Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 29, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | American Realty Capital Global Trust II, Inc. | |
Entity Central Index Key | 1,609,865 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Shares, Shares Outstanding (in shares) | 12,474,407 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Real estate investments, at cost: | ||
Land | $ 76,095 | $ 79,653 |
Buildings, fixtures and improvements | 389,285 | 400,665 |
Acquired intangible lease assets | 120,980 | 122,957 |
Total real estate investments, at cost | 586,360 | 603,275 |
Less accumulated depreciation and amortization | (20,228) | (9,390) |
Total real estate investments, net | 566,132 | 593,885 |
Cash and cash equivalents | 35,014 | 22,735 |
Restricted cash | 5,471 | 23,615 |
Derivatives, at fair value | 13,491 | 8,165 |
Unbilled straight line rent | 3,168 | 747 |
Prepaid expenses and other assets | 2,344 | 8,352 |
Deferred tax assets | 2,753 | 2,753 |
Goodwill and other intangible assets | 5,867 | 5,882 |
Deferred financing costs, net | 2,640 | 5,280 |
Total assets | 636,880 | 671,414 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Mortgage notes payable, net of deferred financing costs ($5,628 and $5,706 for June 30, 2016 and December 31, 2015, respectively) | 287,972 | 275,736 |
Credit facility | 0 | 28,630 |
Mezzanine facility | 132,716 | 136,777 |
Below-market lease liabilities, net | 3,502 | 3,749 |
Derivatives, at fair value | 6,011 | 1,927 |
Due to related parties | 338 | 280 |
Accounts payable and accrued expenses | 7,028 | 10,120 |
Prepaid rent | 6,972 | 5,821 |
Deferred tax liability | 6,029 | 5,921 |
Taxes payable | 944 | 474 |
Distributions payable | 1,824 | 1,848 |
Total liabilities | 453,336 | 471,283 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 12,448,568 and 12,249,858 shares issued; and 12,444,303 and 12,242,127 shares outstanding, as of June 30, 2016, and December 31, 2015, respectively. | 124 | 122 |
Additional paid-in capital | 267,851 | 263,030 |
Accumulated other comprehensive loss | (4,412) | (1,701) |
Accumulated deficit | (80,019) | (61,320) |
Total stockholders' equity | 183,544 | 200,131 |
Total liabilities and stockholders' equity | $ 636,880 | $ 671,414 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Deferred financing costs, net of accumulated amortization | $ 5,628 | $ 5,706 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (shares) | 0 | 0 |
Preferred stock, outstanding (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (shares) | 300,000,000 | 300,000,000 |
Common stock, issued (shares) | 12,448,568 | 12,249,858 |
Common stock, outstanding (shares) | 12,444,303 | 12,242,127 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
Rental income | $ 11,972 | $ 2,976 | $ 23,783 | $ 4,022 |
Operating expense reimbursements | 293 | 308 | 1,290 | 482 |
Total revenues | 12,265 | 3,284 | 25,073 | 4,504 |
Expenses: | ||||
Property operating | 618 | 498 | 1,940 | 655 |
Operating fees to related parties | 1,850 | 101 | 3,786 | 126 |
Acquisition and transaction related | 146 | 13,028 | 40 | 20,193 |
Recovery of impaired deposits for real estate acquisitions | (250) | 0 | (250) | 0 |
General and administrative | 1,681 | 455 | 2,971 | 771 |
Depreciation and amortization | 4,861 | 1,535 | 9,674 | 2,017 |
Total expenses | 8,906 | 15,617 | 18,161 | 23,762 |
Operating income (loss) | 3,359 | (12,333) | 6,912 | (19,258) |
Other income (expense): | ||||
Interest expense | (5,864) | (2,087) | (13,062) | (2,913) |
Losses on foreign currency | 0 | (277) | 0 | (745) |
Losses on derivative instruments | (299) | (48) | (712) | (48) |
Unrealized gains (losses) on undesignated foreign currency advances and other hedge ineffectiveness | 75 | (82) | (395) | (82) |
Other income | 6 | 16 | 11 | 16 |
Total other expense, net | (6,082) | (2,478) | (14,158) | (3,772) |
Net loss before income tax | (2,723) | (14,811) | (7,246) | (23,030) |
Income tax (expense) benefit | (400) | 21 | (540) | 21 |
Net loss | (3,123) | (14,790) | (7,786) | (23,009) |
Other comprehensive income (loss): | ||||
Cumulative translation adjustment | 1,613 | (2,583) | 1,465 | 188 |
Designated derivatives, fair value adjustments | (1,008) | 386 | (4,176) | 138 |
Comprehensive loss | $ (2,518) | $ (16,987) | $ (10,497) | $ (22,683) |
Earnings Per Share, Basic and Diluted | ||||
Basic and diluted weighted average shares outstanding (shares) | 12,412,618 | 6,773,666 | 12,363,312 | 4,614,053 |
Basic and diluted net loss per share (in dollars per share) | $ (0.25) | $ (2.18) | $ (0.63) | $ (4.99) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning Balance (in shares) at Dec. 31, 2015 | 12,242,127 | ||||
Beginning Balance at Dec. 31, 2015 | $ 200,131 | $ 122 | $ 263,030 | $ (1,701) | $ (61,320) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 1,548 | ||||
Issuance of common stock | 16 | 16 | |||
Common stock offering costs, commissions and dealer manager fees | 63 | 63 | |||
Common stock issued through distribution reinvestment plan (in shares) | 197,162 | ||||
Common stock issued through distribution reinvestment plan | 4,683 | $ 2 | 4,681 | ||
Share-based compensation (in shares) | 3,466 | ||||
Amortization of restricted shares | 61 | 61 | |||
Distributions declared | (10,913) | (10,913) | |||
Net loss | (7,786) | (7,786) | |||
Cumulative translation adjustment | 1,465 | 1,465 | |||
Designated derivatives, fair value adjustments | (4,176) | (4,176) | |||
Ending Balance (in shares) at Jun. 30, 2016 | 12,444,303 | ||||
Ending Balance at Jun. 30, 2016 | $ 183,544 | $ 124 | $ 267,851 | $ (4,412) | $ (80,019) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (7,786) | $ (23,009) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 5,442 | 1,257 |
Amortization of intangibles | 4,232 | 760 |
Amortization (including accelerated write-off) of deferred financing costs | 3,288 | 1,141 |
Amortization of below-market lease liabilities | (190) | (33) |
Amortization of above-market lease assets | 1,124 | 120 |
Amortization of below-market ground lease assets | 360 | 0 |
Unbilled straight line rent | (2,578) | 157 |
Recovery of impaired deposits for real estate acquisitions | (250) | 0 |
Share-based compensation | 61 | 6 |
Unrealized gains on foreign currency transactions, derivatives, and other | (45) | 48 |
Unrealized losses on undesignated foreign currency advances and other hedge ineffectiveness | 395 | 82 |
Changes in assets and liabilities: | ||
Due to related parties | 58 | (18) |
Prepaid expenses and other assets | 6,108 | (1,279) |
Deferred tax assets | 0 | (21) |
Accounts payable and accrued expenses | (3,070) | 6,149 |
Prepaid rent | 1,151 | 1,945 |
Deferred tax liability | 0 | 0 |
Taxes payable | 355 | 0 |
Net cash provided by (used in) operating activities | 8,655 | (12,695) |
Cash flows from investing activities: | ||
Capital expenditures | (250) | 0 |
Investment in real estate and real estate related assets | 0 | (68,487) |
Deposits for real estate acquisitions | 250 | 2,361 |
Net cash used in investing activities | 0 | (66,126) |
Cash flows from financing activities: | ||
Repayments on credit facility | (27,219) | 0 |
Proceeds from mortgage notes payable | 29,488 | 0 |
Payments of mortgage notes payable | (11,116) | 0 |
Payments of deferred financing costs | (440) | (6,063) |
Proceeds from issuance of common stock | 16 | 192,580 |
Payments of offering costs | 63 | (23,617) |
Distributions paid | (6,254) | (1,785) |
Payments on common stock repurchases, inclusive of fees | 0 | 0 |
Restricted cash | 18,144 | (14,074) |
Net cash provided by financing activities | 2,682 | 147,041 |
Net change in cash and cash equivalents | 11,337 | 68,220 |
Effect of exchange rate on cash | 942 | 48 |
Cash and cash equivalents, beginning of period | 22,735 | 1,286 |
Cash and cash equivalents, end of period | 35,014 | 69,554 |
Supplemental Disclosures: | ||
Cash paid for interest | 11,304 | 827 |
Cash paid for income taxes | 70 | 4 |
Non-Cash Investing and Financing Activities: | ||
VAT refund receivable used to repay notes payable | 0 | 6,746 |
Mortgage notes payable assumed or used to acquire investments in real estate | 0 | (202,269) |
Repayment of note payable | 0 | (6,746) |
Borrowings under line of credit to acquire real estate | 0 | (17,256) |
Repayment of credit facility | (1,029) | 0 |
Settlement of foreign currency derivatives | 1,029 | 0 |
Common stock issued through distribution reinvestment program | $ 4,683 | $ 1,205 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization American Realty Capital Global Trust II, Inc. (the “Company”) was incorporated on April 23, 2014 as a Maryland corporation that elected and qualified to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the taxable year ending December 31, 2015 . On August 26, 2014 , the Company commenced its initial public offering (the “IPO”) on a “reasonable best efforts” basis of up to 125.0 million shares of common stock, $0.01 par value per share ("Common Stock"), at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to a registration statement on Form S-11, as amended (File No. 333-196549 ) (the “Registration Statement”), filed with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement also covered up to 26.3 million shares of Common Stock pursuant to a distribution reinvestment plan (the “DRIP”). On November 15, 2015, the Company announced the suspension of its IPO, effective December 31, 2015, and the IPO will lapse in accordance with its terms on August 26, 2016. The IPO was conducted by Realty Capital Securities, LLC (the "Former Dealer Manager"), as exclusive wholesale distributor, and, on November 18, 2015, the Former Dealer Manager suspended sales activities it performed pursuant to the dealer manager agreement for the IPO. On December 31, 2015, the Company entered into a termination agreement with the Former Dealer Manager to terminate the dealer manager agreement. Due to these circumstances, it is not likely that the Company will resume the IPO. The Company registered $3.125 billion , or 125.0 million shares, of Common Stock for sale in its IPO and through June 30, 2016 , the Company sold 12.4 million shares of Common Stock outstanding, including shares issued pursuant to its IPO and its DRIP for approximately $307.4 million in gross proceeds, all of which had been invested or used for other purposes. On December 31, 2015, the Company registered an additional 1.3 million shares to be issued under the DRIP, pursuant to a registration statement on Form S-3 ( File No-333-208820 ). The Company was formed to primarily acquire a diversified portfolio of commercial properties, with an emphasis on sale-leaseback transactions involving single tenant net-leased commercial properties. All such properties may be acquired and operated by the Company alone or jointly with Moor Park Capital Global II Advisors Limited (the “Service Provider”) or another party. The Company may also originate or acquire first mortgage loans secured by real estate. The Company purchased its first property and commenced active operations on December 29, 2014 . As of June 30, 2016 , the Company owned 16 properties consisting of 4.2 million rentable square feet, which were 99.9% leased, with weighted average remaining lease term of 8.5 years . 4.5% of the Company's properties are located in the United States and 95.5% are located in Europe. Until the NAV pricing date (as described below), the per share purchase price for shares issued under the DRIP will be equal to $23.75 per share. Beginning with the NAV pricing date, the per share price for shares under the DRIP will be equal to the Company’s estimated per share net asset value (the "NAV"), as calculated by American Realty Capital Global II Advisors, LLC (the “Advisor”) and approved by the Company's board of directors. The NAV pricing date means the date the Company first publishes an estimated per share NAV, which will be on or prior to March 16, 2017 , which is 150 days following the second anniversary of the date that the Company broke escrow in the IPO. After the Company has initially established its estimated per share NAV, the Company expects to update it periodically at the discretion of the Company's board of directors, provided that such updated estimates will be made at least once annually. The Company sold 8,888 shares of Common Stock to American Realty Capital Global II Special Limited Partner, LLC (the “Special Limited Partner”), an entity controlled by AR Capital Global Holdings, LLC (the “Sponsor”), on May 28, 2014, at $22.50 per share for $0.2 million . Substantially all of the Company’s business is conducted through American Realty Capital Global II Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company is the sole general partner and holds substantially all of the units of limited partnership interests in the OP (“OP Units”). Additionally, the Special Limited Partner contributed $2,020 to the OP in exchange for 90 OP Units, which represents a nominal percentage of the aggregate OP ownership. A holder of limited partner interests has the right to convert OP Units for the cash value of a corresponding number of shares of the Company's Common Stock or, at the option of the OP, a corresponding number of shares of the Company's Common Stock, as allowed by the limited partnership agreement of the OP. The remaining rights of the OP Units are limited, however, and do not include the ability to replace the general partner or to approve the sale, purchase or refinancing of the OP’s assets. The Company's Advisor has been retained to manage its affairs on a day-to-day basis. The properties are managed and leased by American Realty Capital Global II Properties, LLC (the "Property Manager"). The Advisor, Property Manager and Special Limited Partner are under common control with the parent of the Sponsor, and, as a result, are related parties, each of which have or will receive compensation, fees and expense reimbursements for services related to the IPO and the investment and management of the Company's assets. The Advisor has entered into a service agreement with the Service Provider. The Service Provider is not affiliated with the Company, the Advisor or the Sponsor. Pursuant to the service provider agreement, the Service Provider provides, subject to the Advisor’s oversight, certain real estate related services, as well as sourcing and structuring of investment opportunities, performance of due diligence, and arranging debt financing and equity investment syndicates solely with respect to investments in Europe. Pursuant to the service provider agreement, 50% of the fees payable by the Company to the Advisor and a percentage of the fees paid to the Property Manager are paid or assigned by the Advisor or Property Manager, as applicable, to the Service Provider, solely with respect to the Company's foreign investments in Europe. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Accounting The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results for the entire year or any subsequent interim period. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2015 , which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 22, 2016 . There have been no significant changes to the Company's significant accounting policies during the six months ended June 30, 2016 other than the updates described below and the subsequent notes. Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary. The Company has determined that the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP. Income Taxes The Company qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), beginning with the taxable year ending December 31, 2015. Commencing with such taxable year, the Company was organized to operate in such a manner as to qualify for taxation as a REIT under the Code. The Company intends to continue to operate in such a manner to continue to qualify for taxation as a REIT, but no assurance can be given that it will operate in a manner so as to remain qualified as a REIT. As a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes annually all of its REIT taxable earnings. REIT's are subject to a number of other organizational and operational requirements. The Company conducts business in various states and municipalities within the United States, United Kingdom and continental Europe and, as a result, the Company or one of its subsidiaries file income tax returns in the United States federal jurisdiction and various states and certain foreign jurisdictions. As a result, the Company may be subject to certain federal, state, local and foreign taxes on its income and assets, including alternative minimum taxes, taxes on any undistributed income and state, local or foreign income, franchise, property and transfer taxes. Any of these taxes decrease the Company's earnings and available cash. In addition, the Company's international assets and operations, including those designated as direct or indirect qualified REIT subsidiaries or other disregarded entities of a REIT, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted. For the Period from April 23, 2014 (date of inception) to December 31, 2014 , the Company was taxed as a C corporation, pursuant to which income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded for the future tax consequences attributable to differences between the financial statements carrying amounts and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carry-forwards, using expected tax rates in effect for each taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. The Company recognizes the financial statement effects of a tax position when it is more-likely-than-not, based on technical merits, that the position will be sustained upon examination. Because the Company elected and qualified to be taxed as a REIT commencing with the taxable year ended December 31, 2015 , it does not anticipate that any applicable deferred tax assets or liabilities will be realized. Significant judgment is required in determining the Company's tax provision and in evaluating its tax positions. The Company establishes tax reserves based on a benefit recognition model, which the Company believes could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. The Company derecognizes the tax position when the likelihood of the tax position being sustained is no longer more likely than not. The Company recognizes deferred income taxes in certain of its subsidiaries taxable in the United States or in foreign jurisdictions. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. The Company provides a valuation allowance against its deferred income tax assets when it believes that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit). The Company derives most of its REIT income from its real estate operations in Europe, which are subject to foreign taxes. The Company's real estate operations in the United States are generally not subject to federal tax, and accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial statements for these operations. These operations may be subject to certain state, local, and foreign taxes, as applicable. Our deferred tax assets and liabilities are primarily the result of temporary differences related to the following: • Basis differences between tax and GAAP for certain international real estate investments. For income tax purposes, in certain acquisitions, the Company assumes the seller’s basis, or the carry-over basis, in the acquired assets. The carry-over basis is typically lower than the purchase price, or the GAAP basis, resulting in a deferred tax liability with an offsetting increase to goodwill or the acquired tangible or intangible assets; • Timing differences generated by differences in the GAAP basis and the tax basis of assets such as those related to capitalized acquisition costs and depreciation expense; and • Tax net operating losses in certain subsidiaries, including those domiciled in foreign jurisdictions, that may be realized in future periods if the respective subsidiary generates sufficient taxable income. The Company recognizes current income tax expense for state and local income taxes and taxes incurred in its foreign jurisdictions. The Company's current income tax expense fluctuates from period to period based primarily on the timing of its taxable income. For the three and six months ended June 30, 2016 , the Company recognized an income tax expense of $0.4 million and $0.5 million , respectively. For the three and six months ended June 30, 2015 , the Company recognized an income tax benefit of $21,000 . Deferred income tax (expense) benefit is generally a function of the period’s temporary differences and the utilization of net operating losses generated in prior years that had been previously recognized as deferred income tax assets from state and local taxes in the United States or in foreign jurisdictions. Reclassifications Certain reclassifications have been made to the 2015 consolidated financial statements to conform to the current period presentation. Revisions to previously issued financial statements During the three months ended March 31, 2016, the Company identified certain historical errors in the preparation of its statements of operations and comprehensive income (loss) and consolidated statement of changes in equity since 2014 which impacted the quarterly financial statements for the periods ended March 31, June 30, and September 30, 2015 and the years ended December 31, 2015 and 2014. Specifically, the Company had been reflecting the fair value adjustments for its cross currency derivatives designated as net investment hedges on its foreign investments as part of “Designated derivatives - fair value adjustments” within Other Comprehensive Income ("OCI") rather than treating them as part of “Cumulative translation adjustments” also in OCI consistent with the treatment of the hedged item as required by ASC 815. The Company concluded that the errors noted above were not material to any historical periods presented. However, in order to correctly present the cumulative translation adjustment and designated derivatives, fair value adjustment in the appropriate period, the Company revised previously issued financial statements and will revise its future presentations of OCI when the periods are refiled in 2016 for comparative purposes. The effects of these revisions are summarized below: (In thousands) As originally Reported Adjustment As Revised Year ended December 31, 2014 Cumulative translation adjustment $ (205 ) $ 250 $ 45 Designated derivatives, fair value adjustments 164 (250 ) (86 ) Total OCI $ (41 ) $ — $ (41 ) (In thousands) As originally Reported Adjustment As Revised Three months ended June 30, 2015 Cumulative translation adjustment $ (1,822 ) $ (761 ) $ (2,583 ) Designated derivatives, fair value adjustments (375 ) 761 386 Total OCI $ (2,197 ) $ — $ (2,197 ) (In thousands) As originally Reported Adjustment As Revised Six months ended June 30, 2015 Cumulative translation adjustment $ (1,979 ) $ 2,167 $ 188 Designated derivatives, fair value adjustments 2,305 (2,167 ) 138 Total OCI $ 326 $ — $ 326 (In thousands) As originally Reported Adjustment As Revised Three months ended September 30, 2015 Cumulative translation adjustment $ 852 $ (31 ) $ 821 Designated derivatives, fair value adjustments (1,607 ) 31 (1,576 ) Total OCI $ (755 ) $ — $ (755 ) (In thousands) As originally Reported Adjustment As Revised Nine months ended September 30, 2015 Cumulative translation adjustment $ (1,127 ) $ 2,136 $ 1,009 Designated derivatives, fair value adjustments 698 (2,136 ) (1,438 ) Total OCI $ (429 ) $ — $ (429 ) (In thousands) As originally Reported