash-based approach, and waives a rent coverage ratio requirement with respect to certain healthcare pool properties beginning with the quarter ended June 30, 2020 through and including the quarter ending June 30, 2021, and (ii) provide updated provisions for the conversion of the benchmark interest rate from LIBOR to an alternate index rate adopted by the Federal Reserve Board and the Federal Reserve Bank of New York following the occurrence of certain transition events. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
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. |
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 condensed consolidated 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. |
Restricted Cash | Restricted Cash Restricted cash consists of restricted cash held in escrow and restricted bank deposits. Restricted cash held in escrow includes cash held by lenders in escrow accounts for tenant and capital improvements, repairs and maintenance and other lender reserves for certain properties, in accordance with the respective lender’s loan agreement. Restricted bank deposits consist of tenant receipts for certain properties which are required to be deposited into lender-controlled accounts in accordance with the respective lender's loan agreement. Restricted cash held in escrow and restricted bank deposits are reported in other assets, net in the accompanying condensed consolidated balance sheets . See Note 8—"Other Assets, Net." |
Notes Receivable | Notes Receivable Notes receivable are recorded at their outstanding principal balance, net of any unearned income, unamortized deferred fees and costs and allowances for loan losses. The Company defers notes receivable origination costs and fees and amortizes them as an adjustment of yield over the term of the related note receivable. Amortization of the notes receivable origination costs and fees are recorded in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income (loss) . During the six months ended June 30, 2020, in connection with the sale of a healthcare property, a wholly-owned subsidiary of the Company issued a note receivable in the principal amount of $28,000,000 . See Note 7—"Notes Receivable, Net" for further discussion. The Company evaluates the collectability of both interest and principal on each note receivable to determine whether it is collectible, primarily through the evaluation of credit quality indicators, such as the tenant's financial condition, collateral, evaluations of historical loss experience, current economic conditions and other relevant factors, including contractual terms of repayments. Evaluating a note receivable for potential impairment requires management to exercise judgment. The use of alternative assumptions in evaluating a note receivable could result in a different determination of the note's estimated fair value and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the note receivable. See " Recently Adopted Accounting Pronouncements- Measurement of Credit Losses on Financial Instruments" section below for further discussion. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets may not be recoverable, the Company assesses the recoverability of the asset group by estimating whether the Company will recover the carrying value of the asset group through its undiscounted future cash flows and their eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the asset group, the Company will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the asset group. When developing estimates of expected future cash flows, the Company makes certain assumptions regarding future market rental rates subsequent to the expiration of current lease arrangements, property operating expenses, terminal capitalization and discount rates, the expected number of months it takes to re-lease the property, required tenant improvements and the number of years the property will be held for investment. The use of alternative assumptions in the future cash flow analysis could result in a different determination of the property’s future cash flows and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate and related assets. In addition, the Company estimates the fair value of the assets by applying a market approach using comparable sales for certain properties. The use of alternative assumptions in the market approach analysis could result in a different determination of the property’s estimated fair value and a different conclusion regarding the existence of an impairment, the extent of such loss, if any, as well as the carrying value of the real estate and related assets. |
Concentration of Credit Risk and Significant Leases | Concentration of Credit Risk and Significant Leases As of June 30, 2020 , the Company had cash on deposit, including restricted cash, in certain financial institutions that had deposits in excess of current federally insured levels. 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 not experienced a loss or lack of access to cash in its accounts. |
Share Repurchase Program | Share Repurchase Program The Company’s share repurchase program, or SRP, allows for repurchases of shares of the Company’s common stock when certain criteria are met. The SRP provides that all repurchases during any calendar year, including those redeemable upon death or a Qualifying Disability of a stockholder, are limited to those that can be funded with equivalent proceeds raised from the DRIP during the prior calendar year and other operating funds, if any, as the board of directors, in its sole discretion, may reserve for this purpose. Repurchases of shares of the Company’s common stock are at the sole discretion of the Company’s board of directors, provided, however, 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 as of December 31 st of the previous calendar year. Subject to the terms and limitations of the SRP, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation and DRIP funding limitations, the SRP is available to any stockholder as a potential means of interim liquidity. In addition, the Company’s board of directors, in its sole discretion, may suspend (in whole or in part) the SRP at any time, and may amend, reduce, terminate or otherwise change the SRP upon 30 days' prior notice to the Company’s stockholders for any reason it deems appropriate. The Company generally honors valid repurchase requests approximately 30 days following the end of the applicable quarter. The Company reached the DRIP funding limitation, and was not able to fully accommodate all repurchase requests for the second quarter repurchase date of 2020, which was April 30, 2020. See Part II, Item 2. "Unregistered Sales of Equity Securities" for further information for the second quarter repurchase date of 2020. On April 30, 2020 , due to the uncertainty surrounding the ongoing coronavirus, or COVID-19, pandemic and any impact it may have on the Company, the Company's board of directors decided to temporarily suspend share repurchases under the SRP, effe ctive wit h repurchase requests that would otherwise be processed on the third quarter repurchase date of 2020, which was July 30, 2020 . However, the Company will continue to process repurchases due to death in accordance with the terms of its SRP. See Part II, Item 2. "Unregistered Sales of Equity Securities" for more information on the Company's SRP. |
Distribution Policy and Distributions Payable | Distribution Policy and Distributions Payable In order to maintain its status as a REIT, the Company is required to make distributions each taxable year equal to at least 90% of its REIT taxable income, computed without regard to the dividends paid deduction and excluding capital gains. To the extent funds are available, the Company intends to continue to pay regular distributions to stockholders. Distributions are paid to stockholders of record as of the applicable record dates. Distributions are payable to stockholders from legally available funds therefor. |
Earnings Per Share | Earnings Per Share The Company calculates basic earnings per share by dividing net income 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. |
Reportable Segments | Reportable Segments Accounting Standards Codification, or ASC, 280, Segment Reporting , establishes standards for reporting financial and descriptive information about an enterprise’s reportable segments. As of June 30, 2020 and December 31, 2019 , the Company operated through two reportable business segments— real estate investments in data centers and healthcare. With the continued expansion of the Company’s portfolio, segregation of the Company’s operations into two reportable segments is useful in assessing the performance of the Company’s business in the same way that management reviews performance and makes operating decisions. See Note 12—"Segment Reporting" for further discussion on the reportable segments of the Company. |
