Cover
Cover - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-55435 | |
Entity Registrant Name | SILA REALTY TRUST, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-1854011 | |
Entity Address, Address Line One | 4890 West Kennedy Blvd. | |
Entity Address, Address Line Two | Suite 650 | |
Entity Address, City or Town | Tampa | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33609 | |
City Area Code | 813 | |
Local Phone Number | 287-0101 | |
Title of 12(b) Security | None | |
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 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001567925 | |
No Trading Symbol Flag | true | |
Current Fiscal Year End Date | --12-31 | |
Class A | ||
Entity Common Stock, Shares Outstanding (in shares) | 167,324 | |
Class I | ||
Entity Common Stock, Shares Outstanding (in shares) | 14,366 | |
Class T | ||
Entity Common Stock, Shares Outstanding (in shares) | 40,206 | |
Class T2 | ||
Entity Common Stock, Shares Outstanding (in shares) | 2,053 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Real estate: | ||
Land | $ 159,777 | $ 168,969 |
Buildings and improvements, less accumulated depreciation of $153,734 and $119,947, respectively | 1,628,363 | 1,661,351 |
Construction in progress | 12,053 | 19,232 |
Total real estate, net | 1,800,193 | 1,849,552 |
Cash and cash equivalents | 75,363 | 53,174 |
Acquired intangible assets, less accumulated amortization of $65,534 and $49,866, respectively | 182,688 | 197,901 |
Goodwill | 23,284 | 23,955 |
Right-of-use assets - operating leases | 22,101 | 22,499 |
Right-of-use assets - finance leases | 2,301 | 2,527 |
Notes receivable, net | 2,200 | 31,262 |
Other assets, net | 61,456 | 64,669 |
Assets held for sale, net | 30,620 | 959,750 |
Total assets | 2,200,206 | 3,205,289 |
Liabilities: | ||
Notes payable, net of deferred financing costs of $0 and $682, respectively | 0 | 146,645 |
Credit facility, net of deferred financing costs of $3,494 and $5,900, respectively | 516,506 | 932,100 |
Accounts payable and other liabilities | 40,572 | 67,946 |
Acquired intangible liabilities, less accumulated amortization of $4,101 and $3,122, respectively | 12,546 | 11,971 |
Operating lease liabilities | 23,975 | 23,926 |
Finance lease liabilities | 2,634 | 2,843 |
Liabilities held for sale, net | 2,369 | 365,985 |
Total liabilities | 598,602 | 1,551,416 |
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; 237,511,555 and 234,957,801 shares issued, respectively; 223,826,695 and 222,045,522 shares outstanding, respectively | 2,238 | 2,220 |
Additional paid-in capital | 2,000,934 | 1,983,361 |
Accumulated distributions in excess of earnings | (390,932) | (311,264) |
Accumulated other comprehensive loss | (10,636) | (20,444) |
Total stockholders’ equity | 1,601,604 | 1,653,873 |
Total liabilities and stockholders’ equity | $ 2,200,206 | $ 3,205,289 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Buildings and improvements, accumulated depreciation | $ 153,734 | $ 119,947 |
Acquired intangible assets, accumulated amortization | 65,534 | 49,866 |
Notes payable, deferred financing costs | 0 | 682 |
Credit facility, deferred financing costs | 3,494 | 5,900 |
Acquired intangible liabilities, accumulated amortization | $ 4,101 | $ 3,122 |
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) | 237,511,555 | 234,957,801 |
Common stock, shares outstanding (in shares) | 223,826,695 | 222,045,522 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue: | ||||
Rental revenue | $ 43,063,000 | $ 40,722,000 | $ 129,232,000 | $ 123,879,000 |
Expenses: | ||||
Rental expenses | 3,024,000 | 4,405,000 | 9,513,000 | 12,639,000 |
General and administrative expenses | 6,348,000 | 3,578,000 | 19,610,000 | 9,960,000 |
Internalization transaction expenses | 0 | 2,235,000 | 0 | 3,640,000 |
Asset management fees | 0 | 4,218,000 | 0 | 12,604,000 |
Depreciation and amortization | 17,259,000 | 17,002,000 | 53,098,000 | 52,714,000 |
Impairment loss on real estate | 10,241,000 | 0 | 27,166,000 | 0 |
Impairment loss on goodwill | 0 | 0 | 671,000 | 0 |
Total expenses | 36,872,000 | 31,438,000 | 110,058,000 | 91,557,000 |
Gain on real estate disposition | 0 | 0 | 0 | 2,703,000 |
Income from operations | 6,191,000 | 9,284,000 | 19,174,000 | 35,025,000 |
Interest and other expense, net | 11,737,000 | 9,865,000 | 30,035,000 | 32,597,000 |
(Loss) income from continuing operations | (5,546,000) | (581,000) | (10,861,000) | 2,428,000 |
Income from discontinued operations | 377,191,000 | 5,845,000 | 401,444,000 | 19,600,000 |
Net income attributable to common stockholders | 371,645,000 | 5,264,000 | 390,583,000 | 22,028,000 |
Other comprehensive income (loss): | ||||
Unrealized income (loss) on interest rate swaps, net | 2,241,000 | 2,584,000 | 9,808,000 | (18,890,000) |
Other comprehensive income (loss) | 2,241,000 | 2,584,000 | 9,808,000 | (18,890,000) |
Comprehensive income attributable to common stockholders | $ 373,886,000 | $ 7,848,000 | $ 400,391,000 | $ 3,138,000 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 223,661,774 | 221,346,730 | 223,079,613 | 221,293,405 |
Diluted (in shares) | 223,661,774 | 221,346,730 | 223,079,613 | 221,335,874 |
Basic: | ||||
Basic, continuing operations (in dollars per share) | $ (0.03) | $ (0.01) | $ (0.05) | $ 0.01 |
Basic, discontinued operations (in dollars per share) | 1.69 | 0.03 | 1.80 | 0.09 |
Net income attributable to common stockholders (in dollars per share) | 1.66 | 0.02 | 1.75 | 0.10 |
Diluted: | ||||
Diluted, continuing operations (in dollars per share) | (0.03) | (0.01) | (0.05) | 0.01 |
Diluted, discontinued operations (in dollars per share) | 1.69 | 0.03 | 1.80 | 0.09 |
Net income attributable to common stockholders (in dollars per share) | 1.66 | 0.02 | 1.75 | 0.10 |
Distributions declared per common share (in dollars per share) | $ 1.86 | $ 0.12 | $ 2.11 | $ 0.36 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Additional Paid-in Capital | Accumulated Distributions in Excess of Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Balance, (in shares) at Dec. 31, 2019 | 221,912,714 | ||||||
Balance, beginning at Dec. 31, 2019 | $ 1,738,419 | $ 1,738,417 | $ 2,219 | $ 1,981,848 | $ (240,946) | $ (4,704) | $ 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 2,664,728 | ||||||
Issuance of common stock under the distribution reinvestment plan | 23,055 | 23,055 | $ 27 | 23,028 | |||
Vesting of restricted stock (in shares) | 10,500 | ||||||
Stock-based compensation | 102 | 102 | 102 | ||||
Purchase of noncontrolling interest | (2) | (2) | |||||
Distribution and servicing fees | 65 | 65 | 65 | ||||
Other offering costs | (9) | (9) | (9) | ||||
Repurchase of common stock (in shares) | (3,059,072) | ||||||
Repurchase of common stock | (26,461) | (26,461) | $ (31) | (26,430) | |||
Distributions to common stockholders | (80,063) | (80,063) | (80,063) | ||||
Other comprehensive income (loss) | (18,890) | (18,890) | (18,890) | ||||
Net income | 22,028 | 22,028 | 22,028 | ||||
Balance, (in shares) at Sep. 30, 2020 | 221,528,870 | ||||||
Balance, ending at Sep. 30, 2020 | 1,658,244 | 1,658,244 | $ 2,215 | 1,978,604 | (298,981) | (23,594) | 0 |
Balance, (in shares) at Jun. 30, 2020 | 220,865,308 | ||||||
Balance, beginning at Jun. 30, 2020 | 1,671,570 | 1,671,568 | $ 2,209 | 1,972,886 | (277,349) | (26,178) | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 879,728 | ||||||
Issuance of common stock under the distribution reinvestment plan | 7,613 | 7,613 | $ 9 | 7,604 | |||
Vesting of restricted stock (in shares) | 8,250 | ||||||
Stock-based compensation | 45 | 45 | 45 | ||||
Purchase of noncontrolling interest | (2) | (2) | |||||
Distribution and servicing fees | 6 | 6 | 6 | ||||
Repurchase of common stock (in shares) | (224,416) | ||||||
Repurchase of common stock | (1,940) | (1,940) | $ (3) | (1,937) | |||
Distributions to common stockholders | (26,896) | (26,896) | (26,896) | ||||
Other comprehensive income (loss) | 2,584 | 2,584 | 2,584 | ||||
Net income | 5,264 | 5,264 | 5,264 | ||||
Balance, (in shares) at Sep. 30, 2020 | 221,528,870 | ||||||
Balance, ending at Sep. 30, 2020 | $ 1,658,244 | 1,658,244 | $ 2,215 | 1,978,604 | (298,981) | (23,594) | $ 0 |
Balance, (in shares) at Dec. 31, 2020 | 222,045,522 | 222,045,522 | |||||
Balance, beginning at Dec. 31, 2020 | 1,653,873 | $ 2,220 | 1,983,361 | (311,264) | (20,444) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 2,532,368 | ||||||
Issuance of common stock under the distribution reinvestment plan | $ 21,750 | 21,750 | $ 25 | 21,725 | |||
Vesting of restricted stock (in shares) | 21,386 | ||||||
Stock-based compensation | 1,756 | 1,756 | |||||
Distribution and servicing fees | 649 | 649 | |||||
Repurchase of common stock (in shares) | (772,581) | ||||||
Repurchase of common stock | (6,564) | $ (7) | (6,557) | ||||
Distributions to common stockholders | (470,251) | (470,251) | |||||
Other comprehensive income (loss) | 9,808 | 9,808 | |||||
Net income | $ 390,583 | 390,583 | 390,583 | ||||
Balance, (in shares) at Sep. 30, 2021 | 223,826,695 | 223,826,695 | |||||
Balance, ending at Sep. 30, 2021 | 1,601,604 | $ 2,238 | 2,000,934 | (390,932) | (10,636) | ||
Balance, (in shares) at Jun. 30, 2021 | 223,285,587 | ||||||
Balance, beginning at Jun. 30, 2021 | 1,638,713 | $ 2,233 | 1,995,298 | (345,941) | (12,877) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under the distribution reinvestment plan (in shares) | 826,280 | ||||||
Issuance of common stock under the distribution reinvestment plan | 6,917 | $ 8 | 6,909 | ||||
Vesting of restricted stock (in shares) | 18,075 | ||||||
Stock-based compensation | 637 | 637 | |||||
Distribution and servicing fees | 573 | 573 | |||||
Repurchase of common stock (in shares) | (303,247) | ||||||
Repurchase of common stock | (2,486) | $ (3) | (2,483) | ||||
Distributions to common stockholders | (416,636) | (416,636) | |||||
Other comprehensive income (loss) | 2,241 | 2,241 | |||||
Net income | 371,645 | 371,645 | |||||
Balance, (in shares) at Sep. 30, 2021 | 223,826,695 | 223,826,695 | |||||
Balance, ending at Sep. 30, 2021 | $ 1,601,604 | $ 2,238 | $ 2,000,934 | $ (390,932) | $ (10,636) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | 9 Months Ended | |
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | |
Cash flows from operating activities: | ||
Net income attributable to common stockholders | $ 390,583,000 | $ 22,028,000 |
Adjustments to reconcile net income attributable to common stockholders to net cash provided by operating activities: | ||
Depreciation and amortization | 64,843,000 | 80,607,000 |
Amortization of deferred financing costs | 2,761,000 | 2,883,000 |
Amortization of above-market leases | 1,450,000 | 1,983,000 |
Amortization of below-market leases | (2,689,000) | (6,050,000) |
Amortization of origination fee | 394,000 | 96,000 |
Amortization of discount of deferred liability | 272,000 | 0 |
Swap termination | 833,000 | 0 |
Reduction in the carrying amount of right-of-use assets - operating leases, net | 660,000 | 701,000 |
Reduction in the carrying amount of right-of-use assets - finance lease, net | 14,000 | 1,000 |
Impairment loss on real estate | 27,166,000 | 0 |
Impairment loss on goodwill | 671,000 | 0 |
Gain on real estate disposition from continuing operations | 0 | (2,703,000) |
Gain on real estate dispositions of discontinued operations | (395,801,000) | 0 |
Loss on extinguishment of debt | 28,751,000 | 0 |
Straight-line rent | (12,492,000) | (16,146,000) |
Stock-based compensation | 1,756,000 | 102,000 |
Changes in operating assets and liabilities: | ||
Accounts payable and other liabilities | (7,172,000) | 1,745,000 |
Accounts payable due to affiliates | 0 | (3,350,000) |
Other assets | 2,816,000 | (1,293,000) |
Net cash provided by operating activities | 104,816,000 | 80,604,000 |
Cash flows from investing activities: | ||
Investment in real estate | (25,048,000) | (16,064,000) |
Consideration paid for the internalization transaction | (15,000,000) | (25,000,000) |
Proceeds from real estate dispositions | 1,295,367,000 | 6,125,000 |
Capital expenditures | (20,323,000) | (21,251,000) |
Payments of deal costs | 0 | (126,000) |
Real estate deposits, net | (400,000) | 600,000 |
Collection of notes receivable | 28,500,000 | 0 |
Net cash provided by (used in) investing activities | 1,263,096,000 | (55,716,000) |
Cash flows from financing activities: | ||
Payments on notes payable | (453,422,000) | (2,822,000) |
Proceeds from credit facility | 15,000,000 | 140,000,000 |
Payments on credit facility | (433,000,000) | (65,000,000) |
Payments for extinguishment of debt | (29,244,000) | 0 |
Payments of deferred financing costs | (436,000) | (622,000) |
Repurchase of common stock | (6,564,000) | (26,461,000) |
Offering costs on issuance of common stock | (1,807,000) | (2,384,000) |
Distributions to common stockholders | (450,143,000) | (57,321,000) |
Purchase of noncontrolling interests | 0 | (2,000) |
Net cash used in financing activities | (1,359,616,000) | (14,612,000) |
Net change in cash, cash equivalents and restricted cash | 8,296,000 | 10,276,000 |
Cash, cash equivalents and restricted cash - Beginning of period | 67,909,000 | 80,230,000 |
Cash, cash equivalents and restricted cash - End of period | 76,205,000 | 90,506,000 |
Supplemental cash flow disclosure: | ||
Interest paid, net of interest capitalized of $296 and $463, respectively | 34,142,000 | 42,103,000 |
Supplemental disclosure of non-cash transactions: | ||
Common stock issued through distribution reinvestment plan | 21,750,000 | 23,055,000 |
Contingent consideration | 978,000 | |
Accrued capital expenditures | 0 | 1,186,000 |
Accrued deal costs | 56,000 | 13,000 |
Deferred internalization transaction purchase price | 0 | 14,674,000 |
Right-of-use assets in exchange for lease liability - operating leases | 625,000 | 1,060,000 |
Right-of-use assets in exchange for lease liability - finance lease | 0 | 2,854,000 |
Origination of note receivable related to real estate disposition | $ 0 | $ 28,000,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Cash Flows [Abstract] | ||
Interest capitalized | $ 296 | $ 463 |
Organization and Business Opera
Organization and Business Operations | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Operations | Organization and Business Operations Sila Realty Trust, 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 commencing with its taxable year ended December 31, 2014. Substantially all of the Company’s business is conducted through Sila Realty Operating Partnership, LP, a Delaware limited partnership, or the Operating Partnership, formed on January 10, 2013. The Company is the sole general partner and, prior to the completion of the Internalization Transaction (as defined herein) on September 30, 2020, Carter Validus Advisors II, LLC, or the Former Advisor, was the special limited partner of the Operating Partnership. As of the closing of the Internalization Transaction, the Company owns directly or indirectly, all of the interests in the Operating Partnership. Prior to September 30, 2020, the Former Advisor was responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making investments on the Company’s behalf pursuant to an advisory agreement among the Company, the Operating Partnership and the Former Advisor. On July 28, 2020, the Company and the Operating Partnership entered into a Membership Interest Purchase Agreement, or the Purchase Agreement, to provide for the internalization of the external management functions previously performed for the Company and the Operating Partnership by the Former Advisor and its affiliates, or the Internalization Transaction. On September 30, 2020, the Company closed the Internalization Transaction. Effective September 30, 2020, as a result of the Internalization Transaction, the Former Advisor is no longer affiliated with the Company. Upon completion of the Internalization Transaction, individuals, who were previously employed by an affiliate of the Former Advisor, became employees of the Company and the functions previously performed by the Former Advisor were internalized by the Company. As an internally managed company, the Company no longer pays the Former Advisor and its affiliates any fees or expense reimbursements arising from the advisory agreement. In addition, on September 30, 2020, the Operating Partnership redeemed the Former Advisor’s limited partner interest (including special limited partner interest) in the Operating Partnership in connection with the Internalization Transaction. On September 30, 2020, the Company and Sila REIT, LLC, a Maryland limited liability company that is the sole limited partner of the Operating Partnership, entered into the Third Amended and Restated Agreement of Limited Partnership of the Operating Partnership, or the Third A&R LP Agreement, in order to reflect the completion of the Internalization Transaction. 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 second quarter of 2021, the Company's board of directors, or the Board, made a determination to sell the Company's data center assets. On May 19, 2021, the Company and certain of its wholly-owned subsidiaries entered into a purchase and sale agreement, or the PSA, for the sale of up to 29 data center properties owned by the Company, which constituted the entirety of the Company's data center segment. See Note 4—"Held for Sale and Discontinued Operations" for further discussion. The decision of the Board to sell the data center assets, as well as the execution of the PSA, represented a strategic shift that had a major effect on the Company's results and operations and assets and liabilities for the periods presented. As a result, the Company has classified the assets and liabilities related to the data center segment as assets held for sale, net, and liabilities held for sale, net, respectively, on the condensed consolidated balance sheets and the operations have been classified as income from discontinued operations on the condensed consolidated statements of comprehensive income. On July 22, 2021, the Company completed the sale of all 29 of its data centers, or the Data Center Sale, for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. See Note 3—"Acquisitions and Dispositions" for further discussion. Concurrently, the Board declared a special cash distribution of $1.75 per share of Class A, Class I, Class T and Class T2 shares of common stock. The special cash distribution was funded with the proceeds from the Data Center Sale. The special cash distribution was paid on July 30, 2021 to stockholders of record at the close of business on July 26, 2021, in the aggregate amount of approximately $392,685,000. As of September 30, 2021, the Company owned 125 real estate healthcare properties, in two micropolitan statistical areas and 54 metropolitan statistical areas, or MSAs. 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, or each, a DRIP Offering and together the DRIP Offerings, since November 2017. Except as the context otherwise requires, the “Company” refers to Sila Realty Trust, Inc., the Operating Partnership and all wholly-owned subsidiaries. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
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 responsibility 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 nine months ended September 30, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The condensed consolidated balance sheet at December 31, 2020, 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, 2020, and related notes thereto set forth in the Company’s Annual Report on Form 10-K, filed with the SEC on March 24, 2021. 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, which includes cash held by escrow agents in escrow accounts for tenant and capital improvements in accordance with the respective tenant’s lease agreement. Restricted cash attributable to continuing operations is reported in other assets, net, in the accompanying condensed consolidated balance sheets. See Note 10—"Other Assets, Net." Restricted cash attributable to discontinued operations is reported in assets held for sale, net, in the accompanying condensed consolidated balance sheets. 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): Nine Months Ended 2021 2020 Beginning of period: Cash and cash equivalents $ 53,174 $ 69,342 Restricted cash 14,735 (1) 10,888 (2) Cash, cash equivalents and restricted cash $ 67,909 $ 80,230 End of period: Cash and cash equivalents $ 75,363 $ 75,505 Restricted cash 842 15,001 (3) Cash, cash equivalents and restricted cash $ 76,205 $ 90,506 (1) Of this amount, $13,499,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. (2) Of this amount, $9,652,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. (3) Of this amount, $13,765,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. Held for Sale and Discontinued Operations The Company classifies a real estate property as held for sale upon satisfaction of all of the following criteria: (i) management commits to a plan to sell a property, (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such properties, (iii) there is an active program to locate a buyer, (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year, (v) the property is being actively marketed for sale, and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Upon the determination to classify a property as held for sale, the Company ceases depreciation and amortization on the real estate properties held for sale, as well as the amortization of acquired in-place leases and right-of-use assets. The real estate properties held for sale and associated liabilities are classified separately on the condensed consolidated balance sheets. Such properties are recorded at the lesser of the carrying value or estimated fair value less estimated cost to sell. As a result of the Data Center Sale, as of September 30, 2021, the Company had assets held for sale in the amount of $2,394,000, which primarily related to accounts receivable to be collected from the former tenants and liabilities held for sale in the amount of $1,822,000, which primarily related to accounts payable and other liabilities to be paid when obligations become due. Additionally, during the three months ended September 30, 2021, the Company classified two healthcare properties as held for sale. The Company has recorded the real estate properties held for sale at their carrying value at September 30, 2021. See Note 4—"Held for Sale and Discontinued Operations" for further discussion. The Company classifies assets and liabilities of the 29-property data center portfolio as discontinued operations for all periods presented because they represent a strategic shift that had a major effect on the Company's results and operations. The assets and liabilities are classified on the condensed consolidated balance sheets as assets held for sale, net, and liabilities held for sale, net, respectively, and the operations are classified on the condensed consolidated statements of comprehensive income as income from discontinued operations for all periods presented. On July 22, 2021, the Company completed the Data Center Sale, for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. See Note 3—"Acquisitions and Dispositions" for additional information. 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 may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate 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, probability weighting of the potential re-lease of the property versus sales scenarios, sale prices of comparable properties, 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 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 assets. Impairment of Real Estate During the first quarter of 2021, real estate assets related to one healthcare property were determined to be impaired. A tenant of the property that was experiencing financial difficulty vacated its space on June 19, 2020. During the fourth quarter of 2020, the Company entered into lease negotiations with a prospective tenant for the same property, but the Company did not reach a mutual agreement. As such, the Company evaluated other strategic options for the property, including a possible sale, and in April 2021, the Company received a letter of intent from a prospective buyer. The inclusion of a potential sale scenario in the Company’s step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $17,145,000, resulting in an impairment charge of $10,423,000. During the third quarter of 2021, the Company entered into a purchase and sale agreement with the prospective buyer. The agreement was terminated subsequently due to higher than anticipated costs to redevelop the property. As a result, the Company re-performed the impairment analysis with changes to the sale scenario. The aggregate carrying amount of the assets of $16,909,000 exceeded their fair value. The carrying value of the property was reduced to its estimated fair value of $6,668,000, resulting in an impairment charge of $10,241,000. The Company utilized a market approach, using comparable properties, to estimate the fair value of the property. During the second quarter of 2021, real estate assets related to one healthcare property were determined to be impaired. The tenant of the property was experiencing financial difficulty and vacated the space in March 2021. Subsequently, during the second quarter, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. The Company utilized a market approach, using comparable properties, to estimate the fair value of the property. As a result, the carrying value of the property was reduced to its estimated fair value of $5,957,000, resulting in an impairment charge of $2,894,000. Additionally, during the second quarter of 2021, real estate assets related to another healthcare property were determined to be impaired. The last of the three tenants that occupied the building terminated its lease agreement and vacated the space on July 12, 2021. Subsequently, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $22,311,000, resulting in an impairment charge of $3,608,000. Impairment charges are recorded as impairment loss on real estate in the condensed consolidated statements of comprehensive income. No impairment losses were recorded on real estate assets during the three and nine months ended September 30, 2020. See Note 14—"Fair Value" for further discussion. During the second quarter of 2021, the Company accelerated depreciation of equipment at one healthcare property based on its anticipated sale in July 2021. As a result, the Company accelerated the depreciation of the equipment in the amount of $296,000 in depreciation and amortization expense in the condensed consolidated statements of comprehensive income and sold the equipment for $94,000 during the third quarter of 2021. Impairment of Acquired Intangible Assets and Acquired Intangible Liabilities During the three months ended September 30, 2021, the Company did not record impairment of acquired intangible assets or acquired intangible liabilities. During the nine months ended September 30, 2021, the Company did not record impairment of acquired intangible liabilities. During the nine months ended September 30, 2021, the Company recognized an impairment of one in-place lease intangible asset in the amount of approximately $1,120,000, by accelerating the amortization of the acquired intangible asset related to one