Cover_DEI Document Information
Cover/DEI Document Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 20, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Brookfield DTLA Fund Office Trust Investor Inc. | ||
Entity Central Index Key | 0001575311 | ||
Entity File Number | 001-36135 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 0 | ||
Title of 12(b) Security | 7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share | ||
Trading Symbol | DTLA-P | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 0 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Investments in Real Estate: | ||
Land | $ 222,555 | $ 227,555 |
Buildings and improvements | 2,283,350 | 2,245,818 |
Tenant improvements | 419,670 | 361,077 |
Investments in real estate, gross | 2,925,575 | 2,834,450 |
Less: accumulated depreciation | 466,405 | 418,205 |
Investments in real estate, net | 2,459,170 | 2,416,245 |
Investment in unconsolidated real estate joint venture | 42,920 | 0 |
Cash and cash equivalents | 33,964 | 80,421 |
Restricted cash | 25,024 | 25,349 |
Rents, deferred rents and other receivables, net | 138,010 | 151,509 |
Intangible assets, net | 31,895 | 44,640 |
Deferred charges, net | 68,290 | 67,731 |
Due from affiliates | 18,359 | 0 |
Prepaid and other assets, net | 9,340 | 9,763 |
Total assets | 2,826,972 | 2,795,658 |
Liabilities: | ||
Secured debt, net | 2,199,980 | 2,140,724 |
Accounts payable and other liabilities | 79,845 | 63,678 |
Due to affiliates | 5,400 | 3,834 |
Intangible liabilities, net | 8,306 | 12,454 |
Total liabilities | 2,293,531 | 2,220,690 |
Commitments and Contingencies (See Note 17) | ||
Mezzanine Equity: | ||
Total mezzanine equity | 1,054,223 | 1,015,889 |
Stockholders’ Deficit: | ||
Common stock, $0.01 par value, 1,000 shares issued and outstanding as of December 31, 2019 and 2018 | 0 | 0 |
Additional paid-in capital | 197,535 | 195,825 |
Accumulated deficit | (499,793) | (385,158) |
Accumulated other comprehensive loss | (2,341) | (107) |
Noncontrolling interests | (216,183) | (251,481) |
Total stockholders’ deficit | (520,782) | (440,921) |
Total liabilities and deficit | 2,826,972 | 2,795,658 |
Series A preferred stock | ||
Mezzanine Equity: | ||
Mezzanine equity | 428,480 | 409,932 |
Series A-1 preferred interest | ||
Mezzanine Equity: | ||
Mezzanine equity | 418,029 | 400,816 |
Senior participating preferred interest | ||
Mezzanine Equity: | ||
Mezzanine equity | 22,362 | 23,443 |
Series B preferred interest | ||
Mezzanine Equity: | ||
Mezzanine equity | $ 185,352 | $ 181,698 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
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 | ||
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 STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Lease income | $ 276,895 | $ 268,133 | $ 262,207 |
Revenue | 317,845 | 315,680 | 306,322 |
Expenses: | |||
Rental property operating and maintenance | 105,738 | 98,940 | 93,945 |
Real estate taxes | 37,657 | 40,013 | 37,758 |
Parking | 10,373 | 10,165 | 9,374 |
Other expense | 9,031 | 9,920 | 11,508 |
Depreciation and amortization | 105,529 | 96,264 | 97,808 |
Interest | 98,875 | 105,035 | 93,566 |
Total expenses | 367,203 | 360,337 | 343,959 |
Other Income: | |||
Gain from derecognition of assets | 24,777 | 0 | 0 |
Equity in loss of unconsolidated real estate joint venture | (2,080) | 0 | 0 |
Total other income | 22,697 | 0 | 0 |
Net loss | (26,661) | (44,657) | (37,637) |
Net loss (income) attributable to noncontrolling interests: | |||
Net loss attributable to Brookfield DTLA | (96,087) | (109,749) | (23,065) |
Net loss attributable to common interest holders of Brookfield DTLA | (114,635) | (128,281) | (41,613) |
Series A-1 preferred interest | |||
Net loss (income) attributable to noncontrolling interests: | |||
Preferred interest returns | 17,213 | 17,306 | 17,213 |
Senior participating preferred interest | |||
Net loss (income) attributable to noncontrolling interests: | |||
Redemption measurement adjustments | (1,017) | 1,482 | 479 |
Series B preferred interest | |||
Net loss (income) attributable to noncontrolling interests: | |||
Preferred interest returns | 18,049 | 17,961 | 13,435 |
Series B common interest | |||
Net loss (income) attributable to noncontrolling interests: | |||
Allocation of net income (loss) | 35,181 | 28,343 | (45,699) |
Series A preferred stock | |||
Net loss (income) attributable to noncontrolling interests: | |||
Dividends | 18,548 | 18,532 | 18,548 |
Parking | |||
Revenue: | |||
Revenue | 39,715 | 37,252 | 37,093 |
Interest and other | |||
Revenue: | |||
Revenue | $ 1,235 | $ 10,295 | $ 7,022 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (26,661) | $ (44,657) | $ (37,637) |
Derivative transactions: | |||
Unrealized derivative holding (losses) gains | (2,117) | 1,548 | 2,799 |
Less: reclassification adjustment for realized gain included in net loss | 0 | 1,198 | 0 |
Total other comprehensive (loss) income | (2,117) | 350 | 2,799 |
Comprehensive loss | (28,778) | (44,307) | (34,838) |
Less: comprehensive income (loss) attributable to noncontrolling interests | 69,543 | 65,276 | (13,107) |
Comprehensive loss attributable to common interest holders of Brookfield DTLA | $ (98,321) | $ (109,583) | $ (21,731) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non- controlling Interest |
Balance at beginning of year (in shares) at Dec. 31, 2016 | 1,000 | |||||
Balance at beginning of year at Dec. 31, 2016 | $ (258,435) | $ 0 | $ 194,210 | $ (215,264) | $ (1,607) | $ (235,774) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (37,637) | (23,065) | (14,572) | |||
Other comprehensive income (loss) | 2,799 | 1,334 | 1,465 | |||
Contributions | 0 | 0 | ||||
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity | (49,675) | (18,548) | (31,127) | |||
Balance at end of year (in shares) at Dec. 31, 2017 | 1,000 | |||||
Balance at end of year at Dec. 31, 2017 | (342,948) | $ 0 | 194,210 | (256,877) | (273) | (280,008) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (44,657) | (109,749) | 65,092 | |||
Other comprehensive income (loss) | 350 | 166 | 184 | |||
Contributions | 1,615 | 1,615 | ||||
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity | (55,281) | (18,532) | (36,749) | |||
Balance at end of year (in shares) at Dec. 31, 2018 | 1,000 | |||||
Balance at end of year at Dec. 31, 2018 | (440,921) | $ 0 | 195,825 | (385,158) | (107) | (251,481) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (26,661) | (96,087) | 69,426 | |||
Other comprehensive income (loss) | (2,117) | (2,234) | 117 | |||
Contributions | 1,710 | 1,710 | ||||
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity | (52,793) | (18,548) | (34,245) | |||
Balance at end of year (in shares) at Dec. 31, 2019 | 1,000 | |||||
Balance at end of year at Dec. 31, 2019 | $ (520,782) | $ 0 | $ 197,535 | $ (499,793) | $ (2,341) | $ (216,183) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net loss | $ (26,661) | $ (44,657) | $ (37,637) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 105,529 | 96,264 | 97,808 |
Gain from derecognition of assets | (24,777) | 0 | 0 |
Equity in loss of unconsolidated real estate joint venture | 2,080 | 0 | 0 |
Provision for (recovery of) doubtful accounts | 165 | 190 | (7) |
Amortization of acquired below-market leases, net of acquired above-market leases | (195) | 222 | (2,219) |
Straight-line rent amortization | (10,083) | (11,399) | (11,237) |
Amortization of tenant inducements | 3,852 | 4,228 | 3,816 |
Amortization of debt financing costs and discounts | 5,264 | 9,565 | 6,400 |
Unrealized loss on interest rate cap contracts | 44 | 0 | 0 |
Realized gain on interest rate swap contract | 0 | (1,198) | 0 |
Changes in assets and liabilities: | |||
Rents, deferred rents and other receivables, net | 299 | (12,179) | (3,850) |
Deferred charges, net | (8,497) | (22,209) | (15,336) |
Due from affiliates | (2,690) | 0 | 0 |
Prepaid and other assets, net | (570) | (82) | 139 |
Accounts payable and other liabilities | (5,541) | 6,083 | (3,037) |
Due to affiliates | 1,566 | (7,439) | (3,054) |
Net cash provided by operating activities | 39,785 | 17,389 | 31,786 |
Cash flows from investing activities: | |||
Expenditures for real estate improvements | (127,775) | (90,065) | (74,696) |
Net cash used in investing activities | (127,775) | (90,065) | (74,696) |
Cash flows from financing activities: | |||
Proceeds from secured debt | 277,610 | 1,081,686 | 470,000 |
Principal payments on secured debt | (220,000) | (931,831) | (554,028) |
Proceeds from Series B preferred interest | 40,700 | 0 | 111,492 |
Proceeds from senior participating preferred interest | 538 | 0 | 520 |
Distributions to Series B preferred interest | (20,574) | (26,554) | 0 |
Repurchases of Series B preferred interest | (34,521) | 0 | 0 |
Distributions to senior participating preferred interest | (602) | (3,587) | (470) |
Contributions to additional paid-in capital | 1,710 | 1,615 | 0 |
Purchase of interest rate cap contracts | (35) | 0 | 0 |
Debt financing costs paid | (3,618) | (10,388) | (7,484) |
Net cash provided by financing activities | 41,208 | 110,941 | 20,030 |
Net change in cash, cash equivalents and restricted cash | (46,782) | 38,265 | (22,880) |
Cash, cash equivalents and restricted cash at beginning of year | 105,770 | 67,505 | 90,385 |
Cash, cash equivalents and restricted cash at end of year | 58,988 | 105,770 | 67,505 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 93,020 | 96,074 | 88,160 |
Cash paid for income taxes | 59 | 1,127 | 214 |
Supplemental disclosure of non-cash investing and financing activities: | |||
Accrual for real estate improvements | 33,812 | 17,179 | 25,616 |
Contribution of investments in real estate, net to unconsolidated real estate joint venture | 20,139 | 0 | 0 |
(Decrease) increase in fair value of interest rate swaps | (2,117) | 1,548 | 2,799 |
Writeoff of fully depreciated investments in real estate | 37,373 | 0 | 60,298 |
Writeoff of fully amortized intangible assets | 40,077 | 0 | 68,990 |
Writeoff of fully amortized intangible liabilities | 5,766 | 0 | 16,783 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash, cash equivalents and restricted cash | $ 58,988 | $ 105,770 | $ 67,505 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business 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, a Delaware limited liability company (“ DTLA Holdings ”, and together with its affiliates excluding the Company and its subsidiaries, the “ Manager ”). DTLA Holdings is an indirect partially-owned subsidiary of Brookfield Property Partners L.P. (“ BPY ”), an exempted limited partnership under the Laws of Bermuda, which in turn is the flagship commercial property entity and the primary vehicle through which Brookfield Asset Management Inc. (“ BAM ”), a corporation under the Laws of Canada, invests in real estate on a global basis. As of December 31, 2019 and 2018 , Brookfield DTLA owned Bank of America Plaza (“ BOA Plaza ”), EY Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower and 777 Tower, which are Class A office properties, and FIGat7th, a retail center nestled between EY Plaza and 777 Tower, all of which are located in the Los Angeles Central Business District (the “ LACBD ”). On May 31, 2019 , Brookfield DTLA Fund Properties II LLC (“ New OP ”), a wholly-owned subsidiary of the Company, entered into an agreement to contribute and transfer all of its wholly-owned interests in Brookfield DTLA 4050/755 Inc. (the “ Property Owner ”), the indirect property owner of 755 South Figueroa, a residential development property, in exchange for noncontrolling interests in a newly formed joint venture with Brookfield DTLA FP IV Holdings, LLC (“ DTLA FP IV Holdings ”), a wholly-owned subsidiary of DTLA Holdings. See Note 4—“Investment in Unconsolidated Real Estate Joint Venture.” Brookfield DTLA receives its income primarily from lease income generated from the operations of its office and retail properties, and to a lesser extent, revenue from its parking garages. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies As used in these consolidated financial statements and related notes, unless the context requires otherwise, the terms “Brookfield DTLA,” the “Company,” “us,” “we” and “our” refer to Brookfield DTLA Fund Office Trust Investor Inc. together with its direct and indirect subsidiaries. Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“ GAAP ”). The consolidated balance sheets as of December 31, 2019 and 2018 include the accounts of Brookfield DTLA and subsidiaries in which it has a controlling financial interest. All intercompany transactions have been eliminated in consolidation as of and for the years ended December 31, 2019 , 2018 and 2017 . Determination of Controlling Financial Interest 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 VIE that most significantly impact the entity’s economic performance and has the obligation to absorb the 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. Brookfield DTLA is required to continually evaluate its VIE relationships and consolidation conclusion. Brookfield DTLA Fund Properties II LLC. The Company earns a return through an indirect investment in New OP. 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. Investment in Unconsolidated Real Estate Joint Venture. New OP has noncontrolling interests in a joint venture with DTLA FP IV Holdings. The Company determined that the joint venture is a VIE mainly because its equity investment at risk is insufficient to finance the joint venture’s activities without additional subordinated financial support. While the joint venture meets the definition of a VIE, Brookfield DTLA is not its primary beneficiary as the Company lacks the power through voting or similar rights to direct the activities that most significantly impact the joint venture’s economic performance. Therefore, the Company accounts for its ownership interest in the joint venture under the equity method. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. For example, estimates and assumptions have been made with respect to the fair value of assets and liabilities for purposes of the contribution of its wholly-owned interests in exchange for noncontrolling interests in a joint venture, the useful lives of assets, recoverable amounts of receivables, impairment of long‑lived assets and the fair value of debt. Actual results could ultimately differ from such estimates. Restatements In January 2018, Brookfield DTLA adopted, on a retrospective basis, the guidance in Accounting Standards Update (“ ASU ”) 2016-18, Restricted Cash , which requires entities to include restricted cash with cash and cash equivalents when reconciling the beginning and end of period total amounts shown in the statement of cash flows. Therefore, the change in restricted cash is no longer presented as a separate line item within cash flows from investing activities in the Company’s consolidated statement of cash flows since such balances are now combined with cash and cash equivalents at both the beginning and end of the reporting period. We have retroactively restated the consolidated statement of cash flows for the year ended December 31, 2017 by reclassifying the decrease in restricted cash of $24.5 million from cash flows used in investing activities to net change in cash, cash equivalents and restricted cash. Reclassifications On January 1, 2019 , Brookfield DTLA adopted Accounting Standards Codification (“ ASC ”) Topic 842, Leases, using the modified retrospective transition method. Please refer to Note 3—“Leases” for a discussion of the reclassification of rental income and tenant reimbursements in the consolidated statements of operations for the years ended December 31, 2018 and 2017 . During the year ended December 31, 2018 , the Company reclassified asset management fees earned by BPY and BAM from rental property operating and maintenance expense to other expense in the consolidated statement of operations. Management does not include asset management fees as an input when evaluating the operating performance of Brookfield DTLA’s properties and created a new category within other expense during 2018 to capture such fees. For the year ended December 31, 2017 , the Company reported rental property operating and maintenance expense totaling $100.3 million and other expense totaling $5.2 million in the consolidated statement of operations. After the reclassification, rental property operating and maintenance expense now totals $94.0 million and other expense now totals $11.5 million in the consolidated statement of operations for the year ended December 31, 2017 . This reclassification had no effect on the Company’s financial position, results of operations or cash flows. During the year ended December 31, 2018 , the Company also reclassified lease termination fees from interest and other income to rental income in the consolidated statement of operations in anticipation of adopting ASU 2016-02, Leases (Topic 842) . For the year ended December 31, 2017 , the Company reported interest and other income totaling $10.3 million and rental income totaling $162.4 million in the consolidated statement of operations. After the reclassification, interest and other income now totals $7.0 million and rental income now totals $165.7 million in the consolidated statement of operations for the year ended December 31, 2017 . See Note 3—“Leases” for reconciliation of lease income reported for the year ended December 31, 2017 in the current year’s consolidated statement of operations after the adoption of Topic 842. This reclassification had no effect on the Company’s financial position, results of operations or cash flows. Significant Accounting Policies Investments in Real Estate, Net— Land is carried at cost. Buildings are recorded at historical cost and are depreciated on a straight‑line basis over their estimated useful lives of 60 years. Building improvements are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives, which range from 5 years to 25 years. Land improvements are combined with building improvements for financial reporting purposes and are carried at cost. Tenant improvements that are determined to be assets of Brookfield DTLA are recorded at cost and amortized on a straight‑line basis over the shorter of their estimated useful life or the applicable lease term, with the related amortization reported as part of depreciation and amortization expense in the consolidated statement of operations. Depreciation expense related to investments in real estate during the years ended December 31, 2019 , 2018 and 2017 totaled $85.6 million , $75.7 million and $73.6 million , respectively, and is reported as part of depreciation and amortization expense in the consolidated statements of operations. Investments in real estate are 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 between (i) the current and projected operating cash flows of the property into the foreseeable future on an undiscounted basis and (ii) the carrying amount of the property. If the undiscounted cash flows expected to be generated by a property are less than its carrying amount, an impairment provision would be recorded to write down the carrying amount of such property 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 flows 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 properties existed at December 31, 2019 and 2018 . Investment in Unconsolidated Real Estate Joint Venture— As discussed in Note 1—“Organization and Description of Business,” on May 31, 2019 New OP entered into an agreement to contribute and transfer all of its wholly‑owned interests in the Property Owner in exchange for noncontrolling interests in a newly formed joint venture with DTLA FP IV Holdings. The liabilities of the joint venture may only be settled using the assets of 755 South Figueroa and are not recourse to the Company. Brookfield DTLA’s exposure to its investment in the joint venture is limited to its investment balance and the Company has no obligation to future contributions to the joint venture. Pursuant to the operating agreement of the joint venture, DTLA FP IV Holdings may be required to fund additional amounts for the development of 755 South Figueroa, routine operating costs, and guaranties or commitments of the joint venture. Our noncontrolling interests in the joint venture were initially recorded at the fair value of the assets contributed and have been adjusted to redemption value as of December 31, 2019 . Adjustments to increase or decrease the carrying amount to redemption value are recorded in the consolidated statement of operations as equity in loss of unconsolidated real estate joint venture. Cash and Cash Equivalents— Cash and cash equivalents include cash, deposits with major commercial banks, 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, reserves for real estate taxes and insurance, and other items as required by certain of the Company’s secured debt agreements. Rents, Deferred Rents and Other Receivables, Net— Deferred rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. Rents, deferred rents and other receivables, net also includes amounts paid to a tenant for improvements owned or costs incurred by the tenant. Such amounts are treated as tenant inducements and are presented in the consolidated balance sheet net of accumulated amortization. Amortization of tenant inducements is recorded on a straight-line basis over the term of the related lease as a reduction of lease income in the consolidated statement of operations. See Note 5—“Rents, Deferred Rents and Other Receivables, Net.” In addition, under Topic 842, Brookfield DTLA must assess on an individual lease basis whether it is probable that the Company will collect the future lease payments throughout the lease term. The Company considers the tenant’s payment history and current credit status when assessing collectability. If the collectability of the lease payments is probable at lease commencement, the Company recognizes lease income over the lease term on a straight-line basis. When collectability is not deemed probable at the commencement date, the Company’s lease income is constrained to the lesser of (1) the income that would have been recognized if collection were probable, and (2) the lease payments that have been collected from the lessee. If the collectability assessment changes to probable after the commencement date, any difference between the lease income that would have been recognized if collectability had always been assessed as probable and the lease income recognized to date is recognized as a current-period adjustment to lease income. If the collectability assessment changes to not probable after the commencement date, lease income is reversed to the extent that the lease payments that have been collected from the lessee are less than the lease income recognized to date. Changes to the collectability of operating leases are recorded as adjustments to lease income in the consolidated statement of operations. During the years ended December 31, 2019 , 2018 and 2017 , Brookfield DTLA recorded provisions for doubtful accounts of $165 thousand and $190 thousand , and a recovery of doubtful accounts of $7 thousand , respectively. The Company wrote off rents, deferred rents and other receivables totaling $478 thousand during the year ended December 31, 2019 . Intangibles Assets and Liabilities, Net— Brookfield DTLA evaluates each acquisition of real estate to determine whether the integrated set of assets and activities meets the definition of a business and needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the definition of a business is accounted for as an asset acquisition. For an acquisition of real estate that is accounting for as a business combination, the Company allocates the acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and any previously existing ownership interests at fair value as of the acquisition date. Acquired assets include tangible real estate assets consisting primarily of land, buildings, and tenant improvements, as well as identifiable intangible assets and liabilities, including acquired above- and below-market leases, in-place leases and tenant relationships. 