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 at fair value as assets and liabilities on its condensed consolidated balance sheets . 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 such period. In accordance with the fair value measurement guidance Accounting Standards Update, or 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. 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 of 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 gains or losses on the derivative instruments are reported as a component of other comprehensive loss in the condensed consolidated statements of comprehensive income (loss) and are reclassified into earnings in the same line item associated with the forecasted transaction in the same period during which the hedged transactions affect earnings. See additional discussion in Note 14—"Derivative Instruments and Hedging Activities." |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Leases—Rent Concessions The ongoing COVID-19 pandemic has forced the temporary closure, changes to the operating hours or other temporary changes to the business of certain healthcare and data center tenants of the Company. In response, some tenants are seeking rent concessions, including decreased rent and rent deferrals for COVID-19 affected periods. To provide operational clarity, on April 8, 2020, the Financial Accounting Standards Board, or FASB, issued practical expedients to the lease modification guidance in ASC 842, Leases , in the context of the COVID-19 crisis for leases where the total lease cash flows will remain substantially the same or less than those after the COVID-19 related effects. Entities may choose to forgo the evaluation of the enforceable rights and obligations of the original lease agreements in accordance with ASC 842, Leases . An entity may elect to account for rent concessions either: • as if they are part of the enforceable rights and obligations of the parties under the existing lease contracts; or • as a lease modification. As a lessor, for leases impacted by COVID-19, the Company elected t o account for any rent concessions as if they were part of the enforceable rights and obligations under the existing lease. During the three months ended June 30, 2020, the Company granted rent deferrals to a certain number of tenants impacted by COVID-19 with immaterial impact to the Company's condensed consolidated financial statements and no impact on the collectability of tenant receivables over their respective term of the lease. During the six months ended June 30, 2020, the Company entered into 29 rent concessions and lease modifications impacted by COVID-19 and collected approximately 97% of rental revenue originally contracted for such period. As a lessee, the Company did not elect the practical expedient and will apply the lease modification guidance in accordance with ASC 842, Leases , if changes to ground lease agreements occur. The Company had not modified any of its ground lease agreements as of June 30, 2020 . Measurement of Credit Losses on Financial Instruments On January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments-Credit Losses , or ASU 2016-13. ASU 2016-13 requires a new model for estimating credit losses for certain types of financial instruments, including loans receivable, held-to-maturity debt securities and net investments in direct financing leases, among other financial instruments. The new model for estimated credit losses is applicable to the Company's notes receivable. Other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the estimated credit loss model have some amount of credit loss reserve. The reserve is to reflect the GAAP principal underlying the estimated credit loss model that all loans, debt securities, and similar assets have an inherent risk of loss, regardless of credit quality, subordinate capital or other mitigating factors. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for credit losses. The standard does not apply to receivables arising from operating leases, which are within the scope of ASC 842, Leases . The adoption of ASU 2016-13 did not have any impact to the Company’s consolidated financial statements. Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848), or ASU 2020-04 . ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time through, December 31, 2022, as reference rate reform activities occur. During the six months ended June 30, 2020 , the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact the guidance may have on its condensed consolidated financial statements and may apply other elections, as applicable, as additional changes in the market occur. |
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 Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the totals shown in the condensed consolidated statements of cash flows (amounts in thousands): Six Months Ended 2020 2019 Beginning of period: Cash and cash equivalents 69,342 68,360 Restricted cash 10,888 11,167 Cash, cash equivalents and restricted cash $ 80,230 $ 79,527 End of period: Cash and cash equivalents 74,782 66,049 Restricted cash 12,682 12,439 Cash, cash equivalents and restricted cash $ 87,464 $ 78,488 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
Schedule of Consideration Transferred for Properties Acquired | The following table summarizes the consideration transferred for the 2020 Acquisition during the six months ended June 30, 2020 : Property Description Date Acquired Ownership Percentage Purchase Price Grimes Healthcare Facility 2/19/2020 100% $ 5,030 |
Schedule of Allocation of Acquisitions | The following table summarizes the Company's purchase price allocation of the 2020 Acquisition during the six months ended June 30, 2020 (amounts in thousands): Total Land $ 831 Buildings and improvements 3,690 In-place lease 509 Total assets acquired $ 5,030 |
Acquired Intangible Assets, N_2
Acquired Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of Acquired Intangible Assets, Net | Acquired intangible assets, net, consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands, except weighted average remaining life amounts): June 30, 2020 December 31, 2019 In-place leases, net of accumulated amortization of $77,942 and $62,252, respectively (with a weighted average remaining life of 9.9 years and 10.4 years, respectively) $ 247,829 $ 266,856 Above-market leases, net of accumulated amortization of $3,035 and $1,912, respectively (with a weighted average remaining life of 9.7 years and 10.5 years, respectively) 16,528 18,603 $ 264,357 $ 285,459 |
Acquired Intangible Liabiliti_2
Acquired Intangible Liabilities, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Intangible Lease Liabilities, Net [Abstract] | |
Schedule of Acquired Intangible Liabilities, Net | Acquired intangible liabilities, net, consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands, except weighted average remaining life amounts): June 30, 2020 December 31, 2019 Below-market leases, net of accumulated amortization of $15,089 and $12,332, respectively (with a weighted average remaining life of 15.6 years and 16.1 years, respectively) $ 56,781 $ 59,538 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Rent to Lessor from Operating Leases | Future rent to be received from the Company's investments in real estate assets under the terms of non-cancelable operating leases in effect as of June 30, 2020 , including optional renewal periods, for the six months ending December 31, 2020, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Six months ending December 31, 2020 $ 110,167 2021 228,670 2022 233,625 2023 233,547 2024 229,008 Thereafter 1,619,684 Total (1) $ 2,654,701 (1) The total future rent amount of $2,654,701,000 includes approximately $47,642,000 in rent to be received in connection with two leases executed as of December 31, 2019, at two development properties with estimated lease start dates of December 1, 2020 and March 1, 2021 . |
Schedule of Future Minimum Rent from Lessee for Ground Leases | The future rent payments, discounted by the Company's adjusted incremental borrowing rates, under non-cancelable ground leases, as of June 30, 2020 , for the six months ending December 31, 2020, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Six months ending December 31, 2020 $ 817 2021 1,634 2022 1,634 2023 1,638 2024 1,687 Thereafter 136,719 Total undiscounted rental payments 144,129 Less imputed interest (113,026 ) Total operating lease liabilities $ 31,103 |
