Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 10, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-55424 | |
Entity Registrant Name | PACIFIC OAK STRATEGIC OPPORTUNITY REIT II, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-2822978 | |
Entity Address, Address Line One | 11766 Wilshire Blvd., Suite 1670 | |
Entity Address, City or Town | Los Angeles, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90025 | |
City Area Code | 424 | |
Local Phone Number | 208-8100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001580673 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 17,838,351 | |
Class T | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,222,529 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Real estate, net | $ 489,380 | $ 493,683 |
Real estate equity securities | 8,607 | 9,934 |
Total real estate and real estate-related investments, net | 497,987 | 503,617 |
Cash and cash equivalents | 9,458 | 17,500 |
Restricted cash | 2,785 | 5,976 |
Investment in unconsolidated entities | 3,199 | 3,468 |
Rents and other receivables | 5,876 | 4,648 |
Above-market leases, net | 38 | 44 |
Prepaid expenses and other assets | 8,425 | 8,230 |
Total assets | 527,768 | 543,483 |
Liabilities and equity | ||
Notes payable, net | 328,186 | 325,995 |
Accounts payable and accrued liabilities | 7,073 | 6,684 |
Due to affiliates | 1,034 | 649 |
Distributions payable | 0 | 242 |
Below-market leases, net | 3,663 | 4,677 |
Other liabilities | 15,054 | 12,776 |
Redeemable common stock payable | 621 | 2,218 |
Total liabilities | 355,631 | 353,241 |
Commitments and contingencies (Note 10) | ||
Pacific Oak Strategic Opportunity REIT II, Inc. stockholders’ equity | ||
Preferred stock, $.01 par value per share; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Additional paid-in capital | 266,298 | 266,310 |
Cumulative distributions and net losses | (101,150) | (84,339) |
Total Pacific Oak Strategic Opportunity REIT II, Inc. stockholders’ equity | 165,449 | 182,273 |
Noncontrolling interests | 6,688 | 7,969 |
Total equity | 172,137 | 190,242 |
Total liabilities and equity | 527,768 | 543,483 |
Class A | ||
Pacific Oak Strategic Opportunity REIT II, Inc. stockholders’ equity | ||
Common stock | 178 | 179 |
Class T | ||
Pacific Oak Strategic Opportunity REIT II, Inc. stockholders’ equity | ||
Common stock | $ 123 | $ 123 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 17,841,219 | 17,949,194 |
Common stock, shares outstanding (in shares) | 17,841,219 | 17,949,194 |
Class T | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 12,222,529 | 12,272,927 |
Common stock, shares outstanding (in shares) | 12,222,529 | 12,272,927 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues: | ||||
Office revenues | $ 6,935 | $ 7,194 | $ 14,031 | $ 14,311 |
Dividend income from real estate equity securities | 151 | 105 | 290 | 209 |
Total revenues | 11,710 | 19,336 | 25,081 | 34,532 |
Expenses: | ||||
Office expenses | 3,237 | 3,427 | 6,611 | 6,824 |
Asset management fees to affiliate | 1,053 | 1,062 | 2,096 | 2,111 |
General and administrative expenses | 1,434 | 768 | 3,079 | 1,475 |
Depreciation and amortization | 4,909 | 5,107 | 9,805 | 10,181 |
Interest expense | 3,738 | 5,027 | 7,864 | 9,988 |
Total expenses | 17,873 | 22,410 | 38,425 | 43,670 |
Other (loss) income: | ||||
Other interest income | 1 | 48 | 34 | 112 |
Equity in income of unconsolidated entity | 0 | 0 | 0 | 2,800 |
Other income | 26 | 0 | 26 | 0 |
(Loss) gain on real estate equity securities | (728) | 221 | (4,618) | 1,335 |
Total other (loss) income | (701) | 269 | (4,558) | 4,247 |
Net loss | (6,864) | (2,805) | (17,902) | (4,891) |
Net loss attributable to noncontrolling interests | 523 | 220 | 1,091 | 771 |
Net loss attributable to common stockholders | (6,341) | (2,585) | (16,811) | (4,120) |
Class A | ||||
Other (loss) income: | ||||
Net loss attributable to common stockholders | $ (3,763) | $ (1,537) | $ (9,978) | $ (2,451) |
Net loss per common share, basic and diluted (in dollars per share) | $ (0.21) | $ (0.09) | $ (0.56) | $ (0.14) |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 17,842,289 | 17,930,156 | 17,860,958 | 17,955,331 |
Class T | ||||
Other (loss) income: | ||||
Net loss attributable to common stockholders | $ (2,578) | $ (1,048) | $ (6,833) | $ (1,669) |
Net loss per common share, basic and diluted (in dollars per share) | $ (0.21) | $ (0.09) | $ (0.56) | $ (0.14) |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 12,222,534 | 12,230,499 | 12,231,843 | 12,221,952 |
Hotel | ||||
Revenues: | ||||
Revenue | $ 2,608 | $ 10,067 | $ 6,687 | $ 16,047 |
Expenses: | ||||
Expenses | 2,728 | 6,136 | 7,386 | 11,311 |
Apartment | ||||
Revenues: | ||||
Revenue | 2,016 | 1,970 | 4,073 | 3,965 |
Expenses: | ||||
Expenses | $ 774 | $ 883 | $ 1,584 | $ 1,780 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (6,864) | $ (2,805) | $ (17,902) | $ (4,891) |
Other comprehensive loss: | ||||
Foreign currency translation gain (loss) | 0 | 27 | 0 | (25) |
Reclassification adjustment for amounts recognized in net loss | 0 | (64) | 0 | (64) |
Total other comprehensive loss | 0 | (37) | 0 | (89) |
Total comprehensive loss | (6,864) | (2,842) | (17,902) | (4,980) |
Total comprehensive loss attributable to noncontrolling interests | 523 | 220 | 1,091 | 771 |
Total comprehensive loss attributable to common stockholders | $ (6,341) | $ (2,622) | $ (16,811) | $ (4,209) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Class A | Class T | Total Stockholders’ Equity | Common Stock | Common StockClass A | Common StockClass T | Additional Paid-in Capital | Cumulative Distributions and Net Losses | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests |
Balance (in shares) at Dec. 31, 2018 | 18,103,437 | 12,208,242 | |||||||||
Balance at Dec. 31, 2018 | $ 204,438 | $ 193,270 | $ 181 | $ 122 | $ 266,339 | $ (73,461) | $ 89 | $ 11,168 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (4,891) | (4,120) | (4,120) | (771) | |||||||
Other comprehensive loss | (89) | (89) | (89) | ||||||||
Issuance of common stock (in shares) | 73,549 | 65,825 | |||||||||
Issuance of common stock | 1,347 | 1,347 | $ 1 | $ 1 | 1,345 | ||||||
Redemptions of common stock (in shares) | (251,212) | (35,977) | |||||||||
Redemptions of common stock | (2,733) | (2,733) | $ (3) | (2,730) | |||||||
Transfers from redeemable common stock | 1,366 | 1,366 | 1,366 | ||||||||
Distributions declared | (1,930) | (1,930) | (1,930) | ||||||||
Noncontrolling interests contributions | 210 | 0 | 210 | ||||||||
Distributions to noncontrolling interests | (100) | 0 | (100) | ||||||||
Balance (in shares) at Jun. 30, 2019 | 17,925,774 | 12,238,090 | |||||||||
Balance at Jun. 30, 2019 | 197,618 | 187,111 | $ 179 | $ 123 | 266,320 | (79,511) | 0 | 10,507 | |||
Balance (in shares) at Mar. 31, 2019 | 17,926,128 | 12,216,244 | |||||||||
Balance at Mar. 31, 2019 | 201,183 | 190,456 | $ 179 | $ 122 | 266,320 | (76,202) | 37 | 10,727 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (2,805) | (2,585) | (2,585) | (220) | |||||||
Other comprehensive loss | (37) | (37) | (37) | ||||||||
Issuance of common stock (in shares) | 24,324 | 21,846 | |||||||||
Issuance of common stock | 448 | 448 | $ 1 | $ 1 | 446 | ||||||
Redemptions of common stock (in shares) | (24,678) | ||||||||||
Redemptions of common stock | (239) | (239) | $ (1) | (238) | |||||||
Transfers to redeemable common stock | (208) | (208) | (208) | ||||||||
Distributions declared | (724) | (724) | (724) | ||||||||
Noncontrolling interests contributions | 100 | 0 | 100 | ||||||||
Distributions to noncontrolling interests | (100) | 0 | (100) | ||||||||
Balance (in shares) at Jun. 30, 2019 | 17,925,774 | 12,238,090 | |||||||||
Balance at Jun. 30, 2019 | 197,618 | 187,111 | $ 179 | $ 123 | 266,320 | (79,511) | 0 | 10,507 | |||
Balance (in shares) at Dec. 31, 2019 | 17,949,194 | 12,272,927 | 17,949,194 | 12,272,927 | |||||||
Balance at Dec. 31, 2019 | 190,242 | 182,273 | $ 179 | $ 123 | 266,310 | (84,339) | 0 | 7,969 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (17,902) | (16,811) | (16,811) | (1,091) | |||||||
Other comprehensive loss | 0 | ||||||||||
Issuance of common stock (in shares) | 6,552 | 6,290 | |||||||||
Issuance of common stock | 135 | 135 | 135 | ||||||||
Redemptions of common stock (in shares) | (114,527) | (56,688) | |||||||||
Redemptions of common stock | (1,730) | (1,730) | $ (1,700) | $ (1) | (1,729) | ||||||
Transfers from redeemable common stock | 1,597 | 1,597 | 1,597 | ||||||||
Other offering costs | (15) | (15) | (15) | ||||||||
Noncontrolling interests contributions | 10 | 0 | 10 | ||||||||
Distributions to noncontrolling interests | (200) | 0 | (200) | ||||||||
Balance (in shares) at Jun. 30, 2020 | 17,841,219 | 12,222,529 | 17,841,219 | 12,222,529 | |||||||
Balance at Jun. 30, 2020 | 172,137 | 165,449 | $ 178 | $ 123 | 266,298 | (101,150) | 0 | 6,688 | |||
Balance (in shares) at Mar. 31, 2020 | 17,842,301 | 12,222,534 | |||||||||
Balance at Mar. 31, 2020 | 179,215 | 171,804 | $ 178 | $ 123 | 266,312 | (94,809) | 0 | 7,411 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (6,864) | (6,341) | (6,341) | (523) | |||||||
Other comprehensive loss | 0 | ||||||||||
Redemptions of common stock (in shares) | (1,082) | (5) | |||||||||
Redemptions of common stock | (10) | (10) | (10) | ||||||||
Transfers from redeemable common stock | 11 | 11 | 11 | ||||||||
Other offering costs | (15) | (15) | (15) | ||||||||
Distributions to noncontrolling interests | (200) | 0 | (200) | ||||||||
Balance (in shares) at Jun. 30, 2020 | 17,841,219 | 12,222,529 | 17,841,219 | 12,222,529 | |||||||
Balance at Jun. 30, 2020 | $ 172,137 | $ 165,449 | $ 178 | $ 123 | $ 266,298 | $ (101,150) | $ 0 | $ 6,688 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Cash Flows from Operating Activities: | |||||
Net loss | $ (6,864) | $ (2,805) | $ (17,902) | $ (4,891) | |
Adjustment to reconcile net loss to net cash used in operating activities | |||||
Equity in income of unconsolidated entity | 0 | 0 | 0 | (2,800) | |
Depreciation and amortization | 4,909 | 5,107 | 9,805 | 10,181 | |
Loss (gain) on real estate equity securities | 728 | (221) | 4,618 | (1,335) | |
Deferred rents | (357) | (233) | |||
Amortization of above- and below-market leases, net | (1,008) | (1,373) | |||
Amortization of deferred financing costs | 1,020 | 807 | |||
Foreign currency translation gain | 0 | (64) | |||
Unrealized gain on derivative instruments | (9) | (71) | |||
Changes in operating assets and liabilities: | |||||
Rents and other receivables | (205) | (217) | |||
Prepaid expenses and other assets | (674) | (647) | |||
Accounts payable and accrued liabilities | 307 | (222) | |||
Due to affiliates | 414 | 15 | |||
Other liabilities | 152 | 638 | |||
Net cash used in operating activities | (3,839) | (212) | |||
Cash Flows from Investing Activities: | |||||
Improvements to real estate | (4,931) | (6,578) | |||
Investment in real estate securities | (4,049) | (4) | |||
Investment in unconsolidated entities | (143) | 0 | |||
Proceeds from the sale of real estate equity securities | 758 | 0 | |||
Distribution of capital from unconsolidated entities | 383 | 5,104 | |||
Proceeds from termination of derivative instruments | 0 | 145 | |||
Net cash used in investing activities | (7,982) | (1,333) | |||
Cash Flows from Financing Activities: | |||||
Proceeds from notes payable | 1,560 | 3,779 | |||
Principal payments on notes payable | (348) | (4,690) | |||
Payments of deferred financing costs | (41) | (249) | |||
Other financing proceeds | 1,710 | 0 | |||
Principal payments on finance lease obligations | (251) | (196) | |||
Payments to redeem common stock | (1,730) | (2,733) | |||
Distributions paid | (107) | (826) | |||
Payments of other offering costs | (15) | 0 | |||
Noncontrolling interest contributions | 10 | 210 | |||
Distributions to noncontrolling interest | (200) | (100) | |||
Net cash provided by (used in) financing activities | 588 | (4,805) | |||
Net decrease in cash, cash equivalents and restricted cash | (11,233) | (6,350) | |||
Cash, cash equivalents and restricted cash, beginning of period | 23,476 | 26,858 | $ 26,858 | ||
Cash, cash equivalents and restricted cash, end of period | $ 12,243 | $ 20,508 | 12,243 | 20,508 | $ 23,476 |
Supplemental Disclosure of Cash Flow Information: | |||||
Interest paid, net of capitalized interest of $68 and $0 for the six months ended June 30, 2020 and 2019, respectively | 6,785 | 9,029 | |||
Supplemental Disclosure of Noncash Investing and Financing Activities: | |||||
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | 135 | 1,347 | |||
Foreign currency translation loss on investment in unconsolidated entity | 0 | (25) | |||
Redemption payable | 621 | 1,662 | |||
Accrued improvements to real estate | 1,240 | 2,272 | |||
Distributions payable | 0 | 241 | |||
Construction cost payable | $ 0 | $ 14 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | |||
Interest capitalized | $ 32 | $ 68 | $ 0 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Pacific Oak Strategic Opportunity REIT II, Inc. (the “Company”) was formed on February 6, 2013 as a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2014 and intends to continue to operate in such a manner. The Company’s business is conducted through Pacific Oak Strategic Opportunity Limited Partnership II (the “Operating Partnership”), a Delaware limited partnership formed on February 7, 2013. The Company is the sole general partner of, and owns a 0.1% partnership interest in, the Operating Partnership. Pacific Oak Strategic Opportunity Holdings II LLC (“REIT Holdings”), a Delaware limited liability company formed on February 7, 2013, owns the remaining 99.9% partnership interest in the Operating Partnership and is the sole limited partner. The Company is the sole member and manager of REIT Holdings. The Company has three wholly owned taxable REIT subsidiaries (“TRS”), two of which lease the Company’s hotel properties and in turn contract with independent hotel management companies that manage the day-to-day operations of the Company’s hotels; the third consolidates the Company’s wholly owned TRSs. The Company’s TRSs are subject to federal and state income tax at regular corporate tax rates. Subject to certain restrictions and limitations, the business of the Company was externally managed by KBS Capital Advisors LLC (“KBS Capital Advisors”), an affiliate of the Company, since July 2013 pursuant to an advisory agreement the Company renewed with KBS Capital Advisors on September 26, 2019. KBS Capital Advisors conducted the Company’s operations and managed its portfolio of real estate loans, opportunistic real estate and other real estate-related investments. On October 31, 2019, KBS Capital Advisors ceased to serve as the Company's advisor or have any advisory responsibility to the Company immediately following the filing of the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2019 (filed November 8, 2019) with the Securities and Exchange Commission (the “SEC”). On November 1, 2019, the Company entered into an advisory agreement (the “Advisory Agreement”) with Pacific Oak Capital Advisors, LLC (the “Advisor”). The Advisory Agreement is effective as of November 1, 2019 through November 1, 2020; however the Company may terminate the Advisory Agreement without cause or penalty upon providing 30 days’ written notice and the Advisor may terminate the Advisory Agreement without cause or penalty upon providing 90 days’ written notice. The terms of the Advisory Agreement are consistent with those of the advisory agreement that was previously in effect with KBS Capital Advisors. KBS Capital Advisors previously entered into a sub-advisory agreement with STAM Europe (“STAM”), a real estate operating company based in Paris, France, to provide real estate acquisition and portfolio management services to KBS Capital Advisors in connection with any investments the Company may make in value-added real estate, distressed debt, and real estate-related investments in Europe. Effective April 17, 2019, STAM terminated the sub-advisory agreement with KBS Capital Advisors. The Company has invested in and manages a portfolio of opportunistic real estate, real estate equity securities and other real estate-related investments located in the United States and Europe. As of June 30, 2020, the Company had invested in two hotel properties, three office properties, one apartment building, two investments in