Document And Entity Information
Document And Entity Information - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Entity Registrant Name | Phillips Edison Grocery Center REIT II, Inc. | |
Entity Central Index Key | 1,581,405 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 46.4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Investment in real estate: | ||
Land and improvements | $ 506,574 | $ 452,515 |
Building and improvements | 1,028,050 | 905,705 |
Acquired in-place lease assets | 156,261 | 138,916 |
Acquired above-market lease assets | 14,663 | 13,024 |
Total investment in property | 1,705,548 | 1,510,160 |
Accumulated depreciation and amortization | (138,529) | (85,255) |
Net investment in property | 1,567,019 | 1,424,905 |
Investment in unconsolidated joint venture | 16,597 | 14,287 |
Total investment in real estate assets, net | 1,583,616 | 1,439,192 |
Cash and cash equivalents | 4,509 | 8,259 |
Restricted cash | 3,857 | 2,829 |
Other assets, net | 46,662 | 36,247 |
Total assets | 1,638,644 | 1,486,527 |
Liabilities: | ||
Mortgages and loans payable, net | 736,561 | 533,215 |
Acquired below-market lease liabilities, net of accumulated amortization of $9,818 and $6,362, respectively | 55,282 | 53,196 |
Accounts payable – affiliates | 3,351 | 3,499 |
Accounts payable and other liabilities | 40,878 | 34,383 |
Total liabilities | 836,072 | 624,293 |
Commitments and contingencies (Note 7) | 0 | 0 |
Equity: | ||
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 0 | 0 |
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 46,555 and 46,372 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 468 | 463 |
Additional paid-in capital | 1,031,026 | 1,026,887 |
Accumulated other comprehensive income | 4,965 | 4,390 |
Accumulated deficit | (233,887) | (169,506) |
Total equity | 802,572 | 862,234 |
Total liabilities and equity | $ 1,638,644 | $ 1,486,527 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Acquired below-market lease liabilities, accumulated amortization | $ 9,818 | $ 6,362 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued and outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued and outstanding | 46,555,000 | 46,372,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Rental income | $ 30,483 | $ 25,241 | $ 88,512 | $ 69,415 |
Tenant recovery income | 10,227 | 8,609 | 30,566 | 23,796 |
Other property income | 261 | 152 | 652 | 470 |
Total revenues | 40,971 | 34,002 | 119,730 | 93,681 |
Expenses: | ||||
Property operating | 6,264 | 5,498 | 19,059 | 15,391 |
Real estate taxes | 5,783 | 5,129 | 18,393 | 14,557 |
General and administrative | 4,870 | 4,437 | 14,691 | 13,289 |
Acquisition expenses | 240 | 579 | 499 | 8,570 |
Termination of affiliate arrangements | 5,962 | 0 | 5,962 | 0 |
Depreciation and amortization | 18,037 | 14,933 | 52,573 | 41,045 |
Total expenses | 41,156 | 30,576 | 111,177 | 92,852 |
Other: | ||||
Interest expense, net | (5,691) | (3,371) | (15,617) | (7,074) |
Gain on contribution of properties to unconsolidated joint venture | 0 | 0 | 0 | 3,341 |
Other income (expense), net | 19 | (7) | (132) | (249) |
Net (loss) income | $ (5,857) | $ 48 | $ (7,196) | $ (3,153) |
Earnings per common share: | ||||
Net (loss) income per share - basic and diluted | $ (0.13) | $ 0 | $ (0.15) | $ (0.07) |
Weighted-average common shares outstanding: | ||||
Basic | 46,545 | 46,219 | 46,529 | 46,168 |
Diluted | 46,545 | 46,221 | 46,529 | 46,168 |
Comprehensive (loss) income: | ||||
Net (loss) income | $ (5,857) | $ 48 | $ (7,196) | $ (3,153) |
Other comprehensive (loss) income: | ||||
Changed in unrealized (loss) gain on interest rate swap | (43) | 1,101 | 59 | 1,101 |
Comprehensive (loss) income | $ (5,900) | $ 1,149 | $ (7,137) | $ (2,052) |
Consolidated Statements Of Equi
Consolidated Statements Of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Balance, shares at Dec. 31, 2015 | 45,723 | ||||
Balance, values at Dec. 31, 2015 | $ 923,285 | $ 458 | $ 1,011,635 | $ 0 | $ (88,808) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share repurchases, shares | (770) | ||||
Share repurchases, value | (16,901) | $ (8) | (16,893) | ||
Distribution reinvestment plan (DRIP), shares | 1,253 | ||||
Distribution reinvestment plan (DRIP), value | 28,861 | $ 13 | 28,848 | ||
Change in unrealized gain on interest rate swaps | 1,101 | 1,101 | |||
Common distributions declared, $1.22 per share | (56,208) | (56,208) | |||
Share-based compensation, value | 10 | 10 | |||
Net (loss) | (3,153) | (3,153) | |||
Balance, shares at Sep. 30, 2016 | 46,206 | ||||
Balance, values at Sep. 30, 2016 | 876,995 | $ 463 | 1,023,600 | 1,101 | (148,169) |
Balance, shares at Dec. 31, 2016 | 46,372 | ||||
Balance, values at Dec. 31, 2016 | 862,234 | $ 463 | 1,026,887 | 4,390 | (169,506) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adoption of new accounting pronouncement (see Note 8) | 516 | (516) | |||
Balance at January 1, 2017, as adjusted at Jan. 01, 2017 | 862,234 | $ 463 | 1,026,887 | 4,906 | (170,022) |
Balance, shares at Jan. 01, 2017 | 46,372 | ||||
Balance, shares at Dec. 31, 2016 | 46,372 | ||||
Balance, values at Dec. 31, 2016 | 862,234 | $ 463 | 1,026,887 | 4,390 | (169,506) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share repurchases, shares | (1,040) | ||||
Share repurchases, value | (23,510) | $ (9) | (23,501) | ||
Distribution reinvestment plan (DRIP), shares | 1,222 | ||||
Distribution reinvestment plan (DRIP), value | 27,630 | $ 14 | 27,616 | ||
Change in unrealized gain on interest rate swaps | 59 | 59 | |||
Common distributions declared, $1.22 per share | (56,669) | (56,669) | |||
Share-based compensation, shares | 1 | ||||
Share-based compensation, value | 24 | 24 | |||
Net (loss) | (7,196) | (7,196) | |||
Balance, shares at Sep. 30, 2017 | 46,555 | ||||
Balance, values at Sep. 30, 2017 | $ 802,572 | $ 468 | $ 1,031,026 | $ 4,965 | $ (233,887) |
Consolidated Statements Of Equ6
Consolidated Statements Of Equity (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Stockholders' Equity [Abstract] | ||
Common distributions declared per share | $ 1.22 | $ 1.22 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) income | $ (7,196) | $ (3,153) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 51,595 | 40,281 |
Net amortization of above- and below-market leases | (1,782) | (1,547) |
Amortization of deferred financing expense | 2,060 | 1,377 |
Gain on contribution of properties | 0 | (3,341) |
Change in fair value of derivatives | (448) | (317) |
Straight-line rental income | (2,261) | (2,199) |
Equity in net loss of unconsolidated joint ventures | 144 | 126 |
Other | 81 | 125 |
Changes in operating assets and liabilities: | ||
Accounts receivable and accounts payable – affiliates | (162) | 2,022 |
Other assets | (10,583) | (8,693) |
Accounts payable and other liabilities | 5,700 | 10,065 |
Net cash provided by operating activities | 37,148 | 34,746 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions | (153,091) | (348,611) |
Capital expenditures | (9,934) | (11,275) |
Change in restricted cash | (1,028) | (822) |
Investment in unconsolidated joint venture | (2,854) | (2,580) |
Return of investment in unconsolidated joint venture | 400 | 0 |
Proceeds after contribution to unconsolidated joint venture | 0 | 87,386 |
Principal disbursement on notes receivable - affiliate | (1,272) | 0 |
Principal proceeds on notes receivable - affiliate | 1,272 | 0 |
Net cash used in investing activities | (166,507) | (275,902) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net change in credit facility | (5,644) | 56,000 |
Proceeds from mortgages and loans payable | 200,000 | 243,000 |
Payments on mortgages and loans payable | (13,726) | (13,364) |
Payments of deferred financing expenses | (2,353) | (5,517) |
Distributions paid, net of DRIP | (29,217) | (27,519) |
Repurchases of common stock | (23,451) | (18,782) |
Net cash provided by financing activities | 125,609 | 233,818 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (3,750) | (7,338) |
CASH AND CASH EQUIVALENTS: | ||
Beginning of period | 8,259 | 17,359 |
End of period | 4,509 | 10,021 |
SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Cash paid for interest | 14,297 | 6,148 |
Fair value of debt assumed | 24,697 | 58,047 |
Initial investment in unconsolidated joint venture | 0 | 6,888 |
Accrued capital expenditures | 4,314 | 954 |
Change in distributions payable | (178) | (172) |
Change in accrued share repurchase obligation | 59 | (1,881) |
Distributions reinvested | $ 27,630 | $ 28,861 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Phillips Edison Grocery Center REIT II, Inc. (“we,” the “Company,” “our,” or “us”) was formed as a Maryland corporation in June 2013. Substantially all of our business is conducted through Phillips Edison Grocery Center Operating Partnership II, L.P., (the “Operating Partnership”), a Delaware limited partnership formed in June 2013. We are a limited partner of the Operating Partnership, and our wholly owned subsidiary, PE Grocery Center OP GP II LLC, is the sole general partner of the Operating Partnership. We invest primarily in well-occupied, grocery-anchored, neighborhood and community shopping centers that have a mix of creditworthy national and regional retailers that sell necessity-based goods and services in strong demographic markets throughout the United States. In addition, we may invest in other retail properties including power and lifestyle shopping centers, multi-tenant shopping centers, free-standing single-tenant retail properties, and other real estate or real estate-related assets. Our advisor is Phillips Edison NTR II LLC (“PE-NTR II”), which was directly or indirectly owned by Phillips Edison Limited Partnership (“Phillips Edison sponsor”). On October 4, 2017, our Phillips Edison sponsor was acquired by Phillips Edison Grocery Center REIT I, Inc. (“PECO I”). Under the terms of the advisory agreement between PE-NTR II and us, PE-NTR II is responsible for the management of our day-to-day activities and the implementation of our investment strategy. As of September 30, 2017 , we wholly-owned fee simple interests in 83 real estate properties acquired from third parties unaffiliated with us or PE-NTR II. In addition, we own a 20% equity interest in a joint venture that owned 14 real estate properties as of September 30, 2017 (see Note 4 ). |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by management. For example, significant estimates and assumptions have been made with respect to the useful lives of assets; recoverable amounts of receivables; and other fair value measurement assessments required for the preparation of the consolidated financial statements. As a result, these estimates are subject to a degree of uncertainty. Other than those noted below, there have been no changes to our significant accounting policies during the nine months ended September 30, 2017 . For a full summary of our accounting policies, refer to our 2016 Annual Report on Form 10-K filed with the SEC on March 9, 2017. Basis of Presentation and Principles of Consolidation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to the audited consolidated financial statements of Phillips Edison Grocery Center REIT II, Inc. for the year ended December 31, 2016 , which are included in our 2016 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three and nine months ended September 30, 2017 , are not necessarily indicative of the operating results expected for the full year. The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation. Reclassifications —The following line item on our consolidated balance sheet as of December 31, 2016 , was reclassified to conform to the current year presentation: • Restricted Cash was separately disclosed due to significance in the current period. In the previous period these amounts were included in Other Assets, Net. Newly Adopted and Recently Issued Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material effect on our financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) This update amends existing guidance in order to provide consistency in accounting for the derecognition of a business or nonprofit activity. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We will adopt this standard concurrently with ASU 2014-09, listed below. We expect the adoption will impact our transactions that are subject to the amendments, which, although expected to be infrequent, would include a partial sale of real estate or contribution of a nonfinancial asset to form a joint venture. ASU 2016-18, Statement of Cash Flows (Topic 230) This update amends existing guidance in order to clarify the classification and presentation of restricted cash on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 Upon adoption, we will include amounts generally described as restricted cash within the beginning-of-period and end-of-period total amounts on the statement of cash flows rather than within an activity on the statement of cash flows. ASU 2016-15, Statement of Cash Flows (Topic 230) This update addresses the presentation of eight specific cash receipts and cash payments on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Of the eight specific cash receipts and cash payments listed within this guidance, we believe only three would be applicable to our business as it stands currently: debt prepayment or debt extinguishment costs, proceeds from settlement of insurance claims, and distributions received from equity method investees. We will continue to evaluate the impact that adoption of the standard will have on our presentation of these and any other applicable cash receipts and cash payments. ASU 2016-02, Leases (Topic 842) This update amends existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual reporting periods beginning after December 15, 2018, but early adoption is permitted. January 1, 2019 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. We have identified areas within our accounting policies we believe could be impacted by the new standard. We expect to have a change in presentation on our consolidated statement of operations with regards to Tenant Recovery Income, which includes reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. Additionally, this standard impacts the lessor’s ability to capitalize certain costs related to the leasing of vacant space, which will result in a reduction in the amount of execution costs currently being capitalized in connection with leasing activities. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it also applies to certain other transactions such as the sale of real estate or equipment. Expanded quantitative and qualitative disclosures are also required for contracts subject to ASU 2014-09. In 2015, the Financial Accounting Standard Board (“FASB”) provided for a one-year deferral of the effective date for ASU 2014-09, making it effective for annual reporting periods beginning after December 15, 2017. January 1, 2018 Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, we do not expect the adoption of this standard to have a material impact on our rental or reimbursement revenue. We currently plan to adopt this guidance on a modified retrospective basis. The following table provides a brief description of newly adopted accounting pronouncements and their effect on our financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2017-12, Derivatives and Hedging (Topic 815) This update amended existing guidance in order to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. September 2017 Upon adoption, we included a disclosure related to the effect of our hedging activities on our consolidated statements of operations. This disclosure also eliminated the periodic measurement and recognition of hedging ineffectiveness. We adopted this guidance on a modified retrospective basis and applied an adjustment to Accumulated Other Comprehensive Income with a corresponding adjustment to the opening balance of Accumulated Deficit as of the beginning of 2017. For a more detailed discussion, see Note 8. ASU 2017-01, Business Combinations This update amended existing guidance in order to clarify when an integrated set of assets and activities is considered a business. January 1, 2017 For a more detailed discussion of the effect of this adoption on our financial statements, see Note 5. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | FAIR VALUE MEASUREMENTS The following describes the methods we use to estimate the fair value of our financial and nonfinancial assets and liabilities: Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, and Accounts Payable —We consider the carrying values of these financial instruments to approximate fair value because of the short period of time between origination of the instruments and their expected realization. Real Estate Investments —The purchase prices of the investment properties, including related lease intangible assets and liabilities, were allocated at estimated fair value based on Level 3 inputs, such as discount rates, capitalization rates, comparable sales, replacement costs, income and expense growth rates, and current market rents and allowances as determined by management. Mortgages and Loans Payable —We estimate the fair value of our debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by our lenders using Level 3 inputs. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assuming the debt is outstanding through maturity and considering the debt’s collateral (if applicable). We have utilized market information, as available, or present value techniques to estimate the amounts required to be disclosed. The following is a summary of borrowings as of September 30, 2017 and December 31, 2016 (dollars in thousands): September 30, 2017 December 31, 2016 Fair value $ 731,543 $ 527,167 Recorded value (1) 742,232 537,736 (1) Recorded value does not include deferred financing costs of 5.7 million and 4.5 million as of September 30, 2017 and December 31, 2016 , respectively. Derivative Instruments —As of September 30, 2017 , we had four interest rate swaps that fixed LIBOR on $370 million of our unsecured term loan facilities (“Term Loans”), and as of December 31, 2016 , we had two interest rate swaps that fixed LIBOR on $243 million of the Term Loans. Subsequent to September 30, 2017, we executed an interest rate swap that fixes LIBOR on an additional $200 million of the Term Loans through September 2024. For a more detailed discussion of our cash flow hedges, see Note 8 . As of September 30, 2017 and December 31, 2016 , we were also party to two interest rate swaps that fixed the variable interest rate on $15.5 million and $15.8 million , respectively, of two of our variable-rate mortgage notes. The change in fair value of these instruments is recorded in Other Expense, Net on the consolidated statements of operations and was not material for the three and nine months ended September 30, 2017 and 2016 . All interest rate swap agreements are measured at fair value on a recurring basis. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although we determined that the significant inputs used to value our derivatives fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties. However, as of September 30, 2017 and December 31, 2016 , we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. We record derivative assets in Other Assets, Net and derivative liabilities in Accounts Payable and Other Liabilities on our consolidated balance sheets. The fair value measurements of our derivative assets and liabilities as of September 30, 2017 and December 31, 2016 , were as follows (in thousands): September 30, 2017 December 31, 2016 Derivative asset: Interest rate swaps designated as hedging instruments - Term Loans $ 4,966 $ 5,369 Derivative liability: Interest rate swaps designated as hedging instruments - Term Loans $ 1 $ 463 Interest rate swaps not designated as hedging instruments - mortgage notes 402 850 Total $ 403 $ 1,313 |
Investment in Unconsolidated Jo
Investment in Unconsolidated Joint Venture | 9 Months Ended |
Sep. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure | INVESTMENT IN UNCONSOLIDATED JOINT VENTURE On March 22, 2016, we entered into a joint venture (the “Joint Venture”) through our indirect wholly-owned subsidiary, PE OP II Value Added Grocery, LLC (“REIT Member”), with a limited partnership (“Investor Member”) affiliated with TPG Real Estate, the real estate platform of the global private investment firm TPG, and with PECO Value Added Grocery Manager, LLC (“PECO Member”), a wholly-owned subsidiary of our Phillips Edison sponsor and an affiliate of our advisor and property manager, Phillips Edison & Company Ltd. (“Property Manager”). REIT Member owns a 20% equity interest and Investor Member owns an 80% equity interest in the Joint Venture. REIT Member and Investor Member may contribute up to $50 million and $200 million of equity, respectively, to the Joint Venture. As of September 30, 2017 , the REIT Member has contributed $17.5 million of its $50 million commitment. PECO Member manages and conducts the day-to-day operations and affairs of the Joint Venture. REIT Member has customary approval rights with respect to major decisions, but does not have the right to cause or prohibit various material transactions. The Joint Venture’s income, losses, and distributions are generally allocated based on the members’ respective ownership interests. Therefore, we account for the Joint Venture under the equity method. Distributions of net cash are anticipated to be made as appropriate. During the nine months ended September 30, 2017 , we received a $0.4 million cash distribution from the Joint Venture. Additional capital contributions in proportion to the members’ respective capital interests in the Joint Venture may be required. In March 2017 , our board of directors approved certain short-term loans (the “JV Loans”) that we may provide to the Joint Venture for its acquisitions, as needed. The JV Loans have terms of up to 60 days , and are to be funded 80% by the Investor Member and 20% by us. Our portion of the outstanding principal should not exceed $15 million at any given time. The JV Loans will incur interest at a rate equal to the greater of a) LIBOR plus 1.70% , or b) the borrowing rate on our revolving credit facility. In June 2017, we loaned the Joint Venture $1.3 million , which was subsequently repaid in July 2017. As of September 30, 2017 , there were no outstanding loans between the Joint Venture and us. |
Real Estate Acquisitions