Notes Receivable, Net (Tables)
Notes Receivable, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Notes Receivable Balance | The following summarizes the notes receivable balances as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Interest Rate (1) Maturity Date Note receivable $ 2,700 $ 2,700 6.0% 11/05/2020 Note receivable 28,719 — 7.0% 06/01/2022 Total notes receivable $ 31,419 $ 2,700 (1) As of June 30, 2020. |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Assets [Abstract] | |
Schedule of Other Assets, Net | Other assets, net, consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands): June 30, 2020 December 31, 2019 Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $6,272 and $5,696, respectively $ 2,050 $ 2,623 Leasing commissions, net of accumulated amortization of $422 and $240, respectively 11,125 10,288 Restricted cash 12,682 10,888 Tenant receivables 6,365 6,116 Straight-line rent receivable, net 59,437 48,526 Accounts receivable due from affiliates 21 — Prepaid and other assets 3,575 4,709 Derivative assets — 884 $ 95,255 $ 84,034 |
Accounts Payable and Other Li_2
Accounts Payable and Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Other Liabilities | Accounts payable and other liabilities consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands): June 30, 2020 December 31, 2019 Accounts payable and accrued expenses $ 12,247 $ 11,448 Accrued interest expense 4,318 5,185 Accrued property taxes 4,479 3,537 Distributions payable to stockholders 8,753 9,093 Tenant deposits 1,014 1,500 Deferred rental income 8,784 9,003 Derivative liabilities 26,178 5,588 $ 65,773 $ 45,354 |
Notes Payable and Credit Faci_2
Notes Payable and Credit Facility (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's debt outstanding as of June 30, 2020 and December 31, 2019 , consisted of the following (amounts in thousands): June 30, 2020 December 31, 2019 Notes payable: Fixed rate notes payable $ 218,997 $ 219,567 Variable rate notes payable fixed through interest rate swaps 236,605 237,778 Total notes payable, principal amount outstanding 455,602 457,345 Unamortized deferred financing costs related to notes payable (2,040 ) (2,500 ) Total notes payable, net of deferred financing costs 453,562 454,845 Credit facility: Variable rate revolving line of credit 138,000 108,000 Variable rate term loan fixed through interest rate swaps 400,000 250,000 Variable rate term loans 400,000 550,000 Total credit facility, principal amount outstanding 938,000 908,000 Unamortized deferred financing costs related to the term loan credit facility (6,560 ) (7,385 ) Total credit facility, net of deferred financing costs 931,440 900,615 Total debt outstanding $ 1,385,002 $ 1,355,460 |
Schedule of Future Principal Payments Due on Debt | The principal payments due on the notes payable and credit facility as of June 30, 2020 , for the six months ending December 31, 2020 , and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Six months ending December 31, 2020 $ 2,181 2021 146,026 2022 304,209 2023 282,710 2024 547,360 Thereafter 111,116 $ 1,393,602 |
Related-Party Transactions an_2
Related-Party Transactions and Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table details amounts incurred in connection with the Company's related-party transactions as described above for the three and six months ended June 30, 2020 and 2019 (amounts in thousands): Incurred Three Months Ended Six Months Ended Fee Entity 2020 2019 2020 2019 Distribution and servicing fees (1) SC Distributors, LLC $ (26 ) $ (42 ) $ (59 ) $ (94 ) Acquisition fees and costs Carter Validus Advisors II, LLC and its affiliates — — 97 — Asset management fees Carter Validus Advisors II, LLC and its affiliates 5,969 3,493 11,925 6,987 Property management fees Carter Validus Real Estate Management Services II, LLC 1,792 1,228 3,588 2,437 Operating expense reimbursement Carter Validus Advisors II, LLC and its affiliates 1,386 1,750 2,664 2,480 Leasing commission fees Carter Validus Real Estate Management Services II, LLC 244 95 483 98 Construction management fees Carter Validus Real Estate Management Services II, LLC 162 35 338 164 Disposition fees Carter Validus Advisors II, LLC and its affiliates 350 — 350 — Loan origination fees Carter Validus Advisors II, LLC and its affiliates 560 — 560 — Total $ 10,437 $ 6,559 $ 19,946 $ 12,072 (1) Reduction of distribution and servicing fees is a result of repurchases of Class T and Class T2 shares of common stock for the three and six months ended June 30, 2020 and June 30, 2019 . The following table details amounts payable to affiliates in connection with the Company's related-party transactions as described above as of June 30, 2020 and December 31, 2019 (amounts in thousands): Payable June 30, 2020 December 31, 2019 Fee Entity Distribution and servicing fees SC Distributors, LLC $ 4,591 $ 6,210 Asset management fees Carter Validus Advisors II, LLC and its affiliates 1,991 2,100 Property management fees Carter Validus Real Estate Management Services II, LLC 528 433 Operating expense reimbursement Carter Validus Advisors II, LLC and its affiliates 479 518 Leasing commission fees Carter Validus Real Estate Management Services II, LLC 373 299 Construction management fees Carter Validus Real Estate Management Services II, LLC 187 199 Total $ 8,149 $ 9,759 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Information for Reportable Segments | Summary information for the reportable segments during the three and six months ended June 30, 2020 and 2019 is as follows (amounts in thousands): Data Centers Healthcare Three Months Ended Revenue: Rental revenue $ 27,144 $ 41,731 $ 68,875 Expenses: Rental expenses (7,027 ) (3,895 ) (10,922 ) Segment net operating income $ 20,117 $ 37,836 57,953 Expenses: General and administrative expenses (4,099 ) Asset management fees (5,969 ) Depreciation and amortization (25,294 ) Gain on real estate disposition 2,703 Income from operations 25,294 Interest and other expense, net (14,199 ) Net income attributable to common stockholders $ 11,095 Data Centers Healthcare Three Months Ended Revenue: Rental revenue $ 27,838 $ 19,099 $ 46,937 Expenses: Rental expenses (8,137 ) (2,005 ) (10,142 ) Segment net operating income $ 19,701 $ 17,094 36,795 Expenses: General and administrative expenses (1,535 ) Asset management fees (3,493 ) Depreciation and amortization (15,610 ) Income from operations 16,157 Interest and other expense, net (9,893 ) Net income attributable to common stockholders $ 6,264 Data Centers Healthcare Six Months Ended June 30, 2020 Revenue: Rental revenue $ 54,903 $ 83,157 $ 138,060 Expenses: Rental expenses (14,176 ) (8,234 ) (22,410 ) Segment net operating income $ 40,727 $ 74,923 115,650 Expenses: General and administrative expenses (7,787 ) Asset management fees (11,925 ) Depreciation and amortization (52,359 ) Gain on real estate disposition 2,703 Income from operations 46,282 Interest and other expense, net (29,518 ) Net income attributable to common stockholders $ 16,764 Data Centers Healthcare Six Months Ended Revenue: Rental revenue $ 54,515 $ 38,889 $ 93,404 Expenses: Rental expenses (15,102 ) (4,168 ) (19,270 ) Segment net operating income $ 39,413 $ 34,721 74,134 Expenses: General and administrative expenses (2,938 ) Asset management fees (6,987 ) Depreciation and amortization (33,856 ) Income from operations 30,353 Interest and other expense, net (19,728 ) Net income attributable to common stockholders $ 10,625 |
Schedule of Assets by Reportable Segments | Assets by each reportable segment as of June 30, 2020 and December 31, 2019 are as follows (amounts in thousands): June 30, 2020 December 31, 2019 Assets by segment: Data centers $ 975,230 $ 989,953 Healthcare 2,142,284 2,184,450 All other 100,864 65,131 Total assets $ 3,218,378 $ 3,239,534 |