unconsolidated entities and two investments in real estate equity securities. Additionally, as of June 30, 2020, the Company had entered into a consolidated joint venture to develop one office/retail property. From July 3, 2013 to August 11, 2014, the Company conducted a private placement offering (the “Private Offering”) exempt from registration under Regulation D of the Securities Act of 1933, as amended (the “Act”). The Company sold 3,619,851 shares of common stock for gross offering proceeds of $32.2 million in the Private Offering. On November 14, 2013, the Company filed a registration statement on Form S-11 with the SEC to offer a maximum of 180,000,000 shares of common stock for sale to the public (the “Public Offering”), of which 100,000,000 shares were registered in a primary offering and 80,000,000 shares were registered to be sold under the Company’s dividend reinvestment plan. The SEC declared the Company’s registration statement effective on August 12, 2014. On February 11, 2016, the Company filed an amended registration statement on Form S-11 with the SEC to offer a second class of common stock designated as Class T shares and to designate its initially offered and outstanding common stock as Class A shares. Pursuant to the amended registration statement, the Company offered to sell any combination of Class A and Class T shares in the Public Offering but in no event may the Company sell more than 180,000,000 of shares of its common stock pursuant to the Public Offering. The Company commenced offering Class T shares of common stock for sale to the public on February 17, 2016. KBS Capital Markets Group LLC (the “Dealer Manager”), an affiliate of the Company’s former advisor, served as the dealer manager of the Public Offering pursuant to a dealer manager agreement originally dated August 12, 2014 and amended and restated February 17, 2016 (the “Dealer Manager Agreement”). Previously the Dealer Manager served as dealer manager for the Private Offering. The Dealer Manager was responsible for marketing the Company’s shares. The Company ceased offering shares of common stock in the primary portion of the Public Offering on July 31, 2018 and terminated the primary portion of the Public Offering on September 28, 2018. The Company continues to offer shares of common stock under its dividend reinvestment plan. In some states, the Company will need to renew the registration statement annually or file a new registration statement to continue its dividend reinvestment plan offering. The Company may terminate its dividend reinvestment plan offering at any time. The Company sold 11,977,758 and 11,537,701 shares of Class A and Class T common stock, respectively, in the Public Offering for aggregate gross offering proceeds of $228.6 million. As of June 30, 2020, the Company had sold 730,193 and 340,127 shares of Class A and Class T common stock, respectively, under its dividend reinvestment plan for aggregate gross offering proceeds of $10.0 million. Also, as of June 30, 2020, the Company had redeemed 833,490 and 164,618 shares of Class A and Class T common stock, respectively, for $9.2 million. In addition, the Company raised $4.2 million in separate private transactions exempt from the registration requirements of the Act pursuant to Section 4(2) of the Act. On July 3, 2013, the Company issued 21,739 shares of its Class A common stock to KBS Capital Advisors at a purchase price of $9.20 per share. On each of April 2, 2014 and July 31, 2014, the Company issued 120,106 shares of Class A common stock to Willowbrook Capital Group LLC, an entity owned and controlled by Keith D. Hall, one of the Company’s directors and the Company’s Chief Executive Officer, and Peter McMillan III, also one of the Company’s directors and the Company’s President, for $1.0 million. On July 14, 2017 and February 13, 2018, the Company issued 214,175 shares and 10,935 shares, respectively, of Class A common stock to a business associate of Keith D. Hall and Peter McMillan III for approximately $2.0 million and $0.1 million, respectively. The Company issued these shares of common stock in a private transaction exempt from the registration requirements of the Act pursuant to Section 4(2) of the Act. On February 19, 2020, the Company, Pacific Oak Strategic Opportunity REIT, Inc. (“POSOR I”), and Pacific Oak SOR II, LLC, an indirect subsidiary of POSOR I (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Subject to the terms and conditions of the Merger Agreement, the Company will merge with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger (the “Surviving Entity”), such that following the Merger, the Surviving Entity will continue as an indirect subsidiary of POSOR I. In accordance with the applicable provisions of the Maryland General Corporation Law, the separate existence of the Company shall cease. At the effective time of the Merger and subject to the terms and conditions of the Merger Agreement, each issued and outstanding share of the Company's common stock will be converted into the right to receive 0.9643 shares of POSOR I common stock. The combined company after the Merger will retain the name “Pacific Oak Strategic Opportunity REIT, Inc.” |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2019. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC. Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the FASB Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries and joint ventures in which the Company has a controlling interest and VIEs in which the Company has a primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Restricted Cash Restricted cash is comprised of lender impound reserve accounts on the Company’s borrowings for security deposits, property taxes, insurance, debt service obligations and capital improvements and replacements. Redeemable Common Stock The Company limits the dollar value of shares that may be redeemed under the share redemption program. During the six months ended June 30, 2020, the Company had redeemed $1.7 million of common stock under the share redemption program. The Company processed all redemption requests received in good order and eligible for redemption through the June 2020 redemption date, except for 1,037,033 shares totaling $10.5 million due to the limitations under the share redemption program. The Company recorded $0.6 million and $2.2 million of redeemable common stock payable on the Company’s balance sheet as of June 30, 2020 and December 31, 2019, respectively, related to unfulfilled redemption requests received in good order under the share redemption program. Based on the fourth amended and restated share redemption program, the Company has $0.5 million available for redemptions in the remainder of 2020, including shares that are redeemed in connection with a stockholders’ death, “qualifying disability” or “determination of incompetence,” subject to the limitations under the share redemption program. Effective beginning with the month of February 2020, the Company suspended redemptions requested under the share redemption program not in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence”, until the Company and POSOR I file with the SEC a registration statement on Form S-4 containing a Joint Proxy Statement/Prospectus for the proposed merger, and (b) all other redemptions under the share redemption program until after the Merger closes. The Form S-4 was filed on June 15, 2020 with the SEC. Segments The Company has invested in opportunistic real estate investments, real estate equity securities, other real estate-related assets and originated a loan secured by a non-stabilized real estate asset, which was repaid on January 12, 2018. In general, the Company intends to hold its investments in opportunistic real estate, real estate equity securities and other real estate-related assets for capital appreciation. Traditional performance metrics of opportunistic real estate and other real estate-related assets may not be meaningful as these investments are generally non-stabilized and do not provide a consistent stream of interest income or rental revenue. These investments exhibit similar long-term financial performance and have similar economic characteristics. These investments typically involve a higher degree of risk and do not provide a constant stream of ongoing cash flows. As a result, the Company’s management views opportunistic real estate and other real estate-related assets as similar investments. Substantially all of its revenue and net income (loss) is from opportunistic real estate and other real estate-related assets, and therefore, the Company currently aggregates its operating segments into one reportable business segment. In addition, the Company has invested in a participating loan facility secured by a portfolio of light industrial properties located in Europe, which was terminated on April 17, 2019. Per Share Data Basic net income (loss) per share of common stock is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock issued and outstanding for each class of share outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were 0 potentially dilutive securities outstanding during the three and six months ended June 30, 2020 and 2019. For the purpose of determining the weighted-average number of shares outstanding, stock dividends issued are adjusted retroactively and treated as if they were issued and outstanding for all periods presented. Cash distributions declared per share of Class A and Class T common stock were $0.02397501 and $0.0639334 for the three and six months ended June 30, 2019. Distributions declared per common share assumes each share was issued and outstanding each day that was a record date for distributions and were based on a monthly record date for each month during the periods commencing January 2019 through June 2019. There were no distributions declared for the three and six months ended June 30, 2020. The Company uses the two-class method to calculate earnings per share. Basic earnings per share is calculated based on dividends declared (“distributed earnings”) and the rights of common shares and participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends declared during the period. The undistributed earnings are allocated to all outstanding common shares based on the relative percentage of each class of shares to the total number of outstanding shares. The Company does not have any participating securities outstanding other than Class A Common Stock and Class T Common stock during the periods presented. The Company’s calculated earnings per share for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net loss attributable to common stockholders $ (6,341) $ (2,585) $ (16,811) $ (4,120) Less: Class A Common Stock cash distributions declared — 430 — 1,148 Less: Class T Common Stock cash distributions declared — 294 — 782 Undistributed net loss attributable to common stockholders $ (6,341) $ (3,309) $ (16,811) $ (6,050) Class A Common Stock: Undistributed net loss attributable to common stockholders $ (3,763) $ (1,967) $ (9,978) $ (3,599) Class A Common Stock cash distributions declared — 430 — 1,148 Net loss attributable to Class A common stockholders $ (3,763) $ (1,537) $ (9,978) $ (2,451) Net loss per common share, basic and diluted $ (0.21) $ (0.09) $ (0.56) $ (0.14) Weighted-average number of common shares outstanding, basic and diluted 17,842,289 17,930,156 17,860,958 17,955,331 Class T Common Stock: Undistributed net loss attributable to common stockholders $ (2,578) $ (1,342) $ (6,833) $ (2,451) Class T Common Stock cash distributions declared — 294 — 782 Net loss attributable to Class T common stockholders $ (2,578) $ (1,048) $ (6,833) $ (1,669) Net loss per common share, basic and diluted $ (0.21) $ (0.09) $ (0.56) $ (0.14) Weighted-average number of common shares outstanding, basic and diluted 12,222,534 12,230,499 12,231,843 12,221,952 Square Footage, Occupancy and Other Measures Any references to square footage, occupancy or annualized base rent are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. Recently Issued Accounting Standards Updates In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU No. 2016-13”). ASU No. 2016-13 affects entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. The amendments in ASU No. 2016-13 require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU No. 2016-13 also amends the impairment model for available-for-sale debt securities. An entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. ASU No. 2016-13 also requires new disclosures. For financial assets measured at amortized cost, an entity will be required to disclose information about how it developed its allowance for credit losses, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. For financing receivables and net investments in leases measured at amortized cost, an entity will be required to further disaggregate the information it currently discloses about the credit quality of these assets by year of the asset’s origination for as many as five annual periods. For available-for-sale debt securities, an entity will be required to provide a roll-forward of the allowance for credit losses and an aging analysis for securities that are past due. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses , which clarified that receivables from operating leases are not within the scope of Topic 326 and instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842. The Company is still evaluating the impact of adopting ASU No. 2016-13 on its financial statements, but does not expect the adoption of ASU No. 2016-13 to have a material impact on its financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) . ASU No. 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the three months ended March 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. For the period from January 1, 2020 (the earliest date the Company may elect to apply ASU No. 2020-04) through March 31, 2020, the Company did not have any contract modifications that meet the criteria described above, specifically contract modifications that have been modified from LIBOR to an alternative reference rate. The Company’s loan agreements, derivative instruments, and certain lease agreements use LIBOR as the current reference rate. For eligible contract modifications, the Company expects to adopt the temporary optional expedients described in ASU No. 2020-04. The optional expedients for hedging relationships described in ASU No. 2020-04 are not expected to have an impact to the Company, as the Company has elected to not designate its derivative instruments as a hedge. In April 2020, the FASB issued a FASB Staff Q&A related to Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic (the “Topic 842 Q&A”) which focused on the application of lease guidance for concessions related to the effects of the COVID-19 pandemic. In this Q&A document, the FASB staff will allow entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842, Leases |
REAL ESTATE
REAL ESTATE | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
