Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 31, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Starwood Waypoint Residential Trust | |
Trading Symbol | SWAY | |
Entity Central Index Key | 1,579,471 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 37,972,764 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Investments in real estate properties | ||
Land | $ 405,605 | $ 359,889 |
Building and improvements | 1,906,762 | 1,619,622 |
Total investments in real estate properties | 2,312,367 | 1,979,511 |
Less: accumulated depreciation | (89,615) | (41,563) |
Investments in real estate properties, net | 2,222,752 | 1,937,948 |
Real estate held for sale, net | 77,978 | 32,102 |
Total investments in real estate properties, net | 2,300,730 | 1,970,050 |
Non-performing loans | 71,965 | 125,488 |
Non-performing loans held for sale | 0 | 26,911 |
Non-performing loans (fair value option) | 399,774 | 491,790 |
Resident and other receivables, net | 22,014 | 17,270 |
Cash and cash equivalents | 109,842 | 175,198 |
Restricted cash | 91,321 | 50,749 |
Deferred financing costs, net | 28,670 | 34,160 |
Asset-backed securitization certificates | 26,553 | 26,553 |
Other assets | 16,979 | 17,994 |
Total assets | 3,067,848 | 2,936,163 |
Liabilities: | ||
Asset-backed securitization, net | 527,152 | 526,816 |
Convertible senior notes, net | 370,195 | 363,110 |
Accounts payable and accrued expenses | 72,294 | 52,457 |
Resident security deposits and prepaid rent | 22,809 | 17,857 |
Total liabilities | $ 2,021,076 | $ 1,855,728 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Preferred shares, $0.01 par value-100,000,000 authorized; none issued and outstanding as of September 30, 2015 and December 31, 2014 | $ 0 | $ 0 |
Common shares, $0.01 par value-500,000,000 authorized; 37,907,966 issued and outstanding as of September 30, 2015, and 37,778,663 issued and outstanding as of December 31, 2014 | 382 | 378 |
Additional paid-in capital | 1,130,708 | 1,133,239 |
Accumulated deficit | (86,501) | (53,723) |
Accumulated other comprehensive loss | (170) | (70) |
Total Starwood Waypoint Residential Trust equity | 1,044,419 | 1,079,824 |
Non-controlling interests | 2,353 | 611 |
Total equity | 1,046,772 | 1,080,435 |
Total liabilities and equity | 3,067,848 | 2,936,163 |
Deutsche Bank [Member] | ||
Liabilities: | ||
Credit facilities | 331,212 | 454,249 |
SFR Facility [Member] | ||
Liabilities: | ||
Credit facilities | $ 697,414 | $ 441,239 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Preferred shares, par value | $ 0.01 | $ 0.01 |
Preferred shares, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common shares, par value | $ 0.01 | $ 0.01 |
Common shares, shares authorized | 500,000,000 | 500,000,000 |
Common shares, shares issued | 37,907,966 | 37,778,663 |
Common shares, shares outstanding | 37,907,966 | 37,778,663 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations (Unaudited) - USD ($) $ in Thousands | Sep. 21, 2015 | Jul. 31, 2015 | Feb. 02, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Revenues | ||||||||
Rental revenues, net | $ 49,197 | $ 30,366 | $ 137,857 | $ 67,733 | ||||
Other property revenues | 1,801 | 1,139 | 4,634 | 2,508 | ||||
Realized gain on non-performing loans, net | 26,024 | 1,941 | 40,510 | 7,141 | ||||
Realized gain on loan conversions, net | 9,270 | 5,791 | 23,942 | 17,688 | ||||
Total revenues | 86,292 | 39,237 | 206,943 | 95,070 | ||||
Expenses | ||||||||
Property operating and maintenance | 11,580 | 8,796 | 33,100 | 22,619 | ||||
Real estate taxes and insurance | 9,957 | 5,143 | 27,502 | 12,754 | ||||
Mortgage loan servicing costs | 10,404 | 7,918 | 29,985 | 17,939 | ||||
Non-performing loan management fees and expenses | 3,146 | 3,508 | 9,301 | 7,794 | ||||
General and administrative | 3,965 | 4,627 | 11,827 | 14,441 | ||||
Share-based compensation | 2,344 | 2,101 | 5,661 | 4,560 | ||||
Investment management fees | 4,664 | 4,522 | 14,326 | 11,272 | ||||
Acquisition fees and other expenses | 244 | 217 | 866 | 664 | ||||
Interest expense, including amortization | 20,200 | 11,899 | 57,412 | 18,590 | ||||
Depreciation and amortization | 19,783 | 9,238 | 56,775 | 21,954 | ||||
Separation costs | 0 | 0 | 0 | 3,543 | ||||
Transaction-related expenses | 4,288 | 0 | 4,288 | 0 | ||||
Finance related expenses and write-off of loan costs | 722 | 1,334 | 2,177 | 6,775 | ||||
Impairment of real estate | 202 | 341 | 861 | 2,408 | ||||
Total expenses | 91,499 | 59,644 | 254,081 | 145,313 | ||||
Loss before other income, income tax expense and non-controlling interests | (5,207) | (20,407) | (47,138) | (50,243) | ||||
Other income (expense) | ||||||||
Realized gain (loss) on sales of investments in real estate, net | 1,472 | 125 | 2,176 | (76) | ||||
Realized loss on sales of divestiture homes, net | (3,320) | 0 | (3,001) | 0 | ||||
Unrealized (loss) gain on non-performing loans, net | (3,952) | 13,705 | 34,431 | 17,346 | ||||
Loss on derivative financial instruments, net | (31) | (104) | (307) | (574) | ||||
Total other income | (5,831) | 13,726 | 33,299 | 16,696 | ||||
Loss before income tax expense and non-controlling interests | (11,038) | (6,681) | (13,839) | (33,547) | ||||
Income tax expense | 16 | 19 | 440 | 504 | ||||
Net loss | $ (931) | (11,054) | (6,700) | $ (33,120) | (14,279) | (34,051) | ||
Net income attributable to non-controlling interests | (109) | (13) | (328) | (86) | ||||
Net income (loss) attributable to Starwood Waypoint Residential Trust shareholders | $ (11,163) | $ (6,713) | $ (14,607) | $ (34,137) | ||||
Weighted-average shares outstanding-basic and diluted | 37,906,769 | 38,613,270 | 37,942,011 | 38,911,505 | ||||
Net loss per common share | ||||||||
Basic and diluted | $ (0.29) | $ (0.17) | $ (0.38) | $ (0.88) | ||||
Dividends per common share | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.14 | $ 0.47 | $ 0.14 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Other Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (11,054) | $ (6,700) | $ (14,279) | $ (34,051) |
Interest rate caps | (8) | 0 | (100) | 0 |
Comprehensive loss | (11,062) | (6,700) | (14,379) | (34,051) |
Comprehensive income attributable to non-controlling interests | (109) | (13) | (328) | (86) |
Comprehensive loss attributable to Starwood Waypoint Residential Trust shareholders | $ (11,171) | $ (6,713) | $ (14,707) | $ (34,137) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Of Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Shares [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Starwood Waypoint Residential Trust Equity [Member] | Non-controlling Interests [Member] |
Balance at Dec. 31, 2013 | $ 992,056 | $ 1,018,267 | $ (27,848) | $ 990,419 | $ 1,637 | ||
Balance, shares at Dec. 31, 2013 | 1,000 | ||||||
Net loss | (34,051) | ||||||
Balance at Sep. 30, 2014 | 1,097,020 | $ 385 | 1,134,845 | (38,742) | 1,096,488 | 532 | |
Balance, shares at Sep. 30, 2014 | 38,506,041 | ||||||
Balance at Dec. 31, 2014 | 1,080,435 | $ 378 | 1,133,239 | (53,723) | $ (70) | 1,079,824 | 611 |
Balance, shares at Dec. 31, 2014 | 37,778,663 | ||||||
Net loss | (14,279) | (14,607) | (14,607) | 328 | |||
Dividends declared or paid | (18,171) | (18,171) | (18,171) | ||||
Repurchases of common shares | $ (8,302) | $ (4) | $ (8,298) | $ (8,302) | |||
Repurchases of common shares, shares | (332,250) | ||||||
Board member compensation paid in shares, shares | 114 | 4,462 | 114 | 114 | |||
Board member forfeiture of shares, shares | (1,111) | ||||||
Share-based compensation, shares | 458,202 | ||||||
Share-based compensation | $ 5,661 | $ 8 | $ 5,653 | $ 5,661 | |||
Other comprehensive loss | (100) | (100) | (100) | ||||
Non-controlling interests contributions | 1,521 | 1,521 | |||||
Non-controlling interests distributions | (107) | (107) | |||||
Balance at Sep. 30, 2015 | $ 1,046,772 | $ 382 | $ 1,130,708 | $ (86,501) | $ (170) | $ 1,044,419 | $ 2,353 |
Balance, shares at Sep. 30, 2015 | 37,907,966 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (14,279) | $ (34,051) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 56,775 | 21,954 |
Amortization of deferred financing costs | 7,019 | 3,767 |
Amortization of securitization discount | 336 | 0 |
Amortization of convertible debt discount | 6,739 | 1,048 |
Board member compensation paid in shares | 114 | 109 |
Share-based compensation expense | 5,661 | 4,560 |
Realized loss (gain) on sales of investments in real estate, net | (2,176) | 76 |
Realized loss on sales of divestiture homes, net | 3,001 | 0 |
Realized gain on non-performing loans, net | (40,510) | (7,141) |
Realized gain on loan conversions, net | (23,942) | (17,688) |
Unrealized gain on non-performing loans, net | (34,431) | (17,346) |
Loss on derivative financial instruments, net | 307 | 574 |
Straight-line rents | (729) | (505) |
Provision for doubtful accounts receivable | 1,530 | 1,993 |
Impairment of real estate | 861 | 2,408 |
Write-off of loan costs | 0 | 5,032 |
Changes in operating assets and liabilities: | ||
Resident and other receivables | (6,274) | (5,782) |
Restricted cash | (37,067) | (35,394) |
Other assets | (9,485) | (17,558) |
Accounts payable and accrued expenses | 18,128 | 25,032 |
Resident security deposits and prepaid rent | 4,952 | 10,776 |
Net cash used in operating activities | (63,470) | (58,136) |
Cash flows from investing activities: | ||
Purchases of real estate | (313,690) | (808,402) |
Initial renovations to single-family rentals | (93,057) | (162,212) |
Other capital expenditures for single-family rentals | (10,137) | (5,006) |
Proceeds from sale of real estate | 29,584 | 17,789 |
Proceeds from sale of divestiture homes | 117,290 | 0 |
Purchases of non-performing loans | 0 | (486,509) |
Liquidation, principal repayments and other proceeds on loans | 47,148 | 27,435 |
Proceeds from sale of loans | 112,685 | 4,546 |
Change in restricted cash and other investing activities | 93 | (16,634) |
Net cash used in investing activities | (110,084) | (1,428,993) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible senior notes | 0 | 230,000 |
Payment of financing costs | (1,797) | (25,346) |
Repurchases of common shares | (8,302) | (16,055) |
Contributions from non-controlling interests | 1,521 | 400 |
Distributions to non-controlling interests | (107) | (1,591) |
Offering costs | 0 | (782) |
Capital contributions | 0 | 128,290 |
Payments of dividends | (16,255) | 0 |
Net cash provided by financing activities | 108,198 | 1,528,160 |
Net (decrease) increase in cash and cash equivalents | (65,356) | 41,031 |
Cash and cash equivalents at beginning of the period | 175,198 | 44,613 |
Cash and cash equivalents at end of the period | 109,842 | 85,644 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 43,722 | 13,582 |
Cash paid for income taxes | 440 | 342 |
Non-cash investing activities | ||
Accrued capital expenditures | 10,091 | 14,241 |
Loan basis converted to real estate | 87,558 | 40,064 |
Non-cash financing activities | ||
Accrued distribution to common shareholders | 7,340 | 5,526 |
Deutsche Bank [Member] | ||
Cash flows from financing activities: | ||
Borrowings on credit facilities | 0 | 466,474 |
Payments of credit facilities | (123,037) | (18,154) |
SFR Facility [Member] | ||
Cash flows from financing activities: | ||
Borrowings on credit facilities | 258,761 | 1,181,780 |
Payments of credit facilities | $ (2,586) | $ (416,856) |
Organization And Operations
Organization And Operations | 9 Months Ended |
Sep. 30, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Operations | Note 1. Organization and Operations We are a Maryland real estate investment trust formed in May 2012 primarily to acquire, renovate, lease and manage residential assets in select markets throughout the United States. Our objective is to generate attractive risk-adjusted returns for our shareholders over the long-term through dividends and capital appreciation. Our primary strategy is to acquire single-family rental homes (“SFR”) through a variety of channels, renovate these homes to the extent necessary and lease them to qualified residents. We seek to take advantage of macroeconomic trends in favor of leasing homes by acquiring, owning, renovating and managing homes that we believe will (1) generate substantial current rental revenue, which we expect to grow over time, and (2) appreciate in value over the next several years. In addition, we have a significant portfolio of NPLs which we may seek to (1) modify and hold or resell at higher prices if circumstances warrant, thus providing additional liquidity or (2) convert into homes through the foreclosure or other resolution process that can then either be contributed to our rental portfolio or sold. We were organized as a Maryland corporation in May 2012 as a wholly-owned subsidiary of Starwood Property Trust, Inc. (“SPT”) to own homes and NPLs. Subsequently, we changed our corporate form from a Maryland corporation to a Maryland real estate investment trust and our name from Starwood Residential Properties, Inc. to Starwood Waypoint Residential Trust. On January 31, 2014, SPT completed the spin-off of us to its stockholders (the “Separation”), and we issued approximately 39.1 million common shares. Our shares began trading on February 3, 2014, on the New York Stock Exchange (“NYSE”) under the ticker symbol SWAY. As part of the Separation, SPT also contributed $100.0 million to us, in order to continue to fund our growth and operations. Prior to the Separation, there were also $28.3 million of contributions from SPT. Starwood Waypoint Residential Partnership, L.P. (our “operating partnership”) was formed as a Delaware limited partnership in May 2012. This wholly-owned subsidiary is the sole general partner of our operating partnership, and we conduct substantially all of our business through our operating partnership. We own 100% of the operating partnership units in our operating partnership (the “OP Units”). We have a joint venture with Prime Asset Fund VI, LLC (“Prime”), an entity managed by Prime Finance, an asset manager that specializes in acquisition, resolution and disposition of NPLs. We own a greater than 98.75% interest in the joint venture, which holds all of our NPLs. Prime earns a one-time fee from us, equal to a percentage of the value (as determined pursuant to the Amended and Restated Limited Partnership Agreement of PrimeStar Fund I, L.P. (“PrimeStar Fund I”)) of the NPLs and homes we designate as rental pool assets upon disposition or resolution of such assets. Prime also earns a fee in connection with the asset management services that Prime provides to the joint venture’s non-rental pool assets, and the joint venture pays Prime a monthly asset management fee in arrears for all non-rental pool assets acquired. We intend to operate and to be taxed as a REIT for U.S. federal income tax purposes. We generally will not be subject to U.S. federal income taxes on our REIT taxable income to the extent that we annually distribute all of our REIT taxable income to shareholders and qualify and maintain our qualification as a REIT. Our Manager We are externally managed and advised by our Manager pursuant to the terms of a management agreement (the “Management Agreement”), which will not expire until January 31, 2017. Our Manager is an affiliate of Starwood Capital Group, a privately-held private equity firm founded and controlled by Barry Sternlicht, our chairman. On January 31, 2014, our Manager acquired the Waypoint platform, which is an advanced, technology driven operating platform that provides the backbone for deal sourcing, property underwriting, acquisitions, asset protection, renovations, marketing and leasing, repairs and maintenance, portfolio reporting and property management of homes. Merger On September 21, 2015, we and CAH announced the signing of the Merger Agreement to combine the two companies in a stock-for-stock transaction. In connection with the transaction, we will internalize our Manager. The combined internally managed company (the “Combined Company”) is expected to own and manage over 30,000 homes and have an aggregate asset value of approximately $7.7 billion at the closing of the transaction. The Merger is expected to achieve estimated annualized cost synergies of $40.0 - $50.0 million. Under the Merger Agreement, CAH shareholders will receive an aggregate of 64,869,583 of our common shares in exchange for all shares of CAH (the “Merger Consideration”). Upon completion of the transaction, our existing shareholders and the former owner of our Manager will own approximately 41% of the Combined Company’s shares combined, while former CAH shareholders will own approximately 59% of the Combined Company’s shares. The share allocation was determined based on each company’s net asset value and is not subject to adjustment. The Combined Company’s shares will continue to trade on the NYSE. We expect to maintain our quarterly dividend of $0.19 per share up to the closing of the Merger. The transaction has been approved by our board of trustees and CAH’s board of directors, and the terms of the Internalization of our Manager were negotiated and approved by a special committee of our board of trustees. The transaction is expected to close in the first quarter of 2016. Among other things, the transaction is subject to approval of our shareholders and customary closing conditions. Upon the closing of the Internalization and the Merger, the Combined Company will be named “Colony Starwood Homes” and its Common Shares will be listed and traded on the NYSE under the ticker symbol “SFR”. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Note 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying interim condensed consolidated financial statements are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the applicable rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The December 31, 2014 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated financial statements include our accounts and those of our wholly and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly our financial position as of September 30, 2015, results of operations, comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014 and cash flows for the nine months ended September 30, 2015 and 2014. The interim results for the three and nine months ended September 30, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures About Market Risk and the consolidated financial statements and notes thereto included in Items 7, 7A and 8, respectively, in our Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on March 6, 2015. Prior to the Separation, the historical condensed consolidated financial statements were derived from the condensed consolidated financial statements and accounting records of SPT principally representing the single-family segment, using the historical results of operations and historical basis of assets and liabilities of our businesses. The historical condensed consolidated financial statements also include allocations of certain of SPT’s general corporate expenses. Management believes the assumptions and methodologies underlying the allocation of general corporate expenses to the historical results of operations were reasonable. However, such expenses may not be indicative of the actual level of expenses that would have been incurred by us if we had operated as an independent, publicly traded company or of the costs expected to be incurred in the future. As such, the results of operations prior to the Separation, included herein, may not necessarily reflect our results of operations, financial position, or cash flows in the future or what our results of operations, financial position, or cash flows would have been had we been an independent, publicly traded company during the historical periods presented. Transactions between the single-family business segment and other business segments of SPT’s businesses have been identified in the historical condensed consolidated financial statements as transactions between related parties for periods prior to the Separation. We have no expenses allocated to us from SPT in 2014 or 2015. The non-controlling interest in a consolidated subsidiary is the portion of the equity (net assets) in Prime that is not attributable, directly or indirectly, to us. Non-controlling interests are presented as a separate component of equity in the condensed consolidated balance sheets. In addition, the accompanying condensed consolidated statements of operations include the allocation of the net income or loss in the Prime joint venture to the non-controlling interest holders in Prime. Use of Estimates The preparation of financial statements in conformity with GAAP requires us 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, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant estimate that we make is of the fair value of our properties and NPLs. While home values are typically not a highly subjective estimate on a per-unit basis, given the usual availability of comparable property sale and other market data, these fair value estimates significantly affect the condensed consolidated financial statements, including (1) whether certain assets are identified as being potentially impaired and then, if deemed to be impaired, the amount of the resulting impairment charges, and (2) the allocation of purchase price to individual assets acquired as part of a pool, which have a significant impact on the amount of gain or loss recognized from a subsequent sale, and the subsequent impairment assessment, of individual assets. Beginning in 2014, we elected the fair value option for our NPLs. Estimates pertaining to the fair value of NPLs use a discounted cash flow valuation model and consider alternate loan resolution probabilities, including modification, liquidation, or conversion to rental property. These fair value estimates significantly affect the condensed consolidated financial statements in that changes to the fair value of NPLs for which we have elected the fair value option are reflected in unrealized gains and losses and recorded in current-period earnings. Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents include cash in banks and short-term investments. Short-term investments are comprised of highly liquid instruments with original maturities of three months or less. We maintain our cash and cash equivalents in multiple financial institutions with high credit quality in order to minimize our credit loss exposure. At times, these balances exceed federally insurable limits. Restricted Cash Restricted cash is primarily comprised of resident security deposits held by us and rental revenues held in accounts controlled by lenders on our debt facilities. Investments in Real Estate Property acquisitions are evaluated to determine whether they meet the definition of a business combination or of an asset acquisition under GAAP. For asset acquisitions, we capitalize (1) pre-acquisition costs to the extent such costs would have been capitalized had we owned the asset when the cost was incurred, and (2) closing and other direct acquisition costs. We then allocate the total cost of the property including acquisition costs, between land and building based on their relative fair values, generally utilizing the relative allocation that was contained in the property tax assessment of the same or a similar property, adjusted as deemed necessary. For acquisitions that do not qualify as an asset acquisition, we evaluate the acquisition to determine if it qualifies as a business combination. For acquired properties where we have determined that the property has a resident with an existing lease in place, we account for the acquisition as a business combination. For acquisitions that qualify as a business combination, we (1) expense the acquisition costs in the period in which the costs were incurred and (2) allocate the cost of the property among land, building and in-place lease intangibles based on their fair value. The fair values of acquired in-place lease intangibles are based on costs to execute similar leases including commissions and other related costs. The origination value of in-place leases also includes an estimate of lost rent revenue at in-place rental rates during the estimated time required to lease up the property from vacant to the occupancy level at the date of acquisition. The in-place lease intangible is amortized over the life of the lease and is recorded in other assets in our condensed consolidated balance sheets. If, at acquisition, a property needs to be renovated before it is ready for its intended use, we commence the necessary development activities. During this development period, we capitalize all direct and indirect costs incurred in renovating the property. Once a property is ready for its intended use, expenditures for ordinary maintenance and repairs thereafter are expensed to operations as incurred, and we capitalize expenditures that improve or extend the life of a home and for furniture and fixtures. We begin depreciating properties to be held and used when they are ready for their intended use. We compute depreciation using the straight-line method over the estimated useful lives of the respective assets. We depreciate buildings and building improvements over 30 years, and we depreciate other capital expenditures over periods ranging from four to 25 years. Land is not depreciated. Properties are classified as held for sale when they meet the applicable GAAP criteria, including that the property is listed for sale and that it is ready to be sold in its current condition. Held-for-sale properties are reported at the lower of their carrying amount or estimated fair value less costs to sell. We evaluate our long-lived assets for impairment periodically or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Significant indicators of impairment may include declines in home values, rental rate and occupancy and significant changes in the economy. We make our assessment at the individual property level because it represents the lowest level of identifiable cash flows. If an impairment indicator exists, we compare the expected future undiscounted cash flows against the net carrying amount of a property. If the sum of the estimated undiscounted cash flows is less than the net carrying amount of the property, we record an impairment loss for the difference between the estimated fair value of the individual property and the carrying amount of