Real Estate Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Acquisitions | REAL ESTATE ACQUISITIONS In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This update amended existing guidance in order to clarify when an integrated set of assets and activities is considered a business. We adopted ASU 2017-01 on January 1, 2017, and applied it prospectively. Under this new guidance, most of our real estate acquisition activity is no longer considered a business combination and is instead classified as an asset acquisition. As a result, most acquisition-related costs that would have been recorded on our consolidated statements of operations are capitalized and will be amortized over the life of the related assets. Costs incurred related to properties that were not ultimately acquired were recorded as Acquisition Expenses on our consolidated statements of operations. As of September 30, 2017 , none of our real estate acquisitions in 2017 met the definition of a business; therefore, we accounted for all as asset acquisitions. During the nine months ended September 30, 2017 , we acquired nine grocery-anchored shopping centers. During the nine months ended September 30, 2016 , we acquired 19 grocery-anchored shopping centers and additional real estate adjacent to a previously acquired shopping center. For the nine months ended September 30, 2017 and 2016 , we allocated the purchase price of our acquisitions to the fair value of the assets acquired and liabilities assumed as follows (in thousands): 2017 2016 Land and improvements $ 48,671 $ 129,506 Building and improvements 116,163 252,186 Acquired in-place leases 17,345 39,277 Acquired above-market leases 1,639 1,327 Acquired below-market leases (5,543 ) (15,561 ) Total assets and lease liabilities acquired 178,275 406,735 Less: Fair value of assumed debt at acquisition 24,697 58,047 Net assets acquired $ 153,578 $ 348,688 The weighted-average amortization periods for in-place, above-market, and below-market lease intangibles acquired during the nine months ended September 30, 2017 and 2016 , are as follows (in years): 2017 2016 Acquired in-place leases 10 13 Acquired above-market leases 8 8 Acquired below-market leases 18 17 |
Mortgages and Loans Payable
Mortgages and Loans Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Mortgages and Loans Payable | MORTGAGES AND LOANS PAYABLE In September 2017, we executed a new $200 million unsecured term loan facility, which matures in September 2024. Proceeds from this facility were used to pay down the revolving credit facility. Subsequent to September 30, 2017, we executed an interest rate swap that fixes LIBOR at 2.194% for this new term loan facility. The following is a summary of the outstanding principal balances of our debt obligations as of September 30, 2017 and December 31, 2016 (in thousands): Interest Rate (1) September 30, 2017 December 31, 2016 Revolving credit facility due 2018 (2)(3) 2.64% $ 22,357 $ 28,000 Term loan due 2019 (3) 2.09%-2.89% 185,000 185,000 Term loan due 2020 (3) 2.16%-3.09% 185,000 185,000 Term loan due 2024 3.14% 200,000 — Mortgages payable (4) 4.13%-6.64% 145,207 134,941 Assumed market debt adjustments, net (5) 4,668 4,795 Deferred financing costs, net (6) (5,671 ) (4,521 ) Total $ 736,561 $ 533,215 (1) Includes the effects of derivative financial instruments (see Notes 3 and 8 ) as of September 30, 2017 . (2) The gross borrowings and payments under our revolving credit facility were $272 million and $278 million , respectively, during the nine months ended September 30, 2017 . The revolving credit facility had a maximum capacity of $350 million as of September 30, 2017 and December 31, 2016 . (3) The revolving credit facility and term loans have options to extend their maturities to 2019 and 2021, respectively. A maturity date extension for the term loans requires the payment of an extension fee of 0.15% of the outstanding principal amount of the corresponding tranche. (4) Due to the non-recourse nature of our fixed-rate mortgages, the assets and liabilities of the properties securing such mortgages are neither available to pay the debts of the consolidated property-holding limited liability companies, nor do they constitute obligations of such consolidated limited liability companies as of September 30, 2017 and December 31, 2016 . (5) Net of accumulated amortization of $1.7 million and $1.3 million as of September 30, 2017 and December 31, 2016 , respectively. (6) Deferred financing costs shown are related to our Term Loans and mortgages payable and are net of accumulated amortization of $2.2 million and $1.2 million as of September 30, 2017 and December 31, 2016 , respectively. Deferred financing costs related to the revolving credit facility, which are included in Other Assets, Net, were $0.9 million and $1.8 million as of September 30, 2017 and December 31, 2016 , respectively, and are net of accumulated amortization of $3.1 million and $2.2 million , respectively. As of September 30, 2017 and December 31, 2016 , the weighted-average interest rate for all of our mortgages and loans payable was 3.1% and 3.0% , respectively. The allocation of total debt between fixed and variable-rate and between secured and unsecured, excluding market debt adjustments and deferred financing costs, as of September 30, 2017 and December 31, 2016 , is summarized below (in thousands): September 30, 2017 December 31, 2016 As to interest rate: (1) Fixed-rate debt $ 515,207 $ 377,941 Variable-rate debt 222,357 155,000 Total $ 737,564 $ 532,941 As to collateralization: Unsecured debt $ 592,357 $ 398,000 Secured debt 145,207 134,941 Total $ 737,564 $ 532,941 (1) Includes the effects of derivative financial instruments (see Notes 3 and 8 ). |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Litigation We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the resolution of such claims and litigation will not have a material adverse effect on our consolidated financial statements. Environmental Matters In connection with the ownership and operation of real estate, we may potentially be liable for costs and damages related to environmental matters. In addition, we may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property, and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify us against future remediation costs. We also carry environmental liability insurance on our properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which we may be liable. We are not aware of any environmental matters which we believe are reasonably likely to have a material effect on our consolidated financial statements. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Activities | DERIVATIVES AND HEDGING ACTIVITIES In September 2017, we adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This update amended existing guidance in order to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. It requires us to disclose the effect of our hedging activities on our consolidated statements of operations and eliminated the periodic measurement and recognition of hedging ineffectiveness. In accordance with the modified retrospective transition method required by ASU 2017-12, the Company recognized the cumulative effect of the change, representing the reversal of the $0.5 million cumulative ineffectiveness gain as of December 31, 2016, in the opening balance of Accumulated Other Comprehensive Income (“AOCI”) with a corresponding adjustment to the opening balance of Accumulated Deficit as of the beginning of 2017. Risk Management Objective of Using Derivatives We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposure to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into interest rate swaps to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings. Cash Flow Hedges of Interest Rate Risk Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2017 and 2016 , such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. The ineffectiveness previously reported in earnings for the quarters ended March 31, 2017 and June 30, 2017, was adjusted to reflect application of the provisions of ASU 2017-12 as of the beginning of 2017 (as discussed above). This adjustment was not material. Amounts reported in AOCI related to these derivatives will be reclassified to Interest Expense, Net as interest payments are made on the variable-rate debt. During the next twelve months, we estimate that an additional $1.6 million will be reclassified from Other Comprehensive (Loss) Income as a decrease to Interest Expense, Net. The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of September 30, 2017 and December 31, 2016 , and includes two interest rate swaps that were entered into in December 2016 with a notional amount of $127 million that became effective January 3, 2017 (notional amount in thousands): Count Notional Amount Fixed LIBOR Maturity Date 4 $370,000 0.7%-1.7% 2019-2020 Subsequent to September 30, 2017, we executed an interest rate swap designated as a cash flow hedge of interest rate risk that fixes LIBOR at 2.194% with a notional amount of $200 million through September 2024. The table below details the location of the gain or loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations and comprehensive (loss) income for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Amount of gain recognized in OCI on derivative $ 152 $ 1,012 $ 16 $ 1,012 Amount of gain (loss) reclassified from AOCI into interest expense 195 (89 ) (43 ) (89 ) |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Equity | EQUITY On May 9, 2017, our board of directors increased its estimated value per share of our common stock to $22.75 based substantially on the estimated market value of our portfolio of real estate properties as of March 31, 2017. We engaged a third party valuation firm to provide a calculation of the range in estimated value per share of our common stock as of March 31, 2017, which reflected certain balance sheet assets and liabilities as of that date. Distribution Reinvestment Plan —We have adopted a DRIP that allows stockholders to invest distributions in additional shares of our common stock. Before our board of directors approved an increased estimated value per share on May 9, 2017, shares were issued under the DRIP at a price of $22.50 per share. Subsequent to that date, participants acquired and continue to acquire shares of common stock through the DRIP at a price of $22.75 per share. Share Repurchase Program —Our share repurchase program (“SRP”) provides an opportunity for stockholders to have shares of common stock repurchased, subject to certain restrictions and limitations. The cash available for repurchases on any particular date will generally be limited to the proceeds from the DRIP during the preceding four fiscal quarters, less amounts already used for repurchases since the beginning of that period. The board of directors reserves the right, in its sole discretion, at any time and from time to time, to reject any request for repurchase. Effective April 14, 2016, the repurchase price per share for all stockholders was equal to the estimated value per share of $22.50 , which was subsequently increased to $22.75 on May 9, 2017. During the nine months ended September 30, 2017 , repurchase requests surpassed the funding limits under the SRP. Approximately $23.5 million of shares of common stock were repurchased under our SRP during the nine months ended September 30, 2017 . As of September 30, 2017 , we had approximately 404,000 shares of unfulfilled repurchase requests, which will be treated as requests for repurchase during future months until satisfied or withdrawn. We continue to fulfill repurchases sought upon a stockholder’s death, “qualifying disability,” or “determination of incompetence” in accordance with the terms of the SRP. Due to the program’s funding limits, the funds available for repurchases during the fourth quarter of 2017 are expected to be insufficient to meet all requests. When we are unable to fulfill all repurchase requests in a given month, we will honor requests on a pro rata basis to the extent funds are available. We will continue to fulfill repurchases sought upon a stockholder’s death, “qualifying disability,” or “determination of incompetence” in accordance with the terms of the SRP. Class B Units —The Operating Partnership issues limited partnership units that are designated as Class B units for asset management services provided by PE-NTR II. The vesting of the Class B units is contingent upon a market condition and service condition. We had outstanding unvested Class B units of 406,513 shares and 414,415 shares as of September 30, 2017 and December 31, 2016 , respectively. In September 2017, we entered into an agreement with American Realty Capital PECO II Advisors, LLC (“ARC”) to terminate all remaining contractual and economic relationships between us and ARC. In exchange for a payment of $6 million , ARC sold their unvested Class B units and their interests in a special limited partner interest co-owned with the Phillips Edison sponsor back to us, and terminated all fee-sharing arrangements with PE-NTR II. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. Restricted stock are granted under our 2013 Independent Director Stock Plan and are potentially dilutive. There were approximately 5,000 and 4,400 restricted stock awards outstanding as of September 30, 2017 and 2016, respectively. During periods of net loss, these securities are anti-dilutive and, as a result, are excluded from the weighted average common shares used to calculate diluted EPS. Class B units are potentially dilutive securities as they contain non-forfeitable rights to dividends or dividend equivalents. There were 406,513 and 391,349 Class B units of the Operating Partnership outstanding as of September 30, 2017 and 2016 , respectively. The vesting of the Class B units is contingent upon satisfaction of a market condition and service condition. Since the satisfaction of both conditions was not probable as of September 30, 2017 and 2016 , the Class B units remained unvested and thus were not included in the diluted net loss per share computations. The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator for basic and diluted earnings per share: Net (loss) income $ (5,857 ) $ 48 $ (7,196 ) $ (3,153 ) Denominator: Denominator for basic earnings per share - weighted-average shares 46,545 46,219 46,529 46,168 Effect of restricted stock awards — 2 — — Denominator for diluted earnings per share - adjusted weighted-average shares 46,545 46,221 46,529 46,168 Earnings per common share: Net (loss) income - basic and diluted $ (0.13 ) $ 0.00 $ (0.15 ) $ (0.07 ) |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Economic Dependency —We are dependent on PE-NTR II, the Property Manager, and their respective affiliates for certain services that are essential to us, including asset acquisition and disposition decisions, asset management, operating and leasing of our properties, and other general and administrative responsibilities. In the event that PE-NTR II, the Property Manager, and/or their respective affiliates are unable to provide such services, we would be required to find alternative service providers, which could result in higher costs and expenses. Advisory Agreement —Effective September 1, 2017, in connection with the termination of ARC’s and PE-NTR II’s fee-sharing arrangements, we entered into an amended and restated advisory agreement (the “PE-NTR II Agreement”). Under the PE-NTR II Agreement, all fees payable to PE-NTR II are decreased by 15% . Other than the foregoing, there were no material changes in the PE-NTR II Agreement. Pursuant to the PE-NTR II Agreement, PE-NTR II is entitled to specified fees for certain services, including managing our day-to-day activities and implementing our investment strategy. PE-NTR II manages our day-to-day affairs and our portfolio of real estate investments subject to the board’s supervision. Expenditures are reimbursed to PE-NTR II based on amounts incurred on our behalf. Acquisition Fee —We pay PE-NTR II under the PE-NTR II Agreement an acquisition fee related to services provided in connection with the selection and purchase or origination of real estate and real estate-related investments. The acquisition fee is equal to 0.85% , or 1.0% prior to September 1, 2017, of the contract purchase price of each property we acquire, including acquisition or origination expenses and any debt attributable to such investments. Due Diligence Fee —We reimburse PE-NTR II for expenses incurred related to selecting, evaluating, and acquiring assets on our behalf. Asset Management Fee and Subordinated Participation —Under the PE-NTR II Agreement, the asset management fee is equal to 0.85% , or 1.0% prior to September 1, 2017, of the cost of our assets, and is paid 80% in cash and 20% in Class B units of the Operating Partnership. The cash portion is paid on a monthly basis in arrears at the rate of 0.05667% , or 0.06667% prior to September 1, 2017, multiplied by the cost of our assets as of the last day of the preceding monthly period. Within 60 days after the end of each calendar quarter (subject to the approval of our board of directors), we pay an asset management subordinated participation by issuing a number of restricted operating partnership units designated as Class B Units to PE-NTR II, equal to 0.0425% , or 0.05% prior to September 1, 2017, multiplied by the lower of the cost of assets and the applicable quarterly NAV, divided by the per share NAV. Our board of directors established an estimated NAV per share of $22.50 on April 14, 2016, and approved an increased estimated NAV per share of $22.75 on May 9, 2017. The Class B units are subject to forfeiture provisions. PE-NTR II is entitled to receive distributions on the Class B units at the same rate as distributions are paid to common stockholders. Such distributions are in addition to the incentive compensation that PE-NTR II and their affiliates may receive from us. During the nine months ended September 30, 2017 and 2016 , the Operating Partnership issued 69,341 and 159,540 Class B units, respectively, to PE-NTR II and ARC under the PE-NTR II Agreement for asset management services performed by PE-NTR II. PE-NTR II or one of its affiliates must continue to provide advisory services through the date that such economic hurdle is met. The economic hurdle will be met when (a) the value of the Operating Partnership’s assets, plus all distributions made equal or exceeds (b) the total amount of capital contributed by investors, plus a 6% cumulative, pre-tax, non-compounded annual return on the capital contributed. Prior to September 2017, ARC also received the asset management fee and subordinated participation, as well as distributions on Class B units. For a more detailed discussion of the termination of our relationship with ARC, see Note 9 . Disposition Fee —We pay PE-NTR II for substantial assistance by PE-NTR II or its affiliates up to the lesser of: (i) 1.7% , or 2.0% prior to September 1, 2017, of the contract sales price of each property or other investment sold; or (ii) one-half of the total brokerage commissions paid if a non-affiliated broker is also involved in the sale, provided that total real estate commissions paid (to PE-NTR II and others) in connection with the sale may not exceed the lesser of a competitive real estate commission or 6% of the contract sales price. The conflicts committee of our board of directors determines whether PE-NTR II or its affiliates have provided substantial assistance to us in connection with the sale of an asset. Substantial assistance in connection with the sale of a property includes preparation of an investment package for the property (including an investment analysis, rent rolls, tenant information regarding credit, a property title report, an environmental report, a structural report and exhibits) or such other substantial services performed by PE-NTR II or its affiliates in connection with a sale. General and Administrative Expenses —As of September 30, 2017 and December 31, 2016 , we owed PE-NTR II and its affiliates approximately $67,000 and $43,000 , respectively, for general and administrative expenses paid on our behalf. Summarized below are the fees earned by and the expenses reimbursable to PE-NTR II and ARC for the three and nine months ended September 30, 2017 and 2016 . As of September 2017, pursuant to the termination of our relationship with ARC, they were no longer entitled to these fees and reimbursements. This table includes any related amounts unpaid as of September 30, 2017 and December 31, 2016 , except for unpaid general and administrative expenses, which we disclose above (in thousands): Three Months Ended Nine Months Ended Unpaid Amount as of September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Acquisition fees (1) $ 459 $ 198 $ 1,681 $ 4,041 $ — $ 179 Due diligence fees (1) 168 40 412 794 — — Asset management fees (2) 3,056 2,649 9,192 7,262 929 1,007 Class B units distribution (3) 185 156 536 518 54 57 Total $ 3,868 $ 3,043 $ 11,821 $ 12,615 $ 983 $ 1,243 (1) Prior to January 1, 2017, acquisition and due diligence fees were presented as Acquisition Expenses on our consolidated statements of operations. The majority of these costs are now capitalized and allocated to the related investment in real estate assets on the consolidated balance sheet based on the acquisition-date fair values of the respective assets and liability acquired. (2) Asset management fees are presented in General and Administrative on the consolidated statements of operations. (3) Represents the distributions paid to holders of Class B units of the Operating Partnership and is presented in General and Administrative on the consolidated statements of operations. Property Manager —All of our real properties are managed and leased by the Property Manager. The Property Manager is wholly owned by our Phillips Edison sponsor. The Property Manager also manages real properties owned by Phillips Edison affiliates and other third parties. Property Management Fee —We pay the Property Manager a monthly property management fee of 4% of the monthly gross cash receipts from the properties it manages. Leasing Commissions —In addition to the property management fee, if the Property Manager provides leasing services with respect to a property, we pay the Property Manager leasing fees in an amount equal to the leasing fees charged by unaffiliated persons rendering comparable services based on national market rates. The Property Manager shall be paid a leasing fee in connection with a tenant’s exercise of an option to extend an existing lease, and the leasing fees payable to the Property Manager may be increased by up to 50% in the event that the Property Manager engages a co-broker to lease a particular vacancy. Construction Management Fee —If we engage the Property Manager to provide construction management services with respect to a particular property, we pay a construction management fee in an amount that is usual and customary for comparable services rendered to similar projects in the geographic market of the property. Expenses