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. Loans assumed in an acquisition are analyzed using current market terms for similar debt. The value of the acquired above- 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 lease income in the consolidated statement 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 as part of depreciation and amortization in the consolidated statement of operations. Deferred Charges, Net— Deferred charges mainly include initial direct costs, primarily commissions related to the leasing of the Company’s office properties, are presented as deferred charges in the consolidated balance sheet net of accumulated amortization totaling $43.6 million and $50.3 million as of December 31, 2019 and 2018 , respectively. All leasing commissions paid for new or renewed leases are capitalized and deferred. Deferred leasing costs are amortized on a straight‑line basis over the initial fixed terms of the related leases as part of depreciation and amortization expense in the consolidated statement of operations. Costs to negotiate or arrange a lease, regardless of its outcome, such as fixed employee compensation, tax or legal advice to negotiate lease terms, and lessor costs related to advertising or soliciting potential tenants, are expensed as incurred. Due From/To Affiliates— Amounts due from/to affiliates consist of related party receivables from and payables due to affiliates of BPY and BAM, primarily related to lease income and fees for property and asset management and other services. See Note 15—“Related Party Transactions.” Prepaid and Other Assets, Net— Prepaid and other assets, net include prepaid insurance, real estate taxes and interest, fair value of derivative financial instruments and refundable deposits. Secured Debt, Net— Debt secured by our properties are presented in the consolidated balance sheet net of unamortized debt financing costs. Debt financing costs and discounts totaling $5.3 million , $9.6 million , and $6.4 million were amortized during the years ended December 31, 2019 , 2018 and 2017 , respectively, over the terms of the related loans using the effective interest method and are included as part of interest expense in the consolidated statements of operations. Any unamortized amounts remaining upon the early repayment of debt are written off, and the related costs and accumulated amortization are removed from the consolidated balance sheet. Mezzanine Equity— Mezzanine equity in the consolidated balance sheet is comprised of the Series A preferred stock, a Series A-1 preferred interest, a senior participating preferred interest, and a Series B preferred interest (collectively, the “ Preferred Interests ”). The Series A-1 preferred interest, senior participating preferred interest and Series B 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, senior participating preferred interest, Series B preferred interest, and 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 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, 2019 and 2018 . Adjustments to increase or decrease the carrying amount to redemption value are recorded in the consolidated statement of operations as redemption measurement adjustments. Revenue Recognition— Lease Income— Brookfield DTLA’s lease income primarily represents revenue related to agreements for rental of our investments in real estate, subject to ASC Topic 842, Leases . All of the leases in which the Company is the lessor are classified as operating leases. The Company’s leases do not have guarantees of residual value of the underlying assets. We manage risk associated with the residual value of our leased assets by carefully selecting our tenants and monitoring their credit quality throughout their respective lease terms. Upon the expiration or termination of a lease, the Company often has the ability to re-lease the space with an existing tenant or to a new tenant within a reasonable amount of time. None of our tenants accounted for more than 10% of our lease income for the year ended December 31, 2019 . As of December 31, 2019 , Brookfield DTLA has six Class A office properties and one retail center aggregating 7.6 million net building rentable square feet located in the LACBD. We are susceptible to adverse developments in the markets for office space, particularly in Southern California. Such adverse developments could include oversupply of or reduced demand for office space; declines in property values; business layoffs, downsizings, relocations or industry slowdowns affecting tenants of the Company’s properties; changing demographics; increased telecommuting; terrorist targeting of or acts of war against high-rise structures; infrastructure quality; California state budgetary constraints and priorities; increases in real estate and other taxes; costs of complying with state, local and federal government regulations or increased regulation and other factors. The Company’s lease income is comprised of variable payments including fixed and contingent rental payments and tenant recoveries. Fixed contractual payments from the Company’s leases are recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of lease income recognized during the period. Straight-line rental revenue is commenced when the customer assumes control of the leased premises. During the years ended December 31, 2019 , 2018 and 2017 , the Company recorded straight-line rental revenue totaling $10.1 million , $11.4 million and $11.2 million , respectively, as part of lease income in the consolidated statements of operations. Certain leases with retail tenants also provide for the payment by the lessee of additional rent based on a percentage of the tenant’s sales. Percentage rents are recognized as lease income in the consolidated statement of operations only after the tenant sales thresholds have been achieved. See Note 16—“Future Minimum Base Rents.” Tenant recoveries, including reimbursements of utilities, repairs and maintenance, common area expenses, real estate taxes and insurance, and other operating expenses, are recognized as part of lease income in the consolidated statement of operations in the period when the applicable expenses are incurred and the tenant’s obligation to reimburse us arises. Some of the Company’s leases have termination options that allow the tenant to terminate the lease prior to the end of the lease term under certain circumstances. Termination options generally become effective half way or further into the original lease term and require advance notification from the tenant and payment of a termination fee that reimburses the Company for a portion of the remaining rent under the original lease term and the undepreciated lease inception costs such as commissions, tenant improvements and lease incentives. Termination fees are recognized as part of lease income in the consolidated statement of operations at the later of when the tenant has vacated the space or the lease has expired, a fully executed lease termination agreement has been delivered to the Company, the amount of the fee is determinable and collectability of the fee is reasonably assured. Parking Revenue— Parking revenue is recognized in accordance with Topic 606, Revenue from Contracts with Customers , when the services are provided and the performance obligations are satisfied, which normally occurs at a point in time. 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 makes distributions to its stockholders, if any, that generally equal or exceed its taxable income. Brookfield DTLA has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (“ TRS ”). A TRS is permitted to engage in activities that a REIT cannot engage in directly, such as performing non‑customary services for the Company’s tenants, holding assets that the Company cannot hold directly and conducting certain affiliate transactions. A TRS is subject to both federal and state income taxes. The Company’s various TRS did not have significant tax provisions during the years ended December 31, 2019 , 2018 and 2017 or deferred income tax items for the years ended December 31, 2019 and 2018 . As of December 31, 2019 and 2018 , Brookfield DTLA had net operating loss carryforwards (“ NOLs ”) totaling $290.2 million and $281.5 million , respectively. The NOLs generated prior to January 1, 2018 will begin to expire in 2033 , while NOLs generated in tax years beginning January 1, 2018 or later have an indefinite carryforward period. Uncertain Tax Positions— 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 has no unrecognized tax benefits as of December 31, 2019 and 2018 , and does not expect its unrecognized tax benefits balance to change during the next 12 months. As of December 31, 2019 , Brookfield DTLA’s 2015, 2016, 2017 and 2018 tax years remain open under the normal statute of limitations and may be subject to examination by federal, state and local authorities. Derivative Financial Instruments— Brookfield DTLA uses interest rate swap and cap contracts to manage risk from fluctuations in interest rates. The Company believes these contracts are with counterparties who are creditworthy financial institutions. At the inception of the contracts, Brookfield DTLA designates its interest rate swap contracts as cash flow hedges and documents the relationship of the hedge to the underlying transaction. Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting. Changes in fair value associated with hedge ineffectiveness, if any, are recorded as part of interest expense in the consolidated statement of operations. Changes in fair value of cash flow hedge derivative financial instruments are deferred and recorded as part of accumulated other comprehensive loss in the consolidated statement of stockholders’ deficit until the underlying transaction affects earnings. In the event that an anticipated transaction is no longer likely to occur, the Company recognizes the change in fair value of the derivative financial instrument in the consolidated statement of operations in the period the determination is made. Interest rate swap assets are included in prepaid and other assets, net and interest rate swap liabilities are included in accounts payable and other liabilities in the consolidated balance sheet. Additionally, Brookfield DTLA uses interest rate cap contracts to limit impact of changes in the LIBOR rate on certain of its debt. The Company does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change as part of other expense in the consolidated statement of operations. 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. Fair Value Measurements— Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date and, in many cases, requires management to make a number of significant judgments. Based on the observable inputs used in the valuation techniques, Brookfield DTLA classifies its assets and liabilities measured and disclosed at fair value in accordance with a three-level hierarchy (i.e., Level 1, Level 2 and Level 3) established under ASC 820, Fair Value Measurements . Brookfield DTLA records certain financial instruments, such as interest rate swap and cap contracts, at fair value on a recurring basis. Certain financial instruments, such as accounts receivable, are not carried at fair value each period but may require nonrecurring fair value adjustments due to write-downs of individual assets. The fair value of Brookfield DTLA’s derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of the derivatives. These analyses reflect the contractual terms of the derivatives, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities, which management considers to be Level 2 inputs. The Company has incorporated credit valuation adjustments to appropriately reflect both our own and the respective counterparty’s non-performance risk in the fair value measurements. See Note 13—“Fair Value Measurements.” The Company estimates the fair value of its debt by calculating the credit-adjusted present value of principal and interest payments for each loan. The calculation incorporates observable market interest rates, which management considers to be Level 2 inputs, assumes that each loan will be outstanding until maturity, and excludes any options to extend the maturity date of the loan available per the terms of the loan agreement, if any. See Note 14—“Financial Instruments.” Recent Accounting Pronouncements Accounting Pronouncements Adopted in 2019 Please refer to Note 3—“Leases” for a discussion of our adoption of Topic 842, Leases , on January 1, 2019 . In August 2017, the Financial Accounting Standards Board (“ FASB ”) issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. This update introduced amendments to Topic 815, Derivatives and Hedging, intended to make targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The objective of this update is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Brookfield DTLA adopted the guidance in ASU 2017-12 on January 1, 2019 . The adoption of this guidance did not have a material impact on Brookfield DTLA’s consolidated financial statements. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“ SOFR ”) Overnight Index Swap (“ OIS ”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes . ASU 2018-16 amends |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Brookfield DTLA’s properties are leased to tenants under operating leases. The Company adopted Topic 842, Leases, on January 1, 2019 using the modified retrospective transition method. Information in this Note 3 with respect to our leases and lease-related costs and receivables is presented under Topic 842 as of December 31, 2019 and for the years ended December 31, 2019 , 2018 and 2017 . Topic 842 sets out the principles for recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The primary impact of Topic 842 is the recognition of lease assets and liabilities on the balance sheet by lessees for leases classified as operating leases. The accounting applied by lessors is largely unchanged. As of January 1, 2019 and December 31, 2019 , the Company had no material ground leases or finance leases where the Company was a lessee and therefore did not record any right‑of-use asset or liability in its consolidated balance sheet as of December 31, 2019 . On the date of adoption, Brookfield DTLA elected the package of practical expedients provided for in Topic 842, including: • No reassessment of whether any expired or existing contracts were or contained leases; • No reassessment of the lease classification for any expired or existing leases; and • No reassessment of initial direct costs for any existing leases. The package of practical expedients was made as a single election and was consistently applied to all existing leases as of January 1, 2019 . The Company also elected the practical expedient provided to lessors in a subsequent amendment to Topic 842 that removed the requirement to separate lease and nonlease components, provided certain conditions were met. Brookfield DTLA leases its office properties to lessees in exchange for payments from tenants comprised of monthly payments that cover rent, property taxes, insurance and certain cost recoveries. Payments from tenants for reimbursement are considered nonlease components that are separated from lease components and are generally accounted for in accordance with the revenue recognition standard. However, the Company qualified for and elected the practical expedient related to combining the components because the lease component is classified as an operating lease and the timing and pattern of transfer of tenant reimbursements, which is not the predominant component, is the same as the lease component. As such, consideration for tenant reimbursements is accounted for as part of the overall consideration in the lease. Lease income related to variable payments includes fixed and contingent rental payments and tenant recoveries. Such payments from customers are considered nonlease components of the lease and therefore no consideration is allocated to them because they do not transfer a good or service to the customer. Parking revenue does not qualify for the single lease component practical expedient, discussed above, due to the difference in the timing and pattern of transfer of the Company’s parking service obligations and associated lease components within the same lease agreement. Topic 842 requires lessors to capitalize and amortize only incremental direct leasing costs. All leasing commissions paid in connection with new leases or lease renewals are capitalized and amortized on a straight-line basis over the initial fixed terms of the respective leases as part of depreciation and amortization in the consolidated statement of operations. Initial direct costs, primarily commissions, related to the leasing of our office properties are deferred and are presented as deferred charges in the consolidated balance sheet net of accumulated amortization totaling $43.6 million and $50.3 million as of December 31, 2019 and 2018 , respectively. Beginning January 1, 2019 , any costs incurred by the Company to negotiate or arrange a lease regardless of its outcome, such as fixed employee compensation, tax or legal advice to negotiate lease terms, and lessor costs related to advertising or soliciting potential tenants are required to be expensed as incurred. During the year ended December 31, 2019 , Brookfield DTLA had no indirect leasing costs that would have been capitalized prior to the adoption of Topic 842. The election of the package of practical expedients described above permits the Company to continue to account for its leases that commenced before January 1, 2019 under the previous lease accounting guidance for the remainder of their lease terms, and to apply the new lease accounting guidance to leases commencing or modified after January 1, 2019 . The Company recorded no net cumulative effect adjustment to the accumulated deficit in the consolidated balance sheet on January 1, 2019 as a result of the adoption of this guidance as there were no indirect leasing costs that were required to be written off. Reclassification of Prior Period Presentation of Rental Income and Tenant Reimbursements As described above, rental income and tenant reimbursements related to our operating leases for which Brookfield DTLA is the lessor qualified for the single component practical expedient and are classified as lease income in the consolidated statement of operations. Prior to the adoption of Topic 842, the Company reported rental income and tenant reimbursements separately in the consolidated statement of operations, in accordance with Topic 840. Upon adoption of the new lease accounting standard, the consolidated statements of operations for the years ended December 31, 2018 and 2017 have been reclassified to conform to the new single component presentation of rental income and tenant reimbursements, classified within lease income in the Company’s consolidated statement of operations. A reconciliation of the revenue line items that were reclassified in Brookfield DTLA’s consolidated statement of operations to conform to the current period presentation pursuant to the adoption of Topic 842 and the election of the single component practical expedient is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Rental income (presentation prior to January 1, 2019) $ 169,625 $ 162,203 $ 165,689 Tenant reimbursements (presentation prior to January 1, 2019) 107,270 105,930 96,518 Lease income (presentation effective January 1, 2019) $ 276,895 $ 268,133 $ 262,207 |