the property at that date. To determine the estimated fair value, we primarily consider local broker-pricing opinions (“BPOs”). In order to validate the BPOs received and used in our assessment of fair value of real estate, we perform an internal review to determine if an acceptable valuation approach was used to estimate fair value in compliance with guidance provided by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements.” In evaluating our investments in real estate, we determined that certain properties were impaired, which resulted in impairment charges of $0.2 million and $0.3 million during the three months ended September 30, 2015 and 2014, respectively. We recorded impairment charges of $0.9 million and $2.4 million during the nine months ended September 30, 2015 and 2014, respectively. Non-Performing Loans We have purchased pools of NPLs which were individually bid on and which we seek to (1) modify and hold or resell at higher prices if circumstances warrant, thus providing additional liquidity or (2) convert into homes through the foreclosure or other resolution process that can then either be contributed to our rental portfolio or sold. Our NPLs are on nonaccrual status at the time of purchase as it is probable that principal or interest is not fully collectible. Generally, when loans are placed on nonaccrual status, accrued interest receivable is reversed against interest income in the current period. Interest payments received thereafter are applied as a reduction to the remaining principal balance as long as concern exists as to the ultimate collection of the principal. Loans are classified as held for sale when they meet the applicable GAAP criteria, including that the loan is being listed for sale and that it is ready to be sold. Held-for-sale loans are reported at the lower of their carrying amount or estimated fair value. We evaluate our loans for impairment periodically or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. As our loans were non-performing when acquired, we generally look to the estimated fair value of the underlying property collateral to assess the recoverability of our investments. As described in our real estate accounting policy above, we primarily utilize the local BPO but also consider any other comparable home sales or other market data, as considered necessary, in estimating a property’s fair value. If the carrying amount of a loan exceeds the estimated fair value of the underlying collateral, we will record an impairment loss for the difference between the estimated fair value of the property collateral and the carrying amount of the loan, inclusive of costs. During the three and nine months ended September 30, 2015 and 2014, no impairments have been recorded on any of our loans. When we convert loans into homes through foreclosure or other resolution process (e.g., through a deed-in-lieu of foreclosure transaction), the property is initially recorded at fair value unless it meets the criteria for being classified as held-for-sale, in which case the property is initially recorded at fair value less estimated costs to sell. The transfer to SFR occurs when we have obtained title to the property through completion of the foreclosure process. SFR also includes a limited number of multi-unit properties. The fair value of these assets at the time of transfer to SFR is estimated using BPOs. BPOs are subject to judgments of a particular broker formed by visiting a property, assessing general home values in an area, reviewing comparable listings, and reviewing comparable completed sales. These judgments may vary among brokers and may fluctuate over time based on housing market activities and the influx of additional comparable listings and sales. Our results could be materially and adversely affected if the judgments used by a broker prove to be incorrect or inaccurate. Gains are recognized in earnings immediately when the fair value of the acquired property (or fair value less estimated costs to sell for held-for-sale properties) exceeds our recorded investment in the loan, and are reported as realized gain on loan conversion, net in our condensed consolidated statements of operations. Conversely, any excess of the recorded investment in the loan over the fair value of the property (or fair value less estimated costs to sell for held-for-sale properties) would be immediately recognized as a loss. During the three and nine months ended September 30, 2015, we converted $32.2 million and $87.6 million in NPLs into $41.5 million and $111.5 million in real estate assets that resulted in gains of $9.3 million and $23.9 million, respectively. During the three and nine months ended September 30, 2014, we converted $15.2 million and $40.1 million in NPLs into $21.0 million and $57.8 million in real estate assets that resulted in gains of $5.8 million and $17.7 million, respectively. In situations where property foreclosure is subject to an auction process and a third party submits the winning bid, we recognize the resulting gain as a realized gain on NPLs, net. Beginning in 2014, we have elected the fair value option for NPL purchases as we have concluded that NPLs accounted for at fair value timely reflect the results of our investment performance. Upon the acquisition of NPLs, we record the assets at fair value, which is the purchase price we paid for the loans on the acquisition date. NPLs are subsequently accounted for at fair value under the fair value option election with unrealized gains and losses recorded in current-period earnings. We determine the purchase price for NPLs at the time of acquisition by using a discounted cash flow valuation model and considering alternate loan resolution probabilities, including modification, liquidation, or conversion to rental property. Observable inputs to the model include loan amounts, payment history, and property types. Unobservable inputs to the model are discussed in Note 3- Fair Value Measurements. For NPLs acquired in 2014, the fair value of each loan is adjusted in each subsequent reporting period as the loan proceeds to a particular resolution (i.e., modification or conversion to a SFR). As a loan approaches resolution, the resolution timeline for that loan decreases and costs embedded in the discounted cash flow model for loan servicing, foreclosure costs, and property insurance are incurred and removed from future expenses. The shorter resolution timelines and reduced future expenses, typically each increases the fair value of the loan. The increase in the value of the loan is recognized in unrealized gains on NPLs in our condensed consolidated statements of operations. Upon the sale of NPLs that results in the recognition of a realized gain or loss, we reclassify what had previously been recorded in unrealized (loss) gain on NPLs, net to realized gains on NPLs, net. During the three and nine months ended September 30, 2015, we recorded unrealized losses of $4.0 million and unrealized gains of $34.4 million, respectively, on the fair value of loans. During the three and nine months ended September 30, 2014, we recorded $13.7 million and $17.3 million, respectively, in unrealized gains on the fair value of the loans. Capitalized Costs We capitalize certain costs incurred in connection with successful property acquisitions and associated stabilization activities, including tangible property improvements and replacements of existing property components. Included in these capitalized costs are certain personnel costs associated with time spent by certain personnel in connection with the planning and execution of all capital additions activities at the property level as well as third-party acquisition agreement fees. Indirect costs are allocations of certain department costs, including personnel costs that directly relate to capital additions activities. We also capitalize property taxes and homeowners’ association (“HOA”) fees dues during periods in which property stabilization is in progress. We charge to expense as incurred costs that do not relate to capital additions activities, including ordinary repairs, maintenance, resident turnover costs and general and administrative expenses. We also defer successful leasing costs and amortize them over the life of the lease, which is typically one to two years. Purchase Deposits We make various deposits relating to property acquisitions, including transactions where we have agreed to purchase a home subject to certain conditions being met before closing, such as satisfactory home inspections and title search results. Our purchase deposit balances are recorded in other assets in our condensed consolidated balance sheets. Derivative Instruments We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through the management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our borrowings. As required by ASC 815, “Derivatives and Hedging,” we record all derivatives in the condensed consolidated balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or we elect not to apply hedge accounting. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (“OCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Derivatives not designated as hedges are derivatives that do not meet the criteria for hedge accounting under GAAP or for which we have not elected to designate as hedges. We do not use these derivatives for speculative purposes, but instead they are used to manage our exposure to interest rate changes. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in loss on derivative financial instruments, net in our condensed consolidated statements of operations. Convertible Notes ASC Topic 470-20, “Debt with Conversion and Other Options,” requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measure the fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital in our condensed consolidated balance sheets, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will be recorded in subsequent periods through the maturity date as the notes accrete to their par value. Securitization/Sale and Financing Arrangements We may periodically sell our financial assets. In connection with these transactions, we may retain or acquire senior or subordinated interests in the related assets. Gains and losses on such transactions are recognized using the guidance in ASC Topic 860, “Transfers and Servicing,” which is based on a financial components approach that focuses on control. Under this approach, after a transfer of financial assets that meets the criteria for treatment as a sale – legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint, and transferred control – an entity recognizes the financial assets it retains and any liabilities it has incurred, derecognizes the financial assets it has sold, and derecognizes liabilities when extinguished. We determine the gain or loss on sale of the assets by allocating the carrying value of the sold asset between the sold asset and the interests retained based on their relative fair values, as applicable. The gain or loss on sale is the difference between the cash proceeds from the sale and the amount allocated to the sold asset. If the sold asset is being accounted for pursuant to the fair value option, there is no gain or loss. Revenue Recognition Rental revenue, net of concessions, is recognized on a straight-line basis over the term of the lease. The initial term of our residential leases is generally one to two years, with renewals upon consent of both parties on an annual or monthly basis. We periodically evaluate the collectability of our resident and other receivables and record an allowance for doubtful accounts for any estimated probable losses. This allowance is estimated based on payment history and probability of collection. We generally do not require collateral other than resident security deposits. Our allowance for doubtful accounts was $0.6 million and $0.3 million as of September 30, 2015 and December 31, 2014, respectively. Bad debt expense amounts are recorded as property operating and maintenance expenses in the condensed consolidated statements of operations. During the three and nine months ended September 30, 2015, we incurred bad debt expense of $0.6 million and $1.5 million, respectively. During the three and nine months ended September 30, 2014, we incurred bad debt expense of $0.9 million and $2.0 million, respectively. We recognize sales of real estate when the sale has closed, title has passed, adequate initial and continuing investment by the buyer is received, possession and other attributes of ownership have been transferred to the buyer, and we are not obligated to perform significant additional activities after closing. All these conditions are typically met at or shortly after closing. We recognize realized gains on loan conversions, net in each reporting period when our NPLs are converted to SFRs. The transfer to SFR occurs when we have obtained legal title to the property upon completion of the foreclosure. The fair value of these assets at the time of transfer to real estate owned is estimated using BPOs. BPOs are subject to judgments of a particular broker formed by visiting a property, assessing general home values in an area, foreclosure timelines, reviewing comparable listings and reviewing comparable completed sales. These judgments may vary among brokers and may fluctuate over time based on housing market activities and the influx of additional comparable listings and sales. We evaluate the validity of the BPOs received pursuant to the policy described above under “-Investments in Real Estate.” Our results could be materially and adversely affected if the judgments used by a broker prove to be incorrect or inaccurate. We recognize realized gains on NPLs upon payoff of principal balance. The gain is calculated by subtracting basis from net proceeds of payoff. Earnings (Loss) Per Share We use the two-class method to calculate basic and diluted earnings per common share (“EPS”) as our restricted share units (“RSUs”) are participating securities as defined by GAAP. We calculate basic EPS by dividing net income (loss) attributable to us for the period by the weighted-average number of common shares outstanding for the period. Diluted-earnings per share reflect the potential dilution that could occur from shares issuable in connection with the RSUs and convertible senior notes, except when doing so would be anti-dilutive. Share-Based Compensation The fair value of our RSUs granted is recorded as expense on a straight-line basis over the vesting period for the award, with an offsetting increase in shareholders' equity. For grants to trustees, the fair value is determined based upon the share price on the grant date. For non-employee grants, the fair value is based on the share price when the shares vest, which requires the amount to be adjusted in each subsequent reporting period based on the fair value of the award at the end of the reporting period until the award has vested. Income Taxes We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and intend to comply with the Code with respect thereto. Accordingly, we will not be subject to federal income tax as long as certain asset, income, dividend distribution, and share ownership tests are met. Many of these requirements are technical and complex, and if we fail to meet these requirements, we may be subject to federal, state, and local income tax and penalties. A REIT's net income from prohibited transactions is subject to a 100% penalty tax. We have taxable REIT subsidiaries (“TRSs”) where certain investments may be made and activities conducted that (1) may have otherwise been subject to the prohibited transactions tax and (2) may not be favorably treated for purposes of complying with the various requirements for REIT qualification. The income, if any, within the TRSs is subject to federal and state income taxes as a domestic C corporation based upon the TRSs' net income. We recorded provisions of approximately $16,000 and $0.4 million for the three and nine months ended September 30, 2015, respectively. We recorded provisions of approximately $19,000 and $0.5 million for the three and nine months ended September 30, 2014, respectively. Reclassification of Prior Period Amounts In 2014, we reclassified amounts related to our credit facilities in the condensed consolidated balance sheet and the condensed consolidated statements of cash flows to disaggregate amounts related to our senior SFR facility and master repurchase agreement to conform to the current period’s presentation. We also reclassified amounts related to additions to real estate in the condensed consolidated statements of cash flows to disaggregate amounts related to initial renovations to single-family rentals and other capital expenditures for single-family rentals. Further, we reclassified certain prior period amounts related to realized gains (losses) on sales of investments in real estate, net in the condensed consolidated statements of operations to disaggregate amounts related to realized gains (losses) on sales of investments in real estate, net and realized loss on sales of divestiture homes, net to conform to the current period’s presentation. Geographic Concentrations We hold significant concentrations of homes and NPLs with collateral in the following regions of the country in excess of 10% of our total portfolio, and as such are more vulnerable to any adverse macroeconomic developments in such areas: Single-Family Rentals As of As of September 30, December 31, Market 2015 2014 South Florida 21 % 20 % Atlanta 15 % 17 % Houston 12 % 14 % Dallas 12 % 12 % Non-Performing Loans As of As of September 30, December 31, State 2015 2014 Florida 17 % 18 % California 17 % 16 % Recent Accounting Pronouncements In August 2015, the FASB issued No. Accounting Standards Update (“ASU”) 2015-15, “Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” The guidance in ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff stated that they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3. Fair Value Measurements GAAP establishes a hierarchy of valuation techniques based on the observability of inputs utilized in measuring financial assets and liabilities at fair values. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The three levels of the hierarchy are described below: Level I—Quoted prices in active markets for identical assets or liabilities. Level II—Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing an asset or liability. These may include quoted prices for similar items, interest rates, speed of prepayments, credit risk, and others. Level III—Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment), unobservable inputs may be used. Unobservable inputs reflect our own assumptions about the factors that market participants would use in pricing an asset or liability, and would be based on the best information available. Cash and Cash Equivalents, Resident and Other Receivables, Restricted Cash, and Purchase Deposits Fair values approximate carrying values due to their short-term nature. These valuations have been classified as Level I. Our assets measured at fair value on a nonrecurring basis are those assets for which we have recorded impairments. See Note 2- Basis of Presentation and Significant Accounting Policies for information regarding significant considerations used to estimate the fair value of our investments in real estate. The assets for which we have recorded impairments, measured at fair value on a nonrecurring basis, are summarized below (in thousands): Three Months Ended Nine Months Ended September 30, September 30, Residential real estate held for sale (Level III) 2015 2014 2015 2014 Pre-impairment amount $ 2,660 $ 847 $ 7,667 $ 6,625 Total losses $ (202 ) $ (36 ) $ (731 ) $ (1,328 ) Fair value $ 2,458 $ 811 $ 6,936 $ 5,297 Three Months Ended Nine Months Ended September 30, September 30, Residential real estate held for use (Level III) 2015 2014 2015 2014 Pre-impairment amount $ — $ 4,370 $ 644 $ 10,850 Total losses $ — $ (305 ) $ (130 ) $ (1,080 ) Fair value $ — $ 4,065 $ 514 $ 9,770 For a summary of our activity for our real estate carried at fair value during the nine months ended September 30, 2015, refer to Note 5-Real Estate. The following table presents the amount of NPLs converted to real estate measured at fair value on a non-recurring basis during the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, Non-recurring basis (assets) 2015 2014 2015 2014 Transfers of NPLs into homes (Level III) Carrying value $ 32,185 $ 15,171 $ 87,558 $ 40,064 Realized gains $ 9,270 $ 5,791 $ 23,942 $ 17,688 Fair value $ 41,455 $ 20,962 $ 111,500 $ 57,752 Fair Value Option The guidance in ASC 825, “Financial Instruments,” provides a fair value option election that allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to this guidance are required to be reported separately in our condensed consolidated balance sheets from those instruments using another accounting method. We have concluded that NPLs accounted for at fair value timely reflect the results of our investment performance. For a summary of our Level III activity for our NPLs carried at fair value during the nine months ended September 30, 2015, refer to Note 6-Non-Performing Loans. The following table presents the fair value of our financial instruments in the condensed consolidated balance sheets (in thousands): September 30, 2015 December 31, 2014 Carrying Fair Carrying Fair Value Value Value Value Assets not carried on the condensed consolidated balance sheet at fair value NPLs Level III $ 71,965 $ 121,563 $ 152,399 $ 235,545 Asset-backed securitization certificates Level III 26,553 26,553 26,553 26,553 Total assets $ 98,518 $ 148,116 $ 178,952 $ 262,098 Liabilities not carried on the condensed consolidated balance sheet at fair value Senior SFR facility Level III $ 697,414 $ 697,414 $ 441,239 $ 441,239 Master repurchase agreement Level III 331,212 331,212 454,249 454,249 3.00% Convertible Senior Notes due 2019 Level III 206,904 193,770 202,874 183,295 4.50% Convertible Senior Notes due 2017 Level III 163,291 165,825 160,236 161,221 Asset-backed securitization, net Level III 527,152 527,152 526,816 526,816 Total liabilities $ 1,925,973 $ 1,915,373 $ 1,785,414 $ 1,766,820 As the transaction for our asset-backed securitization certificates and asset-backed securitization liability closed December 19, 2014, and there has not been a fundamental change in the market since the transaction closed, we concluded that the carrying value approximates fair value as of September 30, 2015 and December 31, 2014. We have determined that our valuation of these arrangements should be classified in Level III of the value hierarchy. The fair value of our convertible senior notes is estimated by discounting the contractual cash flows at the interest rate we estimate such notes would bear if sold in the current market. We have determined that our valuation of our convertible senior notes should be classified in Level III of the fair value hierarchy. The senior SFR facility and master repurchase agreement are recorded at their aggregate principal balance and not at fair value. The fair value was estimated based on the rate at which a similar credit facility would be priced today. The significant unobservable inputs used in the fair value measurement of our NPLs are discount rates, alternate loan resolution probabilities, resolution timelines, and the value of underlying properties. Significant changes in any of these inputs in isolation could result in a significant change to the fair value measurement. A decline in the discount rate in isolation would increase the fair value. A decrease in the housing pricing index in isolation would decrease the fair value. Individual loan characteristics, such as location and value of underlying collateral, affect the loan resolution probabilities and timelines. An increase in the loan resolution timeline in isolation would decrease the fair value. A decrease in the value of underlying properties in isolation would decrease the fair value. The following table sets forth quantitative information about the significant unobservable inputs used to measure the fair value of our NPLs as of September 30, 2015 and December 31, 2014: As of September 30, 2015 As of December 31, 2014 Input High Low Average High Low Average Discount rate 15 % 15 % 15 % 15 % 15 % 15 % Loan resolution probabilities - rental 100 % 0 % 23 % 100 % 0 % 24 % Loan resolution probabilities - liquidation 100 % 0 % 77 % 100 % 0 % 76 % Loan resolution timelines (in years) 2.9 0.5 1.1 5.8 0.1 1.1 Value of underlying properties $ 2,300,000 $ 3,000 $ 222,385 $ 2,300,000 $ 2,900 $ 212,358 Carrying costs 7.0 % 7.0 % 7.0 % 7.0 % 7.0 % 7.0 % Annual advance 2.3 % 2.3 % 2.3 % 2.3 % 2.3 % 2.3 % Remaining legal costs 0.8 % 0.8 % 0.8 % 2.1 % 2.1 % 2.1 % |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Note 4. Net Loss per Share Our shares began trading on February 3, 2014 on the NYSE under the ticker symbol “SWAY.” In our calculation of EPS, the numerator for both basic and diluted EPS is net earnings (loss) attributable to us. For periods prior to January 31, 2014, the denominator for basic and diluted EPS is based on the number of our common shares outstanding on the January 31, 2014. On January 31, 2014, SPT stockholders of record as of the close of business on January 24, 2014, received one of our common shares for every five shares of SPT common stock held as of the record date. Basic and diluted EPS and the average number of common shares outstanding were calculated using the number of our common shares outstanding immediately following the distribution and as adjusted for subsequent issuances and repurchases. The number of shares at January 31, 2014 was used to calculate basic and diluted EPS as none of the equity awards were outstanding prior to the distribution. We use the two-class method in calculating basic and diluted EPS. Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share amounts) 2015 2014 2015 2014 Numerator: Net loss attributable to Starwood Waypoint Residential Trust shareholders $ (11,163 ) $ (6,713 ) $ (14,607 ) $ (34,137 ) Denominator: Basic and diluted weighted average shares outstanding 37,907 38,613 37,942 38,912 Basic and diluted net loss per share $ (0.29 ) $ (0.17 ) $ (0.38 ) $ (0.88 ) The dilutive effect of outstanding RSUs is reflected in diluted net income per share, but not diluted net loss per share, by application of the treasury share method, which includes consideration of share-based compensation required by GAAP. As we reported a net loss for the three and nine months ended September 30, 2015, and the corresponding periods of 2014, both basic and diluted net loss per share are the same. For the three and nine months ended September 30, 2015, 0.7 million of our common shares subject to RSUs were excluded from the computation of diluted net loss per share, and the RSUs do not participate in losses. For the three and nine months ended September 30, 2014, 0.9 million of our common shares subject to RSUs were excluded from the computation of diluted net loss per share, and the RSUs do not participate in losses. For the three and nine months ended September 30, 2015 and 2014, the potential common shares contingently issuable upon the conversion of our 3.00% Convertible Senior Notes due 2019 (the “2019 Convertible Notes”) and our 4.50% Convertible Senior Notes due 2017 (the “2017 Convertible Notes” and, together with the 2019 Convertible Notes, the “Convertible Senior Notes”) were also excluded from the computation of diluted net loss per share as we have the intent and ability to settle the obligation in cash. Equity Transactions On May 6, 2015, our board of trustees authorized a share repurchase program (the “2015 Program”). Under the 2015 Program, we may repurchase up to $150.0 million of our common shares beginning May 6, 2015 and ending May 6, 2016. During the nine months ended September 30, 2015, we repurchased 0.3 million common shares for $8.3 million under the 2015 Program. We did not repurchase any common shares under the 2015 Program during the three months ended September 30, 2015. On April 24, 2014, our board of trustees authorized a share repurchase program (the “2014 Program”). Under the 2014 Program, we could have repurchased up to $150.0 million of our common shares beginning April 17, 2014 and ending April 17, 2015. During fiscal year 2014, we repurchased 1.3 million common shares for $34.3 million under the 2014 Program. The 2014 Program expired on April 17, 2015 and we did not repurchase any shares pursuant to the 2014 Program during 2015. On October 15, 2014, we paid a quarterly dividend of $0.14 per common share, totaling $5.5 million, to shareholders of record at the close of business on September 30, 2014. On January 15, 2015, we paid a quarterly dividend of $0.14 per common share, totaling $5.4 million, to shareholders of record at the close of business on December 31, 2014. On April 15, 2015, we paid a quarterly dividend of $0.14 per common share, totaling $5.4 million, to shareholders of record at the close of business on March 31, 2015. On July 15, 2015, we paid a quarterly dividend of $0.14 per common share, totaling $5.4 million to shareholders of record at the close of business on June 30, 2015. On July 31, 2015, our board of trustees declared a quarterly dividend of $0.19 per common share. Total dividend payments of $7.3 million were made on October 15, 2015 to shareholders of record at the close of business on September 30, 2015. |
