Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 25, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Brookfield DTLA Fund Office Trust Investor Inc. | ||
Entity Central Index Key | 1,575,311 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 0 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Investments in Real Estate: | ||
Land | $ 227,555 | $ 229,555 |
Buildings and improvements | 2,167,746 | 2,155,040 |
Tenant improvements | 279,948 | 234,827 |
Investments in real estate, cost | 2,675,249 | 2,619,422 |
Less: accumulated depreciation | 256,130 | 189,108 |
Investments in real estate, net | 2,419,119 | 2,430,314 |
Cash and cash equivalents | 53,736 | 125,004 |
Restricted cash | 53,830 | 47,118 |
Rents, deferred rents and other receivables, net | 95,690 | 74,332 |
Intangible assets, net | 99,710 | 125,827 |
Deferred charges, net | 66,791 | 59,697 |
Prepaid and other assets | 9,134 | 11,516 |
Total assets | 2,798,010 | 2,873,808 |
Liabilities: | ||
Mortgage loans, net | 2,111,405 | 2,107,007 |
Accounts payable and other liabilities | 105,004 | 85,125 |
Due to affiliates, net | 9,335 | 2,749 |
Intangible liabilities, net | 30,208 | 37,725 |
Total liabilities | $ 2,255,952 | $ 2,232,606 |
Commitments and Contingencies | ||
Mezzanine Equity: | ||
Mezzanine equity | $ 726,595 | $ 739,600 |
Total mezzanine equity | 726,595 | 739,600 |
Stockholders’ Deficit: | ||
Common stock, $0.01 par value, 1,000 shares issued and outstanding as of December 31, 2015 and 2014 | 0 | 0 |
Additional paid-in capital | 191,710 | 191,710 |
Accumulated deficit | (177,879) | (137,339) |
Accumulated other comprehensive loss | (2,580) | (2,066) |
Noncontrolling interest – Series B common interest | (195,788) | (150,703) |
Total stockholders’ deficit | (184,537) | (98,398) |
Total liabilities and deficit | 2,798,010 | 2,873,808 |
Series A Preferred Stock | ||
Mezzanine Equity: | ||
Mezzanine equity | 354,304 | 357,649 |
Series A-1 preferred interest | ||
Mezzanine Equity: | ||
Mezzanine equity | 349,084 | 331,871 |
Senior participating preferred interest | ||
Mezzanine Equity: | ||
Mezzanine equity | $ 23,207 | $ 50,080 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stockholders’ Deficit: | ||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 1,000 | 1,000 |
Common stock, shares outstanding (in shares) | 1,000 | 1,000 |
Series A Preferred Stock | ||
Mezzanine Equity: | ||
Preferred stock feature | 7.625% Series A Cumulative Redeemable Preferred Stock | 7.625% Series A Cumulative Redeemable Preferred Stock |
Preferred stock, dividend rate, percentage | 7.625% | 7.625% |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 9,730,370 | 9,730,370 |
Preferred stock, shares outstanding (in shares) | 9,730,370 | 9,730,370 |
CONSOLIDATED AND COMBINED STATE
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue: | |||
Rental income | $ 160,662 | $ 152,372 | $ 78,031 |
Tenant reimbursements | 88,615 | 95,931 | 40,933 |
Parking | 34,439 | 33,774 | 16,531 |
Interest and other | 15,374 | 12,084 | 3,227 |
Total revenue | 299,090 | 294,161 | 138,722 |
Expenses: | |||
Rental property operating and maintenance | 96,757 | 100,264 | 47,454 |
Real estate taxes | 35,675 | 38,340 | 14,604 |
Parking | 8,080 | 7,411 | 3,977 |
Other expense | 5,357 | 3,325 | 9,096 |
Depreciation and amortization | 98,160 | 105,058 | 46,682 |
Interest | 95,415 | 92,755 | 32,183 |
Total expenses | 339,444 | 347,153 | 153,996 |
Net loss | (40,354) | (52,992) | (15,274) |
Net loss attributable to Brookfield DTLA | (21,992) | (29,614) | (3,066) |
Net loss available to common interest holders of Brookfield DTLA | (40,540) | (48,162) | (89,177) |
Series A-1 preferred interest | |||
Expenses: | |||
Current dividends | 17,213 | 17,213 | 0 |
Cumulative dividends | 0 | 0 | 3,586 |
Redemption measurement adjustment | 0 | 0 | 76,305 |
Senior participating preferred interest | |||
Expenses: | |||
Current dividends | 2,321 | 10,044 | 0 |
Cumulative dividends | 0 | 0 | 3,500 |
Redemption measurement adjustment | 6,625 | 2,256 | 0 |
Series B common interest | |||
Expenses: | |||
Series B common interest – allocation of net loss | (44,521) | (52,891) | (97,934) |
Series A Preferred Stock | |||
Expenses: | |||
Current dividends | 18,548 | 18,548 | 0 |
Cumulative dividends | 0 | 0 | 3,864 |
Redemption measurement adjustment | 0 | 0 | 82,247 |
TRZ Holdings IV LLC’s Interest | |||
Expenses: | |||
Net income attributable to TRZ Holdings IV LLC | $ 0 | $ 0 | $ 2,335 |
CONSOLIDATED AND COMBINED STAT5
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (40,354) | $ (52,992) | $ (15,274) |
Derivative transactions: | |||
Derivative holding (losses) gains | (1,078) | (5,344) | 1,007 |
Comprehensive loss | (41,432) | (58,336) | (14,267) |
Comprehensive (income) attributable to TRZ Holdings IV LLC | 0 | 0 | (2,335) |
Comprehensive loss attributable to noncontrolling interests | 18,926 | 26,176 | 14,016 |
Comprehensive loss available to common interest holders of Brookfield DTLA | $ (22,506) | $ (32,160) | $ (2,586) |
CONSOLIDATED AND COMBINED STAT6
CONSOLIDATED AND COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | TRZ Holdings IV LLC’s Interest | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest |
Balance at beginning of year (in shares) at Dec. 31, 2012 | 0 | ||||||
Balance at beginning of year at Dec. 31, 2012 | $ 508,703 | $ 0 | $ 0 | $ 0 | $ 508,703 | $ 0 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | (15,274) | (3,066) | 2,335 | (14,543) | |||
Other comprehensive (loss) income | 1,007 | 480 | 527 | ||||
Contributions from TRZ Holdings IV LLC, net | 5,402 | 5,402 | |||||
Non-cash distribution to TRZ Holdings IV LLC | (25,000) | (25,000) | |||||
Exchange of predecessor equity | (489,047) | (491,440) | 2,393 | ||||
Issuance of common stock, net of offering costs (in shares) | 1,000 | ||||||
Issuance of common stock, net of offering costs | 191,710 | $ 0 | 191,710 | ||||
Dividends on Series A Preferred Stock, Series A-1 preferred interest and senior participating preferred interest | (169,502) | (86,111) | (83,391) | ||||
Balance at end of year (in shares) at Dec. 31, 2013 | 1,000 | ||||||
Balance at end of year at Dec. 31, 2013 | 7,999 | $ 0 | 191,710 | (89,177) | 0 | 480 | (95,014) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | (52,992) | (29,614) | (23,378) | ||||
Other comprehensive (loss) income | (5,344) | (2,546) | (2,798) | ||||
Dividends on Series A Preferred Stock, Series A-1 preferred interest and senior participating preferred interest | (48,061) | (18,548) | (29,513) | ||||
Balance at end of year (in shares) at Dec. 31, 2014 | 1,000 | ||||||
Balance at end of year at Dec. 31, 2014 | (98,398) | $ 0 | 191,710 | (137,339) | 0 | (2,066) | (150,703) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | (40,354) | (21,992) | (18,362) | ||||
Other comprehensive (loss) income | (1,078) | (514) | (564) | ||||
Dividends on Series A Preferred Stock, Series A-1 preferred interest and senior participating preferred interest | (44,707) | (18,548) | (26,159) | ||||
Balance at end of year (in shares) at Dec. 31, 2015 | 1,000 | ||||||
Balance at end of year at Dec. 31, 2015 | $ (184,537) | $ 0 | $ 191,710 | $ (177,879) | $ 0 | $ (2,580) | $ (195,788) |
CONSOLIDATED AND COMBINED STAT7
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Cash flows from operating activities: | |||
Net loss | $ (40,354) | $ (52,992) | $ (15,274) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Gain on sale of land held for investment | (28) | 0 | 0 |
Depreciation and amortization | 98,160 | 105,058 | 46,682 |
Provision for doubtful accounts | 103 | 24 | 357 |
Amortization of below-market leases/ above-market leases | (2,559) | (3,059) | (5,321) |
Straight-line rent amortization | (21,598) | (15,849) | (8,541) |
Deemed contribution from Brookfield DTLA Holdings for costs related to the acquisition of MPG | 0 | 0 | 6,314 |
Amortization of tenant inducements | 2,647 | 1,209 | 987 |
Amortization of discounts and deferred financing costs | 5,064 | 6,049 | 951 |
Changes in assets and liabilities: | |||
Rents, deferred rents and other receivables | (2,479) | (6,409) | (5,422) |
Due to (from) affiliates, net | 6,586 | (13,712) | 0 |
Deferred charges | (17,056) | (12,832) | (7,323) |
Prepaid and other assets | 2,382 | 6,787 | (10,757) |
Accounts payable and other liabilities | (877) | 8,688 | (4,861) |
Net cash provided by (used in) operating activities | 29,991 | 22,962 | (2,208) |
Cash flows from investing activities: | |||
Acquisition of MPG | 0 | 0 | (189,202) |
Cash acquired in acquisition of MPG | 0 | 0 | 155,685 |
Proceeds from sale of land held for investment | 2,028 | 0 | 0 |
Expenditures for improvements to real estate | (60,089) | (43,729) | (24,297) |
(Increase) decrease in restricted cash | (6,712) | (24,321) | 17,946 |
Net cash used in investing activities | (64,773) | (68,050) | (39,868) |
Cash flows from financing activities: | |||
Proceeds from mortgage loans | 0 | 435,000 | 475,000 |
Principal payments on mortgage loans | (623) | (214,512) | (441,364) |
(Distributions to) contributions from senior participating preferred interest | (32,769) | (207,231) | 189,202 |
Dividends paid to senior participating preferred interest | (3,051) | (12,769) | 0 |
Contributions from TRZ Holdings IV LLC, net | 0 | 0 | 5,402 |
Due to affiliates | 0 | (25,000) | 12,400 |
Financing fees paid | (43) | (1,467) | (4,366) |
Offering costs | 0 | 0 | (3,834) |
Net cash (used in) provided by financing activities | (36,486) | (25,979) | 232,440 |
Net change in cash and cash equivalents | (71,268) | (71,067) | 190,364 |
Cash and cash equivalents at beginning of year | 125,004 | 196,071 | 5,707 |
Cash and cash equivalents at end of year | 53,736 | 125,004 | 196,071 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 90,093 | 86,990 | 26,337 |
Supplemental disclosure of non-cash activities: | |||
Issuance of Series A preferred stock in connection with the acquisition of MPG | 0 | 0 | 252,990 |
Issuance of note to TRZ Holdings IV LLC | 0 | 0 | 25,000 |
Accrual for real estate improvements | 16,290 | 18,588 | 7,074 |
Accrual for deferred leasing costs | 4,956 | 2,585 | 3,844 |
Dividends declared but not yet paid | 21,893 | 0 | 0 |
(Decrease) increase in fair value of interest rate swap, net | $ (1,078) | $ (5,344) | $ 1,007 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business General Brookfield DTLA Fund Office Trust Investor Inc. (“Brookfield DTLA” or the “Company”) is a Maryland corporation and was incorporated on April 19, 2013. Brookfield DTLA was formed for the purpose of consummating the transactions contemplated in the Agreement and Plan of Merger dated as of April 24, 2013, as amended (the “Merger Agreement”), and the issuance of shares of 7.625% Series A Cumulative Redeemable Preferred Stock (the “Series A preferred stock”) in connection with the acquisition of MPG Office Trust, Inc. and MPG Office, L.P. (together, “MPG”). Brookfield DTLA is a direct subsidiary of Brookfield DTLA Holdings LLC (“Brookfield DTLA Holdings”), a Delaware limited liability company, and an indirect subsidiary of Brookfield Office Properties Inc. (“BPO”). Prior to October 15, 2013 , 333 South Hope Co. LLC (“333 South Hope”) and EYP Realty LLC (“EYP Realty”) were controlled by BPO through its indirect ownership interest in TRZ Holdings IV LLC (“TRZ”). TRZ owned 100% of the member units of 333 South Hope and EYP Realty, and BPO indirectly owned approximately 84% of the member units of TRZ. On October 15, 2013 , through a series of formation transactions, TRZ’s interests in 333 South Hope and EYP Realty were contributed to subsidiaries of Brookfield DTLA in exchange for preferred and common interests in Brookfield DTLA Fund Properties II LLC (“New OP”) and a preferred interest in Brookfield DTLA Fund Properties III LLC (“DTLA OP”). 333 South Hope owned Bank of America Plaza (“BOA Plaza”) and EYP Realty owned Ernst & Young Plaza (“EY Plaza”). Both of these Class A commercial properties are located in the Los Angeles Central Business District (the “LACBD”). MPG Acquisition On October 15, 2013 , Brookfield DTLA completed the acquisition of MPG (the “merger”) pursuant to the terms of the Merger Agreement. As part of the transaction, MPG was contributed to New OP in exchange for a preferred interest in New OP. See Note 3 “Acquisition of MPG Office Trust, Inc.” In addition to BOA Plaza and EY Plaza, Brookfield DTLA now owns Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower and 777 Tower, each of which are Class A office properties located in the LACBD that were formerly owned by MPG. At the effective time of the merger, (i) each issued and outstanding share of MPG common stock was automatically converted into, and canceled in exchange for, the right to receive $3.15 in cash, without interest and less any required withholding tax and (ii) each issued and outstanding share of 7.625% Series A Cumulative Redeemable Preferred Stock of MPG (the “MPG Preferred Stock”) automatically, and without a vote by the holders of MPG Preferred Stock, was converted into and canceled in exchange for, the right to receive one share of the Company’s Series A preferred stock. In connection with the acquisition, DTLA Fund Holding Co., a subsidiary of Brookfield DTLA Holdings, made a tender offer to purchase all of the issued and outstanding shares of MPG Preferred Stock for cash consideration of $25.00 per share (the “offer price”). A total of 372,901 shares of MPG Preferred Stock were validly tendered into the offer and the holders thereof received the offer price for such shares. At the effective time of the merger, each share of MPG Preferred Stock that was issued and outstanding immediately prior to the merger, including each share of MPG Preferred Stock acquired by DTLA Fund Holding Co. in the offer, was exchanged for one share of Series A preferred stock with rights, terms and conditions substantially identical to those of the MPG Preferred Stock. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Predecessor Entities Prior to October 15, 2013 , Brookfield DTLA had not conducted any business as a separate company and had no material assets or liabilities. In accordance with accounting principles generally accepted in the United States of America (“GAAP”), the contribution of 333 South Hope and EYP Realty (together, the “Predecessor Entities”) constitute a transaction between entities under common control. A combination between entities that already share the same parent is not considered a business combination because there is no change in control at the parent level. Accordingly, the operations of the Predecessor Entities contributed to Brookfield DTLA by TRZ on October 15, 2013 are presented in the accompanying consolidated and combined financial statements as if they were owned by Brookfield DTLA for all historical periods presented and the assets and liabilities of BOA Plaza and EY Plaza were recorded at the carrying values reflected in the books and records of 333 South Hope and EYP Realty. As such, no gain or loss has been recorded in the consolidated and combined statement of operations for the year ended December 31, 2013 due to this transaction. As a result of the transaction, TRZ’s interest in the Predecessor Entities was exchanged for a preferred and common interest in New OP and a preferred interest in DTLA OP. As a result of certain redemption features in the preferred instruments, these instruments have been classified in the consolidated balance sheet as mezzanine equity. See Note 6 “Mezzanine Equity.” Principles of Consolidation and Combination and Basis of Presentation As used in these consolidated and combined financial statements and related notes, unless the context requires otherwise, the terms “Brookfield DTLA,” the “Company,” “us,” “we” and “our” refer to the combination of Brookfield DTLA Fund Office Trust Investor Inc. and the Predecessor Entities. The accompanying consolidated and combined financial statements are prepared in accordance with GAAP. The consolidated balance sheets as of December 31, 2015 and 2014 include the accounts of Brookfield DTLA and subsidiaries in which it has a controlling financial interest. The accompanying consolidated and combined statement of operations for the year ended December 31, 2013 includes the accounts of the Predecessor Entities on a combined basis from January 1, 2013 through October 15, 2013 (the date of the merger); and the consolidated accounts of Brookfield DTLA from October 15, 2013 (the date of the merger) through December 31, 2013 . All intercompany transactions have been eliminated in consolidation and combination as of and for the years ended December 31, 2015 , 2014 and 2013 . In determining whether Brookfield DTLA has a controlling financial interest in an entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity (“VIE”) and Brookfield DTLA is the primary beneficiary. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. A variable interest holder is considered to be the primary beneficiary of a VIE if it has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. Brookfield DTLA qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE. Consideration of various factors includes, but is not limited to, Brookfield DTLA’s ability to direct the activities that most significantly impact the VIE’s economic performance, its form of ownership interest, its representation on the VIE’s governing body, the size and seniority of its investment, its ability and the rights of other investors to participate in policy making decisions and its ability to replace the manager of and/or liquidate the entity. The Company earns a return through an indirect investment in New OP. Brookfield DTLA Holdings, the parent of Brookfield DTLA, owns all of the common interest in New OP. Brookfield DTLA has an indirect preferred stock interest in New OP and its wholly owned subsidiary is the managing member of New OP. The Company determined that New OP is a VIE and as a result of having the power to direct the significant activities of New OP and exposure to the economic performance of New OP, Brookfield DTLA meets the two conditions for being the primary beneficiary. Brookfield DTLA is required to continually evaluate its VIE relationships and consolidation conclusion. Reclassifications We had reported $220,000 of distributions to Brookfield DTLA Holdings in the consolidated statement of cash flows for the year ended December 31, 2014 . We have reclassified this total to show $207,231 as distributions to senior participating preferred interest and $12,769 as dividends paid to senior participating preferred interest so as to conform to the 2015 presentation. In December 2015, Brookfield DTLA adopted the guidance in Accounting Standards Update (“ASU”) 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. We have retroactively restated the December 31, 2014 consolidated balance sheet by reclassifying unamortized debt issuance costs of $4,128 from deferred charges, net and combining them with unamortized debt discounts of $6,865 (for a total of $10,993 ) and presented this total as a deduction from mortgage loans, net. In addition, we have combined the amortization of deferred financing costs ( $1,007 and $152 ) and the amortization of debt discounts ( $5,042 and $799 ) for the years ended December 31, 2014 and 2013 , respectively, and presented new totals ( $6,049 and $951 ) in the consolidated and combined statements of cash flow so as to reflect the presentation of such costs in the consolidated balance sheet. Use of Estimates The preparation of consolidated and combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated and combined financial statements and accompanying notes. For example, estimates and assumptions have been made with respect to fair values of assets and liabilities for purposes of applying the acquisition method of accounting, the useful lives of assets, recoverable amounts of receivables, impairment of long‑lived assets and fair value of debt. Actual results could ultimately differ from such estimates. Recent Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014‑08, Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which requires entities to disclose only disposals representing a strategic shift in operations as discontinued operations. The new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The guidance in ASU 2014-08 became effective for Brookfield DTLA beginning January 1, 2015. The implementation of this pronouncement did not have a material impact on Brookfield DTLA’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09 establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration that the entity expects to be entitled to receive in exchange for those goods or services and also requires certain additional disclosures. ASU 2014-09 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2014-09 on Brookfield DTLA’s consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This topic provides guidance on management’s responsibility to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and requires related footnote disclosures. The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2014-15 on Brookfield DTLA’s consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis to ASC Topic 810 , Consolidation . ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidated analysis of reporting entities that are involved with VIEs, and (iv) provide a scope exception for certain entities. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. We are currently evaluating the impact of the adoption of ASU 2015-02 on Brookfield DTLA’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03 that requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, as opposed to being presented as assets. ASU 2015-03 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2015. Early adoption is permitted. Brookfield DTLA elected to early adopt ASU 2015-03 effective as of December 31, 2015 and retroactively restated its consolidated balance sheet as of December 31, 2014 in accordance with this guidance. The effect of the adoption of ASU 2015-03 was to reclassify unamortized debt issuance costs of $4.1 million as of December 31, 2014 from deferred charges, net to a contra account as a deduction from mortgage loans, net. There was no effect on our consolidated and combined statements of operations. Significant Accounting Policies Business Combinations— Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired from third parties. In accordance with FASB ASC Topic 805, Business Combinations , the purchase price of the real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, building and tenant improvements, and identifiable intangible assets and liabilities, consisting of the value of above- and below-market leases, in-place leases, and tenant relationships, based in each case on their fair value. The principal valuation technique employed by Brookfield DTLA in determining the fair value of identified assets acquired and liabilities assumed is the income approach, which is then compared to the cost approach. Tangible values for investments in real estate are calculated based on replacement costs for like type quality assets. Above- and below-market lease values are determined by comparing in-place rents with current market rents. In‑place lease amounts are determined by calculating the potential lost revenue during the replacement of the current leases in place. Leasing commissions and legal/marketing fees are determined based upon market allowances pro-rated over the remaining lease terms. Mortgage loans assumed in an acquisition are analyzed using current market terms for similar debt. The value of the acquired above-market and below-market leases are amortized and recorded as either a decrease (in the case of above-market leases) or an increase (in the case of below-market leases) to rental income in the consolidated and combined statements of operations over the remaining term of the associated lease. The value of tenant relationships is amortized over the expected term of the relationship, which includes an estimated probability of lease renewal. The value of in-place leases is amortized as an expense over the remaining life of the leases. Amortization of tenant relationships and in‑place leases is included in depreciation and amortization in the consolidated and combined statements of operations. Investments in Real Estate— Land is carried at cost. Buildings are recorded at historical cost and are depreciated on a straight-line basis over the estimated useful life of the building, which is 60 years with an estimated salvage value of 5% . Building improvements are recorded at historical cost and are depreciated on a straight-line basis over their estimated useful lives, which range from 7 years to 25 years. Tenant improvements that are determined to be assets of Brookfield DTLA are recorded at cost; amortization is included in depreciation and amortization expense in the consolidated and combined statements of operations on a straight-line basis over the shorter of the useful life or the applicable lease term. Depreciation expense related to investments in real estate during the years ended December 31, 2015 , 2014 and 2013 was $67.0 million , $67.5 million and $29.1 million , respectively. Real estate is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the real estate may not be recoverable. In such an event, a comparison is made of the current and projected operating cash flows of the property into the foreseeable future on an undiscounted basis to the carrying amount of the real estate. If the undiscounted cash flows expected to be generated by an asset are less than its carrying amount, an impairment provision would be recorded to write down the carrying amount of such asset to its fair value. Brookfield DTLA assesses fair value based on estimated cash flow projections utilizing appropriate discount and capitalization rates and available market information. Projections of future cash flow take into account the specific business plan for the property and management’s best estimate of the most probable set of economic conditions expected to prevail in the market. Management believes no impairment of Brookfield DTLA’s real estate assets existed at December 31, 2015 and 2014 . Cash and Cash Equivalents— Cash and cash equivalents include all cash and short-term investments with an original maturity of three months or less. Restricted Cash— Restricted cash consists primarily of deposits for tenant improvements and leasing commissions, real estate taxes and insurance reserves, debt service reserves and other items as required by our mortgage loan agreements. Rents, Deferred Rents and Other Receivables, Net— Differences between rental income and the contractual amounts due are recorded as deferred rents receivable in the consolidated balance sheet. Brookfield DTLA evaluates its deferred rents receivable to consider if an allowance is necessary. Rents, deferred rents and other receivables, net also includes any amounts paid to a tenant for improvements owned or costs incurred by the tenant are treated as tenant inducements and are presented in the consolidated balance sheet net of accumulated amortization totaling $6.5 million and $3.9 million as of December 31, 2015 and 2014 , respectively. Amortization of tenant inducements is recorded on a straight-line basis over the term of the related lease as a reduction of rental income in the consolidated and combined statements of operations. Brookfield DTLA periodically evaluates the collectability of amounts due from tenants and maintains an allowance for doubtful accounts in the consolidated balance sheet for estimated losses resulting from the inability of tenants to make required payments under the lease agreements. Management exercises judgment in establishing these allowances and considers payment history and current credit status in developing these estimates. The allowance for doubtful accounts for Brookfield DTLA totaled $0.5 million and $0.4 million as of December 31, 2015 and 2014 , respectively. For the years ended December 31, 2015 , 2014 and 2013 , Brookfield DTLA recorded provisions for doubtful accounts of $103 thousand , $24 thousand and $357 thousand , respectively. Due to/from Affiliates, Net— Amounts due to/from affiliates, net consist of related party receivables and payables from affiliates of BPO primarily for fees for property management and other services. These amounts are due on demand and are non‑interest bearing. Deferred Charges, Net— Leasing costs are deferred and are presented as deferred charges in the consolidated balance sheet net of accumulated amortization totaling $38.2 million and $28.3 million as of December 31, 2015 and 2014 , respectively. Deferred leasing costs are amortized on a straight-line basis over the terms of the related leases as part of depreciation and amortization in the consolidated and combined statements of operations. Prepaid and Other Assets, Net— Prepaid and other assets include prepaid insurance, prepaid real estate taxes and other operating costs. Mortgage Loans, Net— Mortgage loans are presented in the consolidated balance sheet net of unamortized discounts and debt issuance costs totaling $6.0 million and $11.0 million as of December 31, 2015 and 2014 , respectively. Discounts and debt issuance costs totaling $5.1 million , $6.0 million and $1.0 million were amortized during the years ended December 31, 2015 , 2014 and 2013 , respectively, over the terms of the related mortgage loans on a basis that approximates the effective interest method and are included as part of interest expense in the consolidated and combined statements of operations. Revenue Recognition— Rental income from leases providing for periodic increases in base rent is recognized on a straight-line basis over the noncancelable term of the respective leases. Recoveries of operating expenses and real estate taxes are recorded as tenant reimbursements in the consolidated and combined statements of operations in the period during which the expenses are incurred. Income Taxes— Brookfield DTLA has elected to be taxed as a real estate investment trust (“REIT”) pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its tax period ended December 31, 2013. Brookfield DTLA conducts and intends to conduct its operations so as to continue to qualify as a REIT. Accordingly, Brookfield DTLA is not subject to U.S. federal income tax, provided that it continues to qualify as a REIT and distributions to its stockholders, if any, generally equal or exceed its taxable income. Brookfield DTLA has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRS”). Certain activities that we undertake must be conducted by a TRS, such as non-customary services for our tenants, and holding assets that we cannot hold directly. A TRS is subject to both federal and state income taxes. Qualification and taxation as a REIT depends upon Brookfield DTLA’s ability to meet the various qualification tests imposed under the Code related to annual operating results, asset diversification, distribution levels and diversity of stock ownership. Accordingly, no assurance can be given that Brookfield DTLA will be organized or be able to operate in a manner so as to continue to qualify as a REIT. If Brookfield DTLA fails to qualify as a REIT in any taxable year, it will be subject to federal and state income tax on its taxable income at regular corporate tax rates, and it may be ineligible to qualify as a REIT for four subsequent tax years. Brookfield DTLA may also be subject to certain state or local income taxes, or franchise taxes on its REIT activities. Brookfield DTLA has made no provision for income taxes in its consolidated and combined financial statements for the years ended December 31, 2015 , 2014 and 2013 . Brookfield DTLA’s taxable income or loss is different than its financial statement income or loss. Brookfield DTLA recognizes tax benefits from uncertain tax positions when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition threshold. Brookfield DTLA had no unrecognized tax benefits of December 31, 2015 and 2014 , and Brookfield DTLA does not expect its unrecognized tax benefits balance to change during the next 12 months. As of December 31, 2015 , Brookfield DTLA’s 2013 tax period and 2014 tax year remain open due to the statute of limitations and may be subject to examination by federal, state and local authorities. The 2012 tax year as well as the short tax period ended October 15, 2013 for Brookfield DTLA and its subsidiaries remain open due to the statute of limitations and may be subject to examination by federal, state and local tax authorities. Derivative Financial Instruments— Brookfield DTLA uses interest rate swap and cap contracts to manage risk from fluctuations in interest rates as well as to hedge anticipated future financing transactions. Interest rate swaps involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. Interest rate caps involve the receipt of variable-rate amounts beyond a specified strike price over the life of the agreements without exchange of the underlying principal amount. The Company believes these agreements are with counterparties who are creditworthy financial institutions. Brookfield DTLA adheres to the provisions of ASC Subtopic 815-10-15, Derivatives and Hedging (“ASC 815-10-15”). ASC 815-10-15 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires the recognition of all derivative instruments as assets or liabilities in the Company’s consolidated balance sheet at fair value. Changes in the fair value of derivative instruments that are not designated as hedges, or that do not meet the hedge accounting criteria in ASC 815-10-15, are required to be reported through the statement of operations. Brookfield DTLA has elected to designate its interest rate swap as a cash flow hedge. Segment Reporting Brookfield DTLA operates in a single reportable segment referred to as its office segment, which includes the operation and management of commercial office properties. Each of Brookfield DTLA’s operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. Management does not distinguish or group Brookfield DTLA’s consolidated operations based on geography, size or type. Brookfield DTLA’s operating properties have similar economic characteristics and provide similar products and services to tenants. As a result, Brookfield DTLA’s operating properties are aggregated into a single reportable segment. Accounting for Conditional Asset Retirement Obligations Brookfield DTLA has evaluated whether it has any conditional asset retirement obligations, which are a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional upon future events that may or may not be within an entity’s control. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. Accordingly, Brookfield DTLA recognized a liability for a conditional asset retirement obligation. |
Acquisition of MPG Office Trust
Acquisition of MPG Office Trust, Inc. | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisition of MPG Office Trust, Inc. | Acquisition of MPG Office Trust, Inc. On October 15, 2013 , Brookfield DTLA completed the acquisition of MPG. At the effective time of the merger, (i) each issued and outstanding share of MPG common stock was automatically converted into, and canceled in exchange for, the right to receive $3.15 in cash, without interest and less any required withholding tax and (ii) each issued and outstanding share of 7.625% Series A Cumulative Redeemable Preferred Stock of MPG (the “MPG Preferred Stock”) automatically, and without a vote by the holders of MPG Preferred Stock, was converted into and canceled in exchange for, the right to receive one share of the Company’s Series A preferred stock. The components of the purchase price paid by Brookfield DTLA in connection with the MPG acquisition are as follows: MPG common stock and noncontrolling common units 57,540,216 MPG in-the-money equity awards 2,524,079 60,064,295 Merger consideration per common share $ 3.15 Cash consideration – common stock $ 189,202,529 Fair value of Series A preferred stock issued by Brookfield DTLA 252,989,620 Total purchase price $ 442,192,149 The cash consideration paid was settled using cash contributed to Brookfield DTLA by Brookfield DTLA Holdings. The fair value of the 9,730,370 shares of Series A preferred stock issued by the Company in the merger was based on an estimate of fair value of $26.00 per share. The valuation was based on available trading information for the MPG Preferred Stock and the Company’s Series A preferred stock on the day prior to and subsequent to the transaction, respectively. In connection with the acquisition, DTLA Fund Holding Co., a subsidiary of Brookfield DTLA Holdings, made a tender offer to purchase all of the issued and outstanding shares of MPG Preferred Stock for cash consideration of $25.00 per share (the “offer price”). A total of 372,901 shares of MPG Preferred Stock were validly tendered into the offer and the holders thereof received the offer price for such shares. At the effective time of the merger, each share of MPG Preferred Stock that was issued and outstanding immediately prior to the merger, including each share of MPG Preferred Stock acquired by DTLA Fund Holding Co. in the offer, was exchanged for one share of Series A preferred stock of the Company with rights, terms and conditions substantially identical to those of the MPG Preferred Stock. The acquisition of MPG is being accounted for in accordance with ASC Topic 805, Business Combinations. Brookfield DTLA recognized the assets and liabilities of MPG at fair value in its consolidated balance sheet as of October 15, 2013 . The following is the final fair value assigned to the identified assets acquired and liabilities assumed (in millions): Purchase price $ 442 Identified Assets Acquired: Investments in real estate $ 1,685 Cash and cash equivalents 156 Restricted cash 41 Rents, deferred rents and other receivables 3 Intangible assets 142 Deferred charges 32 Prepaid and other assets 2 Liabilities Assumed: Mortgage loans 1,532 Accounts payable and other liabilities 47 Intangible liabilities 40 Total identified assets acquired, net 442 Residual amount $ — Brookfield DTLA incurred acquisition and transaction-related costs of $6.8 million , which are included in other expense in the consolidated and combined statement of operations for the year ended December 31, 2013 . Of that amount, $6.3 million was paid by Brookfield DTLA Holdings and was treated as a contribution in the consolidated and combined statement of stockholders’ equity for the year ended December 31, 2013 . Pro Forma Financial Information The results of operations of MPG are included in the consolidated statement of operations from October 15, 2013 (the date of acquisition). During the year ended December 31, 2013 , Brookfield DTLA recorded $38.8 million of total revenue and $16.4 million of net loss generated by the properties acquired from MPG. Condensed pro forma financial information for the year ended December 31, 2013 , assuming the MPG acquisition had occurred as of January 1, 2012, is presented below for comparative purposes (in millions): For the Year Ended December 31, 2013 (Unaudited) Total revenue $ 272.8 Net loss (103.4 ) The condensed pro forma financial information is not necessarily indicative of what the actual results of operations of Brookfield DTLA would have been assuming the MPG acquisition had been consummated as of January 1, 2012, nor does it purport to represent the results of operations for future periods. Pro forma adjustments include the amortization of acquired intangible assets and liabilities, and depreciation and amortization. |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets and Liabilities [Abstract] | |
Intangible Assets and Liabilities | Intangible Assets and Liabilities Brookfield DTLA’s intangible assets and liabilities are summarized as follows (in thousands): December 31, 2015 December 31, 2014 Intangible Assets In-place leases $ 110,519 $ 110,519 Tenant relationships 46,248 46,248 Above-market leases 39,936 39,936 196,703 196,703 Less: accumulated amortization 96,993 70,876 Intangible assets, net $ 99,710 $ 125,827 Intangible Liabilities Below-market leases $ 76,344 $ 76,344 Less: accumulated amortization 46,136 38,619 Intangible liabilities, net $ 30,208 $ 37,725 The impact of the amortization of acquired below-market leases, net of acquired above-market leases, on rental income and of acquired in-place leases and tenant relationships on depreciation and amortization expense is as follows (in thousands): For the Year Ended December 31, 2015 2014 2013 Rental income $ 2,559 $ 3,059 $ 5,321 Depreciation and amortization expense 21,159 26,872 10,111 As of December 31, 2015 , the estimate of the amortization/accretion of intangible assets and liabilities during the next five years and thereafter is as follows (in thousands): In-Place Leases Other Intangible Assets Intangible Liabilities 2016 $ 13,437 $ 7,633 $ 5,521 2017 10,335 6,293 4,870 2018 7,608 5,196 4,064 2019 6,511 4,361 3,639 2020 5,724 3,440 3,434 Thereafter 15,202 13,970 8,680 $ 58,817 $ 40,893 $ 30,208 |
Mortgage Loans