healthcare tenant of the Company that was experiencing financial difficulties and vacated the property in March 2021. On April 5, 2021, the Company terminated its lease agreement and the tenant paid a lease termination fee of $400,000, which was recorded in rental revenue in the condensed consolidated statements of comprehensive income. During the three months ended September 30, 2020, the Company recognized an impairment of one in-place lease intangible asset in the amount of approximately $3,189,000, by accelerating the amortization of the acquired intangible asset related to a tenant in a data center property of the Company that was experiencing financial difficulty due to deteriorating economic conditions driven by the impact of the COVID-19 pandemic and accelerating its modification of work strategy to a remote environment due to the pandemic. The impairment loss was recorded in income from discontinued operations in the condensed consolidated statements of comprehensive income. During the nine months ended September 30, 2020, the Company recognized impairments of two in-place lease intangible assets in the amount of approximately $4,673,000 and one above-market lease intangible asset in the amount of approximately $344,000, by accelerating the amortization of the acquired intangible assets. Of the $4,673,000 in-place lease intangible assets written off, $3,189,000 related to the tenant of the data center property discussed above, which was recorded in income from discontinued operations; and $1,484,000 related to one healthcare tenant of the Company that was experiencing financial difficulties and vacated the property on June 19, 2020. The impairment loss related to the in-place lease intangible asset of the healthcare tenant was recorded in depreciation and amortization in the condensed consolidated statements of comprehensive income. The impairment loss related to the above market lease intangible asset in the amount of $344,000 was recorded as an adjustment to rental revenue in the condensed consolidated statements of comprehensive income. During the three and nine months ended September 30, 2020, the Company wrote off one below-market lease intangible liability in the amount of approximately $1,974,000, by accelerating the amortization of the acquired intangible liability related to one tenant of the data center property discussed above, which was recorded in income from discontinued operations in the condensed consolidated statements of comprehensive income Impairment of Goodwill Goodwill represents the excess of the amount paid over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is allocated to an entity's reporting units. Goodwill has an indefinite life and is not amortized. On September 30, 2020, the Company recorded $39,529,000 of goodwill related to the Internalization Transaction, of which $15,574,000 was allocated to the data center properties and written off as a result of the Data Center Sale on July 22, 2021. Out of $39,529,000, $23,955,000 was allocated to the healthcare segment. See Note 5—"Internalization Transaction" for details. The Company evaluates goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, or at least annually. Unless circumstances otherwise dictate, the annual impairment test is performed as of the last day of each year. The Company evaluates potential triggering events that may affect the estimated fair value of the Company’s reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse market conditions for certain reporting units may have a significant impact on the estimated fair value of these reporting units and could result in future impairments of goodwill. If the carrying value of a reporting unit exceeds its estimated fair value, then an impairment charge is recorded in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company has the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Under a qualitative assessment, the impairment analysis for goodwill represents an evaluation of whether it is more-likely-than-not the reporting unit's fair value is less than its carrying value, including goodwill. If a qualitative analysis indicates that it is more-likely-than-not that the estimated carrying value of a reporting unit, including goodwill, exceeds its fair value, the Company performs the quantitative analysis as described below. During the first quarter of 2021, the Company recognized $240,000 of goodwill impairment. Impairment loss on real estate recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered evaluation of the reporting unit fair value for goodwill impairment. The Company's reporting unit represents each individual operating real estate property. The carrying value of long-lived assets within the reporting unit with indicators of impairment were first tested for recoverability and resulted in recognition of impairment during such period. As a result, the fair value of the reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill in the amount of $240,000 for the amount that the carrying value of the reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to that reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach, using comparable sales to estimate the fair value. As of March 31, 2021, the Company did not have any goodwill associated with this healthcare reporting unit. During the second quarter of 2021, the Company recognized $431,000 of goodwill impairment on two reporting units. Impairment loss on two real estate properties recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered evaluation of each reporting unit's fair value for goodwill impairment. As a result, the fair value of each reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill for the two reporting units in the amounts of $112,000 and $319,000, respectively. Goodwill impairment was recorded for the amount that the carrying value of each reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to each reporting unit. Goodwill impairment was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of each reporting unit was determined based on a market approach model. As of June 30, 2021, the Company did not have any goodwill associated with these healthcare reporting units. The Company had no goodwill impairment during the three months ended September 30, 2021. The following table summarizes the rollforward of goodwill for the nine months ended September 30, 2021, excluding amounts classified as discontinued operations (amounts in thousands): Goodwill Balance as of December 31, 2020 $ 23,955 Accumulated impairment losses (671) Balance as of September 30, 2021 $ 23,284 Revenue Recognition, Tenant Receivables and Allowance for Uncollectible Accounts The Company recognizes non-rental related revenue in accordance with Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers , or ASC 606. The Company has identified its revenue streams as rental income from leasing arrangements and tenant reimbursements, which are outside the scope of ASC 606. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Non-rental revenue, subject to ASC 606, is immaterial to the Company's condensed consolidated financial statements. The majority of the Company's revenue is derived from rental revenue, which is accounted for in accordance with ASC 842, Leases , or ASC 842. In accordance with ASC 842, rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). For lease arrangements when it is not probable that the Company will collect all or substantially all of the remaining lease payments under the term of the lease, rental revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis or the lease payments that have been collected from the lessee. Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. Tenant reimbursements, which are comprised of additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses, are recognized when the services are provided and the performance obligations are satisfied. The Company wrote off approximately $199,000 and $4,000 for the nine months ended September 30, 2021 and 2020, respectively, as a reduction in rental revenue from continuing operations in the accompanying condensed consolidated statements of comprehensive income because the amounts were determined to be uncollectible. No write-offs from continuing operations were recorded during the three months ended September 30, 2021 and 2020, respectively. The Company wrote off approximately $0 and $118,000 for the three months ended September 30, 2021 and 2020, respectively, and $17,000 and $118,000 for the nine months ended September 30, 2021 and 2020, respectively, related to discontinued operations, which was recorded in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income. On April 22, 2021, the Company entered into a settlement agreement with a data center property tenant that was experiencing financial difficulty due to deteriorating economic conditions driven by the impact of the COVID-19 pandemic and accelerating its modification of work strategy to a remote environment due to the pandemic. The tenant stopped paying rent in October 2020. Pursuant to the settlement agreement, the lease was terminated, effective immediately. The tenant surrendered the space on June 20, 2021. Additionally, in connection with the lease termination, the tenant paid the Company a $7,000,000 termination fee on April 23, 2021, which was recorded in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income during the second quarter of 2021. The Company collected an additional $75,000 on July 7, 2021 related to the lease termination agreement with the tenant. Additionally, on January 26, 2021, in connection with a lease termination with a tenant of one healthcare property that was experiencing financial difficulty and vacated its space on June 19, 2020 (as discussed above), the Company entered into a settlement agreement with the prior tenant to recover certain outstanding rental obligations due under the lease agreement. Pursuant to the settlement agreement, the prior tenant agreed to pay approximately $620,000 in total, payable on a monthly basis from January 2021 through September 2022. During the three and nine months ended September 30, 2021, the Company recovered $50,000 and $295,000 of settlement agreement income, respectively, and recorded these amounts when received, due to uncertainty regarding collectability of the funds. Settlement agreement income was recorded in rental revenue in the accompanying condensed consolidated statements of comprehensive income. Notes Receivable Notes receivable are recorded at their outstanding principal balance and accrued interest, 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 is recorded in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income. The Company evaluates the collectability of both interest and principal on each note receivable to determine whether it is collectable, 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. Concentration of Credit Risk and Significant Leases As of September 30, 2021, 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 September 30, 2021, the Company owned real estate investments in two micropolitan statistical areas and 54 MSAs, one MSA of which accounted for 10.0% or more of rental revenue from continuing operations for the nine months ended September 30, 2021. Real estate investments located in the Houston-The Woodlands-Sugar Land, Texas MSA accounted for 12.0% of rental revenue from continuing operations for the nine months ended September 30, 2021 As of September 30, 2021, the Company had one exposure to tenant concentration that accounted for 10.0% or more of rental revenue from continuing operations for the nine months ended September 30, 2021. The leases with tenants at healthcare properties under common control of Post Acute Medical, LLC and affiliates accounted for 16.3% of rental revenue from continuing operations for the nine months ended September 30, 2021. Share Repurchase Program The Company’s share repurchase program, or SRP, allows for repurchases of shares of the Company’s common stock upon meeting certain criteria. The SRP provided that all repurchases during any calendar year, including those redeemable upon death or a "Qualifying Disability" as defined in the Company's SRP of a stockholder, be 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, 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 Board, provided, however, that the Company could 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 and any amendments to the plan, as more fully described below, the SRP has been generally available to any stockholder as a potential means of interim liquidity. In addition, the Board, 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. On December 11, 2020, the Board authorized and approved the Amended and Restated Share Repurchase Program, or the A&R SRP, which applied beginning with the first quarter repurchase date of 2021, provided, however, the Company will only repurchase shares due to death and involuntary exigent circumstances in accordance with the A&R SRP, subject in each case to the terms and limitations of the A&R SRP, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation, and distribution reinvestment plan funding limitations. Under the A&R SRP, the Company may waive certain of the terms and requirements of the A&R SRP in the event of the death of a stockholder who is a natural person, including shares held through an Individual Retirement Account or other retirement or profit-sharing plan, and certain trusts meeting the requirements of the A&R SRP. The Company may also waive certain of the terms and requirements of the A&R SRP in the event of an involuntary exigent circumstance, as determined by the Company or any of the executive officers thereof, in its or their sole discretion. See Part II, Item 2. "Unregistered Sales of Equity Securities" for more information on the Company's A&R SRP. During the nine months ended September 30, 2021, the Company repurchased 772,581 Class A shares, Class I shares and Class T shares of common stock (715,406 Class A shares, 8,322 Class I shares and 48,853 Class T shares), for an aggregate purchase price of approximately $6,564,000 (an average of $8.50 per share). During the nine months ended September 30, 2020, the Company repurchased 3,059,072 Class A shares, Class I shares, Class T shares and Class T2 shares of common stock (2,382,166 Class A shares, 395,334 Class I shares, 258,550 Class T shares and 23,022 Class T2 shares), for an aggregate purchase price of approximately $26,461,000 (an average of $8.65 per share). Stock-based Compensation On March 6, 2020, the Board approved the Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, pursuant to which the Company has the authority and power to grant awards of restricted shares of its Class A common stock to its directors, officers and employees. The Company accounts for its stock awards in accordance with ASC 718-10, Compensation—Stock Compensation . ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). For performance-based awards, compensation costs are recognized over the service period if it is probable that the performance condition will be satisfied, with changes of the assessment at each reporting period and recording the effect of the change in the compensation cost as a cumulative catch-up adjustment. The compensation costs for restricted stock are recognized based on the fair value of the restricted stock awards at grant date less forfeitures (if applicable). On January 8, 2021, the Company granted time-based awards to our executive officers of 178,366 in restricted shares of Class A common stock, or the Time-Based 2021 Awards. The Time-Based 2021 Awards will vest ratably over four years fol |
Acquisitions and Dispositions
Acquisitions and Dispositions | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions 2021 Real Estate Property Acquisition During the nine months ended September 30, 2021, the Company purchased one real estate property, or the 2021 Acquisition, which was determined to be an asset acquisition. Upon the completion of the 2021 Acquisition, the Company allocated the purchase price of the real estate property to acquired tangible assets, consisting of land and building and improvements, acquired intangible assets, consisting of an in-place lease, and acquired intangible liabilities, consisting of a below-market lease, based on the relative fair value method of allocating all accumulated costs. The following table summarizes the consideration transferred for the 2021 Acquisition during the nine months ended September 30, 2021: Property Description Date Acquired Ownership Percentage Purchase Price Greenwood Healthcare Facility 04/19/2021 100% $ 25,048 The following table summarizes the Company's purchase price allocation of the 2021 Acquisition during the nine months ended September 30, 2021 (amounts in thousands): Total Land $ 1,603 Buildings and improvements 22,588 In-place leases 2,411 Total assets acquired 26,602 Below-market leases (1,554) Total liabilities acquired (1,554) Net assets acquired $ 25,048 Acquisition costs associated with transactions determined to be asset acquisitions are capitalized. The Company capitalized acquisition costs of approximately $48,000 related to the 2021 Acquisition, which are included in the Company's allocation of the real estate acquisition presented above. The total amount of all acquisition costs is limited to 6.0% of the contract purchase price of a property, unless the Board 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 costs. During the nine months ended September 30, 2021, acquisition costs did not exceed 6.0% of the contract purchase price of the 2021 Acquisition during such period. Dispositions - Discontinued Operations Dispositions resulting in a strategic shift with a major effect on results and operations qualify as discontinued operations. As discussed in Note 2—"Summary of Significant Accounting Policies - Held for Sale and Discontinued Operations, " the Data Center Sale qualifies as discontinued operations and the operations associated with the related assets have been included in discontinued operations on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2021 and 2020. On July 22, 2021, the Company completed the Data Center Sale for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. The Company recognized an aggregate gain on sale of approximately $398,560,000 and $395,801,000 and recorded it as a part of income from discontinued operations in the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2021, respectively. |
Held for Sale and Discontinued
Held for Sale and Discontinued Operations | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Held for Sale and Discontinued Operations | Held for Sale and Discontinued Operations The assets and liabilities related to the 29 data center properties are separately classified on the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, as assets held for sale, net, and liabilities held for sale, net, and their operations have been classified as income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2021 and 2020. As of September 30, 2021, the assets and liabilities held for sale related to the Data Center Sale primarily related to accounts receivable to be collected from the former tenants and accounts payable and other liabilities to be paid when obligations become due. On July 19, 2021, the Company entered into a purchase and sale agreement for the sale of one healthcare property that is currently vacant. The Company classified the healthcare property as held for sale during the three months ended September 30, 2021, because the property met the held for sale criteria as outlined in Note 2—"Summary of Significant Accounting Policies - Held for Sale and Discontinued Operations." On October 21, 2021, the Company sold the healthcare property. See Note 18—"Subsequent Events" for additional information. On August 30, 2021, the Company entered into a purchase and sale agreement for the sale of another healthcare property that is currently vacant. The purchase and sale agreement contains a clause that the healthcare property has to be demolished prior to the sale. The Company classified the healthcare property as held for sale during the three months ended September 30, 2021, because the property met the held for sale criteria as outlined in Note 2—"Summary of Significant Accounting Policies - Held for Sale and Discontinued Operations. The Company estimates that the total demolition cost of the property will be approximately $305,000. The Company expects to sell the healthcare property during the fourth quarter of 2021. The following table presents the major classes of assets and liabilities of 29 data center properties, which were sold on July 22, 2021, and two healthcare properties classified as assets and liabilities held for sale, net, presented separately in the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Assets: Real estate: Land $ 9,112 $ 166,709 Buildings and improvements, net 19,050 677,563 Total real estate, net 28,162 (1) 844,272 Acquired intangible assets, net — 48,860 Goodwill — 15,574 Right-of-use assets - operating leases — 7,252 Other assets, net 2,458 (1) 43,792 (2) Assets held for sale, net $ 30,620 $ 959,750 Liabilities: Notes payable, net $ — $ 304,972 Accounts payable and other liabilities 2,369 (1) 12,300 (3) Acquired intangible liabilities, net — 40,589 Operating lease liabilities — 8,124 Liabilities held for sale, net $ 2,369 $ 365,985 (1) As of September 30, 2021, two healthcare properties with $28,162,000 of total real estate, net, $64,000 of other assets, net, and $547,000 of accounts payable and other liabilities did not meet the criteria of discontinued operations. The remaining 29 data center held for sale properties were sold on July 22, 2021. (2) Primarily consists of straight-line rent receivable, net, leasing commissions, net, and restricted cash. (3) Primarily consists of accounts payable and accrued expenses, accrued property taxes, deferred rental income and derivative liabilities. The operations reflected in income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Revenue: Rental revenue $ 6,180 $ 29,945 $ 57,903 $ 84,848 Lease termination revenue 75 — 7,075 — Total revenue 6,255 29,945 64,978 84,848 Expenses: Rental expenses 2,504 7,663 15,737 21,839 Asset management fees — 1,771 — 5,310 Depreciation and amortization 35 11,247 11,759 27,894 Total expenses 2,539 20,681 27,496 55,043 Interest and other expense, net (1) 25,085 3,419 31,839 10,205 (Loss) income from discontinued operations (21,369) 5,845 5,643 19,600 Gain on real estate dispositions (2) 398,560 — 395,801 — Net income from discontinued operations attributable to common stockholders $ 377,191 $ 5,845 $ 401,444 $ 19,600 (1) Interest expense attributable to discontinued operations for the three months ended September 30, 2021 and 2020, was $25,085,000 and $3,452,000, respectively, and $31,856,000 and $10,293,000 for the nine months ended September 30, 2021 and 2020, respectively, which related to notes payable on certain data center properties. On July 22, 2021, in connection with the disposition and proceeds received from the data center properties, the Company paid off all data center and healthcare related notes payable, with an outstanding principal balance of $450,806,000 at the time of repayment and incurred approximately $23,738,000 related to debt extinguishment costs. See Note 12—"Notes Payable and Credit Facility" for additional information. (2) Represents gain on real estate dispositions related to the Data Center Sale that occurred on July 22, 2021. The Company recognized $2,759,000 in transaction costs during the second quarter of 2021, resulting in the total gain being higher during the three months ended September 30, 2021. Capital expenditures on a cash basis for the nine months ended September 30, 2021 and 2020, were $2,215,000 and $3,633,000, respectively, related to properties classified within discontinued operations. There were no significant non-cash operating or investing activities for the properties classified within discontinued operations for the nine months ended September 30, 2021. Significant non-cash operating activities for properties classified within discontinued operations were $3,563,000 for the nine months ended September 30, 2020, which primarily related to accrued property taxes and utilities. There were no significant non-cash investing activities for the properties classified within discontinued operations for the nine months ended September 30, 2020. |
Internalization Transaction
Internalization Transaction | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Internalization Transaction | Internalization Transaction Overview On July 28, 2020, the Company and the Operating Partnership entered into the Purchase Agreement, to effectively provide for the internalization of the Company’s external management functions. The Purchase Agreement was entered into with the Former Advisor, and various affiliates of the Former Advisor, or the Sellers, and Sila Realty Management Company, LLC, f/k/a CV Manager, LLC, a newly formed Delaware limited liability company, or Manager Sub. The Internalization Transaction closed on September 30, 2020. A special committee comprised entirely of independent and disinterested members of the Board, negotiated the Internalization Transaction and, after consultation with its independent legal and financial advisors, determined that the Internalization Transaction was advisable, fair and reasonable to and in the Company’s best interests and on terms and conditions no less favorable to the Company than those available from unaffiliated third parties. The Company believes that the Internalization Transaction provides various benefits, including cost savings, continuity of management and further alignment of interests between management and its stockholders, as well as a potential benefit for ultimate liquidity given the preference for an internal management structure in traded equity REITs. Under the Purchase Agreement and related agreements, immediately prior to the closing of the Internalization Transaction, the Sellers assigned to Manager Sub all of the assets necessary to operate the business of the Company and its subsidiaries, or the Business, and delegated all obligations of the Sellers in connection with the Business to Manager Sub pursuant to an assignment and acceptance agreement. On September 30, 2020, or the Closing, under the Purchase Agreement, the Operating Partnership (i) acquired 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) redeemed the Former Advisor’s limited partner interest (including special limited partner interest) in the Operating Partnership. The Purchase Price was paid as follows, subject to certain acceleration provisions: (i) $25,000,000 was paid at the Closing, (ii) $7,500,000 was due and payable on March 31, 2021, and was paid on March 30, 2021, and (iii) $7,500,000 was due and payable on March 31, 2022, and was paid on July 27, 2021, as a result of the Data Center Sale, which was considered an acceleration condition as outlined in the Purchase and Sale Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K/A, filed on July 23, 2021, and incorporated herein by reference. The Purchase Price was recorded at fair value, net of amortization of discount in accounts payable and other liabilities in the accompanying condensed consolidated balance sheets. As a result of the early repayment of $7,500,000 that was originally payable on March 31, 2022, the Company accelerated amortization of discount of deferred liability in the amount of $145,000 during the three months ended September 30, 2021, which was recorded in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income. Allocation of Purchase Price The Internalization Transaction was accounted for as a business combination and the following table summarizes management’s allocation of the fair value of the Internalization Transaction as of September 30, 2020 (amounts in thousands): Total Goodwill $ 39,529 Right-of-use assets - operating lease 1,205 Total assets acquired 40,734 Operating lease liabilities (1,060) Deferred internalization transaction purchase price (14,674) Total liabilities acquired (15,734) Net assets allocated at acquisition $ 25,000 Pro Forma Financial Information (Unaudited) Assuming the Internalization Transaction had occurred on January 1, 2020, pro forma revenues and net income attributable to common stockholders would have been as follows for the periods presented below (amounts in thousands, except per share amounts): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Pro forma basis: Revenues $ 43,063 $ 40,722 $ 129,232 $ 123,879 Income (loss) from continuing operations (5,261) 4,786 (10,380) 15,733 Income from discontinued operations 377,191 5,845 401,444 19,600 Net income attributable to common stockholders $ 371,930 $ 10,631 $ 391,064 $ 35,333 Net income per common share attributable to common stockholders: Basic: Continuing operations $ (0.03) $ 0.02 $ (0.05) $ 0.07 Discontinued operations 1.69 0.03 1.80 0.09 Net income attributable to common stockholders $ 1.66 $ 0.05 $ 1.75 $ 0.16 Diluted: Continuing operations $ (0.03) $ 0.02 $ (0.05) $ 0.07 Discontinued operations 1.69 0.03 1.80 0.09 Net income attributable to common stockholders $ 1.66 $ 0.05 $ 1.75 $ 0.16 The condensed pro forma financial statements for the three and nine months ended September 30, 2021 and 2020 include pro forma adjustments related to the Internalization Transaction during 2020 and 2021. The pro forma information for the three and nine months ended September 30, 2020, was adjusted to exclude approximately $2,235,000 and $3,640,000 of internalization transaction expenses. Internalization transaction expenses consisted primarily of legal fees, as well as fees for other professional and financial advisors. The pro forma information may not be indicative of what actual results of operations would have been had the transaction occurred at the beginning of 2020, nor is it necessarily indicative of future operating results. |