Real Estate
Real Estate | 9 Months Ended |
Sep. 30, 2015 | |
Real Estate [Abstract] | |
Real Estate | Note 5. Real Estate The following table summarizes transactions within our home portfolio for the year ended December 31, 2014 and the nine months ended September 30, 2015 (in thousands): (1) Balance as of January 1, 2014 $ 755,083 Acquisitions 957,741 Real estate converted from loans 87,446 Capitalized expenditures 251,568 Basis of real estate sold (37,563 ) Impairment of real estate (2,579 ) Balance as of December 31, 2014 2,011,696 Acquisitions 313,690 Real estate converted from loans 111,500 Capitalized expenditures 103,672 Basis of real estate sold (148,577 ) Impairment of real estate (861 ) Balance as of September 30, 2015 $ 2,391,120 (1) Excludes accumulated depreciation related to investments in real estate as of September 30, 2015, December 31, 2014, and January 1, 2014, of $89.6 million, $41.6 million, and $5.7 million, respectively; and excludes accumulated depreciation on assets held for sale as of September 30, 2015, December 31, 2014 and January 1, 2014 of $0.8 million, $0.1 million and zero, respectively. Total depreciation and amortization expense for the three and nine months ended September 30, 2015, was $19.8 million and $56.8 million, respectively. Total depreciation and amortization expense for the three and nine months ended September 30, 2014, was $9.2 million and $22.0 million, respectively. |
Non-Performing Loans
Non-Performing Loans | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Non-Performing Loans | Note 6. Non-Performing Loans We hold our NPLs within a consolidated subsidiary that we established with Prime. We hold a controlling interest in the subsidiary and, as such, have the power to direct its significant activities while Prime manages the subsidiary's day-to-day operations. Should this subsidiary realize future returns in excess of specific thresholds, Prime may receive incremental incentive distributions in excess of their ownership interest. The following table summarizes transactions within our NPLs for the year ended December 31, 2014 and the nine months ended September 30, 2015: NPLs (in thousands) NPLs NPLs (fair value option) Balance as of January 1, 2014 $ 214,965 $ — $ — Acquisitions — — 486,509 Unrealized gain on non-performing loans, net — — 44,593 Basis of loans sold (3,092 ) — — Loans converted to real estate (44,614 ) — (18,150 ) Loan liquidations and other basis adjustments (14,860 ) — (21,162 ) Loans held for sale (26,911 ) 26,911 — Balance as of December 31, 2014 $ 125,488 $ 26,911 $ 491,790 Unrealized gain on non-performing loans, net — — 34,431 Basis of loans sold (169 ) (82,198 ) (1,529 ) Loans converted to real estate (32,904 ) — (54,654 ) Loan liquidations and other basis adjustments (8,397 ) (2,417 ) (24,613 ) Loans held for sale (12,053 ) 57,704 (45,651 ) Balance as of September 30, 2015 $ 71,965 $ — $ 399,774 See Note 3- Fair Value Measurements for information regarding significant unobservable inputs used to measure the fair value of our NPLs as of September 30, 2015 and December 31, 2014. Total unpaid principal balance (“UPB”) for our first-lien NPL portfolio as of September 30, 2015 and December 31, 2014, was $625.8 million and $968.7 million, respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Note 7. Debt Senior SFR Facility On June 13, 2014, Starwood Waypoint Borrower, LLC (“SFR Borrower”), a wholly-owned indirect subsidiary of ours that was established as a special-purpose entity (“SPE”) to own, acquire and finance, directly or indirectly, substantially all of our SFRs, entered into an Amended and Restated Master Loan and Security Agreement evidencing a $1.0 billion secured revolving credit facility (“SFR Facility”) with a syndicate of financial institutions led by Citibank, N.A., as administrative agent. The SFR Facility replaced our $500.0 million credit facility with Citibank, N.A., as sole lender. The SFR Facility was subsequently amended on July 31, 2014, and December 19, 2014, to clarify certain definitions in the agreement. The outstanding balance on this facility as of September 30, 2015 and December 31, 2014, was approximately $697.4 million and $441.2 million, respectively. The SFR Facility is set to mature on February 3, 2017, subject to a one-year extension option which would defer the maturity date to February 5, 2018. The SFR Facility includes an accordion feature that may allow the SFR Borrower to increase availability thereunder by $250.0 million, subject to meeting specified requirements and obtaining additional commitments. The SFR Facility has a variable interest rate of London Interbank Offered Rate (“LIBOR”) plus a spread, which will equal 2.95% during the first three years and then 3.95% during any extended term, subject to a default rate of an additional 5% on amounts not paid when due. The SFR Borrower is required to pay a commitment fee on the unused commitments at a per annum rate that varies from zero to 0.25% depending on the principal amounts outstanding. The SFR Facility is secured by all assets of the SFR Borrower and its subsidiaries and also by a pledge of the SFR Borrower’s equity. The facility contains customary terms, conditions precedent, affirmative and negative covenants, limitations, and other conditions for credit facilities of this type, including requirements for cash reserves and restrictions on incurring additional indebtedness, creation of liens, mergers and fundamental changes, sales or other dispositions of property, changes in the nature of the SFR Borrower’s business, investments, and capital expenditures. The facility is also subject to certain financial covenants concerning our liquidity and tangible net worth, and to requirements that SFR Borrower maintain minimum levels of debt service coverage and debt yield. In connection with the SFR Facility, we provided a limited guaranty and recourse indemnity with respect to specified losses due to fraud, misrepresentation, misapplication of funds, physical waste, breaches of specified representations, warranties, and covenants and a full guaranty in the event that SFR Borrower or its subsidiaries file insolvency proceedings or violate certain covenants that result in their being substantively consolidated with any other entity that is subject to a bankruptcy proceeding. Availability under the SFR Facility is limited by a formula equal to the lower of 60% of the SFR Borrower’s acquisition cost of a home or 60% of its value (increasing to the lower of 65% of acquisition cost and initial capital expenditures or 70% of its value once a property is stabilized) as such value is established by an independent BPO. The facility includes customary events of default. The occurrence of an event of default will permit the lenders to terminate their commitments under the facility and accelerate payment of all amounts outstanding thereunder. In addition, if a default or a failure to observe the asset performance triggers should occur and be continuing, all of the rental income associated with the real estate properties of the SFR Borrower and its subsidiaries will, after payment of specified operating expenses, asset management fees, and interest, be required to prepay the loans under the facility, which will preclude the SFR Borrower from being able to make distributions on its equity for our benefit. Master Repurchase Agreement On September 1, 2015, we (in our capacity as guarantor), PrimeStar Fund I (a limited partnership in which we own, indirectly, at least 98.75% of the general partnership and limited partnership interests) and Wilmington Savings Fund Society, FSB, not in its individual capacity but solely as trustee of PrimeStar-H Fund I Trust (“PrimeStar-H”) (a trust in which we own, indirectly, at least 98.75% of the beneficial trust interests), amended our master repurchase agreement with Deutsche Bank AG, Cayman Islands Branch (“Deutsche Bank AG”). The repurchase agreement, which provided maximum borrowings of up to $500.0 million, had a maturity date of September 11, 2015, and interest which accrued on advances under the repurchase agreement at a per annum rate based on 30-day LIBOR (or the rate payable by a commercial paper conduit administered or managed by Deutsche Bank AG, to the extent Deutsche Bank AG utilizes such a commercial paper conduit to finance its advances under the repurchase agreement) plus 3% (the “Spread”), has been amended to change the maximum borrowings, extend the maturity date to March 1, 2017 and decrease the Spread to 2.375%. The maximum borrowing means, as of September 1, 2015, approximately $386.1 million; provided, however, that thereafter the maximum borrowings shall be reduced to an amount equal to the aggregate outstanding borrowings on any given date and, thereafter, shall be reduced commensurately with each reduction in the aggregate outstanding borrowings. The repurchase agreement is secured, among other things, by PrimeStar Fund I’s ownership interest in certificates that evidence 100% of the ownership interests in PrimeStar-H. The repurchase agreement is used to finance the acquired pools of NPLs secured by residential real property by PrimeStar-H and by various wholly-owned subsidiaries of PrimeStar-H. Advances under the repurchase agreement accrue interest at a per annum rate based on 30-day LIBOR (or the rate payable by a commercial paper conduit administered or managed by Deutsche Bank AG, to the extent Deutsche Bank AG utilizes such a commercial paper conduit to finance its advances under the repurchase agreement) plus 2.375%. During the existence of an event of default under the repurchase agreement, interest accrues at the post-default rate, which is based on the applicable pricing rate in effect on such date plus an additional 3%. The initial maturity date of the repurchase agreement is March 1, 2017, subject to a six month extension option, which may be exercised by PrimeStar Fund I upon the satisfaction of certain conditions set forth in the repurchase agreement. Borrowings are available under the repurchase agreement until March 1, 2017. In connection with the repurchase agreement, we provided a guaranty, under which we guaranty the obligations of PrimeStar I, L.P. under the repurchase agreement and ancillary transaction documents. The outstanding balance on September 30, 2015 and December 31, 2014, on this facility was approximately $331.2 million and $454.2 million, respectively. The repurchase agreement and ancillary transaction documents, including the guaranty, contain various affirmative and negative covenants concerning our liquidity and tangible net worth and maximum leverage ratio. Convertible Senior Notes On July 7, 2014, we issued $230.0 million in aggregate principal amount of the 2019 Convertible Notes. The sale of the 2019 Convertible Notes generated gross proceeds of $230.0 million and net proceeds of approximately $223.9 million, after deducting the initial purchasers’ discounts and estimated offering expenses paid by us. The net proceeds from the offering were used to acquire additional homes and NPLs, to repurchase our common shares and for general corporate purposes. Interest on the 2019 Convertible Notes is payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2015. The 2019 Convertible Notes will mature on July 1, 2019. On October 14, 2014, we issued $172.5 million in aggregate principal amount of the 2017 Convertible Notes. The sale of the 2017 Convertible Notes generated gross proceeds of $172.5 million and net proceeds of approximately $167.8 million, after deducting the initial purchasers’ discounts and estimated offering expenses paid by us. The net proceeds from the offering were used to acquire additional homes and NPLs, to repurchase our common shares and for general corporate purposes. Interest on the 2017 Convertible Notes will be payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2015. The 2017 Convertible Notes will mature on October 15, 2017. The following tables summarize the terms of the Convertible Senior Notes outstanding as of September 30, 2015 (in thousands, except rates): Remaining Principal Coupon Effective Conversion Maturity Period of Amount Rate Rate (1) Rate (2) Date Amortization 2017 Convertible Notes $ 172,500 4.50 % 7.37 % 33.2934 10/15/17 2.04 years 2019 Convertible Notes $ 230,000 3.00 % 6.02 % 30.5896 7/1/19 3.75 years As of As of September 30, 2015 December 31, 2014 Total principal $ 402,500 $ 402,500 Net unamortized discount (32,305 ) (39,390 ) Carrying amount of debt components $ 370,195 $ 363,110 Carrying amount of conversion option equity components recorded in additional paid-in capital $ 42,721 $ 42,721 (1) Effective rate includes the effect of the adjustment for the conversion option, the value of which reduced the initial liability and was recorded in additional paid-in capital. (2) We have the option to settle any conversions in cash, common shares, or a combination thereof. The conversion rate represents the number of common shares issuable per $1,000 principal amount of Convertible Senior Notes converted at September 30, 2015, as adjusted in accordance with the applicable indentures as a result of cash dividend payments. The if-converted value of the Convertible Senior Notes did not exceed their principal amount at September 30, 2015 since the closing market price of our common shares of $23.83 per share did not exceed the implicit conversion price of $32.69 for the 2019 Convertible Notes or $30.04 for the 2017 Convertible Notes. Terms of Conversion As of September 30, 2015, the conversion rate applicable to the 2019 Convertible Notes was 30.5896 common shares per $1,000 principal amount of the 2019 Convertible Notes, which was equivalent to a conversion price of approximately $32.69 per common share. The conversion rate for the 2019 Convertible Notes is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain events that occur prior to the maturity date, we will increase the conversion rate for a holder who elects to convert its 2019 Convertible Notes in connection with such an event in certain circumstances. At any time prior to January 1, 2019, holders may convert the 2019 Convertible Notes at their option only under specific circumstances as defined in the indenture agreement (the “Indenture Agreement”) dated as of July 7, 2014, between us and our trustee, Wilmington Trust, National Association (the “Convertible Notes Trustee”). On or after January 1, 2019, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2019 Convertible Notes, holders may convert all or any portion of the 2019 Convertible Notes at any time. Upon conversion, we will pay or deliver, as the case may be, cash, common shares, or a combination of cash and common shares, at our election. As of September 30, 2015, the conversion rate applicable to the 2017 Convertible Notes was 33.2934 common shares per $1,000 principal amount of 2017 Convertible Notes (equivalent to a conversion price of approximately $30.04 per common share). The conversion rate for the 2017 Convertible Notes is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain events that occur prior to the maturity date, we will increase the conversion rate for a holder who elects to convert its 2017 Convertible Notes in connection with such an event in certain circumstances. At any time prior to April 15, 2017, holders may convert the 2017 Convertible Notes at their option only under specific circumstances as defined in the Indenture (together with the Indenture Agreement, the “Indentures”) dated as of October 14, 2014, between us and the Convertible Notes Trustee. On or after April 15, 2017, until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2017 Convertible Notes, holders may convert all or any portion of the 2017 Convertible Notes at any time. Upon conversion, we will pay or deliver, as the case may be, cash, common shares, or a combination of cash and common shares, at our election. We may not redeem the Convertible Senior Notes prior to their maturity dates except to the extent necessary to preserve our status as a REIT for U.S. federal income tax purposes, as further described in the Indentures. If we undergo a fundamental change as defined in the Indentures, holders may require us to repurchase for cash all or any portion of their Convertible Senior Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Senior Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indentures contain customary terms and covenants and events of default. If an event of default occurs and is continuing, the Convertible Notes Trustee by notice to us, or the holders of at least 25% in aggregate principal amount of the outstanding Convertible Senior Notes, by notice to us and the Convertible Notes Trustee, may, and the Convertible Notes Trustee at the request of such holders shall, declare 100% of the principal of and accrued and unpaid interest on all the Convertible Senior Notes to be due and payable. However, in the case of an event of default arising out of certain events of bankruptcy, insolvency or reorganization in respect to us (as set forth in the Indentures), 100% of the principal of and accrued and unpaid interest on the Convertible Senior Notes will automatically become due and payable. Asset-Backed Securitizations On December 19, 2014, we completed our first securitization transaction of $504.5 million, which involved the issuance and sale in a private offering of single-family rental pass-through certificates (the “Certificates”) issued by a trust (the “Trust”) established by us. The Certificates represent beneficial ownership interests in a loan secured by a portfolio of 4,095 single-family homes operated as rental properties (collectively, the “Properties”) contributed from our portfolio of single-family homes to a newly-formed SPE indirectly owned by us. Subsequent to December 19, 2014, we repaid $2.0 million in principal and reduced the portfolio to 4,081 single-family homes and the total proceeds of the securitization to $502.5 million (excluding the Class G Certificate described below). Net proceeds of $477.7 million from the offering to third parties were distributed to our operating partnership, and used, primarily, to repay a portion of the SFR Facility of our subsidiary, SFR Borrower, for acquisitions, and for general corporate purposes. A principal-only bearing subordinate Certificate, Class G, in the amount of $26.6 million, was retained by us. Each class of Certificate (other than Class G and Class R) offered to investors (the “Offered Certificates”) accrues interest at a rate based on one-month LIBOR, plus a pass-through rate ranging from 1.30% to 4.55%. The table below shows the balance and pass-through rate for each class of the Offered Certificates as of September 30, 2015. The weighted-average of the fixed-rate spreads of the Offered Certificates is approximately 2.37%. Taking into account the discount at which certain of the certificates were sold, and assuming the successful exercise of the three one-year extension options of the Loan Agreement (as defined below) and amortization of the discount over the resulting fully extended period, the effective weighted-average of the fixed-rate spreads of the Offered Certificates is 2.46%. As of September 30, 2015, the Offered Certificates had the following par certificate balances, pass-through rates, and ratings: (in thousands) Ratings Certificate Balance Pass-Through Rate (KBRA/Moody's/Morningstar) (1) Class A $ 232,193 One-Month LIBOR + 1.30% AAA(sf)/Aaa(sf)/AAA Class B 61,260 One-Month LIBOR + 1.95% AA(sf)/Aa2(sf)/AA+ Class C 55,855 One-Month LIBOR + 2.65% A-(sf)/A2(sf)/A+ Class D 39,639 One-Month LIBOR + 3.20% BBB+(sf)/Baa2(sf)/BBB+ Class E 80,359 One-Month LIBOR + 4.30% BBB-(sf)/NR/BBB- Class F 33,152 One-Month LIBOR + 4.55% BB+(sf)/NR/BB+ Class R N/A N/A Not rated Total/Effective weighted-average $ 502,458 2.37% (1) The ratings shown are those of Kroll Bond Rating Agency, Inc. (“KBRA”), Moody’s Investors Service, Inc. (“Moody’s”), and Morningstar Credit Ratings, LLC (“Morningstar”) as of September 30, 2015. The interest rates on the certificates and classification are based on a credit assessment and rating by these rating agencies of the credit quality of the portfolio of the homes securing the certificates and do not reflect any credit rating of us as an entity. The assets of the Trust consist primarily of a single componentized promissory note issued by a SPE, SWAY 2014-1 Borrower, LLC, a Delaware limited liability company (the “Borrower”), evidencing a monthly-pay mortgage loan with an initial principal balance of $531.0 million, having six floating rate components and one fixed-rate component (the “Loan”). The Loan has a two-year term with three 12-month extension options and is guaranteed by the Borrower’s sole member (the “Equity Owner”), also a SPE owned by us. The Loan is secured by a pledge of all of the assets of the Borrower, including first-priority mortgages on the Properties, and the Equity Owner’s obligations under its guaranty is secured by a pledge of all of the assets of the Equity Owner, including a security interest in the sole membership interest in the Borrower. SWAY Depositor, LLC, our wholly-owned subsidiary, (the “Depositor”), the Borrower, and the Equity Owner are under our common control. The Loan was originated on December 19, 2014 between JPMorgan Chase Bank, National Association (the “Loan Seller”) and the Borrower. The Loan Seller sold the Loan to the Depositor, which then transferred the Loan to the Securitization Trustee (as defined below) of the Trust in exchange for the issuance of the Certificates. The Certificates were issued pursuant to a Trust and Servicing Agreement (the “Trust and Servicing Agreement”) between the Depositor, Midland Loan Services, a Division of PNC Bank, National Association, as servicer and as special servicer, Wells Fargo Bank, National Association, as certificate administrator, and Christiana Trust, a division of Wilmington Savings Fund Society, FSB, as trustee (the “Securitization Trustee”). Distributions will be made on the Certificates monthly on the fourth business day following the 13th day of each month (or, if such 13th day is not a business day, the immediately preceding business day), commencing in January 2015. The Class A, Class B, Class C, Class D, Class E, and Class F Certificates accrue interest from and including December 19, 2014. The Class R Certificates represent the residual interests in the Trust real estate mortgage investment conduit and do not have an initial certificate balance, pass-through rate, rating, or rated final distribution date, and will not be entitled to distributions of principal or interest. The Certificates represent the entire beneficial interest in the trust. The Certificates (other than Class G and Class R) were offered and sold to qualified institutional buyers and non-U.S. persons through the placement agents retained for the transaction pursuant to the exemptions from registration provided by Rule 144A and Regulation S, respectively, under the Securities Act of 1933, as amended. As part of the securitization transaction, various subsidiaries of us, through both distributions and contributions, transferred the Properties to Borrower, an indirect subsidiary of us, which then entered into the Loan Agreement. The