Adjustment As Revised Year ended December 31, 2015 Cumulative translation adjustment $ (7,918 ) $ 7,899 $ (19 ) Designated derivatives, fair value adjustments 6,258 (7,899 ) (1,641 ) Total OCI $ (1,660 ) $ — $ (1,660 ) Out-of-period adjustment The Company received a tax refund of $0.1 million in excess of the originally recorded tax receivable for periods prior to the Company's ownership of an acquired subsidiary. During the three months ended March 31, 2016, the Company recorded the out-of-period excess benefit as a reduction to general and administrative expense rather than an adjustment to goodwill and other intangible assets. Management concluded this adjustment is not material to the financial position or results of operations of the current or prior quarter and corrected these amounts in during the three months ended June 30, 2016. There is no net effect to year to date amounts. Recently Issued Accounting Pronouncements Adopted: In February 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-02 Consolidation (Topic 810) - Amendments to the Consolidation Analysis . The new guidance applies to entities in all industries and provides a new scope exception to registered money market funds and similar unregistered money market funds. It makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the VIE guidance. The standard does not add or remove any of the characteristics that determine if an entity is a VIE. However, when decision-making over the entity’s most significant activities has been outsourced, the standard changes how a reporting entity assesses if the equity holders at risk lack decision making rights. Previously, the reporting entity would be required to determine if there is a single equity holder that is able to remove the outsourced decision maker that has a variable interest. The new standard requires that the reporting entity first consider the rights of all of the equity holders at risk. If the equity holders have certain rights that are deemed to give them the power to direct the entity’s most significant activities, then the entity does not have this VIE characteristic. The new standard also introduces a separate analysis specific to limited partnerships and similar entities for assessing if the equity holders at risk lack decision making rights. Limited partnerships and similar entities will be VIEs unless the limited partners hold substantive kick-out rights or participating rights. In order for such rights to be substantive, they must be exercisable by a simple majority vote (or less) of all of the partners (exclusive of the general partner and its related parties). A right to liquidate an entity is viewed as akin to a kick-out right. The guidance for limited partnerships under the voting model has been eliminated in conjunction with the introduction of this separate analysis, including the rebuttable presumption that a general partner unilaterally controls a limited partnership and should therefore consolidate it. A limited partner with a controlling financial interest obtained through substantive kick out rights would consolidate a limited partnership. The standard eliminates certain of the criteria that must be met for an outsourced decision maker or service provider’s fee arrangement to not be a variable interest. Under current guidance, a reporting entity first assesses whether it meets power and economics tests based solely on its own variable interests in the entity to determine if it is the primary beneficiary required to consolidate the VIE. Under the new standard, a reporting entity that meets the power test will also include indirect interests held through related parties on a proportionate basis to determine whether it meets the economics test and is the primary beneficiary on a standalone basis. The standard is effective for annual periods beginning after December 15, 2015. We have evaluated the impact of the adoption of ASU 2015-02 on the Company's consolidated financial position and have determined under ASU 2015-02 the Company's operating ownership is considered a VIE. However, the Company meets the disclosure exemption criteria as the Company is the primary beneficiary of the VIE and the OPs interest is considered a majority voting interest. As such, this standard will not have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30). The guidance changes the presentation of debt issuance costs on the balance sheet. The amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. In August 2015, the FASB added that, for line of credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line, regardless of whether or not there are any outstanding borrowings. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016. As a result, the Company reclassified $5.7 million of deferred debt issuance costs related to the Company's mortgage notes payable from deferred costs, net to mortgage notes payable in the Company's consolidated balance sheets as of December 31, 2015 . As permitted under the revised guidance, the Company elected to not reclassify the deferred debt issuance costs associated with its Credit Facility (as defined in Note 4 — Revolving Credit Borrowings). The deferred debt issuance costs associated with the Credit Facility, net of accumulated amortization, and deferred leasing costs, net of accumulated amortization, are included in deferred costs, net on the Company's accompanying consolidated balance sheet as of December 31, 2015 . In August 2015, FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which amends ASC 835-30, Interest - Imputation of Interest . This update clarifies the presentation and subsequent measurement of debt issuance costs associated with lines of credit. These costs may be deferred and presented as an asset and subsequently amortized ratably over the term of the revolving debt arrangement. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company has adopted the provisions of this guidance effective January 1, 2016, and has applied the provisions prospectively. The adoption of this guidance has not had a material impact on the Company's consolidated financial position, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, Business Combination (Topic 805) . The guidance eliminates the requirement to adjust provisional amounts from a business combination and the related impact on earnings by restating prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of measurement period adjustments on current and prior periods, including the prior period impact on depreciation, amortization and other income statement items and their related tax effects, shall be recognized in the period the adjustment amount is determined. The cumulative adjustment would be reflected within the respective financial statement line items affected. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company has adopted the provisions of this guidance effective January 1, 2016, and has applied the provisions prospectively. The adoption of this guidance has not had a material impact on the Company's consolidated financial position, results of operations or cash flows. Pending Adoption: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . Under the revised guidance, an entity is required to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revised guidance allows entities to apply either a full retrospective or modified retrospective transition method upon adoption. In July 2015, the FASB finalized a one-year delay of the revised guidance, although entities will be allowed to early adopt the guidance as of the original effective date. The new guidance will be effective in the Company's 2018 fiscal year. The Company is currently evaluating the impact of the revised guidance on the consolidated financial statements and has not yet determined the method by which the Company will adopt the standard. In January 2016, the FASB issued ASU 2016-01 Financial Instruments-Overall:Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). The revised guidance amends the recognition and measurement of financial instruments. The new guidance significantly revises an entity’s accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it also amends the presentation and disclosure requirements associated with the fair value of financial instruments. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is not permitted for most of the amendments in the update. The Company is currently evaluating the impact of the new guidance. In February 2016, the FASB issued ASU 2016-02 Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The ASU is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance. In March 2016, the FASB issued ASU 2016-05 Derivatives and Hedging (Topic 815) , Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships . Under the new guidance, the novation of a derivative contract in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship. The hedge accounting relationship could continue uninterrupted if all of the other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered. The guidance is effective for fiscal years beginning after December 15, 2016, and interim periods therein. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this new guidance. In March 2016, the FASB issued ASU 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The guidance requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In March 2016, the FASB issued an update on ASU 2016-09 Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The guidance changes the accounting for certain aspects of share-based compensation. Among other things, the revised guidance allows companies to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In April 2016, the FASB issued ASU 2016-10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . The amendments in this update do not change the core principle of the guidance in Topic 606 but rather, clarify aspects of identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The amendment is effective on the same date as ASU 2014-09, which is not yet effective. The Company is currently evaluating the impact of the revised guidance on the consolidated financial statements and has not yet determined the method by which the Company will adopt the standard. In May 2016, the FASB issued ASU 2016-12 Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . The amendments provide clarifying guidance in a few narrow areas and add some practical expedients to the guidance. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606 , which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance. The amendment is effective on the same date as ASU 2014-09, which is not yet effective. The Company is currently evaluating the impact of the revised guidance on the consolidated financial statements and has not yet determined the method by which the Company will adopt the standard. |
Real Estate Investments
Real Estate Investments | 6 Months Ended |
Jun. 30, 2016 | |
Real Estate [Abstract] | |
Real Estate Investments | Real Estate Investments The following table reflects the number and related base purchase prices of properties acquired as of December 31, 2015 and during the six months ended June 30, 2016 : Number of Properties Base Purchase Price (1) (In thousands) As of December 31, 2015 16 $ 619,914 Six Months Ended June 30, 2016 — — Portfolio as of June 30, 2016 16 $ 619,914 ________________________________________________ (1) Contract purchase price, excluding acquisition related costs, based on the exchange rate at the time of purchase, where applicable. The following table presents the allocation of assets acquired and liabilities assumed during the six months ended June 30, 2015 based on contract purchase price, excluding acquisition related costs, based on the exchange rate at the time of purchase. There were no acquisitions during the six months ended June 30, 2016 . (Dollar amounts in thousands) Six Months Ended Real estate investments, at cost: Land $ 26,827 Buildings, fixtures and improvements 188,820 Total tangible assets 215,647 Acquired intangibles: In-place leases 49,536 Above market lease assets 379 Below market lease liabilities (2,757 ) Below market ground lease intangible assets (1) 25,207 Total assets acquired, net 288,012 Mortgage notes payable used to acquire real estate investments (202,269 ) Credit facilities payable used to acquire real estate investments (17,256 ) Cash paid for acquired real estate investments $ 68,487 Number of properties purchased 7 ___________________________________ (1) Below market ground lease intangible assets is for one ground lease which is related to ING Amsterdam property which is prepaid through 2050. The Company purchased its first property and commenced active operations on December 29, 2014 . The following table presents unaudited pro forma information as if the acquisitions during the three and six months ended June 30, 2015 had been consummated on April 23, 2014 (date of inception). Three Months Ended Six Months Ended (In thousands, except per share data) June 30, 2015 June 30, 2015 Pro forma revenues $ 6,407 $ 12,753 Pro forma income net loss (686 ) $ (1,439 ) Basic and diluted net loss per share $ (0.10 ) $ (0.31 ) The following table presents future minimum base rent payments on a cash basis due to the Company over the next five calendar years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items. These amounts also exclude recoveries from tenants for certain expenses such as real estate taxes and insurance. (In thousands) Future Minimum Base Rental Payments (1) 2016 (remainder) $ 23,214 2017 45,186 2018 47,767 2019 48,377 2020 49,239 2021 49,301 Thereafter 139,313 $ 402,397 ________________________ (1) Based on exchange rate as of June 30, 2016 . The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all properties on a straight-line basis as of June 30, 2016 and 2015 : June 30, Tenant 2016 2015 Foster Wheeler 23.5% —% ING Amsterdam 18.0% 34.8% Harper Collins 14.3% —% Sagemcom 11.5% 22.1% DB Luxembourg * 20.7% ___________________________________________ * Tenant's annualized rental income on a straight-line basis was not greater than 10.0% of total annualized rental income for all portfolio properties as of the period specified. The termination, delinquency or non-renewal of leases by any of the above tenants may have a material adverse effect on revenues. The following table lists the countries where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10.0% of consolidated annualized rental income on a straight-line basis as of June 30, 2016 and 2015 . June 30, Country 2016 2015 United Kingdom 39.9% —% France 25.5% 31.2% The Netherlands 18.0% 34.8% Luxembourg * 20.7% ___________________________________________ * The country's/state annualized rental income on a straight-line basis was not greater than 10.0% of total annualized rental income for all portfolio properties as of the period specified. The Company did not own properties in any other state/country that in total represented 10.0% or greater of consolidated annualized rental income on a straight-line basis as of June 30, 2016 and 2015 . As of December 31, 2015, the Company had $2.0 million in aggregate deposits as closing consideration under certain pending acquisition agreements. At the time, the Company believed, that it will not be able to meet those closing considerations and as a result have impaired all such deposits as of December 31, 2015. Subsequently, during the three months ended June 30, 2016 , the Company was able to negotiate and recoup $0.3 million on such deposits which are recorded in gains on sale of agreements in the consolidated statement of operations. |
Revolving Credit Borrowings
Revolving Credit Borrowings | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Revolving Credit Borrowings | Revolving Credit Borrowings Credit Facility On January 28, 2015 , the Company, through its OP, entered into a credit agreement relating to a credit facility (the “Credit Facility”) that provided for aggregate borrowings up to $100.0 million , including swingline loans up to $50.0 million and letters of credit up to $25.0 million , subject in each case to borrowing base availability and certain other conditions. Borrowings under the Credit Facility were used, along with cash on hand, to finance portfolio acquisitions and for general corporate purposes. The Company had the option, based upon its consolidated leverage ratio, to have draws under the Credit Facility priced at either (i) Alternate Base Rate plus an applicable spread ranging from 0.5% to 1.1% , (ii) Adjusted LIBO Rate plus an applicable spread ranging from 1.5% to 2.1% , or (iii) Adjusted EURIBOR Rate plus an applicable spread ranging from 1.5% to 2.1% . Alternate Base Rate is defined in the Credit Facility as the greatest of (a) the prime rate in effect on such day; (b) the federal funds effective rate in effect on such day plus half of 0.50% ; and (c) Adjusted LIBO Rate for a one month interest period on such day plus 1.0% . Adjusted LIBO Rate refers to the London interbank offered rate, adjusted based on applicable reserve percentages established by the Federal Reserve. Adjusted EURIBOR Rate refers to the Euro interbank offered rate, adjusted based on applicable reserve percentages in effect on such day for fundings in Euros maintained by commercial banks which lend in Euros. If any principal or interest on any loan under the Credit Facility or any other amount payable by the OP under the Credit Facility is not paid when due, such overdue amount will bear interest at, in respect of principal, 2.0% plus the rate otherwise applicable to such principal amount, or, in respect of any other amount, 2.0% plus the rate otherwise applicable to loans under the Credit Facility bearing interest at the Alternate Base Rate. The Credit Facility agreement provided for quarterly interest payments for each Alternate Base Rate loan and periodic payments for each Adjusted LIBO Rate loan, based upon the applicable LIBOR loan period, with all principal outstanding being due on the maturity date in January 2017 . The Credit Facility agreement could be prepaid at any time, in whole or in part, without premium or penalty, subject to prior notice to the lender. In the event of a default, the lender had the right to terminate their obligations under the Credit Facility agreement and to accelerate the payment on any unpaid principal amount of all outstanding loans. On March 11, 2016, the Company terminated the Credit Facility agreement and repaid in full the outstanding balance of $28.4 million comprised of £11.2 million ( $16.1 million based upon an exchange rate of £1.00 to $1.43 ) and €11.0 million ( $12.3 million based upon an exchange rate of €1.00 to $1.12 ) with $20.0 million of previously restricted cash which was held as collateral for the Credit Facility with the remainder of the obligation funded with available cash on hand. As a result, the Company accelerated the amortization of approximately $1.1 million of deferred financing costs associated with the Credit Facility. Such amounts are included in interest expense in the six months ended June 30, 2016 . Foreign currency draws under the Credit Facility were designated as net investment hedges through March 11, 2016 (see Note 7 — Derivatives and Hedging Activities for further discussion). Mezzanine Facility On November 13, 2015 , the Company, through a wholly owned subsidiary entity (the "Borrower"), entered into a mezzanine loan agreement (the "Mezzanine Facility"), that provided for aggregate borrowings up to €128.0 million ( $142.1 million based upon an exchange rate as of June 30, 2016 ) subject to certain conditions. Borrowings under the Mezzanine Facility were used, along with cash on hand, to refinance certain existing properties and finance portfolio acquisitions. The Mezzanine Facility bears interest at 8.25% per annum, payable quarterly, and is scheduled to mature on August 13, 2017 . The creditors can offer leverage up to 82.5% of the net purchase price of the collateral properties. If the actual leverage of the Borrower exceeds 77.5% of net purchase price of the collateral properties, the interest rate for the loan shall be 8.50% . The Mezzanine Facility is secured by first-priority ranking of the shares of the Borrower, and all of the Borrower's unencumbered country holding vehicles. The Mezzanine Facility is also cross-collateralized by pledges of the direct or indirect ownership of the Company in all the related personal property, reserves, and a pledge of shareholder loans and receivables to the extent not already pledged to senior lenders. The Mezzanine Facility may be prepaid at any time during the term commencing on June 30, 2016 with a minimum of all mezzanine interest due for the first nine months of the loan payable, less any interest already paid. The outstanding amount of the Mezzanine Facility was $132.7 million (including €72.6 million and £38.9 million ) and $136.8 million (including €72.6 million and £38.9 million ) as of June 30, 2016 and December 31, 2015 , respectively. The unused borrowing capacity under the Mezzanine Facility as of June 30, 2016 and December 31, 2015 was $9.4 million and $2.8 million , respectively. As discussed in Note 14 — Subsequent Events, the Mezzanine Facility was subsequently modified. As a result, the Company was required to repay €10.2 million in July 2016. It will be further required to repay an additional £1.8 million in 2016 and £3.7 million in 2017 (or earlier upon closing of specific asset sales). Effective January 4, 2016, all non-functional currency draws under the Mezzanine Facility were designated as net investment hedges (see Note 7 — Derivatives and Hedging Activities for further discussion). The total gross carrying value of unencumbered assets as of June 30, 2016 was $9.7 million . |
Mortgage Notes Payable