REAL ESTATE | REAL ESTATE As of June 30, 2020, the Company’s real estate portfolio was composed of two hotel properties, three office properties and one apartment building. In addition, as of June 30, 2020, the Company has entered into a consolidated joint venture to develop one office/retail property. The following table summarizes the Company’s real estate as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Land $ 102,288 $ 102,288 Buildings and improvements 432,796 427,696 Tenant origination and absorption costs 13,425 15,422 Total real estate, cost and net of impairment charges 548,509 545,406 Accumulated depreciation and amortization (59,129) (51,723) Total real estate, net $ 489,380 $ 493,683 The following table provides summary information regarding the Company’s real estate as of June 30, 2020 (in thousands): Property Date City State Property Type Land Building and Improvements (1) Tenant Origination and Absorption Total Real Estate, at Cost and Net of Impairment Charges Accumulated Depreciation and Amortization Total Real Estate, Net Ownership % Springmaid Beach Resort 12/30/2014 Myrtle Beach SC Hotel $ 27,438 $ 40,458 $ — $ 67,896 $ (11,804) $ 56,092 90.0% Q&C Hotel 12/17/2015 New Orleans LA Hotel 1,232 53,323 — 54,555 (9,446) 45,109 90.0% Lincoln Court 05/20/2016 Campbell CA Office 14,706 36,067 1,069 51,842 (5,493) 46,349 100.0% Lofts at NoHo Commons 11/16/2016 North Hollywood CA Apartment 26,222 82,057 — 108,279 (7,950) 100,329 90.0% 210 West 31st Street (2) 12/01/2016 New York NY Office/Retail — 55,269 — 55,269 — 55,269 80.0% Oakland City Center 08/18/2017 Oakland CA Office 22,150 143,462 9,556 175,168 (20,118) 155,050 100.0% Madison Square (3) 10/03/2017 Phoenix AZ Office 10,540 22,160 2,800 35,500 (4,318) 31,182 90.0% $ 102,288 $ 432,796 $ 13,425 $ 548,509 $ (59,129) $ 489,380 _____________________ (1) Building and improvements includes construction costs for the Company’s project that was under development. (2) The Company acquired the rights to a leasehold interest with respect to this property, which was accounted for as a finance lease. The Company applied a 6.1% discount rate to the finance lease and the lease expires on January 31, 2114. As of June 30, 2020, the finance lease right-of-use asset had a carrying value of $6.8 million included in building and improvements. No depreciation or amortization was recorded to this property as of June 30, 2020. (3) The Company acquired the rights to a leasehold interest with respect to the land at this property, which was accounted for as a finance lease. The Company applied a 5.4% discount rate to the finance lease and as of June 30, 2020, the finance lease had a weighted average remaining lease term of 2.3 years. As of June 30, 2020, the finance lease right-of-use asset had a carrying value of $1.9 million included in land. Office Properties As of June 30, 2020, the Company owned three office properties encompassing in the aggregate 806,960 rentable square feet which were 69% occupied. The following table provides detailed information regarding the Company’s office revenues and expenses for the three and six months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Office revenues: Rental income $ 6,734 $ 7,007 $ 13,604 $ 13,919 Other income 201 187 427 392 Office revenues $ 6,935 $ 7,194 $ 14,031 $ 14,311 Office expenses: Operating, maintenance, and management $ 2,144 $ 2,338 $ 4,418 $ 4,663 Real estate taxes and insurance 1,093 1,089 2,193 2,161 Office expenses $ 3,237 $ 3,427 $ 6,611 $ 6,824 Operating Leases The Company’s office properties are leased to tenants under operating leases for which the terms and expirations vary. As of June 30, 2020, the leases had remaining terms, excluding options to extend, of up to 10.3 years with a weighted-average remaining term of 3.3 years. Some of the leases may have provisions to extend the term of the lease, options for early termination for all or a part of the leased premises after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but generally is not a significant amount. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to office tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $1.0 million and $1.1 million as of June 30, 2020 and December 31, 2019, respectively. During the three and six months ended June 30, 2020, the Company recognized deferred rent from tenants of $0.1 million and $0.3 million, respectively, net of lease incentive amortization. During the three and six months ended June 30, 2019, the Company recognized deferred rent from tenants of $0.1 million and $0.2 million, respectively, net of lease incentive amortization. As of June 30, 2020 and December 31, 2019, the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $3.9 million and $2.9 million, respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $0.1 million and $0.2 million of unamortized lease incentives as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020, the future minimum rental income from the Company’s office properties under its non-cancelable operating leases was as follows (in thousands): July 1, 2020 through December 31, 2020 $ 11,061 2021 20,153 2022 16,403 2023 13,304 2024 10,827 Thereafter 33,323 $ 105,071 As of June 30, 2020, the Company’s commercial real estate properties were leased to approximately 80 tenants over a diverse range of industries and geographic areas. As of June 30, 2020, the highest tenant industry concentrations (greater than 10% of annualized base rent) in the Company’s portfolio were as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Legal Services 13 $ 4,547 21.2 % Public Administration 6 3,219 15.0 % Professional, Scientific, and Technical Services 11 2,961 13.8 % $ 10,727 50.0 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of June 30, 2020, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. No other tenant industries accounted for more than 10% of annualized base rent. No tenant accounted for more than 10% of annualized base rent. No material tenant credit issues have been identified at this time. During six months ended June 30, 2020, the Company recorded a $45,000 adjustment to office revenues for lease payments deemed not probable of collection. There were no adjustments during the three months ended June 30, 2020. During the three and six months ended June 30, 2019, the Company recorded bad debt recovery of $31,000 and $0.1 million, respectively, which were included in office expenses in the accompanying consolidated statements of operations. Hotel Properties As of June 30, 2020, the Company owned two hotel properties. The following table provides detailed information regarding the Company’s hotel revenues and expenses for the three and six months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Hotel revenues: Room $ 1,908 $ 7,590 $ 4,862 12,055 Food, beverage and convention services 233 1,679 834 2,552 Campground 256 280 511 551 Other 211 518 480 889 Hotel revenues $ 2,608 $ 10,067 $ 6,687 $ 16,047 Hotel expenses: Room $ 608 $ 1,680 $ 1,698 3,004 Food, beverage and convention services 262 1,164 887 1,940 General and administrative 337 708 1,142 1,494 Sales and marketing 291 912 830 1,606 Repairs and maintenance 335 526 797 1,092 Utilities 214 224 508 485 Property taxes and insurance 519 435 1,108 873 Other 162 487 416 817 Hotel expenses $ 2,728 $ 6,136 $ 7,386 $ 11,311 On March 31, 2020, both hotels were temporarily closed due to COVID-19 (Coronavirus) and the Springmaid Beach Resort reopened on May 1, 2020. The Company is unable to predict when the Q&C Hotel will resume operations. The extent of the effects of the COVID-19 pandemic on the Company’s business and the hotel industry at large is highly uncertain and will ultimately depend on future developments, including, but not limited to, the duration and severity of the outbreak, governmental response, the length of time it takes for demand and pricing to return and normal economic and operating conditions to resume. Contract liabilities The following table summarizes the Company’s contract liabilities, which are comprised of advanced deposits and are included in other liabilities in the accompanying consolidated balance sheets, as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Contract liability $ 459 $ 500 Revenue recognized in the period from: Amounts included in contract liability at the beginning of the period $ 267 $ 281 Apartment Property As of June 30, 2020, the Company owned one apartment property with 292 units which was 88% occupied. The following table provides detailed information regarding the Company’s apartment revenues and expenses for the three months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Apartment revenues: Rental income $ 1,807 $ 1,829 $ 3,635 $ 3,659 Other income 209 141 438 306 Apartment revenues $ 2,016 $ 1,970 $ 4,073 $ 3,965 Apartment expenses: Operating, maintenance, and management $ 431 $ 544 $ 875 $ 1,080 Real estate taxes and insurance 343 339 709 700 Apartment expenses $ 774 $ 883 $ 1,584 $ 1,780 Geographic Concentration Risk As of June 30, 2020, the Company’s real estate investments in California represented 57.2% of the Company’s total assets. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the California real estate market. Any adverse economic or real estate developments in this market, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results and its ability to make distributions to stockholders. |
TENANT ORIGINATION AND ABSORPTI
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 6 Months Ended |
Jun. 30, 2020 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES As of June 30, 2020 and December 31, 2019, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Below-Market June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019 Cost $ 13,425 $ 15,422 $ 72 $ 72 $ (8,962) $ (10,802) Accumulated Amortization (7,349) (7,954) (34) (28) 5,299 6,125 Net Amount $ 6,076 $ 7,468 $ 38 $ 44 $ (3,663) $ (4,677) Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Below-Market For the Three Months Ended June 30, For the Three Months Ended June 30, For the Three Months Ended June 30, 2020 2019 2020 2019 2020 2019 Amortization $ (673) $ (888) $ (3) $ (4) $ 472 $ 679 Tenant Origination and Absorption Costs Above-Market Below-Market For the Six Months Ended June 30, For the Six Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 2020 2019 Amortization $ (1,393) $ (1,831) $ (6) $ (9) $ 1,014 $ 1,382 As of June 30, 2020 and December 31, 2019, the Company had recorded a housing subsidy intangible asset, net of amortization, which is included in prepaid expenses and other assets in the accompanying balance sheets, of $2.2 million. As of June 30, 2020, the housing subsidy intangible asset has a remaining amortization period of 28.1 years. During each of the three months ended June 30, 2020 and 2019, the Company recorded amortization expense of $20,000 related to the housing subsidy intangible asset. During each of the six months ended June 30, 2020 and 2019, the Company recorded amortization expense of $40,000 related to the housing subsidy intangible asset. Additionally, as of June 30, 2020 and December 31, 2019, the Company had recorded property tax abatement intangible assets, net of amortization, which are included in prepaid expenses and other assets in the accompanying balance sheets, of $1.7 million and $1.8 million, respectively. As of June 30, 2020, the property tax abatement intangible assets have a weighted-average remaining amortization period of 3.3 years. During each of the three months ended June 30, 2020 and 2019, the Company recorded amortization expense of $0.1 million related to the property tax abatement intangible assets. During each of the six months ended June 30, 2020 and 2019, the Company recorded amortization expense $0.2 million related to the property tax abatement intangible assets. |
REAL ESTATE EQUITY SECURITIES
REAL ESTATE EQUITY SECURITIES | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
REAL ESTATE EQUITY SECURITIES | REAL ESTATE EQUITY SECURITIES The Company’s real estate equity securities are carried at their estimated fair value based on quoted market prices for the security. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis. Unrealized gains and losses on real estate equity securities are recognized in earnings. The following table sets forth the number of shares owned by the Company and the related carrying value of the shares as of June 30, 2020 and December 31, 2019 (dollars in thousands): June 30, 2020 December 31, 2019 Real Estate Equity Securities Number of Shares Owned Total Carrying Value Number of Shares Owned Total Carrying Value Franklin Street Properties Corp. 1,580,713 $ 8,046 1,160,591 $ 9,934 Plymouth Industrial REIT, Inc. 43,829 561 — — 1,624,542 $ 8,607 1,160,591 $ 9,934 During the six months ended June 30, 2020, the Company purchased 92,931 shares of common stock of Plymouth Industrial REIT, Inc. (NYSE Ticker: PLYM) for an aggregate purchase price of $1.3 million and also purchased 420,122 shares of Franklin Street Properties Corp. (NYSE Ticker: FSP) for an aggregate purchase price of $2.8 million. During the six months ended June 30, 2020, the Company sold 49,102 shares of PLYM for an aggregate sales price of $0.8 million. The following summarizes the portion of gain and loss for the period related to real estate equity securities held during the three and six months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net (loss) gain recognized during the period on real estate equity securities $ (728) $ 221 $ (4,618) $ 1,335 Less net gain recognized during the period on real estate equity securities sold during the period (67) — (67) — Unrealized (loss) gain recognized during the reporting period on real estate equity securities held at the end of the period $ (795) $ 221 $ (4,685) $ 1,335 During the three and six months ended June 30, 2020, the Company recognized $0.2 million and $0.3 million of dividend income from real estate equity securities, respectively. During the three and six months ended June 30, 2019, the Company recognized $0.1 million and $0.2 million of dividend income from real estate equity securities, respectively. |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITIES | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED ENTITIES | INVESTMENT IN UNCONSOLIDATED ENTITIESOn June 28, 2016, the Company originated a participating loan facility (“STAM investment”) in an amount up to €2.6 million ($2.9 million at closing) with STAM, a real estate operating company that provides real estate acquisition and portfolio management services to make in value-added real estate, distressed debt, and real estate-related investments in Europe. The Company funded approximately €2.1 million ($2.3 million at closing). The proceeds were used by STAM to fund a 5% general partner interest in a joint venture acquiring a portfolio of light industrial properties located throughout France. The total acquisition cost of the portfolio was approximately €95.5 million ($105.6 million at closing). Under the terms of the participating loan facility, the Company participates in the expected residual profits of the portfolio and the terms are structured in a manner such that the risks and rewards of the arrangement are similar to those associated with an investment in a real estate joint venture. Accordingly, the participating loan facility is accounted for under the equity method of accounting. In addition to the amount funded at closing, the Company also capitalized an additional $0.2 million of acquisition costs and fees. During the year ended December 31, 2019, STAM completed the liquidation of the portfolio and the Company recognized $2.8 million of equity in income of unconsolidated entity with respect to this investment. During the six months ended June 30, 2020, the Company received a distribution of €0.4 million or $0.4 million and as of June 30, 2020, the Company’s investment in the STAM investment was $0.1 million. On December 31, 2019, the Company acquired 13 Class A Units for $2.9 million in Pacific Oak Opportunity Zone Fund I, LLC (“Pacific Oak Opportunity Zone Fund I”). As of June 30, 2020, Pacific Oak Opportunity Zone Fund I consolidated two joint ventures with real estate under development. As of June 30, 2020, the Company has concluded that Pacific Oak Opportunity Zone Fund I qualifies as a Variable Interest Entity (“VIE”) because there is insufficient equity at risk to finance the entity’s activities and the entity is structured with non-substantive voting rights. The Company concluded it is not the primary beneficiary of this VIE since it does not have the power to direct the activities that most significantly impact the entity’s economic performance and will account for its investment under the equity method of accounting. The Company’s maximum exposure to loss as a result of its involvement with this VIE is limited to the carrying value of the investment in Pacific Oak Opportunity Zone Fund I which totaled $3.0 million as of June 30, 2020. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE As of June 30, 2020 and December 31, 2019, the Company’s notes payable consisted of the following (in thousands): Book Value as of June 30, 2020 Book Value as of December 31, 2019 Contractual Interest Rate (1) Effective Interest Rate (1) Payment Type Maturity Date Springmaid Beach Resort Mortgage Loan (2) $ 56,461 $ 56,536 One-month LIBOR + 2.25% (2) 5.75% Principal & 08/10/2022 Q&C Hotel Mortgage Loan 25,000 25,000 One-month LIBOR + 2.50% (3) 4.50% Principal & Interest (3) 12/23/2022 Lincoln Court Mortgage Loan 34,615 34,615 One-month LIBOR + 1.75% 1.91% Interest Only 12/01/2020 Lofts at NoHo Commons Mortgage Loan (4) 73,862 73,862 One-month LIBOR + 2.18% (4) 3.93% Interest Only 09/09/2021 210 West 31st Street Mortgage Loan 20,000 20,000 One-month LIBOR + 3.00% 3.16% Interest Only 12/16/2020 Oakland City Center Mortgage Loan (5) 97,112 95,989 One-month LIBOR + 1.75% 1.91% Interest Only 09/01/2022 Madison Square Mortgage Loan (6) 23,757 23,593 One-month LIBOR + 4.05% (6) 5.05% Interest Only 10/09/2020 Total notes payable principal outstanding 330,807 329,595 Deferred financing costs, net (2,621) (3,600) Total notes payable, net $ 328,186 $ 325,995 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of June 30, 2020. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2020 (consisting of the contractual interest rate, contractual floor rates and the effects of interest rate caps, if applicable), using interest rate indices at June 30, 2020, where applicable. (2) As of June 30, 2020, $57.3 million had been disbursed to the Company and up to $9.7 million was available for future disbursements, subject to certain terms and conditions contained in the loan documents. The interest rate is variable at the higher of one-month LIBOR + 2.25% or 5.75%. (3) The interest rate is variable at the higher of one-month LIBOR + 2.5% or 4.5%. Principal payments will commence on January 1, 2022. (4) As of June 30, 2020, $73.9 million had been disbursed to the Company and up to $2.1 million is available for future disbursements to be used for tenant improvements and leasing commissions, subject to certain terms and conditions contained in the loan documents. The LIBOR rate is variable at the higher of one-month LIBOR or 1.75%. (5) As of June 30, 2020, $97.1 million had been disbursed to the Company and up to $6.3 million is available for future disbursements to be used for tenant improvements and leasing commissions, subject to certain terms and conditions contained in the loan documents. Beginning October 1, 2020, monthly payments will include principal and interest with principal payments of $110,000 or, in the event the Company repays any principal of the loan amount, with principal payments calculated using an amortization schedule of 30 years and an annual interest rate of 6.0%, subject to certain terms and conditions contained in the loan documents. (6) As of June 30, 2020, $23.8 million had been disbursed to the Company and up to $10.3 million is available for future disbursements to be used for tenant improvements and leasing expenses, subject to certain terms and conditions contained in the loan documents. The Madison Square Mortgage Loan bears interest at a floating rate of 405 basis points over one-month LIBOR, but at no point shall the interest rate be less than 5.05%. The Company plans to refinance or utilize available extension options for notes payable with maturities through the second quarter of 2021. There can be no assurance that the Company will be able to refinance or utilize extension options. During the three and six months ended June 30, 2020, the Company incurred $3.7 million and $7.9 million, respectively, of interest expense. Included in interest expense was: (i) the amortization of deferred financing costs of $0.5 million and $1.0 million for the three and six months ended June 30, 2020, respectively, (ii) an unrealized loss of $4,000 and an unrealized gain of $9,000 interest rate cap agreements for the three and six months ended June 30, 2020, respectively, and (iii) $0.2 million and $0.3 million of interest on finance leases for the three and six months ended June 30, 2020, respectively. Additionally, during the three and six months ended June 30, 2020, the Company capitalized $32,000 and $68,000, respectively, of interest related to an investment in unconsolidated entity. During the three and six months ended June 30, 2019, the Company incurred $5.0 million and $10.0 million, respectively, of interest expense. Included in interest expense was: (i) the amortization of deferred financing costs of $0.4 million and $0.8 million for the three and six months ended June 30, 2019, respectively, (ii) an unrealized loss of $6,000 on interest rate cap agreements for the six months ended June 30, 2019 and (iii) $0.2 million and $0.3 million of interest on finance leases for the three and six months ended June 30, 2019, respectively. As of June 30, 2020 and December 31, 2019, the Company’s interest payable was $0.9 million and $0.8 million, respectively. The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of June 30, 2020 (in thousands): July 1, 2020 through December 31, 2020 $ 78,702 2021 76,226 2022 175,879 $ 330,807 The Company’s notes payable contain financial and non-financial debt covenants. As of June 30, 2020, the Company was in compliance with all debt covenants, except that the borrower under the Madison Square Mortgage Loan was out of debt yield compliance. Such non-compliance does not constitute an event of default under the loan agreement. As a result of such non-compliance, the Company is required to maintain an interest shortfall reserve. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES The following were the face value, carrying amount and fair value of the Company’s financial instruments as of June 30, 2020 and December 31, 2019, which carrying amounts do not approximate the fair values (in thousands): June 30, 2020 December 31, 2019 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial liability (Level 3): Notes payable $ 330,807 $ 328,186 $ 327,350 $ 329,595 $ 325,995 $ 330,687 Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. Despite increased capital market and credit market activity, transaction volume for certain financial instruments remains relatively low. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. As of June 30, 2020, the Company measured the following assets at fair value on a recurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Recurring Basis: Real estate equity securities $ 8,607 $ 8,607 $ — $ — Asset derivatives - interest rate caps $ 10 $ — $ 10 $ — As of December 31, 2019, the Company measured the following assets at fair value on a recurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Real estate equity securities $ 9,934 $ 9,934 $ — $ — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS As described further below, the Company has entered into agreements with certain affiliates pursuant to which they provide services to the Company. Keith D. Hall and Peter McMillan III control and indirectly own Pacific Oak Holding Group, LLC (“Pacific Oak Holding”), the Company’s sponsor since November 1, 2019. Pacific Oak Holding is the sole owner of Pacific Oak Capital Advisors, LLC, the Company’s advisor since November 1, 2019. Messrs. Hall and McMillan are also two of the Company’s executive officers and directors. In addition, along with Charles J. Schreiber, Jr., Keith D. Hall and Peter McMillan III control and indirectly own KBS Holdings LLC (“KBS Holdings”), the Company’s sponsor prior to November 1, 2019. KBS Holdings is the sole owner of KBS Capital Advisors, the Company’s advisor prior to November 1, 2019, and KBS Capital Markets Group LLC, the entity that acted as the dealer manager of the Company’s now-terminated primary initial public offering. From the Company’s inception through October 31, 2019, KBS Capital Advisors provided day-to-day management of the Company’s business. The advisory agreement with KBS Capital Advisors terminated on October 31, 2019, and the Company hired the Advisor under substantially the same terms on November 1, 2019. The advisory agreement with the Advisor has a one year term subject to an unlimited number of successive one year renewals upon the mutual consent of the parties. Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three and six months ended June 30, 2020 and 2019, respectively, and any related amounts payable as of June 30, 2020 and December 31, 2019 (in thousands): Incurred Payable as of Three Months Ended June 30, Six Months Ended June 30, June 30, 2020 December 31, 2019 2020 2019 2020 2019 Expensed Asset management fees $ 1,053 $ 1,062 $ 2,096 $ 2,111 $ 1,034 $ 620 Reimbursable operating expenses (1) — 92 72 194 — — Capitalized Acquisition fees on real estate equity securities — — 71 — — — Acquisition fee on investment in unconsolidated entities 46 — 46 — — 29 $ 1,099 $ 1,154 $ 2,285 $ 2,305 $ 1,034 $ 649 _____________________ (1) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cyber-security related expenses incurred by the applicable advisor under the applicable advisory agreement. The Company has reimbursed the applicable advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $0.1 million and $0.2 million for the three and six months ended June 30, 2019, respectively and were the only employee costs reimbursed under the applicable advisory agreement over the shown periods. There were no employee cost reimbursements during 2020. In the future, the Advisor may seek reimbursement for certain other employee costs under the Advisory Agreement. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition or origination fees or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimbursed the applicable advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the applicable advisor on behalf of the Company. Insurance. On January 6, 2014, the Company, together with KBS Real Estate Investment Trust, Inc. ("KBS REIT I"), KBS Real Estate Investment Trust II, Inc. ("KBS REIT II"), KBS Real Estate Investment Trust, Inc. ("KBS REIT III"), KBS Legacy Partners Apartment REIT, Inc. ("KBS Legacy Partners Apartment REIT"), POSOR I, the Dealer Manager, KBS Capital Advisors and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage are shared. The cost of these lower tiers was allocated by KBS Capital Advisors and its insurance broker among each of the various entities covered by the program, and was billed directly to each entity. In June 2015, KBS Growth & Income REIT, Inc. ("KBS Growth & Income REIT") was added to the insurance program at terms similar to those described above. At renewal in June 2018, the Company, along with POSOR I and KBS Legacy Partners Apartment REIT elected to cease participation in the program and obtain separate insurance coverage. The Company, together with POSOR I, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage are shared. The cost of these lower tiers is or was allocated by the Company’s applicable advisor and its insurance broker among each REIT covered by the program, and is billed directly to each REIT. The program is effective through June 30, 2021. Pacific Oak Opportunity Zone Fund I. On December 31, 2019, the Company made a $2.9 million investment in the Pacific Oak Opportunity Zone Fund I. Pacific Oak Opportunity Zone Fund I is sponsored by Pacific Oak Holding. Pacific Oak Capital Advisors is entitled to certain fees in connection with the fund. The fund will pay an acquisition fee equal to 1.5% of the purchase price of each asset (including any debt incurred or assumed and significant capital improvement costs budgeted as of the date of acquisition) with a purchase price less than or equal to $25.0 million plus 1.0% of the purchase price in excess of $25.0 million; a quarterly asset management fee equal to 0.25% of the total purchase price of all assets (including any debt incurred or assumed and significant capital improvement costs budgeted as of the date of acquisition) as of the end of the applicable quarter; and a financing fee equal to 0.5% of the original principal amount of any indebtedness they incur (reduced by any financing fee previously paid with respect to indebtedness being refinanced). In the case of investments made through joint ventures, the fees above will be determined based on our proportionate share of the investment. Pacific Oak Holding is also entitled to certain distributions paid by the Pacific Oak Opportunity Zone Fund I after the Class A Members have received their preferred return. These fees and distributions have been waived for the Company’s $2.9 million investment. In addition, a side letter agreement between the Advisor and Pacific Oak Opportunity Zone Fund I was executed on February 2, 2020 and stipulates that any asset management fees allocable to the Company and waived by the Advisor for Pacific Oak Opportunity Zone Fund I shall be distributed to the Company. During the six months ended June 30, 2020, the Company received $26,000 related to this agreement. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Management Agreement Springmaid Beach Resort The consolidated joint venture entity through which the Company leases the operations for Springmaid Beach Resort has entered into a management agreement with Doubletree Management LLC, an independent third-party hotel operator (the “Operator”) pursuant to which the Operator will manage and operate the Springmaid Beach Resort. The hotel was branded a DoubleTree by Hilton in September 2016 (the “Brand Commencement Date”). The management agreement expires on December 31 of the 20th full year following the Brand Commencement Date. Upon mutual agreement, the parties may extend the term of the agreement for two successive periods of five years each. If an event of default occurs and continues beyond any applicable notice and cure periods set forth in the management agreement, the non-defaulting party generally has, among other remedies, the option of terminating the management agreement upon written notice to the defaulting party with no termination fee payable to Doubletree. In addition, the Company has the right to terminate the management agreement without the payment of a termination fee if Doubletree fails to achieve certain criteria relating to the performance of the hotel for any two Pursuant to the management agreement, the Operator receives the following fees: • a base fee, which is a percentage of total operating revenue that starts at 2.5% and increases to 2.75% in the second year following the Brand Commencement Date and further increases in the third year following the Brand Commencement Date and thereafter to 3.0%; • a campground area management fee, which is 2% of any campground revenue; • an incentive fee, which is 15% of operating cash flow (after deduction for capital renewals reserve and the joint venture owner’s priority, which is 12% of the joint venture owner’s total investment); • an additional services fee in the amount reasonably determined by the Operator from time to time; and • a brand services fee in the amount of 4% of total rooms revenue, and an other brand services fee in an amount determined by the Operator from time to time. The management agreement contains specific standards for the operation and maintenance of the hotel, which allows the Operator to maintain uniformity in the system created by the Operator’s franchise. Such standards generally regulate the appearance of the hotel, quality and type of goods and services offered, signage and protection of trademarks. Compliance with the management agreement will require the Company to make significant expenditures for capital improvements. During the three and six months ended June 30, 2020, the Company incurred $72,000 and $0.1 million, respectively, of fees related to the management agreement, which are included in hotel expenses on the accompanying consolidated statements of operations. During the three and six months ended June 30, 2019, the Company incurred $0.2 million and $0.3 million, respectively, of fees related to the management agreement, which are included in hotel expenses on the accompanying consolidated statements of operations. On March 31, 2020, the Springmaid Beach Resort temporarily closed due to COVID-19 (Coronavirus) and reopened on May 1, 2020. Q&C Hotel A wholly owned subsidiary of the joint venture through which the Company leases the operations of the Q&C Hotel (“Q&C Hotel Operations”) has entered into a management agreement with Encore Hospitality, LLC (“Encore Hospitality”), an affiliate of the joint venture partner, pursuant to which Encore Hospitality will manage and operate the Q&C Hotel. The management agreement expires on December 17, 2035. Subject to certain conditions, Encore Hospitality may extend the term of the agreement for a period of five years. Pursuant to the management agreement Encore Hospitality will receive a base fee, which is 4.0% of gross revenue (as defined in the management agreement). During the six months ended June 30, 2020, the Company incurred $0.1 million of fees related to the management agreement, which are included in hotel expenses on the accompanying consolidated statements of operations. During the three