Mortgage Loans | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Mortgage Loans | Mortgage Loans Brookfield DTLA’s debt is as follows (in thousands, except percentage amounts): Contractual Maturity Date Principal Amount as of Interest Rate December 31, 2015 December 31, 2014 Floating-Rate Debt Variable-Rate Loans: Wells Fargo Center–South Tower (1) 12/1/2016 2.05 % $ 290,000 $ 290,000 777 Tower (2) 11/1/2018 1.95 % 200,000 200,000 Figueroa at 7th (3) 9/10/2017 2.54 % 35,000 35,000 Total variable-rate loans 525,000 525,000 Variable-Rate Swapped to Fixed-Rate Loan: EY Plaza (4) 11/27/2020 3.93 % 184,377 185,000 Total floating-rate debt 709,377 710,000 Fixed-Rate Debt: Wells Fargo Center–North Tower 4/6/2017 5.70 % 550,000 550,000 Gas Company Tower 8/11/2016 5.10 % 458,000 458,000 BOA Plaza 9/1/2024 4.05 % 400,000 400,000 Total fixed-rate debt 1,408,000 1,408,000 Total debt 2,117,377 2,118,000 Less: unamortized discounts and debt issuance costs 5,972 10,993 Total debt, net $ 2,111,405 $ 2,107,007 __________ (1) This loan bears interest at LIBOR plus 1.80% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 4.75% . Brookfield DTLA has two options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). As of December 31, 2015 , the Company does not meet the criteria specified in the loan agreement to extend this loan on its contractual maturity date. (2) This loan bears interest at LIBOR plus 1.70% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 5.75% . Brookfield DTLA has two options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). (3) This loan bears interest at LIBOR plus 2.25% . Brookfield DTLA has two options to extend the maturity date of this loan, each for a period of 12 months, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). (4) This loan bears interest at LIBOR plus 1.75% . As required by the loan agreement, we have entered into an interest rate swap agreement to hedge this loan, which effectively fixes the LIBOR portion of the interest rate at 2.178% . The effective interest rate of 3.93% includes interest on the swap. The weighted average interest rate of our debt was 4.20% as of December 31, 2015 and 4.17% as of December 31, 2014 . Debt Maturities As of December 31, 2015 , our debt to be repaid during the next five years and thereafter is as follows (in thousands): 2016 $ 751,519 2017 589,026 2018 204,232 2019 4,449 2020 168,151 Thereafter 400,000 $ 2,117,377 As of December 31, 2015 , $509.4 million of our debt may be prepaid without penalty, $458.0 million may be defeased (as defined in the underlying loan agreements), $550.0 million may be prepaid with prepayment penalties or defeased (as defined in the underlying loan agreement) at our option, $200.0 million may be prepaid with prepayment penalties, and $400.0 million locked out from defeasance until September 30, 2016 . Gas Company Tower— As Brookfield DTLA’s debt matures, principal payment obligations present significant future cash requirements. Brookfield DTLA currently intends to refinance the $458.0 million mortgage loan secured by Gas Company Tower on or about its August 11, 2016 maturity with new debt with a target leverage ratio of approximately 60% to 65% . We do not have a commitment from the lenders to extend the maturity date of or to refinance this loan. This loan will most likely require a paydown upon extension or refinancing (depending on market conditions), funding of additional reserve amounts, or both. As the leverage ratio for this loan is significantly above such targeted leverage ratio, Brookfield DTLA anticipates the need for additional cash of approximately $142 million to complete the refinancing. We may use cash on hand to make any such payments or cash received as a capital contribution from Brookfield DTLA Holdings. If we are unable or unwilling to use cash on hand or do not use cash contributed by Brookfield DTLA Holdings to make such payments, we may face challenges in repaying, extending or refinancing this loan on favorable terms or at all, and we may be forced to give back the asset to the lenders. Wells Fargo Center–South Tower— Brookfield DTLA currently intends to refinance the $290.0 million mortgage loan secured by Wells Fargo Center–South Tower on or about its December 1, 2016 maturity date. We do not have a commitment from the lenders to extend the maturity date of or to refinance this loan. As of December 31, 2015 , the Company does not meet the criteria specified in the loan agreement to extend this loan on its contractual maturity date. This loan will most likely require a paydown upon extension or refinancing (depending on market conditions), funding of additional reserve amounts, or both. As of December 31, 2015 , Brookfield DTLA anticipates the need for additional cash of approximately $15 million to complete the refinancing. We may use cash on hand to make any such payments or cash received as a capital contribution from Brookfield DTLA Holdings. If we are unable or unwilling to use cash on hand or do not use cash contributed by Brookfield DTLA Holdings to make such payments, we may face challenges in repaying, extending or refinancing this loan on favorable terms or at all, and we may be forced to give back the asset to the lenders. Secured Debt Financing during 2014 On September 10, 2014 , Brookfield DTLA completed a $35.0 million mortgage loan secured by the Figueroa at 7th retail property and received net proceeds totaling $34.6 million , which were used for general corporate purposes, including the repayment of Brookfield DTLA’s $25.0 million intercompany loan with BOP Management Inc. (“BOP”), an affiliate of BPO. See Note 12 “Related Party Transactions—Intercompany Loan.” The loan bears interest at a rate equal to LIBOR plus 2.25% , matures on September 10, 2017 , and requires the payment of interest-only until maturity. The mortgage loan can be repaid at any time prior to maturity, in whole or in part, without penalty. Brookfield DTLA has two options to extend the maturity date of this loan, each for a period of 12 months, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). If the maturity date of the loan is extended, the loan will require the monthly payment of a principal reduction amount (as defined in the loan agreement) and interest until maturity. Mortgage Loan Refinancings during 2014 On August 7, 2014 , Brookfield DTLA Holdings refinanced the mortgage loans secured by the BOA Plaza office property and received net proceeds totaling $399.4 million , of which $211.8 million was used to repay the mortgage loans that previously encumbered the property and $7.7 million was used to fund the loan reserves discussed below, with the remaining $179.9 million used for general corporate purposes, including a $150.0 million cash distribution from Brookfield DTLA to Brookfield DTLA Holdings to the holders of the senior preferred participating interest. See Note 6 “Mezzanine Equity— Senior Participating Preferred Interest.” The new $400.0 million mortgage loan bears interest at a fixed rate equal to 4.05% , matures on September 1, 2024 , and requires the payment of interest-only until maturity. The mortgage loan can be defeased beginning on September 30, 2016 until March 1, 2024 , after which the loan can be repaid in full without penalty. In connection with the refinancing, Brookfield DTLA Holdings was required to fund a $4.2 million tax reserve, a $3.0 million tenant improvement and leasing commission reserve, and a $0.5 million rent concession reserve at closing. Funding of Wells Fargo Center–North Tower Collateral Reserve In connection with the MPG acquisition, Brookfield DTLA Holdings assumed the mortgage loan secured by the Wells Fargo Center–North Tower office property. In connection with the loan assumption, Brookfield DTLA Holdings agreed to deposit a total of $10.0 million into a collateral reserve account held by the lender, of which $5.0 million was deposited when the loan was assumed during 2013 and $1.25 million was funded by Brookfield DTLA in April 2014, October 2014, April 2015 and October 2015, respectively. The collateral reserve is included as part of restricted cash in the consolidated balance sheet. MPG Office, L.P. Tax Indemnification Agreements In connection with tax indemnification agreements entered into with MPG Office, L.P. prior to the acquisition of MPG in 2013 by Brookfield DTLA, Robert F. Maguire III, certain entities owned or controlled by Mr. Maguire, and other contributors to MPG at the time of its initial public offering guaranteed a portion of the Wells Fargo Center–North Tower and Gas Company Tower mortgage loans. As of December 31, 2015 and 2014 , $591.8 million of these loans is subject to such guarantees. Non-Recourse Carve Out Guarantees All of Brookfield DTLA’s $2.1 billion of mortgage debt is subject to “non-recourse carve out” guarantees that expire upon elimination of the underlying loan obligations. Under these guarantees, these otherwise non‑recourse loans can become partially or fully recourse against Brookfield DTLA Holdings if certain triggering events occur as defined in the loan agreements. Although these events differ from loan to loan, some of the common events include: • The special purpose property-owning subsidiary’s or Brookfield DTLA Holdings’ filing a voluntary petition for bankruptcy; • The special purpose property-owning subsidiary’s failure to maintain its status as a special purpose entity; • Subject to certain conditions, the special purpose property-owning subsidiary’s failure to obtain the lender’s written consent prior to any subordinate financing or other voluntary lien encumbering the associated property; and • Subject to certain conditions, the special purpose property-owning subsidiary’s failure to obtain the lender’s written consent prior to a transfer or conveyance of the associated property, including, in some cases, indirect transfers in connection with a change in control of Brookfield DTLA Holdings or Brookfield DTLA. In addition, other items that are customarily recourse to a non-recourse carve out guarantor include, but are not limited to, the payment of real property taxes, the breach of representations related to environmental issues or hazardous substances, physical waste of the property, liens which are senior to the mortgage loan and outstanding security deposits. The maximum amount Brookfield DTLA Holdings would be required to pay under a “non‑recourse carve out” guarantee is the principal amount of the loan (or a total of $2.1 billion as of December 31, 2015 for all loans). This maximum amount does not include liabilities related to environmental issues or hazardous substances. Losses resulting from the breach of our loan agreement representations related to environmental issues or hazardous substances are generally recourse to Brookfield DTLA Holdings pursuant to the “non-recourse carve out” guarantees and any such losses would be in addition to the total principal amounts of the loans. The potential losses are not quantifiable and can be material in certain circumstances, depending on the severity of the environmental or hazardous substance issues. Since each of our non-recourse loans is secured by the office building owned by the special purpose property-owning subsidiary, the amount due to the lender from Brookfield DTLA Holdings in the event a “non-recourse carve out” guarantee is triggered could subsequently be partially or fully mitigated by the net proceeds received from any disposition of the office building; however, such proceeds may not be sufficient to cover the maximum potential amount due, depending on the particular asset. Debt Reporting Pursuant to the terms of certain of our mortgage loan agreements, Brookfield DTLA is required to report a debt service coverage ratio (“DSCR”) calculated using the formulas specified in the underlying loan agreements. We have submitted the required reports to the lenders for the measurement periods ended December 31, 2015 and were in compliance with the amounts required by the loan agreements, with the exception of Gas Company Tower. Under the Gas Company Tower mortgage loan, we reported a DSCR of 0.71 to 1.00 , calculated using actual debt service under the loan, and a DSCR of 0.57 to 1.00 , calculated using actual debt service plus a hypothetical principal payment using a 30 -year amortization schedule. Because the reported DSCR using the actual debt service plus a hypothetical principal payment was less than 1.00 to 1.00, the lender could seek to remove Brookfield Properties Management (CA) Inc. as property manager of Gas Company Tower, which is the only recourse available to the lender as a result of such breach. Pursuant to the terms of the Gas Company Tower, Wells Fargo Center–South Tower, Wells Fargo Center–North Tower, EY Plaza, and Figueroa at 7th mortgage loan agreements, we are required to provide annual audited financial statements of Brookfield DTLA Holdings to the lenders or agents. The receipt of any opinion other than an “unqualified” audit opinion on our annual audited financial statements is an event of default under the loan agreements for the properties listed above. If an event of default occurs, the lenders have the right to pursue the remedies contained in the loan documents, including acceleration of all or a portion of the debt and foreclosure. |
Mezzanine Equity
Mezzanine Equity | 12 Months Ended |
Dec. 31, 2015 | |
Temporary Equity Disclosure [Abstract] | |
Mezzanine Equity | Mezzanine Equity Mezzanine equity in the consolidated balance sheets as of December 31, 2015 and 2014 is comprised of the Series A preferred stock, a Series A-1 preferred interest and a senior participating preferred interest (the “Preferred Interests”). The Series A-1 preferred interest and senior participating preferred interest are held by a noncontrolling interest holder. The Preferred Interests are classified in mezzanine equity because they are callable and the holder of the Series A-1 preferred interest and senior participating preferred interest (which also owns some of the Series A preferred stock) indirectly controls the ability to elect to redeem such instruments, through its controlling interest in the Company and its subsidiaries. There is no commitment or obligation on the part of Brookfield DTLA or Brookfield DTLA Holdings to redeem the Preferred Interests. The Preferred Interests included within mezzanine equity were recorded at fair value on the date of issuance and have been adjusted to the greater of their carrying amount or redemption value as of December 31, 2015 and 2014 . Adjustments to increase the carrying amount to redemption value are recorded in the consolidated statement of operations as a redemption measurement adjustment. During the years ended December 31, 2015 and 2014 , the Company paid distributions and dividends totaling $35.8 million and $220.0 million , respectively, to Brookfield DTLA Holdings related to the senior participating preferred interest. On January 4, 2016 , Brookfield DTLA paid a cash dividend of $2.25 per share to holders of record of its Series A preferred stock at the close of business on December 15, 2015 . This dividend payment reduced the accrued and unpaid dividends owed on the Series A preferred stock by $21.9 million . See Note 17 “Subsequent Event.” Any future dividends declared would be at the discretion of Brookfield DTLA’s board of directors and would depend on its financial condition, results of operations, contractual obligations and the terms of its financing agreements at the time a dividend is considered, and other relevant factors. Series A Preferred Stock Brookfield DTLA is authorized to issue up to 10,000,000 shares of Series A preferred stock, $0.01 par value per share, with a liquidation preference of $25.00 per share. As of December 31, 2015 and 2014 , 9,730,370 shares of Series A preferred stock were outstanding, of which 9,357,469 shares were issued to third parties and 372,901 shares were issued to DTLA Fund Holding Co., a subsidiary of Brookfield DTLA Holdings. The fair value of the 9,730,370 shares of Series A preferred stock issued by the Company on October 15, 2013 in connection with the merger with MPG was based on an estimate of fair value of $26.00 per share. The valuation was based on available trading information for the MPG Preferred Stock and the Company’s Series A preferred stock on the day prior to and subsequent to the transaction, respectively. On December 4, 2015 , the board of directors declared a cash dividend of $2.25 per share to holders of record of its Series A preferred stock at the close of business on December 15, 2015 in connection with the settlement on a class-wide basis of the litigation brought in Maryland State Court and styled as In re MPG Office Trust Inc. Preferred Shareholder Litigation , Case No. 24-C-13-004097. This dividend was paid on January 4, 2016 . See Note 17 “Subsequent Event.” No dividends were declared on the Series A preferred stock during the years ended December 31, 2014 and 2013 . Dividends on the Series A preferred stock are cumulative, and therefore, will continue to accrue at an annual rate of $1.90625 per share. As of December 31, 2015 , the cumulative amount of unpaid dividends totaled $111.0 million , after a reduction of $21.9 million for the dividend declared, and has been reflected in the carrying amount of the Series A preferred stock. The Series A preferred stock does not have a stated maturity and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the Series A preferred stock will rank senior to our common stock with respect to the payment of distributions. We may, at our option, redeem the Series A preferred stock, in whole or in part, for cash at a redemption price of $25.00 per share, plus all accumulated and unpaid dividends on such Series A preferred stock up to and including the redemption date. The Series A preferred stock is not convertible into or exchangeable for any other property or securities of Brookfield DTLA. As of December 31, 2015 , the Series A preferred stock is reported at its redemption value of $354.3 million calculated using the redemption price of $25.00 per share plus all accumulated and unpaid dividends, after a reduction of $21.9 million for the dividend declared, on such Series A preferred stock through December 31, 2015 . Series A-1 Preferred Interest On October 15, 2013 , New OP issued a Series A-1 preferred interest to Brookfield DTLA Holdings or wholly owned subsidiaries of Brookfield DTLA Holdings with a stated value of $225.7 million in connection with the formation of Brookfield DTLA and the MPG acquisition. The Series A-1 preferred interest has mirror rights to the Series A preferred interests issued by New OP, which are held by a wholly owned subsidiary of Brookfield DTLA, but only with respect to their respective preferred liquidation preferences, and share pro rata with 48.13% to the Series A-1 preferred interest and 51.87% to the Series A preferred interest based on their current liquidation preferences in accordance with their respective preferred liquidation preferences in distributions from New OP, until their preferred liquidation preferences have been reduced to zero. Thereafter, distributions will be made 47.66% to the Series A preferred interest and 52.34% to the Series B preferred interest, which is held by Brookfield DTLA Holdings. The economic terms of the Series A preferred stock mirror those of the New OP Series A preferred interests, including distributions in respect of the preferred liquidation preference. As of December 31, 2015 , the Series A-1 preferred interest is reported at its redemption value of $349.1 million calculated using its liquidation value of $225.7 million plus $123.4 million of accumulated and unpaid dividends on such Series A-1 preferred interest through December 31, 2015 . Senior Participating Preferred Interest On October 15, 2013 , DTLA OP issued a senior participating preferred interest to Brookfield DTLA Holdings in connection with the formation of Brookfield DTLA and the MPG acquisition. The senior participating preferred interest was comprised of $240.0 million in preferred interests with a 7.0% coupon and a 4.0% participating interest in the residual value of DTLA OP, which owns 333 South Hope and EYP Realty. BOA Plaza and EY Plaza were contributed to DTLA OP, directly and indirectly, by Brookfield DTLA in connection with the merger. As of the merger date, these properties had a leverage ratio that was lower than the leverage ratio of the MPG properties acquired, as well as the target leverage ratio that the Company’s management sought to achieve for its properties, as they were refinanced, of approximately 60% to 65% . The size of the preferred interest component of the senior participating preferred interest issued to Brookfield DTLA was based, in part, on the expected net proceeds from the refinancing of the properties owned by 333 South Hope (which holds BOA Plaza) and EYP Realty (which holds EY Plaza) at a leverage ratio in this range and represented a portion of the approximately $595 million fair market value as of the merger date of BOA Plaza and EY Plaza, reduced by the outstanding principal balances of the mortgage loans secured by BOA Plaza and EY Plaza and the $25.0 million promissory note due to BOP. On March 21, 2014 , Brookfield DTLA made a cash distribution to Brookfield DTLA Holdings totaling $70.0 million , in respect of the senior participating preferred interest held by Brookfield DTLA Holdings, which was comprised of $7.3 million in settlement of preferred dividends on the senior participating preferred interest through March 21, 2014 and a return of investment of $62.7 million using proceeds generated by the refinancing of EY Plaza. On August 28, 2014 , Brookfield DTLA made a cash distribution to Brookfield DTLA Holdings totaling $150.0 million , in respect of the senior participating preferred interest held by Brookfield DTLA Holdings, which was comprised of $5.5 million in settlement of preferred dividends on the senior participating preferred interest through August 28, 2014 and a return of investment of $144.5 million using proceeds generated by the refinancing of BOA Plaza. On December 16, 2015 , Brookfield DTLA made a cash distribution to Brookfield DTLA Holdings totaling $35.8 million , in respect of the senior participating preferred interest held by Brookfield DTLA Holdings, which was comprised of $3.1 million in settlement of preferred dividends on the senior participating preferred interest through December 16, 2015 and a return of investment of $32.8 million using cash on hand. As of December 31, 2015 , the senior participating preferred interest is reported at its redemption value of $23.2 million using the value of the participating interest. Change in Mezzanine Equity A summary of the change in mezzanine equity is as follows (in thousands, except share amounts): Number of Shares of Series A Preferred Stock Series A Preferred Stock Noncontrolling Interests Total Mezzanine Equity Series A-1 Preferred Interest Senior Participating Preferred Interest Balance, December 31, 2012 — $ — $ — $ — $ — Issuance of Series A preferred stock 9,730,370 252,990 252,990 Issuance of Series A-1 preferred interest 234,767 234,767 Issuance of senior participating preferred interest 254,280 254,280 Cumulative dividends 3,864 3,586 3,500 10,950 Redemption measurement adjustment 82,247 76,305 158,552 Balance, December 31, 2013 9,730,370 339,101 314,658 257,780 911,539 Current dividends 18,548 17,213 10,044 45,805 Redemption measurement adjustment 2,256 2,256 Cash distributions (220,000 ) (220,000 ) Balance, December 31, 2014 9,730,370 357,649 331,871 50,080 739,600 Current dividends 18,548 17,213 2,321 38,082 Redemption measurement adjustment 6,626 6,626 Dividends declared (21,893 ) (21,893 ) Cash distribution (35,820 ) (35,820 ) Balance, December 31, 2015 9,730,370 $ 354,304 $ 349,084 $ 23,207 $ 726,595 |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders’ Deficit Brookfield DTLA is authorized to issue up to 1,000,000 shares of common stock, $0.01 par value per share. On April 24, 2013, Brookfield DTLA received an initial contribution of $1,000 from Brookfield DTLA Holdings in exchange for 1,000 shares of Brookfield DTLA common stock. An additional $27,000 was contributed by Brookfield DTLA Holdings during 2013. As of December 31, 2015 and 2014 , 1,000 shares of common stock were outstanding. No dividends were declared on the common stock during the years ended December 31, 2015 , 2014 and 2013 . Brookfield DTLA has not paid any cash dividends on its common stock in the past. Any future dividends declared would be at the discretion of Brookfield DTLA’s board of directors and would depend on its financial condition, results of operations, contractual obligations and the terms of its financing agreements at the time a dividend is considered, and other relevant factors. |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Mezzanine Equity Component The Series A-1 preferred interest and senior participating preferred interest consist of equity interests of New OP and DTLA OP, respectively, which are owned directly by Brookfield DTLA Holdings. These noncontrolling interests are presented in mezzanine equity in the consolidated balance sheet. See Note 6 “Mezzanine Equity.” Stockholders’ Deficit Component The Series B common interest ranks junior to the Series A preferred stock as to dividends and upon liquidation and is presented in the consolidated balance sheet as noncontrolling interest. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) Disclosure [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income A summary of the change in accumulated other comprehensive (loss) income related to Brookfield DTLA’s cash flow hedges is as follows (in thousands): For the Year Ended December 31, 2015 2014 2013 Balance at beginning of year $ (4,337 ) $ 1,007 $ — Other comprehensive (loss) gain before reclassifications (1,078 ) (5,344 ) 1,007 Amounts reclassified from accumulated other — — — Net current-period other comprehensive (loss) gain (1,078 ) (5,344 ) 1,007 Balance at end of year $ (5,415 ) $ (4,337 ) $ 1,007 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosures , defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three categories: • Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date. • Level 2—Observable prices that are based on inputs not quoted in active markets, but corroborated by market data. • Level 3—Unobservable prices that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Brookfield DTLA utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as consider counterparty credit risk in its assessment of fair value. Recurring Measurements The valuation of Brookfield DTLA’s interest rate swap is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flow of the derivative. This analysis reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. We have incorporated credit valuation adjustments to appropriately reflect both our own and the respective counterparty’s non-performance risk in the fair value measurements. Brookfield DTLA’s (liabilities) assets measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall, are as follows (in thousands): Fair Value Measurements Using Total Fair Value Quoted Prices in Active Markets for Identical (Liabilities) Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate swap at: December 31, 2015 $ (5,415 ) $ — $ (5,415 ) $ — December 31, 2014 (4,337 ) — (4,337 ) — December 31, 2013 1,007 — 1,007 — Interest rate caps at: December 31, 2015 $ 19 $ — $ 19 $ — December 31, 2014 190 — 190 — December 31, 2013 1,600 — 1,600 — |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments Derivative Financial Instruments A summary of the fair value of Brookfield DTLA’s derivative financial instruments is as follows (in thousands): Fair Value as of December 31, 2015 December 31, 2014 Derivatives designated as cash flow hedging instruments: Interest rate swap $ (5,415 ) $ (4,337 ) The interest rate swap liability is included in accounts payable and other liabilities in the consolidated balance sheet. A summary of the effect of derivative financial instruments reported in the consolidated and combined financial statements is as follows (in thousands): Amount of (Loss) Gain Recognized in AOCL Amount of Gain (Loss) Reclassified from AOCL to Statement of Operations Derivatives designated as cash flow hedging instruments: Interest rate swap for the year ended: December 31, 2015 $ (1,078 ) $ — December 31, 2014 (5,344 ) — December 31, 2013 1,007 — Interest Rate Swap— As of December 31, 2015 and 2014 , Brookfield DTLA held an interest rate swap with a notional amount of $185.0 million , which was assigned to the EY Plaza mortgage loan. The swap requires net settlement each month and expires on November 2, 2020 . Interest Rate Caps— Brookfield DTLA holds interest rate caps pursuant to the terms of certain of its mortgage agreements with the following notional amounts (in thousands): December 31, 2015 December 31, 2014 Wells Fargo Center–South Tower $ 290,000 $ 290,000 777 Tower 200,000 200,000 $ 490,000 $ 490,000 Other Financial Instruments Brookfield DTLA’s other financial instruments that are exposed to concentrations of credit risk consist primarily of cash and accounts receivable. Management routinely assesses the financial strength of its tenants and, as a consequence, believes that its accounts receivable credit risk exposure is limited. Brookfield DTLA places its temporary cash investments with federally insured institutions. Cash balances with any one institution may at times be in excess of the federally insured limits. The estimated fair value and carrying amount of Brookfield DTLA’s mortgage loans are as follows (in thousands): December 31, 2015 December 31, 2014 Estimated fair value $ 2,114,761 $ 2,133,158 Carrying amount 2,117,377 2,118,000 We calculated the estimated fair value of our mortgage loans by discounting the future contractual cash flows of the loans using current risk adjusted rates available to borrowers with similar credit ratings. The estimated fair value of mortgage loans is classified as Level 3. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Intercompany Loan Brookfield DTLA was indebted to BOP under a $25.0 million promissory note dated October 11, 2013 that bore interest at 3.25% . For the years ended December 31, 2014 and 2013 , the Company accrued $0.6 million and $0.2 million of interest expense, respectively, related to this note. During September 2014, Brookfield DTLA paid $25.8 million in full settlement of the principal and interest outstanding on the intercompany loan using proceeds from the mortgage loan secured by the Figueroa at 7th retail property. Management Agreements The Predecessor Entities entered into arrangements with Brookfield Properties Management LLC, which is affiliated with the Company through common ownership through BPO, under which the affiliate provides property management and various other services. On October 15, 2013 , these agreements were transferred to BOP. The MPG properties entered into similar arrangements with BOP after the closing of the acquisition on October 15, 2013 . Property management fees under these agreements are calculated based on 2.75% of rents collected (as defined in the management agreements). In addition, the Company pays BOP an asset management fee, which is calculated based on 0.75% of the capital contributed by Brookfield DTLA Holdings. A summary of costs incurred by Brookfield DTLA and the Predecessor Entities under these arrangements, which are included in rental property operating and maintenance expense in the consolidated and combined statements of operations, is as follows (in thousands): For the Year Ended December 31, 2015 2014 2013 Property management fee expense $ 7,445 $ 8,135 $ 3,667 Asset management fee expense 6,292 6,109 1,320 General, administrative and reimbursable expenses 2,593 2,509 1,190 Leasing and construction management fees 6,396 3,626 786 Insurance Agreements Brookfield DTLA’s properties are covered under insurance policies entered into by BPO that provide, among other things, all risk property and business interruption for BPO’s commercial portfolio with an aggregate limit of $2.5 billion per occurrence as well as an aggregate limit of $350.0 million of earthquake, flood and weather catastrophe insurance. In addition, Brookfield DTLA’s properties are covered by a terrorism insurance policy that provides aggregate coverage of $4.0 billion for all of BPO’s U.S. properties. Brookfield DTLA is in compliance with the contractual obligations regarding terrorism insurance contained in such policies. Prior to their expiration, which became effective on April 19, 2014, the MPG properties were covered under an insurance policy that provided all risk property and business interruption with an aggregate limit of $1.25 billion and a $130.0 million aggregate limit of earthquake insurance, and a terrorism insurance policy with a $1.25 billion aggregate limit. Effective April 19, 2014, the MPG properties were added to the existing BPO insurance policies described above. Insurance premiums for Brookfield DTLA are paid by an affiliate of BPO. Brookfield DTLA reimburses this BPO affiliate for the actual cost of such premiums. A summary of costs incurred by Brookfield DTLA and the Predecessor Entities under this arrangement, which are included in rental property operating and maintenance expense in the consolidated and combined statements of operations, is as follows (in thousands): For the Year Ended December 31, 2015 2014 2013 Insurance expense $ 8,532 $ 8,466 $ 4,949 |
Rental Income
Rental Income | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Rental Income | Rental Income Brookfield DTLA’s properties are leased to tenants under net operating leases with initial expiration dates ranging from 2016 to 2035 . The future minimum rental income (on a non-straight-line basis) to be received under noncancelable tenant operating leases in effect as of December 31, 2015 is as follows (in thousands): 2016 $ 145,449 2017 150,447 2018 140,131 2019 134,553 2020 125,360 Thereafter 599,184 $ 1,295,124 The future minimum rental income shown above excludes amounts that are not fixed in accordance with a tenant’s lease, but are based upon a percentage of reimbursement of actual operating expenses and amortization of above- and below-market leases. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Tenant Concentration Brookfield DTLA generally does not require collateral or other security from its tenants, other than security deposits or letters of credit. Our credit risk is mitigated by the high quality of our existing tenant base, review of prospective tenants’ risk profiles prior to lease execution, and frequent monitoring of our tenant portfolio to identify problem tenants. However, since we have a significant concentration of rental revenue from certain tenants, the inability of those tenants to make their lease payments could have a material adverse effect on our results of operations, cash flow or financial condition. A significant portion of Brookfield DTLA’s rental income and tenant reimbursements revenue is generated by a small number of tenants. During the year ended December 31, 2013 , one tenant, The Capital Group Companies, accounted for more than 10% of our consolidated and combined rental income and tenant reimbursements revenue. No tenant accounted for more than 10% of our consolidated rental income and tenant reimbursements revenue during the years ended December 31, 2015 and 2014 . During the year ended December 31, 2013 , BOA Plaza and EY Plaza each contributed more than 10% of Brookfield DTLA’s consolidated and combined revenue. The revenue generated by these two properties totaled 72% of Brookfield DTLA’s consolidated and combined revenue during the year ended December 31, 2013 . During the years ended December 31, 2015 and 2014 , EY Plaza, BOA Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower and 777 Tower each contributed more than 10% of Brookfield DTLA’s consolidated revenue. The revenue generated by these six properties totaled 98% and 100% of Brookfield DTLA’s consolidated revenue during the years ended December 31, 2015 and 2014 , respectively. Litigation General— Brookfield DTLA and its subsidiaries may be subject to pending legal proceedings and litigation incidental to its business. After consultation with legal counsel, management believes that any liability that may potentially result upon resolution of such matters is not expected to have a material adverse effect on the Company’s business, financial condition or consolidated financial statements as a whole. Merger-Related Litigation— Following the announcement of the execution of the Agreement and Plan of Merger dated as of April 24, 2013, as amended (the “Merger Agreement”), seven putative class actions were filed against Brookfield Office Properties Inc. (“BPO”), Brookfield DTLA, Brookfield DTLA Holdings LLC, Brookfield DTLA Fund Office Trust Inc., Brookfield DTLA Fund Properties (collectively, the “Brookfield Parties”), MPG Office Trust, Inc., MPG Office, L.P., and the members of MPG Office Trust, Inc.’s board of directors. Five of these lawsuits were filed on behalf of MPG Office Trust, Inc.’s common stockholders: (i) two lawsuits, captioned Coyne v. MPG Office Trust, Inc., et al ., No. BC507342 (the “Coyne Action”), and Masih v. MPG Office Trust, Inc., et al. , No. BC507962 (the “Masih Action”), were filed in the Superior Court of the State of California in Los Angeles County (the “California State Court”) on April 29, 2013 and May 3, 2013, respectively; and (ii) three lawsuits, captioned Kim v. MPG Office Trust, Inc. et al ., No. 24‑C-13-002600 (the “Kim Action”), Perkins v. MPG Office Trust, Inc., et al. , No. 24-C-13-002778 (the “Perkins Action”) and Dell’Osso v. MPG Office Trust, Inc., et al., No. 24‑C-13-003283 (the “Dell’Osso Action”) were filed in the Circuit Court for Baltimore City, Maryland on May 1, 2013, May 8, 2013 and May 22, 2013, respectively (collectively, the “Common Stock Actions”). Two lawsuits, captioned Cohen v. MPG Office Trust, Inc. et al. , No. 24-C-13-004097 (the “Cohen Action”) and Donlan v. Weinstein, et al ., No. 24‑C-13-004293 (the “Donlan Action”), were filed on behalf of MPG Office Trust, Inc.’s preferred stockholders in the Circuit Court for Baltimore City, Maryland on June 20, 2013 and July 2, 2013, respectively (collectively, the “Preferred Stock Actions”). In each of the Common Stock Actions, the plaintiffs allege, among other things, that MPG Office Trust, Inc.’s board of directors breached their fiduciary duties in connection with the merger by failing to maximize the value of MPG Office Trust, Inc. and ignoring or failing to protect against conflicts of interest, and that the relevant Brookfield Parties named as defendants aided and abetted those breaches of fiduciary duty. The Kim Action further alleges that MPG Office, L.P. also aided and abetted the breaches of fiduciary duty by MPG Office Trust, Inc.’s board of directors, and the Dell’Osso Action further alleges that MPG Office Trust, Inc. and MPG Office, L.P. aided and abetted the breaches of fiduciary duty by MPG Office Trust, Inc.’s board of directors. On June 4, 2013, the Kim and Perkins plaintiffs filed identical, amended complaints in the Circuit Court for Baltimore City, Maryland. On June 5, 2013, the Masih plaintiffs also filed an amended complaint in the Superior Court of the State of California in Los Angeles County. The three amended complaints, as well as the Dell’Osso Action complaint, allege that the preliminary proxy statement filed by MPG Office Trust, Inc. with the SEC on May 21, 2013 is false and/or misleading because it fails to include certain details of the process leading up to the merger and fails to provide adequate information concerning MPG Office Trust, Inc.’s financial advisors. In each of the Preferred Stock Actions, which were brought on behalf of MPG Office Trust, Inc.’s preferred stockholders, the plaintiffs allege, among other things, that, by entering into the Merger Agreement and tender offer, MPG Office Trust, Inc. breached the Articles Supplementary, which governs the issuance of the MPG preferred shares, that MPG Office Trust, Inc.’s board of directors breached their fiduciary duties by agreeing to a merger agreement that violated the preferred stockholders’ contractual rights and that the relevant Brookfield Parties named as defendants aided and abetted those breaches of contract and fiduciary duty. On July 15, 2013, the plaintiffs in the Preferred Stock Actions filed a joint amended complaint in the Circuit Court for Baltimore City, Maryland that further alleged that MPG Office Trust, Inc.’s board of directors failed to disclose material information regarding BPO’s extension of the tender offer. The plaintiffs in the seven lawsuits sought an injunction against the merger, rescission or rescissory damages in the event the merger has been consummated, an award of fees and costs, including attorneys’ and experts’ fees, and other relief. On July 10, 2013, solely to avoid the costs, risks and uncertainties inherent in litigation, the Brookfield Parties and the other named defendants in the Common Stock Actions signed a memorandum of understanding, regarding a proposed settlement of all claims asserted therein. The parties subsequently entered into a stipulation of settlement dated November 21, 2013 providing for the release of all asserted claims, additional disclosures by MPG concerning the merger made prior to the merger’s approval, and the payment, by defendants, of an award of attorneys’ fees and expenses in an amount not to exceed $475,000 . After a hearing on June 4, 2014, the California State Court granted plaintiffs’ motion for final approval of the settlement and entered a Final Order and Judgment, awarding plaintiffs’ counsel’s attorneys’ fees and expenses in the amount of $475,000 , which was paid by MPG Office LLC on June 18, 2014. BPO is seeking reimbursement for the settlement payment from MPG’s insurers. In the Preferred Stock Actions, at a hearing on July 24, 2013, the Maryland State Court denied the plaintiffs’ motion for preliminary injunction seeking to enjoin the tender offer. The plaintiffs filed a second amended complaint on November 22, 2013 that added additional arguments in support of their allegations that the new preferred shares do not have the same rights as the MPG preferred shares. The defendants moved to dismiss the second amended complaint on December 20, 2013, and briefing on the motion concluded on February 28, 2014. At a hearing on June 18, 2014, the Maryland State Court heard oral arguments on the defendants’ motion to dismiss and reserved judgment on the decision. On October 21, 2014, the parties sent a joint letter to the Maryland State Court stating that since the June 18 meeting, the parties have commenced discussions towards a possible resolution of the lawsuit, requesting that the court temporarily refrain from deciding the pending motion to dismiss to facilitate the discussions. On March 30, 2015 , the plaintiff in the Cohen Actions and the defendants entered into a memorandum of understanding setting forth an agreement in principle to settle the Preferred Stock Actions on a class-wide basis and dismiss the case with prejudice in exchange for the payment of $2.25 per share of Series A preferred stock of accumulated and unpaid dividends (the “Dividend Payment”) to holders of record on a record date to be set after final approval of the settlement by the Maryland State Court, plus any attorneys’ fees awarded by the Maryland State Court to the plaintiff’s counsel. The dividend would reduce the amount of accumulated and unpaid dividends on the Series A preferred stock, and the terms of the Series A preferred stock would otherwise remain unchanged. On August 18, 2015, the Maryland State Court entered an order preliminarily approving the settlement and scheduling a final fairness hearing for October 27, 2015. On September 28, 2015, the plaintiff filed a motion for final certification of the settlement class, final approval of the class action settlement and approval of attorneys’ fees and reimbursement of expenses, seeking a total fee and expense award of $5,250,000 . The defendants submitted their opposition to the plaintiff’s fee application on October 13, 2015. On October 16, 2015, the plaintiff filed a motion seeking discovery related to the valuation of the Dividend Payment in connection with its fee application and served related discovery requests on the defendants. On October 23, 2015, the defendants filed their opposition to that motion, as well as a motion for a protective order precluding discovery. On October 27, 2015, the Maryland State Court held a hearing to decide whether to grant final approval of the settlement and to rule on the parties’ discovery motions. At the hearing, the Court ordered limited discovery to occur prior to ruling on the fee application. On October 28, 2015, the Maryland State Court issued an order granting final approval of the settlement. The time to appeal the order expired on November 30, 2015 without any appeals having been filed. On December 4, 2015 , in accordance with the final approval order and the terms of the parties’ settlement agreement, the board of directors declared a cash dividend of $2.25 per share to holders of record of its Series A preferred stock at the close of business on December 15, 2015 . On January 4, 2016 , Brookfield DTLA paid the Dividend Payment totaling $21.9 million using cash on hand. See Note 17 “Subsequent Event.” On December 16, 2015, after taking certain limited discovery permitted by the Maryland State Court during the October 27 hearing, the plaintiff served the defendants with its reply memorandum of law in support of its motion for attorneys’ fees and expenses. That same day, the plaintiff requested that the Court permit it to file the reply memorandum and an exhibit thereto under seal given the confidential nature of the information contained therein. On December 17, 2015, the plaintiff provided the Court with plaintiff’s counsel’s time records for the Court’s in camera review. On January 15, 2016, the defendants filed a surreply to the plaintiff’s reply memorandum after obtaining the Court’s permission to do so. The Maryland State Court has scheduled oral arguments on the plaintiff’s motion for attorneys’ fees and expenses to be held on April 6, 2016. Management is not in a position to estimate the amount of attorneys’ fees and expenses that will ultimately be awarded by the Court. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands) Year Ended December 31, 2015 Revenue $ 73,508 $ 77,438 $ 74,561 $ 73,583 Expenses 82,569 84,166 83,908 88,801 Net loss (9,061 ) (6,728 ) (9,347 ) (15,218 ) Net loss attributable to noncontrolling interests: Series A-1 preferred interest – current dividends 4,303 4,303 4,303 4,304 Senior participating preferred interest – current dividends 587 597 608 529 Senior participating preferred interest – redemption measurement adjustment 760 1,540 804 3,521 Series B common interest – allocation of net loss (10,127 ) (9,319 ) (10,310 ) (14,765 ) Net loss attributable to Brookfield DTLA (4,584 ) (3,849 ) (4,752 ) (8,807 ) Series A preferred stock – current dividends 4,637 4,637 4,637 4,637 Net loss available to common interest holders of Brookfield DTLA $ (9,221 ) $ (8,486 ) $ (9,389 ) $ (13,444 ) Year Ended December 31, 2014 Revenue $ 68,677 $ 74,358 $ 75,697 $ 75,429 Expenses 84,002 85,757 90,601 86,793 Net loss (15,325 ) (11,399 ) (14,904 ) (11,364 ) Net loss attributable to noncontrolling interests: Series A-1 preferred interest – current dividends 4,303 4,303 4,303 4,304 Senior participating preferred interest – current dividends 4,133 3,102 2,232 577 Senior participating preferred interest – redemption measurement adjustment 198 930 97 1,031 Series B common interest – allocation of net loss (14,967 ) (12,756 ) (13,699 ) (11,469 ) Net loss attributable to Brookfield DTLA (8,992 ) (6,978 ) (7,837 ) (5,807 ) Series A preferred stock – current dividends 4,637 4,637 4,637 4,637 Net loss available to common interest holders of Brookfield DTLA $ (13,629 ) $ (11,615 ) $ (12,474 ) $ (10,444 ) |