Loan was deposited into the Trust in exchange for the Certificates. We evaluated the accounting for the securitization transaction under ASC 860, “Transfers and Servicing.” Specifically, we considered ASC 860-10-40-4 in determining whether the Depositor had surrendered control over the Loan as part of transferring it to the Securitization Trustee. In this evaluation, we first considered and concluded that the transferee (i.e., the Securitization Trustee), which is a fully separate and independent entity, over which we have no control, would not be consolidated by the transferor (i.e., the Depositor). Next, as the Depositor has fully sold, transferred, and assigned all right, title, and interest in the Loan under terms of the Trust and Servicing Agreement, we have concluded that it has no continuing involvement in the Loan. Lastly, we have considered all other relevant arrangements and agreements related to the transfer of the Loan, noting no facts or circumstances inconsistent with the above analysis. We have also evaluated the transfer of the Loan from the Depositor to the Securitization Trustee under ASC 860-10-40-5, noting that the Loan has been isolated from the Depositor, even in bankruptcy or receivership, which has been supported by a true sale opinion obtained as part of the securitization transaction. Additionally, the third-party holders of the Certificates are freely able to pledge or exchange their Certificates, and we maintain no other form of effective control over the Loan through repurchase agreements, cleanup calls, or otherwise. Accordingly, we have concluded that the transfer of the Loan from the Depositor to the Trust meets the conditions for a sale of financial assets under ASC 860-10-40-4 through ASC 860-10-40-5 and have therefore derecognized the Loan in accordance with ASC 860-20. As such, our condensed consolidated financial statements, through the Borrower, our consolidated subsidiary, will continue to reflect the Properties at historical cost basis and a loan payable will be recorded in an amount equal to the principal balance outstanding on the Loan as discussed in further detail below. Securitization Loan Agreement As described above, on December 19, 2014, the Borrower entered into a loan agreement (the “Loan Agreement”), with JPMorgan Chase Bank, National Association, as lender (“Lender”). Pursuant to the Loan Agreement, the Borrower borrowed $531.0 million from Lender. The Loan is a two-year, floating rate loan, composed of six floating rate components, each of which is computed monthly based on one-month LIBOR, plus a fixed component spread, and one fixed rate component. Interest on the Loan Agreement is paid monthly. As part of certain lender requirements in connection with the securitization transaction described above, the Borrower entered into an interest rate cap agreement for the initial two-year term of the Loan, with a LIBOR-based strike rate equal to 3.615%. The outstanding balance on the Loan, as of September 30, 2015 was approximately $527.2 million. For purposes of computing, among other things, interest accrued on the Loan, the Loan is divided into seven components designated as “Component A,” “Component B,” “Component C,” “Component D,” “Component E,” “Component F,” and “Component G.” Each of the components corresponds to one class of Certificates with the same alphabetical designation and had, at December 19, 2014, an initial component balance equal to the corresponding class of Offered Certificates. The following table sets forth the principal amount of each component and the component spread added to the one-month LIBOR for each monthly interest period as of September 30, 2015: (in thousands) Principal Component Component Amount Spread (1) Component A $ 232,193 One-Month LIBOR + 1.41% Component B 61,260 One-Month LIBOR + 2.06% Component C 55,855 One-Month LIBOR + 2.76% Component D 39,639 One-Month LIBOR + 3.31% Component E 80,359 One-Month LIBOR + 4.41% Component F 33,152 One-Month LIBOR + 4.66% Component G 26,553 0% Total/Effective weighted-average $ 529,011 2.36% (1) Component spread is a per annum rate equal to the sum of (a) the spread added to LIBOR to determine the pass-through rate for the class of Certificates corresponding to such component of the Loan, (b) the servicing fee and (c) the CREFC® license fee. If LIBOR is unascertainable, the components will accrue based on the prime rate defined in the Loan Agreement. The Loan is secured by first-priority mortgages on the Properties, which are owned by the Borrower. The Loan is also secured by a first-priority pledge of the equity interests of the Borrower. The initial maturity date of the Loan is January 9, 2017 (the “Initial Maturity Date”). Borrower has the option to extend the Loan beyond the Initial Maturity Date for three successive one-year terms, provided that there is no event of default under the Loan Agreement on each maturity date, Borrower obtains a replacement interest rate cap agreement in a form reasonably acceptable to Lender, and Borrower complies with the other terms set forth in the Loan Agreement. The Loan Agreement requires that the Borrower comply with various affirmative and negative covenants that are customary for loans of this type, including limitations on indebtedness Borrower can incur, limitations on sales and dispositions of the Properties, required maintenance of specified cash reserves, and various restrictions on the use of cash generated by the operations of the Properties while the Loan Agreement is outstanding. The Loan Agreement also includes customary events of default, the occurrence of which would allow the Lender to accelerate payment of all amounts outstanding thereunder and to require that all of the rental income associated with the real estate properties of the Borrower, after payment of specified operating expenses, asset management fees, and interest, be required to prepay the Loan. The Borrower is also required to furnish various financial and other reports to the Lender. Our underwriting process for residents of the Properties is consistent with the review and underwriting process for the other SFRs owned by us. In limited circumstances in which a Property fails to comply with the property covenants and representations in the Loan Agreement and provided there is no event of default, we may substitute a comparable property meeting specified criteria or repay the allocated loan amount for such Property. In connection with the Loan, we provided the Lender with a limited recourse guaranty agreement under which we agreed to indemnify the Lender against specified losses due to fraud, misrepresentation, misapplication of funds, physical waste, breaches of specified representations, warranties, and covenants, as well as a guaranty of the entire amount of the Loan Agreement, not to exceed the greater of (i) $35.0 million (or if less, the entire outstanding balance of the Components A through F) and (ii) thirty-five percent of the aggregate outstanding balance of Components A through F, in the event that the Borrower files insolvency proceedings or violates certain covenants that result in its being substantively consolidated with any other entity that is subject to a bankruptcy proceeding. We have accounted for the transfer of the Loan to the Securitization Trustee as a sale under ASC 860 with no resulting gain or loss as the Loan was both originated by the Loan Seller and immediately transferred at the same fair market value. We have also evaluated the purchased Class G certificates as a variable interest in the Trust and concluded that the Class G certificates will not absorb a majority of the Trust's expected losses or receive a majority of the Trust's expected residual returns. Additionally, we have concluded that the Class G certificates do not provide us with any ability to direct activities that could impact the Trust's economic performance. Accordingly, we do not consolidate the Trust and consolidate, at historical cost basis, the 4,081 homes placed as collateral for the Loan and have recorded a $527.2 million net asset-backed securitization liability at September 30, 2015, representing the principal balance outstanding on the Loan, net of unamortized loan discounts of $1.9 million, in the accompanying condensed consolidated balance sheets. Separately, the $26.6 million of purchased Class G certificates have been reflected as asset-backed securitization certificates in the accompanying condensed consolidated balance sheets as of September 30, 2015. Interest Rate Caps In connection with the effectiveness of the SFR Facility, we purchased interest rate caps to protect against increases in monthly LIBOR above 3.0%. Continuation of that cap for an additional year (or purchase of a new rate cap) is a condition to any extension of maturity. As of September 30, 2015, we had five interest rate caps used to mitigate our exposure to potential future increases in USD-LIBOR rates in connection with the SFR Facility. Interest rate caps involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. These caps have maturities within the next two years and a total notional amount of $600.0 million. During the three and nine months ended September 30, 2015 and 2014, such derivatives were used to hedge the variable cash flows, indexed to USD-LIBOR, associated with existing variable-rate loan agreements. The change in fair value of the derivatives is recognized directly in earnings. We recorded losses of $31,000 and $0.3 million during the three and nine months ended September 30, 2015, respectively, and we recorded losses of $0.1 million and $0.6 million for the corresponding periods in 2014. As of September 30, 2015, we had one interest rate cap used to mitigate our exposure to potential future increases in USD-LIBOR rates in connection with the asset-backed securitization. This cap matures in January 2017 and has a total notional amount of $505.0 million, of which 90% or $454.5 million of the cap notional, was designated in a cash flow hedging relationship as of September 30, 2015. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated OCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated OCI related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. Over the next 12 months, we estimate that approximately $86,000 will be reclassified out of accumulated OCI as an increase to interest expense. The table below presents the fair value of our derivative financial instruments as of September 30, 2015 and December 31, 2014 (in thousands): Fair Value of Derivatives in an Asset Position As of September 30, 2015 December 31, 2014 Derivatives Designated as Hedging Instruments: Interest rate caps $ 4 $ 104 Derivatives Not Designated as Hedging Instruments: Interest rate caps 15 322 Total derivatives $ 19 $ 426 The tables below present the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 (in thousands): Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Reclassifications Amount of Gain (Loss) of Missed Forecasted Amount of Gain (Loss) Reclassified from Location of Gain (Loss) Transactions and Amounts Recognized in OCI on Accumulated OCI on Recognized in Income on Excluded from Derivative (Effective Portion) Location of Gain (Loss) Derivative (Effective Portion) Derivative (Ineffective Effectiveness Testing) For the Three Months Reclassified from For the Three Months Portion and Amount For the Three Months Derivatives in Cash Flow Ended September 30, Accumulated OCI on Ended September 30, Excluded from Ended September 30, Hedging Relationships 2015 2014 Derivative (Effective Portion) 2015 2014 Effectiveness Testing) 2015 2014 Interest rate caps $ (8 ) $ — Interest exp |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | Note 8. Share-Based Compensation On January 16, 2014, we adopted (i) the Starwood Waypoint Residential Trust Equity Plan (the “Equity Plan”) which provided for the issuance of our common shares and common share-based awards to persons providing services to us, including without limitation, our trustees, officers, advisors, and consultants and employees of our external Manager, (ii) the Starwood Waypoint Residential Trust Manager Equity Plan (the “Manager Equity Plan”, and together with the Equity Plan, the “Equity Plans”), which provides for the issuance of our common shares and common share-based awards to our Manager, and (iii) the Starwood Waypoint Residential Trust Non-Executive Trustee Share Plan (the “Non-Executive Trustee Share Plan”), which provides for the issuance of common shares and common shares-based awards to our non-executive trustees. In connection with the Separation, we granted (1) our Manager 777,574 RSUs and (2) certain employees of our Manager an aggregate of 199,991 of our RSUs. The award of RSUs to our Manager will vest ratably on a quarterly basis over a three-year period ending on April 1, 2017. The awards of RSUs to certain employees of our Manager vest ratably in three annual installments on January 31, 2015, January 31, 2016, and January 31, 2017. In connection with the Separation, we also granted 8,330 of our restricted common shares to our non-executive trustees (1,666 to each of our five non-executive trustees). These awards of restricted shares vest ratably in three annual installments on January 31, 2015, January 31, 2016, and January 31, 2017, subject to the trustee’s continued service on our board of trustees. During the nine months ended September 30, 2015, of the 777,574 RSUs awarded to our Manager in connection with the Separation, 194,401 vested. The remaining 323,990 unvested grants will vest ratably on a quarterly basis over a period ending on April 1, 2017. During the nine months ended September 30, 2015, we granted 258,847 new RSUs to certain employees of our Manager which vest over three years, 59,491 RSUs vested and 45,283 RSUs were forfeited. The remaining 332,566 unvested awards of RSUs will vest over a period ending June 30, 2018. During the nine months ended September 30, 2015, we granted 14,387 new restricted shares to our non-executive trustees, 10,333 shares vested and 1,111 shares were forfeited. The remaining 11,273 awards of restricted shares vest ratably in two annual installments on January 31, 2016, and January 31, 2017. During the nine months ended September 30, 2015, we also granted 4,462 restricted shares to members of our board of trustees in lieu of trustee fees for an aggregate cost of approximately $113,000. After giving effect to activity described above and summarized in the table below, we have 1,696,285 and 173,225 shares available for grant as of September 30, 2015, for the Equity Plans and Non-Executive Trustee Share Plan, respectively. The following table summarizes our RSUs and restricted share awards activity during the nine months ended September 30, 2015: Non-Executive Manager Equity Plan Equity Plan Trustee Share Plan Total Weighted- Weighted- Weighted- Weighted- Average Average Average Average Grant Grant Grant Grant Shares Fair Value Shares Fair Value Shares Fair Value Shares Fair Value Nonvested shares, December 31, 2014 518,391 $ 30.00 178,493 $ 30.00 8,330 $ 28.95 705,214 $ 29.99 Granted — $ — 258,847 $ 25.50 14,387 $ 25.26 273,234 $ 25.48 Vested (194,401 ) $ 30.00 (59,491 ) $ 30.00 (10,333 ) 27.11 (264,225 ) $ 29.89 Forfeited — $ — (45,283 ) $ 29.81 (1,111 ) $ 30.00 (46,394 ) $ 29.82 Nonvested shares, September 30, 2015 323,990 $ 30.00 332,566 $ 26.52 11,273 $ 25.83 667,829 $ 28.20 During the three and nine months ended September 30, 2015, we recorded $2.3 million and $5.7 million of share-based compensation expense, respectively, on our condensed consolidated statements of operations. During the three and nine months ended September 30, 2014, we recorded $2.1 million and $4.6 million of share-based compensation expense, respectively, on our condensed consolidated statements of operations. As of September 30, 2015, $13.5 million of total unrecognized compensation cost related to unvested RSUs and restricted shares is expected to be recognized over a weighted-average period of 1.7 years. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 9. Related-Party Transactions The accompanying condensed consolidated statements of operations include the following expenses that have been allocated from our Manager for the three and nine months ended September 30, 2015 and 2014, to us. The allocated expenses generally represent (1) certain invoices that our Manager paid on our behalf and (2) the portion of certain expenses that were incurred by our Manager that are estimated to have been attributable to us. We believe the allocation of these expenses is considered appropriate under the SEC guidelines for carve-out financial statements, as we believe that there is reasonable basis for the allocations (in thousands): Condensed Consolidated Three Months Ended September 30, Nine Months Ended September 30, Type of Costs Incurred Financial Statement Location 2015 2014 2015 2014 Property operating and maintenance Statements of operations $ 6,475 $ 4,311 $ 18,725 $ 11,613 Management fee Statements of operations 4,664 4,522 14,326 11,272 Other expenses Statements of operations 3,042 3,526 11,622 10,497 Subtotal 14,181 12,359 44,673 33,382 Development costs Balance sheets-investments in real estate properties 2,501 4,663 9,525 12,880 Leasing costs Balance sheets-other assets 1,049 1,406 3,438 4,673 Total related party costs $ 17,731 $ 18,428 $ 57,636 $ 50,935 Reimbursement of Costs We are required to reimburse our Manager for the costs incurred on our behalf. Cost reimbursements to our Manager are made in cash on a monthly basis following the end of each month. Our reimbursement obligation is not subject to any dollar limitation. Because our Manager’s personnel perform certain legal, accounting, due diligence tasks, and other services that outside professionals or outside consultants otherwise would perform, our Manager is paid or reimbursed for the documented cost of performing such tasks. For the three and nine months ended September 30, 2015, we incurred $13.1 million and $43.3 million of costs, respectively. For the three and nine months ended September 30, 2014, we incurred $13.9 million and $39.7 million of costs, respectively. Management Fees We pay our Manager a base management fee calculated and payable quarterly in arrears in cash in an amount equal to one-fourth of 1.5% of the daily average of our adjusted market capitalization for the preceding quarter. For purposes of calculating the management fee, our adjusted equity market capitalization means (1) the average daily closing price per our common share during the relevant period, multiplied by (2) (a) the average number of our common shares and securities convertible into our common shares issued and outstanding during the relevant period, plus (b) the maximum number of our common shares issuable pursuant to outstanding rights, options, or warrants to subscribe for, purchase or otherwise acquire our common shares that are in the money on such date, or the common share equivalents, minus (3) the aggregate consideration payable to us on the applicable date upon the redemption, exercise, conversion, and/or exchange of any common share equivalents, plus (x) the average daily closing price per our preferred share during the relevant period, multiplied by (y) average number of our preferred shares issued and outstanding during the relevant period. The amount of management fees incurred by us during the three and nine months ended September 30, 2015, was $4.7 million and $14.3 million, respectively. The amount of management fees incurred by us during the three and nine months ended September 30, 2014, was $4.5 million and $11.3 million, respectively. Fund XI Portfolio Purchase On March 3, 2014, we purchased 707 homes from Waypoint Fund XI, LLC (“Fund XI Portfolio”), an entity that certain of our officers had an ownership interest in, for approximately $144.0 million in cash. Pursuant to our policy regarding conflicts of interest, a majority of our independent trustees approved the purchase of Fund XI Portfolio. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 10. Segment Reporting In the operation of the business, management, including our chief decision maker, our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements. The segment information within this note is reported on that basis. We are focused primarily on acquiring SFRs and NPLs and currently operate in two reportable segments. Prior to the Separation, we reported in only one segment. After the Separation, the chief decision maker changed from SPT’s chief executive officer to our Chief Executive Officer who views our NPL activities as a separate segment of our business. In connection with our change in reportable segments, we have created new revenue line items in our condensed consolidated statements of operations associated with our NPL segment. Current and prior amounts previously shown as other income will now be presented as realized gain on NPLs, net and realized gain on loan conversions, net within our revenue section in the condensed consolidated statements of operations as we believe revenues associated with our NPL business segment represent a significant part of our ongoing operations. We currently have two reportable business segments: · SFRs—includes the business activities associated with our investments in residential properties · NPLs—includes the business activities associated with our investments in NPLs Due to the structure of our business, certain costs incurred by one segment may benefit other segments. Costs that are identifiable are allocated to the segments that benefit so that one segment is not solely burdened by this cost. Allocated costs currently include management fees payable to our Manager and the Separation costs, both of which represent shared costs. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. Our reportable segments are strategic business units that offer different channels to acquiring real estate and offer different risk and return profiles. While the SFR business segment provides a direct conduit to real estate, the NPL business segment also provides revenue opportunities through potential gains achieved through the resolution of the NPLs. Further, not all NPLs resolve into the acquisition of real estate resulting in potential gains from the sale or dissolution of the NPL. Additionally, both business segments require differing asset management approaches given the differing nature of the investments. We have presented certain prior-period amounts within this note to conform to the way we internally manage and monitor segment performance in the current periods. Assets by Business Segment As of (in thousands) September 30, 2015 December 31, 2014 SFR $ 2,567,349 $ 2,264,040 NPL 500,499 672,123 Total $ 3,067,848 $ 2,936,163 Statements of Operations by Business Segment Three Months Ended Three Months Ended September 30, 2015 September 30, 2014 SFR NPL Total SFR NPL Total Revenues Rental revenues, net $ 49,197 $ — $ 49,197 $ 30,366 $ — $ 30,366 Other property revenues 1,801 — 1,801 1,139 — 1,139 Realized gain on non-performing loans, net — 26,024 26,024 — 1,941 1,941 Realized gain on loan conversions, net — 9,270 9,270 — 5,791 5,791 Total revenues 50,998 35,294 86,292 31,505 7,732 39,237 Expenses Property operating and maintenance 11,580 — 11,580 8,796 — 8,796 Real estate taxes and insurance 9,957 — 9,957 5,143 — 5,143 Mortgage loan servicing costs — 10,404 10,404 — 7,918 7,918 Non-performing loan management fees and expenses — 3,146 3,146 — 3,508 3,508 General and administrative 3,143 822 3,965 3,357 1,270 4,627 Share-based compensation 1,858 486 2,344 1,524 577 2,101 Investment management fees 3,698 966 4,664 3,281 1,241 4,522 Acquisition fees and other expenses 244 — 244 217 — 217 Interest expense, including amortization 16,543 3,657 20,200 10,117 1,782 11,899 Depreciation and amortization 19,783 — 19,783 9,238 — 9,238 Separation costs — — — — — — Transaction-related expenses 3,400 888 4,288 — — — Finance-related expenses and write-off of loan costs 374 348 722 975 359 1,334 Impairment of real estate 17 185 202 341 — 341 Total expenses 70,597 20,902 91,499 42,989 16,655 59,644 Income (loss) before other income, income tax expense and non-controlling interests (19,599 ) 14,392 (5,207 ) (11,484 ) (8,923 ) (20,407 ) Other income (expense) Realized gain on sales of investments in real estate, net 1,472 — 1,472 125 — 125 Realized loss on sales of divestiture homes, net (556 ) (2,764 ) (3,320 ) — — — Unrealized gain (loss) on non-performing loans, net — (3,952 ) (3,952 ) — 13,705 13,705 Loss on derivative financial instruments, net (31 ) — (31 ) (104 ) — (104 ) Total other income (expense) 885 (6,716 ) (5,831 ) 21 13,705 13,726 Income (loss) before income tax expense and non-controlling interests (18,714 ) 7,676 (11,038 ) (11,463 ) 4,782 (6,681 ) Income tax expense 16 — 16 19 — 19 Net income (loss) (18,730 ) 7,676 (11,054 ) (11,482 ) 4,782 (6,700 ) Net (income) attributable to non-controlling interests — (109 ) (109 ) — (13 ) (13 ) Net income (loss) attributable to Starwood Waypoint Residential Trust shareholders $ (18,730 ) $ 7,567 $ (11,163 ) $ (11,482 ) $ 4,769 $ (6,713 ) Weighted-average shares outstanding-basic and diluted 37,906,769 37,906,769 37,906,769 38,613,270 38,613,270 38,613,270 Net income (loss) per common share Basic and diluted $ (0.49 ) $ 0.20 $ (0.29 ) $ (0.29 ) $ 0.12 $ (0.17 ) Statements of Operations by Business Segment Nine Months Ended Nine Months Ended September 30, 2015 September 30, 2014 SFR NPL Total SFR NPL Total Revenues Rental revenues, net $ 137,857 $ — $ 137,857 $ 67,733 $ — $ 67,733 Other property revenues 4,634 — 4,634 2,508 — 2,508 Realized gain on non-performing loans, net — 40,510 40,510 — 7,141 7,141 Realized gain on loan conversions, net — 23,942 23,942 — 17,688 17,688 Total revenues 142,491 64,452 206,943 70,241 24,829 95,070 Expenses Property operating and maintenance 33,100 — 33,100 22,619 — 22,619 Real estate taxes and insurance 27,502 — 27,502 12,754 — 12,754 Mortgage loan servicing costs — 29,985 29,985 — 17,939 17,939 Non-performing loan management fees and expenses — 9,301 9,301 — 7,794 7,794 General and administrative 9,376 2,451 11,827 10,477 3,964 14,441 Share-based compensation 4,488 1,173 5,661 3,308 1,252 4,560 Investment management fees 11,358 2,968 14,326 8,178 3,094 11,272 Acquisition fees and other expenses 866 — 866 664 — 664 Interest expense, including amortization 45,896 11,516 57,412 12,524 6,066 18,590 Depreciation and amortization 56,775 — 56,775 21,954 — 21,954 Separation costs — — — 2,797 746 3,543 Transaction-related expenses 3,400 888 4,288 — — — Finance-related expenses and write-off of loan costs 1,790 387 2,177 6,233 542 6,775 Impairment of real estate 202 659 861 2,408 — 2,408 Total expenses 194,753 59,328 254,081 103,916 41,397 145,313 Income (loss) before other income, income tax expense and non-controlling interests (52,262 ) 5,124 (47,138 ) (33,675 ) (16,568 ) (50,243 ) Other income (expense) Realized gain (loss) on sales of investments in real estate, net 2,176 — 2,176 (76 ) — (76 ) Realized loss on sales of divestiture homes, net (832 ) (2,169 ) (3,001 ) — — — Unrealized gain on non-performing loans, net — 34,431 34,431 — 17,346 17,346 Loss on derivative financial instruments, net (307 ) — (307 ) (574 ) — (574 ) Total other income (expense) 1,037 32,262 33,299 (650 ) 17,346 16,696 Income (loss) before income tax expense and non-controlling interests (51,225 ) 37,386 (13,839 ) (34,325 ) 778 (33,547 ) Income tax expense 440 — 440 504 — 504 Net income (loss) (51,665 ) 37,386 (14,279 ) (34,829 ) 778 (34,051 ) Net (income) attributable to non-controlling interests — (328 ) (328 ) — (86 ) (86 ) Net income (loss) attributable to Starwood Waypoint Residential Trust shareholders $ (51,665 ) $ 37,058 $ (14,607 ) $ (34,829 ) $ 692 $ (34,137 ) Weighted-average shares outstanding-basic and diluted 37,942,011 37,942,011 37,942,011 38,911,505 38,911,505 38,911,505 Net income (loss) per common share Basic and diluted $ (1.36 ) $ 0.98 $ (0.38 ) $ (0.90 ) $ 0.02 $ (0.88 ) |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Purchase Commitments As of September 30, 2015, we had executed agreements to purchase an additional 93 homes in separate transactions for an aggregate purchase price of $15.2 million. As of September 30, 2015, we had not contracted to purchase or sell any NPLs. Legal and Regulatory From time to time, we may be subject to potential liability under laws and government regulations and various claims and legal actions arising in the ordinary course of our business. Liabilities are established for legal claims when payments associated with the claims become probable and the costs can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher or lower than the amounts established for those claims. Based on information currently available, we have no legal or regulatory claims that would have a material effect on our condensed consolidated financial statements. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events Dividend Declaration On November 2, 2015, our board of trustees declared a quarterly dividend of $0.19 per common share. Payment of the dividend is expected to be made on December 22, 2015 to shareholders of record at the close of business on December 10, 2015. Acquisition of Homes Subsequent to September 30, 2015, we have continued to purchase and sell homes in the normal course of business. For the period from October 1, 2015 through October 20, 2015, we purchased 58 homes with an aggregate acquisition cost of approximately $10.1 million. We did not purchase or sell any NPLs during this subsequent period. |
