Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 31, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AMERICAN REALTY CAPITAL NEW YORK CITY REIT, INC. | |
Entity Central Index Key | 1,595,527 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 30,319,846 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Real estate investments, at cost: | ||
Land | $ 133,380 | $ 83,316 |
Buildings, fixtures and improvements | 330,809 | 139,489 |
Acquired intangible assets | 80,407 | 47,278 |
Total real estate investments, at cost | 544,596 | 270,083 |
Less accumulated depreciation and amortization | (13,091) | (1,970) |
Total real estate investments, net | 531,505 | 268,113 |
Cash and cash equivalents | 192,947 | 184,341 |
Investment securities, at fair value | 456 | 490 |
Receivables for sale of common stock | 0 | 2,003 |
Prepaid expenses and other assets (including amounts due from related parties of $700 at September 30, 2015) | 10,395 | 3,618 |
Deferred costs, net | 5,965 | 0 |
Total assets | 741,268 | 458,565 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Mortgage note payable | 96,000 | 0 |
Accounts payable, accrued expenses and other liabilities (including amounts due to related parties of $386 and $1,109 at September 30, 2015 and December 31, 2014, respectively) | 5,742 | 3,025 |
Below-market lease liabilities, net | 27,409 | 15,367 |
Deferred revenue | 816 | 225 |
Distributions payable | 3,766 | 2,542 |
Total liabilities | 133,733 | 21,159 |
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding at September 30, 2015 and December 31, 2014 | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 30,240,174 and 20,569,012 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively | 302 | 206 |
Additional paid-in capital | 666,101 | 454,131 |
Accumulated other comprehensive loss | (73) | (24) |
Accumulated deficit | (58,795) | (16,907) |
Total stockholders' equity | 607,535 | 437,406 |
Total liabilities and stockholders' equity | $ 741,268 | $ 458,565 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Due to related party | $ 386 | $ 1,109 |
Due from related party | $ 700 | $ 0 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 30,240,174 | 20,569,012 |
Common stock, shares outstanding | 30,240,174 | 20,569,012 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Rental income | $ 7,329 | $ 516 | $ 16,929 | $ 559 |
Operating expense reimbursements | 550 | 24 | 1,207 | 24 |
Total revenues | 7,879 | 540 | 18,136 | 583 |
Operating expenses: | ||||
Property operating | 3,514 | 71 | 7,586 | 81 |
Operating fees incurred from the Property Manager | 128 | 0 | 128 | 0 |
Acquisition and transaction related | 0 | 2,047 | 6,012 | 2,189 |
General and administrative | 639 | 190 | 2,301 | 268 |
Depreciation and amortization | 4,822 | 467 | 11,598 | 510 |
Total operating expenses | 9,103 | 2,775 | 27,625 | 3,048 |
Operating loss | (1,224) | (2,235) | (9,489) | (2,465) |
Other income (expense): | ||||
Interest expense | (1,158) | 0 | (2,378) | 0 |
Income from investment securities and interest | 77 | 0 | 141 | 0 |
Total other expenses | (1,081) | 0 | (2,237) | 0 |
Net loss | (2,305) | (2,235) | (11,726) | (2,465) |
Unrealized loss on investment securities | (21) | (14) | (49) | (14) |
Comprehensive loss | $ (2,326) | $ (2,249) | $ (11,775) | $ (2,479) |
Basic and diluted weighted average shares outstanding (in shares) | 29,867,646 | 8,543,271 | 26,657,732 | 3,112,029 |
Basic and diluted net loss per share (in dollars per share) | $ (0.08) | $ (0.26) | $ (0.44) | $ (0.79) |
Dividends declared per common share (in dollars per share) | $ 0.38 | $ 0.38 | $ 1.13 | $ 0.46 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning Balance (in shares) at Dec. 31, 2014 | 20,569,012 | ||||
Beginning Balance at Dec. 31, 2014 | $ 437,406 | $ 206 | $ 454,131 | $ (24) | $ (16,907) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 9,165,430 | ||||
Common stock | 228,597 | $ 91 | 228,506 | ||
Common stock offering costs, commissions and dealer manager fees | (28,506) | (28,506) | |||
Common stock issued through distribution reinvestment plan (in shares) | 617,132 | ||||
Common stock issued through distribution reinvestment plan | 14,657 | $ 6 | 14,651 | ||
Common stock repurchases (in shares) | (112,733) | ||||
Common stock repurchases | (2,701) | $ (1) | (2,700) | ||
Share-based compensation (in shares) | 1,333 | ||||
Share-based compensation | 19 | 19 | |||
Distributions declared | (30,162) | (30,162) | |||
Other comprehensive loss | (49) | (49) | |||
Net loss | (11,726) | (11,726) | |||
Ending Balance (in shares) at Sep. 30, 2015 | 30,240,174 | ||||
Ending Balance at Sep. 30, 2015 | $ 607,535 | $ 302 | $ 666,101 | $ (73) | $ (58,795) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 21 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | |
Cash flows from operating activities: | |||||
Net loss | $ (2,305) | $ (2,235) | $ (11,726) | $ (2,465) | |
Adjustment to reconcile net loss to net cash used in operating activities: | |||||
Depreciation and amortization | 4,822 | 467 | 11,598 | 510 | |
Amortization of deferred financing costs | 1,170 | 0 | |||
Accretion of below- and amortization of above-market lease liabilities and assets, net | (1,525) | (50) | |||
Share-based compensation | 19 | 8 | |||
Changes in assets and liabilities: | |||||
Prepaid expenses, other assets and deferred costs | (10,267) | (173) | |||
Accounts payable, accrued expenses and other liabilities | 1,902 | 590 | |||
Deferred revenue | 591 | 204 | |||
Net cash used in operating activities | (8,238) | (1,376) | |||
Cash flows from investing activities: | |||||
Investments in real estate | (157,029) | (92,097) | |||
Purchase of investment securities | (15) | (500) | |||
Acquisition funds released from escrow | 2,068 | 0 | |||
Capital expenditures | (7,898) | 0 | |||
Net cash used in investing activities | (162,874) | (92,597) | |||
Cash flows from financing activities: | |||||
Payments of offering costs and fees related to common stock issuances | (30,426) | (35,036) | |||
Payments of financing costs | (4,574) | 0 | |||
Proceeds from issuance of common stock | 230,600 | 337,426 | $ 750,500 | ||
Distributions paid | (14,281) | (735) | |||
Repurchases of common stock | (1,601) | 0 | |||
Net cash provided by financing activities | 179,718 | 301,655 | |||
Net change in cash and cash equivalents | 8,606 | 207,682 | |||
Cash and cash equivalents, beginning of period | 184,341 | 0 | |||
Cash and cash equivalents, end of period | 192,947 | 207,682 | 192,947 | 207,682 | 192,947 |
Supplemental information: | |||||
Receivable for offering cost reimbursement | 700 | 0 | 700 | 0 | 700 |
Mortgage note payable used to acquire investments in real estate | 96,000 | 0 | |||
Accrued stock repurchase requests | 1,100 | 0 | |||
Distributions payable | $ 3,766 | $ 1,515 | 3,766 | 1,515 | $ 3,766 |
Accrued offering costs | 178 | 0 | |||
Accrued capital expenditures | 507 | 0 | |||
Other assets (liabilities) assumed in real estate transactions, net | 29 | (153) | |||
Common stock issued through distribution reinvestment plan | 14,657 | 1,283 | |||
Reclassification of deferred offering costs to equity | $ 0 | $ 35 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization American Realty Capital New York City REIT, Inc. (including, as required by context, New York City Operating Partnership L.P., and its subsidiaries, the “Company”) was incorporated on December 19, 2013 as a Maryland corporation and elected and qualified to be taxed as a real estate investment trust for U.S. federal income tax purposes (“REIT”) beginning with its taxable year ended December 31, 2014. On April 24, 2014, the Company commenced its initial public offering (the "IPO") on a "reasonable best efforts" basis of up to 30.0 million shares of common stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, for total gross proceeds of up to $750.0 million , pursuant to a registration statement on Form S-11, as amended (File No. 333-194135 ) (the "Registration Statement") filed with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"). The Registration Statement also covered up to 10.5 million shares available pursuant to a distribution reinvestment plan (the "DRIP") under which the Company's common stockholders may elect to have their distributions reinvested in additional shares of the Company's common stock at a price of $23.75 per share, which is equal to 95% of the offering price in the IPO. On May 29, 2014, the Company received and accepted subscriptions in excess of the minimum offering amount for the IPO of $2.0 million in shares, broke general escrow and issued shares of common stock to initial investors who were admitted as stockholders of the Company. In February 2015, as permitted, the Company reallocated the remaining 10.0 million DRIP shares available under the Registration Statement to the primary offering. On May 22, 2015, the Company registered an additional 25.0 million shares to be issued pursuant to the DRIP pursuant to a registration statement on Form S-3 (File No. 333-204433). The Company closed its IPO on May 31, 2015, and continued to accept subscriptions in process as of that date. As of September 30, 2015 , the Company had 30.2 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total gross proceeds from the IPO of $750.5 million , inclusive of $19.2 million from the DRIP. The per share purchase price in the IPO was up to $25.00 per share (including the maximum allowed to be charged for commissions and fees) and the per share purchase price of shares issued under the DRIP is equal to $23.75 per share, which is equal to 95% of the offering price in the primary offering. Beginning with the net asset value ("NAV") pricing date, the per share price for shares under the DRIP will vary quarterly and will be equal to the NAV per share, as determined by New York City Advisors, LLC (the "Advisor"). The NAV pricing date means the date on which the Company first publishes an estimated per share NAV, which will be on or prior to October 26, 2016, which is 150 days following the second anniversary from the date the Company broke escrow in the IPO. The Company was formed to invest its assets in properties in the five boroughs of New York City, with a focus on Manhattan. The Company may also purchase for investment purposes certain real estate investment assets that accompany office properties, including retail spaces and amenities, as well as hospitality assets, residential assets and other property types exclusively in New York City. All such properties may be acquired and owned by the Company alone or jointly with another party. As of September 30, 2015 , the Company owned five properties consisting of 841,868 rentable square feet. Substantially all of the Company’s business is conducted through New York City Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and holds