Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 12-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | dea | |
Entity Registrant Name | Easterly Government Properties, Inc. | |
Entity Central Index Key | 1622194 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,168,379 |
Combined_Consolidated_Balance_
Combined Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Real estate properties, net | $627,608 | |
Real estate investments, at fair value | 267,683 | |
Cash and cash equivalents | 11,922 | 31,437 |
Restricted cash | 1,585 | |
Deposits on acquisitions | 20,167 | |
Rents receivable | 5,337 | |
Accounts receivable | 3,228 | |
Deferred financing, net | 3,281 | |
Intangible assets, net | 105,856 | |
Prepaid expenses and other assets | 1,148 | 1,385 |
Total assets | 780,132 | 300,505 |
Liabilities | ||
Revolving credit facility | 30,917 | |
Mortgage notes payable | 69,981 | |
Intangible liabilities, net | 35,841 | |
Accounts payable and accrued liabilities | 5,979 | 3,321 |
Total liabilities | 142,718 | 3,321 |
Equity | ||
Common stock, par value $0.01, 200,000,000 and 100,000 shares authorized, 24,168,379 and 1,000 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 241 | |
Additional paid-in capital | 390,786 | 1 |
Retained (deficit) | -2,885 | |
Members' capital | 13,336 | |
Non-controlling interest | 283,847 | |
Non-controlling interest in operating partnership | 249,272 | |
Total equity | 637,414 | 297,184 |
Total liabilities and equity | $780,132 | $300,505 |
Combined_Consolidated_Balance_1
Combined Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, par value | $0.01 | $0.01 |
Common Stock, shares authorized | 200,000,000 | 100,000 |
Common Stock, shares issued | 24,168,379 | 1,000 |
Common Stock, shares outstanding | 24,168,379 | 1,000 |
Combined_Consolidated_Statemen
Combined Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues | ||
Rental income | $9,304 | |
Tenant reimbursements | 776 | |
Other income | 11 | |
Income from real estate investments | 1,116 | |
Total revenues | 10,091 | 1,116 |
Operating Expenses | ||
Property operating | 1,730 | |
Real estate taxes | 959 | |
Depreciation and amortization | 4,900 | |
Acquisition costs | 1,440 | |
Formation expenses | 1,594 | |
Corporate general and administrative | 1,572 | 916 |
Fund general and administrative | 75 | 259 |
Total expenses | 12,270 | 1,175 |
Operating (loss) income | -2,179 | -59 |
Other (expenses) / income | ||
Interest expense, net | -700 | |
Net unrealized (loss) gain on investments | -5,122 | 7,480 |
Net (loss) income | -8,001 | 7,421 |
Non-controlling interest in operating partnership | -5,116 | |
Net (loss) income available to Easterly Government Properties, Inc. | -2,885 | 6,520 |
Net (loss) income available to Easterly Government Properties, Inc. per share: | ||
Basic | ($0.22) | |
Diluted | ($0.22) | |
Weighted- average common shares outstanding | ||
Basic | 13,144,277 | |
Diluted | 13,144,227 | |
Easterly Partners, LLC [Member] | ||
Other (expenses) / income | ||
Non-controlling interest in operating partnership | $901 |
Combined_Consolidated_Statemen1
Combined Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities | ||
Net (loss) income | ($8,001) | $7,421 |
Adjustments to reconcile net (loss) income to net cash (used in) operating activities | ||
Depreciation and amortization | 4,900 | |
Net unrealized gain (loss) on investments | 5,122 | -7,480 |
Cash flows from financing activities | ||
Repayments of mortgage payable | 24,500 | |
Cash and cash equivalents, beginning of period | 31,437 | |
Cash and cash equivalents, end of period | 11,922 | |
Easterly Government Properties LP [Member] | ||
Cash flows from operating activities | ||
Net (loss) income | -8,001 | 7,421 |
Adjustments to reconcile net (loss) income to net cash (used in) operating activities | ||
Depreciation and amortization | 4,212 | |
Amortization of deferred financing costs | 116 | |
Purchase of investments | -30,316 | |
Deposits for potential new investments | 668 | |
Contributions to investments | -257 | -748 |
Distributions from investments | 1,366 | |
Net unrealized gain (loss) on investments | 5,122 | -7,480 |
Other | 55 | 184 |
Net change in: | ||
Rents receivable | -3,858 | |
Accounts receivable | -640 | |
Prepaid expenses and other assets | -417 | 636 |
Accounts payable and accrued liabilities | 2,297 | -35 |
Net cash (used in) operating activities | -1,371 | -28,304 |
Cash flows from investing activities | ||
Deposits on acquisitions | -20,167 | |
Cash assumed in formation | 6,187 | |
Additions to real estate property | -26 | |
Restricted cash | 53 | |
Net cash (used in) investing activities | -13,953 | |
Cash flows from financing activities | ||
Payment of deferred financing costs | -3,379 | |
Issuance of common shares | 193,545 | |
Repurchase of initial shares | -1 | |
Proceeds from private placement | 75,638 | |
Credit facility draws, net | 30,917 | |
Repayments of mortgage payable | -334 | |
Debt payoff | -293,381 | |
Contributions | 30,325 | |
Distributions | -5,441 | -3,186 |
Payment of offering costs | -1,755 | |
Net cash provided by (used in) financing activities | -4,191 | 27,139 |
Net decrease in cash and cash equivalents | -19,515 | -1,165 |
Cash and cash equivalents, beginning of period | 31,437 | 3,363 |
Cash and cash equivalents, end of period | 11,922 | 2,198 |
Supplemental disclosure of cash flow information is as follows (amounts in thousands): | ||
Cash paid for interest, net | 569 | |
Additions to real estate property | 7 | |
Contribution for shares and OPUs | 260,687 | |
Deferred offering accrued, not paid | 207 | |
Deferred financing accrued, not paid | 18 | |
Easterly Government Properties LP [Member] | Western Devcon, Inc [Member] | ||
Supplemental disclosure of cash flow information is as follows (amounts in thousands): | ||
Contribution for shares and OPUs | $86,397 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation |
Easterly Government Properties, Inc. (which may be referred to in these financial statements as the “Company,” “we,” “us,” or “our”) is a Maryland corporation that intends to qualify as a real estate investment trust (a “REIT”) under the Internal Revenue Code (the “Code”) commencing with its taxable period ending on December 31, 2015. The operations of the Company are carried on primarily through Easterly Government Properties LP (the “Operating Partnership”) and the wholly owned subsidiaries of the Operating Partnership. | |
We are an internally managed REIT, focused primarily on the acquisition, development, and management of Class A commercial properties that are leased to U.S. Government agencies that serve essential functions. We generate substantially all of our revenue by leasing our properties to such agencies through the U.S. General Services Administration (the “GSA”). Our objective is to generate attractive risk-adjusted returns for our stockholders over the long term through Funds from Operations per share, dividends and capital appreciation. | |
As of March 31, 2015, we wholly owned 29 properties in the United States, including 26 properties that were leased primarily to U.S. Government tenant agencies and three properties that were entirely leased to private tenants, encompassing approximately 2.1 million square feet in the aggregate. We focus on acquiring, developing, and managing GSA-leased properties that are essential to supporting the mission of the tenant agency and strive to be a partner of choice for the U.S. Government, working closely with the GSA to meet the needs and objectives of the tenant agency. | |
We were incorporated in Maryland as a corporation on October 9, 2014 and did not have any meaningful operations until the completion of the formation transactions and our initial public offering on February 11, 2015 (the “IPO”). On February 11, 2015, we completed an initial public offering of 13.8 million shares of our common stock at a price to the public of $15.00 per share, including 1.8 million shares sold in connection with the full exercise of the option to purchase additional shares granted to the underwriters, resulting in gross proceeds of $207.0 million. The aggregate net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses payable by the Company, was approximately $191.6 million. The Company contributed the net proceeds from the IPO to the Operating Partnership in exchange for common units representing limited partnership interests in the Operating Partnership (“common units”). | |
In connection with the IPO, we engaged in certain formation transactions (the “formation transactions”) pursuant to which our operating partnership acquired (i) 15 properties previously owned by the Easterly Funds (as defined below) in exchange for 3,308,000 shares of common stock and 8,635,714 common units (ii) 14 properties previously owned by Western Devcon, Inc., a private real estate company and a series of related entities beneficially owned by Michael P. Ibe (collectively, “ Western Devcon”) in exchange for 5,759,819 common units and (iii) all of the ownership interests in the management entities (as defined below) in exchange for 1,135,406 common units. | |
Concurrent with the IPO, the Company sold an aggregate of 7,033,712 shares of its common stock to the Easterly Funds in a private placement at a price per share of $15.00 without payment of any underwriting fees, discounts or commissions. | |
Our predecessor (the “Predecessor”) means Easterly Partners, LLC and its consolidated subsidiaries, including (i) all entities or interests in U.S. Government Properties Income and Growth Fund L.P., U.S. Government Properties Income and Growth Fund REIT, Inc. and the related feeder and subsidiary entities (collectively, “Easterly Fund I,”) (ii) all entities or interests in U.S. Government Properties Income and Growth Fund II, LP, USGP II REIT LP, USGP II (Parallel) Fund, LP and their related feeders and subsidiary entities (collectively, “Easterly Fund II” and, together with Easterly Fund I, the “Easterly Funds”) and (iii) the entities that manage the Easterly Funds, (the “management entities”). | |
All of the Company’s assets and its operations are primarily conducted through the Operating Partnership. The Company is the sole general partner of the Operating Partnership. The Company owned 60.9% of the Operating Partnership’s common units at March 31, 2015 and the remaining 39.1% was owned by the Easterly Funds and certain members of management. | |
Principle of Combination and Consolidation | |
The accompanying consolidated financial statements are presented on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company, including Easterly Government Properties TRS, LLC and Easterly Government Services, LLC, and the Operating Partnership. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Upon completion of the IPO and the related formation transactions, the Company succeeded to the operations of the Predecessor. Prior to the IPO, the Predecessor was under the control of Darrell W. Crate, the Chairman of our Board of Directors. | |
These financial statements reflect the consolidated equity ownership structure of the Company as if the IPO and formation transactions related to the Easterly Funds and management entities had been completed as of January 1, 2014. The formation transactions related to the Easterly Funds and the management entities were accounted for at carryover basis due to the existence of common control. | |
Prior to the IPO, the Easterly Funds, as controlled by the Predecessor, qualified as investment companies pursuant to ASC 946 Financial Services – Investment Companies and, as a result, the Predecessor’s consolidated financial statements accounted for the Easterly Funds using specialized investment company accounting based on fair value. Subsequent to the IPO, as the properties contributed to us from the Easterly Funds are no longer held by funds that qualify for investment company accounting, we made a shift, in accordance with GAAP to account for the properties contributed by the Easterly Funds using historical cost accounting instead of investment company accounting, resulting in a significant change in the presentation of our consolidated financial statements following the formation transactions. The contribution of the Western Devcon properties in the formation transactions has been accounted for as a business combination using the acquisition method of accounting and recognized at the estimated fair value of acquired assets and assumed liabilities on the date of such contribution. | |
Due to the timing of the IPO and the formation transactions, the Company’s financial condition as of December 31, 2014 reflects the financial condition of the Company and the Predecessor and the results of operations for the three months ended March 31, 2014 reflect the financial condition and results of operations of the Predecessor. The Company’s financial condition and results of operations for the three months ended March 31, 2015 reflect the financial condition and results of operations of the Predecessor combined with the Company for the period prior to February 11, 2015, and the Company’s consolidated results for the period from February 11, 2015 through March 31, 2015. | |
Interim Financial Information | |
The information in the Company’s combined consolidated financial statements for the three months ended March 31, 2015 and 2014 and at December 31, 2014 is unaudited. All significant inter-company balances and transactions have been eliminated in consolidation. The accompanying financial statements for the three months ended March 31, 2015 and 2014 and at December 31, 2014 include adjustments based on management’s estimates (consisting of normal and recurring accruals), which the Company considers necessary for a fair presentation of the results for the periods. The financial information should be read in conjunction with the combined consolidated financial statements contained in the Company’s 2014 Annual Report on Form 10-K for the year ended December 31, 2014 and the notes thereto and the final prospectus relating to the IPO, dated February 5, 2015, both of which the Company filed with the Securities and Exchange Commission (the “SEC”). Operating results for the three months ended March 31, 2015 and 2014 are not necessarily indicative of actual operating results for the entire year. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Accounting Policies [Abstract] | ||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | |||
The accompanying unaudited interim combined consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. | ||||
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||
In light of the significant differences that exist between our basis of accounting subsequent to the IPO (historical cost accounting) and the pre-IPO basis of accounting (investment company accounting), we present the significant accounting policies for both periods below. | ||||
a) Significant Accounting Policies for the Company post-IPO | ||||
Real Estate Properties | ||||
Real estate properties comprise all tangible assets we hold for rent. Real property is recognized at cost less accumulated depreciation. Betterments, major renovations and certain costs directly related to the improvement of real properties are capitalized. Maintenance and repair expenses are charged to expense as incurred. | ||||
When we acquire properties, we allocate the purchase price to numerous tangible and intangible components. Our process for determining the allocation to these components requires many estimates and assumptions, including the following: (1) determination of market rental rates; (2) estimation of leasing and tenant improvement costs associated with the remaining term of acquired leases; (3) assumptions used in determining the in-place lease and if-vacant value including the rental rates, period of time that it would take to lease vacant space and estimated tenant improvement and leasing costs; (4) renewal probabilities; and (5) allocation of the if-vacant value between land and building. A change in any of the above key assumptions can materially change not only the presentation of acquired properties in our consolidated financial statements but also our reported results of operations. The allocation to different components affects the following: | ||||
• | the amount of the purchase price allocated among different categories of assets and liabilities on our consolidated balance sheets; and the amount of costs assigned to individual properties in multiple property acquisitions; | |||
