Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 09, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41686 | |
Entity Registrant Name | Peakstone Realty Trust | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-4654479 | |
Entity Address, Address Line One | 1520 E. Grand Ave | |
Entity Address, City or Town | El Segundo | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90245 | |
City Area Code | 310 | |
Local Phone Number | 606-3200 | |
Title of 12(b) Security | Common shares, $0.001 par value per share | |
Trading Symbol | PKST | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 36,013,175 | |
Entity Central Index Key | 0001600626 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 364,446 | $ 233,180 |
Restricted cash | 5,651 | 4,764 |
Real estate: | ||
Land | 244,369 | 327,408 |
Building and improvements | 2,042,347 | 2,631,965 |
Tenant origination and absorption cost | 418,896 | 535,889 |
Construction in progress | 2,197 | 1,994 |
Total real estate | 2,707,809 | 3,497,256 |
Less: accumulated depreciation and amortization | (546,732) | (644,639) |
Total real estate, net | 2,161,077 | 2,852,617 |
Investments in unconsolidated entity | 0 | 178,647 |
Intangible assets, net | 30,572 | 33,861 |
Deferred rent receivable | 63,874 | 79,572 |
Deferred leasing costs, net | 17,087 | 26,507 |
Goodwill | 94,678 | 94,678 |
Right of use assets | 34,175 | 35,453 |
Interest rate swap asset | 39,687 | 41,404 |
Other assets | 28,962 | 31,877 |
Real estate assets and other assets held for sale, net | 0 | 20,816 |
Total assets | 2,840,209 | 3,633,376 |
LIABILITIES AND EQUITY | ||
Debt, net | 1,442,003 | 1,485,402 |
Distributions payable | 8,296 | 12,402 |
Due to related parties | 706 | 1,458 |
Intangible liabilities, net | 17,104 | 20,658 |
Lease liability | 46,368 | 46,519 |
Accrued expenses and other liabilities | 80,452 | 80,802 |
Total liabilities | 1,594,929 | 1,647,241 |
Commitments and contingencies (Note 13) | ||
Perpetual convertible preferred shares | 0 | 125,000 |
Noncontrolling interests subject to redemption; zero and 61,788 units as of September 30, 2023 and December 31, 2022, respectively | 0 | 3,812 |
Shareholders’ equity: | ||
Common shares, $0.001 par value; shares authorized, 800,000,000; shares outstanding in the aggregate, 35,997,549 and 35,999,898 as of September 30, 2023 and December 31, 2022, respectively | 36 | 36 |
Additional paid-in capital | 2,967,635 | 2,948,600 |
Cumulative distributions | (1,067,807) | (1,036,678) |
Accumulated deficit | (807,965) | (269,926) |
Accumulated other comprehensive income | 37,434 | 40,636 |
Total shareholders’ equity | 1,129,333 | 1,682,668 |
Noncontrolling interests | 115,947 | 174,655 |
Total equity | 1,245,280 | 1,857,323 |
Total liabilities and equity | $ 2,840,209 | $ 3,633,376 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Units eligible towards redemption (in shares) | 0 | 61,788 |
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares outstanding (in shares) | 35,997,549 | 35,999,898 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Rental income | $ 61,713 | $ 101,330 | $ 191,226 | $ 340,592 |
Expenses: | ||||
Property operating expense | 7,829 | 13,716 | 21,858 | 43,094 |
Property tax expense | 5,077 | 9,737 | 16,444 | 31,252 |
Property management fees | 440 | 823 | 1,392 | 2,907 |
General and administrative expenses | 9,653 | 9,521 | 31,411 | 27,463 |
Corporate operating expenses to related parties | 257 | 140 | 975 | 1,065 |
Depreciation and amortization | 25,003 | 42,628 | 86,830 | 155,470 |
Real estate impairment provision | 0 | 10,697 | 397,373 | 86,254 |
Total expenses | 48,259 | 87,262 | 556,283 | 347,505 |
Income before other income (expenses) | 13,454 | 14,068 | (365,057) | (6,913) |
Other income (expenses): | ||||
Interest expense | (16,126) | (24,283) | (49,208) | (68,315) |
Debt breakage cost | 0 | (13,249) | 0 | (13,249) |
Other income (expense), net | 3,654 | (162) | 7,613 | (588) |
Net loss from investment in unconsolidated entity | (144,598) | 0 | (176,767) | 0 |
Net gain (loss) from disposition of assets | 3,748 | (95,513) | 24,657 | (95,513) |
Transaction expenses | (80) | (234) | (24,570) | (8,662) |
Net loss | (139,948) | (119,373) | (583,332) | (193,240) |
Distributions to redeemable preferred shareholders | 0 | (2,516) | (2,375) | (7,547) |
Preferred units redemption | 0 | 0 | (4,970) | 0 |
Net loss attributable to noncontrolling interests | 12,353 | 10,710 | 52,677 | 17,643 |
Net loss attributable to controlling interests | (127,595) | (111,179) | (538,000) | (183,144) |
Distributions to redeemable noncontrolling interests attributable to common shareholders | 0 | (45) | (36) | (133) |
Net loss attributable to common shareholders | $ (127,595) | $ (111,224) | $ (538,036) | $ (183,277) |
Net loss attributable to common shareholders per share, basic (in usd per share) | $ (3.55) | $ (3.08) | $ (14.97) | $ (5.08) |
Net loss attributable to common shareholders per share, diluted (in usd per share) | $ (3.55) | $ (3.08) | $ (14.97) | $ (5.08) |
Weighted average number of common shares outstanding, basic (in shares) | 35,975,483 | 36,081,363 | 35,965,751 | 36,077,614 |
Weighted average number of common shares outstanding, diluted (in shares) | 35,975,483 | 36,081,363 | 35,965,751 | 36,077,614 |
Cash distributions declared per common share (in usd per share) | $ 0.23 | $ 0.80 | $ 0.87 | $ 2.37 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (139,948) | $ (119,373) | $ (583,332) | $ (193,240) |
Other comprehensive income: | ||||
Equity in other comprehensive (loss) income of unconsolidated joint venture | (1,797) | 0 | (1,880) | 0 |
Change in fair value of swap agreements | (1,327) | 20,851 | (1,622) | 64,471 |
Total comprehensive loss | (143,072) | (98,522) | (586,834) | (128,769) |
Distributions to redeemable preferred shareholders | 0 | (2,516) | (2,375) | (7,547) |
Preferred units redemption charge | 0 | 0 | (4,970) | 0 |
Distributions to redeemable noncontrolling interests attributable to common shareholders | 0 | (44) | (36) | (133) |
Comprehensive loss attributable to noncontrolling interests | 12,629 | 8,878 | 52,976 | 11,977 |
Comprehensive loss attributable to common shareholders | $ (130,443) | $ (92,204) | $ (541,239) | $ (124,472) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Stockholders' Equity | Common Shares | Additional Paid-In Capital | Cumulative Distributions | Accumulated (Deficit) Income | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests |
Beginning balance (in shares) at Dec. 31, 2021 | 36,070,902 | |||||||
Beginning balance at Dec. 31, 2021 | $ 2,371,663 | $ 2,153,010 | $ 36 | $ 2,951,972 | $ (922,562) | $ 141,983 | $ (18,708) | $ 218,653 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 14,248 | |||||||
Deferred equity compensation | 1,757 | 1,757 | 1,757 | |||||
Shares acquired to satisfy employee tax withholding requirements on vesting RSUs (in shares) | (5,621) | |||||||
Shares acquired to satisfy employee tax withholding requirements on vesting RSUs | (459) | (459) | (459) | |||||
Cash distributions to common stockholders | (28,073) | (28,073) | (28,073) | |||||
Reversal of shares for distribution reinvestment plan (in shares) | (2) | |||||||
Reclass of noncontrolling interest subject to redemption | 99 | 99 | ||||||
Distributions to noncontrolling interest | (2,698) | (2,698) | ||||||
Distributions to noncontrolling interests subject to redemption | (4) | (4) | ||||||
Offering costs | (14) | (14) | (14) | |||||
Net income (loss) | 170 | 151 | 151 | 19 | ||||
Other comprehensive (loss) income | 33,891 | 30,912 | 30,912 | 2,979 | ||||
Ending balance (in shares) at Mar. 31, 2022 | 36,079,527 | |||||||
Ending balance at Mar. 31, 2022 | 2,376,332 | 2,157,284 | $ 36 | 2,953,256 | (950,635) | 142,134 | 12,204 | 219,048 |
Beginning balance (in shares) at Dec. 31, 2021 | 36,070,902 | |||||||
Beginning balance at Dec. 31, 2021 | $ 2,371,663 | 2,153,010 | $ 36 | 2,951,972 | (922,562) | 141,983 | (18,708) | 218,653 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Reclass of noncontrolling interest subject to redemption | 957 | |||||||
Reclass of redeemable non-controlling interest | 0 | |||||||
Distributions to noncontrolling interest | (10,942) | |||||||
Distributions to noncontrolling interests subject to redemption | (17) | |||||||
Net income (loss) | (39,714) | |||||||
Other comprehensive (loss) income | 5,718 | |||||||
Ending balance (in shares) at Dec. 31, 2022 | 35,999,898 | 35,999,898 | ||||||
Ending balance at Dec. 31, 2022 | $ 1,857,323 | 1,682,668 | $ 36 | 2,948,600 | (1,036,678) | (269,926) | 40,636 | 174,655 |
Beginning balance (in shares) at Mar. 31, 2022 | 36,079,527 | |||||||
Beginning balance at Mar. 31, 2022 | 2,376,332 | 2,157,284 | $ 36 | 2,953,256 | (950,635) | 142,134 | 12,204 | 219,048 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 2,756 | |||||||
Deferred equity compensation | 1,685 | 1,685 | 1,685 | |||||
Cash distributions to common stockholders | (28,393) | (28,393) | (28,393) | |||||
Distributions to noncontrolling interest | (2,728) | (2,728) | ||||||
Distributions to noncontrolling interests subject to redemption | (4) | (4) | ||||||
Offering costs | (9) | (9) | (9) | |||||
Net income (loss) | (79,159) | (72,207) | (72,207) | (6,952) | ||||
Other comprehensive (loss) income | 9,729 | 8,874 | 8,874 | 855 | ||||
Ending balance (in shares) at Jun. 30, 2022 | 36,082,283 | |||||||
Ending balance at Jun. 30, 2022 | 2,277,453 | 2,067,234 | $ 36 | 2,954,932 | (979,028) | 69,927 | 21,078 | 210,219 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 0 | |||||||
Deferred equity compensation | 2,698 | 2,698 | 2,698 | |||||
Cash distributions to common stockholders | (28,929) | (28,929) | (28,929) | |||||
Repurchase of common stock (in shares) | (74,850) | |||||||
Repurchase of common stock | (4,999) | (4,999) | (4,999) | |||||
Reclass of noncontrolling interest subject to redemption | 857 | 857 | ||||||
Distributions to noncontrolling interest | (2,758) | (2,758) | ||||||
Distributions to noncontrolling interests subject to redemption | (4) | (4) | ||||||
Offering costs | (13) | (13) | (13) | |||||
Net income (loss) | (121,930) | (111,220) | (111,220) | (10,710) | ||||
Other comprehensive (loss) income | 20,851 | 19,019 | 19,019 | 1,832 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 36,007,433 | |||||||
Ending balance at Sep. 30, 2022 | $ 2,143,226 | 1,943,790 | $ 36 | 2,952,618 | (1,007,957) | (41,293) | 40,097 | 199,436 |
Beginning balance (in shares) at Dec. 31, 2022 | 35,999,898 | 35,999,898 | ||||||
Beginning balance at Dec. 31, 2022 | $ 1,857,323 | 1,682,668 | $ 36 | 2,948,600 | (1,036,678) | (269,926) | 40,636 | 174,655 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 13,620 | |||||||
Deferred equity compensation | 2,556 | 2,556 | 2,556 | |||||
Shares acquired to satisfy employee tax withholding requirements on vesting RSUs (in shares) | (5,700) | |||||||
Shares acquired to satisfy employee tax withholding requirements on vesting RSUs | (381) | (381) | (381) | |||||
Cash distributions to common stockholders | (14,873) | (14,873) | (14,873) | |||||
Repurchase of common stock (in shares) | (896) | |||||||
Repurchase of common stock | (60) | (60) | (60) | |||||
Reclass of noncontrolling interest subject to redemption | 10 | 10 | ||||||
Distributions to noncontrolling interest | (1,435) | (1,435) | ||||||
Distributions to noncontrolling interests subject to redemption | (2) | (2) | ||||||
Offering costs | (9) | (9) | (9) | |||||
Net income (loss) | 6,618 | 6,033 | 6,033 | 585 | ||||
Other comprehensive (loss) income | (7,445) | (6,789) | (6,789) | (656) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 36,006,922 | |||||||
Ending balance at Mar. 31, 2023 | $ 1,842,302 | 1,669,145 | $ 36 | 2,950,706 | (1,051,551) | (263,893) | 33,847 | 173,157 |
Beginning balance (in shares) at Dec. 31, 2022 | 35,999,898 | 35,999,898 | ||||||
Beginning balance at Dec. 31, 2022 | $ 1,857,323 | 1,682,668 | $ 36 | 2,948,600 | (1,036,678) | (269,926) | 40,636 | 174,655 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Reclass of noncontrolling interest subject to redemption | 10 | |||||||
Reclass of redeemable non-controlling interest | 3,801 | |||||||
Distributions to noncontrolling interest | (2,990) | |||||||
Distributions to noncontrolling interests subject to redemption | (3) | |||||||
Net income (loss) | (52,677) | |||||||
Other comprehensive (loss) income | (300) | |||||||
Ending balance (in shares) at Sep. 30, 2023 | 35,997,549 | |||||||
Ending balance at Sep. 30, 2023 | $ 1,245,280 | 1,129,333 | $ 36 | 2,967,635 | (1,067,807) | (807,965) | 37,434 | 115,947 |
Beginning balance (in shares) at Mar. 31, 2023 | 36,006,922 | |||||||
Beginning balance at Mar. 31, 2023 | 1,842,302 | 1,669,145 | $ 36 | 2,950,706 | (1,051,551) | (263,893) | 33,847 | 173,157 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation (in shares) | 33,092 | |||||||
Deferred equity compensation | 4,034 | 4,034 | 4,034 | |||||
Shares acquired to satisfy employee tax withholding requirements on vesting RSUs (in shares) | (49,738) | |||||||
Shares acquired to satisfy employee tax withholding requirements on vesting RSUs | (1,069) | (1,069) | (1,069) | |||||
Cash distributions to common stockholders | (8,117) | (8,117) | (8,117) | |||||
Reclass of noncontrolling interest subject to redemption | 0 | 0 | ||||||
Share class conversion (in shares) | (69,988) | |||||||
Exchange of noncontrolling interests (in shares) | 4,188 | |||||||
Exchange of noncontrolling interests | 0 | 370 | 370 | (370) | ||||
Reclass of redeemable non-controlling interest | 3,801 | 3,801 | ||||||
Distributions to noncontrolling interest | (776) | (776) | ||||||
Distributions to noncontrolling interests subject to redemption | (1) | (1) | ||||||
Offering costs on preferred units | 4,970 | 4,970 | 4,970 | |||||
Net income (loss) | (457,385) | (416,476) | (416,476) | (40,909) | ||||
Other comprehensive (loss) income | $ 7,067 | 6,435 | 6,435 | 632 | ||||
Ending balance (in shares) at Jun. 30, 2023 | 35,924,476 | |||||||
Ending balance at Jun. 30, 2023 | $ 1,394,826 | 1,259,292 | $ 36 | 2,959,011 | (1,059,668) | (680,369) | 40,282 | 135,534 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation | 2,444 | 2,444 | 2,444 | |||||
Cash distributions to common stockholders | (8,139) | (8,139) | (8,139) | |||||
Exchange of noncontrolling interests (in shares) | 73,073 | |||||||
Exchange of noncontrolling interests | 0 | 6,180 | 6,180 | (6,180) | ||||
Distributions to noncontrolling interest | (778) | (778) | ||||||
Net income (loss) | (139,949) | (127,596) | (127,596) | (12,353) | ||||
Other comprehensive (loss) income | $ (3,124) | (2,848) | (2,848) | (276) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 35,997,549 | |||||||
Ending balance at Sep. 30, 2023 | $ 1,245,280 | $ 1,129,333 | $ 36 | $ 2,967,635 | $ (1,067,807) | $ (807,965) | $ 37,434 | $ 115,947 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Activities: | ||
Net loss | $ (583,332) | $ (193,240) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation of building and building improvements | 55,943 | 90,855 |
Amortization of leasing costs and intangibles, including ground leasehold interests and leasing costs | 32,005 | 65,733 |
Amortization of below market leases, net | (834) | (1,282) |
Amortization of deferred financing costs and debt premium | 2,875 | 4,628 |
Amortization of swap interest | 94 | 94 |
Deferred rent | (6,453) | (8,584) |
Net (loss) gain from sale of depreciable operating properties | (24,657) | 95,513 |
Net loss from investment in unconsolidated entity | 176,767 | 0 |
Gain from investments | 52 | 180 |
Impairment provision | 397,373 | 86,254 |
Share-based compensation | 9,034 | 6,141 |
Change in operating assets and liabilities: | ||
Deferred leasing costs and other assets | (4,491) | (1,975) |
Accrued expenses and other liabilities | 5,029 | (8,257) |
Due to related parties, net | (635) | (712) |
Net cash provided by operating activities | 58,770 | 135,348 |
Investing Activities: | ||
Proceeds from disposition of properties | 299,107 | 970,376 |
Restricted reserves | 0 | (337) |
Payments for construction in progress | (9,102) | (13,715) |
Purchase of investments | (209) | (221) |
Investment in unconsolidated entities | 0 | (34,558) |
Net cash provided by investing activities | 289,796 | 921,545 |
Financing Activities: | ||
Proceeds from borrowings - Credit Facility | 400,000 | 0 |
Principal payoff of secured indebtedness - Mortgage Debt | (36,128) | (469,777) |
Principal pay down of indebtedness - Revolving Credit Facility | 0 | (373,500) |
Principal payoff of indebtedness - Term Loan | (400,000) | (200,000) |
Principal amortization payments on secured indebtedness | (5,449) | (6,848) |
Deferred financing costs | (2,955) | (2,724) |
Offering costs | (9) | (35) |
Redemption of preferred units | (125,000) | 0 |
Repurchase of common shares | (4,443) | 0 |
Distributions to noncontrolling interests | (3,196) | (8,360) |
Distributions to preferred units subject to redemption | (4,891) | (7,547) |
Distributions to common shareholders | (32,668) | (85,674) |
Financing lease payment | (224) | (226) |
Repurchase of common shares to satisfy employee tax withholding requirements | (1,450) | (459) |
Net cash used in financing activities | (216,413) | (1,155,150) |
Net increase in cash, cash equivalents and restricted cash | 132,153 | (98,257) |
Cash, cash equivalents and restricted cash at the beginning of the period | 237,944 | 186,140 |
Cash, cash equivalents and restricted cash at the end of the period | 370,097 | 87,883 |
Supplemental Disclosures of Significant Non-Cash Transactions: | ||
Decrease (increase) in fair value swap agreement | (1,622) | 64,471 |
Accrued tenant obligations | 551 | 3,294 |
Distributions payable to common shareholders | 8,139 | 9,386 |
Distributions payable to noncontrolling interests | 778 | 915 |
Exchange of noncontrolling interest to common stock | 6,550 | 0 |
Common share redemptions funded subsequent to period-end | 0 | (5,000) |
Operating lease right-of-use assets obtained in exchange for lease liabilities | 0 | 1,358 |
Accrued for construction in progress | 1,173 | 122 |
Investment in unconsolidated entity | 0 | 159,927 |
Contribution to unconsolidated joint venture | 1,960 | 0 |