substantially all of the units of limited partner interests in the OP (“OP units”). The Advisor contributed $2,020 to the OP in exchange for 90 OP units, which represents a nominal percentage of the aggregate OP ownership. A holder of OP units has the right to convert OP units for the cash value of a corresponding number of shares of the Company's common stock or, at the option of the OP, a corresponding number of shares of the Company's common stock, in accordance with the limited partnership agreement of the OP, provided, however, that such OP units must have been outstanding for at least one year. The remaining rights of the limited partners in the OP are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP's assets. The Company has no direct employees. The Advisor has been retained by the Company to manage the Company's affairs on a day-to-day basis. The Company has retained New York City Properties, LLC (the “Property Manager”) to serve as the Company’s property manager. Realty Capital Securities, LLC (the “Dealer Manager”) served as the dealer manager of the IPO and continues to provide the Company with various services. The Advisor, Property Manager and Dealer Manager are under common control with AR Capital, LLC ("ARC"), the parent of the Company's sponsor, American Realty Capital III, LLC (the "Sponsor"), as a result of which they are related parties, and each of which has received or will receive compensation, fees and expense reimbursements for services related to the IPO and the investment and management of the Company's assets. The Advisor, New York City Special Limited Partner, LLC (the "Special Limited Partner"), Property Manager and Dealer Manager have also received or will also receive fees, distributions and other compensation during the offering, acquisition, operational and liquidation stages. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The accompanying consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the results for the entire year or any subsequent interim period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2014 , which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2015. There have been no significant changes to the Company's significant accounting policies during three or nine months ended September 30, 2015 other than the updates described below. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued revised guidance relating to revenue recognition. Under the revised guidance, an entity is required to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revised guidance allows entities to apply either a full retrospective or modified retrospective transition method upon adoption. In July 2015, the FASB deferred the effective date of the revised guidance by one year to annual reporting periods beginning after December 15, 2017, although entities will be allowed to early adopt the guidance as of the original effective date. The Company has not yet selected a transition method and is currently evaluating the impact of the new guidance. In January 2015, the FASB issued updated guidance that eliminates extraordinary item classification from GAAP, which was the concept of an event or transaction that is unusual in nature and occurs infrequently being treated as an extraordinary item. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Any amendments may be applied either prospectively or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company has opted to adopt this revised guidance early and has determined that there has been no impact to its financial position, results of operations and cash flows. In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are variable interest entities ("VIEs") or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership and affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships). The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not previously been issued. The Company currently has no VIEs and is evaluating the impact of the new guidance. In April 2015, the FASB amended the presentation of debt issuance costs on the balance sheet. The amendment requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. In August 2015, the FASB added that, for line of credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line, regardless of whether or not there are any outstanding borrowings. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not previously been issued. The revised guidance is not expected to have a significant impact on the Company's financial position, results of operations or cash flows. In September 2015, the FASB issued an update that eliminates the requirement to adjust provisional amounts from a business combination and the related impact on earnings by restating prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of measurement period adjustments on current and prior periods, including the prior period impact on depreciation, amortization and other income statement items and their related tax effects, shall be recognized in the period the adjustment amount is determined. The cumulative adjustment would be reflected within the respective financial statement line items affected. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company has elected to adopt the new guidance as of September 30, 2015. The adoption of this guidance had no impact on the Company's consolidated financial position, results of operations or cash flows. |
Real Estate Investments
Real Estate Investments | 9 Months Ended |
Sep. 30, 2015 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Investments | Real Estate Investments On March 27, 2015, the Company, through a wholly owned subsidiary of the OP, acquired for investment the fee simple interest in an institutional-quality office building located at 123 William Street in Downtown Manhattan ("123 William Street"). The seller of 123 William Street was EEGO 123 William Owner, LLC, which is a wholly owned subsidiary of EEGO-ARC 123 William JV, LLC, a joint venture in which New York REIT, Inc. ("NYRT") held a $35.1 million non-controlling preferred equity interest. The sponsor of NYRT is also the Sponsor of the Company. The purchase price of 123 William Street was $253.0 million , exclusive of closing costs and net of purchase price adjustments, and was funded with proceeds from the Company's IPO and a loan from Capital One, National Association (See Note 5 — Mortgage Note Payable). The Company accounted for the purchase of 123 William Street as a business combination and incurred acquisition related costs of $6.0 million , which are reflected in the acquisition and transaction related line item of the consolidated statements of operations and comprehensive loss. The following table presents the allocation of the assets acquired during the nine months ended September 30, 2015 and 2014 as well as the weighted-average remaining amortization period (in years) as of the acquisition date for intangible assets acquired and liabilities assumed. For the acquisition during the nine months ended September 30, 2015, land, building and improvements and intangibles have been provisionally assigned pending receipt and review of information being prepared by a third-party specialist. Nine Months Ended September 30, 2015 2014 Total Weighted Average Total (Dollar amounts in thousands) Assets Acquired Amortization Period Assets Acquired Real estate investments, at cost: Land $ 50,064 $ 29,163 Building and improvements 182,917 62,949 Total tangible assets 232,981 92,112 Acquired intangibles: In-place leases 33,380 8.3 5,263 Above-market lease assets 884 7.8 3,898 Other intangibles — — 3,126 Below-market lease liabilities (14,245 ) 10.3 (12,149 ) Total intangible assets, net 20,019 8.9 138 Total assets acquired, net 253,000 92,250 Mortgage notes payable used to acquire real estate investments (96,000 ) — Other assets and liabilities assumed, net 29 (153 ) Cash paid for acquired real estate investment $ 157,029 $ 92,097 Number of properties purchased 1 3 The following table presents unaudited pro forma information as if the acquisition during the nine months ended September 30, 2015 had been consummated on January 1, 2014. Additionally, the pro forma net loss was adjusted to reclassify acquisition and transaction related expense of $6.0 million from the nine months ended September 30, 2015 to the nine months ended September 30, 2014 . Nine Months Ended September 30, (In thousands, except per share data) 2015 2014 Pro forma revenues (1) $ 22,705 $ 15,259 Pro forma net loss attributable to stockholders (1) $ (7,139 ) $ (12,782 ) Basic and diluted pro forma net loss per share attributable to stockholders $ (0.27 ) $ (4.11 ) _____________________ (1) For the three and nine months ended September 30, 2015 , aggregate revenues derived from the Company's acquisition (for the Company's period of ownership) were $5.1 million and $10.1 million , respectively. For the three and nine months ended September 30, 2015 , net loss derived from the Company's acquisition was $1.6 million and $3.0 million , respectively, excluding acquisition fees. The following table presents future minimum base cash rental payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. (In thousands) Future Minimum Base Cash Rent Payments October 1, 2015 - December 31, 2015 $ 5,787 2016 26,038 2017 24,270 2018 23,476 2019 22,975 Thereafter 133,523 $ 236,069 The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of September 30, 2015 and 2014 . September 30, Property Tenant 2015 2014 123 William Street Planned Parenthood Federation of America, Inc. 11.2% * 400 E. 67th Street - Laurel Condominium Cornell University * 44.5% 400 E. 67th Street - Laurel Condominium TD Bank, N.A. * 18.6% 400 E. 67th Street - Laurel Condominium Quik Park East 67th Street LLC * 15.3% 421 W. 54th Street - Hit Factory Gibson Guitar Corporation * 10.9% 200 Riverside Boulevard - ICON Garage 200 Riverside Parking LLC * 10.7% ________________ * Tenant's annualized rental income on a straight-line basis was not greater than 10% of total annualized rental income on a straight-line basis for all portfolio properties for the period specified. The termination, delinquency or non-renewal of these leases by any of the above tenants may have a material adverse effect on the Company's revenues. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments Securities | Investment Securities As of September 30, 2015 and December 31, 2014 , the Company had an investment in an equity security with a fair value of $0.5 million . The equity security consists of a mutual fund managed by an affiliate of the Sponsor (see Note 9 — Related Party Transactions and Arrangements). This investment is considered to be an available-for-sale security and therefore increases or decreases in the fair value of this investment are recorded in accumulated other comprehensive loss as a component of equity on the consolidated balance sheets unless the security is considered to be other-than-temporarily impaired, at which time the losses would be reclassified to expense. The following table details the unrealized gains and losses on the investment security by security type as of September 30, 2015 and December 31, 2014 : (In thousands) Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2015 Equity security $ 529 $ — $ (73 ) $ 456 December 31, 2014 Equity security $ 514 $ — $ (24 ) $ 490 The Company's investment in this equity security has been in a continuous unrealized loss position for greater than twelve months. The Company believes that the decline in fair value is solely a factor of market conditions and, as such, considers the unrealized losses as of September 30, 2015 to be temporary and, therefore, no impairment was required to be recorded during the three and nine months ended September 30, 2015 . The Company did not record an impairment charge during the three and nine months ended September 30, 2014 . |