Schedule of Capital Additions, Acquisitions and Dispositions by Reportable Segments | Capital additions, acquisitions and dispositions, on a cash basis, by reportable segments for the six months ended June 30, 2020 and 2019 are as follows (amounts in thousands): Six Months Ended 2020 2019 Capital additions by segment: Data centers $ 3,450 $ 6,019 Healthcare 10,160 150 Total 13,610 6,169 Acquisitions by segment: Healthcare 5,030 — Total 5,030 — Proceeds from Dispositions by segment: Healthcare (6,129 ) — Total (6,129 ) — Net cash outflows from capital additions, acquisitions and dispositions $ 12,511 $ 6,169 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables show 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 June 30, 2020 and December 31, 2019 (amounts in thousands): June 30, 2020 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Liabilities: Derivative liabilities $ — $ 26,178 $ — $ 26,178 Total liabilities at fair value $ — $ 26,178 $ — $ 26,178 December 31, 2019 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 884 $ — $ 884 Total assets at fair value $ — $ 884 $ — $ 884 Liabilities: Derivative liabilities $ — $ 5,588 $ — $ 5,588 Total liabilities at fair value $ — $ 5,588 $ — $ 5,588 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 instruments (amounts in thousands): Derivatives Balance Effective Maturity June 30, 2020 December 31, 2019 Outstanding Fair Value of Outstanding Fair Value of Asset (Liability) Asset (Liability) Interest rate swaps Other assets, net/ 07/01/2016 to 12/22/2020 to $ 736,605 (1) $ — $ (26,178 ) $ 637,778 $ 884 $ (5,588 ) (1) Outstanding notional amount includes two interest rate swap agreements the Company entered into d uring the six months ended June 30, 2020 , with an effective date of July 1, 2020 , which will effectively fix LIBOR related to $100,000,000 of the term loans of the credit facility. |
Schedule of Income and Losses Recognized on Derivative Instruments | The table below summarizes the amount of loss recognized on the interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2020 and 2019 (amounts in thousands): Derivatives in Cash Flow Amount of Loss Recognized Location of Loss Amount of (Loss) Income Total Amount of Interest and Other Expense, Net Presented in Condensed Consolidated Statements of Comprehensive Income (Loss) Three Months Ended June 30, 2020 Interest rate swaps $ (3,261 ) Interest and other expense, net $ (2,121 ) $ 14,199 Total $ (3,261 ) $ (2,121 ) Three Months Ended June 30, 2019 Interest rate swaps $ (6,846 ) Interest and other expense, net $ 706 $ 9,893 Total $ (6,846 ) $ 706 Six Months Ended June 30, 2020 Interest rate swaps $ (23,854 ) Interest and other expense, net $ (2,380 ) $ 29,518 Total $ (23,854 ) $ (2,380 ) Six Months Ended June 30, 2019 Interest rate swaps $ (9,801 ) Interest and other expense, net $ 1,362 $ 19,728 Total $ (9,801 ) $ 1,362 |
Schedule of Offsetting of Derivative Assets | The following tables present the effect on the Company’s financial position had the Company made the election to offset its derivative positions as of June 30, 2020 and December 31, 2019 (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 December 31, 2019 $ 884 $ — $ 884 $ (5 ) $ — $ 879 |
Schedule of Offsetting of Derivative Liabilities | Offsetting of Derivative Liabilities Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net June 30, 2020 $ 26,178 $ — $ 26,178 $ — $ — $ 26,178 December 31, 2019 $ 5,588 $ — $ 5,588 $ (5 ) $ — $ 5,583 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Amounts Recognized in Accumulated Other Comprehensive (Loss) Income | The following table presents a rollforward of amounts recognized in accumulated other comprehensive (loss) income by component for the six months ended June 30, 2020 and 2019 (amounts in thousands): Unrealized Loss on Derivative Balance as of December 31, 2019 $ (4,704 ) Other comprehensive loss before reclassification (23,854 ) Amount of loss reclassified from accumulated other comprehensive loss to net income 2,380 Other comprehensive loss (21,474 ) Balance as of June 30, 2020 $ (26,178 ) Unrealized Loss on Derivative Balance as of December 31, 2018 $ 6,100 Cumulative effect of accounting change 103 Balance as of January 1, 2019 6,203 Other comprehensive loss before reclassification (9,801 ) Amount of income reclassified from accumulated other comprehensive income to net income (1,362 ) Other comprehensive loss (11,163 ) Balance as of June 30, 2019 $ (4,960 ) |
Schedule of Reclassifications Out of Accumulated Other Comprehensive (Loss) Income | The following table presents reclassifications out of accumulated other comprehensive (loss) income for the six months ended June 30, 2020 and 2019 (amounts in thousands): Details about Accumulated Other Amounts Reclassified from Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income (Loss) Six Months Ended 2020 2019 Interest rate swap contracts $ 2,380 $ (1,362 ) Interest and other expense, net |
Subsequent Events (Tables)
Subsequent Events (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Schedule of Subsequent Events | The following table summarizes the Company's distributions paid to stockholders on July 1, 2020 , for the period from June 1, 2020 through June 30, 2020 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution July 1, 2020 Class A $ 5,258 $ 1,542 $ 6,800 July 1, 2020 Class I 306 206 512 July 1, 2020 Class T 648 676 1,324 July 1, 2020 Class T2 53 64 117 $ 6,265 $ 2,488 $ 8,753 The following table summarizes the Company's distributions paid to stockholders on August 3, 2020, for the period from July 1, 2020 through July 31, 2020 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution August 3, 2020 Class A $ 5,442 $ 1,592 $ 7,034 August 3, 2020 Class I 314 216 530 August 3, 2020 Class T 680 691 1,371 August 3, 2020 Class T2 55 66 121 $ 6,491 $ 2,565 $ 9,056 Distributions Authorized The following tables summarize the daily distributions approved and authorized by the board of directors of the Company subsequent to June 30, 2020 : Authorization Date (1) Common Stock Daily Distribution Rate (1) Annualized Distribution Per Share July 22, 2020 Class A $ 0.001366120 $ 0.50 July 22, 2020 Class I $ 0.001366120 $ 0.50 July 22, 2020 Class T $ 0.001129781 $ 0.41 July 22, 2020 Class T2 $ 0.001129781 $ 0.41 (1) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on August 1, 2020 and ending on August 31, 2020. The distributions will be calculated based on 366 days in the calendar year. The distributions declared for each record date in August 2020 will be paid in September 2020. The distributions will be payable to stockholders from legally available funds therefor. |
Organization and Business Ope_2
Organization and Business Operations (Details) | 6 Months Ended | |
Jun. 30, 2020registration_statementproperty | Nov. 30, 2018initial_public_offering | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of real estate properties sold | 1 | |
Number of real estate properties owned | 152 | |
Number of public offerings | initial_public_offering | 2 | |
Number of registration statements on Form S-3 | registration_statement | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)metropolitanmicropolitantenantshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2020USD ($)metropolitanleasesegmentmicropolitantenant$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | |
Summary of Significant Accounting Policies [Line Items] | ||||
Origination of note receivable related to real estate disposition | $ 28,000 | $ 0 | ||
Impairment losses on real estate | $ 0 | $ 0 | $ 0 | 0 |
Impairment of acquired intangible assets | $ 0 | 0 | ||
Number of micropolitan statistical areas with owned real estate investments | micropolitan | 2 | 2 | ||
Number of metropolitan statistical areas with owned real estate investments | metropolitan | 67 | 67 | ||
Maximum number of shares available for repurchase during any calendar year, as percentage of common stock outstanding at end of prior year | 5.00% | |||
Period of notice required for changes to share repurchase program | 30 days | |||
Repurchase of common stock | $ 12,244 | $ 10,780 | $ 24,521 | $ 21,513 |
Diluted earnings per share outstanding adjustment (in shares) | shares | 37,000 | 25,000 | 34,000 | 25,000 |
Number of reportable business segments | segment | 2 | |||
Number of rent concessions | lease | 29 | |||
Rental revenue, percentage | 97.00% | |||
Common Stock [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Repurchase of common stock (in shares) | shares | 1,415,299 | 1,165,436 | 2,834,656 | 2,325,715 |
Repurchase of common stock | $ 14 | $ 11 | $ 28 | $ 23 |
Class A, I, T and T2 shares [Member] | Common Stock [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Repurchase of common stock (in shares) | shares | 2,834,656 | 2,325,715 | ||
Repurchase of common stock | $ 24,521 | $ 21,513 | ||
Repurchase of common stock, average price per share (in dollars per share) | $ / shares | $ 8.65 | $ 9.25 | ||
Class A shares [Member] | Common Stock [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Repurchase of common stock (in shares) | shares | 2,197,452 | 1,749,624 | ||