Shortfall Loan related to unconsolidated joint venture | $ (1,960) | $ 0 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Peakstone Realty Trust (“PKST” or the “Company”) is an internally managed, publicly traded real estate investment trust (“REIT”) that owns and operates a high-quality, newer-vintage portfolio of predominantly single-tenant industrial and office properties. The Company’s fiscal year-end is December 31. PKST OP, L.P., our operating partnership (the “Operating Partnership”), owns directly and indirectly all of the Company’s assets. As of September 30, 2023, the Company owned approximately 91.2% of the outstanding common units of limited partnership interest in the Operating Partnership (“OP Units”). As of September 30, 2023, the Company’s wholly-owned portfolio consisted of 73 properties located in 24 states with a weighted average remaining lease term of approximately 6.3 years. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies There have been no significant changes to the Company’s accounting policies since the Company filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2022. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”). The accompanying unaudited consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 . In addition, see the risk factors identified in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The consolidated financial statements of the Company include all accounts of the Company, the Operating Partnership, and its consolidated subsidiaries. Intercompany transactions are shown on the consolidated statements if and to the extent to required pursuant to GAAP. With the exception of the Office Joint Venture (defined below), each property-owning entity is a wholly-owned subsidiary which is a special purpose entity (“SPE”). If a property is separately financed (i.e., not part of the borrowing base under our credit facility or a collateralized loan pool), the income from such property is generally not available to satisfy the debts or obligations of any other entity. Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Per Share Data The Company reports earnings per share for the period as (1) basic earnings per share computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period, and (2) diluted earnings per share computed by dividing net income (loss) attributable to common shareholders by the weighted average number of outstanding common shares determined in the basic earnings per share computation plus the potential effect of any dilutive securities (e.g., OP Units and preferred shares, when considered convertible for purposes of computing diluted earnings per share). The effect of including OP Units and unvested time-based restricted share units using the treasury stock method was excluded from our calculation of weighted average common shares outstanding for diluted earnings per share, as the inclusion would have been anti-dilutive for the three and nine months ended September 30, 2023 and September 30, 2022. Total excluded shares related to the OP Units and unvested time-based restricted share units were 3,879,641 and 3,745,445 for the three and nine months ended September 30, 2023, respectively. Total excluded shares related to the OP Units and unvested time-based restricted share units were 3,785,135 and 3,755,708 for the three and nine months ended September 30, 2022, respectively. Restricted Cash As required by certain lease provisions or certain lenders in conjunction with an acquisition or debt financing, the Company assumed or funded reserves for specific property improvements and deferred maintenance, re-leasing costs, and taxes and insurance, which are included on the consolidated balance sheets as restricted cash. Additionally, an ongoing replacement reserve is funded by certain tenants pursuant to such tenant’s respective lease as follows: Balance as of September 30, 2023 December 31, 2022 Cash reserves $ 1,036 $ 4,262 Restricted lockbox 4,615 502 Total restricted cash $ 5,651 $ 4,764 Impairment of Real Estate and Related Intangible Assets In accordance with the provisions of the Impairment or Disposal of Long-Lived Assets Subsections of ASC 360, the Company assesses the carrying values of our respective long-lived assets whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Recoverability of real estate assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. To review real estate assets for recoverability, the Company considers current market conditions as well as the Company's intent with respect to holding or disposing of the asset. The intent with regard to the underlying assets might change as market conditions and other factors change. Fair value is determined through various valuation techniques, including discounted cash flow models, applying a capitalization rate to estimated net operating income of a property, and quoted market values and third party appraisals, where considered necessary. The use of projected future cash flows is based on assumptions that are consistent with estimates of future expectations and the strategic plan used to manage the Company's underlying business. If the Company’s analysis indicates that the carrying value of the real estate asset is not recoverable on an undiscounted cash flow basis, the Company will recognize an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. Projections of expected future undiscounted cash flows require management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount and capitalization rates, the number of months it takes to re-lease the property, and the number of years the property is held for investment. See Note 3, Real Estate, for further details. Impairment of Investments in Unconsolidated Entities On a quarterly basis, the Company evaluates its equity method investment in an unconsolidated entity for a potential other-than-temporary impairment (“OTTI”). If the Company’s investment is other than temporarily impaired, it determines the fair value of its investment and records the impairment measured as the difference between its carrying amount and fair value. The impairment is recorded to net earnings or loss from investment in unconsolidated entities on the consolidated statement of operations. See Note 4, Investment in Unconsolidated Entities, for further details. Segment Information ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity’s reportable segments. The Company internally evaluates all of the properties and interests therein as three reportable segments: Industrial, Office, and Other. Refer to Note 14, Segment Reporting , for further details. Income Taxes The Company has elected to be taxed as a REIT under the Internal Revenue Code (“Code”). To qualify as a REIT, the Company must meet certain organizational and operational requirements. The Company intends to adhere to these requirements and maintain its REIT status for the current year and subsequent years. As a REIT, the Company generally will not be subject to federal income taxes on taxable income that is distributed to shareholders. However, the Company may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income, if any. If the Company fails to qualify as a REIT in any taxable year, the Company will then be subject to federal income taxes on the taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially adversely affect net income and net cash available for distribution to shareholders. As of September 30, 2023, the Company satisfied the REIT requirements and distributed all of its taxable income. Pursuant to the Code, the Company has elected to treat Griffin Capital Essential Asset TRS, Inc. as a taxable REIT subsidiary (a “TRS”). In general, the TRS may perform non-customary services for the Company’s tenants and may engage in any real estate or non-real estate-related business. The TRS will be subject to corporate federal and state income tax. Goodwill Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of business acquired. The Company’s goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the goodwill might be impaired. On October 1 of each year, the Company performs a qualitative analysis to determine whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting units in step one of the impairment test. If a quantitative assessment is deemed necessary, and to the extent the carrying amount of the reporting unit’s allocated goodwill exceeds the unit’s fair value, the Company recognizes an impairment of goodwill for the excess up to the amount of goodwill of that reporting unit. Recently Issued Accounting Pronouncements Changes to GAAP are established by the FASB in the form of an Accounting Standards Update (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not recently issued any other ASUs that the Company expects to be applicable and have a material impact on the Company's financial statements. Adoption of New Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance that provides transition relief for reference rate reform, including optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions that reference LIBOR or a reference rate that is expected to be discontinued as a result of reference rate reform if certain criteria are met. ASU 2020-04 was effective upon issuance, and the provisions generally can be applied prospectively as of January 1, 2020 through December 31, 2023. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. The Company has subsequently elected to apply additional expedients related to contract modifications, changes in critical terms, and updates to the designated hedged risk(s) as qualifying changes have been made to applicable debt and anticipate to be made to derivative contracts. Application of these expedients preserves the presentation of derivatives and debt contracts consistent with past presentation. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which refines the scope of Topic 848 and clarifies some of its guidance. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848) to defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Real Estate
Real Estate | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Real Estate | Real Estate The following table summarizes the Company’s gross investment in real estate as of: September 30, 2023 December 31, 2022 Land $ 244,369 $ 327,408 Building and improvements 2,042,347 2,631,965 Tenant origination and absorption cost 418,896 535,889 Construction in progress 2,197 1,994 Total real estate $ 2,707,809 $ 3,497,256 Acquisitions of Real Estate The Company had no acquisitions of real estate during the three and nine month periods ended September 30, 2023. Dispositions of Real Estate For the nine months ended September 30, 2023, the Company sold nine properties for gross disposition proceeds of approximately $308.7 million. The Company recognized a net gain of approximately $24.7 million, detailed in the table below: Sale Date Segment Location Gross Proceeds Gain (Loss) Three Months Ended March 31, 2023 January 6, 2023 Industrial Irvine, CA $ 40,000 $ 18,690 February 16, 2023 Industrial Clinton, SC 19,300 7,109 March 2, 2023 Office Herndon, VA 110,300 4,811 Total 169,600 30,610 Three Months Ended June 30, 2023 May 9, 2023 Other Lone Tree, CO 5,600 (301) May 15, 2023 Office Houston, TX 62,300 (5,000) June 8, 2023 Other Greenwood Village, CO 5,000 (5,200) June 30, 2023 Office Andover, MA 23,700 100 June 30, 2023 Office Andover, MA 34,200 700 Total 130,800 (9,701) Three Months Ended September 30, 2023 August 16, 2023 Other Rancho Cordova, CA 8,300 3,748 Total 8,300 3,748 Total for the Nine Months Ended September 30, 2023 $ 308,700 $ 24,657 Real Estate Impairment During the nine months ended September 30, 2023, in connection with the preparation and review of the financial statements, the Company recorded a real estate impairment provision of approximately $397.4 million on 16 properties, consisting of eight Office properties for $196.1 million and eight Other properties for $201.2 million. The impaired properties are located in the Southwest, Northeast, West, and Southeast regions of the United States. The impairment resulted from changes in the second quarter related to anticipated hold periods, estimated selling prices, and potential vacancies that impacted the recoverability of these assets. In determining the fair value of the properties, the Company considered Level 3 inputs. See Note 8, Fair Value Measurements , for details. Real Estate and Acquired Lease Intangibles The following table summarizes the Company’s allocation of acquired and contributed real estate asset value to in-place lease valuation, tenant origination and absorption cost, and other intangibles, as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 In-place lease valuation (above market) $ 23,042 $ 28,619 In-place lease valuation (above market) - accumulated amortization (16,394) (19,799) In-place lease valuation (above market), net 6,648 8,820 Intangibles - other 32,028 32,028 Intangibles - other - accumulated amortization (8,104) (6,987) Intangibles - other, net 23,924 25,041 Intangible assets, net $ 30,572 $ 33,861 In-place lease valuation (below market) $ (44,840) $ (48,686) Land leasehold interest (above market) (3,072) (3,072) Intangibles - other (above market) (205) (258) In-place lease valuation & land leasehold interest - accumulated amortization 31,013 31,358 Intangible liabilities, net $ (17,104) $ (20,658) Tenant origination and absorption cost $ 418,896 $ 535,889 Tenant origination and absorption cost - accumulated amortization (224,061) (282,383) Tenant origination and absorption cost, net $ 194,835 $ 253,506 The amortization of the intangible assets and other leasing costs for the respective periods is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Above and below market leases, net $ (421) $ (436) $ (834) $ (1,282) Tenant origination and absorption cost $ 8,261 $ 15,427 $ 29,651 $ 60,826 Ground lease amortization (below market) $ (98) $ (95) $ (290) $ (274) Other leasing costs amortization $ 489 $ 1,028 $ 1,527 $ 4,064 |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities Office Joint Venture On August 26, 2022, the Company completed the sale of a majority interest in a 41-property office portfolio (the “Initial JV Office Portfolio”) for a sale price of approximately $1.1 billion. On December 27, 2022, the Company completed a companion sale of a majority interest in a five-property office portfolio (“Companion JV Office Portfolio”, and together with the Initial JV Office Portfolio, the “JV Office Portfolio”) for a sale price of approximately $170.4 million. In connection with the sale of the JV Office Portfolio, the Company, through its subsidiary GRT VAO OP, LLC (“GRT VAO Sub”), invested a combined $184.2 million for a 49% interest in a joint venture (the “Office Joint Venture”), through which it owns indirectly an approximate 49% interest in the JV Office Portfolio. The Office Joint Venture is managed and accounted for by RVMC Capital LLC, an affiliate of Workspace Property Trust (the “Managing Member”). The Managing Member of the Office Joint Venture has general authority to manage the operations of the Office Joint Venture. The Managing Member also has day-to-day management authority over the Office Joint Venture, subject to certain major decision rights held by another minority interest holder. The Managing Member may be removed from its management positions upon the occurrence of specified events. GRT VAO Sub has approval rights over certain major decisions regarding actions by the Office Joint Venture, including certain fundamental decisions that the Office Joint Venture may approve. GRT VAO Sub’s obligation is generally limited to its initial contribution. GRT VAO Sub is not obligated to make any additional capital contributions beyond its initial capital contribution. The Office Joint Venture, through various subsidiary borrowers, obtained acquisition financing for the Initial JV Office Portfolio comprised of (a) a $736.0 million mortgage loan (the “Initial JV Office Mortgage Loan”), and (b) a $194.8 million mezzanine loan (the “JV Office Mezzanine Loan”, and together with the JV Office Initial Mortgage Loan, the “Initial Office JV Loans”). The initial maturity date of the Initial Office JV Loans was September 9, 2023, subject to two, one-year extension options. The interest rates during the initial term of the Initial JV Office Mortgage Loan and the JV Office Mezzanine Loan were Term SOFR (1-month) (with a 3% interest rate cap on SOFR) + 3.635% (subject to a 0.25% increase during each extension term) and Term SOFR (1-month) with a 3% interest rate cap on SOFR + 6.574% (subject to a 0.25% increase during each extension term), respectively. The Office Joint Venture paid approximately $6.7 million for the interest rate caps. During the quarter ended September 30, 2023, the Office Joint Venture exercised the first of two one-year extension options, extending the maturity date of the Initial Office JV Loans to September 9, 2024. The interest rates during the one-year extension terms of the Initial JV Office Mortgage Loan and the JV Office Mezzanine Loan are Term SOFR (1-month) (with a 4.4% interest rate cap on SOFR) + 3.885% and Term SOFR (1-month) + 6.824%, respectively. The Office Joint Venture paid approximately $9.6 million for the interest rate caps and funded a portion of the purchase by calling capital from its members (the “Capital Call”). GRT VAO Sub’s portion of the Capital Call was approximately $2.0 million. GRT VAO Sub is not obligated to and did not fund any amount of the Capital Call. In accordance with the Office Joint Venture’s governing documents, another member of the Office Joint Venture (the “Funding Member”) made an interest bearing loan to GRT VAO Sub in the principal amount of GRT VAO Sub’s portion of the Capital Call (the “Shortfall Loan”), the proceeds of which Shortfall Loan were used to fund GRT VAO Sub’s portion of the Capital Call. The Shortfall Loan is non-recourse to GRT VAO Sub and its affiliates and shall be repaid to the Funding Member solely out of (i) any distributions to which GRT VAO Sub is otherwise entitled under the Office Joint Venture’s governing documents and (ii) the proceeds from certain transfers which results in GRT VAO Sub and its affiliates no longer owning a direct or indirect equity interest in the Office Joint Venture. The Office Joint Venture, through various subsidiary borrowers, also obtained acquisition financing for the Companion JV Office Portfolio, comprised of a $142.1 million mortgage loan, having an initial maturity date of January 6, 2024 (subject to two, one-year extension options), and an interest rate during the initial term of Term SOFR (1-month with a 4% interest rate cap on SOFR) + 4.25% (subject to a 0.25% increase during each extension term) (the “Companion Office JV Loan”, and together with the Initial Office JV Loans, the “Office JV Loans”). The Company has not guaranteed any debt obligations and has not otherwise committed to providing financial support in respect of the Office JV Loans. In addition, the Company does not anticipate receiving any near-term cash flow distributions from the assets that are part of the JV Office Portfolio. Considering the Company’s limited economic exposure to the Office Joint Venture, the Company excludes interests in the assets in the Office Joint Venture from operating data. The interests discussed above are deemed to be variable interests in variable interest entities ("VIE") and based on an evaluation of the variable interests against the criteria for consolidation, the Company determined that it is not the primary beneficiary of the investment, as the Company does not have power to direct the activities of the entities that most significantly affect their performance. As such, the interest in the VIE is recorded using the equity method of accounting in the accompanying consolidated financial statements. Under the equity method, the investments in the unconsolidated entities are stated at cost and adjusted for the Company’s share of net earnings or losses and reduced by distributions. Equity in earnings of real estate ventures is generally recognized based on the allocation of cash distributions upon liquidation of the investment at book value in accordance with the operating agreements. The Company records the net earnings or losses on investment on a one quarter lag. The Company's maximum exposure to losses associated with its unconsolidated investments is primarily limited to its initial contribution in the investments. Impairment of Investment in Office Joint Venture During the three months ended September 30, 2023, the Company recorded an OTTI of approximately $129.3 million for its investment in the Office Joint Venture, which represents a complete write-off of the Company’s remaining investment balance. The impairment resulted from a decline in the fair value of the investment primarily due to increased future loan extension risk impacting the Company’s expectations on the recoverability of the investment. The impairment was recorded to “Net loss from investment in unconsolidated entity” on the consolidated statement of operations. Summary of Investment in Office Joint Venture The table below summarizes the Company’s investment in the unconsolidated Office Joint Venture, which the Company determined is related to corporate activities and is excluded from its segment reporting: Office Joint Venture Investment in Office Joint Venture Balance at December 31, 2022 $ 178,647 Contributions (1) 1,960 Shortfall Loan (1) (1,960) Company’s share of net loss (48,659) Company’s share of other comprehensive loss (654) Impairment provision (2) (129,334) Balance at September 30, 2023 $ — (1) Amounts represent the deemed contribution and related Shortfall Loan between the Company’s subsidiary, GRT VAO Sub, and the Funding Member of the Office Joint Venture for the Capital Call. Refer to details above. (2) Amount represents the impairment of the Company’s investment in the Office Joint Venture of $129.3 million. As of September 30, 2023, the Company also had a cumulative proportionate share of the Office Joint Venture’s accumulated other comprehensive income (“AOCI”) of $1.2 million, which was also written off in conjunction with the investment balance being impaired to zero. The write-off of the AOCI resulted in recognition of income, which was also recorded to “Net loss from investment in unconsolidated entity” for a total net loss of $128.1 million during the period. The table below presents the condensed balance sheet for the unconsolidated Office Joint Venture: September 30, 2023 (1) December 31, 2022 (2) Assets Real estate properties, net $ 1,099,915 $ 981,354 Other assets 299,847 240,447 Total Assets $ 1,399,762 $ 1,221,801 Liabilities Mortgages payable, net $ 1,051,178 $ 856,765 Other liabilities 86,358 52,018 Total Liabilities $ 1,137,536 $ 908,783 (1) Amounts are as of June 30, 2023 due to the recording of the Office Joint Venture’s activity on a one quarter lag. (2) Amounts are as of September 30, 2022 due to the recording of the Office Joint Venture’s activity on a one quarter lag. The table below presents condensed statements of operations of the unconsolidated Office Joint Venture: Three Months Ended September 30, Nine Months Ended September 30, 2023 (1) 2022 (2) 2023 (3) 2022 (2) Total revenues $ 50,889 $ — $ 145,595 $ — Expenses: Operating expenses (16,838) — (49,271) — General and administrative (1,699) — (5,354) — Depreciation and amortization (17,074) — (50,259) — Interest expense (51,721) — (144,703) — Other expenses, net 2,782 — 4,665 — Total Expenses (84,550) — (244,922) — Net Loss $ (33,661) $ — $ (99,327) $ — (1) Amounts represent the period of April 1, 2023 to June 30, 2023 due to the recording of the Office Joint Venture’s activity on a one quarter lag. (2) No activity reported for the three and nine months ended September 30, 2022 as the Office Joint Venture was formed in August 2022 and reports activity on a one quarter lag. (3) Amounts represent the period of October 1, 2022 to June 30, 2023 due to the recording of the Office Joint Venture’s activity on a one quarter lag. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of September 30, 2023 and December 31, 2022, the Company’s consolidated debt consisted of the following: September 30, 2023 December 31, 2022 Contractual Interest Rate (1) Loan Maturity (2) Effective Interest Rate (3) Highway 94 Mortgage Loan $ 11,970 $ 12,740 3.75% August 2024 5.04% Pepsi Bottling Ventures Mortgage Loan 17,540 17,836 3.69% October 2024 3.93% AIG Loan II 120,556 122,328 4.15% November 2025 4.99% BOA II Loan 250,000 250,000 4.32% May 2028 4.14% AIG Loan 98,158 99,794 4.96% February 2029 5.09% HealthSpring Mortgage Loan — 19,107 —% (4) — —% Samsonite Mortgage Loan — 17,998 —% (5) — —% Total Mortgage Debt 498,224 539,803 Revolving Credit Facility 400,000 — SOF Rate + 1.30% (6) January 2026 (8) 6.95% 2025 Term Loan 400,000 400,000 SOF Rate + 1.25% (6) December 2025 6.91% 2026 Term Loan 150,000 150,000 SOF Rate + 1.25% (6) April 2026 6.75% 2024 Term Loan — 400,000 —% (7) — —% Total Debt 1,448,224 1,489,803 Unamortized Deferred Financing Costs and Discounts, net (6,221) (4,401) Total Debt, net $ 1,442,003 $ 1,485,402 (1) Including the effect of the interest rate swap agreements with a total notional amount of $750.0 million, the weighted average interest rate as of September 30, 2023 was 4.16% for both the Company’s fixed-rate and variable-rate debt combined and 3.73% for the Company’s fixed-rate debt only. (2) Reflects the maturity dates as of September 30, 2023. (3) Reflects the effective interest rate as of September 30, 2023 and includes the effect of amortization of discounts/premiums and deferred financing costs, but excludes the effect of the interest rate swaps. (4) HealthSpring Mortgage Loan was paid off in full in March 2023 and had a contractual interest rate of 4.18%. (5) Samsonite Mortgage Loan was paid off in full in September 2023 and had a contractual interest rate of 6.08%. (6) The applicable SOFR as of September 30, 2023 (assuming a five day look-back per the credit facility agreement) was 5.31%, which excludes a 0.1% per annum index adjustment as required per the Fifth Amendment to the Second Amended and Restated Credit Agreement. (7) 2024 Term Loan was paid off in full in March 2023 using proceeds drawn from the Revolving Credit Facility, and had a contractual interest rate of SOFR + 1.40%. (8) The Revolving Credit Facility has a maturity date of December 30, 2023 with a series of extension options to January 31, 2026. See discussion below. Second Amended and Restated Credit Agreement Pursuant to the Second Amended and Restated Credit Agreement dated as of April 30, 2019 (as amended by the First Amendment to the Second Amended and Restated Credit Agreement dated as of October 1, 2020 (the “First Amendment”), the Second Amendment to the Second Amended and Restated Credit Agreement dated as of December 18, 2020 (the “Second Amendment”), the Third Amendment to the Second Amended and Restated Credit Agreement dated as of July 14, 2021 (the “Third Amendment”), the Fourth Amendment to the Second Amended and Restated Credit Agreement dated as of April 28, 2022 (the “Fourth Amendment”), the Fifth Amendment to the Second Amended and Restated Credit Agreement dated as of September 28, 2022 (the “Fifth Amendment”), the Sixth Amendment to the Second Amended and Restated Credit Agreement dated as of November 30, 2022 (the “Sixth Amendment”), and the Seventh Amendment to the Amended and Restated Credit Agreement dated as of March 21, 2023 (the “Seventh Amendment”), and together with the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment, and the Sixth Amendment, the “Second Amended and Restated Credit Agreement”)), with KeyBank National Association (“KeyBank”) as administrative agent, and a syndicate of lenders, the Operating Partnership, as the borrower, has been provided with a $1.3 billion credit facility consisting of a $750.0 million senior unsecured revolving credit facility (the “Revolving Credit Facility”) maturing in December 2023 (with a series of extension options to January 31, 2026, subject to the satisfaction of certain customary conditions), a $400.0 million senior unsecured term loan maturing in December 2025 (the “$400M 2025 5-Year Term Loan”), and a $150.0 million senior unsecured term loan maturing in April 2026 (the “$150M 2026 7-Year Term Loan”) and, together with the Revolving Credit Facility and the $400M 2025 5-Year Term Loan, the “KeyBank Loans”). The Second Amended and Restated Credit Agreement also provides the option, subject to obtaining additional commitments from lenders and certain other customary conditions, to increase the commitments under the Revolving Credit Facility, to increase the existing term loans and/or incur new term loans by up to an additional $1.0 billion in the aggregate. As of September 30, 2023, the available undrawn capacity under the Revolving Credit Facility was $152.1 million. The Second Amended and Restated Credit Agreement requires that the Operating Partnership maintain a pool of unencumbered real properties (each a “Pool Property” and collectively the “Pool Properties”) that meet certain requirements contained in the Second Amended and Restated Credit Agreement. The Second Amended and Restated Credit Agreement sets forth certain covenants relating to the Pool Properties, including, without limitation: • there must be no less than 15 Pool Properties at any time; • no greater than 15% of the aggregate pool value may be contributed by a single Pool Property or tenant; • no greater than 15% of the aggregate pool value may be contributed by Pool Properties subject to ground leases; • no greater than 20% of the aggregate pool value may be contributed by Pool Properties which are under development or assets under renovation; • the minimum aggregate leasing percentage of all Pool Properties must be no less than 90%; and • other limitations as determined by KeyBank upon further due diligence of the Pool Properties. Borrowing availability under the Revolving Credit Facility is limited to the lesser of the maximum amount of all loans outstanding that would result in (i) an unsecured leverage ratio of no greater than 60%, or (ii) an unsecured interest coverage ratio of no less than 2.00:1.00. Guarantors of the KeyBank Loans include the Company, each special purpose entity that owns a Pool Property, and each of the Operating Partnership’s other subsidiaries which owns a direct or indirect equity interest in a SPE that owns a Pool Property. In addition to customary representations, warranties, covenants, and indemnities, the Second Amended and Restated Credit Agreement requires the Operating Partnership to comply with the following, which will be tested on a quarterly basis: • a maximum consolidated leverage ratio of 60%, or, the ratio may increase, on two occasions, to 65% for up to four consecutive quarters after a material acquisition; • a minimum consolidated tangible net worth of not less than the sum of (i) $1,000,000,000.00, plus (ii) (A) seventy-five percent (75%) of the net proceeds (gross proceeds less reasonable and customary costs of sale and issuance paid to persons not affiliates of any credit party) received by the Company or the Operating Partnership at any time from the issuance of shares (whether common, preferred or otherwise), after the effective date of the Seventh Amendment, plus (B) seventy-five percent (75%) of the amount of OP Units of the Operating Partnership issued after the effective date of the Seventh Amendment, minus (iii) seventy-five percent (75%) of the amount of any payments that are used to redeem shares (whether common, preferred or otherwise) of the Company or the Operating Partnership or to redeem OP Units after the effective date of the Seventh Amendment, minus (iv) any amounts paid for the redemption or retirement of, or any accrued return on, the preferred equity held by SHBNPP Global Professional Investment Type Private Real Estate Trust No. 13(H) (the “Preferred Holder”); • a minimum consolidated fixed charge coverage ratio of not less than 1.50:1.00; • a maximum total secured debt ratio of not greater than 40%, which ratio may increase, on two occasions, to 45% for four consecutive quarters after closing of a material acquisition that is financed with secured debt; • a minimum unsecured interest coverage ratio of 2.00:1.00; • a maximum total secured recourse debt ratio, excluding recourse obligations associated with interest rate hedges, of 10% of our total asset value; • aggregate maximum unhedged variable rate debt of not greater than 30% of the Company's total asset value; and • a maximum unsecured leverage ratio of 60%, or, the ratio may increase, on two occasions, up to 65% for up to four consecutive quarters after a material acquisition. Furthermore, the activities of the Operating Partnership, the Company, and the Company's subsidiaries must be focused principally on the ownership, development, operation and management of office, industrial, manufacturing, warehouse, distribution or educational properties (or mixed uses thereof) and businesses reasonably related or ancillary thereto. In addition, the Second Amended and Restated Credit Agreement prohibits any special distributions from extraordinary non-recurring income. On October 31, 2023, the Company exercised its option to extend the Revolving Loan Maturity Date (as defined in the Second Amended and Restated Credit Agreement) to March 30, 2024, which extension will become effective upon the satisfaction or waiver of certain customary conditions. Debt Covenant Compliance Pursuant to the terms of the Company’s mortgage loans and the KeyBank Loans, the Operating Partnership, in consolidation with the Company, is subject to certain loan compliance covenants. The Company was in compliance with all of its debt covenants as of September 30, 2023. |
Interest Rate Contracts
Interest Rate Contracts | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Contracts | Interest Rate Contracts Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the values of which are determined by expected cash payments principally related to borrowings and interest rates. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not use derivatives for trading or speculative purposes. Derivative Instruments The Company has entered into interest rate swap agreements to hedge the variable cash flows associated with its variable-rate debt, including the KeyBank Loans. The change in the fair value of derivatives designated and qualifying as cash flow hedges is initially recorded in accumulated other comprehensive income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. The following table sets forth a summary of the interest rate swaps at September 30, 2023 and December 31, 2022: Fair Value (1) Current Notional Amounts Derivative Instrument Effective Date Maturity Date Interest Strike Rate September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Assets/(Liabilities): Interest Rate Swap 3/10/2020 7/1/2025 0.83% $ 10,807 $ 12,391 $ 150,000 $ 150,000 Interest Rate Swap 3/10/2020 7/1/2025 0.84% 7,199 8,244 100,000 100,000 Interest Rate Swap 3/10/2020 7/1/2025 0.86% 5,370 6,145 75,000 75,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% 4,818 4,331 125,000 125,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% 3,841 3,444 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.83% 3,838 3,441 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.84% 3,814 3,408 100,000 100,000 Total $ 39,687 $ 41,404 $ 750,000 $ 750,000 (1) The Company records all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly there are no offsetting amounts that net assets against liabilities. As of September 30, 2023, derivatives in an asset or liability position are included in the line item “Other assets” or “Interest rate swap liability” in the consolidated balance sheets at fair value. The SOF rate as of September 30, 2023 (effective date) was 5.43%. The following table sets forth the impact of the interest rate swaps on the consolidated statements of operations for the periods presented: Nine Months Ended September 30, 2023 2022 Interest Rate Swap in Cash Flow Hedging Relationship: Amount of loss recognized in AOCI on derivatives $ (15,371) $ 59,179 Amount of gain reclassified from AOCI into earnings under “Interest expense” $ 16,993 $ (5,292) Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded $ 49,208 $ 68,315 During the twelve months subsequent to September 30, 2023, the Company estimates that an additional $25.5 million of its income will be recognized from AOCI into earnings. Certain agreements with the derivative counterparties contain a provision that if the Company defaults on its credit facility indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender within a specified time period, then the Company could also be declared in default on its derivative obligations. As of September 30, 2023 and December 31, 2022, there were no swaps in a liability position. As of September 30, 2023 and December 31, 2022, the Company had not posted any collateral related to these agreements. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Interest payable $ 16,700 $ 13,654 Prepaid tenant rent 11,423 12,399 Deferred compensation 9,176 8,913 Real estate taxes payable 7,549 6,296 Property operating expense payable 4,394 7,960 Accrued construction in progress 1,173 35 Accrued tenant improvements 551 620 Redemptions payable — 4,383 Other liabilities 29,486 26,542 Total $ 80,452 $ 80,802 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company is required to disclose fair value information about all financial instruments, for which it is practicable to estimate fair value, whether or not recognized in the consolidated balance sheets. The Company measures and discloses the estimated fair value of financial assets and liabilities utilizing a fair value hierarchy that distinguishes between data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels, as follows: (i) quoted prices in active markets for identical assets or liabilities, (ii) “significant other observable inputs,” and (iii) “significant unobservable inputs.” “Significant other observable inputs” can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability, such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. “Significant unobservable inputs” are typically based on an entity’s own assumptions, since there is little, if any, related market activity. In instances in which 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 of input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers between the levels in the fair value hierarchy during the nine months ended September 30, 2023 and the year ended December 31, 2022. Recurring Measurements The following table sets forth the assets and liabilities that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2023 and December 31, 2022: Assets/(Liabilities) Total Fair Value Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2023 Interest Rate Swap Asset $ 39,687 $ — $ 39,687 $ — Mutual Funds Asset $ 6,815 $ 6,815 $ — $ — December 31, 2022 Interest Rate Swap Asset $ 41,404 $ — $ 41,404 $ — Mutual Funds Asset $ 6,191 $ 6,191 $ — $ — Nonrecurring Measurement - Real Estate Impairment During the nine months ended September 30, 2023, in connection with the preparation and review of the financial statements, the Company recorded a real estate impairment provision of approximately $397.4 million on sixteen properties, including eight Office and eight Other properties, located in the Southwest, Northeast, West, and Southeast regions of the United States. The impairment resulted from changes in the second quarter related to anticipated hold periods, estimated selling prices, and potential vacancies that impacted the recoverability of these assets. In determining the fair value of the properties, (i) for thirteen assets, the Company performed discounted cash flow analyses based on assumptions primarily relating to market rent, discount rates, and terminal capitalization rates, and (ii) for three assets, the Company based its determination on an estimated selling price per square foot and a shortened hold period. The Company considered these inputs as Level 3 measurements within the fair value hierarchy. The following table is a summary of the quantitative information related to the non-recurring fair value measurement for the impairment of the Company's real estate properties for the nine months ended September 30, 2023: Range of Inputs Southwest Northeast West Southeast Market rent (per square foot) $16.00 - $27.00 $15.00 - $30.00 $21.00 $14.00 Discount rate 8.50% - 15.00% 8.00% - 15.00% 9.00% 15.00% Terminal capitalization rate 8.00% - 10.50% 6.50% - 9.00% 8.50% 9.00% Range of Inputs Southwest Northeast West Estimated selling price (per square foot) $235.00 $227.00 $30.00 Anticipated hold period One year One year One year Nonrecurring Measurement - Investment in Unconsolidated Entity Impairment During the three months ended September 30, 2023, the Company recorded an OTTI of approximately $129.3 million for its investment in the Office Joint Venture, which represents a complete write-off of the Company’s remaining investment balance. The impairment resulted from a decline in the fair value of the investment primarily due to increased future loan extension risk impacting the Company’s expectations on the recoverability of the investment. In determining the fair value of the investment in the Office Joint Venture, the Company considered Level 3 inputs. Financial Instruments at Fair Value Financial instruments as of September 30, 2023 and December 31, 2022 consisted of cash and cash equivalents, restricted cash, accounts receivable, accrued expenses and other liabilities, and mortgage payable and other borrowings, as defined in Note 5, Debt. With the exception of the mortgage loans in the table below, the amounts of the financial instruments presented in the consolidated financial statements substantially approximate their fair value as of September 30, 2023 and December 31, 2022. The fair value of the seven mortgage loans in the table below is estimated by discounting each loan’s principal balance over the remaining term of the mortgage using estimated current borrowing rates available to the Company for debt instruments with similar terms and maturities. The Company determined that the mortgage debt valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt. September 30, 2023 December 31, 2022 Fair Value Carrying Value (1) Fair Value Carrying Value (1) BOA II Loan $ 214,374 $ 250,000 $ 226,361 $ 250,000 AIG Loan II 109,010 120,556 111,872 122,328 AIG Loan 76,658 98,158 89,526 99,794 Samsonite Mortgage Loan — — 17,998 17,998 HealthSpring Mortgage Loan — — 19,107 19,107 Pepsi Bottling Ventures Mortgage Loan 16,994 17,540 17,014 17,836 Highway 94 Mortgage Loan 11,970 11,970 11,941 12,740 Total $ 429,006 $ 498,224 $ 493,819 $ 539,803 (1) The carrying values do not include the debt premium/(discount) or deferred financing costs as of September 30, 2023 and December 31, 2022. See Note 5, Debt , for details. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | Equity Common Equity On April 13, 2023, the Company’s common Class T Shares, Class S shares, Class D shares, Class I shares, Class A shares, Class AA shares and Class AAA shares, were converted into Class E common shares (the “Conversion”) and all of our Class E common shares became listed (the “Listing”) on the New York Stock Exchange as “common shares”. Prior to the Conversion, Class T shares, Class S shares, Class D shares, Class I shares, Class A shares, Class AA shares, Class AAA shares and Class E shares voted together as a single class, and each common share of each class was entitled to one vote on each matter submitted to a vote at a meeting of the Company’s shareholders; provided that with respect to any matter that would only have a material adverse effect on the rights of a particular class of common shares, only the holders of such affected class were entitled to a vote . As a result of the Conversion and in connection with the Listing on April 13, 2023, all of our Class E common shares are now known as common shares. As of September 30, 2023, the Company had received aggregate gross offering proceeds of approximately $2.8 billion from the sale of shares in private offerings, public offerings, the DRP (defined below) offerings and mergers (includes offerings by our predecessor, Griffin Capital Essential Asset REIT, Inc. (our “Predecessor”), our Predecessor’s merger with Signature Office REIT, Inc., and our Predecessor’s merger with certain other related entities (the “Predecessor Mergers”) and the acquisition of Cole Office & Industrial REIT (“CCIT II”) in a stock-for-stock transaction (the “CCIT II Merger”). As part of the $2.8 billion from the sale of shares, the Company issued (i) approximately 4,863,623 Class E shares in June 2015 upon the consummation of the merger with Signature Office REIT, Inc., (ii) 19,442,394 Class E shares in April 2019 upon consummation of the Predecessor Mergers in exchange for all outstanding shares of our Predecessor’s common stock at the time of the Predecessor Mergers, and (iii) 10,384,185 Class E shares in exchange for all the outstanding shares of CCIT II’s common stock at the time of the CCIT II Merger. As of September 30, 2023, there were 35,997,549 common shares outstanding, including shares issued pursuant to the DRP, less shares redeemed pursuant to the SRP (defined below) and the self-tender offer, which occurred in May 2019 (the “Self-Tender Offer”). ATM Program In August 2023, the Company entered into an at-the-market equity offering (the “ATM”) pursuant to which the Company may sell common shares up to an aggregate purchase price of $200.0 million. The Company may sell such shares in amounts and at times to be determined by the Company from time to time, but the Company has no obligation to sell any of the shares. Actual sales, if any, will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the Company’s common shares, capital needs, and the Company’s determinations of the appropriate sources of funding. During the three months ended September 30, 2023, the Company did not sell shares under the ATM program. Distribution Reinvestment Plan Prior to its termination on May 15, 2023, the Company adopted a Dividend Reinvestment Plan (the “DRP”), which allowed shareholders to have dividends and other distributions otherwise distributable to them invested in additional common shares. No sales commissions or dealer manager fees were paid on shares sold through the DRP, but the DRP shares were charged the applicable distribution fee payable with respect to all shares of the applicable class. The purchase price per share under the DRP was equal to the net asset value ("NAV") per share applicable to the class of shares purchased, calculated using the most recently published NAV available at the time of reinvestment. On May 22, 2023, the Company filed a post-effective amendment to the registration statement for the Company’s DRP to deregister to all of the common shares registered for sales that were not sold pursuant to such registration statement. As of September 30, 2023 and September 30, 2022, the Company had issued approximately $341.1 million in shares pursuant to the DRP offerings. Share Redemption Program Prior to its termination upon the Listing on April 13, 2023, the Company had adopted a share redemption program (the “SRP”) that enabled shareholders to sell their shares to the Company in limited circumstances. The SRP was suspended on October 1, 2021 but resumed on a limited basis (i.e., limited to redemptions in connection with a holder’s death, disability, or incompetence) on August 5, 2022 with quarterly redemptions capped at $5.0 million. In addition, pursuant to the terms of the SRP, during any calendar year, with respect to each share class, the Company was permitted to redeem no more than 5% of the weighted-average number of shares of such class outstanding during the prior calendar year. Under the SRP, the Company would redeem shares as of the last business day of each quarter at a price equal to the most recently published NAV per share for the applicable class prior to quarter end. During the nine months ended September 30, 2023, the Company redeemed 941 shares. The SRP was suspended again on March 7, 2023 and terminated in connection with the Listing. The following table summarizes share redemption activity under the SRP during the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Shares of common shares redeemed — 74,850 941 (1) 74,850 Weighted average price per share $ — $ 66.78 $ 66.87 $ 66.78 (1) Does not include shares withheld (i.e., forfeited) by employees to satisfy minimum statutory tax withholding requirements associated with the vesting of RSUs. During the period beginning July 31, 2014 and through the termination of the SRP, the C ompany had redeemed 3,295,618 shares (excluding the Self-Tender Offer) of common shares for approximately $275.5 million at a weighted average price per share of $83.60 pursuant to the SRP. Issuance of Restricted Share Units to Executive Officers, Employees and Board of Trustees On April 5, 2023, the Compensation Committee of the Board approved the Peakstone Realty Trust Second Amended and Restated Employee and Long-Term Incentive Plan (the “Plan”) which amended and restated the Amended and Restated Employee and Trustee Long-Term Incentive Plan (the “Prior Plan”) to (1) change the name of the Prior Plan in connection with the Company’s name change, (2) expressly provide for the grant of profits interests (or “LTIP Units”) in the Operating Partnership and (3) make conforming entity name changes throughout. Otherwise, the Plan contains the same material terms as the Prior Plan. The Plan provides for the grant of share-based awards to the Company’s trustees, full-time employees and certain consultants that provide services to the Company or affiliated entities. Awards granted under the Plan may consist of stock options, restricted shares, share appreciation rights, distribution equivalent rights, LTIP Units, and other equity-based awards. The share-based awards are measured at fair value at issuance and recognized as compensation expense over the vesting period. The maximum number of shares authorized under the Plan is 777,778 shares. As of September 30, 2023 , 166,868 shares were available for future issuance under the Plan. As of September 30, 2023 and September 30, 2022, there was $11.0 million and $14.2 million, respectively, of unrecognized compensation expense remaining, which vests between three months and approximately 2.3 years. Total compensation expense related to RSUs for the three months ended September 30, 2023 and September 30, 2022 was approximately $2.4 million and $2.7 million, respectively. Total compensation expense for the nine months ended September 30, 2023 and September 30, 2022 was approximately $9.0 million and $6.1 million, respectively. The following table summarizes the activity of unvested shares of RSU awards for the periods presented: Number of Unvested Shares of RSU Awards Weighted-Average Grant Date Fair Value per Share Balance at December 31, 2021 169,846 Granted 116,749 $ 66.87 Forfeited (9,404) $ 80.38 Vested (119,056) $ 77.68 Balance at December 31, 2022 158,135 Granted 166,321 $ 56.53 Forfeited (161) $ 62.17 Vested (1) (41,896) $ 70.32 Balance at September 30, 2023 282,399 (1) Total shares vested include 55,438 common shares that were withheld (i.e., forfeited) by employees during the nine months ended September 30, 2023 to satisfy minimum statutory tax with holdings requirements associated with the vesting of RSUs. Full Redemption of Perpetual Convertible Preferred Shares On April 10, 2023, the Company entered into a Redemption Agreement (the “Redemption Agreement”) with the Preferred Holder and Shinhan Asset Management Co., Ltd. Pursuant to the Redemption Agreement, the Company redeemed from the Preferred Holder all 5,000,000 shares of “Series A Cumulative Perpetual Convertible Preferred Stock” (the “Series A Preferred Shares”) held by the Preferred Holder in exchange for (i) a redemption payment of $125.0 million, and (ii) the amount of accumulated and unpaid distributions of approximately $2.4 million, in accordance with the Articles Supplementary filed by the Company on April 30, 2019 (the “Articles Supplementary”). The Preferred Holder agreed to waive the Redemption Fee (as defined in the Articles Supplementary) in the amount of $1.9 million and any other payments in connection with the Series A Preferred Shares. The Redemption Agreement also terminated the Series A Cumulative Perpetual Convertible Stock Purchase Agreement dated as of August 8, 2018, by and between the Company and the Preferred Holder (the “Purchase Agreement”), and provided that any rights and privileges afforded to the Preferred Holder under the Purchase Agreement were terminated and canceled and of no further force or effect, including the Preferred Holder’s right to purchase, and the Company’s obligation to sell, the Second Tranche (as defined in the Purchase Agreement), and no party to the Purchase Agreement has any further obligations thereunder. |
Noncontrolling Interests
Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interests represent limited partnership interests in the Operating Partnership in which the Company is the general partner. As of September 30, 2023, noncontrolling interests were approximately 8.8% of total shares and 8.9% of weighted average shares outstanding (both measures assuming OP Units were converted to common shares). The Company classified OP Units exchanged for limited partnership interests issued in conjunction with contributed assets and in connection with the internalization of management of the Company in December 2018 (the “Self-Administration Transaction”), as noncontrolling interests, which are presented as a component of permanent equity, except as discussed below. Any noncontrolling interest that fails to qualify as permanent equity has been reclassified as temporary equity and adjusted to the greater of (a) the carrying amount or (b) its redemption value as of the end of the period in which the determination is made. As of September 30, 2023, the limited partners of the Operating Partnership owned approximately 3.5 million OP Units, which were issued to then affiliated parties and unaffiliated third parties in exchange for the contribution of certain properties to the Company and in connection with the Self-Administration Transaction, and approximately 0.02 million OP Units were issued unrelated to property contributions. As of September 30, 2023, all limited partners of the Operating Partnership (See Noncontrolling Interest Subject to Redemption below) had an Exchange Right (as defined below), pursuant to which, if exercised, the Operating Partnership would be required to redeem their OP Units for cash equal to the value of an equivalent number of common shares as calculated pursuant to the limited partnership agreement and applicable contribution agreement (the “Exchange Right”). If a limited partner of the Operating Partnership exercises an Exchange Right, the Company, as general partner of the Operating Partnership, may, in its sole and absolute discretion, elect to either (i) purchase the OP units for cash equal to the value of an equivalent number of common shares as calculated pursuant to the limited partnership agreement and applicable contribution agreement or (ii) purchase such limited partner’s OP Units by issuing common shares of the Company for the OP Units redeemed pursuant to the limited partnership agreement and applicable contribution agreement, subject to certain transfer and ownership limitations included in the Company’s charter and the limited partnership agreement. The following summarizes the activity for noncontrolling interests recorded as equity for the nine months ended September 30, 2023 and year ended December 31, 2022: Nine Months Ended September 30, 2023 Year Ended December 31, 2022 Beginning balance $ 174,655 $ 218,653 Reclass of noncontrolling interest subject to redemption 10 957 Exchange of noncontrolling interests (6,550) — Reclass of redeemable non-controlling interest 3,801 — Distributions to noncontrolling interests (2,990) (10,942) Allocated distributions to noncontrolling interests subject to redemption (3) (17) Allocated net loss (52,677) (39,714) Allocated other comprehensive income (loss) (300) 5,718 Ending balance $ 115,946 $ 174,655 Noncontrolling interests subject to redemption Prior to the Listing, OP Units issued pursuant to the Will Partners Contribution were not included in permanent equity on the consolidated balance sheets, because the limited partners holding these OP Units could cause the general partner to redeem the OP Units for the cash value, and the Company could not elect to purchase such limited partner’s OP Units by issuing common shares of the Company for the OP Units redeemed. Accordingly, prior to Listing, the general partner of the Operating Partnership did not control these redemptions and these OP Units were presented on the consolidated balance sheets as noncontrolling interest subject to redemption at their redeemable value, and the net income (loss) and distributions attributed to these limited partners are allocated proportionately between common shareholders and other noncontrolling interests that are not considered redeemable. Effective as of the Listing, and subsequently as of September 30, 2023, all OP Units are subject to the same redemption process as all other OP Units (i.e., can be redeemed for cash or, the Company can elect to purchase these OP Units by issuing common shares) as described above. The Company intends to redeem all OP Units for common shares. Redemption of OP units from Self-Administration Transaction In connection with the Self-Administration Transaction, Griffin Capital, LLC (“GC LLC”), an entity controlled by our former Executive Chairman, Kevin A. Shields, and an affiliate of our Predecessor’s sponsor, Griffin Capital Company, LLC “GCC LLC”), received OP units (approximately 2.7 million taking into effect the 9 to 1 reverse split) as consideration in exchange for the sale to our Predecessor of the advisory, asset management and property management business of Griffin Capital Real Estate Company, LLC (“GRECO”). GC LLC assigned approximately 50% of the OP units received in connection with the Self-Administration Transaction to then participants in GC LLC’s long-term incentive plan. Mr. Shields is the plan administrator of such long-term incentive plan. As previously disclosed, certain of our current and former employees and executive officers, including Michael Escalante, our Chief Executive Officer, and Javier Bitar, our Chief Financial Officer and Treasurer, were employed by affiliates of GC LLC prior to the Self-Administration Transaction and are therefore participants in a long-term incentive plan of GC LLC that made grants to such participants in connection with services rendered prior to the Self-Administration Transaction. Participants in GC LLC’s long-term incentive plan, including Messrs. Escalante and Bitar, are entitled to receive distributions from the long-term incentive plan in the form of either cash, common shares, or other property, or a combination thereof, as elected by the plan administrator. The Listing requires that certain awards under GC LLC’s long-term incentive plan be settled during the fourth quarter 2023 and in four annual installments thereafter, unless waived or modified . As described above, in connection with the settlement of GC LLC’s long-term incentive plan, the plan administrator may choose to distribute cash, common shares, or other property, or a combination thereof, as elected by the plan administrator. If the plan administrator elects to redeem the OP units GC LLC received in connection with the Self-Administration Transaction pursuant to the terms of our Operating Partnership’s operating agreement, we intend to satisfy such redemption request with our common shares. If such a redemption occurs in the fourth quarter of 2023 and the plan administrator determines to distribute only common shares to plan participants, then, pursuant to the terms of the GC LLC long-term incentive plan, GC LLC would distribute 56,266 common shares to Mr. Escalante and 2,000 common shares to Mr. Bitar in connection with the redemption in the fourth quarter of 2023. The redemption of OP units and distribution of common shares would have no economically dilutive effect on our common shareholders. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Summarized below are the related party transaction costs receivable and payable by the Company as of September 30, 2023 and December 31, 2022: Incurred for the Nine Months Ended Payable as of September 30, September 30, December 31, 2023 2022 2023 2022 Expensed Costs advanced by related party $ 85 $ 705 $ 48 $ 67 Administrative reimbursement 975 1,066 38 522 Assumed through Self-Administration Transaction/Mergers Earn-out — — — 130 Other Distributions 2,381 6,498 620 739 Total $ 3,441 $ 8,269 $ 706 $ 1,458 Administrative Services Agreement As of October 6, 2023, the ASA is terminated. In connection with the Self-Administration Transaction, the Company, Operating Partnership, Predecessor, and GRECO, on the one hand, and GCC LLC and GC LLC, on the other hand, entered into that certain Administrative Services Agreement dated December 14, 2018 (as amended, the “ASA”), pursuant to which GCC LLC and GC LLC provided certain operational and administrative services to the Company at cost. The Company paid GCC LLC a monthly amount based on the actual costs anticipated to be incurred by GCC LLC for the provision of such services until such items were terminated from the ASA. Such costs were reconciled periodically and a full review of the costs is performed at least annually. In addition, the Company directly paid or reimbursed GCC LLC for the actual cost of any reasonable third-party expenses incurred in connection with the provision of such services. On March 30, 2022, June 30, 2022, and March 21, 2023, the Company amended the ASA to reduce the scope of services provided, including removing the provision of office space and advisor services. On June 21, 2023, the Company delivered a partial termination notice under the ASA electing to terminate certain general corporate support services effective July 22, 2023. Following such amendments and such notice, GCC LLC and GC LLC were obligated to provide the Company with human resources support only, which services were terminable by the Company upon thirty (30) days’ prior written notice to GCC and GC LLC. On September 6, 2023, the Company delivered a termination notice under the ASA with respect to such human resources support services and, given those were the only remaining services, the ASA itself, automatically terminated effective October 6, 2023. Office Sublease On March 25, 2022, the Company executed a sublease agreement with GCC (the “El Segundo Sublease”) for the building located at 1520 E. Grand Ave, El Segundo, CA (the “Building”) which is the location of the Company’s corporate headquarters and where the Company conducts day-to-day business. The Building is part of a campus that contains other buildings and parking (the “Campus”). The El Segundo Sublease also entitles the Company to use certain common areas on the Campus. Prior to the execution of the El Segundo Sublease, the Company paid GCC rent for the Building as part of the Administrative Services Agreement. The Campus is owned by GCPI, LLC (“GCPI”), and the Building is master leased by GCPI to GCC. GCC is the sublessor under the El Segundo Sublease. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases Lessor The Company leases industrial and office space to tenants primarily under leases classified as non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum lease payments are recognized in rental income on a straight-line basis over the term of the related lease and estimated reimbursements from tenants for real estate taxes, insurance, common area maintenance and other recoverable operating expenses are recognized in rental income in the period that the expenses are incurred. The Company recognized $166.5 million and $277.7 million of lease income related to operating lease payments for the nine months ended September 30, 2023 and September 30, 2022, respectively. The Company's current third-party tenant leases have expirations ranging from 2024 to 2044. The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2023: As of September 30, 2023 Remaining 2023 $ 52,740 2024 199,272 2025 185,716 2026 181,278 2027 162,377 Thereafter 708,591 Total $ 1,489,974 The future minimum base rents in the table above excludes tenant reimbursements of operating expenses, amortization of adjustments for deferred rent receivables and the amortization of above/below-market lease intangibles. Lessee - Ground Leases As of September 30, 2023, the Company is the tenant under (i) three ground leases classified as operating leases, and (ii) two ground leases classified as financing leases. Each of these ground leases were assigned to the Company as part of its acquisition of the applicable assets and no incremental costs were incurred for such ground leases. These ground leases are classified as non-cancelable and contain no renewal options. Lessee - Office Leases As of September 30, 2023, the Company is the tenant under the following two office space leases, each of which is classified as a non-cancelable operating lease: (i) the El Segundo Sublease described in Note 11, Related Party Transactions, above, and (ii) a lease for its office space in Chicago, Illinois, which expires on June 29, 2025, which is subject and subordinate to the rights of another tenant in the building. For ground leases and operating leases, the Company incurred costs of approximately $2.9 million for the nine months ended September 30, 2023 and $3.1 million for the nine months ended September 30, 2022, which are included in “Property Operating Expense” in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $1.6 million for the nine months ended September 30, 2023 and $1.6 million for the nine months ended September 30, 2022. The following table sets forth the weighted-average for the lease term and the discount rate as of September 30, 2023: As of September 30, 2023 Lease Term and Discount Rate Operating Financing Weighted-average remaining lease term in years 76.6 years 15.2 years Weighted-average discount rate (1) 4.89% 3.34 % (1) Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate for each lease, the Company considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements. Maturities of lease liabilities as of September 30, 2023 were as follows: As of September 30, 2023 Operating Financing Remaining 2023 $ 540 $ 343 2024 1,909 360 2025 1,570 365 2026 1,504 375 2027 1,527 381 2028 1,595 386 Thereafter 248,695 3,072 Total undiscounted lease payments 257,340 5,282 Less: imputed interest (214,243) (2,011) Total lease liabilities $ 43,097 $ 3,271 |