Basis of Presentation and Sig20
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying interim condensed consolidated financial statements are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the applicable rules and regulations of the SEC for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The December 31, 2014 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated financial statements include our accounts and those of our wholly and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly our financial position as of September 30, 2015, results of operations, comprehensive income (loss) for the three and nine months ended September 30, 2015 and 2014 and cash flows for the nine months ended September 30, 2015 and 2014. The interim results for the three and nine months ended September 30, 2015, are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures About Market Risk and the consolidated financial statements and notes thereto included in Items 7, 7A and 8, respectively, in our Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the SEC on March 6, 2015. Prior to the Separation, the historical condensed consolidated financial statements were derived from the condensed consolidated financial statements and accounting records of SPT principally representing the single-family segment, using the historical results of operations and historical basis of assets and liabilities of our businesses. The historical condensed consolidated financial statements also include allocations of certain of SPT’s general corporate expenses. Management believes the assumptions and methodologies underlying the allocation of general corporate expenses to the historical results of operations were reasonable. However, such expenses may not be indicative of the actual level of expenses that would have been incurred by us if we had operated as an independent, publicly traded company or of the costs expected to be incurred in the future. As such, the results of operations prior to the Separation, included herein, may not necessarily reflect our results of operations, financial position, or cash flows in the future or what our results of operations, financial position, or cash flows would have been had we been an independent, publicly traded company during the historical periods presented. Transactions between the single-family business segment and other business segments of SPT’s businesses have been identified in the historical condensed consolidated financial statements as transactions between related parties for periods prior to the Separation. We have no expenses allocated to us from SPT in 2014 or 2015. The non-controlling interest in a consolidated subsidiary is the portion of the equity (net assets) in Prime that is not attributable, directly or indirectly, to us. Non-controlling interests are presented as a separate component of equity in the condensed consolidated balance sheets. In addition, the accompanying condensed consolidated statements of operations include the allocation of the net income or loss in the Prime joint venture to the non-controlling interest holders in Prime. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us 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, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The most significant estimate that we make is of the fair value of our properties and NPLs. While home values are typically not a highly subjective estimate on a per-unit basis, given the usual availability of comparable property sale and other market data, these fair value estimates significantly affect the condensed consolidated financial statements, including (1) whether certain assets are identified as being potentially impaired and then, if deemed to be impaired, the amount of the resulting impairment charges, and (2) the allocation of purchase price to individual assets acquired as part of a pool, which have a significant impact on the amount of gain or loss recognized from a subsequent sale, and the subsequent impairment assessment, of individual assets. Beginning in 2014, we elected the fair value option for our NPLs. Estimates pertaining to the fair value of NPLs use a discounted cash flow valuation model and consider alternate loan resolution probabilities, including modification, liquidation, or conversion to rental property. These fair value estimates significantly affect the condensed consolidated financial statements in that changes to the fair value of NPLs for which we have elected the fair value option are reflected in unrealized gains and losses and recorded in current-period earnings. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash in banks and short-term investments. Short-term investments are comprised of highly liquid instruments with original maturities of three months or less. We maintain our cash and cash equivalents in multiple financial institutions with high credit quality in order to minimize our credit loss exposure. At times, these balances exceed federally insurable limits. |
Restricted Cash | Restricted Cash Restricted cash is primarily comprised of resident security deposits held by us and rental revenues held in accounts controlled by lenders on our debt facilities. |
Investments in Real Estate | Investments in Real Estate Property acquisitions are evaluated to determine whether they meet the definition of a business combination or of an asset acquisition under GAAP. For asset acquisitions, we capitalize (1) pre-acquisition costs to the extent such costs would have been capitalized had we owned the asset when the cost was incurred, and (2) closing and other direct acquisition costs. We then allocate the total cost of the property including acquisition costs, between land and building based on their relative fair values, generally utilizing the relative allocation that was contained in the property tax assessment of the same or a similar property, adjusted as deemed necessary. For acquisitions that do not qualify as an asset acquisition, we evaluate the acquisition to determine if it qualifies as a business combination. For acquired properties where we have determined that the property has a resident with an existing lease in place, we account for the acquisition as a business combination. For acquisitions that qualify as a business combination, we (1) expense the acquisition costs in the period in which the costs were incurred and (2) allocate the cost of the property among land, building and in-place lease intangibles based on their fair value. The fair values of acquired in-place lease intangibles are based on costs to execute similar leases including commissions and other related costs. The origination value of in-place leases also includes an estimate of lost rent revenue at in-place rental rates during the estimated time required to lease up the property from vacant to the occupancy level at the date of acquisition. The in-place lease intangible is amortized over the life of the lease and is recorded in other assets in our condensed consolidated balance sheets. If, at acquisition, a property needs to be renovated before it is ready for its intended use, we commence the necessary development activities. During this development period, we capitalize all direct and indirect costs incurred in renovating the property. Once a property is ready for its intended use, expenditures for ordinary maintenance and repairs thereafter are expensed to operations as incurred, and we capitalize expenditures that improve or extend the life of a home and for furniture and fixtures. We begin depreciating properties to be held and used when they are ready for their intended use. We compute depreciation using the straight-line method over the estimated useful lives of the respective assets. We depreciate buildings and building improvements over 30 years, and we depreciate other capital expenditures over periods ranging from four to 25 years. Land is not depreciated. Properties are classified as held for sale when they meet the applicable GAAP criteria, including that the property is listed for sale and that it is ready to be sold in its current condition. Held-for-sale properties are reported at the lower of their carrying amount or estimated fair value less costs to sell. We evaluate our long-lived assets for impairment periodically or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Significant indicators of impairment may include declines in home values, rental rate and occupancy and significant changes in the economy. We make our assessment at the individual property level because it represents the lowest level of identifiable cash flows. If an impairment indicator exists, we compare the expected future undiscounted cash flows against the net carrying amount of a property. If the sum of the estimated undiscounted cash flows is less than the net carrying amount of the property, we record an impairment loss for the difference between the estimated fair value of the individual property and the carrying amount of the property at that date. To determine the estimated fair value, we primarily consider local broker-pricing opinions (“BPOs”). In order to validate the BPOs received and used in our assessment of fair value of real estate, we perform an internal review to determine if an acceptable valuation approach was used to estimate fair value in compliance with guidance provided by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements.” In evaluating our investments in real estate, we determined that certain properties were impaired, which resulted in impairment charges of $0.2 million and $0.3 million during the three months ended September 30, 2015 and 2014, respectively. We recorded impairment charges of $0.9 million and $2.4 million during the nine months ended September 30, 2015 and 2014, respectively. |
Non-Performing Loans | Non-Performing Loans We have purchased pools of NPLs which were individually bid on and which we seek to (1) modify and hold or resell at higher prices if circumstances warrant, thus providing additional liquidity or (2) convert into homes through the foreclosure or other resolution process that can then either be contributed to our rental portfolio or sold. Our NPLs are on nonaccrual status at the time of purchase as it is probable that principal or interest is not fully collectible. Generally, when loans are placed on nonaccrual status, accrued interest receivable is reversed against interest income in the current period. Interest payments received thereafter are applied as a reduction to the remaining principal balance as long as concern exists as to the ultimate collection of the principal. Loans are classified as held for sale when they meet the applicable GAAP criteria, including that the loan is being listed for sale and that it is ready to be sold. Held-for-sale loans are reported at the lower of their carrying amount or estimated fair value. We evaluate our loans for impairment periodically or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. As our loans were non-performing when acquired, we generally look to the estimated fair value of the underlying property collateral to assess the recoverability of our investments. As described in our real estate accounting policy above, we primarily utilize the local BPO but also consider any other comparable home sales or other market data, as considered necessary, in estimating a property’s fair value. If the carrying amount of a loan exceeds the estimated fair value of the underlying collateral, we will record an impairment loss for the difference between the estimated fair value of the property collateral and the carrying amount of the loan, inclusive of costs. During the three and nine months ended September 30, 2015 and 2014, no impairments have been recorded on any of our loans. When we convert loans into homes through foreclosure or other resolution process (e.g., through a deed-in-lieu of foreclosure transaction), the property is initially recorded at fair value unless it meets the criteria for being classified as held-for-sale, in which case the property is initially recorded at fair value less estimated costs to sell. The transfer to SFR occurs when we have obtained title to the property through completion of the foreclosure process. SFR also includes a limited number of multi-unit properties. The fair value of these assets at the time of transfer to SFR is estimated using BPOs. BPOs are subject to judgments of a particular broker formed by visiting a property, assessing general home values in an area, reviewing comparable listings, and reviewing comparable completed sales. These judgments may vary among brokers and may fluctuate over time based on housing market activities and the influx of additional comparable listings and sales. Our results could be materially and adversely affected if the judgments used by a broker prove to be incorrect or inaccurate. Gains are recognized in earnings immediately when the fair value of the acquired property (or fair value less estimated costs to sell for held-for-sale properties) exceeds our recorded investment in the loan, and are reported as realized gain on loan conversion, net in our condensed consolidated statements of operations. Conversely, any excess of the recorded investment in the loan over the fair value of the property (or fair value less estimated costs to sell for held-for-sale properties) would be immediately recognized as a loss. During the three and nine months ended September 30, 2015, we converted $32.2 million and $87.6 million in NPLs into $41.5 million and $111.5 million in real estate assets that resulted in gains of $9.3 million and $23.9 million, respectively. During the three and nine months ended September 30, 2014, we converted $15.2 million and $40.1 million in NPLs into $21.0 million and $57.8 million in real estate assets that resulted in gains of $5.8 million and $17.7 million, respectively. In situations where property foreclosure is subject to an auction process and a third party submits the winning bid, we recognize the resulting gain as a realized gain on NPLs, net. Beginning in 2014, we have elected the fair value option for NPL purchases as we have concluded that NPLs accounted for at fair value timely reflect the results of our investment performance. Upon the acquisition of NPLs, we record the assets at fair value, which is the purchase price we paid for the loans on the acquisition date. NPLs are subsequently accounted for at fair value under the fair value option election with unrealized gains and losses recorded in current-period earnings. We determine the purchase price for NPLs at the time of acquisition by using a discounted cash flow valuation model and considering alternate loan resolution probabilities, including modification, liquidation, or conversion to rental property. Observable inputs to the model include loan amounts, payment history, and property types. Unobservable inputs to the model are discussed in Note 3- Fair Value Measurements. For NPLs acquired in 2014, the fair value of each loan is adjusted in each subsequent reporting period as the loan proceeds to a particular resolution (i.e., modification or conversion to a SFR). As a loan approaches resolution, the resolution timeline for that loan decreases and costs embedded in the discounted cash flow model for loan servicing, foreclosure costs, and property insurance are incurred and removed from future expenses. The shorter resolution timelines and reduced future expenses, typically each increases the fair value of the loan. The increase in the value of the loan is recognized in unrealized gains on NPLs in our condensed consolidated statements of operations. Upon the sale of NPLs that results in the recognition of a realized gain or loss, we reclassify what had previously been recorded in unrealized (loss) gain on NPLs, net to realized gains on NPLs, net. During the three and nine months ended September 30, 2015, we recorded unrealized losses of $4.0 million and unrealized gains of $34.4 million, respectively, on the fair value of loans. During the three and nine months ended September 30, 2014, we recorded $13.7 million and $17.3 million, respectively, in unrealized gains on the fair value of the loans. |
Capitalized Costs | Capitalized Costs We capitalize certain costs incurred in connection with successful property acquisitions and associated stabilization activities, including tangible property improvements and replacements of existing property components. Included in these capitalized costs are certain personnel costs associated with time spent by certain personnel in connection with the planning and execution of all capital additions activities at the property level as well as third-party acquisition agreement fees. Indirect costs are allocations of certain department costs, including personnel costs that directly relate to capital additions activities. We also capitalize property taxes and homeowners’ association (“HOA”) fees dues during periods in which property stabilization is in progress. We charge to expense as incurred costs that do not relate to capital additions activities, including ordinary repairs, maintenance, resident turnover costs and general and administrative expenses. We also defer successful leasing costs and amortize them over the life of the lease, which is typically one to two years. |
Purchase Deposits | Purchase Deposits We make various deposits relating to property acquisitions, including transactions where we have agreed to purchase a home subject to certain conditions being met before closing, such as satisfactory home inspections and title search results. Our purchase deposit balances are recorded in other assets in our condensed consolidated balance sheets. |
Derivative Instruments | Derivative Instruments We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through the management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our borrowings. As required by ASC 815, “Derivatives and Hedging,” we record all derivatives in the condensed consolidated balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or we elect not to apply hedge accounting. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (“OCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Derivatives not designated as hedges are derivatives that do not meet the criteria for hedge accounting under GAAP or for which we have not elected to designate as hedges. We do not use these derivatives for speculative purposes, but instead they are used to manage our exposure to interest rate changes. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in loss on derivative financial instruments, net in our condensed consolidated statements of operations. |
Convertible Notes | Convertible Notes ASC Topic 470-20, “Debt with Conversion and Other Options,” requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. The initial proceeds from the sale of convertible notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonconvertible debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measure the fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity component of the convertible notes is reflected within additional paid-in capital in our condensed consolidated balance sheets, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to the convertible notes will be recorded in subsequent periods through the maturity date as the notes accrete to their par value. |
Securitization/Sale and Financing Arrangements | Securitization/Sale and Financing Arrangements We may periodically sell our financial assets. In connection with these transactions, we may retain or acquire senior or subordinated interests in the related assets. Gains and losses on such transactions are recognized using the guidance in ASC Topic 860, “Transfers and Servicing,” which is based on a financial components approach that focuses on control. Under this approach, after a transfer of financial assets that meets the criteria for treatment as a sale – legal isolation, ability of transferee to pledge or exchange the transferred assets without constraint, and transferred control – an entity recognizes the financial assets it retains and any liabilities it has incurred, derecognizes the financial assets it has sold, and derecognizes liabilities when extinguished. We determine the gain or loss on sale of the assets by allocating the carrying value of the sold asset between the sold asset and the interests retained based on their relative fair values, as applicable. The gain or loss on sale is the difference between the cash proceeds from the sale and the amount allocated to the sold asset. If the sold asset is being accounted for pursuant to the fair value option, there is no gain or loss. |
Revenue Recognition | Revenue Recognition Rental revenue, net of concessions, is recognized on a straight-line basis over the term of the lease. The initial term of our residential leases is generally one to two years, with renewals upon consent of both parties on an annual or monthly basis. We periodically evaluate the collectability of our resident and other receivables and record an allowance for doubtful accounts for any estimated probable losses. This allowance is estimated based on payment history and probability of collection. We generally do not require collateral other than resident security deposits. Our allowance for doubtful accounts was $0.6 million and $0.3 million as of September 30, 2015 and December 31, 2014, respectively. Bad debt expense amounts are recorded as property operating and maintenance expenses in the condensed consolidated statements of operations. During the three and nine months ended September 30, 2015, we incurred bad debt expense of $0.6 million and $1.5 million, respectively. During the three and nine months ended September 30, 2014, we incurred bad debt expense of $0.9 million and $2.0 million, respectively. We recognize sales of real estate when the sale has closed, title has passed, adequate initial and continuing investment by the buyer is received, possession and other attributes of ownership have been transferred to the buyer, and we are not obligated to perform significant additional activities after closing. All these conditions are typically met at or shortly after closing. We recognize realized gains on loan conversions, net in each reporting period when our NPLs are converted to SFRs. The transfer to SFR occurs when we have obtained legal title to the property upon completion of the foreclosure. The fair value of these assets at the time of transfer to real estate owned is estimated using BPOs. BPOs are subject to judgments of a particular broker formed by visiting a property, assessing general home values in an area, foreclosure timelines, reviewing comparable listings and reviewing comparable completed sales. These judgments may vary among brokers and may fluctuate over time based on housing market activities and the influx of additional comparable listings and sales. We evaluate the validity of the BPOs received pursuant to the policy described above under “-Investments in Real Estate.” Our results could be materially and adversely affected if the judgments used by a broker prove to be incorrect or inaccurate. We recognize realized gains on NPLs upon payoff of principal balance. The gain is calculated by subtracting basis from net proceeds of payoff. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share We use the two-class method to calculate basic and diluted earnings per common share (“EPS”) as our restricted share units (“RSUs”) are participating securities as defined by GAAP. We calculate basic EPS by dividing net income (loss) attributable to us for the period by the weighted-average number of common shares outstanding for the period. Diluted-earnings per share reflect the potential dilution that could occur from shares issuable in connection with the RSUs and convertible senior notes, except when doing so would be anti-dilutive. |