Investments in Real Estate
Investments in Real Estate | 12 Months Ended |
Dec. 31, 2015 | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Investments in Real Estate | Investments in Real Estate A summary of information related to Brookfield DTLA’s investments in real estate as of December 31, 2015 is as follows (in thousands): Encum- brances Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount at Which Carried at Close of Period Accum- ulated Depre- ciation (2) Year Acquired Land Buildings and Improve- ments Improve- ments Carrying Costs Land Buildings and Improve- ments Total (1) Los Angeles, CA Wells Fargo Center– North Tower 333 S. Grand Avenue $ 550,000 $ 41,024 $ 456,363 $ 42,404 $ — $ 41,024 $ 498,767 $ 539,791 $ 33,398 2013 BOA Plaza 400,000 54,163 354,422 46,999 — 54,163 401,421 455,584 84,077 2006 Wells Fargo Center– South Tower 355 S. Grand Avenue 290,000 21,231 401,149 12,999 — 21,231 414,148 435,379 23,178 2013 Gas Company 458,000 20,742 396,159 21,516 — 20,742 417,675 438,417 20,552 2013 EY Plaza (3) 725 S. Figueroa 219,377 47,385 286,982 110,101 — 47,385 397,083 444,468 72,718 2006 777 Tower 777 S. Figueroa 200,000 38,010 303,697 14,888 — 38,010 318,585 356,595 22,207 2013 Miscellaneous — 5,000 — 15 — 5,000 15 5,015 — $ 2,117,377 $ 227,555 $ 2,198,772 $ 248,922 $ — $ 227,555 $ 2,447,694 $ 2,675,249 $ 256,130 __________ (1) The aggregate gross cost of Brookfield DTLA’s investments in real estate for federal income tax purposes approximated $2.8 billion as of December 31, 2015 . (2) Depreciation in the consolidated and combined statements of operations is computed on a straight-line basis over the following estimated useful lives: buildings ( 60 years, with an estimated salvage value of 5% ), building improvements (ranging from 7 years to 25 years), and tenant improvements (the shorter of the useful life or the applicable lease term). (3) Includes the mortgage loan encumbering the Figueroa at 7th retail property. The following is a reconciliation of Brookfield DTLA’s investments in real estate (in thousands): For the Year Ended December 31, 2015 2014 2013 Investments in Real Estate Balance at beginning of period $ 2,619,422 $ 2,557,865 $ 848,572 Additions during period: Acquisitions — — 1,685,375 Improvements 57,827 61,557 23,918 Deductions during period: Dispositions 2,000 — — Other — — — Balance at close of period $ 2,675,249 $ 2,619,422 $ 2,557,865 The following is a reconciliation of Brookfield DTLA’s accumulated depreciation on its investments in real estate (in thousands): For the Year Ended December 31, 2015 2014 2013 Accumulated Depreciation Balance at beginning of period $ 189,108 $ 121,612 $ 92,500 Additions during period: Depreciation expense 67,022 67,496 29,112 Deductions during period: Other — — — Balance at close of period $ 256,130 $ 189,108 $ 121,612 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On January 4, 2016 , Brookfield DTLA paid a cash dividend of $2.25 per share to holders of record of its Series A preferred stock at the close of business on December 15, 2015 using cash on hand. This dividend payment reduced the accrued and unpaid dividends owed on the Series A preferred stock by $21.9 million . The dividend was declared on December 4, 2015 by the board of directors in connection with the settlement on a class-wide basis of the litigation brought in Maryland State Court and styled as In re MPG Office Trust Inc. Preferred Shareholder Litigation , Case No. 24-C-13-004097. |
Basis of Presentation and Sum25
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Predecessor Entities and Principles of Consolidation and Combination and Basis of Presentation | Predecessor Entities Prior to October 15, 2013 , Brookfield DTLA had not conducted any business as a separate company and had no material assets or liabilities. In accordance with accounting principles generally accepted in the United States of America (“GAAP”), the contribution of 333 South Hope and EYP Realty (together, the “Predecessor Entities”) constitute a transaction between entities under common control. A combination between entities that already share the same parent is not considered a business combination because there is no change in control at the parent level. Accordingly, the operations of the Predecessor Entities contributed to Brookfield DTLA by TRZ on October 15, 2013 are presented in the accompanying consolidated and combined financial statements as if they were owned by Brookfield DTLA for all historical periods presented and the assets and liabilities of BOA Plaza and EY Plaza were recorded at the carrying values reflected in the books and records of 333 South Hope and EYP Realty. As such, no gain or loss has been recorded in the consolidated and combined statement of operations for the year ended December 31, 2013 due to this transaction. As a result of the transaction, TRZ’s interest in the Predecessor Entities was exchanged for a preferred and common interest in New OP and a preferred interest in DTLA OP. As a result of certain redemption features in the preferred instruments, these instruments have been classified in the consolidated balance sheet as mezzanine equity. See Note 6 “Mezzanine Equity.” Principles of Consolidation and Combination and Basis of Presentation As used in these consolidated and combined financial statements and related notes, unless the context requires otherwise, the terms “Brookfield DTLA,” the “Company,” “us,” “we” and “our” refer to the combination of Brookfield DTLA Fund Office Trust Investor Inc. and the Predecessor Entities. The accompanying consolidated and combined financial statements are prepared in accordance with GAAP. The consolidated balance sheets as of December 31, 2015 and 2014 include the accounts of Brookfield DTLA and subsidiaries in which it has a controlling financial interest. The accompanying consolidated and combined statement of operations for the year ended December 31, 2013 includes the accounts of the Predecessor Entities on a combined basis from January 1, 2013 through October 15, 2013 (the date of the merger); and the consolidated accounts of Brookfield DTLA from October 15, 2013 (the date of the merger) through December 31, 2013 . All intercompany transactions have been eliminated in consolidation and combination as of and for the years ended December 31, 2015 , 2014 and 2013 . |
Consolidation of Variable Interest Entities | In determining whether Brookfield DTLA has a controlling financial interest in an entity and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity (“VIE”) and Brookfield DTLA is the primary beneficiary. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. A variable interest holder is considered to be the primary beneficiary of a VIE if it has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and has the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to the VIE. Brookfield DTLA qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE. Consideration of various factors includes, but is not limited to, Brookfield DTLA’s ability to direct the activities that most significantly impact the VIE’s economic performance, its form of ownership interest, its representation on the VIE’s governing body, the size and seniority of its investment, its ability and the rights of other investors to participate in policy making decisions and its ability to replace the manager of and/or liquidate the entity. The Company earns a return through an indirect investment in New OP. Brookfield DTLA Holdings, the parent of Brookfield DTLA, owns all of the common interest in New OP. Brookfield DTLA has an indirect preferred stock interest in New OP and its wholly owned subsidiary is the managing member of New OP. The Company determined that New OP is a VIE and as a result of having the power to direct the significant activities of New OP and exposure to the economic performance of New OP, Brookfield DTLA meets the two conditions for being the primary beneficiary. Brookfield DTLA is required to continually evaluate its VIE relationships and consolidation conclusion. |
Reclassifications | Reclassifications We had reported $220,000 of distributions to Brookfield DTLA Holdings in the consolidated statement of cash flows for the year ended December 31, 2014 . We have reclassified this total to show $207,231 as distributions to senior participating preferred interest and $12,769 as dividends paid to senior participating preferred interest so as to conform to the 2015 presentation. In December 2015, Brookfield DTLA adopted the guidance in Accounting Standards Update (“ASU”) 2015-03, Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. We have retroactively restated the December 31, 2014 consolidated balance sheet by reclassifying unamortized debt issuance costs of $4,128 from deferred charges, net and combining them with unamortized debt discounts of $6,865 (for a total of $10,993 ) and presented this total as a deduction from mortgage loans, net. In addition, we have combined the amortization of deferred financing costs ( $1,007 and $152 ) and the amortization of debt discounts ( $5,042 and $799 ) for the years ended December 31, 2014 and 2013 , respectively, and presented new totals ( $6,049 and $951 ) in the consolidated and combined statements of cash flow so as to reflect the presentation of such costs in the consolidated balance sheet. |
Use of Estimates | Use of Estimates The preparation of consolidated and combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated and combined financial statements and accompanying notes. For example, estimates and assumptions have been made with respect to fair values of assets and liabilities for purposes of applying the acquisition method of accounting, the useful lives of assets, recoverable amounts of receivables, impairment of long‑lived assets and fair value of debt. Actual results could ultimately differ from such estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014‑08, Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which requires entities to disclose only disposals representing a strategic shift in operations as discontinued operations. The new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The guidance in ASU 2014-08 became effective for Brookfield DTLA beginning January 1, 2015. The implementation of this pronouncement did not have a material impact on Brookfield DTLA’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09 establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration that the entity expects to be entitled to receive in exchange for those goods or services and also requires certain additional disclosures. ASU 2014-09 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2014-09 on Brookfield DTLA’s consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This topic provides guidance on management’s responsibility to evaluate whether there is substantial doubt about a company’s ability to continue as a going concern and requires related footnote disclosures. The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. We are currently evaluating the impact of the adoption of ASU 2014-15 on Brookfield DTLA’s consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis to ASC Topic 810 , Consolidation . ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidated analysis of reporting entities that are involved with VIEs, and (iv) provide a scope exception for certain entities. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. We are currently evaluating the impact of the adoption of ASU 2015-02 on Brookfield DTLA’s consolidated financial statements. In April 2015, the FASB issued ASU 2015-03 that requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, as opposed to being presented as assets. ASU 2015-03 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2015. Early adoption is permitted. Brookfield DTLA elected to early adopt ASU 2015-03 effective as of December 31, 2015 and retroactively restated its consolidated balance sheet as of December 31, 2014 in accordance with this guidance. The effect of the adoption of ASU 2015-03 was to reclassify unamortized debt issuance costs of $4.1 million as of December 31, 2014 from deferred charges, net to a contra account as a deduction from mortgage loans, net. There was no effect on our consolidated and combined statements of operations. |
Business Combinations | Business Combinations— Purchase accounting is applied to the assets and liabilities related to all real estate investments acquired from third parties. In accordance with FASB ASC Topic 805, Business Combinations , the purchase price of the real estate acquired is allocated to the acquired tangible assets, consisting primarily of land, building and tenant improvements, and identifiable intangible assets and liabilities, consisting of the value of above- and below-market leases, in-place leases, and tenant relationships, based in each case on their fair value. The principal valuation technique employed by Brookfield DTLA in determining the fair value of identified assets acquired and liabilities assumed is the income approach, which is then compared to the cost approach. Tangible values for investments in real estate are calculated based on replacement costs for like type quality assets. Above- and below-market lease values are determined by comparing in-place rents with current market rents. In‑place lease amounts are determined by calculating the potential lost revenue during the replacement of the current leases in place. Leasing commissions and legal/marketing fees are determined based upon market allowances pro-rated over the remaining lease terms. Mortgage loans assumed in an acquisition are analyzed using current market terms for similar debt. The value of the acquired above-market and below-market leases are amortized and recorded as either a decrease (in the case of above-market leases) or an increase (in the case of below-market leases) to rental income in the consolidated and combined statements of operations over the remaining term of the associated lease. The value of tenant relationships is amortized over the expected term of the relationship, which includes an estimated probability of lease renewal. The value of in-place leases is amortized as an expense over the remaining life of the leases. Amortization of tenant relationships and in‑place leases is included in depreciation and amortization in the consolidated and combined statements of operations. |
Investments in Real Estate | Investments in Real Estate— Land is carried at cost. Buildings are recorded at historical cost and are depreciated on a straight-line basis over the estimated useful life of the building, which is 60 years with an estimated salvage value of 5% . Building improvements are recorded at historical cost and are depreciated on a straight-line basis over their estimated useful lives, which range from 7 years to 25 years. Tenant improvements that are determined to be assets of Brookfield DTLA are recorded at cost; amortization is included in depreciation and amortization expense in the consolidated and combined statements of operations on a straight-line basis over the shorter of the useful life or the applicable lease term. Depreciation expense related to investments in real estate during the years ended December 31, 2015 , 2014 and 2013 was $67.0 million , $67.5 million and $29.1 million , respectively. Real estate is reviewed for impairment if events or changes in circumstances indicate that the carrying amount of the real estate may not be recoverable. In such an event, a comparison is made of the current and projected operating cash flows of the property into the foreseeable future on an undiscounted basis to the carrying amount of the real estate. If the undiscounted cash flows expected to be generated by an asset are less than its carrying amount, an impairment provision would be recorded to write down the carrying amount of such asset to its fair value. Brookfield DTLA assesses fair value based on estimated cash flow projections utilizing appropriate discount and capitalization rates and available market information. Projections of future cash flow take into account the specific business plan for the property and management’s best estimate of the most probable set of economic conditions expected to prevail in the market. Management believes no impairment of Brookfield DTLA’s real estate assets existed at December 31, 2015 and 2014 . |
Cash and Cash Equivalents | Cash and Cash Equivalents— Cash and cash equivalents include all cash and short-term investments with an original maturity of three months or less. |
Restricted Cash | Restricted Cash— Restricted cash consists primarily of deposits for tenant improvements and leasing commissions, real estate taxes and insurance reserves, debt service reserves and other items as required by our mortgage loan agreements. |
Rents, Deferred Rents and Other Receivables, Net | Rents, Deferred Rents and Other Receivables, Net— Differences between rental income and the contractual amounts due are recorded as deferred rents receivable in the consolidated balance sheet. Brookfield DTLA evaluates its deferred rents receivable to consider if an allowance is necessary. Rents, deferred rents and other receivables, net also includes any amounts paid to a tenant for improvements owned or costs incurred by the tenant are treated as tenant inducements and are presented in the consolidated balance sheet net of accumulated amortization totaling $6.5 million and $3.9 million as of December 31, 2015 and 2014 , respectively. Amortization of tenant inducements is recorded on a straight-line basis over the term of the related lease as a reduction of rental income in the consolidated and combined statements of operations. Brookfield DTLA periodically evaluates the collectability of amounts due from tenants and maintains an allowance for doubtful accounts in the consolidated balance sheet for estimated losses resulting from the inability of tenants to make required payments under the lease agreements. Management exercises judgment in establishing these allowances and considers payment history and current credit status in developing these estimates. The allowance for doubtful accounts for Brookfield DTLA totaled $0.5 million and $0.4 million as of December 31, 2015 and 2014 , respectively. For the years ended December 31, 2015 , 2014 and 2013 , Brookfield DTLA recorded provisions for doubtful accounts of $103 thousand , $24 thousand and $357 thousand , respectively. |
Deferred Charges, Net | Deferred Charges, Net— Leasing costs are deferred and are presented as deferred charges in the consolidated balance sheet net of accumulated amortization totaling $38.2 million and $28.3 million as of December 31, 2015 and 2014 , respectively. Deferred leasing costs are amortized on a straight-line basis over the terms of the related leases as part of depreciation and amortization in the consolidated and combined statements of operations. |