Leases | Leases Lessor The Company leases industrial and office space to tenants primarily under leases classified as non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum lease payments are recognized in rental income on a straight-line basis over the term of the related lease and estimated reimbursements from tenants for real estate taxes, insurance, common area maintenance and other recoverable operating expenses are recognized in rental income in the period that the expenses are incurred. The Company recognized $166.5 million and $277.7 million of lease income related to operating lease payments for the nine months ended September 30, 2023 and September 30, 2022, respectively. The Company's current third-party tenant leases have expirations ranging from 2024 to 2044. The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2023: As of September 30, 2023 Remaining 2023 $ 52,740 2024 199,272 2025 185,716 2026 181,278 2027 162,377 Thereafter 708,591 Total $ 1,489,974 The future minimum base rents in the table above excludes tenant reimbursements of operating expenses, amortization of adjustments for deferred rent receivables and the amortization of above/below-market lease intangibles. Lessee - Ground Leases As of September 30, 2023, the Company is the tenant under (i) three ground leases classified as operating leases, and (ii) two ground leases classified as financing leases. Each of these ground leases were assigned to the Company as part of its acquisition of the applicable assets and no incremental costs were incurred for such ground leases. These ground leases are classified as non-cancelable and contain no renewal options. Lessee - Office Leases As of September 30, 2023, the Company is the tenant under the following two office space leases, each of which is classified as a non-cancelable operating lease: (i) the El Segundo Sublease described in Note 11, Related Party Transactions, above, and (ii) a lease for its office space in Chicago, Illinois, which expires on June 29, 2025, which is subject and subordinate to the rights of another tenant in the building. For ground leases and operating leases, the Company incurred costs of approximately $2.9 million for the nine months ended September 30, 2023 and $3.1 million for the nine months ended September 30, 2022, which are included in “Property Operating Expense” in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $1.6 million for the nine months ended September 30, 2023 and $1.6 million for the nine months ended September 30, 2022. The following table sets forth the weighted-average for the lease term and the discount rate as of September 30, 2023: As of September 30, 2023 Lease Term and Discount Rate Operating Financing Weighted-average remaining lease term in years 76.6 years 15.2 years Weighted-average discount rate (1) 4.89% 3.34 % (1) Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate for each lease, the Company considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements. Maturities of lease liabilities as of September 30, 2023 were as follows: As of September 30, 2023 Operating Financing Remaining 2023 $ 540 $ 343 2024 1,909 360 2025 1,570 365 2026 1,504 375 2027 1,527 381 2028 1,595 386 Thereafter 248,695 3,072 Total undiscounted lease payments 257,340 5,282 Less: imputed interest (214,243) (2,011) Total lease liabilities $ 43,097 $ 3,271 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, the Company may become subject to legal and regulatory proceedings, claims and litigation arising in the ordinary course of business. The Company is not a party to, nor is the Company aware of any material pending legal proceedings nor is any property of the Company subject to any material pending legal proceedings. Capital Expenditures and Tenant Improvement Commitments As of September 30, 2023, the Company had an aggregate remaining contractual commitment for repositioning, capital expenditure projects, leasing commissions and tenant improvements of approximately $17.9 million. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment ReportingIn the fourth quarter of 2022, the Company evolved the management strategy of its real estate portfolio to focus on three different property types in order to provide clarity as to the value and operations associated with the assets within each group. As a result, the Company changed to three reportable segments: Industrial, Office, and Other. The Industrial segment consists of high-quality, well-located industrial properties with modern specifications. The Office segment consists of newer, high-quality, and business-essential office properties. The Other segment consists of vacant and non-core properties, together with other properties in the same cross-collateralized loan pools. This segment includes properties that are either non-stabilized, leased to tenants with shorter lease terms or are being evaluated for repositioning, re-leasing or potential sale. The Company recast its segment results for all prior periods presented to show the three reportable segments. The Company evaluates performance of each segment based on segment net operating income (“NOI”), which is defined as property revenue less property expenses. The Company excludes the following from Segment NOI because they are addressed on a corporate level: (i) the Office Joint Venture, (ii) interest expense, and (iii) general and administrative expenses. Segment NOI is not a measure of operating income or cash flows from operating activities, is not indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate segment profit measures in the same manner. The Company considers segment NOI to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of our properties. The following table presents segment NOI for the three and nine months ended September 30, 2023 and September 30, 2022 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Industrial NOI Total Industrial revenues $ 13,934 $ 15,095 $ 42,508 $ 45,401 Industrial operating expenses (1,884) (1,706) (5,510) (5,489) Industrial NOI 12,050 13,389 36,998 39,912 Office NOI Total Office revenues 34,022 72,128 108,210 251,467 Office operating expenses (6,102) (17,762) (18,518) (57,832) Office NOI 27,920 54,366 89,692 193,635 Other NOI Total Other revenues 13,757 14,107 40,508 43,724 Other operating expenses (5,360) (4,808) (15,666) (13,932) Other NOI 8,397 9,299 24,842 29,792 Total NOI $ 48,367 $ 77,054 $ 151,532 $ 263,339 A reconciliation of net loss to NOI for the three and nine months ended September 30, 2023 and September 30, 2022 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Reconciliation of Net Loss to Total NOI Net loss $ (139,948) $ (119,373) $ (583,332) $ (193,240) General and administrative expenses 9,653 9,521 31,411 27,463 Corporate operating expenses to related parties 257 140 975 1,065 Real estate impairment provision — 10,697 397,373 86,254 Depreciation and amortization 25,003 42,628 86,830 155,470 Interest expense 16,126 24,283 49,208 68,315 Other (income) expense, net (3,654) 162 (7,613) 588 Net loss from investment in unconsolidated entity 144,598 — 176,767 — (Gain) loss from disposition of assets (3,748) 95,513 (24,657) 95,513 Debt breakage costs — 13,249 — 13,249 Transaction expenses 80 234 24,570 8,662 Total NOI $ 48,367 $ 77,054 $ 151,532 $ 263,339 The following table presents the Company’s goodwill for each of the segments as of September 30, 2023 and December 31, 2022: September 30, December 31, 2023 2022 Goodwill Industrial $ 68,373 $ 68,373 Office — — Other 26,305 26,305 Total Goodwill $ 94,678 $ 94,678 The following table presents the Company’s total real estate assets, net, which includes accumulated depreciation and amortization and excludes intangibles, for each segment as of the September 30, 2023 and December 31, 2022: September 30, December 31, 2023 2022 Industrial Real Estate, net Total real estate $ 740,790 $ 761,757 Accumulated depreciation and amortization (146,047) (137,738) Industrial real estate, net 594,743 624,019 Office Real Estate, net Total real estate 1,567,724 2,020,463 Accumulated depreciation and amortization (279,852) (305,829) Office real estate, net 1,287,872 1,714,634 Other Real Estate, net Total real estate 399,295 715,036 Accumulated depreciation and amortization (120,833) (201,072) Other real estate, net 278,462 513,964 Total Real Estate, net $ 2,161,077 $ 2,852,617 Total asset information by segment is not reported because the Company does not use this measure to assess performance or to make resource allocation decisions. |
Declaration of Distributions
Declaration of Distributions | 9 Months Ended |
Sep. 30, 2023 | |
Declaration of Distributions [Abstract] | |
Declaration of Distributions | Declaration of Distributions On March 14, 2023, the Board declared an all-cash distribution for the month of March in the amount of $0.075 per common share. The Company paid such distribution on May 12, 2023 to shareholders of record as of May 2, 2023. On June 20, 2023, the Board declared an all-cash distribution for the second quarter in the amount of $0.225 per common share. The Company paid such distribution on July 17, 2023 to shareholders of record as of June 30, 2023. On August 2, 2023, the Board declared an all-cash distribution for the third quarter in the amount of $0.225 per common share. The Company paid such distribution on October 17, 2023 to shareholders of record as of September 30, 2023. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 31, 2023, the Company exercised its option to extend the Revolving Loan Maturity Date (as defined in the Second Amended and Restated Credit Agreement) to March 30, 2024, which extension will become effective upon the satisfaction or waiver of certain customary conditions. On November 7, 2023, the Board declared an all-cash distribution for the fourth quarter in the amount of $0.225 per common share. Such distribution is payable on or about January 17, 2024 to shareholders of record as of December 29, 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (127,595) | $ (111,224) | $ (538,036) | $ (183,277) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. |
Consolidation | The consolidated financial statements of the Company include all accounts of the Company, the Operating Partnership, and its consolidated subsidiaries. Intercompany transactions are shown on the consolidated statements if and to the extent to required pursuant to GAAP. With the exception of the Office Joint Venture (defined below), each property-owning entity is a wholly-owned subsidiary which is a special purpose entity (“SPE”). If a property is separately financed (i.e., not part of the borrowing base under our credit facility or a collateralized loan pool), the income from such property is generally not available to satisfy the debts or obligations of any other entity. |
Use of Estimates | Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Per Share Data | Per Share Data The Company reports earnings per share for the period as (1) basic earnings per share computed by dividing net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period, and (2) diluted earnings per share computed by dividing net income (loss) attributable to common shareholders by the weighted |
Restricted Cash | As required by certain lease provisions or certain lenders in conjunction with an acquisition or debt financing, the Company assumed or funded reserves for specific property improvements and deferred maintenance, re-leasing costs, and taxes and insurance, which are included on the consolidated balance sheets as restricted cash. |
Impairment of Real Estate and Related Intangible Assets | Impairment of Real Estate and Related Intangible Assets In accordance with the provisions of the Impairment or Disposal of Long-Lived Assets Subsections of ASC 360, the Company assesses the carrying values of our respective long-lived assets whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. Recoverability of real estate assets is measured by comparison of the carrying amount of the asset to the estimated future undiscounted cash flows. To review real estate assets for recoverability, the Company considers current market conditions as well as the Company's intent with respect to holding or disposing of the asset. The intent with regard to the underlying assets might change as market conditions and other factors change. Fair value is determined through various valuation techniques, including discounted cash flow models, applying a capitalization rate to estimated net operating income of a property, and quoted market values and third party appraisals, where considered necessary. The use of projected future cash flows is based on assumptions that are consistent with estimates of future expectations and the strategic plan used to manage the Company's underlying business. If the Company’s analysis indicates that the carrying value of the real estate asset is not recoverable on an undiscounted cash flow basis, the Company will recognize an impairment charge for the amount by which the carrying value exceeds the current estimated fair value of the real estate property. Projections of expected future undiscounted cash flows require management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount and capitalization rates, the number of months it takes to re-lease the property, and the number of years the property is held for investment. See Note 3, Real Estate, for further details. |
Impairment of Investments in Unconsolidated Entities | Impairment of Investments in Unconsolidated Entities On a quarterly basis, the Company evaluates its equity method investment in an unconsolidated entity for a potential other-than-temporary impairment (“OTTI”). If the Company’s investment is other than temporarily impaired, it determines the fair value of its investment and records the impairment measured as the difference between its carrying amount and fair value. The impairment is recorded to net earnings or loss from investment in unconsolidated entities on the consolidated statement of operations. See Note 4, Investment in Unconsolidated Entities, for further details. |
Segment Information | Segment Information ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity’s reportable segments. The Company internally evaluates all of the properties and interests therein as three reportable segments: Industrial, Office, and Other. Refer to Note 14, Segment Reporting , for further details. |
Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under the Internal Revenue Code (“Code”). To qualify as a REIT, the Company must meet certain organizational and operational requirements. The Company intends to adhere to these requirements and maintain its REIT status for the current year and subsequent years. As a REIT, the Company generally will not be subject to federal income taxes on taxable income that is distributed to shareholders. However, the Company may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed taxable income, if any. If the Company fails to qualify as a REIT in any taxable year, the Company will then be subject to federal income taxes on the taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially adversely affect net income and net cash available for distribution to shareholders. As of September 30, 2023, the Company satisfied the REIT requirements and distributed all of its taxable income. |
Goodwill | Goodwill Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of business acquired. The Company’s goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the goodwill might be impaired. On October 1 of each year, the Company performs a qualitative analysis to determine whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting units in step one of the impairment test. If a quantitative assessment is deemed necessary, and to the extent the carrying amount of the reporting unit’s allocated goodwill exceeds the unit’s fair value, the Company recognizes an impairment of goodwill for the excess up to the amount of goodwill of that reporting unit. |
Recently Issued Accounting Pronouncements and Adoption of New Accounting Pronouncements | Recently Issued Accounting Pronouncements Changes to GAAP are established by the FASB in the form of an Accounting Standards Update (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not recently issued any other ASUs that the Company expects to be applicable and have a material impact on the Company's financial statements. Adoption of New Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides temporary optional guidance that provides transition relief for reference rate reform, including optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions that reference LIBOR or a reference rate that is expected to be discontinued as a result of reference rate reform if certain criteria are met. ASU 2020-04 was effective upon issuance, and the provisions generally can be applied prospectively as of January 1, 2020 through December 31, 2023. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. The Company has subsequently elected to apply additional expedients related to contract modifications, changes in critical terms, and updates to the designated hedged risk(s) as qualifying changes have been made to applicable debt and anticipate to be made to derivative contracts. Application of these expedients preserves the presentation of derivatives and debt contracts consistent with past presentation. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, which refines the scope of Topic 848 and clarifies some of its guidance. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848) to defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Restrictions on Cash and Cash Equivalents | Additionally, an ongoing replacement reserve is funded by certain tenants pursuant to such tenant’s respective lease as follows: Balance as of September 30, 2023 December 31, 2022 Cash reserves $ 1,036 $ 4,262 Restricted lockbox 4,615 502 Total restricted cash $ 5,651 $ 4,764 |