and six months ended June 30, 2019, the Company incurred $0.1 million and $0.2 million, respectively, of fees related to the management agreement, which are included in hotel expenses on the accompanying consolidated statements of operations. Q&C Hotel Operations has also entered into a franchise agreement with Marriott International (“Marriott”) pursuant to which Marriott has granted Q&C Hotel Operations a limited, non-exclusive license to establish and operate the Q&C Hotel using certain of Marriott’s proprietary marks and systems and the hotel was branded as a Marriott Autograph Collection hotel on May 25, 2016. The franchise agreement will expire on May 25, 2041. Pursuant to the franchise agreement, Q&C Hotel Operations pays Marriott a monthly franchise fee equal to a percent of gross room sales on a sliding scale that is initially 2% and increases to 5% on May 25, 2019 and a monthly marketing fund contribution fee equal to 1.5% of the Q&C Hotel’s gross room sales. In addition, the franchise agreement requires the maintenance of a reserve account to fund all renovations at the hotel based on a percentage of gross revenues which starts at 2% of gross revenues and increases to 5% of gross revenues on May 25, 2019. Q&C Hotel Operations is also responsible for the payment of certain other fees, charges and costs as set forth in the agreement. During the three and six months ended June 30, 2020, the Company incurred $0.1 million and $0.2 million, respectively, of fees related to the Marriott franchise agreement. During the three and six months ended June 30, 2019, the Company incurred $0.2 million and $0.4 million, respectively, of fees related to the Marriott franchise agreement. On March 31, 2020, the Q&C Hotel temporarily closed due to COVID-19 (Coronavirus). The Company is unable to predict when Q&C Hotel will resume their operations. In addition, in connection with the execution of the franchise agreement, Pacific Oak SOR US Properties II, an indirect wholly owned subsidiary of the Company, is providing an unconditional guarantee that all Q&C Hotel Operations’ obligations under the franchise agreement will be punctually paid and performed. Finally, certain transfers of the Q&C Hotel or an ownership interest therein are subject to a notice and consent requirement, and the franchise agreement further provides Marriott with a right of first refusal with respect to a sale of the hotel to a competitor of Marriott. Lease Obligations As of June 30, 2020, the Company had leasehold interests expiring on various expiration dates between 2023 and 2114. Future minimum lease payments owed by the Company under the finance leases as of June 30, 2020 are as follows (in thousands): July 1, 2020 through December 31, 2020 $ 240 2021 735 2022 935 2023 525 2024 360 Thereafter 52,956 Total expected minimum lease liabilities 55,751 Less: Amount representing interest (1) (47,765) Present value of net minimum lease payments (2) $ 7,986 _____________________ (1) Interest includes the amount necessary to reduce the total expected minimum lease obligations to present value calculated at the Company’s incremental borrowing rate at acquisition. (2) The present value of net minimum lease payments are presented in other liabilities in the accompanying consolidated balance sheets. Paycheck Protection Program On April 27, 2020 and May 6, 2020, the Company, through wholly owned subsidiaries of joint ventures, entered into Paycheck Protection Program Promissory Notes for the Springmaid Beach Resort and Q&C Hotel (the “PPP Notes”) and received funding of $1.3 million and $0.4 million, respectively. In accordance with the original requirements of the CARES Act, at least 75% of the proceeds used to date have been used to pay eligible payroll costs. Under the original requirements of the CARES Act, the loan may be fully forgiven if (i) proceeds are used to pay eligible payroll costs, rent, mortgage interest and utilities and (ii) full-time employee headcount and salaries are either maintained during the applicable eight-week period or restored by June 30, 2020. Any forgiveness of the loan will be subject to approval by the U.S. Small Business Administration (the “SBA”) and will require the Company to apply for such treatment in the future. On June 5, 2020, the Paycheck Protection Program Flexibility Act (the “PPP Flexibility Act”) was signed into law, extending the loan forgiveness period from 8 weeks to 24 weeks after loan origination, reducing the required amount of payroll expenditures from 75% to 60%, removing the prior ban on borrowers taking advantage of payroll tax deferral after loan forgiveness and allowing for the amendment of the maturity date on existing loans from two years to five years. While the Company may apply for forgiveness of the PPP Notes in accordance with the requirements and limitations under the CARES Act and the SBA regulations and requirements, no assurance can be given that any portion of the PPP Notes will be forgiven. As of June 30, 2020, the PPP Notes balance was $1.7 million and recorded in other liabilities in the accompanying consolidated balance sheet. Economic Dependency The Company is dependent on the Advisor for certain services that are essential to the Company, including the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that the Advisor is unable to provide these services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations as of June 30, 2020. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities. COVID-19 While the Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, the situation is rapidly evolving and the Company cannot predict how long the COVID-19 pandemic will last or what the long term impact will be on the Company’s operations. As a result, the Company has experienced and continues to experience a significant negative impact on its liquidity, and could experience additional material impacts including, but not limited to, asset impairment charges. The Company anticipates this will have a material impact on its business, results of operations and cash flows in 2020. Legal Matters From time to time, the Company is a party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and the possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the FASB Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries and joint ventures in which the Company has a controlling interest and VIEs in which the Company has a primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Restricted Cash | Restricted cash is comprised of lender impound reserve accounts on the Company’s borrowings for security deposits, property taxes, insurance, debt service obligations and capital improvements and replacements. |
Redeemable Common Stock | The Company limits the dollar value of shares that may be redeemed under the share redemption program. During the six months ended June 30, 2020, the Company had redeemed $1.7 million of common stock under the share redemption program. The Company processed all redemption requests received in good order and eligible for redemption through the June 2020 redemption date, except for 1,037,033 shares totaling $10.5 million due to the limitations under the share redemption program. The Company recorded $0.6 million and $2.2 million of redeemable common stock payable on the Company’s balance sheet as of June 30, 2020 and December 31, 2019, respectively, related to unfulfilled redemption requests received in good order under the share redemption program. Based on the fourth amended and restated share redemption program, the Company has $0.5 million available for redemptions in the remainder of 2020, including shares that are redeemed in connection with a stockholders’ death, “qualifying disability” or “determination of incompetence,” subject to the limitations under the share redemption program. Effective beginning with the month of February 2020, the Company suspended redemptions requested under the share redemption program not in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence”, until the Company and POSOR I file with the SEC a registration statement on Form S-4 containing a Joint Proxy Statement/Prospectus for the proposed merger, and (b) all other redemptions under the share redemption program until after the Merger closes. The Form S-4 was filed on June 15, 2020 with the SEC. |
Segments | The Company has invested in opportunistic real estate investments, real estate equity securities, other real estate-related assets and originated a loan secured by a non-stabilized real estate asset, which was repaid on January 12, 2018. In general, the Company intends to hold its investments in opportunistic real estate, real estate equity securities and other real estate-related assets for capital appreciation. Traditional performance metrics of opportunistic real estate and other real estate-related assets may not be meaningful as these investments are generally non-stabilized and do not provide a consistent stream of interest income or rental revenue. These investments exhibit similar long-term financial performance and have similar economic characteristics. These investments typically involve a higher degree of risk and do not provide a constant stream of ongoing cash flows. As a result, the Company’s management views opportunistic real estate and other real estate-related assets as similar investments. Substantially all of its revenue and net income (loss) is from opportunistic real estate and other real estate-related assets, and therefore, the Company currently aggregates its operating segments into one reportable business segment. In addition, the Company has invested in a participating loan facility secured by a portfolio of light industrial properties located in Europe, which was terminated on April 17, 2019. |
Per Share Data | Basic net income (loss) per share of common stock is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock issued and outstanding for each class of share outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were 0 potentially dilutive securities outstanding during the three and six months ended June 30, 2020 and 2019. For the purpose of determining the weighted-average number of shares outstanding, stock dividends issued are adjusted retroactively and treated as if they were issued and outstanding for all periods presented. Cash distributions declared per share of Class A and Class T common stock were $0.02397501 and $0.0639334 for the three and six months ended June 30, 2019. Distributions declared per common share assumes each share was issued and outstanding each day that was a record date for distributions and were based on a monthly record date for each month during the periods commencing January 2019 through June 2019. There were no distributions declared for the three and six months ended June 30, 2020. The Company uses the two-class method to calculate earnings per share. Basic earnings per share is calculated based on dividends declared (“distributed earnings”) and the rights of common shares and participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends declared during the period. The undistributed earnings are allocated to all outstanding common shares based on the relative percentage of each class of shares to the total number of outstanding shares. The Company does not have any participating securities outstanding other than Class A Common Stock and Class T Common stock during the periods presented. |
Square Footage, Occupancy and Other Measures Policy | Any references to square footage, occupancy or annualized base rent are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board. |
Recently Issued Accounting Standards Updates | In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments (“ASU No. 2016-13”). ASU No. 2016-13 affects entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. The amendments in ASU No. 2016-13 require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. ASU No. 2016-13 also amends the impairment model for available-for-sale debt securities. An entity will recognize an allowance for credit losses on available-for-sale debt securities as a contra-account to the amortized cost basis rather than as a direct reduction of the amortized cost basis of the investment, as is currently required. ASU No. 2016-13 also requires new disclosures. For financial assets measured at amortized cost, an entity will be required to disclose information about how it developed its allowance for credit losses, including changes in the factors that influenced management’s estimate of expected credit losses and the reasons for those changes. For financing receivables and net investments in leases measured at amortized cost, an entity will be required to further disaggregate the information it currently discloses about the credit quality of these assets by year of the asset’s origination for as many as five annual periods. For available-for-sale debt securities, an entity will be required to provide a roll-forward of the allowance for credit losses and an aging analysis for securities that are past due. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses , which clarified that receivables from operating leases are not within the scope of Topic 326 and instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842. The Company is still evaluating the impact of adopting ASU No. 2016-13 on its financial statements, but does not expect the adoption of ASU No. 2016-13 to have a material impact on its financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) . ASU No. 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the three months ended March 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. For the period from January 1, 2020 (the earliest date the Company may elect to apply ASU No. 2020-04) through March 31, 2020, the Company did not have any contract modifications that meet the criteria described above, specifically contract modifications that have been modified from LIBOR to an alternative reference rate. The Company’s loan agreements, derivative instruments, and certain lease agreements use LIBOR as the current reference rate. For eligible contract modifications, the Company expects to adopt the temporary optional expedients described in ASU No. 2020-04. The optional expedients for hedging relationships described in ASU No. 2020-04 are not expected to have an impact to the Company, as the Company has elected to not designate its derivative instruments as a hedge. In April 2020, the FASB issued a FASB Staff Q&A related to Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic (the “Topic 842 Q&A”) which focused on the application of lease guidance for concessions related to the effects of the COVID-19 pandemic. In this Q&A document, the FASB staff will allow entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842, Leases |
Fair Value Measurements | Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. Despite increased capital market and credit market activity, transaction volume for certain financial instruments remains relatively low. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method | The Company’s calculated earnings per share for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands, except share and per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net loss attributable to common stockholders $ (6,341) $ (2,585) $ (16,811) $ (4,120) Less: Class A Common Stock cash distributions declared — 430 — 1,148 Less: Class T Common Stock cash distributions declared — 294 — 782 Undistributed net loss attributable to common stockholders $ (6,341) $ (3,309) $ (16,811) $ (6,050) Class A Common Stock: Undistributed net loss attributable to common stockholders $ (3,763) $ (1,967) $ (9,978) $ (3,599) Class A Common Stock cash distributions declared — 430 — 1,148 Net loss attributable to Class A common stockholders $ (3,763) $ (1,537) $ (9,978) $ (2,451) Net loss per common share, basic and diluted $ (0.21) $ (0.09) $ (0.56) $ (0.14) Weighted-average number of common shares outstanding, basic and diluted 17,842,289 17,930,156 17,860,958 17,955,331 Class T Common Stock: Undistributed net loss attributable to common stockholders $ (2,578) $ (1,342) $ (6,833) $ (2,451) Class T Common Stock cash distributions declared — 294 — 782 Net loss attributable to Class T common stockholders $ (2,578) $ (1,048) $ (6,833) $ (1,669) Net loss per common share, basic and diluted $ (0.21) $ (0.09) $ (0.56) $ (0.14) Weighted-average number of common shares outstanding, basic and diluted 12,222,534 12,230,499 12,231,843 12,221,952 |