Investment in Unconsolidated Re
Investment in Unconsolidated Real Estate Joint Venture | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Unconsolidated Real Estate Joint Venture | Investment in Unconsolidated Real Estate Joint Venture On May 31, 2019 , New OP entered into an agreement to contribute and transfer all of its wholly‑owned interests in the Property Owner in exchange for noncontrolling interests in a newly formed joint venture with DTLA FP IV Holdings (the “ Existing Agreement ”). During the year ended December 31, 2019 , the Company recognized a gain from derecognition of assets in the consolidated statement of operations representing the difference between the amount of consideration measured and allocated to the assets and their carrying amount as follows (in thousands): Consideration $ 45,000 Investments in real estate, net $ 20,139 Cash and cash equivalents 73 Prepaid and other assets, net 11 Carrying amount 20,223 Gain from derecognition of assets $ 24,777 The consideration allocated to the assets contributed to the joint venture by New OP increased by $9.8 million during the three months ended December 31, 2019 as a result of an amendment to the Existing Agreement. As of December 31, 2019 , the Company’s ownership interest in the joint venture was 55.8% . |
Rents, Deferred Rents and Other
Rents, Deferred Rents and Other Receivables, Net | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Rents, Deferred Rents and Other Receivables, Net | Rents, Deferred Rents and Other Receivables, Net Brookfield DTLA’s rents, deferred rents and other receivables are comprised of the following (in thousands): As of December 31, 2019 2018 Straight-line and other deferred rents $ 109,859 $ 115,445 Tenant inducements receivable 33,304 42,642 Other receivables 7,881 10,437 Rents, deferred rents and other receivables, gross 151,044 168,524 Less: accumulated amortization of tenant inducements 13,034 16,701 allowance for doubtful accounts — 314 Rents, deferred rents and other receivables, net $ 138,010 $ 151,509 |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Liabilities | Intangible Assets and Liabilities Brookfield DTLA’s intangible assets and liabilities are summarized as follows (in thousands): For the Year Ended December 31, 2019 2018 Intangible Assets In-place leases $ 47,872 $ 66,365 Tenant relationships 15,397 30,078 Above-market leases 24,367 31,270 Intangible assets, gross 87,636 127,713 Less: accumulated amortization 55,741 83,073 Intangible assets, net $ 31,895 $ 44,640 Intangible Liabilities Below-market leases $ 53,795 $ 59,561 Less: accumulated amortization 45,489 47,107 Intangible liabilities, net $ 8,306 $ 12,454 The impact of the amortization of acquired below-market leases, net of acquired above-market leases, on lease 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, 2019 2018 2017 Lease income $ 195 $ (222 ) $ 2,219 Depreciation and amortization expense 8,792 9,642 13,527 As of December 31, 2019 , the estimate of the amortization/accretion of intangible assets and liabilities for future periods is as follows (in thousands): In-Place Leases Other Intangible Assets Intangible Liabilities 2020 $ 4,879 $ 3,471 $ 2,910 2021 3,922 2,775 2,282 2022 3,428 2,572 2,149 2023 2,001 2,209 641 2024 1,134 2,088 124 Thereafter 1,516 1,900 200 $ 16,880 $ 15,015 $ 8,306 |
Secured Debt, Net
Secured Debt, Net | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Secured Debt, Net | Secured Debt, Net Brookfield DTLA’s debt is as follows (in thousands, except dates and percentage amounts): Contractual Maturity Date Interest Rate Principal Amount as of December 31, 2019 2018 Floating-Rate Debt Variable-Rate Loans: Wells Fargo Center–North Tower (1) 10/9/2020 3.39 % $ 400,000 $ 400,000 Wells Fargo Center–North Tower (2) 10/9/2020 5.74 % 65,000 65,000 Wells Fargo Center–North Tower (3) 10/9/2020 6.74 % 35,000 35,000 Wells Fargo Center–South Tower (4) 11/4/2021 3.49 % 260,796 258,186 777 Tower (5) 10/31/2024 3.32 % 231,842 — 777 Tower (6) 10/31/2024 5.87 % 43,158 — EY Plaza (7) 11/27/2020 6.24 % 35,000 35,000 Total variable-rate loans 1,070,796 793,186 Variable-Rate Swapped to Fixed-Rate Loan: EY Plaza (8) 11/27/2020 3.88 % 230,000 230,000 Total floating-rate debt 1,300,796 1,023,186 Fixed-Rate Debt: BOA Plaza 9/1/2024 4.05 % 400,000 400,000 Gas Company Tower 8/6/2021 3.47 % 319,000 319,000 Gas Company Tower 8/6/2021 6.50 % 131,000 131,000 FIGat7th 3/1/2023 3.88 % 58,500 58,500 Total fixed-rate debt 908,500 908,500 Debt Refinanced: 777 Tower — 220,000 Total debt refinanced — 220,000 Total secured debt 2,209,296 2,151,686 Less: unamortized debt financing costs 9,316 10,962 Total secured debt, net $ 2,199,980 $ 2,140,724 __________ (1) This loan bears interest at LIBOR plus 1.65% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.25% . Brookfield DTLA has three options to extend the maturity date of this loan, each for a period of one year, as long as the maturity dates of both of the mezzanine loans are extended when the maturity date of the mortgage loan is extended. As of December 31, 2019 , we meet the criteria specified in the loan agreement to extend this loan. (2) This loan bears interest at LIBOR plus 4.00% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.25% . Brookfield DTLA has three options to extend the maturity date of this loan, each for a period of one year, as long as the maturity date of the other mezzanine loan is extended when the maturity date of the mortgage loan is extended. As of December 31, 2019 , we meet the criteria specified in the loan agreement to extend the mortgage loan. (3) This loan bears interest at LIBOR plus 5.00% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.25% . Brookfield DTLA has three options to extend the maturity date of this loan, each for a period of one year, as long as the maturity date of the other mezzanine loan is extended when the maturity date of the mortgage loan is extended. As of December 31, 2019 , we meet the criteria specified in the loan agreement to extend the mortgage loan. On September 30, 2019 , BAM acquired a significant interest in a company whose subsidiary is the lender of this loan. See Note 15—“Related Party Transactions.” (4) This loan bears interest at LIBOR plus 1.80% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.50% . Brookfield DTLA has two options to extend the maturity date of this loan, each for a period of one year. As of December 31, 2019 , a future advance amount of $29.2 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements and inducements, leasing commissions, and common area improvements. (5) This loan bears interest at LIBOR plus 1.60% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.00% . As of December 31, 2019 , a future advance amount of $36.8 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreements), including tenant improvements and inducements, and leasing commissions. The Company can draw against this future advance amount as long as a pro rata draw is made against the mezzanine loan future advance amount. (6) This loan bears interest at LIBOR plus 4.15% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.00% . As of December 31, 2019 , a future advance amount of $6.8 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreements), including tenant improvements and inducements, and leasing commissions. The Company can draw against this future advance amount as long as a pro rata draw is made against the mortgage loan future advance amount. (7) This loan bears interest at LIBOR plus 4.55% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 3.50% . (8) This loan bears interest at LIBOR plus 1.65% . As required by the loan agreement, we have entered into interest rate swap contracts to hedge this loan, which effectively fix the LIBOR portion of the interest rate at 2.28% . The effective interest rate of 3.88% includes interest on the swaps. The weighted average interest rate of our debt was 3.99% and 4.34% as of December 31, 2019 and 2018 , respectively. As of December 31, 2019 , the weighted average term to maturity of our debt was approximately two years. Proceeds from Wells Fargo Center–South Tower Mortgage Loan During the year ended December 31, 2019 , the Company received $2.6 million from the lender for approved leasing costs under the future advance portion of the Wells Fargo Center–South Tower mortgage loan. Debt Refinanced 777 Tower— On October 31, 2019 , Brookfield DTLA refinanced the mortgage loan secured by the 777 Tower office property and received net proceeds totaling approximately $271.5 million , of which $220.0 million was used to repay the loan that previously encumbered the property, with the remainder to be used for capital and tenant improvements at the Company’s properties. The new $318.6 million loan is comprised of a $268.6 million mortgage loan and a $50.0 million mezzanine loan, each of which bears interest at variable rates equal to LIBOR plus 1.60% and 4.15% , respectively, requires the payment of interest-only until maturity, and matures on October 31, 2024 . On October 31, 2019 , initial loan advances under the mortgage and mezzanine loans of $231.8 million and $43.2 million , respectively, were disbursed to the Company. As of December 31, 2019 , maximum future advance amounts of $36.8 million and $6.8 million are available under the mortgage and mezzanine loans, respectively, that can be drawn to fund approved leasing costs (as defined in the underlying loan agreements), including tenant improvements and inducements, and leasing commissions. The Company can draw against the mortgage loan future advance amount as long as a pro rata draw is made against the mezzanine loan future advance amount. The mortgage and mezzanine loans can be prepaid, in whole or in part, with prepayment fees (as defined in the underlying loan agreements), as long as the mezzanine loan is repaid on a pro rata basis with the mortgage loan, until November 10, 2020 , after which the loans may be repaid without penalty. Debt Maturities As Brookfield DTLA’s debt matures, principal payment obligations present significant future cash requirements. As of December 31, 2019 , our debt to be repaid in future periods is as follows (in thousands): 2020 $ 765,000 2021 710,796 2022 — 2023 58,500 2024 675,000 $ 2,209,296 As of December 31, 2019 , $1,025.8 million of our debt may be prepaid without penalty, $400.0 million may be defeased (as defined in the underlying loan agreement), $725.0 million may be prepaid with prepayment penalties, and $58.5 million is locked out from prepayment until March 1, 2020 . Wells Fargo Center–North Tower— Brookfield DTLA currently intends to extend the debt secured by Wells Fargo Center–North Tower on its scheduled maturity in October 2020. The Company has three options to extend the maturity date of this debt, each for a period of one year, as long as the maturity dates of both of the mezzanine loans are extended when the maturity date of the mortgage loan is extended. As of December 31, 2019 , we meet the criteria specified in the loan agreements to extend these loans. EY Tower— Brookfield DTLA currently intends to refinance the debt secured by EY Plaza on or about its scheduled maturity in November 2020. There can be no assurance that the refinancing of this debt can be accomplished, what terms will be available in the market for this type of financing at the time of any refinancing, and whether a principal paydown will be needed when the debt is refinanced (based on market conditions.) |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities Brookfield DTLA’s accounts payable and other liabilities are comprised of the following (in thousands): As of December 31, 2019 2018 Tenant improvements and inducements payable $ 29,140 $ 27,862 Unearned rent and tenant payables 23,817 17,077 Accrued capital expenditures and leasing commissions 18,205 9,844 Accrued expenses and other liabilities 8,683 8,895 Accounts payable and other liabilities $ 79,845 $ 63,678 |
Mezzanine Equity
Mezzanine Equity | 12 Months Ended |
Dec. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Mezzanine Equity | Mezzanine Equity 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, 2019 and 2018 , 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 DTLA Holdings. No dividends were declared on the Series A preferred stock during the years ended December 31, 2019 , 2018 and 2017 . Dividends on the Series A preferred stock are cumulative, and therefore, will continue to accrue at an annual rate of $1.90625 per share. 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, 2019 , the Series A preferred stock is reported at its redemption value of $428.5 million calculated using the redemption price of $25.00 per share plus $185.2 million of accumulated and unpaid dividends on such Series A preferred stock through December 31, 2019 . Series A-1 Preferred Interest The Series A-1 preferred interest is held by DTLA Holdings or wholly owned subsidiaries of DTLA Holdings. Interest on the Series A-1 preferred interest is cumulative and accrues at an annual rate of 7.625% . 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. Distributions will be made 47.66% to the common component of the Series A interest and 52.34% to the common component of the Series B interest, which is held by 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, 2019 , the Series A-1 preferred interest is reported at its redemption value of $418.0 million calculated using its liquidation value of $225.7 million plus $192.3 million of unpaid interest on such Series A-1 preferred interest through December 31, 2019 . Senior Participating Preferred Interest Brookfield DTLA Fund Properties III LLC (“ DTLA OP ”) issued a senior participating preferred interest to DTLA Holdings in connection with the formation of Brookfield DTLA and the MPG acquisition. The senior participating preferred interest represents a 4.0% participating interest in the residual value of DTLA OP. As of December 31, 2019 , the senior participating preferred interest is reported at its redemption value of $22.4 million using the value of the participating interest. Series B Preferred Interest At the time of the merger with MPG, DTLA Holdings made a commitment to contribute up to $260.0 million in cash or property to New OP, which directly or indirectly owns the Brookfield DTLA properties, for which it will be entitled to receive a market rate of return determined at the time of contribution (“ preferred return ”). As of December 31, 2019 , $44.5 million is available to the Company under this commitment for future funding. The Series B preferred interest in New OP held by DTLA Holdings is effectively senior to the interest in New OP held by Brookfield DTLA and has a priority on distributions senior to the equity securities of such subsidiaries held indirectly by Brookfield DTLA and, as a result, effectively rank senior to the Series A preferred stock. The Series B preferred interest in New OP may limit the amount of funds available to Brookfield DTLA for any purpose, including for dividends or other distributions to holders of its capital stock, including the Series A preferred stock. As of December 31, 2019 , the Series B preferred interest is reported at its redemption value of $185.4 million calculated using its liquidation value of $181.0 million plus $4.4 million of unpaid preferred returns on such Series B preferred interest through December 31, 2019 . 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 Series B Preferred Interest Balance, December 31, 2016 9,730,370 $ 372,852 $ 366,297 $ 25,019 $ 65,364 $ 829,532 Issuance of Series B preferred interest 111,492 111,492 Dividends 18,548 18,548 Preferred returns 17,213 13,435 30,648 Redemption measurement adjustments 479 479 Contributions from noncontrolling interests 520 520 Distributions to noncontrolling interests (470 ) — (470 ) Balance, December 31, 2017 9,730,370 391,400 383,510 25,548 190,291 990,749 Issuance of Series B preferred interest — — Dividends 18,532 18,532 Preferred returns 17,306 17,961 35,267 Redemption measurement adjustments 1,482 1,482 Contributions from noncontrolling interests — — Distributions to noncontrolling interests (3,587 ) (26,554 ) (30,141 ) Balance, December 31, 2018 9,730,370 409,932 400,816 23,443 181,698 1,015,889 Issuance of Series B preferred interest 40,700 40,700 Dividends 18,548 18,548 Preferred returns 17,213 18,049 35,262 Redemption measurement adjustments (1,017 ) (1,017 ) Contributions from noncontrolling interests 538 538 Repurchases of noncontrolling interests (34,521 ) (34,521 ) Distributions to noncontrolling interests (602 ) (20,574 ) (21,176 ) Balance, December 31, 2019 9,730,370 $ 428,480 $ 418,029 $ 22,362 $ 185,352 $ 1,054,223 During the year ended December 31, 2019 , the Company used the cash received from the issuance of the Series B preferred interest for capital expenditures and leasing costs while during the year ended December 31, 2017 , the Company used the cash received to pay for costs associated with the refinancing of the Wells Fargo Center–North Tower mortgage loan, including a principal paydown and transaction costs, and for general corporate purposes. Contributions from noncontrolling interests were used for general corporate purposes. All distributions to and repurchases of noncontrolling interests were made using cash on hand. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders’ Deficit Common Stock Brookfield DTLA is authorized to issue up to 1,000,000 shares of common stock, $0.01 par value per share. As of December 31, 2019 and 2018 , 1,000 shares of common stock were issued and outstanding. No dividends were declared on the Company’s common stock during the years ended December 31, 2019 , 2018 and 2017 . 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. Additional Paid-in Capital During the years ended December 31, 2019 and 2018 , Brookfield DTLA received contributions to additional paid-in capital totaling $1.7 million and $1.6 million , respectively, from DTLA Holdings, which were used for general corporate purposes. |
Noncontrolling Interests
Noncontrolling Interests | 12 Months Ended |
Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Mezzanine Equity Component The Series A-1 preferred interest, senior participating preferred interest and Series B preferred interest consist of equity interests of New OP, DTLA OP and New OP, respectively, which are owned directly by DTLA Holdings. These noncontrolling interests are presented as mezzanine equity in the consolidated balance sheet. See Note 9—“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 | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss A summary of the change in accumulated other comprehensive loss related to Brookfield DTLA’s derivative financial instruments designated as cash flow hedges is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Balance at beginning of year $ (224 ) $ (574 ) $ (3,373 ) Other comprehensive (loss) income before reclassifications (2,117 ) 1,548 2,799 Amounts reclassified from accumulated — (1,198 ) — Net current-year other comprehensive (loss) income (2,117 ) 350 2,799 Balance at end of year $ (2,341 ) $ (224 ) $ (574 ) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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 swaps at: December 31, 2019 $ (1,143 ) $ — $ (1,143 ) $ — December 31, 2018 974 — 974 — December 31, 2017 (574 ) — (574 ) — |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 Derivatives designated as hedging instruments: Interest rate swap assets $ — $ 974 Interest rate swap liabilities (1,143 ) — A summary of the effect of derivative financial instruments reported in the consolidated financial statements is as follows (in thousands): Amount of (Loss) Gain Recognized in AOCL Amount of Gain Reclassified from AOCL to Statement of Operations Derivatives designated as hedging instruments: Interest rate swaps for the years ended: December 31, 2019 $ (2,117 ) $ — December 31, 2018 1,548 1,198 December 31, 2017 2,799 — The gain reclassified from accumulated other comprehensive loss during the year ended December 31, 2018 is included as part of interest and other revenue in the consolidated statement of operations. Interest Rate Swaps— As of December 31, 2019 , Brookfield DTLA held the following interest rate swap contracts pursuant to the terms of the EY Plaza mortgage loan agreement (in thousands, except percentages and dates): Notional Amount Swap Rate LIBOR Spread Effective Interest Rate Expiration Date Interest rate swap $ 168,151 2.18 % 1.65 % 3.83 % 11/2/2020 Interest rate swap 54,206 2.47 % 1.65 % 4.12 % 11/2/2020 $ 222,357 2.28 % 1.65 % 3.88 % Interest Rate Caps— Brookfield DTLA holds interest rate cap contracts pursuant to the terms of certain of its debt agreements with the following notional amounts (in thousands): As of December 31, 2019 2018 Wells Fargo Center–North Tower $ 400,000 $ 400,000 Wells Fargo Center–North Tower 65,000 65,000 Wells Fargo Center–North Tower 35,000 35,000 Wells Fargo Center–South Tower 290,000 290,000 777 Tower 268,600 220,000 777 Tower 50,000 — EY Plaza 35,000 35,000 $ 1,143,600 $ 1,045,000 As required by the 777 Tower mortgage and mezzanine loan agreements, on October 31, 2019 the Company entered into interest rate cap contracts with notional amounts totaling $318.6 million that limit the LIBOR portion of the interest rate to 4.00% . The contracts expire on November 10, 2021 . Other Financial Instruments As of December 31, 2019 and 2018 , the carrying values of cash, cash equivalents, restricted cash, other receivables, other assets, accounts payable and other liabilities, and amounts due from or to affiliates approximate fair value. The estimated fair value and carrying amount of Brookfield DTLA’s secured debt is as follows (in thousands): As of December 31, 2019 2018 Estimated fair value $ 2,210,389 $ 2,142,813 Carrying amount 2,209,296 2,151,686 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Management Agreements Certain subsidiaries of Brookfield DTLA have entered into arrangements with the Manager, pursuant to which the Manager provides property management and various other services. Property management fees under the management agreements entered into in connection with these arrangements are calculated based on 2.75% of rents collected (as defined in the management agreements). In addition, the Company pays an asset management fee to BPY and BAM, which is calculated based on 0.75% of the capital invested by DTLA Holdings in Brookfield DTLA’s properties. Leasing management fees paid to the Manager range from 1.00% to 4.00% of expected rents, depending on the terms of the lease and whether a third-party broker was paid a commission for the transaction. Construction management fees are paid to the Manager based on 3.00% of hard and soft construction costs. Development management fees are paid to the Manager and Brookfield affiliates by the unconsolidated real estate joint venture based on 3.00% of hard and soft construction costs. A summary of costs incurred by the applicable Brookfield DTLA subsidiaries under these arrangements is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Property management fee expense $ 8,479 $ 8,111 $ 8,136 Asset management fee expense 6,161 6,330 6,330 Leasing and construction management fees 5,051 3,209 5,198 Development management fees (1) 991 — — General, administrative and reimbursable expenses 2,865 3,007 2,613 __________ (1) Amount presented is calculated by applying the Company’s ownership interest percentage in the unconsolidated real estate joint venture as of period end to the amounts capitalized during the period. Amounts capitalized prior to May 31, 2019 (the date our wholly‑owned interests in the Property Owner were transferred to the joint venture) are reported at 100%. Expenses incurred under these arrangements are included in rental property operating and maintenance expense in the consolidated statement of operations, with the exception of asset management fee expense which is included in other expense. Leasing management fees are capitalized as deferred charges, while construction management fees are capitalized as part of investments in real estate in the consolidated balance sheet. Insurance Agreements Properties held by certain Brookfield DTLA subsidiaries and affiliates are covered under insurance policies entered into by the Manager that provide, among other things, all risk property and business interruption coverage for BPY’s commercial portfolio with an aggregate limit of $2.5 billion per occurrence as well as an aggregate limit of $437.5 million of earthquake insurance for California, and $372.5 million of flood and weather catastrophe insurance. In addition, Brookfield DTLA’s properties are covered by a terrorism insurance policy that provides a maximum of $4.0 billion per occurrence for all of BPY’s U.S. properties. Brookfield DTLA is in compliance with the contractual obligations regarding terrorism insurance contained in such policies. Insurance premiums for Brookfield DTLA’s properties are paid by the Manager. Brookfield DTLA reimburses the Manager for the amount of fees and expenses related to such policies that have been allocated to the Company’s properties as determined by the Manager in its reasonable discretion taking into consideration certain facts and circumstances, including the value of the Company’s properties. A summary of costs incurred by the applicable Brookfield DTLA subsidiaries and affiliates under this arrangement, which are included in rental property operating and maintenance expense in the consolidated statement of operations, is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Insurance expense $ 9,286 $ 8,026 $ 7,795 Other Related Party Transactions with BAM Affiliates A summary of the impact of other related party transactions with BAM affiliates on the Company’s consolidated statement of operations is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Lease income $ 5,916 $ 1,928 $ — Interest and other revenue 208 — — Rental property operating and maintenance expense (1) 676 862 579 Other expense 142 — — Interest expense (2) 613 — — __________ (1) Amounts presented are for purchases of chilled water for air conditioning at one of the Company’s properties. (2) On September 30, 2019 , BAM acquired a significant interest in Oaktree Capital Management, L.P., whose subsidiary is the lender of the $35.0 million mezzanine loan due from Wells Fargo Center–North Tower. Interest payable to the lender totals $112 thousand and is presented as part of accounts payable and other liabilities in the consolidated balance sheet as of December 31, 2019 . See Note 7—“Secured Debt, Net.” |
Future Minimum Base Rents
Future Minimum Base Rents | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Future Minimum Base Rents | Future Minimum Base Rents Brookfield DTLA’s properties are leased to tenants under net operating leases with initial expiration dates ranging from 2020 to 2035 . As of December 31, 2019 , the undiscounted cash flows for future minimum base rents to be received from tenants under executed noncancelable operating leases for future periods are as follows (in thousands): 2020 $ 164,816 2021 165,161 2022 152,236 2023 139,245 2024 121,143 Thereafter 634,167 $ 1,376,768 The amounts shown in the table above do not include percentage rents. The Company recorded percentage rents totaling $0.8 million , $2.0 million and $3.1 million as part of lease income in the consolidated statements of operations during the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Concentration of Tenant Credit Risk 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 lease income from certain tenants, the inability of those tenants to make payments under their leases could have a material adverse effect on our results of operations, cash flows or financial condition. A significant portion of Brookfield DTLA’s lease income is generated by a small number of tenants. No tenant accounted for more than 10% of our consolidated lease income during the years ended December 31, 2019 , 2018 and 2017 . Concentration of Property Revenue Risk During the years ended December 31, 2019 , 2018 and 2017 , BOA Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower, EY Plaza and 777 Tower each contributed more than 10% of Brookfield DTLA’s consolidated revenue. The revenue generated by these six properties totaled 96% , 98% and 100% of Brookfield DTLA’s consolidated revenue during the years ended December 31, 2019 , 2018 and 2017 , respectively. Litigation 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. Capital Commitments As of December 31, 2019 , the Company had $35.4 million in tenant-related commitments, including tenant improvements and leasing commissions, which are based on executed leases. Additionally, we had $10.3 million in construction-related commitments related to the atrium renovation project at Wells Fargo Center as of December 31, 2019 . |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Total revenue $ 76,207 $ 79,166 $ 79,612 $ 82,860 Total expenses 89,540 90,383 90,815 96,465 Total other income (loss) (1) — 14,688 (29 ) 8,038 Net (loss) income (13,333 ) 3,471 (11,232 ) (5,567 ) Net loss (income) attributable to noncontrolling interests: Series A-1 preferred interest returns 4,303 4,303 4,303 4,304 Senior participating preferred interest redemption measurement adjustments (572 ) (179 ) 602 (868 ) Series B preferred interest returns 4,091 4,591 4,966 4,401 Series B common interest – allocation of net loss 9,925 18,659 5,260 1,337 Net loss attributable to Brookfield DTLA (31,080 ) (23,903 ) (26,363 ) (14,741 ) Series A preferred stock dividends 4,637 4,637 4,637 4,637 Net loss attributable to common interest holders of Brookfield DTLA $ (35,717 ) $ (28,540 ) $ (31,000 ) $ (19,378 ) __________ (1) In May 2019, Brookfield DTLA Fund Properties II LLC, a wholly-owned subsidiary of Brookfield DTLA, entered into an agreement to contribute and transfer all of its wholly-owned interests in Brookfield DTLA 4050/755 Inc. in exchange for noncontrolling interests in a newly formed joint venture, which resulted in the derecognition of the assets of 755 South Figueroa, a residential development property. As a result of the derecognition of assets, the Company recognized a gain on representing the difference between the amount of consideration measured and allocated to the assets and their carrying amount as part of other income during the Second Quarter of 2019 consolidated statement of operations. The consideration allocated to the assets contributed to the joint venture by New OP increased by $9.8 million during the Fourth Quarter of 2019 as a result of an amendment to the Existing Agreement, and an additional gain was recognized in the consolidated statement of operations as part of other income. First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands) Year Ended December 31, 2018 Total revenue $ 75,211 $ 84,194 $ 77,151 $ 79,124 Total expenses 84,990 89,458 91,789 94,100 Net loss (9,779 ) (5,264 ) (14,638 ) (14,976 ) Net loss (income) attributable to noncontrolling interests: Series A-1 preferred interest returns 4,303 4,303 4,303 4,397 Senior participating preferred interest redemption measurement adjustments 1,657 768 220 (1,163 ) Series B preferred interest returns 3,879 3,921 3,965 6,196 Series B common interest – allocation of net (loss) income (12,695 ) (9,889 ) (14,531 ) 65,458 Net loss attributable to Brookfield DTLA (6,923 ) (4,367 ) (8,595 ) (89,864 ) Series A preferred stock dividends 4,637 4,637 4,637 4,621 Net loss attributable to common interest holders of Brookfield DTLA $ (11,560 ) $ (9,004 ) $ (13,232 ) $ (94,485 ) |
Investments in Real Estate
Investments in Real Estate | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in 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, 2019 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 (3) Year Acquired or Con- structed (4) Land Buildings and Improve- ments Improve- ments Carrying Costs Land Buildings and Improve- ments (1) Total (2) Los Angeles, CA Wells Fargo Center– North Tower 333 S. Grand Avenue $ 500,000 $ 41,024 $ 455,741 $ 125,794 $ — $ 41,024 $ 581,535 $ 622,559 $ 89,600 2013 A BOA Plaza 400,000 54,163 343,976 78,322 — 54,163 422,298 476,461 103,525 2006 A Wells Fargo Center– South Tower 355 S. Grand Avenue 260,796 21,231 398,238 75,237 — 21,231 473,475 494,706 59,288 2013 A Gas Company 450,000 20,742 394,378 77,489 — 20,742 471,867 492,609 63,914 2013 A EY Plaza 725 S. Figueroa 265,000 47,385 242,557 97,124 — 47,385 339,681 387,066 87,597 2006 A 777 Tower 777 S. Figueroa 275,000 38,010 296,964 41,113 — 38,010 338,077 376,087 43,560 2013 A FIGat7th 735 S. Figueroa 58,500 — 44,743 31,344 — — 76,087 76,087 18,921 2013 C $ 2,209,296 $ 222,555 $ 2,176,597 $ 526,423 $ — $ 222,555 $ 2,703,020 $ 2,925,575 $ 466,405 __________ (1) Land improvements are combined with building improvements for financial reporting purposes and are carried at cost. (2) The aggregate gross cost of Brookfield DTLA’s investments in real estate for federal income tax purposes approximated $2.7 billion as of December 31, 2019 . (3) Depreciation in the consolidated statement of operations is computed on a straight-line basis over the following estimated useful lives: buildings ( 60 years), building improvements (ranging from 5 years to 25 years), and tenant improvements (the shorter of the useful life or the applicable lease term). (4) Year represents either the year the property was acquired by the Company (“A”) or the year the property was placed in service by the Company after construction was completed (“C”). The following is a reconciliation of Brookfield DTLA’s investments in real estate (in thousands): For the Year Ended December 31, 2019 2018 2017 Investments in Real Estate Balance at beginning of year $ 2,834,450 $ 2,756,322 $ 2,740,773 Additions during the year: Improvements 148,637 78,128 75,847 Deductions during the year: Dispositions 20,139 — — Other (1) 37,373 — 60,298 Balance at end of year $ 2,925,575 $ 2,834,450 $ 2,756,322 __________ (1) During the years ended December 31, 2019 and 2017 , the amount reported represents the cost of fully depreciated buildings and improvements and tenant improvements written off during the period. 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, 2019 2018 2017 Accumulated Depreciation Balance at beginning of year $ 418,205 $ 342,465 $ 329,149 Additions during the year: Depreciation expense 85,573 75,740 73,614 Deductions during the year: Other (1) 37,373 — 60,298 Balance at end of year $ 466,405 $ 418,205 $ 342,465 __________ (1) During the years ended December 31, 2019 and 2017 , the amount reported represents the accumulated depreciation of fully depreciated buildings and improvements and tenant improvements written off during the period. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Coronavirus Disease 2019 (“ COVID–19 ”) Brookfield DTLA owns, operates and manages commercial office and retail properties in the LACBD and receives its income primarily from lease income generated from tenants of those properties. Our business may be vulnerable to damages from a number of sources, including major health issues and pandemics, such as COVID–19, commerce and travel, which may adversely affect trade and global and local economic conditions. Such adverse developments could include oversupply of or reduced demand for office and retail space; business layoffs; downsizings; relocations; increased telecommuting; or industry slowdowns affecting the tenants of our properties. Tenants of our properties may experience a downturn in their business from the effects of COVID–19, which could cause the loss of tenants or weaken their financial condition and result in the tenants’ inability to make lease payments when due or require rent concessions. In the event of a significant number of lease defaults and/or tenant bankruptcies, it may be difficult, costly and time consuming to attract new tenants and lease the space for the rent and on terms as favorable as the previous leases or at all. The loss of lease payments from tenants and costs of re-leasing would adversely affect our operating results and financial condition, and our cash flows may not be sufficient to meet all of our obligations and liabilities. Given the ongoing and dynamic nature of the circumstances, it is difficult to predict the impact of the COVID–19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID–19. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“ GAAP ”). The consolidated balance sheets as of December 31, 2019 and 2018 include the accounts of Brookfield DTLA and subsidiaries in which it has a controlling financial interest. All intercompany transactions have been eliminated in consolidation as of and for the years ended December 31, 2019 , 2018 and 2017 . |
Determination of Controlling Financial Interest | Determination of Controlling Financial Interest 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 VIE that most significantly impact the entity’s economic performance and has the obligation to absorb the 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. Brookfield DTLA is required to continually evaluate its VIE relationships and consolidation conclusion. Brookfield DTLA Fund Properties II LLC. The Company earns a return through an indirect investment in New OP. 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. Investment in Unconsolidated Real Estate Joint Venture. New OP has noncontrolling interests in a joint venture with DTLA FP IV Holdings. The Company determined that the joint venture is a VIE mainly because its equity investment at risk is insufficient to finance the joint venture’s activities without additional subordinated financial support. While the joint venture meets the definition of a VIE, Brookfield DTLA is not its primary beneficiary as the Company lacks the power through voting or similar rights to direct the activities that most significantly impact the joint venture’s economic performance. Therefore, the Company accounts for its ownership interest in the joint venture under the equity method. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. For example, estimates and assumptions have been made with respect to the fair value of assets and liabilities for purposes of the contribution of its wholly-owned interests in exchange for noncontrolling interests in a joint venture, the useful lives of assets, recoverable amounts of receivables, impairment of long‑lived assets and the fair value of debt. Actual results could ultimately differ from such estimates. |
Restatements | Restatements In January 2018, Brookfield DTLA adopted, on a retrospective basis, the guidance in Accounting Standards Update (“ ASU ”) 2016-18, Restricted Cash , which requires entities to include restricted cash with cash and cash equivalents when reconciling the beginning and end of period total amounts shown in the statement of cash flows. Therefore, the change in restricted cash is no longer presented as a separate line item within cash flows from investing activities in the Company’s consolidated statement of cash flows since such balances are now combined with cash and cash equivalents at both the beginning and end of the reporting period. We have retroactively restated the consolidated statement of cash flows for the year ended December 31, 2017 by reclassifying the decrease in restricted cash of $24.5 million from cash flows used in investing activities to net change in cash, cash equivalents and restricted cash. |
Reclassifications | Reclassifications On January 1, 2019 , Brookfield DTLA adopted Accounting Standards Codification (“ ASC ”) Topic 842, Leases, using the modified retrospective transition method. Please refer to Note 3—“Leases” for a discussion of the reclassification of rental income and tenant reimbursements in the consolidated statements of operations for the years ended December 31, 2018 and 2017 . During the year ended December 31, 2018 , the Company reclassified asset management fees earned by BPY and BAM from rental property operating and maintenance expense to other expense in the consolidated statement of operations. Management does not include asset management fees as an input when evaluating the operating performance of Brookfield DTLA’s properties and created a new category within other expense during 2018 to capture such fees. For the year ended December 31, 2017 , the Company reported rental property operating and maintenance expense totaling $100.3 million and other expense totaling $5.2 million in the consolidated statement of operations. After the reclassification, rental property operating and maintenance expense now totals $94.0 million and other expense now totals $11.5 million in the consolidated statement of operations for the year ended December 31, 2017 . This reclassification had no effect on the Company’s financial position, results of operations or cash flows. During the year ended December 31, 2018 , the Company also reclassified lease termination fees from interest and other income to rental income in the consolidated statement of operations in anticipation of adopting ASU 2016-02, Leases (Topic 842) . For the year ended December 31, 2017 , the Company reported interest and other income totaling $10.3 million and rental income totaling $162.4 million in the consolidated statement of operations. After the reclassification, interest and other income now totals $7.0 million and rental income now totals $165.7 million in the consolidated statement of operations for the year ended December 31, 2017 . See Note 3—“Leases” for reconciliation of lease income reported for the year ended December 31, 2017 in the current year’s consolidated statement of operations after the adoption of Topic 842. This reclassification had no effect on the Company’s financial position, results of operations or cash flows. |