• | where the amortization of the components appear over time in our consolidated statements of operations. Allocations to above- and below-market leases are amortized into rental revenue, whereas allocations to most of the other tangible and intangible assets are amortized into depreciation and amortization expense. As a REIT, this is important to us since much of the investment community evaluates our operating performance using non-GAAP measures such as funds from operations, the computation of which includes rental revenue but does not include depreciation and amortization expense; and | |||
• | the timing over which the items are recognized as revenue or expense in our consolidated statements of operations. For example, for allocations to the as-if vacant value, the land portion is not depreciated and the building portion is depreciated over a longer period of time than the other components (generally 40 years). Allocations to above- and below-market leases and in-place lease value are amortized over significantly shorter timeframes, and if individual tenants’ leases are terminated early, any unamortized amounts remaining associated with those tenants are written off upon termination. These differences in timing can materially affect our reported results of operations. | |||
Tenant improvements are capitalized in real property when we own the improvement. When we are required to provide improvements under the terms of a lease, we need to determine whether the improvements constitute landlord assets or tenant assets. If the improvements are considered landlord assets, we capitalize the cost of the improvements and recognize depreciation expense associated with such improvements over the shorter of the useful life of the assets or the term of the lease and recognize any payments from the tenant as rental revenue over the term of the lease. If the improvements are considered tenant assets, we defer the cost of improvements funded by us as a lease incentive asset and amortize it as a reduction of rental revenue over the term of the lease. Our determination of whether improvements are landlord assets or tenant assets also may affect when we commence revenue recognition in connection with a lease. In determining whether improvements constitute landlord or tenant assets, we consider numerous factors that may require subjective or complex judgments, including: whether the improvements are unique to the tenant or reusable by other tenants; whether the tenant is permitted to alter or remove the improvements without our consent or without compensating us for any lost fair value; whether the ownership of the improvements remains with us or remains with the tenant at the end of the lease term; and whether the economic substance of the lease terms is properly reflected. | ||||
Depreciation of an asset begins when it is available for use and is calculated using the straight-line method over the estimated useful lives. Each period, depreciation is charged to expense and credited to the related accumulated depreciation account. A used asset acquired is depreciated over its estimated remaining useful life, not to exceed the life of a new asset. Range of useful lives for depreciable assets are as follows: | ||||
Category | Term | |||
Buildings | 40 years | |||
Building improvements | 5 - 40 years | |||
Tenant improvements | Shorter of remaining life of the lease or useful life | |||
Furniture and equipment | 3 - 7 years | |||
We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of long lived assets. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected undiscounted cash flows to determine if an impairment loss should be recognized. We determine the amount of any impairment loss by comparing the historical carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. In addition to consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining lives of our long lived assets. If we change our estimate of the remaining lives, we allocate the carrying value of the affected assets over their revised remaining lives. | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents include all cash and liquid investments that mature three months or less from when they are purchased. Cash equivalents are reported at cost, which approximates fair value. We maintain our cash in bank accounts in amounts that may exceed Federally insured limits at times. We have not experienced any losses in these accounts and believe that we are not exposed to significant credit risk because our accounts are deposited with major financial institutions. | ||||
Restricted Cash | ||||
Restricted cash consists of amounts escrowed for future real estate taxes, insurance, capital expenditures and debt service, as required by certain of our mortgage debt agreements. | ||||
Deferred Financing Costs | ||||
Deferred financing fees include issuance costs related to borrowings and we amortize those costs over the terms of the related indebtedness. Any unamortized amounts upon early repayment of mortgage notes payable are written off in the period in which repayment occurs. Fully amortized deferred financing fees are removed from the books upon maturity or repayment of the underlying debt. As of March 31, 2015, we recognized $3.4 million in deferred financing costs and $0.1 million in accumulated amortization associated with entering into a $400.0 million senior unsecured revolving credit facility upon completion of the IPO. | ||||
Non-Controlling Interests | ||||
Non-controlling interests relate to the common units of the Operating Partnership not owned by the Company. Common units of the Operating Partnership are owned by the limited partners who contributed properties and other assets to the Operating Partnership in exchange for common units. The Company contributed the net proceeds from the IPO to the Operating Partnership in exchange for common units of limited partnership interests in the Operating Partnership. Fifteen months after the IPO, limited partners of the Operating Partnership, other than the Company, will have the right to require the Operating Partnership to redeem part or all of their common units for cash, based upon the value of an equivalent number of shares of the Company’s common stock at the time of the election to redeem, or, at the Company’s election, shares of the Company’s common stock on a one-for-one basis. Unitholders receive a distribution per unit equivalent to the dividend per share of the Company’s common stock. Pursuant to the consolidation accounting standard with respect to the accounting and reporting for non-controlling interest changes and changes in ownership interest of a subsidiary, changes in parent’s ownership interest when the parent retains controlling interest in the subsidiary should be accounted for as equity transactions. The carrying amount of the non-controlling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the Company. | ||||
Revenue Recognition | ||||
Rental income includes base rents paid by each tenant in accordance with its lease agreement conditions. We recognize rental income on a straight-line basis over the lease term of the respective leases. For acquisitions of existing buildings, we recognize rental income from leases already in place coincident with the date of property closing. Lease incentives are recorded as a deferred asset and amortized as a reduction of revenue on a straight-line basis over the respective lease term. Tenant reimbursement income (scheduled rent increases based on increases in real estate taxes, operating expenses and utility usage) is recognized by us in the consolidated statements of operations when earned and when their amounts can be reasonably estimated. Above- and below-market leases are amortized into rental revenue over the terms of the respective leases. | ||||
Income Taxes | ||||
We intend to elect and to qualify as a REIT for U.S. federal income tax purposes commencing with the taxable year ending December 31, 2015. So long as we qualify as a REIT, we generally will not be subject to U.S. federal income tax on our net income that we distribute to our stockholders. To maintain our qualification as a REIT, we are required under the Code to distribute at least 90% of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to our stockholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates. Even if we qualify as a REIT, we will be subject to certain U.S. federal, state and local taxes on our income and property, and on taxable income that we do not distribute to our stockholders. In addition, we may provide services that are not customarily provided by a landlord, hold properties for sale and engage in other activities (such as a management business) through Taxable REIT Subsidiaries (“TRSs”) and the income of those subsidiaries will be subject to U.S. federal income tax at regular corporate rates. For the period ending March 31, 2015, we did not incur any material tax liability associated with any of the above. | ||||
We do not anticipate any potential expense related to uncertain tax positions as we closely monitor our REIT compliance, do not have any prohibited transactions related to property sales, and neither the states in which we operate nor our foreign investors subject us to withholding tax requirements. | ||||
Stock Based Compensation | ||||
Prior to the completion of the IPO, our Board of Directors adopted, and our sole stockholder approved, our 2015 Equity Incentive Plan, under which we may grant future cash and equity incentive awards to our executive officers, non-employee directors and eligible employees. See Note 6 (Equity) for further information. The shares issued to officers, employees, and non-employee directors vest over a period of time as determined by the Board of Directors at the date of grant. The Company recognizes compensation expense for non-vested shares granted to officers, employees and non-employee directors on a straight-line basis over the requisite service period based upon the fair market value of the shares on the date of grant, as adjusted for forfeitures. | ||||
Earnings Per Share of Common Stock Amount | ||||
Basic earnings per share is calculated by dividing net income available to Easterly Government Properties Inc. by the weighted-average number of shares of common stock outstanding during the period, excluding the weighted average number of unvested restricted shares. Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities such as stock grants or shares that would be issued in the event that common units of the Operating Partnership are redeemed for shares of common stock of the Company. No adjustment is made for shares that are anti-dilutive during a period. | ||||
Deferred Offering Costs | ||||
The Company capitalizes certain legal, accounting and other third party fees that are directly associated with in-process equity financings as other assets until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction to capital. Should the equity financing no longer be considered probable of being consummated, the deferred offering costs would be expensed immediately as a charge to corporate general and administrative expenses in the accompanying combined statement of operations. | ||||
Segments | ||||
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. All revenue has been generated in the United States and all tangible assets are held in the United States. | ||||
Application of new accounting standards | ||||
In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance simplifying the presentation of debt issuance costs. The guidance requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. The amortization of these costs will remain under the interest method and will continue to be reported as interest expense. The guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. We have not yet determined the impact, if any, that the adoption of this guidance will have on our consolidated financial statements. | ||||
In February 2015, the FASB issued guidance modifying the analysis a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance does not change the general order in which the consolidation models are applied. A reporting entity that holds an economic interest in, or is otherwise involved with, another legal entity first determines if the variable interest entity model applies, and if so, whether it holds a controlling financial interest under that model. If the entity being evaluated for consolidation is not a variable interest entity, then the voting model should be applied to determine whether the entity should be consolidated by the reporting entity. Key changes to the guidance include, though are not limited to; (i.) limiting the extent to which related party interests are included in the other economic interest criterion to the decision maker’s effective interest holding, (ii.) requiring limited partners of a limited partnership, or the members of a limited liability company that is similar to a limited partnership, to have, at minimum, kick-out or participating rights to demonstrate that the partnership is a voting entity, (iii.) changing the evaluation of whether the equity holders at risk lack decision making rights when decision making is outsourced and (iv.) changing how the economics test is performed. The guidance does not amend the existing disclosure requirements for variable interest entities or voting model entities. The guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We have not yet determined the impact, if any, that the adoption of this guidance will have on our consolidated financial statements. | ||||
b) Significant Accounting Policies of the Company pre-IPO | ||||
Real Estate Investments | ||||
Real estate investments represent investments in real estate entities that own real estate assets and are stated at the fair value of the net equity interest in the real estate investments as discussed below. Subsequent changes in fair value are recorded as unrealized gains or losses. Upon the disposition of a real estate investment, realized gains and losses are determined by deducting the proceeds received by the Predecessor from the basis of the real estate investment; any previously unrealized gains and losses are reversed. | ||||
Distributions from real estate entities are recorded as dividend income when received to the extent distributed from the estimated taxable earnings and profits of the underlying investment vehicle and as a return of capital to the extent not in excess of that amount. | ||||
Under investment company accounting, the statements of operations reflect the change in fair value of the real estate investments of the Easterly Funds, prior to the IPO, whether realized or unrealized. | ||||
Fair Value of Investments | ||||
The fair value of the real estate investments is determined using a fair value hierarchy. The fair value hierarchy is based on the observability of inputs used to measure fair value and requires additional disclosure regarding the fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date (exit price). The fair value of an asset or a liability disregards transaction costs and assumes the asset or liability’s highest and best use. As the investments are in entities that invest in real estate, the estimated values are based on the underlying assets, liabilities, and cash flows of the related properties. The three levels of the fair value hierarchy are described below: | ||||
Level 1 | Valuation is based upon quoted prices for identical assets or liabilities in an active market. | |||
Level 2 | Valuation is based upon observable inputs: | |||
a) Quoted prices for similar assets or liabilities in active markets, | ||||
b) Quoted prices for identical or similar assets or liabilities in not active markets, or | ||||
c) Model-based valuation techniques for which all significant assumptions are observable in the market. | ||||
Level 3 | Valuation is based upon prices or valuation techniques that require assumptions not observable in the market which are significant to the overall fair value measurement. These unobservable inputs reflect the Predecessor’s own estimates about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Valuation techniques include the use of discounted cash flow models, and similar techniques. | |||
Non-Controlling Interest | ||||
Consolidation addresses the accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated capital resulting from operations attributable to the parent and to the non-controlling interest, the changes in a parent’s ownership interest, and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated per ASC 810. | ||||