and Reimbursements —The Property Manager hires, directs, and establishes policies for employees who have direct responsibility for the operations of each real property it manages, which may include, but is not limited to, on-site managers and building and maintenance personnel. Certain employees of the Property Manager may be employed on a part-time basis and may also be employed by PE-NTR II or certain of its affiliates. The Property Manager also directs the purchase of equipment and supplies and supervises all maintenance activity. We reimburse the costs and expenses incurred by the Property Manager on our behalf, including employee compensation, legal, travel, and other out-of-pocket expenses that are directly related to the management of specific properties and corporate matters, as well as fees and expenses of third-party accountants. Summarized below are the fees earned by and the expenses reimbursable to the Property Manager for the three and nine months ended September 30, 2017 and 2016 , and any related amounts unpaid as of September 30, 2017 and December 31, 2016 (in thousands): Three Months Ended Nine Months Ended Unpaid Amount as of September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Property management fees (1) $ 1,462 $ 1,314 $ 4,354 $ 3,484 $ 504 $ 423 Leasing commissions (2) 934 1,134 2,555 2,699 320 386 Construction management fees (2) 356 370 577 676 230 185 Other fees and reimbursements (3) 908 992 2,663 2,696 464 367 Total $ 3,660 $ 3,810 $ 10,149 $ 9,555 $ 1,518 $ 1,361 (1) The property management fees are included in Property Operating on the consolidated statements of operations. (2) Leasing commissions paid for leases with terms less than one year are expensed immediately and included in Depreciation and Amortization on the consolidated statements of operations. Leasing commissions paid for leases with terms greater than one year, and construction management fees, are capitalized and amortized over the life of the related leases or assets. (3) Other fees and reimbursements are included in Property Operating and General and Administrative on the consolidated statements of operations based on the nature of the expense. Transfer Agent —Prior to February 2016, we utilized transfer agent services provided by an affiliate of Realty Capital Securities, LLC, our former dealer manager. Fees incurred from this transfer agent represented amounts paid by PE-NTR II to the affiliate of the Dealer Manager for such services. We reimbursed PE-NTR II for these fees through the payment of organization and offering costs. The transfer agent ceased services and the agreement was terminated in connection with the bankruptcy of the transfer agent and its parent company. The following table details fees paid to the transfer agent for the three and nine months ended September 30, 2017 and 2016 , and any related amounts unpaid, which are included as a component of total unpaid organization and offering costs, as of September 30, 2017 and December 31, 2016 (in thousands): Three Months Ended Nine Months Ended Unpaid Amount as of September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Transfer agent fees incurred related to offering costs $ — $ — $ — $ — $ 140 $ 140 Other fees incurred from transfer agent — — — 140 560 560 Unconsolidated Joint Venture —As of September 30, 2017 and December 31, 2016 , we owed the Joint Venture approximately $83,000 and $152,000 , respectively, for real estate tax, property operating, and other general and administrative expenses paid on our behalf. |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2017 | |
Leases, Operating [Abstract] | |
Operating Leases | OPERATING LEASES The terms and expirations of our operating leases with our tenants vary. The lease agreements frequently contain options to extend the terms of leases and other terms and conditions as negotiated. We retain substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Approximate future rental income to be received under non-cancelable operating leases in effect as of September 30, 2017 , assuming no new or renegotiated leases or option extensions on lease agreements, was as follows (in thousands): Year Amount Remaining 2017 $ 30,639 2018 115,409 2019 103,306 2020 90,401 2021 75,162 2022 and thereafter 283,488 Total $ 698,405 No tenants comprised 10% or more of our aggregate annualized base rent (“ABR”) as of September 30, 2017 . As of September 30, 2017 , our real estate investments in Florida and California represented 15.4% and 13.5% of our ABR, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse economic developments in the Florida and California real estate markets. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Distributions to Stockholders Distributions equal to a daily amount of $0.00445205 per share of common stock outstanding were paid subsequent to September 30, 2017 , to the stockholders of record from September 1, 2017, through October 31, 2017, as follows (in thousands): Distribution Period Date Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through the DRIP Net Cash Distribution September 1, 2017, through September 30, 2017 10/2/2017 $ 6,218 $ 2,957 $ 3,261 October 1, 2017, through October 31, 2017 11/1/2017 6,441 3,031 3,410 In November 2017, our board of directors authorized distributions to the stockholders of record at the close of business each day in the period commencing December 1, 2017 through December 31, 2017, equal to a daily amount of $0.00445205 per share of common stock. Our board of directors also authorized distributions for January 2018 and February 2018 in the amount of $0.13541652 per share on the outstanding common shares to the stockholders of record at the close of business on January 16, 2018 and February 15, 2018, respectively. The monthly distribution rate will result in the same annual distribution amount as the current, daily distribution rate. Share Repurchase Program Subsequent to September 30, 2017 , we repurchased 325,851 shares of common stock in the amount of $7.4 million . |
Summary Of Significant Accoun21
Summary Of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to the audited consolidated financial statements of Phillips Edison Grocery Center REIT II, Inc. for the year ended December 31, 2016 , which are included in our 2016 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three and nine months ended September 30, 2017 , are not necessarily indicative of the operating results expected for the full year. The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation. |
Accounting Estimates | . |
Reclassifications | Reclassifications —The following line item on our consolidated balance sheet as of December 31, 2016 , was reclassified to conform to the current year presentation: • Restricted Cash was separately disclosed due to significance in the current period. In the previous period these amounts were included in Other Assets, Net. |
Newly Adopted and Recently Issued Accounting Pronouncements | Newly Adopted and Recently Issued Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material effect on our financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) This update amends existing guidance in order to provide consistency in accounting for the derecognition of a business or nonprofit activity. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We will adopt this standard concurrently with ASU 2014-09, listed below. We expect the adoption will impact our transactions that are subject to the amendments, which, although expected to be infrequent, would include a partial sale of real estate or contribution of a nonfinancial asset to form a joint venture. ASU 2016-18, Statement of Cash Flows (Topic 230) This update amends existing guidance in order to clarify the classification and presentation of restricted cash on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 Upon adoption, we will include amounts generally described as restricted cash within the beginning-of-period and end-of-period total amounts on the statement of cash flows rather than within an activity on the statement of cash flows. ASU 2016-15, Statement of Cash Flows (Topic 230) This update addresses the presentation of eight specific cash receipts and cash payments on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Of the eight specific cash receipts and cash payments listed within this guidance, we believe only three would be applicable to our business as it stands currently: debt prepayment or debt extinguishment costs, proceeds from settlement of insurance claims, and distributions received from equity method investees. We will continue to evaluate the impact that adoption of the standard will have on our presentation of these and any other applicable cash receipts and cash payments. ASU 2016-02, Leases (Topic 842) This update amends existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual reporting periods beginning after December 15, 2018, but early adoption is permitted. January 1, 2019 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. We have identified areas within our accounting policies we believe could be impacted by the new standard. We expect to have a change in presentation on our consolidated statement of operations with regards to Tenant Recovery Income, which includes reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. Additionally, this standard impacts the lessor’s ability to capitalize certain costs related to the leasing of vacant space, which will result in a reduction in the amount of execution costs currently being capitalized in connection with leasing activities. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it also applies to certain other transactions such as the sale of real estate or equipment. Expanded quantitative and qualitative disclosures are also required for contracts subject to ASU 2014-09. In 2015, the Financial Accounting Standard Board (“FASB”) provided for a one-year deferral of the effective date for ASU 2014-09, making it effective for annual reporting periods beginning after December 15, 2017. January 1, 2018 Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, we do not expect the adoption of this standard to have a material impact on our rental or reimbursement revenue. We currently plan to adopt this guidance on a modified retrospective basis. The following table provides a brief description of newly adopted accounting pronouncements and their effect on our financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2017-12, Derivatives and Hedging (Topic 815) This update amended existing guidance in order to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. September 2017 Upon adoption, we included a disclosure related to the effect of our hedging activities on our consolidated statements of operations. This disclosure also eliminated the periodic measurement and recognition of hedging ineffectiveness. We adopted this guidance on a modified retrospective basis and applied an adjustment to Accumulated Other Comprehensive Income with a corresponding adjustment to the opening balance of Accumulated Deficit as of the beginning of 2017. For a more detailed discussion, see Note 8. ASU 2017-01, Business Combinations This update amended existing guidance in order to clarify when an integrated set of assets and activities is considered a business. January 1, 2017 For a more detailed discussion of the effect of this adoption on our financial statements, see Note 5. |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy | We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing the income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. |