Investments in Real Estate, Net | Investments in Real Estate, Net— Land is carried at cost. Buildings are recorded at historical cost and are depreciated on a straight‑line basis over their estimated useful lives of 60 years. Building improvements are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives, which range from 5 years to 25 years. Land improvements are combined with building improvements for financial reporting purposes and are carried at cost. Tenant improvements that are determined to be assets of Brookfield DTLA are recorded at cost and amortized on a straight‑line basis over the shorter of their estimated useful life or the applicable lease term, with the related amortization reported as part of depreciation and amortization expense in the consolidated statement of operations. Depreciation expense related to investments in real estate during the years ended December 31, 2019 , 2018 and 2017 totaled $85.6 million , $75.7 million and $73.6 million , respectively, and is reported as part of depreciation and amortization expense in the consolidated statements of operations. Investments in real estate are 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 between (i) the current and projected operating cash flows of the property into the foreseeable future on an undiscounted basis and (ii) the carrying amount of the property. If the undiscounted cash flows expected to be generated by a property are less than its carrying amount, an impairment provision would be recorded to write down the carrying amount of such property 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 flows 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 properties existed at December 31, 2019 and 2018 . |
Investment in Unconsolidated Real Estate Joint Venture | Investment in Unconsolidated Real Estate Joint Venture— As discussed in Note 1—“Organization and Description of Business,” on May 31, 2019 New OP entered into an agreement to contribute and transfer all of its wholly‑owned interests in the Property Owner in exchange for noncontrolling interests in a newly formed joint venture with DTLA FP IV Holdings. The liabilities of the joint venture may only be settled using the assets of 755 South Figueroa and are not recourse to the Company. Brookfield DTLA’s exposure to its investment in the joint venture is limited to its investment balance and the Company has no obligation to future contributions to the joint venture. Pursuant to the operating agreement of the joint venture, DTLA FP IV Holdings may be required to fund additional amounts for the development of 755 South Figueroa, routine operating costs, and guaranties or commitments of the joint venture. Our noncontrolling interests in the joint venture were initially recorded at the fair value of the assets contributed and have been adjusted to redemption value as of December 31, 2019 . Adjustments to increase or decrease the carrying amount to redemption value are recorded in the consolidated statement of operations as equity in loss of unconsolidated real estate joint venture. |
Rents, Deferred Rents and Other Receivables, Net | Rents, Deferred Rents and Other Receivables, Net— Deferred rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. Rents, deferred rents and other receivables, net also includes amounts paid to a tenant for improvements owned or costs incurred by the tenant. Such amounts are treated as tenant inducements and are presented in the consolidated balance sheet net of accumulated amortization. Amortization of tenant inducements is recorded on a straight-line basis over the term of the related lease as a reduction of lease income in the consolidated statement of operations. See Note 5—“Rents, Deferred Rents and Other Receivables, Net.” In addition, under Topic 842, Brookfield DTLA must assess on an individual lease basis whether it is probable that the Company will collect the future lease payments throughout the lease term. The Company considers the tenant’s payment history and current credit status when assessing collectability. If the collectability of the lease payments is probable at lease commencement, the Company recognizes lease income over the lease term on a straight-line basis. When collectability is not deemed probable at the commencement date, the Company’s lease income is constrained to the lesser of (1) the income that would have been recognized if collection were probable, and (2) the lease payments that have been collected from the lessee. If the collectability assessment changes to probable after the commencement date, any difference between the lease income that would have been recognized if collectability had always been assessed as probable and the lease income recognized to date is recognized as a current-period adjustment to lease income. If the collectability assessment changes to not probable after the commencement date, lease income is reversed to the extent that the lease payments that have been collected from the lessee are less than the lease income recognized to date. Changes to the collectability of operating leases are recorded as adjustments to lease income in the consolidated statement of operations. During the years ended December 31, 2019 , 2018 and 2017 , Brookfield DTLA recorded provisions for doubtful accounts of $165 thousand and $190 thousand , and a recovery of doubtful accounts of $7 thousand , respectively. The Company wrote off rents, deferred rents and other receivables totaling $478 thousand during the year ended December 31, 2019 . |
Intangible Assets and Liabilities, Net | Intangibles Assets and Liabilities, Net— Brookfield DTLA evaluates each acquisition of real estate to determine whether the integrated set of assets and activities meets the definition of a business and needs to be accounted for as a business combination. An acquisition of an integrated set of assets and activities that does not meet the definition of a business is accounted for as an asset acquisition. For an acquisition of real estate that is accounting for as a business combination, the Company allocates the acquisition consideration (excluding acquisition costs) to the assets acquired, liabilities assumed, noncontrolling interests, and any previously existing ownership interests at fair value as of the acquisition date. Acquired assets include tangible real estate assets consisting primarily of land, buildings, and tenant improvements, as well as identifiable intangible assets and liabilities, including acquired above- and below-market leases, in-place leases and tenant relationships. 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. Loans assumed in an acquisition are analyzed using current market terms for similar debt. The value of the acquired above- 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 lease income in the consolidated statement 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 as part of depreciation and amortization in the consolidated statement of operations. |
Deferred Charges, Net | Deferred Charges, Net— Deferred charges mainly include initial direct costs, primarily commissions related to the leasing of the Company’s office properties, are presented as deferred charges in the consolidated balance sheet net of accumulated amortization totaling $43.6 million and $50.3 million as of December 31, 2019 and 2018 , respectively. All leasing commissions paid for new or renewed leases are capitalized and deferred. Deferred leasing costs are amortized on a straight‑line basis over the initial fixed terms of the related leases as part of depreciation and amortization expense in the consolidated statement of operations. Costs to negotiate or arrange a lease, regardless of its outcome, such as fixed employee compensation, tax or legal advice to negotiate lease terms, and lessor costs related to advertising or soliciting potential tenants, are expensed as incurred. |
Secured Debt, Net | Secured Debt, Net— Debt secured by our properties are presented in the consolidated balance sheet net of unamortized debt financing costs. Debt financing costs and discounts totaling $5.3 million , $9.6 million , and $6.4 million were amortized during the years ended December 31, 2019 , 2018 and 2017 , respectively, over the terms of the related loans using the effective interest method and are included as part of interest expense in the consolidated statements of operations. Any unamortized amounts remaining upon the early repayment of debt are written off, and the related costs and accumulated amortization are removed from the consolidated balance sheet. |
Mezzanine Equity | Mezzanine Equity— Mezzanine equity in the consolidated balance sheet is comprised of the Series A preferred stock, a Series A-1 preferred interest, a senior participating preferred interest, and a Series B preferred interest (collectively, the “ Preferred Interests ”). The Series A-1 preferred interest, senior participating preferred interest and Series B 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, senior participating preferred interest, Series B preferred interest, and 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 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, 2019 and 2018 . Adjustments to increase or decrease the carrying amount to redemption value are recorded in the consolidated statement of operations as redemption measurement adjustments. |
Lease Income | Lease Income— Brookfield DTLA’s lease income primarily represents revenue related to agreements for rental of our investments in real estate, subject to ASC Topic 842, Leases . All of the leases in which the Company is the lessor are classified as operating leases. The Company’s leases do not have guarantees of residual value of the underlying assets. We manage risk associated with the residual value of our leased assets by carefully selecting our tenants and monitoring their credit quality throughout their respective lease terms. Upon the expiration or termination of a lease, the Company often has the ability to re-lease the space with an existing tenant or to a new tenant within a reasonable amount of time. None of our tenants accounted for more than 10% of our lease income for the year ended December 31, 2019 . As of December 31, 2019 , Brookfield DTLA has six Class A office properties and one retail center aggregating 7.6 million net building rentable square feet located in the LACBD. We are susceptible to adverse developments in the markets for office space, particularly in Southern California. Such adverse developments could include oversupply of or reduced demand for office space; declines in property values; business layoffs, downsizings, relocations or industry slowdowns affecting tenants of the Company’s properties; changing demographics; increased telecommuting; terrorist targeting of or acts of war against high-rise structures; infrastructure quality; California state budgetary constraints and priorities; increases in real estate and other taxes; costs of complying with state, local and federal government regulations or increased regulation and other factors. The Company’s lease income is comprised of variable payments including fixed and contingent rental payments and tenant recoveries. Fixed contractual payments from the Company’s leases are recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of lease income recognized during the period. Straight-line rental revenue is commenced when the customer assumes control of the leased premises. During the years ended December 31, 2019 , 2018 and 2017 , the Company recorded straight-line rental revenue totaling $10.1 million , $11.4 million and $11.2 million , respectively, as part of lease income in the consolidated statements of operations. Certain leases with retail tenants also provide for the payment by the lessee of additional rent based on a percentage of the tenant’s sales. Percentage rents are recognized as lease income in the consolidated statement of operations only after the tenant sales thresholds have been achieved. See Note 16—“Future Minimum Base Rents.” Tenant recoveries, including reimbursements of utilities, repairs and maintenance, common area expenses, real estate taxes and insurance, and other operating expenses, are recognized as part of lease income in the consolidated statement of operations in the period when the applicable expenses are incurred and the tenant’s obligation to reimburse us arises. Some of the Company’s leases have termination options that allow the tenant to terminate the lease prior to the end of the lease term under certain circumstances. Termination options generally become effective half way or further into the original lease term and require advance notification from the tenant and payment of a termination fee that reimburses the Company for a portion of the remaining rent under the original lease term and the undepreciated lease inception costs such as commissions, tenant improvements and lease incentives. Termination fees are recognized as part of lease income in the consolidated statement of operations at the later of when the tenant has vacated the space or the lease has expired, a fully executed lease termination agreement has been delivered to the Company, the amount of the fee is determinable and collectability of the fee is reasonably assured. |
Parking Revenue | Parking Revenue— Parking revenue is recognized in accordance with Topic 606, Revenue from Contracts with Customers , when the services are provided and the performance obligations are satisfied, which normally occurs at a point in time. |
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 makes distributions to its stockholders, if any, that generally equal or exceed its taxable income. Brookfield DTLA has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (“ TRS ”). A TRS is permitted to engage in activities that a REIT cannot engage in directly, such as performing non‑customary services for the Company’s tenants, holding assets that the Company cannot hold directly and conducting certain affiliate transactions. A TRS is subject to both federal and state income taxes. The Company’s various TRS did not have significant tax provisions during the years ended December 31, 2019 , 2018 and 2017 or deferred income tax items for the years ended December 31, 2019 and 2018 . As of December 31, 2019 and 2018 , Brookfield DTLA had net operating loss carryforwards (“ NOLs ”) totaling $290.2 million and $281.5 million , respectively. The NOLs generated prior to January 1, 2018 will begin to expire in 2033 , while NOLs generated in tax years beginning January 1, 2018 or later have an indefinite carryforward period. Uncertain Tax Positions— 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 has no unrecognized tax benefits as of December 31, 2019 and 2018 , and does not expect its unrecognized tax benefits balance to change during the next 12 months. As of December 31, 2019 , Brookfield DTLA’s 2015, 2016, 2017 and 2018 tax years remain open under the normal statute of limitations and may be subject to examination by federal, state and local authorities. |
Derivative Financial Instruments | Derivative Financial Instruments— Brookfield DTLA uses interest rate swap and cap contracts to manage risk from fluctuations in interest rates. The Company believes these contracts are with counterparties who are creditworthy financial institutions. At the inception of the contracts, Brookfield DTLA designates its interest rate swap contracts as cash flow hedges and documents the relationship of the hedge to the underlying transaction. Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting. Changes in fair value associated with hedge ineffectiveness, if any, are recorded as part of interest expense in the consolidated statement of operations. Changes in fair value of cash flow hedge derivative financial instruments are deferred and recorded as part of accumulated other comprehensive loss in the consolidated statement of stockholders’ deficit until the underlying transaction affects earnings. In the event that an anticipated transaction is no longer likely to occur, the Company recognizes the change in fair value of the derivative financial instrument in the consolidated statement of operations in the period the determination is made. Interest rate swap assets are included in prepaid and other assets, net and interest rate swap liabilities are included in accounts payable and other liabilities in the consolidated balance sheet. Additionally, Brookfield DTLA uses interest rate cap contracts to limit impact of changes in the LIBOR rate on certain of its debt. The Company does not use hedge accounting for these contracts, and as such, changes in fair value are recorded in the period of change as part of other expense in the consolidated statement of operations. |
Other Financial Instruments | 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. |
Fair Value Measurements | Fair Value Measurements— Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date and, in many cases, requires management to make a number of significant judgments. Based on the observable inputs used in the valuation techniques, Brookfield DTLA classifies its assets and liabilities measured and disclosed at fair value in accordance with a three-level hierarchy (i.e., Level 1, Level 2 and Level 3) established under ASC 820, Fair Value Measurements . Brookfield DTLA records certain financial instruments, such as interest rate swap and cap contracts, at fair value on a recurring basis. Certain financial instruments, such as accounts receivable, are not carried at fair value each period but may require nonrecurring fair value adjustments due to write-downs of individual assets. The fair value of Brookfield DTLA’s derivative financial instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of the derivatives. These analyses reflect the contractual terms of the derivatives, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities, which management considers to be Level 2 inputs. The Company has incorporated credit valuation adjustments to appropriately reflect both our own and the respective counterparty’s non-performance risk in the fair value measurements. See Note 13—“Fair Value Measurements.” The Company estimates the fair value of its debt by calculating the credit-adjusted present value of principal and interest payments for each loan. The calculation incorporates observable market interest rates, which management considers to be Level 2 inputs, assumes that each loan will be outstanding until maturity, and excludes any options to extend the maturity date of the loan available per the terms of the loan agreement, if any. See Note 14—“Financial Instruments.” |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Adopted in 2019 Please refer to Note 3—“Leases” for a discussion of our adoption of Topic 842, Leases , on January 1, 2019 . In August 2017, the Financial Accounting Standards Board (“ FASB ”) issued ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities. This update introduced amendments to Topic 815, Derivatives and Hedging, intended to make targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The objective of this update is to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Brookfield DTLA adopted the guidance in ASU 2017-12 on January 1, 2019 . The adoption of this guidance did not have a material impact on Brookfield DTLA’s consolidated financial statements. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“ SOFR ”) Overnight Index Swap (“ OIS ”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes . ASU 2018-16 amends Topic 815 by expanding the list of U.S. benchmark interest rates permitted in the application of hedge accounting by adding the OIS rate based on SOFR as an eligible benchmark interest rate. Brookfield DTLA adopted this update effective January 1, 2019 . Upon adoption on January 1, 2019 and during the year ended December 31, 2019 , the Company had no hedges based on SOFR, and hence, the adoption of this update did not have a material impact on Brookfield DTLA’s consolidated financial statements. Should the Company issue variable interest rate debt in the future, including SOFR-based debt, and enter into related interest rate hedge agreements to manage the Company’s exposure to variable interest rates, the Company will continue applying the interest rate hedge accounting policy that has been applied to the Company’s interest rate hedge agreements based on LIBOR. Accounting Pronouncements Effective January 1, 2020 In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , to amend the accounting for credit losses for certain financial instruments. Under the new guidance, an entity recognizes its estimate of expected credit losses as an allowance, which the FASB believes will result in more timely recognition of such losses. In November 2018, the FASB released ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses . This amendment clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Subtopic 842-30, Leases—Lessor . ASU 2016-13 and ASU 2018-19 are effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019, with early adoption permitted as of the fiscal year beginning after December 15, 2018, including adoption in an interim period. The majority of the Company’s receivables arise in the ordinary course of business under operating leases with its tenants and are therefore not subject to the guidance in Subtopic 326-20. Brookfield DTLA does not expect the adoption of this guidance to have a material effect on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement . ASU 2018-13 amends Topic 820 by adding new fair value measurement disclosure requirements, as well as modifying and removing certain disclosure requirements. This guidance is effective for interim and annual periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for any eliminated or modified disclosures. Brookfield DTLA does not expect the adoption of this guidance to have a material effect on its consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation ( Topic 810 ): Targeted Improvements to Related Party Guidance for Variable Interest Entities , which amends the related-party guidance in Topic 810. Specifically, ASU 2018-17 removes a sentence in ASC 810-10-55-37D regarding the evaluation of fees paid to decision makers to conform with the amendments in ASU 2016-17. ASU 2018-17 is effective for interim and annual periods in fiscal years beginning after December 15, 2019. Early adoption is permitted. Brookfield DTLA does not expect the adoption of this guidance to have a material effect on its consolidated financial statements. |
