Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 12, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'CIO | ' |
Entity Registrant Name | 'City Office REIT, Inc. | ' |
Entity Central Index Key | '0001593222 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 8,192,915 |
Condensed_Consolidated_and_Com
Condensed Consolidated and Combined Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Predecessor [Member] | ||
Assets | ' | ' |
Land | $61,788,918 | $30,164,513 |
Building and improvement | 115,639,203 | 62,908,338 |
Tenant improvement | 25,252,774 | 14,590,971 |
Furniture, fixtures and equipment | 198,114 | 198,114 |
Real estate properties, gross | 202,879,009 | 107,861,936 |
Accumulated depreciation | -13,065,451 | -7,735,450 |
Real estate properties, net | 189,813,558 | 100,126,486 |
Investments in unconsolidated entity | ' | 4,337,899 |
Cash and cash equivalents | 8,855,196 | 7,127,764 |
Restricted cash | 13,184,871 | 7,368,124 |
Rents receivable, net | 7,372,062 | 4,680,284 |
Deferred financing costs, net of accumulated amortization | 2,919,700 | 1,167,666 |
Deferred leasing costs, net of accumulated amortization | 2,478,801 | 2,302,841 |
Acquired lease intangibles assets, net | 26,995,279 | 13,751,563 |
Prepaid expenses and other assets | 546,298 | 296,572 |
Deferred offering costs | ' | 1,830,950 |
Total Assets | 252,165,765 | 142,990,149 |
Liabilities: | ' | ' |
Debt | 179,604,305 | 109,916,430 |
Accounts payable and accrued liabilities | 4,201,127 | 2,347,999 |
Deferred rent | 2,648,850 | 1,488,618 |
Tenant rent deposits | 1,842,820 | 1,361,641 |
Acquired lease intangibles liability, net | 649,234 | 167,346 |
Dividend distributions payable | 2,689,532 | ' |
Earn-out liability | 8,000,000 | ' |
Total Liabilities | 199,635,868 | 115,282,034 |
Commitments and Contingencies (Note 9) | ' | ' |
Equity: | ' | ' |
Common stock, $0.01 par value, 100,000,000 shares authorized, 8,192,915 shares issued and outstanding | 81,929 | ' |
Additional paid in capital | 45,503,697 | ' |
Accumulated deficit | -7,136,038 | ' |
Predecessor equity | ' | 26,624,375 |
Total Stockholders' and Predecessor Equity | 38,449,588 | 26,624,375 |
Operating Partnership unitholders' noncontrolling interests | 14,816,720 | ' |
Noncontrolling interests in properties | -736,411 | 1,083,740 |
Total Equity | 52,529,897 | 27,708,115 |
Total Liabilities and Equity | $252,165,765 | $142,990,149 |
Condensed_Consolidated_and_Com1
Condensed Consolidated and Combined Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Predecessor [Member] | ||
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 8,192,915 | 8,192,915 |
Common stock, shares outstanding | 8,192,915 | 8,192,915 |
Condensed_Consolidated_and_Com2
Condensed Consolidated and Combined Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | |
Predecessor [Member] | Predecessor [Member] | |||
Revenues: | ' | ' | ' | ' |
Rental income | $9,036,858 | $23,987,891 | $6,222,764 | $12,938,686 |
Expense reimbursement | 843,753 | 1,796,567 | 406,622 | 1,093,117 |
Other | 117,809 | 589,631 | 202,990 | 593,724 |
Total Revenues | 9,998,420 | 26,374,089 | 6,832,376 | 14,625,527 |
Operating Expenses: | ' | ' | ' | ' |
Property operating expenses | 2,782,296 | 7,304,371 | 1,819,634 | 4,005,302 |
Insurance | 167,046 | 489,471 | 144,057 | 374,655 |
Property taxes | 753,329 | 1,775,641 | 458,611 | 1,015,164 |
Property management fees | 225,719 | 619,497 | 143,764 | 397,297 |
Acquisition costs | 401,200 | 1,551,347 | ' | 1,479,292 |
Base management fee | 226,295 | 411,471 | ' | ' |
Stock based compensation | 382,205 | 667,347 | ' | ' |
General and administrative | 407,075 | 821,379 | ' | ' |
Depreciation and amortization | 4,057,809 | 10,633,593 | 2,530,128 | 5,245,498 |
Total Operating Expenses | 9,402,974 | 24,274,117 | 5,096,194 | 12,517,208 |
Operating income | 595,446 | 2,099,972 | 1,736,182 | 2,108,319 |
Interest Expense: | ' | ' | ' | ' |
Contractual interest expense | -1,866,999 | -5,821,533 | -1,229,215 | -3,065,648 |
Amortization of deferred financing costs | -159,670 | -1,288,714 | -433,495 | -638,938 |
Loss on early extinguishment of Predecessor debt | ' | -1,654,828 | ' | ' |
Interest expense, net | -2,026,669 | -8,765,075 | -1,662,710 | -3,704,586 |
Change in fair value of earn-out | -942,650 | -1,047,515 | ' | ' |
Gain on equity investment | ' | 4,474,644 | ' | ' |
Equity in income of unconsolidated entity | ' | ' | 84,774 | 255,422 |
Net (loss)/income | -2,373,873 | -3,237,974 | 158,246 | -1,340,845 |
Less: Net (income)/loss attributable to noncontrolling interests in properties | -87,296 | -8,326 | 21,368 | 60,356 |
Less: Net loss/(income) attributable to Predecessor | ' | -1,973,197 | 179,614 | -1,280,489 |
Less: Net loss attributable to Operating Partnership unitholders' noncontrolling interests | 693,971 | 1,508,097 | ' | ' |
Net loss attributable to stockholders | ($1,767,198) | ($3,711,400) | ' | ' |
Net loss per share: | ' | ' | ' | ' |
Basic and diluted | ($0.22) | ($0.46) | ' | ' |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic and diluted | 8,192,915 | 8,133,940 | ' | ' |
Dividend distributions declared per common share and unit | $0.24 | $0.42 | ' | ' |
Condensed_Consolidated_and_Com3
Condensed Consolidated and Combined Statements of Changes in Equity (USD $) | Total | Predecessor [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Parent [Member] | Operating Partnership Unitholders' Noncontrolling Interests [Member] | Noncontrolling Interests in Properties [Member] |
Predecessor [Member] | ||||||||
Beginning balance at Dec. 31, 2013 | $27,708,115 | $26,624,375 | ' | ' | ' | $26,624,375 | ' | $1,083,740 |
Contributions | 3,905,445 | 3,843,445 | ' | ' | ' | 3,843,445 | ' | 62,000 |
Distributions | -1,500,000 | -1,347,000 | ' | ' | ' | -1,347,000 | ' | -153,000 |
Net income/ (loss) | ' | 1,973,197 | ' | ' | ' | 1,973,197 | ' | ' |
Net income/ (loss) | 1,944,487 | 1,944,487 | ' | ' | ' | ' | ' | -28,710 |
Ending balance at Apr. 20, 2014 | 32,058,047 | 31,094,017 | ' | ' | ' | 31,094,017 | ' | 964,030 |
Beginning balance at Mar. 31, 2014 | ' | ' | ' | ' | ' | ' | ' | ' |
Net income/ (loss) | ' | -240,057 | ' | ' | ' | ' | ' | ' |
Net income/ (loss) | ' | -258,842 | ' | ' | ' | ' | ' | ' |
Ending balance at Apr. 20, 2014 | 32,058,047 | 31,094,017 | ' | ' | ' | 31,094,017 | ' | 964,030 |
Net proceeds from sale of common shares, values | 72,470,455 | ' | 65,821 | 72,404,634 | ' | 72,470,455 | ' | ' |
Net proceeds from sale of common shares | ' | ' | 6,582,150 | ' | ' | ' | ' | ' |
Formation Transaction | -42,620,221 | -31,094,017 | 16,108 | -27,568,284 | ' | -58,646,193 | 17,684,113 | -1,658,141 |
Formation Transaction, shares | ' | ' | 1,610,765 | ' | ' | ' | ' | ' |
Restricted stock award grants | 667,347 | ' | ' | 667,347 | ' | 667,347 | ' | ' |
Dividend distributions declared | -4,783,934 | ' | ' | ' | -3,424,638 | -3,424,638 | -1,359,296 | ' |
Distributions | -79,336 | ' | ' | ' | ' | ' | ' | -79,336 |
Net income/ (loss) | ' | ' | ' | ' | -3,711,400 | -3,711,400 | ' | ' |
Net income/ (loss) | -5,182,461 | ' | ' | ' | ' | ' | -1,508,097 | 37,036 |
Ending balance at Sep. 30, 2014 | $52,529,897 | ' | $81,929 | $45,503,697 | ($7,136,038) | $38,449,588 | $14,816,720 | ($736,411) |
Ending balance, shares at Sep. 30, 2014 | ' | ' | 8,192,915 | ' | ' | ' | ' | ' |
Condensed_Consolidated_and_Com4
Condensed Consolidated and Combined Statements of Cash Flows (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Predecessor [Member] | ||
Cash Flows from Operating Activities: | ' | ' |
Net loss | ($3,237,974) | ($1,340,845) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 10,633,593 | 5,245,498 |
Amortization of deferred financing costs | 1,288,714 | 638,938 |
Amortization of above/below market leases | 367,708 | 371,930 |
Increase in straight-line rent | -1,145,563 | -1,667,624 |
Non-cash stock compensation | 667,347 | ' |
Change in fair value of earn-out | 1,047,515 | ' |
Loss on early extinguishment of debt | 885,024 | ' |
Gain on equity investment | -4,474,644 | ' |
Equity in income of unconsolidated entity | ' | -255,422 |
Changes in non-cash working capital: | ' | ' |
Rents receivable, net | -1,546,216 | -365,362 |
Prepaid expenses and other assets | -218,190 | 277,711 |
Accounts payable and accrued liabilities | 72,100 | 1,015,543 |
Deferred rent | 1,160,232 | 1,791,921 |
Tenant rent deposits | 481,179 | 658,273 |
Net Cash Provided By Operating Activities | 5,980,825 | 6,370,561 |
Cash Flows to Investing Activities: | ' | ' |
Additions to real estate properties | -2,542,032 | -1,885,438 |
Acquisition of real estate, net of cash assumed | -62,543,576 | -71,313,835 |
Distribution from unconsolidated entity | ' | 672,469 |
Deferred leasing cost | -570,735 | -722,775 |
Net Cash Used In Investing Activities | -65,656,343 | -73,249,579 |
Cash Flows from Financing Activities: | ' | ' |
Net proceeds from issuance of common shares | 72,470,455 | ' |
Formation transactions | -35,244,570 | ' |
Debt issuance and extinguishment costs | -3,925,772 | -841,035 |
Proceeds from mortgage loans payable | 195,260,000 | 56,294,637 |
Repayment of mortgage loans payable | -161,572,125 | -638,513 |
Contributions from partners and members | 3,843,445 | 22,007,794 |
Contributions from noncontrolling interests in properties | 62,000 | 1,365,000 |
Distributions to partners and members | -1,347,000 | -1,224,120 |
Distributions to noncontrolling interests in properties | -232,334 | -97,350 |
Dividend distributions paid to stockholders and Operating Partnership unitholders | -2,094,402 | ' |
Change in restricted cash | -5,816,747 | -5,540,614 |
Net Cash Provided By Financing Activities | 61,402,950 | 71,325,799 |
Net Increase in Cash and Cash Equivalents | 1,727,432 | 4,446,781 |
Cash and Cash Equivalents, Beginning of Period | 7,127,764 | 3,106,616 |
Cash and Cash Equivalents, End of Period | 8,855,196 | 7,553,397 |
Supplemental Disclosures of Cash Flow Information: | ' | ' |
Cash paid for interest | 6,555,549 | 3,067,866 |
Accrued dividend distributions payable | $2,689,532 | ' |
Organization_and_Description_o
Organization and Description of Business | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||
Organization and Description of Business | ' | ||||||||||||
1. Organization and Description of Business | |||||||||||||
City Office REIT, Inc. (the “Company”) was organized in the state of Maryland on November 26, 2013. On April 21, 2014, the Company completed its initial public offering (“IPO”) of shares of the Company’s common stock. The Company contributed the net proceeds of the IPO to City Office REIT Operating Partnership, L.P., a Maryland limited partnership (the “Operating Partnership”), in exchange for common units in the Operating Partnership. Both the Company and the Operating Partnership commenced operations upon completion of the IPO and certain related formation transactions (the “Formation Transactions”). | |||||||||||||
The Company’s interest in the Operating Partnership entitles the Company to share in distributions from, and allocations of profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership of common units. As the sole general partner of the Operating Partnership, the Company has the exclusive power under the partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners. | |||||||||||||
City Office REIT, Inc. Predecessor (the “Predecessor”) represents the combination of the six properties outlined below (the “Properties”). The Predecessor does not represent a legal entity. The Predecessor and its related assets and liabilities are under common control and were contributed to a newly formed Operating Partnership in connection with the IPO of the Company on April 21, 2014. | |||||||||||||
The historical financial results in these financial statements for periods prior to April 21, 2014 relate to the Predecessor. The Predecessor is comprised of the following properties: | |||||||||||||
• | City Center: Property in St. Petersburg, Florida, acquired in December 2010. | ||||||||||||
• | Central Fairwinds: Property in Orlando, Florida, acquired in May 2012. | ||||||||||||
• | AmberGlen: Property in Portland, Oregon, acquired in December 2009. | ||||||||||||
• | Washington Group Plaza: Property in downtown Boise, Idaho, acquired in June 2013. | ||||||||||||
• | Corporate Parkway: Property in Allentown, Pennsylvania, acquired in May 2013. | ||||||||||||
• | Cherry Creek: Property in Denver, Colorado, acquired in January 2014. | ||||||||||||
The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a real estate investment trust (“REIT”) commencing with its taxable year ending December 31, 2014. Subject to qualification as a REIT, the Company will be permitted to deduct dividend distributions paid to its stockholders, eliminating the U.S. federal taxation of income represented by such distributions at the Company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and any applicable alternative minimum tax. | |||||||||||||
Pursuant to the Jumpstart Our Business Startups Act (the “JOBS Act”), the Company qualifies as an emerging growth company (“EGC”). An EGC may choose to take advantage of the extended private company transition period provided for complying with new or revised accounting standards that may be issued by the Financial Accounting Standards Board (“FASB”) or the Securities and Exchange Commission (the “SEC”). The Company has elected to opt out of such extended transition period. This election is irrevocable. | |||||||||||||
Initial Public Offering and Formation Transactions | |||||||||||||
The Company’s operations will be carried on primarily through the Operating Partnership and wholly owned subsidiaries of the Operating Partnership. Both the Company and the Operating Partnership commenced operations upon completion of the IPO and certain related formation transactions. | |||||||||||||
On April 21, 2014, the Company closed the IPO, pursuant to which it sold 5,800,000 shares of common stock to the public at a public offering price of $12.50 per share. The Company raised $72.5 million in gross proceeds, resulting in net proceeds to us of approximately $63.4 million after deducting approximately $5.1 million in underwriting discounts and approximately $4.0 million in other expenses relating to the IPO. On May 9, 2014, the underwriters of the IPO exercised their overallotment option to purchase an additional 782,150 shares of the Company’s common stock at the IPO price of $12.50 a share resulting in additional gross proceeds of approximately $9.8 million. The net proceeds to the Company were $9.1 million after deducting approximately $0.7 million in underwriting discounts. The Company’s common stock began trading on the New York Stock Exchange under the symbol “CIO” on April 15, 2014. | |||||||||||||