Summary Of Significant Accoun23
Summary Of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table provides a brief description of recent accounting pronouncements that could have a material effect on our financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) This update amends existing guidance in order to provide consistency in accounting for the derecognition of a business or nonprofit activity. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We will adopt this standard concurrently with ASU 2014-09, listed below. We expect the adoption will impact our transactions that are subject to the amendments, which, although expected to be infrequent, would include a partial sale of real estate or contribution of a nonfinancial asset to form a joint venture. ASU 2016-18, Statement of Cash Flows (Topic 230) This update amends existing guidance in order to clarify the classification and presentation of restricted cash on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 Upon adoption, we will include amounts generally described as restricted cash within the beginning-of-period and end-of-period total amounts on the statement of cash flows rather than within an activity on the statement of cash flows. ASU 2016-15, Statement of Cash Flows (Topic 230) This update addresses the presentation of eight specific cash receipts and cash payments on the statement of cash flows. It is effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. January 1, 2018 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. Of the eight specific cash receipts and cash payments listed within this guidance, we believe only three would be applicable to our business as it stands currently: debt prepayment or debt extinguishment costs, proceeds from settlement of insurance claims, and distributions received from equity method investees. We will continue to evaluate the impact that adoption of the standard will have on our presentation of these and any other applicable cash receipts and cash payments. ASU 2016-02, Leases (Topic 842) This update amends existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual reporting periods beginning after December 15, 2018, but early adoption is permitted. January 1, 2019 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. We have identified areas within our accounting policies we believe could be impacted by the new standard. We expect to have a change in presentation on our consolidated statement of operations with regards to Tenant Recovery Income, which includes reimbursement amounts we receive from tenants for operating expenses such as real estate taxes, insurance, and other common area maintenance. Additionally, this standard impacts the lessor’s ability to capitalize certain costs related to the leasing of vacant space, which will result in a reduction in the amount of execution costs currently being capitalized in connection with leasing activities. ASU 2014-09, Revenue from Contracts with Customers (Topic 606) This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it also applies to certain other transactions such as the sale of real estate or equipment. Expanded quantitative and qualitative disclosures are also required for contracts subject to ASU 2014-09. In 2015, the Financial Accounting Standard Board (“FASB”) provided for a one-year deferral of the effective date for ASU 2014-09, making it effective for annual reporting periods beginning after December 15, 2017. January 1, 2018 Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, we do not expect the adoption of this standard to have a material impact on our rental or reimbursement revenue. We currently plan to adopt this guidance on a modified retrospective basis. The following table provides a brief description of newly adopted accounting pronouncements and their effect on our financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2017-12, Derivatives and Hedging (Topic 815) This update amended existing guidance in order to better align a company’s financial reporting for hedging activities with the economic objectives of those activities. September 2017 Upon adoption, we included a disclosure related to the effect of our hedging activities on our consolidated statements of operations. This disclosure also eliminated the periodic measurement and recognition of hedging ineffectiveness. We adopted this guidance on a modified retrospective basis and applied an adjustment to Accumulated Other Comprehensive Income with a corresponding adjustment to the opening balance of Accumulated Deficit as of the beginning of 2017. For a more detailed discussion, see Note 8. ASU 2017-01, Business Combinations This update amended existing guidance in order to clarify when an integrated set of assets and activities is considered a business. January 1, 2017 For a more detailed discussion of the effect of this adoption on our financial statements, see Note 5. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The following is a summary of borrowings as of September 30, 2017 and December 31, 2016 (dollars in thousands): September 30, 2017 December 31, 2016 Fair value $ 731,543 $ 527,167 Recorded value (1) 742,232 537,736 (1) Recorded value does not include deferred financing costs of 5.7 million and 4.5 million as of September 30, 2017 and December 31, 2016 , respectively. |
Schedule of Derivative Instruments, Fair Value | The fair value measurements of our derivative assets and liabilities as of September 30, 2017 and December 31, 2016 , were as follows (in thousands): September 30, 2017 December 31, 2016 Derivative asset: Interest rate swaps designated as hedging instruments - Term Loans $ 4,966 $ 5,369 Derivative liability: Interest rate swaps designated as hedging instruments - Term Loans $ 1 $ 463 Interest rate swaps not designated as hedging instruments - mortgage notes 402 850 Total $ 403 $ 1,313 |
Real Estate Acquisitions (Table
Real Estate Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | For the nine months ended September 30, 2017 and 2016 , we allocated the purchase price of our acquisitions to the fair value of the assets acquired and liabilities assumed as follows (in thousands): 2017 2016 Land and improvements $ 48,671 $ 129,506 Building and improvements 116,163 252,186 Acquired in-place leases 17,345 39,277 Acquired above-market leases 1,639 1,327 Acquired below-market leases (5,543 ) (15,561 ) Total assets and lease liabilities acquired 178,275 406,735 Less: Fair value of assumed debt at acquisition 24,697 58,047 Net assets acquired $ 153,578 $ 348,688 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The weighted-average amortization periods for in-place, above-market, and below-market lease intangibles acquired during the nine months ended September 30, 2017 and 2016 , are as follows (in years): 2017 2016 Acquired in-place leases 10 13 Acquired above-market leases 8 8 Acquired below-market leases 18 17 |
Mortgages and Loans Payable (Ta
Mortgages and Loans Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Principal Balances and Debt Obligations | The following is a summary of the outstanding principal balances of our debt obligations as of September 30, 2017 and December 31, 2016 (in thousands): Interest Rate (1) September 30, 2017 December 31, 2016 Revolving credit facility due 2018 (2)(3) 2.64% $ 22,357 $ 28,000 Term loan due 2019 (3) 2.09%-2.89% 185,000 185,000 Term loan due 2020 (3) 2.16%-3.09% 185,000 185,000 Term loan due 2024 3.14% 200,000 — Mortgages payable (4) 4.13%-6.64% 145,207 134,941 Assumed market debt adjustments, net (5) 4,668 4,795 Deferred financing costs, net (6) (5,671 ) (4,521 ) Total $ 736,561 $ 533,215 (1) Includes the effects of derivative financial instruments (see Notes 3 and 8 ) as of September 30, 2017 . (2) The gross borrowings and payments under our revolving credit facility were $272 million and $278 million , respectively, during the nine months ended September 30, 2017 . The revolving credit facility had a maximum capacity of $350 million as of September 30, 2017 and December 31, 2016 . (3) The revolving credit facility and term loans have options to extend their maturities to 2019 and 2021, respectively. A maturity date extension for the term loans requires the payment of an extension fee of 0.15% of the outstanding principal amount of the corresponding tranche. (4) Due to the non-recourse nature of our fixed-rate mortgages, the assets and liabilities of the properties securing such mortgages are neither available to pay the debts of the consolidated property-holding limited liability companies, nor do they constitute obligations of such consolidated limited liability companies as of September 30, 2017 and December 31, 2016 . (5) Net of accumulated amortization of $1.7 million and $1.3 million as of September 30, 2017 and December 31, 2016 , respectively. (6) Deferred financing costs shown are related to our Term Loans and mortgages payable and are net of accumulated amortization of $2.2 million and $1.2 million as of September 30, 2017 and December 31, 2016 , respectively. Deferred financing costs related to the revolving credit facility, which are included in Other Assets, Net, were $0.9 million and $1.8 million as of September 30, 2017 and December 31, 2016 , respectively, and are net of accumulated amortization of $3.1 million and $2.2 million , respectively |
Schedule of Debt Allocation | The allocation of total debt between fixed and variable-rate and between secured and unsecured, excluding market debt adjustments and deferred financing costs, as of September 30, 2017 and December 31, 2016 , is summarized below (in thousands): September 30, 2017 December 31, 2016 As to interest rate: (1) Fixed-rate debt $ 515,207 $ 377,941 Variable-rate debt 222,357 155,000 Total $ 737,564 $ 532,941 As to collateralization: Unsecured debt $ 592,357 $ 398,000 Secured debt 145,207 134,941 Total $ 737,564 $ 532,941 (1) Includes the effects of derivative financial instruments (see Notes 3 and 8 ). |
Derivatives and Hedging Activ27
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivative | The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of September 30, 2017 and December 31, 2016 , and includes two interest rate swaps that were entered into in December 2016 with a notional amount of $127 million that became effective January 3, 2017 (notional amount in thousands): Count Notional Amount Fixed LIBOR Maturity Date 4 $370,000 0.7%-1.7% 2019-2020 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The table below details the location of the gain or loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations and comprehensive (loss) income for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Amount of gain recognized in OCI on derivative $ 152 $ 1,012 $ 16 $ 1,012 Amount of gain (loss) reclassified from AOCI into interest expense 195 (89 ) (43 ) (89 ) |
Earnings Per Share Earning Per