Share-Based Compensation | Share-Based Compensation The fair value of our RSUs granted is recorded as expense on a straight-line basis over the vesting period for the award, with an offsetting increase in shareholders' equity. For grants to trustees, the fair value is determined based upon the share price on the grant date. For non-employee grants, the fair value is based on the share price when the shares vest, which requires the amount to be adjusted in each subsequent reporting period based on the fair value of the award at the end of the reporting period until the award has vested. |
Income Taxes | Income Taxes We intend to operate as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and intend to comply with the Code with respect thereto. Accordingly, we will not be subject to federal income tax as long as certain asset, income, dividend distribution, and share ownership tests are met. Many of these requirements are technical and complex, and if we fail to meet these requirements, we may be subject to federal, state, and local income tax and penalties. A REIT's net income from prohibited transactions is subject to a 100% penalty tax. We have taxable REIT subsidiaries (“TRSs”) where certain investments may be made and activities conducted that (1) may have otherwise been subject to the prohibited transactions tax and (2) may not be favorably treated for purposes of complying with the various requirements for REIT qualification. The income, if any, within the TRSs is subject to federal and state income taxes as a domestic C corporation based upon the TRSs' net income. We recorded provisions of approximately $16,000 and $0.4 million for the three and nine months ended September 30, 2015, respectively. We recorded provisions of approximately $19,000 and $0.5 million for the three and nine months ended September 30, 2014, respectively. |
Reclassification of Prior Period Amounts | Reclassification of Prior Period Amounts In 2014, we reclassified amounts related to our credit facilities in the condensed consolidated balance sheet and the condensed consolidated statements of cash flows to disaggregate amounts related to our senior SFR facility and master repurchase agreement to conform to the current period’s presentation. We also reclassified amounts related to additions to real estate in the condensed consolidated statements of cash flows to disaggregate amounts related to initial renovations to single-family rentals and other capital expenditures for single-family rentals. Further, we reclassified certain prior period amounts related to realized gains (losses) on sales of investments in real estate, net in the condensed consolidated statements of operations to disaggregate amounts related to realized gains (losses) on sales of investments in real estate, net and realized loss on sales of divestiture homes, net to conform to the current period’s presentation. |
Geographic Concentrations | Geographic Concentrations We hold significant concentrations of homes and NPLs with collateral in the following regions of the country in excess of 10% of our total portfolio, and as such are more vulnerable to any adverse macroeconomic developments in such areas: Single-Family Rentals As of As of September 30, December 31, Market 2015 2014 South Florida 21 % 20 % Atlanta 15 % 17 % Houston 12 % 14 % Dallas 12 % 12 % Non-Performing Loans As of As of September 30, December 31, State 2015 2014 Florida 17 % 18 % California 17 % 16 % |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2015, the FASB issued No. Accounting Standards Update (“ASU”) 2015-15, “Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.” The guidance in ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff stated that they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis. We are currently evaluating the new guidance to determine the impact it may have on our condensed consolidated financial statements. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (ASU 2015-14).” ASU 2015-14 defers the effective date of ASU 2014-09 by one year, and would allow entities the option to early adopt ASU 2014-09 as of the original effective date. We do not anticipate that the adoption of ASU 2015-14 will have a material impact on our condensed consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The new standard requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. The standard also indicates that debt issuance costs do not meet the definition of an asset because they provide no future economic benefit. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The new guidance should be applied on a retrospective basis. We are currently evaluating the new guidance to determine the impact it may have on our condensed consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis.” The new standard amends the consolidation guidance in ASC 810 and significantly changes the consolidation analysis required under current GAAP. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the new guidance to determine the impact it may have on our condensed consolidated financial statements. In November 2014, the FASB issued ASU No. 2014-16, “Derivatives and Hedging (Topic 815) - Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity.” Certain classes of shares include features that entitle the holders to preferences and rights (such as conversion rights, redemption rights, voting powers and liquidation and dividend payment preferences) over the other shareholders. Shares that include embedded derivative features are referred to as hybrid financial instruments, which must be separated from the host contract and accounted for as a derivative if certain criteria are met under Subtopic 815-10. One criterion requires evaluating whether the nature of the host contract is more akin to debt or to equity and whether the economic characteristics and risks of the embedded derivative feature are “clearly and closely related” to the host contract. In making that evaluation, an issuer or investor may consider all terms and features in a hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting or may consider all terms and features in the hybrid financial instrument, except for the embedded derivative feature that is being evaluated for separate accounting. The use of different methods can result in different accounting outcomes for economically similar hybrid financial instruments. Additionally, there is diversity in practice with respect to the consideration of redemption features in relation to other features when determining whether the nature of a host contract is more akin to debt or to equity. The amendments apply to all reporting entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of a share. The amendments in ASU No. 2014-16 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption, including adoption in an interim period, is permitted. We are currently evaluating the impacts of the adoption of ASU No. 2014-16 on our condensed consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 2015-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 introduces an explicit requirement for management to assess and provide certain disclosures if there is substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 is effective for the annual period ending after December 15, 2016. We do not anticipate that the adoption of ASU 2014-15 will have a material impact on our consolidated financial statements. In June 2014, the FASB issued ASU 2014-11, “Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures” (“ASU 2014-11”). ASU 2014-11 amends the accounting guidance for repurchase-to-maturity transactions and repurchase agreements executed as repurchase financings, and requires additional disclosure about certain transactions by the transferor. ASU 2014-11 is effective for certain transactions that qualify for sales treatment for the first interim or annual period beginning after December 15, 2014. The new disclosure requirements for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that qualify for secured borrowing treatment is effective for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. We have historically recorded our repurchase arrangements as secured borrowings and, accordingly, the adoption of ASU 2014-11 did not have a material impact on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 broadly amends the accounting guidance for revenue recognition. ASU 2014-09 is effective for the first interim or annual period beginning after December 15, 2016, and is to be applied prospectively. We do not anticipate that the adoption of ASU 2014-09 will have a material impact on our consolidated financial statements. |
Basis of Presentation and Sig21
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Geographic Concentrations | Single-Family Rentals As of As of September 30, December 31, Market 2015 2014 South Florida 21 % 20 % Atlanta 15 % 17 % Houston 12 % 14 % Dallas 12 % 12 % Non-Performing Loans As of As of September 30, December 31, State 2015 2014 Florida 17 % 18 % California 17 % 16 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets Measured At Fair Value On A Nonrecurring Basis | Three Months Ended Nine Months Ended September 30, September 30, Residential real estate held for sale (Level III) 2015 2014 2015 2014 Pre-impairment amount $ 2,660 $ 847 $ 7,667 $ 6,625 Total losses $ (202 ) $ (36 ) $ (731 ) $ (1,328 ) Fair value $ 2,458 $ 811 $ 6,936 $ 5,297 Three Months Ended Nine Months Ended September 30, September 30, Residential real estate held for use (Level III) 2015 2014 2015 2014 Pre-impairment amount $ — $ 4,370 $ 644 $ 10,850 Total losses $ — $ (305 ) $ (130 ) $ (1,080 ) Fair value $ — $ 4,065 $ 514 $ 9,770 |
Fair Value Nonperforming Loans Converted To Real Estate Measured On Nonrecurring Basis | Three Months Ended Nine Months Ended September 30, September 30, Non-recurring basis (assets) 2015 2014 2015 2014 Transfers of NPLs into homes (Level III) Carrying value $ 32,185 $ 15,171 $ 87,558 $ 40,064 Realized gains $ 9,270 $ 5,791 $ 23,942 $ 17,688 Fair value $ 41,455 $ 20,962 $ 111,500 $ 57,752 |
Financial Instruments Carried At Fair Value | September 30, 2015 December 31, 2014 Carrying Fair Carrying Fair Value Value Value Value Assets not carried on the condensed consolidated balance sheet at fair value NPLs Level III $ 71,965 $ 121,563 $ 152,399 $ 235,545 Asset-backed securitization certificates Level III 26,553 26,553 26,553 26,553 Total assets $ 98,518 $ 148,116 $ 178,952 $ 262,098 Liabilities not carried on the condensed consolidated balance sheet at fair value Senior SFR facility Level III $ 697,414 $ 697,414 $ 441,239 $ 441,239 Master repurchase agreement Level III 331,212 331,212 454,249 454,249 3.00% Convertible Senior Notes due 2019 Level III 206,904 193,770 202,874 183,295 4.50% Convertible Senior Notes due 2017 Level III 163,291 165,825 160,236 161,221 Asset-backed securitization, net Level III 527,152 527,152 526,816 526,816 Total liabilities $ 1,925,973 $ 1,915,373 $ 1,785,414 $ 1,766,820 |
Quantitative Information For Significant Unobservable Inputs Used To Measure Fair Value Of Non-performing Loans | As of September 30, 2015 As of December 31, 2014 Input High Low Average High Low Average Discount rate 15 % 15 % 15 % 15 % 15 % 15 % Loan resolution probabilities - rental 100 % 0 % 23 % 100 % 0 % 24 % Loan resolution probabilities - liquidation 100 % 0 % 77 % 100 % 0 % 76 % Loan resolution timelines (in years) 2.9 0.5 1.1 5.8 0.1 1.1 Value of underlying properties $ 2,300,000 $ 3,000 $ 222,385 $ 2,300,000 $ 2,900 $ 212,358 Carrying costs 7.0 % 7.0 % 7.0 % 7.0 % 7.0 % 7.0 % Annual advance 2.3 % 2.3 % 2.3 % 2.3 % 2.3 % 2.3 % Remaining legal costs 0.8 % 0.8 % 0.8 % 2.1 % 2.1 % 2.1 % |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Calculation of Net Loss per Share | Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share amounts) 2015 2014 2015 2014 Numerator: Net loss attributable to Starwood Waypoint Residential Trust shareholders $ (11,163 ) $ (6,713 ) $ (14,607 ) $ (34,137 ) Denominator: Basic and diluted weighted average shares outstanding 37,907 38,613 37,942 38,912 Basic and diluted net loss per share $ (0.29 ) $ (0.17 ) $ (0.38 ) $ (0.88 ) |
Real Estate (Tables)
Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments in Consolidated Properties | Balance as of January 1, 2014 $ 755,083 Acquisitions 957,741 Real estate converted from loans 87,446 Capitalized expenditures 251,568 Basis of real estate sold (37,563 ) Impairment of real estate (2,579 ) Balance as of December 31, 2014 2,011,696 Acquisitions 313,690 Real estate converted from loans 111,500 Capitalized expenditures 103,672 Basis of real estate sold (148,577 ) Impairment of real estate (861 ) Balance as of September 30, 2015 $ 2,391,120 (1) Excludes accumulated depreciation related to investments in real estate as of September 30, 2015, December 31, 2014, and January 1, 2014, of $89.6 million, $41.6 million, and $5.7 million, respectively; and excludes accumulated depreciation on assets held for sale as of September 30, 2015, December 31, 2014 and January 1, 2014 of $0.8 million, $0.1 million and zero, respectively. Total depreciation and amortization expense for the three and nine months ended September 30, 2015, was $19.8 million and $56.8 million, respectively. Total depreciation and amortization expense for the three and nine months ended September 30, 2014, was $9.2 million and $22.0 million, respectively. |
Non-Performing Loans (Tables)
Non-Performing Loans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Summary of Non-Performing Loan Transactions | The following table summarizes transactions within our NPLs for the year ended December 31, 2014 and the nine months ended September 30, 2015: NPLs (in thousands) NPLs NPLs (fair value option) Balance as of January 1, 2014 $ 214,965 $ — $ — Acquisitions — — 486,509 Unrealized gain on non-performing loans, net — — 44,593 Basis of loans sold (3,092 ) — — Loans converted to real estate (44,614 ) — (18,150 ) Loan liquidations and other basis adjustments (14,860 ) — (21,162 ) Loans held for sale (26,911 ) 26,911 — Balance as of December 31, 2014 $ 125,488 $ 26,911 $ 491,790 Unrealized gain on non-performing loans, net — — 34,431 Basis of loans sold (169 ) (82,198 ) (1,529 ) Loans converted to real estate (32,904 ) — (54,654 ) Loan liquidations and other basis adjustments (8,397 ) (2,417 ) (24,613 ) Loans held for sale (12,053 ) 57,704 (45,651 ) Balance as of September 30, 2015 $ 71,965 $ — $ 399,774 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Terms of Convertible Debt | The following tables summarize the terms of the Convertible Senior Notes outstanding as of September 30, 2015 (in thousands, except rates): Remaining Principal Coupon Effective Conversion Maturity Period of Amount Rate Rate (1) Rate (2) Date Amortization 2017 Convertible Notes $ 172,500 4.50 % 7.37 % 33.2934 10/15/17 2.04 years 2019 Convertible Notes $ 230,000 3.00 % 6.02 % 30.5896 7/1/19 3.75 years As of As of September 30, 2015 December 31, 2014 Total principal $ 402,500 $ 402,500 Net unamortized discount (32,305 ) (39,390 ) Carrying amount of debt components $ 370,195 $ 363,110 Carrying amount of conversion option equity components recorded in additional paid-in capital $ 42,721 $ 42,721 (1) Effective rate includes the effect of the adjustment for the conversion option, the value of which reduced the initial liability and was recorded in additional paid-in capital. (2) We have the option to settle any conversions in cash, common shares, or a combination thereof. The conversion rate represents the number of common shares issuable per $1,000 principal amount of Convertible Senior Notes converted at September 30, 2015, as adjusted in accordance with the applicable indentures as a result of cash dividend payments. The if-converted value of the Convertible Senior Notes did not exceed their principal amount at September 30, 2015 since the closing market price of our common shares of $23.83 per share did not exceed the implicit conversion price of $32.69 for the 2019 Convertible Notes or $30.04 for the 2017 Convertible Notes. |
Class of Debt | As of September 30, 2015, the Offered Certificates had the following par certificate balances, pass-through rates, and ratings: (in thousands) Ratings Certificate Balance Pass-Through Rate (KBRA/Moody's/Morningstar) (1) Class A $ 232,193 One-Month LIBOR + 1.30% AAA(sf)/Aaa(sf)/AAA Class B 61,260 One-Month LIBOR + 1.95% AA(sf)/Aa2(sf)/AA+ Class C 55,855 One-Month LIBOR + 2.65% A-(sf)/A2(sf)/A+ Class D 39,639 One-Month LIBOR + 3.20% BBB+(sf)/Baa2(sf)/BBB+ Class E 80,359 One-Month LIBOR + 4.30% BBB-(sf)/NR/BBB- Class F 33,152 One-Month LIBOR + 4.55% BB+(sf)/NR/BB+ Class R N/A N/A Not rated Total/Effective weighted-average $ 502,458 2.37% (1) The ratings shown are those of Kroll Bond Rating Agency, Inc. (“KBRA”), Moody’s Investors Service, Inc. (“Moody’s”), and Morningstar Credit Ratings, LLC (“Morningstar”) as of September 30, 2015. The interest rates on the certificates and classification are based on a credit assessment and rating by these rating agencies of the credit quality of the portfolio of the homes securing the certificates and do not reflect any credit rating of us as an entity. |
Schedule of Debt | The following table sets forth the principal amount of each component and the component spread added to the one-month LIBOR for each monthly interest period as of September 30, 2015: (in thousands) Principal Component Component Amount Spread (1) Component A $ 232,193 One-Month LIBOR + 1.41% Component B 61,260 One-Month LIBOR + 2.06% Component C 55,855 One-Month LIBOR + 2.76% Component D 39,639 One-Month LIBOR + 3.31% Component E 80,359 One-Month LIBOR + 4.41% Component F 33,152 One-Month LIBOR + 4.66% Component G 26,553 0% Total/Effective weighted-average $ 529,011 2.36% (1) Component spread is a per annum rate equal to the sum of (a) the spread added to LIBOR to determine the pass-through rate for the class of Certificates corresponding to such component of the Loan, (b) the servicing fee and (c) the CREFC® license fee. If LIBOR is unascertainable, the components will accrue based on the prime rate defined in the Loan Agreement. |
Fair Value of Derivative Financial Instruments in the Condensed Consolidated Balance Sheet | The table below presents the fair value of our derivative financial instruments as of September 30, 2015 and December 31, 2014 (in thousands): Fair Value of Derivatives in an Asset Position As of September 30, 2015 December 31, 2014 Derivatives Designated as Hedging Instruments: Interest rate caps $ 4 $ 104 Derivatives Not Designated as Hedging Instruments: Interest rate caps 15 322 Total derivatives $ 19 $ 426 |
Effect of Derivative Financial Instruments on the Condensed Consolidated Statements of Operations | The tables below present the effect of our derivative financial instruments on the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 (in thousands): Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Reclassifications Amount of Gain (Loss) of Missed Forecasted Amount of Gain (Loss) Reclassified from Location of Gain (Loss) Transactions and Amounts Recognized in OCI on Accumulated OCI on Recognized in Income on Excluded from Derivative (Effective Portion) Location of Gain (Loss) Derivative (Effective Portion) Derivative (Ineffective Effectiveness Testing) For the Three Months Reclassified from For the Three Months Portion and Amount For the Three Months Derivatives in Cash Flow Ended September 30, Accumulated OCI on Ended September 30, Excluded from Ended September 30, Hedging Relationships 2015 2014 Derivative (Effective Portion) 2015 2014 Effectiveness Testing) 2015 2014 Interest rate caps $ (8 ) $ — Interest expense $ — $ — Other expense $ — $ — $ (8 ) $ — $ — $ — $ — $ — Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Reclassifications Amount of Gain (Loss) of Missed Forecasted Amount of Gain (Loss) Reclassified from Location of Gain (Loss) Transactions and Amounts Recognized in OCI on Accumulated OCI on Recognized in Income on Excluded from Derivative (Effective Portion) Location of Gain (Loss) Derivative (Effective Portion) Derivative (Ineffective Effectivenes s For the Nine Months Reclassified from For the Nine Months Portion and Amount For the Nine Months Derivatives in Cash Flow Ended September 30, Accumulated OCI on Ended September 30, Excluded from Ended September 30, Hedging Relationships 2015 2014 Derivative (Effective Portion) 2015 2014 Effectiveness Testing) 2015 2014 Interest rate caps $ (100 ) $ — Interest expense $ — $ — Other expense $ — $ — $ (100 ) $ — $ — $ — $ — $ — Amount of Loss Amount of Loss Recognized in Income for the Recognized in Income for the Derivatives Location of Gain (Loss) Three Months Ended September 30, Nine Months Ended September 30, as Hedging Instruments Recognized in Income 2015 2014 2015 2014 Interest rate caps Loss on derivative financial instruments, net $ (31 ) $ (104 ) $ (307 ) $ (574 ) $ (31 ) $ (104 ) $ (307 ) $ (574 ) |
Summary of Debt Interest Expense | The following table outlines our total gross interest, including unused commitment and other fees and amortization of deferred financing costs, and capitalized interest for the three and nine months ended September 30, 2015 and 2014 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Gross interest cost $ 20,654 $ 12,913 $ 58,749 $ 20,058 Capitalized interest 454 1,014 1,337 1,468 Interest expense $ 20,200 $ 11,899 $ 57,412 $ 18,590 |
Contractual Maturities of Debt | The following table summarizes our contractual maturities of our debt as of September 30, 2015 (in thousands): Year 2015 remainder $ — 2016 — 2017 1,730,137 2018 — 2019 230,000 Thereafter — Total $ 1,960,137 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary Of Restricted Stock Units And Restricted Stock Activity | The following table summarizes our RSUs and restricted share awards activity during the nine months ended September 30, 2015: Non-Executive Manager Equity Plan Equity Plan Trustee Share Plan Total Weighted- Weighted- Weighted- Weighted- Average Average Average Average Grant Grant Grant Grant Shares Fair Value Shares Fair Value Shares Fair Value Shares Fair Value Nonvested shares, December 31, 2014 518,391 $ 30.00 178,493 $ 30.00 8,330 $ 28.95 705,214 $ 29.99 Granted — $ — 258,847 $ 25.50 14,387 $ 25.26 273,234 $ 25.48 Vested (194,401 ) $ 30.00 (59,491 ) $ 30.00 (10,333 ) 27.11 (264,225 ) $ 29.89 Forfeited — $ — (45,283 ) $ 29.81 (1,111 ) $ 30.00 (46,394 ) $ 29.82 Nonvested shares, September 30, 2015 323,990 $ 30.00 332,566 $ 26.52 11,273 $ 25.83 667,829 $ 28.20 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Expenses Incurred | Condensed Consolidated Three Months Ended September 30, Nine Months Ended September 30, Type of Costs Incurred Financial Statement Location 2015 2014 2015 2014 Property operating and maintenance Statements of operations $ 6,475 $ 4,311 $ 18,725 $ 11,613 Management fee Statements of operations 4,664 4,522 14,326 11,272 Other expenses Statements of operations 3,042 3,526 11,622 10,497 Subtotal 14,181 12,359 44,673 33,382 Development costs Balance sheets-investments in real estate properties 2,501 4,663 9,525 12,880 Leasing costs Balance sheets-other assets 1,049 1,406 3,438 4,673 Total related party costs $ 17,731 $ 18,428 $ 57,636 $ 50,935 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Assets by Business Segment | As of (in thousands) September 30, 2015 December 31, 2014 SFR $ 2,567,349 $ 2,264,040 NPL 500,499 672,123 Total $ 3,067,848 $ 2,936,163 |
