Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Mar. 08, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Parkway, Inc. | |
Entity Central Index Key | 1,677,761 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | FY | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 49,195,214 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Public Float | $ 990.4 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2015 |
Assets | ||||
Office properties | $ 1,864,668 | |||
Accumulated depreciation | (159,057) | |||
Total real estate related investments, net | 1,705,611 | |||
Cash and cash equivalents | 230,333 | |||
Deferred rents receivable | 32,000 | |||
Receivables and other assets | 92,257 | |||
In-place lease intangibles, net of accumulated amortization of $76,137 | 117,243 | |||
Other intangible assets, net | 18,451 | |||
Total assets | 2,163,895 | |||
Liabilities | ||||
Notes payable to banks, net | 341,602 | |||
Mortgage notes payable, net | 451,577 | |||
Accounts payable and other liabilities | 47,219 | |||
Accrued tenant improvements | 66,104 | |||
Accrued property taxes | 53,659 | |||
Below market lease, net of accumulated amortization | 51,812 | |||
Total liabilities | 1,011,973 | |||
Stockholder's Equity | ||||
8.00% Series A non-voting preferred stock, $100,000 liquidation preference per share, 50 shares authorized, issued and outstanding, and preferred stock, $0.001 par value, 48,999,950 shares authorized, zero issued and outstanding | 5,000 | |||
Additional paid-in capital | 1,138,151 | |||
Accumulated deficit | (14,316) | |||
Total Parkway, Inc. stockholders’ equity | 1,128,885 | |||
Noncontrolling interest - unitholders | 23,037 | |||
Total equity | 1,151,922 | |||
Total liabilities and equity | 2,163,895 | |||
Common Stock | ||||
Stockholder's Equity | ||||
Common stock, $0.001 par value, 200,000,000 shares authorized and 49,110,645 shares issued and outstanding | 49 | |||
Limited Voting Stock | ||||
Stockholder's Equity | ||||
Common stock, $0.001 par value, 200,000,000 shares authorized and 49,110,645 shares issued and outstanding | $ 1 | |||
Parkway Houston | ||||
Assets | ||||
Office properties | $ 831,473 | $ 818,594 | ||
Accumulated depreciation | (86,517) | (65,941) | ||
Total real estate related investments, net | 744,956 | 752,653 | ||
Cash and cash equivalents | 13,671 | 11,961 | ||
Deferred rents receivable | 25,159 | 21,073 | ||
Receivables and other assets | 79,423 | 76,300 | ||
Intangible assets, net | 17,452 | 24,439 | ||
Total assets | 855,502 | 865,731 | ||
Liabilities | ||||
Mortgage notes payable, net | 276,441 | 396,901 | ||
Accounts payable and other liabilities | 32,011 | 36,299 | ||
Accrued tenant improvements | 3,862 | 4,346 | ||
Accrued property taxes | 16,279 | 9,300 | ||
Below market lease, net of accumulated amortization | 17,862 | 23,465 | ||
Total liabilities | 326,314 | 456,665 | ||
Stockholder's Equity | ||||
Total equity | 529,188 | 409,066 | ||
Legacy Parkway equity | 529,188 | 409,066 | ||
Total liabilities and equity | 855,502 | 865,731 | ||
Parkway Houston | Acquired In-Place Lease and Above Market Leases | ||||
Assets | ||||
Intangible assets, net | 17,452 | 24,439 | ||
Parkway Houston | Management Contract Intangibles | ||||
Assets | ||||
Intangible assets, net | $ 0 | 378 | ||
Cousins Houston | ||||
Assets | ||||
Accumulated depreciation | $ (148,523) | (111,949) | ||
Total real estate related investments, net | 1,081,712 | 1,086,451 | ||
Cash and cash equivalents | 0 | 109 | ||
Deferred rents receivable | 28,211 | 22,798 | ||
Accounts receivable | 5,693 | 4,549 | ||
Intangible assets, net of accumulated amortization of $72,909 and $61,567 in 2016 and 2015, respectively | 62,512 | 72,166 | ||
Other assets | 2,093 | 2,163 | ||
Total assets | 1,180,221 | 1,188,236 | ||
Liabilities | ||||
Mortgage notes payable, net | 178,180 | 180,937 | ||
Accounts payable and other liabilities | 43,635 | 47,126 | ||
Below market lease, net of accumulated amortization | 36,399 | 41,089 | ||
Other liabilities | 2,467 | 2,212 | ||
Total liabilities | 260,681 | 271,364 | ||