REAL ESTATE (Tables)
REAL ESTATE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
Schedule of Real Estate | The following table summarizes the Company’s real estate as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Land $ 102,288 $ 102,288 Buildings and improvements 432,796 427,696 Tenant origination and absorption costs 13,425 15,422 Total real estate, cost and net of impairment charges 548,509 545,406 Accumulated depreciation and amortization (59,129) (51,723) Total real estate, net $ 489,380 $ 493,683 The following table provides summary information regarding the Company’s real estate as of June 30, 2020 (in thousands): Property Date City State Property Type Land Building and Improvements (1) Tenant Origination and Absorption Total Real Estate, at Cost and Net of Impairment Charges Accumulated Depreciation and Amortization Total Real Estate, Net Ownership % Springmaid Beach Resort 12/30/2014 Myrtle Beach SC Hotel $ 27,438 $ 40,458 $ — $ 67,896 $ (11,804) $ 56,092 90.0% Q&C Hotel 12/17/2015 New Orleans LA Hotel 1,232 53,323 — 54,555 (9,446) 45,109 90.0% Lincoln Court 05/20/2016 Campbell CA Office 14,706 36,067 1,069 51,842 (5,493) 46,349 100.0% Lofts at NoHo Commons 11/16/2016 North Hollywood CA Apartment 26,222 82,057 — 108,279 (7,950) 100,329 90.0% 210 West 31st Street (2) 12/01/2016 New York NY Office/Retail — 55,269 — 55,269 — 55,269 80.0% Oakland City Center 08/18/2017 Oakland CA Office 22,150 143,462 9,556 175,168 (20,118) 155,050 100.0% Madison Square (3) 10/03/2017 Phoenix AZ Office 10,540 22,160 2,800 35,500 (4,318) 31,182 90.0% $ 102,288 $ 432,796 $ 13,425 $ 548,509 $ (59,129) $ 489,380 _____________________ (1) Building and improvements includes construction costs for the Company’s project that was under development. (2) The Company acquired the rights to a leasehold interest with respect to this property, which was accounted for as a finance lease. The Company applied a 6.1% discount rate to the finance lease and the lease expires on January 31, 2114. As of June 30, 2020, the finance lease right-of-use asset had a carrying value of $6.8 million included in building and improvements. No depreciation or amortization was recorded to this property as of June 30, 2020. |
Schedule of Office Property Revenue and Expense | The following table provides detailed information regarding the Company’s office revenues and expenses for the three and six months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Office revenues: Rental income $ 6,734 $ 7,007 $ 13,604 $ 13,919 Other income 201 187 427 392 Office revenues $ 6,935 $ 7,194 $ 14,031 $ 14,311 Office expenses: Operating, maintenance, and management $ 2,144 $ 2,338 $ 4,418 $ 4,663 Real estate taxes and insurance 1,093 1,089 2,193 2,161 Office expenses $ 3,237 $ 3,427 $ 6,611 $ 6,824 |
Schedule of Future Minimum Rental Income for Company's Properties | As of June 30, 2020, the future minimum rental income from the Company’s office properties under its non-cancelable operating leases was as follows (in thousands): July 1, 2020 through December 31, 2020 $ 11,061 2021 20,153 2022 16,403 2023 13,304 2024 10,827 Thereafter 33,323 $ 105,071 |
Schedule of Concentration of Risk, by Risk | As of June 30, 2020, the highest tenant industry concentrations (greater than 10% of annualized base rent) in the Company’s portfolio were as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Legal Services 13 $ 4,547 21.2 % Public Administration 6 3,219 15.0 % Professional, Scientific, and Technical Services 11 2,961 13.8 % $ 10,727 50.0 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of June 30, 2020, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. |
Schedule of Hotel Revenue and Expense | As of June 30, 2020, the Company owned two hotel properties. The following table provides detailed information regarding the Company’s hotel revenues and expenses for the three and six months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Hotel revenues: Room $ 1,908 $ 7,590 $ 4,862 12,055 Food, beverage and convention services 233 1,679 834 2,552 Campground 256 280 511 551 Other 211 518 480 889 Hotel revenues $ 2,608 $ 10,067 $ 6,687 $ 16,047 Hotel expenses: Room $ 608 $ 1,680 $ 1,698 3,004 Food, beverage and convention services 262 1,164 887 1,940 General and administrative 337 708 1,142 1,494 Sales and marketing 291 912 830 1,606 Repairs and maintenance 335 526 797 1,092 Utilities 214 224 508 485 Property taxes and insurance 519 435 1,108 873 Other 162 487 416 817 Hotel expenses $ 2,728 $ 6,136 $ 7,386 $ 11,311 |
Schedule of Contract with Customer, Asset and Liability | The following table summarizes the Company’s contract liabilities, which are comprised of advanced deposits and are included in other liabilities in the accompanying consolidated balance sheets, as of June 30, 2020 and December 31, 2019 (in thousands): June 30, 2020 December 31, 2019 Contract liability $ 459 $ 500 Revenue recognized in the period from: Amounts included in contract liability at the beginning of the period $ 267 $ 281 |
Schedule of Apartment Property Revenue and Expense | The following table provides detailed information regarding the Company’s apartment revenues and expenses for the three months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Apartment revenues: Rental income $ 1,807 $ 1,829 $ 3,635 $ 3,659 Other income 209 141 438 306 Apartment revenues $ 2,016 $ 1,970 $ 4,073 $ 3,965 Apartment expenses: Operating, maintenance, and management $ 431 $ 544 $ 875 $ 1,080 Real estate taxes and insurance 343 339 709 700 Apartment expenses $ 774 $ 883 $ 1,584 $ 1,780 |
TENANT ORIGINATION AND ABSORP_2
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities | As of June 30, 2020 and December 31, 2019, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Below-Market June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019 June 30, 2020 December 31, 2019 Cost $ 13,425 $ 15,422 $ 72 $ 72 $ (8,962) $ (10,802) Accumulated Amortization (7,349) (7,954) (34) (28) 5,299 6,125 Net Amount $ 6,076 $ 7,468 $ 38 $ 44 $ (3,663) $ (4,677) |
Amortization of Tenant Origination and Absorption Costs, Above-Market Leases and Below-Market Lease Liabilities | Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands): Tenant Origination and Absorption Costs Above-Market Below-Market For the Three Months Ended June 30, For the Three Months Ended June 30, For the Three Months Ended June 30, 2020 2019 2020 2019 2020 2019 Amortization $ (673) $ (888) $ (3) $ (4) $ 472 $ 679 Tenant Origination and Absorption Costs Above-Market Below-Market For the Six Months Ended June 30, For the Six Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 2020 2019 Amortization $ (1,393) $ (1,831) $ (6) $ (9) $ 1,014 $ 1,382 |
REAL ESTATE EQUITY SECURITIES (
REAL ESTATE EQUITY SECURITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Securities | The following table sets forth the number of shares owned by the Company and the related carrying value of the shares as of June 30, 2020 and December 31, 2019 (dollars in thousands): June 30, 2020 December 31, 2019 Real Estate Equity Securities Number of Shares Owned Total Carrying Value Number of Shares Owned Total Carrying Value Franklin Street Properties Corp. 1,580,713 $ 8,046 1,160,591 $ 9,934 Plymouth Industrial REIT, Inc. 43,829 561 — — 1,624,542 $ 8,607 1,160,591 $ 9,934 |
Schedule of Gain (Loss) on Securities | The following summarizes the portion of gain and loss for the period related to real estate equity securities held during the three and six months ended June 30, 2020 and 2019 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net (loss) gain recognized during the period on real estate equity securities $ (728) $ 221 $ (4,618) $ 1,335 Less net gain recognized during the period on real estate equity securities sold during the period (67) — (67) — Unrealized (loss) gain recognized during the reporting period on real estate equity securities held at the end of the period $ (795) $ 221 $ (4,685) $ 1,335 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | As of June 30, 2020 and December 31, 2019, the Company’s notes payable consisted of the following (in thousands): Book Value as of June 30, 2020 Book Value as of December 31, 2019 Contractual Interest Rate (1) Effective Interest Rate (1) Payment Type Maturity Date Springmaid Beach Resort Mortgage Loan (2) $ 56,461 $ 56,536 One-month LIBOR + 2.25% (2) 5.75% Principal & 08/10/2022 Q&C Hotel Mortgage Loan 25,000 25,000 One-month LIBOR + 2.50% (3) 4.50% Principal & Interest (3) 12/23/2022 Lincoln Court Mortgage Loan 34,615 34,615 One-month LIBOR + 1.75% 1.91% Interest Only 12/01/2020 Lofts at NoHo Commons Mortgage Loan (4) 73,862 73,862 One-month LIBOR + 2.18% (4) 3.93% Interest Only 09/09/2021 210 West 31st Street Mortgage Loan 20,000 20,000 One-month LIBOR + 3.00% 3.16% Interest Only 12/16/2020 Oakland City Center Mortgage Loan (5) 97,112 95,989 One-month LIBOR + 1.75% 1.91% Interest Only 09/01/2022 Madison Square Mortgage Loan (6) 23,757 23,593 One-month LIBOR + 4.05% (6) 5.05% Interest Only 10/09/2020 Total notes payable principal outstanding 330,807 329,595 Deferred financing costs, net (2,621) (3,600) Total notes payable, net $ 328,186 $ 325,995 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of June 30, 2020. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2020 (consisting of the contractual interest rate, contractual floor rates and the effects of interest rate caps, if applicable), using interest rate indices at June 30, 2020, where applicable. (2) As of June 30, 2020, $57.3 million had been disbursed to the Company and up to $9.7 million was available for future disbursements, subject to certain terms and conditions contained in the loan documents. The interest rate is variable at the higher of one-month LIBOR + 2.25% or 5.75%. (3) The interest rate is variable at the higher of one-month LIBOR + 2.5% or 4.5%. Principal payments will commence on January 1, 2022. (4) As of June 30, 2020, $73.9 million had been disbursed to the Company and up to $2.1 million is available for future disbursements to be used for tenant improvements and leasing commissions, subject to certain terms and conditions contained in the loan documents. The LIBOR rate is variable at the higher of one-month LIBOR or 1.75%. (5) As of June 30, 2020, $97.1 million had been disbursed to the Company and up to $6.3 million is available for future disbursements to be used for tenant improvements and leasing commissions, subject to certain terms and conditions contained in the loan documents. Beginning October 1, 2020, monthly payments will include principal and interest with principal payments of $110,000 or, in the event the Company repays any principal of the loan amount, with principal payments calculated using an amortization schedule of 30 years and an annual interest rate of 6.0%, subject to certain terms and conditions contained in the loan documents. (6) As of June 30, 2020, $23.8 million had been disbursed to the Company and up to $10.3 million is available for future disbursements to be used for tenant improvements and leasing expenses, subject to certain terms and conditions contained in the loan documents. The Madison Square Mortgage Loan bears interest at a floating rate of 405 basis points over one-month LIBOR, but at no point shall the interest rate be less than 5.05%. |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of June 30, 2020 (in thousands): July 1, 2020 through December 31, 2020 $ 78,702 2021 76,226 2022 175,879 $ 330,807 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Face Value, Carrying Amounts and Fair Value | The following were the face value, carrying amount and fair value of the Company’s financial instruments as of June 30, 2020 and December 31, 2019, which carrying amounts do not approximate the fair values (in thousands): June 30, 2020 December 31, 2019 Face Value Carrying Amount Fair Value Face Value Carrying Amount Fair Value Financial liability (Level 3): Notes payable $ 330,807 $ 328,186 $ 327,350 $ 329,595 $ 325,995 $ 330,687 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of June 30, 2020, the Company measured the following assets at fair value on a recurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Recurring Basis: Real estate equity securities $ 8,607 $ 8,607 $ — $ — Asset derivatives - interest rate caps $ 10 $ — $ 10 $ — As of December 31, 2019, the Company measured the following assets at fair value on a recurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Basis: Real estate equity securities $ 9,934 $ 9,934 $ — $ — |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Costs | Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three and six months ended June 30, 2020 and 2019, respectively, and any related amounts payable as of June 30, 2020 and December 31, 2019 (in thousands): Incurred Payable as of Three Months Ended June 30, Six Months Ended June 30, June 30, 2020 December 31, 2019 2020 2019 2020 2019 Expensed Asset management fees $ 1,053 $ 1,062 $ 2,096 $ 2,111 $ 1,034 $ 620 Reimbursable operating expenses (1) — 92 72 194 — — Capitalized Acquisition fees on real estate equity securities — — 71 — — — Acquisition fee on investment in unconsolidated entities 46 — 46 — — 29 $ 1,099 $ 1,154 $ 2,285 $ 2,305 $ 1,034 $ 649 _____________________ (1) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cyber-security related expenses incurred by the applicable advisor under the applicable advisory agreement. The Company has reimbursed the applicable advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $0.1 million and $0.2 million for the three and six months ended June 30, 2019, respectively and were the only employee costs reimbursed under the applicable advisory agreement over the shown periods. There were no employee cost reimbursements during 2020. In the future, the Advisor may seek reimbursement for certain other employee costs under the Advisory Agreement. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition or origination fees or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimbursed the applicable advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the applicable advisor on behalf of the Company. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligation, Fiscal Year Maturity Schedule | As of June 30, 2020, the Company had leasehold interests expiring on various expiration dates between 2023 and 2114. Future minimum lease payments owed by the Company under the finance leases as of June 30, 2020 are as follows (in thousands): July 1, 2020 through December 31, 2020 $ 240 2021 735 2022 935 2023 525 2024 360 Thereafter 52,956 Total expected minimum lease liabilities 55,751 Less: Amount representing interest (1) (47,765) Present value of net minimum lease payments (2) $ 7,986 _____________________ (1) Interest includes the amount necessary to reduce the total expected minimum lease obligations to present value calculated at the Company’s incremental borrowing rate at acquisition. (2) The present value of net minimum lease payments are presented in other liabilities in the accompanying consolidated balance sheets. |
ORGANIZATION (Details)
ORGANIZATION (Details) $ / shares in Units, $ in Thousands | Nov. 01, 2019 | Feb. 13, 2018USD ($)shares | Jul. 14, 2017USD ($)shares | Jul. 31, 2014shares | Apr. 02, 2014shares | Jul. 03, 2013USD ($)$ / sharesshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2020USD ($)investmentpropertysubsidiaryshares | Jun. 30, 2019USD ($)shares | Aug. 11, 2014USD ($)shares | Jun. 30, 2020USD ($)investmentpropertysubsidiaryshares | Feb. 19, 2020 | Nov. 14, 2013shares |
Organizational Structure [Line Items] | |||||||||||||
Number of wholly owned subsidiaries | subsidiary | 3 | 3 | |||||||||||
Period of termination of advisory agreement without cause or penalty | 30 days | ||||||||||||
Number of investments in an unconsolidated entity | investment | 2 | 2 | |||||||||||
Number of investments in equity securities | investment | 2 | 2 | |||||||||||
Proceeds from issuance of common stock, dividend reinvestment plan | $ | $ 10,000 | ||||||||||||
Issuance of common stock | $ | $ 448 | $ 135 | $ 1,347 | 9,200 | |||||||||
Private Placement | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Proceeds from issuance of common stock | $ | $ 32,200 | ||||||||||||
IPO | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Proceeds from issuance of common stock | $ | $ 228,600 | ||||||||||||