Mortgage Loans, Net | Mortgage Loans, Net— Mortgage loans are presented in the consolidated balance sheet net of unamortized discounts and debt issuance costs totaling $6.0 million and $11.0 million as of December 31, 2015 and 2014 , respectively. Discounts and debt issuance costs totaling $5.1 million , $6.0 million and $1.0 million were amortized during the years ended December 31, 2015 , 2014 and 2013 , respectively, over the terms of the related mortgage loans on a basis that approximates the effective interest method and are included as part of interest expense in the consolidated and combined statements of operations. |
Revenue Recognition | Revenue Recognition— Rental income from leases providing for periodic increases in base rent is recognized on a straight-line basis over the noncancelable term of the respective leases. Recoveries of operating expenses and real estate taxes are recorded as tenant reimbursements in the consolidated and combined statements of operations in the period during which the expenses are incurred. |
Income Taxes | Income Taxes— Brookfield DTLA has elected to be taxed as a real estate investment trust (“REIT”) pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its tax period ended December 31, 2013. Brookfield DTLA conducts and intends to conduct its operations so as to continue to qualify as a REIT. Accordingly, Brookfield DTLA is not subject to U.S. federal income tax, provided that it continues to qualify as a REIT and distributions to its stockholders, if any, generally equal or exceed its taxable income. Brookfield DTLA has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRS”). Certain activities that we undertake must be conducted by a TRS, such as non-customary services for our tenants, and holding assets that we cannot hold directly. A TRS is subject to both federal and state income taxes. Qualification and taxation as a REIT depends upon Brookfield DTLA’s ability to meet the various qualification tests imposed under the Code related to annual operating results, asset diversification, distribution levels and diversity of stock ownership. Accordingly, no assurance can be given that Brookfield DTLA will be organized or be able to operate in a manner so as to continue to qualify as a REIT. If Brookfield DTLA fails to qualify as a REIT in any taxable year, it will be subject to federal and state income tax on its taxable income at regular corporate tax rates, and it may be ineligible to qualify as a REIT for four subsequent tax years. Brookfield DTLA may also be subject to certain state or local income taxes, or franchise taxes on its REIT activities. Brookfield DTLA has made no provision for income taxes in its consolidated and combined financial statements for the years ended December 31, 2015 , 2014 and 2013 . Brookfield DTLA’s taxable income or loss is different than its financial statement income or loss. Brookfield DTLA recognizes tax benefits from uncertain tax positions when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition threshold. Brookfield DTLA had no unrecognized tax benefits of December 31, 2015 and 2014 , and Brookfield DTLA does not expect its unrecognized tax benefits balance to change during the next 12 months. As of December 31, 2015 , Brookfield DTLA’s 2013 tax period and 2014 tax year remain open due to the statute of limitations and may be subject to examination by federal, state and local authorities. The 2012 tax year as well as the short tax period ended October 15, 2013 for Brookfield DTLA and its subsidiaries remain open due to the statute of limitations and may be subject to examination by federal, state and local tax authorities. |
Derivative Financial Instruments | Derivative Financial Instruments— Brookfield DTLA uses interest rate swap and cap contracts to manage risk from fluctuations in interest rates as well as to hedge anticipated future financing transactions. Interest rate swaps involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount. Interest rate caps involve the receipt of variable-rate amounts beyond a specified strike price over the life of the agreements without exchange of the underlying principal amount. The Company believes these agreements are with counterparties who are creditworthy financial institutions. Brookfield DTLA adheres to the provisions of ASC Subtopic 815-10-15, Derivatives and Hedging (“ASC 815-10-15”). ASC 815-10-15 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires the recognition of all derivative instruments as assets or liabilities in the Company’s consolidated balance sheet at fair value. Changes in the fair value of derivative instruments that are not designated as hedges, or that do not meet the hedge accounting criteria in ASC 815-10-15, are required to be reported through the statement of operations. Brookfield DTLA has elected to designate its interest rate swap as a cash flow hedge. |
Segment Reporting | Segment Reporting Brookfield DTLA operates in a single reportable segment referred to as its office segment, which includes the operation and management of commercial office properties. Each of Brookfield DTLA’s operating properties is considered a separate operating segment, as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. Management does not distinguish or group Brookfield DTLA’s consolidated operations based on geography, size or type. Brookfield DTLA’s operating properties have similar economic characteristics and provide similar products and services to tenants. As a result, Brookfield DTLA’s operating properties are aggregated into a single reportable segment. |
Accounting for Conditional Asset Retirement Obligations | Accounting for Conditional Asset Retirement Obligations Brookfield DTLA has evaluated whether it has any conditional asset retirement obligations, which are a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional upon future events that may or may not be within an entity’s control. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. Accordingly, Brookfield DTLA recognized a liability for a conditional asset retirement obligation. |
Acquisition of MPG Office Tru26
Acquisition of MPG Office Trust, Inc. (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of the Components of the Purchase Price Paid in Connection with the MPG Acquisition | The components of the purchase price paid by Brookfield DTLA in connection with the MPG acquisition are as follows: MPG common stock and noncontrolling common units 57,540,216 MPG in-the-money equity awards 2,524,079 60,064,295 Merger consideration per common share $ 3.15 Cash consideration – common stock $ 189,202,529 Fair value of Series A preferred stock issued by Brookfield DTLA 252,989,620 Total purchase price $ 442,192,149 |
Schedule of Fair Value Assigned to the Identified Assets Acquired and Liabilities Assumed | The following is the final fair value assigned to the identified assets acquired and liabilities assumed (in millions): Purchase price $ 442 Identified Assets Acquired: Investments in real estate $ 1,685 Cash and cash equivalents 156 Restricted cash 41 Rents, deferred rents and other receivables 3 Intangible assets 142 Deferred charges 32 Prepaid and other assets 2 Liabilities Assumed: Mortgage loans 1,532 Accounts payable and other liabilities 47 Intangible liabilities 40 Total identified assets acquired, net 442 Residual amount $ — |
Schedule of Condensed Pro Forma Financial Information | Condensed pro forma financial information for the year ended December 31, 2013 , assuming the MPG acquisition had occurred as of January 1, 2012, is presented below for comparative purposes (in millions): For the Year Ended December 31, 2013 (Unaudited) Total revenue $ 272.8 Net loss (103.4 ) |
Intangible Assets and Liabili27
Intangible Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets and Liabilities [Abstract] | |
Summary of Intangible Assets and Liabilities | Brookfield DTLA’s intangible assets and liabilities are summarized as follows (in thousands): December 31, 2015 December 31, 2014 Intangible Assets In-place leases $ 110,519 $ 110,519 Tenant relationships 46,248 46,248 Above-market leases 39,936 39,936 196,703 196,703 Less: accumulated amortization 96,993 70,876 Intangible assets, net $ 99,710 $ 125,827 Intangible Liabilities Below-market leases $ 76,344 $ 76,344 Less: accumulated amortization 46,136 38,619 Intangible liabilities, net $ 30,208 $ 37,725 |
Schedule of Finite-lived Intangible Assets and Liabilities Depreciation and Amortization Expense and Rental Income | The impact of the amortization of acquired below-market leases, net of acquired above-market leases, on rental income and of acquired in-place leases and tenant relationships on depreciation and amortization expense is as follows (in thousands): For the Year Ended December 31, 2015 2014 2013 Rental income $ 2,559 $ 3,059 $ 5,321 Depreciation and amortization expense 21,159 26,872 10,111 |
Schedule of Estimate of Amortization/Accretion of Intangible Assets and Liabilities During Next Five Years and Thereafter | As of December 31, 2015 , the estimate of the amortization/accretion of intangible assets and liabilities during the next five years and thereafter is as follows (in thousands): In-Place Leases Other Intangible Assets Intangible Liabilities 2016 $ 13,437 $ 7,633 $ 5,521 2017 10,335 6,293 4,870 2018 7,608 5,196 4,064 2019 6,511 4,361 3,639 2020 5,724 3,440 3,434 Thereafter 15,202 13,970 8,680 $ 58,817 $ 40,893 $ 30,208 |
Mortgage Loans (Tables)
Mortgage Loans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Brookfield DTLA’s debt is as follows (in thousands, except percentage amounts): Contractual Maturity Date Principal Amount as of Interest Rate December 31, 2015 December 31, 2014 Floating-Rate Debt Variable-Rate Loans: Wells Fargo Center–South Tower (1) 12/1/2016 2.05 % $ 290,000 $ 290,000 777 Tower (2) 11/1/2018 1.95 % 200,000 200,000 Figueroa at 7th (3) 9/10/2017 2.54 % 35,000 35,000 Total variable-rate loans 525,000 525,000 Variable-Rate Swapped to Fixed-Rate Loan: EY Plaza (4) 11/27/2020 3.93 % 184,377 185,000 Total floating-rate debt 709,377 710,000 Fixed-Rate Debt: Wells Fargo Center–North Tower 4/6/2017 5.70 % 550,000 550,000 Gas Company Tower 8/11/2016 5.10 % 458,000 458,000 BOA Plaza 9/1/2024 4.05 % 400,000 400,000 Total fixed-rate debt 1,408,000 1,408,000 Total debt 2,117,377 2,118,000 Less: unamortized discounts and debt issuance costs 5,972 10,993 Total debt, net $ 2,111,405 $ 2,107,007 __________ (1) This loan bears interest at LIBOR plus 1.80% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 4.75% . Brookfield DTLA has two options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). As of December 31, 2015 , the Company does not meet the criteria specified in the loan agreement to extend this loan on its contractual maturity date. (2) This loan bears interest at LIBOR plus 1.70% . As required by the loan agreement, we have entered into an interest rate cap agreement that limits the LIBOR portion of the interest rate to 5.75% . Brookfield DTLA has two options to extend the maturity date of the loan, each for a period of one year, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). (3) This loan bears interest at LIBOR plus 2.25% . Brookfield DTLA has two options to extend the maturity date of this loan, each for a period of 12 months, subject to meeting certain debt yield and loan to value ratios (as specified in the loan agreement). (4) This loan bears interest at LIBOR plus 1.75% . As required by the loan agreement, we have entered into an interest rate swap agreement to hedge this loan, which effectively fixes the LIBOR portion of the interest rate at 2.178% . The effective interest rate of 3.93% includes interest on the swap. |
Schedule of Debt to be Repaid During the Next Five Years and Thereafter | As of December 31, 2015 , our debt to be repaid during the next five years and thereafter is as follows (in thousands): 2016 $ 751,519 2017 589,026 2018 204,232 2019 4,449 2020 168,151 Thereafter 400,000 $ 2,117,377 |
Mezzanine Equity (Tables)
Mezzanine Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Temporary Equity Disclosure [Abstract] | |
Summary of the Change in Mezzanine Equity | A summary of the change in mezzanine equity is as follows (in thousands, except share amounts): Number of Shares of Series A Preferred Stock Series A Preferred Stock Noncontrolling Interests Total Mezzanine Equity Series A-1 Preferred Interest Senior Participating Preferred Interest Balance, December 31, 2012 — $ — $ — $ — $ — Issuance of Series A preferred stock 9,730,370 252,990 252,990 Issuance of Series A-1 preferred interest 234,767 234,767 Issuance of senior participating preferred interest 254,280 254,280 Cumulative dividends 3,864 3,586 3,500 10,950 Redemption measurement adjustment 82,247 76,305 158,552 Balance, December 31, 2013 9,730,370 339,101 314,658 257,780 911,539 Current dividends 18,548 17,213 10,044 45,805 Redemption measurement adjustment 2,256 2,256 Cash distributions (220,000 ) (220,000 ) Balance, December 31, 2014 9,730,370 357,649 331,871 50,080 739,600 Current dividends 18,548 17,213 2,321 38,082 Redemption measurement adjustment 6,626 6,626 Dividends declared (21,893 ) (21,893 ) Cash distribution (35,820 ) (35,820 ) Balance, December 31, 2015 9,730,370 $ 354,304 $ 349,084 $ 23,207 $ 726,595 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) Disclosure [Abstract] | |
Summary of the Change in Accumulated Other Comprehensive (Loss) Income Related to Cash Flow Hedges | A summary of the change in accumulated other comprehensive (loss) income related to Brookfield DTLA’s cash flow hedges is as follows (in thousands): For the Year Ended December 31, 2015 2014 2013 Balance at beginning of year $ (4,337 ) $ 1,007 $ — Other comprehensive (loss) gain before reclassifications (1,078 ) (5,344 ) 1,007 Amounts reclassified from accumulated other — — — Net current-period other comprehensive (loss) gain (1,078 ) (5,344 ) 1,007 Balance at end of year $ (5,415 ) $ (4,337 ) $ 1,007 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of (Liabilities) Assets Measured at Fair Value on a Recurring Basis, Aggregated by the Level in the Fair Value Hierarchy | Brookfield DTLA’s (liabilities) assets measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall, are as follows (in thousands): Fair Value Measurements Using Total Fair Value Quoted Prices in Active Markets for Identical (Liabilities) Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Interest rate swap at: December 31, 2015 $ (5,415 ) $ — $ (5,415 ) $ — December 31, 2014 (4,337 ) — (4,337 ) — December 31, 2013 1,007 — 1,007 — Interest rate caps at: December 31, 2015 $ 19 $ — $ 19 $ — December 31, 2014 190 — 190 — December 31, 2013 1,600 — 1,600 — |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of the Fair Value of Derivative Financial Instruments | A summary of the fair value of Brookfield DTLA’s derivative financial instruments is as follows (in thousands): Fair Value as of December 31, 2015 December 31, 2014 Derivatives designated as cash flow hedging instruments: Interest rate swap $ (5,415 ) $ (4,337 ) |
Summary of the Effect of Derivative Financial Instruments Reported in the Consolidated and Combined Financial Statements | A summary of the effect of derivative financial instruments reported in the consolidated and combined financial statements is as follows (in thousands): Amount of (Loss) Gain Recognized in AOCL Amount of Gain (Loss) Reclassified from AOCL to Statement of Operations Derivatives designated as cash flow hedging instruments: Interest rate swap for the year ended: December 31, 2015 $ (1,078 ) $ — December 31, 2014 (5,344 ) — December 31, 2013 1,007 — |
Schedule of Notional Amounts of Interest Rate Caps Pursuant to the Terms of Certain Mortgage Agreements | Brookfield DTLA holds interest rate caps pursuant to the terms of certain of its mortgage agreements with the following notional amounts (in thousands): December 31, 2015 December 31, 2014 Wells Fargo Center–South Tower $ 290,000 $ 290,000 777 Tower 200,000 200,000 $ 490,000 $ 490,000 |
Summary of the Estimated Fair Value and Carrying Amount of Mortgage Loans | The estimated fair value and carrying amount of Brookfield DTLA’s mortgage loans are as follows (in thousands): December 31, 2015 December 31, 2014 Estimated fair value $ 2,114,761 $ 2,133,158 Carrying amount 2,117,377 2,118,000 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Summary of Costs Incurred Under Agreements with Related Parties | A summary of costs incurred by Brookfield DTLA and the Predecessor Entities under these arrangements, which are included in rental property operating and maintenance expense in the consolidated and combined statements of operations, is as follows (in thousands): For the Year Ended December 31, 2015 2014 2013 Property management fee expense $ 7,445 $ 8,135 $ 3,667 Asset management fee expense 6,292 6,109 1,320 General, administrative and reimbursable expenses 2,593 2,509 1,190 Leasing and construction management fees 6,396 3,626 786 A summary of costs incurred by Brookfield DTLA and the Predecessor Entities under this arrangement, which are included in rental property operating and maintenance expense in the consolidated and combined statements of operations, is as follows (in thousands): For the Year Ended December 31, 2015 2014 2013 Insurance expense $ 8,532 $ 8,466 $ 4,949 |
Rental Income (Tables)
Rental Income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Income Under Noncancelable Tenant Operating Leases | The future minimum rental income (on a non-straight-line basis) to be received under noncancelable tenant operating leases in effect as of December 31, 2015 is as follows (in thousands): 2016 $ 145,449 2017 150,447 2018 140,131 2019 134,553 2020 125,360 Thereafter 599,184 $ 1,295,124 |
Quarterly Financial Informati35
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information (Unaudited) | First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands) Year Ended December 31, 2015 Revenue $ 73,508 $ 77,438 $ 74,561 $ 73,583 Expenses 82,569 84,166 83,908 88,801 Net loss (9,061 ) (6,728 ) (9,347 ) (15,218 ) Net loss attributable to noncontrolling interests: Series A-1 preferred interest – current dividends 4,303 4,303 4,303 4,304 Senior participating preferred interest – current dividends 587 597 608 529 Senior participating preferred interest – redemption measurement adjustment 760 1,540 804 3,521 Series B common interest – allocation of net loss (10,127 ) (9,319 ) (10,310 ) (14,765 ) Net loss attributable to Brookfield DTLA (4,584 ) (3,849 ) (4,752 ) (8,807 ) Series A preferred stock – current dividends 4,637 4,637 4,637 4,637 Net loss available to common interest holders of Brookfield DTLA $ (9,221 ) $ (8,486 ) $ (9,389 ) $ (13,444 ) Year Ended December 31, 2014 Revenue $ 68,677 $ 74,358 $ 75,697 $ 75,429 Expenses 84,002 85,757 90,601 86,793 Net loss (15,325 ) (11,399 ) (14,904 ) (11,364 ) Net loss attributable to noncontrolling interests: Series A-1 preferred interest – current dividends 4,303 4,303 4,303 4,304 Senior participating preferred interest – current dividends 4,133 3,102 2,232 577 Senior participating preferred interest – redemption measurement adjustment 198 930 97 1,031 Series B common interest – allocation of net loss (14,967 ) (12,756 ) (13,699 ) (11,469 ) Net loss attributable to Brookfield DTLA (8,992 ) (6,978 ) (7,837 ) (5,807 ) Series A preferred stock – current dividends 4,637 4,637 4,637 4,637 Net loss available to common interest holders of Brookfield DTLA $ (13,629 ) $ (11,615 ) $ (12,474 ) $ (10,444 ) |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Summary of Information Related to Investments in Real Estate | A summary of information related to Brookfield DTLA’s investments in real estate as of December 31, 2015 is as follows (in thousands): Encum- brances Initial Cost to Company Costs Capitalized Subsequent to Acquisition Gross Amount at Which Carried at Close of Period Accum- ulated Depre- ciation (2) Year Acquired Land Buildings and Improve- ments Improve- ments Carrying Costs Land Buildings and Improve- ments Total (1) Los Angeles, CA Wells Fargo Center– North Tower 333 S. Grand Avenue $ 550,000 $ 41,024 $ 456,363 $ 42,404 $ — $ 41,024 $ 498,767 $ 539,791 $ 33,398 2013 BOA Plaza 400,000 54,163 354,422 46,999 — 54,163 401,421 455,584 84,077 2006 Wells Fargo Center– South Tower 355 S. Grand Avenue 290,000 21,231 401,149 12,999 — 21,231 414,148 435,379 23,178 2013 Gas Company 458,000 20,742 396,159 21,516 — 20,742 417,675 438,417 20,552 2013 EY Plaza (3) 725 S. Figueroa 219,377 47,385 286,982 110,101 — 47,385 397,083 444,468 72,718 2006 777 Tower 777 S. Figueroa 200,000 38,010 303,697 14,888 — 38,010 318,585 356,595 22,207 2013 Miscellaneous — 5,000 — 15 — 5,000 15 5,015 — $ 2,117,377 $ 227,555 $ 2,198,772 $ 248,922 $ — $ 227,555 $ 2,447,694 $ 2,675,249 $ 256,130 __________ (1) The aggregate gross cost of Brookfield DTLA’s investments in real estate for federal income tax purposes approximated $2.8 billion as of December 31, 2015 . (2) Depreciation in the consolidated and combined statements of operations is computed on a straight-line basis over the following estimated useful lives: buildings ( 60 years, with an estimated salvage value of 5% ), building improvements (ranging from 7 years to 25 years), and tenant improvements (the shorter of the useful life or the applicable lease term). (3) Includes the mortgage loan encumbering the Figueroa at 7th retail property. |