Mortgage Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable | Mortgage Notes Payable The Company's mortgage notes payable as of June 30, 2016 and December 31, 2015 consisted of the following: Country Portfolio Encumbered Properties Outstanding Loan Amount (1) Effective Interest Rate Interest Rate Maturity June 30, 2016 December 31, 2015 (In thousands) France: Auchan 1 $ 9,217 $ 9,053 1.7% (2) Fixed Dec. 2019 Pole Emploi 1 6,441 6,326 1.7% (2) Fixed Dec. 2019 Sagemcom 1 39,867 39,156 1.7% (2) Fixed Dec. 2019 Worldline 1 5,552 5,453 1.9% (2) Fixed Jul. 2020 DCNS 1 10,550 10,362 1.5% (2) Fixed Dec. 2020 ID Logistics II 2 11,660 — 1.3% Fixed Jun. 2020 Luxembourg: DB Luxembourg (primary mortgage loan) (3) 1 39,978 39,265 1.4% (2) Fixed May 2020 DB Luxembourg (secondary mortgage loan) (3) 13,416 24,094 9.1% Fixed May 2017 The Netherlands: ING Amsterdam 1 48,862 47,991 1.7% (2) Fixed Jun. 2020 Total EUR denominated 9 185,543 181,700 United Kingdom: Foster Wheeler 1 52,631 58,180 2.7% (2) Fixed Oct. 2018 Harper Collins 1 37,598 41,562 3.4% (2) Fixed Oct. 2019 NCR Dundee 1 7,553 — 3.0% (2) Fixed Apr. 2020 Total GBP denominated 3 97,782 99,742 United States: FedEx Freight 1 6,165 — 4.5% Fixed May 2020 Veolia Water 1 4,110 — 4.5% Fixed May 2020 Total USD denominated 2 10,275 — Gross mortgage notes payable 14 293,600 281,442 2.5% Deferred financing costs, net of accumulated amortization — (5,628 ) (5,706 ) Mortgage notes payable, net of deferred financing costs 14 $ 287,972 $ 275,736 2.5% _________________________ (1) Amounts borrowed in local currency and translated at the spot rate as of the respective measurement date. (2) Fixed as a result of entering into an interest rate swap agreement. (3) The DB Luxembourg property is encumbered by a mortgage and a second mortgage loan, each pursuant to the same loan agreement. The second mortgage loan was partially paid off during three months ended June 30, 2016 . During the three and six months ended June 30, 2016 , the Company encumbered two French property for which the Company received proceeds of €10.5 million ( $11.7 million based upon an exchange rate of $1.00 to €1.11 as of June 30, 2016 ), one U.K. property for which the Company received proceeds of £5.6 million ( $7.6 million based upon an exchange rate of $1.00 to £1.34 as of June 30, 2016 ), and two U.S. properties for which the Company received proceeds of $10.3 million . The following table summarizes the scheduled aggregate principal payments on the gross mortgage notes payable subsequent to June 30, 2016 : (In thousands) Future Principal Payments (1) 2016 (remainder) $ — 2017 13,416 2018 52,631 2019 93,123 2020 112,495 2021 21,935 Thereafter — Total $ 293,600 _________________________ (1) Based on exchange rate as of June 30, 2016 . As discussed in Note 14 — Subsequent Events, the Mezzanine Facility was subsequently modified. As a result, the Company was required to repay €10.2 million in July 2016. It will be further required to repay an additional £1.8 million in 2016 and £3.7 million in 2017 (or earlier upon closing of specific asset sales), and such amounts are not reflected in the table above. The Company's mortgage notes payable agreements require compliance with certain property-level financial covenants including debt service coverage ratios. As of June 30, 2016 , the Company was in compliance with financial covenants under its mortgage notes payable agreements. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability and those inputs are significant. Level 3 — Unobservable inputs that reflect the entity's own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter, however, the Company expects that changes in classifications between levels will be rare. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of June 30, 2016 and December 31, 2015 , the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company's derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company's potential nonperformance risk and the performance risk of the counterparties. Financial Instruments Measured at Fair Value on a Recurring Basis The following table presents information about the Company's assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015 , aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Level 1 Level 2 Level 3 Total June 30, 2016 Cross currency swaps, net (GBP & EUR) $ — $ 12,960 $ — $ 12,960 Interest rate swaps, net (GBP & EUR) $ — $ (5,980 ) $ — $ (5,980 ) Foreign currency forwards, net (GBP & EUR) $ — $ 500 $ — $ 500 December 31, 2015 Cross currency swaps, net (GBP & EUR) $ — $ 7,408 $ — $ 7,408 Interest rate swaps, net (GBP & EUR) $ — $ (1,726 ) $ — $ (1,726 ) Foreign currency forwards, net (GBP & EUR) $ — $ 556 $ — $ 556 A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended June 30, 2016 . Financial Instruments not Measured at Fair Value on a Recurring Basis The Company is required to disclose the fair value of financial instruments for which it is practicable to estimate that value. The fair value of short-term financial instruments such as cash and cash equivalents, due to/from related parties, accounts payable and distributions payable approximates their carrying value on the consolidated balance sheets due to their short-term nature. The fair values of the Company's remaining financial instruments that are not reported at fair value on the consolidated balance sheets as of June 30, 2016 and December 31, 2015 are reported below. Carrying Fair Value Carrying Amount Fair Value (In thousands) Level June 30, June 30, December 31, December 31, Gross mortgage notes payable 3 $ 293,600 $ 291,854 $ 281,442 $ 286,547 Credit Facility (1) 3 $ — $ — $ 28,630 $ 28,630 Mezzanine Facility 3 $ 132,716 $ 132,716 $ 136,777 $ 136,777 _____________________________ (1) On March 11, 2016, the Company terminated and repaid all outstanding amounts under the Credit Facility in full. As more fully described in Note 7 , certain of the Credit Facility advances were denominated in Euro and British Pounds. A portion of the foreign currency advances under the Credit Facility through March 11, 2016 and a portion foreign currency advances under the Mezzanine Facility as of June 30, 2016 were designated as net investment hedges and measured at fair value through other comprehensive income (loss) as part of the cumulative translation adjustment. The fair value of the mortgage notes payable is estimated using a discounted cash flow analysis, based on the Advisor's experience with similar types of borrowing arrangements. On March 11, 2016, the Company repaid the outstanding amount of the Credit Facility in full (see Note 4 — Revolving Credit Borrowings). The Mezzanine Facility carries a fixed interest rate and as such advances under the Mezzanine Facility are considered to approximate fair value. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Activities | Derivatives and Hedging Activities Risk Management Objective The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. Certain foreign investments expose the Company to fluctuations in foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency, the U.S. dollar ("USD"). The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate and currency risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its related parties may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the balance sheets as of June 30, 2016 and December 31, 2015 : (In thousands) Balance Sheet Location June 30, December 31, 2015 Derivatives designated as hedging instruments: Cross currency swaps (EUR-USD) Derivative assets, at fair value $ 562 $ 3,632 Cross currency swaps (EUR-USD) Derivative liabilities, at fair value (7 ) — Cross currency swaps (GBP-USD) Derivative assets, at fair value 11,782 3,776 Foreign currency forwards (EUR-USD) Derivative assets, at fair value 370 490 Interest rate swaps (GBP) Derivative assets, at fair value — 190 Interest rate swaps (GBP) Derivative liabilities, at fair value (1,957 ) (166 ) Interest rate swaps (EUR) Derivative liabilities, at fair value (1,221 ) (1,751 ) Total $ 9,529 $ 6,171 Derivatives not designated as hedging instruments: Foreign currency forwards (GBP-USD) Derivative assets, at fair value $ 153 $ 55 Foreign currency forwards (EUR-USD) Derivative assets, at fair value 1 22 Foreign currency forwards (EUR-USD) Derivative liabilities, at fair value (24 ) (10 ) Cross currency swaps (EUR-USD) Derivative assets, at fair value 623 — Interest rate swaps (EUR) Derivative liabilities, at fair value (2,802 ) — Total $ (2,049 ) $ 67 The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of June 30, 2016 and December 31, 2015 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying consolidated balance sheets. Gross Amounts Not Offset on the Balance Sheet Derivatives (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset on the Balance Sheet Net Amounts of Assets (Liabilities) presented on the Balance Sheet Financial Instruments Cash Collateral Received (Posted) Net Amount June 30, 2016 $ 13,491 $ (6,011 ) $ — $ 7,480 $ — $ — $ 7,480 December 31, 2015 $ 8,165 $ (1,927 ) $ — $ 6,238 $ — $ — $ 6,238 Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During 2016 , such derivatives were used to hedge the variable cash flows associated with variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three months ended June 30, 2016 , the Company recorded no gains (losses) of ineffectiveness in earnings. During the six months ended June 30, 2016 , the Company recorded losses of $0.1 million of hedge ineffectiveness in earnings. During the three and six months ended June 30, 2015 , the Company recorded gains of $18,000 of hedge ineffectiveness in earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. During the next 12 months, the Company estimates that an additional $1.6 million will be reclassified from other comprehensive income (loss) as an increase to interest expense. The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2016 and June 30, 2015 : Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2016 2015 2016 2015 Amount of gain (loss) recognized in accumulated other comprehensive income (loss) on interest rate derivatives (effective portion) $ 7,562 $ (504 ) $ 2,991 $ 2,364 Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) $ (343 ) $ (80 ) $ (905 ) $ (98 ) Amount of gain (loss) recognized in income on derivative instruments (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) $ — $ 18 $ (56 ) $ 18 As of June 30, 2016 and December 31, 2015 , the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: June 30, 2016 December 31, 2015 Derivatives Number of Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate swaps (EUR) 4 $ 61,078 8 $ 169,604 Interest rate swaps (GBP) 3 97,782 3 116,374 Total 7 $ 158,860 11 $ 285,978 During the three and six months ended June 30, 2016 , the Company terminated certain active interest rate swaps and as a result the Company accelerated the reclassification of zero and $0.2 million of losses from other comprehensive income (loss) to earnings as a result of the hedged forecasted transactions becoming probable not to occur. Net Investment Hedges The Company is exposed to fluctuations in foreign exchange rates on property investments in foreign countries which pay rental income, property related expenses and hold debt instruments in currencies other than its functional currency. The Company uses foreign currency derivatives including cross currency swaps to hedge its exposure to changes in foreign exchange rates on certain of its foreign investments. Cross currency swaps involve fixing the applicable currency exchange rate for delivery of a specified amount of foreign currency on specified dates. For derivatives designated as net investment hedges, the effective portion of changes in the fair value of the derivatives are reported in accumulated other comprehensive income (loss) (outside of earnings) as part of the cumulative translation adjustment. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts are reclassified out of accumulated other comprehensive income (loss) into earnings when the hedged net investment is either sold or substantially liquidated. On March 11, 2016, the Company terminated and repaid all outstanding amounts under the Credit Facility which were designated as net investment hedges of the Company's investments during the periods reflected in the consolidated statements of operations and comprehensive loss. Foreign currency advances under the Company's Credit Facility were utilized to fund individual real estate investments in the respective local currency. Foreign denominated draws under the Credit Facility were designated as net investment hedges through the repayment date of March 11, 2016, which created a natural hedge against the equity invested, removing the need for final currency swaps. As of March 11, 2016, total foreign currency advances under the Credit Facility were approximately $28.4 million , which reflects advances of £11.2 million ( $16.1 million based upon an exchange rate of £1.00 to $1.43 as of March 11, 2016) and advances of €11.0 million ( $12.3 million based upon an exchange rate of €1.00 to $1.12 , as of March 11, 2016). The Company did not record any gains (losses) for the three and six months ended June 30, 2016 and 2015 due to currency changes on the undesignated excess of the foreign currency advances over the related net investments. On March 11, 2016, in connection with the repayment of the Credit Facility, the Company partially terminated a cross currency swap. The hedge instruments had been designated as net investment hedges through that date. The partial settlement of the cross currency swap resulted in a gain of approximately $1.0 million , of which $1.0 million was retained by the bank as a reduction to the Credit Facility. The gain will remain in the other comprehensive income (loss) until such time as the net investments are sold or substantially liquidated in accordance with ASC 830. In addition, the Company entered into the Mezzanine Facility through a foreign subsidiary with EUR functional currency. The Mezzanine Facility allows for draws in both EUR and GBP denominated amounts. As of June 30, 2016 , the Company has drawn foreign currency advances under its Mezzanine Facility to refinance certain secondary mortgages as well as fund individual real estate investments in GBP and EUR. Effective January 4, 2016, all non-functional GBP draws under the Mezzanine Facility were designated as net investment hedges, which created a natural hedge against the GBP equity invested, removing the need for final currency swaps. As of June 30, 2016 , total GBP advances under the Mezzanine Facility were approximately €47.0 million (or $52.1 million ), which reflects advances of £38.9 million (based upon an exchange rate of £1.00 to €1.21 as of June 30, 2016 ). The Company recorded gains (losses) of $0.1 million and $(0.1) million for the three and six months ended June 30, 2016 , respectively, due to currency changes on the undesignated excess of the foreign currency advances over the related net investments. As of June 30, 2016 and December 31, 2015 , the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations: June 30, 2016 December 31, 2015 Derivatives Number of Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Cross currency swaps (EUR-USD) 3 $ 40,067 4 $ 53,998 Cross currency swaps (GBP-USD) 1 65,788 1 72,725 Foreign currency forwards (EUR-USD) 1 10,100 1 10,100 Total 5 $ 115,955 6 $ 136,823 Non-Designated Hedges The Company is exposed to fluctuations in the exchange rates of its functional currency, the USD, against the Pound Sterling ("GBP") and the Euro ("EUR"). The Company uses foreign currency derivatives including currency forward and cross currency swap agreements to manage its exposure to fluctuations in GBP-USD and EUR-USD exchange rates. While these derivatives are hedging the fluctuations in foreign currencies, they do not meet the strict hedge accounting requirements to be classified as hedging instruments. Changes in the fair value of derivatives not designated as hedges under qualifying hedging relationships are recorded directly in earnings. The Company recorded marked-to-market losses of $0.3 million and $0.7 million on the non-designated derivatives for the three and six months ended June 30, 2016 , respectively. The Company recorded losses of $48,000 on the non-designated derivatives for the three and six months ended June 30, 2015 . As of June 30, 2016 and December 31, 2015 , the Company had the following outstanding derivatives that were not designated as hedges under qualifying hedging relationships. June 30, 2016 December 31, 2015 Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Foreign currency forwards (GBP-USD) 7 $ 812 9 $ 1,044 Foreign currency forwards (EUR-USD) 10 1,780 12 2,136 Cross currency swaps (EUR-USD) 1 14,911 — — Interest rate swaps (EUR) 3 99,390 — — Total 21 $ 116,893 21 $ 3,180 Prior to January 4, 2016, non-functional foreign currency advances under the Mezzanine Facility were not designated as net investment hedges and, accordingly, the changes in value due to currency fluctuations were reflected in earnings. As a result, the Company recorded remeasurement gains on the GBP denominated draws of $1.7 million for the year ended December 31, 2015. Credit-risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain provisions whereby if the Company either defaults or is capable of being declared to be in default on any of its indebtedness, then the Company could also be declared to be in default on its derivative obligation. As of June 30, 2016 , the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $6.5 million . As of June 30, 2016 , the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value. |
Common Stock
Common Stock | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Common Stock | Common Stock On August 26, 2014, the Company commenced its IPO on a “reasonable best efforts” basis of up to 125.0 million shares of Common Stock, $0.01 par value per share, at a price of $25.00 per share, subject to certain volume and other discounts, pursuant to the Registration Statement. The Registration Statement also covered up to 26.3 million shares of Common Stock under its DRIP, initially at $23.75 per share, which is 95% of the primary offering price. On November 15, 2015 , the Company announced the suspension of its IPO, which was conducted by the Former Dealer Manager, as exclusive wholesale distributor, effective December 31, 2015 , and, on November 18, 2015 , the Former Dealer Manager suspended sales activities it performed pursuant to the dealer manager agreement for the IPO. On December 31, 2015 , the Company entered into a termination agreement with the Former Dealer Manager to terminate the dealer manager agreement. Due to these circumstances, it is not likely that the Company will resume the IPO. The IPO will lapse in accordance with its terms on August 26, 2016. On December 31, 2015 , the Company registered an additional 1.3 million shares to be issued under the DRIP, pursuant to a registration statement on Form S-3. As of June 30, 2016 and December 31, 2015 , the Company sold 12.4 million and 12.2 million shares of Common Stock outstanding, respectively, including shares issued pursuant to the DRIP and in pursuant to its IPO. Total gross proceeds from these issuances were $307.4 million and $302.7 million , including proceeds from shares issued under the DRIP, as of June 30, 2016 and December 31, 2015 , respectively, all of which had been invested or used for other operating purposes. On August 11, 2016, in contemplation of the merger, the Company’s board of directors determined to suspend the DRIP effective as of the later of August 12, 2016 and the day following the date on which the suspension is publicly announced. The final issuance of Common Stock pursuant to the DRIP occurred in connection with the distribution paid on August 1, 2016 . Monthly Distributions and Change to Payment Dates In October 2014 , the Company's board of directors authorized, and the Company declared, a distribution payable on a monthly basis to stockholders of record each day at a rate equal to $0.0048630137 per day, which is equivalent to $1.775 per annum, per share of Common Stock. The first distribution payment was made in December 2014. In March 2016, the Company’s board of directors ratified the existing distribution amount equivalent to $1.775 per annum, and, for calendar year 2016, affirmed a change to the daily distribution amount to $0.0048497268 per day per share of Common Stock, effective January 1, 2016, to accurately reflect that 2016 is a leap year. The distributions are payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. Distribution payments are dependent on the availability of funds. The board of directors may reduce the amount of distributions paid or suspend distribution payments at any time and therefore distribution payments are not assured. Share Repurchase Program On January 26, 2016, the Company's board of directors approved and amended the Company’s existing Share Repurchase Program (as amended, the “SRP”) that continues to enable stockholders that purchased shares of Common Stock of the Company or received their shares from the Company (directly or indirectly) through one or more non-cash transactions and have held their shares for a period of at least one year may request that the Company repurchase their shares of Common Stock so long as the repurchase otherwise complies with the provisions of Maryland law. Repurchase requests made following the death or qualifying disability of a stockholder will not be subject to any minimum holding period. Repurchases of shares of the Company's Common Stock, when requested, are at the sole discretion of the board of directors and generally will be made semiannually (each six-month period ending June 30 or December 31, a “fiscal semester”). Prior to the effectiveness of the amended SRP on February 28, 2016, the Company limited the number of shares repurchased during any calendar year to 5.0% of the weighted average number of shares of Common Stock outstanding on December 31st of the previous calendar year. Under the amended SRP, repurchases for any fiscal semester will be limited to a maximum of 2.5% of the weighted average number of shares of Common Stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of Common Stock outstanding during the previous fiscal year. In addition, the Company is only authorized to repurchase shares in a given fiscal semester up to the amount of proceeds received from its DRIP in that same fiscal semester. Prior to the NAV Pricing Date (other than with respect a repurchase request is made in connection with a stockholder’s death or disability), the repurchase price per share will depend on the length of time investors have held such shares as follows: • 92.5% of the amount they actually paid for each share, after one year from the purchase date; • 95.0% of the amount they actually paid for each share, after two years from the purchase date; • 97.5% of the amount they actually paid for each share, and after three years from the purchase date; and • 100.0% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations), after four years from the purchase date. In cases of requests for death and disability, the repurchase prices will be equal to the price actually paid for each such share. If the NAV Pricing Date occurs during any fiscal semester, any repurchase requests received during such fiscal semester will be paid at the applicable NAV then in effect. Beginning with the NAV Pricing Date, the price per share that the Company will pay to repurchase its shares will be equal to the NAV applicable on the last day of the fiscal semester in which the request was made multiplied by a percentage equal to (i) 92.5% , if the person seeking repurchase has held his or her shares for a period greater than one year and less than two years; (ii) 95.0% , if the person seeking repurchase has held his or her shares for a period greater than two years and less than three years; (iii) 97.5% , if the person seeking repurchase has held his or her shares for a period greater than three years and less than four years; or (iv) 100.0% , if the person seeking repurchase has held his or her shares for a period greater than four years. In cases of requests for death and disability, the repurchase prices will be equal to NAV at the time of repurchase. Shares purchased under the SRP will have the status of authorized but unissued shares. The following table reflects the cumulative number of common shares repurchased as of December 31, 2015 and June 30, 2016 : Number of Shares Repurchased Weighted Average Price per Share Cumulative repurchases as of December 31, 2015 17,316 $ 23.85 Six Months Ended June 30, 2016 — — Cumulative repurchases as of June 30, 2016 17,316 $ 23.85 On August 11, 2016, in contemplation of the merger, the Company’s board of directors determined to suspend the SRP with effect on the later of August 12, 2016 and the day following the date on which the suspension is publicly announced. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments & Contingencies Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. As of June 30, 2016 , there were no material legal or regulatory proceedings pending or known to be contemplated against the Company. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of June 30, 2016 , the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of June 30, 2016 and December 31, 2015 , an entity controlled by the Sponsor owned 8,888 shares of the Company’s outstanding Common Stock. The Advisor and its related parties may incur and pay costs and fees on behalf of the Company. As of June 30, 2016 and December 31, 2015 , the Company had $0.3 million and $0.3 million of payables to related parties for advances received to fund the payment of offering costs, respectively. The Former Dealer Manager served as the dealer manager of the Company's IPO. SK Research, LLC ("SK Research") and American National Stock Transfer, LLC ("ANST"), both subsidiaries of the parent company of the Former Dealer Manager, provided other general professional services through December 2015 and February 2016, respectively. RCS Capital Corporation ("RCAP"), the parent company of the Former Dealer Manager and certain of its affiliates that provided the Company with services, filed for Chapter 11 bankruptcy protection in January 2016, prior to which it was also under common control with AR Global Investments, LLC (the successor business to AR Capital LLC, "AR Global"), the parent of the Sponsor. In May 2016, RCAP and its affiliated debtors emerged from bankruptcy under the new name, Aretec Group, Inc. Fees Paid in Connection with the IPO The Former Dealer Manager received fees and compensation in connection with the sale of the Company’s Common Stock. The Former Dealer Manager received selling commission of up to 7.0% of the per share purchase price of offering proceeds before reallowance of commissions earned by participating broker-dealers. In addition, the Former Dealer Manager received 3.0% of the per share purchase price from the sale of the Company's shares, before reallowance to such participating broker-dealers, as a dealer-manager fee. The Former Dealer Manager may have re-allowed its dealer-manager fee to participating broker-dealers. A participating broker dealer may have elected to receive a fee equal to 7.5% of the gross proceeds from the sale of shares (not including selling commissions and dealer manager fees) by such participating broker dealers, with 2.5% thereof paid at the time of the sale and 1.0% paid on each anniversary date of the closing of the sale to the fifth anniversary date of the closing of the sale. If this option were elected, the Former Dealer Manager's fee would have been reduced to 2.5% (not including selling commissions and dealer manager fees). The following table details total selling commissions and dealer manager fees incurred and due to the Former Dealer Manager as of and for the periods presented: Three Months Ended Six Months Ended Payable as of (In thousands) 2016 2015 2016 2015 June 30, 2016 December 31, 2015 Total commissions and fees from Former Dealer Manager $ — $ 10,658 $ — $ 17,400 $ — $ — The Advisor and its related parties received compensation and reimbursement for services relating to the IPO, including transfer agent services provided by an affiliate of the Former Dealer Manager. All offering costs incurred by the Company or its related parties on behalf of the Company were charged to additional paid-in capital on the accompanying consolidated balance sheets. As of June 30, 2016 and December 31, 2015 , the Company has not incurred any offering cost reimbursements from the Advisor or the Former Dealer Manager. The Company was responsible for offering and related costs from the IPO, excluding commissions and dealer manager fees, up to a maximum of 2.0% of gross proceeds from the IPO of Common Stock, measured at the end of the IPO. IPO costs in excess of the 2.0% cap as of the end of the IPO will be the Advisor’s responsibility. As of June 30, 2016 , offering and related costs exceeded 2.0% of gross proceeds received from the offering by $6.3 million . The IPO is currently suspended but securities may still be sold under the offering until the end of the two year period from the beginning of the IPO, subject to a potential one year extension. The IPO will lapse in accordance with its terms on August 26, 2016. The Company's board of directors and the Advisor are engaged in discussions regarding the amounts paid in excess of 2.0% of gross proceeds. The following table details offering costs and reimbursements incurred from and due to the Advisor and Former Dealer Manager as of and for the periods presented: Three Months Ended Six Months Ended Payable as of (In thousands) 2016 2015 2016 2015 June 30, 2016 December 31, 2015 Fees and expense reimbursements from the Advisor and Former Dealer Manager $ — $ 3,344 $ — $ 5,558 $ 283 $ 283 After the escrow break, the Advisor elected to cap cumulative offering costs incurred by the Company, net of unpaid amounts, to 15.0% of gross Common Stock proceeds during the offering period. As of June 30, 2016 , cumulative offering costs were $39.5 million . As of June 30, 2016 , cumulative offering costs, net of unpaid amounts did no t exceed the 15.0% threshold. Fees Paid in Connection With the Operations of the Company The Advisor is paid an acquisition fee of 1.5% of (A) the contract purchase price of each property acquired (including the Company's pro rata share of any indebtedness assumed or incurred in respect of that investment and exclusive of acquisition fees and financing coordination fees) and (B) the amount advanced for a loan or other investment (exclusive of acquisition fees and financing coordination fees). Solely with respect to the Company’s European investment activities, the Advisor will assign to the Service Provider its pro rata portion of the acquisition fees in respect of such properties, and the Advisor will receive the remaining portion. The Company may also reimburse the Advisor or the Servicer Provider for expenses actually incurred related to selecting, evaluating and acquiring assets, regardless of whether the Company actually acquires the related assets. In addition, the Company will also pay third parties, or reimburse the Advisor or its affiliates for any investment-related expenses due to third parties. In no event will the total of all acquisition fees, acquisition expenses and any financing coordination fees (as described below) payable with respect to a particular investment exceed 4.5% of (A) the contract purchase price of the property (including the Company's pro rata share of any indebtedness assumed or incurred in respect of that investment) and (B) the amount advanced for each loan or other investment. Effective January 11, 2016, the board of directors approved the removal of the 4.5% acquisition expense limitation solely with respect to our European or other international acquisitions. If the Advisor provides services in connection with the origination or refinancing of any debt that the Company obtains and uses to acquire properties or to make other permitted investments, or that is assumed, directly or indirectly, in connection with the acquisition of properties, the Company will pay the Advisor a financing coordination fee equal to 0.75% of the amount available or outstanding under such financing, subject to certain limitations. The OP issued (subject to periodic approval by the board of directors) restricted Class B units in the OP (“Class B units”) to the Advisor for asset management services on a quarterly basis in an amount equal to: (i) the excess of (A) the product of (y) 0.1875% multiplied by (z) the cost of the Company's assets (until the NAV pricing date, then the lower of the cost of assets and the fair value of the Company's assets) less (B) any amounts payable as an oversight fee for such calendar quarter; divided by (ii) the value of one share of Common Stock as of the last day of such calendar quarter, which is equal initially to $22.50 (the primary offering price minus selling commissions and dealer manager fees) and, at such time as the Company calculates NAV, to per share NAV. The Class B units are intended to be profits interests and will vest, and no longer be subject to forfeiture, at such time as any one of the following events occurs: (i) a listing of the Company's Common Stock on a national securities exchange; (ii) a transaction to which the Company or the Company's operating partnership is a party, as a result of which OP Units or the Company's Common Stock are or will be exchanged for or converted into the right, or the holders of such securities will otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause; provided that the Advisor pursuant to the advisory agreement is providing services to us immediately prior to the occurrence of an event of the type described in this clause, unless the failure to provide such services is attributable to the termination without cause of the advisory agreement by an affirmative vote of a majority of the Company's independent directors after the economic hurdle described above has been met. Such Class B units will be forfeited immediately if: (a) the advisory agreement is terminated other than by an affirmative vote of a majority of the Company's independent directors without cause. The value of issued Class B units will be determined and expensed, when the Company deems the achievement of the performance condition to be probable. As of June 30, 2016 , the Company cannot determine the probability of achieving the performance condition. The Advisor will receive distributions on each unvested Class B unit in an amount equal to the distributions rate received on the Company's Common Stock. Such distributions on issued Class B units will be expensed in the consolidated statements of operations and comprehensive loss until the performance condition is considered probable to occur. During the six months ended June 30, 2016 and 2015 , the Company's board of directors approved the issuance of 54,528 and 13,427 shares of Class B units, respectively. On March 22, 2016, the Company, the OP and the Advisor entered into an amendment to the advisory agreement, which, effective from January 1, 2016, provides for an asset management fee of 0.0625% (the "Asset Management Fee") of the cost of assets held during each monthly period, payable in cash, shares or OP Units (at the Advisor's election) on the first business day following the end of the monthly period. For any given month, if the sum of the (x) Acquisition Fees for the immediately prior month and (y) the Asset Management Fee to be paid for the given month, exceed the Asset Management Fee payable for the given month (such excess, the “Fee Limit”), the Company will pay (i) the Asset Management Fee minus the amount representing the Fee Limit in the form of cash, shares of Common Stock, or Class OP Units, or a combination thereof, the form of payment to be determined in the sole discretion of the Advisor; and (ii) an amount equal to the Fee Limit in the form of Class B units; it being understood that, for any given month, if the Acquisition Fees payable for the immediately prior month exceed the Asset Management Fee to be paid for the given month, the entire Asset Management Fee for such month will be payable as Class B units. If the Property Manager, or an affiliate, provide property management and leasing services for properties owned by the Company, the Company will pay fees equal to: (i) with respect to stand-alone, single-tenant net leased properties which are not part of a shopping center, 2.0% of gross revenues from the properties managed and (ii) with respect to all other types of properties, 4.0% of gross revenues from the properties managed. For services related to overseeing property management and leasing services provided by any person or entity that is not an affiliate of the Property Manager, the Company will pay the Property Manager an oversight fee equal to 1.0% of gross revenues of the property managed. Solely with respect to the Company's investment activities in Europe, the Service Provider or other entity providing property management services with respect to such investments will be paid: (i) with respect to single-tenant net leased properties which are not part of a shopping center, 1.75% of the gross revenues from such properties and (ii) with respect to all other types of properties, 3.5% of the gross revenues from such properties. The Property Manager receives 0.25% of the gross revenues from European single-tenant net leased properties which are not part of a shopping center and 0.5% of the gross revenues from all other types of properties, reflecting a split of the oversight fee with the Service Provider or an affiliated entity providing European property management services. Such fees are deducted from fees payable to the Advisor, pursuant to the service provider agreement. The predecessor to AR Global is a party to a services agreement with RCS Advisory Services, LLC, a subsidiary of the parent company of the Former Dealer Manager (“RCS Advisory”), pursuant to which RCS Advisory and its affiliates provided the Company and certain other companies sponsored by AR Global with services (including, without limitation, transaction management, compliance, due diligence, event coordination and marketing services, among others) on a time and expenses incurred basis or at a flat rate based on services performed. The predecessor to AR Global instructed RCS Advisory to stop providing such services in November 2015 and no services have since been provided by RCS Advisory. The Company was party to a transfer agency agreement with ANST, pursuant to which ANST provided the Company with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services), and supervisory services overseeing the transfer agency services performed by a third-party transfer agent. AR Global received written notice from ANST on February 10, 2016 that it would wind down operations by the end of the month and would withdraw as the transfer agent effective February 29, 2016. Effective February 26, 2016, the Company entered into a definitive agreement with DST Systems, Inc., its previous provider of sub-transfer agency services, to directly provide the Company with transfer agency services (including broker and stockholder servicing, transaction processing, year-end IRS reporting and other services). Following the completion of the IPO, fees payable with respect to transfer agency services are included in general and administrative expenses on the consolidated statements of operations and comprehensive loss during the period the service was provided. The following table details amounts incurred, forgiven and payable to related parties in connection with the operations-related services described above as of and for the periods presented: Three Months Ended June 30, Six months ended June 30, Payable (Receivable) as of 2016 2015 2016 2015 (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven June 30, 2016 December 31, 2015 One-time fees and reimbursements: Acquisition fees and related cost reimbursements (1) $ — $ — $ 4,289 $ — $ — $ — $ 5,917 $ — $ — $ — Financing coordination fees (2) — — 1,044 — 77 — 2,267 — — — Ongoing fees: Other expense reimbursements (3) 416 — — — 873 — — 7 — Asset management fees (3) 1,191 — — — 2,453 — — — — — Property management and leasing fees (3) (4) 243 — 56 15 460 — 90 19 (10 ) 24 Total related party fees and reimbursements $ 1,850 $ — $ 5,389 $ 15 $ 3,863 $ — $ 8,274 $ 19 $ (3 ) (5) $ 24 _____________________________________________ (1) These related party fees are recorded within acquisition and transaction related costs on the consolidated statements of operations and comprehensive loss. (2) These related party fees are recorded as deferred financing costs and amortized over the term of the respective financing arrangement. (3) These related party fees are recorded within operating fees to related parties in the consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2016 . (4) The Advisor waived 100% of fees from U.S. assets and its allocated portion of 50% of fees from European assets through August 31, 2015. No such fees were waived effective September 1, 2015. (5) In addition, as of June 30, 2016 , amounts due to related parties includes $59,000 , which are recorded within general and administrative expenses on the consolidated statements of operations and comprehensive loss for the six months ended June 30, 2016 and are not reflected in the table above. The Company will reimburse the Advisor’s costs of providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairments or other similar non-cash reserves and excluding any gain from the sale of assets for that period. Additionally, the Company will reimburse the Advisor for personnel costs in connection with other services during the operational stage; however, the Company may not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives acquisition fees or real estate commissions. During the three and six months ended June 30, 2016 the Company incurred $0.4 million and $0.9 million , respectively, in cost reimbursements from the Advisor. No reimbursement was incurred from the Advisor for providing services during the three and six months ended June 30, 2015 . In order to improve operating cash flows and the ability to pay distributions from operating cash flows, the Advisor may waive certain fees including asset management and property management fees. Because the Advisor may waive certain fees, cash flow from operations that would have been paid to the Advisor may be available to pay distributions to stockholders. The fees that may be forgiven are not deferrals and accordingly, will not be paid to the Advisor. In certain instances, to improve the Company's working capital, the Advisor may elect to absorb a portion of the Company's general and administrative costs or property operating expenses. These absorbed costs are presented net in the accompanying consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2016 and 2015 , there were no property operating and general administrative expenses absorbed by our Advisor. Fees Paid in Connection with the Liquidation or Listing of the Company’s Real Estate Assets The Company will pay the Advisor an annual subordinated performance fee calculated on the basis of the Company’s return to stockholders, payable annually in arrears, such that for any year in which investors receive payment of 6.0% per annum, the Advisor will be entitled to 15.0% of the excess return, provided that the amount paid to the Advisor does not exceed 10.0% of the aggregate return for such year. This fee will be payable only upon the sale of assets, distributions or other event which results in the return on stockholders’ capital exceeding 6.0% per annum. No subordinated performance fees were incurred during the three and six months ended June 30, 2016 and 2015 . The Company will pay a brokerage commission on the sale of property, not to exceed the lesser of 2.0% of the contract sale price of the property and one-half of the total brokerage commission paid if a third party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a reasonable, customary and competitive real estate commission, in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services in connection with the sale. No such commissions were incurred during the three and six months ended June 30, 2016 and 2015 . The Special Limited Partner will be entitled to receive a subordinated participation in the net sales proceeds of the sale of real estate assets equal to 15.0% of remaining net sale proceeds after return of capital contributions to investors plus payment to investors of a 6.0% cumulative, pre-tax non-compounded return on the capital contributed by investors. The Special Limited Partner will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a return of their capital plus a return equal to a 6.0% cumulative non-compounded return on their capital contributions. No such participation in net sale proceeds became due and payable during the three and six months ended June 30, 2016 and 2015 . If the Company’s shares of Common Stock are listed on a national exchange, the Special Limited Partner will receive a subordinated incentive listing distribution from the OP equal to 15.0% of the amount by which the Company’s market value plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax non-compounded annual return to investors. The Special Limited Partner will not be entitled to the subordinated incentive listing distribution unless investors have received a return of their capital plus a return equal to 6.0% cumulative, pre-tax non-compounded return on their capital contributions. No such distributions were incurred during the three and six months ended June 30, 2016 and 2015 . Upon termination or non-renewal of the advisory agreement with or without cause, the Special Limited Partner will be entitled to receive distributions from the OP equal to 15.0% of the amount by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to an annual 6.0% cumulative, pre-tax, non-compounded return to investors. The Advisor may elect to defer its right to receive a subordinated distribution upon termination until either a listing on a national securities exchange or other liquidity event occurs. |
Economic Dependency
Economic Dependency | 6 Months Ended |
Jun. 30, 2016 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor, and the Service Provider to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of the Company's Common Stock available for issue, transfer agency services, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates and the Service Provider. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Share Based Compensation