The Company contributed the net proceeds of the IPO to the Operating Partnership in exchange for common units in the Operating Partnership. The Operating Partnership utilized a portion of the net proceeds of the IPO to pay fees in connection with the assumption of the indebtedness, pay expenses incurred in connection with the IPO and Formation Transactions and repay loans that were made to several of the contributing entities by certain investors in such entities. The remaining funds are expected to be used for general working capital purposes and to fund potential future acquisitions. | |||||||||||||
Pursuant to the Formation Transactions and exercise of the underwriters’ overallotment option, the Operating Partnership acquired a 100% interest in each of the Washington Group Plaza, Cherry Creek and Corporate Parkway properties and acquired an approximate 76% economic interest in the AmberGlen property, 90% interest in the Central Fairwinds property and 95% interest in the City Center property. These initial property interests were contributed in exchange for 3,731,209 common units, 1,610,765 common stock and $19.4 million of cash. On May 9, 2014, subsequent to the exercise of the underwriters’ overallotment option, 479,305 common units and 248,095 common stock were redeemed for $9.1 million in cash. | |||||||||||||
In connection with the IPO and Formation Transactions, the Company, through its Operating Partnership, extinguished the loan on the Central Fairwinds property and completed a refinancing of three properties (Cherry Creek, City Center and Corporate Parkway) with a new $95 million non-recourse mortgage loan and proceeds from the IPO. The loan bears a fixed interest rate of 4.34% and matures on May 6, 2021. | |||||||||||||
The following is a summary of the Predecessor Statements of Operations for the period from April 1, 2014 through April 20, 2014 and for the period from January 1, 2014 through April 20, 2014, and the Company’s Statement of Operations for the period from April 21, 2014 through September 30, 2014. These amounts are included in the condensed consolidated and combined statement of operations herein for the three and nine months ended September 30, 2014. All balances as of December 31, 2013 and for the three and nine months ended September 30, 2013 are those of the Predecessor. | |||||||||||||
Predecessor | City Office REIT, Inc | ||||||||||||
April 1, 2014 | January 1, 2014 | April 21, 2014 through | |||||||||||
through April 20, | through April 20, | September 30, 2014 | |||||||||||
2014 | 2014 | ||||||||||||
Revenues: | |||||||||||||
Rental income | $ | 1,628,480 | $ | 8,865,238 | $ | 15,122,653 | |||||||
Expense reimbursement | 105,569 | 555,611 | 1,240,956 | ||||||||||
Other | 47,198 | 342,859 | 246,772 | ||||||||||
Total Revenues | 1,781,247 | 9,763,708 | 16,610,381 | ||||||||||
Operating Expenses: | |||||||||||||
Property operating expenses | 510,431 | 2,764,893 | 4,539,478 | ||||||||||
Insurance | 23,570 | 176,428 | 313,043 | ||||||||||
Property taxes | 136,684 | 597,788 | 1,177,853 | ||||||||||
Property management fees | 27,265 | 234,882 | 384,615 | ||||||||||
Acquisition costs | — | 806,344 | 745,003 | ||||||||||
Base management fees | — | — | 411,471 | ||||||||||
Stock-based compensation | — | — | 667,347 | ||||||||||
General and administrative | 29,799 | 79,799 | 741,580 | ||||||||||
Depreciation and amortization | 701,962 | 3,861,939 | 6,771,654 | ||||||||||
Total Operating Expenses | 1,429,711 | 8,522,073 | 15,752,044 | ||||||||||
Operating income | 351,536 | 1,241,635 | 858,337 | ||||||||||
Interest expense, net | (610,378 | ) | (3,771,792 | ) | (4,993,283 | ) | |||||||
Change in fair value of earn-out | — | — | (1,047,515 | ) | |||||||||
Gain on equity investment | — | 4,474,644 | — | ||||||||||
Net (Loss)/Income | (258,842 | ) | 1,944,487 | (5,182,461 | ) | ||||||||
Net Loss attributable to noncontrolling interests in properties | 18,785 | 28,710 | (37,036 | ) | |||||||||
Net (Loss)/Income attributable to Predecessor | (240,057 | ) | 1,973,197 | — | |||||||||
Net loss attributable to Operating Partnership noncontrolling interests | 1,508,097 | ||||||||||||
Net loss attributable to Stockholders | (3,711,400 | ) | |||||||||||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||
Sep. 30, 2014 | |||
Accounting Policies [Abstract] | ' | ||
Summary of Significant Accounting Policies | ' | ||
2. Summary of Significant Accounting Policies | |||
Basis of Preparation and Summary of Significant Accounting Policies | |||
The accompanying condensed consolidated and combined financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the financial position and results of operations of the Company, the Operating Partnership and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated on consolidation. | |||
The Predecessor represents a combination of certain entities holding interests in real estate that were commonly controlled prior to the Formation Transactions. Due to their common control, the financial statements of the separate entities which own the properties are presented on a combined basis in the Predecessor financial statements. | |||
The accompanying condensed consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All significant intercompany balances and transactions have been eliminated on combination. | |||
The information furnished in the accompanying condensed consolidated and combined financial statements reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the aforementioned condensed consolidated and combined financial statements for the interim periods. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. These interim financial statements should be read in conjunction with the audited combined financial statements of the Predecessor for the year ended December 31, 2013, included in the Company’s final prospectus dated April 14, 2014. | |||
Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the combined financial statements and the reported amounts of revenues and expenses during the period. Such estimates are based on management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from management’s estimates. | |||
Business Combinations | |||
The fair value of the real estate acquired, which includes the impact of fair value adjustments for assumed mortgage debt related to property acquisitions, is allocated to the acquired tangible assets, consisting of land, buildings and improvements and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and value of tenant relationships, based in each case on their fair values. Acquisition costs are expensed as incurred in the accompanying combined statements of operations. Also, noncontrolling interests acquired are recorded at estimated fair market value. | |||
The fair value of the tangible assets of an acquired property (which includes land, buildings and improvements and fixtures and equipment) is determined by valuing the property as if it were vacant. The “as-if-vacant” value is then allocated to land and buildings and improvements based on management’s determination of relative fair values of these assets. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases including leasing commissions. | |||
The fair value of above-market and below-market lease values are recorded based on the difference between the current in-place lease rent and management’s estimate of current market rents. Below-market lease intangibles are recorded as part of acquired lease intangibles liability and amortized into rental revenue over the non-cancelable periods and bargain renewal periods of the respective leases. Above-market leases are recorded as part of intangible assets and amortized as a direct charge against rental revenue over the noncancelable portion of the respective leases. | |||
The fair value of acquired in-place leases are recorded based on the costs management estimates the Company would have incurred to lease the property to the occupancy level of the property at the date of acquisition. Such estimates include the fair value of leasing commissions and legal costs that would be incurred to lease the property to this occupancy level. Additionally, management evaluates the time period over which such occupancy level would be achieved and includes an estimate of the net operating costs incurred during the lease-up period. Acquired in-place leases are amortized on a straight-line basis over the term of the individual leases. | |||
Revenue Recognition | |||
The Company recognizes lease revenue on a straight-line basis over the term of the lease. Certain leases allow for the tenant to terminate the lease, but the tenant must make a termination payment as stipulated in the lease. If the termination payment is in such an amount that continuation of the lease appears, at the time of lease inception, to be reasonably assured, then the Company recognizes revenue over the term of the lease. The Company has determined that for these leases, the termination payment is in such an amount that continuation of the lease appears, at the time of inception, to be reasonably assured. The Company recognizes lease termination fees as revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred or deferred revenue on the consolidated balance sheets. | |||
If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. | |||
Recoveries from tenants for real estate taxes, insurance and other operating expenses are recognized as revenues in the period that the applicable costs are incurred. The Company recognizes differences between estimated recoveries and the final billed amounts in the subsequent year. Final billings to tenants for real estate taxes, insurance and other operating expenses did not vary significantly as compared to the estimated receivable balances. | |||
Real Estate Properties | |||
Real estate properties are stated at cost less accumulated depreciation, except land. Depreciation is computed on the straightline basis over estimated useful lives of: | |||
Years | |||
Buildings and improvement | 29-50 | ||
Furniture, fixtures and equipment | 7-Apr | ||
Expenditures for maintenance and repairs are charged to operations as incurred. | |||
Impairment of Real Estate Properties | |||
Long-lived assets currently in use are reviewed periodically for possible impairment and will be written down to fair value if considered impaired. Long-lived assets, to be disposed of, are written down to the lower of cost or fair value less the estimated cost to sell. The Company reviews its real estate properties for impairment when there is an event or a change in circumstances that indicates that the carrying amount may not be recoverable. The Company measures and records impairment losses and reduces the carrying value of properties when indicators of impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts. In cases where the Company does not expect to recover its carrying costs on properties held for use, the Company reduces its carrying costs to fair value. | |||
Offering Costs | |||
Costs related to the IPO and Formation Transactions paid by the Company’s Predecessor were reimbursed from the proceeds of the IPO. | |||
Income Taxes | |||
The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a REIT under the U.S. Internal Revenue Code (the “Code”) commencing with its taxable year ending December 31, 2014. To qualify as a REIT, the Company is required to distribute dividends equal to at least 90% of the REIT taxable income (computed without regard to the dividends paid deduction and net capital gains) to its stockholders, and meet the various other requirements imposed by the Code relating to matters such as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided the Company qualifies for taxation as a REIT, it is generally not subject to U.S. federal corporate-level income tax on the earnings distributed currently to its stockholders. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and any applicable alternative minimum tax. In addition, the Company may not be able to re-elect as a REIT for the four subsequent taxable years. | |||
For periods prior to the completion of the IPO and the Formation Transactions on April 21, 2014, no provision was made for U.S. federal, state or local income taxes because profits and losses of the Predecessor flowed through to its respective partners, members and shareholders who were individually responsible for reporting such amounts. | |||
For periods subsequent to the completion of the IPO and the Formation Transactions, the taxable REIT subsidiaries are subject to federal, state and local corporate income taxes to the extent there is taxable income. | |||
Noncontrolling Interests | |||
Upon completion of the IPO and Formation Transactions and exercise of the underwriters’ overallotment option, the Operating Partnership issued 3,251,904 common units of limited partnership interest to the Predecessor’s prior investors as partial consideration for the contribution of their interest in the Predecessor to the Operating Partnership. Noncontrolling interest in the Company represents common units of the Operating Partnership held by the Predecessor’s prior investors. | |||
As of September 30, 2014, the Company held a 71.6% interest in the Operating Partnership. As the sole general partner and the majority interest holder, the Company consolidates the financial position and results of operations of the Operating Partnership. | |||
Dividends | |||
On May 12, 2014, the Company’s board of directors declared an initial, prorated cash dividend of $0.183 per share for the quarterly period from April 21 2014 through June 30, 2014, which is equivalent to a full quarterly dividend of $0.235. The dividend was payable on July 17, 2014 to stockholders and common unitholders of record on July 3, 2014. The $1.5 million in dividends was paid to stockholders and $0.6 million to common unitholders, totaling $2.1 million. | |||
On September 15, 2014, the Company’s board of directors declared a cash dividend of $0.235 per share for the quarterly period from July 1, 2014 through September 30, 2014. The dividend was payable on October 17, 2014 to stockholders and common unitholders of record on October 3, 2014. Subsequent to September 30, 2014, $1.9 million in dividends was paid to stockholders and $0.8 million to common unitholders, totaling $2.7 million. | |||
Equity-Based Compensation | |||
The Company accounts for equity-based compensation, including shares of restricted stock units, in accordance with ASC Topic 718 Compensation – Stock Compensation, which requires the Company to recognize an expense for the fair value of equity-based awards. The estimated fair value of restricted stock units is amortized over their respective vesting periods. See note 11 for further details. | |||
Earnings per Share | |||