Prior to the IPO, all of the partners invested in the Easterly Funds represented a non-controlling interest. In addition, prior to the IPO, a third-party member had invested in Federal Properties, GP, LLC, an entity included within the Predecessor, which also represented a non-controlling interest. |
Real_Estate_and_Intangibles
Real Estate and Intangibles | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Real Estate [Abstract] | |||||||||||||
Real Estate and Intangibles | 3. Real Estate and Intangibles | ||||||||||||
Formation transactions | |||||||||||||
The contribution of the investments of the Easterly Funds to the Operating Partnership pursuant to the formation transactions is accounted for as transactions among entities under common control. As a result, the fair value of the real estate investments at the time of the formation transactions was deemed the initial cost. Such fair value was allocated to the underlying real estate properties, related intangible assets and liabilities and mortgage debt ascribed to the properties. Refer to Note 5 (Fair Value Measurements) for additional discussion on fair value. Prior to the IPO on February 11, 2015, the Easterly Funds qualified as investment companies pursuant to ASC 946 Financial Services – Investment Companies and, as a result, the Predecessor’s consolidated financial statements accounted for the Easterly Funds using investment company accounting based on fair value. Subsequent to the IPO, as the properties contributed to us from the Easterly Funds are no longer held by funds that qualify for investment company accounting, we made a shift, in accordance with GAAP to account for the properties contributed by the Easterly Funds using historical cost accounting instead of investment company accounting, resulting in a significant change in the presentation of our consolidated financial statements following the formation transactions. | |||||||||||||
As part of the formation transactions, Western Devcon entered into a contribution agreement with us and the Operating Partnership pursuant to which it contributed its 100% interest in each of 14 properties to the Operating Partnership upon completion of the IPO. In exchange for its contribution, Western Devcon received 5,759,819 common units in the Operating Partnership valued at the time of the IPO at $86.4 million. This contribution has been accounted for as a business combination using purchase accounting. The total estimated purchase price, equal to the aggregate value of the Operating Partnership’s common units, was allocated to the net tangible assets and intangible assets based on their estimated fair values as of the completion of the acquisition of the Western Devcon properties. | |||||||||||||
As part of the formation transactions, we acquired the following properties, as set forth in the table below: | |||||||||||||
Property | Location | Property Type | Rentable Square Feet | ||||||||||
Easterly Portfolio | |||||||||||||
IRS - Fresno | Fresno, CA | Office | 180,481 | ||||||||||
PTO - Arlington | Arlington, VA | Office | 189,871 | ||||||||||
FBI - San Antonio | San Antonio, TX | Office | 148,584 | ||||||||||
FBI - Omaha | Omaha, NE | Office | 112,196 | ||||||||||
ICE - Charleston | North Charleston, SC | Office | 86,733 | ||||||||||
DOT - Lakewood | Lakewood, CO | Office | 122,225 | ||||||||||
USFS II - Albuquerque | Albuquerque, TX | Office | 98,720 | ||||||||||
USFS I - Albuquerque | Albuquerque, TX | Office | 92,455 | ||||||||||
AOC - Del Rio | Del Rio, TX | Courthouse/Office | 89,880 | ||||||||||
DEA - Dallas | Dallas, TX | Office | 71,827 | ||||||||||
DEA - Albany | Albany, NY | Office | 31,976 | ||||||||||
FBI - Little Rock | Little Rock, AR | Office | 101,977 | ||||||||||
CBP - Sunburst | Sunburst, MT | Office | 33,000 | ||||||||||
USCG - Martinsburg | Martinsburg, WV | Office | 59,547 | ||||||||||
MEPCOM - Jacksonville | Jacksonville, FL | Office | 30,000 | ||||||||||
Total | 1,449,472 | ||||||||||||
Western Devcon | |||||||||||||
CBP - Savannah | Savannah, GA | Laboratory | 35,000 | ||||||||||
AOC - El Centro | El Centro, CA | Courthouse/Office | 46,813 | ||||||||||
DEA - Vista | Vista, CA | Laboratory | 54,119 | ||||||||||
DEA - Santa Ana | Santa Ana, CA | Office | 39,905 | ||||||||||
CBP - Chula Vista | Chula Vista, CA | Office | 59,397 | ||||||||||
DEA - North Highlands | Sacramento, CA | Office | 37,975 | ||||||||||
DEA - Otay | San Diego, CA | Office | 32,560 | ||||||||||
DEA - Riverside | Riverside, CA | Office | 34,354 | ||||||||||
SSA - Mission Viegjo | Mission Viejo, CA | Office | 11,590 | ||||||||||
SSA - San Diego | San Diego, CA | Office | 11,743 | ||||||||||
DEA - San Diego | San Diego, CA | Warehouse | 16,100 | ||||||||||
2650 SW 145th Avenue - Parbel of Florida | Miramar, FL | Warehouse/Distribution | 81,721 | ||||||||||
5998 Osceola Court - United Technologies | Midland, GA | Manufacturing Warehouse | 105,641 | ||||||||||
501 East Hunter Street - Lummus Corporation | Lubbock, TX | Distribution | 70,078 | ||||||||||
Total | 636,996 | ||||||||||||
The fair values of the assets acquired and liabilities assumed upon completion of the formation transactions are as follows (dollars in thousands): | |||||||||||||
Easterly Portfolio | Western Devcon, Inc. | Total | |||||||||||
Real Estate | |||||||||||||
Land | $ | 43,681 | $ | 35,573 | $ | 79,254 | |||||||
Building | 411,472 | 107,424 | 518,896 | ||||||||||
Acquired tenant improvements | 27,441 | 4,388 | 31,829 | ||||||||||
Total Real Estate | 482,594 | 147,385 | 629,979 | ||||||||||
Intangibles | |||||||||||||
In-place leases | 61,218 | 21,308 | 82,526 | ||||||||||
Acquired leasing commissions | 11,257 | 4,350 | 15,607 | ||||||||||
Above market leases | 2,644 | 7,763 | 10,407 | ||||||||||
Total Intangibles | 75,119 | 33,421 | 108,540 | ||||||||||
Deferred Market Liabilities | |||||||||||||
Below market leases | (34,383 | ) | (2,322 | ) | (36,705 | ) | |||||||
Total Deferred Market Liabilities | (34,383 | ) | (2,322 | ) | (36,705 | ) | |||||||
Debt Assumed | (271,622 | ) | (92,087 | ) | (363,709 | ) | |||||||
Net Current Assets Transferred | 8,979 | — | 8,979 | ||||||||||
Net assets acquired | $ | 260,687 | $ | 86,397 | $ | 347,084 | |||||||
The fair value of the assets acquired and liabilities assumed in 2015 are preliminary as we continue to finalize their acquisition date fair value determination. | |||||||||||||
The intangible assets and liabilities recognized in our formation transactions have an aggregate weighted average amortization period of 7.51 years as of March 31, 2015. | |||||||||||||
For the period of February 11, 2015 to March 31, 2015, we included $10.1 million of revenues, and $2.2 million of net income, respectively, in our consolidated statement of operations related to the properties contributed or acquired as part of the formation transactions. During the three months ended March 31, 2015, we incurred $1.4 million of acquisition-related costs associated with the contribution of Western Devcon assets and $1.6 million in formation expenses, which include costs associated with the contribution of the investments of the Easterly Funds. | |||||||||||||
Pro Forma Financial Information | |||||||||||||
The unaudited pro forma financial information set forth below presents results for the three months ended March 31, 2015 and March 31, 2014 as if the formation transactions had occurred on January 1, 2014. The pro forma information is not necessarily indicative of the results that actually would have occurred nor does it intend to indicate future operating results future operating results (dollars in thousands): | |||||||||||||
For the three months ended | |||||||||||||
March 31, | |||||||||||||
Proforma (unaudited) | 2015 | 2014 | |||||||||||
Total rental revenue | $ | 18,536 | $ | 18,536 | |||||||||
Net income (loss) | 1,127 | (1,907 | ) | ||||||||||
Real estate and intangibles consisted of the following as of March 31, 2015 (dollars in thousands): | |||||||||||||
Total | |||||||||||||
Real Estate | |||||||||||||
Land | $ | 79,254 | |||||||||||
Building | 518,929 | ||||||||||||
Acquired tenant improvements | 31,829 | ||||||||||||
Accumulated amortization | (2,404 | ) | |||||||||||
Total Real Estate | 627,608 | ||||||||||||
Intangibles | |||||||||||||
In-place leases | 82,526 | ||||||||||||
Acquired leasing commissions | 15,607 | ||||||||||||
Above market leases | 10,407 | ||||||||||||
Accumulated amortization | (2,684 | ) | |||||||||||
Total Intangibles | 105,856 | ||||||||||||
Intangible Liabilities | |||||||||||||
Below market leases | (36,705 | ) | |||||||||||
Accumulated amortization | 864 | ||||||||||||
Total Intangible Liabilities | (35,841 | ) | |||||||||||
The net projected amortization of total intangible assets and intangible liabilities as of March 31, 2015 are as follows (dollars in thousands): | |||||||||||||
Intangible assets | |||||||||||||
2015 | $ | 14,664 | |||||||||||
2016 | 18,866 | ||||||||||||
2017 | 17,731 | ||||||||||||
2018 | 14,404 | ||||||||||||
2019 | 9,633 | ||||||||||||
Thereafter | 30,558 | ||||||||||||
$ | 105,856 | ||||||||||||
Intangible liabilities | |||||||||||||
2015 | $ | (4,723 | ) | ||||||||||
2016 | (6,163 | ) | |||||||||||
2017 | (5,966 | ) | |||||||||||
2018 | (5,601 | ) | |||||||||||
2019 | (3,856 | ) | |||||||||||
Thereafter | (9,532 | ) | |||||||||||
$ | (35,841 | ) | |||||||||||
Debt
Debt | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||
Debt | 4. Debt | ||||||||||||||||||||||||
At March 31, 2015, our borrowings consisted of the following (dollars in thousands): | |||||||||||||||||||||||||
Senior unsecured revolving credit facility | $ | 30,917 | |||||||||||||||||||||||
Mortgage debt | 69,981 | ||||||||||||||||||||||||
Total | 100,898 | ||||||||||||||||||||||||
a. | Senior Unsecured Revolving Credit Facility | ||||||||||||||||||||||||
Upon the completion of the IPO on February 11, 2015 we entered into a $400.0 million senior unsecured revolving credit facility with Raymond James Bank, N.A. and Royal Bank of Canada, as co-syndication agents and Citigroup Capital Markets Inc, Raymond James Bank, N.A. and Royal Bank of Canada, as joint lead arrangers and joint book running managers. This credit facility has an accordion feature that provides us with additional capacity, subject to the satisfaction of customary terms and conditions, of up to $250.0 million, for a total facility size of not more than $650.0 million. We intend to use the senior unsecured revolving credit facility to repay indebtedness, fund acquisitions, development and redevelopment opportunities, capital expenditures and the costs of securing new and renewal leases and provide working capital. | |||||||||||||||||||||||||
The Operating Partnership is the borrower under the senior unsecured revolving credit facility and we and certain of our subsidiaries that directly own certain of our properties are guarantors under the credit facility. The senior unsecured revolving credit facility will terminate in four years. In addition, there will be two extension options for the senior unsecured revolving credit facility and each extension option will allow us to extend the senior unsecured revolving credit facility for an additional six months, in each case if certain conditions are satisfied. | |||||||||||||||||||||||||
Our senior unsecured revolving credit facility bears interest, at our option, either at: | |||||||||||||||||||||||||
• | a fluctuating rate equal to the sum of (a) the highest of (x) Citibank, N.A.’s base rate, (y) the federal funds effective rate plus 0.50% and (z) the one-month LIBOR rate plus 1.00% plus (b) a margin ranging from 0.4% to 0.9%, or | ||||||||||||||||||||||||
• | a Eurodollar rate equal to a periodic fixed rate equal to LIBOR plus, a margin ranging from 1.4% to 1.9%, in each case with a margin based on our leverage ratio. | ||||||||||||||||||||||||
Our senior unsecured revolving credit facility also contains certain customary financial covenants, as follows: (i) the maximum ratio of consolidated total indebtedness to total asset value (each as defined in the agreement) may not exceed 60.0% on any date, provided that the maximum ratio may be increased to 65.0% for the two consecutive quarters following the date on which a material acquisition (as defined in the agreement) occurs, (ii) the maximum ratio of consolidated secured indebtedness (as defined in the agreement) to total asset value may not exceed 40.0% on any date, (iii) the maximum ratio of consolidated secured recourse indebtedness (as defined in the agreement) to total asset value may not exceed 15% on any date, (iv) the minimum consolidated tangible net worth (as defined in the agreement) may not, on any date, be less than the sum of an amount equal to 75.0% of our consolidated tangible net worth as of the closing date of the facility plus an amount equal to 75.0% of the aggregate net cash proceeds received by us from any offering of our capital stock after the closing date of the facility, (v) the minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges (each as defined in the agreement) may not be less than 1.50 to 1.00 on any date, (vi) the maximum ratio of consolidated unsecured indebtedness to unencumbered asset value (each as defined in the agreement) may not exceed 60% as of any date and (vii) the minimum ratio of adjusted consolidated net operating income from unencumbered assets (as defined in the agreement) to interest payable on unsecured debt (as determined in accordance with the agreement) shall not be less than 1.75 to 1.00 on any date. Additionally, under the revolving credit facility, our distributions may not exceed the greater of (i) 95.0% of our FFO or (ii) the amount required for us to maintain our status as a REIT and avoid the payment of federal or state income or excise tax. | |||||||||||||||||||||||||
Our senior unsecured revolving credit facility also includes customary limits on the percentage of our total asset value that may be invested in unimproved land, unconsolidated joint ventures, redevelopment and development assets (as defined in the agreement), loans, advances or extensions of credit and investments in mixed used assets and require that we obtain consent for mergers in which the company is not the surviving entity. These financial and restrictive covenants may limit the investments we may make and our ability to make distributions. As of March 31, 2015, we were in compliance with all financial and restrictive covenants under our senior unsecured revolving credit facility. | |||||||||||||||||||||||||
During the first quarter of 2015, we borrowed a total of $55.4 million under the senior unsecured revolving credit facility, of which $35.4 million was drawn upon entering into the senior unsecured revolving credit facility. We repaid $24.5 million of the outstanding balance with proceeds from the underwriter’s exercise of their overallotment option at the time of IPO. We also drew $20.0 million in anticipation of the purchase of a property in Lakewood, Colorado which is recorded within deposits on acquisitions at March 31, 2015. For the three months ended March 31, 2015, our weighted average borrowings under the unsecured revolving credit facility was $19.5 million, with a weighted average interest rate of 1.58% for the three months ended March 31, 2015. At March 31, 2015, outstanding borrowings under the senior unsecured revolving credit facility were $30.9 million with a weighted average interest rate of 1.58%. At March 31, 2015, LIBOR was 0.17% and the applicable spread on our senior unsecured revolving credit facility was 140 basis points. | |||||||||||||||||||||||||
b. | Mortgage Debt | ||||||||||||||||||||||||
As part of the formation transaction, we completed the repayment or defeasance of, and full satisfaction of our obligations with respect to, $293.4 million of secured nonrecourse mortgage loans. | |||||||||||||||||||||||||
The fair value of our mortgage debt was determined at the date of the formation transactions by discounting future contractual principal and interest payments using prevailing market rates for securities with similar terms and characteristics at the date of the IPO. At March 31, 2015, the carrying amount approximated the estimated fair value of the Company’s debt instruments net of any amortization of the notes premium or discount. The table below provides a summary of our mortgage debt at March 31, 2015 (dollars in thousands): | |||||||||||||||||||||||||
Property | Fixed/Floating | Contractual | Effective | Maturity | Principal | Premium/Discount | Carrying | ||||||||||||||||||
Interest | Interest | Balance | Value | ||||||||||||||||||||||
Rate | Rate | Date | |||||||||||||||||||||||