Share Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share Based Compensation | Share Based Compensation Restricted Share Plan The Company has an employee and director incentive restricted share plan (the “RSP”), which provides for the automatic grant of 1,333 restricted shares of Common Stock to each of the independent directors, without any further action by the Company’s board of directors or the stockholders, on the date of initial election to the board of directors and on the date of each annual stockholder’s meeting. Restricted stock issued to independent directors will vest over a five -year period following the first anniversary of the date of grant in increments of 20.0% per annum. The RSP provides the Company with the ability to grant awards of restricted shares to the Company’s directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of common shares granted under the RSP shall not exceed 5.0% of the Company’s outstanding shares of Common Stock on a fully diluted basis at any time and in any event will not exceed 6.3 million shares (as such number may be adjusted for stock splits, stock distributions, combinations and similar events). Restricted share awards entitle the recipient to receive shares of Common Stock from the Company under terms that provide for vesting over a specified period of time or upon attainment of pre-established performance objectives. Such awards would typically be forfeited with respect to the unvested shares upon the termination of the recipient’s employment or other relationship with the Company. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares may receive cash distributions prior to the time that the restrictions on the restricted shares have lapsed. Any distributions payable in shares of Common Stock shall be subject to the same restrictions as the underlying restricted shares. The fair value of the shares will be expensed over the vesting period of five years. The following table reflects restricted share award activity for the six months ended June 30, 2016 : Number of Restricted Shares Weighted-Average Issue Price Unvested, December 31, 2015 7,731 $ 22.50 Granted — — Vested (3,466 ) 22.50 Forfeitures — — Unvested, June 30, 2016 4,265 $ 22.50 Compensation expense related to restricted stock was approximately $6,000 and $0.1 million during the three and six months ended June 30, 2016 , respectively, and is recorded as general and administrative expense in the accompanying statements of operations and comprehensive loss. Compensation expense related to restricted stock was approximately $3,000 and $6,000 during the three and six months ended June 30, 2015 , respectively, and is recorded as general and administrative expense in the accompanying statements of operations and comprehensive loss. As of June 30, 2016 , the Company had $0.1 million of unrecognized compensation cost related to unvested restricted share awards granted under the Company’s RSP. That cost is expected to be recognized over a weighted average period of 2.0 years . Other Share-Based Compensation The Company has issued Common Stock in lieu of cash to pay fees earned by the Company's directors at each director's election. There are no restrictions on the shares issued since these payments in lieu of cash relate to fees earned for services performed. There were no such shares of Common Stock issued in lieu of cash during the six months ended June 30, 2016 . There were 412 shares of Common Stock issued in lieu of cash during the six months ended June 30, 2015 which resulted in additional shared based compensation of $9,000 . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share data) 2016 2015 2016 2015 Net loss $ (3,123 ) $ (14,790 ) $ (7,786 ) $ (23,009 ) Basic and diluted net loss per share $ (0.25 ) $ (2.18 ) $ (0.63 ) $ (4.99 ) Basic and diluted weighted average shares outstanding 12,412,618 6,773,666 12,363,312 4,614,053 The Company had the following common share equivalents as of June 30, 2016 , which were excluded from the calculation of diluted loss per share attributable to stockholders as the effect would have been antidilutive: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Unvested restricted stock 4,265 3,999 4,265 3,999 OP Units 90 90 90 90 Class B units 125,020 13,247 125,020 13,247 Total common share equivalents 129,375 17,336 129,375 17,336 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Form 10-Q, and determined that there have not been any events that have occurred that would require adjustments to, or disclosures in, the consolidated financial statements, except for as previously disclosed or disclosed below. Modification to Mezzanine Facility The Company and the lender in relating to the Mezzanine Facility agreed to modify the terms of the loan relating to prepayment requirements relating to sales or financing transactions on unencumbered assets. As a result, the Company was required to repay €10.2 million in July 2016. It will be further required to repay an additional £1.8 million in 2016 and £3.7 million in 2017 (or earlier upon closing of specific asset sales). Merger Agreement On August 8, 2016, the Company and the OP entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Global Net Lease, Inc. (“GNL”), Global Net Lease Operating Partnership, L.P. (the “GNL OP”) and Mayflower Acquisition LLC, a Maryland limited liability company and wholly owned subsidiary of GNL (“Merger Sub”). The Merger Agreement provides for (i) the merger of the Company with and into Merger Sub (the “REIT Merger”), with Merger Sub surviving as a wholly owned subsidiary of GNL and (ii) the merger of the Company OP with and into the GNL OP (the “Partnership Merger”, and together with the REIT Merger, the “Mergers”). A special committee comprised of the independent members (the “Special Committee”) of the board of directors of the Company (the “Board”) recommended, and by unanimous vote of all of the Board members, the Board declared advisable and approved the Mergers and the other transactions contemplated by the Merger Agreement and directed that the REIT Merger, and, to the extent stockholder approval is required, the other transactions contemplated by the Merger Agreement be submitted for consideration at a special meeting of the stockholders of the Company. The Board further resolved to recommend that the stockholders of the Company vote in favor of the approval of the REIT Merger and the other transactions contemplated by the Merger Agreement. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Mergers (the “Effective Time”), each outstanding share of common stock, including restricted shares of common stock, of the Company, $0.01 par value per share (“Company Common Stock”), other than shares owned by GNL, any subsidiary of GNL or any wholly owned subsidiary of the Company, will be converted into the right to receive 2.27 shares of common stock of GNL, par value $0.01 per share (“GNL Common Stock”) (such consideration, the “Merger Consideration”), and at the effective time of the Partnership Merger (the “Partnership Merger Effective Time”), each outstanding unit of limited partnership interest and Class B interest of the Company OP issued and outstanding immediately prior to the Partnership Merger Effective Time will be converted into the right to receive 2.27 shares of GNL Common Stock (the “Partnership Merger Consideration”). The Merger Agreement further provides that immediately prior to the Effective Time, any outstanding restricted stock of the Company will become fully vested and will have the right to receive the Merger Consideration. The completion of the Mergers is subject to various conditions, including, among other things, the approval of the Merger and the other transactions contemplated by the Merger Agreement by the Company’s common stockholders holding a majority of the outstanding shares of Company Common Stock and the approval of the Merger and the other transactions contemplated by the Merger Agreement by the affirmative vote of a majority of the votes of GNL’s common stockholders cast at a meeting of GNL’s common stockholders, a quorum being present. Moreover, each party’s obligation to consummate the Mergers is subject to certain other conditions, including the accuracy of the other party’s representations and warranties (subject to customary qualifications) and the other party’s material compliance with its covenants and agreements contained in the Merger Agreement, including, among other things, the GNL’s obligation to prepare and file a registration statement on Form S4 to register the offer and sale of shares of GNL Common Stock to be issued pursuant to the Merger Agreement. The Company and GNL have made certain customary representations and warranties and covenants for transactions of this type, including with respect to the conduct of business by each of the Company and GNL prior to the closing. Notably, under the terms of the Merger Agreement, the Company and the OP and their representatives may initiate, solicit, provide information and enter into discussions concerning proposals relating to alternative business combination transactions until September 22, 2016 (the “Go Shop Period”), and thereafter, until the receipt of the approval of the Merger and the Merger Agreement by the Company’s stockholders, the Company and the OP and their representatives may continue to participate in such discussions with any third party who submitted a bona fide proposal prior to the end of the Go Shop Period that has not been withdrawn and where the special committee of the Company’s board of directors has determined in good faith that such proposal has resulted in, or would be reasonably expected to lead to, a Superior Proposal (as defined in the Merger Agreement). Following the Go Shop Period, certain covenants prohibiting the Company and the OP and their representatives from initiating, soliciting, providing information or entering into discussions concerning proposals relating to alternative business combination transactions, subject to certain limited exceptions. The Merger Agreement provides that, in connection with the termination of the Merger Agreement under specified circumstances, including following a breach by the non-terminating party or a change in recommendation of the non-terminating party, one party may be required to pay to the other a termination fee of $6.0 million plus reasonable out-of-pocket transaction expenses (up to a maximum of $5.0 million in expenses). However, if the Merger Agreement is terminated in connection with the Company entering into or recommending a qualified Superior Proposal with a bigger on or before the date that is 15 days following the end of the Go Shop Period, the termination fee payable by the Company to GNL would be $1.2 million plus reasonable out-of-pocket expenses of GNL (up to a maximum of $5.0 million in expenses). The Company and GNL each are sponsored, directly or indirectly, by AR Global Investments, LLC (“AR Global”). AR Global and its affiliates provide investment and advisory services to the Company and the Target pursuant to written advisory agreements. In connection with, and subject to the terms and conditions of, the Merger Agreement, certain equity interests in the OP held by AR Global and its affiliates that are subject to forfeiture will, consistent with the terms of the OP partnership agreement, no longer be subject to forfeiture and will be exchanged for GNL Common Stock in the Partnership Merger. Termination Agreement Concurrently with the execution of the Merger Agreement, the Company and the OP entered into a termination agreement with the Advisor and other service providers providing for termination of the advisory, service provider, property management and leasing, European property management and leasing and performance-related distribution agreements, as applicable, immediately prior to, and contingent upon, the closing of the Merger (the “Termination Agreement”). The Termination Agreement will, pursuant to its terms, automatically terminate and be of no further force or effect if the Merger Agreement is terminated in accordance with its terms. Amendment to Bylaws On August 5, 2016, the board of directors of the Company amended the Company’s Bylaws to add an exclusive forum provision. The exclusive forum provision generally provides that, unless the Company consents in writing to the selection of an alternative forum, the courts of the State of Maryland in the jurisdiction in which the principal office (as defined in the Maryland General Corporation law (the “MGCL”)) of the Company is located shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach by any director, officer or other employee of the Company of a duty owed to the Company or the Company’s stockholders or of any standard of conduct set forth in the MGCL, (iii) any action asserting a claim arising pursuant to any provision of the MGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine (or as to (iv), if no state court of the State of Maryland has subject matter jurisdiction, the United States District Court for the District of Maryland), provided in each case that such court has personal jurisdiction over the indispensable parties named as defendants. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results for the entire year or any subsequent interim period. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2015 , which are included in the Company's Annual Report on Form 10-K filed with the SEC on March 22, 2016 . There have been no significant changes to the Company's significant accounting policies during the six months ended June 30, 2016 other than the updates described below and the subsequent notes. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity ("VIE") for which the Company is the primary beneficiary. The Company has determined that the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company's assets and liabilities are held by the OP. |
Income Taxes | Income Taxes The Company qualified to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), beginning with the taxable year ending December 31, 2015. Commencing with such taxable year, the Company was organized to operate in such a manner as to qualify for taxation as a REIT under the Code. The Company intends to continue to operate in such a manner to continue to qualify for taxation as a REIT, but no assurance can be given that it will operate in a manner so as to remain qualified as a REIT. As a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes annually all of its REIT taxable earnings. REIT's are subject to a number of other organizational and operational requirements. The Company conducts business in various states and municipalities within the United States, United Kingdom and continental Europe and, as a result, the Company or one of its subsidiaries file income tax returns in the United States federal jurisdiction and various states and certain foreign jurisdictions. As a result, the Company may be subject to certain federal, state, local and foreign taxes on its income and assets, including alternative minimum taxes, taxes on any undistributed income and state, local or foreign income, franchise, property and transfer taxes. Any of these taxes decrease the Company's earnings and available cash. In addition, the Company's international assets and operations, including those designated as direct or indirect qualified REIT subsidiaries or other disregarded entities of a REIT, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted. For the Period from April 23, 2014 (date of inception) to December 31, 2014 , the Company was taxed as a C corporation, pursuant to which income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded for the future tax consequences attributable to differences between the financial statements carrying amounts and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carry-forwards, using expected tax rates in effect for each taxing jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or settled. The Company recognizes the financial statement effects of a tax position when it is more-likely-than-not, based on technical merits, that the position will be sustained upon examination. Because the Company elected and qualified to be taxed as a REIT commencing with the taxable year ended December 31, 2015 , it does not anticipate that any applicable deferred tax assets or liabilities will be realized. Significant judgment is required in determining the Company's tax provision and in evaluating its tax positions. The Company establishes tax reserves based on a benefit recognition model, which the Company believes could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. The Company derecognizes the tax position when the likelihood of the tax position being sustained is no longer more likely than not. The Company recognizes deferred income taxes in certain of its subsidiaries taxable in the United States or in foreign jurisdictions. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. The Company provides a valuation allowance against its deferred income tax assets when it believes that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit). The Company derives most of its REIT income from its real estate operations in Europe, which are subject to foreign taxes. The Company's real estate operations in the United States are generally not subject to federal tax, and accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial statements for these operations. These operations may be subject to certain state, local, and foreign taxes, as applicable. Our deferred tax assets and liabilities are primarily the result of temporary differences related to the following: • Basis differences between tax and GAAP for certain international real estate investments. For income tax purposes, in certain acquisitions, the Company assumes the seller’s basis, or the carry-over basis, in the acquired assets. The carry-over basis is typically lower than the purchase price, or the GAAP basis, resulting in a deferred tax liability with an offsetting increase to goodwill or the acquired tangible or intangible assets; • Timing differences generated by differences in the GAAP basis and the tax basis of assets such as those related to capitalized acquisition costs and depreciation expense; and • Tax net operating losses in certain subsidiaries, including those domiciled in foreign jurisdictions, that may be realized in future periods if the respective subsidiary generates sufficient taxable income. The Company recognizes current income tax expense for state and local income taxes and taxes incurred in its foreign jurisdictions. The Company's current income tax expense fluctuates from period to period based primarily on the timing of its taxable income. For the three and six months ended June 30, 2016 , the Company recognized an income tax expense of $0.4 million and $0.5 million , respectively. For the three and six months ended June 30, 2015 , the Company recognized an income tax benefit of $21,000 . Deferred income tax (expense) benefit is generally a function of the period’s temporary differences and the utilization of net operating losses generated in prior years that had been previously recognized as deferred income tax assets from state and local taxes in the United States or in foreign jurisdictions. |
Reclassifications | Reclassifications Certain reclassifications have been made to the 2015 consolidated financial statements to conform to the current period presentation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted: In February 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-02 Consolidation (Topic 810) - Amendments to the Consolidation Analysis . The new guidance applies to entities in all industries and provides a new scope exception to registered money market funds and similar unregistered money market funds. It makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the VIE guidance. The standard does not add or remove any of the characteristics that determine if an entity is a VIE. However, when decision-making over the entity’s most significant activities has been outsourced, the standard changes how a reporting entity assesses if the equity holders at risk lack decision making rights. Previously, the reporting entity would be required to determine if there is a single equity holder that is able to remove the outsourced decision maker that has a variable interest. The new standard requires that the reporting entity first consider the rights of all of the equity holders at risk. If the equity holders have certain rights that are deemed to give them the power to direct the entity’s most significant activities, then the entity does not have this VIE characteristic. The new standard also introduces a separate analysis specific to limited partnerships and similar entities for assessing if the equity holders at risk lack decision making rights. Limited partnerships and similar entities will be VIEs unless the limited partners hold substantive kick-out rights or participating rights. In order for such rights to be substantive, they must be exercisable by a simple majority vote (or less) of all of the partners (exclusive of the general partner and its related parties). A right to liquidate an entity is viewed as akin to a kick-out right. The guidance for limited partnerships under the voting model has been eliminated in conjunction with the introduction of this separate analysis, including the rebuttable presumption that a general partner unilaterally controls a limited partnership and should therefore consolidate it. A limited partner with a controlling financial interest obtained through substantive kick out rights would consolidate a limited partnership. The standard eliminates certain of the criteria that must be met for an outsourced decision maker or service provider’s fee arrangement to not be a variable interest. Under current guidance, a reporting entity first assesses whether it meets power and economics tests based solely on its own variable interests in the entity to determine if it is the primary beneficiary required to consolidate the VIE. Under the new standard, a reporting entity that meets the power test will also include indirect interests held through related parties on a proportionate basis to determine whether it meets the economics test and is the primary beneficiary on a standalone basis. The standard is effective for annual periods beginning after December 15, 2015. We have evaluated the impact of the adoption of ASU 2015-02 on the Company's consolidated financial position and have determined under ASU 2015-02 the Company's operating ownership is considered a VIE. However, the Company meets the disclosure exemption criteria as the Company is the primary beneficiary of the VIE and the OPs interest is considered a majority voting interest. As such, this standard will not have a material impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30). The guidance changes the presentation of debt issuance costs on the balance sheet. The amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. In August 2015, the FASB added that, for line of credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line, regardless of whether or not there are any outstanding borrowings. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted this guidance effective January 1, 2016. As a result, the Company reclassified $5.7 million of deferred debt issuance costs related to the Company's mortgage notes payable from deferred costs, net to mortgage notes payable in the Company's consolidated balance sheets as of December 31, 2015 . As permitted under the revised guidance, the Company elected to not reclassify the deferred debt issuance costs associated with its Credit Facility (as defined in Note 4 — Revolving Credit Borrowings). The deferred debt issuance costs associated with the Credit Facility, net of accumulated amortization, and deferred leasing costs, net of accumulated amortization, are included in deferred costs, net on the Company's accompanying consolidated balance sheet as of December 31, 2015 . In August 2015, FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements, which amends ASC 835-30, Interest - Imputation of Interest . This update clarifies the presentation and subsequent measurement of debt issuance costs associated with lines of credit. These costs may be deferred and presented as an asset and subsequently amortized ratably over the term of the revolving debt arrangement. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company has adopted the provisions of this guidance effective January 1, 2016, and has applied the provisions prospectively. The adoption of this guidance has not had a material impact on the Company's consolidated financial position, results of operations or cash flows. In September 2015, the FASB issued ASU 2015-16, Business Combination (Topic 805) . The guidance eliminates the requirement to adjust provisional amounts from a business combination and the related impact on earnings by restating prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of measurement period adjustments on current and prior periods, including the prior period impact on depreciation, amortization and other income statement items and their related tax effects, shall be recognized in the period the adjustment amount is determined. The cumulative adjustment would be reflected within the respective financial statement line items affected. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The Company has adopted the provisions of this guidance effective January 1, 2016, and has applied the provisions prospectively. The adoption of this guidance has not had a material impact on the Company's consolidated financial position, results of operations or cash flows. Pending Adoption: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . Under the revised guidance, an entity is required to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revised guidance allows entities to apply either a full retrospective or modified retrospective transition method upon adoption. In July 2015, the FASB finalized a one-year delay of the revised guidance, although entities will be allowed to early adopt the guidance as of the original effective date. The new guidance will be effective in the Company's 2018 fiscal year. The Company is currently evaluating the impact of the revised guidance on the consolidated financial statements and has not yet determined the method by which the Company will adopt the standard. In January 2016, the FASB issued ASU 2016-01 Financial Instruments-Overall:Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10). The revised guidance amends the recognition and measurement of financial instruments. The new guidance significantly revises an entity’s accounting related to equity investments and the presentation of certain fair value changes for financial liabilities measured at fair value. Among other things, it also amends the presentation and disclosure requirements associated with the fair value of financial instruments. The revised guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is not permitted for most of the amendments in the update. The Company is currently evaluating the impact of the new guidance. In February 2016, the FASB issued ASU 2016-02 Leases (ASC 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The ASU is expected to impact the Company’s consolidated financial statements as the Company has certain operating and land lease arrangements for which it is the lessee. ASC 842 supersedes the previous leases standard, ASC 840 Leases. The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance. In March 2016, the FASB issued ASU 2016-05 Derivatives and Hedging (Topic 815) , Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships . Under the new guidance, the novation of a derivative contract in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship. The hedge accounting relationship could continue uninterrupted if all of the other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered. The guidance is effective for fiscal years beginning after December 15, 2016, and interim periods therein. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this new guidance. In March 2016, the FASB issued ASU 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The guidance requires an entity to determine whether the nature of its promise to provide goods or services to a customer is performed in a principal or agent capacity and to recognize revenue in a gross or net manner based on its principal/agent designation. This guidance is effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In March 2016, the FASB issued an update on ASU 2016-09 Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The guidance changes the accounting for certain aspects of share-based compensation. Among other things, the revised guidance allows companies to make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The revised guidance is effective for reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance. In April 2016, the FASB issued ASU 2016-10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing . The amendments in this update do not change the core principle of the guidance in Topic 606 but rather, clarify aspects of identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The amendment is effective on the same date as ASU 2014-09, which is not yet effective. The Company is currently evaluating the impact of the revised guidance on the consolidated financial statements and has not yet determined the method by which the Company will adopt the standard. In May 2016, the FASB issued ASU 2016-12 Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . The amendments provide clarifying guidance in a few narrow areas and add some practical expedients to the guidance. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606 , which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance. The amendment is effective on the same date as ASU 2014-09, which is not yet effective. The Company is currently evaluating the impact of the revised guidance on the consolidated financial statements and has not yet determined the method by which the Company will adopt the standard. |
Fair Value of Financial Instruments | The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability and those inputs are significant. Level 3 — Unobservable inputs that reflect the entity's own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and, depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter, however, the Company expects that changes in classifications between levels will be rare. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of June 30, 2016 and December 31, 2015 , the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company's derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company's potential nonperformance risk and the performance risk of the counterparties. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The effects of these revisions are summarized below: (In thousands) As originally Reported Adjustment As Revised Year ended December 31, 2014 Cumulative translation adjustment $ (205 ) $ 250 $ 45 Designated derivatives, fair value adjustments 164 (250 ) (86 ) Total OCI $ (41 ) $ — $ (41 ) (In thousands) As originally Reported Adjustment As Revised Three months ended June 30, 2015 Cumulative translation adjustment $ (1,822 ) $ (761 ) $ (2,583 ) Designated derivatives, fair value adjustments (375 ) 761 386 Total OCI $ (2,197 ) $ — $ (2,197 ) (In thousands) As originally Reported Adjustment As Revised Six months ended June 30, 2015 Cumulative translation adjustment $ (1,979 ) $ 2,167 $ 188 Designated derivatives, fair value adjustments 2,305 (2,167 ) 138 Total OCI $ 326 $ — $ 326 (In thousands) As originally Reported Adjustment As Revised Three months ended September 30, 2015 Cumulative translation adjustment $ 852 $ (31 ) $ 821 Designated derivatives, fair value adjustments (1,607 ) 31 (1,576 ) Total OCI $ (755 ) $ — $ (755 ) (In thousands) As originally Reported Adjustment As Revised Nine months ended September 30, 2015 Cumulative translation adjustment $ (1,127 ) $ 2,136 $ 1,009 Designated derivatives, fair value adjustments 698 (2,136 ) (1,438 ) Total OCI $ (429 ) $ — $ (429 ) (In thousands) As originally Reported Adjustment As Revised Year ended December 31, 2015 Cumulative translation adjustment $ (7,918 ) $ 7,899 $ (19 ) Designated derivatives, fair value adjustments 6,258 (7,899 ) (1,641 ) Total OCI $ (1,660 ) $ — $ (1,660 ) |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | The following table reflects the number and related base purchase prices of properties acquired as of December 31, 2015 and during the six months ended June 30, 2016 : Number of Properties Base Purchase Price (1) (In thousands) As of December 31, 2015 16 $ 619,914 Six Months Ended June 30, 2016 — — Portfolio as of June 30, 2016 16 $ 619,914 ________________________________________________ (1) Contract purchase price, excluding acquisition related costs, based on the exchange rate at the time of purchase, where applicable. |
Schedule of Business Acquisitions, by Acquisition | The following table presents the allocation of assets acquired and liabilities assumed during the six months ended June 30, 2015 based on contract purchase price, excluding acquisition related costs, based on the exchange rate at the time of purchase. There were no acquisitions during the six months ended June 30, 2016 . (Dollar amounts in thousands) Six Months Ended Real estate investments, at cost: Land $ 26,827 Buildings, fixtures and improvements 188,820 Total tangible assets 215,647 Acquired intangibles: In-place leases 49,536 Above market lease assets 379 Below market lease liabilities (2,757 ) Below market ground lease intangible assets (1) 25,207 Total assets acquired, net 288,012 Mortgage notes payable used to acquire real estate investments (202,269 ) Credit facilities payable used to acquire real estate investments (17,256 ) Cash paid for acquired real estate investments $ 68,487 Number of properties purchased 7 ___________________________________ (1) Below market ground lease intangible assets is for one ground lease which is related to ING Amsterdam property which is prepaid through 2050. |
Business Acquisition, Pro Forma Information | The following table presents unaudited pro forma information as if the acquisitions during the three and six months ended June 30, 2015 had been consummated on April 23, 2014 (date of inception). Three Months Ended Six Months Ended (In thousands, except per share data) June 30, 2015 June 30, 2015 Pro forma revenues $ 6,407 $ 12,753 Pro forma income net loss (686 ) $ (1,439 ) Basic and diluted net loss per share $ (0.10 ) $ (0.31 ) |
Schedule of Future Minimum Rental Payments for Operating Leases | The following table presents future minimum base rent payments on a cash basis due to the Company over the next five calendar years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items. These amounts also exclude recoveries from tenants for certain expenses such as real estate taxes and insurance. (In thousands) Future Minimum Base Rental Payments (1) 2016 (remainder) $ 23,214 2017 45,186 2018 47,767 2019 48,377 2020 49,239 2021 49,301 Thereafter 139,313 $ 402,397 ________________________ (1) Based on exchange rate as of June 30, 2016 . |
Schedule of Annualized Rental Income by Major Tenants | The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all properties on a straight-line basis as of June 30, 2016 and 2015 : June 30, Tenant 2016 2015 Foster Wheeler 23.5% —% ING Amsterdam 18.0% 34.8% Harper Collins 14.3% —% Sagemcom 11.5% 22.1% DB Luxembourg * 20.7% ___________________________________________ * Tenant's annualized rental income on a straight-line basis was not greater than 10.0% of total annualized rental income for all portfolio properties as of the period specified. |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following table lists the countries where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10.0% of consolidated annualized rental income on a straight-line basis as of June 30, 2016 and 2015 . June 30, Country 2016 2015 United Kingdom 39.9% —% France 25.5% 31.2% The Netherlands 18.0% 34.8% Luxembourg * 20.7% ___________________________________________ * The country's/state annualized rental income on a straight-line basis was not greater than 10.0% of total annualized rental income for all portfolio properties as of the period specified. |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company's mortgage notes payable as of June 30, 2016 and December 31, 2015 consisted of the following: Country Portfolio Encumbered Properties Outstanding Loan Amount (1) Effective Interest Rate Interest Rate Maturity June 30, 2016 December 31, 2015 (In thousands) France: Auchan 1 $ 9,217 $ 9,053 1.7% (2) Fixed Dec. 2019 Pole Emploi 1 6,441 6,326 1.7% (2) Fixed Dec. 2019 Sagemcom 1 39,867 39,156 1.7% (2) Fixed Dec. 2019 Worldline 1 5,552 5,453 1.9% (2) Fixed Jul. 2020 DCNS 1 10,550 10,362 1.5% (2) Fixed Dec. 2020 ID Logistics II 2 11,660 — 1.3% Fixed Jun. 2020 Luxembourg: DB Luxembourg (primary mortgage loan) (3) 1 39,978 39,265 1.4% (2) Fixed May 2020 DB Luxembourg (secondary mortgage loan) (3) 13,416 24,094 9.1% Fixed May 2017 The Netherlands: ING Amsterdam 1 48,862 47,991 1.7% (2) Fixed Jun. 2020 Total EUR denominated 9 185,543 181,700 United Kingdom: Foster Wheeler 1 52,631 58,180 2.7% (2) Fixed Oct. 2018 Harper Collins 1 37,598 41,562 3.4% (2) Fixed Oct. 2019 NCR Dundee 1 7,553 — 3.0% (2) Fixed Apr. 2020 Total GBP denominated 3 97,782 99,742 United States: FedEx Freight 1 6,165 — 4.5% Fixed May 2020 Veolia Water 1 4,110 — 4.5% Fixed May 2020 Total USD denominated 2 10,275 — Gross mortgage notes payable 14 293,600 281,442 2.5% Deferred financing costs, net of accumulated amortization — (5,628 ) (5,706 ) Mortgage notes payable, net of deferred financing costs 14 $ 287,972 $ 275,736 2.5% _________________________ (1) Amounts borrowed in local currency and translated at the spot rate as of the respective measurement date. (2) Fixed as a result of entering into an interest rate swap agreement. (3) The DB Luxembourg property is encumbered by a mortgage and a second mortgage loan, each pursuant to the same loan agreement. The second mortgage loan was partially paid off during three months ended June 30, 2016 . |
Schedule of Maturities of Long-term Debt | The following table summarizes the scheduled aggregate principal payments on the gross mortgage notes payable subsequent to June 30, 2016 : (In thousands) Future Principal Payments (1) 2016 (remainder) $ — 2017 13,416 2018 52,631 2019 93,123 2020 112,495 2021 21,935 Thereafter — Total $ 293,600 _________________________ (1) Based on exchange rate as of June 30, 2016 . As discussed in Note 14 — Subsequent Events, the Mezzanine Facility was subsequently modified. As a result, the Company was required to repay €10.2 million in July 2016. It will be further required to repay an additional £1.8 million in 2016 and £3.7 million in 2017 (or earlier upon closing of specific asset sales), and such amounts are not reflected in the table above. |
Fair Value of Financial Instr25
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table presents information about the Company's assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015 , aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Level 1 Level 2 Level 3 Total June 30, 2016 Cross currency swaps, net (GBP & EUR) $ — $ 12,960 $ — $ 12,960 Interest rate swaps, net (GBP & EUR) $ — $ (5,980 ) $ — $ (5,980 ) Foreign currency forwards, net (GBP & EUR) $ — $ 500 $ — $ 500 December 31, 2015 Cross currency swaps, net (GBP & EUR) $ — $ 7,408 $ — $ 7,408 Interest rate swaps, net (GBP & EUR) $ — $ (1,726 ) $ — $ (1,726 ) Foreign currency forwards, net (GBP & EUR) $ — $ 556 $ — $ 556 |
Fair Value, by Balance Sheet Grouping | The fair values of the Company's remaining financial instruments that are not reported at fair value on the consolidated balance sheets as of June 30, 2016 and December 31, 2015 are reported below. Carrying Fair Value Carrying Amount Fair Value (In thousands) Level June 30, June 30, December 31, December 31, Gross mortgage notes payable 3 $ 293,600 $ 291,854 $ 281,442 $ 286,547 Credit Facility (1) 3 $ — $ — $ 28,630 $ 28,630 Mezzanine Facility 3 $ 132,716 $ 132,716 $ 136,777 $ 136,777 _____________________________ (1) On March 11, 2016, the Company terminated and repaid all outstanding amounts under the Credit Facility in full. As more fully described in Note 7 , certain of the Credit Facility advances were denominated in Euro and British Pounds. A portion of the foreign currency advances under the Credit Facility through March 11, 2016 and a portion foreign currency advances under the Mezzanine Facility as of June 30, 2016 were designated as net investment hedges and measured at fair value through other comprehensive income (loss) as part of the cumulative translation adjustment. |
Derivatives and Hedging Activ26
Derivatives and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the balance sheets as of June 30, 2016 and December 31, 2015 : (In thousands) Balance Sheet Location June 30, December 31, 2015 Derivatives designated as hedging instruments: Cross currency swaps (EUR-USD) Derivative assets, at fair value $ 562 $ 3,632 Cross currency swaps (EUR-USD) Derivative liabilities, at fair value (7 ) — Cross currency swaps (GBP-USD) Derivative assets, at fair value 11,782 3,776 Foreign currency forwards (EUR-USD) Derivative assets, at fair value 370 490 Interest rate swaps (GBP) Derivative assets, at fair value — 190 Interest rate swaps (GBP) Derivative liabilities, at fair value (1,957 ) (166 ) Interest rate swaps (EUR) Derivative liabilities, at fair value (1,221 ) (1,751 ) Total $ 9,529 $ 6,171 Derivatives not designated as hedging instruments: Foreign currency forwards (GBP-USD) Derivative assets, at fair value $ 153 $ 55 Foreign currency forwards (EUR-USD) Derivative assets, at fair value 1 22 Foreign currency forwards (EUR-USD) Derivative liabilities, at fair value (24 ) (10 ) Cross currency swaps (EUR-USD) Derivative assets, at fair value 623 — Interest rate swaps (EUR) Derivative liabilities, at fair value (2,802 ) — Total $ (2,049 ) $ 67 |
Offsetting Assets | The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of June 30, 2016 and December 31, 2015 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying consolidated balance sheets. Gross Amounts Not Offset on the Balance Sheet Derivatives (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset on the Balance Sheet Net Amounts of Assets (Liabilities) presented on the Balance Sheet Financial Instruments Cash Collateral Received (Posted) Net Amount June 30, 2016 $ 13,491 $ (6,011 ) $ — $ 7,480 $ — $ — $ 7,480 December 31, 2015 $ 8,165 $ (1,927 ) $ — $ 6,238 $ — $ — $ 6,238 |
Derivative Instruments, Gain (Loss) | The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and six months ended June 30, 2016 and June 30, 2015 : Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2016 2015 2016 2015 Amount of gain (loss) recognized in accumulated other comprehensive income (loss) on interest rate derivatives (effective portion) $ 7,562 $ (504 ) $ 2,991 $ 2,364 Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) $ (343 ) $ (80 ) $ (905 ) $ (98 ) Amount of gain (loss) recognized in income on derivative instruments (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) $ — $ 18 $ (56 ) $ 18 |
Schedule of Interest Rate Derivatives | As of June 30, 2016 and December 31, 2015 , the Company had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations: June 30, 2016 December 31, 2015 Derivatives Number of Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Cross currency swaps (EUR-USD) 3 $ 40,067 4 $ 53,998 Cross currency swaps (GBP-USD) 1 65,788 1 72,725 Foreign currency forwards (EUR-USD) 1 10,100 1 10,100 Total 5 $ 115,955 6 $ 136,823 As of June 30, 2016 and December 31, 2015 , the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: June 30, 2016 December 31, 2015 Derivatives Number of Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest rate swaps (EUR) 4 $ 61,078 8 $ 169,604 Interest rate swaps (GBP) 3 97,782 3 116,374 Total 7 $ 158,860 11 $ 285,978 |
Schedule of Notional Amounts of Outstanding Derivative Positions | As of June 30, 2016 and December 31, 2015 , the Company had the following outstanding derivatives that were not designated as hedges under qualifying hedging relationships. June 30, 2016 December 31, 2015 Derivatives Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Foreign currency forwards (GBP-USD) 7 $ 812 9 $ 1,044 Foreign currency forwards (EUR-USD) 10 1,780 12 2,136 Cross currency swaps (EUR-USD) 1 14,911 — — Interest rate swaps (EUR) 3 99,390 — — Total 21 $ 116,893 21 $ 3,180 |
Common Stock (Tables)
Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Stock by Class | The following table reflects the cumulative number of common shares repurchased as of December 31, 2015 and June 30, 2016 : Number of Shares Repurchased Weighted Average Price per Share Cumulative repurchases as of December 31, 2015 17,316 $ 23.85 Six Months Ended June 30, 2016 — — Cumulative repurchases as of June 30, 2016 17,316 $ 23.85 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Selling Commissions and Dealer Manager Fees Payable to Affiliate | The following table details total selling commissions and dealer manager fees incurred and due to the Former Dealer Manager as of and for the periods presented: Three Months Ended Six Months Ended Payable as of (In thousands) 2016 2015 2016 2015 June 30, 2016 December 31, 2015 Total commissions and fees from Former Dealer Manager $ — $ 10,658 $ — $ 17,400 $ — $ — |
Schedule of Offering Costs Reimbursements to Related Party | The following table details offering costs and reimbursements incurred from and due to the Advisor and Former Dealer Manager as of and for the periods presented: Three Months Ended Six Months Ended Payable as of (In thousands) 2016 2015 2016 2015 June 30, 2016 December 31, 2015 Fees and expense reimbursements from the Advisor and Former Dealer Manager $ — $ 3,344 $ — $ 5,558 $ 283 $ 283 |
Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services | The following table details amounts incurred, forgiven and payable to related parties in connection with the operations-related services described above as of and for the periods presented: Three Months Ended June 30, Six months ended June 30, Payable (Receivable) as of 2016 2015 2016 2015 (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven June 30, 2016 December 31, 2015 One-time fees and reimbursements: Acquisition fees and related cost reimbursements (1) $ — $ — $ 4,289 $ — $ — $ — $ 5,917 $ — $ — $ — Financing coordination fees (2) — — 1,044 — 77 — 2,267 — — — Ongoing fees: Other expense reimbursements (3) 416 — — — 873 — — 7 — Asset management fees (3) 1,191 — — — 2,453 — — — — — Property management and leasing fees (3) (4) 243 — 56 15 460 — 90 19 (10 ) 24 Total related party fees and reimbursements $ 1,850 $ — $ 5,389 $ 15 $ 3,863 $ — $ 8,274 $ 19 $ (3 ) (5) $ 24 _____________________________________________ (1) These related party fees are recorded within acquisition and transaction related costs on the consolidated statements of operations and comprehensive loss. (2) These related party fees are recorded as deferred financing costs and amortized over the term of the respective financing arrangement. (3) These related party fees are recorded within operating fees to related parties in the consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2016 . (4) The Advisor waived 100% of fees from U.S. assets and its allocated portion of 50% of fees from European assets through August 31, 2015. No such fees were waived effective September 1, 2015. (5) In addition, as of June 30, 2016 , amounts due to related parties includes $59,000 , which are recorded within general and administrative expenses on the consolidated statements of operations and comprehensive loss for the six months ended June 30, 2016 and are not reflected in the table above. |
Share Based Compensation (Table
Share Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Activity | The following table reflects restricted share award activity for the six months ended June 30, 2016 : Number of Restricted Shares Weighted-Average Issue Price Unvested, December 31, 2015 7,731 $ 22.50 Granted — — Vested (3,466 ) 22.50 Forfeitures — — Unvested, June 30, 2016 4,265 $ 22.50 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share data) 2016 2015 2016 2015 Net loss $ (3,123 ) $ (14,790 ) $ (7,786 ) $ (23,009 ) Basic and diluted net loss per share $ (0.25 ) $ (2.18 ) $ (0.63 ) $ (4.99 ) Basic and diluted weighted average shares outstanding 12,412,618 6,773,666 12,363,312 4,614,053 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company had the following common share equivalents as of June 30, 2016 , which were excluded from the calculation of diluted loss per share attributable to stockholders as the effect would have been antidilutive: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Unvested restricted stock 4,265 3,999 4,265 3,999 OP Units 90 90 90 90 Class B units 125,020 13,247 125,020 13,247 Total common share equivalents 129,375 17,336 129,375 17,336 |