Mortgage Notes Payable
Mortgage Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable | Mortgage Note Payable The Company's mortgage note payable as of September 30, 2015 is as follows. The Company had no mortgage notes payable as of December 31, 2014 . Outstanding Loan Amount Portfolio Encumbered Properties September 30, Effective Interest Rate Interest Rate Maturity (In thousands) 123 William Street 1 $ 96,000 (1) 2.48 % (2) Variable Mar. 2017 (3) _____________________ (1) The Company may borrow up to $110.0 million subject to compliance with certain provisions as described in the terms of the mortgage agreement. (2) Interest rate is one month LIBOR, which was 0.197% at September 30, 2015 , plus a margin of 2.25% , based on a 360 day year. (3) The Company has a one-time option to extend the maturity date by one year . Real estate assets of $269.8 million , at cost, at September 30, 2015 have been pledged as collateral to the Company's mortgage note payable and are not available to satisfy the Company's other obligations unless first satisfying the mortgage note payable on the property. The Company makes payments of interest on its mortgage note payable on a monthly basis. The following table summarizes the scheduled aggregate principal payments subsequent to September 30, 2015 : (In thousands) Future Minimum Principal Payments October 1, 2015 - December 31, 2015 $ — 2016 — 2017 96,000 2018 — 2019 — Thereafter — Total $ 96,000 The Company's mortgage note payable requires compliance with certain property-level debt covenants. As of September 30, 2015 , the Company was in compliance with the debt covenants under its mortgage note agreement. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the instrument. This alternative approach also reflects the contractual terms of the instrument, as applicable, including the period to maturity, and may use observable market-based inputs, including interest rate curves and implied volatilities, and unobservable inputs, such as expected volatility. The guidance defines three levels of inputs that may be used to measure fair value. Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 — Unobservable inputs that reflect the entity's own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. The Company has an investment in a real estate income fund that is traded in active markets and therefore, due to the availability of quoted market prices in active markets, classified this investment as Level 1 in the fair value hierarchy. The following table presents information about the Company's asset measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 , aggregated by the level in the fair value hierarchy within which that instrument falls. Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) Level 1 Level 2 Level 3 Total September 30, 2015 Investment Securities $ 456 $ — $ — $ 456 December 31, 2014 Investment Securities $ 490 $ — $ — $ 490 There were no transfers between levels of the fair value hierarchy during the three and nine months ended September 30, 2015 . Financial instruments not carried at fair value The Company is required to disclose at least annually the fair value of financial instruments for which it is practicable to estimate the value. The fair value of short-term financial instruments such as cash and cash equivalents, receivables for sale of common stock, accounts payable and distributions payable approximates their carrying value on the consolidated balance sheet due to their short-term nature. As of September 30, 2015 and December 31, 2014 , the Company did not have any financial instruments not carried at fair value or an amount that approximates fair value. The fair value of the mortgage note payable is deemed to be equivalent to its carrying value because it bears interest at a variable rate that fluctuates with market and there has been no change in the credit risk or credit markets since origination. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Common Stock | Common Stock The Company had 30.2 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total proceeds of $750.5 million , inclusive of $19.2 million from the DRIP, as of September 30, 2015 . The Company had 20.6 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP, and had received total gross proceeds of $509.9 million , inclusive of $4.5 million from the DRIP, as of December 31, 2014 . On May 22, 2014, the Company's board of directors authorized, and the Company declared, a distribution payable to stockholders of record each day during the applicable period equal to $0.0041438356 per day, which is equivalent to $1.5125 per annum, per share of common stock. The distributions began to accrue on June 13, 2014, which date represents the closing of the Company’s initial property acquisition. The distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. The Company has a Share Repurchase Program ("SRP") that enables stockholders, subject to certain conditions and limitations, to sell their shares to the Company. Under the SRP, stockholders may request that the Company repurchase all or any portion of their shares of common stock, if such repurchase does not impair the Company's capital or operations. Repurchases of shares of the Company's common stock, when requested, are at the Company's sole discretion and generally will be made quarterly. The Company funds repurchases from proceeds from the sale of common stock pursuant to the DRIP. The following table reflects the cumulative number of shares repurchased as of and during the nine months ended September 30, 2015 . Number of Requests Number of Shares Repurchased Average Price per Share Cumulative repurchases as of December 31, 2014 — — $ — Three months ended March 31, 2015 4 4,100 25.00 Three months ended June 30, 2015 13 60,762 24.67 Three months ended September 30, 2015 (1) 21 47,871 22.97 Cumulative repurchases as of September 30, 2015 38 112,733 $ 23.96 ________________________ (1) Includes 21 unfulfilled repurchase requests consisting of 47,871 shares at an average repurchase price per share of $22.97 , which were processed in October 2015. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of September 30, 2015 , the Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. |
Related Party Transactions and
Related Party Transactions and Arrangements | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Related Party Transactions and Arrangements As of September 30, 2015 , an entity wholly owned by the Sponsor owned 8,888 shares of the Company’s outstanding common stock. As of September 30, 2015 and 2014 , the Company had $0.5 million invested in a mutual fund managed by an affiliate of the Sponsor (see Note 4 — Investment Securities). There is no obligation to purchase any additional shares and the shares can be sold at any time. The Company recognized income from investment securities of approximately $8,000 and $15,000 , respectively, during the three and nine months ended September 30, 2015 . No income related to the investment securities was recognized during the three and nine months ended September 30, 2014 . Fees Paid in Connection with the IPO The Dealer Manager was paid fees and compensation in connection with the sale of the Company's common stock in the IPO. The Dealer Manager was paid a selling commission of up to 7.0% of the per share purchase price of offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Dealer Manager was paid up to 3.0% of the gross proceeds from the sale of shares as a dealer manager fee. The Dealer Manager was able to reallow its dealer manager fee to participating broker-dealers. A participating broker-dealer had the option to elect to receive a fee equal to 7.5% of the gross proceeds from the sale of shares (not including selling commissions and dealer manager fees) by such participating broker-dealer, with 2.5% thereof paid at the time of such sale and 1.0% thereof paid on each anniversary of the closing of such sale up to and including the fifth anniversary of the closing of such sale. If this option was elected, the dealer manager fee would have been reduced to 2.5% of gross proceeds (not including selling commissions and dealer manager fees). The following table details total selling commissions and dealer manager fees incurred from and due to the Dealer Manager as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, Payable as of (In thousands) 2015 2014 2015 2014 September 30, 2015 December 31, 2014 Total commissions and fees incurred from the Dealer Manager $ 2,056 $ 26,017 $ 22,374 $ 30,980 $ — $ 197 The Advisor and its affiliates were paid compensation and reimbursement for services relating to the IPO, including transfer agent services and other professional services provided by an affiliate of the Dealer Manager. All offering costs incurred by the Company, the Advisor and affiliated entities of the Advisor on behalf of the Company were charged to additional paid-in capital on the accompanying consolidated balance sheets through the end of the IPO. Subsequent to the closing of the IPO, transfer agent and other professional fees are recognized as a component of general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. The following table details offering costs and reimbursements incurred from and due to the Advisor and affiliated parties of the Dealer Manager as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, Payable (Receivable) as of (In thousands) 2015 2014 2015 2014 September 30, 2015 December 31, 2014 Fees and expense reimbursements from the Advisor and affiliates of the Dealer Manager $ 240 $ 3,605 $ 5,277 $ 4,147 $ (569 ) $ 912 As of September 30, 2015 , cumulative offering costs, including selling commissions and dealer manager fees, were $84.1 million . The Company was responsible for paying offering and related costs