CBP- Savannah | Fixed | 3.4 | % | 4.12 | % | July 2033 | $ | 16,070 | (907 | ) | $ | 15,163 | |||||||||||||
ICE - Charleston | Fixed | 4.21 | % | 3.93 | % | January 2027 | 22,767 | 438 | 23,205 | ||||||||||||||||
MEPCOM - Jacksonville | Fixed | 4.41 | % | 3.89 | % | October 2025 | 13,030 | 360 | 13,390 | ||||||||||||||||
USFS II - Albuquerque | Fixed | 4.46 | % | 3.92 | % | Jul-26 | 17,500 | 723 | 18,223 | ||||||||||||||||
Total | $ | 69,367 | $ | 614 | 69,981 | ||||||||||||||||||||
c. | Aggregate Debt Maturities | ||||||||||||||||||||||||
The Company’s aggregate debt maturities as of March 31, 2015 are as follows (dollars in thousands): | |||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
2015 | $ | 1,828 | |||||||||||||||||||||||
2016 | 2,857 | ||||||||||||||||||||||||
2017 | 2,977 | ||||||||||||||||||||||||
2018 | 3,100 | ||||||||||||||||||||||||
2019 | 34,146 | ||||||||||||||||||||||||
Thereafter | 55,376 | ||||||||||||||||||||||||
100,284 | |||||||||||||||||||||||||
Unamortized fair value adjustments | 614 | ||||||||||||||||||||||||
$ | 100,898 | ||||||||||||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Fair Value Disclosures [Abstract] | |||||
Fair Value Measurements | The following table includes a roll-forward of the amounts investments classified within Level 3 for the quarter’s ended March 31, 2015 and March 31, 2014. The classification of an investment within Level 3 is based upon the significance of the unobservable inputs to the overall fair value measurement. | ||||
(dollars in thousands) | March 31, 2015 | ||||
Balance at January 1, 2015 | $ | 267,683 | |||
Purchase of investments | — | ||||
Contributions to investments | 257 | ||||
Distributions from investments | — | ||||
Net change in realized appreciation | — | ||||
Net change in unrealized (depreciation) appreciation | (5,122 | ) | |||
Sale of investments | (262,818 | ) | |||
Balance at February 11, 2015 | $ | — | |||
(dollars in thousands) | March 31, 2014 | ||||
Balance at January 1, 2014 | $ | 173,099 | |||
Purchase of investments | 30,316 | ||||
Contributions to investments | 748 | ||||
Distributions from investments | (1,366 | ) | |||
Net change in unrealized appreciation (depreciation) | 7,480 | ||||
Balance at March 31, 2014 | $ | 210,277 |
Equity
Equity | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||
Equity | 6. Equity | ||||||||||||||||||||||||||||||||
The following table summarizes the changes in our stockholders equity for the three months ended March 31, 2015 (dollars in thousands): | |||||||||||||||||||||||||||||||||
Shares | Common | Additional | Retained | Non- | Predecessor | Non- | Total | ||||||||||||||||||||||||||
Shares | Paid-in | (Deficit) | controlling | Capital / | controlling | Equity | |||||||||||||||||||||||||||
Par | Capital | Interest in | (Deficit) | Interests | |||||||||||||||||||||||||||||
Value | Operating | ||||||||||||||||||||||||||||||||
Partnership | |||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | 1,000 | $ | — | $ | 1 | $ | — | $ | — | $ | 13,336 | $ | 283,847 | $ | 297,184 | ||||||||||||||||||
Distributions | — | — | — | — | (9 | ) | (5,432 | ) | (5,441 | ) | |||||||||||||||||||||||
Exchange of members’ capital and non controlling interests for OP units and shares | 3,308,000 | 33 | 67,312 | — | 194,530 | (12,738 | ) | (249,137 | ) | — | |||||||||||||||||||||||
Public offering | 13,800,000 | 138 | 191,445 | — | — | — | — | 191,583 | |||||||||||||||||||||||||
Proceeds of private placement | 7,033,712 | 70 | 105,435 | — | — | (589 | ) | (29,278 | ) | 75,638 | |||||||||||||||||||||||
Contribution of Western Devcon Properties for OP units | — | — | — | 86,397 | — | — | 86,397 | ||||||||||||||||||||||||||
Stock based compensation | — | 55 | — | — | — | — | 55 | ||||||||||||||||||||||||||
Grant of unvested restricted stock | 26,667 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Buyback of common stock | (1,000 | ) | — | (1 | ) | — | — | — | — | (1 | ) | ||||||||||||||||||||||
Net loss | — | — | (2,885 | ) | (5,116 | ) | — | — | (8,001 | ) | |||||||||||||||||||||||
Allocation of NCI in OP | — | 26,539 | — | (26,539 | ) | — | — | — | |||||||||||||||||||||||||
Balance at March 31, 2015 | 24,168,379 | $ | 241 | $ | 390,786 | $ | (2,885 | ) | $ | 249,272 | $ | — | $ | — | $ | 637,414 | |||||||||||||||||
On October 16, 2014, the Company issued 1,000 shares to its sole stockholder, Darrell Crate, for $1,000, which we repurchased upon the IPO. | |||||||||||||||||||||||||||||||||
On February 11, 2015, we completed an initial public offering of 13.8 million shares of our common stock at a price to the public of $15.00 per share, including 1.8 million shares sold in connection with the full exercise of the option to purchase additional shares granted to the underwriters, resulting in gross proceeds of $207.0 million. In connection with the IPO, we engaged in a series of formation transactions by which we acquired 15 properties previously owned by the Easterly Funds and the ownership interests in the management entities in exchange for 9,771,120 common units and 3,308,000 shares of common stock. Additionally, in connection with the IPO, Western Devcon contributed its interest in 14 properties to the Company in an exchange for 5,759,819 common units. | |||||||||||||||||||||||||||||||||
Concurrent with the IPO, the Company sold an aggregate of 7,033,712 shares of its common stock to the Easterly Funds in a private placement at a price per share of $15.00 without payment of any underwriting fees, discounts or commissions. | |||||||||||||||||||||||||||||||||
Prior to the completion of the IPO, our Board of Directors adopted, and our sole stockholder approved, our 2015 Equity Incentive Plan, under which we may grant future cash and equity incentive awards to our executive officers, non-employee directors and eligible employees in order to attract, motivate and retain the talent for which we compete. The 2015 Equity Incentive Plan permits us to make grants of options, stock appreciation rights, restricted stock units, restricted stock, dividend equivalent rights, cash-based awards, performance-based awards and other equity-based awards, including LTIP units, or any combination of the foregoing. | |||||||||||||||||||||||||||||||||
On February 10, 2015, we filed with the SEC a registration statement on Form S-8 covering the shares of our common stock issuable under the 2015 Equity Incentive Plan. The 2015 Equity Incentive Plan is administered by the compensation committee of the Board of Directors. The 2015 Equity Incentive Plan permits the granting of both options to purchase shares of our common stock intended to qualify as incentive stock options under Section 422 of the Code and options that do not so qualify. The option exercise price of each option will be determined by our compensation committee but may not be less than 100% of the fair market value of our common stock on the date of grant. The term of each option will be fixed by our compensation committee and may not exceed ten years from the grant date. Our compensation committee may also grant awards of restricted stock, restricted stock units, performance shares or cash-based awards under the 2015 Equity Incentive Plan that are intended to qualify as “performance based compensation” under Section 162(m) of the Code. Those awards would only vest or become payable upon the attainment of performance goals that are established by our compensation committee and related to established performance criteria. From and after the time that we become subject to Section 162(m) of the Code, the maximum award that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code that may be made to any one employee during any one calendar year period is 2,273,959 shares of our common stock with respect to stock-based award and $5.0 million with respect to a cash based award. | |||||||||||||||||||||||||||||||||
The shares issued under the 2015 Equity Incentive Plan are authorized but unissued shares or shares that we reacquire. The shares of our common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting, satisfied without any issuance of stock, expire or are otherwise terminated (other than by exercise) under the 2015 Equity Incentive Plan are added back to the shares available for issuance under the 2015 Equity Incentive Plan. | |||||||||||||||||||||||||||||||||
We have reserved 2,273,959 shares of our common stock for issuance of awards under the 2015 Equity Incentive Plan, including 26,667 shares of restricted common stock issued to our non-employee directors at the completion of the IPO, which will vest upon the anniversary of the date of grant or the next annual stockholder meeting, as applicable. For the three months ended March 31, 2015, we recognized $0.1 million in compensation related to the award. | |||||||||||||||||||||||||||||||||
No additional shares or options were issued under the 2015 Equity Incentive Plan as of March 31, 2015. All shares of our common stock issued to the Easterly Funds as a part of the IPO, the formation transactions and the concurrent private placement will be eligible for future sale following the expiration of the 180-day lock-up period, and of such shares held by holders of shares of our common stock and certain holders of common units in our operating partnership (other than the Company and its affiliates) will have registration rights pursuant to registration rights agreements that we have entered into with those investors. When the restrictions under the lock-up arrangements expire or are waived, the related shares of common stock or securities convertible into, exchangeable for, exercisable for, or repayable with common stock will be available for sale or resale, as the case may be. | |||||||||||||||||||||||||||||||||
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Earnings Per Share [Abstract] | |||||
Earnings Per Share | 7. Earnings Per Share | ||||
Basic earnings or loss per share of common stock (“EPS”) is calculated by dividing net income or loss attributable to common stockholders by the weighted average shares of common stock outstanding for the periods presented. Diluted EPS is computed after adjusting the basic EPS computation for the effect of dilutive common equivalent shares outstanding during the periods presented. The following table sets for the computation of the Company’s basic and diluted earnings per share of common stock for the three months ended March 31, 2015 (amounts in thousands, except per share amounts): | |||||
Three months ended | |||||
March 31, 2015 | |||||
Numerator | |||||
Net (loss) | $ | (8,001 | ) | ||
Less: Non-controlling interest in predecessor | — | ||||
Less: Non-controlling interest in operating partnership | (5,116 | ) | |||
Net (loss) available to Easterly Government Properties, Inc. | $ | (2,885 | ) | ||
Denominator for basic EPS | 13,144,277 | ||||
Dilutive effect of share-based compensation awards | — | ||||
Denominator for basic and diluted EPS | 13,144,277 | ||||
Basic EPS | $ | (0.22 | ) | ||
Diluted EPS | $ | (0.22 | ) |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||
Commitments and Contingencies | 8. Commitments and Contingencies | ||||||||||||||||||||||||||||
a) | Operating Leases | ||||||||||||||||||||||||||||
Our rental properties are subject to generally non-cancelable operating leases generating future minimum contractual rent payments due from tenants, which as of March 31, 2015, are as follows (dollars in thousands): | |||||||||||||||||||||||||||||
Payments due by period | |||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||||||
Minimum lease payments | $ | 389,644 | 36,859 | 48,303 | 48,705 | 46,933 | 41,827 | 167,017 | |||||||||||||||||||||
The Company’s consolidated properties were 100% occupied by 16 tenants at March 31, 2015. We billed $8.6 million in rental income and recorded a minimal straight-line adjustment for the three months ended March 31, 2015. We also recognized $0.7 million in rental income attributable to the amortization of our above and below market leases. | |||||||||||||||||||||||||||||
We lease 4,731 square feet of office space in Washington D.C. under an operating lease agreement that commenced February 2012 and expires in March 2016. Upon completion of the IPO, we became responsible for monthly rental payments. We also lease 5,752 square feet of office space in San Diego, CA under an operating lease that commenced February 2015 and expires in April 2017. | |||||||||||||||||||||||||||||
Rent expense incurred under the terms of the corporate office leases, was less than $0.1 million and $0.1 million for the three months ended March 31, 2015 and March 31, 2014, respectively. Future minimum rental payments under the Company’s corporate office leases as of March 31, 2015 are summarized as follows (amounts in thousands): | |||||||||||||||||||||||||||||
Payments due by period | |||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||||
Corporate office leases | |||||||||||||||||||||||||||||
Minimum lease payments | $ | 506 | 273 | 189 | 44 | — | |||||||||||||||||||||||
b) | Environmental | ||||||||||||||||||||||||||||
As an owner of real estate, the Company is subject to various environmental laws of federal, state, and local governments. The Company’s compliance with existing laws has not had a material adverse effect on its financial condition and results of operations, and the Company does not believe it will have a material adverse effect in the future. However, the Company cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on its current properties or on properties that the Company may acquire. | |||||||||||||||||||||||||||||
c) | Tax Protection Agreement | ||||||||||||||||||||||||||||
Concurrent with the completion of the IPO, we also entered into a tax protection agreement with Michael P. Ibe, a director and our Executive Vice President—Development and Acquisitions, under which we agreed to indemnify Mr. Ibe for any taxes incurred as a result of a taxable sale of the properties contributed by Western Devcon in the formation transactions for a period of eight years after the closing of the IPO and the formation transactions. We also agreed in the tax protection agreement with Mr. Ibe to use the “traditional method” of making allocations under Section 704(c) of the Code for the eight-year period. |
Concentrations_Risk
Concentrations Risk | 3 Months Ended |
Mar. 31, 2015 | |
Risks and Uncertainties [Abstract] | |
Concentrations Risk | 9. Concentrations Risk |
Concentrations of credit risk arise for the Company when multiple tenants of the Company are engaged in similar business activities, are located in the same geographic region or have similar economic features that impact in a similar manner their ability to meet contractual obligations, including those to the Company. The Company regularly monitors its tenant base to assess potential concentrations of credit risk. | |
As stated in Note 1 above, the Company leases commercial space to the U.S. Government through the GSA or other federal agencies or nongovernmental tenants. For the three months ended March 31, 2015 (unaudited), the GSA and other federal agency accounted for approximately 97% of rental income and non-governmental tenants accounted for the remaining approximately 4%. | |
Eleven of our 29 properties are located in California, accounting for approximately 25% of our total rentable square feet and approximately 33% of our total annualized lease income as of March 31, 2015. To the extent that weak economic or real estate conditions or natural disasters affect California more severely than other areas of the country, our business, financial condition and results of operations could be negatively impacted. |
Related_Party
Related Party | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party | 10. Related Party |
Upon completion of the IPO, we were responsible for reimbursing Easterly Capital $0.2 million for the three months ended March 31, 2015 for a portion of their rent and office expense at their Beverly, MA office and for the services of certain employees. Additionally, during the three months ended March 31, 2015, Western Devcon was responsible for reimbursing us $0.1 million for payroll expenses and interest and defeasance costs at closing that we paid on their behalf. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events |
For its consolidated financial statements as of March 31, 2015, the Company evaluated subsequent events and noted the following significant events: | |