The Company calculates net income per share based upon the weighted average shares outstanding during the period beginning April 2014. Diluted earnings per share is calculated after giving effect to all potential dilutive shares outstanding during the period. There were 3,251,904 potentially dilutive shares outstanding related to the issuance of common units held by noncontrolling interests during the three and nine months ended September 30, 2014. However, the shares were excluded from the computation of diluted shares as their impact would have been anti-dilutive. As a result, the number of diluted outstanding shares was equal to the number of basic outstanding shares. | |||
New Accounting Pronouncements | |||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a new Topic Accounting Standards Codification (Topic 606). The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. This standard is effective for interim or annual periods beginning after December 15, 2016 and allows for either full retrospective or modified retrospective adoption. Early adoption of this standard is not allowed. We are currently evaluating the impact the adoption of Topic 606 will have on our financial statements. |
Real_Estate_Investments
Real Estate Investments | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Real Estate [Abstract] | ' | ||||||||
Real Estate Investments | ' | ||||||||
3. Real Estate Investments | |||||||||
Acquisitions | |||||||||
During the three months and nine months ended September 30, 2014, the Company acquired the following properties: | |||||||||
Property | Date Acquired | Percentage Owned | |||||||
Cherry Creek | January 2014 | 100 | % | ||||||
Plaza 25 | June 2014 | 100 | % | ||||||
Lake Vista Pointe | Jul-14 | 100 | % | ||||||
The above acquisitions have been accounted for as business combinations. | |||||||||
On January 2, 2014, the Predecessor acquired the remaining 57.7% interest it did not already own in ROC-SCCP Cherry Creek I, LP (“Cherry Creek”) for approximately $12.0 million. The acquisition was financed through a new $50 million mortgage loan, the proceeds of which were used to repay $36 million of existing debt of Cherry Creek, fund the payment of $12.0 million to the seller, pay $1.2 million of deferred financing costs and $0.8 million in transactions costs. | |||||||||
The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed during the three and nine months ended September 30, 2014: | |||||||||
Cherry Creek | |||||||||
Land | $ | 25,745,012 | |||||||
Buildings and improvements | 15,771,277 | ||||||||
Tenant improvements | 4,372,849 | ||||||||
Acquired intangible assets | 12,009,085 | ||||||||
Accounts payable and other liabilities | (815,378 | ) | |||||||
Lease intangible liability | (249,409 | ) | |||||||
Fair value of assets and liabilities at acquisition | $ | 56,833,436 | |||||||
The Company recognized expenses relating to the Cherry Creek acquisition of $806,344 for the three and nine months ended September 30, 2014. A gain of $4.5 million was recognized from the fair value adjustment associated with the Predecessor’s original ownership due to a change in control, calculated as follows: | |||||||||
Fair value of assets and liabilities acquired | $ | 56,833,436 | |||||||
Less existing mortgage in Cherry Creek | (36,000,000 | ) | |||||||
20,833,436 | |||||||||
Less cash paid to seller | (12,020,893 | ) | |||||||
Fair value of 42.3% equity interest | 8,812,543 | ||||||||
Carrying value of investment in Cherry Creek | (4,337,899 | ) | |||||||
Gain on existing 42.3% equity interest | $ | 4,474,644 | |||||||
On June 4, 2014, the Company, through its Operating Partnership, acquired 100% of CIO Plaza 25 Limited Partnership, a property in Denver, Colorado for $24.3 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed during the three and nine months ended September 30, 2014: | |||||||||
Plaza 25 | |||||||||
Land | $ | 1,764,235 | |||||||
Buildings and improvements | 18,486,580 | ||||||||
Tenant improvements | 2,075,932 | ||||||||
Acquired intangible assets | 2,923,754 | ||||||||
Prepaid expenses and other assets | 1,926 | ||||||||
Accounts payable and other liabilities | (640,630 | ) | |||||||
Lease intangible liability | (327,906 | ) | |||||||
Total consideration | $ | 24,283,891 | |||||||
On July 18, 2014, the Company, through its Operating Partnership, acquired 100% of CIO Lake Vista Pointe Limited Partnership, a property in Dallas, Texas for $26.2 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed during the three and nine months ended September 30, 2014: | |||||||||
Lake Vista Pointe | |||||||||
Land | $ | 4,115,158 | |||||||
Buildings and improvements | 17,562,157 | ||||||||
Tenant Improvements | 2,581,839 | ||||||||
Acquired intangible assets | 3,682,828 | ||||||||
Prepaid expenses and other assets | 29,610 | ||||||||
Accounts payable and other liabilities | (1,732,801 | ) | |||||||
Total consideration | $ | 26,238,791 | |||||||
The operating results of the acquired properties, during the three and nine months ended September 30, 2014, since the date of acquisition have been included in the Company’s condensed consolidated and combined financial statements. The following table represents the results of the properties’ operations since the date of acquisition on a stand-alone basis. | |||||||||
Three months ended | Nine months ended | ||||||||
September 30, 2014 | September 30, 2014 | ||||||||
Operating revenues | $ | 3,466,503 | $ | 7,190,976 | |||||
Operating expenses | (2,920,995 | ) | (6,625,117 | ) | |||||
Interest | (753,974 | ) | (3,124,948 | ) | |||||
Net loss before gain on equity investment | $ | (208,466 | ) | $ | (2,559,089 | ) | |||
The following table presents the unaudited revenues and income from continuing operations for Cherry Creek, Plaza 25 and Lake Vista Pointe on a pro forma basis as if the Predecessor had completed the acquisition of the properties as of January 1, 2013: | |||||||||
Nine months ended | Nine months ended | ||||||||
September 30, 2014 | September 30, 2013 | ||||||||
Total revenues as reported by City Office REIT, Inc. and Predecessor | $ | 26,374,089 | $ | 14,625,527 | |||||
Plus: Cherry Creek | — | 5,186,771 | |||||||
Plaza 25 | 1,672,163 | 2,964,289 | |||||||
Lake Vista Pointe | 1,879,889 | 2,591,968 | |||||||
Proforma total revenues | $ | 29,926,141 | $ | 25,368,555 | |||||
Total operating income as reported by the City Office REIT, Inc. and Predecessor | $ | 2,099,972 | $ | 2,108,319 | |||||
Property acquisition costs | 1,551,347 | (1,551,347 | ) | ||||||
Plus: Cherry Creek | — | 527,261 | |||||||
Plaza 25 | (91,120 | ) | (161,531 | ) | |||||
Lake Vista Pointe | 289,237 | 398,246 | |||||||
Proforma operating income | $ | 3,849,436 | $ | 1,320,948 | |||||
Lease_Intangibles
Lease Intangibles | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||
Lease Intangibles | ' | ||||||||||||||||||||||||||||
4. Lease Intangibles | |||||||||||||||||||||||||||||
Lease intangibles and the value of assumed lease obligations as of September 30, 2014 and December 31, 2013 were comprised as follows: | |||||||||||||||||||||||||||||
September 30, 2014 | Above | In Place | Leasing | Total | Below | Below | Total | ||||||||||||||||||||||
Market | Leases | Commissions | Market | Market | |||||||||||||||||||||||||
Leases | Leases | Ground | |||||||||||||||||||||||||||
Lease | |||||||||||||||||||||||||||||
Cost | $ | 6,980,813 | $ | 22,370,372 | $ | 12,535,456 | $ | 41,886,641 | $ | (746,219 | ) | $ | (138,218 | ) | $ | (884,437 | ) | ||||||||||||
Accumulated amortization | (3,131,678 | ) | (8,604,160 | ) | (3,155,524 | ) | (14,891,362 | ) | 215,986 | 19,217 | 235,203 | ||||||||||||||||||
$ | 3,849,135 | $ | 13,766,212 | $ | 9,379,932 | $ | 26,995,279 | $ | (530,233 | ) | $ | (119,001 | ) | $ | (649,234 | ) | |||||||||||||
December 31, 2013 | Above | In Place | Leasing | Total | Below | Below | Total | ||||||||||||||||||||||
Market | Leases | Commissions | Market | Market | |||||||||||||||||||||||||
Leases | Leases | Ground | |||||||||||||||||||||||||||
Lease | |||||||||||||||||||||||||||||
Cost | $ | 3,043,030 | $ | 14,885,115 | $ | 5,447,198 | $ | 23,375,343 | $ | (168,904 | ) | $ | (138,218 | ) | $ | (307,122 | ) | ||||||||||||
Accumulated Amortization | (1,306,326 | ) | (6,536,311 | ) | (1,781,143 | ) | (9,623,780 | ) | 123,567 | 16,209 | 139,776 | ||||||||||||||||||
$ | 1,736,704 | $ | 8,348,804 | $ | 3,666,055 | $ | 13,751,563 | $ | (45,337 | ) | $ | (122,009 | ) | $ | (167,346 | ) | |||||||||||||
The Company has adjusted acquired lease intangibles and accounts payable and accrued liabilities as of December 31, 2013 in the amount of $649,192 to conform with the current period presentation as of September 30, 2014. There was no impact to net income resulting from this adjustment. | |||||||||||||||||||||||||||||
The estimated aggregate amortization expense for lease intangibles for the five succeeding years and in the aggregate are as follows: | |||||||||||||||||||||||||||||
2014 | $ | 1,650,514 | |||||||||||||||||||||||||||
2015 | 6,343,804 | ||||||||||||||||||||||||||||
2016 | 5,860,838 | ||||||||||||||||||||||||||||
2017 | 3,605,134 | ||||||||||||||||||||||||||||
2018 | 2,430,107 | ||||||||||||||||||||||||||||
Thereafter | 6,455,648 | ||||||||||||||||||||||||||||
$ | 26,346,045 | ||||||||||||||||||||||||||||
Debt
Debt | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||
Debt | ' | ||||||||||||||||
5. Debt | |||||||||||||||||
The following table summarizes the secured indebtedness as of September 30, 2014 and December 31, 2013: | |||||||||||||||||
Property | September 30, 2014 | December 31, 2013 | Interest Rate as | Maturity | |||||||||||||
of | |||||||||||||||||
September 30, | |||||||||||||||||
2014 | |||||||||||||||||
Revolving Credit Facility (1) | $ | 6,400,000 | $ | — | LIBOR +2.75 | %(2) | Apr-16 | ||||||||||
AmberGlen Mortgage Loan (3) | 25,262,516 | — | 4.38 | % | May-19 | ||||||||||||
Midland Life Insurance (4) | 95,000,000 | — | 4.34 | % | May-21 | ||||||||||||
Lake Vista Pointe (5) | 18,460,000 | — | 4.28 | % | Jul-18 | ||||||||||||
Washington Group Plaza (5) | 34,481,789 | 34,949,159 | 3.85 | % | Jul-18 | ||||||||||||
City Center (6) | — | 22,333,938 | — | June 2014 | |||||||||||||
Central Fairwinds (7) | — | 10,000,000 | — | October 2015 | |||||||||||||
Corporate Parkway (7) | — | 19,133,333 | — | Apr-16 | |||||||||||||
AmberGlen (8) | — | 23,500,000 | — | Jul-17 | |||||||||||||
Total | $ | 179,604,305 | $ | 109,916,430 | |||||||||||||
All interest rates are fixed interest rates with the exception of the revolving credit facility (“Revolving Credit Facility”) as explained in footnote 1 below. | |||||||||||||||||
-1 | The Revolving Credit Facility currently has $30 million authorized with $26.4 million available immediately. In addition, the Revolving Credit Facility has an accordion feature that will permit us to borrow up to $150 million, subject to additional collateral availability and lender approval. The Revolving Credit Facility bears an interest rate of LIBOR plus 2.75% and requires the Company to maintain a fixed charge coverage ratio of no less than 1.60x. The Revolving Credit Facility is cross-collateralized by Central Fairwinds and Plaza 25. | ||||||||||||||||
-2 | As of September 30, 2014, the 3 Month LIBOR rate was 0.27%. | ||||||||||||||||
-3 | Following the Formation Transactions, on April 29, 2014, we entered into a new mortgage loan in relation to the AmberGlen property for $25.4 million. The loan bears an interest rate of 4.38% and matures on May 1, 2019. The Company is required to maintain a minimum net worth of $25 million and a minimum liquidity of $2 million. | ||||||||||||||||
-4 | The loan is cross-collateralized by Corporate Parkway, Cherry Creek and City Center. Interest only until February 2016 then interest payable monthly plus principal based on 360 months of amortization. The loan bears a fixed interest rate of 4.34% and matures on May 6, 2021. | ||||||||||||||||
-5 | Interest payable monthly plus principal based on 360 months of amortization. | ||||||||||||||||
-6 | Interest payable monthly plus monthly principal payment of $20,000. This loan was extinguished on April 21, 2014 in relation to the Formation Transaction. | ||||||||||||||||
-7 | Interest only payable monthly, principal due on maturity. This loan was extinguished on April 21, 2014 in relation to the Formation Transactions. | ||||||||||||||||
-8 | This AmberGlen loan was refinanced on April 29, 2014 with the new AmberGlen loan discussed in footnote (3) above. | ||||||||||||||||
On June 13, 2014, in connection with the addition of Plaza 25 as an additional collateral property, the Company, through its Operating Partnership, exercised a portion of the accordion feature of the Revolving Credit Facility and entered into an amendment to the credit agreement, thereby increasing the aggregate principal maximum amount available for borrowing under the Revolving Credit Facility to $30 million. | |||||||||||||||||
The scheduled principal repayments of mortgage payable as of September 30, 2014 are as follows: | |||||||||||||||||
2014 | $ | 259,621 | |||||||||||||||
2015 | 1,065,209 | ||||||||||||||||
2016 | 8,420,590 | ||||||||||||||||
2017 | 2,873,753 | ||||||||||||||||
2018 | 34,836,409 | ||||||||||||||||
Thereafter | 132,148,723 | ||||||||||||||||
$ | 179,604,305 |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Investments, All Other Investments [Abstract] | ' | ||||||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||||||
6. Fair Value of Financial Instruments | |||||||||||||||||||||
Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows: | |||||||||||||||||||||
Level 1 Inputs | – | quoted prices in active markets for identical assets or liabilities | |||||||||||||||||||
Level 2 Inputs | – | observable inputs other than quoted prices in active markets for identical assets and liabilities | |||||||||||||||||||
Level 3 Inputs | – | unobservable inputs | |||||||||||||||||||
Financial assets whose fair values are measured on a recurring basis consist only of an interest rate swap. The fair value of the interest rate swap is calculated based on Level 2 inputs. | |||||||||||||||||||||
As of September 30, 2014, the Company did not have any hedges or derivatives. As of December 31, 2013, the Predecessor had not designated its interest rate swap as a hedge. This derivative was not speculative and was used to manage the Predecessor’s exposure to interest rate movements and other identified risks, but the Predecessor elected not to designate these instruments in hedging relationships based on the provisions in ASC 815-10. The changes in fair value of derivatives not designated in hedging relationships have been recognized in earnings. The interest rate swap was subsequently terminated upon completion of the IPO. The interest rate derivative outstanding as at December 31, 2013 was as follows: | |||||||||||||||||||||
Property | Type of | Notional | Maturity | Effective | Fair Value as of | ||||||||||||||||
Instrument | amount | date | rate | December 31, 2013 | |||||||||||||||||
City Center | Interest Rate Swap | $ | 15,000,000 | — | 6 | % | $ | — | |||||||||||||