Acquired Intangible Assets, Net
Acquired Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Acquired Intangible Assets, Net | Acquired Intangible Assets, Net Acquired intangible assets, net, excluding assets held for sale, net, consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands, except weighted average remaining life amounts): September 30, 2021 December 31, 2020 In-place leases, net of accumulated amortization of $61,530 and $47,312, respectively (with a weighted average remaining life of 9.8 years and 10.5 years, respectively) $ 168,577 $ 182,340 Above-market leases, net of accumulated amortization of $4,004 and $2,554, respectively (with a weighted average remaining life of 9.1 years and 9.9 years, respectively) 14,111 15,561 $ 182,688 $ 197,901 The aggregate weighted average remaining life of the acquired intangible assets was 9.7 years and 10.5 years as of September 30, 2021 and December 31, 2020, respectively. Amortization of the acquired intangible assets was $5,507,000 and $5,461,000 for the three months ended September 30, 2021 and 2020, respectively, and $17,624,000 and $18,348,000 for the nine months ended September 30, 2021 and 2020, respectively. Of the $17,624,000 recorded for the nine months ended September 30, 2021, $1,120,000 was attributable to accelerated amortization due to the impairment of one in-place lease intangible asset. Of the $18,348,000 recorded for the nine months ended September 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. Amortization of the in-place leases is included in depreciation and amortization and amortization of above-market leases is recorded as an adjustment to rental revenue in the accompanying condensed consolidated statements of comprehensive income. |
Acquired Intangible Liabilities
Acquired Intangible Liabilities, Net | 9 Months Ended |
Sep. 30, 2021 | |
Intangible Lease Liabilities, Net [Abstract] | |
Acquired Intangible Liabilities, Net | Acquired Intangible Liabilities, Net Acquired intangible liabilities, net, excluding liabilities held for sale, net, consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands, except weighted average remaining life amounts): September 30, 2021 December 31, 2020 Below-market leases, net of accumulated amortization of $4,101 and $3,122, respectively (with a weighted average remaining life of 9.6 years and 10.1 years, respectively) $ 12,546 $ 11,971 Amortization of the below-market leases was $338,000 and $301,000 for three months ended September 30, 2021 and 2020, respectively, and $979,000 and $901,000 for the nine months ended September 30, 2021 and 2020, respectively. Amortization of below-market leases is recorded as an adjustment to rental revenue in the accompanying condensed consolidated statements of comprehensive income. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
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-cancellable operating leases in effect as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Three months ending December 31, 2021 $ 37,841 2022 155,544 2023 158,052 2024 158,052 2025 153,839 Thereafter 1,059,376 Total (1) $ 1,722,704 (1) The total future rent amount of $1,722,704,000 includes approximately $16,476,000 in rent to be received in connection with two leases executed as of September 30, 2021, at one development property with estimated lease commencement dates of March 1, 2022. Lessee The Company is subject to various non-cancellable operating and finance lease agreements, inclusive of 15 ground operating leases, one corporate-related operating lease, one ground finance lease and one office lease related to the Company’s principal executive office in Tampa, Florida, or the Corporate Lease. Of the 15 ground operating leases, four do not have corresponding operating lease liabilities because the Company did not have future payment obligations at the acquisition of these leases. The Company has one non-cancellable lease agreement that is classified as a finance lease, as defined in ASC 842, Leases , related to a ground lease of a healthcare property. Ground lease expenses for finance lease payments are recognized as amortization expense of the ROU asset - finance lease and interest expense on the finance lease liability over the lease term. The Company's operating and finance leases do not provide an implicit interest rate. In order to calculate the present value of the remaining operating and finance 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 operating or finance lease. During the three months ended September 30, 2021, the Company entered into a corporate-related operating lease agreement for an aggregate present value of future rent payments of $625,000. As of September 30, 2021, the Company's IBRs for its operating leases were between 2.5% and 6.4%, with a weighted average IBR of 5.4%. The weighted average remaining lease term for the Company's operating leases attributable to continuing operations was 36.4 years and 38.0 years as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, the Company's IBR for its finance lease was 5.3%. The remaining lease term for the Company's finance lease was 42.6 years and 43.4 years as of September 30, 2021 and December 31, 2020, respectively. The future rent payments, discounted by the Company's incremental borrowing rates, under non-cancellable leases, as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Operating Finance Three months ending December 31, 2021 $ 541 $ 34 2022 1,367 136 2023 1,326 136 2024 1,380 141 2025 1,385 143 Thereafter 66,425 6,584 Total undiscounted rental payments 72,424 7,174 Less imputed interest (48,449) (4,540) Total lease liabilities $ 23,975 $ 2,634 The following table provides details of the Company's total lease costs and reimbursements for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended Nine Months Ended Location in Condensed Consolidated Statements of Comprehensive Income 2021 2020 2021 2020 Operating lease costs: Ground lease costs Rental expenses $ 422 $ 422 $ 1,266 $ 1,266 Ground lease reimbursements (1) Rental revenue 298 298 894 893 Ground lease costs (2) Income from discontinued operations 25 220 414 660 Ground lease reimbursements (1),(2) Income from discontinued operations 24 103 230 309 Corporate lease costs General and administrative expenses 264 — 792 — Corporate-related operating lease costs General and administrative expenses 33 — 33 — Finance lease costs: Amortization of right-of-use asset Depreciation and amortization $ 5 $ 1 $ 14 $ 1 Interest on lease liability Interest and other expense, net 35 10 102 10 (1) The Company is reimbursed by tenants who sublease the ground leases. (2) Amounts relate to lease costs and reimbursements attributable to two operating ground leases related to data center properties disposed of in the Data Center Sale on July 22, 2021. |
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-cancellable operating leases in effect as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Three months ending December 31, 2021 $ 37,841 2022 155,544 2023 158,052 2024 158,052 2025 153,839 Thereafter 1,059,376 Total (1) $ 1,722,704 (1) The total future rent amount of $1,722,704,000 includes approximately $16,476,000 in rent to be received in connection with two leases executed as of September 30, 2021, at one development property with estimated lease commencement dates of March 1, 2022. Lessee The Company is subject to various non-cancellable operating and finance lease agreements, inclusive of 15 ground operating leases, one corporate-related operating lease, one ground finance lease and one office lease related to the Company’s principal executive office in Tampa, Florida, or the Corporate Lease. Of the 15 ground operating leases, four do not have corresponding operating lease liabilities because the Company did not have future payment obligations at the acquisition of these leases. The Company has one non-cancellable lease agreement that is classified as a finance lease, as defined in ASC 842, Leases , related to a ground lease of a healthcare property. Ground lease expenses for finance lease payments are recognized as amortization expense of the ROU asset - finance lease and interest expense on the finance lease liability over the lease term. The Company's operating and finance leases do not provide an implicit interest rate. In order to calculate the present value of the remaining operating and finance 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 operating or finance lease. During the three months ended September 30, 2021, the Company entered into a corporate-related operating lease agreement for an aggregate present value of future rent payments of $625,000. As of September 30, 2021, the Company's IBRs for its operating leases were between 2.5% and 6.4%, with a weighted average IBR of 5.4%. The weighted average remaining lease term for the Company's operating leases attributable to continuing operations was 36.4 years and 38.0 years as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, the Company's IBR for its finance lease was 5.3%. The remaining lease term for the Company's finance lease was 42.6 years and 43.4 years as of September 30, 2021 and December 31, 2020, respectively. The future rent payments, discounted by the Company's incremental borrowing rates, under non-cancellable leases, as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Operating Finance Three months ending December 31, 2021 $ 541 $ 34 2022 1,367 136 2023 1,326 136 2024 1,380 141 2025 1,385 143 Thereafter 66,425 6,584 Total undiscounted rental payments 72,424 7,174 Less imputed interest (48,449) (4,540) Total lease liabilities $ 23,975 $ 2,634 The following table provides details of the Company's total lease costs and reimbursements for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended Nine Months Ended Location in Condensed Consolidated Statements of Comprehensive Income 2021 2020 2021 2020 Operating lease costs: Ground lease costs Rental expenses $ 422 $ 422 $ 1,266 $ 1,266 Ground lease reimbursements (1) Rental revenue 298 298 894 893 Ground lease costs (2) Income from discontinued operations 25 220 414 660 Ground lease reimbursements (1),(2) Income from discontinued operations 24 103 230 309 Corporate lease costs General and administrative expenses 264 — 792 — Corporate-related operating lease costs General and administrative expenses 33 — 33 — Finance lease costs: Amortization of right-of-use asset Depreciation and amortization $ 5 $ 1 $ 14 $ 1 Interest on lease liability Interest and other expense, net 35 10 102 10 (1) The Company is reimbursed by tenants who sublease the ground leases. (2) Amounts relate to lease costs and reimbursements attributable to two operating ground leases related to data center properties disposed of in the Data Center Sale on July 22, 2021. |
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-cancellable operating leases in effect as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Three months ending December 31, 2021 $ 37,841 2022 155,544 2023 158,052 2024 158,052 2025 153,839 Thereafter 1,059,376 Total (1) $ 1,722,704 (1) The total future rent amount of $1,722,704,000 includes approximately $16,476,000 in rent to be received in connection with two leases executed as of September 30, 2021, at one development property with estimated lease commencement dates of March 1, 2022. Lessee The Company is subject to various non-cancellable operating and finance lease agreements, inclusive of 15 ground operating leases, one corporate-related operating lease, one ground finance lease and one office lease related to the Company’s principal executive office in Tampa, Florida, or the Corporate Lease. Of the 15 ground operating leases, four do not have corresponding operating lease liabilities because the Company did not have future payment obligations at the acquisition of these leases. The Company has one non-cancellable lease agreement that is classified as a finance lease, as defined in ASC 842, Leases , related to a ground lease of a healthcare property. Ground lease expenses for finance lease payments are recognized as amortization expense of the ROU asset - finance lease and interest expense on the finance lease liability over the lease term. The Company's operating and finance leases do not provide an implicit interest rate. In order to calculate the present value of the remaining operating and finance 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 operating or finance lease. During the three months ended September 30, 2021, the Company entered into a corporate-related operating lease agreement for an aggregate present value of future rent payments of $625,000. As of September 30, 2021, the Company's IBRs for its operating leases were between 2.5% and 6.4%, with a weighted average IBR of 5.4%. The weighted average remaining lease term for the Company's operating leases attributable to continuing operations was 36.4 years and 38.0 years as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, the Company's IBR for its finance lease was 5.3%. The remaining lease term for the Company's finance lease was 42.6 years and 43.4 years as of September 30, 2021 and December 31, 2020, respectively. The future rent payments, discounted by the Company's incremental borrowing rates, under non-cancellable leases, as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Operating Finance Three months ending December 31, 2021 $ 541 $ 34 2022 1,367 136 2023 1,326 136 2024 1,380 141 2025 1,385 143 Thereafter 66,425 6,584 Total undiscounted rental payments 72,424 7,174 Less imputed interest (48,449) (4,540) Total lease liabilities $ 23,975 $ 2,634 The following table provides details of the Company's total lease costs and reimbursements for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended Nine Months Ended Location in Condensed Consolidated Statements of Comprehensive Income 2021 2020 2021 2020 Operating lease costs: Ground lease costs Rental expenses $ 422 $ 422 $ 1,266 $ 1,266 Ground lease reimbursements (1) Rental revenue 298 298 894 893 Ground lease costs (2) Income from discontinued operations 25 220 414 660 Ground lease reimbursements (1),(2) Income from discontinued operations 24 103 230 309 Corporate lease costs General and administrative expenses 264 — 792 — Corporate-related operating lease costs General and administrative expenses 33 — 33 — Finance lease costs: Amortization of right-of-use asset Depreciation and amortization $ 5 $ 1 $ 14 $ 1 Interest on lease liability Interest and other expense, net 35 10 102 10 (1) The Company is reimbursed by tenants who sublease the ground leases. (2) Amounts relate to lease costs and reimbursements attributable to two operating ground leases related to data center properties disposed of in the Data Center Sale on July 22, 2021. |
Notes Receivable, Net
Notes Receivable, Net | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Notes Receivable, Net | Notes Receivable, Net As of September 30, 2021, the Company had one note receivable outstanding in the amount of $2,200,000 secured by real estate properties. The following summarizes the notes receivable balances as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Interest Rate (1) Maturity Date Note receivable $ 2,200 (2) $ 2,700 6.0% 11/05/2021 Note receivable — 28,562 (3) (3) Total notes receivable $ 2,200 $ 31,262 (1) As of September 30, 2021. (2) Note receivable was repaid on November 5, 2021. (3) Note receivable was repaid on July 14, 2021. In connection with the sale on May 28, 2020, of the San Antonio Healthcare Facility II, a wholly-owned subsidiary of the Company entered into a note receivable agreement in the principal amount of $28,000,000. The note receivable was secured by a first mortgage lien on San Antonio Healthcare Facility II and was set to mature on June 1, 2022, or the Maturity Date. The interest rate of the note receivable was 7.0% per annum for the period commencing May 28, 2020 through May 31, 2021, and was 8.0% per annum for the period commencing on June 1, 2021 through the Maturity Date. Monthly payments were interest only, with the outstanding principal due and payable on the Maturity Date; however, the outstanding principal and any unpaid accrued interest could have been prepaid at any time without penalty or charge. On July 14, 2021, the borrower repaid the total outstanding amount of $28,000,000 in principal and $87,000 in accrued interest on the note receivable. In connection with the note receivable, the Company incurred a loan origination fee in the amount of $560,000. Amortization of the loan origination fee, inclusive of accelerated amortization due to early repayment of the note receivable, was $256,000 and $394,000 for the three and nine months ended September 30, 2021, respectively, and $70,000 and $96,000 for the three and nine months ended September 30, 2020, respectively, which was recorded in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income. The Company recognized $87,000 and $1,096,000 for the three and nine months ended September 30, 2021, respectively, and $501,000 and $686,000 for the three and nine months ended September 30, 2020, respectively, of interest income on the note receivable, which was recorded in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income. In connection with a note receivable issued in the amount of $2,700,000, on November 5, 2020, the Company entered into an amended agreement with the borrower to, among other things, change the maturity date to November 5, 2021 (the maturity date was previously November 5, 2020), or earlier, as provided in the amended agreement. During the first quarter of 2021, in accordance with the amended note receivable agreement, the borrower paid and the Company recognized, an amendment fee in the amount of $50,000 and paid down $500,000 in principal outstanding on the note receivable. On November 5, 2021, the borrower repaid the total outstanding amount of $2,200,000 in principal on the note receivable. Expected Credit Losses During the nine months ended September 30, 2021, the Company had two notes receivable, one of which was determined to be a collateral dependent loan and was repaid on July 14, 2021, and the other was secured by collateral that the Company believed had sufficient value to cover the note receivable in the event of a default by the borrower and was repaid on November 5, 2021. 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 not record any estimated credit losses for its notes receivable for the three and nine months ended September 30, 2021 and 2020, because the Company believed that the collateral for these loans was sufficient to cover its investment. |
Other Assets, Net
Other Assets, Net | 9 Months Ended |
Sep. 30, 2021 | |
Other Assets [Abstract] | |
Other Assets, Net | Other Assets, Net Other assets, net, excluding assets held for sale, net, consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $7,936 and $6,902, respectively $ 857 $ 1,634 Leasing commissions, net of accumulated amortization of $105 and $58, respectively 855 845 Restricted cash 842 13,499 Tenant receivables 1,527 1,965 Straight-line rent receivable 52,715 42,732 Real estate deposits 400 — Prepaid and other assets 3,258 (1) 3,994 Derivative assets 1,002 — $ 61,456 $ 64,669 (1) Excludes $64,000 of prepaid and other assets attributable to two healthcare properties classified as held for sale as of September 30, 2021, that did not meet the criteria of discontinued operations. |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Accounts payable and other liabilities, excluding liabilities held for sale, net, consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Accounts payable and accrued expenses $ 8,778 (1) $ 10,011 Accrued interest expense 1,773 3,257 Accrued property taxes 2,428 (1) 2,090 Accrued personnel costs 2,560 1,202 Distribution and servicing fees 692 3,128 Distributions payable to stockholders 7,099 9,117 Performance DSUs distributions payable 376 — Tenant deposits 801 801 Deferred rental income 5,778 6,381 Deferred internalization transaction liability — 14,728 Contingent consideration 978 — Derivative liabilities 9,309 17,231 $ 40,572 $ 67,946 (1) Excludes $547,000 of accounts payable, accrued expenses and accrued property taxes attributable to two healthcare properties classified as held for sale as of September 30, 2021, that did not meet the criteria of discontinued operations. |
Notes Payable and Credit Facili
Notes Payable and Credit Facility | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable and Credit Facility | Notes Payable and Credit Facility The Company's debt outstanding as of September 30, 2021 and December 31, 2020, consisted of the following (amounts in thousands): September 30, 2021 December 31, 2020 Notes payable: Fixed rate notes payable $ — $ 45,748 Variable rate notes payable fixed through interest rate swaps — 101,579 Total notes payable, principal amount outstanding — 147,327 Unamortized deferred financing costs related to notes payable — (682) Total notes payable, net of deferred financing costs (1) $ — $ 146,645 Credit facility: Variable rate revolving line of credit $ — $ 138,000 Variable rate term loans fixed through interest rate swaps 400,000 400,000 Variable rate term loans 120,000 400,000 Total credit facility, principal amount outstanding 520,000 938,000 Unamortized deferred financing costs related to the term loan credit facility (3,494) (5,900) Total credit facility, net of deferred financing costs 516,506 932,100 Total debt outstanding $ 516,506 $ 1,078,745 (1) As of December 31, 2020, there were $304,972,000 of notes payable, net of deferred financing costs, related to data center properties classified as held for sale, which are included in liabilities held for sale, net, on the condensed consolidated balance sheets. Significant debt activity during the nine months ended September 30, 2021, and subsequently, excluding scheduled principal payments, includes: • On April 19, 2021, the Company drew $15,000,000 on its credit facility related to a property acquisition. See Note 3—"Acquisitions and Dispositions" for additional information. • On July 16, 2021, the Company repaid $30,000,000 on its credit facility primarily with proceeds from a note receivable that was repaid on July 14, 2021. • On July 20, 2021, 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 third amendments to such agreements to allow for the making of the special distribution. In particular, the third amendments: (i) exclude the special distribution from the distributions limitation of 95% of Funds From Operations when added to the distributions paid in any four consecutive calendar quarters; (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; and (iii) incorporate language regarding erroneous payments, protecting KeyBank in the event an erroneous payment is made to the other lenders listed as lenders in the Company's credit agreement and term loan agreement. • On July 22, 2021, in connection with the proceeds received from the Data Center Sale, the Company paid off all its notes payable (seven data center notes payable and five healthcare notes payable), with an outstanding principal balance of $450,806,000 ($305,161,000 outstanding principal balance on data center notes payable and $145,645,000 outstanding principal balance on healthcare notes payable) at the time of repayment. The outstanding principal balance on data center notes payable in the amount of $305,161,000 was required to be paid off in order to consummate the Data Center Sale, while the outstanding principal balance on healthcare notes payable in the amount of $145,645,000 was paid off at the Company's sole discretion. • On July 22, 2021, the Company repaid $403,000,000 on its credit facility with proceeds from the Data Center Sale in order to reduce leverage and to position the Company for future growth. • On September 29, 2021, the Company, the Operating Partnership, certain of the Company's subsidiaries, KeyBank, and the other lenders listed as lenders in the Company's credit agreement and term loan agreement, entered into a consent letter for the Company's credit agreement and a consent letter for the Company's term loan agreement that accelerated the applicable margin adjustment date on the Company's credit facility, reducing the applicable margin from 2.25% to 1.75%, effective September 29, 2021. Per the current language in the credit agreement, the applicable margin adjustment would not have otherwise taken place until December 1, 2021. In connection with the payoff of debt during the third quarter of 2021, the Company recognized a loss of $28,751,000 on extinguishment of debt, which included defeasance and other loan costs in the amount of $26,082,000 and accelerated unamortized debt issuance costs related to the debt repayment of $2,669,000. Of the $28,751,000 loss on extinguishment of debt, $5,013,000 was recognized in interest and other expense, net, and $23,738,000 was recognized in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income. The principal payments due on the credit facility for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount 2024 $ 520,000 $ 520,000 |