Commitments and contingencies (Note 6) | ||||
Stockholder's Equity | ||||
Total Parkway, Inc. stockholders’ equity | 919,540 | 916,872 | ||
Total liabilities and equity | $ 1,180,221 | $ 1,188,236 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2016 | Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2015 | |
Below market leases, accumulated amortization | $ 26,958,000 | $ 26,958,000 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |||
Preferred stock, shares authorized (in shares) | 48,999,950 | 48,999,950 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Operating properties, accumulated depreciation | $ 159,057,000 | $ 159,057,000 | |||
Parkway Houston | |||||
Below market leases, accumulated amortization | $ 41,778,000 | $ 36,175,000 | |||
Operating properties, accumulated depreciation | 86,517,000 | 65,941,000 | |||
Cousins Houston | |||||
Intangible assets, accumulated amortization | $ 72,909,000 | 61,567,000 | |||
Below market leases, accumulated amortization | 24,797,000 | 20,107,000 | |||
Operating properties, accumulated depreciation | 148,523,000 | 111,949,000 | |||
Common Stock | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |||
Common stock, shares issued (in shares) | 49,110,645 | 49,110,645 | |||
Common stock, shares outstanding (in shares) | 49,110,645 | 49,110,645 | |||
Limited Voting Stock | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |||
Common stock, shares issued (in shares) | 858,417 | 858,417 | |||
Common stock, shares outstanding (in shares) | 858,417 | 858,417 | |||
Series A Preferred Stock | |||||
Series A preferred stock, dividend rate | 8.00% | 8.00% | |||
Series A preferred stock, liquidation preference (in dollars) | $ 100,000 | $ 100,000 | |||
Preferred stock, shares authorized (in shares) | 50 | 50 | |||
Preferred stock, shares issued (in shares) | 50 | 50 | |||
Preferred stock, shares outstanding (in shares) | 50 | 50 | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
In-Place Lease Intangibles | |||||
Intangible assets, accumulated amortization | $ 76,137,000 | $ 76,137,000 | |||
In-Place Lease Intangibles | Parkway Houston | |||||
Intangible assets, accumulated amortization | $ 57,178,000 | 50,787,000 | |||
In-Place Lease Intangibles | Cousins Houston | |||||
Intangible assets, accumulated amortization | $ 69,434,000 | $ 58,715,000 |
Consolidated Statement of Opera
Consolidated Statement of Operations and Comprehensive Loss - USD ($) shares in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues [Abstract] | |||||
Income from office properties | $ 67,550,000 | ||||
Management company income | 1,381,000 | ||||
Total revenues | 68,931,000 | ||||
Expenses | |||||
Property operating expenses | 32,518,000 | ||||
Depreciation and amortization | 25,139,000 | ||||
Management company expenses | 1,050,000 | ||||
General and administrative | 17,510,000 | ||||
Total expenses | 76,217,000 | ||||
Operating loss | (7,286,000) | ||||
Other income and expense | |||||
Interest and other income | 1,225,000 | ||||
Interest expense | (8,007,000) | ||||
Loss before income taxes | (14,068,000) | ||||
Income tax expense | (453,000) | ||||
Net loss | (14,521,000) | ||||
Net loss attributable to noncontrolling interest - unitholders | 299,000 | ||||
Net loss attributable to Parkway, Inc. | (14,222,000) | ||||
Dividends on preferred stock | (94,000) | ||||
Net loss attributable to common stockholders | $ (14,316,000) | ||||
Net loss per common share attributable to common stockholders: | |||||
Basic net loss per common share attributable to common stockholders (in dollars per share) | $ (0.29) | ||||
Diluted net loss per common share attributable to common stockholders (in dollars per share) | $ (0.29) | ||||
Weighted average shares outstanding: | |||||
Basic (in shares) | 49,111 | ||||
Diluted (in shares) | 49,111 | ||||
Cousins Houston | |||||
Revenues [Abstract] | |||||
Income from office properties | $ 137,374,000 | $ 177,890,000 | $ 184,536,000 | ||
Other | 288,000 | 0 | 31,000 | ||
Total revenues | 137,662,000 | 177,890,000 | 184,567,000 | ||
Expenses | |||||
Property operating expenses | 58,704,000 | 74,162,000 | 79,625,000 | ||