The fair value of the Central Fairwinds earn-out (note 9) was derived by making assumptions on the timing of the lease up of vacant space and the net effective rents of those new leases and then applying an 8% discount rate to the resulting cash-flows to obtain a present value. The earn-out valuation assumes that approximately 17,000 square feet of additional leasing is completed between the date of the valuation and the end of the calculation period which would take the existing occupancy from 76% signed and committed at September 30, 2014 to 89% by September 2016 and stabilized at that level thereafter. The average net effective rent and incremental operating costs per square foot is assumed to be $14 and $4 respectively. | |||||||||||||||||||||
As of September 30, 2014, the estimated fair value of the earn-out liability is $8.0 million. The change in fair value for the three months ended September 30, 2014 was $1.0 million. | |||||||||||||||||||||
Level 3 sensitivity analysis: | |||||||||||||||||||||
The Company applies judgment in determining unobservable inputs used to calculate the fair value of Level 3 instruments. Level 3 instruments held by the Company include the earn-out. The unobservable inputs used in the valuation of the earn-out primarily include the net effective rent assumptions. A sensitivity analysis has been performed to determine the potential gain or loss by varying the significant unobservable inputs by increasing or decreasing them by 10%. The impact of applying these other reasonably possible inputs is a potential loss of $0.1 million and a potential gain of $0.1 million. This potential gain or loss would be recorded through profit and loss. | |||||||||||||||||||||
Fair Values of Financial Instruments Not Carried at Fair Value | |||||||||||||||||||||
With the exception of fixed rate mortgage loans payable, the carrying amounts of the Predecessor’s financial instruments approximate their fair value. The Predecessor determines the fair value of its fixed rate mortgage loan payable based on a discounted cash flow analysis using a discount rate that approximates the current borrowing rates for instruments of similar maturities. Based on this, the Company has determined that the fair value of these instruments was $172,700,000 and $88,500,000 as of September 30, 2014 and December 31, 2013, respectively. Although the Predecessor has determined the majority of the inputs used to value its fixed rate debt fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its fixed rate debt utilize Level 3 inputs, such as estimates of current credit spreads. Accordingly, mortgage loans payable have been classified as Level 3 fair value measurements. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
7. Related Party Transactions | |
Formation Transactions | |
The formation transactions were completed on April 21, 2014 through the contribution of the initial properties by Second City Capital Partners II, Limited Partnership, Second City General Partner II, Limited Partnership, Gibralt US, Inc., GCC Amberglen Investments Limited Partnership and Daniel Rapaport (collectively the “Second City Group”). The Second City Group received as consideration for its contribution approximately $19.4 million in cash in accordance with the terms of its contribution agreement to acquire various noncontrolling interests and eliminate economic incentives in the initial properties. Additional payments to the Second City Group included $4.9 million for reimbursement of IPO costs and $1.8 million for working capital. On May 9, 2014, subsequent to the underwriters’ exercise of the overallotment option, net proceeds of $9.1 million was paid to the Second City Group to redeem 479,305 common units and 248,095 common stock. | |
Property Management Fees | |
Three of the properties (City Center, Central Fairwinds and AmberGlen) engaged related parties to perform asset and property management services for a fee ranging from 1.75% to 3.5% of gross revenue. | |
Prior to the Formation Transactions, the property manager of Washington Group Plaza was also entitled to an additional incentive commission equal to the lesser of (a) 15% of net operating income in excess of $5 million in 2013, $5.45 million in 2014 and $5.6 million in 2015; or (b) 1% of all monthly gross revenue. The asset and management agreement has an initial term of three years and will automatically renew for successive two year periods. This agreement can be terminated by the Company or the property manager upon thirty days prior written notice to the other party. | |
Deferred Offering and Financing Costs | |
Deferred offering and financing costs directly associated with the IPO and Formation Transactions of $4.9 million were reimbursed to Second City Capital Partners II, Limited Partnership, (“Second City”) upon the closing of the IPO. |
Future_Minimum_Rent_Schedule
Future Minimum Rent Schedule | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Leases [Abstract] | ' | ||||
Future Minimum Rent Schedule | ' | ||||
8. Future Minimum Rent Schedule | |||||
Future minimum lease payments to be received as of September 30, 2014 under noncancellable operating leases for the next five years and thereafter are as follows: | |||||
2014 | $ | 8,532,363 | |||
2015 | 35,048,004 | ||||
2016 | 28,542,171 | ||||
2017 | 20,887,708 | ||||
2018 | 17,401,040 | ||||
Thereafter | 65,593,200 | ||||
$ | 176,004,486 | ||||
The above minimum lease payments to be received do not include reimbursements from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases. | |||||
Two state government tenants currently have the exercisable right to terminate their lease if the state does not appropriate rent in its annual budgets. The Company has determined that the occurrence of the government tenant not appropriating the rent in its annual budget is a remote contingency and accordingly recognizes lease revenue on a straight-line basis over the respective lease term. These tenants represent approximately 44.0% of the Company’s total future minimum lease payments as of September 30, 2014. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
9. Commitments and Contingencies | |
Earn-Out | |
As part of the Formation Transactions and contribution agreement with respect to the Central Fairwinds property (which is currently approximately 76.0% leased, including committed tenants), the Company is obligated to make additional payments to Second City (each, an “Earn-Out Payment”). Earn-Out Payments are contingent on the property reaching certain specified occupancy levels through new leases to qualified tenants and exceeding a net operating income threshold, which grows annually. Second City will be entitled to receive an Earn-Out Payment (net of the associated leasing costs and inclusive of leasing commissions and tenant improvements/allowances and free rent) as and when the occupancy of Central Fairwinds reaches each of 70%, 80% and 90% (each, an “Earn-Out Threshold”) based on the incremental cash flow generated by new leases and a 7.75% stabilized capitalization rate. The Company will make any additional Earn-Out Payment within 30 days of the end of the Earn-Out Term based on new qualified leases entered into since the achievement of the last Earn-Out Threshold. Earn-Out Payments will be subject to a claw-back if a qualified tenant defaults in the payment of rent and is not replaced with another qualified tenant (see note 6). | |
As of September 30, 2014, the estimated fair value of the earn-out liability is $8.0 million. The change in fair value for the three months ended September 30, 2014 was $1.0 million. | |
Property Management Fees | |
Prior to the Formation Transactions, Washington Group Plaza engaged a related party to perform asset and management services for base and incentive fees as discussed in note 7. | |
Other | |
The Company is obligated under certain tenant leases to fund tenant improvements and the expansion of the underlying leased properties. | |
Under various federal, state and local laws, ordinances and regulations relating to the protection of the environment, a current or previous owner or operator of real estate may be liable for the cost of removal or remediation of certain hazardous or toxic substances disposed, stored, generated, released, manufactured or discharged from, on, at, under, or in a property. As such, the Company may be potentially liable for costs associated with any potential environmental remediation at any of its formerly or currently owned properties. | |
The Company believes that it is in compliance in all material respects with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. Management is not aware of any environmental liability that it believes would have a material adverse impact on the Company’s financial position or results of operations. Management is unaware of any instances in which the Company would incur significant environmental costs if any or all properties were sold, disposed of or abandoned. However, there can be no assurance that any such non-compliance, liability, claim or expenditure will not arise in the future. | |
The Company is involved from time to time in lawsuits and other disputes which arise in the ordinary course of business. As of September 30, 2014 management believes that these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s financial position or results of operations. |
Earnings_per_Share
Earnings per Share | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Earnings per Share | ' | ||||||||
10. Earnings per Share | |||||||||
The following table shows the amounts used in computing the Company’s basic and diluted earnings per share. As of the three and nine months ended September 30, 2014, there is no dilution to earnings per share. | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
September 30, 2014 | September 30, 2014 | ||||||||
Numerator for loss per share – basic and diluted | |||||||||
Net loss | $ | (2,373,873 | ) | $ | (3,237,974 | ) | |||
Less: Net loss attributable to noncontrolling interests in properties | (87,296 | ) | (8,326 | ) | |||||
Less: Net loss attributable to Predecessor | — | (1,973,197 | ) | ||||||
Less: Net loss attributable to Operating Partnership unitholders’ noncontrolling interests | 693,971 | 1,508,097 | |||||||
Numerator for loss per share – basic and diluted | $ | (1,767,198 | ) | $ | (3,711,400 | ) | |||
Denominator for loss per share – basic and diluted | 8,192,915 | 8,133,940 | |||||||
Basic and diluted loss per share | $ | (0.22 | ) | $ | (0.46 | ) | |||
Stockholders_Equity
Stockholder's Equity | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Stockholder's Equity | ' |
11. Stockholder’s Equity | |
The Company issued 5,800,000 shares in conjunction with the IPO resulting in net proceeds of $63.4 million after deducting the underwriters’ discount and offering expenses. The underwriters of the IPO exercised their overallotment option to purchase an additional 782,150 shares of the Company’s common stock resulting in additional net proceeds to us of $9.1 million after deducting underwriting discounts. | |
Noncontrolling Interests | |
Noncontrolling interests in the Company represent common units of the Operating Partnership held by the Predecessor’s prior investors. Noncontrolling interests consisted of 3,251,904 Operating Partnership units and represented approximately 28.4% of the Operating Partnership as of September 30, 2014. Operating Partnership units and shares of common stock have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of the Operating Partnership. Beginning on or after the date which is 12 months after the later of the completion of this offering or the date on which a person first became a holder of common units, each limited partner and assignees of limited partners will have the right, subject to the terms and conditions set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of the common units held by such limited partner or assignee in exchange for a cash amount per common unit equal to the value of one share of common stock, determined in accordance with and subject to adjustment under the partnership agreement. The Company has the sole option at its discretion to redeem the common units by issuing common stock on a one-for-one basis. The Operating Partnership unitholders are entitled to share in cash distributions from the Operating Partnership in proportion to its percentage ownership of common units. | |
Restricted Stock Units | |
The Company has an equity incentive plan (“Equity Incentive Plan”) for certain officers, directors, advisors and personnel, and, with approval of the board of directors, for subsidiaries, the Advisor and their respective affiliates. The Equity Incentive Plan provides for grants of restricted common stock, restricted stock units, phantom shares, stock options, dividend equivalent rights and other equity-based awards (including LTIP Units), subject to the total number of shares available for issuance under the plan. The Equity Incentive Plan is administered by the compensation committee of the board of directors (the “plan administrator”). | |
The maximum number of shares of common stock that may be issued under the Equity Incentive Plan is 1,263,580 shares. To the extent an award granted under the Equity Incentive Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards. | |
On April 21, 2014, 352,272 restricted stock units (“RSUs”) were granted to the Company’s executive officers and one of the directors at a grant date fair value of $12.50 totaling $4.4 million. During the three months ended September 30, 2014 an additional 30,100 RSUs were granted to directors and non-executive employees of the Advisor. The awards will vest in three equal, annual installments on each of the first three anniversaries of the date of grant. For the three and nine months ended September 30, 2014, the Company recognized net compensation expense of $0.4 million and $0.7 million respectively related to the RSU’s. | |
A RSU award represents the right to receive shares of the Company’s common stock in the future, after the applicable vesting criteria, determined by the plan administrator, has been satisfied. The holder of an award of RSU has no rights as a stockholder until shares of common stock are issued in settlement of vested restricted stock units. The plan administrator may provide for a grant of dividend equivalent rights in connection with the grant of RSU; provided, however, that if the restricted stock units do not vest solely upon satisfaction of continued employment or service, any payment in respect to the related dividend equivalent rights will be held by the Company and paid when, and only to the extent that, the related RSU vest. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
12. Subsequent Events | |
On November 7, 2014, the Company, through its Operating Partnership, entered into the Agreement of Purchase and Sale to acquire a property in Orlando, Florida for $26.5 million. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Accounting Policies [Abstract] | ' | ||