Related-Party Transactions and
Related-Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions and Arrangements | Related-Party Transactions and Arrangements Prior to the closing of the Internalization Transaction, the Company had no direct employees. Substantially all of the Company's business was managed by the Former Advisor. The employees of the Former Advisor and its affiliates provided services to the Company related to acquisitions, property management, asset management, accounting, investor relations and all other administrative services. Upon completion of the Internalization Transaction, the employees of an affiliate of the Former Advisor became employees of the Company and the functions previously performed by the Former Advisor were internalized by the Company. As an internally managed company, the Company no longer pays the Former Advisor and its affiliates any fees or expense reimbursements arising from the advisory agreement. Additionally, the Company concluded that there were no preexisting relationships between the Former Advisor and the Company that had to be settled and accounted for as separate transactions from the Internalization Transaction. Special Limited Partner Interest of Advisor Prior to the closing of the Internalization Transaction, the Former Advisor, as the special limited partner of the Operating Partnership, was 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 Former Advisor would only become entitled to the compensation after stockholders had, in the aggregate, cumulative distributions equal to their invested capital plus an 8.0% cumulative, non-compounded annual return on such invested capital. The Former Advisor's special limited partnership interest in the Operating Partnership was redeemed and cancelled at the closing of the Internalization Transaction and the Former Advisor did not receive any compensation as a special limited partner of the Operating Partnership. Distribution and Servicing Fees Through the termination of the Offering on November 27, 2018, the Company paid SC Distributors, LLC, an affiliate of the Former 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 an adjustment to equity. Effective September 30, 2020, as a result of the Internalization Transaction, the Dealer Manager is no longer a related party of the Company. Acquisition Fees and Expenses Prior to entering into the Purchase Agreement for the Internalization Transaction on July 28, 2020, the Company paid to the Former 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). Prior to the closing of the Internalization Transaction, the Company reimbursed the Former 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 did 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 communication expenses, accounting fees and expenses and title insurance premiums, whether or not the property was acquired. The Company reimbursed the Former Advisor expenses of approximately 0.01% of the aggregate purchase price of all 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 Prior to the closing of the Internalization Transaction, the Company paid to the Former 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 was payable monthly, in arrears. Operating Expense Reimbursement Prior to the closing of the Internalization Transaction, the Company reimbursed the Former 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 exceeded the greater of: (a) 2% of average invested assets or (b) 25% of net income, subject to certain adjustments, were not reimbursed unless the independent directors determined such excess expenses were justified. The Company did not reimburse the Former Advisor for personnel costs in connection with services for which the Former Advisor received an acquisition fee or a disposition fee. Historically, operating expenses incurred on the Company’s behalf were recorded in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income. Property Management Fees In connection with the rental, leasing, operation and management of the Company’s properties, prior to the closing of the Internalization Transaction, the Company paid Carter Validus Real Estate Management Services II, LLC, a wholly-owned subsidiary of the Former Sponsor, or the Former Property Manager, and its affiliates, aggregate fees equal to 3.0% of gross revenues from the properties managed, or property management fees. The Company reimbursed the Former Property Manager and its affiliates for property-level expenses that were paid or incurred on the Company’s behalf, including certain salaries, bonuses and benefits of persons employed by the Former Property Manager and its affiliates, except for the salaries, bonuses and benefits of persons who also served as one of its executive officers. For certain properties the Former Property Manager and its affiliates subcontracted the performance of their duties to third parties and paid all or a portion of the property management fee to the third parties with whom they contracted for those services. When the Company contracted directly with third parties for such services, it paid third parties customary market fees and paid the Former Property Manager an oversight fee equal to 1.0% of the gross revenues of the properties managed. In no event did the Company pay the Former Property Manager or any affiliate both a property management fee and an oversight fee with respect to any particular property. Historically, property management fees were recorded in rental expenses in the accompanying condensed consolidated statements of comprehensive income. Leasing Commission Fees Prior to the closing of the Internalization Transaction, the Company paid the Former 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. Historically, leasing commission fees were capitalized in other assets, net, in the accompanying condensed consolidated balance sheets and amortized over the terms of the related leases. Construction Management Fees Prior to the closing of the Internalization Transaction, 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 paid the Former Property Manager up to 5.0% of the cost of the projects, repairs and/or rehabilitation, as applicable, or construction management fees. Historically, construction management fees were capitalized in real estate, net, in the accompanying condensed consolidated balance sheets. Disposition Fees Prior to the closing of the Internalization Transaction, the Company paid its Former Advisor, or its affiliates, if the Former Advisor or its affiliates provided 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 was also involved, without exceeding the lesser of 6.0% of the contract sales price or a reasonable, customary and competitive real estate commission. The following table details amounts incurred in connection with the Company's related-party transactions as described above for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Incurred Three Months Ended Nine Months Ended Fee Entity 2021 2020 2021 2020 Distribution and servicing fees (1)(2) SC Distributors, LLC $ — $ (6) $ — $ (65) Acquisition fees and costs (2) Carter Validus Advisors II, LLC and its affiliates — — — 97 Asset management fees (3) Carter Validus Advisors II, LLC and its affiliates — 5,989 — 17,914 Operating expense reimbursement (4) Carter Validus Advisors II, LLC and its affiliates — 1,302 — 3,966 Property management fees (5) Carter Validus Real Estate Management Services II, LLC — 1,702 — 5,290 Leasing commission fees (6) Carter Validus Real Estate Management Services II, LLC — 111 — 594 Construction management fees (7) Carter Validus Real Estate Management Services II, LLC — 97 — 435 Disposition fees (2) Carter Validus Advisors II, LLC and its affiliates — — — 350 Loan origination fees (2) Carter Validus Advisors II, LLC and its affiliates — — — 560 Total $ — $ 9,195 $ — $ 29,141 (1) Effective September 30, 2020, as a result of the Internalization Transaction, the Dealer Manager is no longer a related party of the Company. Refer to Note 11—"Accounts Payable and Other Liabilities" for the outstanding balance on distribution and servicing fees owed by the Company to the Dealer Manager. (2) For the three and nine months ended September 30, 2020, the entire amount is attributable to continuing operations. (3) For the three months ended September 30, 2020, $4,218,000 is attributable to continuing operations and $1,771,000 is attributable to discontinued operations. For the nine months ended September 30, 2020, $12,604,000 is attributable to continuing operations and $5,310,000 is attributable to discontinued operations. (4) For the three months ended September 30, 2020, $1,116,000 is attributable to continuing operations and $186,000 is attributable to discontinued operations. For the nine months ended September 30, 2020, $3,374,000 is attributable to continuing operations and $592,000 is attributable to discontinued operations. (5) For the three months ended September 30, 2020, $1,104,000 is attributable to continuing operations and $598,000 is attributable to discontinued operations. For the nine months ended September 30, 2020, $3,299,000 is attributable to continuing operations and $1,991,000 is attributable to discontinued operations. (6) For the three and nine months ended September 30, 2020, the entire amount is attributable to discontinued operations. (7) For the three months ended September 30, 2020, $88,000 is attributable to continuing operations and $9,000 is attributable to discontinued operations. For the nine months ended September 30, 2020, $380,000 is attributable to continuing operations and $55,000 is attributable to discontinued operations. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Credit facility — Variable Rate —The estimated fair value of the credit facility—variable rate (Level 2) was approximately $118,270,000 and $536,329,000 as of September 30, 2021 and December 31, 2020, respectively, as compared to the outstanding principal of $120,000,000 and $538,000,000 as of September 30, 2021 and December 31, 2020, respectively. Credit facility — Fixed Rate —The estimated fair value of the credit facility—variable rate fixed through interest rate swap agreements (Level 2) was approximately $394,233,000 and $398,563,000 as of September 30, 2021 and December 31, 2020, respectively, as compared to the outstanding principal of $400,000,000 and $400,000,000 as of September 30, 2021 and December 31, 2020, respectively. The fair value of the Company's debt is estimated based on the interest rates currently offered to the Company by its financial institutions. Notes receivable —The outstanding principal balance of the notes receivable in the amount of $2,200,000 and $30,700,000 approximated the fair value as of September 30, 2021 and December 31, 2020, respectively. The fair value was determined through the evaluation of credit quality indicators such as underlying collateral and payment history 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 September 30, 2021, 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 15—"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 September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 1,002 $ — $ 1,002 Total assets at fair value $ — $ 1,002 $ — $ 1,002 Liabilities: Derivative liabilities $ — $ 9,309 $ — $ 9,309 Total liabilities at fair value $ — $ 9,309 $ — $ 9,309 December 31, 2020 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Liabilities: Derivative liabilities (1) $ — $ 20,444 $ — $ 20,444 Total liabilities at fair value $ — $ 20,444 $ — $ 20,444 (1) Of this amount, $17,231,000 is attributable to continuing operations and $3,213,000 is attributable to discontinued operations. Derivative assets are reported in other assets, net, on the condensed consolidated balance sheets. Derivative liabilities attributable to continuing operations and discontinued operations are reported in accounts payable and other liabilities and liabilities held for sale, net, respectively, on the condensed consolidated balance sheets. Real estate assets —As discussed in Note 2—"Summary of Significant Accounting Policies," during the first quarter of 2021, real estate assets related to one healthcare property were determined to be impaired. The carrying value of the property was reduced to its estimated fair value of $17,145,000, resulting in an impairment charge of $10,423,000, which was included in impairment loss on real estate in the condensed consolidated statements of comprehensive income in the first quarter of 2021. During the third quarter of 2021, the Company entered into a purchase and sale agreement with the prospective buyer. The agreement was terminated subsequently due to higher than anticipated costs to redevelop the property. As a result, the Company re-performed the impairment analysis with changes to the sale scenario. The aggregate carrying value of the assets exceeded their estimated fair value of $6,668,000 as of September 30, 2021, resulting in an impairment charge of $10,241,000. During the second quarter of 2021, real estate assets related to one healthcare property were determined to be impaired. The carrying value of the property was reduced to its estimated fair value of $5,957,000, resulting in an impairment charge of $2,894,000, which was included in impairment loss on real estate in the condensed consolidated statements of comprehensive income. Additionally, during the second quarter of 2021, real estate assets related to another healthcare property were determined to be impaired. The carrying value of the property was reduced to its estimated fair value of $22,311,000, resulting in an impairment charge of $3,608,000, which was included in impairment loss on real estate in the condensed consolidated statements of comprehensive income. The fair values of the Company's impaired real estate assets described above were determined based on market approach models using comparable properties adjusted for differences in characteristics to estimate the fair value and classified within Level 2 of the fair value hierarchy. During the three and nine months ended September 30, 2020, no impairment losses were recorded on real estate assets. The following tables show the fair value of the Company's real estate assets measured at fair value on a non-recurring basis as of September 30, 2021 (amounts in thousands): September 30, 2021 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Total Losses Real estate assets $ — $ 34,936 $ — $ 34,936 $ 27,166 Goodwill —As discussed in Note 2—"Summary of Significant Accounting Policies," during the first quarter of 2021, the Company recorded $240,000 of goodwill impairment. Impairment loss on goodwill represented the carrying value of the reporting unit, including goodwill, that exceeded its fair value, limited to the total amount of goodwill allocated to that reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach, using comparable sales. The Company determined that its valuation using a market approach model was classified within Level 2 of the fair value hierarchy. As of March 31, 2021, the Company did not have any goodwill associated with this healthcare reporting unit. During the second quarter of 2021, the Company recorded $431,000 of goodwill impairment on two reporting units. Impairment loss on goodwill represented the carrying value of each reporting unit, including goodwill, that exceeded its fair value, limited to the total amount of goodwill allocated to each reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of each reporting unit was determined based on a market approach model. The Company determined that its valuation using a market approach model was classified within Level 2 of the fair value hierarchy. As of June 30, 2021, the Company did not have any goodwill associated with these healthcare reporting units. The Company had no goodwill impairment during the three months ended September 30, 2021. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2021 | |
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 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. In connection with the Data Center Sale on July 22, 2021, the Company terminated eight interest rate swap agreements related to mortgage notes fixed through interest rate swaps. Prior to the termination of the eight interest rate swaps, the Company de-designated and then formally re-designated these hedged transactions. During the three and nine months ended September 30, 2021, the Company reclassified approximately $1,041,000 from accumulated other comprehensive loss to earnings, related to the swaps termination and recorded $499,000 in interest and other expense, net, and $542,000 in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income. 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 $7,810,000 will be reclassified from accumulated other comprehensive loss as a decrease to earnings. See Note 14—"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 September 30, 2021 December 31, 2020 Outstanding Fair Value of Outstanding Notional Amount (2) Fair Value of Assets (Liability) (Liability) (3) Interest rate swaps (1) 04/01/2019 to 04/27/2023 to $ 400,000 $ 1,002 $ (9,309) $ 635,007 $ (20,444) (1) Derivative assets are reported in other assets, net, on the condensed consolidated balance sheets. Derivative liabilities attributable to continuing operations and discontinued operations are reported in accounts payable and other liabilities and liabilities held for sale, net, respectively, on the condensed consolidated balance sheets. (2) Of this amount, $501,579,000 is attributable to continuing operations and $133,428,000 is attributable to discontinued operations. (3) Of this amount, $17,231,000 is attributable to continuing operations and $3,213,000 is attributable to discontinued operations. 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. The change in fair value of the derivative instruments that are designated as hedges are recorded in other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive income. The table below summarizes the amount of income (loss) recognized on the interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Derivatives in Cash Flow Amount of Income (Loss) Recognized Location of Loss Amount of (Loss) Total Amount of Line Item in Statements of Comprehensive Income Three Months Ended September 30, 2021 Interest rate swaps - continuing operations $ (253) Interest and other expense, net $ (1,952) $ 11,737 Interest rate swaps - discontinued operations — Income from discontinued operations (542) 377,191 Total $ (253) $ (2,494) Three Months Ended September 30, 2020 Interest rate swaps - continuing operations $ (155) Interest and other expense, net $ (2,192) $ 9,865 Interest rate swaps - discontinued operations (2) Income from discontinued operations (549) 5,845 Total $ (157) $ (2,741) Nine Months Ended September 30, 2021 Interest rate swaps - continuing operations $ 2,555 Interest and other expense, net $ (5,643) $ 30,035 Interest rate swaps - discontinued operations (37) Income from discontinued operations (1,647) 401,444 Total $ 2,518 $ (7,290) Nine Months Ended September 30, 2020 Interest rate swaps - continuing operations $ (20,120) Interest and other expense, net $ (4,094) $ 32,597 Interest rate swaps - discontinued operations (3,891) Income from discontinued operations (1,027) 19,600 Total $ (24,011) $ (5,121) Credit Risk-Related Contingent Features The 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 September 30, 2021, the fair value of derivatives in a net liability position was $9,507,000, inclusive of accrued interest but excluding any adjustment for nonperformance risk related to the agreement. As of September 30, 2021, 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 September 30, 2021 and December 31, 2020 (amounts in thousands): Offsetting of Derivative Assets Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net September 30, 2021 $ 1,002 $ — $ 1,002 $ (433) $ — $ 569 Offsetting of Derivative Liabilities Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net September 30, 2021 $ 9,309 $ — $ 9,309 $ (433) $ — $ 8,876 December 31, 2020 (1) $ 20,444 $ — $ 20,444 $ — $ — $ 20,444 (1) Of this net amount, $17,231,000 is attributable to continuing operations and $3,213,000 is attributable to discontinued operations. The Company reports derivative assets in the accompanying condensed consolidated balance sheets as other assets, net. The Company reports derivative liabilities attributable to continuing operations and discontinued operations in the accompanying condensed consolidated balance sheets as accounts payable and other liabilities and liabilities held for sale, net, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table presents a rollforward of amounts recognized in accumulated other comprehensive loss by component for the nine months ended September 30, 2021 and 2020 (amounts in thousands): Unrealized Income on Derivative Balance as of December 31, 2020 $ (20,444) Other comprehensive income before reclassification 2,518 Amount of loss reclassified from accumulated other comprehensive loss to net income 7,290 Other comprehensive income 9,808 Balance as of September 30, 2021 $ (10,636) Unrealized Loss on Derivative Balance as of December 31, 2019 $ (4,704) Other comprehensive loss before reclassification (24,011) Amount of loss reclassified from accumulated other comprehensive loss to net income 5,121 Other comprehensive loss (18,890) Balance as of September 30, 2020 $ (23,594) The following table presents reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2021 and 2020 (amounts in thousands): Details about Accumulated Other Loss Amounts Reclassified from Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income Nine Months Ended 2021 2020 Interest rate swap contracts - continuing operations $ 5,643 $ 4,094 Interest and other expense, net Interest rate swap contracts - discontinued operations 1,647 1,027 Income from discontinued operations Interest rate swap contracts $ 7,290 $ 5,121 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings In the ordinary course of business, the Company may become subject to litigation or claims. As of September 30, 2021, 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. Contingent Consideration During the fourth quarter of 2020, the Company acquired a development property subject to an earnout provision, obligating the Company to pay additional consideration to the developer contingent upon the future leasing and occupancy of vacant space at the property. The developer will have 18 months from completion of the development property to earn the additional consideration. During the 18-month earnout agreement, the developer will be responsible for the pro-rata share of operating expenses associated with the unoccupied space. As of September 30, 2021, the Company recorded an accrual related to the earnout provision in the amount of $978,000, which is reported in accounts payable and other liabilities in the accompanying condensed consolidated balance sheets. The Company used a probability-weighted future cash flows approach to estimate contingent consideration. Changes in assumptions could have an impact on the payout of contingent consideration with a maximum payout of $2,151,000 in cash and a minimum payout of $373,000. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Distributions Paid to Stockholders The following table summarizes the Company's distributions paid to stockholders on October 6, 2021, for the period from September 1, 2021 through September 30, 2021 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution October 6, 2021 Class A $ 4,315 $ 1,214 $ 5,529 October 6, 2021 Class I 273 189 462 October 6, 2021 Class T 552 496 1,048 October 6, 2021 Class T2 32 28 60 $ 5,172 $ 1,927 $ 7,099 The following table summarizes the Company's distributions paid to stockholders on November 5, 2021, for the period from October 1, 2021 through October 31, 2021 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution November 5, 2021 Class A $ 4,467 $ 1,249 $ 5,716 November 5, 2021 Class I 289 199 488 November 5, 2021 Class T 573 512 1,085 November 5, 2021 Class T2 29 27 56 $ 5,358 $ 1,987 $ 7,345 Distributions Authorized The following tables summarize the daily distributions approved and authorized by the Board subsequent to September 30, 2021: Authorization Date (1) Common Stock Daily Distribution Rate (1) Annualized Distribution Per Share October 25, 2021 Class A $ 0.00109589 $ 0.40 October 25, 2021 Class I $ 0.00109589 $ 0.40 October 25, 2021 Class T $ 0.00087123 $ 0.32 October 25, 2021 Class T2 $ 0.00087123 $ 0.32 Authorization Date (2) Common Stock Daily Distribution Rate (2) Annualized Distribution Per Share November 4, 2021 Class A $ 0.00109589 $ 0.40 November 4, 2021 Class I $ 0.00109589 $ 0.40 November 4, 2021 Class T $ 0.00087123 $ 0.32 November 4, 2021 Class T2 $ 0.00087123 $ 0.32 (1) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on November 1, 2021 and ending on November 30, 2021. The distributions will be calculated based on 365 days in the calendar year. The distributions declared for each record date in November 2021 will be paid in December 2021. The distributions will be payable to stockholders from legally available funds therefor. (2) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on December 1, 2021 and ending on December 31, 2021. The distributions will be calculated based on 365 days in the calendar year. The distributions declared for each record date in December 2021 will be paid in January 2022. The distributions will be payable to stockholders from legally available funds therefor. Disposition of St. Louis Healthcare Facility On October 21, 2021, the Company sold a healthcare property, or the St. Louis Healthcare Facility, for $6,120,000. The Company's net proceeds at closing from the disposition of the St. Louis Healthcare Facility were approximately $5,861,000, after transaction costs and other pro-rations, subject to additional transaction costs paid subsequent to the closing date. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
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, which includes cash held by escrow agents in escrow accounts for tenant and capital improvements in accordance with the respective tenant’s lease agreement. Restricted cash attributable to continuing operations is reported in other assets, net, in the accompanying condensed consolidated balance sheets. See Note 10—"Other Assets, Net." Restricted cash attributable to discontinued operations is reported in assets held for sale, net, in the accompanying condensed consolidated balance sheets. |