Schedule of Information for Reportable Segments | Three Months Ended Three Months Ended September 30, 2015 September 30, 2014 SFR NPL Total SFR NPL Total Revenues Rental revenues, net $ 49,197 $ — $ 49,197 $ 30,366 $ — $ 30,366 Other property revenues 1,801 — 1,801 1,139 — 1,139 Realized gain on non-performing loans, net — 26,024 26,024 — 1,941 1,941 Realized gain on loan conversions, net — 9,270 9,270 — 5,791 5,791 Total revenues 50,998 35,294 86,292 31,505 7,732 39,237 Expenses Property operating and maintenance 11,580 — 11,580 8,796 — 8,796 Real estate taxes and insurance 9,957 — 9,957 5,143 — 5,143 Mortgage loan servicing costs — 10,404 10,404 — 7,918 7,918 Non-performing loan management fees and expenses — 3,146 3,146 — 3,508 3,508 General and administrative 3,143 822 3,965 3,357 1,270 4,627 Share-based compensation 1,858 486 2,344 1,524 577 2,101 Investment management fees 3,698 966 4,664 3,281 1,241 4,522 Acquisition fees and other expenses 244 — 244 217 — 217 Interest expense, including amortization 16,543 3,657 20,200 10,117 1,782 11,899 Depreciation and amortization 19,783 — 19,783 9,238 — 9,238 Separation costs — — — — — — Transaction-related expenses 3,400 888 4,288 — — — Finance-related expenses and write-off of loan costs 374 348 722 975 359 1,334 Impairment of real estate 17 185 202 341 — 341 Total expenses 70,597 20,902 91,499 42,989 16,655 59,644 Income (loss) before other income, income tax expense and non-controlling interests (19,599 ) 14,392 (5,207 ) (11,484 ) (8,923 ) (20,407 ) Other income (expense) Realized gain on sales of investments in real estate, net 1,472 — 1,472 125 — 125 Realized loss on sales of divestiture homes, net (556 ) (2,764 ) (3,320 ) — — — Unrealized gain (loss) on non-performing loans, net — (3,952 ) (3,952 ) — 13,705 13,705 Loss on derivative financial instruments, net (31 ) — (31 ) (104 ) — (104 ) Total other income (expense) 885 (6,716 ) (5,831 ) 21 13,705 13,726 Income (loss) before income tax expense and non-controlling interests (18,714 ) 7,676 (11,038 ) (11,463 ) 4,782 (6,681 ) Income tax expense 16 — 16 19 — 19 Net income (loss) (18,730 ) 7,676 (11,054 ) (11,482 ) 4,782 (6,700 ) Net (income) attributable to non-controlling interests — (109 ) (109 ) — (13 ) (13 ) Net income (loss) attributable to Starwood Waypoint Residential Trust shareholders $ (18,730 ) $ 7,567 $ (11,163 ) $ (11,482 ) $ 4,769 $ (6,713 ) Weighted-average shares outstanding-basic and diluted 37,906,769 37,906,769 37,906,769 38,613,270 38,613,270 38,613,270 Net income (loss) per common share Basic and diluted $ (0.49 ) $ 0.20 $ (0.29 ) $ (0.29 ) $ 0.12 $ (0.17 ) Nine Months Ended Nine Months Ended September 30, 2015 September 30, 2014 SFR NPL Total SFR NPL Total Revenues Rental revenues, net $ 137,857 $ — $ 137,857 $ 67,733 $ — $ 67,733 Other property revenues 4,634 — 4,634 2,508 — 2,508 Realized gain on non-performing loans, net — 40,510 40,510 — 7,141 7,141 Realized gain on loan conversions, net — 23,942 23,942 — 17,688 17,688 Total revenues 142,491 64,452 206,943 70,241 24,829 95,070 Expenses Property operating and maintenance 33,100 — 33,100 22,619 — 22,619 Real estate taxes and insurance 27,502 — 27,502 12,754 — 12,754 Mortgage loan servicing costs — 29,985 29,985 — 17,939 17,939 Non-performing loan management fees and expenses — 9,301 9,301 — 7,794 7,794 General and administrative 9,376 2,451 11,827 10,477 3,964 14,441 Share-based compensation 4,488 1,173 5,661 3,308 1,252 4,560 Investment management fees 11,358 2,968 14,326 8,178 3,094 11,272 Acquisition fees and other expenses 866 — 866 664 — 664 Interest expense, including amortization 45,896 11,516 57,412 12,524 6,066 18,590 Depreciation and amortization 56,775 — 56,775 21,954 — 21,954 Separation costs — — — 2,797 746 3,543 Transaction-related expenses 3,400 888 4,288 — — — Finance-related expenses and write-off of loan costs 1,790 387 2,177 6,233 542 6,775 Impairment of real estate 202 659 861 2,408 — 2,408 Total expenses 194,753 59,328 254,081 103,916 41,397 145,313 Income (loss) before other income, income tax expense and non-controlling interests (52,262 ) 5,124 (47,138 ) (33,675 ) (16,568 ) (50,243 ) Other income (expense) Realized gain (loss) on sales of investments in real estate, net 2,176 — 2,176 (76 ) — (76 ) Realized loss on sales of divestiture homes, net (832 ) (2,169 ) (3,001 ) — — — Unrealized gain on non-performing loans, net — 34,431 34,431 — 17,346 17,346 Loss on derivative financial instruments, net (307 ) — (307 ) (574 ) — (574 ) Total other income (expense) 1,037 32,262 33,299 (650 ) 17,346 16,696 Income (loss) before income tax expense and non-controlling interests (51,225 ) 37,386 (13,839 ) (34,325 ) 778 (33,547 ) Income tax expense 440 — 440 504 — 504 Net income (loss) (51,665 ) 37,386 (14,279 ) (34,829 ) 778 (34,051 ) Net (income) attributable to non-controlling interests — (328 ) (328 ) — (86 ) (86 ) Net income (loss) attributable to Starwood Waypoint Residential Trust shareholders $ (51,665 ) $ 37,058 $ (14,607 ) $ (34,829 ) $ 692 $ (34,137 ) Weighted-average shares outstanding-basic and diluted 37,942,011 37,942,011 37,942,011 38,911,505 38,911,505 38,911,505 Net income (loss) per common share Basic and diluted $ (1.36 ) $ 0.98 $ (0.38 ) $ (0.90 ) $ 0.02 $ (0.88 ) |
Organization and Operations (Na
Organization and Operations (Narrative) (Details) $ / shares in Units, $ in Thousands | Sep. 21, 2015USD ($)Home$ / sharesshares | Jul. 31, 2015$ / shares | Feb. 03, 2014USD ($) | Jan. 31, 2014USD ($)shares | Sep. 30, 2015$ / sharesshares | Sep. 30, 2014$ / shares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014USD ($)$ / shares | Dec. 31, 2014shares |
Organization And Operations [Line Items] | |||||||||
Proceeds from Contributed Capital | $ 100,000 | $ 28,300 | $ 0 | $ 128,290 | |||||
Common shares, shares issued | shares | 39,100,000 | 37,907,966 | 37,907,966 | 37,778,663 | |||||
Percent of operating partnership "OP" units owned | 100.00% | ||||||||
Percent of joint venture interest | 98.75% | ||||||||
Dividends per common share | $ / shares | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.14 | $ 0.47 | $ 0.14 | |||
CAH [Member] | |||||||||
Organization And Operations [Line Items] | |||||||||
Aggregate asset value | $ 7,700,000 | ||||||||
Shares exchange receive an aggregate | shares | 64,869,583 | ||||||||
Percentage of ownership after transaction | 59.00% | ||||||||
CAH [Member] | Minimum [Member] | |||||||||
Organization And Operations [Line Items] | |||||||||
Expected to own and manage homes | Home | 30,000 | ||||||||
Estimated annualized cost synergies | $ 40,000 | ||||||||
CAH [Member] | Maximum [Member] | |||||||||
Organization And Operations [Line Items] | |||||||||
Estimated annualized cost synergies | $ 50,000 | ||||||||
Existing Shareholders and Former Owner of Manager [Member] | |||||||||
Organization And Operations [Line Items] | |||||||||
Percentage of ownership after transaction | 41.00% |
Basis of Presentation and Sig31
Basis of Presentation and Significant Accounting Policies (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | |||||
Asset Impairment Charges | $ 200,000 | $ 300,000 | $ 900,000 | $ 2,400,000 | |
Impairment on loans | 0 | 0 | 0 | 0 | |
Unrealized gain (loss) on fair value of NPLs | (3,952,000) | 13,705,000 | 34,431,000 | 17,346,000 | |
Allowance for doubtful accounts | 600,000 | 600,000 | $ 300,000 | ||
Bad debt expense | 600,000 | 900,000 | $ 1,500,000 | 2,000,000 | |
Penalty tax, percent | 100.00% | ||||
Income tax expense | 16,000 | 19,000 | $ 440,000 | 504,000 | |
Nonperforming Financing Receivable [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Loans | 32,200,000 | 15,200,000 | 87,600,000 | 40,100,000 | |
Nonperforming Financing Receivable [Member] | Residential Portfolio Segment [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Loans | 41,500,000 | 21,000,000 | 111,500,000 | 57,800,000 | |
Gains on converted loans | $ 9,300,000 | $ 5,800,000 | $ 23,900,000 | $ 17,700,000 | |
Buildings and Building Improvements [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 30 years | ||||
Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Capitalized costs amortization period | 1 year | ||||
Initial term of residential leases | 1 year | ||||
Percent of non-performing residential mortgage loans of total portfolio | 10.00% | ||||
Minimum [Member] | Furniture, fixtures, and equipment [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 4 years | ||||
Maximum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Capitalized costs amortization period | 2 years | ||||
Initial term of residential leases | 2 years | ||||
Maximum [Member] | Furniture, fixtures, and equipment [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated useful lives | 25 years |
Basis of Presentation and Sig32
Basis of Presentation and Significant Accounting Policies (Geographic Concentrations) (Details) - Net Assets Geographic Area [Member] - Geographic Concentration Risk [Member] | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
South Florida [Member] | Residential Portfolio Segment [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 21.00% | 20.00% |
Atlanta [Member] | Residential Portfolio Segment [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 15.00% | 17.00% |
Houston [Member] | Residential Portfolio Segment [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 12.00% | 14.00% |
Dallas [Member] | Residential Portfolio Segment [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 12.00% | 12.00% |
Florida [Member] | Nonperforming Financing Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 17.00% | 18.00% |
California [Member] | Nonperforming Financing Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 17.00% | 16.00% |
Fair Value (Assets Measured At
Fair Value (Assets Measured At Fair Value On A Nonrecurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | ||||
Residential real estate, Total losses | $ (202) | $ (341) | $ (861) | $ (2,408) |
Real Estate Held For Sale [Member] | Level III [Member] | Fair Value, Measurements, Nonrecurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | ||||
Residential real estate, Pre-Impairment amount | 2,660 | 847 | 7,667 | 6,625 |
Residential real estate, Total losses | (202) | (36) | (731) | (1,328) |
Residential real estate, Fair value | 2,458 | 811 | 6,936 | 5,297 |
Real Estate Held For Use [Member] | Level III [Member] | Fair Value, Measurements, Nonrecurring [Member] | ||||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis [Line Items] | ||||
Residential real estate, Pre-Impairment amount | 0 | 4,370 | 644 | 10,850 |
Residential real estate, Total losses | 0 | (305) | (130) | (1,080) |
Residential real estate, Fair value | $ 0 | $ 4,065 | $ 514 | $ 9,770 |
Fair Value (Fair Value Nonperfo
Fair Value (Fair Value Nonperforming Loans Converted To Real Estate Measure On Nonrecurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||
Transfer of non-performing loans into homes, Carrying Value | $ 32,904 | $ 44,614 | |||
Transfer of non-performing loans into homes, Realized Gains | $ 9,270 | $ 5,791 | 23,942 | $ 17,688 | |
Fair Value, Measurements, Nonrecurring [Member] | Level III [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | |||||
Transfer of non-performing loans into homes, Carrying Value | 32,185 | 15,171 | 87,558 | 40,064 | |
Transfer of non-performing loans into homes, Realized Gains | 9,270 | 5,791 | 23,942 | 17,688 | |
Transfer of non-performing loans into homes. Fair Value | $ 41,455 | $ 20,962 | $ 111,500 | $ 57,752 |
Fair Value (Financial Instrumen
Fair Value (Financial Instruments Carried At Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value [Line Items] | |||
Non-performing loans | $ 71,965 | $ 125,488 | $ 214,965 |
Asset-backed securitization certificates | 26,553 | 26,553 | |
Asset-backed securitization, net | 527,152 | 526,816 | |
Carrying Value [Member] | |||
Fair Value [Line Items] | |||
Total liabilities | 1,925,973 | 1,785,414 | |
Fair Value [Member] | |||
Fair Value [Line Items] | |||
Total liabilities | 1,915,373 | 1,766,820 | |
Level III [Member] | Carrying Value [Member] | |||
Fair Value [Line Items] | |||
Asset-backed securitization, net | 527,152 | 526,816 | |
Level III [Member] | Fair Value [Member] | |||
Fair Value [Line Items] | |||
Asset-backed securitization, net | 527,152 | 526,816 | |
Level III [Member] | Sfr Facility | Carrying Value [Member] | |||
Fair Value [Line Items] | |||
Senior SFR facility | 697,414 | 441,239 | |
Level III [Member] | Sfr Facility | Fair Value [Member] | |||
Fair Value [Line Items] | |||
Senior SFR facility | 697,414 | 441,239 | |
Level III [Member] | Master Repurchase Agreement | Carrying Value [Member] | |||
Fair Value [Line Items] | |||
Master repurchase agreement | 331,212 | 454,249 | |
Level III [Member] | Master Repurchase Agreement | Fair Value [Member] | |||
Fair Value [Line Items] | |||
Master repurchase agreement | 331,212 | 454,249 | |
Fair Value, Measurements, Nonrecurring [Member] | Carrying Value [Member] | |||
Fair Value [Line Items] | |||
Total assets | 98,518 | 178,952 | |
Fair Value, Measurements, Nonrecurring [Member] | Fair Value [Member] | |||
Fair Value [Line Items] | |||
Total assets | 148,116 | 262,098 | |
Fair Value, Measurements, Nonrecurring [Member] | Level III [Member] | Carrying Value [Member] | |||
Fair Value [Line Items] | |||
Non-performing loans | 71,965 | 152,399 | |
Asset-backed securitization certificates | 26,553 | 26,553 | |
Fair Value, Measurements, Nonrecurring [Member] | Level III [Member] | Fair Value [Member] | |||
Fair Value [Line Items] | |||
Non-performing loans | 121,563 | 235,545 | |
Asset-backed securitization certificates | 26,553 | 26,553 | |
July 01, 2019 [Member] | Level III [Member] | 3.00% Convertible Senior Notes [Member] | Carrying Value [Member] | |||
Fair Value [Line Items] | |||
Convertible Senior Notes due | 206,904 | 202,874 | |
July 01, 2019 [Member] | Level III [Member] | 3.00% Convertible Senior Notes [Member] | Fair Value [Member] | |||
Fair Value [Line Items] | |||
Convertible Senior Notes due | 193,770 | 183,295 | |
October 15, 2017 [Member] | Level III [Member] | 4.50% Convertible Senior Notes [Member] | Carrying Value [Member] | |||
Fair Value [Line Items] | |||
Convertible Senior Notes due | 163,291 | 160,236 | |
October 15, 2017 [Member] | Level III [Member] | 4.50% Convertible Senior Notes [Member] | Fair Value [Member] | |||
Fair Value [Line Items] | |||
Convertible Senior Notes due | $ 165,825 | $ 161,221 |
Fair Value (Quantitative Inform
Fair Value (Quantitative Information For Significant Unobservable Inputs Used To Measure Fair Value Of Non-performing Loans) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 15.00% | 15.00% |
Loan resolution probabilities - rental | 100.00% | 100.00% |
Loan resolution probabilities - liquidation | 100.00% | 100.00% |
Loan resolution timelines (in years) | 2 years 10 months 24 days | 5 years 9 months 18 days |
Value of underlying properties | $ 2,300,000 | $ 2,300,000 |
Carrying costs | 7.00% | 7.00% |
Annual advance | 2.30% | 2.30% |
Remaining legal costs | 0.80% | 2.10% |
Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 15.00% | 15.00% |
Loan resolution probabilities - rental | 0.00% | 0.00% |
Loan resolution probabilities - liquidation | 0.00% | 0.00% |
Loan resolution timelines (in years) | 6 months | 1 month 6 days |
Value of underlying properties | $ 3,000 | $ 2,900 |
Carrying costs | 7.00% | 7.00% |
Annual advance | 2.30% | 2.30% |
Remaining legal costs | 0.80% | 2.10% |
Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Discount rate | 15.00% | 15.00% |
Loan resolution probabilities - rental | 23.00% | 24.00% |
Loan resolution probabilities - liquidation | 77.00% | 76.00% |
Loan resolution timelines (in years) | 1 year 1 month 6 days | 1 year 1 month 6 days |
Value of underlying properties | $ 222,385 | $ 212,358 |
Carrying costs | 7.00% | 7.00% |
Annual advance | 2.30% | 2.30% |
Remaining legal costs | 0.80% | 2.10% |
Net Loss per Share (Narrative)
Net Loss per Share (Narrative) (Details) $ / shares in Units, shares in Millions | Oct. 15, 2015USD ($) | Sep. 21, 2015$ / shares | Jul. 31, 2015$ / shares | Jul. 15, 2015USD ($)$ / shares | Apr. 15, 2015USD ($)$ / shares | Jan. 15, 2015USD ($)$ / shares | Oct. 15, 2014USD ($)$ / shares | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014$ / sharesshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)$ / sharesshares | Sep. 30, 2014$ / sharesshares | Dec. 31, 2014USD ($)shares |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Stock Conversion Ratio | 0.2 | ||||||||||||
Dividends paid per share | $ / shares | $ 0.14 | $ 0.14 | $ 0.14 | $ 0.14 | |||||||||
Dividends paid | $ 5,400,000 | $ 5,400,000 | $ 5,400,000 | $ 5,500,000 | $ 5,526,000 | $ 18,171,000 | |||||||
Dividends declared per common share | $ / shares | $ 0.19 | $ 0.19 | $ 0.19 | $ 0.14 | $ 0.47 | $ 0.14 | |||||||
Subsequent Event [Member] | |||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Dividends paid | $ 7,300,000 | ||||||||||||
2015 Program [Member] | |||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Share repurchase program authorized amount | $ 150,000,000 | $ 150,000,000 | |||||||||||
Number of shares repurchased | shares | 0.3 | ||||||||||||
Aggregate purchase price of shares | $ 8,300,000 | ||||||||||||
2014 Program [Member] | |||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Share repurchase program authorized amount | $ 150,000,000 | $ 150,000,000 | |||||||||||
Number of shares repurchased | shares | 1.3 | ||||||||||||
Aggregate purchase price of shares | $ 34,300,000 | ||||||||||||
Stock repurchase program expiration date | Apr. 17, 2015 | ||||||||||||
4.50% Convertible Senior Notes [Member] | October 15, 2017 [Member] | |||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Interest rate | 4.50% | 4.50% | 4.50% | 4.50% | 4.50% | ||||||||
3.00% Convertible Senior Notes [Member] | July 01, 2019 [Member] | |||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Interest rate | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | ||||||||
Restricted Stock [Member] | |||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 0.7 | 0.9 | 0.7 | 0.9 |
Net Loss per Share (Calculation
Net Loss per Share (Calculation of Net Loss per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Net loss attributable to Starwood Waypoint Residential Trust shareholders | $ (11,163) | $ (6,713) | $ (14,607) | $ (34,137) |
Denominator: | ||||
Basic and diluted weighted average shares outstanding | 37,906,769 | 38,613,270 | 37,942,011 | 38,911,505 |
Basic and diluted net loss per share | $ (0.29) | $ (0.17) | $ (0.38) | $ (0.88) |
Real Estate (Schedule of Real E
Real Estate (Schedule of Real Estate Investments in Consolidated Properties) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Jan. 01, 2014 | |
Real Estate Properties [Line Items] | ||||||
Beginning Balance | $ 1,979,511 | |||||
Ending Balance | $ 2,312,367 | 2,312,367 | $ 1,979,511 | |||
Depreciation and Amortization Expense | 19,783 | $ 9,238 | 56,775 | $ 21,954 | ||
Assets Held-for-sale [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Accumulated Depreciation | 800 | 800 | 100 | $ 0 | ||
Residential Portfolio Segment [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Beginning Balance | 2,011,696 | $ 755,083 | 755,083 | |||
Acquisitions | 313,690 | 957,741 | ||||
Real estate converted from loans | 111,500 | 87,446 | ||||
Capitalized expenditures | 103,672 | 103,672 | 251,568 | |||
Basis of real estate sold | (148,577) | (37,563) | ||||
Impairment of real estate | (861) | (2,579) | ||||
Ending Balance | 2,391,120 | 2,391,120 | 2,011,696 | |||
Accumulated Depreciation | $ 89,600 | $ 89,600 | $ 41,600 | $ 5,700 |
Non-Performing Loans (Summary o
Non-Performing Loans (Summary of Non-Performing Loan Transactions within our loans) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Receivables [Abstract] | ||
Non-performing loans, Beginning Balance | $ 125,488 | $ 214,965 |
Basis of loans sold | (169) | (3,092) |
Loans converted to real estate | (32,904) | (44,614) |
Loan liquidations and other basis adjustments | (8,397) | (14,860) |
Loans held for sale | (12,053) | (26,911) |
Non-performing loans, Ending Balance | 71,965 | 125,488 |
Non-performing loans held for sale, Beginning Balance | 26,911 | 0 |
Basis of loans sold | (82,198) | 0 |
Loan liquidations and other basis adjustments | (2,417) | 0 |
NPLs held for sale | 57,704 | 26,911 |
Non-performing loans held for sale, Ending Balance | 0 | 26,911 |
Non-performing loans, Fair Value Option, Beginning Balance | 491,790 | 0 |
Acquisitions | 0 | 486,509 |
Unrealized gain on non-performing loans, net | 34,431 | 44,593 |
Basis of loans sold | (1,529) | 0 |
Loans converted to real estate | (54,654) | (18,150) |
Loan liquidations and other basis adjustments | (24,613) | (21,162) |
Loans held for sale | (45,651) | 0 |
Non-performing loans, Fair Value Option, Ending Balance | 399,774 | 491,790 |
Unpaid principal balance of NPL portfolio | $ 625,800 | $ 968,700 |
Debt (Senior SFR Facility Narra
Debt (Senior SFR Facility Narrative) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Jun. 13, 2014 | |
Credit Facility [Line Items] | |||
Accordion feature to increase availability | $ 250,000 | ||
Citibank, N.A. [Member] | |||
Credit Facility [Line Items] | |||
Borrowing base availability | $ 500,000 | ||
SFR Facility [Member] | |||
Credit Facility [Line Items] | |||
Credit facilities | $ 697,414 | $ 441,239 | |
SFR Borrower [Member] | SFR Facility [Member] | Citibank, N.A. [Member] | |||
Credit Facility [Line Items] | |||
Borrowing base availability | $ 1,000,000 | ||
Default rate | 5.00% | ||
Maturity date | Feb. 3, 2017 | ||
Extended maturity date | Feb. 5, 2018 | ||
SFR Borrower [Member] | SFR Facility [Member] | Citibank, N.A. [Member] | Minimum [Member] | |||
Credit Facility [Line Items] | |||
Per annum rate fee percentage for unused portion of lenders' commitments | 0.00% | ||
SFR Borrower [Member] | SFR Facility [Member] | Citibank, N.A. [Member] | Maximum [Member] | |||
Credit Facility [Line Items] | |||
Per annum rate fee percentage for unused portion of lenders' commitments | 0.25% | ||
SFR Borrower [Member] | SFR Facility [Member] | Citibank, N.A. [Member] | LIBOR [Member] | |||
Credit Facility [Line Items] | |||
Margin percentage added to rate | 2.95% | ||
Margin percentage added to rate for extended period | 3.95% |
Debt (Master Repurchase Agreeme
Debt (Master Repurchase Agreement Narrative) (Details) - USD ($) | Sep. 01, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Credit Facility [Line Items] | |||
PrimeStar Fund interest in PrimeStar-H | 100.00% | ||
Deutsche Bank [Member] | |||
Credit Facility [Line Items] | |||
Aggregate maximum principal amount committed | $ 386,100,000 | $ 500,000,000 | |
Margin percentage added to rate | 2.375% | 3.00% | |
Maturity date | Mar. 1, 2017 | Sep. 11, 2015 | |
Variable rate description | 30-day LIBOR | ||
Credit facilities | $ 331,212,000 | $ 454,249,000 | |
PrimeStar Fund I [Member] | |||
Credit Facility [Line Items] | |||
Indirect ownership | 98.75% | ||
PrimeStar-H Fund I Trust [Member] | |||
Credit Facility [Line Items] | |||
Indirect ownership | 98.75% |
Debt (Convertible Senior Notes
Debt (Convertible Senior Notes Narrative) (Details) - USD ($) | Oct. 14, 2014 | Jul. 07, 2014 | Sep. 30, 2015 |
3.00% Convertible Senior Notes [Member] | July 01, 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 230,000,000 | $ 230,000,000 | |
Proceeds from convertible note, gross | 230,000,000 | ||
Proceeds from convertible note, net of discounts and offering costs | $ 223,900,000 | ||
Maturity date | Jul. 1, 2019 | ||
Debt instrument payment terms | Interest on the 2019 Convertible Notes is payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2015. | ||
4.50% Convertible Senior Notes [Member] | October 15, 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 172,500,000 | $ 172,500,000 | |
Proceeds from convertible note, gross | 172,500,000 | ||
Proceeds from convertible note, net of discounts and offering costs | $ 167,800,000 | ||
Maturity date | Oct. 15, 2017 | ||
Debt instrument payment terms | Interest on the 2017 Convertible Notes will be payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2015. |
Debt (Convertible Senior Notes)
Debt (Convertible Senior Notes) (Details) | 9 Months Ended | ||||
Sep. 30, 2015USD ($)$ / shares | Dec. 31, 2014USD ($) | Oct. 14, 2014USD ($) | Sep. 30, 2014 | Jul. 07, 2014USD ($) | |
Debt Instrument [Line Items] | |||||
Principal amount used for conversion | $ 1,000 | ||||
Share Price | $ / shares | $ 23.83 | ||||
4.50% Convertible Senior Notes [Member] | October 15, 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal Amount | $ 172,500,000 | $ 172,500,000 | |||
Coupon Rate | 4.50% | 4.50% | |||
Effective Rate | 7.37% | ||||
Conversion Rate | 33.2934 | ||||
Maturity Date | Oct. 15, 2017 | ||||
Remaining Period of Amortization | 2 years 15 days | ||||
Principal amount used for conversion | $ 1,000 | ||||
Initial conversion price | $ / shares | $ 30.04 | ||||
3.00% Convertible Senior Notes [Member] | July 01, 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal Amount | $ 230,000,000 | $ 230,000,000 | |||
Coupon Rate | 3.00% | 3.00% | |||
Effective Rate | 6.02% | ||||
Conversion Rate | 30.5896 | ||||
Maturity Date | Jul. 1, 2019 | ||||
Remaining Period of Amortization | 3 years 9 months | ||||
Principal amount used for conversion | $ 1,000 | ||||
Initial conversion price | $ / shares | $ 32.69 | ||||
Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal Amount | $ 402,500,000 | $ 402,500,000 | |||
Net unamortized discount | (32,305,000) | (39,390,000) | |||
Carrying amount of debt components | 370,195,000 | 363,110,000 | |||
Carrying amount of conversion option equity components recorded in additional paid-in capital | $ 42,721,000 | $ 42,721,000 |
Debt (Terms of Conversion Narra
Debt (Terms of Conversion Narrative) (Details) | 9 Months Ended |
Sep. 30, 2015USD ($)$ / shares | |
Debt Instrument [Line Items] | |
Principal amount used for conversion | $ 1,000 |
3.00% Convertible Senior Notes [Member] | July 01, 2019 [Member] | |
Debt Instrument [Line Items] | |
Conversion Rate | 30.5896 |
Principal amount used for conversion | $ 1,000 |
Initial conversion price | $ / shares | $ 32.69 |
4.50% Convertible Senior Notes [Member] | October 15, 2017 [Member] | |
Debt Instrument [Line Items] | |
Conversion Rate | 33.2934 |
Principal amount used for conversion | $ 1,000 |
Initial conversion price | $ / shares | $ 30.04 |
Minimum percentage of principal amount | 25.00% |
Percentage of repurchase price to principal amount if company undergoes fundamental change | 100.00% |
Percentage of repurchase price to principal amount if Company defaults | 100.00% |
Debt (Asset-Backed Securitizati
Debt (Asset-Backed Securitizations Narrative) (Details) - Asset-backed Securities [Member] | Dec. 19, 2014USD ($)property | Sep. 30, 2015USD ($) |
Debt Instrument [Line Items] | ||
Principal Amount | $ 504,500,000 | $ 502,458,000 |
Number of homes | property | 4,095 | |
Proceeds from convertible note, gross | $ 502,500,000 | |
Proceeds from convertible note, net | 477,700,000 | |
Repaid principal | $ 2,000,000 | |
Number of homes used as securitization after repaid principal | property | 4,081 | |
LIBOR rate | 2.37% | |
Weighted-average of fixed-rate | 2.37% | |
Effective weighted-average of fixed-rate | 2.46% | |
Extension options | 3 years | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
LIBOR rate | 1.30% | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
LIBOR rate | 4.55% | |
Class G Certificate [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from convertible note, gross | $ 26,600,000 | |
Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 531,000,000 | |
Debt instrument term | 2 years |
Debt (Classes of Debt) (Details
Debt (Classes of Debt) (Details) - Asset-backed Securities [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 19, 2014 | |
Debt Instrument [Line Items] | ||
Principal Amount | $ 502,458,000 | $ 504,500,000 |
LIBOR rate | 2.37% | |
Class A Certificate [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 232,193,000 | |
LIBOR rate | 1.30% | |
Class B Certificate [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 61,260,000 | |
LIBOR rate | 1.95% | |
Class C Certificate [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 55,855,000 | |
LIBOR rate | 2.65% | |
Class D Certificate [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 39,639,000 | |
LIBOR rate | 3.20% | |
Class E Certificate [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 80,359,000 | |
LIBOR rate | 4.30% | |