from the IPO, excluding commissions and dealer manager fees, up to a maximum of 2.0% of gross proceeds received from the IPO, measured at the end of the IPO. Offering costs, excluding commissions and dealer manager fees, in excess of the 2.0% cap as of the end of the IPO are the Advisor’s responsibility. As of September 30, 2015 , the Company had a receivable from the Advisor totaling $0.7 million related to excess offering and related costs. Fees and Participations Paid in Connection With the Operations of the Company The Advisor is paid an acquisition fee of 1.5% of the contract purchase price of each acquired property and 1.5% of the amount advanced for a loan or other investment. The Advisor is also reimbursed for expenses actually incurred related to selecting, evaluating and acquiring assets on the Company's behalf, regardless of whether the Company actually acquires the related assets. Specifically, the Company pays the Advisor or its affiliates for any services provided for which they incur investment-related expenses, or insourced expenses. Such insourced expenses are fixed initially at and may not exceed 0.50% of the contract purchase price of each property and 0.50% of the amount advanced for each loan or other investment, which is paid at the closing of each such investment. The Advisor is also reimbursed for legal expenses incurred in the process of acquiring properties, in an amount not to exceed 0.10% of the contract purchase price. In addition, the Company also pays third parties, or reimburses the Advisor for any investment-related expenses due to third parties. In no event will the total of all acquisition fees, acquisition expenses and any financing coordination fees (as described below) payable with respect to the Company's portfolio of investments exceed 4.5% of the contract purchase price or 4.5% of the amount advanced for all loans or other investments. Once the proceeds from the primary offering have been fully invested, the aggregate amount of acquisition fees and any financing coordination fees may not exceed 4.5% of the contract purchase price and the amount advanced for a loan or other investment, as applicable, for all the assets acquired. If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company pays the Advisor a financing coordination fee equal to 0.75% of the amount made available or outstanding under such financing, subject to certain limitations. Until September 30, 2015, for its asset management services, the Company issued to the Advisor an asset management subordinated participation by causing the OP to issue (subject to periodic approval by the board of directors) to the Advisor performance-based, restricted, forfeitable partnership units in the OP designated as “Class B Units” on a quarterly basis in an amount equal to: (i) the product of (y) 0.1875% multiplied by (z) the cost of the Company's assets (until the NAV pricing date, then the lower of the cost of assets and the fair value of the Company's assets); divided by (ii) the value of one share of common stock as of the last day of such calendar quarter, which is equal initially to $22.50 (the primary offering price minus selling commissions and dealer manager fees) and, at such time as the Company calculates NAV, to per share NAV. The Class B Units are intended to be profits interests and will vest, and no longer be subject to forfeiture, at such time as: (a) the value of the OP's assets plus all distributions made by the Company to its stockholders equals or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pretax, non-compounded annual return thereon, or the "economic hurdle;" (b) any one of the following events occurs concurrently with or subsequently to the achievement of the economic hurdle described above: (i) a listing of the Company's common stock on a national securities exchange; (ii) a transaction to which the Company or the OP is a party, as a result of which OP units or the Company's common stock are or will be exchanged for or converted into the right, or the holders of such securities will otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause by an affirmative vote of a majority of the Company's independent directors after the economic hurdle has been met; and (c) the Advisor pursuant to the advisory agreement is providing services to the Company immediately prior to the occurrence of an event of the type described in clause (b) above, unless the failure to provide such services is attributable to the termination without cause of the advisory agreement by an affirmative vote of the majority of the Company's independent directors after the economic hurdle has been met (the "performance condition"). The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the performance condition to be probable. As of September 30, 2015 , the Company cannot determine the probability of achieving the performance condition. The Advisor receives distributions on its vested and unvested Class B Units at the same rate as distributions received on the Company's common stock. Such distributions on issued Class B Units are expensed in the consolidated statements of operations and comprehensive loss until the performance condition is considered probable to occur. As of September 30, 2015 , the Company's board of directors has approved the issuance of 115,798 Class B Units in connection with the arrangement. Beginning on October 1, 2015, the Company began paying asset management fees in cash, in shares, or a combination of both, the form of payment to be determined at the sole discretion of the Advisor. See Note 13 — Subsequent Events. Unless the Company contracts with a third party, the Company pays the Property Manager a property management fee equal to: (i) for non-hotel properties, 4.0% of gross revenues from the properties managed, plus market-based leasing commissions; and (ii) for hotel properties, a market-based fee based on a percentage of gross revenues. The Company also reimburses the Property Manager for property-level expenses. The Property Manager may subcontract the performance of its property management and leasing services duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services. The Company reimburses the Advisor’s costs of providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairments or other similar non-cash expenses and excluding any gain from the sale of assets for that period, unless the Company's independent directors determine that such excess was justified based on unusual and nonrecurring factors which they deem sufficient, in which case the excess amount may be reimbursed to the Advisor in subsequent periods. Additionally, the Company reimburses the Advisor for personnel costs in connection with other services; however, the Company may not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives acquisition fees or real estate commissions. No reimbursement was incurred from the Advisor for providing administrative services during the three and nine months ended September 30, 2015 and 2014 . The Dealer Manager and its affiliates also provide other general professional services. The Advisor pays general and administrative expenses on behalf of the Company, for which the Company subsequently reimburses the Advisor. These fees and reimbursements are included in general and administrative expenses in the accompanying consolidated statement of operations and comprehensive loss. The following table details amounts incurred, forgiven and payable in connection with the Company's operations-related services described above as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Payable as of (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven September 30, 2015 December 31, 2014 Acquisition fees and reimbursements: Acquisition fees and related cost reimbursements $ — $ — $ 1,736 $ — $ 5,060 $ — $ 1,845 $ — $ — $ — Financing coordination fees — — — — 825 — — — — — Ongoing fees: Property management and leasing fees 128 — — 19 128 204 — 20 128 — Professional fees and reimbursements 203 — — — 520 — — — 127 — Distributions on Class B Units 37 — — — 68 — — — — — Total related party operation fees and reimbursements $ 368 $ — $ 1,736 $ 19 $ 6,601 $ 204 $ 1,845 $ 20 $ 255 $ — Fees and Participations Paid in Connection with Liquidation or Listing The Company will pay to the Advisor an annual subordinated performance fee calculated on the basis of the Company’s return to stockholders, payable annually in arrears, such that for any year in which investors receive payment of 6.0% per annum, the Advisor will be entitled to 15.0% of the excess return, provided that the amount paid to the Advisor does not exceed 10.0% of the aggregate return for such year, and that the amount paid to the Advisor will not be paid unless investors receive a return of capital contributions. This fee will be paid only upon the sale of assets, distributions or other event which results in the return on stockholders’ capital exceeding 6.0% per annum. No subordinated performance fees were incurred during the three and nine months ended September 30, 2015 and 2014 . The Company will pay a brokerage commission to the Advisor or its affiliates on the sale of properties, not to exceed the lesser of 2.0% of the contract sale price of the property and 50.0% of the total brokerage commission paid if a third party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services in connection with the sale. No such fees were incurred during the three and nine months ended September 30, 2015 and 2014 . Upon a sale of all or substantially all assets, the Special Limited Partner will receive a subordinated distribution from the OP equal to 15.0% of remaining net sale proceeds after return of capital contributions to investors plus payment to investors of an annual 6.0% cumulative, pre-tax non-compounded return on the capital contributed by investors. The Special Limited Partner will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a return of their capital plus a 6.0% cumulative non-compounded annual return on their capital contributions. No such participation in net sales proceeds became due and payable during the three and nine months ended September 30, 2015 and 2014 . If the Company’s shares of common stock are listed on a national exchange, the Special Limited Partner will receive a subordinated incentive listing distribution from the OP equal to 15.0% of the amount by which the Company’s market value plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax non-compounded annual return to investors. The Special Limited Partner will not be entitled to the subordinated incentive listing distribution unless investors have received a 6.0% cumulative, pre-tax non-compounded annual return on their capital contributions. No such distributions were incurred during the three and nine months ended September 30, 