Held for Sale and Discontinued Operations | Held for Sale and Discontinued Operations The Company classifies a real estate property as held for sale upon satisfaction of all of the following criteria: (i) management commits to a plan to sell a property, (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such properties, (iii) there is an active program to locate a buyer, (iv) the sale of the property is probable and transfer of the asset is expected to be completed within one year, (v) the property is being actively marketed for sale, and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Upon the determination to classify a property as held for sale, the Company ceases depreciation and amortization on the real estate properties held for sale, as well as the amortization of acquired in-place leases and right-of-use assets. The real estate properties held for sale and associated liabilities are classified separately on the condensed consolidated balance sheets. Such properties are recorded at the lesser of the carrying value or estimated fair value less estimated cost to sell. As a result of the Data Center Sale, as of September 30, 2021, the Company had assets held for sale in the amount of $2,394,000, which primarily related to accounts receivable to be collected from the former tenants and liabilities held for sale in the amount of $1,822,000, which primarily related to accounts payable and other liabilities to be paid when obligations become due. Additionally, during the three months ended September 30, 2021, the Company classified two healthcare properties as held for sale. The Company has recorded the real estate properties held for sale at their carrying value at September 30, 2021. See Note 4—"Held for Sale and Discontinued Operations" for further discussion. The Company classifies assets and liabilities of the 29-property data center portfolio as discontinued operations for all periods presented because they represent a strategic shift that had a major effect on the Company's results and operations. The assets and liabilities are classified on the condensed consolidated balance sheets as assets held for sale, net, and liabilities held for sale, net, respectively, and the operations are classified on the condensed consolidated statements of comprehensive income as income from discontinued operations for all periods presented. On July 22, 2021, the Company completed the Data Center Sale, for an aggregate sale price of $1,320,000,000, and generated net proceeds of approximately $1,295,367,000. See Note 3—"Acquisitions and Dispositions" for additional information. |
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 may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate 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, probability weighting of the potential re-lease of the property versus sales scenarios, sale prices of comparable properties, 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 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 assets. Impairment of Real Estate During the first quarter of 2021, real estate assets related to one healthcare property were determined to be impaired. A tenant of the property that was experiencing financial difficulty vacated its space on June 19, 2020. During the fourth quarter of 2020, the Company entered into lease negotiations with a prospective tenant for the same property, but the Company did not reach a mutual agreement. As such, the Company evaluated other strategic options for the property, including a possible sale, and in April 2021, the Company received a letter of intent from a prospective buyer. The inclusion of a potential sale scenario in the Company’s step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $17,145,000, resulting in an impairment charge of $10,423,000. During the third quarter of 2021, the Company entered into a purchase and sale agreement with the prospective buyer. The agreement was terminated subsequently due to higher than anticipated costs to redevelop the property. As a result, the Company re-performed the impairment analysis with changes to the sale scenario. The aggregate carrying amount of the assets of $16,909,000 exceeded their fair value. The carrying value of the property was reduced to its estimated fair value of $6,668,000, resulting in an impairment charge of $10,241,000. The Company utilized a market approach, using comparable properties, to estimate the fair value of the property. During the second quarter of 2021, real estate assets related to one healthcare property were determined to be impaired. The tenant of the property was experiencing financial difficulty and vacated the space in March 2021. Subsequently, during the second quarter, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property falling below its current carrying value. The Company utilized a market approach, using comparable properties, to estimate the fair value of the property. As a result, the carrying value of the property was reduced to its estimated fair value of $5,957,000, resulting in an impairment charge of $2,894,000. Additionally, during the second quarter of 2021, real estate assets related to another healthcare property were determined to be impaired. The last of the three tenants that occupied the building terminated its lease agreement and vacated the space on July 12, 2021. Subsequently, the Company received a letter of intent from a prospective buyer. The inclusion of this new potential sale scenario in the Company's step one impairment analysis resulted in the expected future cash flows from the property to fall below its current carrying value. As a result, the carrying value of the property was reduced to its estimated fair value of $22,311,000, resulting in an impairment charge of $3,608,000. Impairment charges are recorded as impairment loss on real estate in the condensed consolidated statements of comprehensive income. No impairment losses were recorded on real estate assets during the three and nine months ended September 30, 2020. See Note 14—"Fair Value" for further discussion. During the second quarter of 2021, the Company accelerated depreciation of equipment at one healthcare property based on its anticipated sale in July 2021. As a result, the Company accelerated the depreciation of the equipment in the amount of $296,000 in depreciation and amortization expense in the condensed consolidated statements of comprehensive income and sold the equipment for $94,000 during the third quarter of 2021. Impairment of Acquired Intangible Assets and Acquired Intangible Liabilities During the three months ended September 30, 2021, the Company did not record impairment of acquired intangible assets or acquired intangible liabilities. During the nine months ended September 30, 2021, the Company did not record impairment of acquired intangible liabilities. During the nine months ended September 30, 2021, the Company recognized an impairment of one in-place lease intangible asset in the amount of approximately $1,120,000, by accelerating the amortization of the acquired intangible asset related to one healthcare tenant of the Company that was experiencing financial difficulties and vacated the property in March 2021. On April 5, 2021, the Company terminated its lease agreement and the tenant paid a lease termination fee of $400,000, which was recorded in rental revenue in the condensed consolidated statements of comprehensive income. During the three months ended September 30, 2020, the Company recognized an impairment of one in-place lease intangible asset in the amount of approximately $3,189,000, by accelerating the amortization of the acquired intangible asset related to a tenant in a data center property of the Company that was experiencing financial difficulty due to deteriorating economic conditions driven by the impact of the COVID-19 pandemic and accelerating its modification of work strategy to a remote environment due to the pandemic. The impairment loss was recorded in income from discontinued operations in the condensed consolidated statements of comprehensive income. During the nine months ended September 30, 2020, the Company recognized impairments of two in-place lease intangible assets in the amount of approximately $4,673,000 and one above-market lease intangible asset in the amount of approximately $344,000, by accelerating the amortization of the acquired intangible assets. Of the $4,673,000 in-place lease intangible assets written off, $3,189,000 related to the tenant of the data center property discussed above, which was recorded in income from discontinued operations; and $1,484,000 related to one healthcare tenant of the Company that was experiencing financial difficulties and vacated the property on June 19, 2020. The impairment loss related to the in-place lease intangible asset of the healthcare tenant was recorded in depreciation and amortization in the condensed consolidated statements of comprehensive income. The impairment loss related to the above market lease intangible asset in the amount of $344,000 was recorded as an adjustment to rental revenue in the condensed consolidated statements of comprehensive income. During the three and nine months ended September 30, 2020, the Company wrote off one below-market lease intangible liability in the amount of approximately $1,974,000, by accelerating the amortization of the acquired intangible liability related to one tenant of the data center property discussed above, which was recorded in income from discontinued operations in the condensed consolidated statements of comprehensive income Impairment of Goodwill Goodwill represents the excess of the amount paid over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is allocated to an entity's reporting units. Goodwill has an indefinite life and is not amortized. On September 30, 2020, the Company recorded $39,529,000 of goodwill related to the Internalization Transaction, of which $15,574,000 was allocated to the data center properties and written off as a result of the Data Center Sale on July 22, 2021. Out of $39,529,000, $23,955,000 was allocated to the healthcare segment. See Note 5—"Internalization Transaction" for details. The Company evaluates goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, or at least annually. Unless circumstances otherwise dictate, the annual impairment test is performed as of the last day of each year. The Company evaluates potential triggering events that may affect the estimated fair value of the Company’s reporting units to assess whether any goodwill impairment exists. Deteriorating or adverse market conditions for certain reporting units may have a significant impact on the estimated fair value of these reporting units and could result in future impairments of goodwill. If the carrying value of a reporting unit exceeds its estimated fair value, then an impairment charge is recorded in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company has the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. Under a qualitative assessment, the impairment analysis for goodwill represents an evaluation of whether it is more-likely-than-not the reporting unit's fair value is less than its carrying value, including goodwill. If a qualitative analysis indicates that it is more-likely-than-not that the estimated carrying value of a reporting unit, including goodwill, exceeds its fair value, the Company performs the quantitative analysis as described below. During the first quarter of 2021, the Company recognized $240,000 of goodwill impairment. Impairment loss on real estate recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered evaluation of the reporting unit fair value for goodwill impairment. The Company's reporting unit represents each individual operating real estate property. The carrying value of long-lived assets within the reporting unit with indicators of impairment were first tested for recoverability and resulted in recognition of impairment during such period. As a result, the fair value of the reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill in the amount of $240,000 for the amount that the carrying value of the reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to that reporting unit and was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of the reporting unit was determined based on a market valuation approach, using comparable sales to estimate the fair value. As of March 31, 2021, the Company did not have any goodwill associated with this healthcare reporting unit. During the second quarter of 2021, the Company recognized $431,000 of goodwill impairment on two reporting units. Impairment loss on two real estate properties recorded during such period (as discussed in the "Impairment of Real Estate" section above) triggered evaluation of each reporting unit's fair value for goodwill impairment. As a result, the fair value of each reporting unit compared to its carrying value, including goodwill, was determined to be lower than its carrying value. Therefore, the Company recognized an impairment loss on goodwill for the two reporting units in the amounts of $112,000 and $319,000, respectively. Goodwill impairment was recorded for the amount that the carrying value of each reporting unit, including goodwill, exceeded its fair value, limited to the total amount of goodwill allocated to each reporting unit. Goodwill impairment was recorded in impairment loss on goodwill in the condensed consolidated statements of comprehensive income. Fair value of each reporting unit was determined based on a market approach model. As of June 30, 2021, the Company did not have any goodwill associated with these healthcare reporting units. The Company had no goodwill impairment during the three months ended September 30, 2021. The following table summarizes the rollforward of goodwill for the nine months ended September 30, 2021, excluding amounts classified as discontinued operations (amounts in thousands): Goodwill Balance as of December 31, 2020 $ 23,955 Accumulated impairment losses (671) Balance as of September 30, 2021 $ 23,284 |
Revenue Recognition, Tenant Receivables and Allowance for Uncollectible Accounts | Revenue Recognition, Tenant Receivables and Allowance for Uncollectible Accounts The Company recognizes non-rental related revenue in accordance with Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers , or ASC 606. The Company has identified its revenue streams as rental income from leasing arrangements and tenant reimbursements, which are outside the scope of ASC 606. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Non-rental revenue, subject to ASC 606, is immaterial to the Company's condensed consolidated financial statements. The majority of the Company's revenue is derived from rental revenue, which is accounted for in accordance with ASC 842, Leases , or ASC 842. In accordance with ASC 842, rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). For lease arrangements when it is not probable that the Company will collect all or substantially all of the remaining lease payments under the term of the lease, rental revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis or the lease payments that have been collected from the lessee. Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. Tenant reimbursements, which are comprised of additional amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses, are recognized when the services are provided and the performance obligations are satisfied. The Company wrote off approximately $199,000 and $4,000 for the nine months ended September 30, 2021 and 2020, respectively, as a reduction in rental revenue from continuing operations in the accompanying condensed consolidated statements of comprehensive income because the amounts were determined to be uncollectible. No write-offs from continuing operations were recorded during the three months ended September 30, 2021 and 2020, respectively. The Company wrote off approximately $0 and $118,000 for the three months ended September 30, 2021 and 2020, respectively, and $17,000 and $118,000 for the nine months ended September 30, 2021 and 2020, respectively, related to discontinued operations, which was recorded in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income. On April 22, 2021, the Company entered into a settlement agreement with a data center property tenant that was experiencing financial difficulty due to deteriorating economic conditions driven by the impact of the COVID-19 pandemic and accelerating its modification of work strategy to a remote environment due to the pandemic. The tenant stopped paying rent in October 2020. Pursuant to the settlement agreement, the lease was terminated, effective immediately. The tenant surrendered the space on June 20, 2021. Additionally, in connection with the lease termination, the tenant paid the Company a $7,000,000 termination fee on April 23, 2021, which was recorded in income from discontinued operations in the accompanying condensed consolidated statements of comprehensive income during the second quarter of 2021. The Company collected an additional $75,000 on July 7, 2021 related to the lease termination agreement with the tenant. Additionally, on January 26, 2021, in connection with a lease termination with a tenant of one healthcare property that was experiencing financial difficulty and vacated its space on June 19, 2020 (as discussed above), the Company entered into a settlement agreement with the prior tenant to recover certain outstanding rental obligations due under the lease agreement. Pursuant to the settlement agreement, the prior tenant agreed to pay approximately $620,000 in total, payable on a monthly basis from January 2021 through September 2022. During the three and nine months ended September 30, 2021, the Company recovered $50,000 and $295,000 of settlement agreement income, respectively, and recorded these amounts when received, due |
Notes Receivable | Notes Receivable Notes receivable are recorded at their outstanding principal balance and accrued interest, 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 is recorded in interest and other expense, net, in the accompanying condensed consolidated statements of comprehensive income. The Company evaluates the collectability of both interest and principal on each note receivable to determine whether it is collectable, 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. |
Concentration of Credit Risk and Significant Leases | Concentration of Credit Risk and Significant Leases As of September 30, 2021, 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 September 30, 2021, the Company owned real estate investments in two micropolitan statistical areas and 54 MSAs, one MSA of which accounted for 10.0% or more of rental revenue from continuing operations for the nine months ended September 30, 2021. Real estate investments located in the Houston-The Woodlands-Sugar Land, Texas MSA accounted for 12.0% of rental revenue from continuing operations for the nine months ended September 30, 2021 As of September 30, 2021, the Company had one exposure to tenant concentration that accounted for 10.0% or more of rental revenue from continuing operations for the nine months ended September 30, 2021. The leases with tenants at healthcare properties under common control of Post Acute Medical, LLC and affiliates accounted for 16.3% of rental revenue from continuing operations for the nine months ended September 30, 2021. |
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 upon meeting certain criteria. The SRP provided that all repurchases during any calendar year, including those redeemable upon death or a "Qualifying Disability" as defined in the Company's SRP of a stockholder, be 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, 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 Board, provided, however, that the Company could 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 and any amendments to the plan, as more fully described below, the SRP has been generally available to any stockholder as a potential means of interim liquidity. In addition, the Board, 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. On December 11, 2020, the Board authorized and approved the Amended and Restated Share Repurchase Program, or the A&R SRP, which applied beginning with the first quarter repurchase date of 2021, provided, however, the Company will only repurchase shares due to death and involuntary exigent circumstances in accordance with the A&R SRP, subject in each case to the terms and limitations of the A&R SRP, including, but not limited to, quarterly share limitations, an annual 5.0% share limitation, and distribution reinvestment plan funding limitations. Under the A&R SRP, the Company may waive certain of the terms and requirements of the A&R SRP in the event of the death of a stockholder who is a natural person, including shares held through an Individual Retirement Account or other retirement or profit-sharing plan, and certain trusts meeting the requirements of the A&R SRP. The Company may also waive certain of the terms and requirements of the A&R SRP in the event of an involuntary exigent circumstance, as determined by the Company or any of the executive officers thereof, in its or their sole discretion. See Part II, Item 2. "Unregistered Sales of Equity Securities" for more information on the Company's A&R SRP. |
Stock-based Compensation | Stock-based Compensation On March 6, 2020, the Board approved the Amended and Restated 2014 Restricted Share Plan, or the A&R Incentive Plan, pursuant to which the Company has the authority and power to grant awards of restricted shares of its Class A common stock to its directors, officers and employees. The Company accounts for its stock awards in accordance with ASC 718-10, Compensation—Stock Compensation . ASC 718-10 requires that compensation cost for all stock awards be calculated and amortized over the service period (generally equal to the vesting period). For performance-based awards, compensation costs are recognized over the service period if it is probable that the performance condition will be satisfied, with changes of the assessment at each reporting period and recording the effect of the change in the compensation cost as a cumulative catch-up adjustment. The compensation costs for restricted stock are recognized based on the fair value of the restricted stock awards at grant date less forfeitures (if applicable). On January 8, 2021, the Company granted time-based awards to our executive officers of 178,366 in restricted shares of Class A common stock, or the Time-Based 2021 Awards. The Time-Based 2021 Awards will vest ratably over four years following the grant date, subject to each executive's employment through the applicable vesting dates, with certain exceptions. In addition, on January 8, 2021, the Company's compensation committee approved performance-based deferred stock unit awards, or Performance DSUs, to be granted for the Performance-Based 2021 Awards. The Performance DSUs represent the right to receive a number of restricted shares of the Company's Class A common stock on a one-to-one basis with the number of Performance DSUs that vest. The awards were granted under and subject to the terms of the A&R Incentive Plan and an award agreement. Stock-based compensation expense for the Time-Based 2021 Awards and Performance-Based 2021 Awards for the three and nine months ended September 30, 2021, was approximately $226,000 and $678,000, which is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income. The Company recognized total stock-based compensation expense, net of forfeitures, of $637,000 and $45,000 for the three months ended September 30, 2021 and 2020, respectively, and $1,756,000 and $102,000 for the nine months ended September 30, 2021 and 2020, respectively, which is reported in general and administrative expenses in the accompanying condensed consolidated statements of comprehensive income. |
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 and Performance DSUs give rise to potentially dilutive shares of common stock. For the three and nine months ended September 30, 2021, diluted earnings per share was computed the same as basic earnings per share because the Company recorded a loss from continuing operations, which would make potentially dilutive shares of 990,000 and 965,000, respectively, related to non-vested shares of restricted common stock and Performance DSUs antidilutive. For the three months ended September 30, 2020, diluted earnings per share was computed the same as basic earnings per share because the Company recorded a loss from continuing operations, which would make potentially dilutive shares of 60,000 related to non-vested shares of restricted common stock antidilutive. For the nine months ended September 30, 2020, diluted earnings per share reflected the effect of approximately 42,000 of non-vested awards that were outstanding. |
Reportable Segments | Reportable Segments ASC 280, Segment Reporting , establishes standards for reporting financial and descriptive information about an entity’s reportable segments. As of September 30, 2021 and December 31, 2020, 100% of the Company's consolidated revenues from continuing operations were generated from real estate investments in healthcare properties. The Company’s chief operating decision maker evaluates operating performance of healthcare properties on an individual property level, which are aggregated into one reportable business segment due to their similar economic characteristics. In accordance with the definition of discontinued operations, the Company's decision to sell the properties in the data centers segment represented a strategic shift that had a major effect on the Company's results and operations and assets and liabilities for the periods presented. As a result of the Data Center Sale, the Company no longer has a data centers segment. All activities related to the previously reported data centers segment have been classified as discontinued operations. The assets and liabilities related to discontinued operations are separately classified on the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, as assets held for sale, net, and liabilities held for sale, net, and the operations |
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. 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 income (loss) in the condensed consolidated statements of comprehensive income 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 15—"Derivative Instruments and Hedging Activities." |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Reference Rate Reform In March 2020, the Financial Accounting Standards Board 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 nine months ended September 30, 2021, 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 condensed consolidated statement of comprehensive income. The Company's assets and liabilities related to the data center properties and two healthcare properties are classified as assets held for sale, net, and liabilities held for sale, net, respectively, on the condensed consolidated balance sheets. Additionally, operations of data center properties are classified as income from discontinued operations on the condensed consolidated statements of comprehensive income for all periods presented. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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): Nine Months Ended 2021 2020 Beginning of period: Cash and cash equivalents $ 53,174 $ 69,342 Restricted cash 14,735 (1) 10,888 (2) Cash, cash equivalents and restricted cash $ 67,909 $ 80,230 End of period: Cash and cash equivalents $ 75,363 $ 75,505 Restricted cash 842 15,001 (3) Cash, cash equivalents and restricted cash $ 76,205 $ 90,506 (1) Of this amount, $13,499,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. (2) Of this amount, $9,652,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. (3) Of this amount, $13,765,000 is attributable to continuing operations and $1,236,000 is attributable to discontinued operations. |