Class I shares [Member] | Common Stock [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Repurchase of common stock (in shares) | shares | 395,334 | 188,680 | ||
Class T shares [Member] | Common Stock [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Repurchase of common stock (in shares) | shares | 238,206 | 382,012 | ||
Class T2 shares [Member] | Common Stock [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Repurchase of common stock (in shares) | shares | 3,664 | 5,399 | ||
Rental Revenue [Member] | Geographic Concentration Risk [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Number of metropolitan statistical areas with owned real estate investments | metropolitan | 2 | 2 | ||
Rental Revenue [Member] | Geographic Concentration Risk [Member] | Atlanta-Sandy Springs-Roswell, Georgia MSA [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 11.60% | |||
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 | 10.30% | |||
Rental Revenue [Member] | Customer Concentration Risk [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Number of tenants | tenant | 1 | 1 | ||
Rental Revenue [Member] | Customer Concentration Risk [Member] | Post Acute Medical LLC [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 10.10% | |||
In-place leases [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Impairment of acquired intangible assets | $ 1,484 | $ 2,658 | ||
Above-market leases [Member] | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Impairment of acquired intangible assets | $ 344 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Reconciliation of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 74,782 | $ 69,342 | $ 66,049 | $ 68,360 |
Restricted cash | 12,682 | 10,888 | 12,439 | 11,167 |
Cash, cash equivalents and restricted cash | $ 87,464 | $ 80,230 | $ 78,488 | $ 79,527 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions (Narrative) (Details) $ in Thousands | May 28, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)property | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Real Estate [Line Items] | ||||||
Number of real estate properties acquired | property | 1 | |||||
Capitalized acquisition fees and costs | $ 205 | |||||
Sale price of real estate disposition | $ 35,000 | |||||
Proceeds from real estate disposition | 6,129 | 6,129 | $ 0 | |||
Gain on real estate disposition | $ 2,703 | $ 0 | 2,703 | $ 0 | ||
Sale price of real estate disposition in cash | 7,000 | |||||
Investment in note receivable, principal amount | $ 28,000 | $ 30,700 | $ 30,700 | $ 2,700 | ||
Maximum [Member] | ||||||
Real Estate [Line Items] | ||||||
Acquisition fees and costs (% of contract purchase price) | 6.00% |
Acquisitions and Dispositions_3
Acquisitions and Dispositions (Schedule of Consideration Transferred for Properties Acquired) (Details) - Grimes Healthcare Facility [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Business Acquisition [Line Items] | |
Date Acquired | Feb. 19, 2020 |
Ownership Percentage | 100.00% |
Purchase Price | $ 5,030 |
Acquisitions and Dispositions_4
Acquisitions and Dispositions (Schedule of Allocation of Acquisitions) (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Real Estate [Abstract] | |
Land | $ 831 |
Buildings and improvements | 3,690 |
In-place lease | 509 |
Total assets acquired | $ 5,030 |
Acquired Intangible Assets, N_3
Acquired Intangible Assets, Net (Narrative) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)lease | Jun. 30, 2019USD ($) | Dec. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquired intangible asset, weighted average remaining life | 9 years 10 months 24 days | 10 years 4 months 24 days | |||
Amortization of acquired intangible assets | $ 8,254 | $ 5,100 | $ 18,801 | $ 12,895 | |
Impairment of acquired intangible assets | $ 0 | $ 0 | |||
In-place and above-market leases [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of acquired intangible assets | $ 1,828 | ||||
In-place leases [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquired intangible asset, weighted average remaining life | 9 years 10 months 24 days | 10 years 4 months 24 days | |||
Impairment of acquired intangible assets | $ 1,484 | $ 2,658 | |||
Number of impaired acquired intangible assets | lease | 1 | ||||
Above-market leases [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquired intangible asset, weighted average remaining life | 9 years 8 months 12 days | 10 years 6 months | |||
Impairment of acquired intangible assets | $ 344 | ||||
Number of impaired acquired intangible assets | lease | 1 |
Acquired Intangible Assets, N_4
Acquired Intangible Assets, Net (Schedule of Acquired Intangible Assets, Net) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 264,357 | $ 285,459 |
Acquired intangible asset, accumulated amortization | $ 80,977 | $ 64,164 |
Acquired intangible asset, weighted average remaining life | 9 years 10 months 24 days | 10 years 4 months 24 days |
In-place leases [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 247,829 | $ 266,856 |
Acquired intangible asset, accumulated amortization | $ 77,942 | $ 62,252 |
Acquired intangible asset, weighted average remaining life | 9 years 10 months 24 days | 10 years 4 months 24 days |
Above-market leases [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible asset, net of accumulated amortization | $ 16,528 | $ 18,603 |
Acquired intangible asset, accumulated amortization | $ 3,035 | $ 1,912 |
Acquired intangible asset, weighted average remaining life | 9 years 8 months 12 days | 10 years 6 months |
Acquired Intangible Liabiliti_3
Acquired Intangible Liabilities, Net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Intangible Lease Liabilities, Net [Abstract] | ||||
Amortization of below-market leases | $ 1,371 | $ 1,232 | $ 2,757 | $ 2,464 |
Acquired Intangible Liabiliti_4
Acquired Intangible Liabilities, Net (Schedule of Acquired Intangible Liabilities, Net) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Intangible Lease Liabilities, Net [Abstract] | ||
Below-market leases, net of accumulated amortization of $15,089 and $12,332, respectively (with a weighted average remaining life of 15.6 years and 16.1 years, respectively) | $ 56,781 | $ 59,538 |
Below-market leases, accumulated amortization | $ 15,089 | $ 12,332 |
Below-market leases, weighted average remaining life | 15 years 7 months 6 days | 16 years 1 month 6 days |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - lease | Jun. 30, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Number of operating ground leases | 17 | |
Number of operating ground leases without corresponding operating lease liabilities | 4 | |
Operating lease, weighted average remaining lease term | 50 years 1 month 6 days | 50 years 8 months 9 days |
Minimum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, weighted average incremental borrowing rate, percent | 5.00% | |
Maximum [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, weighted average incremental borrowing rate, percent | 6.60% |
Leases (Schedule of Future Mini
Leases (Schedule of Future Minimum Rent to Lessor from Operating Leases) (Details) $ in Thousands | Jun. 30, 2020USD ($)leaseproperty |
Leases [Abstract] | |
Six months ending December 31, 2020 | $ 110,167 |
2021 | 228,670 |
2022 | 233,625 |
2023 | 233,547 |
2024 | 229,008 |
Thereafter | 1,619,684 |
Total | 2,654,701 |
Value of underlying operating lease asset, leases not yet commenced | $ 47,642 |
Number of executed leases, operating leases not yet commenced | lease | 2 |
Number of development properties, operating leases not yet commenced | property | 2 |
Leases (Schedule of Future Mi_2
Leases (Schedule of Future Minimum Rent from Lessee for Ground Leases) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Six months ending December 31, 2020 | $ 817 | |
2021 | 1,634 | |
2022 | 1,634 | |
2023 | 1,638 | |
2024 | 1,687 | |
Thereafter | 136,719 | |
Total undiscounted rental payments | 144,129 | |
Less imputed interest | (113,026) | |
Total operating lease liabilities | $ 31,103 | $ 31,004 |
Notes Receivable, Net (Narrativ
Notes Receivable, Net (Narrative) (Details) | May 28, 2020USD ($) | Jun. 30, 2020USD ($)receivable | Jun. 30, 2020USD ($)receivable | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of notes receivable outstanding | receivable | 2 | 2 | |||
Notes receivable, net | $ 31,419,000 | $ 31,419,000 | $ 2,700,000 | ||
Investment in note receivable, principal amount | $ 28,000,000 | 30,700,000 | 30,700,000 | 2,700,000 | |
Amortization of loan origination fee | 26,000 | $ 0 | |||
Estimated credit losses for notes receivable | 0 | 0 | |||