Basis of Presentation and Summary of Significant Accounting Policies | ' | ||
Basis of Preparation and Summary of Significant Accounting Policies | |||
The accompanying condensed consolidated and combined financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the financial position and results of operations of the Company, the Operating Partnership and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated on consolidation. | |||
The Predecessor represents a combination of certain entities holding interests in real estate that were commonly controlled prior to the Formation Transactions. Due to their common control, the financial statements of the separate entities which own the properties are presented on a combined basis in the Predecessor financial statements. | |||
The accompanying condensed consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All significant intercompany balances and transactions have been eliminated on combination. | |||
The information furnished in the accompanying condensed consolidated and combined financial statements reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the aforementioned condensed consolidated and combined financial statements for the interim periods. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. These interim financial statements should be read in conjunction with the audited combined financial statements of the Predecessor for the year ended December 31, 2013, included in the Company’s final prospectus dated April 14, 2014. | |||
Use of Estimates | ' | ||
Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the combined financial statements and the reported amounts of revenues and expenses during the period. Such estimates are based on management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from management’s estimates. | |||
Business Combinations | ' | ||
Business Combinations | |||
The fair value of the real estate acquired, which includes the impact of fair value adjustments for assumed mortgage debt related to property acquisitions, is allocated to the acquired tangible assets, consisting of land, buildings and improvements and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in place leases and value of tenant relationships, based in each case on their fair values. Acquisition costs are expensed as incurred in the accompanying combined statements of operations. Also, noncontrolling interests acquired are recorded at estimated fair market value. | |||
The fair value of the tangible assets of an acquired property (which includes land, buildings and improvements and fixtures and equipment) is determined by valuing the property as if it were vacant. The “as-if-vacant” value is then allocated to land and buildings and improvements based on management’s determination of relative fair values of these assets. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases including leasing commissions. | |||
The fair value of above-market and below-market lease values are recorded based on the difference between the current in-place lease rent and management’s estimate of current market rents. Below-market lease intangibles are recorded as part of acquired lease intangibles liability and amortized into rental revenue over the non-cancelable periods and bargain renewal periods of the respective leases. Above-market leases are recorded as part of intangible assets and amortized as a direct charge against rental revenue over the noncancelable portion of the respective leases. | |||
The fair value of acquired in place leases are recorded based on the costs management estimates the Company would have incurred to lease the property to the occupancy level of the property at the date of acquisition. Such estimates include the fair value of leasing commissions and legal costs that would be incurred to lease the property to this occupancy level. Additionally, management evaluates the time period over which such occupancy level would be achieved and includes an estimate of the net operating costs incurred during the lease-up period. Acquired in place leases are amortized on a straight-line basis over the term of the individual leases. | |||
Revenue Recognition | ' | ||
Revenue Recognition | |||
The Company recognizes lease revenue on a straight-line basis over the term of the lease. Certain leases allow for the tenant to terminate the lease, but the tenant must make a termination payment as stipulated in the lease. If the termination payment is in such an amount that continuation of the lease appears, at the time of lease inception, to be reasonably assured, then the Company recognizes revenue over the term of the lease. The Company has determined that for these leases, the termination payment is in such an amount that continuation of the lease appears, at the time of inception, to be reasonably assured. The Company recognizes lease termination fees as revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred or deferred revenue on the consolidated balance sheets. | |||
If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. | |||
Recoveries from tenants for real estate taxes, insurance and other operating expenses are recognized as revenues in the period that the applicable costs are incurred. The Company recognizes differences between estimated recoveries and the final billed amounts in the subsequent year. Final billings to tenants for real estate taxes, insurance and other operating expenses did not vary significantly as compared to the estimated receivable balances. | |||
Real Estate Properties | ' | ||
Real Estate Properties | |||
Real estate properties are stated at cost less accumulated depreciation, except land. Depreciation is computed on the straightline basis over estimated useful lives of: | |||
Years | |||
Buildings and improvement | 29-50 | ||
Furniture, fixtures and equipment | 7-Apr | ||
Expenditures for maintenance and repairs are charged to operations as incurred. | |||
Impairment of Real Estate Properties | ' | ||
Impairment of Real Estate Properties | |||
Long-lived assets currently in use are reviewed periodically for possible impairment and will be written down to fair value if considered impaired. Long-lived assets to be disposed of are written down to the lower of cost or fair value less the estimated cost to sell. The Company reviews its real estate properties for impairment when there is an event or a change in circumstances that indicates that the carrying amount may not be recoverable. The Company measures and records impairment losses and reduces the carrying value of properties when indicators of impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts. In cases where the Company does not expect to recover its carrying costs on properties held for use, the Company reduces its carrying costs to fair value. | |||
Offering Costs | ' | ||
Offering Costs | |||
Costs related to the IPO and Formation Transactions paid by the Company’s Predecessor were reimbursed from the proceeds of the IPO. | |||
Income Taxes | ' | ||
Income Taxes | |||
The Company intends to elect to be taxed and to operate in a manner that will allow it to qualify as a REIT under the U.S. Internal Revenue Code (the “Code”) commencing with its taxable year ending December 31, 2014. To qualify as a REIT, the Company is required to distribute dividends equal to at least 90% of the REIT taxable income (computed without regard to the dividends paid deduction and net capital gains) to its stockholders, and meet the various other requirements imposed by the Code relating to matters such as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided the Company qualifies for taxation as a REIT, it is generally not subject to U.S. federal corporate-level income tax on the earnings distributed currently to its stockholders. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and any applicable alternative minimum tax. In addition, the Company may not be able to re-elect as a REIT for the four subsequent taxable years. | |||
For periods prior to the completion of the IPO and the Formation Transactions on April 21, 2014, no provision was made for U.S. federal, state or local income taxes because profits and losses of the Predecessor flowed through to its respective partners, members and shareholders who were individually responsible for reporting such amounts. | |||
For periods subsequent to the completion of the IPO and the Formation Transactions, the taxable REIT subsidiaries are subject to federal, state and local corporate income taxes to the extent there is taxable income. | |||
Noncontrolling Interests | ' | ||
Noncontrolling Interests | |||
Upon completion of the IPO and Formation Transactions and exercise of the underwriters’ overallotment option, the Operating Partnership issued 3,251,904 common units of limited partnership interest to the Predecessor’s prior investors as partial consideration for the contribution of their interest in the Predecessor to the Operating Partnership. Noncontrolling interest in the Company represents common units of the Operating Partnership held by the Predecessor’s prior investors. | |||
As of September 30, 2014, the Company held a 71.6% interest in the Operating Partnership. As the sole general partner and the majority interest holder, the Company consolidates the financial position and results of operations of the Operating Partnership. | |||
Dividends | ' | ||
Dividends | |||
On May 12, 2014, the Company’s board of directors declared an initial, prorated cash dividend of $0.183 per share for the quarterly period from April 21 2014 through June 30, 2014, which is equivalent to a full quarterly dividend of $0.235. The dividend was payable on July 17, 2014 to stockholders and common unitholders of record on July 3, 2014. The $1.5 million in dividends was paid to stockholders and $0.6 million to common unitholders, totaling $2.1 million. | |||
On September 15, 2014, the Company’s board of directors declared a cash dividend of $0.235 per share for the quarterly period from July 1, 2014 through September 30, 2014. The dividend was payable on October 17, 2014 to stockholders and common unitholders of record on October 3, 2014. Subsequent to September 30, 2014, $1.9 million in dividends was paid to stockholders and $0.8 million to common unitholders, totaling $2.7 million. | |||
Equity Based Compensation | ' | ||
Equity Based Compensation | |||
The Company accounts for equity-based compensation, including shares of restricted stock units, in accordance with ASC Topic 718 Compensation – Stock Compensation, which requires the Company to recognize an expense for the fair value of equity-based awards. The estimated fair value of restricted stock units is amortized over their respective vesting periods. See note 11 for further details. | |||
Earnings per Share | ' | ||
Earnings per Share | |||
The Company calculates net income per share based upon the weighted average shares outstanding during the period beginning April 2014. Diluted earnings per share is calculated after giving effect to all potential dilutive shares outstanding during the period. There were 3,251,904 potentially dilutive shares outstanding related to the issuance of common units held by noncontrolling interests during the three and nine months ended September 30, 2014. However, the shares were excluded from the computation of diluted shares as their impact would have been anti-dilutive. As a result, the number of diluted outstanding shares was equal to the number of basic outstanding shares. | |||
New Accounting Pronouncements | ' | ||
New Accounting Pronouncements | |||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a new Topic Accounting Standards Codification (Topic 606). The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. This standard is effective for interim or annual periods beginning after December 15, 2016 and allows for either full retrospective or modified retrospective adoption. Early adoption of this standard is not allowed. We are currently evaluating the impact the adoption of Topic 606 will have on our financial statements. |
Organization_and_Description_o1
Organization and Description of Business (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||
Summary of Predecessor and Company's Statement of Operations | ' | ||||||||||||
The following is a summary of the Predecessor Statements of Operations for the period from April 1, 2014 through April 20, 2014 and for the period from January 1, 2014 through April 20, 2014, and the Company’s Statement of Operations for the period from April 21, 2014 through September 30, 2014. These amounts are included in the condensed consolidated and combined statement of operations herein for the three and nine months ended September 30, 2014. All balances as of December 31, 2013 and for the three and nine months ended September 30, 2013 are those of the Predecessor. | |||||||||||||
Predecessor | City Office REIT, Inc | ||||||||||||
April 1, 2014 | January 1, 2014 | April 21, 2014 through | |||||||||||
through April 20, | through April 20, | September 30, 2014 | |||||||||||
2014 | 2014 | ||||||||||||
Revenues: | |||||||||||||
Rental income | $ | 1,628,480 | $ | 8,865,238 | $ | 15,122,653 | |||||||
Expense reimbursement | 105,569 | 555,611 | 1,240,956 | ||||||||||
Other | 47,198 | 342,859 | 246,772 | ||||||||||
Total Revenues | 1,781,247 | 9,763,708 | 16,610,381 | ||||||||||
Operating Expenses: | |||||||||||||
Property operating expenses | 510,431 | 2,764,893 | 4,539,478 | ||||||||||
Insurance | 23,570 | 176,428 | 313,043 | ||||||||||
Property taxes | 136,684 | 597,788 | 1,177,853 | ||||||||||
Property management fees | 27,265 | 234,882 | 384,615 | ||||||||||
Acquisition costs | — | 806,344 | 745,003 | ||||||||||
Base management fees | — | — | 411,471 | ||||||||||
Stock based compensation | — | — | 667,347 | ||||||||||
General and administrative | 29,799 | 79,799 | 741,580 | ||||||||||
Depreciation and amortization | 701,962 | 3,861,939 | 6,771,654 | ||||||||||
Total Operating Expenses | 1,429,711 | 8,522,073 | 15,752,044 | ||||||||||
Operating income | 351,536 | 1,241,635 | 858,337 | ||||||||||
Interest expense, net | (610,378 | ) | (3,771,792 | ) | (4,993,283 | ) | |||||||
Change in fair value of earn-out | — | — | (1,047,515 | ) | |||||||||
Gain on equity investment | — | 4,474,644 | — | ||||||||||
Net (Loss)/Income | (258,842 | ) | 1,944,487 | (5,182,461 | ) | ||||||||
Net Loss attributable to noncontrolling interests in properties | 18,785 | 28,710 | (37,036 | ) | |||||||||
Net (Loss)/Income attributable to Predecessor | (240,057 | ) | 1,973,197 | — | |||||||||
Net loss attributable to Operating Partnership noncontrolling interests | 1,508,097 | ||||||||||||
Net loss attributable to Stockholders | (3,711,400 | ) | |||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||
Sep. 30, 2014 | |||