Schedule of Goodwill | The following table summarizes the rollforward of goodwill for the nine months ended September 30, 2021, excluding amounts classified as discontinued operations (amounts in thousands): Goodwill Balance as of December 31, 2020 $ 23,955 Accumulated impairment losses (671) Balance as of September 30, 2021 $ 23,284 |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
Schedule of Consideration Transferred for Property Acquired | The following table summarizes the consideration transferred for the 2021 Acquisition during the nine months ended September 30, 2021: Property Description Date Acquired Ownership Percentage Purchase Price Greenwood Healthcare Facility 04/19/2021 100% $ 25,048 |
Schedule of Allocation of Acquisition | The following table summarizes the Company's purchase price allocation of the 2021 Acquisition during the nine months ended September 30, 2021 (amounts in thousands): Total Land $ 1,603 Buildings and improvements 22,588 In-place leases 2,411 Total assets acquired 26,602 Below-market leases (1,554) Total liabilities acquired (1,554) Net assets acquired $ 25,048 |
Held for Sale and Discontinue_2
Held for Sale and Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Major Classes of Assets and Liabilities Classified as Held for Sale and Operations Reflected in Discontinued Operations | The following table presents the major classes of assets and liabilities of 29 data center properties, which were sold on July 22, 2021, and two healthcare properties classified as assets and liabilities held for sale, net, presented separately in the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Assets: Real estate: Land $ 9,112 $ 166,709 Buildings and improvements, net 19,050 677,563 Total real estate, net 28,162 (1) 844,272 Acquired intangible assets, net — 48,860 Goodwill — 15,574 Right-of-use assets - operating leases — 7,252 Other assets, net 2,458 (1) 43,792 (2) Assets held for sale, net $ 30,620 $ 959,750 Liabilities: Notes payable, net $ — $ 304,972 Accounts payable and other liabilities 2,369 (1) 12,300 (3) Acquired intangible liabilities, net — 40,589 Operating lease liabilities — 8,124 Liabilities held for sale, net $ 2,369 $ 365,985 (1) As of September 30, 2021, two healthcare properties with $28,162,000 of total real estate, net, $64,000 of other assets, net, and $547,000 of accounts payable and other liabilities did not meet the criteria of discontinued operations. The remaining 29 data center held for sale properties were sold on July 22, 2021. (2) Primarily consists of straight-line rent receivable, net, leasing commissions, net, and restricted cash. (3) Primarily consists of accounts payable and accrued expenses, accrued property taxes, deferred rental income and derivative liabilities. The operations reflected in income from discontinued operations on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2021 and 2020, were as follows (amounts in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Revenue: Rental revenue $ 6,180 $ 29,945 $ 57,903 $ 84,848 Lease termination revenue 75 — 7,075 — Total revenue 6,255 29,945 64,978 84,848 Expenses: Rental expenses 2,504 7,663 15,737 21,839 Asset management fees — 1,771 — 5,310 Depreciation and amortization 35 11,247 11,759 27,894 Total expenses 2,539 20,681 27,496 55,043 Interest and other expense, net (1) 25,085 3,419 31,839 10,205 (Loss) income from discontinued operations (21,369) 5,845 5,643 19,600 Gain on real estate dispositions (2) 398,560 — 395,801 — Net income from discontinued operations attributable to common stockholders $ 377,191 $ 5,845 $ 401,444 $ 19,600 (1) Interest expense attributable to discontinued operations for the three months ended September 30, 2021 and 2020, was $25,085,000 and $3,452,000, respectively, and $31,856,000 and $10,293,000 for the nine months ended September 30, 2021 and 2020, respectively, which related to notes payable on certain data center properties. On July 22, 2021, in connection with the disposition and proceeds received from the data center properties, the Company paid off all data center and healthcare related notes payable, with an outstanding principal balance of $450,806,000 at the time of repayment and incurred approximately $23,738,000 related to debt extinguishment costs. See Note 12—"Notes Payable and Credit Facility" for additional information. (2) Represents gain on real estate dispositions related to the Data Center Sale that occurred on July 22, 2021. The Company recognized $2,759,000 in transaction costs during the second quarter of 2021, resulting in the total gain being higher during the three months ended September 30, 2021. |
Internalization Transaction (Ta
Internalization Transaction (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of Allocation of Purchase Price | The Internalization Transaction was accounted for as a business combination and the following table summarizes management’s allocation of the fair value of the Internalization Transaction as of September 30, 2020 (amounts in thousands): Total Goodwill $ 39,529 Right-of-use assets - operating lease 1,205 Total assets acquired 40,734 Operating lease liabilities (1,060) Deferred internalization transaction purchase price (14,674) Total liabilities acquired (15,734) Net assets allocated at acquisition $ 25,000 |
Schedule of Pro Forma Financial Information | Assuming the Internalization Transaction had occurred on January 1, 2020, pro forma revenues and net income attributable to common stockholders would have been as follows for the periods presented below (amounts in thousands, except per share amounts): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Pro forma basis: Revenues $ 43,063 $ 40,722 $ 129,232 $ 123,879 Income (loss) from continuing operations (5,261) 4,786 (10,380) 15,733 Income from discontinued operations 377,191 5,845 401,444 19,600 Net income attributable to common stockholders $ 371,930 $ 10,631 $ 391,064 $ 35,333 Net income per common share attributable to common stockholders: Basic: Continuing operations $ (0.03) $ 0.02 $ (0.05) $ 0.07 Discontinued operations 1.69 0.03 1.80 0.09 Net income attributable to common stockholders $ 1.66 $ 0.05 $ 1.75 $ 0.16 Diluted: Continuing operations $ (0.03) $ 0.02 $ (0.05) $ 0.07 Discontinued operations 1.69 0.03 1.80 0.09 Net income attributable to common stockholders $ 1.66 $ 0.05 $ 1.75 $ 0.16 |
Acquired Intangible Assets, N_2
Acquired Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Schedule of Acquired Intangible Assets, Net | Acquired intangible assets, net, excluding assets held for sale, net, consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands, except weighted average remaining life amounts): September 30, 2021 December 31, 2020 In-place leases, net of accumulated amortization of $61,530 and $47,312, respectively (with a weighted average remaining life of 9.8 years and 10.5 years, respectively) $ 168,577 $ 182,340 Above-market leases, net of accumulated amortization of $4,004 and $2,554, respectively (with a weighted average remaining life of 9.1 years and 9.9 years, respectively) 14,111 15,561 $ 182,688 $ 197,901 |
Acquired Intangible Liabiliti_2
Acquired Intangible Liabilities, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Intangible Lease Liabilities, Net [Abstract] | |
Schedule of Acquired Intangible Liabilities, Net | Acquired intangible liabilities, net, excluding liabilities held for sale, net, consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands, except weighted average remaining life amounts): September 30, 2021 December 31, 2020 Below-market leases, net of accumulated amortization of $4,101 and $3,122, respectively (with a weighted average remaining life of 9.6 years and 10.1 years, respectively) $ 12,546 $ 11,971 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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-cancellable operating leases in effect as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount Three months ending December 31, 2021 $ 37,841 2022 155,544 2023 158,052 2024 158,052 2025 153,839 Thereafter 1,059,376 Total (1) $ 1,722,704 (1) The total future rent amount of $1,722,704,000 includes approximately $16,476,000 in rent to be received in connection with two leases executed as of September 30, 2021, at one development property with estimated lease commencement dates of March 1, 2022. |
Schedule of Future Minimum Rent from Lessee for Operating Leases | The future rent payments, discounted by the Company's incremental borrowing rates, under non-cancellable leases, as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Operating Finance Three months ending December 31, 2021 $ 541 $ 34 2022 1,367 136 2023 1,326 136 2024 1,380 141 2025 1,385 143 Thereafter 66,425 6,584 Total undiscounted rental payments 72,424 7,174 Less imputed interest (48,449) (4,540) Total lease liabilities $ 23,975 $ 2,634 |
Schedule of Future Minimum Rent from Lessee for Finance Lease | The future rent payments, discounted by the Company's incremental borrowing rates, under non-cancellable leases, as of September 30, 2021, for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Operating Finance Three months ending December 31, 2021 $ 541 $ 34 2022 1,367 136 2023 1,326 136 2024 1,380 141 2025 1,385 143 Thereafter 66,425 6,584 Total undiscounted rental payments 72,424 7,174 Less imputed interest (48,449) (4,540) Total lease liabilities $ 23,975 $ 2,634 |
Schedule of Lease Cost | The following table provides details of the Company's total lease costs and reimbursements for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Three Months Ended Nine Months Ended Location in Condensed Consolidated Statements of Comprehensive Income 2021 2020 2021 2020 Operating lease costs: Ground lease costs Rental expenses $ 422 $ 422 $ 1,266 $ 1,266 Ground lease reimbursements (1) Rental revenue 298 298 894 893 Ground lease costs (2) Income from discontinued operations 25 220 414 660 Ground lease reimbursements (1),(2) Income from discontinued operations 24 103 230 309 Corporate lease costs General and administrative expenses 264 — 792 — Corporate-related operating lease costs General and administrative expenses 33 — 33 — Finance lease costs: Amortization of right-of-use asset Depreciation and amortization $ 5 $ 1 $ 14 $ 1 Interest on lease liability Interest and other expense, net 35 10 102 10 (1) The Company is reimbursed by tenants who sublease the ground leases. (2) Amounts relate to lease costs and reimbursements attributable to two operating ground leases related to data center properties disposed of in the Data Center Sale on July 22, 2021. |
Notes Receivable, Net (Tables)
Notes Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Schedule of Notes Receivable Balance | The following summarizes the notes receivable balances as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Interest Rate (1) Maturity Date Note receivable $ 2,200 (2) $ 2,700 6.0% 11/05/2021 Note receivable — 28,562 (3) (3) Total notes receivable $ 2,200 $ 31,262 (1) As of September 30, 2021. (2) Note receivable was repaid on November 5, 2021. (3) Note receivable was repaid on July 14, 2021. |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Assets [Abstract] | |
Schedule of Other Assets, Net | Other assets, net, excluding assets held for sale, net, consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $7,936 and $6,902, respectively $ 857 $ 1,634 Leasing commissions, net of accumulated amortization of $105 and $58, respectively 855 845 Restricted cash 842 13,499 Tenant receivables 1,527 1,965 Straight-line rent receivable 52,715 42,732 Real estate deposits 400 — Prepaid and other assets 3,258 (1) 3,994 Derivative assets 1,002 — $ 61,456 $ 64,669 (1) Excludes $64,000 of prepaid and other assets attributable to two healthcare properties classified as held for sale as of September 30, 2021, that did not meet the criteria of discontinued operations. |
Accounts Payable and Other Li_2
Accounts Payable and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Other Liabilities | Accounts payable and other liabilities, excluding liabilities held for sale, net, consisted of the following as of September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 December 31, 2020 Accounts payable and accrued expenses $ 8,778 (1) $ 10,011 Accrued interest expense 1,773 3,257 Accrued property taxes 2,428 (1) 2,090 Accrued personnel costs 2,560 1,202 Distribution and servicing fees 692 3,128 Distributions payable to stockholders 7,099 9,117 Performance DSUs distributions payable 376 — Tenant deposits 801 801 Deferred rental income 5,778 6,381 Deferred internalization transaction liability — 14,728 Contingent consideration 978 — Derivative liabilities 9,309 17,231 $ 40,572 $ 67,946 (1) Excludes $547,000 of accounts payable, accrued expenses and accrued property taxes attributable to two healthcare properties classified as held for sale as of September 30, 2021, that did not meet the criteria of discontinued operations. |
Notes Payable and Credit Faci_2
Notes Payable and Credit Facility (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company's debt outstanding as of September 30, 2021 and December 31, 2020, consisted of the following (amounts in thousands): September 30, 2021 December 31, 2020 Notes payable: Fixed rate notes payable $ — $ 45,748 Variable rate notes payable fixed through interest rate swaps — 101,579 Total notes payable, principal amount outstanding — 147,327 Unamortized deferred financing costs related to notes payable — (682) Total notes payable, net of deferred financing costs (1) $ — $ 146,645 Credit facility: Variable rate revolving line of credit $ — $ 138,000 Variable rate term loans fixed through interest rate swaps 400,000 400,000 Variable rate term loans 120,000 400,000 Total credit facility, principal amount outstanding 520,000 938,000 Unamortized deferred financing costs related to the term loan credit facility (3,494) (5,900) Total credit facility, net of deferred financing costs 516,506 932,100 Total debt outstanding $ 516,506 $ 1,078,745 (1) As of December 31, 2020, there were $304,972,000 of notes payable, net of deferred financing costs, related to data center properties classified as held for sale, which are included in liabilities held for sale, net, on the condensed consolidated balance sheets. |
Schedule of Future Principal Payments Due on Debt | The principal payments due on the credit facility for the three months ending December 31, 2021, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands): Year Amount 2024 $ 520,000 $ 520,000 |
Related-Party Transactions an_2
Related-Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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 nine months ended September 30, 2021 and 2020 (amounts in thousands): Incurred Three Months Ended Nine Months Ended Fee Entity 2021 2020 2021 2020 Distribution and servicing fees (1)(2) SC Distributors, LLC $ — $ (6) $ — $ (65) Acquisition fees and costs (2) Carter Validus Advisors II, LLC and its affiliates — — — 97 Asset management fees (3) Carter Validus Advisors II, LLC and its affiliates — 5,989 — 17,914 Operating expense reimbursement (4) Carter Validus Advisors II, LLC and its affiliates — 1,302 — 3,966 Property management fees (5) Carter Validus Real Estate Management Services II, LLC — 1,702 — 5,290 Leasing commission fees (6) Carter Validus Real Estate Management Services II, LLC — 111 — 594 Construction management fees (7) Carter Validus Real Estate Management Services II, LLC — 97 — 435 Disposition fees (2) Carter Validus Advisors II, LLC and its affiliates — — — 350 Loan origination fees (2) Carter Validus Advisors II, LLC and its affiliates — — — 560 Total $ — $ 9,195 $ — $ 29,141 (1) Effective September 30, 2020, as a result of the Internalization Transaction, the Dealer Manager is no longer a related party of the Company. Refer to Note 11—"Accounts Payable and Other Liabilities" for the outstanding balance on distribution and servicing fees owed by the Company to the Dealer Manager. (2) For the three and nine months ended September 30, 2020, the entire amount is attributable to continuing operations. (3) For the three months ended September 30, 2020, $4,218,000 is attributable to continuing operations and $1,771,000 is attributable to discontinued operations. For the nine months ended September 30, 2020, $12,604,000 is attributable to continuing operations and $5,310,000 is attributable to discontinued operations. (4) For the three months ended September 30, 2020, $1,116,000 is attributable to continuing operations and $186,000 is attributable to discontinued operations. For the nine months ended September 30, 2020, $3,374,000 is attributable to continuing operations and $592,000 is attributable to discontinued operations. (5) For the three months ended September 30, 2020, $1,104,000 is attributable to continuing operations and $598,000 is attributable to discontinued operations. For the nine months ended September 30, 2020, $3,299,000 is attributable to continuing operations and $1,991,000 is attributable to discontinued operations. (6) For the three and nine months ended September 30, 2020, the entire amount is attributable to discontinued operations. (7) For the three months ended September 30, 2020, $88,000 is attributable to continuing operations and $9,000 is attributable to discontinued operations. For the nine months ended September 30, 2020, $380,000 is attributable to continuing operations and $55,000 is attributable to discontinued operations. |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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 September 30, 2021 and December 31, 2020 (amounts in thousands): September 30, 2021 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Assets: Derivative assets $ — $ 1,002 $ — $ 1,002 Total assets at fair value $ — $ 1,002 $ — $ 1,002 Liabilities: Derivative liabilities $ — $ 9,309 $ — $ 9,309 Total liabilities at fair value $ — $ 9,309 $ — $ 9,309 December 31, 2020 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Liabilities: Derivative liabilities (1) $ — $ 20,444 $ — $ 20,444 Total liabilities at fair value $ — $ 20,444 $ — $ 20,444 |
Schedule of Fair Value, Real Estate Assets Measured on Non-Recurring Basis | The following tables show the fair value of the Company's real estate assets measured at fair value on a non-recurring basis as of September 30, 2021 (amounts in thousands): September 30, 2021 Fair Value Hierarchy Quoted Prices in Active Significant Other Significant Total Fair Total Losses Real estate assets $ — $ 34,936 $ — $ 34,936 $ 27,166 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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 September 30, 2021 December 31, 2020 Outstanding Fair Value of Outstanding Notional Amount (2) Fair Value of Assets (Liability) (Liability) (3) Interest rate swaps (1) 04/01/2019 to 04/27/2023 to $ 400,000 $ 1,002 $ (9,309) $ 635,007 $ (20,444) (1) Derivative assets are reported in other assets, net, on the condensed consolidated balance sheets. Derivative liabilities attributable to continuing operations and discontinued operations are reported in accounts payable and other liabilities and liabilities held for sale, net, respectively, on the condensed consolidated balance sheets. (2) Of this amount, $501,579,000 is attributable to continuing operations and $133,428,000 is attributable to discontinued operations. (3) Of this amount, $17,231,000 is attributable to continuing operations and $3,213,000 is attributable to discontinued operations. |
Schedule of Income and Losses Recognized on Derivative Instruments | The table below summarizes the amount of income (loss) recognized on the interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2021 and 2020 (amounts in thousands): Derivatives in Cash Flow Amount of Income (Loss) Recognized Location of Loss Amount of (Loss) Total Amount of Line Item in Statements of Comprehensive Income Three Months Ended September 30, 2021 Interest rate swaps - continuing operations $ (253) Interest and other expense, net $ (1,952) $ 11,737 Interest rate swaps - discontinued operations — Income from discontinued operations (542) 377,191 Total $ (253) $ (2,494) Three Months Ended September 30, 2020 Interest rate swaps - continuing operations $ (155) Interest and other expense, net $ (2,192) $ 9,865 Interest rate swaps - discontinued operations (2) Income from discontinued operations (549) 5,845 Total $ (157) $ (2,741) Nine Months Ended September 30, 2021 Interest rate swaps - continuing operations $ 2,555 Interest and other expense, net $ (5,643) $ 30,035 Interest rate swaps - discontinued operations (37) Income from discontinued operations (1,647) 401,444 Total $ 2,518 $ (7,290) Nine Months Ended September 30, 2020 Interest rate swaps - continuing operations $ (20,120) Interest and other expense, net $ (4,094) $ 32,597 Interest rate swaps - discontinued operations (3,891) Income from discontinued operations (1,027) 19,600 Total $ (24,011) $ (5,121) |
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 September 30, 2021 and December 31, 2020 (amounts in thousands): Offsetting of Derivative Assets Gross Amounts Not Offset in the Balance Sheet Gross Gross Amounts Net Amounts of Financial Instruments Cash Collateral Net September 30, 2021 $ 1,002 $ — $ 1,002 $ (433) $ — $ 569 |
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 September 30, 2021 $ 9,309 $ — $ 9,309 $ (433) $ — $ 8,876 December 31, 2020 (1) $ 20,444 $ — $ 20,444 $ — $ — $ 20,444 (1) Of this net amount, $17,231,000 is attributable to continuing operations and $3,213,000 is attributable to discontinued operations. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Amounts Recognized in Accumulated Other Comprehensive Loss | The following table presents a rollforward of amounts recognized in accumulated other comprehensive loss by component for the nine months ended September 30, 2021 and 2020 (amounts in thousands): Unrealized Income on Derivative Balance as of December 31, 2020 $ (20,444) Other comprehensive income before reclassification 2,518 Amount of loss reclassified from accumulated other comprehensive loss to net income 7,290 Other comprehensive income 9,808 Balance as of September 30, 2021 $ (10,636) Unrealized Loss on Derivative Balance as of December 31, 2019 $ (4,704) Other comprehensive loss before reclassification (24,011) Amount of loss reclassified from accumulated other comprehensive loss to net income 5,121 Other comprehensive loss (18,890) Balance as of September 30, 2020 $ (23,594) |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss | The following table presents reclassifications out of accumulated other comprehensive loss for the nine months ended September 30, 2021 and 2020 (amounts in thousands): Details about Accumulated Other Loss Amounts Reclassified from Affected Line Items in the Condensed Consolidated Statements of Comprehensive Income Nine Months Ended 2021 2020 Interest rate swap contracts - continuing operations $ 5,643 $ 4,094 Interest and other expense, net Interest rate swap contracts - discontinued operations 1,647 1,027 Income from discontinued operations Interest rate swap contracts $ 7,290 $ 5,121 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Schedule of Subsequent Events | The following table summarizes the Company's distributions paid to stockholders on October 6, 2021, for the period from September 1, 2021 through September 30, 2021 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution October 6, 2021 Class A $ 4,315 $ 1,214 $ 5,529 October 6, 2021 Class I 273 189 462 October 6, 2021 Class T 552 496 1,048 October 6, 2021 Class T2 32 28 60 $ 5,172 $ 1,927 $ 7,099 The following table summarizes the Company's distributions paid to stockholders on November 5, 2021, for the period from October 1, 2021 through October 31, 2021 (amounts in thousands): Payment Date Common Stock Cash DRIP Total Distribution November 5, 2021 Class A $ 4,467 $ 1,249 $ 5,716 November 5, 2021 Class I 289 199 488 November 5, 2021 Class T 573 512 1,085 November 5, 2021 Class T2 29 27 56 $ 5,358 $ 1,987 $ 7,345 Distributions Authorized The following tables summarize the daily distributions approved and authorized by the Board subsequent to September 30, 2021: Authorization Date (1) Common Stock Daily Distribution Rate (1) Annualized Distribution Per Share October 25, 2021 Class A $ 0.00109589 $ 0.40 October 25, 2021 Class I $ 0.00109589 $ 0.40 October 25, 2021 Class T $ 0.00087123 $ 0.32 October 25, 2021 Class T2 $ 0.00087123 $ 0.32 Authorization Date (2) Common Stock Daily Distribution Rate (2) Annualized Distribution Per Share November 4, 2021 Class A $ 0.00109589 $ 0.40 November 4, 2021 Class I $ 0.00109589 $ 0.40 November 4, 2021 Class T $ 0.00087123 $ 0.32 November 4, 2021 Class T2 $ 0.00087123 $ 0.32 (1) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on November 1, 2021 and ending on November 30, 2021. The distributions will be calculated based on 365 days in the calendar year. The distributions declared for each record date in November 2021 will be paid in December 2021. The distributions will be payable to stockholders from legally available funds therefor. (2) Distributions approved and authorized to stockholders of record as of the close of business on each day of the period commencing on December 1, 2021 and ending on December 31, 2021. The distributions will be calculated based on 365 days in the calendar year. The distributions declared for each record date in December 2021 will be paid in January 2022. The distributions will be payable to stockholders from legally available funds therefor. |
Organization and Business Ope_2
Organization and Business Operations (Details) $ / shares in Units, $ in Thousands | Jul. 30, 2021USD ($) | Jul. 22, 2021USD ($)property$ / shares | Sep. 30, 2021USD ($)statisticalAreapropertyregistration_statement | Sep. 30, 2020USD ($) | May 19, 2021property | Dec. 31, 2020property | Nov. 30, 2018initial_public_offering |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties owned | property | 125 | ||||||
Proceeds from real estate dispositions | $ 1,295,367 | $ 6,125 | |||||
Special cash dividend (in dollars per share) | $ / shares | $ 1.75 | ||||||
Special cash distribution (in dollars) | $ 392,685 | ||||||
Number of micropolitan statistical areas with owned real estate investments | statisticalArea | 2 | ||||||
Number of metropolitan statistical areas with owned real estate investments | statisticalArea | 54 | ||||||
Number of public offerings | initial_public_offering | 2 | ||||||
Number of registration statements on Form S-3 | registration_statement | 2 | ||||||
Discontinued Operations, Held-for-sale | Data Centers | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties owned | property | 29 | ||||||
Discontinued Operations, Disposed of by Sale | Data Centers | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of real estate properties owned | property | 29 | 29 | 29 | ||||