Separate Private Transactions | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Issuance of common stock | $ | $ 4,200 | ||||||||||||
Common Stock | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Issuance of common stock (in shares) | 21,739 | ||||||||||||
Shares issued (in dollars per share) | $ / shares | $ 9.20 | ||||||||||||
Common Stock | Class A | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Issuance of common stock (in shares) | 24,324 | 6,552 | 73,549 | 833,490 | |||||||||
Shares, dividend reinvestment plan (in shares) | 730,193 | ||||||||||||
Issuance of common stock | $ | $ 1 | $ 1 | |||||||||||
Common Stock | Class T | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Issuance of common stock (in shares) | 21,846 | 6,290 | 65,825 | 164,618 | |||||||||
Shares, dividend reinvestment plan (in shares) | 340,127 | ||||||||||||
Issuance of common stock | $ | $ 1 | $ 1 | |||||||||||
Common Stock | Private Placement | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Issuance of common stock (in shares) | 3,619,851 | ||||||||||||
Common Stock | Private Placement | Class A | Willowbrook Capital Group LLC | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Issuance of common stock (in shares) | 10,935 | 214,175 | 120,106 | 120,106 | |||||||||
Issuance of common stock | $ | $ 100 | $ 2,000 | $ 1,000 | ||||||||||
Common Stock | IPO | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Shares registered in primary offering (in shares) | 100,000,000 | ||||||||||||
Shares registered for sale under dividend reinvestment plan (in shares) | 80,000,000 | ||||||||||||
Common Stock | IPO | Class A | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Issuance of common stock (in shares) | 11,977,758 | ||||||||||||
Common Stock | IPO | Class T | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Issuance of common stock (in shares) | 11,537,701 | ||||||||||||
Common Stock | IPO | Maximum | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Stock offering, shares authorized for issuance (in shares) | 180,000,000 | ||||||||||||
Hotel | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 2 | 2 | |||||||||||
Office Building | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 3 | 3 | |||||||||||
Apartment Building | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Number of real estate properties | property | 1 | 1 | |||||||||||
Pacific Oak Capital Advisors, LLC | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Period of termination of renewal of advisory agreement without cause or penalty | 90 days | ||||||||||||
POSOR I | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Merger, common stock conversion ratio | 96.43% | ||||||||||||
KBS Strategic Opportunity Limited Partnership II | |||||||||||||
Organizational Structure [Line Items] | |||||||||||||
Partnership interest in Operating Partnership | 0.10% | ||||||||||||
Partnership interest in the Operating Partnership and is its sole limited partner | 99.90% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2020USD ($)segment$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Accounting Policies [Abstract] | ||||||
Redeemable common stock payable | $ 621 | $ 621 | $ 2,218 | |||
Number of reportable segments | segment | 1 | |||||
Potentially dilutive securities | shares | 0 | 0 | 0 | 0 | ||
Summary of Significant Accounting Policies [Line Items] | ||||||
Stock redeemed during period | $ 10 | $ 239 | $ 1,730 | $ 2,733 | ||
Class A | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0 | $ 0.02397501 | $ 0 | $ 0.0639334 | ||
Class T | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0 | $ 0.02397501 | $ 0 | $ 0.0639334 | ||
Forecast | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Remaining authorized repurchase amount | $ 500 | |||||
Common Stock | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Stock redeemed during period | $ 1,700 | |||||
Number of shares non-redeemable do to limitation (in shares) | shares | 1,037,033 | |||||
Number of shares non-redeemable do to limitation | $ 10,500 | |||||
Common Stock | Class A | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Stock redeemed during period | $ 1 | $ 1 | $ 3 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - EPS Two-class Method (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (6,341) | $ (2,585) | $ (16,811) | $ (4,120) |
Undistributed net loss attributable to common stockholders | (6,341) | (3,309) | (16,811) | (6,050) |
Class A | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | (3,763) | (1,537) | (9,978) | (2,451) |
Less: Common Stock cash distributions declared | 0 | 430 | 0 | 1,148 |
Undistributed net loss attributable to common stockholders | $ (3,763) | $ (1,967) | $ (9,978) | $ (3,599) |
Net loss per common share, basic and diluted (in dollars per share) | $ (0.21) | $ (0.09) | $ (0.56) | $ (0.14) |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 17,842,289 | 17,930,156 | 17,860,958 | 17,955,331 |
Class T | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss attributable to common stockholders | $ (2,578) | $ (1,048) | $ (6,833) | $ (1,669) |
Less: Common Stock cash distributions declared | 0 | 294 | 0 | 782 |
Undistributed net loss attributable to common stockholders | $ (2,578) | $ (1,342) | $ (6,833) | $ (2,451) |
Net loss per common share, basic and diluted (in dollars per share) | $ (0.21) | $ (0.09) | $ (0.56) | $ (0.14) |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 12,222,534 | 12,230,499 | 12,231,843 | 12,221,952 |
REAL ESTATE - Additional Inform
REAL ESTATE - Additional Information (Details) | Jun. 30, 2020property |
Hotel | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 2 |
Office Building | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 3 |
Apartment Building | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
Office/ Retail Property | |
Real Estate Properties [Line Items] | |
Number of real estate properties | 1 |
REAL ESTATE - Schedule of Real
REAL ESTATE - Schedule of Real Estate Investments (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | $ 548,509,000 | $ 545,406,000 |
Accumulated depreciation and amortization | (59,129,000) | (51,723,000) |
Total real estate, net | 489,380,000 | 493,683,000 |
Springmaid Beach Resort | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 67,896,000 | |
Accumulated depreciation and amortization | (11,804,000) | |
Total real estate, net | $ 56,092,000 | |
Ownership % | 90.00% | |
Q&C Hotel | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | $ 54,555,000 | |
Accumulated depreciation and amortization | (9,446,000) | |
Total real estate, net | $ 45,109,000 | |
Ownership % | 90.00% | |
Lincoln Court | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | $ 51,842,000 | |
Accumulated depreciation and amortization | (5,493,000) | |
Total real estate, net | $ 46,349,000 | |
Ownership % | 100.00% | |
Lofts at NoHo Commons | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | $ 108,279,000 | |
Accumulated depreciation and amortization | (7,950,000) | |
Total real estate, net | $ 100,329,000 | |
Ownership % | 90.00% | |
210 West 31st Street | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | $ 55,269,000 | |
Accumulated depreciation and amortization | 0 | |
Total real estate, net | $ 55,269,000 | |
Ownership % | 80.00% | |
Weighted average discount rate, percent | 6.10% | |
Right-of-use asset, amortization | $ 0 | |
Oakland City Center | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 175,168,000 | |
Accumulated depreciation and amortization | (20,118,000) | |
Total real estate, net | $ 155,050,000 | |
Ownership % | 100.00% | |
Madison Square | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | $ 35,500,000 | |
Accumulated depreciation and amortization | (4,318,000) | |
Total real estate, net | $ 31,182,000 | |
Ownership % | 90.00% | |
Weighted average discount rate, percent | 5.40% | |
Weighted average remaining lease term | 2 years 3 months 18 days | |
Land | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | $ 102,288,000 | 102,288,000 |
Land | Springmaid Beach Resort | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 27,438,000 | |
Land | Q&C Hotel | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 1,232,000 | |
Land | Lincoln Court | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 14,706,000 | |
Land | Lofts at NoHo Commons | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 26,222,000 | |
Land | 210 West 31st Street | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 0 | |
Land | Oakland City Center | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 22,150,000 | |
Land | Madison Square | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 10,540,000 | |
Finance lease, right-of-use asset | 1,900,000 | |
Buildings and improvements | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 432,796,000 | 427,696,000 |
Buildings and improvements | Springmaid Beach Resort | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 40,458,000 | |
Buildings and improvements | Q&C Hotel | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 53,323,000 | |
Buildings and improvements | Lincoln Court | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 36,067,000 | |
Buildings and improvements | Lofts at NoHo Commons | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 82,057,000 | |
Buildings and improvements | 210 West 31st Street | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 55,269,000 | |
Finance lease, right-of-use asset | 6,800,000 | |
Buildings and improvements | Oakland City Center | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 143,462,000 | |
Buildings and improvements | Madison Square | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 22,160,000 | |
Tenant origination and absorption costs | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 13,425,000 | $ 15,422,000 |
Tenant origination and absorption costs | Springmaid Beach Resort | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 0 | |
Tenant origination and absorption costs | Q&C Hotel | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 0 | |
Tenant origination and absorption costs | Lincoln Court | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 1,069,000 | |
Tenant origination and absorption costs | Lofts at NoHo Commons | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 0 | |
Tenant origination and absorption costs | 210 West 31st Street | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 0 | |
Tenant origination and absorption costs | Oakland City Center | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | 9,556,000 | |
Tenant origination and absorption costs | Madison Square | ||
Real Estate Properties [Line Items] | ||
Total real estate, cost and net of impairment charges | $ 2,800,000 |
REAL ESTATE - Office Property (
REAL ESTATE - Office Property (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)ft²property | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)ft²property | Jun. 30, 2019USD ($) | |
Real Estate Properties [Line Items] | ||||
Other income | $ (701) | $ 269 | $ (4,558) | $ 4,247 |
Total revenues | 11,710 | 19,336 | 25,081 | 34,532 |
Total expenses | $ 17,873 | 22,410 | $ 38,425 | 43,670 |
Office Building | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate properties | property | 3 | 3 | ||
Net rentable area | ft² | 806,960 | 806,960 | ||
Percentage of portfolio occupied | 69.00% | 69.00% | ||
Rental income | $ 6,734 | 7,007 | $ 13,604 | 13,919 |
Other income | 201 | 187 | 427 | 392 |
Total revenues | 6,935 | 7,194 | 14,031 | 14,311 |
Operating, maintenance, and management | 2,144 | 2,338 | 4,418 | 4,663 |
Real estate taxes and insurance | 1,093 | 1,089 | 2,193 | 2,161 |
Total expenses | $ 3,237 | $ 3,427 | $ 6,611 | $ 6,824 |
REAL ESTATE - Operating Leases
REAL ESTATE - Operating Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Real Estate Properties [Line Items] | |||||
Deferred rent recognized | $ 100,000 | $ 100,000 | $ 300,000 | $ 200,000 | |
Deferred rent receivables | 3,900,000 | 3,900,000 | $ 2,900,000 | ||
Incentive to lessee | 100,000 | 100,000 | 200,000 | ||
Office Revenue | |||||
Real Estate Properties [Line Items] | |||||
Revenue adjustments | 0 | 45,000 | |||
Operating Maintenance Expense | |||||
Real Estate Properties [Line Items] | |||||
Bad debt expense | $ 31,000 | $ 100,000 | |||
Other Liabilities | |||||
Real Estate Properties [Line Items] | |||||
Security deposit liability | $ 1,000,000 | $ 1,000,000 | $ 1,100,000 | ||
Maximum | |||||
Real Estate Properties [Line Items] | |||||
Operating lease, term | 10 years 3 months 18 days | 10 years 3 months 18 days | |||
Weighted Average | |||||
Real Estate Properties [Line Items] | |||||
Operating lease, term | 3 years 3 months 18 days | 3 years 3 months 18 days |
REAL ESTATE - Future Minimum Re
REAL ESTATE - Future Minimum Rental Income (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Real Estate [Abstract] | |
July 1, 2020 through December 31, 2020 | $ 11,061 |
2021 | 20,153 |
2022 | 16,403 |
2023 | 13,304 |
2024 | 10,827 |
Thereafter | 33,323 |
Future minimum rental income | $ 105,071 |
REAL ESTATE - Highest Tenant In
REAL ESTATE - Highest Tenant Industry Concentrations, Greater than 10% of Annual Base Rent (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($)tenant | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 80 |
Annualized Base Rent | $ | $ 10,727 |
Percentage of Annualized Base Rent | 50.00% |
Legal Services | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 13 |
Annualized Base Rent | $ | $ 4,547 |
Percentage of Annualized Base Rent | 21.20% |
Public Administration | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 6 |
Annualized Base Rent | $ | $ 3,219 |
Percentage of Annualized Base Rent | 15.00% |
Professional, Scientific and Technical Services | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 11 |
Annualized Base Rent | $ | $ 2,961 |
Percentage of Annualized Base Rent | 13.80% |
REAL ESTATE - Hotel Revenue and
REAL ESTATE - Hotel Revenue and Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Hotel expenses: | ||||
General and administrative | $ 1,434 | $ 768 | $ 3,079 | $ 1,475 |
Hotel | ||||
Hotel revenues: | ||||
Revenue | 2,608 | 10,067 | 6,687 | 16,047 |
Hotel expenses: | ||||
Expenses | 2,728 | 6,136 | 7,386 | 11,311 |
General and administrative | 337 | 708 | 1,142 | 1,494 |
Sales and marketing | 291 | 912 | 830 | 1,606 |
Repairs and maintenance | 335 | 526 | 797 | 1,092 |
Property taxes and insurance | 519 | 435 | 1,108 | 873 |
Hotel | Room | ||||
Hotel revenues: | ||||
Revenue | 1,908 | 7,590 | 4,862 | 12,055 |
Hotel expenses: | ||||
Expenses | 608 | 1,680 | 1,698 | 3,004 |
Hotel | Food, beverage and convention services | ||||
Hotel revenues: | ||||
Revenue | 233 | 1,679 | 834 | 2,552 |
Hotel expenses: | ||||
Expenses | 262 | 1,164 | 887 | 1,940 |
Hotel | Campground | ||||
Hotel revenues: | ||||
Revenue | 256 | 280 | 511 | 551 |
Hotel | Utilities | ||||
Hotel expenses: | ||||
Expenses | 214 | 224 | 508 | 485 |
Hotel | Other | ||||
Hotel revenues: | ||||
Revenue | 211 | 518 | 480 | 889 |
Hotel expenses: | ||||
Expenses | $ 162 | $ 487 | $ 416 | $ 817 |
REAL ESTATE - Contract Liabilit
REAL ESTATE - Contract Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Product Liability Contingency [Line Items] | |||
Amounts included in contract liability at the beginning of the period | $ 357 | $ 233 | |
Other Liabilities | |||
Product Liability Contingency [Line Items] | |||
Contract liability | 459 | $ 500 | |
Amounts included in contract liability at the beginning of the period | $ 267 | $ 281 |
REAL ESTATE - Apartment Propert
REAL ESTATE - Apartment Property (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)propertyunit | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)propertyunit | Jun. 30, 2019USD ($) | |
Real Estate Properties [Line Items] | ||||
Other income | $ (701) | $ 269 | $ (4,558) | $ 4,247 |
Total revenues | 11,710 | 19,336 | 25,081 | 34,532 |
Total expenses | $ 17,873 | 22,410 | $ 38,425 | 43,670 |
Apartment Building | ||||
Real Estate Properties [Line Items] | ||||
Number of real estate properties | property | 1 | 1 | ||
Number of units in real estate property | unit | 292 | 292 | ||
Percentage of real estate portfolio occupied | 88.00% | 88.00% | ||
Rental income | $ 1,807 | 1,829 | $ 3,635 | 3,659 |
Other income | 209 | 141 | 438 | 306 |
Total revenues | 2,016 | 1,970 | 4,073 | 3,965 |
Operating, maintenance, and management | 431 | 544 | 875 | 1,080 |