Class F Certificate [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 33,152,000 | |
LIBOR rate | 4.55% |
Debt (Securitization Loan Agree
Debt (Securitization Loan Agreement Narrative) (Details) | Dec. 19, 2014USD ($) | Sep. 30, 2015USD ($)property | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | |||
Asset-backed securitization, net | $ 527,152,000 | $ 526,816,000 | |
Asset-backed securitization certificates | 26,553,000 | $ 26,553,000 | |
Loan Agreement [Member] | |||
Debt Instrument [Line Items] | |||
LIBOR rate | 3.615% | ||
Outstanding amount | $ 527,200,000 | ||
Debt instrument, maturity date | Jan. 9, 2017 | ||
Debt instrument debt default percentage | 35.00% | ||
Number of homes placed as collateral | property | 4,081 | ||
Asset Back Securitization Amount | $ 527,200,000 | ||
Net unamortized discount | 1,900,000 | ||
Loan Agreement [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Asset-backed securitization, net | $ 35,000,000 | ||
Asset-backed Securities [Member] | |||
Debt Instrument [Line Items] | |||
Principal Amount | 504,500,000 | $ 502,458,000 | |
LIBOR rate | 2.37% | ||
Asset-backed Securities [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
LIBOR rate | 4.55% | ||
JP Morgan Chase Bank [Member] | Asset-backed Securities [Member] | |||
Debt Instrument [Line Items] | |||
Principal Amount | $ 531,000,000 | ||
Class G [Member] | |||
Debt Instrument [Line Items] | |||
Asset-backed securitization certificates | $ 26,600,000 |
Debt (Components of Debt) (Deta
Debt (Components of Debt) (Details) - Components Of Debt [Member] | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Debt Instrument [Line Items] | |
Principal Amount | $ 529,011,000 |
LIBOR rate | 2.36% |
Component A [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 232,193,000 |
LIBOR rate | 1.41% |
Component B [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 61,260,000 |
LIBOR rate | 2.06% |
Component C [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 55,855,000 |
LIBOR rate | 2.76% |
Component D [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 39,639,000 |
LIBOR rate | 3.31% |
Component E [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 80,359,000 |
LIBOR rate | 4.41% |
Component F [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 33,152,000 |
LIBOR rate | 4.66% |
Component G [Member] | |
Debt Instrument [Line Items] | |
Principal Amount | $ 26,553,000 |
LIBOR rate | 0.00% |
Debt (Interest Rate Caps Narrat
Debt (Interest Rate Caps Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($) | |
Derivative [Line Items] | ||||
Interest expense | $ 20,200,000 | $ 11,899,000 | $ 57,412,000 | $ 18,590,000 |
Reclassification Out Of Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Derivative [Line Items] | ||||
Interest expense | $ 86,000 | |||
Asset-backed Securities [Member] | ||||
Derivative [Line Items] | ||||
LIBOR rate | 2.37% | |||
Cash Flow Hedging | ||||
Derivative [Line Items] | ||||
Loss due to ineffective portion of change in fair value of derivatives | $ 31,000 | $ 100,000 | $ 300,000 | $ 600,000 |
Interest Rate Caps [Member] | SFR Facility [Member] | ||||
Derivative [Line Items] | ||||
Number of interest rate caps | item | 5 | 5 | ||
Maturities of interest rate caps | 2 years | |||
Notional amount | $ 600,000,000 | $ 600,000,000 | ||
Interest Rate Caps [Member] | Asset-backed Securities [Member] | ||||
Derivative [Line Items] | ||||
Number of interest rate caps | item | 1 | 1 | ||
Notional amount | $ 505,000,000 | $ 505,000,000 | ||
Maturity of interest rate caps, year and month | 2017-01 | |||
Interest Rate Caps [Member] | Cash Flow Hedging | Asset-backed Securities [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 454,500,000 | $ 454,500,000 | ||
Percent of notional amount | 90.00% | 90.00% | ||
SFR Borrower [Member] | Interest Rate Caps [Member] | ||||
Derivative [Line Items] | ||||
LIBOR rate | 3.00% |
Debt (Fair Value of Derivative
Debt (Fair Value of Derivative Financial Instruments in the Condensed Consolidated Balance Sheet) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 19 | $ 426 |
Interest Rate Caps [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 4 | 104 |
Interest Rate Caps [Member] | Nondesignated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 15 | $ 322 |
Debt (Effect of Derivative Fina
Debt (Effect of Derivative Financial Instruments on the Condensed Consolidated Statements of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain or (Loss), Recognized in OCI on Derivative (Effective Portion) | $ (8) | $ 0 | $ (100) | $ 0 |
Loss on derivative financial instruments, net | (31) | (104) | (307) | (574) |
Nondesignated as Hedging Instrument [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Loss on derivative financial instruments, net | (31) | (104) | (307) | (574) |
Interest Rate Caps [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain or (Loss), Recognized in OCI on Derivative (Effective Portion) | (8) | 0 | (100) | 0 |
Interest Rate Caps [Member] | Nondesignated as Hedging Instrument [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Loss on derivative financial instruments, net | $ (31) | $ (104) | $ (307) | $ (574) |
Debt (Total Borrowings Narrativ
Debt (Total Borrowings Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Credit Facility [Line Items] | ||
Total outstanding borrowings | $ 1,900,000 | |
Asset-backed securitization, net | 527,152 | $ 526,816 |
Convertible senior notes, net | 370,195 | $ 363,110 |
Gross deferred financing costs | 41,800 | |
SFR Facility and Master Repurchase Agreement [Member] | ||
Credit Facility [Line Items] | ||
Credit facilities | $ 1,000,000 |
Debt (Gross Interest, Unused Co
Debt (Gross Interest, Unused Commitment, And Other Fees) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ||||
Gross interest cost | $ 20,654 | $ 12,913 | $ 58,749 | $ 20,058 |
Capitalized interest | 454 | 1,014 | 1,337 | 1,468 |
Interest expense | $ 20,200 | $ 11,899 | $ 57,412 | $ 18,590 |
Debt (Contractual Maturities of
Debt (Contractual Maturities of Debt) (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,017 | $ 1,730,137 |
2,019 | 230,000 |
Total | $ 1,960,137 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) | Jan. 31, 2014itemshares | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)shares | Sep. 30, 2014USD ($) | Dec. 31, 2014shares |
Stock-Based Compensation [Line Items] | |||||||
Aggregate cost of shares granted | $ | $ 109,000 | ||||||
Share-based compensation expense | $ | $ 2,344,000 | $ 2,101,000 | $ 5,661,000 | $ 4,560,000 | |||
Unrecognized compensation expense, total | $ | $ 13,500,000 | $ 13,500,000 | |||||
Unrecognized compensation expense, weighted average period of recognition | 1 year 8 months 12 days | ||||||
Non Executive Trustees [Member] | |||||||
Stock-Based Compensation [Line Items] | |||||||
Number of shares granted | 8,330 | 14,387 | |||||
Shares remaining for grant | 173,225 | 173,225 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation [Line Items] | |||||||
Number of shares granted | 273,234 | ||||||
Number Of Non Executive Trustees | item | 5 | ||||||
Number of shares vested | 264,225 | ||||||
Remaining shares unvested grants | 667,829 | 667,829 | 705,214 | ||||
Forfeited, Shares | 46,394 | ||||||
Shares remaining for grant | 332,566 | 332,566 | |||||
Restricted Stock Units (RSUs) [Member] | Non Executive Trustees [Member] | |||||||
Stock-Based Compensation [Line Items] | |||||||
Number of shares granted | 1,666 | ||||||
Number of shares vested | 10,333 | ||||||
Forfeited, Shares | 1,111 | ||||||
Shares remaining for grant | 11,273 | 11,273 | |||||
Restricted Stock Units (RSUs) [Member] | Board Of Trustees [Member] | |||||||
Stock-Based Compensation [Line Items] | |||||||
Number of shares granted | 4,462 | ||||||
Aggregate cost of shares granted | $ | $ 113,000 | ||||||
Restricted Stock Units (RSUs) [Member] | Certain Employee's Chosen [Member] | |||||||
Stock-Based Compensation [Line Items] | |||||||
Number of shares granted | 258,847 | ||||||
Award vesting period under plan | 3 years | ||||||
Number of shares vested | 59,491 | ||||||
Forfeited, Shares | 45,283 | ||||||
Manager Equity Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation [Line Items] | |||||||
Number of shares granted | 777,574 | ||||||
Award vesting period under plan | 3 years | ||||||
Number of shares vested | 194,401 | ||||||
Remaining shares unvested grants | 323,990 | 323,990 | 518,391 | ||||
Equity Plan [Member] | |||||||
Stock-Based Compensation [Line Items] | |||||||
Shares remaining for grant | 1,696,285 | 1,696,285 | |||||
Equity Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Stock-Based Compensation [Line Items] | |||||||
Number of shares granted | 199,991 | 258,847 | |||||
Number of shares vested | 59,491 | ||||||
Remaining shares unvested grants | 332,566 | 332,566 | 178,493 | ||||
Forfeited, Shares | 45,283 |
Share-Based Compensation (Sched
Share-Based Compensation (Schedule of Nonvested Shares of Restricted Common Stock) (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | Jan. 31, 2014 | Sep. 30, 2015 |
Summary of restricted stock activity, shares: | ||
Nonvested, Beginning Balance, Shares | 705,214 | |
Granted, Shares | 273,234 | |
Vested, Shares | (264,225) | |
Forfeited, Shares | (46,394) | |
Nonvested, Ending Balance, Shares | 667,829 | |
Summary of restricted stock activity, weighted average grant date fair value: | ||
Nonvested, Beginning Balance, Weighted Average Grant Date Fair Value | $ 29.99 | |
Granted, Weighted Average Grant Date Fair Value | 25.48 | |
Vested, Weighted Average Grant Date Fair Value | 29.89 | |
Forfeited, Weighted Average Grant Date Fair Value | 29.82 | |
Nonvested, Ending Balance, Weighted Average Grant Date Fair Value | $ 28.20 | |
Manager Equity Plan [Member] | ||
Summary of restricted stock activity, shares: | ||
Nonvested, Beginning Balance, Shares | 518,391 | |
Granted, Shares | 777,574 | |
Vested, Shares | (194,401) | |
Nonvested, Ending Balance, Shares | 323,990 | |
Summary of restricted stock activity, weighted average grant date fair value: | ||
Nonvested, Beginning Balance, Weighted Average Grant Date Fair Value | $ 30 | |
Vested, Weighted Average Grant Date Fair Value | 30 | |
Nonvested, Ending Balance, Weighted Average Grant Date Fair Value | $ 30 | |
Equity Plan [Member] | ||
Summary of restricted stock activity, shares: | ||
Nonvested, Beginning Balance, Shares | 178,493 | |
Granted, Shares | 199,991 | 258,847 |
Vested, Shares | (59,491) | |
Forfeited, Shares | (45,283) | |
Nonvested, Ending Balance, Shares | 332,566 | |
Summary of restricted stock activity, weighted average grant date fair value: | ||
Nonvested, Beginning Balance, Weighted Average Grant Date Fair Value | $ 30 | |
Granted, Weighted Average Grant Date Fair Value | 25.50 | |
Vested, Weighted Average Grant Date Fair Value | 30 | |
Forfeited, Weighted Average Grant Date Fair Value | 29.81 | |
Nonvested, Ending Balance, Weighted Average Grant Date Fair Value | $ 26.52 | |
Non Executive Trustee Shares Plan [Member] | ||
Summary of restricted stock activity, shares: | ||
Nonvested, Beginning Balance, Shares | 8,330 | |
Granted, Shares | 14,387 | |
Vested, Shares | (10,333) | |
Forfeited, Shares | (1,111) | |
Nonvested, Ending Balance, Shares | 11,273 | |
Summary of restricted stock activity, weighted average grant date fair value: | ||
Nonvested, Beginning Balance, Weighted Average Grant Date Fair Value | $ 28.95 | |
Granted, Weighted Average Grant Date Fair Value | 25.26 | |
Vested, Weighted Average Grant Date Fair Value | 27.11 | |
Forfeited, Weighted Average Grant Date Fair Value | 30 | |
Nonvested, Ending Balance, Weighted Average Grant Date Fair Value | $ 25.83 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Related Party Expenses Incurred) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 14,181 | $ 12,359 | $ 44,673 | $ 33,382 |
Total related party costs | 17,731 | 18,428 | 57,636 | 50,935 |
Property Operating And Maintenance [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 6,475 | 4,311 | 18,725 | 11,613 |
Management Fee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 4,664 | 4,522 | 14,326 | 11,272 |
Other Expenses [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 3,042 | 3,526 | 11,622 | 10,497 |
Development Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 2,501 | 4,663 | 9,525 | 12,880 |
Leasing Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 1,049 | $ 1,406 | $ 3,438 | $ 4,673 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) $ in Thousands | Mar. 03, 2014USD ($)property | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) |
Related Party Transaction [Line Items] | |||||
Asset management fees | $ 4,664 | $ 4,522 | $ 14,326 | $ 11,272 | |
Related Party Transaction, Amounts of Transaction | 17,731 | 18,428 | 57,636 | 50,935 | |
SWAY Management LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Reimbursement costs incurred | 13,100 | 13,900 | $ 43,300 | 39,700 | |
Percentage of annual asset management fee | 1.50% | ||||
Asset management fees | $ 4,700 | $ 4,500 | $ 14,300 | $ 11,300 | |
Fund XI, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Real Estate Properties | property | 707 | ||||
Related Party Transaction, Amounts of Transaction | $ 144,000 |
Segment Reporting (Narrative) (
Segment Reporting (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2015segment | |
Segment Reporting [Abstract] | |
Number of operating segments for reporting purposes | 2 |
Segment Reporting (Assets By Bu
Segment Reporting (Assets By Business Segment) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 3,067,848 | $ 2,936,163 |
SFR [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 2,567,349 | 2,264,040 |
NPL [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 500,499 | $ 672,123 |
Segment Reporting (Segment Repo
Segment Reporting (Segment Reporting Statements Of Operations) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||
Feb. 02, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | ||||||
Rental revenues, net | $ 49,197 | $ 30,366 | $ 137,857 | $ 67,733 | ||
Other property revenues | 1,801 | 1,139 | 4,634 | 2,508 | ||
Realized gain on non-performing loans, net | 26,024 | 1,941 | 40,510 | 7,141 | ||
Realized gain on loan conversions, net | 9,270 | 5,791 | 23,942 | 17,688 | ||
Total revenues | 86,292 | 39,237 | 206,943 | 95,070 | ||
Expenses | ||||||
Property operating and maintenance | 11,580 | 8,796 | 33,100 | 22,619 | ||
Real estate taxes and insurance | 9,957 | 5,143 | 27,502 | 12,754 | ||
Mortgage loan servicing costs | 10,404 | 7,918 | 29,985 | 17,939 | ||
Non-performing loan management fees and expenses | 3,146 | 3,508 | 9,301 | 7,794 | ||
General and administrative | 3,965 | 4,627 | 11,827 | 14,441 | ||
Share-based compensation | 2,344 | 2,101 | 5,661 | 4,560 | ||
Investment management fees | 4,664 | 4,522 | 14,326 | 11,272 | ||
Acquisition fees and other expenses | 244 | 217 | 866 | 664 | ||
Interest expense, including amortization | 20,200 | 11,899 | 57,412 | 18,590 | ||
Depreciation and amortization | 19,783 | 9,238 | 56,775 | 21,954 | ||
Separation costs | 0 | 0 | 0 | 3,543 | ||
Transaction-related expenses | 4,288 | 0 | 4,288 | 0 | ||
Finance related expenses and write-off of loan costs | 722 | 1,334 | 2,177 | 6,775 | ||
Impairment of real estate | 202 | 341 | 861 | 2,408 | ||
Total expenses | 91,499 | 59,644 | 254,081 | 145,313 | ||
Loss before other income, income tax expense and non-controlling interests | (5,207) | (20,407) | (47,138) | (50,243) | ||
Other income (expense) | ||||||
Realized gain (loss) on sales of investments in real estate, net | 1,472 | 125 | 2,176 | (76) | ||
Realized loss on sales of divestiture homes, net | (3,320) | 0 | (3,001) | 0 | ||
Unrealized (loss) gain on non-performing loans, net | (3,952) | 13,705 | 34,431 | 17,346 | ||
Loss on derivative financial instruments, net | (31) | (104) | (307) | (574) | ||
Total other income | (5,831) | 13,726 | 33,299 | 16,696 | ||
Loss before income tax expense and non-controlling interests | (11,038) | (6,681) | (13,839) | (33,547) | ||
Income tax expense | 16 | 19 | 440 | 504 | ||
Net loss | $ (931) | (11,054) | (6,700) | $ (33,120) | (14,279) | (34,051) |
Net (income) attributable to non-controlling interests | (109) | (13) | (328) | (86) | ||
Net income (loss) attributable to Starwood Waypoint Residential Trust shareholders | $ (11,163) | $ (6,713) | $ (14,607) | $ (34,137) | ||
Weighted-average shares outstanding-basic and diluted | 37,906,769 | 38,613,270 | 37,942,011 | 38,911,505 | ||
Net income (loss) per common share | ||||||
Basic and diluted | $ (0.29) | $ (0.17) | $ (0.38) | $ (0.88) | ||
SFR [Member] | ||||||
Revenues | ||||||
Rental revenues, net | $ 49,197 | $ 30,366 | $ 137,857 | $ 67,733 | ||
Other property revenues | 1,801 | 1,139 | 4,634 | 2,508 | ||
Realized gain on non-performing loans, net | 0 | 0 | 0 | 0 | ||
Realized gain on loan conversions, net | 0 | 0 | 0 | 0 | ||
Total revenues | 50,998 | 31,505 | 142,491 | 70,241 | ||
Expenses | ||||||
Property operating and maintenance | 11,580 | 8,796 | 33,100 | 22,619 | ||
Real estate taxes and insurance | 9,957 | 5,143 | 27,502 | 12,754 | ||
Mortgage loan servicing costs | 0 | 0 | 0 | 0 | ||
Non-performing loan management fees and expenses | 0 | 0 | 0 | 0 | ||
General and administrative | 3,143 | 3,357 | 9,376 | 10,477 | ||
Share-based compensation | 1,858 | 1,524 | 4,488 | 3,308 | ||
Investment management fees | 3,698 | 3,281 | 11,358 | 8,178 | ||
Acquisition fees and other expenses | 244 | 217 | 866 | 664 | ||
Interest expense, including amortization | 16,543 | 10,117 | 45,896 | 12,524 | ||
Depreciation and amortization | 19,783 | 9,238 | 56,775 | 21,954 | ||
Separation costs | 0 | 0 | 0 | 2,797 | ||
Transaction-related expenses | 3,400 | 0 | 3,400 | 0 | ||
Finance related expenses and write-off of loan costs | 374 | 975 | 1,790 | 6,233 | ||
Impairment of real estate | 17 | 341 | 202 | 2,408 | ||
Total expenses | 70,597 | 42,989 | 194,753 | 103,916 | ||
Loss before other income, income tax expense and non-controlling interests | (19,599) | (11,484) | (52,262) | (33,675) | ||
Other income (expense) | ||||||
Realized gain (loss) on sales of investments in real estate, net | 1,472 | 125 | 2,176 | (76) | ||
Realized loss on sales of divestiture homes, net | (556) | 0 | (832) | 0 | ||
Unrealized (loss) gain on non-performing loans, net | 0 | 0 | 0 | 0 | ||
Loss on derivative financial instruments, net | (31) | (104) | (307) | (574) | ||
Total other income | 885 | 21 | 1,037 | (650) | ||
Loss before income tax expense and non-controlling interests | (18,714) | (11,463) | (51,225) | (34,325) | ||
Income tax expense | 16 | 19 | 440 | 504 | ||
Net loss | (18,730) | (11,482) | (51,665) | (34,829) | ||
Net (income) attributable to non-controlling interests | 0 | 0 | 0 | 0 | ||
Net income (loss) attributable to Starwood Waypoint Residential Trust shareholders | $ (18,730) | $ (11,482) | $ (51,665) | $ (34,829) | ||
Weighted-average shares outstanding-basic and diluted | 37,906,769 | 38,613,270 | 37,942,011 | 38,911,505 | ||
Net income (loss) per common share | ||||||
Basic and diluted | $ (0.49) | $ (0.29) | $ (1.36) | $ (0.90) | ||
NPL [Member] | ||||||
Revenues | ||||||
Rental revenues, net | $ 0 | $ 0 | $ 0 | $ 0 | ||
Other property revenues | 0 | 0 | 0 | 0 | ||
Realized gain on non-performing loans, net | 26,024 | 1,941 | 40,510 | 7,141 | ||
Realized gain on loan conversions, net | 9,270 | 5,791 | 23,942 | 17,688 | ||
Total revenues | 35,294 | 7,732 | 64,452 | 24,829 | ||
Expenses | ||||||
Property operating and maintenance | 0 | 0 | 0 | 0 | ||
Real estate taxes and insurance | 0 | 0 | 0 | 0 | ||
Mortgage loan servicing costs | 10,404 | 7,918 | 29,985 | 17,939 | ||
Non-performing loan management fees and expenses | 3,146 | 3,508 | 9,301 | 7,794 | ||
General and administrative | 822 | 1,270 | 2,451 | 3,964 | ||
Share-based compensation | 486 | 577 | 1,173 | 1,252 | ||
Investment management fees | 966 | 1,241 | 2,968 | 3,094 | ||
Acquisition fees and other expenses | 0 | 0 | 0 | 0 | ||
Interest expense, including amortization | 3,657 | 1,782 | 11,516 | 6,066 | ||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Separation costs | 0 | 0 | 0 | 746 | ||
Transaction-related expenses | 888 | 0 | 888 | 0 | ||
Finance related expenses and write-off of loan costs | 348 | 359 | 387 | 542 | ||
Impairment of real estate | 185 | 0 | 659 | 0 | ||
Total expenses | 20,902 | 16,655 | 59,328 | 41,397 | ||
Loss before other income, income tax expense and non-controlling interests | 14,392 | (8,923) | 5,124 | (16,568) | ||
Other income (expense) | ||||||
Realized gain (loss) on sales of investments in real estate, net | 0 | 0 | 0 | 0 | ||
Realized loss on sales of divestiture homes, net | (2,764) | 0 | (2,169) | 0 | ||
Unrealized (loss) gain on non-performing loans, net | (3,952) | 13,705 | 34,431 | 17,346 | ||
Loss on derivative financial instruments, net | 0 | 0 | 0 | 0 | ||
Total other income | (6,716) | 13,705 | 32,262 | 17,346 | ||
Loss before income tax expense and non-controlling interests | 7,676 | 4,782 | 37,386 | 778 | ||
Income tax expense | 0 | 0 | 0 | 0 | ||
Net loss | 7,676 | 4,782 | 37,386 | 778 | ||
Net (income) attributable to non-controlling interests | (109) | (13) | (328) | (86) | ||
Net income (loss) attributable to Starwood Waypoint Residential Trust shareholders | $ 7,567 | $ 4,769 | $ 37,058 | $ 692 | ||
Weighted-average shares outstanding-basic and diluted | 37,906,769 | 38,613,270 | 37,942,011 | 38,911,505 | ||
Net income (loss) per common share | ||||||
Basic and diluted | $ 0.20 | $ 0.12 | $ 0.98 | $ 0.02 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 9 Months Ended |
Sep. 30, 2015USD ($)property | |
Commitments And Contingencies Disclosure [Abstract] | |
Additional homes purchased | 93 |
Total commitment | $ | $ 15,200,000 |
Number of NPLs homes acquired | 0 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | |
Oct. 20, 2015USD ($)propertyloan | Sep. 30, 2015property | Nov. 02, 2015$ / shares | |
Subsequent Event [Line Items] | |||
Number of NPLs homes acquired | 0 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Dividends declared | $ / shares | $ 0.19 | ||
Number of homes acquired | 58 | ||
Acquisition cost | $ | $ 10.1 | ||
Number of NPLs homes acquired | loan | 0 |
Uncategorized Items - sway-2015
Label | Element | Value |
Stockholders Equity Note Spinoff Transaction | us-gaap_StockholdersEquityNoteSpinoffTransaction | $ 128,290 |
Adjustments To Additional Paid In Capital Stock Issued Issuance Costs | us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts | 782 |
Adjustments To Additional Paid In Capital Convertible Debt With Conversion Feature | us-gaap_AdjustmentsToAdditionalPaidInCapitalConvertibleDebtWithConversionFeature | 29,610 |
Stock Repurchased And Retired During Period Value | us-gaap_StockRepurchasedAndRetiredDuringPeriodValue | 16,055 |
Noncontrolling Interest Increase From Business Combination | us-gaap_NoncontrollingInterestIncreaseFromBusinessCombination | 400 |
Adjustments To Additional Paid In Capital Sharebased Compensation Requisite Service Period Recognition Value | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 4,560 |
Minority Interest Decrease From Distributions To Noncontrolling Interest Holders | us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders | 1,591 |
Additional Paid In Capital [Member] | ||
Stockholders Equity Note Spinoff Transaction | us-gaap_StockholdersEquityNoteSpinoffTransaction | 99,130 |
Adjustments To Additional Paid In Capital Stock Issued Issuance Costs | us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts | 782 |
Adjustments To Additional Paid In Capital Convertible Debt With Conversion Feature | us-gaap_AdjustmentsToAdditionalPaidInCapitalConvertibleDebtWithConversionFeature | 29,610 |
Stock Repurchased And Retired During Period Value | us-gaap_StockRepurchasedAndRetiredDuringPeriodValue | 16,049 |
Adjustments To Additional Paid In Capital Sharebased Compensation Requisite Service Period Recognition Value | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 4,560 |
Stock Issued During Period Value Issued For Services | us-gaap_StockIssuedDuringPeriodValueIssuedForServices | 109 |
Common Stock [Member] | ||
Stockholders Equity Note Spinoff Transaction | us-gaap_StockholdersEquityNoteSpinoffTransaction | 391 |
Stock Repurchased And Retired During Period Value | us-gaap_StockRepurchasedAndRetiredDuringPeriodValue | $ 6 |
Stockholders Equity Note Spinoff Transaction Shares | sway_StockholdersEquityNoteSpinoffTransactionShares | 39,109,969 |
Stock Issued During Period Shares Issued For Services | us-gaap_StockIssuedDuringPeriodSharesIssuedForServices | 4,058 |
Stock Repurchased And Retired During Period Shares | us-gaap_StockRepurchasedAndRetiredDuringPeriodShares | 608,986 |
Noncontrolling Interest [Member] | ||
Profit Loss | us-gaap_ProfitLoss | $ (10) |
Profit Loss | us-gaap_ProfitLoss | 96 |
Noncontrolling Interest Increase From Business Combination | us-gaap_NoncontrollingInterestIncreaseFromBusinessCombination | 400 |
Minority Interest Decrease From Distributions To Noncontrolling Interest Holders | us-gaap_MinorityInterestDecreaseFromDistributionsToNoncontrollingInterestHolders | 1,591 |
Parent [Member] | ||
Stockholders Equity Note Spinoff Transaction | us-gaap_StockholdersEquityNoteSpinoffTransaction | 128,290 |
Adjustments To Additional Paid In Capital Stock Issued Issuance Costs | us-gaap_AdjustmentsToAdditionalPaidInCapitalStockIssuedIssuanceCosts | 782 |
Profit Loss | us-gaap_ProfitLoss | (921) |
Profit Loss | us-gaap_ProfitLoss | (33,216) |
Adjustments To Additional Paid In Capital Convertible Debt With Conversion Feature | us-gaap_AdjustmentsToAdditionalPaidInCapitalConvertibleDebtWithConversionFeature | 29,610 |
Stock Repurchased And Retired During Period Value | us-gaap_StockRepurchasedAndRetiredDuringPeriodValue | 16,055 |
Adjustments To Additional Paid In Capital Sharebased Compensation Requisite Service Period Recognition Value | us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue | 4,560 |
Stock Issued During Period Value Issued For Services | us-gaap_StockIssuedDuringPeriodValueIssuedForServices | 109 |
Dividends Common Stock | us-gaap_DividendsCommonStock | 5,526 |
Retained Earnings [Member] | ||
Stockholders Equity Note Spinoff Transaction | us-gaap_StockholdersEquityNoteSpinoffTransaction | 28,769 |
Profit Loss | us-gaap_ProfitLoss | (921) |
Profit Loss | us-gaap_ProfitLoss | (33,216) |
Dividends Common Stock | us-gaap_DividendsCommonStock | $ 5,526 |