Aggregate sales price | $ 1,320,000 | ||||||
Proceeds from real estate dispositions | $ 1,295,367 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Reconciliation of Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash and cash equivalents | $ 75,363 | $ 53,174 | $ 75,505 | $ 69,342 |
Restricted cash | 842 | 14,735 | 15,001 | 10,888 |
Cash, cash equivalents and restricted cash | $ 76,205 | 67,909 | 90,506 | 80,230 |
Continuing Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restricted cash | 13,499 | 13,765 | 9,652 | |
Discontinued Operations, Disposed of by Sale | Data Centers | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restricted cash | $ 1,236 | $ 1,236 | $ 1,236 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Narrative) (Details) | Jul. 22, 2021USD ($)property | Jul. 07, 2021USD ($) | Apr. 23, 2021USD ($) | Apr. 05, 2021USD ($) | Jan. 08, 2021shares | Sep. 30, 2021USD ($)tenantstatisticalAreapropertyshares | Jun. 30, 2021USD ($)unitproperty | Mar. 31, 2021USD ($)property | Sep. 30, 2020USD ($)leaseshares | Sep. 30, 2021USD ($)leasetenantstatisticalAreapropertysegment$ / sharesshares | Sep. 30, 2020USD ($)lease$ / sharesshares | Dec. 31, 2020USD ($)propertysegment | Sep. 29, 2021USD ($) | Jan. 26, 2021USD ($) |
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Assets held for sale, net | $ 30,620,000 | $ 30,620,000 | $ 959,750,000 | |||||||||||
Liabilities held for sale, net | $ 2,369,000 | $ 2,369,000 | 365,985,000 | |||||||||||
Number of real estate properties | property | 125 | 125 | ||||||||||||
Proceeds from real estate dispositions | $ 1,295,367,000 | $ 6,125,000 | ||||||||||||
Real estate assets | $ 1,800,193,000 | 1,800,193,000 | 1,849,552,000 | |||||||||||
Impairment loss on real estate | 10,241,000 | $ 0 | 27,166,000 | 0 | ||||||||||
Accelerated depreciation | $ 296,000 | |||||||||||||
Proceeds from equipment sold | 94,000 | |||||||||||||
Impairment of acquired intangible assets | 0 | |||||||||||||
Impairment of acquired intangible liabilities | 0 | 0 | ||||||||||||
Proceeds from lease termination fee | $ 400,000 | |||||||||||||
Goodwill | 23,284,000 | 23,284,000 | $ 23,955,000 | |||||||||||
Impairment loss on goodwill | 0 | 0 | 671,000 | 0 | ||||||||||
Reduction in rental revenue | 0 | 0 | 199,000 | 4,000 | ||||||||||
Settlement agreement receivable | $ 620,000 | |||||||||||||
Settlement agreement, income | $ 50,000 | $ 295,000 | ||||||||||||
Number of micropolitan statistical areas with owned real estate investments | statisticalArea | 2 | 2 | ||||||||||||
Number of metropolitan statistical areas with owned real estate investments | statisticalArea | 54 | 54 | ||||||||||||
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 | 1,940,000 | 26,461,000 | ||||||||||||
Grants in period (in shares) | shares | 178,366 | |||||||||||||
Stock-based compensation expense | $ 637,000 | $ 45,000 | $ 1,756,000 | $ 102,000 | ||||||||||
Diluted earnings per share outstanding adjustment (in shares) | shares | 990,000 | 60,000 | 965,000 | |||||||||||
Diluted earnings per share outstanding adjustment (in shares) | shares | 42,000 | |||||||||||||
Number of reportable business segments | segment | 1 | 1 | ||||||||||||
Restricted Stock, Time-Based | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Award vesting period under plan | 4 years | |||||||||||||
Restricted Stock, Time-Based and Performance Based | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Stock-based compensation expense | $ 226,000 | $ 678,000 | ||||||||||||
Common Stock | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Repurchase of common stock (in shares) | shares | 303,247 | 224,416 | 772,581 | 3,059,072 | ||||||||||
Repurchase of common stock | $ 3,000 | $ 3,000 | $ 7,000 | $ 31,000 | ||||||||||
Class A, I and T Shares | Common Stock | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Repurchase of common stock (in shares) | shares | 772,581 | |||||||||||||
Repurchase of common stock | $ 6,564,000 | |||||||||||||
Repurchase of common stock, average price per share (in dollars per share) | $ / shares | $ 8.50 | |||||||||||||
Class A | Common Stock | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Repurchase of common stock (in shares) | shares | 715,406 | 2,382,166 | ||||||||||||
Class I | Common Stock | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Repurchase of common stock (in shares) | shares | 8,322 | 395,334 | ||||||||||||
Class T | Common Stock | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Repurchase of common stock (in shares) | shares | 48,853 | 258,550 | ||||||||||||
Class A, I, T and T2 shares | Common Stock | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Repurchase of common stock (in shares) | shares | 3,059,072 | |||||||||||||
Repurchase of common stock | $ 26,461,000 | |||||||||||||
Repurchase of common stock, average price per share (in dollars per share) | $ / shares | $ 8.65 | |||||||||||||
Class T2 | Common Stock | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Repurchase of common stock (in shares) | shares | 23,022 | |||||||||||||
Rental Revenue | Geographic Concentration Risk | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Number of metropolitan statistical areas with owned real estate investments | statisticalArea | 1 | 1 | ||||||||||||
Rental Revenue | Geographic Concentration Risk | Houston-The Woodlands-Sugar Land, Texas MSA | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Concentration risk, percentage | 12.00% | |||||||||||||
Rental Revenue | Customer Concentration Risk | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Number of major tenants | tenant | 1 | 1 | ||||||||||||
Internalization Transaction | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Goodwill | 39,529,000 | $ 39,529,000 | ||||||||||||
Internalization Transaction | Healthcare | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Goodwill | 23,955,000 | 23,955,000 | ||||||||||||
In-place leases | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Impairment of acquired intangible assets | $ 4,673,000 | |||||||||||||
Number of impaired acquired intangible assets | lease | 2 | |||||||||||||
In-place leases | Continuing Operations | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Impairment of acquired intangible assets | $ 1,120,000 | |||||||||||||
Number of impaired acquired intangible assets | lease | 1 | 1 | ||||||||||||
In-place leases | Healthcare | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Impairment of acquired intangible assets | $ 1,484,000 | |||||||||||||
Above-market leases | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Impairment of acquired intangible assets | $ 344,000 | |||||||||||||
Above-market leases | Continuing Operations | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Number of impaired acquired intangible assets | lease | 1 | |||||||||||||
Below Market Leases | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Impairment of acquired intangible assets | $ 1,974,000 | $ 1,974,000 | ||||||||||||
Number of impaired acquired intangible assets | lease | 1 | 1 | ||||||||||||
Healthcare reporting unit 1 | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Real estate assets | $ 16,909,000 | |||||||||||||
Impairment loss on real estate | $ 10,241,000 | $ 10,423,000 | ||||||||||||
Goodwill | 0 | |||||||||||||
Impairment loss on goodwill | 240,000 | |||||||||||||
Healthcare reporting unit 2 | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Impairment loss on real estate | 2,894,000 | |||||||||||||
Impairment loss on goodwill | 112,000 | |||||||||||||
Healthcare reporting unit 3 | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Impairment loss on real estate | 3,608,000 | |||||||||||||
Impairment loss on goodwill | 319,000 | |||||||||||||
Healthcare reporting units 2 and 3 | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Goodwill | 0 | |||||||||||||
Impairment loss on goodwill | $ 431,000 | |||||||||||||
Number of reporting units | unit | 2 | |||||||||||||
Impaired Real Estate Property 1 | Healthcare reporting unit 1 | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Real estate assets | $ 6,668,000 | $ 17,145,000 | $ 6,668,000 | |||||||||||
Impaired Real Estate Property 2 | Healthcare reporting unit 2 | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Real estate assets | $ 5,957,000 | |||||||||||||
Impaired Real Estate Property 3 | Healthcare reporting unit 3 | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Real estate assets | $ 22,311,000 | |||||||||||||
Healthcare | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Number of impaired properties | property | 1 | 1 | ||||||||||||
Tenant of Healthcare Property | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Number of tenants with impaired intangible assets | tenant | 1 | |||||||||||||
Post Acute Medical LLC and affiliates | Rental Revenue | Customer Concentration Risk | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Concentration risk, percentage | 16.30% | |||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Healthcare | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Number of real estate properties | property | 2 | 2 | 2 | |||||||||||
Data Centers | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Assets held for sale, net | $ 2,394,000 | $ 2,394,000 | ||||||||||||
Liabilities held for sale, net | $ 1,822,000 | $ 1,822,000 | ||||||||||||
Data Centers | Discontinued Operations, Disposed of by Sale | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Number of real estate properties | property | 29 | 29 | 29 | 29 | ||||||||||
Aggregate sales price | $ 1,320,000,000 | |||||||||||||
Proceeds from real estate dispositions | 1,295,367,000 | |||||||||||||
Proceeds from lease termination fee | $ 75,000 | $ 7,000,000 | ||||||||||||
Reduction in rental revenue | $ 0 | $ 118,000 | $ 17,000 | $ 118,000 | ||||||||||
Data Centers | Discontinued Operations, Disposed of by Sale | Internalization Transaction | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Goodwill | $ 15,574,000 | 15,574,000 | 15,574,000 | |||||||||||
Data Centers | Discontinued Operations, Disposed of by Sale | In-place leases | ||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||||
Impairment of acquired intangible assets | $ 3,189,000 | $ 3,189,000 | ||||||||||||
Number of impaired acquired intangible assets | lease | 1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Schedule of Goodwill) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | ||||
Beginning balance | $ 23,955,000 | |||
Impairment loss on goodwill | $ 0 | $ 0 | (671,000) | $ 0 |
Ending balance | $ 23,284,000 | $ 23,284,000 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions (Narrative) (Details) $ in Thousands | Jul. 22, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($)property | Sep. 30, 2020USD ($) |
Real Estate [Line Items] | ||||
Number of real estate properties acquired | property | 1 | |||
Capitalized acquisition fees and costs | $ 48 | |||
Proceeds from real estate dispositions | 1,295,367 | $ 6,125 | ||
Aggregate gain on sale | 395,801 | $ 0 | ||
Discontinued Operations, Disposed of by Sale | Data Centers | ||||
Real Estate [Line Items] | ||||
Aggregate sales price | $ 1,320,000 | |||
Proceeds from real estate dispositions | $ 1,295,367 | |||
Aggregate gain on sale | $ 398,560 | $ 395,801 | ||
Maximum | ||||
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) - Greenwood Healthcare Facility $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Business Acquisition [Line Items] | |
Ownership Percentage | 100.00% |
Purchase Price | $ 25,048 |
Acquisitions and Dispositions_4
Acquisitions and Dispositions (Schedule of Allocation of Acquisitions) (Details) - 2021 Acquisition $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Business Acquisition [Line Items] | |
Total assets acquired | $ 26,602 |
Below-market leases | (1,554) |
Total liabilities acquired | (1,554) |
Net assets acquired | 25,048 |
In-place leases | |
Business Acquisition [Line Items] | |
In-place leases | 2,411 |
Land | |
Business Acquisition [Line Items] | |
Property, plant and equipment acquired | 1,603 |
Buildings and improvements | |
Business Acquisition [Line Items] | |
Property, plant and equipment acquired | $ 22,588 |
Held for Sale and Discontinue_3
Held for Sale and Discontinued Operations (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)property | Sep. 30, 2021USD ($)property | Sep. 30, 2020USD ($) | Jul. 22, 2021property | Dec. 31, 2020property | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties | property | 125 | 125 | |||
Expected demolition expense | $ 305 | ||||
Capital expenditures | $ 20,323 | $ 21,251 | |||
Discontinued Operations, Disposed of by Sale | Data Centers | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties | property | 29 | 29 | 29 | 29 | |
Discontinued Operations, Held-for-sale or Disposed of by Sale | Data Centers | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Capital expenditures | $ 2,215 | 3,633 | |||
Non-cash operating activities | $ 3,563 |
Held for Sale and Discontinue_4
Held for Sale and Discontinued Operations (Disposal Group Financials) (Details) $ in Thousands | Jul. 22, 2021USD ($)property | Sep. 30, 2021USD ($)property | Jun. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)property | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)property |
Assets: | |||||||
Assets held for sale, net | $ 30,620 | $ 30,620 | $ 959,750 | ||||
Liabilities: | |||||||
Liabilities held for sale, net | $ 2,369 | $ 2,369 | 365,985 | ||||
Number of real estate properties owned | property | 125 | 125 | |||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||||||
Income from discontinued operations | $ 377,191 | $ 5,845 | $ 401,444 | $ 19,600 | |||
Notes payable, principal amount outstanding | 0 | 0 | 147,327 | ||||
Data Centers | |||||||
Assets: | |||||||
Assets held for sale, net | 2,394 | 2,394 | |||||
Liabilities: | |||||||
Liabilities held for sale, net | 1,822 | 1,822 | |||||
Discontinued Operations, Held-for-sale or Disposed of by Sale | |||||||
Assets: | |||||||
Total real estate, net | 28,162 | 28,162 | 844,272 | ||||
Acquired intangible assets, net | 0 | 0 | 48,860 | ||||
Goodwill | 0 | 0 | 15,574 | ||||
Right-of-use assets - operating leases | 0 | 0 | 7,252 | ||||
Other assets, net | 2,458 | 2,458 | 43,792 | ||||
Assets held for sale, net | 30,620 | 30,620 | 959,750 | ||||
Liabilities: | |||||||
Notes payable, net | 0 | 0 | 304,972 | ||||
Accounts payable and other liabilities | 2,369 | 2,369 | 12,300 | ||||
Acquired intangible liabilities, net | 0 | 0 | 40,589 | ||||
Operating lease liabilities | 0 | 0 | 8,124 | ||||
Liabilities held for sale, net | 2,369 | 2,369 | 365,985 | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||||||
Rental revenue | 6,180 | 29,945 | 57,903 | 84,848 | |||
Lease termination revenue | 75 | 0 | 7,075 | 0 | |||
Total revenue | 6,255 | 29,945 | 64,978 | 84,848 | |||
Rental expenses | 2,504 | 7,663 | 15,737 | 21,839 | |||
Asset management fees | 0 | 1,771 | 0 | 5,310 | |||
Depreciation and amortization | 35 | 11,247 | 11,759 | 27,894 | |||
Total expenses | 2,539 | 20,681 | 27,496 | 55,043 | |||
Interest and other expense, net | 25,085 | 3,419 | 31,839 | 10,205 | |||
(Loss) income from discontinued operations | (21,369) | 5,845 | 5,643 | 19,600 | |||
Gain on real estate dispositions | 398,560 | 0 | 395,801 | 0 | |||
Income from discontinued operations | 377,191 | 5,845 | 401,444 | 19,600 | |||
Discontinued Operations, Held-for-sale or Disposed of by Sale | Land | |||||||
Assets: | |||||||
Total real estate, net | 9,112 | 9,112 | 166,709 | ||||
Discontinued Operations, Held-for-sale or Disposed of by Sale | Buildings and improvements | |||||||
Assets: | |||||||
Total real estate, net | 19,050 | 19,050 | $ 677,563 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||||
Assets: | |||||||
Total real estate, net | 28,162 | 28,162 | |||||
Liabilities: | |||||||
Accounts payable and other liabilities | 547 | 547 | |||||
Prepaid and other assets | $ 64 | $ 64 | |||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Healthcare | |||||||
Liabilities: | |||||||
Number of real estate properties owned | property | 2 | 2 | 2 | ||||
Discontinued Operations, Disposed of by Sale | Data Centers | |||||||
Liabilities: | |||||||
Number of real estate properties owned | property | 29 | 29 | 29 | 29 | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||||||
Income from discontinued operations | $ 377,191 | 5,845 | $ 401,444 | 19,600 | |||
Interest expense attributable to discontinued operations | $ 25,085 | $ 3,452 | $ 31,856 | $ 10,293 | |||
Notes payable, principal amount outstanding | $ 305,161 | ||||||
Debt extinguishment costs incurred | $ 23,738 | ||||||
Transaction costs | $ 2,759 |
Internalization Transaction (Na
Internalization Transaction (Narrative) (Details) - USD ($) $ in Thousands | Jul. 27, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Business Acquisition [Line Items] | |||||||
Amortization of discount of deferred liability | $ 272 | $ 0 | |||||
Internalization transaction expenses | $ 0 | $ 2,235 | $ 0 | $ 3,640 | |||
Internalization Transaction | |||||||
Business Acquisition [Line Items] | |||||||
Membership interests acquired percentage | 100.00% | 100.00% | 100.00% | ||||
Cash paid in transaction | $ 40,000 | ||||||
Amortization of discount of deferred liability | $ 145 | ||||||
Internalization Transaction, Tranche One, Closing | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid in transaction | 25,000 | ||||||
Internalization Transaction, Tranche Two, March 31, 2021 | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid in transaction | $ 7,500 | ||||||
Internalization transaction, payable | 7,500 | ||||||
Internalization Transaction, Tranche Three, March 31, 2022 | |||||||
Business Acquisition [Line Items] | |||||||
Cash paid in transaction | $ 7,500 | ||||||
Internalization transaction, payable | $ 7,500 |
Internalization Transaction (Sc
Internalization Transaction (Schedule of Allocation of Purchase Price) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 23,284 | $ 23,955 | |
Deferred internalization transaction purchase price | $ 0 | $ (14,728) | |
Internalization Transaction | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 39,529 | ||
Right-of-use assets - operating lease | 1,205 | ||
Total assets acquired | 40,734 | ||
Operating lease liabilities | (1,060) | ||
Deferred internalization transaction purchase price | (14,674) | ||
Total liabilities acquired | (15,734) | ||
Net assets allocated at acquisition | $ 25,000 |
Internalization Transaction (_2
Internalization Transaction (Schedule of Pro Forma Financial Information) (Details) - Internalization Transaction - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 43,063 | $ 40,722 | $ 129,232 | $ 123,879 |
Income (loss) from continuing operations | (5,261) | 4,786 | (10,380) | 15,733 |
Income from discontinued operations | 377,191 | 5,845 | 401,444 | 19,600 |
Net income attributable to common stockholders | $ 371,930 | $ 10,631 | $ 391,064 | $ 35,333 |
Net income per common share attributable to common stockholders: | ||||
Basic: Continuing operations (in dollars per share) | $ (0.03) | $ 0.02 | $ (0.05) | $ 0.07 |
Basic: Discontinued operations (in dollars per share) | 1.69 | 0.03 | 1.80 | 0.09 |
Basic (in dollars per share) | 1.66 | 0.05 | 1.75 | 0.16 |
Diluted: Continuing operations (in dollars per share) | (0.03) | 0.02 | (0.05) | 0.07 |
Diluted: Discontinued operations (in dollars per share) | 1.69 | 0.03 | 1.80 | 0.09 |
Diluted (in dollars per share) | $ 1.66 | $ 0.05 | $ 1.75 | $ 0.16 |
Acquired Intangible Assets, N_3
Acquired Intangible Assets, Net (Schedule of Acquired Intangible Assets, Net) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, accumulated amortization | $ 65,534 | $ 49,866 |
Acquired intangible assets, net of accumulated amortization | $ 182,688 | $ 197,901 |
Continuing Operations | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life of intangible assets | 9 years 8 months 12 days | 10 years 6 months |
Acquired intangible assets, net of accumulated amortization | $ 182,688 | $ 197,901 |
In-place leases | Continuing Operations | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, accumulated amortization | $ 61,530 | $ 47,312 |
Weighted average remaining useful life of intangible assets | 9 years 9 months 18 days | 10 years 6 months |
Acquired intangible assets, net of accumulated amortization | $ 168,577 | $ 182,340 |
Above-market leases | Continuing Operations | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, accumulated amortization | $ 4,004 | $ 2,554 |
Weighted average remaining useful life of intangible assets | 9 years 1 month 6 days | 9 years 10 months 24 days |
Acquired intangible assets, net of accumulated amortization | $ 14,111 | $ 15,561 |
Acquired Intangible Assets, N_4
Acquired Intangible Assets, Net (Narrative) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)lease | Sep. 30, 2020USD ($)lease | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of acquired intangible assets | $ 0 | ||||
Continuing Operations | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining useful life of intangible assets | 9 years 8 months 12 days | 10 years 6 months | |||
Amortization of acquired intangible assets | $ 5,507,000 | $ 5,461,000 | $ 17,624,000 | $ 18,348,000 | |
In-place leases | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of acquired intangible assets | $ 4,673,000 | ||||
Number of impaired acquired intangible assets | lease | 2 | ||||
In-place leases | Continuing Operations | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining useful life of intangible assets | 9 years 9 months 18 days | 10 years 6 months | |||
Impairment of acquired intangible assets | $ 1,120,000 | ||||
Number of impaired acquired intangible assets | lease | 1 | 1 | |||
In-place and above-market leases | Continuing Operations | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of acquired intangible assets | $ 1,828,000 | ||||
Above-market leases | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of acquired intangible assets | $ 344,000 | ||||
Above-market leases | Continuing Operations | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average remaining useful life of intangible assets | 9 years 1 month 6 days | 9 years 10 months 24 days | |||
Number of impaired acquired intangible assets | lease | 1 |
Acquired Intangible Liabiliti_3
Acquired Intangible Liabilities, Net (Schedule of Acquired Intangible Liabilities, Net) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Intangible Lease Liabilities, Net [Line Items] | ||
Accumulated amortization of below-market leases | $ 4,101 | $ 3,122 |
Below-market leases, net of accumulated amortization | 12,546 | 11,971 |
Continuing Operations | ||
Intangible Lease Liabilities, Net [Line Items] | ||
Accumulated amortization of below-market leases | $ 4,101 | $ 3,122 |
Weighted average remaining life of below-market leases | 9 years 7 months 6 days | 10 years 1 month 6 days |
Below-market leases, net of accumulated amortization | $ 12,546 | $ 11,971 |
Acquired Intangible Liabiliti_4
Acquired Intangible Liabilities, Net (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Intangible Lease Liabilities, Net [Line Items] | ||||
Amortization of below-market leases | $ 2,689 | $ 6,050 | ||
Continuing Operations | ||||
Intangible Lease Liabilities, Net [Line Items] | ||||
Amortization of below-market leases | $ 338 | $ 301 | $ 979 | $ 901 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) $ in Thousands | Sep. 30, 2021USD ($)lease | Dec. 31, 2020USD ($) |
Lessee, Lease, Description [Line Items] | ||
Number of operating ground leases | 15 | |
Number of corporate-related leases | 1 | |
Number of finance ground leases | 1 | |
Number of operating office leases | 1 | |
Number of operating ground leases without corresponding operating lease liabilities | 4 | |
Operating lease liabilities | $ | $ 23,975 | $ 23,926 |
Operating lease, weighted average incremental borrowing rate, percent | 5.40% | |
Operating lease, weighted average remaining lease term | 36 years 4 months 24 days | 38 years |
Finance lease, incremental borrowing rate, percent | 5.30% | |
Finance lease, remaining lease term | 42 years 7 months 6 days | 43 years 4 months 24 days |
Corporate Lease | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease liabilities | $ | $ 625 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, incremental borrowing rate, percent | 2.50% | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, incremental borrowing rate, percent | 6.40% |
Leases (Schedule of Future Mini
Leases (Schedule of Future Minimum Rent to Lessor from Operating Leases) (Details) $ in Thousands | Sep. 30, 2021USD ($)leaseproperty |
Leases [Abstract] | |
Three months ending December 31, 2021 | $ 37,841 |
2022 | 155,544 |
2023 | 158,052 |
2024 | 158,052 |
2025 | 153,839 |
Thereafter | 1,059,376 |
Total | 1,722,704 |
Value of underlying operating lease asset, leases not yet commenced | $ 16,476 |
Number of executed leases, operating leases not yet commenced | lease | 2 |
Number of development properties, operating leases not yet commenced | property | 1 |
Leases (Schedule of Rent Paymen
Leases (Schedule of Rent Payments from Lessee) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Operating | ||
Three months ending December 31, 2021 | $ 541 | |
2022 | 1,367 | |
2023 | 1,326 | |
2024 | 1,380 | |
2025 | 1,385 | |
Thereafter | 66,425 | |
Total undiscounted rental payments | 72,424 | |
Less imputed interest | (48,449) | |
Total lease liabilities | 23,975 | $ 23,926 |
Finance | ||
Three months ending December 31, 2021 | 34 | |
2022 | 136 | |
2023 | 136 | |
2024 | 141 | |
2025 | 143 | |
Thereafter | 6,584 | |
Total undiscounted rental payments | 7,174 | |
Less imputed interest | (4,540) | |
Total lease liabilities | $ 2,634 | $ 2,843 |
Leases (Schedule of Lease Cost)
Leases (Schedule of Lease Cost) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($)lease | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)lease | Sep. 30, 2020USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Amortization of right-of-use asset | $ 14 | $ 1 | ||
Number of operating ground leases | lease | 15 | 15 | ||
Discontinued Operations, Disposed of by Sale | Data Centers | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of operating ground leases | lease | 2 | 2 | ||
Rental expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Ground lease costs | $ 422 | $ 422 | $ 1,266 | 1,266 |
Rental revenue | ||||
Lessee, Lease, Description [Line Items] | ||||
Ground lease reimbursements | 298 | 298 | 894 | 893 |
Income from discontinued operations | ||||
Lessee, Lease, Description [Line Items] | ||||
Ground lease costs | 25 | 220 | 414 | 660 |
Ground lease reimbursements | 24 | 103 | 230 | 309 |
General and administrative expenses | ||||
Lessee, Lease, Description [Line Items] | ||||
Corporate lease costs | 264 | 0 | 792 | 0 |
Corporate-related operating lease costs | 33 | 0 | 33 | 0 |
Depreciation and amortization | ||||
Lessee, Lease, Description [Line Items] | ||||
Amortization of right-of-use asset | 5 | 1 | 14 | 1 |
Interest and other expense, net | ||||
Lessee, Lease, Description [Line Items] | ||||
Interest on lease liability | $ 35 | $ 10 | $ 102 | $ 10 |
Notes Receivable, Net (Narrativ