Note Receivable Due June 2022 | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Notes receivable, net | $ 28,719,000 | $ 28,719,000 | $ 0 | ||
Investment in note receivable, principal amount | 28,000,000 | ||||
Interest Rate | 7.00% | 7.00% | |||
Loan origination fee incurred | $ 560,000 | ||||
Interest income on notes receivable | $ 185,000 | $ 185,000 | |||
Amortization of loan origination fee | 26,000 | ||||
Unamortized loan origination fee | $ 534,000 | $ 534,000 | |||
Note Receivable Due June 2022 | Note Receivable, Period One | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Interest Rate | 7.00% | ||||
Note Receivable Due June 2022 | Note Receivable, Period Two | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Interest Rate | 8.00% |
Notes Receivable, Net (Schedule
Notes Receivable, Net (Schedule of Notes Receivable Balance) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, net | $ 31,419 | $ 2,700 |
Note Receivable Due November 2020 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, net | $ 2,700 | 2,700 |
Interest Rate | 6.00% | |
Note Receivable Due June 2022 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, net | $ 28,719 | $ 0 |
Interest Rate | 7.00% |
Other Assets, Net (Schedule of
Other Assets, Net (Schedule of Other Assets, Net) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Other Assets [Abstract] | ||||
Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $6,272 and $5,696, respectively | $ 2,050 | $ 2,623 | ||
Leasing commissions, net of accumulated amortization of $422 and $240, respectively | 11,125 | 10,288 | ||
Restricted cash | 12,682 | 10,888 | $ 12,439 | $ 11,167 |
Tenant receivables | 6,365 | 6,116 | ||
Straight-line rent receivable, net | 59,437 | 48,526 | ||
Accounts receivable due from affiliates | 21 | 0 | ||
Prepaid and other assets | 3,575 | 4,709 | ||
Derivative assets | 0 | 884 | ||
Total other assets, net | 95,255 | 84,034 | ||
Deferred financing costs, related to the revolver portion of the credit facility, accumulated amortization | 6,272 | 5,696 | ||
Leasing commissions, accumulated amortization | $ 422 | $ 240 |
Accounts Payable and Other Li_3
Accounts Payable and Other Liabilities (Schedule of Accounts Payable and Other Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 12,247 | $ 11,448 |
Accrued interest expense | 4,318 | 5,185 |
Accrued property taxes | 4,479 | 3,537 |
Distributions payable to stockholders | 8,753 | 9,093 |
Tenant deposits | 1,014 | 1,500 |
Deferred rental income | 8,784 | 9,003 |
Derivative liabilities | 26,178 | 5,588 |
Total accounts payable and other liabilities | $ 65,773 | $ 45,354 |
Notes Payable and Credit Faci_3
Notes Payable and Credit Facility (Narrative) (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020USD ($)instrument | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||
Proceeds from credit facility | $ 95,000 | $ 15,000 | |
Payments on credit facility | (65,000) | $ 0 | |
Credit facility, principal amount outstanding | 938,000 | $ 908,000 | |
Notes payable, principal amount outstanding | 455,602 | 457,345 | |
Property acquisition and share repurchases [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from credit facility | 20,000 | ||
Economic uncertainty [Member] | |||
Debt Instrument [Line Items] | |||
Proceeds from credit facility | 75,000 | ||
Variable Rate, Subject To Interest Rate Swap [Member] | |||
Debt Instrument [Line Items] | |||
Credit facility, principal amount outstanding | 400,000 | 250,000 | |
Notes payable, principal amount outstanding | 236,605 | $ 237,778 | |
Mortgage loan agreement - covenant non-compliance [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable, principal amount outstanding | $ 30,812 | ||
Variable Rate Debt [Member] | Interest Rate Swaps [Member] | Variable Rate, Subject To Interest Rate Swap [Member] | |||
Debt Instrument [Line Items] | |||
Number of interest rate swap agreements | instrument | 3 | ||
Credit facility, principal amount outstanding | $ 150,000 | ||
Variable Rate Debt [Member] | Interest Rate Swaps [Member] | Variable Rate, Subject To Interest Rate Swap, Two [Member] | |||
Debt Instrument [Line Items] | |||
Number of interest rate swap agreements | instrument | 2 | ||
Credit facility, principal amount outstanding | $ 100,000 |
Notes Payable and Credit Faci_4
Notes Payable and Credit Facility (Schedule of Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Notes payable, principal amount outstanding | $ 455,602 | $ 457,345 |
Unamortized deferred financing costs related to notes payable | (2,040) | (2,500) |
Total notes payable, net of deferred financing costs | 453,562 | 454,845 |
Credit facility, principal amount outstanding | 938,000 | 908,000 |
Unamortized deferred financing costs related to the term loan credit facility | (6,560) | (7,385) |
Total credit facility, net of deferred financing costs | 931,440 | 900,615 |
Total debt outstanding | 1,385,002 | 1,355,460 |
Fixed Rate [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable, principal amount outstanding | 218,997 | 219,567 |
Variable Rate, Subject To Interest Rate Swap [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable, principal amount outstanding | 236,605 | 237,778 |
Credit facility, principal amount outstanding | 400,000 | 250,000 |
Variable Rate [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, principal amount outstanding | 538,000 | 658,000 |
Revolving Line of Credit [Member] | Variable Rate [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, principal amount outstanding | 138,000 | 108,000 |
Term Loan [Member] | Variable Rate, Subject To Interest Rate Swap [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, principal amount outstanding | 400,000 | 250,000 |
Term Loan [Member] | Variable Rate [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility, principal amount outstanding | $ 400,000 | $ 550,000 |
Notes Payable and Credit Faci_5
Notes Payable and Credit Facility (Schedule of Future Principal Payments Due on Debt) (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
Six months ending December 31, 2020 | $ 2,181 |
2021 | 146,026 |
2022 | 304,209 |
2023 | 282,710 |
2024 | 547,360 |
Thereafter | 111,116 |
Total | $ 1,393,602 |
Related-Party Transactions an_3
Related-Party Transactions and Arrangements (Narrative) (Details) $ in Thousands | Jun. 30, 2020USD ($)employee | Jun. 30, 2020USD ($)employee | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | |||
Number of employees | employee | 0 | 0 | |
Special limited partnership interest, shareholder annual return | 8.00% | ||
Accounts receivable due from affiliates | $ 21 | $ 21 | $ 0 |
Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Typical pricing for survey of brokers and agents in same geographical area | $ 1 | ||
Disposition fee (% of contract sales price) | 6.00% | ||
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | |||
Related Party Transaction [Line Items] | |||
Acquisition fee (% of contract purchase price of each property or asset acquired) | 2.00% | ||
Acquisition fee (% of amount advanced with respect to loans and similar assets) | 2.00% | ||
Acquisition expenses reimbursed (% of purchase price of each property or real estate-related investment) | 0.01% | ||
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Disposition fee (% of contract sales price) | 1.00% | ||
Disposition fee (% of third party brokerage commission) | 50.00% | ||
Carter Validus Advisors II, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Monthly asset management fee (% of aggregate asset value) | 0.0625% | ||
Accounts receivable due from affiliates | $ 21 | $ 21 | |
Carter Validus Advisors II, LLC [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Operating expense reimbursement (% of average invested assets) | 2.00% | ||
Operating expense reimbursement ( % of net income) | 25.00% | ||
Carter Validus Real Estate Management Services II, LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Property management fee (% of gross revenues from properties managed) | 3.00% | ||
Oversight fee (% of gross revenues from properties managed) | 1.00% | ||
Construction management fee (% of project costs) | 5.00% |
Related-Party Transactions an_4
Related-Party Transactions and Arrangements (Schedule of Related Party Transactions) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Incurred | $ 10,437 | $ 6,559 | $ 19,946 | $ 12,072 | |
Payable | 8,149 | 8,149 | $ 9,759 | ||
SC Distributors, LLC [Member] | Distribution and Servicing Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | (26) | (42) | (59) | (94) | |
Payable | 4,591 | 4,591 | 6,210 | ||