Real Estate (Tables)
Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of Gross Investment in Real Estate | The following table summarizes the Company’s gross investment in real estate as of: September 30, 2023 December 31, 2022 Land $ 244,369 $ 327,408 Building and improvements 2,042,347 2,631,965 Tenant origination and absorption cost 418,896 535,889 Construction in progress 2,197 1,994 Total real estate $ 2,707,809 $ 3,497,256 |
Schedule of Gain on Dispositions of Real Estate | The Company recognized a net gain of approximately $24.7 million, detailed in the table below: Sale Date Segment Location Gross Proceeds Gain (Loss) Three Months Ended March 31, 2023 January 6, 2023 Industrial Irvine, CA $ 40,000 $ 18,690 February 16, 2023 Industrial Clinton, SC 19,300 7,109 March 2, 2023 Office Herndon, VA 110,300 4,811 Total 169,600 30,610 Three Months Ended June 30, 2023 May 9, 2023 Other Lone Tree, CO 5,600 (301) May 15, 2023 Office Houston, TX 62,300 (5,000) June 8, 2023 Other Greenwood Village, CO 5,000 (5,200) June 30, 2023 Office Andover, MA 23,700 100 June 30, 2023 Office Andover, MA 34,200 700 Total 130,800 (9,701) Three Months Ended September 30, 2023 August 16, 2023 Other Rancho Cordova, CA 8,300 3,748 Total 8,300 3,748 Total for the Nine Months Ended September 30, 2023 $ 308,700 $ 24,657 |
Schedule of Company's Intangibles | The following table summarizes the Company’s allocation of acquired and contributed real estate asset value to in-place lease valuation, tenant origination and absorption cost, and other intangibles, as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 In-place lease valuation (above market) $ 23,042 $ 28,619 In-place lease valuation (above market) - accumulated amortization (16,394) (19,799) In-place lease valuation (above market), net 6,648 8,820 Intangibles - other 32,028 32,028 Intangibles - other - accumulated amortization (8,104) (6,987) Intangibles - other, net 23,924 25,041 Intangible assets, net $ 30,572 $ 33,861 In-place lease valuation (below market) $ (44,840) $ (48,686) Land leasehold interest (above market) (3,072) (3,072) Intangibles - other (above market) (205) (258) In-place lease valuation & land leasehold interest - accumulated amortization 31,013 31,358 Intangible liabilities, net $ (17,104) $ (20,658) Tenant origination and absorption cost $ 418,896 $ 535,889 Tenant origination and absorption cost - accumulated amortization (224,061) (282,383) Tenant origination and absorption cost, net $ 194,835 $ 253,506 |
Schedule of Amortization (Income) Expense | The amortization of the intangible assets and other leasing costs for the respective periods is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Above and below market leases, net $ (421) $ (436) $ (834) $ (1,282) Tenant origination and absorption cost $ 8,261 $ 15,427 $ 29,651 $ 60,826 Ground lease amortization (below market) $ (98) $ (95) $ (290) $ (274) Other leasing costs amortization $ 489 $ 1,028 $ 1,527 $ 4,064 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Company's Share of Net Earnings or Losses and Reduced by Distributions | The table below summarizes the Company’s investment in the unconsolidated Office Joint Venture, which the Company determined is related to corporate activities and is excluded from its segment reporting: Office Joint Venture Investment in Office Joint Venture Balance at December 31, 2022 $ 178,647 Contributions (1) 1,960 Shortfall Loan (1) (1,960) Company’s share of net loss (48,659) Company’s share of other comprehensive loss (654) Impairment provision (2) (129,334) Balance at September 30, 2023 $ — (1) Amounts represent the deemed contribution and related Shortfall Loan between the Company’s subsidiary, GRT VAO Sub, and the Funding Member of the Office Joint Venture for the Capital Call. Refer to details above. (2) Amount represents the impairment of the Company’s investment in the Office Joint Venture of $129.3 million. As of September 30, 2023, the Company also had a cumulative proportionate share of the Office Joint Venture’s accumulated other comprehensive income (“AOCI”) of $1.2 million, which was also written off in conjunction with the investment balance being impaired to zero. The write-off of the AOCI resulted in recognition of income, which was also recorded to “Net loss from investment in unconsolidated entity” for a total net loss of $128.1 million during the period. The table below presents the condensed balance sheet for the unconsolidated Office Joint Venture: September 30, 2023 (1) December 31, 2022 (2) Assets Real estate properties, net $ 1,099,915 $ 981,354 Other assets 299,847 240,447 Total Assets $ 1,399,762 $ 1,221,801 Liabilities Mortgages payable, net $ 1,051,178 $ 856,765 Other liabilities 86,358 52,018 Total Liabilities $ 1,137,536 $ 908,783 (1) Amounts are as of June 30, 2023 due to the recording of the Office Joint Venture’s activity on a one quarter lag. (2) Amounts are as of September 30, 2022 due to the recording of the Office Joint Venture’s activity on a one quarter lag. The table below presents condensed statements of operations of the unconsolidated Office Joint Venture: Three Months Ended September 30, Nine Months Ended September 30, 2023 (1) 2022 (2) 2023 (3) 2022 (2) Total revenues $ 50,889 $ — $ 145,595 $ — Expenses: Operating expenses (16,838) — (49,271) — General and administrative (1,699) — (5,354) — Depreciation and amortization (17,074) — (50,259) — Interest expense (51,721) — (144,703) — Other expenses, net 2,782 — 4,665 — Total Expenses (84,550) — (244,922) — Net Loss $ (33,661) $ — $ (99,327) $ — (1) Amounts represent the period of April 1, 2023 to June 30, 2023 due to the recording of the Office Joint Venture’s activity on a one quarter lag. (2) No activity reported for the three and nine months ended September 30, 2022 as the Office Joint Venture was formed in August 2022 and reports activity on a one quarter lag. (3) Amounts represent the period of October 1, 2022 to June 30, 2023 due to the recording of the Office Joint Venture’s activity on a one quarter lag. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of September 30, 2023 and December 31, 2022, the Company’s consolidated debt consisted of the following: September 30, 2023 December 31, 2022 Contractual Interest Rate (1) Loan Maturity (2) Effective Interest Rate (3) Highway 94 Mortgage Loan $ 11,970 $ 12,740 3.75% August 2024 5.04% Pepsi Bottling Ventures Mortgage Loan 17,540 17,836 3.69% October 2024 3.93% AIG Loan II 120,556 122,328 4.15% November 2025 4.99% BOA II Loan 250,000 250,000 4.32% May 2028 4.14% AIG Loan 98,158 99,794 4.96% February 2029 5.09% HealthSpring Mortgage Loan — 19,107 —% (4) — —% Samsonite Mortgage Loan — 17,998 —% (5) — —% Total Mortgage Debt 498,224 539,803 Revolving Credit Facility 400,000 — SOF Rate + 1.30% (6) January 2026 (8) 6.95% 2025 Term Loan 400,000 400,000 SOF Rate + 1.25% (6) December 2025 6.91% 2026 Term Loan 150,000 150,000 SOF Rate + 1.25% (6) April 2026 6.75% 2024 Term Loan — 400,000 —% (7) — —% Total Debt 1,448,224 1,489,803 Unamortized Deferred Financing Costs and Discounts, net (6,221) (4,401) Total Debt, net $ 1,442,003 $ 1,485,402 (1) Including the effect of the interest rate swap agreements with a total notional amount of $750.0 million, the weighted average interest rate as of September 30, 2023 was 4.16% for both the Company’s fixed-rate and variable-rate debt combined and 3.73% for the Company’s fixed-rate debt only. (2) Reflects the maturity dates as of September 30, 2023. (3) Reflects the effective interest rate as of September 30, 2023 and includes the effect of amortization of discounts/premiums and deferred financing costs, but excludes the effect of the interest rate swaps. (4) HealthSpring Mortgage Loan was paid off in full in March 2023 and had a contractual interest rate of 4.18%. (5) Samsonite Mortgage Loan was paid off in full in September 2023 and had a contractual interest rate of 6.08%. (6) The applicable SOFR as of September 30, 2023 (assuming a five day look-back per the credit facility agreement) was 5.31%, which excludes a 0.1% per annum index adjustment as required per the Fifth Amendment to the Second Amended and Restated Credit Agreement. (7) 2024 Term Loan was paid off in full in March 2023 using proceeds drawn from the Revolving Credit Facility, and had a contractual interest rate of SOFR + 1.40%. (8) The Revolving Credit Facility has a maturity date of December 30, 2023 with a series of extension options to January 31, 2026. See discussion below. |
Interest Rate Contracts (Tables
Interest Rate Contracts (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Swaps | The following table sets forth a summary of the interest rate swaps at September 30, 2023 and December 31, 2022: Fair Value (1) Current Notional Amounts Derivative Instrument Effective Date Maturity Date Interest Strike Rate September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Assets/(Liabilities): Interest Rate Swap 3/10/2020 7/1/2025 0.83% $ 10,807 $ 12,391 $ 150,000 $ 150,000 Interest Rate Swap 3/10/2020 7/1/2025 0.84% 7,199 8,244 100,000 100,000 Interest Rate Swap 3/10/2020 7/1/2025 0.86% 5,370 6,145 75,000 75,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% 4,818 4,331 125,000 125,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% 3,841 3,444 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.83% 3,838 3,441 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.84% 3,814 3,408 100,000 100,000 Total $ 39,687 $ 41,404 $ 750,000 $ 750,000 |
Schedule of Derivative Instruments, Gain (Loss) | The following table sets forth the impact of the interest rate swaps on the consolidated statements of operations for the periods presented: Nine Months Ended September 30, 2023 2022 Interest Rate Swap in Cash Flow Hedging Relationship: Amount of loss recognized in AOCI on derivatives $ (15,371) $ 59,179 Amount of gain reclassified from AOCI into earnings under “Interest expense” $ 16,993 $ (5,292) Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded $ 49,208 $ 68,315 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Interest payable $ 16,700 $ 13,654 Prepaid tenant rent 11,423 12,399 Deferred compensation 9,176 8,913 Real estate taxes payable 7,549 6,296 Property operating expense payable 4,394 7,960 Accrued construction in progress 1,173 35 Accrued tenant improvements 551 620 Redemptions payable — 4,383 Other liabilities 29,486 26,542 Total $ 80,452 $ 80,802 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measure at Fair Value on a Recurring Basis | The following table sets forth the assets and liabilities that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2023 and December 31, 2022: Assets/(Liabilities) Total Fair Value Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2023 Interest Rate Swap Asset $ 39,687 $ — $ 39,687 $ — Mutual Funds Asset $ 6,815 $ 6,815 $ — $ — December 31, 2022 Interest Rate Swap Asset $ 41,404 $ — $ 41,404 $ — Mutual Funds Asset $ 6,191 $ 6,191 $ — $ — |
Schedule of Quantitative Information Related to Non-recurring Fair Value Measurements | The following table is a summary of the quantitative information related to the non-recurring fair value measurement for the impairment of the Company's real estate properties for the nine months ended September 30, 2023: Range of Inputs Southwest Northeast West Southeast Market rent (per square foot) $16.00 - $27.00 $15.00 - $30.00 $21.00 $14.00 Discount rate 8.50% - 15.00% 8.00% - 15.00% 9.00% 15.00% Terminal capitalization rate 8.00% - 10.50% 6.50% - 9.00% 8.50% 9.00% Range of Inputs Southwest Northeast West Estimated selling price (per square foot) $235.00 $227.00 $30.00 Anticipated hold period One year One year One year |
Schedule of Carrying Values and Estimated Fair Values of Financial Instruments | The Company determined that the mortgage debt valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt. September 30, 2023 December 31, 2022 Fair Value Carrying Value (1) Fair Value Carrying Value (1) BOA II Loan $ 214,374 $ 250,000 $ 226,361 $ 250,000 AIG Loan II 109,010 120,556 111,872 122,328 AIG Loan 76,658 98,158 89,526 99,794 Samsonite Mortgage Loan — — 17,998 17,998 HealthSpring Mortgage Loan — — 19,107 19,107 Pepsi Bottling Ventures Mortgage Loan 16,994 17,540 17,014 17,836 Highway 94 Mortgage Loan 11,970 11,970 11,941 12,740 Total $ 429,006 $ 498,224 $ 493,819 $ 539,803 (1) The carrying values do not include the debt premium/(discount) or deferred financing costs as of September 30, 2023 and December 31, 2022. See Note 5, Debt , for details. |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Share Redemption Activity | The following table summarizes share redemption activity under the SRP during the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Shares of common shares redeemed — 74,850 941 (1) 74,850 Weighted average price per share $ — $ 66.78 $ 66.87 $ 66.78 (1) |
Schedule of Unvested Shares of Restricted Stock Awards Activity | The following table summarizes the activity of unvested shares of RSU awards for the periods presented: Number of Unvested Shares of RSU Awards Weighted-Average Grant Date Fair Value per Share Balance at December 31, 2021 169,846 Granted 116,749 $ 66.87 Forfeited (9,404) $ 80.38 Vested (119,056) $ 77.68 Balance at December 31, 2022 158,135 Granted 166,321 $ 56.53 Forfeited (161) $ 62.17 Vested (1) (41,896) $ 70.32 Balance at September 30, 2023 282,399 (1) Total shares vested include 55,438 common shares that were withheld (i.e., forfeited) by employees during the nine months ended September 30, 2023 to satisfy minimum statutory tax with holdings requirements associated with the vesting of RSUs. |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of Activity for Noncontrolling Interests | The following summarizes the activity for noncontrolling interests recorded as equity for the nine months ended September 30, 2023 and year ended December 31, 2022: Nine Months Ended September 30, 2023 Year Ended December 31, 2022 Beginning balance $ 174,655 $ 218,653 Reclass of noncontrolling interest subject to redemption 10 957 Exchange of noncontrolling interests (6,550) — Reclass of redeemable non-controlling interest 3,801 — Distributions to noncontrolling interests (2,990) (10,942) Allocated distributions to noncontrolling interests subject to redemption (3) (17) Allocated net loss (52,677) (39,714) Allocated other comprehensive income (loss) (300) 5,718 Ending balance $ 115,946 $ 174,655 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Summarized below are the related party transaction costs receivable and payable by the Company as of September 30, 2023 and December 31, 2022: Incurred for the Nine Months Ended Payable as of September 30, September 30, December 31, 2023 2022 2023 2022 Expensed Costs advanced by related party $ 85 $ 705 $ 48 $ 67 Administrative reimbursement 975 1,066 38 522 Assumed through Self-Administration Transaction/Mergers Earn-out — — — 130 Other Distributions 2,381 6,498 620 739 Total $ 3,441 $ 8,269 $ 706 $ 1,458 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Future Minimum Base Rents to be Received | The Company's current third-party tenant leases have expirations ranging from 2024 to 2044. The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2023: As of September 30, 2023 Remaining 2023 $ 52,740 2024 199,272 2025 185,716 2026 181,278 2027 162,377 Thereafter 708,591 Total $ 1,489,974 |
Schedule of Lease, Cost | The following table sets forth the weighted-average for the lease term and the discount rate as of September 30, 2023: As of September 30, 2023 Lease Term and Discount Rate Operating Financing Weighted-average remaining lease term in years 76.6 years 15.2 years Weighted-average discount rate (1) 4.89% 3.34 % (1) Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate for each lease, the Company considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements. |
Schedule of Remaining Required Payments Under Ground Leases | Maturities of lease liabilities as of September 30, 2023 were as follows: As of September 30, 2023 Operating Financing Remaining 2023 $ 540 $ 343 2024 1,909 360 2025 1,570 365 2026 1,504 375 2027 1,527 381 2028 1,595 386 Thereafter 248,695 3,072 Total undiscounted lease payments 257,340 5,282 Less: imputed interest (214,243) (2,011) Total lease liabilities $ 43,097 $ 3,271 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Segment Revenues | The following table presents segment NOI for the three and nine months ended September 30, 2023 and September 30, 2022 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Industrial NOI Total Industrial revenues $ 13,934 $ 15,095 $ 42,508 $ 45,401 Industrial operating expenses (1,884) (1,706) (5,510) (5,489) Industrial NOI 12,050 13,389 36,998 39,912 Office NOI Total Office revenues 34,022 72,128 108,210 251,467 Office operating expenses (6,102) (17,762) (18,518) (57,832) Office NOI 27,920 54,366 89,692 193,635 Other NOI Total Other revenues 13,757 14,107 40,508 43,724 Other operating expenses (5,360) (4,808) (15,666) (13,932) Other NOI 8,397 9,299 24,842 29,792 Total NOI $ 48,367 $ 77,054 $ 151,532 $ 263,339 A reconciliation of net loss to NOI for the three and nine months ended September 30, 2023 and September 30, 2022 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Reconciliation of Net Loss to Total NOI Net loss $ (139,948) $ (119,373) $ (583,332) $ (193,240) General and administrative expenses 9,653 9,521 31,411 27,463 Corporate operating expenses to related parties 257 140 975 1,065 Real estate impairment provision — 10,697 397,373 86,254 Depreciation and amortization 25,003 42,628 86,830 155,470 Interest expense 16,126 24,283 49,208 68,315 Other (income) expense, net (3,654) 162 (7,613) 588 Net loss from investment in unconsolidated entity 144,598 — 176,767 — (Gain) loss from disposition of assets (3,748) 95,513 (24,657) 95,513 Debt breakage costs — 13,249 — 13,249 Transaction expenses 80 234 24,570 8,662 Total NOI $ 48,367 $ 77,054 $ 151,532 $ 263,339 The following table presents the Company’s goodwill for each of the segments as of September 30, 2023 and December 31, 2022: September 30, December 31, 2023 2022 Goodwill Industrial $ 68,373 $ 68,373 Office — — Other 26,305 26,305 Total Goodwill $ 94,678 $ 94,678 The following table presents the Company’s total real estate assets, net, which includes accumulated depreciation and amortization and excludes intangibles, for each segment as of the September 30, 2023 and December 31, 2022: September 30, December 31, 2023 2022 Industrial Real Estate, net Total real estate $ 740,790 $ 761,757 Accumulated depreciation and amortization (146,047) (137,738) Industrial real estate, net 594,743 624,019 Office Real Estate, net Total real estate 1,567,724 2,020,463 Accumulated depreciation and amortization (279,852) (305,829) Office real estate, net 1,287,872 1,714,634 Other Real Estate, net Total real estate 399,295 715,036 Accumulated depreciation and amortization (120,833) (201,072) Other real estate, net 278,462 513,964 Total Real Estate, net $ 2,161,077 $ 2,852,617 |
Organization (Details)
Organization (Details) | 9 Months Ended |
Sep. 30, 2023 real_estate_property state | |
Subsidiary, Sale of Stock [Line Items] | |
Number of properties owned | real_estate_property | 73 |
Number of states | state | 24 |
Weighted-average remaining lease term in years | 6 years 3 months 18 days |
GCEAR Operating Partnership | |
Subsidiary, Sale of Stock [Line Items] | |
Ownership interest | 91.20% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 shares | Sep. 30, 2022 shares | Sep. 30, 2023 segment shares | Sep. 30, 2022 shares | |
Accounting Policies [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 3,879,641 | 3,785,135 | 3,745,445 | 3,755,708 |
Number of reportable segments | segment | 3 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 5,651 | $ 4,764 |
Real Estate Asset Acquisitions and Contributions | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 5,651 | 4,764 |
Real Estate Asset Acquisitions and Contributions | Cash reserves | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 1,036 | 4,262 |
Real Estate Asset Acquisitions and Contributions | Restricted lockbox | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 4,615 | $ 502 |
Real Estate - Gross Investment