Real estate taxes and insurance | 343 | 339 | 709 | 700 |
Total expenses | $ 774 | $ 883 | $ 1,584 | $ 1,780 |
REAL ESTATE - Geographic Concen
REAL ESTATE - Geographic Concentration Risk (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate Properties [Line Items] | |
Concentration risk, percentage | 50.00% |
Assets, Total | California | |
Real Estate Properties [Line Items] | |
Concentration risk, percentage | 57.20% |
TENANT ORIGINATION AND ABSORP_3
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES - Net Amount and Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |||||
Tenant Origination And Absorption Costs, Cost | $ 13,425 | $ 13,425 | $ 15,422 | ||
Tenant Origination and Absorption Costs, Accumulated Amortization | (7,349) | (7,349) | (7,954) | ||
Tenant Origination and Absorption Costs, Net Amount | 6,076 | 6,076 | 7,468 | ||
Tenant Origination and Absorption Costs, Amortization expense | (673) | $ (888) | (1,393) | $ (1,831) | |
Above-Market Lease Assets, Cost | 72 | 72 | 72 | ||
Above-Market Lease Assets, Accumulated Amortization | (34) | (34) | (28) | ||
Above-Market Lease Assets, Net Amount | 38 | 38 | 44 | ||
Above-Market Lease Assets, Amortization expense | (3) | (4) | (6) | (9) | |
Below-Market Lease Liabilities, Cost | (8,962) | (8,962) | (10,802) | ||
Below-Market Lease Liabilities, Accumulated Amortization | 5,299 | 5,299 | 6,125 | ||
Below-Market Lease Liabilities, Net Amount | (3,663) | (3,663) | $ (4,677) | ||
Below-Market Lease Liabilities, Amortization expense | $ 472 | $ 679 | $ 1,014 | $ 1,382 |
TENANT ORIGINATION AND ABSORP_4
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||||
Intangible assets | $ 2,200 | $ 2,200 | $ 2,200 | ||
Depreciation and amortization | 4,909 | $ 5,107 | $ 9,805 | $ 10,181 | |
Housing Subsidy Intangible Asset | |||||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||||
Remaining amortization period | 28 years 1 month 6 days | ||||
Depreciation and amortization | 20 | 20 | $ 40 | 40 | |
Property Tax Abatement Intangible Asset | |||||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||||
Depreciation and amortization | 100 | $ 100 | $ 200 | $ 200 | |
Property Tax Abatement Intangible Asset | Minimum | |||||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||||
Remaining amortization period | 3 years 3 months 18 days | ||||
Prepaid Expenses and Other Assets | |||||
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Line Items] | |||||
Unamortized tax abatement intangible asset | $ 1,700 | $ 1,700 | $ 1,800 |
REAL ESTATE EQUITY SECURITIES -
REAL ESTATE EQUITY SECURITIES - Shares Owned (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Total Carrying Value | $ 8,607 | $ 9,934 |
Available-for-sale Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of Shares Owned (in shares) | 1,624,542 | 1,160,591 |
Plymouth Industrial REIT, Inc. | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Carrying Value | $ 8,046 | $ 9,934 |
Plymouth Industrial REIT, Inc. | Available-for-sale Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of Shares Owned (in shares) | 1,580,713 | 1,160,591 |
Franklin Street Properties Corp. | ||
Debt Securities, Available-for-sale [Line Items] | ||
Total Carrying Value | $ 561 | $ 0 |
Franklin Street Properties Corp. | Available-for-sale Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of Shares Owned (in shares) | 43,829 | 0 |
REAL ESTATE EQUITY SECURITIES_2
REAL ESTATE EQUITY SECURITIES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Investment in real estate securities | $ 4,049 | $ 4 | ||
Proceeds from sale of securities | 758 | 0 | ||
Dividend income from real estate equity securities | $ 151 | $ 105 | 290 | $ 209 |
Plymouth Industrial REIT, Inc. | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment in real estate securities | $ 1,300 | |||
Plymouth Industrial REIT, Inc. | Available-for-sale Securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Stock purchased (in shares) | 92,931 | |||
Number of securities sold (in shares) | 49,102 | |||
Proceeds from sale of securities | $ 800 | |||
Franklin Street Properties Corp. | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment in real estate securities | $ 2,800 | |||
Franklin Street Properties Corp. | Available-for-sale Securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Stock purchased (in shares) | 420,122 |
REAL ESTATE EQUITY SECURITIES_3
REAL ESTATE EQUITY SECURITIES - Portion of Gain and Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Unrealized gain (loss) recognized during the reporting period on real estate equity securities held at the end of the period | $ (728) | $ 221 | $ (4,618) | $ 1,335 |
Less net gain recognized during the period on real estate equity securities sold during the period | (67) | 0 | (67) | 0 |
Net gain (loss) recognized during the period on real estate equity securities | $ (795) | $ 221 | $ (4,685) | $ 1,335 |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED ENTITIES (Details) $ in Thousands, € in Millions | Jun. 28, 2016USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020EUR (€) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)numberOfJointVenturesshares | Jun. 28, 2016EUR (€) |
Schedule of Equity Method Investments [Line Items] | ||||||||
Equity in income of unconsolidated entity | $ 0 | $ 0 | $ 0 | $ 2,800 | ||||
Dividend income | 151 | $ 105 | 290 | $ 209 | ||||
Pacific Oak Opportunity Zone Fund I | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Number of units acquired (in shares) | shares | 13 | |||||||
Investments | 3,000 | 3,000 | $ 2,900 | |||||
Number of joint ventures | numberOfJointVentures | 2 | |||||||
Real Estate Joint Venture | Industrial | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Current capacity | $ 2,900 | € 2.6 | ||||||
Amount outstanding | $ 2,300 | € 2.1 | ||||||
Ownership interest | 5.00% | 5.00% | ||||||
Investments in unconsolidated joint ventures | $ 105,600 | $ 100 | 100 | € 95.5 | ||||
Amortization of acquisition costs | $ 200 | |||||||
Equity in income of unconsolidated entity | $ 2,800 | |||||||
Dividend income | $ 400 | € 0.4 |
NOTES PAYABLE - Schedule of Not
NOTES PAYABLE - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 330,807 | $ 329,595 |
Deferred financing costs, net | (2,621) | (3,600) |
Total notes payable, net | 328,186 | 325,995 |
Mortgage | Springmaid Beach Resort Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 56,461 | 56,536 |
Contractual Interest Rate | 2.25% | |
Effective Interest Rate | 5.75% | |
Mortgage | Springmaid Beach Resort Mortgage Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Amount outstanding | $ 57,300 | |
Unused borrowing capacity, amount | $ 9,700 | |
Mortgage | Springmaid Beach Resort Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 2.25% | |
Mortgage | Q&C Hotel Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 25,000 | 25,000 |
Effective Interest Rate | 4.50% | |
Mortgage | Q&C Hotel Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 2.50% | |
Mortgage | Lincoln Court Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 34,615 | 34,615 |
Effective Interest Rate | 1.91% | |
Mortgage | Lincoln Court Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 1.75% | |
Mortgage | Lofts at NoHo Commons Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 73,862 | 73,862 |
Effective Interest Rate | 3.93% | |
Mortgage | Lofts at NoHo Commons Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 2.18% | |
Mortgage | Lofts at NoHo Commons Mortgage Loan | One-month LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 1.75% | |
Mortgage | 210 West 31st Street Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 20,000 | 20,000 |
Effective Interest Rate | 3.16% | |
Mortgage | 210 West 31st Street Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 3.00% | |
Mortgage | Oakland City Center Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 97,112 | 95,989 |
Effective Interest Rate | 1.91% | |
Periodic payment | $ 110 | |
Amortization schedule of mortgage loans on real estate | 30 years | |
Contractual interest rate, percent | 6.00% | |
Mortgage | Oakland City Center Mortgage Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Amount outstanding | $ 97,100 | |
Unused borrowing capacity, amount | $ 6,300 | |
Mortgage | Oakland City Center Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 1.75% | |
Mortgage | Madison Square Mortgage Loan | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 23,757 | $ 23,593 |
Effective Interest Rate | 5.05% | |
Mortgage | Madison Square Mortgage Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total notes payable principal outstanding | $ 23,800 | |
Mortgage | Madison Square Mortgage Loan | One-month LIBOR | ||
Debt Instrument [Line Items] | ||
Contractual Interest Rate | 4.05% | |
Mortgage | Grace Court Mortgage Loan | Maximum | ||
Debt Instrument [Line Items] | ||
Contractual interest rate, percent | 5.05% | |
Mortgage | Grace Court Mortgage Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Unused borrowing capacity, amount | $ 10,300 | |
Mortgage | 2200 Paseo Verde Mortgage Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Amount outstanding | 73,900 | |
Unused borrowing capacity, amount | $ 2,100 |
NOTES PAYABLE - Additional Info
NOTES PAYABLE - Additional Information (Details) - USD ($) $ in Thousands | May 15, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Derivative [Line Items] | ||||||
Interest expense | $ 3,738 | $ 5,027 | $ 7,864 | $ 9,988 | ||
Amortization of deferred financing costs | 500 | 400 | 1,000 | 800 | ||
Finance lease, interest | 200 | $ 200 | 300 | 300 | ||
Interest capitalized | 32 | 68 | 0 | |||
Interest payable | 900 | 900 | $ 800 | |||
Mortgage | Q&C Hotel Mortgage Loan | ||||||
Derivative [Line Items] | ||||||
Period of defer monthly principal and interest payments | 90 days | |||||
Interest Rate Cap | ||||||
Derivative [Line Items] | ||||||
Unrealized gain (loss) on derivative instruments | $ (4) | $ 9 | $ (6) |
NOTES PAYABLE - Schedule of Mat
NOTES PAYABLE - Schedule of Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
July 1, 2020 through December 31, 2020 | $ 78,702 | |
2021 | 76,226 | |
2022 | 175,879 | |
Total notes payable principal outstanding | $ 330,807 | $ 329,595 |
FAIR VALUE DISCLOSURES - Schedu
FAIR VALUE DISCLOSURES - Schedule of Face Value, Carrying Amounts and Fair Value (Details) - Level 3 - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, Face Value | $ 330,807 | $ 329,595 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, Value | 325,995 | |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, Value | $ 327,350 | $ 330,687 |
FAIR VALUE DISCLOSURES - Sche_2
FAIR VALUE DISCLOSURES - Schedule of Assets at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate equity securities | $ 8,607 | $ 9,934 |
Recurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate equity securities | 8,607 | 9,934 |
Recurring Basis | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivatives | 10 | |
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate equity securities | 8,607 | 9,934 |
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivatives | 0 | |
Recurring Basis | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate equity securities | 0 | 0 |
Recurring Basis | Significant Other Observable Inputs (Level 2) | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivatives | 10 | |
Recurring Basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate equity securities | 0 | $ 0 |
Recurring Basis | Significant Unobservable Inputs (Level 3) | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Asset derivatives | $ 0 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) | Nov. 01, 2019 | Jun. 30, 2020 | Dec. 31, 2019 |
Pacific Oak Opportunity Zone Fund I, LLC | |||
Related Party Transaction [Line Items] | |||
Investments | $ 2,900,000 | ||
Incurred | $ 26,000 | ||
KBS Capital Advisors LLC | |||
Related Party Transaction [Line Items] | |||
Term of advisory agreement | 1 year | ||
Renewal period | 1 year | ||
Pacific Oak Capital Advisors, LLC | |||
Related Party Transaction [Line Items] | |||
Acquisition fee, percent | 1.50% | ||
Benchmark amount of contracted acquisition sales price | $ 25,000,000 | ||
Acquisition fee as percent of benchmark contract sales price | 1.00% | ||
Quarterly asset management fee, percent of acquisition purchase price | 0.25% | ||
Financing fee, percent of original principal amount of indebtedness incurred | 0.50% |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related-party Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Payable as of | $ 1,034,000 | $ 1,034,000 | $ 649,000 | ||
Payment for administrative fees | 0 | $ 100,000 | 0 | $ 200,000 | |
Advisor and Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 1,099,000 | 1,154,000 | |||
Payable as of | 1,034,000 | 1,034,000 | 649,000 | ||
Acquisition fees on real estate equity securities | Advisor and Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Expenses | 0 | 0 | 71,000 | 0 | |
Payable as of | 0 | 0 | 0 | ||
Acquisition fee on investment in unconsolidated entities | Advisor and Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Expenses | 46,000 | 0 | 46,000 | 0 | |
Payable as of | 0 | 0 | 29,000 | ||
Advisor and Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Incurred | 2,285,000 | 2,305,000 | |||
Advisor and Dealer Manager | Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses | 1,053,000 | 1,062,000 | 2,096,000 | 2,111,000 | |
Payable as of | 1,034,000 | 1,034,000 | 620,000 | ||
Advisor and Dealer Manager | Reimbursable operating expenses | |||||
Related Party Transaction [Line Items] | |||||
Expenses | 0 | $ 92,000 | 72,000 | $ 194,000 | |
Payable as of | $ 0 | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | May 25, 2019 | May 25, 2016 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | May 06, 2020 | Apr. 27, 2020 | Dec. 31, 2019 |
Lease Obligations | |||||||||
July 1, 2020 through December 31, 2020 | $ 240,000 | $ 240,000 | |||||||
2021 | 735,000 | 735,000 | |||||||
2022 | 935,000 | 935,000 | |||||||
2023 | 525,000 | 525,000 | |||||||
2024 | 360,000 | 360,000 | |||||||
Thereafter | 52,956,000 | 52,956,000 | |||||||
Total expected minimum lease liabilities | 55,751,000 | 55,751,000 | |||||||
Less: Amount representing interest | (47,765,000) | (47,765,000) | |||||||
Present value of net minimum lease payments | 7,986,000 | 7,986,000 | |||||||
Total notes payable principal outstanding | 330,807,000 | 330,807,000 | $ 329,595,000 | ||||||
Springmaid Beach Resort | Doubletree Management LLC | |||||||||
Loss Contingencies [Line Items] | |||||||||
Fees incurred to management agreement | 72,000 | $ 200,000 | $ 100,000 | $ 300,000 | |||||
Springmaid Beach Resort | Doubletree Management LLC | |||||||||
Loss Contingencies [Line Items] | |||||||||
Performance period | 2 years | ||||||||
Base fee as percentage of total operating revenue in year one | 2.50% | ||||||||
Base fee as percentage of total operating revenue in year two | 2.75% | ||||||||
Base fee as percentage of total operating revenue, thereafter | 3.00% | ||||||||
Management fee as percent of any campground revenue | 2.00% | ||||||||
Incentive fee as percent of operating cash flow | 15.00% | ||||||||
Percent of total investments | 12.00% | ||||||||
Brand services fee as percent of total room revenue | 4.00% | ||||||||
Management agreement, extension period | 5 years | ||||||||
Q&C Hotel | Paycheck Protection Program, CARES Act | |||||||||
Lease Obligations | |||||||||
Notes payable | $ 400,000 | $ 1,300,000 | |||||||
Total notes payable principal outstanding | 1,700,000 | $ 1,700,000 | |||||||
Q&C Hotel | Encore Hospitality, LLC | Direct Costs of Hotels | |||||||||
Loss Contingencies [Line Items] | |||||||||
Management agreement, fees accrued | 100,000 | $ 100,000 | 200,000 | ||||||
Q&C Hotel | Encore Hospitality, LLC | |||||||||
Loss Contingencies [Line Items] | |||||||||
Management agreement, extension period | 5 years | ||||||||
Base fee as percentage of gross revenue | 4.00% | ||||||||
Q&C Hotel | Marriott International | |||||||||
Loss Contingencies [Line Items] | |||||||||
Brand services fee as percent of total room revenue | 2.00% | 2.00% | |||||||
Fees incurred to management agreement | $ 100,000 | $ 200,000 | $ 200,000 | $ 400,000 | |||||
Brand services fee as percent of total room revenue, after three years | 5.00% | 5.00% | |||||||
Monthly marketing fund contribution fees as percent of gross room sales | 1.50% |