Earnings Per Share Earning Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation of the numerator and denominator of the earnings per unit calculations for the three and nine months ended September 30, 2017 and 2016 (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator for basic and diluted earnings per share: Net (loss) income $ (5,857 ) $ 48 $ (7,196 ) $ (3,153 ) Denominator: Denominator for basic earnings per share - weighted-average shares 46,545 46,219 46,529 46,168 Effect of restricted stock awards — 2 — — Denominator for diluted earnings per share - adjusted weighted-average shares 46,545 46,221 46,529 46,168 Earnings per common share: Net (loss) income - basic and diluted $ (0.13 ) $ 0.00 $ (0.15 ) $ (0.07 ) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Advisor Transactions | Summarized below are the fees earned by and the expenses reimbursable to PE-NTR II and ARC for the three and nine months ended September 30, 2017 and 2016 . As of September 2017, pursuant to the termination of our relationship with ARC, they were no longer entitled to these fees and reimbursements. This table includes any related amounts unpaid as of September 30, 2017 and December 31, 2016 , except for unpaid general and administrative expenses, which we disclose above (in thousands): Three Months Ended Nine Months Ended Unpaid Amount as of September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Acquisition fees (1) $ 459 $ 198 $ 1,681 $ 4,041 $ — $ 179 Due diligence fees (1) 168 40 412 794 — — Asset management fees (2) 3,056 2,649 9,192 7,262 929 1,007 Class B units distribution (3) 185 156 536 518 54 57 Total $ 3,868 $ 3,043 $ 11,821 $ 12,615 $ 983 $ 1,243 (1) Prior to January 1, 2017, acquisition and due diligence fees were presented as Acquisition Expenses on our consolidated statements of operations. The majority of these costs are now capitalized and allocated to the related investment in real estate assets on the consolidated balance sheet based on the acquisition-date fair values of the respective assets and liability acquired. (2) Asset management fees are presented in General and Administrative on the consolidated statements of operations. (3) Represents the distributions paid to holders of Class B units of the Operating Partnership and is presented in General and Administrative on the consolidated statements of operations. |
Property Manager Transactions | Summarized below are the fees earned by and the expenses reimbursable to the Property Manager for the three and nine months ended September 30, 2017 and 2016 , and any related amounts unpaid as of September 30, 2017 and December 31, 2016 (in thousands): Three Months Ended Nine Months Ended Unpaid Amount as of September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Property management fees (1) $ 1,462 $ 1,314 $ 4,354 $ 3,484 $ 504 $ 423 Leasing commissions (2) 934 1,134 2,555 2,699 320 386 Construction management fees (2) 356 370 577 676 230 185 Other fees and reimbursements (3) 908 992 2,663 2,696 464 367 Total $ 3,660 $ 3,810 $ 10,149 $ 9,555 $ 1,518 $ 1,361 (1) The property management fees are included in Property Operating on the consolidated statements of operations. (2) Leasing commissions paid for leases with terms less than one year are expensed immediately and included in Depreciation and Amortization on the consolidated statements of operations. Leasing commissions paid for leases with terms greater than one year, and construction management fees, are capitalized and amortized over the life of the related leases or assets. (3) Other fees and reimbursements are included in Property Operating and General and Administrative on the consolidated statements of operations based on the nature of the expense. |
Transfer Agent Transactions | The following table details fees paid to the transfer agent for the three and nine months ended September 30, 2017 and 2016 , and any related amounts unpaid, which are included as a component of total unpaid organization and offering costs, as of September 30, 2017 and December 31, 2016 (in thousands): Three Months Ended Nine Months Ended Unpaid Amount as of September 30, September 30, September 30, December 31, 2017 2016 2017 2016 2017 2016 Transfer agent fees incurred related to offering costs $ — $ — $ — $ — $ 140 $ 140 Other fees incurred from transfer agent — — — 140 560 560 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Leases, Operating [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Approximate future rental income to be received under non-cancelable operating leases in effect as of September 30, 2017 , assuming no new or renegotiated leases or option extensions on lease agreements, was as follows (in thousands): Year Amount Remaining 2017 $ 30,639 2018 115,409 2019 103,306 2020 90,401 2021 75,162 2022 and thereafter 283,488 Total $ 698,405 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Distributions to Stockholders | Distributions equal to a daily amount of $0.00445205 per share of common stock outstanding were paid subsequent to September 30, 2017 , to the stockholders of record from September 1, 2017, through October 31, 2017, as follows (in thousands): Distribution Period Date Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through the DRIP Net Cash Distribution September 1, 2017, through September 30, 2017 10/2/2017 $ 6,218 $ 2,957 $ 3,261 October 1, 2017, through October 31, 2017 11/1/2017 6,441 3,031 3,410 |
Organization (Details)
Organization (Details) | Sep. 30, 2017property |
Schedule of Equity Method Investments [Line Items] | |
Number of real estate properties owned | 83 |
Corporate Joint Venture | |
Schedule of Equity Method Investments [Line Items] | |
Number of real estate properties owned | 14 |
Joint venture ownership percentage | 20.00% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Mortgages and Loans Payable - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Recorded value | $ 742,232 | $ 537,736 |
Deferred financing costs | 5,671 | 4,521 |
Fair Value, Level 3 Inputs | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Fair value | $ 731,543 | $ 527,167 |
Fair Value Measurements (Deta34
Fair Value Measurements (Details) - Derivative Instruments $ in Thousands | Nov. 09, 2017USD ($) | Sep. 30, 2017USD ($)derivative | Dec. 31, 2016USD ($)derivative |
Fair Value, (Assets) Liabilities Measured on Recurring Basis [Line Items] | |||
Interest rate derivative liabilities, at fair value | $ 400 | ||
Interest Rate Swap | |||
Fair Value, (Assets) Liabilities Measured on Recurring Basis [Line Items] | |||
Interest rate derivative liabilities, at fair value | $ 403 | $ 1,313 | |
Interest Rate Swap | Designated as Hedging Instrument | |||
Fair Value, (Assets) Liabilities Measured on Recurring Basis [Line Items] | |||
Number of interest rate swap agreements | derivative | 4 | 2 | |
Derivative, notional amount | $ 370,000 | $ 243,000 | |
Interest rate derivative assets, at fair value | 4,966 | 5,369 | |
Interest rate derivative liabilities, at fair value | $ 1 | $ 463 | |
Interest Rate Swap | Not Designated as Hedging Instrument | |||
Fair Value, (Assets) Liabilities Measured on Recurring Basis [Line Items] | |||
Number of interest rate swap agreements | 2 | 2 | |
Derivative, notional amount | $ 15,500 | $ 15,800 | |
Interest rate derivative liabilities, at fair value | $ 402 | $ 850 | |
Subsequent Event | Interest Rate Swap | Designated as Hedging Instrument | |||
Fair Value, (Assets) Liabilities Measured on Recurring Basis [Line Items] | |||
Derivative, notional amount | $ 200,000 |
Investment in Unconsolidated 35
Investment in Unconsolidated Joint Venture (Details) - USD ($) | 9 Months Ended | 18 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||
Contribution to unconsolidated joint venture | $ 2,854,000 | $ 2,580,000 | $ 17,500,000 |
Return of investment in unconsolidated joint venture | 400,000 | $ 0 | |
Maximum | |||
Schedule of Equity Method Investments [Line Items] | |||
Contribution to unconsolidated joint venture | $ 50,000,000 | ||
Co-venturer | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint venture ownership percentage | 80.00% | 80.00% | |
Co-venturer | Maximum | |||
Schedule of Equity Method Investments [Line Items] | |||
Contribution to unconsolidated joint venture | $ 200,000,000 | ||
Corporate Joint Venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint venture ownership percentage | 20.00% | 20.00% | |
Debt instrument, term | 60 days | ||
Maximum loan balance - related party | $ 15,000,000 | ||
Debt instrument, basis spread on variable rate | 1.70% | ||
Loan principal amount - related party | $ 1,300,000 | ||
Due from Joint Ventures, Current | $ 0 | $ 0 | |
Short Term Debt Arrangement by Joint Venture [Member] | Co-venturer | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint venture ownership percentage | 80.00% | 80.00% | |
Short Term Debt Arrangement by Joint Venture [Member] | Corporate Joint Venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint venture ownership percentage | 20.00% | 20.00% |
Real Estate Acquisitions (Detai
Real Estate Acquisitions (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Real Estate Investments, Net [Abstract] | ||
Number of real estate acquisitions | 9 | 19 |
Real Estate Acquisitions (Det37
Real Estate Acquisitions (Details) - Allocation - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Real Estate Investments, Net [Abstract] | ||
Land and improvements | $ 48,671 | $ 129,506 |
Building and improvements | 116,163 | 252,186 |
Acquired in-place leases | 17,345 | 39,277 |
Acquired above-market leases | 1,639 | 1,327 |
Acquired below-market leases | (5,543) | (15,561) |
Total assets and lease liabilities acquired | 178,275 | 406,735 |
Less: Fair value of assumed debt at acquisition | 24,697 | 58,047 |
Net assets acquired | $ 153,578 | $ 348,688 |
Real Estate Acquisitions (Det38
Real Estate Acquisitions (Details) - Weighted-average amortization | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Acquired In-Place Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired finite-lived intangible assets, weighted average useful life | 10 years | 13 years |
Acquired Above-Market Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired finite-lived intangible assets, weighted average useful life | 8 years | 8 years |
Acquired Below-Market Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired finite-lived intangible assets, weighted average useful life | 18 years | 17 years |
Mortgages and Loans Payable (De
Mortgages and Loans Payable (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Nov. 09, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Unsecured Debt | $ 592,357 | $ 398,000 | |
Outstanding principal balance | 737,564 | 532,941 | |
Assumed market debt adjustments, net | 4,668 | 4,795 | |
Deferred financing cost, net | (5,671) | (4,521) | |
Total | 736,561 | 533,215 | |
Accumulated amortization, assumed market debt adjustment | 1,700 | 1,300 | |
Accumulated amortization, deferred financing costs | $ 2,200 | $ 1,200 | |
Weighted-average interest rate on debt | 3.10% | 3.00% | |
Mortgages | |||
Debt Instrument [Line Items] | |||
Outstanding principal balance | $ 145,207 | $ 134,941 | |
Minimum | Mortgages | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.13% | ||
Maximum | Mortgages | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.64% | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.64% | ||
Outstanding principal balance | $ 22,357 | 28,000 | |
Gross borrowing | 272,000 | ||
Gross payments | 278,000 | ||
Line of credit facility, maximum borrowing capacity | 350,000 | 350,000 | |
Deferred financing costs, line of credit arrangements, net | 900 | 1,800 | |
Accumulated amortization of deferred financing costs, line of credit arrangements | $ 3,100 | 2,200 | |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Maturity date extension fee, percent | 0.15% | ||