On January 23, 2015, the Predecessor entered into a purchase and sale agreement for the purchase of an 115,650 rentable square feet property located in Lakewood, Colorado for a purchase price of approximately $20.3 million. The building was constructed in 1999 and is 100% leased to the GSA and occupied by the U.S. Department of energy under a 15-year lease that expires in November 2029. On March 9, 2015, the right to acquire the property was assigned to the Operating Partnership. As of March 31, 2015, we had a $20.2 million deposit related to the acquisition of the property in deposits on acquisitions. On April 1, 2015, the Operating Partnership closed on the acquisition at a purchase price of $20.3 million. | |
On May 6, 2015, the Board of Directors declared a dividend for the first quarter of 2015 in the amount of $0.11 per common stock and per common unit of the Operating Partnership, outstanding to stockholders and common unitholders of record as of the close of business on May 18, 2015. Such dividends are to be paid on June 3, 2015. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Accounting Policies [Abstract] | ||||
Real Estate Properties | Real Estate Properties | |||
Real estate properties comprise all tangible assets we hold for rent. Real property is recognized at cost less accumulated depreciation. Betterments, major renovations and certain costs directly related to the improvement of real properties are capitalized. Maintenance and repair expenses are charged to expense as incurred. | ||||
When we acquire properties, we allocate the purchase price to numerous tangible and intangible components. Our process for determining the allocation to these components requires many estimates and assumptions, including the following: (1) determination of market rental rates; (2) estimation of leasing and tenant improvement costs associated with the remaining term of acquired leases; (3) assumptions used in determining the in-place lease and if-vacant value including the rental rates, period of time that it would take to lease vacant space and estimated tenant improvement and leasing costs; (4) renewal probabilities; and (5) allocation of the if-vacant value between land and building. A change in any of the above key assumptions can materially change not only the presentation of acquired properties in our consolidated financial statements but also our reported results of operations. The allocation to different components affects the following: | ||||
• | the amount of the purchase price allocated among different categories of assets and liabilities on our consolidated balance sheets; and the amount of costs assigned to individual properties in multiple property acquisitions; | |||
• | where the amortization of the components appear over time in our consolidated statements of operations. Allocations to above- and below-market leases are amortized into rental revenue, whereas allocations to most of the other tangible and intangible assets are amortized into depreciation and amortization expense. As a REIT, this is important to us since much of the investment community evaluates our operating performance using non-GAAP measures such as funds from operations, the computation of which includes rental revenue but does not include depreciation and amortization expense; and | |||
• | the timing over which the items are recognized as revenue or expense in our consolidated statements of operations. For example, for allocations to the as-if vacant value, the land portion is not depreciated and the building portion is depreciated over a longer period of time than the other components (generally 40 years). Allocations to above- and below-market leases and in-place lease value are amortized over significantly shorter timeframes, and if individual tenants’ leases are terminated early, any unamortized amounts remaining associated with those tenants are written off upon termination. These differences in timing can materially affect our reported results of operations. | |||
Tenant improvements are capitalized in real property when we own the improvement. When we are required to provide improvements under the terms of a lease, we need to determine whether the improvements constitute landlord assets or tenant assets. If the improvements are considered landlord assets, we capitalize the cost of the improvements and recognize depreciation expense associated with such improvements over the shorter of the useful life of the assets or the term of the lease and recognize any payments from the tenant as rental revenue over the term of the lease. If the improvements are considered tenant assets, we defer the cost of improvements funded by us as a lease incentive asset and amortize it as a reduction of rental revenue over the term of the lease. Our determination of whether improvements are landlord assets or tenant assets also may affect when we commence revenue recognition in connection with a lease. In determining whether improvements constitute landlord or tenant assets, we consider numerous factors that may require subjective or complex judgments, including: whether the improvements are unique to the tenant or reusable by other tenants; whether the tenant is permitted to alter or remove the improvements without our consent or without compensating us for any lost fair value; whether the ownership of the improvements remains with us or remains with the tenant at the end of the lease term; and whether the economic substance of the lease terms is properly reflected. | ||||
Depreciation of an asset begins when it is available for use and is calculated using the straight-line method over the estimated useful lives. Each period, depreciation is charged to expense and credited to the related accumulated depreciation account. A used asset acquired is depreciated over its estimated remaining useful life, not to exceed the life of a new asset. Range of useful lives for depreciable assets are as follows: | ||||
Category | Term | |||
Buildings | 40 years | |||
Building improvements | 5 - 40 years | |||
Tenant improvements | Shorter of remaining life of the lease or useful life | |||
Furniture and equipment | 3 - 7 years | |||
We regularly evaluate whether events or changes in circumstances have occurred that could indicate an impairment in the value of long lived assets. If there is an indication that the carrying value of an asset is not recoverable, we estimate the projected undiscounted cash flows to determine if an impairment loss should be recognized. We determine the amount of any impairment loss by comparing the historical carrying value to estimated fair value. We estimate fair value through an evaluation of recent financial performance and projected discounted cash flows using standard industry valuation techniques. In addition to consideration of impairment upon the events or changes in circumstances described above, we regularly evaluate the remaining lives of our long lived assets. If we change our estimate of the remaining lives, we allocate the carrying value of the affected assets over their revised remaining lives. | ||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||
Cash and cash equivalents include all cash and liquid investments that mature three months or less from when they are purchased. Cash equivalents are reported at cost, which approximates fair value. We maintain our cash in bank accounts in amounts that may exceed Federally insured limits at times. We have not experienced any losses in these accounts and believe that we are not exposed to significant credit risk because our accounts are deposited with major financial institutions. | ||||
Restricted Cash | Restricted Cash | |||
Restricted cash consists of amounts escrowed for future real estate taxes, insurance, capital expenditures and debt service, as required by certain of our mortgage debt agreements. | ||||
Deferred Financing Costs | Deferred Financing Costs | |||
Deferred financing fees include issuance costs related to borrowings and we amortize those costs over the terms of the related indebtedness. Any unamortized amounts upon early repayment of mortgage notes payable are written off in the period in which repayment occurs. Fully amortized deferred financing fees are removed from the books upon maturity or repayment of the underlying debt. As of March 31, 2015, we recognized $3.4 million in deferred financing costs and $0.1 million in accumulated amortization associated with entering into a $400.0 million senior unsecured revolving credit facility upon completion of the IPO. | ||||
Noncontrolling Interests | Noncontrolling Interests | |||
Non-controlling interests relate to the common units of the Operating Partnership not owned by the Company. Common units of the Operating Partnership are owned by the limited partners who contributed properties and other assets to the Operating Partnership in exchange for common units. The Company contributed the net proceeds from the IPO to the Operating Partnership in exchange for common units of limited partnership interests in the Operating Partnership. Fifteen months after the IPO, limited partners of the Operating Partnership, other than the Company, will have the right to require the Operating Partnership to redeem part or all of their common units for cash, based upon the value of an equivalent number of shares of the Company’s common stock at the time of the election to redeem, or, at the Company’s election, shares of the Company’s common stock on a one-for-one basis. Unitholders receive a distribution per unit equivalent to the dividend per share of the Company’s common stock. Pursuant to the consolidation accounting standard with respect to the accounting and reporting for non-controlling interest changes and changes in ownership interest of a subsidiary, changes in parent’s ownership interest when the parent retains controlling interest in the subsidiary should be accounted for as equity transactions. The carrying amount of the non-controlling interest shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the Company. | ||||
Non-Controlling Interest | ||||
Consolidation addresses the accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated capital resulting from operations attributable to the parent and to the non-controlling interest, the changes in a parent’s ownership interest, and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated per ASC 810. | ||||
Prior to the IPO, all of the partners invested in the Easterly Funds represented a non-controlling interest. In addition, prior to the IPO, a third-party member had invested in Federal Properties, GP, LLC, an entity included within the Predecessor, which also represented a non-controlling interest. | ||||
Revenue Recognition | Revenue Recognition | |||
Rental income includes base rents paid by each tenant in accordance with its lease agreement conditions. We recognize rental income on a straight-line basis over the lease term of the respective leases. For acquisitions of existing buildings, we recognize rental income from leases already in place coincident with the date of property closing. Lease incentives are recorded as a deferred asset and amortized as a reduction of revenue on a straight-line basis over the respective lease term. Tenant reimbursement income (scheduled rent increases based on increases in real estate taxes, operating expenses and utility usage) is recognized by us in the consolidated statements of operations when earned and when their amounts can be reasonably estimated. Above- and below-market leases are amortized into rental revenue over the terms of the respective leases. | ||||
Income Taxes | Income Taxes | |||
We intend to elect and to qualify as a REIT for U.S. federal income tax purposes commencing with the taxable year ending December 31, 2015. So long as we qualify as a REIT, we generally will not be subject to U.S. federal income tax on our net income that we distribute to our stockholders. To maintain our qualification as a REIT, we are required under the Code to distribute at least 90% of our REIT taxable income (without regard to the deduction for dividends paid and excluding net capital gains) to our stockholders and meet certain other requirements. If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate rates. Even if we qualify as a REIT, we will be subject to certain U.S. federal, state and local taxes on our income and property, and on taxable income that we do not distribute to our stockholders. In addition, we may provide services that are not customarily provided by a landlord, hold properties for sale and engage in other activities (such as a management business) through Taxable REIT Subsidiaries (“TRSs”) and the income of those subsidiaries will be subject to U.S. federal income tax at regular corporate rates. For the period ending March 31, 2015, we did not incur any material tax liability associated with any of the above. | ||||
We do not anticipate any potential expense related to uncertain tax positions as we closely monitor our REIT compliance, do not have any prohibited transactions related to property sales, and neither the states in which we operate nor our foreign investors subject us to withholding tax requirements. | ||||
Stock Based Compensation | Stock Based Compensation | |||
Prior to the completion of the IPO, our Board of Directors adopted, and our sole stockholder approved, our 2015 Equity Incentive Plan, under which we may grant future cash and equity incentive awards to our executive officers, non-employee directors and eligible employees. See Note 6 (Equity) for further information. The shares issued to officers, employees, and non-employee directors vest over a period of time as determined by the Board of Directors at the date of grant. The Company recognizes compensation expense for non-vested shares granted to officers, employees and non-employee directors on a straight-line basis over the requisite service period based upon the fair market value of the shares on the date of grant, as adjusted for forfeitures. | ||||
Earnings Per Share of Common Stock Amount | Earnings Per Share of Common Stock Amount | |||
Basic earnings per share is calculated by dividing net income available to Easterly Government Properties Inc. by the weighted-average number of shares of common stock outstanding during the period, excluding the weighted average number of unvested restricted shares. Diluted earnings per share is calculated by dividing net income by the weighted-average number of shares of common stock outstanding during the period plus other potentially dilutive securities such as stock grants or shares that would be issued in the event that common units of the Operating Partnership are redeemed for shares of common stock of the Company. No adjustment is made for shares that are anti-dilutive during a period. | ||||
Deferred Offering Costs | Deferred Offering Costs | |||
The Company capitalizes certain legal, accounting and other third party fees that are directly associated with in-process equity financings as other assets until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction to capital. Should the equity financing no longer be considered probable of being consummated, the deferred offering costs would be expensed immediately as a charge to corporate general and administrative expenses in the accompanying combined statement of operations. | ||||
Segments | Segments | |||
The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. All revenue has been generated in the United States and all tangible assets are held in the United States. | ||||
Application of new accounting standards | Application of new accounting standards | |||
In April 2015, the Financial Accounting Standards Board (“FASB”) issued guidance simplifying the presentation of debt issuance costs. The guidance requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. The amortization of these costs will remain under the interest method and will continue to be reported as interest expense. The guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The new guidance will be applied on a retrospective basis. We have not yet determined the impact, if any, that the adoption of this guidance will have on our consolidated financial statements. | ||||