Accounting Policies [Abstract] | ' | ||
Schedule of Estimated Useful Lives of Real Estate Properties | ' | ||
Real estate properties are stated at cost less accumulated depreciation, except land. Depreciation is computed on the straightline basis over estimated useful lives of: | |||
Years | |||
Buildings and improvement | 29-50 | ||
Furniture, fixtures and equipment | 7-Apr |
Real_Estate_Investments_Tables
Real Estate Investments (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Schedule of Acquired Properties | ' | ||||||||
During the three months and nine months ended September 30, 2014, the Company acquired the following properties: | |||||||||
Property | Date Acquired | Percentage Owned | |||||||
Cherry Creek | January 2014 | 100 | % | ||||||
Plaza 25 | June 2014 | 100 | % | ||||||
Lake Vista Pointe | Jul-14 | 100 | % | ||||||
Schedule of Realized Gain Loss on Investments | ' | ||||||||
The Company recognized expenses relating to the Cherry Creek acquisition of $806,344 for the three and nine months ended September 30, 2014. A gain of $4.5 million was recognized from the fair value adjustment associated with the Predecessor’s original ownership due to a change in control, calculated as follows: | |||||||||
Fair value of assets and liabilities acquired | $ | 56,833,436 | |||||||
Less existing mortgage in Cherry Creek | (36,000,000 | ) | |||||||
20,833,436 | |||||||||
Less cash paid to seller | (12,020,893 | ) | |||||||
Fair value of 42.3% equity interest | 8,812,543 | ||||||||
Carrying value of investment in Cherry Creek | (4,337,899 | ) | |||||||
Gain on existing 42.3% equity interest | $ | 4,474,644 | |||||||
Schedule of Operating Results Relating to Acquired Entities | ' | ||||||||
The following table represents the results of the properties’ operations since the date of acquisition on a stand-alone basis. | |||||||||
Three months ended | Nine months ended | ||||||||
September 30, 2014 | September 30, 2014 | ||||||||
Operating revenues | $ | 3,466,503 | $ | 7,190,976 | |||||
Operating expenses | (2,920,995 | ) | (6,625,117 | ) | |||||
Interest | (753,974 | ) | (3,124,948 | ) | |||||
Net loss before gain on equity investment | $ | (208,466 | ) | $ | (2,559,089 | ) | |||
Schedule of Business Acquisition Pro Forma Results of Operations | ' | ||||||||
The following table presents the unaudited revenues and income from continuing operations for Cherry Creek, Plaza 25 and Lake Vista Pointe on a pro forma basis as if the Predecessor had completed the acquisition of the properties as of January 1, 2013: | |||||||||
Nine months ended | Nine months ended | ||||||||
September 30, 2014 | September 30, 2013 | ||||||||
Total revenues as reported by City Office REIT, Inc. and Predecessor | $ | 26,374,089 | $ | 14,625,527 | |||||
Plus: Cherry Creek | — | 5,186,771 | |||||||
Plaza 25 | 1,672,163 | 2,964,289 | |||||||
Lake Vista Pointe | 1,879,889 | 2,591,968 | |||||||
Proforma total revenues | $ | 29,926,141 | $ | 25,368,555 | |||||
Total operating income as reported by the City Office REIT, Inc. and Predecessor | $ | 2,099,972 | $ | 2,108,319 | |||||
Property acquisition costs | 1,551,347 | (1,551,347 | ) | ||||||
Plus: Cherry Creek | — | 527,261 | |||||||
Plaza 25 | (91,120 | ) | (161,531 | ) | |||||
Lake Vista Pointe | 289,237 | 398,246 | |||||||
Proforma operating income | $ | 3,849,436 | $ | 1,320,948 | |||||
Cherry Creek [Member] | ' | ||||||||
Schedule of Preliminary Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | ' | ||||||||
The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed during the three and nine months ended September 30, 2014: | |||||||||
Cherry Creek | |||||||||
Land | $ | 25,745,012 | |||||||
Buildings and improvements | 15,771,277 | ||||||||
Tenant improvements | 4,372,849 | ||||||||
Acquired intangible assets | 12,009,085 | ||||||||
Accounts payable and other liabilities | (815,378 | ) | |||||||
Lease intangible liability | (249,409 | ) | |||||||
Fair value of assets and liabilities at acquisition | $ | 56,833,436 | |||||||
Plaza 25 [Member] | ' | ||||||||
Schedule of Preliminary Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | ' | ||||||||
The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed during the three and nine months ended September 30, 2014: | |||||||||
Plaza 25 | |||||||||
Land | $ | 1,764,235 | |||||||
Buildings and improvements | 18,486,580 | ||||||||
Tenant improvements | 2,075,932 | ||||||||
Acquired intangible assets | 2,923,754 | ||||||||
Prepaid expenses and other assets | 1,926 | ||||||||
Accounts payable and other liabilities | (640,630 | ) | |||||||
Lease intangible liability | (327,906 | ) | |||||||
Total consideration | $ | 24,283,891 | |||||||
Lake Vista Pointe [Member] | ' | ||||||||
Schedule of Preliminary Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | ' | ||||||||
The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed during the three and nine months ended September 30, 2014: | |||||||||
Lake Vista Pointe | |||||||||
Land | $ | 4,115,158 | |||||||
Buildings and improvements | 17,562,157 | ||||||||
Tenant Improvements | 2,581,839 | ||||||||
Acquired intangible assets | 3,682,828 | ||||||||
Prepaid expenses and other assets | 29,610 | ||||||||
Accounts payable and other liabilities | (1,732,801 | ) | |||||||
Total consideration | $ | 26,238,791 | |||||||
Lease_Intangibles_Tables
Lease Intangibles (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||
Schedule of Lease Intangibles and Value of Assumed Lease Obligations | ' | ||||||||||||||||||||||||||||
Lease intangibles and the value of assumed lease obligations as of September 30, 2014 and December 31, 2013 were comprised as follows: | |||||||||||||||||||||||||||||
September 30, 2014 | Above | In Place | Leasing | Total | Below | Below | Total | ||||||||||||||||||||||
Market | Leases | Commissions | Market | Market | |||||||||||||||||||||||||
Leases | Leases | Ground | |||||||||||||||||||||||||||
Lease | |||||||||||||||||||||||||||||
Cost | $ | 6,980,813 | $ | 22,370,372 | $ | 12,535,456 | $ | 41,886,641 | $ | (746,219 | ) | $ | (138,218 | ) | $ | (884,437 | ) | ||||||||||||
Accumulated amortization | (3,131,678 | ) | (8,604,160 | ) | (3,155,524 | ) | (14,891,362 | ) | 215,986 | 19,217 | 235,203 | ||||||||||||||||||
$ | 3,849,135 | $ | 13,766,212 | $ | 9,379,932 | $ | 26,995,279 | $ | (530,233 | ) | $ | (119,001 | ) | $ | (649,234 | ) | |||||||||||||
December 31, 2013 | Above | In Place | Leasing | Total | Below | Below | Total | ||||||||||||||||||||||
Market | Leases | Commissions | Market | Market | |||||||||||||||||||||||||
Leases | Leases | Ground | |||||||||||||||||||||||||||
Lease | |||||||||||||||||||||||||||||
Cost | $ | 3,043,030 | $ | 14,885,115 | $ | 5,447,198 | $ | 23,375,343 | $ | (168,904 | ) | $ | (138,218 | ) | $ | (307,122 | ) | ||||||||||||
Accumulated Amortization | (1,306,326 | ) | (6,536,311 | ) | (1,781,143 | ) | (9,623,780 | ) | 123,567 | 16,209 | 139,776 | ||||||||||||||||||
$ | 1,736,704 | $ | 8,348,804 | $ | 3,666,055 | $ | 13,751,563 | $ | (45,337 | ) | $ | (122,009 | ) | $ | (167,346 | ) | |||||||||||||
Estimated Aggregate Amortization Expense for Lease Intangibles | ' | ||||||||||||||||||||||||||||
The estimated aggregate amortization expense for lease intangibles for the five succeeding years and in the aggregate are as follows: | |||||||||||||||||||||||||||||
2014 | $ | 1,650,514 | |||||||||||||||||||||||||||
2015 | 6,343,804 | ||||||||||||||||||||||||||||
2016 | 5,860,838 | ||||||||||||||||||||||||||||
2017 | 3,605,134 | ||||||||||||||||||||||||||||
2018 | 2,430,107 | ||||||||||||||||||||||||||||
Thereafter | 6,455,648 | ||||||||||||||||||||||||||||
$ | 26,346,045 | ||||||||||||||||||||||||||||
Debt_Tables
Debt (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||||||||
Summary of Secured Indebtedness | ' | ||||||||||||||||
The following table summarizes the secured indebtedness as of September 30, 2014 and December 31, 2013: | |||||||||||||||||
Property | September 30, 2014 | December 31, 2013 | Interest Rate as | Maturity | |||||||||||||
of | |||||||||||||||||
September 30, | |||||||||||||||||
2014 | |||||||||||||||||
Revolving Credit Facility (1) | $ | 6,400,000 | $ | — | LIBOR +2.75 | %(2) | Apr-16 | ||||||||||
AmberGlen Mortgage Loan (3) | 25,262,516 | — | 4.38 | % | May-19 | ||||||||||||
Midland Life Insurance (4) | 95,000,000 | — | 4.34 | % | May-21 | ||||||||||||
Lake Vista Pointe (5) | 18,460,000 | — | 4.28 | % | Jul-18 | ||||||||||||
Washington Group Plaza (5) | 34,481,789 | 34,949,159 | 3.85 | % | Jul-18 | ||||||||||||
City Center (6) | — | 22,333,938 | — | June 2014 | |||||||||||||
Central Fairwinds (7) | — | 10,000,000 | — | October 2015 | |||||||||||||
Corporate Parkway (7) | — | 19,133,333 | — | Apr-16 | |||||||||||||
AmberGlen (8) | — | 23,500,000 | — | Jul-17 | |||||||||||||
Total | $ | 179,604,305 | $ | 109,916,430 | |||||||||||||
All interest rates are fixed interest rates with the exception of the revolving credit facility (“Revolving Credit Facility”) as explained in footnote 1 below. | |||||||||||||||||
-1 | The Revolving Credit Facility currently has $30 million authorized with $26.4 million available immediately. In addition, the Revolving Credit Facility has an accordion feature that will permit us to borrow up to $150 million, subject to additional collateral availability and lender approval. The Revolving Credit Facility bears an interest rate of LIBOR plus 2.75% and requires the Company to maintain a fixed charge coverage ratio of no less than 1.60x. The Revolving Credit Facility is cross-collateralized by Central Fairwinds and Plaza 25. | ||||||||||||||||
-2 | As of September 30, 2014, the 3 Month LIBOR rate was 0.27%. | ||||||||||||||||
-3 | Following the Formation Transactions, on April 29, 2014, we entered into a new mortgage loan in relation to the AmberGlen property for $25.4 million. The loan bears an interest rate of 4.38% and matures on May 1, 2019. The Company is required to maintain a minimum net worth of $25 million and a minimum liquidity of $2 million. | ||||||||||||||||
-4 | The loan is cross-collateralized by Corporate Parkway, Cherry Creek and City Center. Interest only until February 2016 then interest payable monthly plus principal based on 360 months of amortization. The loan bears a fixed interest rate of 4.34% and matures on May 6, 2021. | ||||||||||||||||
-5 | Interest payable monthly plus principal based on 360 months of amortization. | ||||||||||||||||
-6 | Interest payable monthly plus monthly principal payment of $20,000. This loan was extinguished on April 21, 2014 in relation to the Formation Transaction. | ||||||||||||||||
-7 | Interest only payable monthly, principal due on maturity. This loan was extinguished on April 21, 2014 in relation to the Formation Transactions. | ||||||||||||||||
-8 | This AmberGlen loan was refinanced on April 29, 2014 with the new AmberGlen loan discussed in footnote (3) above. | ||||||||||||||||
Schedule of Principal Repayments of Mortgage Payable | ' | ||||||||||||||||
The scheduled principal repayments of mortgage payable as of September 30, 2014 are as follows: | |||||||||||||||||
2014 | $ | 259,621 | |||||||||||||||
2015 | 1,065,209 | ||||||||||||||||
2016 | 8,420,590 | ||||||||||||||||
2017 | 2,873,753 | ||||||||||||||||
2018 | 34,836,409 | ||||||||||||||||
Thereafter | 132,148,723 | ||||||||||||||||
$ | 179,604,305 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Investments, All Other Investments [Abstract] | ' | ||||||||||||||||||||
Summary of Interest Rate derivative Outstanding | ' | ||||||||||||||||||||
The interest rate derivative outstanding as at December 31, 2013 was as follows: | |||||||||||||||||||||
Property | Type of | Notional | Maturity | Effective | Fair Value as of | ||||||||||||||||
Instrument | amount | date | rate | December 31, 2013 | |||||||||||||||||
City Center | Interest Rate Swap | $ | 15,000,000 | — | 6 | % | $ | — |
Future_Minimum_Rent_Schedule_T
Future Minimum Rent Schedule (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Leases [Abstract] | ' | ||||
Schedule of Future Minimum Lease Payments under Noncancellable Operating Leases | ' | ||||
Future minimum lease payments to be received as of September 30, 2014 under noncancellable operating leases for the next five years and thereafter are as follows: | |||||
2014 | $ | 8,532,363 | |||
2015 | 35,048,004 | ||||
2016 | 28,542,171 | ||||
2017 | 20,887,708 | ||||
2018 | 17,401,040 | ||||
Thereafter | 65,593,200 | ||||
$ | 176,004,486 | ||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Computation of Basic and Diluted Earnings per Share | ' | ||||||||
The following table shows the amounts used in computing the Company’s basic and diluted earnings per share. As of the three and nine months ended September 30, 2014, there is no dilution to earnings per share. | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
September 30, 2014 | September 30, 2014 | ||||||||
Numerator for loss per share – basic and diluted | |||||||||
Net loss | $ | (2,373,873 | ) | $ | (3,237,974 | ) | |||
Less: Net loss attributable to noncontrolling interests in properties | (87,296 | ) | (8,326 | ) | |||||
Less: Net loss attributable to Predecessor | — | (1,973,197 | ) | ||||||
Less: Net loss attributable to Operating Partnership unitholders’ noncontrolling interests | 693,971 | 1,508,097 | |||||||
Numerator for loss per share – basic and diluted | $ | (1,767,198 | ) | $ | (3,711,400 | ) | |||
Denominator for loss per share – basic and diluted | 8,192,915 | 8,133,940 | |||||||
Basic and diluted loss per share | $ | (0.22 | ) | $ | (0.46 | ) | |||
Organization_and_Description_o2
Organization and Description of Business - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended | |||
9-May-14 | Apr. 21, 2014 | Jan. 02, 2014 | Sep. 30, 2014 | Apr. 21, 2014 | |
Property | Property | ||||
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Company formation date | ' | ' | ' | 26-Nov-13 | ' |
Operation commencement date | ' | ' | ' | 21-Apr-14 | ' |
Number of properties acquired | ' | ' | ' | 6 | ' |
Common stock issued in IPO, shares | ' | 5,800,000 | ' | 5,800,000 | ' |
Common stock issued in IPO, price per share | ' | ' | ' | ' | $12.50 |
Shares issued to underwriters under overallotment option | 782,150 | ' | ' | 782,150 | ' |
IPO Closed date | ' | ' | ' | 21-Apr-14 | ' |
Gross proceeds from IPO | $9,800,000 | $72,500,000 | ' | ' | ' |
Net proceeds from IPO | 9,100,000 | 63,400,000 | ' | 63,400,000 | ' |
Underwriting discounts | 700,000 | 5,100,000 | ' | ' | ' |
Other expenses relating to IPO | ' | 4,000,000 | ' | ' | ' |
Purchase consideration, cash paid | ' | 19,400,000 | 12,000,000 | ' | ' |
Percent of ownership interest acquired in properties | ' | ' | ' | 71.60% | ' |
Common stock redemption value, in cash | 9,100,000 | ' | ' | ' | ' |
Number of properties in which loan refinanced | ' | ' | ' | ' | 3 |
Washington Group Plaza [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Percent of ownership interest acquired in properties | ' | 100.00% | ' | ' | 100.00% |