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Acquisition Fees and Costs [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 0 | 0 | 97 | 0 | |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Asset Management Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 5,969 | 3,493 | 11,925 | 6,987 | |
Payable | 1,991 | 1,991 | 2,100 | ||
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Operating Expense Reimbursement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 1,386 | 1,750 | 2,664 | 2,480 | |
Payable | 479 | 479 | 518 | ||
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Disposition Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 350 | 0 | 350 | 0 | |
Carter Validus Advisors II, LLC And/Or Its Affiliates [Member] | Loan Origination Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 560 | 0 | 560 | 0 | |
Carter Validus Real Estate Management Services II, LLC [Member] | Property Management Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 1,792 | 1,228 | 3,588 | 2,437 | |
Payable | 528 | 528 | 433 | ||
Carter Validus Real Estate Management Services II, LLC [Member] | Leasing Commission Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 244 | 95 | 483 | 98 | |
Payable | 373 | 373 | 299 | ||
Carter Validus Real Estate Management Services II, LLC [Member] | Construction Management Fees [Member] | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 162 | $ 35 | 338 | $ 164 | |
Payable | $ 187 | $ 187 | $ 199 |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable business segments | segment | 2 | |||
Rental revenue | $ 68,875,000 | $ 46,937,000 | $ 138,060,000 | $ 93,404,000 |
Intersegment Elimination [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Reporting (Schedule of
Segment Reporting (Schedule of Information for Reportable Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Rental revenue | $ 68,875 | $ 46,937 | $ 138,060 | $ 93,404 |
Rental expenses | (10,922) | (10,142) | (22,410) | (19,270) |
Income from operations | 25,294 | 16,157 | 46,282 | 30,353 |
General and administrative expenses | (4,099) | (1,535) | (7,787) | (2,938) |
Asset management fees | (5,969) | (3,493) | (11,925) | (6,987) |
Depreciation and amortization | (25,294) | (15,610) | (52,359) | (33,856) |
Gain on real estate disposition | 2,703 | 0 | 2,703 | 0 |
Interest and other expense, net | (14,199) | (9,893) | (29,518) | (19,728) |
Net income attributable to common stockholders | 11,095 | 6,264 | 16,764 | 10,625 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 68,875 | 46,937 | 138,060 | 93,404 |
Rental expenses | (10,922) | (10,142) | (22,410) | (19,270) |
Income from operations | 57,953 | 36,795 | 115,650 | 74,134 |
Operating Segments [Member] | Data Centers [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 27,144 | 27,838 | 54,903 | 54,515 |
Rental expenses | (7,027) | (8,137) | (14,176) | (15,102) |
Income from operations | 20,117 | 19,701 | 40,727 | 39,413 |
Operating Segments [Member] | Healthcare [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 41,731 | 19,099 | 83,157 | 38,889 |
Rental expenses | (3,895) | (2,005) | (8,234) | (4,168) |
Income from operations | $ 37,836 | $ 17,094 | $ 74,923 | $ 34,721 |
Segment Reporting (Schedule o_2
Segment Reporting (Schedule of Assets by Reportable Segments) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets by segment [Line Items] | ||
Total assets | $ 3,218,378 | $ 3,239,534 |
Operating Segments [Member] | Data Centers [Member] | ||
Assets by segment [Line Items] | ||
Total assets | 975,230 | 989,953 |
Operating Segments [Member] | Healthcare [Member] | ||
Assets by segment [Line Items] | ||
Total assets | 2,142,284 | 2,184,450 |
All Other [Member] | ||
Assets by segment [Line Items] | ||
Total assets | $ 100,864 | $ 65,131 |
Segment Reporting (Schedule o_3
Segment Reporting (Schedule of Capital Additions, Acquisitions and Dispositions by Reportable Segments) (Details) - USD ($) $ in Thousands | May 28, 2020 | Jun. 30, 2020 | Jun. 30, 2019 |
Capital additions and acquisitions by segment [Line Items] | |||
Capital additions by segment: | $ 13,610 | $ 6,169 | |
Acquisitions by segment: | 5,030 | 0 | |
Proceeds from Dispositions by segment: | $ (6,129) | (6,129) | 0 |
Net cash outflows from capital additions, acquisitions and dispositions | 12,511 | 6,169 | |
Operating Segments [Member] | Data Centers [Member] | |||
Capital additions and acquisitions by segment [Line Items] | |||
Capital additions by segment: | 3,450 | 6,019 | |
Operating Segments [Member] | Healthcare [Member] | |||
Capital additions and acquisitions by segment [Line Items] | |||
Capital additions by segment: | 10,160 | 150 | |
Acquisitions by segment: | 5,030 | 0 | |
Proceeds from Dispositions by segment: | $ (6,129) | $ 0 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | May 28, 2020 | Dec. 31, 2019 |
Fair Value [Line Items] | |||
Notes payable, principal amount outstanding | $ 455,602 | $ 457,345 | |
Credit facility, principal amount outstanding | 938,000 | 908,000 | |
Notes receivable, principal amount outstanding | 30,700 | $ 28,000 | 2,700 |
Fixed Rate [Member] | |||
Fair Value [Line Items] | |||
Notes payable, principal amount outstanding | 218,997 | 219,567 | |
Variable Rate, Fixed Through Interest Rate Swaps [Member] | |||
Fair Value [Line Items] | |||
Notes payable, principal amount outstanding | 236,605 | 237,778 | |
Credit facility, principal amount outstanding | 400,000 | 250,000 | |
Variable Rate Debt [Member] | |||
Fair Value [Line Items] | |||
Credit facility, principal amount outstanding | 538,000 | 658,000 | |
Estimate of Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Fixed Rate [Member] | |||
Fair Value [Line Items] | |||
Notes payable, fair value disclosure | 233,833 | 222,816 | |
Estimate of Fair Value Measurement [Member] | Significant Other Observable Inputs (Level 2) [Member] | Variable Rate, Fixed Through Interest Rate Swaps [Member] | |||
Fair Value [Line Items] | |||
Notes payable, fair value disclosure | 243,136 | 238,555 | |
Credit facility, fair value disclosure | $ 419,760 | $ 251,907 |
Fair Value (Schedule of Fair Va
Fair Value (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Derivative assets | $ 0 | $ 884 |
Liabilities: | ||
Derivative liabilities | 26,178 | 5,588 |
Recurring basis [Member] | ||
Assets: | ||
Derivative assets | 884 | |
Total assets at fair value | 884 | |
Liabilities: | ||
Derivative liabilities | 26,178 | 5,588 |
Total liabilities at fair value | 26,178 | 5,588 |
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 | 0 |
Total liabilities at fair value | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | Recurring basis [Member] | ||
Assets: | ||
Derivative assets | 884 | |
Total assets at fair value | 884 | |
Liabilities: | ||
Derivative liabilities | 26,178 | 5,588 |
Total liabilities at fair value | 26,178 | 5,588 |
Significant Unobservable Inputs (Level 3) [Member] | Recurring basis [Member] | ||
Assets: | ||
Derivative assets | 0 | |
Total assets at fair value | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Total liabilities at fair value | $ 0 | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Narrative) (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Additional loss expected to be reclassified from AOCI into earnings during next twelve months | $ 10,113 |
Derivatives in a net liability position | $ 28,024 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities (Schedule of the Notional Amount and Fair Value of Derivative Instruments) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020USD ($)instrument | Dec. 31, 2019USD ($) | |
Derivatives, Fair Value [Line Items] | ||
Fair Value of Asset | $ 884 | |
Fair Value of (Liability) | $ (26,178) | (5,588) |
Credit facility, principal amount outstanding | 938,000 | 908,000 |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional Amount | $ 736,605 | 637,778 |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Minimum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Effective Dates | Jul. 1, 2016 | |
Maturity Dates | Dec. 22, 2020 | |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Maximum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Effective Dates | Jul. 1, 2020 | |
Maturity Dates | Dec. 31, 2024 | |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Other Assets, Net [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Asset | $ 0 | 884 |
Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | Accounts Payable and Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of (Liability) | $ (26,178) | $ (5,588) |