In February 2015, the FASB issued guidance modifying the analysis a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance does not change the general order in which the consolidation models are applied. A reporting entity that holds an economic interest in, or is otherwise involved with, another legal entity first determines if the variable interest entity model applies, and if so, whether it holds a controlling financial interest under that model. If the entity being evaluated for consolidation is not a variable interest entity, then the voting model should be applied to determine whether the entity should be consolidated by the reporting entity. Key changes to the guidance include, though are not limited to; (i.) limiting the extent to which related party interests are included in the other economic interest criterion to the decision maker’s effective interest holding, (ii.) requiring limited partners of a limited partnership, or the members of a limited liability company that is similar to a limited partnership, to have, at minimum, kick-out or participating rights to demonstrate that the partnership is a voting entity, (iii.) changing the evaluation of whether the equity holders at risk lack decision making rights when decision making is outsourced and (iv.) changing how the economics test is performed. The guidance does not amend the existing disclosure requirements for variable interest entities or voting model entities. The guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We have not yet determined the impact, if any, that the adoption of this guidance will have on our consolidated financial statements. | ||||
b) Significant Accounting Policies of the Company pre-IPO | ||||
Real Estate Investments | Real Estate Investments | |||
Real estate investments represent investments in real estate entities that own real estate assets and are stated at the fair value of the net equity interest in the real estate investments as discussed below. Subsequent changes in fair value are recorded as unrealized gains or losses. Upon the disposition of a real estate investment, realized gains and losses are determined by deducting the proceeds received by the Predecessor from the basis of the real estate investment; any previously unrealized gains and losses are reversed. | ||||
Distributions from real estate entities are recorded as dividend income when received to the extent distributed from the estimated taxable earnings and profits of the underlying investment vehicle and as a return of capital to the extent not in excess of that amount. | ||||
Under investment company accounting, the statements of operations reflect the change in fair value of the real estate investments of the Easterly Funds, prior to the IPO, whether realized or unrealized. | ||||
Fair Value of Investments | Fair Value of Investments | |||
The fair value of the real estate investments is determined using a fair value hierarchy. The fair value hierarchy is based on the observability of inputs used to measure fair value and requires additional disclosure regarding the fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between marketplace participants at the measurement date (exit price). The fair value of an asset or a liability disregards transaction costs and assumes the asset or liability’s highest and best use. As the investments are in entities that invest in real estate, the estimated values are based on the underlying assets, liabilities, and cash flows of the related properties. | ||||
The three levels of the fair value hierarchy are described below: | ||||
Level 1 | Valuation is based upon quoted prices for identical assets or liabilities in an active market. | |||
Level 2 | Valuation is based upon observable inputs: | |||
a) Quoted prices for similar assets or liabilities in active markets, | ||||
b) Quoted prices for identical or similar assets or liabilities in not active markets, or | ||||
c) Model-based valuation techniques for which all significant assumptions are observable in the market. | ||||
Level 3 | Valuation is based upon prices or valuation techniques that require assumptions not observable in the market which are significant to the overall fair value measurement. These unobservable inputs reflect the Predecessor’s own estimates about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Valuation techniques include the use of discounted cash flow models, and similar techniques. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Accounting Policies [Abstract] | |||
Summary of Range of useful Lives For Depreciable Assets | Range of useful lives for depreciable assets are as follows: | ||
Category | Term | ||
Buildings | 40 years | ||
Building improvements | 5 - 40 years | ||
Tenant improvements | Shorter of remaining life of the lease or useful life | ||
Furniture and equipment | 3 - 7 years |
Real_Estate_and_Intangibles_Ta
Real Estate and Intangibles (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Real Estate [Abstract] | |||||||||||||
Summary of Real Estate Properties Acquired in Formation Transactions | As part of the formation transactions, we acquired the following properties, as set forth in the table below: | ||||||||||||
Property | Location | Property Type | Rentable Square Feet | ||||||||||
Easterly Portfolio | |||||||||||||
IRS - Fresno | Fresno, CA | Office | 180,481 | ||||||||||
PTO- Arlington | Arlington, VA | Office | 189,871 | ||||||||||
FBI - San Antonio | San Antonio, TX | Office | 148,584 | ||||||||||
FBI - Omaha | Omaha, NE | Office | 112,196 | ||||||||||
ICE - Charleston | North Charleston, SC | Office | 86,733 | ||||||||||
DOT - Lakewood | Lakewood, CO | Office | 122,225 | ||||||||||
USFS II - Albuquerque | Albuquerque, TX | Office | 98,720 | ||||||||||
USFS I - Albuquerque | Albuquerque, TX | Office | 92,455 | ||||||||||
AOC - Del Rio | Del Rio, TX | Courthouse/Office | 89,880 | ||||||||||
DEA - Dallas | Dallas, TX | Office | 71,827 | ||||||||||
DEA - Albany | Albany, NY | Office | 31,976 | ||||||||||
FBI - Little Rock | Little Rock, AR | Office | 101,977 | ||||||||||
CBP - Sunburst | Sunburst, MT | Office | 33,000 | ||||||||||
USCG - Martinsburg | Martinsburg, WV | Office | 59,547 | ||||||||||
MEPCOM - Jacksonville | Jacksonville, FL | Office | 30,000 | ||||||||||
Total | 1,449,472 | ||||||||||||
Western Devcon | |||||||||||||
CBP - Savannah | Savannah, GA | Laboratory | 35,000 | ||||||||||
AOC - El Centro | El Centro, CA | Courthouse/Office | 46,813 | ||||||||||
DEA - Vista | Vista, CA | Laboratory | 54,119 | ||||||||||
DEA - Santa Ana | Santa Ana, CA | Office | 39,905 | ||||||||||
CBP - Chula Vista | Chula Vista, CA | Office | 59,397 | ||||||||||
DEA - North Highlands | Sacramento, CA | Office | 37,975 | ||||||||||
DEA - Otay | San Diego, CA | Office | 32,560 | ||||||||||
DEA - Riverside | Riverside, CA | Office | 34,354 | ||||||||||
SSA - Mission Viegjo | Mission Viejo, CA | Office | 11,590 | ||||||||||
SSA - San Diego | San Diego, CA | Office | 11,743 | ||||||||||
DEA - San Diego | San Diego, CA | Warehouse | 16,100 | ||||||||||
2650 SW 145th Avenue - Parbel of Florida | Miramar, FL | Warehouse/Distribution | 81,721 | ||||||||||
5998 Osceola Court - United Technologies | Midland, GA | Manufacturing Warehouse | 105,641 | ||||||||||
501 East Hunter Street - Lummus Corporation | Lubbock, TX | Distribution | 70,078 | ||||||||||
Total | 636,996 | ||||||||||||
Fair Values of Assets Acquired and Liabilities Assumed | The fair values of the assets acquired and liabilities assumed upon completion of the formation transactions are as follows (dollars in thousands): | ||||||||||||
Easterly Portfolio | Western Devcon, Inc. | Total | |||||||||||
Real Estate | |||||||||||||
Land | $ | 43,681 | $ | 35,573 | $ | 79,254 | |||||||
Building | 411,472 | 107,424 | 518,896 | ||||||||||
Acquired tenant improvements | 27,441 | 4,388 | 31,829 | ||||||||||
Total Real Estate | 482,594 | 147,385 | 629,979 | ||||||||||
Intangibles | |||||||||||||
In-place leases | 61,218 | 21,308 | 82,526 | ||||||||||
Acquired leasing commissions | 11,257 | 4,350 | 15,607 | ||||||||||
Above market leases | 2,644 | 7,763 | 10,407 | ||||||||||
Total Intangibles | 75,119 | 33,421 | 108,540 | ||||||||||
Deferred Market Liabilities | |||||||||||||
Below market leases | (34,383 | ) | (2,322 | ) | (36,705 | ) | |||||||
Total Deferred Market Liabilities | (34,383 | ) | (2,322 | ) | (36,705 | ) | |||||||
Debt Assumed | (271,622 | ) | (92,087 | ) | (363,709 | ) | |||||||
Net Current Assets Transferred | 8,979 | — | 8,979 | ||||||||||
Net assets acquired | $ | 260,687 | $ | 86,397 | $ | 347,084 | |||||||
Amortization of Total Intangible Assets and Intangible Liabilities | The net projected amortization of total intangible assets and intangible liabilities as of March 31, 2015 are as follows (dollars in thousands): | ||||||||||||
Intangible assets | |||||||||||||
2015 | $ | 14,664 | |||||||||||
2016 | 18,866 | ||||||||||||
2017 | 17,731 | ||||||||||||
2018 | 14,404 | ||||||||||||
2019 | 9,633 | ||||||||||||
Thereafter | 30,558 | ||||||||||||
$ | 105,856 | ||||||||||||
Intangible liabilities | |||||||||||||
2015 | $ | (4,723 | ) | ||||||||||
2016 | (6,163 | ) | |||||||||||
2017 | (5,966 | ) | |||||||||||
2018 | (5,601 | ) | |||||||||||
2019 | (3,856 | ) | |||||||||||
Thereafter | (9,532 | ) | |||||||||||
$ | (35,841 | ) | |||||||||||
Proforma Financial Information of Future Operating Results | The pro forma information is not necessarily indicative of the results that actually would have occurred nor does it intend to indicate future operating results future operating results (dollars in thousands): | ||||||||||||
For the three months ended | |||||||||||||
March 31, | |||||||||||||
Proforma (unaudited) | 2015 | 2014 | |||||||||||
Total rental revenue | $ | 18,536 | $ | 18,536 | |||||||||
Net income (loss) | 1,127 | (1,907 | ) | ||||||||||
Schedule of Real Estate and Intangibles | Real estate and intangibles consisted of the following as of March 31, 2015 (dollars in thousands): | ||||||||||||
Total | |||||||||||||
Real Estate | |||||||||||||
Land | $ | 79,254 | |||||||||||
Building | 518,929 | ||||||||||||
Acquired tenant improvements | 31,829 | ||||||||||||
Accumulated amortization | (2,404 | ) | |||||||||||
Total Real Estate | 627,608 | ||||||||||||
Intangibles | |||||||||||||
In-place leases | 82,526 | ||||||||||||
Acquired leasing commissions | 15,607 | ||||||||||||
Above market leases | 10,407 | ||||||||||||
Accumulated amortization | (2,684 | ) | |||||||||||
Total Intangibles | 105,856 | ||||||||||||
Intangible Liabilities | |||||||||||||
Below market leases | (36,705 | ) | |||||||||||
Accumulated amortization | 864 | ||||||||||||
Total Intangible Liabilities | (35,841 | ) | |||||||||||
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||
Summary of Borrowings | At March 31, 2015, our borrowings consisted of the following (dollars in thousands): | ||||||||||||||||||||||||
Senior unsecured revolving credit facility | $ | 30,917 | |||||||||||||||||||||||
Mortgage debt | 69,981 | ||||||||||||||||||||||||
Total | 100,898 | ||||||||||||||||||||||||
Summary of Mortgage Debt | The table below provides a summary of our mortgage debt at March 31, 2015 (dollars in thousands): | ||||||||||||||||||||||||
Property | Fixed/Floating | Contractual | Effective | Maturity | Principal | Premium/Discount | Carrying | ||||||||||||||||||
Interest | Interest | Balance | Value | ||||||||||||||||||||||
Rate | Rate | Date | |||||||||||||||||||||||
CBP- Savannah | Fixed | 3.4 | % | 4.12 | % | July 2033 | $ | 16,070 | (907 | ) | $ | 15,163 | |||||||||||||
ICE - Charleston | Fixed | 4.21 | % | 3.93 | % | January 2027 | 22,767 | 438 | 23,205 | ||||||||||||||||
MEPCOM - Jacksonville | Fixed | 4.41 | % | 3.89 | % | October 2025 | 13,030 | 360 | 13,390 | ||||||||||||||||
USFS II - Albuquerque | Fixed | 4.46 | % | 3.92 | % | Jul-26 | 17,500 | 723 | 18,223 | ||||||||||||||||
Total | $ | 69,367 | $ | 614 | 69,981 | ||||||||||||||||||||
Summary of Aggregate Debt Maturities | The Company’s aggregate debt maturities as of March 31, 2015 are as follows (dollars in thousands): | ||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
2015 | $ | 1,828 | |||||||||||||||||||||||
2016 | 2,857 | ||||||||||||||||||||||||
2017 | 2,977 | ||||||||||||||||||||||||
2018 | 3,100 | ||||||||||||||||||||||||
2019 | 34,146 | ||||||||||||||||||||||||
Thereafter | 55,376 | ||||||||||||||||||||||||
100,284 | |||||||||||||||||||||||||
Unamortized fair value adjustments | 614 | ||||||||||||||||||||||||
$ | 100,898 | ||||||||||||||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Fair Value Disclosures [Abstract] | |||||
Roll-forward of Amounts for Investments Classified Within Level 3 | The following table includes a roll-forward of the amounts investments classified within Level 3 for the quarter’s ended March 31, 2015 and March 31, 2014. The classification of an investment within Level 3 is based upon the significance of the unobservable inputs to the overall fair value measurement. | ||||
March 31, 2015 | |||||
Balance at January 1, 2015 | $ | 267,683 | |||
Purchase of investments | — | ||||
Contributions to investments | 257 | ||||
Distributions from investments | — | ||||
Net change in realized appreciation | — | ||||
Net change in unrealized (depreciation) | (5,122 | ) | |||
Sale of investments | (262,818 | ) | |||
Balance at February 11, 2015 | $ | — | |||
March 31, 2014 | |||||
Balance at January 1, 2014 | $ | 173,099 | |||
Purchase of investments | 30,316 | ||||
Contributions to investments | 748 | ||||
Distributions from investments | (1,366 | ) | |||
Net change in unrealized appreciation (depreciation) | 7,480 | ||||
Balance at March 31, 2014 | $ | 210,277 |
Equity_Tables
Equity (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||
Summary of Changes In Stockholders Equity | The following table summarizes the changes in our stockholders equity for the three months ended March 31, 2015 (dollars in thousands): | ||||||||||||||||||||||||||||||||
Shares | Common | Additional | Retained | Non- | Predecessor | Non- | Total | ||||||||||||||||||||||||||
Shares | Paid-in | (Deficit) | controlling | Capital / | controlling | Equity | |||||||||||||||||||||||||||
Par | Capital | Interest in | (Deficit) | Interests | |||||||||||||||||||||||||||||
Value | Operating | ||||||||||||||||||||||||||||||||
Partnership | |||||||||||||||||||||||||||||||||
Balance at December 31, 2014 | 1,000 | $ | — | $ | 1 | $ | — | $ | — | $ | 13,336 | $ | 283,847 | $ | 297,184 | ||||||||||||||||||
Distributions | — | — | — | — | (9 | ) | (5,432 | ) | (5,441 | ) | |||||||||||||||||||||||
Exchange of members’ capital and non controlling interests for OP units and shares | 3,308,000 | 33 | 67,312 | — | 194,530 | (12,738 | ) | (249,137 | ) | — | |||||||||||||||||||||||
Public offering | 13,800,000 | 138 | 191,445 | — | — | — | — | 191,583 | |||||||||||||||||||||||||
Proceeds of private placement | 7,033,712 | 70 | 105,435 | — | — | (589 | ) | (29,278 | ) | 75,638 | |||||||||||||||||||||||
Contribution of Western Devcon Properties for OP units | — | — | — | 86,397 | — | — | 86,397 | ||||||||||||||||||||||||||
Stock based compensation | — | 55 | — | — | — | — | 55 | ||||||||||||||||||||||||||
Grant of unvested restricted stock | 26,667 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Buyback of common stock | (1,000 | ) | — | (1 | ) | — | — | — | — | (1 | ) | ||||||||||||||||||||||
Net loss | — | — | (2,885 | ) | (5,116 | ) | — | — | (8,001 | ) | |||||||||||||||||||||||
Allocation of NCI in OP | — | 26,539 | — | (26,539 | ) | — | — | — | |||||||||||||||||||||||||
Balance at March 31, 2015 | 24,168,379 | $ | 241 | $ | 390,786 | $ | (2,885 | ) | $ | 249,272 | $ | — | $ | — | $ | 637,414 | |||||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Earnings Per Share [Abstract] | |||||
Summary of Basic and Diluted Earnings Per Common Share | The following table sets for the computation of the Company’s basic and diluted earnings per share of common stock for the three months ended March 31, 2015 (amounts in thousands, except per share amounts): | ||||
Three months ended | |||||
March 31, 2015 | |||||
Numerator | |||||
Net (loss) | $ | (8,001 | ) | ||
Less: Non-controlling interest in predecessor | — | ||||
Less: Non-controlling interest in operating partnership | (5,116 | ) | |||
Net (loss) available to Easterly Government Properties, Inc. | $ | (2,885 | ) | ||
Denominator for basic EPS | 13,144,277 | ||||
Dilutive effect of share-based compensation awards | — | ||||
Denominator for basic and diluted EPS | 13,144,277 | ||||
Basic EPS | $ | (0.22 | ) | ||
Diluted EPS | $ | (0.22 | ) |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Summary of Future Minimum Contractual Rent Payments | Our rental properties are subject to generally non-cancelable operating leases generating future minimum contractual rent payments due from tenants, which as of March 31, 2015, are as follows (dollars in thousands): | ||||||||||||||||||||||||||||
Payments due by period | |||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | |||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||||||