Cherry Creek [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Purchase consideration, cash paid | ' | ' | 12,000,000 | ' | ' |
Percent of ownership interest acquired in properties | ' | 100.00% | 57.70% | ' | 100.00% |
Corporate Parkway [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Percent of ownership interest acquired in properties | ' | 100.00% | ' | ' | 100.00% |
AmberGlen [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Percent of ownership interest acquired in properties | ' | 76.00% | ' | ' | 76.00% |
Central Fairwinds [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Percent of ownership interest acquired in properties | ' | 90.00% | ' | ' | 90.00% |
City Center Property [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Percent of ownership interest acquired in properties | ' | 95.00% | ' | ' | 95.00% |
Non-Recourse Mortgage Loan [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Non-recourse mortgage loan, amount | ' | $95,000,000 | ' | ' | $95,000,000 |
Non-recourse mortgage loan, interest rate | ' | 4.34% | ' | ' | 4.34% |
Non-recourse mortgage loan, maturity date | ' | ' | ' | 6-May-21 | ' |
Common Units [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Purchase consideration, units issued | ' | 3,731,209 | ' | 3,251,904 | ' |
Previously issued number of redeemable shares | 479,305 | ' | ' | ' | ' |
Common Stock [Member] | ' | ' | ' | ' | ' |
Business Description And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' |
Purchase consideration, units issued | ' | 1,610,765 | ' | ' | ' |
Previously issued number of redeemable shares | 248,095 | ' | ' | ' | ' |
Organization_and_Description_o3
Organization and Description of Business - Summary of Predecessor and Company's Statement of Operations (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Apr. 20, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 20, 2014 | Sep. 30, 2013 | Apr. 20, 2014 | Sep. 30, 2013 | |
Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | |||||
Revenues: | ' | ' | ' | ' | ' | ' | ' | ' |
Rental income | $9,036,858 | ' | $15,122,653 | $23,987,891 | $1,628,480 | $6,222,764 | $8,865,238 | $12,938,686 |
Expense reimbursement | 843,753 | ' | 1,240,956 | 1,796,567 | 105,569 | 406,622 | 555,611 | 1,093,117 |
Other | 117,809 | ' | 246,772 | 589,631 | 47,198 | 202,990 | 342,859 | 593,724 |
Total Revenues | 9,998,420 | ' | 16,610,381 | 26,374,089 | 1,781,247 | 6,832,376 | 9,763,708 | 14,625,527 |
Operating Expenses: | ' | ' | ' | ' | ' | ' | ' | ' |
Property operating expenses | 2,782,296 | ' | 4,539,478 | 7,304,371 | 510,431 | 1,819,634 | 2,764,893 | 4,005,302 |
Insurance | 167,046 | ' | 313,043 | 489,471 | 23,570 | 144,057 | 176,428 | 374,655 |
Property taxes | 753,329 | ' | 1,177,853 | 1,775,641 | 136,684 | 458,611 | 597,788 | 1,015,164 |
Property management fees | 225,719 | ' | 384,615 | 619,497 | 27,265 | 143,764 | 234,882 | 397,297 |
Acquisition costs | 401,200 | ' | 745,003 | 1,551,347 | ' | ' | 806,344 | 1,479,292 |
Base management fees | 226,295 | ' | 411,471 | 411,471 | ' | ' | ' | ' |
Stock based compensation | 382,205 | ' | 667,347 | 667,347 | ' | ' | ' | ' |
General and administrative | 407,075 | ' | 741,580 | 821,379 | 29,799 | ' | 79,799 | ' |
Depreciation and amortization | 4,057,809 | ' | 6,771,654 | 10,633,593 | 701,962 | 2,530,128 | 3,861,939 | 5,245,498 |
Total Operating Expenses | 9,402,974 | ' | 15,752,044 | 24,274,117 | 1,429,711 | 5,096,194 | 8,522,073 | 12,517,208 |
Operating income | 595,446 | ' | 858,337 | 2,099,972 | 351,536 | 1,736,182 | 1,241,635 | 2,108,319 |
Interest expense, net | -2,026,669 | ' | -4,993,283 | -8,765,075 | -610,378 | -1,662,710 | -3,771,792 | -3,704,586 |
Change in fair value of earn-out | -942,650 | ' | -1,047,515 | -1,047,515 | ' | ' | ' | ' |
Gain on equity investment | ' | ' | ' | 4,474,644 | ' | ' | 4,474,644 | ' |
Net (loss)/income | -2,373,873 | 1,944,487 | -5,182,461 | -3,237,974 | -258,842 | 158,246 | 1,944,487 | -1,340,845 |
Net Loss attributable to noncontrolling interests in properties | ' | ' | -37,036 | ' | 18,785 | ' | 28,710 | ' |
Net (Loss)/Income attributable to Predecessor | ' | ' | ' | -1,973,197 | -240,057 | 179,614 | 1,973,197 | -1,280,489 |
Net loss attributable to Operating Partnership noncontrolling interests | 693,971 | ' | 1,508,097 | 1,508,097 | ' | ' | ' | ' |
Net loss attributable to stockholders | ($1,767,198) | ' | ($3,711,400) | ($3,711,400) | ' | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Real Estate Properties (Detail) | 9 Months Ended |
Sep. 30, 2014 | |
Buildings and Improvement [Member] | Minimum [Member] | ' |
Depreciation Amortization Impairment [Line Items] | ' |
Real estate properties, Estimated useful lives | '29 years |
Buildings and Improvement [Member] | Maximum [Member] | ' |
Depreciation Amortization Impairment [Line Items] | ' |
Real estate properties, Estimated useful lives | '50 years |
Furniture, Fixtures and Equipment [Member] | Minimum [Member] | ' |
Depreciation Amortization Impairment [Line Items] | ' |
Real estate properties, Estimated useful lives | '4 years |
Furniture, Fixtures and Equipment [Member] | Maximum [Member] | ' |
Depreciation Amortization Impairment [Line Items] | ' |
Real estate properties, Estimated useful lives | '7 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | 12-May-14 | Sep. 30, 2014 | Sep. 15, 2014 | Sep. 30, 2014 | Apr. 21, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Dividend Declared on May 12, 2014 [Member] | Dividend Declared on May 12, 2014 [Member] | Dividend Declared on September 15, 2014 [Member] | Dividend Declared on September 15, 2014 [Member] | Common Units [Member] | Common Units [Member] | Common Stockholders [Member] | Common Stockholders [Member] | Common Unitholders [Member] | Common Unitholders [Member] | ||||
Dividend Declared on May 12, 2014 [Member] | Dividend Declared on September 15, 2014 [Member] | Dividend Declared on May 12, 2014 [Member] | Dividend Declared on September 15, 2014 [Member] | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of REIT taxable income distributed to stockholders | ' | ' | 90.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase consideration, units issued | ' | ' | ' | ' | ' | ' | ' | 3,731,209 | 3,251,904 | ' | ' | ' | ' |
Percent of ownership interest acquired in properties | 71.60% | 71.60% | 71.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Declared cash dividend per share | $0.24 | ' | $0.42 | $0.18 | ' | $0.24 | ' | ' | ' | ' | ' | ' | ' |
Dividends payable, declared date | ' | ' | ' | ' | 12-May-14 | ' | 15-Sep-14 | ' | ' | ' | ' | ' | ' |
Dividends payable date | ' | ' | ' | ' | 17-Jul-14 | ' | 17-Oct-14 | ' | ' | ' | ' | ' | ' |
Dividends payable, date of record | ' | ' | ' | ' | 3-Jul-14 | ' | 3-Oct-14 | ' | ' | ' | ' | ' | ' |
Dividends | ' | $4,783,934 | ' | ' | $2,100,000 | ' | $2,700,000 | ' | ' | $1,500,000 | $1,900,000 | $600,000 | $800,000 |
Potentially dilutive shares outstanding | 3,251,904 | ' | 3,251,904 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Real_Estate_Investments_Schedu
Real Estate Investments - Schedule of Acquired Properties (Detail) | Sep. 30, 2014 | Apr. 21, 2014 | Jan. 02, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 04, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jul. 18, 2014 |
Cherry Creek [Member] | Cherry Creek [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||
Cherry Creek [Member] | Cherry Creek [Member] | Plaza 25 [Member] | Plaza 25 [Member] | Plaza 25 [Member] | Lake Vista Pointe [Member] | Lake Vista Pointe [Member] | Lake Vista Pointe [Member] | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Real estate property, date acquired | ' | ' | ' | '2014-01 | ' | '2014-06 | ' | ' | '2014-07 | ' | ' |
Real estate property, percentage owned | 71.60% | 100.00% | 57.70% | ' | 100.00% | ' | 100.00% | 100.00% | ' | 100.00% | 100.00% |
Real_Estate_Investments_Additi
Real Estate Investments - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | |||||||
Apr. 21, 2014 | Jan. 02, 2014 | Sep. 30, 2014 | Apr. 20, 2014 | Dec. 31, 2013 | Jan. 02, 2014 | Apr. 21, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 04, 2014 | Sep. 30, 2014 | Jun. 04, 2014 | Jul. 18, 2014 | Sep. 30, 2014 | Jul. 18, 2014 | |
Predecessor [Member] | Predecessor [Member] | Cherry Creek [Member] | Cherry Creek [Member] | Cherry Creek [Member] | Cherry Creek [Member] | Plaza 25 [Member] | Plaza 25 [Member] | Plaza 25 [Member] | Lake Vista Pointe [Member] | Lake Vista Pointe [Member] | Lake Vista Pointe [Member] | ||||
Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, ownership percentage | ' | ' | 71.60% | ' | ' | 57.70% | 100.00% | 100.00% | 100.00% | ' | 100.00% | 100.00% | ' | 100.00% | 100.00% |
Business acquisition, purchase consideration | $19,400,000 | $12,000,000 | ' | ' | ' | $12,000,000 | ' | ' | $12,020,893 | $24,300,000 | ' | ' | $26,200,000 | ' | ' |
Business acquisition, liabilities assumed | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of debt | ' | ' | ' | ' | ' | 36,000,000 | ' | ' | 36,000,000 | ' | ' | ' | ' | ' | ' |
Business acquisition, deferred financing costs | ' | ' | 2,919,700 | ' | 1,167,666 | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition, transaction costs | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expenses related to acquisition | ' | ' | ' | ' | ' | ' | ' | 806,344 | 806,344 | ' | ' | ' | ' | ' | ' |
Gain on equity investment | ' | ' | $4,474,644 | $4,474,644 | ' | ' | ' | ' | $4,500,000 | ' | ' | ' | ' | ' | ' |
Real_Estate_Investments_Schedu1
Real Estate Investments - Schedule of Preliminary Allocation of Purchase Price of Assets Acquired and Liabilities Assumed (Detail) (USD $) | Sep. 30, 2014 |
Cherry Creek [Member] | ' |
Business Acquisition [Line Items] | ' |
Land | $25,745,012 |
Buildings and Improvements | 15,771,277 |
Tenant Improvements | 4,372,849 |
Acquired intangible assets | 12,009,085 |
Accounts payable and other liabilities | -815,378 |
Lease intangible liability | -249,409 |
Fair value of assets and liabilities at acquisition | 56,833,436 |
Plaza 25 [Member] | ' |
Business Acquisition [Line Items] | ' |
Land | 1,764,235 |
Buildings and Improvements | 18,486,580 |
Tenant Improvements | 2,075,932 |
Acquired intangible assets | 2,923,754 |
Prepaid expenses and other assets | 1,926 |
Accounts payable and other liabilities | -640,630 |
Lease intangible liability | -327,906 |
Fair value of assets and liabilities at acquisition | 24,283,891 |
Lake Vista Pointe [Member] | ' |
Business Acquisition [Line Items] | ' |
Land | 4,115,158 |
Buildings and Improvements | 17,562,157 |
Tenant Improvements | 2,581,839 |
Acquired intangible assets | 3,682,828 |
Prepaid expenses and other assets | 29,610 |
Accounts payable and other liabilities | -1,732,801 |
Fair value of assets and liabilities at acquisition | $26,238,791 |
Real_Estate_Investments_Schedu2
Real Estate Investments - Schedule of Realized Gain Loss on Investments (Detail) (USD $) | 0 Months Ended | 9 Months Ended | ||||
Apr. 21, 2014 | Jan. 02, 2014 | Jan. 02, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Cherry Creek [Member] | Cherry Creek [Member] | Predecessor [Member] | Predecessor [Member] | |||
Cherry Creek [Member] | ||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Fair value of assets and liabilities acquired | ' | ' | ' | $56,833,436 | ' | $56,833,436 |
Less existing mortgage in Cherry Creek | ' | ' | -36,000,000 | ' | ' | -36,000,000 |
Fair value of assets and liabilities acquired, after mortgage | ' | ' | ' | ' | ' | 20,833,436 |
Less cash paid to seller | -19,400,000 | -12,000,000 | -12,000,000 | ' | ' | -12,020,893 |
Fair value of 42.3% equity interest | ' | ' | ' | ' | ' | 8,812,543 |
Carrying value of investment in Cherry Creek | ' | ' | ' | ' | -4,337,899 | -4,337,899 |
Gain on existing 42.3% equity interest | ' | ' | ' | ' | ' | $4,474,644 |
Real_Estate_Investments_Schedu3
Real Estate Investments - Schedule of Realized Gain Loss on Investments (Parenthetical) (Detail) (Predecessor [Member], Cherry Creek [Member]) | Sep. 30, 2014 |
Predecessor [Member] | Cherry Creek [Member] | ' |
Business Acquisition [Line Items] | ' |
Percentage of equity interest | 42.30% |
Real_Estate_Investments_Schedu4
Real Estate Investments - Schedule of Operating Results Relating to Acquired Entities (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 20, 2014 | Sep. 30, 2013 | Apr. 20, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | |
Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||||
Cherry Creek [Member] | Cherry Creek [Member] | ||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating revenues | $9,036,858 | $15,122,653 | $23,987,891 | $1,628,480 | $6,222,764 | $8,865,238 | $12,938,686 | $3,466,503 | $7,190,976 |
Operating expenses | -2,782,296 | -4,539,478 | -7,304,371 | -510,431 | -1,819,634 | -2,764,893 | -4,005,302 | -2,920,995 | -6,625,117 |
Interest | ' | ' | ' | ' | ' | ' | ' | -753,974 | -3,124,948 |
Net loss before gain on equity investment | ' | ' | ' | ' | ' | ' | ' | ($208,466) | ($2,559,089) |
Real_Estate_Investments_Schedu5
Real Estate Investments - Schedule of Business Acquisition Pro Forma Results of Operations (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 20, 2014 | Sep. 30, 2013 | Apr. 20, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Cherry Creek [Member] | Plaza 25 [Member] | Lake Vista Pointe [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||||
Cherry Creek [Member] | Plaza 25 [Member] | Lake Vista Pointe [Member] | |||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total revenues as reported by City Office REIT, Inc. and Predecessor | $9,998,420 | $16,610,381 | $26,374,089 | ' | ' | ' | $1,781,247 | $6,832,376 | $9,763,708 | $14,625,527 | ' | ' | ' |
Proforma total revenues | ' | ' | 29,926,141 | ' | 1,672,163 | 1,879,889 | ' | ' | ' | 25,368,555 | 5,186,771 | 2,964,289 | 2,591,968 |
Total operating income as reported by the City Office REIT, Inc. and Predecessor | 595,446 | 858,337 | 2,099,972 | 2,099,972 | ' | ' | 351,536 | 1,736,182 | 1,241,635 | 2,108,319 | 2,108,319 | ' | ' |
Property acquisition costs | -401,200 | -745,003 | -1,551,347 | 1,551,347 | ' | ' | ' | ' | -806,344 | -1,479,292 | -1,551,347 | ' | ' |
Proforma operating income | ' | ' | $3,849,436 | ' | ($91,120) | $289,237 | ' | ' | ' | $1,320,948 | $527,261 | ($161,531) | $398,246 |
Lease_Intangibles_Schedule_of_
Lease Intangibles - Schedule of Lease Intangibles and Value of Assumed Lease Obligations (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 |
Predecessor [Member] | Above Market Leases [Member] | Above Market Leases [Member] | In Place Leases [Member] | In Place Leases [Member] | Leasing Commissions [Member] | Leasing Commissions [Member] | Above Market and In Place Leases and Leasing Commissions [Member] | Above Market and In Place Leases and Leasing Commissions [Member] | Below Market Leases [Member] | Below Market Leases [Member] | Below Market Ground Lease [Member] | Below Market Ground Lease [Member] | Total of Below Market and Below Market Ground Leases [Member] | Total of Below Market and Below Market Ground Leases [Member] | ||
Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | ||||||||||
Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost | ' | ' | $6,980,813 | $3,043,030 | $22,370,372 | $14,885,115 | $12,535,456 | $5,447,198 | $41,886,641 | $23,375,343 | ($746,219) | ($168,904) | ($138,218) | ($138,218) | ($884,437) | ($307,122) |
Accumulated amortization | ' | ' | -3,131,678 | -1,306,326 | -8,604,160 | -6,536,311 | -3,155,524 | -1,781,143 | -14,891,362 | -9,623,780 | 215,986 | 123,567 | 19,217 | 16,209 | 235,203 | 139,776 |
Total | $26,995,279 | $13,751,563 | $3,849,135 | $1,736,704 | $13,766,212 | $8,348,804 | $9,379,932 | $3,666,055 | $26,995,279 | $13,751,563 | ($530,233) | ($45,337) | ($119,001) | ($122,009) | ($649,234) | ($167,346) |
Lease_Intangibles_Additional_I
Lease Intangibles - Additional Information (Detail) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Prior period reclassification adjustment of lease intangibles and accounts payable and accrued liabilities | $649,192 |
Impact to net income | $0 |
Lease_Intangibles_Estimated_Ag
Lease Intangibles - Estimated Aggregate Amortization Expense for Lease Intangibles (Detail) (USD $) | Sep. 30, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
2014 | $1,650,514 |
2015 | 6,343,804 |
2016 | 5,860,838 |
2017 | 3,605,134 |
2018 | 2,430,107 |
Thereafter | 6,455,648 |
Total | $26,346,045 |
Debt_Summary_of_Secured_Indebt
Debt - Summary of Secured Indebtedness (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | $179,604,305 | $109,916,430 |
Revolving Credit Facility [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | 6,400,000 | ' |
Interest Rate, Description | 'LIBOR +2.75% | ' |
Interest Rate | 2.75% | ' |
Maturity | '2016-04 | ' |
Washington Group Plaza [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | 34,481,789 | 34,949,159 |
Interest Rate | 3.85% | ' |
Maturity | '2018-07 | ' |
AmberGlen Mortgage Loan [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | 25,262,516 | ' |
Interest Rate | 4.38% | ' |
Maturity | '2019-05 | ' |
Midland Life Insurance [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | 95,000,000 | ' |
Interest Rate | 4.34% | ' |
Maturity | '2021-05 | ' |
City Center [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | ' | 22,333,938 |
Maturity | '2014-06 | ' |
Lake Vista Pointe [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | 18,460,000 | ' |
Interest Rate | 4.28% | ' |
Maturity | '2018-07 | ' |
Central Fairwinds [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | ' | 10,000,000 |
Maturity | '2015-10 | ' |
Corporate Parkway [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | ' | 19,133,333 |
Maturity | '2016-04 | ' |
AmberGlen [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Secured indebtedness | ' | $23,500,000 |
Maturity | '2017-07 | ' |
Debt_Summary_of_Secured_Indebt1
Debt - Summary of Secured Indebtedness (Parenthetical) (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Mortgage loan | $179,604,305 | $109,916,430 |
Washington Group Plaza [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Effective interest rate of loan | 3.85% | ' |
Mortgage loan | 34,481,789 | 34,949,159 |
Amortization period | '360 months | ' |
AmberGlen Mortgage Loan [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Effective interest rate of loan | 4.38% | ' |
Mortgage loan | 25,262,516 | ' |
Loan maturity date | 1-May-19 | ' |
Minimum net worth required | 25,000,000 | ' |
Minimum liquidity requirements | 2,000,000 | ' |
Midland Life Insurance [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Effective interest rate of loan | 4.34% | ' |
Mortgage loan | 95,000,000 | ' |
Loan maturity date | 6-May-21 | ' |
Amortization period | '360 months | ' |
City Center [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Mortgage loan | ' | 22,333,938 |
Monthly interest payable plus principal payment | ' | 20,000 |
Loan extinguishment date | 21-Apr-14 | ' |
Central Fairwinds [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Mortgage loan | ' | 10,000,000 |
Loan extinguishment date | 21-Apr-14 | ' |
Corporate Parkway [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Mortgage loan | ' | 19,133,333 |
Loan extinguishment date | 21-Apr-14 | ' |
Revolving Credit Facility [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Revolving Credit Facility, authorized amount | 30,000,000 | ' |
Revolving Credit Facility, current borrowing capacity | 26,400,000 | ' |
Revolving Credit Facility, accordion feature | 150,000,000 | ' |
Revolving Credit Facility interest rate, description | 'LIBOR plus 2.75% | ' |
Effective interest rate of loan | 2.75% | ' |
3 Month LIBOR rate | 0.27% | ' |
Mortgage loan | $6,400,000 | ' |
Minimum [Member] | Revolving Credit Facility [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Fixed charge coverage ratio | 1.6 | ' |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (Plaza 25 [Member], USD $) | Jun. 13, 2014 |
In Millions, unless otherwise specified | |
Plaza 25 [Member] | ' |
Debt Instrument [Line Items] | ' |
Maximum amount of Revolving Credit Facility | $30 |
Debt_Schedule_of_Principal_Rep
Debt - Schedule of Principal Repayments of Mortgage Payable (Detail) (USD $) | Sep. 30, 2014 |
Debt Disclosure [Abstract] | ' |
2014 | $259,621 |
2015 | 1,065,209 |
2016 | 8,420,590 |
2017 | 2,873,753 |
2018 | 34,836,409 |
Thereafter | 132,148,723 |
Total principal repayments of mortgage payable | $179,604,305 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 1 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2016 | |
sqft | sqft | sqft | Scenario, Forecast [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' | ' | ' | ' |
Hedges or derivatives | $0 | $0 | $0 | ' | ' |
Fair value, discount rate | ' | ' | 8.00% | ' | ' |
Approximate square feet of additional lease space | 17,000 | 17,000 | 17,000 | ' | ' |
Percentage of lease space occupancy | ' | ' | 76.00% | ' | 89.00% |
Average net effective rent per square foot | ' | ' | 14 | ' | ' |
Incremental operating costs per square foot | ' | ' | 4 | ' | ' |
Estimated fair value of earn-out liability | 8,000,000 | 8,000,000 | 8,000,000 | ' | ' |
Change in fair value of earn-out | -942,650 | -1,047,515 | -1,047,515 | ' | ' |
Percentage of increase or decrease in potential gain or loss by varying the significant unobservable inputs | ' | ' | 10.00% | ' | ' |
Potential loss by varying the significant unobservable inputs | ' | ' | 100,000 | ' | ' |
Potential gain by varying the significant unobservable inputs | ' | ' | 100,000 | ' | ' |
Mortgage loans payable, fair value | $172,700,000 | $172,700,000 | $172,700,000 | $88,500,000 | ' |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments - Summary of Interest Rate derivative Outstanding (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
City Center [Member] | ||
Predecessor [Member] | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Type of Instrument | ' | 'Interest Rate Swap |
Notional amount | ' | $15,000,000 |
Maturity date | ' | NaN, NaN |
Effective rate | ' | 6.00% |
Fair Value | $0 | ' |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended |
In Millions, except Share data, unless otherwise specified | 9-May-14 | Sep. 30, 2014 |
Property | ||
Related Party Transaction [Line Items] | ' | ' |
Proceeds from previously issued redeemable shares value | $9.10 | ' |
Number of real estate properties | ' | 3 |
Property management fee, Description | ' | 'Fee ranging from 1.75% to 3.5% of gross revenue |
Common Units [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Previously issued number of redeemable shares | 479,305 | ' |
Common Stock [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Previously issued number of redeemable shares | 248,095 | ' |
Washington Group Plaza [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Property management fee, percentage of gross revenue | ' | 1.00% |
Property management fee in excess of net operating income, percentage | ' | 15.00% |
Washington Group Plaza [Member] | 2013 [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Minimum property management fee | ' | 5 |
Washington Group Plaza [Member] | 2014 [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Minimum property management fee | ' | 5.45 |
Washington Group Plaza [Member] | 2015 [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Minimum property management fee | ' | 5.6 |
Asset management agreement initial term | ' | '3 years |
Asset management agreement renewal term | ' | '2 years |
Asset management agreement termination description | ' | 'This agreement can be terminated by the Company or the property manager upon thirty days prior written notice to the other party. |
Formation Transactions [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Additional payments to Second City reimbursement of IPO | ' | 4.9 |
Second City Group [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Formation transactions completed date | ' | 21-Apr-14 |
Consideration for formation transactions | ' | 19.4 |
Additional payments to Second City reimbursement of IPO | ' | 4.9 |
Additional payments to the Second City Group for working capital | ' | 1.8 |
Proceeds from previously issued redeemable shares value | $9.10 | ' |
Second City Group [Member] | Common Units [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Previously issued number of redeemable shares | 479,305 | ' |
Second City Group [Member] | Common Stock [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Previously issued number of redeemable shares | 248,095 | ' |
Minimum [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Property management fee, percentage | ' | 1.75% |
Maximum [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Property management fee, percentage | ' | 3.50% |
Future_Minimum_Rent_Schedule_S
Future Minimum Rent Schedule - Schedule of Future Minimum Lease Payments under Noncancellable Operating Leases (Detail) (USD $) | Sep. 30, 2014 |
Leases [Abstract] | ' |
2014 | $8,532,363 |
2015 | 35,048,004 |
2016 | 28,542,171 |
2017 | 20,887,708 |
2018 | 17,401,040 |
Thereafter | 65,593,200 |
Total future minimum lease payments to be received | $176,004,486 |
Future_Minimum_Rent_Schedule_A
Future Minimum Rent Schedule - Additional Information (Detail) | Sep. 30, 2014 |
Leases [Abstract] | ' |
Percentage of total future minimum lease payments | 44.00% |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Other Commitments [Line Items] | ' | ' | ' |
Estimated fair value of earn-out liability | $8,000,000 | $8,000,000 | $8,000,000 |
Change in fair value of earn-out | ($942,650) | ($1,047,515) | ($1,047,515) |
Central Fairwinds [Member] | ' | ' | ' |
Other Commitments [Line Items] | ' | ' | ' |
Percentage of leased area | 76.00% | 76.00% | 76.00% |
Stabilized capitalization rate | ' | ' | 7.75% |
Earn-Out Payment, Description | ' | ' | 'The Company will make any additional Earn-Out Payment within 30 days of the end of the Earn-Out Term based on new qualified leases entered into since the achievement of the last Earn-Out Threshold. |
Range 1 [Member] | Central Fairwinds [Member] | ' | ' | ' |
Other Commitments [Line Items] | ' | ' | ' |
Percentage of Earn-Out Threshold | ' | ' | 70.00% |
Range 2 [Member] | Central Fairwinds [Member] | ' | ' | ' |
Other Commitments [Line Items] | ' | ' | ' |
Percentage of Earn-Out Threshold | ' | ' | 80.00% |
Range 3 [Member] | Central Fairwinds [Member] | ' | ' | ' |
Other Commitments [Line Items] | ' | ' | ' |
Percentage of Earn-Out Threshold | ' | ' | 90.00% |
Earnings_per_Share_Computation
Earnings per Share - Computation of Basic and Diluted Earnings per Share (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Apr. 20, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Numerator for loss per share - basic and diluted | ' | ' | ' | ' |
Net loss | ($2,373,873) | $1,944,487 | ($5,182,461) | ($3,237,974) |
Less: Net loss attributable to noncontrolling interests in properties | -87,296 | ' | ' | -8,326 |
Less: Net loss attributable to Predecessor | ' | ' | ' | -1,973,197 |
Less: Net loss attributable to Operating Partnership unitholders' noncontrolling interests | 693,971 | ' | 1,508,097 | 1,508,097 |
Numerator for loss per share - basic and diluted | ($1,767,198) | ' | ($3,711,400) | ($3,711,400) |
Denominator for loss per share - basic and diluted | 8,192,915 | ' | ' | 8,133,940 |
Basic and diluted loss per share | ($0.22) | ' | ' | ($0.46) |
Stockholders_Equity_Additional
Stockholder's Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | 9-May-14 | Apr. 21, 2014 | Sep. 30, 2014 | Apr. 21, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Installment | Directors and Non-Executive Employees [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Common stock issued in IPO, shares | ' | 5,800,000 | 5,800,000 | ' | ' | ' | ' |
Net proceeds from IPO | $9.10 | $63.40 | $63.40 | ' | ' | ' | ' |
Shares issued to underwriters under overallotment option | 782,150 | ' | 782,150 | ' | ' | ' | ' |
Additional net proceeds from IPO | ' | ' | 9.1 | ' | ' | ' | ' |
Operating Partnership units | ' | ' | 3,251,904 | ' | ' | ' | ' |
Percentage of Operating Partnership unit | ' | ' | 28.40% | ' | ' | ' | ' |
Partnership unit, description | ' | ' | 'Beginning on or after the date which is 12 months after the later of the completion of this offering or the date on which a person first became a holder of common units, each limited partner and assignees of limited partners will have the right, subject to the terms and conditions set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of the common units held by such limited partner or assignee in exchange for a cash amount per common unit equal to the value of one share of common stock, determined in accordance with and subject to adjustment under the partnership agreement. The Company has the sole option at its discretion to redeem the common units by issuing common stock on a one-for-one basis. | ' | ' | ' | ' |
Maximum number of shares issued under Equity Incentive Plan | ' | ' | 1,263,580 | ' | ' | ' | ' |
Restricted stock units granted to executive officers, directors and non-executive employees of the Advisor | ' | ' | ' | 352,272 | ' | ' | 30,100 |
Restricted stock units grant date fair value | ' | ' | ' | $12.50 | ' | ' | ' |
Restricted stock units, value | ' | ' | ' | 4.4 | ' | ' | ' |
Net compensation expense | ' | ' | ' | ' | $0.40 | $0.70 | ' |
Number of annual installments for award vesting | ' | ' | ' | ' | ' | 3 | ' |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | Sep. 30, 2014 | Nov. 07, 2014 |
Subsequent Event [Member] | ||
Orlando, Florida [Member] | ||
Subsequent Event [Line Items] | ' | ' |
Acquired property under agreement of purchase and sale | $189,813,558 | $26,500,000 |