Segment Reporting | Segment Reporting Brookfield DTLA currently operates as one reportable segment, which includes the operation and management of its six commercial office properties and one retail property. Each of Brookfield DTLA’s 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 properties have similar economic characteristics and provide similar products and services to tenants. As a result, Brookfield DTLA’s properties are aggregated into a single reportable segment. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Income Reclassifications for Topic 842 | A reconciliation of the revenue line items that were reclassified in Brookfield DTLA’s consolidated statement of operations to conform to the current period presentation pursuant to the adoption of Topic 842 and the election of the single component practical expedient is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Rental income (presentation prior to January 1, 2019) $ 169,625 $ 162,203 $ 165,689 Tenant reimbursements (presentation prior to January 1, 2019) 107,270 105,930 96,518 Lease income (presentation effective January 1, 2019) $ 276,895 $ 268,133 $ 262,207 |
Investment in Unconsolidated _2
Investment in Unconsolidated Real Estate Joint Venture (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Calculation of Gain from Derecognition of Assets | During the year ended December 31, 2019 , the Company recognized a gain from derecognition of assets in the consolidated statement of operations representing the difference between the amount of consideration measured and allocated to the assets and their carrying amount as follows (in thousands): Consideration $ 45,000 Investments in real estate, net $ 20,139 Cash and cash equivalents 73 Prepaid and other assets, net 11 Carrying amount 20,223 Gain from derecognition of assets $ 24,777 |
Rents, Deferred Rents and Oth_2
Rents, Deferred Rents and Other Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Rents, Deferred Rents and Other Receivables | Brookfield DTLA’s rents, deferred rents and other receivables are comprised of the following (in thousands): As of December 31, 2019 2018 Straight-line and other deferred rents $ 109,859 $ 115,445 Tenant inducements receivable 33,304 42,642 Other receivables 7,881 10,437 Rents, deferred rents and other receivables, gross 151,044 168,524 Less: accumulated amortization of tenant inducements 13,034 16,701 allowance for doubtful accounts — 314 Rents, deferred rents and other receivables, net $ 138,010 $ 151,509 |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Liabilities | Brookfield DTLA’s intangible assets and liabilities are summarized as follows (in thousands): For the Year Ended December 31, 2019 2018 Intangible Assets In-place leases $ 47,872 $ 66,365 Tenant relationships 15,397 30,078 Above-market leases 24,367 31,270 Intangible assets, gross 87,636 127,713 Less: accumulated amortization 55,741 83,073 Intangible assets, net $ 31,895 $ 44,640 Intangible Liabilities Below-market leases $ 53,795 $ 59,561 Less: accumulated amortization 45,489 47,107 Intangible liabilities, net $ 8,306 $ 12,454 |
Summary of Impact of Intangible Amortization Expense | The impact of the amortization of acquired below-market leases, net of acquired above-market leases, on lease 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, 2019 2018 2017 Lease income $ 195 $ (222 ) $ 2,219 Depreciation and amortization expense 8,792 9,642 13,527 |
Schedule of Estimated Future Amortization/Accretion of Intangible Assets and Liabilities | As of December 31, 2019 , the estimate of the amortization/accretion of intangible assets and liabilities for future periods is as follows (in thousands): In-Place Leases Other Intangible Assets Intangible Liabilities 2020 $ 4,879 $ 3,471 $ 2,910 2021 3,922 2,775 2,282 2022 3,428 2,572 2,149 2023 2,001 2,209 641 2024 1,134 2,088 124 Thereafter 1,516 1,900 200 $ 16,880 $ 15,015 $ 8,306 |
Secured Debt, Net (Tables)
Secured Debt, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Secured Debt | Brookfield DTLA’s debt is as follows (in thousands, except dates and percentage amounts): Contractual Maturity Date Interest Rate Principal Amount as of December 31, 2019 2018 Floating-Rate Debt Variable-Rate Loans: Wells Fargo Center–North Tower (1) 10/9/2020 3.39 % $ 400,000 $ 400,000 Wells Fargo Center–North Tower (2) 10/9/2020 5.74 % 65,000 65,000 Wells Fargo Center–North Tower (3) 10/9/2020 6.74 % 35,000 35,000 Wells Fargo Center–South Tower (4) 11/4/2021 3.49 % 260,796 258,186 777 Tower (5) 10/31/2024 3.32 % 231,842 — 777 Tower (6) 10/31/2024 5.87 % 43,158 — EY Plaza (7) 11/27/2020 6.24 % 35,000 35,000 Total variable-rate loans 1,070,796 793,186 Variable-Rate Swapped to Fixed-Rate Loan: EY Plaza (8) 11/27/2020 3.88 % 230,000 230,000 Total floating-rate debt 1,300,796 1,023,186 Fixed-Rate Debt: BOA Plaza 9/1/2024 4.05 % 400,000 400,000 Gas Company Tower 8/6/2021 3.47 % 319,000 319,000 Gas Company Tower 8/6/2021 6.50 % 131,000 131,000 FIGat7th 3/1/2023 3.88 % 58,500 58,500 Total fixed-rate debt 908,500 908,500 Debt Refinanced: 777 Tower — 220,000 Total debt refinanced — 220,000 Total secured debt 2,209,296 2,151,686 Less: unamortized debt financing costs 9,316 10,962 Total secured debt, net $ 2,199,980 $ 2,140,724 __________ (1) This loan bears interest at LIBOR plus 1.65% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.25% . Brookfield DTLA has three options to extend the maturity date of this loan, each for a period of one year, as long as the maturity dates of both of the mezzanine loans are extended when the maturity date of the mortgage loan is extended. As of December 31, 2019 , we meet the criteria specified in the loan agreement to extend this loan. (2) This loan bears interest at LIBOR plus 4.00% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.25% . Brookfield DTLA has three options to extend the maturity date of this loan, each for a period of one year, as long as the maturity date of the other mezzanine loan is extended when the maturity date of the mortgage loan is extended. As of December 31, 2019 , we meet the criteria specified in the loan agreement to extend the mortgage loan. (3) This loan bears interest at LIBOR plus 5.00% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.25% . Brookfield DTLA has three options to extend the maturity date of this loan, each for a period of one year, as long as the maturity date of the other mezzanine loan is extended when the maturity date of the mortgage loan is extended. As of December 31, 2019 , we meet the criteria specified in the loan agreement to extend the mortgage loan. On September 30, 2019 , BAM acquired a significant interest in a company whose subsidiary is the lender of this loan. See Note 15—“Related Party Transactions.” (4) This loan bears interest at LIBOR plus 1.80% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.50% . Brookfield DTLA has two options to extend the maturity date of this loan, each for a period of one year. As of December 31, 2019 , a future advance amount of $29.2 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements and inducements, leasing commissions, and common area improvements. (5) This loan bears interest at LIBOR plus 1.60% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.00% . As of December 31, 2019 , a future advance amount of $36.8 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreements), including tenant improvements and inducements, and leasing commissions. The Company can draw against this future advance amount as long as a pro rata draw is made against the mezzanine loan future advance amount. (6) This loan bears interest at LIBOR plus 4.15% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.00% . As of December 31, 2019 , a future advance amount of $6.8 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreements), including tenant improvements and inducements, and leasing commissions. The Company can draw against this future advance amount as long as a pro rata draw is made against the mortgage loan future advance amount. (7) This loan bears interest at LIBOR plus 4.55% . As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 3.50% . (8) This loan bears interest at LIBOR plus 1.65% . As required by the loan agreement, we have entered into interest rate swap contracts to hedge this loan, which effectively fix the LIBOR portion of the interest rate at 2.28% . The effective interest rate of 3.88% includes interest on the swaps. |
Schedule of Debt Maturities | As of December 31, 2019 , our debt to be repaid in future periods is as follows (in thousands): 2020 $ 765,000 2021 710,796 2022 — 2023 58,500 2024 675,000 $ 2,209,296 |
Accounts Payable and Other Li_2
Accounts Payable and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts Payable and Other Liabilities | Brookfield DTLA’s accounts payable and other liabilities are comprised of the following (in thousands): As of December 31, 2019 2018 Tenant improvements and inducements payable $ 29,140 $ 27,862 Unearned rent and tenant payables 23,817 17,077 Accrued capital expenditures and leasing commissions 18,205 9,844 Accrued expenses and other liabilities 8,683 8,895 Accounts payable and other liabilities $ 79,845 $ 63,678 |
Mezzanine Equity (Tables)
Mezzanine Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of 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 Series B Preferred Interest Balance, December 31, 2016 9,730,370 $ 372,852 $ 366,297 $ 25,019 $ 65,364 $ 829,532 Issuance of Series B preferred interest 111,492 111,492 Dividends 18,548 18,548 Preferred returns 17,213 13,435 30,648 Redemption measurement adjustments 479 479 Contributions from noncontrolling interests 520 520 Distributions to noncontrolling interests (470 ) — (470 ) Balance, December 31, 2017 9,730,370 391,400 383,510 25,548 190,291 990,749 Issuance of Series B preferred interest — — Dividends 18,532 18,532 Preferred returns 17,306 17,961 35,267 Redemption measurement adjustments 1,482 1,482 Contributions from noncontrolling interests — — Distributions to noncontrolling interests (3,587 ) (26,554 ) (30,141 ) Balance, December 31, 2018 9,730,370 409,932 400,816 23,443 181,698 1,015,889 Issuance of Series B preferred interest 40,700 40,700 Dividends 18,548 18,548 Preferred returns 17,213 18,049 35,262 Redemption measurement adjustments (1,017 ) (1,017 ) Contributions from noncontrolling interests 538 538 Repurchases of noncontrolling interests (34,521 ) (34,521 ) Distributions to noncontrolling interests (602 ) (20,574 ) (21,176 ) Balance, December 31, 2019 9,730,370 $ 428,480 $ 418,029 $ 22,362 $ 185,352 $ 1,054,223 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Change in Accumulated Other Comprehensive Loss | A summary of the change in accumulated other comprehensive loss related to Brookfield DTLA’s derivative financial instruments designated as cash flow hedges is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Balance at beginning of year $ (224 ) $ (574 ) $ (3,373 ) Other comprehensive (loss) income before reclassifications (2,117 ) 1,548 2,799 Amounts reclassified from accumulated — (1,198 ) — Net current-year other comprehensive (loss) income (2,117 ) 350 2,799 Balance at end of year $ (2,341 ) $ (224 ) $ (574 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of (Liabilities) Assets Measured at Fair Value on a Recurring Basis | 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 swaps at: December 31, 2019 $ (1,143 ) $ — $ (1,143 ) $ — December 31, 2018 974 — 974 — December 31, 2017 (574 ) — (574 ) — |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of 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, 2019 2018 Derivatives designated as hedging instruments: Interest rate swap assets $ — $ 974 Interest rate swap liabilities (1,143 ) — |
Summary of Effect of Derivative Financial Instruments | A summary of the effect of derivative financial instruments reported in the consolidated financial statements is as follows (in thousands): Amount of (Loss) Gain Recognized in AOCL Amount of Gain Reclassified from AOCL to Statement of Operations Derivatives designated as hedging instruments: Interest rate swaps for the years ended: December 31, 2019 $ (2,117 ) $ — December 31, 2018 1,548 1,198 December 31, 2017 2,799 — |
Schedules of Derivative Instruments | Brookfield DTLA holds interest rate cap contracts pursuant to the terms of certain of its debt agreements with the following notional amounts (in thousands): As of December 31, 2019 2018 Wells Fargo Center–North Tower $ 400,000 $ 400,000 Wells Fargo Center–North Tower 65,000 65,000 Wells Fargo Center–North Tower 35,000 35,000 Wells Fargo Center–South Tower 290,000 290,000 777 Tower 268,600 220,000 777 Tower 50,000 — EY Plaza 35,000 35,000 $ 1,143,600 $ 1,045,000 As of December 31, 2019 , Brookfield DTLA held the following interest rate swap contracts pursuant to the terms of the EY Plaza mortgage loan agreement (in thousands, except percentages and dates): Notional Amount Swap Rate LIBOR Spread Effective Interest Rate Expiration Date Interest rate swap $ 168,151 2.18 % 1.65 % 3.83 % 11/2/2020 Interest rate swap 54,206 2.47 % 1.65 % 4.12 % 11/2/2020 $ 222,357 2.28 % 1.65 % 3.88 % |
Summary of Estimated Fair Value and Carrying Amount of Secured Debt | The estimated fair value and carrying amount of Brookfield DTLA’s secured debt is as follows (in thousands): As of December 31, 2019 2018 Estimated fair value $ 2,210,389 $ 2,142,813 Carrying amount 2,209,296 2,151,686 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Costs Incurred Under Agreements with Related Parties | A summary of costs incurred by the applicable Brookfield DTLA subsidiaries and affiliates under this arrangement, which are included in rental property operating and maintenance expense in the consolidated statement of operations, is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Insurance expense $ 9,286 $ 8,026 $ 7,795 A summary of costs incurred by the applicable Brookfield DTLA subsidiaries under these arrangements is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Property management fee expense $ 8,479 $ 8,111 $ 8,136 Asset management fee expense 6,161 6,330 6,330 Leasing and construction management fees 5,051 3,209 5,198 Development management fees (1) 991 — — General, administrative and reimbursable expenses 2,865 3,007 2,613 __________ (1) Amount presented is calculated by applying the Company’s ownership interest percentage in the unconsolidated real estate joint venture as of period end to the amounts capitalized during the period. Amounts capitalized prior to May 31, 2019 (the date our wholly‑owned interests in the Property Owner were transferred to the joint venture) are reported at 100%. A summary of the impact of other related party transactions with BAM affiliates on the Company’s consolidated statement of operations is as follows (in thousands): For the Year Ended December 31, 2019 2018 2017 Lease income $ 5,916 $ 1,928 $ — Interest and other revenue 208 — — Rental property operating and maintenance expense (1) 676 862 579 Other expense 142 — — Interest expense (2) 613 — — __________ (1) Amounts presented are for purchases of chilled water for air conditioning at one of the Company’s properties. (2) On September 30, 2019 , BAM acquired a significant interest in Oaktree Capital Management, L.P., whose subsidiary is the lender of the $35.0 million mezzanine loan due from Wells Fargo Center–North Tower. Interest payable to the lender totals $112 thousand and is presented as part of accounts payable and other liabilities in the consolidated balance sheet as of December 31, 2019 . See Note 7—“Secured Debt, Net.” |
Future Minimum Base Rents (Tabl
Future Minimum Base Rents (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Future Minimum Base Rents Receivable for Operating Leases (Topic 842) | Brookfield DTLA’s properties are leased to tenants under net operating leases with initial expiration dates ranging from 2020 to 2035 . As of December 31, 2019 , the undiscounted cash flows for future minimum base rents to be received from tenants under executed noncancelable operating leases for future periods are as follows (in thousands): 2020 $ 164,816 2021 165,161 2022 152,236 2023 139,245 2024 121,143 Thereafter 634,167 $ 1,376,768 |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Total revenue $ 76,207 $ 79,166 $ 79,612 $ 82,860 Total expenses 89,540 90,383 90,815 96,465 Total other income (loss) (1) — 14,688 (29 ) 8,038 Net (loss) income (13,333 ) 3,471 (11,232 ) (5,567 ) Net loss (income) attributable to noncontrolling interests: Series A-1 preferred interest returns 4,303 4,303 4,303 4,304 Senior participating preferred interest redemption measurement adjustments (572 ) (179 ) 602 (868 ) Series B preferred interest returns 4,091 4,591 4,966 4,401 Series B common interest – allocation of net loss 9,925 18,659 5,260 1,337 Net loss attributable to Brookfield DTLA (31,080 ) (23,903 ) (26,363 ) (14,741 ) Series A preferred stock dividends 4,637 4,637 4,637 4,637 Net loss attributable to common interest holders of Brookfield DTLA $ (35,717 ) $ (28,540 ) $ (31,000 ) $ (19,378 ) __________ (1) In May 2019, Brookfield DTLA Fund Properties II LLC, a wholly-owned subsidiary of Brookfield DTLA, entered into an agreement to contribute and transfer all of its wholly-owned interests in Brookfield DTLA 4050/755 Inc. in exchange for noncontrolling interests in a newly formed joint venture, which resulted in the derecognition of the assets of 755 South Figueroa, a residential development property. As a result of the derecognition of assets, the Company recognized a gain on representing the difference between the amount of consideration measured and allocated to the assets and their carrying amount as part of other income during the Second Quarter of 2019 consolidated statement of operations. The consideration allocated to the assets contributed to the joint venture by New OP increased by $9.8 million during the Fourth Quarter of 2019 as a result of an amendment to the Existing Agreement, and an additional gain was recognized in the consolidated statement of operations as part of other income. First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands) Year Ended December 31, 2018 Total revenue $ 75,211 $ 84,194 $ 77,151 $ 79,124 Total expenses 84,990 89,458 91,789 94,100 Net loss (9,779 ) (5,264 ) (14,638 ) (14,976 ) Net loss (income) attributable to noncontrolling interests: Series A-1 preferred interest returns 4,303 4,303 4,303 4,397 Senior participating preferred interest redemption measurement adjustments 1,657 768 220 (1,163 ) Series B preferred interest returns 3,879 3,921 3,965 6,196 Series B common interest – allocation of net (loss) income (12,695 ) (9,889 ) (14,531 ) 65,458 Net loss attributable to Brookfield DTLA (6,923 ) (4,367 ) (8,595 ) (89,864 ) Series A preferred stock dividends 4,637 4,637 4,637 4,621 Net loss attributable to common interest holders of Brookfield DTLA $ (11,560 ) $ (9,004 ) $ (13,232 ) $ (94,485 ) |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule of Real Estate Properties | A summary of information related to Brookfield DTLA’s investments in real estate as of December 31, 2019 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 (3) Year Acquired or Con- structed (4) Land Buildings and Improve- ments Improve- ments Carrying Costs Land Buildings and Improve- ments (1) Total (2) Los Angeles, CA Wells Fargo Center– North Tower 333 S. Grand Avenue $ 500,000 $ 41,024 $ 455,741 $ 125,794 $ — $ 41,024 $ 581,535 $ 622,559 $ 89,600 2013 A BOA Plaza 400,000 54,163 343,976 78,322 — 54,163 422,298 476,461 103,525 2006 A Wells Fargo Center– South Tower 355 S. Grand Avenue 260,796 21,231 398,238 75,237 — 21,231 473,475 494,706 59,288 2013 A Gas Company 450,000 20,742 394,378 77,489 — 20,742 471,867 492,609 63,914 2013 A EY Plaza 725 S. Figueroa 265,000 47,385 242,557 97,124 — 47,385 339,681 387,066 87,597 2006 A 777 Tower 777 S. Figueroa 275,000 38,010 296,964 41,113 — 38,010 338,077 376,087 43,560 2013 A FIGat7th 735 S. Figueroa 58,500 — 44,743 31,344 — — 76,087 76,087 18,921 2013 C $ 2,209,296 $ 222,555 $ 2,176,597 $ 526,423 $ — $ 222,555 $ 2,703,020 $ 2,925,575 $ 466,405 __________ (1) Land improvements are combined with building improvements for financial reporting purposes and are carried at cost. (2) The aggregate gross cost of Brookfield DTLA’s investments in real estate for federal income tax purposes approximated $2.7 billion as of December 31, 2019 . (3) Depreciation in the consolidated statement of operations is computed on a straight-line basis over the following estimated useful lives: buildings ( 60 years), building improvements (ranging from 5 years to 25 years), and tenant improvements (the shorter of the useful life or the applicable lease term). (4) Year represents either the year the property was acquired by the Company (“A”) or the year the property was placed in service by the Company after construction was completed (“C”). |