Real Estate - Gross Investment in Real Estate (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Real Estate [Abstract] | ||
Land | $ 244,369 | $ 327,408 |
Building and improvements | 2,042,347 | 2,631,965 |
Tenant origination and absorption cost | 418,896 | 535,889 |
Construction in progress | 2,197 | 1,994 |
Total real estate | $ 2,707,809 | $ 3,497,256 |
Real Estate - Narrative (Detail
Real Estate - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Dec. 27, 2022 USD ($) property | Aug. 26, 2022 USD ($) property | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Property property | Sep. 30, 2022 USD ($) | |
Real Estate [Line Items] | ||||||||
Number of properties sold | property | 5 | 41 | 9 | |||||
Proceeds from sale of property | $ 170,400 | $ 1,100,000 | $ 8,300 | $ 130,800 | $ 169,600 | $ 308,700 | ||
Gain on sale of properties | 3,748 | $ (9,701) | $ 30,610 | 24,657 | ||||
Real estate impairment provision | $ 0 | $ 10,697 | $ 397,373 | $ 86,254 | ||||
Number of properties impaired | property | 16 | |||||||
Office | ||||||||
Real Estate [Line Items] | ||||||||
Real estate impairment provision | $ 196,100 | |||||||
Number of properties impaired | Property | 8 | |||||||
Other | ||||||||
Real Estate [Line Items] | ||||||||
Real estate impairment provision | $ 201,200 | |||||||
Number of properties impaired | Property | 8 |
Real Estate - Dispositions of R
Real Estate - Dispositions of Real Estate (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||||
Aug. 16, 2023 | Jun. 30, 2023 | Jun. 08, 2023 | May 15, 2023 | May 09, 2023 | Mar. 02, 2023 | Feb. 16, 2023 | Jan. 06, 2023 | Dec. 27, 2022 | Aug. 26, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | |
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 170,400 | $ 1,100,000 | $ 8,300 | $ 130,800 | $ 169,600 | $ 308,700 | ||||||||
Gain (Loss) | $ 3,748 | $ (9,701) | $ 30,610 | $ 24,657 | ||||||||||
Irvine, CA | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 40,000 | |||||||||||||
Gain (Loss) | $ 18,690 | |||||||||||||
Clinton, SC | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 19,300 | |||||||||||||
Gain (Loss) | $ 7,109 | |||||||||||||
Herndon, VA | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 110,300 | |||||||||||||
Gain (Loss) | $ 4,811 | |||||||||||||
Lone Tree, CO | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 5,600 | |||||||||||||
Gain (Loss) | $ (301) | |||||||||||||
Houston, TX | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 62,300 | |||||||||||||
Gain (Loss) | $ (5,000) | |||||||||||||
Greenwood Village, CO | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 5,000 | |||||||||||||
Gain (Loss) | $ (5,200) | |||||||||||||
Andover, MA 1 | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 23,700 | |||||||||||||
Gain (Loss) | 100 | |||||||||||||
Andover, MA 2 | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | 34,200 | |||||||||||||
Gain (Loss) | $ 700 | |||||||||||||
Rancho Cordova, CA | ||||||||||||||
Real Estate [Line Items] | ||||||||||||||
Gross Proceeds | $ 8,300 | |||||||||||||
Gain (Loss) | $ 3,748 |
Real Estate - Intangibles (Deta
Real Estate - Intangibles (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of in-place lease valuation | ||
In-place lease valuation (above market) | $ 23,042 | $ 28,619 |
In-place lease valuation (above market) - accumulated amortization | (16,394) | (19,799) |
In-place lease valuation (above market), net | 6,648 | 8,820 |
Intangibles - other | 32,028 | 32,028 |
Intangibles - other - accumulated amortization | (8,104) | (6,987) |
Intangibles - other, net | 23,924 | 25,041 |
Intangible assets, net | 30,572 | 33,861 |
In-place lease valuation (below market) | (44,840) | (48,686) |
Land leasehold interest (above market) | (3,072) | (3,072) |
Intangibles - other (above market) | (205) | (258) |
In-place lease valuation & land leasehold interest - accumulated amortization | 31,013 | 31,358 |
Intangible liabilities, net | (17,104) | (20,658) |
Tenant origination and absorption cost | 418,896 | 535,889 |
Tenant origination and absorption cost - accumulated amortization | (224,061) | (282,383) |
Tenant origination and absorption cost, net | $ 194,835 | $ 253,506 |
Real Estate - Amortization of I
Real Estate - Amortization of Intangible Assets and Other Leasing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of amortization expense | ||||
Above and below market leases, net | $ (421) | $ (436) | $ (834) | $ (1,282) |
Tenant origination and absorption cost | 8,261 | 15,427 | 29,651 | 60,826 |
Ground lease amortization (below market) | (98) | (95) | (290) | (274) |
Other leasing costs amortization | $ 489 | $ 1,028 | $ 1,527 | $ 4,064 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Dec. 27, 2022 USD ($) property | Aug. 26, 2022 USD ($) property | Sep. 30, 2023 USD ($) parcel | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) parcel property | Dec. 31, 2022 USD ($) | |
Gain (Loss) on Securities [Line Items] | |||||||
Number of properties sold | property | 5 | 41 | 9 | ||||
Proceeds from sale of property | $ 170,400 | $ 1,100,000 | $ 8,300 | $ 130,800 | $ 169,600 | $ 308,700 | |
Payments to acquire interest in joint venture | 184,200 | ||||||
Debt, net | $ 1,442,003 | $ 1,442,003 | $ 1,485,402 | ||||
The Loan | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Spread on LIBOR (percent) | 6.574% | ||||||
Debt instrument, interest rate, increase | 0.25% | ||||||
Debt instrument, payments for interest rate caps | $ 6,700 | ||||||
The Loan | First Extension Term | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Spread on LIBOR (percent) | 6.824% | ||||||
Debt instrument, payments for interest rate caps | $ 9,600 | ||||||
The Loan | SOFR | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Interest rate cap | 0.03 | ||||||
Mortgage Loan Due 2024 | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Debt instrument, interest rate, increase | 0.25% | ||||||
Mortgage Loan | The Loan | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Debt, net | 736,000 | $ 736,000 | |||||
Mortgage Loan | Mortgage Loan Due 2024 | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Debt, net | 142,100 | 142,100 | |||||
Mezzanine Loan | The Loan | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Term loan | $ 194,800 | $ 194,800 | |||||
Debt instrument extension options | parcel | 2 | 2 | |||||
Term of debt instrument | 1 year | 1 year | |||||
Mezzanine Loan | The Loan | SOFR | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Interest rate cap | 0.03 | ||||||
Spread on LIBOR (percent) | 3.635% | ||||||
Mezzanine Loan | The Loan | SOFR | First Extension Term | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Interest rate cap | 0.044 | ||||||
Spread on LIBOR (percent) | 3.885% | ||||||
Mortgage 1 Loan | Mortgage Loan Due 2024 | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Debt instrument extension options | parcel | 2 | ||||||
Term of debt instrument | 1 year | ||||||
Mortgage 1 Loan | Mortgage Loan Due 2024 | SOFR | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Interest rate cap | 0.04 | ||||||
Spread on LIBOR (percent) | 4.25% | ||||||
GRT VAO OP, LLC | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Ownership interest (percent) | 49% | 49% | |||||
Capital call portion | $ 2,000 | ||||||
Office Joint Venture | |||||||
Gain (Loss) on Securities [Line Items] | |||||||
Other than temporary impairment | $ 129,300 | $ 129,334 |
Investments in Unconsolidated_4
Investments in Unconsolidated Entities - Schedule of Company's Share of Net Earnings or Losses and Reduced by Distributions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Office Joint Venture | ||||
Beginning balance | $ 178,647 | |||
Contributions | 0 | $ 34,558 | ||
Company’s share of net loss | $ (144,598) | $ 0 | (176,767) | 0 |
Ending balance | 0 | 0 | ||
Impairment provision | 397,373 | $ 86,254 | ||
Office Joint Venture | ||||
Office Joint Venture | ||||
Beginning balance | 178,647 | |||
Contributions | 1,960 | |||
Shortfall Loan | (1,960) | |||
Company’s share of net loss | (48,659) | |||
Company’s share of other comprehensive loss | (654) | |||
Impairment provision | (129,300) | (129,334) | ||
Ending balance | $ 0 | 0 | ||
Impairment provision | 129,300 | |||
Equity method investments, AOCI, write-off | 1,200 | |||
Total net loss | $ 128,100 |
Investments in Unconsolidated_5
Investments in Unconsolidated Entities - Schedule of Balance Sheet for the Unconsolidated Office Joint Venture (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 21, 2022 |
Assets | |||
Real estate properties, net | $ 2,161,077 | $ 2,852,617 | |
Total assets | 2,840,209 | 3,633,376 | |
Liabilities | |||
Other liabilities | 706 | 1,458 | |
Total liabilities | 1,594,929 | $ 1,647,241 | |
Office Joint Venture | |||
Assets | |||
Real estate properties, net | 1,099,915 | $ 981,354 | |
Other assets | 299,847 | 240,447 | |
Total assets | 1,399,762 | 1,221,801 | |
Liabilities | |||
Mortgages payable, net | 1,051,178 | 856,765 | |
Other liabilities | 86,358 | 52,018 | |
Total liabilities | $ 1,137,536 | $ 908,783 |
Investments in Unconsolidated_6
Investments in Unconsolidated Entities - Schedule of Statements of Operations of the Unconsolidated Office Joint Venture (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Gain (Loss) on Securities [Line Items] | ||||
Total revenues | $ 61,713 | $ 101,330 | $ 191,226 | $ 340,592 |
Expenses: | ||||
General and administrative | (9,653) | (9,521) | (31,411) | (27,463) |
Interest expense | (16,126) | (24,283) | (49,208) | (68,315) |
Total expenses | (48,259) | (87,262) | (556,283) | (347,505) |
Net loss attributable to common shareholders | (127,595) | (111,224) | (538,036) | (183,277) |
Office Joint Venture | ||||
Gain (Loss) on Securities [Line Items] | ||||
Total revenues | 50,889 | 0 | 145,595 | 0 |
Expenses: | ||||
Operating expenses | (16,838) | 0 | (49,271) | 0 |
General and administrative | (1,699) | 0 | (5,354) | 0 |
Depreciation and amortization | (17,074) | 0 | (50,259) | 0 |
Interest expense | (51,721) | 0 | (144,703) | 0 |
Other expenses, net | 2,782 | 0 | 4,665 | 0 |
Total expenses | (84,550) | 0 | (244,922) | 0 |
Net loss attributable to common shareholders | $ (33,661) | $ 0 | $ (99,327) | $ 0 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2023 | Sep. 30, 2023 USD ($) d | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||
Total principal | $ 1,448,224,000 | $ 1,489,803,000 | |
Unamortized Deferred Financing Costs and Discounts, net | (6,221,000) | (4,401,000) | |
Total Debt, net | 1,442,003,000 | 1,485,402,000 | |
Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 498,224,000 | 539,803,000 | |
Fixed and variable rate debt | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate (percent) | 4.16% | ||
Fixed rate debt | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate (percent) | 3.73% | ||
Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Derivative notional amount | $ 750,000,000 | ||
Highway 94 Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 11,970,000 | 12,740,000 | |
Contractual stated interest rate (percent) | 3.75% | ||
Effective interest rate (percent) | 5.04% | ||
Pepsi Bottling Ventures Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 17,540,000 | 17,836,000 | |
Contractual stated interest rate (percent) | 3.69% | ||
Effective interest rate (percent) | 3.93% | ||
AIG Loan II | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 120,556,000 | 122,328,000 | |
Contractual stated interest rate (percent) | 4.15% | ||
Effective interest rate (percent) | 4.99% | ||
BOA II Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 250,000,000 | 250,000,000 | |
Contractual stated interest rate (percent) | 4.32% | ||
Effective interest rate (percent) | 4.14% | ||
AIG Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 98,158,000 | 99,794,000 | |
Contractual stated interest rate (percent) | 4.96% | ||
Effective interest rate (percent) | 5.09% | ||
HealthSpring Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 0 | 19,107,000 | |
Contractual stated interest rate (percent) | 4.18% | ||
Samsonite Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 0 | 17,998,000 | |
Contractual stated interest rate (percent) | 6.08% | ||
Revolving Credit Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total principal | $ 400,000,000 | 0 | |
Effective interest rate (percent) | 6.95% | ||
Threshold trading days | d | 5 | ||
Index adjustment percentage | 0.10% | ||
Revolving Credit Facility | Revolving Credit Facility | SOFR | |||
Debt Instrument [Line Items] | |||
Spread on SOFR (percent) | 1.40% | 1.30% | |
Applicable variable rate | 0.0531 | ||
2025 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 400,000,000 | 400,000,000 | |
Effective interest rate (percent) | 6.91% | ||
2025 Term Loan | SOFR | Term Loans | |||
Debt Instrument [Line Items] | |||
Spread on SOFR (percent) | 1.25% | ||
2026 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 150,000,000 | 150,000,000 | |
Effective interest rate (percent) | 6.75% | ||
2026 Term Loan | SOFR | Term Loans | |||
Debt Instrument [Line Items] | |||
Spread on SOFR (percent) | 1.25% | ||
2024 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 0 | $ 400,000,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) quarter real_estate_property | |
Line of Credit | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Covenant - minimum pool properties | real_estate_property | 15 |
Covenant -maximum pool value contributed by single pool property of tenant (percent) | 15% |
Covenant - maximum aggregate pool value to be contributed by pool properties subject to ground leases (percent) | 15% |
Covenant - maximum aggregate pool value to be contributed by pool properties under development (percent) | 20% |
Covenant - minimum aggregate leasing percentage (percent) | 90% |
Covenant - maximum unsecured leverage ratio (percent) | 60% |
Covenant - minimum unsecured interest coverage ratio | 2 |
Unsecured Debt | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Credit facility | $ 750,000,000 |
Additional increase in limit | 1,000,000,000 |
Remaining borrowing capacity | 152,100,000 |
Line of Credit | Line of Credit | |
Debt Instrument [Line Items] | |
Credit facility | 1,300,000,000 |
2025 Term Loan | Term Loans | |
Debt Instrument [Line Items] | |
Credit facility | $ 400,000,000 |
Term of debt instrument | 5 years |
2026 Term Loan | Term Loans | |
Debt Instrument [Line Items] | |
Credit facility | $ 150,000,000 |
Term of debt instrument | 7 years |
Keybank Loans | Term Loans | |
Debt Instrument [Line Items] | |
Compliance requirement - maximum consolidated leverage ratio (percent) | 60% |
Compliance requirement - maximum consolidated leverage ratio after material acquisition (percent) | 65% |
Compliance requirement - consecutive quarters after material acquisition subject to higher consolidated leverage ratio | quarter | 4 |
Compliance requirement - minimum consolidated tangible net worth | $ 1,000,000,000 |
Compliance requirement - minimum consolidated tangible net worth (percent) | 75% |
Compliance requirement - additional net future equity issuances (percent) | 75% |
Compliance requirement - reduction for amount of payments used to redeem stock (percent) | 75% |
Compliance requirement - minimum consolidated fixed charge coverage ratio | 1.50 |
Line of credit facility, covenant, maximum total secured debt ratio (percent) | quarter | 4 |
Compliance requirement - minimum unsecured interest coverage ratio | 2 |
Compliance requirement - maximum total secured recourse debt ratio (percent) | 10% |
Compliance requirement - maximum aggregate maximum unhedged variable rate debt (percent) | 30% |
Keybank Loans | Term Loans | Minimum | |
Debt Instrument [Line Items] | |
Compliance requirement - maximum total secured debt ratio (percent) | 40% |
Keybank Loans | Term Loans | Maximum | |
Debt Instrument [Line Items] | |
Compliance requirement - maximum total secured debt ratio (percent) | 45% |
Interest Rate Contracts - Sched
Interest Rate Contracts - Schedule of Interest Rate Swaps (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Revolving Credit Facility | Revolving Credit Facility | ||
Derivative [Line Items] | ||
Effective interest rate (percent) | 6.95% | |
Revolving Credit Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | ||
Derivative [Line Items] | ||
Effective interest rate (percent) | 5.43% | |
Interest Rate Swap, Effective March 10, 2020 - $150,000 Notional Amount, Interest Rate 0.83% | ||
Derivative [Line Items] | ||
Interest Strike Rate | 0.83% | |
Fair Value | $ 10,807 | $ 12,391 |
Current Notional Amounts | $ 150,000 | 150,000 |
Interest Rate Swap, Effective March 10, 2020 - $100,000 Notional Amount, Interest Rate 0.84% | ||
Derivative [Line Items] | ||
Interest Strike Rate | 0.84% | |
Fair Value | $ 7,199 | 8,244 |
Current Notional Amounts | $ 100,000 | 100,000 |
Interest Rate Swap, Effective March 10, 2020 - $75,000 Notional Amount, Interest Rate 0.86% | ||
Derivative [Line Items] | ||
Interest Strike Rate | 0.86% | |
Fair Value | $ 5,370 | 6,145 |
Current Notional Amounts | $ 75,000 | 75,000 |
Interest Rate Swap Effective Date July 1, 2020,$125,000 Notional Amount, Interest Rate 2.82% | ||
Derivative [Line Items] | ||
Interest Strike Rate | 2.82% | |
Fair Value | $ 4,818 | 4,331 |
Current Notional Amounts | $ 125,000 | 125,000 |
Interest Rate Swap Effective Date July 1, 2020,$100,000 Notional Amount, Interest Rate 2.82% | ||
Derivative [Line Items] | ||
Interest Strike Rate | 2.82% | |
Fair Value | $ 3,841 | 3,444 |
Current Notional Amounts | $ 100,000 | 100,000 |
Interest Rate Swap, Effective July 1, 2020 - $100,000 Notional Amount, Interest Rate 2.83% | ||
Derivative [Line Items] | ||
Interest Strike Rate | 2.83% | |
Fair Value | $ 3,838 | 3,441 |
Current Notional Amounts | $ 100,000 | 100,000 |
Interest Rate Swap, Effective July 1, 2020 - $100,000 Notional Amount, Interest Rate 2.84% | ||
Derivative [Line Items] | ||
Interest Strike Rate | 2.84% | |
Fair Value | $ 3,814 | 3,408 |
Current Notional Amounts | 100,000 | 100,000 |
Interest Rate Swap Asset | ||
Derivative [Line Items] | ||
Fair Value | 39,687 | 41,404 |
Current Notional Amounts | $ 750,000 | $ 750,000 |
Interest Rate Contracts - Sch_2
Interest Rate Contracts - Schedule of Derivative Instruments, Gain (Loss) (Details) - Interest Rate Swap Asset - Cash Flow Hedging - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of loss recognized in AOCI on derivatives | $ (15,371) | $ 59,179 |
Amount of gain reclassified from AOCI into earnings under “Interest expense” | 16,993 | (5,292) |
Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded | $ 49,208 | $ 68,315 |
Interest Rate Contracts - Narra
Interest Rate Contracts - Narrative (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Income expected to be recognized in earnings in next 12 months | $ (25.5) |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Interest payable | $ 16,700 | $ 13,654 |
Prepaid tenant rent | 11,423 | 12,399 |
Deferred compensation | 9,176 | 8,913 |
Real estate taxes payable | 7,549 | 6,296 |
Property operating expense payable | 4,394 | 7,960 |
Accrued construction in progress | 1,173 | 35 |
Accrued tenant improvements | 551 | 620 |
Redemptions payable | 0 | 4,383 |
Other liabilities | 29,486 | 26,542 |
Total | $ 80,452 | $ 80,802 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value on a Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mutual Funds Asset | $ 6,815 | $ 6,191 |
Quoted Prices in Active Markets for Identical Assets and Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mutual Funds Asset | 6,815 | 6,191 |
Significant Other Observable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mutual Funds Asset | 0 | 0 |
Significant Unobservable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mutual Funds Asset | 0 | 0 |
Interest Rate Swap Asset | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 39,687 | 41,404 |
Interest Rate Swap Asset | Quoted Prices in Active Markets for Identical Assets and Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 0 | 0 |
Interest Rate Swap Asset | Significant Other Observable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 39,687 | 41,404 |
Interest Rate Swap Asset | Significant Unobservable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) asset | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) property Property loan asset | Sep. 30, 2022 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Real estate impairment provision | $ 0 | $ 10,697 | $ 397,373 | $ 86,254 |
Number of properties impaired | property | 16 | |||
Assets evaluated using discounted cash flow analyses | asset | 13 | 13 | ||
Assets evaluated using estimated selling price per share | asset | 3 | 3 | ||