Term Loan Due 2019 | |||
Debt Instrument [Line Items] | |||
Outstanding principal balance | $ 185,000 | 185,000 | |
Term Loan Due 2019 | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.09% | ||
Term Loan Due 2019 | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.89% | ||
Term Loan Due 2020 | |||
Debt Instrument [Line Items] | |||
Outstanding principal balance | $ 185,000 | 185,000 | |
Term Loan Due 2020 | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate | 2.16% | ||
Term Loan Due 2020 | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate | 3.09% | ||
Term Loan Due 2024 | |||
Debt Instrument [Line Items] | |||
Interest rate | 3.14% | ||
Outstanding principal balance | $ 200,000 | $ 0 | |
Subsequent Event | |||
Debt Instrument [Line Items] | |||
Unsecured Debt | $ 200,000 | ||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Interest swap, fixed interest rate | 0.70% | ||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Interest swap, fixed interest rate | 1.70% | ||
Designated as Hedging Instrument | Interest Rate Swap | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Interest swap, fixed interest rate | 2.194% |
Mortgages and Loans Payable Deb
Mortgages and Loans Payable Debt Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Fixed-rate debt | $ 515,207 | $ 377,941 |
Variable-rate debt | 222,357 | 155,000 |
Unsecured debt | 592,357 | 398,000 |
Secured debt | 145,207 | 134,941 |
Total | $ 737,564 | $ 532,941 |
Derivatives and Hedging Activ41
Derivatives and Hedging Activities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($)derivative | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)derivative | Sep. 30, 2016USD ($) | Nov. 09, 2017USD ($) | Dec. 31, 2016USD ($)derivative | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ 152 | $ 1,012 | $ 16 | $ 1,012 | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 195 | $ (89) | (43) | $ (89) | ||
Credit Risk Derivative Liabilities, at Fair Value | 400 | 400 | ||||
Unsecured Debt | 592,357 | 592,357 | $ 398,000 | |||
Designated as Hedging Instrument | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Reversal of cumulative ineffectiveness gain due to adoption of new accounting policy | 500 | 500 | ||||
Interest Rate Swap | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Credit Risk Derivative Liabilities, at Fair Value | $ 403 | 403 | $ 1,313 | |||
Interest Rate Swap | Designated as Hedging Instrument | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Amount estimated to be reclassified from AOCI to interest expense over next 12 months | $ 1,600 | |||||
Count | derivative | 4 | 4 | 2 | |||
Notional Amount | $ 370,000 | $ 370,000 | $ 243,000 | |||
Credit Risk Derivative Liabilities, at Fair Value | $ 1 | $ 1 | $ 463 | |||
Interest Rate Contract | Designated as Hedging Instrument | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Count | derivative | 2 | 2 | ||||
Notional Amount | $ 127,000 | $ 127,000 | ||||
Subsequent Event | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Unsecured Debt | $ 200,000 | |||||
Subsequent Event | Interest Rate Swap | Designated as Hedging Instrument | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional Amount | $ 200,000 | |||||
Fixed LIBOR | 2.194% | |||||
Term Loan Facility [Member] | Interest Rate Swap | Designated as Hedging Instrument | Minimum | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Fixed LIBOR | 0.70% | 0.70% | ||||
Term Loan Facility [Member] | Interest Rate Swap | Designated as Hedging Instrument | Maximum | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Fixed LIBOR | 1.70% | 1.70% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | May 09, 2017 | Dec. 31, 2016 | Apr. 14, 2016 | |
Class of Stock [Line Items] | |||||
Share price | $ 22.75 | $ 22.50 | |||
Repurchase of common stock | $ 23,451 | $ 18,782 | |||
SRP, Outstanding Requests | 404,000 | ||||
Class B units unvested | 406,513 | 391,349 | 414,415 | ||
Payments for Repurchase of Other Equity | $ 6,000 | ||||
Dividend Reinvestment Plan | |||||
Class of Stock [Line Items] | |||||
Share price | $ 22.75 | $ 22.50 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Class B units unvested | 406,513 | 391,349 | 406,513 | 391,349 | 414,415 |
Numerator for basic and diluted earning per share | |||||
Net (loss) income | $ (5,857) | $ 48 | $ (7,196) | $ (3,153) | |
Denominator | |||||
Denominator for basic earning per share - weighted-average shares | 46,545,000 | 46,219,000 | 46,529,000 | 46,168,000 | |
Effect of restricted stock awards | 0 | 2,000 | 0 | 0 | |
Denominator for diluted earning per share - adjusted weighted-average shares | 46,545,000 | 46,221,000 | 46,529,000 | 46,168,000 | |
Earnings Per Common Share | |||||
Net (loss) income per share - basic and diluted | $ (0.13) | $ 0 | $ (0.15) | $ (0.07) | |
Stock Compensation Plan [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Restricted stock award | 5,000 | 4,400 |
Related Party Transactions (Det
Related Party Transactions (Details) - Advisor - USD ($) | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | May 09, 2017 | Dec. 31, 2016 | Apr. 14, 2016 | |
Related Party Transaction [Line Items] | |||||||||
Share price | $ 22.75 | $ 22.50 | |||||||
Accounts payable – affiliates | $ 3,351,000 | $ 3,351,000 | $ 3,351,000 | $ 3,499,000 | |||||
Advisory Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related transaction rate, increase or decrease | 15.00% | ||||||||
Related Party, Monthly Cash Asset Management Fee Rate | 0.05667% | 0.06667% | |||||||
Expenses from transactions with related party | 3,868,000 | $ 3,043,000 | 11,821,000 | $ 12,615,000 | |||||
Accounts payable – affiliates | $ 983,000 | 983,000 | 983,000 | 1,243,000 | |||||
Advisory Agreement | Acquisition Fee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, rate | 0.85% | 1.00% | |||||||
Expenses from transactions with related party | 459,000 | $ 198,000 | 1,681,000 | $ 4,041,000 | |||||
Accounts payable – affiliates | $ 0 | $ 0 | $ 0 | 179,000 | |||||
Advisory Agreement | Asset Management Fee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, rate | 0.85% | 1.00% | |||||||
Class B units issuance due date | 60 days | ||||||||
Share price | $ 22.75 | $ 22.50 | |||||||
Class B units of operating partnership, issued in connection with asset management services | 69,341 | 69,341 | 159,540 | 69,341 | 159,540 | ||||
Percentage of return | 6.00% | ||||||||
Expenses from transactions with related party | $ 3,056,000 | $ 2,649,000 | $ 9,192,000 | $ 7,262,000 | |||||
Accounts payable – affiliates | $ 929,000 | 929,000 | 929,000 | 1,007,000 | |||||
Advisory Agreement | General and Administrative Reimbursements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Accounts payable – affiliates | 67,000 | 67,000 | 67,000 | 43,000 | |||||
Advisory Agreement | Due Diligence Fees | |||||||||
Related Party Transaction [Line Items] | |||||||||
Expenses from transactions with related party | 168,000 | 40,000 | 412,000 | 794,000 | |||||
Accounts payable – affiliates | 0 | 0 | 0 | 0 | |||||
Advisory Agreement | Class B Units Distribution | |||||||||
Related Party Transaction [Line Items] | |||||||||
Expenses from transactions with related party | 185,000 | $ 156,000 | 536,000 | $ 518,000 | |||||
Accounts payable – affiliates | $ 54,000 | $ 54,000 | $ 54,000 | $ 57,000 | |||||
Advisory Agreement | Minimum | Disposition Fee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, rate | 1.70% | 2.00% | |||||||
Advisory Agreement | Maximum | Disposition Fee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, rate | 6.00% | ||||||||
Advisory Agreement | Cash | Asset Management Fee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, rate | 80.00% | ||||||||
Advisory Agreement | Class B Units | Asset Management Fee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party transaction, rate | 0.0425% | 0.05% | 20.00% |
Related Party Transactions (D45
Related Party Transactions (Details) - Property Manager - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Accounts payable – affiliates | $ 3,351 | $ 3,351 | $ 3,499 | ||
Property Manager | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 3,660 | $ 3,810 | 10,149 | $ 9,555 | |
Accounts payable – affiliates | 1,518 | $ 1,518 | 1,361 | ||
Property Manager | Property Management Fee | |||||
Related Party Transaction [Line Items] | |||||
Property management fee, percent fee | 4.00% | ||||
Expenses from transactions with related party | 1,462 | 1,314 | $ 4,354 | 3,484 | |
Accounts payable – affiliates | 504 | $ 504 | 423 | ||
Property Manager | Leasing Commissions | |||||
Related Party Transaction [Line Items] | |||||
Allowed percentage increase to leasing fee payable | 50.00% | ||||
Expenses from transactions with related party | 934 | 1,134 | $ 2,555 | 2,699 | |
Accounts payable – affiliates | 320 | 320 | 386 | ||
Property Manager | Construction Management Fee | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 356 | 370 | 577 | 676 | |
Accounts payable – affiliates | 230 | 230 | 185 | ||
Property Manager | Other Fees and Reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 908 | $ 992 | 2,663 | $ 2,696 | |
Accounts payable – affiliates | $ 464 | $ 464 | $ 367 |
Related Party Transactions Rela
Related Party Transactions Related Party Transactions (Details) - Transfer Agent - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |||||
Transfer agent fees incurred related to offering costs | $ 0 | $ 0 | $ 0 | $ 0 | |
Transfer agent fees payable | 140 | 140 | $ 140 | ||
Other fees incurred from transfer agent | 0 | $ 0 | 0 | $ 140 | |
Other fees payable | $ 560 | $ 560 | $ 560 |
Related Party Transactions (D47
Related Party Transactions (Details) - Other - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transactions [Abstract] | ||
Due to Joint Ventures | $ 83,000 | $ 152,000 |
Operating Leases (Details)
Operating Leases (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
Remaining 2,017 | $ 30,639 |
2,018 | 115,409 |
2,019 | 103,306 |
2,020 | 90,401 |
2,021 | 75,162 |
2022 and thereafter | 283,488 |
Total | $ 698,405 |
Florida | Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 15.40% |
California | Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 13.50% |
Subsequent Events (Details) - D
Subsequent Events (Details) - Distributions - USD ($) $ / shares in Units, $ in Thousands | Nov. 01, 2017 | Oct. 02, 2017 | Dec. 31, 2017 | Nov. 09, 2017 | Feb. 28, 2018 | Oct. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Subsequent Event [Line Items] | ||||||||
Common stock, dividends, per share, declared | $ 1.22 | $ 1.22 | ||||||
Distributions reinvested | $ 27,630 | $ 28,861 | ||||||
Net cash distribution | 29,217 | 27,519 | ||||||
Stock repurchased during period, value | $ 23,510 | $ 16,901 | ||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Stock repurchased during period, shares | 325,851 | |||||||
Stock repurchased during period, value | $ 7,400 | |||||||
Dividend Paid | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock, dividends, per share, declared | $ 0.00445205 | |||||||
Gross amount of distribution paid | $ 6,441 | $ 6,218 | ||||||
Distributions reinvested | 3,031 | 2,957 | ||||||
Net cash distribution | $ 3,410 | $ 3,261 | ||||||
Dividend declared | Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Common stock, dividends, per share, declared | $ 0.00445205 | $ 0.13541652 |