2015 and 2014 . Neither the Special Limited Partner nor any of its affiliates can earn both the subordinated participation in net sales proceeds and the subordinated incentive listing distribution. Upon termination or non-renewal of the advisory agreement with or without cause, the Special Limited Partner will be entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to an annual 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs. |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2015 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company's common stock available for issue, transfer agency services, as well as other administrative responsibilities for the Company including accounting services, transaction management services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that the Advisor and its affiliates are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Restricted Share Plan The Company has an employee and director incentive restricted share plan (the “RSP”), which provides for the automatic grant of 1,333 restricted shares of common stock to each of the independent directors, without any further approval by the Company’s board of directors or the stockholders, after initial election to the board of directors and after each annual stockholder meeting, with such shares vesting annually beginning with the one year anniversary of initial election to the board of directors and the date of the next annual meeting, respectively. Restricted stock issued to independent directors will vest over a five-year period in increments of 20.0% per annum. The RSP provides the Company with the ability to grant awards of restricted shares to the Company's directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of common shares granted under the RSP shall not exceed 5.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 1.5 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events). Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time. For restricted share awards granted prior to July 1, 2015, such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient's employment or other relationship with the Company. For restricted share awards granted on or after July 1, 2015, such awards provide for accelerated vesting of the portion of the unvested shares scheduled to vest in the year of the recipient's voluntary termination or the failure to be re-elected to the board. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of common stock shall be subject to the same restrictions as the underlying restricted shares. The following table displays restricted share award activity during the nine months ended September 30, 2015 : Number of Weighted-Average Issue Price Unvested, December 31, 2014 3,999 $ 22.50 Granted 2,666 22.50 Vested (533 ) 22.50 Forfeited (1,333 ) 22.50 Unvested, September 30, 2015 4,799 $ 22.50 As of September 30, 2015 , the Company had $0.1 million of unrecognized compensation cost related to unvested restricted share awards granted under the Company's RSP. That cost is expected to be recognized over a weighted-average period of 4.4 years. Restricted share awards are expensed in accordance with the service period required. Compensation expense related to restricted stock was approximately $18,000 and $19,000 , respectively, for the three and nine months ended September 30, 2015 . Compensation expense related to restricted stock was approximately $4,000 and $8,000 , respectively, for the three and nine months ended September 30, 2014 . Compensation expense related to restricted stock is recorded as general and administrative expense in the accompanying consolidated statement of operations and comprehensive loss. Other Share-Based Compensation The Company may issue common stock in lieu of cash to pay fees earned by the Company's directors at the respective director's election. There are no restrictions on the shares issued. There were no shares of common stock issued in lieu of cash during the three and nine months ended September 30, 2015 or 2014 . |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net loss (in thousands) $ (2,305 ) $ (2,235 ) $ (11,726 ) $ (2,465 ) Basic and diluted weighted average shares outstanding 29,867,646 8,543,271 26,657,732 3,112,029 Basic and diluted net loss per share $ (0.08 ) $ (0.26 ) $ (0.44 ) $ (0.79 ) The Company had the following potentially dilutive securities as of September 30, 2015 and 2014 , which were excluded from the calculation of diluted net loss per share attributable to stockholders as the effect would have been antidilutive: Nine Months Ended September 30, 2015 2014 Unvested restricted stock 4,799 3,999 OP Units 90 — Class B units 115,798 — Total potentially dilutive securities 120,687 3,999 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements, except for the following: On October 1, 2015, the Company announced that it intends to enter into joint venture agreements with NYRT, which is intended to better align interests between the Company and NYRT and to facilitate the continued growth and diversification of both portfolios with reduced need to raise additional equity capital. Any joint venture agreement will require approval by the boards of the Company and NYRT. On November 5, 2015, the Company, the OP and the Advisor entered into an amendment to the advisory agreement, which, among other things, provides that the Company will cease causing the OP to issue Class B Units in the OP to the Advisor or its assignees related to any period ending after September 30, 2015. Effective October 1, 2015, the Company began paying an asset management fee to the Advisor or its assignees as compensation for services rendered in connection with the management of the Company’s assets. The asset management fee is payable on the first business day of each month in the amount of 0.0625% multiplied by the cost of assets for the preceding monthly period. The asset management fee is payable to the Advisor or its assignees in cash, in shares, or a combination of both, the form of payment to be determined in the sole discretion of the Advisor. See Note 9 — Related Party Transactions and Arrangements. Concurrent with amending the advisory agreement, the Company made conforming amendments to the limited partnership agreement of the OP. On November 9, 2015, ARC advised the Company that ARC and Apollo Global Management, LLC (NYSE: APO) (together with its consolidated subsidiaries, “Apollo”) have mutually agreed to terminate an agreement, dated as of August 6, 2015, pursuant to which Apollo would have purchased a controlling interest in a newly formed company that would have owned a majority of the ongoing asset management business of ARC, including the Advisor and the Property Manager. The termination has no effect on the Company’s current management team. On November 12, 2015, the Enforcement Section of the Massachusetts Securities Division filed an administrative complaint against the Dealer Manager. Neither the Company nor the Advisor is a named party in the administrative complaint. The Dealer Manager served as the dealer manager of the Company's IPO, which was completed in May 2015, and, together with its affiliates, has continued to provide certain services to the Company and the Advisor. The administrative complaint alleges fraudulent behavior in connection with proxy services provided by the Dealer Manager to another program sponsored by ARC. The Dealer Manager has previously solicited proxies on behalf of the Company, although the Advisor has determined at this time that the Dealer Manager will no longer provide such services to the Company. The administrative complaint alleges that employees of the Dealer Manager fabricated numerous shareholder proxy votes across multiple entities sponsored by ARC but does not specifically refer to any actions taken in connection with any of the Company's proxy solicitations. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued revised guidance relating to revenue recognition. Under the revised guidance, an entity is required to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revised guidance allows entities to apply either a full retrospective or modified retrospective transition method upon adoption. In July 2015, the FASB deferred the effective date of the revised guidance by one year to annual reporting periods beginning after December 15, 2017, although entities will be allowed to early adopt the guidance as of the original effective date. The Company has not yet selected a transition method and is currently evaluating the impact of the new guidance. In January 2015, the FASB issued updated guidance that eliminates extraordinary item classification from GAAP, which was the concept of an event or transaction that is unusual in nature and occurs infrequently being treated as an extraordinary item. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Any amendments may be applied either prospectively or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company has opted to adopt this revised guidance early and has determined that there has been no impact to its financial position, results of operations and cash flows. In February 2015, the FASB amended the accounting for consolidation of certain legal entities. The amendments modify the evaluation of whether certain legal entities are variable interest entities ("VIEs") or voting interest entities, eliminate the presumption that a general partner should consolidate a limited partnership and affect the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships). The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not previously been issued. The Company currently has no VIEs and is evaluating the impact of the new guidance. In April 2015, the FASB amended the presentation of debt issuance costs on the balance sheet. The amendment requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. In August 2015, the FASB added that, for line of credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line, regardless of whether or not there are any outstanding borrowings. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not previously been issued. The revised guidance is not expected to have a significant impact on the Company's financial position, results of operations or cash flows. In September 2015, the FASB issued an update that eliminates the requirement to adjust provisional amounts from a business combination and the related impact on earnings by restating prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of measurement period adjustments on current and prior periods, including the prior period impact on depreciation, amortization and other income statement items and their related tax effects, shall be recognized in the period the adjustment amount is determined. The cumulative adjustment would be reflected within the respective financial statement line items affected. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company has elected to adopt the new guidance as of September 30, 2015. The adoption of this guidance had no impact on the Company's consolidated financial position, results of operations or cash flows. |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table presents the allocation of the assets acquired during the nine months ended September 30, 2015 and 2014 as well as the weighted-average remaining amortization period (in years) as of the acquisition date for intangible assets acquired and liabilities assumed. For the acquisition during the nine months ended September 30, 2015, land, building and improvements and intangibles have been provisionally assigned pending receipt and review of information being prepared by a third-party specialist. Nine Months Ended September 30, 2015 2014 Total Weighted Average Total (Dollar amounts in thousands) Assets Acquired Amortization Period Assets Acquired Real estate investments, at cost: Land $ 50,064 $ 29,163 Building and improvements 182,917 62,949 Total tangible assets 232,981 92,112 Acquired intangibles: In-place leases 33,380 8.3 5,263 Above-market lease assets 884 7.8 3,898 Other intangibles — — 3,126 Below-market lease liabilities (14,245 ) 10.3 (12,149 ) Total intangible assets, net 20,019 8.9 138 Total assets acquired, net 253,000 92,250 Mortgage notes payable used to acquire real estate investments (96,000 ) — Other assets and liabilities assumed, net 29 (153 ) Cash paid for acquired real estate investment $ 157,029 $ 92,097 Number of properties purchased 1 3 |