Minimum lease payments | $ | 389,644 | 36,859 | 48,303 | 48,705 | 46,933 | 41,827 | 167,017 | |||||||||||||||||||||
Corporate Office Leases [Member] | |||||||||||||||||||||||||||||
Summary of Future Minimum Contractual Rent Payments | Future minimum rental payments under the Company’s corporate office leases as of March 31, 2015 are summarized as follows (amounts in thousands): | ||||||||||||||||||||||||||||
Payments due by period | |||||||||||||||||||||||||||||
Total | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||||||
Corporate office leases | |||||||||||||||||||||||||||||
Minimum lease payments | $ | 506 | 273 | 189 | 44 | — |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Feb. 11, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Property | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties leased | 100 | ||
Gross proceeds from initial public offering | $207 | ||
Common stock shares Sold | 24,168,379 | 1,000 | |
Outstanding common units of partnership interest owned percentage | 60.90% | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 39.10% | ||
Western Devcon, Inc [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | 14 | 14 | |
Number of stock units exchanged | 5,759,819 | ||
Easterly Government Properties LP [Member] | Easterly Funds [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | 15 | ||
Common stock shares exchanged | 3,308,000 | ||
Number of stock units exchanged | 8,635,714 | ||
Easterly Government Properties LP [Member] | Western Devcon, Inc [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | 14 | ||
Number of stock units exchanged | 5,759,819 | ||
Easterly Government Properties LP [Member] | Management Entities [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of stock units exchanged | 1,135,406 | ||
IPO [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | 15 | ||
Shares issued, number of shares | 13,800,000 | ||
Shares issued, price per share | $15 | ||
Net proceeds from initial public offering | $191.60 | ||
Over-Allotment Option [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Shares issued, number of shares | 1,800,000 | ||
Private Placement [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Shares issued, number of shares | 7,033,712 | ||
Shares issued, price per share | $15 | ||
Common stock shares Sold | 7,033,712 | ||
Par value per share | 15 | ||
Wholly Owned Properties [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties | 29 | ||
Aggregate area of land | 2,100,000 | ||
Wholly Owned Properties [Member] | Government [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties leased | 26 | ||
Wholly Owned Properties [Member] | Private Tenants [Member] | |||
Organization And Significant Accounting Policies [Line Items] | |||
Number of properties leased | 3 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Summary of Range of useful Lives For Depreciable Assets (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Building improvements | 40 years |
Minimum [Member] | Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Building improvements | 5 years |
Minimum [Member] | Furniture and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Building improvements | 3 years |
Maximum [Member] | Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Building improvements | 40 years |
Maximum [Member] | Furniture and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Building improvements | 7 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Additional Information (Detail) (Senior Unsecured Revolving Credit Facility [Member], USD $) | Mar. 31, 2015 | Feb. 11, 2015 |
Senior Unsecured Revolving Credit Facility [Member] | ||
Accounting Policies [Line Items] | ||
Deferred financing costs | $3,400,000 | |
Deferred financing costs accumulated amortization | 100,000 | |
Line of credit facility associated with deferred financing costs | $400,000,000 | $400,000,000 |
Real_Estate_and_Intangibles_Ad
Real Estate and Intangibles - Additional Information (Detail) (USD $) | 3 Months Ended | 2 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Feb. 11, 2015 | |
Property | ||||
Real Estate Properties [Line Items] | ||||
Weighted Average Amortization Period | 7 years 6 months 4 days | |||
Net loss/income | ($2,885,000) | $6,520,000 | ||
Acquisition-related costs | 1,440,000 | |||
Formation expenses | 1,594,000 | |||
Consolidated Properties [Member] | ||||
Real Estate Properties [Line Items] | ||||
Revenues | 10,100,000 | |||
Net loss/income | 2,200,000 | |||
Western Devcon, Inc [Member] | ||||
Real Estate Properties [Line Items] | ||||
Percentage of ownership | 100.00% | 100.00% | ||
Number of properties | 14 | 14 | 14 | |
Number of stock units exchanged | 5,759,819 | |||
Amount of stock units exchanged | 86,400,000 | |||
Acquisition-related costs | 1,400,000 | |||
Formation expenses | $1,600,000 |
Real_Estate_and_Intangibles_Sc
Real Estate and Intangibles - Schedule of Transactions of Acquired Properties (Detail) | Jan. 23, 2015 | Mar. 31, 2015 |
sqft | sqft | |
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 115,650 | |
Easterly Partner LLC [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 1,449,472 | |
Western Devcon, Inc [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 636,996 | |
Irs Fresno [Member] | Easterly Partner LLC [Member] | California | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 180,481 | |
Pto Arlington [Member] | Easterly Partner LLC [Member] | VIRGINIA | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 189,871 | |
Fbi San Antonio [Member] | Easterly Partner LLC [Member] | TEXAS | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 148,584 | |
Fbi Omaha [Member] | Easterly Partner LLC [Member] | NEBRASKA | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 112,196 | |
ICE Charleston [Member] | Easterly Partner LLC [Member] | SOUTH CAROLINA | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 86,733 | |
Dot Lakewood [Member] | Easterly Partner LLC [Member] | COLORADO | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 122,225 | |
Usfs Two Albuquerque [Member] | Easterly Partner LLC [Member] | TEXAS | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 98,720 | |
Usfs One Albuquerque [Member] | Easterly Partner LLC [Member] | TEXAS | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 92,455 | |
Aoc Del Rio [Member] | Easterly Partner LLC [Member] | TEXAS | Courthouse Or Office[Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 89,880 | |
Dea Dallas [Member] | Easterly Partner LLC [Member] | TEXAS | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 71,827 | |
Dea Albany [Member] | Easterly Partner LLC [Member] | NEW YORK | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 31,976 | |
Fbi Little Rock [Member] | Easterly Partner LLC [Member] | ARKANSAS | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 101,977 | |
Cbp Sunburst [Member] | Easterly Partner LLC [Member] | MONTANA | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 33,000 | |
Uscg Martinsburg [Member] | Easterly Partner LLC [Member] | WEST VIRGINIA | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 59,547 | |
MEPCOM Jacksonville [Member] | Easterly Partner LLC [Member] | FLORIDA | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 30,000 | |
CBP Savannah [Member] | Western Devcon, Inc [Member] | GEORGIA | Laboratory [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 35,000 | |
Aoc El Centro [Member] | Western Devcon, Inc [Member] | California | Courthouse Or Office[Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 46,813 | |
Dea Vista [Member] | Western Devcon, Inc [Member] | California | Laboratory [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 54,119 | |
Dea Santa Ana [Member] | Western Devcon, Inc [Member] | California | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 39,905 | |
Cbp Chula Vista [Member] | Western Devcon, Inc [Member] | California | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 59,397 | |
Dea North Highlands [Member] | Western Devcon, Inc [Member] | California | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 37,975 | |
Dea Otay [Member] | Western Devcon, Inc [Member] | California | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 32,560 | |
Dea Riverside [Member] | Western Devcon, Inc [Member] | California | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 34,354 | |
Ssa Mission Viejo [Member] | Western Devcon, Inc [Member] | California | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 11,590 | |
Ssa San Diego [Member] | Western Devcon, Inc [Member] | California | Office [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 11,743 | |
Dea San Diego [Member] | Western Devcon, Inc [Member] | California | Warehouse [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 16,100 | |
2650 SW 145th Avenue - Parbel of Florida [Member] | Western Devcon, Inc [Member] | FLORIDA | Warehouse Or Distribution [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 81,721 | |
5998 Osceola Court - United Technologies [Member] | Western Devcon, Inc [Member] | GEORGIA | Manufacturing Warehouse [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 105,641 | |
501 East Hunter Street - Lummus Corporation [Member] | Western Devcon, Inc [Member] | TEXAS | Distribution [Member] | ||
Real Estate Properties [Line Items] | ||
Rentable Square Feet | 70,078 |
Real_Estate_and_Intangibles_Fa
Real Estate and Intangibles - Fair Values of Assets Acquired and Liabilities Assumed (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Business Acquisition [Line Items] | |
Total Real Estate | $629,979 |
Total Intangibles | 108,540 |
Total Deferred Market Liabilities | -36,705 |
Debt Assumed | -363,709 |
Net Current Assets Transferred | 8,979 |
Net assets acquired | 347,084 |
Real Estate Investment [Member] | |
Business Acquisition [Line Items] | |
Land | 79,254 |
Building | 518,896 |
Acquired tenant improvements | 31,829 |
In-place leases [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 82,526 |
Acquired Leasing Commissions [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 15,607 |
Above Market Leases [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 10,407 |
Below Market Leases [Member] | |
Business Acquisition [Line Items] | |
Total Deferred Market Liabilities | -36,705 |
Easterly Partner LLC [Member] | |
Business Acquisition [Line Items] | |
Total Real Estate | 482,594 |
Total Intangibles | 75,119 |
Total Deferred Market Liabilities | -34,383 |
Debt Assumed | -271,622 |
Net Current Assets Transferred | 8,979 |
Net assets acquired | 260,687 |
Easterly Partner LLC [Member] | Real Estate Investment [Member] | |
Business Acquisition [Line Items] | |
Land | 43,681 |
Building | 411,472 |
Acquired tenant improvements | 27,441 |
Easterly Partner LLC [Member] | In-place leases [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 61,218 |
Easterly Partner LLC [Member] | Acquired Leasing Commissions [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 11,257 |
Easterly Partner LLC [Member] | Above Market Leases [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 2,644 |
Easterly Partner LLC [Member] | Below Market Leases [Member] | |
Business Acquisition [Line Items] | |
Total Deferred Market Liabilities | -34,383 |
Western Devcon, Inc [Member] | |
Business Acquisition [Line Items] | |
Total Real Estate | 147,385 |
Total Intangibles | 33,421 |
Total Deferred Market Liabilities | -2,322 |
Debt Assumed | -92,087 |
Net assets acquired | 86,397 |
Western Devcon, Inc [Member] | Real Estate Investment [Member] | |
Business Acquisition [Line Items] | |
Land | 35,573 |
Building | 107,424 |
Acquired tenant improvements | 4,388 |
Western Devcon, Inc [Member] | In-place leases [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 21,308 |
Western Devcon, Inc [Member] | Acquired Leasing Commissions [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 4,350 |
Western Devcon, Inc [Member] | Above Market Leases [Member] | |
Business Acquisition [Line Items] | |
Total Intangibles | 7,763 |
Western Devcon, Inc [Member] | Below Market Leases [Member] | |
Business Acquisition [Line Items] | |
Total Deferred Market Liabilities | ($2,322) |
Real_Estate_and_Intangibles_Pr
Real Estate and Intangibles - Proforma Financial Information of Future Operating Results (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Real Estate [Abstract] | ||
Total rental revenue | $18,536 | $18,536 |
Net income (loss) | $1,127 | ($1,907) |
Real_Estate_and_Intangibles_Sc1
Real Estate and Intangibles - Schedule of Real Estate and Intangibles (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Real Estate | |
Land | $79,254 |
Building | 518,929 |
Acquired tenant improvements | 31,829 |
Accumulated amortization | -2,404 |
Total Real Estate | 627,608 |
Intangibles | |
Above market leases | 31,829 |
Accumulated amortization | -2,684 |
Total Intangibles | 105,856 |
Intangible Liabilities, Below market leases | -36,705 |
Intangible Liabilities, Accumulated amortization | 864 |
Total Intangible Liabilities | -35,841 |
In-place leases [Member] | |
Real Estate | |
Acquired tenant improvements | 82,526 |
Intangibles | |
Above market leases | 82,526 |
Acquired Leasing Commissions [Member] | |
Real Estate | |
Acquired tenant improvements | 15,607 |
Intangibles | |
Above market leases | 15,607 |
Above Market Leases [Member] | |
Real Estate | |
Acquired tenant improvements | 10,407 |
Intangibles | |
Above market leases | $10,407 |
Real_Estate_and_Intangibles_Am
Real Estate and Intangibles - Amortization of Total Intangible Assets and Intangible Liabilities (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Real Estate [Abstract] | |
Intangible assets, 2015 | $14,664 |
Intangible assets, 2016 | 18,866 |
Intangible assets, 2017 | 17,731 |
Intangible assets, 2018 | 14,404 |
Intangible assets, 2019 | 9,633 |
Intangible assets, Thereafter | 30,558 |
Intangible assets, Total | 105,856 |
Intangible liabilities, 2015 | -4,723 |
Intangible liabilities, 2016 | -6,163 |
Intangible liabilities, 2017 | -5,966 |
Intangible liabilities, 2018 | -5,601 |
Intangible liabilities, 2019 | -3,856 |
Intangible liabilities, Thereafter | -9,532 |
Intangible liabilities, Total | ($35,841) |
Debt_Summary_of_Borrowings_Det
Debt - Summary of Borrowings (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Debt Instrument [Line Items] | |
Long term debt, Total | $100,898 |
Senior Unsecured Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Long term debt, Total | 30,917 |
Mortgage Debt [Member] | |
Debt Instrument [Line Items] | |
Long term debt, Total | $69,981 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Feb. 11, 2015 | |
Debt Instrument [Line Items] | ||
Debt Instrument, Description | A fluctuating rate equal to the sum of (a) the highest of (x) Citibank, N.A.'s base rate, (y) the federal funds effective rate plus 0.50% and (z) the one-month LIBOR rate plus 1.00% plus (b) a margin ranging from 0.4% to 0.9%, or a Eurodollar rate equal to a periodic fixed rate equal to LIBOR plus, a margin ranging from 1.4% to 1.9%, in each case with a margin based on our leverage ratio. | |
Percentage of minimum proceeds from common stock issuance under covenant | 75.00% | |
Revolving credit facility, Covenant Terms, Minimum EBITDA to Fixed Charges Ratio | 150.00% | |
Revolving credit facility, covenant terms | (i) the maximum ratio of consolidated total indebtedness to total asset value (each as defined in the agreement) may not exceed 60.0% on any date, provided that the maximum ratio may be increased to 65.0% for the two consecutive quarters following the date on which a material acquisition (as defined in the agreement) occurs, (ii) the maximum ratio of consolidated secured indebtedness (as defined in the agreement) to total asset value may not exceed 40.0% on any date, (iii) the maximum ratio of consolidated secured recourse indebtedness (as defined in the agreement) to total asset value may not exceed 15% on any date, (iv) the minimum consolidated tangible net worth (as defined in the agreement) may not, on any date, be less than the sum of an amount equal to 75.0% of our consolidated tangible net worth as of the closing date of the facility plus an amount equal to 75.0% of the aggregate net cash proceeds received by us from any offering of our capital stock after the closing date of the facility, (v) the minimum ratio of adjusted consolidated EBITDA to consolidated fixed charges (each as defined in the agreement) may not be less than 1.50 to 1.00 on any date, (vi) the maximum ratio of consolidated unsecured indebtedness to unencumbered asset value (each as defined in the agreement) may not exceed 60% as of any date and (vii) the minimum ratio of adjusted consolidated net operating income from unencumbered assets (as defined in the agreement) to interest payable on unsecured debt (as determined in accordance with the agreement) shall not be less than 1.75 to 1.00 on any date. Additionally, under the proposed revolving credit facility, our distributions may not exceed the greater of (i) 95.0% of our FFO or (ii) the amount required for us to maintain our status as a REIT and avoid the payment of federal or state income or excise tax. | |