Organization - Narrative (Detai
Organization - Narrative (Details) $ / shares in Units, ft² in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016USD ($)ft²property$ / sharesshares | Dec. 31, 2015USD ($)property$ / sharesshares | Aug. 26, 2014$ / sharesshares | May 28, 2014USD ($)$ / sharesshares | |
Operations [Line Items] | ||||
Common stock, authorized (shares) | 300,000,000 | 300,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |
Share price (in dollars per share) | $ / shares | $ 22.50 | |||
Common stock, outstanding (shares) | 12,444,303 | 12,242,127 | ||
Proceeds from issuance of common stock and DRIP | $ | $ 307,400,000 | $ 302,700,000 | ||
Number of real estate properties (property) | property | 16 | 16 | ||
Rented square feet | ft² | 4.2 | |||
Occupancy rate | 99.90% | |||
Weighted average remaining lease term | 8 years 6 months | |||
Units of limited partner interest in OP (in shares) | 90 | |||
Europe | ||||
Operations [Line Items] | ||||
Property concentration percentage | 50.00% | |||
United States | ||||
Operations [Line Items] | ||||
Property concentration percentage | 4.50% | |||
Europe | ||||
Operations [Line Items] | ||||
Property concentration percentage | 95.50% | |||
Special Limited Partner | ||||
Operations [Line Items] | ||||
Common stock outstanding | $ | $ 200,000 | |||
Limited partners' contributed capital | $ | $ 2,020 | |||
Common Stock | ||||
Operations [Line Items] | ||||
Shares available for issuance under a distribution reinvestment plan (shares) | 26,300,000 | |||
Common Stock | Special Limited Partner | ||||
Operations [Line Items] | ||||
Share price (in dollars per share) | $ / shares | $ 22.50 | |||
Common stock, outstanding (shares) | 8,888 | |||
Common Stock | Maximum | ||||
Operations [Line Items] | ||||
Share price (in dollars per share) | $ / shares | $ 25 | |||
DRIP Share Price (in dollars per share) | $ / shares | $ 23.75 | $ 23.75 | ||
IPO | ||||
Operations [Line Items] | ||||
Common stock, authorized (shares) | 125,000,000 | 1,300,000 | 125,000,000 | |
Common stock, authorized value | $ | $ 3,125,000,000 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Income tax expense (benefit) | $ 400 | $ (21) | $ 540 | $ (21) | |
Tax refund | 100 | 100 | |||
Deferred debt issuance costs | $ 5,628 | $ 5,628 | $ 5,706 | ||
Debt Issuance Costs, Net | Accounting Standards Update 2015-03 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Deferred debt issuance costs | (5,700) | ||||
Mortgage Notes Payable | Accounting Standards Update 2015-03 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Deferred debt issuance costs | $ 5,700 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - OCI Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Cumulative translation adjustment | $ 1,613 | $ 821 | $ (2,583) | $ 1,465 | $ 188 | $ 1,009 | $ (19) | $ 45 |
Designated derivatives, fair value adjustments | $ (1,008) | (1,576) | 386 | $ (4,176) | 138 | (1,438) | (1,641) | (86) |
Total OCI | (755) | (2,197) | 326 | (429) | (1,660) | (41) | ||
As originally Reported | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Cumulative translation adjustment | 852 | (1,822) | (1,979) | (1,127) | (7,918) | (205) | ||
Designated derivatives, fair value adjustments | (1,607) | (375) | 2,305 | 698 | 6,258 | 164 | ||
Total OCI | (755) | (2,197) | 326 | (429) | (1,660) | (41) | ||
Adjustment | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Cumulative translation adjustment | (31) | (761) | 2,167 | 2,136 | 7,899 | 250 | ||
Designated derivatives, fair value adjustments | 31 | 761 | (2,167) | (2,136) | (7,899) | (250) | ||
Total OCI | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Real Estate Investments - Sched
Real Estate Investments - Schedule of Real Estate Properties (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016USD ($)property | Jun. 30, 2015property | |
Property Acquisition [Roll Forward] | ||
Beginning balance, Number of Properties | property | 16 | |
Number of Properties acquired | property | 0 | 7 |
Ending balance, Number of Properties | property | 16 | |
Beginning Balance, Base Purchase Price | $ | $ 619,914 | |
Aggregate Base Purchase Price | $ | 0 | |
Ending Balance, Base Purchase Price | $ | $ 619,914 |
Real Estate Investments - Sch35
Real Estate Investments - Schedule of Business Acquisitions, by Acquisition (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016property | Jun. 30, 2015USD ($)property | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Land | $ 26,827 | |
Buildings, fixtures and improvements | 188,820 | |
Total tangible assets | 215,647 | |
Total assets acquired, net | 288,012 | |
Mortgage notes payable used to acquire real estate investments | (202,269) | |
Cash paid for acquired real estate investments | $ 68,487 | |
Number of properties purchased | property | 0 | 7 |
In-place leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired in the period | $ 49,536 | |
Above market lease assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired in the period | 379 | |
Below market lease liabilities | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired in the period | (2,757) | |
Below market ground lease intangible assets | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired in the period | 25,207 | |
Credit Facility | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Credit facilities payable used to acquire real estate investments | $ (17,256) |
Real Estate Investments - Busin
Real Estate Investments - Business Acquisition, Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | |
Real Estate [Abstract] | ||
Pro forma revenues | $ 6,407 | $ 12,753 |
Pro forma income net loss | $ (686) | $ (1,439) |
Basic and diluted net loss per share (in dollars per share) | $ (0.10) | $ (0.31) |
Real Estate Investments - Sch37
Real Estate Investments - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Real Estate [Abstract] | |
2016 (remainder) | $ 23,214 |
2,017 | 45,186 |
2,018 | 47,767 |
2,019 | 48,377 |
2,020 | 49,239 |
2,021 | 49,301 |
Thereafter | 139,313 |
Total | $ 402,397 |
Real Estate Investments - Sch38
Real Estate Investments - Schedule of Annualized Rental Income by Major Tenants (Details) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Foster Wheeler | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 23.50% | 0.00% |
ING Amsterdam | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 18.00% | 34.80% |
Harper Collins | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 14.30% | 0.00% |
Sagemcom | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 11.50% | 22.10% |
DB Luxembourg | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 20.70% |
Real Estate Investments - Sch39
Real Estate Investments - Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas (Details) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue, major state percentage | 39.90% | 0.00% |
France | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue, major state percentage | 25.50% | 31.20% |
The Netherlands | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue, major state percentage | 18.00% | 34.80% |
Luxembourg | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue, major state percentage | 20.70% |
Real Estate Investments - Narra
Real Estate Investments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Real Estate [Abstract] | ||
Deposits as closing consideration | $ 2 | |
Deposits recouped | $ 0.3 |
Revolving Credit Borrowings (De
Revolving Credit Borrowings (Details) £ in Millions | Mar. 11, 2016EUR (€) | Mar. 11, 2016USD ($)€ / $£ / $ | Mar. 11, 2016GBP (£) | Jan. 28, 2015USD ($) | Jul. 31, 2016EUR (€) | Dec. 31, 2016GBP (£) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2017GBP (£) | Jun. 30, 2016EUR (€)$ / €$ / ££ / € | Jun. 30, 2016USD ($)$ / €$ / ££ / € | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2015GBP (£) | Nov. 13, 2015EUR (€) | Nov. 13, 2015USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||||||
Repayments on credit facility | $ 27,219,000 | $ 0 | ||||||||||||||
Foreign currency translation | 1.12 | 1.21 | 1.21 | |||||||||||||
Amortization of deferred financing costs | $ 3,288,000 | $ 1,141,000 | ||||||||||||||
Mezzanine facility | $ 132,716,000 | $ 136,777,000 | ||||||||||||||
Unencumbered assets | 9,700,000 | |||||||||||||||
Gross mortgage notes payable | Mezzanine Facility | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Face amount of debt | € | € 128,000,000 | |||||||||||||||
Stated interest rate | 8.25% | 8.25% | ||||||||||||||
Maximum leverage of the net purchase price of collateral properties | 82.50% | 82.50% | ||||||||||||||
Leverage of net purchase price of collateral properties | 77.50% | 77.50% | ||||||||||||||
Potential interest rate increase based on actual leverage | 8.50% | 8.50% | ||||||||||||||
Mezzanine facility | € 72,600,000 | 132,700,000 | € 72,600,000 | 136,800,000 | £ 38.9 | |||||||||||
Unused borrowing capacity | $ 9,400,000 | $ 2,800,000 | ||||||||||||||
Gross mortgage notes payable | Mezzanine Facility | Scenario, Forecast | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Repayments on credit facility | £ | £ 1.8 | £ 3.7 | ||||||||||||||
Gross mortgage notes payable | Mezzanine Facility | Subsequent Event | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Repayments on credit facility | € | € 10,200,000 | |||||||||||||||
United Kingdom, Pounds | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Foreign currency translation | 1.43 | 1.34 | 1.34 | |||||||||||||
Euro Member Countries, Euro | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Foreign currency translation | 1.12 | 1.11 | 1.11 | |||||||||||||
Euro Member Countries, Euro | Gross mortgage notes payable | Mezzanine Facility | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Face amount of debt | $ 142,144,000 | |||||||||||||||
Barclays Bank PLC | Swingline Loans | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 50,000,000 | |||||||||||||||
Barclays Bank PLC | Letter of Credit | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Maximum borrowing capacity | 25,000,000 | |||||||||||||||
Barclays Bank PLC | Credit Facility | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 100,000,000 | |||||||||||||||
Repayments on credit facility | € 11,000,000 | $ 28,400,000 | £ 11.2 | |||||||||||||
Collateral on credit facility | 20,000,000 | |||||||||||||||
Barclays Bank PLC | Credit Facility | Interest Expense | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Amortization of deferred financing costs | 1,100,000 | |||||||||||||||
Barclays Bank PLC | Credit Facility | United Kingdom, Pounds | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Repayments on credit facility | 16,100,000 | |||||||||||||||
Barclays Bank PLC | Credit Facility | Euro Member Countries, Euro | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Repayments on credit facility | $ 12,300,000 | |||||||||||||||
Barclays Bank PLC | Credit Facility | Alternate Base Rate | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Late payment penalty fee percent | 2.00% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Alternate Base Rate | Minimum | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 0.50% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Alternate Base Rate | Maximum | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 1.10% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Adjusted LIBOR | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 1.00% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Adjusted LIBOR | Minimum | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 1.50% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Adjusted LIBOR | Maximum | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 2.10% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Adjusted EURIBOR | Minimum | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 1.50% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Adjusted EURIBOR | Maximum | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 2.10% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Federal Funds Effective Rate | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 0.25% | |||||||||||||||
Barclays Bank PLC | Credit Facility | Federal Funds Effective Rate | Maximum | ||||||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||||||
Basis spread on variable rate | 0.50% |
Mortgage Notes Payable - Schedu
Mortgage Notes Payable - Schedule of Long-term Debt Instruments (Details) $ in Thousands | Jun. 30, 2016USD ($)property | Dec. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||
Deferred financing costs, net of accumulated amortization | $ (5,628) | $ (5,706) |
Mortgage notes payable, net of deferred financing costs | $ 287,972 | 275,736 |
Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 14 | |
Gross mortgage notes payable | $ 293,600 | 281,442 |
Deferred financing costs, net of accumulated amortization | (5,628) | (5,706) |
Mortgage notes payable, net of deferred financing costs | $ 287,972 | 275,736 |
Effective Interest Rate | 2.50% | |
Euro Member Countries, Euro | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 9 | |
Gross mortgage notes payable | $ 185,543 | 181,700 |
Euro Member Countries, Euro | Auchan | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 9,217 | 9,053 |
Effective Interest Rate | 1.70% | |
Euro Member Countries, Euro | Pole Emploi | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 6,441 | 6,326 |
Effective Interest Rate | 1.70% | |
Euro Member Countries, Euro | Sagemcom | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 39,867 | 39,156 |
Effective Interest Rate | 1.70% | |
Euro Member Countries, Euro | Worldline | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 5,552 | 5,453 |
Effective Interest Rate | 1.90% | |
Euro Member Countries, Euro | DCNS | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 10,550 | 10,362 |
Effective Interest Rate | 1.50% | |
Euro Member Countries, Euro | ID Logistics II | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 2 | |
Gross mortgage notes payable | $ 11,660 | 0 |
Effective Interest Rate | 1.30% | |
Euro Member Countries, Euro | DB Luxembourg | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 39,978 | 39,265 |
Effective Interest Rate | 1.40% | |
Euro Member Countries, Euro | DB Luxembourg | Secondary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Gross mortgage notes payable | $ 13,416 | 24,094 |
Effective Interest Rate | 9.10% | |
Euro Member Countries, Euro | ING Amsterdam | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 48,862 | 47,991 |
Effective Interest Rate | 1.70% | |
United Kingdom, Pounds | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 3 | |
Gross mortgage notes payable | $ 97,782 | 99,742 |
United Kingdom, Pounds | Foster Wheeler | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 52,631 | 58,180 |
Effective Interest Rate | 2.70% | |
United Kingdom, Pounds | Harper Collins | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 37,598 | 41,562 |
Effective Interest Rate | 3.40% | |
United Kingdom, Pounds | NCR Dundee | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 7,553 | 0 |
Effective Interest Rate | 3.00% | |
United States of America, Dollars | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 2 | |
Gross mortgage notes payable | $ 10,275 | 0 |
United States of America, Dollars | FedEx Freight | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 6,165 | 0 |
Effective Interest Rate | 4.50% | |
United States of America, Dollars | Veolia Water | Primary Mortgage Loans | Gross mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Gross mortgage notes payable | $ 4,110 | $ 0 |
Effective Interest Rate | 4.50% |
Mortgage Notes Payable - Sche43
Mortgage Notes Payable - Schedule of Maturities of Long-term Debt (Details) $ in Thousands, € in Millions, £ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jul. 31, 2016EUR (€) | Dec. 31, 2016GBP (£) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | ||||||
Repayments on credit facility | $ 27,219 | $ 0 | ||||
Gross mortgage notes payable | ||||||
Debt Instrument [Line Items] | ||||||
2016 (remainder) | 0 | |||||
2,017 | 13,416 | |||||
2,018 | 52,631 | |||||
2,019 | 93,123 | |||||
2,020 | 112,495 | |||||
2,021 | 21,935 | |||||
Thereafter | 0 | |||||
Total | $ 293,600 | $ 281,442 | ||||
Gross mortgage notes payable | Subsequent Event | Mezzanine Facility | ||||||
Debt Instrument [Line Items] | ||||||
Repayments on credit facility | € | € 10.2 | |||||
Gross mortgage notes payable | Scenario, Forecast | Mezzanine Facility | ||||||
Debt Instrument [Line Items] | ||||||
Repayments on credit facility | £ | £ 1.8 | £ 3.7 |
Mortgage Notes Payable - Narrat
Mortgage Notes Payable - Narrative (Details) $ in Thousands, € in Millions, £ in Millions | 6 Months Ended | ||||
Jun. 30, 2016EUR (€)property$ / €$ / ££ / € | Jun. 30, 2016USD ($)property$ / €$ / ££ / € | Jun. 30, 2016GBP (£)property$ / €$ / ££ / € | Jun. 30, 2015USD ($) | Mar. 11, 2016€ / $£ / $ | |
Debt Instrument [Line Items] | |||||
Proceeds from encumbered properties | $ | $ 29,488 | $ 0 | |||
Foreign currency translation | 1.21 | 1.21 | 1.21 | 1.12 | |
Gross mortgage notes payable | |||||
Debt Instrument [Line Items] | |||||
Encumbered properties (property) | 14 | 14 | 14 | ||
France | Gross mortgage notes payable | |||||
Debt Instrument [Line Items] | |||||
Encumbered properties (property) | 2 | 2 | 2 | ||
Proceeds from encumbered properties | € 10.5 | $ 11,700 | |||
United Kingdom | Gross mortgage notes payable | |||||
Debt Instrument [Line Items] | |||||
Encumbered properties (property) | 1 | 1 | 1 | ||
Proceeds from encumbered properties | $ 7,600 | £ 5.6 | |||
United States | Gross mortgage notes payable | |||||
Debt Instrument [Line Items] | |||||
Encumbered properties (property) | 2 | 2 | 2 | ||
Proceeds from encumbered properties | $ | $ 10,300 | ||||
Euro Member Countries, Euro | |||||
Debt Instrument [Line Items] | |||||
Foreign currency translation | 1.11 | 1.11 | 1.11 | 1.12 | |
Euro Member Countries, Euro | Gross mortgage notes payable | |||||
Debt Instrument [Line Items] | |||||
Encumbered properties (property) | 9 | 9 | 9 | ||
United Kingdom, Pounds | |||||
Debt Instrument [Line Items] | |||||
Foreign currency translation | 1.34 | 1.34 | 1.34 | 1.43 |
Fair Value of Financial Instr45
Fair Value of Financial Instruments - Fair Value, Liabilities Measured on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Cross currency swaps, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 12,960 | $ 7,408 |
Cross currency swaps, net (GBP & EUR) | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Cross currency swaps, net (GBP & EUR) | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 12,960 | 7,408 |
Cross currency swaps, net (GBP & EUR) | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Interest rate swaps, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | (5,980) | (1,726) |
Interest rate swaps, net (GBP & EUR) | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 0 | 0 |
Interest rate swaps, net (GBP & EUR) | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | (5,980) | (1,726) |
Interest rate swaps, net (GBP & EUR) | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | 0 | 0 |
Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 500 | 556 |
Foreign currency forwards, net (GBP & EUR) | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Foreign currency forwards, net (GBP & EUR) | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 500 | 556 |
Foreign currency forwards, net (GBP & EUR) | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 0 | $ 0 |
Fair Value of Financial Instr46
Fair Value of Financial Instruments - Fair Value, by Balance Sheet Grouping (Details) - Level 3 - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Carrying Amount | Gross mortgage notes payable | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 293,600 | $ 281,442 |
Carrying Amount | Gross mortgage notes payable | Mezzanine Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 132,716 | 136,777 |
Carrying Amount | Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 0 | 28,630 |
Fair Value | Gross mortgage notes payable | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 291,854 | 286,547 |
Fair Value | Gross mortgage notes payable | Mezzanine Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 132,716 | 136,777 |
Fair Value | Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 0 | $ 28,630 |
Derivatives and Hedging Activ47
Derivatives and Hedging Activities - Schedule of Derivatives by Balance Sheet Classification (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 7,480 | $ 6,238 |
Derivative liability | (6,011) | (1,927) |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Total | 9,529 | 6,171 |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Total | (2,049) | 67 |
Euro Member Countries, Euro | Designated as Hedging Instrument | Cross currency swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 562 | 3,632 |
Derivative liability | (7) | 0 |
Euro Member Countries, Euro | Designated as Hedging Instrument | Foreign currency forwards | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 370 | 490 |
Euro Member Countries, Euro | Designated as Hedging Instrument | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | (1,221) | (1,751) |
Euro Member Countries, Euro | Not Designated as Hedging Instrument | Cross currency swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 623 | 0 |
Euro Member Countries, Euro | Not Designated as Hedging Instrument | Foreign currency forwards | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 1 | 22 |
Derivative liability | (24) | (10) |
Euro Member Countries, Euro | Not Designated as Hedging Instrument | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability | (2,802) | 0 |
United Kingdom, Pounds | Designated as Hedging Instrument | Cross currency swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 11,782 | 3,776 |
United Kingdom, Pounds | Designated as Hedging Instrument | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 190 |
Derivative liability | (1,957) | (166) |
United Kingdom, Pounds | Not Designated as Hedging Instrument | Foreign currency forwards | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 153 | $ 55 |
Derivatives and Hedging Activ48
Derivatives and Hedging Activities - Offsetting Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 13,491 | $ 8,165 |
Gross Amounts of Recognized (Liabilities) | (6,011) | (1,927) |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amounts of Assets (Liabilities) presented on the Balance Sheet | 7,480 | 6,238 |
Financial Instruments | 0 | 0 |
Cash Collateral Received (Posted) | 0 | 0 |
Net Amount | $ 7,480 | $ 6,238 |
Derivatives and Hedging Activ49
Derivatives and Hedging Activities - Narrative (Details) € in Millions, £ in Millions | Mar. 11, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2016EUR (€)$ / €$ / ££ / € | Jun. 30, 2016USD ($)$ / €$ / ££ / € | Jun. 30, 2016GBP (£)$ / €$ / ££ / € | Mar. 11, 2016EUR (€)€ / $£ / $ | Mar. 11, 2016USD ($)€ / $£ / $ | Mar. 11, 2016GBP (£)€ / $£ / $ | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2015GBP (£) |
Derivative [Line Items] | |||||||||||||||
Gains (losses) of derivative ineffectiveness | $ 0 | $ 18,000 | $ (100,000) | $ 18,000 | |||||||||||
Credit facility | $ 0 | $ 28,630,000 | |||||||||||||
Foreign currency translation | 1.21 | 1.21 | 1.21 | 1.12 | 1.12 | 1.12 | |||||||||
Partial settlement amount retained by the bank | 1,029,000 | 0 | |||||||||||||
Mezzanine facility | $ 132,716,000 | 136,777,000 | |||||||||||||
Remeasurement gains on GBP denominated draws | $ 1,700,000 | ||||||||||||||