Investments in Real Estate | The following is a reconciliation of Brookfield DTLA’s investments in real estate (in thousands): For the Year Ended December 31, 2019 2018 2017 Investments in Real Estate Balance at beginning of year $ 2,834,450 $ 2,756,322 $ 2,740,773 Additions during the year: Improvements 148,637 78,128 75,847 Deductions during the year: Dispositions 20,139 — — Other (1) 37,373 — 60,298 Balance at end of year $ 2,925,575 $ 2,834,450 $ 2,756,322 __________ (1) During the years ended December 31, 2019 and 2017 , the amount reported represents the cost of fully depreciated buildings and improvements and tenant improvements written off during the period. |
Accumulated Depreciation | 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, 2019 2018 2017 Accumulated Depreciation Balance at beginning of year $ 418,205 $ 342,465 $ 329,149 Additions during the year: Depreciation expense 85,573 75,740 73,614 Deductions during the year: Other (1) 37,373 — 60,298 Balance at end of year $ 466,405 $ 418,205 $ 342,465 __________ (1) During the years ended December 31, 2019 and 2017 , the amount reported represents the accumulated depreciation of fully depreciated buildings and improvements and tenant improvements written off during the period. |
Organization and Description _2
Organization and Description of Business - Narrative (Details) | Oct. 15, 2013 | Dec. 31, 2019 | Dec. 31, 2018 |
Series A preferred stock | |||
Organization and Description of Business [Line Items] | |||
Preferred stock, dividend rate, percentage | 7.625% | 7.625% | 7.625% |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Restatements - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Increase in net cash used in investing activities | $ (127,775) | $ (90,065) | $ (74,696) |
Accounting Standards Update 2016-18 | |||
Decrease in net cash, cash equivalents and restricted cash | (24,500) | ||
Previously Reported | Accounting Standards Update 2016-18 | |||
Increase in net cash used in investing activities | $ 24,500 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Reclassifications - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Rental property operating and maintenance | $ 105,738 | $ 98,940 | $ 93,945 | ||||||||
Other expense | 9,031 | 9,920 | 11,508 | ||||||||
Revenue | $ 82,860 | $ 79,612 | $ 79,166 | $ 76,207 | $ 79,124 | $ 77,151 | $ 84,194 | $ 75,211 | 317,845 | 315,680 | 306,322 |
Lease income | 165,700 | ||||||||||
Interest and other | |||||||||||
Revenue | $ 1,235 | $ 10,295 | 7,022 | ||||||||
Previously Reported | |||||||||||
Rental property operating and maintenance | 100,300 | ||||||||||
Other expense | 5,200 | ||||||||||
Lease income | 162,400 | ||||||||||
Previously Reported | Interest and other | |||||||||||
Revenue | $ 10,300 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Investments in Real Estate, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense related to investments in real estate | $ 85,600 | $ 75,700 | $ 73,600 |
Impairment of real estate assets | $ 0 | $ 0 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 60 years | ||
Building Improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Building Improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 25 years |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Rents, Deferred Rents and Other Receivables, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Abstract] | |||
Provision for (recovery of) doubtful accounts | $ 165 | $ 190 | $ (7) |
Writeoff of rents, deferred rents and other receivables | $ 478 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Deferred Charges, Net - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred leasing costs, accumulated amortization | $ 43.6 | $ 50.3 |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Secured Debt, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Amortization of debt financing costs and discounts | $ 5,264 | $ 9,565 | $ 6,400 |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Lease Income - Narrative (Details) ft² in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)ft²Buildingscustomer | Dec. 31, 2018USD ($)customer | Dec. 31, 2017USD ($)customer | |
Real Estate Properties [Line Items] | |||
Net building rentable square feet | ft² | 7.6 | ||
Straight-line rental revenue | $ | $ 10.1 | $ 11.4 | $ 11.2 |
Office properties | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties | 6 | ||
Retail property | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties | 1 | ||
Revenue | Customer concentration risk | |||
Real Estate Properties [Line Items] | |||
Number of tenants accounting for more than 10% of consolidated lease income | customer | 0 | 0 | 0 |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Income Taxes - Narrative (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 290,200,000 | $ 281,500,000 |
Unrecognized tax benefits | $ 0 | $ 0 |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Segment Reporting - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019segmentBuildings | |
Real Estate Properties [Line Items] | |
Number of reportable segments | segment | 1 |
Office properties | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 6 |
Retail property | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Deferred leasing costs, accumulated amortization | $ 43,600,000 | $ 50,300,000 | |
ASU 2016-02 | |||
Indirect leasing costs that would have been expensed prior to the adoption of Topic 842 | $ 0 | ||
Cumulative effect of adoption of new accounting principle | $ 0 |
Leases - Schedule of Lease Inco
Leases - Schedule of Lease Income Under ASC 842 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lease income | $ 276,895 | $ 268,133 | $ 262,207 |
ASU 2016-02 | |||
Rental income | 169,625 | 162,203 | 165,689 |
Tenant reimbursements | $ 107,270 | $ 105,930 | $ 96,518 |
Investment in Unconsolidated _3
Investment in Unconsolidated Real Estate Joint Venture - Schedule of Calculation of Gain from Derecognition of Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | |||||
Consideration | $ 9,800 | $ 45,000 | |||
Cash and cash equivalents | 33,964 | 33,964 | $ 80,421 | $ 31,958 | $ 30,301 |
Prepaid and other assets, net | 9,340 | 9,340 | 9,763 | ||
Carrying amount | 20,223 | ||||
Gain from derecognition of assets | 24,777 | $ 0 | $ 0 | ||
Other Property | 755 South Figueroa | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Investments in real estate, net | 20,139 | 20,139 | |||
Cash and cash equivalents | 73 | 73 | |||
Prepaid and other assets, net | $ 11 | $ 11 |
Investment in Unconsolidated _4
Investment in Unconsolidated Real Estate Joint Venture - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||
Increase in consideration allocated to assets contributed to joint venture | $ 9,800 | $ 45,000 |
755 South Figueroa | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest in unconsolidated joint venture | 55.80% | 55.80% |
Rents, Deferred Rents and Oth_3
Rents, Deferred Rents and Other Receivables, Net - Schedule of Rents, Deferred Rents and Other Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Straight-line and other deferred rents | $ 109,859 | $ 115,445 |
Tenant inducements receivable | 33,304 | 42,642 |
Other receivables | 7,881 | 10,437 |
Rents, deferred rents and other receivables, gross | 151,044 | 168,524 |
Less: accumulated amortization of tenant inducements | 13,034 | 16,701 |
allowance for doubtful accounts | 0 | 314 |
Rents, deferred rents and other receivables, net | $ 138,010 | $ 151,509 |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities - Schedule of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Intangible Assets | ||
In-place leases | $ 47,872 | $ 66,365 |
Tenant relationships | 15,397 | 30,078 |
Above-market leases | 24,367 | 31,270 |
Intangible assets, gross | 87,636 | 127,713 |
Less: accumulated amortization | 55,741 | 83,073 |
Intangible assets, net | 31,895 | 44,640 |
Intangible Liabilities | ||
Below-market leases | 53,795 | 59,561 |
Less: accumulated amortization | 45,489 | 47,107 |
Intangible liabilities, net | $ 8,306 | $ 12,454 |
Intangible Assets and Liabili_4
Intangible Assets and Liabilities - Schedule of Impact of Intangible Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lease income | |||
Acquired Indefinite-lived Intangible Assets and Liabilities [Line Items] | |||
Amortization of intangible assets and liabilities | $ 195 | $ (222) | $ 2,219 |
Depreciation and amortization expense | |||
Acquired Indefinite-lived Intangible Assets and Liabilities [Line Items] | |||
Amortization of intangible assets and liabilities | $ 8,792 | $ 9,642 | $ 13,527 |
Intangible Assets and Liabili_5
Intangible Assets and Liabilities - Schedule of Estimated Future Amortization/Accretion of Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | ||
Intangible assets, net | $ 31,895 | $ 44,640 |
Intangible Liabilities, Net, Amortization Income, Fiscal Year Maturity | ||
2020 | 2,910 | |
2021 | 2,282 | |
2022 | 2,149 | |
2023 | 641 | |
2024 | 124 | |
Thereafter | 200 | |
Intangible liabilities, net | 8,306 | $ 12,454 |
In-Place Leases | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | ||
2020 | 4,879 | |
2021 | 3,922 | |
2022 | 3,428 | |
2023 | 2,001 | |
2024 | 1,134 | |
Thereafter | 1,516 | |
Intangible assets, net | 16,880 | |
Other Intangible Assets | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | ||
2020 | 3,471 | |
2021 | 2,775 | |
2022 | 2,572 | |
2023 | 2,209 | |
2024 | 2,088 | |
Thereafter | 1,900 | |
Intangible assets, net | $ 15,015 |
Secured Debt, Net - Schedule of
Secured Debt, Net - Schedule of Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Total secured debt | $ 2,209,296 | $ 2,151,686 |
Less: unamortized debt financing costs | 9,316 | 10,962 |
Total secured debt, net | 2,199,980 | 2,140,724 |
Variable Rate Loans | ||
Debt Instrument [Line Items] | ||
Total secured debt | 1,070,796 | 793,186 |
Floating Rate Debt | ||
Debt Instrument [Line Items] | ||
Total secured debt | 1,300,796 | 1,023,186 |
Fixed Rate Debt | ||
Debt Instrument [Line Items] | ||
Total secured debt | 908,500 | 908,500 |
Debt Refinanced | ||
Debt Instrument [Line Items] | ||
Total secured debt | $ 0 | 220,000 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Oct. 9, 2020 | |
Variable interest rate | 3.39% | |
Total secured debt | $ 400,000 | 400,000 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Oct. 9, 2020 | |
Variable interest rate | 5.74% | |
Total secured debt | $ 65,000 | 65,000 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mezzanine B Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Oct. 9, 2020 | |
Variable interest rate | 6.74% | |
Total secured debt | $ 35,000 | 35,000 |
Wells Fargo Center - South Tower | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Nov. 4, 2021 | |
Variable interest rate | 3.49% | |
Total secured debt | $ 260,796 | 258,186 |
777 Tower | Variable Rate Debt - Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Oct. 31, 2024 | |
Variable interest rate | 3.32% | |
Total secured debt | $ 231,842 | 0 |
777 Tower | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Oct. 31, 2024 | |
Variable interest rate | 5.87% | |
Total secured debt | $ 43,158 | 0 |
777 Tower | Debt Refinanced | ||
Debt Instrument [Line Items] | ||
Total secured debt | $ 0 | 220,000 |
EY Plaza | Variable Rate Debt - Mezzanine A Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Nov. 27, 2020 | |
Variable interest rate | 6.24% | |
Total secured debt | $ 35,000 | 35,000 |
EY Plaza | Floating Rate Debt | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Nov. 27, 2020 | |
Variable interest rate | 3.88% | |
Total secured debt | $ 230,000 | 230,000 |
BOA Plaza | Fixed Rate Debt | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Sep. 1, 2024 | |
Fixed interest rate | 4.05% | |
Total secured debt | $ 400,000 | 400,000 |
Gas Company Tower | Fixed Rate Debt - Senior Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Aug. 6, 2021 | |
Fixed interest rate | 3.47% | |
Total secured debt | $ 319,000 | 319,000 |
Gas Company Tower | Fixed Rate Debt - Mezzanine Loan | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Aug. 6, 2021 | |
Fixed interest rate | 6.50% | |
Total secured debt | $ 131,000 | 131,000 |
FIGat7th | Fixed Rate Debt | ||
Debt Instrument [Line Items] | ||
Contractual maturity date | Mar. 1, 2023 | |
Fixed interest rate | 3.88% | |
Total secured debt | $ 58,500 | $ 58,500 |
Secured Debt, Net - Schedule _2
Secured Debt, Net - Schedule of Debt (Footnote) (Details) $ in Millions | Oct. 31, 2019 | Dec. 31, 2019USD ($)extension |
Variable Rate Debt - Mortgage Loan | Wells Fargo Center - North Tower | ||
Debt Instrument [Line Items] | ||
Number of options to extend | 3 | |
Option extension period | 1 year | |
Effective interest rate | 3.39% | |
Variable Rate Debt - Mortgage Loan | Wells Fargo Center - North Tower | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.65% | |
Cap interest rate | 4.25% | |
Variable Rate Debt - Mortgage Loan | Wells Fargo Center - South Tower | ||
Debt Instrument [Line Items] | ||
Number of options to extend | 2 | |
Option extension period | 1 year | |
Effective interest rate | 3.49% | |
Remaining future advance amount | $ | $ 29.2 | |
Variable Rate Debt - Mortgage Loan | Wells Fargo Center - South Tower | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.80% | |
Cap interest rate | 4.50% | |
Variable Rate Debt - Mortgage Loan | 777 Tower | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 3.32% | |
Remaining future advance amount | $ | $ 36.8 | |
Variable Rate Debt - Mortgage Loan | 777 Tower | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.60% | 1.60% |
Cap interest rate | 4.00% | |
Variable Rate Debt - Mezzanine A Loan | Wells Fargo Center - North Tower | ||
Debt Instrument [Line Items] | ||
Number of options to extend | 3 | |
Option extension period | 1 year | |
Effective interest rate | 5.74% | |
Variable Rate Debt - Mezzanine A Loan | Wells Fargo Center - North Tower | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.00% | |
Cap interest rate | 4.25% | |
Variable Rate Debt - Mezzanine A Loan | 777 Tower | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 5.87% | |
Remaining future advance amount | $ | $ 6.8 | |
Variable Rate Debt - Mezzanine A Loan | 777 Tower | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.15% | 4.15% |
Cap interest rate | 4.00% | |
Variable Rate Debt - Mezzanine A Loan | EY Plaza | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 6.24% | |
Variable Rate Debt - Mezzanine A Loan | EY Plaza | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 4.55% | |
Cap interest rate | 3.50% | |
Variable Rate Debt - Mezzanine B Loan | Wells Fargo Center - North Tower | ||
Debt Instrument [Line Items] | ||
Number of options to extend | 3 | |
Option extension period | 1 year | |
Effective interest rate | 6.74% | |
Variable Rate Debt - Mezzanine B Loan | Wells Fargo Center - North Tower | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 5.00% | |
Cap interest rate | 4.25% | |
Floating Rate Debt | EY Plaza | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 3.88% | |
Floating Rate Debt | EY Plaza | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.65% | |
Interest Rate Swap | EY Plaza | ||
Debt Instrument [Line Items] | ||
Swap rate | 2.28% |
Secured Debt, Net - Narrative (
Secured Debt, Net - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Weighted average interest rate of debt outstanding | 3.99% | 4.34% |
Weighted average term to maturity of debt outstanding | 2 years |
Secured Debt, Net - Proceeds fr
Secured Debt, Net - Proceeds from Wells Fargo Center - South Tower Mortgage Loan - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Wells Fargo Center - South Tower | Variable Rate Debt - Mortgage Loan | |
Debt Instrument [Line Items] | |
Proceeds from issuance of debt | $ 2.6 |
Secured Debt, Net - Debt Refina
Secured Debt, Net - Debt Refinanced - Narrative (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Proceeds from secured debt | $ 277,610 | $ 1,081,686 | $ 470,000 | |
777 Tower | ||||
Debt Instrument [Line Items] | ||||
Net proceeds from refinancing of debt | $ 271,500 | |||
Repayment of long-term debt | 220,000 | |||
New loan principal amount | 318,600 | |||
777 Tower | Variable Rate Debt - Mortgage Loan | ||||
Debt Instrument [Line Items] | ||||
New loan principal amount | 268,600 | |||
Proceeds from secured debt | $ 231,800 | |||
Maximum future advance amount | $ 36,800 | |||
777 Tower | Variable Rate Debt - Mortgage Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.60% | 1.60% | ||
777 Tower | Variable Rate Debt - Mezzanine A Loan | ||||
Debt Instrument [Line Items] | ||||
New loan principal amount | $ 50,000 | |||
Proceeds from secured debt | $ 43,200 | |||
Maximum future advance amount | $ 6,800 | |||
777 Tower | Variable Rate Debt - Mezzanine A Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 4.15% | 4.15% |
Secured Debt, Net - Schedule _3
Secured Debt, Net - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 765,000 | |
2021 | 710,796 | |
2022 | 0 | |
2023 | 58,500 | |
2024 | 675,000 | |
Total | $ 2,209,296 | $ 2,151,686 |
Secured Debt, Net - Debt Maturi
Secured Debt, Net - Debt Maturities - Narrative (Details) $ in Millions | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
Prepaid without penalty | $ 1,025.8 |
Available to be defeased | 400 |
Prepaid with prepayment penalties | 725 |
Locked out from prepayment until March 1, 2020 | $ 58.5 |
Accounts Payable and Other Li_3
Accounts Payable and Other Liabilities - Schedule of Accounts Payable and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Tenant improvements and inducements payable | $ 29,140 | $ 27,862 |
Unearned rent and tenant payables | 23,817 | 17,077 |
Accrued capital expenditures and leasing commissions | 18,205 | 9,844 |
Accrued expenses and other liabilities | 8,683 | 8,895 |
Accounts payable and other liabilities | $ 79,845 | $ 63,678 |
Mezzanine Equity - Series A Pre
Mezzanine Equity - Series A Preferred Stock - Narrative (Details) - Series A preferred stock - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | 131 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | |
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 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 | $ 25 | |
Preferred stock, shares outstanding (in shares) | 9,730,370 | 9,730,370 | 9,730,370 | |
Preferred stock dividends declared (in USD per share) | $ 0 | $ 0 | $ 0 | |
Preferred stock, dividend rate (in USD per share) | 1.90625 | |||
Preferred stock, redemption price (in USD per share) | $ 25 | $ 25 | ||
Preferred stock, redemption value | $ 428.5 | $ 428.5 | ||
Preferred stock, accumulated and upaid dividends | $ 185.2 | |||
Third party issuance | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares outstanding (in shares) | 9,357,469 | 9,357,469 | 9,357,469 | |
DTLA Fund Holding Co. | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares outstanding (in shares) | 372,901 | 372,901 | 372,901 |
Mezzanine Equity - Series A-1 P
Mezzanine Equity - Series A-1 Preferred Interest - Narrative (Details) - USD ($) $ in Thousands | Oct. 15, 2013 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | |||||
Redemption value | $ 1,054,223 | $ 1,015,889 | $ 990,749 | $ 829,532 | |
Series A-1 Preferred Interest | |||||
Class of Stock [Line Items] | |||||
Preferred stock, dividend rate, percentage | 7.625% | ||||
Redemption value | $ 418,029 | $ 400,816 | $ 383,510 | $ 366,297 | |
Liquidation value | 225,700 | ||||
Interest payable | $ 192,300 | ||||
Common Component of Series A Interest | |||||
Class of Stock [Line Items] | |||||
Preferred interest percent distribution after liquidation preference reduced to zero | 47.66% | ||||
Common Component of Series B Interest | |||||
Class of Stock [Line Items] | |||||
Preferred interest percent distribution after liquidation preference reduced to zero | 52.34% |
Mezzanine Equity - Senior Parti
Mezzanine Equity - Senior Participating Preferred Interest - Narrative (Details) - USD ($) $ in Thousands | Oct. 15, 2013 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | |||||