Schedule of Reconciliation of Investments in Real Estate and Accumulated Depreciation | The following is a reconciliation of Brookfield DTLA’s investments in real estate (in thousands): For the Year Ended December 31, 2015 2014 2013 Investments in Real Estate Balance at beginning of period $ 2,619,422 $ 2,557,865 $ 848,572 Additions during period: Acquisitions — — 1,685,375 Improvements 57,827 61,557 23,918 Deductions during period: Dispositions 2,000 — — Other — — — Balance at close of period $ 2,675,249 $ 2,619,422 $ 2,557,865 The following is a reconciliation of Brookfield DTLA’s accumulated depreciation on its investments in real estate (in thousands): For the Year Ended December 31, 2015 2014 2013 Accumulated Depreciation Balance at beginning of period $ 189,108 $ 121,612 $ 92,500 Additions during period: Depreciation expense 67,022 67,496 29,112 Deductions during period: Other — — — Balance at close of period $ 256,130 $ 189,108 $ 121,612 |
Organization and Description 37
Organization and Description of Business - Narrative (Details) | Oct. 15, 2013$ / sharesshares | Oct. 14, 2013 | Dec. 31, 2015 | Dec. 31, 2014 |
TRZ Holdings IV LLC | 333 South Hope and EYP Realty | ||||
Organization and Description of Business [Line Items] | ||||
Percentage ownership | 100.00% | |||
BPO | TRZ Holdings IV LLC | ||||
Organization and Description of Business [Line Items] | ||||
Percentage ownership | 84.00% | |||
Series A Preferred Stock | ||||
Organization and Description of Business [Line Items] | ||||
Preferred stock, dividend rate, percentage | 7.625% | 7.625% | 7.625% | |
Conversion ratio | 1 | |||
Common stock | MPG Office Trust, Inc. | ||||
Organization and Description of Business [Line Items] | ||||
Business acquisition, share price (in USD per share) | $ 3.15 | |||
MPG preferred stock | ||||
Organization and Description of Business [Line Items] | ||||
Preferred stock, dividend rate, percentage | 7.625% | |||
MPG preferred stock | MPG Office Trust, Inc. | ||||
Organization and Description of Business [Line Items] | ||||
Tender offer price (in USD per share) | $ 25 | |||
Shares repurchased in tender offer (in shares) | shares | 372,901 |
Basis of Presentation and Sum38
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Business combination, gain and loss recognized | $ 0 | ||
Distributions to Brookfield DTLA Holdings | $ 220,000,000 | ||
Distributions to senior participating preferred interest | 207,231,000 | ||
Dividends paid to senior participating preferred interest | $ 3,051,000 | 12,769,000 | 0 |
Unamortized debt discounts | 6,865,000 | ||
Less: unamortized discounts and debt issuance costs | 5,972,000 | 10,993,000 | |
Amortization of discounts and deferred financing costs | 5,064,000 | 6,049,000 | 951,000 |
Depreciation | 67,000,000 | 67,500,000 | 29,100,000 |
Impairment of real estate assets | 0 | 0 | |
Tenant inducements, accumulated amortization | 6,500,000 | 3,900,000 | |
Allowance for doubtful accounts | 500,000 | 400,000 | |
Provision for doubtful accounts | 103,000 | 24,000 | 357,000 |
Deferred leasing costs, accumulated amortization | 38,200,000 | 28,300,000 | |
Provision for income taxes | 0 | 0 | 0 |
Unrecognized tax benefits | $ 0 | 0 | |
Building | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Useful life | 60 years | ||
Estimated salvage value | 5.00% | ||
Building Improvements | Minimum | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Useful life | 7 years | ||
Building Improvements | Maximum | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Useful life | 25 years | ||
ASU 2015-03 | New Accounting Pronouncement, Early Adoption, Effect | |||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | |||
Unamortized debt issuance costs reclassified | 4,128,000 | ||
Amortization of deferred financing costs | 1,007,000 | 152,000 | |
Amortization of debt discounts | 5,042,000 | 799,000 | |
Amortization of discounts and deferred financing costs | $ 6,049,000 | $ 951,000 |
Acquisition of MPG Office Tru39
Acquisition of MPG Office Trust, Inc. - Narrative (Details) $ / shares in Units, $ in Millions | Oct. 15, 2013$ / sharesshares | Dec. 31, 2015shares | Dec. 31, 2014shares | Dec. 31, 2013USD ($) |
MPG preferred stock | ||||
Business Acquisition [Line Items] | ||||
Preferred stock, dividend rate, percentage | 7.625% | |||
Series A Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Preferred stock, dividend rate, percentage | 7.625% | 7.625% | 7.625% | |
Brookfield DTLA Preferred stock, shares issued (in shares) | shares | 9,730,370 | 9,730,370 | ||
Conversion ratio | 1 | |||
MPG Office Trust, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquisition and transaction related costs | $ 6.8 | |||
Revenues from MPG subsequent to acquisition | 38.8 | |||
Net loss generated from MPG subsequent to acquisition | 16.4 | |||
MPG Office Trust, Inc. | Brookfield DTLA Holdings LLC | ||||
Business Acquisition [Line Items] | ||||
Acquisition and transaction related costs | $ 6.3 | |||
MPG Office Trust, Inc. | Common stock | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, share price (in USD per share) | $ / shares | $ 3.15 | |||
MPG Office Trust, Inc. | MPG preferred stock | ||||
Business Acquisition [Line Items] | ||||
Tender offer price (in USD per share) | $ / shares | $ 25 | |||
Shares repurchased in tender offer (in shares) | shares | 372,901 | |||
MPG Office Trust, Inc. | Series A Preferred Stock | ||||
Business Acquisition [Line Items] | ||||
Brookfield DTLA Preferred stock, shares issued (in shares) | shares | 9,730,370 | |||
Business acquisition, fair value of preferred stock issued (in USD per share) | $ / shares | $ 26 |
Acquisition of MPG Office Tru40
Acquisition of MPG Office Trust, Inc. - Schedule of the Components of the Purchase Price Paid in Connection with the MPG Acquisition (Details) - MPG Office Trust, Inc. | Oct. 15, 2013USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Purchase price | $ | $ 442,192,149 |
MPG common stock | |
Business Acquisition [Line Items] | |
MPG common stock and noncontrolling common units (in shares) | shares | 57,540,216 |
MPG in-the-money equity awards (in shares) | shares | 2,524,079 |
Total shares (in shares) | shares | 60,064,295 |
Merger consideration per common share (in USD per share) | $ / shares | $ 3.15 |
Purchase price | $ | $ 189,202,529 |
Series A Preferred Stock | |
Business Acquisition [Line Items] | |
Fair value of Series A preferred stock issued by Brookfield DTLA | $ | $ 252,989,620 |
Acquisition of MPG Office Tru41
Acquisition of MPG Office Trust, Inc. - Schedule of Fair Value Assigned to the Identified Assets Acquired and Liabilities Assumed (Details) - MPG Office Trust, Inc. | Oct. 15, 2013USD ($) |
Business Acquisition [Line Items] | |
Purchase price | $ 442,192,149 |
Identified Assets Acquired: | |
Investments in real estate | 1,685,000,000 |
Cash and cash equivalents | 156,000,000 |
Restricted cash | 41,000,000 |
Rents, deferred rents and other receivables | 3,000,000 |
Intangible assets | 142,000,000 |
Deferred charges | 32,000,000 |
Prepaid and other assets | 2,000,000 |
Liabilities Assumed: | |
Mortgage loans | 1,532,000,000 |
Accounts payable and other liabilities | 47,000,000 |
Intangible liabilities | 40,000,000 |
Total identified assets acquired, net | 442,000,000 |
Residual amount | $ 0 |
Acquisition of MPG Office Tru42
Acquisition of MPG Office Trust, Inc. - Schedule of Condensed Pro Forma Financial Information (Details) - MPG Office Trust, Inc. $ in Millions | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Business Acquisition [Line Items] | |
Total revenue | $ 272.8 |
Net loss | $ (103.4) |
Intangible Assets and Liabili43
Intangible Assets and Liabilities - Summary of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Intangible Assets | ||
In-place leases | $ 110,519 | $ 110,519 |
Tenant relationships | 46,248 | 46,248 |
Above-market leases | 39,936 | 39,936 |
Intangible assets, gross | 196,703 | 196,703 |
Less: accumulated amortization | 96,993 | 70,876 |
Intangible assets, net | 99,710 | 125,827 |
Intangible Liabilities | ||
Below-market leases | 76,344 | 76,344 |
Less: accumulated amortization | 46,136 | 38,619 |
Intangible liabilities, net | $ 30,208 | $ 37,725 |
Intangible Assets and Liabili44
Intangible Assets and Liabilities - Schedule of Finite-lived Intangible Assets and Liabilities Depreciation and Amortization Expense and Rental Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Rental income | |||
Acquired Indefinite-lived Intangible Assets and Liabilities [Line Items] | |||
Amortization of intangible assets | $ 2,559 | $ 3,059 | $ 5,321 |
Depreciation and amortization expense | |||
Acquired Indefinite-lived Intangible Assets and Liabilities [Line Items] | |||
Amortization of intangible assets | $ 21,159 | $ 26,872 | $ 10,111 |
Intangible Assets and Liabili45
Intangible Assets and Liabilities - Schedule of Estimate of Amortization/Accretion of Intangible Assets and Liabilities During Next Five Years and Thereafter (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Intangible assets, net | $ 99,710 | $ 125,827 |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | ||
2,016 | 5,521 | |
2,017 | 4,870 | |
2,018 | 4,064 | |
2,019 | 3,639 | |
2,020 | 3,434 | |
Thereafter | 8,680 | |
Intangible liabilities, net | 30,208 | $ 37,725 |
In-Place Leases | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,016 | 13,437 | |
2,017 | 10,335 | |
2,018 | 7,608 | |
2,019 | 6,511 | |
2,020 | 5,724 | |
Thereafter | 15,202 | |
Intangible assets, net | 58,817 | |
Other Intangible Assets | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,016 | 7,633 | |
2,017 | 6,293 | |
2,018 | 5,196 | |
2,019 | 4,361 | |
2,020 | 3,440 | |
Thereafter | 13,970 | |
Intangible assets, net | $ 40,893 |
Mortgage Loans - Schedule of De
Mortgage Loans - Schedule of Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Aug. 07, 2014 | |
Debt Instrument [Line Items] | |||
Total debt, gross | $ 2,117,377 | $ 2,118,000 | |
Less: unamortized discounts and debt issuance costs | 5,972 | 10,993 | |
Total debt, net | 2,111,405 | 2,107,007 | |
Variable Rate Loans | |||
Debt Instrument [Line Items] | |||
Total debt, gross | $ 525,000 | 525,000 | |
Variable Rate Loans | Wells Fargo Center - South Tower | |||
Debt Instrument [Line Items] | |||
Contractual Maturity Date | Dec. 1, 2016 | ||
Variable interest rate | 2.05% | ||
Total debt, gross | $ 290,000 | 290,000 | |
Variable Rate Loans | 777 Tower | |||
Debt Instrument [Line Items] | |||
Contractual Maturity Date | Nov. 1, 2018 | ||
Variable interest rate | 1.95% | ||
Total debt, gross | $ 200,000 | 200,000 | |
Variable Rate Loans | Figueroa at 7th | |||
Debt Instrument [Line Items] | |||
Contractual Maturity Date | Sep. 10, 2017 | ||
Variable interest rate | 2.54% | ||
Total debt, gross | $ 35,000 | 35,000 | |
Floating Rate Debt | |||
Debt Instrument [Line Items] | |||
Total debt, gross | $ 709,377 | 710,000 | |
Floating Rate Debt | EY Plaza | |||
Debt Instrument [Line Items] | |||
Contractual Maturity Date | Nov. 27, 2020 | ||
Variable interest rate | 3.93% | ||
Total debt, gross | $ 184,377 | 185,000 | |
Fixed Rate Debt | |||
Debt Instrument [Line Items] | |||
Total debt, gross | $ 1,408,000 | 1,408,000 | |
Fixed Rate Debt | Wells Fargo Center - North Tower | |||
Debt Instrument [Line Items] | |||
Contractual Maturity Date | Apr. 6, 2017 | ||
Fixed interest rate | 5.70% | ||
Total debt, gross | $ 550,000 | 550,000 | |
Fixed Rate Debt | Gas Company Tower | |||
Debt Instrument [Line Items] | |||
Contractual Maturity Date | Aug. 11, 2016 | ||
Fixed interest rate | 5.10% | ||
Total debt, gross | $ 458,000 | 458,000 | |
Fixed Rate Debt | Bank of America Plaza | |||
Debt Instrument [Line Items] | |||
Contractual Maturity Date | Sep. 1, 2024 | ||
Fixed interest rate | 4.05% | 4.05% | |
Total debt, gross | $ 400,000 | $ 400,000 |
Mortgage Loans - Schedule of 47
Mortgage Loans - Schedule of Debt (Footnote) (Details) | 12 Months Ended |
Dec. 31, 2015extension_option | |
Variable Rate Loans | Wells Fargo Center - South Tower | |
Debt Instrument [Line Items] | |
Effective interest rate | 2.05% |
Variable Rate Loans | Wells Fargo Center - South Tower | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.80% |
Cap interest rate | 4.75% |
Number of options to extend | 2 |
Option extension period | 1 year |
Variable Rate Loans | 777 Tower | |
Debt Instrument [Line Items] | |
Effective interest rate | 1.95% |
Variable Rate Loans | 777 Tower | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.70% |
Cap interest rate | 5.75% |
Number of options to extend | 2 |
Option extension period | 1 year |
Variable Rate Loans | Figueroa at 7th | |
Debt Instrument [Line Items] | |
Effective interest rate | 2.54% |
Variable Rate Loans | Figueroa at 7th | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 2.25% |
Number of options to extend | 2 |
Option extension period | 12 months |
Floating Rate Debt | EY Plaza | |
Debt Instrument [Line Items] | |
Effective interest rate | 3.93% |
Floating Rate Debt | EY Plaza | LIBOR | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.75% |
Swap rate | 2.178% |
Mortgage Loans - Narrative (Det
Mortgage Loans - Narrative (Details) | Dec. 16, 2015USD ($) | Sep. 10, 2014USD ($) | Aug. 28, 2014USD ($) | Aug. 07, 2014USD ($) | Mar. 21, 2014USD ($) | Oct. 15, 2013USD ($) | Dec. 31, 2015USD ($)extension_option | Dec. 31, 2014USD ($) | Oct. 06, 2015USD ($) | Apr. 01, 2015USD ($) | Oct. 02, 2014USD ($) | Apr. 08, 2014USD ($) | Oct. 11, 2013USD ($) |
Debt Instrument [Line Items] | |||||||||||||
Weighted average interest rate | 4.20% | 4.17% | |||||||||||
Prepayment amount without penalty | $ 509,400,000 | ||||||||||||
Amount available to be defeased | 458,000,000 | ||||||||||||
Prepayment amount with penalty or available to be defeased | 550,000,000 | ||||||||||||
Prepaid with penalties | 200,000,000 | ||||||||||||
Amount unavailable for defeasance | 400,000,000 | ||||||||||||
Total debt, gross | $ 2,117,377,000 | $ 2,118,000,000 | |||||||||||
Covenant compliance | Pursuant to the terms of certain of our mortgage loan agreements, Brookfield DTLA is required to report a debt service coverage ratio (“DSCR”) calculated using the formulas specified in the underlying loan agreements. We have submitted the required reports to the lenders for the measurement periods ended December 31, 2015 and were in compliance with the amounts required by the loan agreements, with the exception of Gas Company Tower. | ||||||||||||
Covenant description | Under the Gas Company Tower mortgage loan, we reported a DSCR of 0.71 to 1.00, calculated using actual debt service under the loan, and a DSCR of 0.57 to 1.00, calculated using actual debt service plus a hypothetical principal payment using a 30-year amortization schedule. Because the reported DSCR using the actual debt service plus a hypothetical principal payment was less than 1.00 to 1.00, the lender could seek to remove Brookfield Properties Management (CA) Inc. as property manager of Gas Company Tower, which is the only recourse available to the lender as a result of such breach. | ||||||||||||
Carrying amount | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Total debt, gross | $ 2,117,377,000 | 2,118,000,000 | |||||||||||
Senior Participating Preferred Interest | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Distributions to noncontrolling interests | $ 35,800,000 | $ 150,000,000 | $ 70,000,000 | 35,800,000 | 220,000,000 | ||||||||
Promissory Note to BOP Management, Inc. | BOP Management Inc. | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Promissory note | $ 25,000,000 | ||||||||||||
Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Target leverage ratio | 60.00% | ||||||||||||
Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Target leverage ratio | 65.00% | ||||||||||||
Variable Rate Loans | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Total debt, gross | 525,000,000 | 525,000,000 | |||||||||||
Fixed Rate Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Total debt, gross | 1,408,000,000 | 1,408,000,000 | |||||||||||
Gas Company Tower | Fixed Rate Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Total debt, gross | $ 458,000,000 | 458,000,000 | |||||||||||
Maturity date | Aug. 11, 2016 | ||||||||||||
Additional cash required to refinance debt | $ 142,000,000 | ||||||||||||
Fixed interest rate | 5.10% | ||||||||||||
Debt service coverage ratio | 0.71 | ||||||||||||
Debt service coverage ratio with 30 year amortization schedule | 0.57 | ||||||||||||
Amortization period | 30 years | ||||||||||||
Debt service coverage ratio, minimum | 1 | ||||||||||||
Gas Company Tower | Fixed Rate Debt | Minimum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Target leverage ratio | 60.00% | ||||||||||||
Gas Company Tower | Fixed Rate Debt | Maximum | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Target leverage ratio | 65.00% | ||||||||||||
Wells Fargo Center - South Tower | Variable Rate Loans | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Total debt, gross | $ 290,000,000 | 290,000,000 | |||||||||||
Maturity date | Dec. 1, 2016 | ||||||||||||
Additional cash required to refinance debt | $ 15,000,000 | ||||||||||||
Wells Fargo Center - South Tower | Variable Rate Loans | LIBOR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on variable rate | 1.80% | ||||||||||||
Number of options to extend | extension_option | 2 | ||||||||||||
Extension term of maturity date on loan | 1 year | ||||||||||||
Figueroa at 7th | Mortgages | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount | $ 35,000,000 | ||||||||||||
Proceeds from mortgage loans | $ 34,600,000 | ||||||||||||
Figueroa at 7th | Variable Rate Loans | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Total debt, gross | $ 35,000,000 | 35,000,000 | |||||||||||
Maturity date | Sep. 10, 2017 | ||||||||||||
Figueroa at 7th | Variable Rate Loans | LIBOR | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Basis spread on variable rate | 2.25% | ||||||||||||
Number of options to extend | extension_option | 2 | ||||||||||||
Extension term of maturity date on loan | 12 months | ||||||||||||
Bank of America Plaza | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Tax reserve | $ 4,200,000 | ||||||||||||
Tenant improvement and leasing commission reserve | 3,000,000 | ||||||||||||
Rent concession reserve | 500,000 | ||||||||||||
Bank of America Plaza | Mortgages | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Proceeds from mortgage loans | 399,400,000 | ||||||||||||
Repayments of long term debt | 211,800,000 | ||||||||||||
Proceeds from debt used to fund loan reserves | 7,700,000 | ||||||||||||
Proceeds from debt used for general corporate purposes | 179,900,000 | ||||||||||||
Bank of America Plaza | Fixed Rate Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Total debt, gross | $ 400,000,000 | 400,000,000 | |||||||||||
Maturity date | Sep. 1, 2024 | ||||||||||||
Face amount | $ 400,000,000 | ||||||||||||
Fixed interest rate | 4.05% | 4.05% | |||||||||||
Wells Fargo Center - North Tower | Fixed Rate Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Total debt, gross | $ 550,000,000 | 550,000,000 | |||||||||||
Maturity date | Apr. 6, 2017 | ||||||||||||
Fixed interest rate | 5.70% | ||||||||||||
Collateral reserve required by lender | $ 10,000,000 | ||||||||||||
Wells Fargo Center - North Tower | Fixed Rate Debt | Restricted Cash | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Collateral reserve paid to lender | $ 5,000,000 | $ 1,250,000 | $ 1,250,000 | $ 1,250,000 | $ 1,250,000 | ||||||||
Wells Fargo Center - North Tower and Gas Company Tower | Fixed Rate Debt | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Amount subject to guarantees | $ 591,800,000 | $ 591,800,000 |
Mortgage Loans - Schedule of 49
Mortgage Loans - Schedule of Debt to be Repaid During the Next Five Years and Thereafter (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,016 | $ 751,519 | |
2,017 | 589,026 | |
2,018 | 204,232 | |
2,019 | 4,449 | |
2,020 | 168,151 | |
Thereafter | 400,000 | |
Total | $ 2,117,377 | $ 2,118,000 |
Mezzanine Equity - Narrative (D
Mezzanine Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 04, 2016 | Dec. 16, 2015 | Dec. 04, 2015 | Aug. 28, 2014 | Mar. 21, 2014 | Oct. 15, 2013 | Oct. 15, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | Oct. 11, 2013 | Dec. 31, 2012 |
Class of Stock [Line Items] | |||||||||||||
Redemption value | $ 726,595 | $ 739,600 | $ 911,539 | $ 726,595 | $ 0 | ||||||||
Fair market value as of merger date | $ 595,000 | $ 595,000 | |||||||||||
Payments of dividends to noncontrolling interest | 3,051 | 12,769 | 0 | ||||||||||
Other payment to noncontrolling interest | 207,231 | ||||||||||||
BOP Management Inc. | Promissory Note to BOP Management, Inc. | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Promissory note | $ 25,000 | ||||||||||||
Minimum | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Target leverage ratio | 60.00% | ||||||||||||
Maximum | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Target leverage ratio | 65.00% | ||||||||||||
Series A-1 Preferred Interest | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred interest percent distribution | 48.13% | ||||||||||||
Series A Preferred Interest | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred interest percent distribution | 51.87% | ||||||||||||
Preferred interest percent distribution after liquidation preference reduced to zero | 47.66% | ||||||||||||
Series B Preferred Interest | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred interest percent distribution after liquidation preference reduced to zero | 52.34% | ||||||||||||
Senior Participating Preferred Interest | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Distributions to noncontrolling interests | $ 35,800 | $ 150,000 | $ 70,000 | 35,800 | 220,000 | ||||||||
Redemption value | $ 23,207 | $ 50,080 | $ 257,780 | $ 23,207 | 0 | ||||||||
Temporary equity, stated value | $ 240,000 | $ 240,000 | |||||||||||
Coupon rate, preferred interest | 7.00% | ||||||||||||
Payments of dividends to noncontrolling interest | 3,100 | 5,500 | 7,300 | ||||||||||