Number of mortgage loans (in loan) | loan | 7 | |||
Office Joint Venture | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Other than temporary impairment | $ 129,300 | $ 129,334 | ||
Office | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Real estate impairment provision | $ 196,100 | |||
Number of properties impaired | Property | 8 | |||
Other | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Real estate impairment provision | $ 201,200 | |||
Number of properties impaired | Property | 8 |
Fair Value Measurements - Non-r
Fair Value Measurements - Non-recurring Fair Value Measurements for Impairment (Details) | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Market rent (per square foot) | Southwest | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Estimated selling price (per square foot) | $ 235 |
Market rent (per square foot) | Northeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Estimated selling price (per square foot) | 227 |
Market rent (per square foot) | West | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Market rent (per square foot) | 21 |
Estimated selling price (per square foot) | 30 |
Market rent (per square foot) | Southeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Market rent (per square foot) | 14 |
Market rent (per square foot) | Minimum | Southwest | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Market rent (per square foot) | 16 |
Market rent (per square foot) | Minimum | Northeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Market rent (per square foot) | 15 |
Market rent (per square foot) | Maximum | Southwest | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Market rent (per square foot) | 27 |
Market rent (per square foot) | Maximum | Northeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Market rent (per square foot) | $ 30 |
Discount rate | West | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.0900 |
Discount rate | Southeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.1500 |
Discount rate | Minimum | Southwest | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.0850 |
Discount rate | Minimum | Northeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.0800 |
Discount rate | Maximum | Southwest | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.1500 |
Discount rate | Maximum | Northeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.1500 |
Terminal capitalization rate | West | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.0850 |
Terminal capitalization rate | Southeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.0900 |
Terminal capitalization rate | Minimum | Southwest | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.0800 |
Terminal capitalization rate | Minimum | Northeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.0650 |
Terminal capitalization rate | Maximum | Southwest | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.1050 |
Terminal capitalization rate | Maximum | Northeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Range of inputs (percent) | 0.0900 |
Anticipated hold period | Southwest | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Anticipated hold period | 1 year |
Anticipated hold period | Northeast | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Anticipated hold period | 1 year |
Anticipated hold period | West | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Anticipated hold period | 1 year |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments at Fair Value (Details) - Mortgages - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | $ 429,006 | $ 493,819 |
Fair Value | BOA II Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 214,374 | 226,361 |
Fair Value | AIG Loan II | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 109,010 | 111,872 |
Fair Value | AIG Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 76,658 | 89,526 |
Fair Value | Samsonite Mortgage Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 0 | 17,998 |
Fair Value | HealthSpring Mortgage Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 0 | 19,107 |
Fair Value | Pepsi Bottling Ventures Mortgage Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 16,994 | 17,014 |
Fair Value | Highway 94 Mortgage Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 11,970 | 11,941 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 498,224 | 539,803 |
Carrying Value | BOA II Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 250,000 | 250,000 |
Carrying Value | AIG Loan II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 120,556 | 122,328 |
Carrying Value | AIG Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 98,158 | 99,794 |
Carrying Value | Samsonite Mortgage Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 0 | 17,998 |
Carrying Value | HealthSpring Mortgage Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 0 | 19,107 |
Carrying Value | Pepsi Bottling Ventures Mortgage Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 17,540 | 17,836 |
Carrying Value | Highway 94 Mortgage Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | $ 11,970 | $ 12,740 |
Equity - Narrative (Details)
Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 110 Months Ended | ||||||||||||
Apr. 10, 2023 USD ($) shares | Aug. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) vote $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) vote $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) vote $ / shares shares | Jun. 30, 2023 shares | Mar. 31, 2023 shares | Dec. 31, 2022 USD ($) shares | Jun. 30, 2022 shares | Mar. 31, 2022 shares | Dec. 31, 2021 shares | Oct. 29, 2020 shares | Apr. 30, 2019 shares | Jun. 30, 2015 shares | |
Class of Stock [Line Items] | ||||||||||||||||
Proceeds from sale of shares | $ 2,800,000 | |||||||||||||||
Number of shares outstanding (in shares) | shares | 35,997,549 | 35,997,549 | 35,997,549 | 35,924,476 | 35,999,898 | |||||||||||
Shares issued | $ 36 | $ 36 | $ 36 | $ 36 | ||||||||||||
RSUs | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Total compensation expense | 2,400 | $ 2,700 | 9,000 | $ 6,100 | ||||||||||||
Restricted Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Unrecognized cost | $ 11,000 | $ 14,200 | $ 11,000 | $ 14,200 | $ 11,000 | |||||||||||
Amended and Restated Plan | RSUs | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of shares authorized (in shares) | shares | 777,778 | 777,778 | 777,778 | |||||||||||||
Granted (in shares) | shares | 166,868 | 166,868 | 166,868 | |||||||||||||
Minimum | Restricted Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Unrecognized cost recognition period | 3 months | |||||||||||||||
Maximum | Restricted Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Unrecognized cost recognition period | 2 years 3 months 18 days | |||||||||||||||
Common Shares | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of shares outstanding (in shares) | shares | 36,007,433 | 36,007,433 | 36,006,922 | 35,999,898 | 36,082,283 | 36,079,527 | 36,070,902 | |||||||||
Stock redeemed during period (in shares) | shares | 0 | 74,850 | 941 | 74,850 | ||||||||||||
Weighted average price per share (in usd per share) | $ / shares | $ 0 | $ 66.78 | $ 66.87 | $ 66.78 | ||||||||||||
Share Redemption Program | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Stock repurchase program, quarterly authorized amount | $ 5,000 | $ 5,000 | $ 5,000 | |||||||||||||
Stock repurchase program, annual authorized amount, percentage of weighted average shares outstanding | 5% | |||||||||||||||
Share Redemption Program | Common Shares | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Stock redeemed during period (in shares) | shares | 3,295,618 | |||||||||||||||
Redeemed - Amount | $ 275,500 | |||||||||||||||
Weighted average price per share (in usd per share) | $ / shares | $ 83.60 | |||||||||||||||
Distribution Reinvestment Plan | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares issued | $ 341,100 | $ 341,100 | $ 341,100 | $ 341,100 | $ 341,100 | |||||||||||
ATM Program | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Value of shares authorized | $ 200,000 | |||||||||||||||
Common Class T | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||||||||
Common Class S | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||||||||
Common Class D | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||||||||
Common Class I | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||||||||
Common Class A | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||||||||
Common Class AA | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||||||||
Common Class AAA | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||||||||
Common Class E | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||||||||
Common Class E | Private Placement | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of shares issued (in shares) | shares | 10,384,185 | 19,442,394 | 4,863,623 | |||||||||||||
Series A Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Stock redeemed during period (in shares) | shares | 5,000,000 | |||||||||||||||
Redeemed - Amount | $ 125,000 | |||||||||||||||
Redemption payments | 2,400 | |||||||||||||||
Stock redeemed or called during period, waived redemption fee | $ 1,900 |
Equity - Schedule of Share Rede
Equity - Schedule of Share Redemptions (Details) - Common Shares - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Class of Stock [Line Items] | ||||
Shares of common stock redeemed (in shares) | 0 | 74,850 | 941 | 74,850 |
Weighted average price per share (in usd per share) | $ 0 | $ 66.78 | $ 66.87 | $ 66.78 |
Equity - Nonvested Restricted S
Equity - Nonvested Restricted Stock Activity (Details) - RSUs - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Number of Unvested Shares of RSU Awards | ||
Beginning balance (in shares) | 158,135 | 169,846 |
Granted (in shares) | 166,321 | 116,749 |
Forfeited (in shares) | (161) | (9,404) |
Vested (in shares) | (41,896) | (119,056) |
Ending balance (in shares) | 282,399 | 158,135 |
Weighted-Average Grant Date Fair Value per Share | ||
Granted - Weighted average grant date fair value per shares (in usd per share) | $ 56.53 | $ 66.87 |
Forfeited - Weighted average grant date fair value per shares (in usd per share) | 62.17 | 80.38 |
Vested - Weighted average grant date fair value per shares (in usd per share) | $ 70.32 | $ 77.68 |
Shares used to satisfy employee tax withholding requirements on vesting restricted stock (in shares) | 55,438 |
Noncontrolling Interests - Narr
Noncontrolling Interests - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 installment shares | |
Noncontrolling Interest [Line Items] | |
Percentage of noncontrolling interests based on weighted average shares outstanding (percent) | 8.90% |
Limited partnership units issued (in shares) | 3,500,000 |
Implied EA-1 operating partnership units issued in consideration (in shares) | 20,000 |
Number of annual installments for awards settlement | installment | 4 |
Mr. Escalante | |
Noncontrolling Interest [Line Items] | |
Stock available for distributions (in shares) | 56,266 |
Mr. Bitar | |
Noncontrolling Interest [Line Items] | |
Stock available for distributions (in shares) | 2,000 |
Griffin Capital, LLC | |
Noncontrolling Interest [Line Items] | |
Units received (in shares) | 2,700,000 |
Reverse stock split | 9 |
Units received, percentage | 50% |
Griffin Capital Essential Asset Operating Partnership, L.P. | |
Noncontrolling Interest [Line Items] | |
Percentage of noncontrolling interests based on total shares (percent) | 8.80% |
Noncontrolling Interests - Sche
Noncontrolling Interests - Schedule of Noncontrolling Interests Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Reclass of noncontrolling interest subject to redemption | $ 0 | $ 10 | $ 857 | $ 99 | ||||
Reclass of redeemable non-controlling interest | 3,801 | |||||||
Distributions to noncontrolling interest | $ (778) | (776) | (1,435) | (2,758) | $ (2,728) | (2,698) | ||
Allocated distributions to noncontrolling interests subject to redemption | (1) | (2) | (4) | (4) | (4) | |||
Allocated net loss | (139,949) | (457,385) | 6,618 | (121,930) | (79,159) | 170 | ||
Allocated other comprehensive income (loss) | (3,124) | 7,067 | (7,445) | 20,851 | 9,729 | 33,891 | ||
Non- controlling Interests | ||||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Beginning balance | 174,655 | 218,653 | $ 174,655 | $ 218,653 | ||||
Reclass of noncontrolling interest subject to redemption | 0 | 10 | 857 | 99 | 10 | 957 | ||
Exchange of noncontrolling interests | (6,550) | 0 | ||||||
Reclass of redeemable non-controlling interest | 3,801 | 3,801 | 0 | |||||
Distributions to noncontrolling interest | (778) | (776) | (1,435) | (2,758) | (2,728) | (2,698) | (2,990) | (10,942) |
Allocated distributions to noncontrolling interests subject to redemption | (1) | (2) | (4) | (4) | (4) | (3) | (17) | |
Allocated net loss | (12,353) | (40,909) | 585 | (10,710) | (6,952) | 19 | (52,677) | (39,714) |
Allocated other comprehensive income (loss) | (276) | $ 632 | $ (656) | $ 1,832 | $ 855 | $ 2,979 | (300) | 5,718 |
Ending balance | $ 115,946 | $ 115,946 | $ 174,655 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Related party expenses incurred | $ 48,259 | $ 87,262 | $ 556,283 | $ 347,505 | |
Related party payable | 706 | 706 | $ 1,458 | ||
Operating Expense | Related Party | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses incurred | 3,441 | 8,269 | |||
Related party payable | 706 | 706 | 1,458 | ||
Costs advanced by related party | Related Party | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses incurred | 85 | 705 | |||
Related party payable | 48 | 48 | 67 | ||
Administrative reimbursement | Related Party | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses incurred | 975 | 1,066 | |||
Related party payable | 38 | 38 | 522 | ||
Earn-out | Related Party | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses incurred | 0 | 0 | |||
Related party payable | 0 | 0 | 130 | ||
Distributions | Related Party | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses incurred | 2,381 | $ 6,498 | |||
Related party payable | $ 620 | $ 620 | $ 739 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Mar. 25, 2022 | |
Related Party Transaction [Line Items] | |||
Right of use assets | $ 34,175 | $ 35,453 | |
Lease liability | $ 43,097 | ||
Related Party | |||
Related Party Transaction [Line Items] | |||
Termination notice period | 30 days | ||
Operating sublease monthly base rent | $ 50 | ||
Sublease rent annual escalations percentage | 3% | ||
Related Party | Griffin Capital Corporation | |||
Related Party Transaction [Line Items] | |||
Right of use assets | $ 400 | ||
Lease liability | $ 400 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 USD ($) lease office_space option | Sep. 30, 2022 USD ($) | |
Leases [Abstract] | ||
Rental income | $ 166.5 | $ 277.7 |
Number of ground leases classified as operating | lease | 3 | |
Number of ground leases classified as financing | lease | 2 | |
Options to renew | option | 0 | |
Number of office space | office_space | 2 | |
Operating lease costs | $ 2.9 | 3.1 |
Cash paid for operating lease liabilities | $ 1.6 | $ 1.6 |
Leases - Future Minimum Base Re
Leases - Future Minimum Base Rents to be Received (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
Remaining 2023 | $ 52,740 |
2024 | 199,272 |
2025 | 185,716 |
2026 | 181,278 |
2027 | 162,377 |
Thereafter | 708,591 |
Total | $ 1,489,974 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | Sep. 30, 2023 |
Property, Plant and Equipment [Line Items] | |
Weighted-average remaining lease term in years, Operating | 6 years 3 months 18 days |
Building and Building Improvements | |
Property, Plant and Equipment [Line Items] | |
Weighted-average remaining lease term in years, Operating | 76 years 7 months 6 days |
Weighted-average remaining lease term in years, Financing | 15 years 2 months 12 days |
Weighted average discount rate, Operating | 4.89% |
Weighted-average discount rate, Financing | 3.34% |
Leases - Remaining Required Pay
Leases - Remaining Required Payments Under Ground Leases (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Operating | |
Remaining 2023 | $ 540 |
2024 | 1,909 |
2025 | 1,570 |
2026 | 1,504 |
2027 | 1,527 |
2028 | 1,595 |
Thereafter | 248,695 |
Total undiscounted lease payments | 257,340 |
Less: imputed interest | (214,243) |
Total lease liabilities | 43,097 |
Financing | |
Remaining 2023 | 343 |
2024 | 360 |
2025 | 365 |
2026 | 375 |
2027 | 381 |
2028 | 386 |
Thereafter | 3,072 |
Total undiscounted lease payments | 5,282 |
Less: imputed interest | (2,011) |
Total lease liabilities | $ 3,271 |
Commitment and Contingencies (D
Commitment and Contingencies (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Capital Expenditures, Leasing Commissions and Tenant Improvement Commitment | |
Other Commitments [Line Items] | |
Other Commitment | $ 17.9 |
Segment Reporting (Details)
Segment Reporting (Details) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2022 property_type | Sep. 30, 2023 segment | |
Segment Reporting [Abstract] | ||
Number of property types in real estate portfolio | property_type | 3 | |
Number of reportable segments | segment | 3 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment NOI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 61,713 | $ 101,330 | $ 191,226 | $ 340,592 |
Total NOI | 48,367 | 77,054 | 151,532 | 263,339 |
Industrial NOI | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 13,934 | 15,095 | 42,508 | 45,401 |
Operating expenses | (1,884) | (1,706) | (5,510) | (5,489) |
Total NOI | 12,050 | 13,389 | 36,998 | 39,912 |
Office NOI | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 34,022 | 72,128 | 108,210 | 251,467 |
Operating expenses | (6,102) | (17,762) | (18,518) | (57,832) |
Total NOI | 27,920 | 54,366 | 89,692 | 193,635 |
Other NOI | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 13,757 | 14,107 | 40,508 | 43,724 |
Operating expenses | (5,360) | (4,808) | (15,666) | (13,932) |
Total NOI | $ 8,397 | $ 9,299 | $ 24,842 | $ 29,792 |
Segment Reporting - Reconcili_2
Segment Reporting - Reconciliation of Net Income to Total NOI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting [Abstract] | ||||
Net loss | $ (139,948) | $ (119,373) | $ (583,332) | $ (193,240) |
General and administrative expenses | 9,653 | 9,521 | 31,411 | 27,463 |
Corporate operating expenses to related parties | 257 | 140 | 975 | 1,065 |
Real estate impairment provision | 0 | 10,697 | 397,373 | 86,254 |
Depreciation and amortization | 25,003 | 42,628 | 86,830 | 155,470 |
Interest expense | 16,126 | 24,283 | 49,208 | 68,315 |
Other (income) expense, net | (3,654) | 162 | (7,613) | 588 |
Net loss from investment in unconsolidated entity | 144,598 | 0 | 176,767 | 0 |
(Gain) loss from disposition of assets | (3,748) | 95,513 | (24,657) | 95,513 |
Debt breakage costs | 0 | 13,249 | 0 | 13,249 |
Transaction expenses | 80 | 234 | 24,570 | 8,662 |
Total NOI | $ 48,367 | $ 77,054 | $ 151,532 | $ 263,339 |
Segment Reporting - Allocation
Segment Reporting - Allocation for Each Segments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Goodwill | $ 94,678 | $ 94,678 |
Total real estate | 2,707,809 | 3,497,256 |
Accumulated depreciation and amortization | (546,732) | (644,639) |
Total real estate, net | 2,161,077 | 2,852,617 |
Industrial | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 68,373 | 68,373 |
Total real estate | 740,790 | 761,757 |
Accumulated depreciation and amortization | (146,047) | (137,738) |
Total real estate, net | 594,743 | 624,019 |
Office | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 0 | 0 |
Total real estate | 1,567,724 | 2,020,463 |
Accumulated depreciation and amortization | (279,852) | (305,829) |
Total real estate, net | 1,287,872 | 1,714,634 |
Other | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 26,305 | 26,305 |
Total real estate | 399,295 | 715,036 |
Accumulated depreciation and amortization | (120,833) | (201,072) |
Total real estate, net | $ 278,462 | $ 513,964 |
Declaration of Distributions (D
Declaration of Distributions (Details) - $ / shares | Aug. 02, 2023 | Jun. 20, 2023 | Mar. 14, 2023 |
Declaration of Distributions [Abstract] | |||
Common stock dividends, annualized equivalent (in usd per share) | $ 0.225 | $ 0.225 | $ 0.075 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Nov. 07, 2023 | Aug. 02, 2023 | Jun. 20, 2023 | Mar. 14, 2023 |
Subsequent Event [Line Items] | ||||
Common stock dividends, annualized equivalent (in usd per share) | $ 0.225 | $ 0.225 | $ 0.075 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock dividends, annualized equivalent (in usd per share) | $ 0.225 |