Outstanding borrowings | $30,917,000 | |
Repayment outstanding mortgage indebtedness | 24,500,000 | |
Unsecured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Amount borrowed under senior unsecured revolving credit facility | 55,400,000 | |
Outstanding borrowings | 30,900,000 | |
Unsecured revolving credit facility, weighted average outstanding amount | 19,500,000 | |
Unsecured revolving credit facility, weighted average interest rate | 1.58% | |
London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
LIBOR Rate | 0.17% | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Total indebtedness to total asset value under covenant | 60.00% | |
Unsecured indebtedness to unencumbered asset value under covenant | 60.00% | |
Percentage of fund flow from operation under covenant | 95.00% | |
Maximum [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate margin | 1.90% | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Percentage of minimum tangible net worth under covenant | 75.00% | |
Net operating income from unencumbered assets to interest payable on unsecured debt under covenant | 175.00% | |
Minimum [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate margin | 1.40% | |
Property In Lakewood [Member] | COLORADO | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 20,000,000 | |
Federal Funds [Member] | Base Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate margin | 0.50% | |
Federal Funds [Member] | One Month Libor [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate margin | 1.00% | |
Federal Funds [Member] | Maximum [Member] | One Month Libor [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate margin | 0.90% | |
Federal Funds [Member] | Minimum [Member] | One Month Libor [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate margin | 0.40% | |
Senior Unsecured Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility current borrowing capacity | 400,000,000 | 400,000,000 |
Credit facility maximum borrowing capacity | 250,000,000 | |
Credit facility maximum borrowing capacity | 650,000,000 | |
Debt instrument, termination year | 4 years | |
Line of Credit Facility, Description | In addition, there will be two extension options for the senior unsecured revolving credit facility and each extension option will allow us to extend the senior unsecured revolving credit facility for an additional six months, in each case if certain conditions are satisfied. | |
Senior Unsecured Revolving Credit Facility [Member] | Unsecured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate margin | 1.40% | |
Unsecured revolving credit facility, weighted average interest rate | 1.58% | |
Conditional [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Total indebtedness to total asset value under covenant | 65.00% | |
Secured Debt [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Total indebtedness to total asset value under covenant | 40.00% | |
Recourse Indebtedness [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Total indebtedness to total asset value under covenant | 15.00% | |
Senior Unsecured Revolving Credit Facility [Member] | Unsecured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding borrowings | 35,400,000 | |
Mortgage Debt [Member] | Non Recourse [Member] | ||
Debt Instrument [Line Items] | ||
Secured nonrecourse debt | $293,400,000 |
Debt_Summary_of_Mortgage_Debt_
Debt - Summary of Mortgage Debt (Detail) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Debt Instrument [Line Items] | |
Premium/Discount | ($614) |
Carrying Value | 100,898 |
Mortgage Debt [Member] | |
Debt Instrument [Line Items] | |
Fixed/Floating | 0 |
Principal Balance | 69,367 |
Premium/Discount | 614 |
Carrying Value | 69,981 |
Mortgage Debt [Member] | CBP Savannah [Member] | |
Debt Instrument [Line Items] | |
Fixed/Floating | 0 |
Contractual Interest Rate | 3.40% |
Effective Interest Rate | 4.12% |
Maturity Date | 31-Jul-33 |
Principal Balance | 16,070 |
Premium/Discount | -907 |
Carrying Value | 15,163 |
Mortgage Debt [Member] | ICE Charleston [Member] | |
Debt Instrument [Line Items] | |
Fixed/Floating | 0 |
Contractual Interest Rate | 4.21% |
Effective Interest Rate | 3.93% |
Maturity Date | 31-Jan-27 |
Principal Balance | 22,767 |
Premium/Discount | 438 |
Carrying Value | 23,205 |
Mortgage Debt [Member] | MEPCOM Jacksonville [Member] | |
Debt Instrument [Line Items] | |
Fixed/Floating | 0 |
Contractual Interest Rate | 4.41% |
Effective Interest Rate | 3.89% |
Maturity Date | 31-Oct-25 |
Principal Balance | 13,030 |
Premium/Discount | 360 |
Carrying Value | 13,390 |
Mortgage Debt [Member] | USFS II Albuquerque [Member] | |
Debt Instrument [Line Items] | |
Fixed/Floating | 0 |
Contractual Interest Rate | 4.46% |
Effective Interest Rate | 3.92% |
Maturity Date | 31-Jul-26 |
Principal Balance | 17,500 |
Premium/Discount | 723 |
Carrying Value | $18,223 |
Debt_Summary_of_Aggregate_Debt
Debt - Summary of Aggregate Debt Maturities (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Debt Disclosure [Abstract] | |
2015 | $1,828 |
2016 | 2,857 |
2017 | 2,977 |
2018 | 3,100 |
2019 | 34,146 |
Thereafter | 55,376 |
Unamortized fair value adjustments | 100,284 |
Unamortized fair value adjustments | 614 |
Unamortized fair value adjustments | $100,898 |
Fair_value_measurements_Level_
Fair value measurements - Level 3 Based Upon Significance of Unobservable Inputs to Overall Fair Value Measurement (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Fair Value Disclosures [Abstract] | ||
Beginning Balance | $267,683 | $173,099 |
Purchase of investments | 30,316 | |
Contributions to investments | 257 | 748 |
Distributions from investments | -1,366 | |
Net change in realized appreciation | 0 | |
Net change in unrealized appreciation (depreciation) | -5,122 | 7,480 |
Sale of investments | -262,818 | |
Ending Balance | $210,277 |
Equity_Summary_of_Changes_In_S
Equity - Summary of Changes In Stockholders Equity (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Shareholders Equity [Line Items] | ||
Balance at December 31, 2014 | $297,184 | |
Distributions | -5,441 | |
Public offering | 191,583 | |
Proceeds of private placement | 75,638 | |
Contribution of Western Devcon Properties for OP units | 86,397 | |
Stock based compensation | 55 | |
Grant of unvested restricted stock | 0 | |
Buyback of common stock | -1 | |
Net loss | -8,001 | 7,421 |
Allocation of NCI in OP | 249,272 | |
Balance at March 31, 2015 | 637,414 | |
Balance at December 31, 2014, Shares | 1,000 | |
Exchange of members' capital and non controlling interests for OP units and shares, Shares | 3,308,000 | |
Public offering, Shares | 13,800,000 | |
Proceeds of private placement, Shares | 7,033,712 | |
Grant of unvested restricted stock, Shares | 2,667 | |
Buyback of common stock, Shares | -1,000 | |
Balance at March 31, 2015, Shares | 24,168,379 | |
Partnership [Member] | ||
Shareholders Equity [Line Items] | ||
Net loss | -8,001 | |
Common Stock Par Value [Member] | ||
Shareholders Equity [Line Items] | ||
Exchange of members' capital and non controlling interests for OP units and shares | 33 | |
Public offering | 138 | |
Proceeds of private placement | 70 | |
Grant of unvested restricted stock | 0 | |
Balance at March 31, 2015 | 241 | |
Additional Paid-in Capital [Member] | ||
Shareholders Equity [Line Items] | ||
Balance at December 31, 2014 | 1 | |
Exchange of members' capital and non controlling interests for OP units and shares | 67,312 | |
Public offering | 191,445 | |
Proceeds of private placement | 105,435 | |
Stock based compensation | 55 | |
Grant of unvested restricted stock | 0 | |
Buyback of common stock | -1 | |
Allocation of NCI in OP | 26,539 | |
Balance at March 31, 2015 | 390,786 | |
Dividends in Excess of Earnings [Member] | ||
Shareholders Equity [Line Items] | ||
Grant of unvested restricted stock | 0 | |
Balance at March 31, 2015 | -2,885 | |
Dividends in Excess of Earnings [Member] | Partnership [Member] | ||
Shareholders Equity [Line Items] | ||
Net loss | -2,885 | |
Non-controlling Interest in Operating Partnership [Member] | ||
Shareholders Equity [Line Items] | ||
Exchange of members' capital and non controlling interests for OP units and shares | 194,530 | |
Contribution of Western Devcon Properties for OP units | 86,397 | |
Grant of unvested restricted stock | 0 | |
Allocation of NCI in OP | -26,539 | |
Balance at March 31, 2015 | 249,272 | |
Non-controlling Interest in Operating Partnership [Member] | Partnership [Member] | ||
Shareholders Equity [Line Items] | ||
Net loss | -5,116 | |
Easterly Partners, LLC [Member] | Non-controlling Interest in Operating Partnership [Member] | ||
Shareholders Equity [Line Items] | ||
Balance at December 31, 2014 | 283,847 | |
Distributions | -5,432 | |
Exchange of members' capital and non controlling interests for OP units and shares | -249,137 | |
Proceeds of private placement | -29,278 | |
Grant of unvested restricted stock | 0 | |
Easterly Partners, LLC [Member] | Capital / (Deficit) [Member] | ||
Shareholders Equity [Line Items] | ||
Balance at December 31, 2014 | 13,336 | |
Distributions | -9 | |
Exchange of members' capital and non controlling interests for OP units and shares | -12,738 | |
Proceeds of private placement | -589 | |
Grant of unvested restricted stock | $0 |
Equity_Additional_Information_
Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | |
Feb. 11, 2015 | Mar. 31, 2015 | Oct. 16, 2014 | Dec. 31, 2014 | |
Stockholders Equity Note Disclosure [Line Items] | ||||
Gross proceeds from initial public offering | $207,000,000 | |||
Stock-based awards with respect to equity incentive plans | 2,273,959 | |||
Cash based awards with respect to equity incentive plans | 5,000,000 | |||
Common stock issued to non-employee directors | 2,667 | |||
Additional shares or options issued | 24,168,379 | 1,000 | ||
Western Devcon, Inc [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Number of properties | 14 | 14 | ||
Common units issued upon acquisition | 5,759,819 | |||
Minimum [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Percentage of exercise price of option over fair market value of common stock | 100.00% | |||
Maximum [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Share based compensation, term of options | 10 years | |||
2015 Equity Incentive Plan [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Common stock reserved for future issuance under equity incentive plans | 2,273,959 | |||
Common stock issued to non-employee directors | 26,667 | |||
Compensation expense recognized | 100,000 | |||
Additional shares or options issued | 0 | |||
Lock-up period | 180 days | |||
IPO [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Shares issued, number of shares | 13,800,000 | |||
Shares issued, price per share | $15 | |||
Number of properties | 15 | |||
Over-Allotment Option [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Shares issued, number of shares | 1,800,000 | |||
Private Placement [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Shares issued, number of shares | 7,033,712 | |||
Shares issued, price per share | $15 | |||
Additional shares or options issued | 7,033,712 | |||
Common Stock Par Value [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Shares issued, number of shares | 1,000 | |||
Shares issued, value | $1,000 | |||
Common Stock Par Value [Member] | IPO [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Shares issued upon acquisition | 3,308,000 | |||
Common Units [Member] | Western Devcon, Inc [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Common units issued upon acquisition | 5,759,819 | |||
Common Units [Member] | IPO [Member] | ||||
Stockholders Equity Note Disclosure [Line Items] | ||||
Common units issued upon acquisition | 9,771,120 |
Earnings_Per_Share_Summary_of_
Earnings Per Share - Summary of Basic and Diluted Earnings Per Common Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Net (loss) | ($8,001) | $7,421 |
Less: Non-controlling interest | -5,116 | |
Net Income available to Easterly Government Properties, Inc. | ($2,885) | $6,520 |
Denominator for basic EPS | 13,144,277 | |
Dilutive effect of share-based compensation awards | 0 | |
Denominator for basic and diluted EPS | 13,144,277 | |
Basic EPS | ($0.22) | |
Diluted EPS | ($0.22) |
Commitments_and_Contingencies_1
Commitments and Contingencies - Summary of Future Minimum Contractual Rent Payments (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum lease payments, Total | $389,644 |
Minimum lease payments, 2015 | 36,859 |
Minimum lease payments,2016 | 48,303 |
Minimum lease payments,2017 | 48,705 |
Minimum lease payments,2018 | 46,933 |
Minimum lease payments,2019 | 41,827 |
Minimum lease payments,Thereafter | $167,017 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Commitments And Contingencies [Line Items] | ||
Number of consolidated properties | 100 | |
Number of tenants | 16 | |
Straight-line rent adjustments | $8.60 | |
Amortization of above and below market leases | 0.7 | |
Tax Protection Agreement Period | 8 years | |
DISTRICT OF COLUMBIA | ||
Commitments And Contingencies [Line Items] | ||
Area of leased property | 4,731 | |
Operating lease agreement expire date | 31-Mar-16 | |
California | ||
Commitments And Contingencies [Line Items] | ||
Area of leased property | 5,752 | |
Operating lease agreement expire date | 30-Apr-17 | |
Corporate Office Leases [Member] | ||
Commitments And Contingencies [Line Items] | ||
Rent expense | $0.10 | $0.10 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Summary of Future Minimum Rental Payments Under Company's Corporate Office Leases (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Schedule Of Future Minimum Rental Payments For Operating Leases [Line Items] | |
Minimum lease payments, Total | $389,644 |
Minimum lease payments, 2015 | 36,859 |
Minimum lease payments,2016 | 48,303 |
Minimum lease payments,2017 | 48,705 |
Minimum lease payments,2018 | 46,933 |
Corporate Office Leases [Member] | |
Schedule Of Future Minimum Rental Payments For Operating Leases [Line Items] | |
Minimum lease payments, Total | 506 |
Minimum lease payments, 2015 | 273 |
Minimum lease payments,2016 | 189 |
Minimum lease payments,2017 | 44 |
Minimum lease payments,2018 | $0 |
Concentrations_Risk_Additional
Concentrations Risk - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Wholly Owned Properties [Member] | |
Concentration Risk [Line Items] | |
Number of properties | 29 |
California | |
Concentration Risk [Line Items] | |
Number of properties | 11 |
Lease Income [Member] | Credit Concentration Risk [Member] | California | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 33.00% |
Rentable Square Feet [Member] | Credit Concentration Risk [Member] | California | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 25.00% |
General Services Administration And Other Federal Agencies [Member] | Lease Income [Member] | Credit Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 97.00% |
Non Governmental Tenants [Member] | Lease Income [Member] | Credit Concentration Risk [Member] | |
Concentration Risk [Line Items] | |
Percentage of concentrations risk | 4.00% |
Related_Party_Additional_Infor
Related Party - Additional Information (Detail) (USD $) | Mar. 31, 2015 |
In Millions, unless otherwise specified | |
Payroll Expenses, Interest and Defeasance Costs [Member] | Easterly Capital [Member] | |
Related Party Transaction [Line Items] | |
Due from related parties | $0.20 |
Rent and Office Expense [Member] | Western Devcon, Inc [Member] | |
Related Party Transaction [Line Items] | |
Due to related parties current | $0.10 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | 6-May-15 | Apr. 01, 2015 | Jan. 23, 2015 | Mar. 31, 2015 | Jan. 23, 2015 |
sqft | |||||
Subsequent Events [Abstract] | |||||
Purchase of property, plant and equipment | $20.30 | ||||
Rentable property acquired | 115,650 | ||||
Percentage of property leased | 100.00% | ||||
Lease term | 15 years | ||||
Deposit for Property | 20.2 | ||||
Closing Balance of acquisition purchase price | $20.30 | ||||
Dividend declared per common stock | $0.11 | ||||
Dividend payable date | 3-Jun-15 | ||||
Dividend payable, date of record | 18-May-15 |