Business Acquisition, Pro Forma Information | The following table presents unaudited pro forma information as if the acquisition during the nine months ended September 30, 2015 had been consummated on January 1, 2014. Additionally, the pro forma net loss was adjusted to reclassify acquisition and transaction related expense of $6.0 million from the nine months ended September 30, 2015 to the nine months ended September 30, 2014 . Nine Months Ended September 30, (In thousands, except per share data) 2015 2014 Pro forma revenues (1) $ 22,705 $ 15,259 Pro forma net loss attributable to stockholders (1) $ (7,139 ) $ (12,782 ) Basic and diluted pro forma net loss per share attributable to stockholders $ (0.27 ) $ (4.11 ) _____________________ (1) For the three and nine months ended September 30, 2015 , aggregate revenues derived from the Company's acquisition (for the Company's period of ownership) were $5.1 million and $10.1 million , respectively. For the three and nine months ended September 30, 2015 , net loss derived from the Company's acquisition was $1.6 million and $3.0 million , respectively, excluding acquisition fees. |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents future minimum base cash rental payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. (In thousands) Future Minimum Base Cash Rent Payments October 1, 2015 - December 31, 2015 $ 5,787 2016 26,038 2017 24,270 2018 23,476 2019 22,975 Thereafter 133,523 $ 236,069 |
Schedule of Annualized Rental Income by Major Tenants | The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis as of September 30, 2015 and 2014 . September 30, Property Tenant 2015 2014 123 William Street Planned Parenthood Federation of America, Inc. 11.2% * 400 E. 67th Street - Laurel Condominium Cornell University * 44.5% 400 E. 67th Street - Laurel Condominium TD Bank, N.A. * 18.6% 400 E. 67th Street - Laurel Condominium Quik Park East 67th Street LLC * 15.3% 421 W. 54th Street - Hit Factory Gibson Guitar Corporation * 10.9% 200 Riverside Boulevard - ICON Garage 200 Riverside Parking LLC * 10.7% ________________ * Tenant's annualized rental income on a straight-line basis was not greater than 10% of total annualized rental income on a straight-line basis for all portfolio properties for the period specified. |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Unrealized Gain (Loss) on Investments | The following table details the unrealized gains and losses on the investment security by security type as of September 30, 2015 and December 31, 2014 : (In thousands) Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value September 30, 2015 Equity security $ 529 $ — $ (73 ) $ 456 December 31, 2014 Equity security $ 514 $ — $ (24 ) $ 490 |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company's mortgage note payable as of September 30, 2015 is as follows. The Company had no mortgage notes payable as of December 31, 2014 . Outstanding Loan Amount Portfolio Encumbered Properties September 30, Effective Interest Rate Interest Rate Maturity (In thousands) 123 William Street 1 $ 96,000 (1) 2.48 % (2) Variable Mar. 2017 (3) _____________________ (1) The Company may borrow up to $110.0 million subject to compliance with certain provisions as described in the terms of the mortgage agreement. (2) Interest rate is one month LIBOR, which was 0.197% at September 30, 2015 , plus a margin of 2.25% , based on a 360 day year. (3) The Company has a one-time option to extend the maturity date by one year . |
Schedule of Maturities of Long-term Debt | The following table summarizes the scheduled aggregate principal payments subsequent to September 30, 2015 : (In thousands) Future Minimum Principal Payments October 1, 2015 - December 31, 2015 $ — 2016 — 2017 96,000 2018 — 2019 — Thereafter — Total $ 96,000 |
Fair Value of Financial Instr24
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table presents information about the Company's asset measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 , aggregated by the level in the fair value hierarchy within which that instrument falls. Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (In thousands) Level 1 Level 2 Level 3 Total September 30, 2015 Investment Securities $ 456 $ — $ — $ 456 December 31, 2014 Investment Securities $ 490 $ — $ — $ 490 |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Class of Treasury Stock | The following table reflects the cumulative number of shares repurchased as of and during the nine months ended September 30, 2015 . Number of Requests Number of Shares Repurchased Average Price per Share Cumulative repurchases as of December 31, 2014 — — $ — Three months ended March 31, 2015 4 4,100 25.00 Three months ended June 30, 2015 13 60,762 24.67 Three months ended September 30, 2015 (1) 21 47,871 22.97 Cumulative repurchases as of September 30, 2015 38 112,733 $ 23.96 ________________________ (1) Includes 21 unfulfilled repurchase requests consisting of 47,871 shares at an average repurchase price per share of $22.97 , which were processed in October 2015. |
Related Party Transactions an26
Related Party Transactions and Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Selling Commissions and Dealer Manager Fees Payable to Affiliate | The following table details total selling commissions and dealer manager fees incurred from and due to the Dealer Manager as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, Payable as of (In thousands) 2015 2014 2015 2014 September 30, 2015 December 31, 2014 Total commissions and fees incurred from the Dealer Manager $ 2,056 $ 26,017 $ 22,374 $ 30,980 $ — $ 197 |
Schedule Of Offering Costs Reimbursements to Related Party | The following table details offering costs and reimbursements incurred from and due to the Advisor and affiliated parties of the Dealer Manager as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, Payable (Receivable) as of (In thousands) 2015 2014 2015 2014 September 30, 2015 December 31, 2014 Fees and expense reimbursements from the Advisor and affiliates of the Dealer Manager $ 240 $ 3,605 $ 5,277 $ 4,147 $ (569 ) $ 912 |
Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services | The following table details amounts incurred, forgiven and payable in connection with the Company's operations-related services described above as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Payable as of (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven September 30, 2015 December 31, 2014 Acquisition fees and reimbursements: Acquisition fees and related cost reimbursements $ — $ — $ 1,736 $ — $ 5,060 $ — $ 1,845 $ — $ — $ — Financing coordination fees — — — — 825 — — — — — Ongoing fees: Property management and leasing fees 128 — — 19 128 204 — 20 128 — Professional fees and reimbursements 203 — — — 520 — — — 127 — Distributions on Class B Units 37 — — — 68 — — — — — Total related party operation fees and reimbursements $ 368 $ — $ 1,736 $ 19 $ 6,601 $ 204 $ 1,845 $ 20 $ 255 $ — |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table displays restricted share award activity during the nine months ended September 30, 2015 : Number of Weighted-Average Issue Price Unvested, December 31, 2014 3,999 $ 22.50 Granted 2,666 22.50 Vested (533 ) 22.50 Forfeited (1,333 ) 22.50 Unvested, September 30, 2015 4,799 $ 22.50 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net loss (in thousands) $ (2,305 ) $ (2,235 ) $ (11,726 ) $ (2,465 ) Basic and diluted weighted average shares outstanding 29,867,646 8,543,271 26,657,732 3,112,029 Basic and diluted net loss per share $ (0.08 ) $ (0.26 ) $ (0.44 ) $ (0.79 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company had the following potentially dilutive securities as of September 30, 2015 and 2014 , which were excluded from the calculation of diluted net loss per share attributable to stockholders as the effect would have been antidilutive: Nine Months Ended September 30, 2015 2014 Unvested restricted stock 4,799 3,999 OP Units 90 — Class B units 115,798 — Total potentially dilutive securities 120,687 3,999 |
Organization (Details)
Organization (Details) | May. 29, 2014USD ($) | Apr. 24, 2014USD ($)$ / sharesshares | Feb. 28, 2015shares | Sep. 30, 2015USD ($)ft²property$ / sharesshares | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($)$ / sharesshares | Sep. 30, 2015USD ($)ft²property$ / sharesshares | May. 22, 2015shares |
Operations [Line Items] | ||||||||
Stock available for issuance in IPO (in shares) | 30,000,000 | 300,000,000 | 300,000,000 | 300,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Maximum offering amount | $ | $ 750,000,000 | |||||||
Proceeds from issuance of common stock | $ | $ 230,600,000 | $ 337,426,000 | $ 509,900,000 | $ 750,500,000 | ||||
Shares required to break escrow | $ | $ 2,000,000 | |||||||
Common stock, shares outstanding (in shares) | 30,240,174 | 20,569,012 | 30,240,174 | |||||
Proceeds from issuance of common stock, DRIP | $ | $ 4,500,000 | $ 19,200,000 | ||||||
Number of real estate properties | property | 5 | 5 | ||||||
Net rentable area | ft² | 841,868 | 841,868 | ||||||
Limited partner units (in shares) | 90 | 90 | ||||||
Special Limited Partner | ||||||||
Operations [Line Items] | ||||||||