Fair value of derivatives including accrued interest, net of liability and excluding nonperformance risk adjustment | 6,500,000 | ||||||||||||||
Not Designated as Hedging Instrument | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Marked-to-market gains (losses) | (300,000) | (48,000) | (700,000) | (48,000) | |||||||||||
Net Investment Hedging | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Foreign currency translation | £ / $ | 1.43 | 1.43 | 1.43 | ||||||||||||
Mezzanine Facility | Gross mortgage notes payable | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Mezzanine facility | € 72.6 | 132,700,000 | € 72.6 | $ 136,800,000 | £ 38.9 | ||||||||||
Gains (losses) due to currency changes on undesignated excess of foreign currency advances | 100,000 | (100,000) | |||||||||||||
Mezzanine Facility | Gross mortgage notes payable | Net Investment Hedging | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Mezzanine facility | € 47 | $ 52,100,000 | £ 38.9 | ||||||||||||
Barclays Bank PLC | Credit Facility | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Gains (losses) due to currency changes on undesignated excess of foreign currency advances | 0 | $ 0 | 0 | $ 0 | |||||||||||
Barclays Bank PLC | Credit Facility | Net Investment Hedging | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Credit facility | € 11 | $ 28,400,000 | £ 11.2 | ||||||||||||
Interest rate swaps | Cash Flow Hedging | Interest Expense | Designated as Hedging Instrument | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Estimated net amount to be transferred from accumulated OCI | 1,600,000 | ||||||||||||||
Interest rate swap terminated | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Accelerated loss from termination of interest rate swaps | $ 0 | $ 200,000 | |||||||||||||
Cross currency swap partially terminated | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Gain on partial settlement of cross currency swaps | $ 1,000,000 | ||||||||||||||
Partial settlement amount retained by the bank | $ 1,000,000 | ||||||||||||||
United Kingdom, Pounds | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Foreign currency translation | 1.34 | 1.34 | 1.34 | 1.43 | 1.43 | 1.43 | |||||||||
United Kingdom, Pounds | Barclays Bank PLC | Credit Facility | Net Investment Hedging | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Credit facility | $ 16,100,000 | ||||||||||||||
Euro Member Countries, Euro | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Foreign currency translation | 1.11 | 1.11 | 1.11 | 1.12 | 1.12 | 1.12 | |||||||||
Euro Member Countries, Euro | Barclays Bank PLC | Credit Facility | Net Investment Hedging | |||||||||||||||
Derivative [Line Items] | |||||||||||||||
Credit facility | $ 12,300,000 |
Derivatives and Hedging Activ50
Derivatives and Hedging Activities - Derivative Instruments, Gain (Loss) (Details) - Interest rate swaps - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in accumulated other comprehensive income (loss) on interest rate derivatives (effective portion) | $ 7,562 | $ (504) | $ 2,991 | $ 2,364 |
Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) | (343) | (80) | (905) | (98) |
Amount of gain (loss) recognized in income on derivative instruments (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) | $ 0 | $ 18 | $ (56) | $ 18 |
Derivatives and Hedging Activ51
Derivatives and Hedging Activities - Schedule of Derivatives (Details) $ in Thousands | Jun. 30, 2016USD ($)derivative | Dec. 31, 2015USD ($)derivative |
Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 7 | 11 |
Notional Amount | $ | $ 158,860 | $ 285,978 |
Designated as Hedging Instrument | Net Investment Hedging | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 5 | 6 |
Notional Amount | $ | $ 115,955 | $ 136,823 |
Not Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 21 | 21 |
Notional Amount | $ | $ 116,893 | $ 3,180 |
Euro Member Countries, Euro | Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 4 | 8 |
Notional Amount | $ | $ 61,078 | $ 169,604 |
Euro Member Countries, Euro | Designated as Hedging Instrument | Net Investment Hedging | Cross currency swaps | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 3 | 4 |
Notional Amount | $ | $ 40,067 | $ 53,998 |
Euro Member Countries, Euro | Designated as Hedging Instrument | Net Investment Hedging | Foreign currency forwards | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 1 | 1 |
Notional Amount | $ | $ 10,100 | $ 10,100 |
Euro Member Countries, Euro | Not Designated as Hedging Instrument | Interest rate swaps | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 3 | 0 |
Notional Amount | $ | $ 99,390 | $ 0 |
Euro Member Countries, Euro | Not Designated as Hedging Instrument | Cross currency swaps | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 1 | 0 |
Notional Amount | $ | $ 14,911 | $ 0 |
Euro Member Countries, Euro | Not Designated as Hedging Instrument | Foreign currency forwards | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 10 | 12 |
Notional Amount | $ | $ 1,780 | $ 2,136 |
United Kingdom, Pounds | Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 3 | 3 |
Notional Amount | $ | $ 97,782 | $ 116,374 |
United Kingdom, Pounds | Designated as Hedging Instrument | Net Investment Hedging | Cross currency swaps | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 1 | 1 |
Notional Amount | $ | $ 65,788 | $ 72,725 |
United Kingdom, Pounds | Not Designated as Hedging Instrument | Foreign currency forwards | ||
Derivative [Line Items] | ||
Number of Instruments | derivative | 7 | 9 |
Notional Amount | $ | $ 812 | $ 1,044 |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 26, 2016 | Mar. 31, 2016 | Oct. 31, 2014 | Jun. 30, 2016 | Dec. 31, 2015 | Aug. 26, 2014 |
Class of Stock [Line Items] | ||||||
Common stock, authorized (shares) | 300,000,000 | 300,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock, outstanding (shares) | 12,444,303 | 12,242,127 | ||||
Proceeds from issuance of common stock and DRIP | $ 307.4 | $ 302.7 | ||||
Dividends declared per day (in dollars per share) | $ 0.0048630137 | |||||
Dividends declared per annum (in dollars per share) | $ 1.775 | $ 1.775 | ||||
Dividends declared per day if it's a leap year (in dollars per share) | $ 0.0048497268 | |||||
Percent of shares authorized to repurchase per fiscal year | 5.00% | |||||
Percent of shares authorized to repurchase per fiscal semester | 2.50% | |||||
Prior to NAV Pricing Date | One Year | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Repurchase price as percentage of value of capital paid | 92.50% | |||||
Prior to NAV Pricing Date | Two Years | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Repurchase price as percentage of value of capital paid | 95.00% | |||||
Prior to NAV Pricing Date | Three Years | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Repurchase price as percentage of value of capital paid | 97.50% | |||||
Prior to NAV Pricing Date | Four Years | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Repurchase price as percentage of value of capital paid | 100.00% | |||||
Beginning with NAV Pricing Date | One Year | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Repurchase price as percentage of value of capital paid | 92.50% | |||||
Beginning with NAV Pricing Date | Two Years | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Repurchase price as percentage of value of capital paid | 95.00% | |||||
Beginning with NAV Pricing Date | Three Years | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Repurchase price as percentage of value of capital paid | 97.50% | |||||
Beginning with NAV Pricing Date | Four Years | Maximum | ||||||
Class of Stock [Line Items] | ||||||
Repurchase price as percentage of value of capital paid | 100.00% | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Share price IPO (in dollars per share) | $ 25 | |||||
Shares available for issuance under a distribution reinvestment plan (shares) | 26,300,000 | |||||
Common Stock | Maximum | ||||||
Class of Stock [Line Items] | ||||||
DRIP Share Price (in dollars per share) | $ 23.75 | $ 23.75 | ||||
Percent of primary offering price | 95.00% | |||||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Common stock, authorized (shares) | 125,000,000 | 1,300,000 | 125,000,000 |
Common Stock - Schedule of Shar
Common Stock - Schedule of Share Repurchases (Details) - Common Stock | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Cumulative repurchases, beginning of the period (shares) | shares | 17,316 |
Common stock repurchases (shares) | shares | 0 |
Cumulative repurchases, end of the period (shares) | shares | 17,316 |
Cumulative repurchases, beginning of the period (in dollars per share) | $ / shares | $ 23.85 |
Common stock repurchases (usd per share) | $ / shares | 0 |
Cumulative repurchases, end of the period (in dollars per share) | $ / shares | $ 23.85 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Mar. 22, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||||||
Due to related parties | $ 338,000 | $ 338,000 | $ 280,000 | |||
Initial offering period | 2 years | |||||
Potential extension period | 1 year | |||||
Cumulative offering costs, gross | $ 39,500,000 | |||||
Share price (in dollars per share) | $ 22.50 | $ 22.50 | ||||
Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Liability for initial public offering costs | 2.00% | 2.00% | ||||
Offering costs as a percent of common stock proceeds | 15.00% | 15.00% | ||||
Acquisition fees and related cost reimbursements | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | $ 300,000 | $ 300,000 | $ 300,000 | |||
Special Limited Partner | ||||||
Related Party Transaction [Line Items] | ||||||
Operating partnership units held by related party (in shares) | 8,888 | 8,888 | 8,888 | |||
Dealer Manager | ||||||
Related Party Transaction [Line Items] | ||||||
Aggregate costs borne by related party | $ 6,300,000 | $ 6,300,000 | ||||
Advisor and Dealer Manager | ||||||
Related Party Transaction [Line Items] | ||||||
Aggregate costs borne by related party | 0 | $ 0 | ||||
Class B units | Advisor | American Realty Capital Global II Operating Partnership, L.P. | ||||||
Related Party Transaction [Line Items] | ||||||
Unit-based compensation (in shares) | 54,528 | 13,427 | ||||
Nonrecurring Fees | Incurred | Acquisition fees and related cost reimbursements | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 0 | $ 4,289,000 | $ 0 | $ 5,917,000 | ||
Nonrecurring Fees | Incurred | Other expense reimbursements | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | $ 416,000 | $ 0 | $ 873,000 | $ 0 | ||
Gross Proceeds, Retail Shares | Dealer Manager | Realty Capital Securities, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Sales commissions earned by related party | 7.00% | 7.00% | ||||
Gross Proceeds, Retail Shares | Option One | Dealer Manager | Realty Capital Securities, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Gross proceeds from the sales of common stock | 3.00% | 3.00% | ||||
Gross Proceeds, Retail Shares | Option One | Participating Broker-Dealer | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Brokerage fees earned by related party | 7.50% | 7.50% | ||||
Brokerage fees earned by related party, initial grant | 2.50% | 2.50% | ||||
Brokerage fees earned by related party, periodic payment | 1.00% | 1.00% | ||||
Gross Proceeds, Retail Shares | Option Two | Dealer Manager | Realty Capital Securities, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Sales commissions earned by related party | 2.50% | 2.50% | ||||
Contract Purchase Price | Advisor | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Acquisition fees earned by related party | 1.50% | 1.50% | ||||
Quarterly asset management fee earned by related party | 0.1875% | 0.1875% | ||||
Contract Purchase Price | Advisor | American Realty Capital Healthcare II Advisors, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Acquisition fees earned by related party | 4.50% | 4.50% | ||||
Amount Available or Outstanding Under Financing Arrangement | Advisor | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Financing coordination fees earned by related party | 0.75% | 0.75% | 0.0625% | |||
Gross Revenue, Stand-alone Single-tenant Net Leased Properties | Advisor | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fees earned | 2.00% | 2.00% | ||||
Gross Revenue, Stand-alone Single-tenant Net Leased Properties | Advisor | Europe | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fees earned | 1.75% | 1.75% | ||||
Gross Revenue, Stand-alone Single-tenant Net Leased Properties | Property Manager | Europe | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fees earned | 0.25% | 0.25% | ||||
Gross Revenue, Excluding Stand-alone Single-tenant Net Leased Properties | Advisor | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fees earned | 4.00% | 4.00% | ||||
Gross Revenue, Excluding Stand-alone Single-tenant Net Leased Properties | Advisor | Europe | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fees earned | 3.50% | 3.50% | ||||
Gross Revenue, Excluding Stand-alone Single-tenant Net Leased Properties | Property Manager | Europe | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fees earned | 0.50% | 0.50% | ||||
Gross Revenue, Managed Properties | Advisor | American Realty Capital Healthcare II Advisors, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Oversight fees earned by related party | 1.00% | 1.00% | ||||
Average Invested Assets | Greater Of | Advisor | American Realty Capital Healthcare II Advisors, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Operating expenses | 2.00% | 2.00% | ||||
Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets | Greater Of | Advisor | American Realty Capital Healthcare II Advisors, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Operating expenses | 25.00% | 25.00% | ||||
Pre-tax Non-compounded Return on Capital Contribution | Advisor | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Cumulative capital investment return | 6.00% | 6.00% | ||||
Subordinated performance fee earned | 15.00% | 15.00% | ||||
Pre-tax Non-compounded Return on Capital Contribution | Advisor | American Realty Capital Healthcare II Advisors, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Subordinated performance fee earned | 10.00% | 10.00% | ||||
Pre-tax Non-compounded Return on Capital Contribution | Advisor | Annual Targeted Investor Return | American Realty Capital Global Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Cumulative capital investment return | 6.00% | 6.00% | ||||
Contract Sales Price | Advisor | American Realty Capital Healthcare Advisors, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Real estate commission earned by related | 2.00% | 2.00% | ||||
Contract Sales Price | Advisor | Real Estate Commissions | American Realty Capital Healthcare II Advisors, LLC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Real estate commission earned by related | 6.00% | 6.00% | ||||
Net Sale Proceeds, after Return of Capital Contributions and Annual Targeted Investor Return | Advisor | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Subordinated performance fee earned | 15.00% | 15.00% | ||||
Excess of Adjusted Market Value of Real Estate Assets Plus Distributions Over Aggregate Contributed Investor Capital | Advisor | American Realty Capital Healthcare II Advisors, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Subordinated incentive listing distribution | 15.00% | 15.00% | ||||
Distribution upon nonrenewal of advisory agreement | 15.00% | 15.00% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Selling Commissions and Dealer Manager Fees Payable to Affiliate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 338 | $ 338 | $ 280 | ||
Realty Capital Securities, LLC | Sales Commissions and Dealer Manager Fees | Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | $ 10,658 | 0 | $ 17,400 | |
Due to related parties | $ 0 | $ 0 | $ 0 |
Related Party Transactions - 56
Related Party Transactions - Schedule of Offering Costs Reimbursements to Related Party (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 338 | $ 338 | $ 280 | ||
American Realty Capital Global Advisors, LLC and Realty Capital Securities, LLC | Fees and Expense Reimbursement, Stock Offering | Advisor and Dealer Manager | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | $ 3,344 | 0 | $ 5,558 | |
Due to related parties | $ 283 | $ 283 | $ 283 |
Related Party Transactions - 57
Related Party Transactions - Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 338,000 | $ 338,000 | $ 280,000 | ||
General and Administrative Expense | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | $ 59,000 | ||||
United States | Advisor | |||||
Related Party Transaction [Line Items] | |||||
Percent of fees from net assets forgiven | 100.00% | 100.00% | |||
Europe | Advisor | |||||
Related Party Transaction [Line Items] | |||||
Percent of fees from net assets forgiven | 50.00% | 50.00% | |||
Acquisition fees and related cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 300,000 | $ 300,000 | 300,000 | ||
Incurred | Total related party fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 1,850,000 | $ 5,389,000 | 3,863,000 | $ 8,274,000 | |
Incurred | Nonrecurring Fees | Acquisition fees and related cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | 4,289,000 | 0 | 5,917,000 | |
Incurred | Nonrecurring Fees | Financing coordination fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | 1,044,000 | 77,000 | 2,267,000 | |
Incurred | Nonrecurring Fees | Other expense reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 416,000 | 0 | 873,000 | 0 | |
Incurred | Recurring Fees | Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 1,191,000 | 0 | 2,453,000 | 0 | |
Incurred | Recurring Fees | Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 243,000 | 56,000 | 460,000 | 90,000 | |
Forgiven | Total related party fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | 15,000 | 0 | 19,000 | |
Forgiven | Nonrecurring Fees | Acquisition fees and related cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | 0 | 0 | 0 | |
Forgiven | Nonrecurring Fees | Financing coordination fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | 0 | 0 | 0 | |
Forgiven | Nonrecurring Fees | Other expense reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | 0 | 0 | ||
Forgiven | Recurring Fees | Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | 0 | 0 | 0 | |
Forgiven | Recurring Fees | Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses from transactions with related party | 0 | $ 15,000 | 0 | $ 19,000 | |
Payable | Total related party fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | (3,000) | (3,000) | 24,000 | ||
Payable | Nonrecurring Fees | Acquisition fees and related cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 0 | 0 | ||
Payable | Nonrecurring Fees | Financing coordination fees | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 0 | 0 | ||
Payable | Nonrecurring Fees | Other expense reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 7,000 | 7,000 | 0 | ||
Payable | Recurring Fees | Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 0 | 0 | ||
Payable | Recurring Fees | Property management and leasing fees | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ (10,000) | $ (10,000) | $ 24,000 |
Share Based Compensation - Narr
Share Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 9 | |||
Common stock issued in lieu of cash (in shares) | 0 | 412 | ||
Restricted Share Plan | Unvested restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares granted automatically upon election to board of directors (in shares) | 1,333 | 1,333 | ||
Vesting period | 5 years | |||
Periodic vesting percentage | 20.00% | 20.00% | ||
Maximum authorized amount as a percentage of shares authorized | 5.00% | |||
Number of shares authorized (in shares) | 6,300,000 | 6,300,000 | ||
Share-based compensation | $ 6 | $ 3 | $ 100 | $ 6 |
Compensation cost not yet recognized | $ 100 | $ 100 | ||
Period for recognition of costs not yet recognized | 24 months |
Share Based Compensation - Sche
Share Based Compensation - Schedule of Restricted Share Award Activity (Details) - Restricted Share Plan - Unvested restricted stock | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Unvested shares (shares), beginning balance | shares | 7,731 |
Granted (shares) | shares | 0 |
Vested (shares) | shares | (3,466) |
Forfeitures (shares) | shares | 0 |
Unvested shares (shares), ending balance | shares | 4,265 |
Weighted-Average Issue Price | |
Weighted average price (in dollars per share), beginning balance | $ / shares | $ 22.50 |
Grants (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 22.50 |
Forfeitures (in dollars per share) | $ / shares | 0 |
Weighted average price (in dollars per share), ending balance | $ / shares | $ 22.50 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (3,123) | $ (14,790) | $ (7,786) | $ (23,009) |
Basic and diluted net loss per share (in dollars per share) | $ (0.25) | $ (2.18) | $ (0.63) | $ (4.99) |
Basic and diluted weighted average shares outstanding (shares) | 12,412,618 | 6,773,666 | 12,363,312 | 4,614,053 |
Earnings Per Share - Schedule61
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Common share equivalents (shares) | 129,375 | 17,336 | 129,375 | 17,336 |
Unvested restricted stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Common share equivalents (shares) | 4,265 | 3,999 | 4,265 | 3,999 |
OP Units | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Common share equivalents (shares) | 90 | 90 | 90 | 90 |
Class B units | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Common share equivalents (shares) | 125,020 | 13,247 | 125,020 | 13,247 |
Subsequent Events - Modificatio
Subsequent Events - Modification to Mezzanine Facility (Details) $ in Thousands, € in Millions, £ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 31, 2016EUR (€) | Dec. 31, 2016GBP (£) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2017GBP (£) | |
Subsequent Event [Line Items] | |||||
Repayments on credit facility | $ | $ 27,219 | $ 0 | |||
Mezzanine Facility | Gross mortgage notes payable | Scenario, Forecast | |||||
Subsequent Event [Line Items] | |||||
Repayments on credit facility | £ | £ 1.8 | £ 3.7 | |||
Mezzanine Facility | Gross mortgage notes payable | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Repayments on credit facility | € | € 10.2 |
Subsequent Events - Merger Agre
Subsequent Events - Merger Agreement (Details) | Aug. 08, 2016USD ($)$ / shares | Jun. 30, 2016property$ / shares | Dec. 31, 2015property$ / shares | Aug. 26, 2014$ / shares |
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |
Number of real estate properties (property) | property | 16 | 16 | ||
Merger Agreement | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||
Transaction expenses | $ | $ 5,000,000 | |||
Potential termination fee | $ | 6,000,000 | |||
Potential termination fee if the company enters into a qualified Superior Proposal | $ | $ 1,200,000 | |||
Period to enter into a qualified Superior Proposal | 15 days | |||
Merger Agreement | Global Net Lease | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||
Common Stock | Merger Agreement | Global Net Lease | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock conversion ratio | 2.27 | |||
Common Stock | Merger Agreement | Class B units | Global Net Lease | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock conversion ratio | 2.27 | |||
Common Stock | Merger Agreement | OP Units | Global Net Lease | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock conversion ratio | 2.27 |