Notes Receivable, Net (Narrative) (Details) | Nov. 05, 2021USD ($) | Jul. 14, 2021USD ($) | May 28, 2020USD ($) | Sep. 30, 2021USD ($)noteReceivable | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)noteReceivable | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Nov. 05, 2020USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Number of notes receivable outstanding | noteReceivable | 1 | 1 | ||||||||
Notes receivable, net | $ 2,200,000 | $ 2,200,000 | $ 31,262,000 | |||||||
Investment in note receivable, principal amount | 2,200,000 | 2,200,000 | 30,700,000 | |||||||
Proceeds from collection of notes receivable | 28,500,000 | $ 0 | ||||||||
Amortization of loan origination fee | $ 394,000 | 96,000 | ||||||||
Number of notes receivable during period | noteReceivable | 2 | |||||||||
Estimated credit losses for notes receivable | 0 | $ 0 | $ 0 | 0 | ||||||
Note Receivable Due June 2022 | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Notes receivable, net | 0 | 0 | 28,562,000 | |||||||
Investment in note receivable, principal amount | $ 28,000,000 | |||||||||
Proceeds from collection of notes receivable | $ 28,000,000 | |||||||||
Proceeds from interest received | $ 87,000 | |||||||||
Loan origination fee incurred | $ 560,000 | |||||||||
Amortization of loan origination fee | 256,000 | 70,000 | 394,000 | 96,000 | ||||||
Interest income on notes receivable | 87,000 | $ 501,000 | 1,096,000 | $ 686,000 | ||||||
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% | |||||||||
Note Receivable Due November 2021 | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Notes receivable, net | $ 2,200,000 | $ 2,200,000 | $ 2,700,000 | |||||||
Interest rate | 6.00% | 6.00% | ||||||||
Investment in note receivable, principal amount | $ 2,700,000 | |||||||||
Proceeds from collection of notes receivable | $ 500,000 | |||||||||
Amendment fee received | $ 50,000 | |||||||||
Note Receivable Due November 2021 | Subsequent Event | ||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||
Proceeds from collection of notes receivable | $ 2,200,000 |
Notes Receivable, Net (Schedule
Notes Receivable, Net (Schedule of Notes Receivable Balance) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, net | $ 2,200 | $ 31,262 |
Note Receivable Due November 2021 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, net | $ 2,200 | 2,700 |
Interest rate | 6.00% | |
Note Receivable Due June 2022 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable, net | $ 0 | $ 28,562 |
Other Assets, Net (Details)
Other Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Other Assets [Abstract] | ||
Deferred financing costs, related to the revolver portion of the credit facility, net of accumulated amortization of $7,936 and $6,902, respectively | $ 857 | $ 1,634 |
Leasing commissions, net of accumulated amortization of $105 and $58, respectively | 855 | 845 |
Restricted cash | 842 | 13,499 |
Tenant receivables | 1,527 | 1,965 |
Straight-line rent receivable | 52,715 | 42,732 |
Real estate deposits | 400 | 0 |
Prepaid and other assets | 3,258 | 3,994 |
Derivative assets | 1,002 | 0 |
Total other assets, net | 61,456 | 64,669 |
Deferred financing costs, related to the revolver portion of the credit facility, accumulated amortization | 7,936 | 6,902 |
Leasing commissions, accumulated amortization | 105 | $ 58 |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Prepaid and other assets | $ 64 |
Accounts Payable and Other Li_3
Accounts Payable and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $ 8,778 | $ 10,011 |
Accrued interest expense | 1,773 | 3,257 |
Accrued property taxes | 2,428 | 2,090 |
Accrued personnel costs | 2,560 | 1,202 |
Distribution and servicing fees | 692 | 3,128 |
Distributions payable to stockholders | 7,099 | 9,117 |
Performance DSUs distributions payable | 376 | 0 |
Tenant deposits | 801 | 801 |
Deferred rental income | 5,778 | 6,381 |
Deferred internalization transaction liability | 0 | 14,728 |
Contingent consideration | 978 | 0 |
Derivative liabilities | 9,309 | 17,231 |
Total accounts payable and other liabilities | 40,572 | $ 67,946 |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts payable and other liabilities | $ 547 |
Notes Payable and Credit Faci_3
Notes Payable and Credit Facility (Schedule of Debt) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jul. 22, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Notes payable, principal amount outstanding | $ 0 | $ 147,327 | |
Unamortized deferred financing costs related to notes payable | 0 | (682) | |
Total notes payable, net of deferred financing costs | 0 | 146,645 | |
Credit facility, principal amount outstanding | 520,000 | 938,000 | |
Unamortized deferred financing costs related to the term loan credit facility | (3,494) | (5,900) | |
Total credit facility, net of deferred financing costs | 516,506 | 932,100 | |
Total debt outstanding | 516,506 | 1,078,745 | |
Discontinued Operations, Disposed of by Sale | Data Centers | |||
Debt Instrument [Line Items] | |||
Notes payable, principal amount outstanding | $ 305,161 | ||
Total notes payable, net of deferred financing costs | 304,972 | ||
Fixed Rate | |||
Debt Instrument [Line Items] | |||
Notes payable, principal amount outstanding | 0 | 45,748 | |
Variable Rate, Fixed Through Interest Rate Swaps | |||
Debt Instrument [Line Items] | |||
Notes payable, principal amount outstanding | 0 | 101,579 | |
Credit facility, principal amount outstanding | 400,000 | 400,000 | |
Variable Rate, Fixed Through Interest Rate Swaps | Term Loan | |||
Debt Instrument [Line Items] | |||
Credit facility, principal amount outstanding | 400,000 | 400,000 | |
Variable Rate Debt | |||
Debt Instrument [Line Items] | |||
Credit facility, principal amount outstanding | 120,000 | 538,000 | |
Variable Rate Debt | Revolving Line of Credit | |||
Debt Instrument [Line Items] | |||
Credit facility, principal amount outstanding | 0 | 138,000 | |
Variable Rate Debt | Term Loan | |||
Debt Instrument [Line Items] | |||
Credit facility, principal amount outstanding | $ 120,000 | $ 400,000 |
Notes Payable and Credit Faci_4
Notes Payable and Credit Facility (Narrative) (Details) $ in Thousands | Sep. 29, 2021 | Sep. 28, 2021 | Jul. 22, 2021USD ($)healthcareNotesPayabledataCenterNotesPayable | Jul. 16, 2021USD ($) | Apr. 19, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Jul. 20, 2021 | Dec. 31, 2020USD ($) |
Line of Credit Facility [Line Items] | ||||||||||
Proceeds from credit facility | $ 15,000 | $ 140,000 | ||||||||
Payments on credit facility | $ 403,000 | $ 30,000 | 433,000 | 65,000 | ||||||
Distributions limitation | 95.00% | |||||||||
Notes payable, principal amount outstanding | $ 0 | 0 | $ 147,327 | |||||||
Loss on extinguishment of debt | 28,751 | $ 28,751 | $ 0 | |||||||
Defeasance and other loan costs | 26,082 | |||||||||
Amortization of deferred financing costs | 2,669 | |||||||||
Healthcare | Continuing Operations | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Number of notes payable | healthcareNotesPayable | 5 | |||||||||
Notes payable, principal amount outstanding | $ 145,645 | |||||||||
Interest and other expense, net | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Loss on extinguishment of debt | 5,013 | |||||||||
Income from discontinued operations | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Loss on extinguishment of debt | $ 23,738 | |||||||||
Term Loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Margin range | 1.75% | 2.25% | ||||||||
Discontinued Operations, Disposed of by Sale | Data Centers | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Number of notes payable | dataCenterNotesPayable | 7 | |||||||||
Notes payable, principal amount outstanding | $ 305,161 | |||||||||
Discontinued Operations, Disposed of by Sale | Data Centers | Healthcare | Continuing Operations | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Notes payable, principal amount outstanding | $ 450,806 | |||||||||
Greenwood Healthcare Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Proceeds from credit facility | $ 15,000 |
Notes Payable and Credit Faci_5
Notes Payable and Credit Facility (Schedule of Future Principal Payments Due on Debt) (Details) - Credit Facility $ in Thousands | Sep. 30, 2021USD ($) |
Line of Credit Facility [Line Items] | |
2024 | $ 520,000 |
Total | $ 520,000 |
Related-Party Transactions an_3
Related-Party Transactions and Arrangements (Narrative) (Details) - employee | Sep. 29, 2020 | Jul. 27, 2020 |
Related Party Transaction [Line Items] | ||
Number of employees | 0 | |
Special limited partnership interest, shareholder annual return | 8.00% | |
Maximum | ||
Related Party Transaction [Line Items] | ||
Disposition fee (% of contract sales price) | 6.00% | |
Carter Validus Advisors II, LLC and its affiliates | ||
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 its affiliates | Maximum | ||
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 | ||
Related Party Transaction [Line Items] | ||
Monthly asset management fee (% of aggregate asset value) | 0.0625% | |
Carter Validus Advisors II, LLC | Maximum | ||
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 | ||
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% | |
Carter Validus Real Estate Management Services II, LLC | Maximum | ||
Related Party Transaction [Line Items] | ||
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Related Party Transaction [Line Items] | ||||
Distribution and servicing fees | $ (6) | $ (65) | ||
Incurred | $ 0 | 9,195 | $ 0 | 29,141 |
SC Distributors, LLC | Distribution and servicing fees | ||||
Related Party Transaction [Line Items] | ||||
Distribution and servicing fees | 0 | (6) | 0 | (65) |
Carter Validus Advisors II, LLC and its affiliates | Acquisition fees and costs | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 0 | 0 | 0 | 97 |
Carter Validus Advisors II, LLC and its affiliates | Asset management fees | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 0 | 5,989 | 0 | 17,914 |
Carter Validus Advisors II, LLC and its affiliates | Asset management fees | Continuing Operations | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 4,218 | 12,604 | ||
Carter Validus Advisors II, LLC and its affiliates | Asset management fees | Discontinued Operations | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 1,771 | 5,310 | ||
Carter Validus Advisors II, LLC and its affiliates | Operating expense reimbursement | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 0 | 1,302 | 0 | 3,966 |
Carter Validus Advisors II, LLC and its affiliates | Operating expense reimbursement | Continuing Operations | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 1,116 | 3,374 | ||
Carter Validus Advisors II, LLC and its affiliates | Operating expense reimbursement | Discontinued Operations | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 186 | 592 | ||
Carter Validus Advisors II, LLC and its affiliates | Disposition fees | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 0 | 0 | 0 | 350 |
Carter Validus Advisors II, LLC and its affiliates | Loan origination fees | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 0 | 0 | 0 | 560 |
Carter Validus Real Estate Management Services II, LLC | Property management fees | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 0 | 1,702 | 0 | 5,290 |
Carter Validus Real Estate Management Services II, LLC | Property management fees | Continuing Operations | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 1,104 | 3,299 | ||
Carter Validus Real Estate Management Services II, LLC | Property management fees | Discontinued Operations | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 598 | 1,991 | ||
Carter Validus Real Estate Management Services II, LLC | Leasing commission fees | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 0 | 111 | 0 | 594 |
Carter Validus Real Estate Management Services II, LLC | Construction management fees | ||||
Related Party Transaction [Line Items] | ||||
Incurred | $ 0 | 97 | $ 0 | 435 |
Carter Validus Real Estate Management Services II, LLC | Construction management fees | Continuing Operations | ||||
Related Party Transaction [Line Items] | ||||
Incurred | 88 | 380 | ||
Carter Validus Real Estate Management Services II, LLC | Construction management fees | Discontinued Operations | ||||
Related Party Transaction [Line Items] | ||||
Incurred | $ 9 | $ 55 |
Fair Value (Narrative) (Details
Fair Value (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($)unitproperty | Mar. 31, 2021USD ($)property | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 29, 2021USD ($) | Dec. 31, 2020USD ($) | |
Fair Value [Line Items] | ||||||||
Credit facility, principal amount outstanding | $ 520,000,000 | $ 520,000,000 | $ 938,000,000 | |||||
Notes receivable, principal amount outstanding | 2,200,000 | 2,200,000 | 30,700,000 | |||||
Real estate assets | 1,800,193,000 | 1,800,193,000 | 1,849,552,000 | |||||
Impairment charge | 10,241,000 | $ 0 | 27,166,000 | $ 0 | ||||
Impairment loss on goodwill | 0 | $ 0 | 671,000 | $ 0 | ||||
Goodwill | 23,284,000 | 23,284,000 | 23,955,000 | |||||
Healthcare reporting unit 1 | ||||||||
Fair Value [Line Items] | ||||||||
Real estate assets | $ 16,909,000 | |||||||
Impairment charge | 10,241,000 | $ 10,423,000 | ||||||
Impairment loss on goodwill | 240,000 | |||||||
Goodwill | 0 | |||||||
Healthcare reporting unit 2 | ||||||||
Fair Value [Line Items] | ||||||||
Impairment charge | $ 2,894,000 | |||||||
Impairment loss on goodwill | 112,000 | |||||||
Healthcare reporting unit 3 | ||||||||
Fair Value [Line Items] | ||||||||
Impairment charge | 3,608,000 | |||||||
Impairment loss on goodwill | 319,000 | |||||||
Healthcare reporting units 2 and 3 | ||||||||
Fair Value [Line Items] | ||||||||
Impairment loss on goodwill | 431,000 | |||||||
Goodwill | $ 0 | |||||||
Number of reporting units | unit | 2 | |||||||
Impaired Real Estate Property 1 | Healthcare reporting unit 1 | ||||||||
Fair Value [Line Items] | ||||||||
Real estate assets | 6,668,000 | $ 17,145,000 | 6,668,000 | |||||
Impaired Real Estate Property 2 | Healthcare reporting unit 2 | ||||||||
Fair Value [Line Items] | ||||||||
Real estate assets | $ 5,957,000 | |||||||
Impaired Real Estate Property 3 | Healthcare reporting unit 3 | ||||||||
Fair Value [Line Items] | ||||||||
Real estate assets | $ 22,311,000 | |||||||
Healthcare | ||||||||
Fair Value [Line Items] | ||||||||
Number of impaired properties | property | 1 | 1 | ||||||
Variable Rate Debt | ||||||||
Fair Value [Line Items] | ||||||||
Credit facility, principal amount outstanding | 120,000,000 | 120,000,000 | 538,000,000 | |||||
Variable Rate, Fixed Through Interest Rate Swaps | ||||||||
Fair Value [Line Items] | ||||||||
Credit facility, principal amount outstanding | 400,000,000 | 400,000,000 | 400,000,000 | |||||
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | Variable Rate Debt | ||||||||
Fair Value [Line Items] | ||||||||
Credit facility, fair value disclosure | 118,270,000 | 118,270,000 | 536,329,000 | |||||
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | Variable Rate, Fixed Through Interest Rate Swaps | ||||||||
Fair Value [Line Items] | ||||||||
Credit facility, fair value disclosure | $ 394,233,000 | $ 394,233,000 | $ 398,563,000 |
Fair Value (Schedule of Fair Va
Fair Value (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Derivative assets | $ 1,002 | $ 0 |
Liabilities: | ||
Derivative liabilities | 9,309 | 17,231 |
Recurring basis | ||
Assets: | ||
Derivative assets | 1,002 | |
Total assets at fair value | 1,002 | |
Liabilities: | ||
Derivative liabilities | 9,309 | 20,444 |
Total liabilities at fair value | 9,309 | 20,444 |
Recurring basis | Data Centers | Discontinued Operations, Disposed of by Sale | ||
Liabilities: | ||
Derivative liabilities | 3,213 | |
Recurring basis | Continuing Operations | ||
Liabilities: | ||
Derivative liabilities | 17,231 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring basis | ||
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) | Recurring basis | ||
Assets: | ||
Derivative assets | 1,002 | |
Total assets at fair value | 1,002 | |
Liabilities: | ||
Derivative liabilities | 9,309 | 20,444 |
Total liabilities at fair value | 9,309 | 20,444 |
Significant Unobservable Inputs (Level 3) | Recurring basis | ||
Assets: | ||
Derivative assets | 0 | |
Total assets at fair value | 0 | |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Total liabilities at fair value | $ 0 | $ 0 |
Fair Value (Schedule of Fair _2
Fair Value (Schedule of Fair Value, Real Estate Assets Measured on Non-Recurring Basis) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Real estate assets | $ 1,800,193,000 | $ 1,800,193,000 | $ 1,849,552,000 | ||
Impairment loss on real estate | 10,241,000 | $ 0 | 27,166,000 | $ 0 | |
Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Real estate assets | 34,936,000 | 34,936,000 | |||
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Real estate assets | 0 | 0 | |||
Nonrecurring | Significant Other Observable Inputs (Level 2) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Real estate assets | 34,936,000 | 34,936,000 | |||
Nonrecurring | Significant Unobservable Inputs (Level 3) | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Real estate assets | $ 0 | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Jul. 22, 2021interestRateSwapInstrument | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Additional loss expected to be reclassified from AOCI into earnings during next twelve months | $ 7,810 | $ 7,810 | |
Derivatives in a net liability position | 9,507 | 9,507 | |
Interest and other expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amounts reclassified from AOCI to earnings | 499 | 499 | |
Income from discontinued operations | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amounts reclassified from AOCI to earnings | 542 | 542 | |
Discontinued Operations, Disposed of by Sale | Data Centers | Continuing Operations | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amounts reclassified from AOCI to earnings | $ 1,041 | $ 1,041 | |
Interest rate swaps | Discontinued Operations, Disposed of by Sale | Data Centers | Continuing Operations | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Number of derivative instruments | interestRateSwapInstrument | 8 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities (Schedule of the Notional Amount and Fair Value of Derivative Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Fair Value of Asset | $ 1,002 | |
Fair Value of Liability | (9,309) | $ (20,444) |
Interest rate swaps | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional Amount | 400,000 | 635,007 |
Fair Value of Liability | (20,444) | |
Interest rate swaps | Designated as Hedging Instrument | Data Centers | Discontinued Operations, Disposed of by Sale | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional Amount | 133,428 | |
Interest rate swaps | Designated as Hedging Instrument | Continuing Operations | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional Amount | 501,579 | |
Interest rate swaps | Designated as Hedging Instrument | Other Assets, Net | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Asset | 1,002 | |
Interest rate swaps | Designated as Hedging Instrument | Accounts Payable | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Liability | $ (9,309) | |
Interest rate swaps | Designated as Hedging Instrument | Accounts Payable | Continuing Operations | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Liability | (17,231) | |
Interest rate swaps | Designated as Hedging Instrument | Liabilities Held For Sale | Data Centers | Discontinued Operations, Disposed of by Sale | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value of Liability | $ (3,213) |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Income (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives | $ (253) | $ (157) | $ 2,518 | $ (24,011) |
Amount of (Loss) Reclassified From Accumulated Other Comprehensive Loss to Net Income | (2,494) | (2,741) | (7,290) | (5,121) |
Interest and other expense, net | 11,737 | 9,865 | 30,035 | 32,597 |
Income from discontinued operations | 377,191 | 5,845 | 401,444 | 19,600 |
Data Centers | Discontinued Operations, Disposed of by Sale | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income from discontinued operations | 377,191 | 5,845 | 401,444 | 19,600 |
Continuing Operations | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other expense, net | 11,737 | 9,865 | 30,035 | 32,597 |
Interest rate swaps | Data Centers | Discontinued Operations, Disposed of by Sale | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Income (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives | 0 | (2) | (37) | (3,891) |
Interest rate swaps | Continuing Operations | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Income (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives | (253) | (155) | 2,555 | (20,120) |
Interest rate swaps | Interest and other expense, net | Continuing Operations | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Reclassified From Accumulated Other Comprehensive Loss to Net Income | (1,952) | (2,192) | (5,643) | (4,094) |
Interest rate swaps | Income from discontinued operations | Data Centers | Discontinued Operations, Disposed of by Sale | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of (Loss) Reclassified From Accumulated Other Comprehensive Loss to Net Income | $ (542) | $ (549) | $ (1,647) | $ (1,027) |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 1,002 | |
Gross Amounts Offset in the Balance Sheet | 0 | |
Net Amounts of Assets Presented in the Balance Sheet | 1,002 | $ 0 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral | (433) | |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | 0 | |
Net Amount | $ 569 |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities (Schedule of Offsetting of Derivative Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Gross Amounts of Recognized Liabilities | $ 9,309 | $ 20,444 |
Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Net Amounts of Liabilities Presented in the Balance Sheet | 9,309 | 20,444 |
Gross Amounts Not Offset in the Balance Sheet, Financial Instruments Collateral | (433) | 0 |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral | 0 | 0 |
Net Amount | $ 8,876 | 20,444 |
Discontinued Operations, Disposed of by Sale | Data Centers | ||
Derivatives, Fair Value [Line Items] | ||
Net Amount | 3,213 | |
Continuing Operations | ||
Derivatives, Fair Value [Line Items] | ||
Net Amount | $ 17,231 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Amounts Recognized in AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance, beginning | $ 1,671,570 | $ 1,738,419 | |
Other comprehensive income (loss) | 2,584 | (18,890) | |
Balance, ending | 1,658,244 | 1,658,244 | |
Unrealized Income (Loss) on Derivative Instruments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance, beginning | $ (20,444) | (4,704) | |
Other comprehensive income (loss) before reclassification | 2,518 | (24,011) | |
Amount of loss reclassified from accumulated other comprehensive loss to net income | 7,290 | 5,121 | |
Other comprehensive income (loss) | 9,808 | (18,890) | |
Balance, ending | $ (23,594) | $ (10,636) | $ (23,594) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss (Reclassifications Out of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other expense, net | $ 11,737 | $ 9,865 | $ 30,035 | $ 32,597 |
Income from discontinued operations | (377,191) | (5,845) | (401,444) | (19,600) |
Net income (loss) attributable to common stockholders | $ (371,645) | $ (5,264) | (390,583) | (22,028) |
Interest rate swaps | Loss Amounts Reclassified from Accumulated Other Comprehensive Loss to Net Income | Reclassification out of Accumulated Other Comprehensive Loss | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other expense, net | 5,643 | 4,094 | ||
Income from discontinued operations | 1,647 | 1,027 | ||
Net income (loss) attributable to common stockholders | $ 7,290 | $ 5,121 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Sep. 30, 2021USD ($)legalProceeding | Dec. 31, 2020USD ($) |
Loss Contingencies [Line Items] | ||
Number of pending legal proceedings to which the company is a party | legalProceeding | 0 | |
Contingent consideration | $ 978 | $ 0 |
Contingent consideration | ||
Loss Contingencies [Line Items] | ||
Contingent consideration | 978 | |
Minimum | Contingent consideration | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | 373 | |
Maximum | Contingent consideration | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Estimate of Possible Loss | $ 2,151 |
Subsequent Events (Distribution
Subsequent Events (Distributions) (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 05, 2021 | Nov. 04, 2021 | Oct. 25, 2021 | Oct. 06, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | ||||||||
Cash | $ 450,143 | $ 57,321 | ||||||
Issuance of common stock under the distribution reinvestment plan | $ 7,613 | $ 21,750 | $ 23,055 | |||||
Distributions declared per common share (in dollars per share) | $ 1.86 | $ 0.12 | $ 2.11 | $ 0.36 | ||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash | $ 5,358 | $ 5,172 | ||||||
Issuance of common stock under the distribution reinvestment plan | 1,987 | 1,927 | ||||||
Distributions paid | 7,345 | 7,099 | ||||||
Class A | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash | 4,467 | 4,315 | ||||||
Issuance of common stock under the distribution reinvestment plan | 1,249 | 1,214 | ||||||
Distributions paid | 5,716 | 5,529 | ||||||
Distributions declared per common share (in dollars per share) | $ 0.00109589 | $ 0.00109589 | ||||||
Annualized distribution per share (in dollars per share) | 0.40 | 0.40 | ||||||
Class I | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash | 289 | 273 | ||||||
Issuance of common stock under the distribution reinvestment plan | 199 | 189 | ||||||
Distributions paid | 488 | 462 | ||||||
Distributions declared per common share (in dollars per share) | 0.00109589 | 0.00109589 | ||||||
Annualized distribution per share (in dollars per share) | 0.40 | 0.40 | ||||||
Class T | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash | 573 | 552 | ||||||
Issuance of common stock under the distribution reinvestment plan | 512 | 496 | ||||||
Distributions paid | 1,085 | 1,048 | ||||||
Distributions declared per common share (in dollars per share) | 0.00087123 | 0.00087123 | ||||||
Annualized distribution per share (in dollars per share) | 0.32 | 0.32 | ||||||
Class T2 | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Cash | 29 | 32 | ||||||
Issuance of common stock under the distribution reinvestment plan | 27 | 28 | ||||||
Distributions paid | $ 56 | $ 60 | ||||||
Distributions declared per common share (in dollars per share) | 0.00087123 | 0.00087123 | ||||||
Annualized distribution per share (in dollars per share) | $ 0.32 | $ 0.32 | ||||||
Class A, I, T and T2 shares | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of days, distribution calculation | 365 days | 365 days |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - USD ($) $ in Thousands | Oct. 21, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | |||
Proceeds from real estate dispositions | $ 1,295,367 | $ 6,125 | |
Subsequent Event | St. Louis Healthcare Facility | |||
Subsequent Event [Line Items] | |||
Aggregate sales price | $ 6,120 | ||
Proceeds from real estate dispositions | $ 5,861 |