Common stock, shares outstanding (in shares) | 8,888 | 8,888 | ||||||
Special Limited Partner | American Realty Capital III Special Limited Partnership, LLC | ||||||||
Operations [Line Items] | ||||||||
Contributed capital | $ | $ 2,020 | $ 2,020 | ||||||
Common Stock | ||||||||
Operations [Line Items] | ||||||||
Share Price (in dollars per share) | $ / shares | $ 25 | |||||||
Shares available for issuance under a distribution reinvestment plan (in shares) | 10,500,000 | 25,000,000 | ||||||
Shares reallocated from DRIP (in shares) | 10,000,000 | |||||||
Minimum | Common Stock | ||||||||
Operations [Line Items] | ||||||||
DRIP share price (in dollars per share) | $ / shares | $ 23.75 | |||||||
DRIP Share Price as a percentage of estimated value of common stock | 95.00% |
Real Estate Investments (Narrat
Real Estate Investments (Narrative) (Details) - USD ($) $ in Thousands | Mar. 27, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Business Acquisition [Line Items] | |||||
Acquisition and transaction related | $ 0 | $ 2,047 | $ 6,012 | $ 2,189 | |
Scenario, Adjustment | |||||
Business Acquisition [Line Items] | |||||
Acquisition and transaction related | $ 6,000 | ||||
123 William Street Downtown Manhattan | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 253,000 | ||||
Acquisition and transaction related | 6,000 | ||||
NYRT | 123 William Street Downtown Manhattan | |||||
Business Acquisition [Line Items] | |||||
Preferred equity interest | $ 35,100 |
Real Estate Investments (Alloca
Real Estate Investments (Allocation of Assets) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($)property | Sep. 30, 2014USD ($)property | |
Real estate investments, at cost: | ||
Land | $ 50,064 | $ 29,163 |
Building and improvements | 182,917 | 62,949 |
Total tangible assets | 232,981 | 92,112 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||
Below-market lease liabilities | (14,245) | (12,149) |
Total intangible assets | 20,019 | 138 |
Total assets acquired, net | 253,000 | 92,250 |
Mortgage notes payable used to acquire real estate investments | (96,000) | 0 |
Other assets and liabilities assumed, net | 29 | (153) |
Cash paid for acquired real estate investment | $ 157,029 | $ 92,097 |
Number of properties purchased | property | 1 | 3 |
Weighted Average Amortization Period | 8 years 10 months 24 days | |
In-place leases | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||
Acquired intangibles: | $ 33,380 | $ 5,263 |
Weighted Average Amortization Period | 8 years 3 months 25 days | |
Above-market lease assets | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||
Acquired intangibles: | $ 884 | 3,898 |
Weighted Average Amortization Period | 7 years 9 months 25 days | |
Other intangibles | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||
Acquired intangibles: | $ 0 | $ 3,126 |
Below-market lease liabilities | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill [Abstract] | ||
Weighted Average Amortization Period | 10 years 3 months 22 days |
Real Estate Investments (Profor
Real Estate Investments (Proforma) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||
Pro forma revenues | [1] | $ 22,705 | $ 15,259 | ||
Pro forma net income | [1] | $ (7,139) | $ (12,782) | ||
Basic and diluted pro forma net loss per share (in dollars per share) | $ (0.27) | $ (4,110) | |||
Revenues | $ 7,879 | $ 540 | $ 18,136 | $ 583 | |
Net loss | (2,305) | $ (2,235) | (11,726) | $ (2,465) | |
2015 Acquisitions [Member] | |||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||
Revenues | 5,100 | 10,100 | |||
Net loss | $ (1,600) | $ (3,000) | |||
[1] | For the three and nine months ended September 30, 2015, aggregate revenues derived from the Company's acquisition (for the Company's period of ownership) were $5.1 million and $10.1 million, respectively. For the three and nine months ended September 30, 2015, net loss derived from the Company's acquisition was $1.6 million and $3.0 million, respectively, excluding acquisition fees. |
Real Estate Investments (Minimu
Real Estate Investments (Minimum Rental Payments) (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Real Estate Investments, Net [Abstract] | |
October 1, 2015 - December 31, 2015 | $ 5,787 |
2,016 | 26,038 |
2,017 | 24,270 |
2,018 | 23,476 |
2,019 | 22,975 |
Thereafter | 133,523 |
Total | $ 236,069 |
Real Estate Investments (Concen
Real Estate Investments (Concentration) (Details) - Customer Concentration Risk - Sales Revenue, Net | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Planned Parenthood Federation of America, Inc | ||
Real estate investments | ||
Concentration risk | 11.20% | |
Cornell University | ||
Real estate investments | ||
Concentration risk | 44.50% | |
TD Bank | ||
Real estate investments | ||
Concentration risk | 18.60% | |
Quik Park East Sixty-Seventh East Street LLC | ||
Real estate investments | ||
Concentration risk | 15.30% | |
Gibson Guitar Corp. | ||
Real estate investments | ||
Concentration risk | 10.90% | |
200 Riverside Boulevard | ||
Real estate investments | ||
Concentration risk | 10.70% |
Investment Securities (Details)
Investment Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Investments, Debt and Equity Securities [Abstract] | ||
Cost | $ 529 | $ 514 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (73) | (24) |
Fair Value | $ 456 | $ 490 |
Mortgage Notes Payable (Mortgag
Mortgage Notes Payable (Mortgage Notes) (Details) | 9 Months Ended | ||
Sep. 30, 2015USD ($)property | Dec. 31, 2014USD ($) | ||
Debt Instrument [Line Items] | |||
Mortgage note payable | $ 96,000,000 | $ 0 | |
Real estate investments relating to notes payable | $ 269,800,000 | ||
123 William Street | Mortgages | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Mortgage note payable | [1] | $ 96,000,000 | |
Effective Interest Rate | [2] | 2.48% | |
Maximum borrowing capacity | $ 110,000,000 | ||
Extended maturity term | 1 year | ||
123 William Street | Mortgages | LIBOR | |||
Debt Instrument [Line Items] | |||
Interest rate at end of period | 0.197% | ||
Interest rate | 2.25% | ||
[1] | The Company may borrow up to $110.0 million subject to compliance with certain provisions as described in the terms of the mortgage agreement. | ||
[2] | Interest rate is one month LIBOR, which was 0.197% at September 30, 2015, plus a margin of 2.25%, based on a 360 day year. |
Mortgage Notes Payable (Mortg37
Mortgage Notes Payable (Mortgage Principal Payments) (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
October 1, 2015 - December 31, 2015 | $ 0 | |
2,016 | 0 | |
2,017 | 96,000 | |
2,018 | 0 | |
2,019 | 0 | |
Thereafter | 0 | |
Total | $ 96,000 | $ 0 |
Fair Value of Financial Instr38
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 456 | $ 490 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 456 | 490 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 456 | 490 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 0 | $ 0 |
Common Stock (Details)
Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | May. 22, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Sep. 30, 2015 |
Equity [Abstract] | |||||||
Common stock, shares outstanding (in shares) | 30,240,174 | 30,240,174 | 20,569,012 | 30,240,174 | |||
Proceeds from issuance of common stock | $ 230,600 | $ 337,426 | $ 509,900 | $ 750,500 | |||
Proceeds from issuance of common stock, DRIP | $ 4,500 | $ 19,200 | |||||
Dividends declared per day (in dollars per share) | $ 0.0041438356 | ||||||
Dividends declared per share (in dollars per share) | $ 1.5125000013 | $ 0.38 | $ 0.38 | $ 1.13 | $ 0.46 |
Common Stock (Antidilutive Secu
Common Stock (Antidilutive Securities) (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 21 Months Ended | |||
Oct. 31, 2015request$ / sharesshares | Sep. 30, 2015request$ / sharesshares | [1] | Jun. 30, 2015request$ / sharesshares | Mar. 31, 2015request$ / sharesshares | Dec. 31, 2014request$ / sharesshares | Sep. 30, 2015request$ / sharesshares | |
Equity, Class of Treasury Stock [Line Items] | |||||||
Number of Requests | request | 21 | 13 | 4 | 0 | 38 | ||
Number of Shares Repurchased (in shares) | 47,871 | 60,762.02 | 4,099.98 | 0 | 112,733 | ||
Average Price per Share (in dollars per share) | $ / shares | $ 22.97 | $ 24.67 | $ 25 | $ 0 | $ 23.96 | ||
Subsequent Event | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Number of Requests | request | 21 | ||||||
Number of Shares Repurchased (in shares) | 47,871 | ||||||
Average Price per Share (in dollars per share) | $ / shares | $ 22.97 | ||||||
[1] | Includes 21 unfulfilled repurchase requests consisting of 47,871 shares at an average repurchase price per share of $22.97, which were processed in October 2015. |
Related Party Transactions an41
Related Party Transactions and Arrangements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||||
Common stock, shares outstanding (in shares) | 30,240,174 | 30,240,174 | 20,569,012 | ||
Investment securities, at fair value | $ 456,000 | $ 456,000 | $ 490,000 | ||
Special Limited Partner | |||||
Related Party Transaction [Line Items] | |||||
Common stock, shares outstanding (in shares) | 8,888 | 8,888 | |||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Investment income | $ 8,000 | $ 0 | $ 15,000 | $ 0 |
Related Party Transactions an42
Related Party Transactions and Arrangements (Fees Paid in Connection with the Offering) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Related Party Transaction [Line Items] | |
Cumulative offering costs | $ (84.1) |
Maximum | |
Related Party Transaction [Line Items] | |
Liability for offering and related costs from IPO | 2.00% |
Option One | Gross Proceeds, Common Stock | Maximum | Participating Broker-Dealer | |
Related Party Transaction [Line Items] | |
Brokerage fee as a percentage of benchmark | 7.50% |
Brokerage fees as a percentage of benchmark, initial grant | 2.50% |
Brokerage fees as a percentage of benchmark, periodic payment | 1.00% |
Excess Offering and Related Costs | Advisor | |
Related Party Transaction [Line Items] | |
Receivable | $ 0.7 |
Realty Capital Securities, LLC | Gross Proceeds, Common Stock | Maximum | Dealer Manager | |
Related Party Transaction [Line Items] | |
Sales commissions as a percentage of benchmark | 7.00% |
Realty Capital Securities, LLC | Option One | Gross Proceeds, Common Stock | Maximum | Dealer Manager | |
Related Party Transaction [Line Items] | |
Gross proceeds from the sale of common stock, before allowances, percentage of benchmark | 3.00% |
Realty Capital Securities, LLC | Option Two | Gross Proceeds, Common Stock | Dealer Manager | |
Related Party Transaction [Line Items] | |
Sales commissions as a percentage of benchmark | 2.50% |
Related Party Transactions an43
Related Party Transactions and Arrangements (Fees Paid in Connection with the IPO - Selling Commissions and Dealer Fees) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||||