Variable Rate Debt [Member] | Variable Rate, Subject To Interest Rate Swap, Two [Member] | Interest Rate Swaps [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Number of interest rate swap agreements | instrument | 2 | |
Credit facility, principal amount outstanding | $ 100,000 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities (Schedule of Income and Losses Recognized on Derivative Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Loss Recognized in Other Comprehensive Loss on Derivatives | $ (3,261) | $ (6,846) | $ (23,854) | $ (9,801) |
Amount of (Loss) Income Reclassified From Accumulated Other Comprehensive (Loss) Income to Net Income | (2,121) | 706 | (2,380) | 1,362 |
Interest and other expense, net | 14,199 | 9,893 | 29,518 | 19,728 |
Interest Rate Swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Loss Recognized in Other Comprehensive Loss on Derivatives | (3,261) | (6,846) | (23,854) | (9,801) |
Interest Rate Swaps [Member] | Interest and Other Expense, Net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Income Reclassified From Accumulated Other Comprehensive (Loss) Income to Net Income | $ (2,121) | $ 706 | $ (2,380) | $ 1,362 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 884 | |
Gross Amounts Offset in the Balance Sheet | 0 | |
Net Amounts of Assets Presented in the Balance Sheet | $ 0 | 884 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral | (5) | |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | 0 | |
Net Amount | $ 879 |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Liabilities | $ 26,178 | $ 5,588 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheet | 26,178 | 5,588 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral | 0 | (5) |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | 0 | 0 |
Net Amount | $ 26,178 | $ 5,583 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income (Schedule of Amounts Recognized in Accumulated Other Comprehensive (Loss) Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jan. 01, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance, beginning | $ 1,692,666 | $ 1,026,661 | $ 1,738,419 | $ 1,047,385 | |
Cumulative effect of accounting change | $ 0 | ||||
Other comprehensive loss | (1,140) | (7,552) | (21,474) | (11,163) | |
Balance, ending | 1,671,570 | 1,003,435 | 1,671,570 | 1,003,435 | |
Unrealized Loss on Derivative Instruments [Member] | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance, beginning | (4,704) | 6,100 | |||
Cumulative effect of accounting change | 103 | ||||
Balance as of January 1, 2019 | $ 6,203 | ||||
Other comprehensive loss before reclassification | (23,854) | (9,801) | |||
Amount of (income) loss reclassified from accumulated other comprehensive (loss) income to net income | 2,380 | (1,362) | |||
Other comprehensive loss | (21,474) | (11,163) | |||
Balance, ending | $ (26,178) | $ (4,960) | $ (26,178) | $ (4,960) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive (Loss) Income (Schedule of Reclassifications Out of Accumulated Other Comprehensive (Loss) Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other expense, net | $ 14,199 | $ 9,893 | $ 29,518 | $ 19,728 |
Interest Rate Swaps [Member] | Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income to Net Income [Member] | Reclassification out of Accumulated Other Comprehensive (Loss) Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other expense, net | $ 2,380 | $ (1,362) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 30, 2020case |
Commitments and Contingencies Disclosure [Abstract] | |
Number of pending legal proceedings to which the Company is a party | 0 |
Subsequent Events (Schedule of
Subsequent Events (Schedule of Subsequent Events - Distributions Paid to Stockholders) (Details) - USD ($) $ in Thousands | Aug. 03, 2020 | Jul. 01, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Subsequent Event [Line Items] | ||||||
Cash | $ 38,065 | $ 21,993 | ||||
DRIP | $ 7,711 | $ 10,481 | $ 15,442 | $ 20,866 | ||
Subsequent Event [Member] | Stockholders of record date, June 2020 [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | $ 6,265 | |||||
DRIP | 2,488 | |||||
Total Distribution | 8,753 | |||||
Subsequent Event [Member] | Stockholders of record date, June 2020 [Member] | Class A shares [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | 5,258 | |||||
DRIP | 1,542 | |||||
Total Distribution | 6,800 | |||||
Subsequent Event [Member] | Stockholders of record date, June 2020 [Member] | Class I shares [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | 306 | |||||
DRIP | 206 | |||||
Total Distribution | 512 | |||||
Subsequent Event [Member] | Stockholders of record date, June 2020 [Member] | Class T shares [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | 648 | |||||
DRIP | 676 | |||||
Total Distribution | 1,324 | |||||
Subsequent Event [Member] | Stockholders of record date, June 2020 [Member] | Class T2 shares [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | 53 | |||||
DRIP | 64 | |||||
Total Distribution | $ 117 | |||||
Subsequent Event [Member] | Stockholders of record date, July 2020 [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | $ 6,491 | |||||
DRIP | 2,565 | |||||
Total Distribution | 9,056 | |||||
Subsequent Event [Member] | Stockholders of record date, July 2020 [Member] | Class A shares [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | 5,442 | |||||
DRIP | 1,592 | |||||
Total Distribution | 7,034 | |||||
Subsequent Event [Member] | Stockholders of record date, July 2020 [Member] | Class I shares [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | 314 | |||||
DRIP | 216 | |||||
Total Distribution | 530 | |||||
Subsequent Event [Member] | Stockholders of record date, July 2020 [Member] | Class T shares [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | 680 | |||||
DRIP | 691 | |||||
Total Distribution | 1,371 | |||||
Subsequent Event [Member] | Stockholders of record date, July 2020 [Member] | Class T2 shares [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Cash | 55 | |||||
DRIP | 66 | |||||
Total Distribution | $ 121 |
Subsequent Events (Schedule o_2
Subsequent Events (Schedule of Subsequent Events - Distributions Authorized) (Details) - $ / shares | Jul. 22, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Subsequent Event [Line Items] | |||||
Daily Distribution Rate (in dollars per share) | $ 0.12 | $ 0.16 | $ 0.24 | $ 0.31 | |
Subsequent Event [Member] | Class A shares [Member] | Stockholders of record date, August 2020 [Member] | |||||
Subsequent Event [Line Items] | |||||
Daily Distribution Rate (in dollars per share) | $ 0.001366120 | ||||
Annualized Distribution Per Share (in dollars per share) | 0.50 | ||||
Subsequent Event [Member] | Class I shares [Member] | Stockholders of record date, August 2020 [Member] | |||||
Subsequent Event [Line Items] | |||||
Daily Distribution Rate (in dollars per share) | 0.001366120 | ||||
Annualized Distribution Per Share (in dollars per share) | 0.50 | ||||
Subsequent Event [Member] | Class T shares [Member] | Stockholders of record date, August 2020 [Member] | |||||
Subsequent Event [Line Items] | |||||
Daily Distribution Rate (in dollars per share) | 0.001129781 | ||||
Annualized Distribution Per Share (in dollars per share) | 0.41 | ||||
Subsequent Event [Member] | Class T2 shares [Member] | Stockholders of record date, August 2020 [Member] | |||||
Subsequent Event [Line Items] | |||||
Daily Distribution Rate (in dollars per share) | 0.001129781 | ||||
Annualized Distribution Per Share (in dollars per share) | $ 0.41 | ||||
Subsequent Event [Member] | Class A, I, T and T2 shares [Member] | Stockholders of record date, August 2020 [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of days, distribution calculation | 366 days |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - Subsequent Event [Member] | Jul. 28, 2020USD ($) |
Subsequent Event [Line Items] | |
Equity interest in acquiree percentage | 100.00% |
Business acquisition, purchase price | $ 40,000,000 |
Internalization Transaction, Tranche One, Closing [Member] | |
Subsequent Event [Line Items] | |
Business acquisition, cash paid | 25,000,000 |
Internalization Transaction, Tranche Two, March 31, 2021 [Member] | |
Subsequent Event [Line Items] | |
Business acquisition, cash paid | 7,500,000 |
Internalization Transaction, Tranche Three, March 31, 2022 [Member] | |
Subsequent Event [Line Items] | |
Business acquisition, cash paid | $ 7,500,000 |
Uncategorized Items - cik000156
Label | Element | Value |
Accumulated Distributions in Excess of Net Income [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (103,000) |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 103,000 |