Redemption value | $ 1,054,223 | $ 1,015,889 | $ 990,749 | $ 829,532 | |
Senior Participating Preferred Interest | |||||
Class of Stock [Line Items] | |||||
Redemption value | $ 22,362 | $ 23,443 | $ 25,548 | $ 25,019 | |
DTLA Fund Holding Co. | Senior Participating Preferred Interest | 333 South Hope and EYP Realty | |||||
Class of Stock [Line Items] | |||||
Participating interest in residual value | 4.00% |
Mezzanine Equity - Series B Pre
Mezzanine Equity - Series B Preferred Interest - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 15, 2013 |
Class of Stock [Line Items] | |||||
Redemption value | $ 1,054,223 | $ 1,015,889 | $ 990,749 | $ 829,532 | |
Series B preferred interest | |||||
Class of Stock [Line Items] | |||||
Maximum funding commitment | $ 260,000 | ||||
Future funding commitment available | 44,500 | ||||
Redemption value | 185,352 | $ 181,698 | $ 190,291 | $ 65,364 | |
Liquidation value | 181,000 | ||||
Unpaid preferred returns | $ 4,400 |
Mezzanine Equity - Schedule of
Mezzanine Equity - Schedule of Change in Mezzanine Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | $ 1,015,889 | $ 990,749 | $ 829,532 |
Issuance of Series B preferred interest | 40,700 | 0 | 111,492 |
Dividends | 18,548 | 18,532 | 18,548 |
Preferred returns | 35,262 | 35,267 | 30,648 |
Redemption measurement adjustments | (1,017) | 1,482 | 479 |
Contributions from noncontrolling interests | 538 | 0 | 520 |
Repurchases of noncontrolling interests | (34,521) | ||
Distributions to noncontrolling interests | (21,176) | (30,141) | (470) |
Balance, ending | 1,054,223 | 1,015,889 | 990,749 |
Series A Preferred Stock | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | $ 409,932 | $ 391,400 | $ 372,852 |
Balance, beginning (in shares) | 9,730,370 | 9,730,370 | 9,730,370 |
Dividends | $ 18,548 | $ 18,532 | $ 18,548 |
Balance, ending | $ 428,480 | $ 409,932 | $ 391,400 |
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 | $ 400,816 | $ 383,510 | $ 366,297 |
Preferred returns | 17,213 | 17,306 | 17,213 |
Balance, ending | 418,029 | 400,816 | 383,510 |
Senior Participating Preferred Interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | 23,443 | 25,548 | 25,019 |
Redemption measurement adjustments | (1,017) | 1,482 | 479 |
Contributions from noncontrolling interests | 538 | 0 | 520 |
Distributions to noncontrolling interests | (602) | (3,587) | (470) |
Balance, ending | 22,362 | 23,443 | 25,548 |
Series B Preferred Interest | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Balance, beginning | 181,698 | 190,291 | 65,364 |
Issuance of Series B preferred interest | 40,700 | 0 | 111,492 |
Preferred returns | 18,049 | 17,961 | 13,435 |
Repurchases of noncontrolling interests | (34,521) | ||
Distributions to noncontrolling interests | (20,574) | (26,554) | 0 |
Balance, ending | $ 185,352 | $ 181,698 | $ 190,291 |
Stockholders' Deficit - Common
Stockholders' Deficit - Common Stock - Narrative (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||
Common stock, shares authorized (in shares) | 1,000,000 | 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 |
Stockholders' Deficit - Capital
Stockholders' Deficit - Capital Contributions - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||
Contributions to additional paid-in capital | $ 1,710 | $ 1,615 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Summary of Change in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Other comprehensive (loss) income before reclassifications | $ (2,117) | $ 1,548 | $ 2,799 |
Amounts reclassified from accumulated other comprehensive loss | 0 | (1,198) | 0 |
Accumulated Other Comprehensive Loss | |||
Accumulated Other Comprehensive Loss [Roll Forward] | |||
Balance at beginning of year | (224) | (574) | (3,373) |
Other comprehensive (loss) income before reclassifications | (2,117) | 1,548 | 2,799 |
Amounts reclassified from accumulated other comprehensive loss | 0 | (1,198) | 0 |
Net current-year other comprehensive (loss) income | (2,117) | 350 | 2,799 |
Balance at end of year | $ (2,341) | $ (224) | $ (574) |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of (Liabilities) Assets Measured at Fair Value on a Recurring Basis (Details) - Interest Rate Swap - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Interest rate cash flow hedge derivatives at fair value | $ (1,143) | $ 974 | $ (574) |
Quoted Prices in Active Markets for Identical (Liabilities) Assets (Level 1) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Interest rate cash flow hedge derivatives at fair value | 0 | 0 | 0 |
Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Interest rate cash flow hedge derivatives at fair value | (1,143) | 974 | (574) |
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Interest rate cash flow hedge derivatives at fair value | $ 0 | $ 0 | $ 0 |
Financial Instruments - Summary
Financial Instruments - Summary of Fair Value of Derivative Instruments (Details) - Interest Rate Swap - Cash Flow Hedging - Designated as Hedging Instrument - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaid and Other Assets, Net | ||
Derivatives, Fair Value | ||
Interest rate swap assets at fair value | $ 0 | $ 974 |
Accounts Payable and Other Liabilities | ||
Derivatives, Fair Value | ||
Interest rate swap liabilities at fair value | $ (1,143) | $ 0 |
Financial Instruments - Summa_2
Financial Instruments - Summary of Effect of Derivative Instruments (Details) - Interest Rate Swap - Cash Flow Hedging - Designated as Hedging Instrument - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative | |||
Amount of (Loss) Gain Recognized in AOCL | $ (2,117) | ||
Amount of (Loss) Gain Recognized in AOCL | $ 1,548 | $ 2,799 | |
Interest and other | |||
Derivative | |||
Amount of Gain Reclassified from AOCL to Statement of Operations | $ 0 | ||
Amount of Gain Reclassified from AOCL to Statement of Operations | $ 1,198 | $ 0 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Interest Rate Swaps (Details) - Designated as Hedging Instrument $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Interest Rate Swap Agreement One | EY Plaza | |
Derivative | |
Notional amount | $ 168,151 |
Swap rate | 2.18% |
LIBOR spread | 1.65% |
Effective interest rate | 3.83% |
Interest Rate Swap Agreement Two | EY Plaza | |
Derivative | |
Notional amount | $ 54,206 |
Swap rate | 2.47% |
LIBOR spread | 1.65% |
Effective interest rate | 4.12% |
Interest Rate Swap | |
Derivative | |
Notional amount | $ 222,357 |
Swap rate | 2.28% |
LIBOR spread | 1.65% |
Effective interest rate | 3.88% |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Interest Rate Caps (Details) - Interest Rate Cap - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Instruments, Interest Rate Caps | ||
Notional amount | $ 1,143,600 | $ 1,045,000 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mortgage Loan | ||
Derivative Instruments, Interest Rate Caps | ||
Notional amount | 400,000 | 400,000 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mezzanine A Loan | ||
Derivative Instruments, Interest Rate Caps | ||
Notional amount | 65,000 | 65,000 |
Wells Fargo Center - North Tower | Variable Rate Debt - Mezzanine B Loan | ||
Derivative Instruments, Interest Rate Caps | ||
Notional amount | 35,000 | 35,000 |
Wells Fargo Center - South Tower | Variable Rate Debt - Mortgage Loan | ||
Derivative Instruments, Interest Rate Caps | ||
Notional amount | 290,000 | 290,000 |
777 Tower | Variable Rate Debt - Mortgage Loan | ||
Derivative Instruments, Interest Rate Caps | ||
Notional amount | 268,600 | 220,000 |
777 Tower | Variable Rate Debt - Mezzanine A Loan | ||
Derivative Instruments, Interest Rate Caps | ||
Notional amount | 50,000 | 0 |
EY Plaza | Variable Rate Debt - Mezzanine A Loan | ||
Derivative Instruments, Interest Rate Caps | ||
Notional amount | $ 35,000 | $ 35,000 |
Financial Instruments - Interes
Financial Instruments - Interest Rate Caps - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Oct. 31, 2019 | Dec. 31, 2018 |
Interest Rate Cap | Not Designated as Hedging Instrument | |||
Derivative | |||
Notional amounts | $ 1,143,600 | $ 1,045,000 | |
777 Tower | LIBOR | |||
Derivative | |||
Cap interest rate | 4.00% | ||
777 Tower | Variable Rate Loans | Interest Rate Cap | Not Designated as Hedging Instrument | |||
Derivative | |||
Notional amounts | $ 318,600 |
Financial Instruments - Summa_3
Financial Instruments - Summary of Estimated Fair Value and Carrying Amount of Secured Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Estimated fair value | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Secured debt | $ 2,210,389 | $ 2,142,813 |
Carrying amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Secured debt | $ 2,209,296 | $ 2,151,686 |
Related Party Transactions - Ma
Related Party Transactions - Management Agreements - Narrative (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Property Management Fee | |
Related Party Transaction | |
Related party transaction rate | 2.75% |
Asset Management Fee | |
Related Party Transaction | |
Related party transaction rate | 0.75% |
Leasing Management Fee | Minimum | |
Related Party Transaction | |
Related party transaction rate | 1.00% |
Leasing Management Fee | Maximum | |
Related Party Transaction | |
Related party transaction rate | 4.00% |
Construction Management Fee | |
Related Party Transaction | |
Related party transaction rate | 3.00% |
Development Management Fee | |
Related Party Transaction | |
Related party transaction rate | 3.00% |
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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property management fee expense | |||
Related Party Transaction | |||
Related party expense | $ 8,479 | $ 8,111 | $ 8,136 |
Asset management fee expense | |||
Related Party Transaction | |||
Related party expense | 6,161 | 6,330 | 6,330 |
Leasing and construction management fees | |||
Related Party Transaction | |||
Related party expense | 5,051 | 3,209 | 5,198 |
Development Management Fee | |||
Related Party Transaction | |||
Related party expense | 991 | 0 | 0 |
General, administrative and reimbursable expenses | |||
Related Party Transaction | |||
Related party expense | 2,865 | 3,007 | 2,613 |
Insurance expense | |||
Related Party Transaction | |||
Related party expense | $ 9,286 | $ 8,026 | $ 7,795 |
Related Party Transactions - In
Related Party Transactions - Insurance Agreements - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Related Party Transactions [Abstract] | |
Real Estate Insurance, All Risk Property and Business Interruption, Aggregate Limit per Occurrence | $ 2,500 |
Real Estate Insurance, Earthquake Insurance for California, Aggregate Limit | 437.5 |
Real Estate Insurance, Flood and Weather Catastrophe, Aggregate Limit | 372.5 |
Real Estate Insurance, Terrorism Insurance per Occurrence Maximum | $ 4,000 |
Related Party Transactions - _2
Related Party Transactions - Summary of the Impact of Other Related Party Transactions with BAM Affiliates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lease income | |||
Related Party Transaction | |||
Related party revenue | $ 5,916 | $ 1,928 | $ 0 |
Interest and other revenue | |||
Related Party Transaction | |||
Related party other revenue | 208 | 0 | 0 |
Rental property operating and maintenance expense | |||
Related Party Transaction | |||
Related party expense | 676 | 862 | 579 |
Other expense | |||
Related Party Transaction | |||
Related party expense | 142 | 0 | 0 |
Interest expense | |||
Related Party Transaction | |||
Related party interest expense | $ 613 | $ 0 | $ 0 |
Related Party Transactions - _3
Related Party Transactions - Summary of the Impact of Other Related Party Transactions with BAM Affiliates (Footnote) (Details) - Variable Rate Debt - Mezzanine B Loan - Wells Fargo Center - North Tower $ in Thousands | Dec. 31, 2019USD ($) |
Related Party Transaction | |
Related party loan | $ 35,000 |
Interest payable on related party loan | $ 112 |
Future Minimum Base Rents - Sch
Future Minimum Base Rents - Schedule of Future Minimum Base Rents Under Executed Noncancelable Tenant Operating Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 164,816 |
2021 | 165,161 |
2022 | 152,236 |
2023 | 139,245 |
2024 | 121,143 |
Thereafter | 634,167 |
Total | $ 1,376,768 |
Future Minimum Base Rents - Nar
Future Minimum Base Rents - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Percentage rental income earned from operating leases | $ 0.8 | $ 2 | $ 3.1 |
Commitments and Contingencies -
Commitments and Contingencies - Concentration of Tenant Credit Risk - Narrative (Details) - customer | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Customer concentration risk | Revenue | |||
Concentration Risk [Line Items] | |||
Number of tenants accounting for more than 10% of consolidated lease income | 0 | 0 | 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Concentration of Property Revenue Risk - Narrative (Details) - BOA Plaza, Wells Fargo Center-North Tower, Wells Fargo Center-South Tower, Gas Company Tower, EY Plaza and 777 Tower - Revenue - Properties | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | |||
Number of real estate properties | 6 | 6 | 6 |
Product Concentration Risk | |||
Concentration Risk [Line Items] | |||
Percentage of consolidated revenue generated by six properties | 96.00% | 98.00% | 100.00% |
Commitments and Contingencies_3
Commitments and Contingencies - Capital Commitments - Narrative (Details) $ in Millions | Dec. 31, 2019USD ($) |
Tenant improvements and leasing commissions due to lessees | |
Long-term Purchase Commitment [Line Items] | |
Capital commitment | $ 35.4 |
Construction-related commitments | |
Long-term Purchase Commitment [Line Items] | |
Capital commitment | $ 10.3 |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) - Schedule of Quarterly Financial Information (Unaudited) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information [Line Items] | |||||||||||
Total revenue | $ 82,860 | $ 79,612 | $ 79,166 | $ 76,207 | $ 79,124 | $ 77,151 | $ 84,194 | $ 75,211 | $ 317,845 | $ 315,680 | $ 306,322 |
Total expenses | 96,465 | 90,815 | 90,383 | 89,540 | 94,100 | 91,789 | 89,458 | 84,990 | 367,203 | 360,337 | 343,959 |
Total other income (loss) | 8,038 | (29) | 14,688 | 0 | 22,697 | 0 | 0 | ||||
Net (loss) income | (5,567) | (11,232) | 3,471 | (13,333) | (14,976) | (14,638) | (5,264) | (9,779) | (26,661) | (44,657) | (37,637) |
Net loss attributable to Brookfield DTLA | (14,741) | (26,363) | (23,903) | (31,080) | (89,864) | (8,595) | (4,367) | (6,923) | (96,087) | (109,749) | (23,065) |
Net loss attributable to common interest holders of Brookfield DTLA | (19,378) | (31,000) | (28,540) | (35,717) | (94,485) | (13,232) | (9,004) | (11,560) | (114,635) | (128,281) | (41,613) |
Series A-1 preferred interest | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Preferred interest returns | 4,304 | 4,303 | 4,303 | 4,303 | 4,397 | 4,303 | 4,303 | 4,303 | 17,213 | 17,306 | 17,213 |
Senior participating preferred interest | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Redemption measurement adjustments | (868) | 602 | (179) | (572) | (1,163) | 220 | 768 | 1,657 | (1,017) | 1,482 | 479 |
Series B preferred interest | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Preferred interest returns | 4,401 | 4,966 | 4,591 | 4,091 | 6,196 | 3,965 | 3,921 | 3,879 | 18,049 | 17,961 | 13,435 |
Series B common interest | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Allocation of net income (loss) | 1,337 | 5,260 | 18,659 | 9,925 | 65,458 | (14,531) | (9,889) | (12,695) | 35,181 | 28,343 | (45,699) |
Series A preferred stock | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Dividends | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,637 | $ 4,621 | $ 4,637 | $ 4,637 | $ 4,637 | $ 18,548 | $ 18,532 | $ 18,548 |
Quarterly Financial Informati_4
Quarterly Financial Information (Unaudited) - Schedule of Quarterly Financial Information (Unaudited) (Footnote) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | ||
Increase in consideration allocated to assets contributed to joint venture | $ 9,800 | $ 45,000 |
Investments in Real Estate - Su
Investments in Real Estate - Summary of Information Related to Investments in Real Estate (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | $ 2,209,296 | |||
Initial Cost to Company | ||||
Land | 222,555 | |||
Buildings and Improvements | 2,176,597 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Improvements | 526,423 | |||
Carrying Costs | 0 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 222,555 | |||
Buildings and Improvements | 2,703,020 | |||
Total | 2,925,575 | $ 2,834,450 | $ 2,756,322 | $ 2,740,773 |
Accumulated Depreciation | 466,405 | $ 418,205 | $ 342,465 | $ 329,149 |
Office properties | Wells Fargo Center – North Tower 333 S. Grand Avenue | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 500,000 | |||
Initial Cost to Company | ||||
Land | 41,024 | |||
Buildings and Improvements | 455,741 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Improvements | 125,794 | |||
Carrying Costs | 0 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 41,024 | |||
Buildings and Improvements | 581,535 | |||
Total | 622,559 | |||
Accumulated Depreciation | 89,600 | |||
Office properties | BOA Plaza 333 S. Hope Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 400,000 | |||
Initial Cost to Company | ||||
Land | 54,163 | |||
Buildings and Improvements | 343,976 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Improvements | 78,322 | |||
Carrying Costs | 0 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 54,163 | |||
Buildings and Improvements | 422,298 | |||
Total | 476,461 | |||
Accumulated Depreciation | 103,525 | |||
Office properties | Wells Fargo Center – South Tower 355 S. Grand Avenue | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 260,796 | |||
Initial Cost to Company | ||||
Land | 21,231 | |||
Buildings and Improvements | 398,238 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Improvements | 75,237 | |||
Carrying Costs | 0 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 21,231 | |||
Buildings and Improvements | 473,475 | |||
Total | 494,706 | |||
Accumulated Depreciation | 59,288 | |||
Office properties | Gas Company Tower 525-555 W. Fifth Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 450,000 | |||
Initial Cost to Company | ||||
Land | 20,742 | |||
Buildings and Improvements | 394,378 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Improvements | 77,489 | |||
Carrying Costs | 0 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 20,742 | |||
Buildings and Improvements | 471,867 | |||
Total | 492,609 | |||
Accumulated Depreciation | 63,914 | |||
Office properties | EY Plaza 725 S. Figueroa Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 265,000 | |||
Initial Cost to Company | ||||
Land | 47,385 | |||
Buildings and Improvements | 242,557 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Improvements | 97,124 | |||
Carrying Costs | 0 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 47,385 | |||
Buildings and Improvements | 339,681 | |||
Total | 387,066 | |||
Accumulated Depreciation | 87,597 | |||
Office properties | 777 Tower 777 S. Figueroa Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 275,000 | |||
Initial Cost to Company | ||||
Land | 38,010 | |||
Buildings and Improvements | 296,964 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Improvements | 41,113 | |||
Carrying Costs | 0 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 38,010 | |||
Buildings and Improvements | 338,077 | |||
Total | 376,087 | |||
Accumulated Depreciation | 43,560 | |||
Retail property | FIGat7th 735 S. Figueroa Street | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 58,500 | |||
Initial Cost to Company | ||||
Land | 0 | |||
Buildings and Improvements | 44,743 | |||
Costs Capitalized Subsequent to Acquisition | ||||
Improvements | 31,344 | |||
Carrying Costs | 0 | |||
Gross Amount at Which Carried at Close of Period | ||||
Land | 0 | |||
Buildings and Improvements | 76,087 | |||
Total | 76,087 | |||
Accumulated Depreciation | $ 18,921 |
Investments in Real Estate - _2
Investments in Real Estate - Summary of Information Related to Investments in Real Estate (Footnote) (Details) $ in Billions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |
Investment in real estate for federal income tax purposes | $ 2.7 |
Buildings | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |
Useful life | 60 years |
Building Improvements | Minimum | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |
Useful life | 5 years |
Building Improvements | Maximum | |
SEC Schedule, 12-28, Real Estate Companies, Investment in 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, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments in Real Estate | |||
Balance at beginning of year | $ 2,834,450 | $ 2,756,322 | $ 2,740,773 |
Improvements | 148,637 | 78,128 | 75,847 |
Dispositions | 20,139 | 0 | 0 |
Other deductions | 37,373 | 0 | 60,298 |
Balance at end of year | 2,925,575 | 2,834,450 | 2,756,322 |
Accumulated Depreciation | |||
Balance at beginning of year | 418,205 | 342,465 | 329,149 |
Depreciation expense | 85,573 | 75,740 | 73,614 |
Other deductions | 37,373 | 0 | 60,298 |
Balance at end of year | $ 466,405 | $ 418,205 | $ 342,465 |