Due to affiliates | $ 255 | $ 255 | $ 0 | ||
Realty Capital Securities, LLC | Sales Commissions and Dealer Manager Fees | Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 2,056 | $ 26,017 | 22,374 | $ 30,980 | |
Due to affiliates | $ 0 | $ 0 | $ 197 |
Related Party Transactions an44
Related Party Transactions and Arrangements (Fees Paid in Connection with the IPO, Offering Costs and Reimbursements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||||
Due to affiliates | $ 255 | $ 255 | $ 0 | ||
Realty Capital Securities, LLC | Fees and Expense Reimbursement, Stock Offering | Advisor and Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 240 | $ 3,605 | 5,277 | $ 4,147 | |
Due to affiliates | $ (569) | $ (569) | $ 912 |
Related Party Transactions an45
Related Party Transactions and Arrangements (Fees and Participations Paid in Connection With the Operations of the Company) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Sales Commissions and Dealer Manager Fees | ||||
Related Party Transaction [Line Items] | ||||
Share Price (in dollars per share) | $ 22.50 | $ 22.50 | ||
Advisor | New York City Reit Advisors, LLC | Contract Purchase Price | ||||
Related Party Transaction [Line Items] | ||||
Acquisition fees as a percentage of benchmark | 1.50% | 1.50% | ||
Expected acquisition fees | 0.50% | 0.50% | ||
Financing advance fees as a percentage of benchmark, expected third party costs | 0.10% | 0.10% | ||
Quarterly asset management fee earned by related party | 0.1875% | 0.1875% | ||
Unearned class B units (in shares) | 115,798 | |||
Advisor | New York City Reit Advisors, LLC | Contract Purchase Price | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Acquisition fees as a percentage of benchmark | 4.50% | 4.50% | ||
Advisor | New York City Reit Advisors, LLC | Advance on Loan or Other Investment | ||||
Related Party Transaction [Line Items] | ||||
Financing advance fees as a percentage of benchmark | 1.50% | 1.50% | ||
Advisor | New York City Reit Advisors, LLC | Advance on Loan or Other Investment | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Financing advance fees as a percentage of benchmark | 4.50% | 4.50% | ||
Advisor | New York City Reit Advisors, LLC | Amount Available or Outstanding Under Financing Arrangement | ||||
Related Party Transaction [Line Items] | ||||
Financing coordination fees earned by related party | 0.75% | 0.75% | ||
Advisor | New York City Reit Advisors, LLC | Pre-tax Non-compounded Return on Capital Contribution | ||||
Related Party Transaction [Line Items] | ||||
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% | 6.00% | ||
Advisor | New York City Reit Advisors, LLC | Pre-tax Non-compounded Return on Capital Contribution | Annual Targeted Investor Return | ||||
Related Party Transaction [Line Items] | ||||
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% | 6.00% | ||
Advisor | New York City Reit Advisors, LLC | Gross Revenue, Stand-alone Single-tenant Net Leased Properties | ||||
Related Party Transaction [Line Items] | ||||
Property management fees earned by related party | 4.00% | 4.00% | ||
Advisor | New York City Reit Advisors, LLC | Average Invested Assets | Maximum | Greater Of | ||||
Related Party Transaction [Line Items] | ||||
Operating expenses as a percentage of benchmark | 2.00% | 2.00% | ||
Advisor | New York City Reit Advisors, LLC | Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets | Maximum | Greater Of | ||||
Related Party Transaction [Line Items] | ||||
Operating expenses as a percentage of benchmark | 25.00% | 25.00% | ||
Incurred | ||||
Related Party Transaction [Line Items] | ||||
Total commissions and fees incurred from the Dealer Manager | $ 368 | $ 1,736 | $ 6,601 | $ 1,845 |
Ongoing fees: | Incurred | Property management and leasing fees | ||||
Related Party Transaction [Line Items] | ||||
Total commissions and fees incurred from the Dealer Manager | $ 128 | $ 0 | $ 128 | $ 0 |
Related Party Transactions an46
Related Party Transactions and Arrangements (Fees and Participations Paid in Connection With the Operations of the Company, Incurred Forgiven, and Payable) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||||
Due to affiliates | $ 255 | $ 255 | $ 0 | ||
Incurred | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 368 | $ 1,736 | 6,601 | $ 1,845 | |
Forgiven | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 0 | 19 | 204 | 20 | |
Acquisition fees and reimbursements: | Acquisition fees and related cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | 0 | 0 | 0 | ||
Acquisition fees and reimbursements: | Financing coordination fees | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | 0 | 0 | 0 | ||
Acquisition fees and reimbursements: | Incurred | Acquisition fees and related cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 0 | 1,736 | 5,060 | 1,845 | |
Acquisition fees and reimbursements: | Incurred | Financing coordination fees | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 0 | 0 | 825 | 0 | |
Acquisition fees and reimbursements: | Forgiven | Acquisition fees and related cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 0 | 0 | 0 | 0 | |
Acquisition fees and reimbursements: | Forgiven | Financing coordination fees | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 0 | 0 | 0 | 0 | |
Ongoing fees: | Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | 128 | 128 | 0 | ||
Ongoing fees: | Professional fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | 127 | 127 | 0 | ||
Ongoing fees: | Distributions on Class B Units | |||||
Related Party Transaction [Line Items] | |||||
Due to affiliates | 0 | 0 | $ 0 | ||
Ongoing fees: | Incurred | Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 128 | 0 | 128 | 0 | |
Ongoing fees: | Incurred | Professional fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 203 | 0 | 520 | 0 | |
Ongoing fees: | Incurred | Distributions on Class B Units | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 37 | 0 | 68 | 0 | |
Ongoing fees: | Forgiven | Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 0 | 19 | 204 | 20 | |
Ongoing fees: | Forgiven | Professional fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | 0 | 0 | 0 | 0 | |
Ongoing fees: | Forgiven | Distributions on Class B Units | |||||
Related Party Transaction [Line Items] | |||||
Total commissions and fees incurred from the Dealer Manager | $ 0 | $ 0 | $ 0 | $ 0 |
Related Party Transactions an47
Related Party Transactions and Arrangements (Fees and Participations Paid in Connection with the Liquidation or Listing) (Details) - Advisor - New York City Reit Advisors, LLC | Sep. 30, 2015 |
Pre-tax Non-compounded Return on Capital Contribution | |
Related Party Transaction [Line Items] | |
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% |
Subordinated performance fee as a percentage of benchmark | 15.00% |
Pre-tax Non-compounded Return on Capital Contribution | Annual Targeted Investor Return | |
Related Party Transaction [Line Items] | |
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% |
Pre-tax Non-compounded Return on Capital Contribution | Maximum | |
Related Party Transaction [Line Items] | |
Subordinated performance fee as a percentage of benchmark | 10.00% |
Excess of Adjusted Market Value of Real Estate Assets Plus Distributions Over Aggregate Contributed Investor Capital | |
Related Party Transaction [Line Items] | |
Subordinated participation fees as a percentage of benchmark | 15.00% |
Distribution upon nonrenewal of advisory agreement, percentage of benchmark | 15.00% |
Contract Sales Price | Brokerage Commission Fees | |
Related Party Transaction [Line Items] | |
Real estate commissions as a percentage of benchmark | 2.00% |
Contract Sales Price | Maximum | Brokerage Commission Fees | |
Related Party Transaction [Line Items] | |
Real estate commissions as a percentage of benchmark | 50.00% |
Contract Sales Price | Maximum | Real Estate Commissions | |
Related Party Transaction [Line Items] | |
Real estate commissions as a percentage of benchmark | 6.00% |
Net Sale Proceeds, after Return of Capital Contributions and Annual Targeted Investor Return | |
Related Party Transaction [Line Items] | |
Subordinated performance fee as a percentage of benchmark | 15.00% |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 19 | $ 8 | ||
Restricted Share Plan | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares granted automatically upon election to board of directors (in shares) | 1,333 | 1,333 | ||
Periodic vesting percentage | 20.00% | |||
Maximum authorized amount as a percentage of shares authorized | 5.00% | |||
Number of shares authorized (in shares) | 1,500,000 | 1,500,000 | ||
Nonvested awards, compensation cost not yet recognized | $ 100 | $ 100 | ||
Nonvested awards, compensation cost not yet recognized, period for recognition | 4 years 4 months 10 days | |||
Share-based compensation | $ 18 | $ 4 | $ 19 | $ 8 |
Share-Based Compensation (Activ
Share-Based Compensation (Activity) (Details) - Restricted Share Plan - Restricted Stock | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning Balance, Unvested (in shares) | 3,999 |
Granted (in shares) | 2,666 |
Vested (in shares) | (533) |
Forfeitures (in shares) | (1,333) |
Ending Balance, Unvested (in shares) | 4,799 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning Balance, Unvested, Weighted-Average Issue Price (in dollars per share) | $ / shares | $ 22.50 |
Granted, Weighted-Average Issue Price (in dollars per share) | $ / shares | 22.50 |
Vested, Weighted-Average Issue Price (in dollars per share) | $ / shares | 22.50 |
Forfeitures, Weighted-Average Issued (in dollars per share) | $ / shares | 22.50 |
Ending Balance, Unvested, Weighted-Average Issue Price (in dollars per share) | $ / shares | $ 22.50 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Equity [Abstract] | ||||
Net loss | $ (2,305) | $ (2,235) | $ (11,726) | $ (2,465) |
Basic and diluted weighted average shares outstanding (in shares) | 29,867,646 | 8,543,271 | 26,657,732 | 3,112,029 |
Basic and diluted net loss per share (in dollars per share) | $ (0.08) | $ (0.26) | $ (0.44) | $ (0.79) |
Net Loss Per Share (Shares Excl
Net Loss Per Share (Shares Excluded From Calculation) (Details) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 120,687 | 3,999 |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 4,799 | 3,999 |
OP Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 90 | 0 |
Class B Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 115,798 | 0 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - New York City Reit Advisors, LLC - Advisor - Contract Purchase Price | Nov. 05, 2015 | Sep. 30, 2015 |
Subsequent Event [Line Items] | ||
Quarterly asset management fee earned by related party | 0.1875% | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Quarterly asset management fee earned by related party | 0.0625% |