Other payment to noncontrolling interest | $ 32,800 | $ 144,500 | $ 62,700 | ||||||||||
Senior Participating Preferred Interest | Brookfield DTLA Holdings LLC | 333 South Hope and EYP Realty | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Residual interest, participating interest | 4.00% | ||||||||||||
Series A Preferred Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||||||||||
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||
Preferred stock, liquidation preference (in USD per share) | $ 25 | $ 25 | |||||||||||
Preferred stock, shares outstanding (in shares) | 9,730,370 | 9,730,370 | 9,730,370 | ||||||||||
Preferred stock, shares issued (in shares) | 9,730,370 | 9,730,370 | 9,730,370 | ||||||||||
Preferred stock dividends declared (in USD per share) | $ 2.25 | $ 0 | $ 0 | ||||||||||
Preferred stock, dividend rate (in USD per share) | $ 1.90625 | ||||||||||||
Preferred stock, amount of preferred dividends in arrears | $ 111,000 | ||||||||||||
Preferred stock, redemption price per share (in USD per share) | $ 25 | $ 25 | |||||||||||
Redemption value | $ 354,304 | $ 357,649 | $ 339,101 | $ 354,304 | 0 | ||||||||
Series A Preferred Stock | MPG Office Trust, Inc. | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares issued (in shares) | 9,730,370 | 9,730,370 | |||||||||||
Business acquisition, fair value of preferred stock issued (in USD per share) | $ 26 | $ 26 | |||||||||||
Series A Preferred Stock | Third Party Issuance | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares outstanding (in shares) | 9,357,469 | 9,357,469 | 9,357,469 | ||||||||||
Series A Preferred Stock | Brookfield DTLA Holdings LLC | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, shares outstanding (in shares) | 372,901 | 372,901 | 372,901 | ||||||||||
Series A Preferred Stock | Subsequent Event | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock dividends paid (in USD per share) | $ 2.25 | ||||||||||||
Dividend payment | $ 21,900 | ||||||||||||
Series A-1 Preferred Interest | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Preferred stock, amount of preferred dividends in arrears | $ 123,400 | ||||||||||||
Redemption value | $ 349,084 | $ 331,871 | $ 314,658 | 349,084 | $ 0 | ||||||||
Temporary equity, stated value | $ 225,700 | $ 225,700 | |||||||||||
Liquidation value | $ 225,700 | $ 225,700 |
Mezzanine Equity - Summary of t
Mezzanine Equity - Summary of the Change in Mezzanine Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | $ 739,600 | $ 911,539 | $ 0 |
Dividends | 38,082 | 45,805 | 10,950 |
Redemption measurement adjustment | 6,626 | 2,256 | 158,552 |
Dividends declared | (21,893) | ||
Cash distribution | (35,820) | (220,000) | |
Balance, ending | 726,595 | 739,600 | 911,539 |
Series A Preferred Stock | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | $ 357,649 | $ 339,101 | $ 0 |
Balance, beginning (in shares) | 9,730,370 | 9,730,370 | 0 |
Issuance of mezzanine equity | $ 252,990 | ||
Issuance of mezzanine equity (in shares) | 9,730,370 | ||
Dividends | $ 18,548 | $ 18,548 | $ 3,864 |
Redemption measurement adjustment | 82,247 | ||
Dividends declared | (21,893) | ||
Balance, ending | $ 354,304 | $ 357,649 | $ 339,101 |
Balance, ending (in shares) | 9,730,370 | 9,730,370 | 9,730,370 |
Series A-1 Preferred Interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | $ 331,871 | $ 314,658 | $ 0 |
Issuance of mezzanine equity | 234,767 | ||
Dividends | 17,213 | 17,213 | 3,586 |
Redemption measurement adjustment | 76,305 | ||
Balance, ending | 349,084 | 331,871 | 314,658 |
Senior Participating Preferred Interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | 50,080 | 257,780 | 0 |
Issuance of mezzanine equity | 254,280 | ||
Dividends | 2,321 | 10,044 | 3,500 |
Redemption measurement adjustment | 6,626 | 2,256 | |
Cash distribution | (35,820) | (220,000) | |
Balance, ending | $ 23,207 | $ 50,080 | $ 257,780 |
Stockholders' Deficit - Narrati
Stockholders' Deficit - Narrative (Details) - USD ($) | Apr. 24, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 1,000,000 | |||
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | ||
Common stock, shares issued (in shares) | 1,000 | 1,000 | ||
Common stock, shares outstanding (in shares) | 1,000 | 1,000 | ||
Dividends declared on common stock (in USD per share) | $ 0 | $ 0 | $ 0 | |
Brookfield DTLA Holdings LLC | ||||
Class of Stock [Line Items] | ||||
Proceeds from issuance of common stock | $ 1,000 | $ 27,000 | ||
Common stock, shares issued (in shares) | 1,000 | |||
Common stock, shares outstanding (in shares) | 1,000 | 1,000 |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive (Loss) Income - Summary of the Change in Accumulated Other Comprehensive (Loss) Income Related to Cash Flow Hedges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of year | $ (98,398) | $ 7,999 | $ 508,703 |
Balance at end of year | (184,537) | (98,398) | 7,999 |
Accumulated Other Comprehensive (Loss) Income | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of year | (4,337) | 1,007 | 0 |
Other comprehensive (loss) gain before reclassifications | (1,078) | (5,344) | 1,007 |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 | 0 |
Net current-period other comprehensive (loss) gain | (1,078) | (5,344) | 1,007 |
Balance at end of year | $ (5,415) | $ (4,337) | $ 1,007 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of (Liabilities) Assets Measured at Fair Value on a Recurring Basis, Aggregated by the Level in the Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Interest Rate Swap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cash flow hedge derivative at fair value, net | $ (5,415) | $ (4,337) | $ 1,007 |
Interest Rate Swap | Quoted Prices in Active Markets for Identical (Liabilities) Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cash flow hedge derivative at fair value, net | 0 | 0 | 0 |
Interest Rate Swap | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cash flow hedge derivative at fair value, net | (5,415) | (4,337) | 1,007 |
Interest Rate Swap | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate cash flow hedge derivative at fair value, net | 0 | 0 | 0 |
Interest Rate Cap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate derivative instruments not designated as hedging instruments, asset at fair value | 19 | 190 | 1,600 |
Interest Rate Cap | Quoted Prices in Active Markets for Identical (Liabilities) Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate derivative instruments not designated as hedging instruments, asset at fair value | 0 | 0 | 0 |
Interest Rate Cap | Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate derivative instruments not designated as hedging instruments, asset at fair value | 19 | 190 | 1,600 |
Interest Rate Cap | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate derivative instruments not designated as hedging instruments, asset at fair value | $ 0 | $ 0 | $ 0 |
Financial Instruments - Summary
Financial Instruments - Summary of the Fair Value of Derivative Financial Instruments (Details) - Interest Rate Swap - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Derivatives, Fair Value [Line Items] | |||
Interest rate cash flow hedge derivative at fair value, net | $ (5,415) | $ (4,337) | $ 1,007 |
Accounts Payable and Other Liabilities | Cash Flow Hedging | Designated as Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Interest rate cash flow hedge derivative at fair value, net | $ (5,415) | $ (4,337) |
Financial Instruments - Summa56
Financial Instruments - Summary of the Effect of Derivative Financial Instruments Reported in the Consolidated and Combined Financial Statements (Details) - Interest Rate Swap - Cash Flow Hedging - Designated as Hedging Instrument - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative [Line Items] | |||
Amount of (Loss) Gain Recognized in AOCL | $ (1,078) | $ (5,344) | $ 1,007 |
Amount of Gain (Loss) Reclassified from AOCL to Statement of Operations | $ 0 | $ 0 | $ 0 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
EY Plaza | Interest Rate Swap | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notional amount | $ 185,000,000 | $ 185,000,000 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Notional Amounts of Interest Rate Caps Pursuant to the Terms of Certain Mortgage Agreements (Details) - Interest Rate Cap - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Notional amount | $ 490,000 | $ 490,000 |
Wells Fargo Center - South Tower | ||
Derivative [Line Items] | ||
Notional amount | 290,000 | 290,000 |
777 Tower | ||
Derivative [Line Items] | ||
Notional amount | $ 200,000 | $ 200,000 |
Financial Instruments - Summa59
Financial Instruments - Summary of the Estimated Fair Value and Carrying Amount of Mortgage Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans | $ 2,117,377 | $ 2,118,000 |
Carrying amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans | 2,117,377 | 2,118,000 |
Significant Unobservable Inputs (Level 3) | Estimated fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage loans | $ 2,114,761 | $ 2,133,158 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | Sep. 12, 2014 | Apr. 18, 2014 | Oct. 11, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | ||||||
Property management fee, percent | 2.75% | |||||
Asset management fee, percent | 0.75% | |||||
Real estate insurance, all risk property and business interruption coverage per occurrence | $ 2,500,000,000 | |||||
Real estate insurance, earthquake, flood and weather catastrophe insurance aggregate limit | 350,000,000 | |||||
Real estate insurance, terrorism insurance coverage aggregate limit | $ 4,000,000,000 | |||||
MPG Properties | ||||||
Related Party Transaction [Line Items] | ||||||
Real estate insurance, terrorism insurance coverage aggregate limit | $ 1,250,000,000 | |||||
Real estate insurance, all risk property and business interruption insurance aggregate limit | 1,250,000,000 | |||||
Real estate Insurance, earthquake aggregate limit | $ 130,000,000 | |||||
Promissory Note to BOP Management, Inc. | BOP Management Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Promissory note | $ 25,000,000 | |||||
Interest rate | 3.25% | |||||
Interest expense, related party | $ 600,000 | $ 200,000 | ||||
Repayment of related party debt | $ 25,800,000 |
Related Party Transactions - Su
Related Party Transactions - Summary of Costs Incurred Under Agreements with Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property management fee expense | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses | $ 7,445 | $ 8,135 | $ 3,667 |
Asset management fee expense | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses | 6,292 | 6,109 | 1,320 |
General, administrative and reimbursable expenses | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses | 2,593 | 2,509 | 1,190 |
Leasing and construction management fees | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses | 6,396 | 3,626 | 786 |
Insurance expense | |||
Related Party Transaction [Line Items] | |||
Related party transaction expenses | $ 8,532 | $ 8,466 | $ 4,949 |
Rental Income - Schedule of Fut
Rental Income - Schedule of Future Minimum Rental Income Under Noncancelable Tenant Operating Leases (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Leases [Abstract] | |
2,016 | $ 145,449 |
2,017 | 150,447 |
2,018 | 140,131 |
2,019 | 134,553 |
2,020 | 125,360 |
Thereafter | 599,184 |
Total | $ 1,295,124 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative - Tenant Concentration (Details) - Revenue | 12 Months Ended | ||
Dec. 31, 2015customerProperties | Dec. 31, 2014customerProperties | Dec. 31, 2013customerProperties | |
Customer concentration risk | |||
Concentration Risk [Line Items] | |||
Number of tenants | customer | 0 | 0 | 1 |
Customer concentration risk | BOA and EY Plaza | |||
Concentration Risk [Line Items] | |||
Number of properties | 2 | ||
Customer concentration risk | EY Plaza, BOA Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower and 777 Tower | |||
Concentration Risk [Line Items] | |||
Number of properties | 6 | 6 | |
Property concentration risk | BOA and EY Plaza | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 72.00% | ||
Property concentration risk | EY Plaza, BOA Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower and 777 Tower | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 98.00% | 100.00% |
Commitments and Contingencies64
Commitments and Contingencies - Narrative - Litigation (Details) | Jan. 04, 2016USD ($) | Dec. 04, 2015$ / shares | Jun. 18, 2014USD ($) | Apr. 24, 2013lawsuit | Dec. 31, 2014$ / shares | Dec. 31, 2013$ / shares | Sep. 28, 2015USD ($) | Mar. 30, 2015$ / shares | Nov. 21, 2013USD ($) |
Series A Preferred Stock | |||||||||
Loss Contingencies [Line Items] | |||||||||
Proposed litigation payment per preferred share of accumulated and unpaid dividends (in USD per share) | $ / shares | $ 2.25 | ||||||||
Proposed litigation settlement, attorneys' fees | $ 5,250,000 | ||||||||
Preferred stock dividends declared (in USD per share) | $ / shares | $ 2.25 | $ 0 | $ 0 | ||||||
Series A Preferred Stock | Subsequent Event | |||||||||
Loss Contingencies [Line Items] | |||||||||
Dividend payment | $ 21,900,000 | ||||||||
MPG Office LLC | MPG Office LLC | |||||||||
Loss Contingencies [Line Items] | |||||||||
Payments for legal settlement | $ 475,000 | ||||||||
Amount of Stipulated Settlement | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of claims filed | lawsuit | 7 | ||||||||
Maximum stipulation of settlement | $ 475,000 |
Quarterly Financial Informati65
Quarterly Financial Information (Unaudited) - Schedule of Quarterly Financial Information (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information [Line Items] | |||||||||||
Revenue | $ 73,583 | $ 74,561 | $ 77,438 | $ 73,508 | $ 75,429 | $ 75,697 | $ 74,358 | $ 68,677 | $ 299,090 | $ 294,161 | $ 138,722 |
Expenses | 88,801 | 83,908 | 84,166 | 82,569 | 86,793 | 90,601 | 85,757 | 84,002 | 339,444 | 347,153 | 153,996 |
Net loss | (15,218) | (9,347) | (6,728) | (9,061) | (11,364) | (14,904) | (11,399) | (15,325) | (40,354) | (52,992) | (15,274) |
Series B common interest – allocation of net loss | (14,765) | (10,310) | (9,319) | (10,127) | (11,469) | (13,699) | (12,756) | (14,967) | |||
Net loss attributable to Brookfield DTLA | (8,807) | (4,752) | (3,849) | (4,584) | (5,807) | (7,837) | (6,978) | (8,992) | (21,992) | (29,614) | (3,066) |
Net loss available to common interest holders of Brookfield DTLA | (13,444) | (9,389) | (8,486) | (9,221) | (10,444) | (12,474) | (11,615) | (13,629) | (40,540) | (48,162) | (89,177) |
Series A-1 preferred interest | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Current dividends | 4,304 | 4,303 | 4,303 | 4,303 | 4,304 | 4,303 | 4,303 | 4,303 | 17,213 | 17,213 | 0 |
Redemption measurement adjustment | 0 | 0 | 76,305 | ||||||||
Senior participating preferred interest | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Current dividends | 529 | 608 | 597 | 587 | 577 | 2,232 | 3,102 | 4,133 | 2,321 | 10,044 | 0 |
Redemption measurement adjustment | 3,521 | 804 | 1,540 | 760 | 1,031 | 97 | 930 | 198 | 6,625 | 2,256 | 0 |
Series A Preferred Stock | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Current dividends | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,637 | 18,548 | 18,548 | 0 |
Redemption measurement adjustment | $ 0 | $ 0 | $ 82,247 |
Investments in Real Estate - Su
Investments in Real Estate - Summary of Information Related to Investments in Real Estate (Details) - USD ($) $ in Thousands | Oct. 15, 2013 | Oct. 06, 2006 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Encumbrances | $ 2,117,377 | |||||
Initial Cost to Company | ||||||
Land | 227,555 | |||||
Buildings and Improvements | 2,198,772 | |||||
Costs Capitalized Subsequent to Acquisition | ||||||
Improvements | 248,922 | |||||
Carrying Costs | 0 | |||||
Gross Amount at Which Carried at Close of Period | ||||||
Land | 227,555 | |||||
Buildings and Improvements | 2,447,694 | |||||
Total | 2,675,249 | $ 2,619,422 | $ 2,557,865 | $ 848,572 | ||
Accumulated Depreciation | 256,130 | $ 189,108 | $ 121,612 | $ 92,500 | ||
Office properties | Wells Fargo Center– North Tower 333 S. Grand Avenue | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Encumbrances | 550,000 | |||||
Initial Cost to Company | ||||||
Land | 41,024 | |||||
Buildings and Improvements | 456,363 | |||||
Costs Capitalized Subsequent to Acquisition | ||||||
Improvements | 42,404 | |||||
Carrying Costs | 0 | |||||
Gross Amount at Which Carried at Close of Period | ||||||
Land | 41,024 | |||||
Buildings and Improvements | 498,767 | |||||
Total | 539,791 | |||||
Accumulated Depreciation | 33,398 | |||||
Year Acquired | Oct. 15, 2013 | |||||
Office properties | BOA Plaza 333 S. Hope Street | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Encumbrances | 400,000 | |||||
Initial Cost to Company | ||||||
Land | 54,163 | |||||
Buildings and Improvements | 354,422 | |||||
Costs Capitalized Subsequent to Acquisition | ||||||
Improvements | 46,999 | |||||
Carrying Costs | 0 | |||||
Gross Amount at Which Carried at Close of Period | ||||||
Land | 54,163 | |||||
Buildings and Improvements | 401,421 | |||||
Total | 455,584 | |||||
Accumulated Depreciation | 84,077 | |||||
Year Acquired | Oct. 6, 2006 | |||||
Office properties | Wells Fargo Center– South Tower 355 S. Grand Avenue | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Encumbrances | 290,000 | |||||
Initial Cost to Company | ||||||
Land | 21,231 | |||||
Buildings and Improvements | 401,149 | |||||
Costs Capitalized Subsequent to Acquisition | ||||||
Improvements | 12,999 | |||||
Carrying Costs | 0 | |||||
Gross Amount at Which Carried at Close of Period | ||||||
Land | 21,231 | |||||
Buildings and Improvements | 414,148 | |||||
Total | 435,379 | |||||
Accumulated Depreciation | 23,178 | |||||
Year Acquired | Oct. 15, 2013 | |||||
Office properties | Gas Company Tower 525-555 W. Fifth Street | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Encumbrances | 458,000 | |||||
Initial Cost to Company | ||||||
Land | 20,742 | |||||
Buildings and Improvements | 396,159 | |||||
Costs Capitalized Subsequent to Acquisition | ||||||
Improvements | 21,516 | |||||
Carrying Costs | 0 | |||||
Gross Amount at Which Carried at Close of Period | ||||||
Land | 20,742 | |||||
Buildings and Improvements | 417,675 | |||||
Total | 438,417 | |||||
Accumulated Depreciation | 20,552 | |||||
Year Acquired | Oct. 15, 2013 | |||||
Office properties | EY Plaza 725 S. Figueroa Street | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Encumbrances | 219,377 | |||||
Initial Cost to Company | ||||||
Land | 47,385 | |||||
Buildings and Improvements | 286,982 | |||||
Costs Capitalized Subsequent to Acquisition | ||||||
Improvements | 110,101 | |||||
Carrying Costs | 0 | |||||
Gross Amount at Which Carried at Close of Period | ||||||
Land | 47,385 | |||||
Buildings and Improvements | 397,083 | |||||
Total | 444,468 | |||||
Accumulated Depreciation | 72,718 | |||||
Year Acquired | Oct. 6, 2006 | |||||
Office properties | 777 Tower 777 S. Figueroa Street | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Encumbrances | 200,000 | |||||
Initial Cost to Company | ||||||
Land | 38,010 | |||||
Buildings and Improvements | 303,697 | |||||
Costs Capitalized Subsequent to Acquisition | ||||||
Improvements | 14,888 | |||||
Carrying Costs | 0 | |||||
Gross Amount at Which Carried at Close of Period | ||||||
Land | 38,010 | |||||
Buildings and Improvements | 318,585 | |||||
Total | 356,595 | |||||
Accumulated Depreciation | 22,207 | |||||
Year Acquired | Oct. 15, 2013 | |||||
Miscellaneous investments | Miscellaneous investments | ||||||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||||||
Encumbrances | 0 | |||||
Initial Cost to Company | ||||||
Land | 5,000 | |||||
Buildings and Improvements | 0 | |||||
Costs Capitalized Subsequent to Acquisition | ||||||
Improvements | 15 | |||||
Carrying Costs | 0 | |||||
Gross Amount at Which Carried at Close of Period | ||||||
Land | 5,000 | |||||
Buildings and Improvements | 15 | |||||
Total | 5,015 | |||||
Accumulated Depreciation | $ 0 |
Investments in Real Estate - 67
Investments in Real Estate - Summary of Information Related to Investments in Real Estate (Footnote) (Details) $ in Billions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |
Real estate for federal income tax purposes | $ 2.8 |
Building | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |
Useful life | 60 years |
Estimated salvage value | 5.00% |
Minimum | Building Improvements | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |
Useful life | 7 years |
Maximum | Building Improvements | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |
Useful life | 25 years |
Investments in Real Estate - Sc
Investments in Real Estate - Schedule of Reconciliation of Investments in Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investments in Real Estate | |||
Balance at beginning of period | $ 2,619,422 | $ 2,557,865 | $ 848,572 |
Acquisitions | 0 | 0 | 1,685,375 |
Improvements | 57,827 | 61,557 | 23,918 |
Dispositions | 2,000 | 0 | 0 |
Other | 0 | 0 | 0 |
Balance at close of period | 2,675,249 | 2,619,422 | 2,557,865 |
Accumulated Depreciation | |||
Balance at beginning of period | 189,108 | 121,612 | 92,500 |
Depreciation expense | 67,022 | 67,496 | 29,112 |
Other | 0 | 0 | 0 |
Balance at close of period | $ 256,130 | $ 189,108 | $ 121,612 |
Subsequent Event - Narrative (D
Subsequent Event - Narrative (Details) - Series A Preferred Stock - Subsequent Event $ / shares in Units, $ in Millions | Jan. 04, 2016USD ($)$ / shares |
Subsequent Event [Line Items] | |
Preferred stock dividends paid (in USD per share) | $ / shares | $ 2.25 |
Dividend payment | $ | $ 21.9 |