Depreciation and amortization | 47,345,000 | 63,791,000 | 77,760,000 | ||
Transaction costs | 6,349,000 | 0 | 0 | ||
General and administrative | 6,787,000 | 6,328,000 | 7,347,000 | ||
Total expenses | 125,206,000 | 152,269,000 | 172,859,000 | ||
Other income and expense | |||||
Interest expense | (6,021,000) | (7,988,000) | (8,127,000) | ||
Net loss attributable to Parkway, Inc. | $ 12,456,000 | 25,621,000 | 11,708,000 | ||
Parkway Houston | |||||
Revenues [Abstract] | |||||
Income from office properties | $ 83,249,000 | 108,507,000 | 123,172,000 | ||
Management company income | 3,835,000 | 9,891,000 | 23,971,000 | ||
Sale of condominium units | 0 | 11,063,000 | 16,554,000 | ||
Total revenues | 87,084,000 | 129,461,000 | 163,697,000 | ||
Expenses | |||||
Property operating expenses | 39,758,000 | 45,385,000 | 54,856,000 | ||
Management company expenses | 3,263,000 | 9,362,000 | 27,038,000 | ||
Cost of sales - condominium units | 0 | 11,120,000 | 13,199,000 | ||
Depreciation and amortization | 30,791,000 | 55,570,000 | 64,012,000 | ||
Impairment loss on management contracts | 0 | 0 | 4,750,000 | ||
General and administrative | 4,880,000 | 6,336,000 | 6,917,000 | ||
Total expenses | 78,692,000 | 127,773,000 | 170,772,000 | ||
Operating loss | 8,392,000 | 1,688,000 | (7,075,000) | ||
Other income and expense | |||||
Gain (loss) on extinguishment of debt | 154,000 | 0 | 0 | ||
Interest and other income | 196,000 | 246,000 | 244,000 | ||
Interest expense | (10,010,000) | (16,088,000) | (16,252,000) | ||
Loss before income taxes | (1,268,000) | (14,154,000) | (23,083,000) | ||
Income tax expense | (1,113,000) | (1,635,000) | 180,000 | ||
Net loss | (2,381,000) | (15,789,000) | (22,903,000) | ||
Net (income) loss attributable to noncontrolling interests | 0 | 7,000 | (148,000) | ||
Net loss attributable to Parkway, Inc. | $ (2,381,000) | $ (15,782,000) | $ (23,051,000) |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Thousands | Total | Common StockCommon Stock | Common StockLimited Voting Stock | Preferred Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interests | Parkway Houston | Parkway HoustonParkway Equity | Parkway HoustonNoncontrolling Interests | Cousins Houston |
Balance at beginning of period at Dec. 31, 2013 | $ 936,947 | ||||||||||
Balance at beginning of period at Dec. 31, 2013 | $ 400,035 | $ 396,985 | $ 3,050 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (22,903) | (23,051) | 148 | ||||||||
Net income | (23,051) | 11,708 | |||||||||
Distributions to noncontrolling interest holders in properties | (2,290) | (2,290) | |||||||||
Contributions from parent, net | 6,119 | 6,119 | (38,858) | ||||||||
Balance at end of period at Dec. 31, 2014 | 380,961 | 380,053 | 908 | ||||||||
Balance at end of period at Dec. 31, 2014 | 909,797 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (15,789) | (15,782) | (7) | ||||||||
Net income | (15,782) | 25,621 | |||||||||
Distributions to noncontrolling interest holders in properties | (901) | (901) | |||||||||
Contributions from parent, net | 44,795 | 44,795 | (18,546) | ||||||||
Balance at end of period at Dec. 31, 2015 | 409,066 | 409,066 | 0 | ||||||||
Balance at end of period at Dec. 31, 2015 | 916,872 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (2,381) | (2,381) | 0 | ||||||||
Net income | (2,381) | ||||||||||
Contributions from parent, net | 122,503 | 122,503 | |||||||||
Balance at end of period at Oct. 05, 2016 | 529,188 | 529,188 | 0 | ||||||||
Balance at beginning of period at Dec. 31, 2015 | 916,872 | ||||||||||
Balance at beginning of period at Dec. 31, 2015 | $ 409,066 | $ 409,066 | $ 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 12,456 | ||||||||||
Contributions from parent, net | (9,788) | ||||||||||
Balance at end of period at Oct. 06, 2016 | $ 919,540 | ||||||||||
Balance at beginning of period at Jun. 28, 2016 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net loss | (14,521) | (14,222) | (299) | ||||||||
Net income | (14,222) | ||||||||||
Preferred dividends declared - $1,889 per share | (94) | (94) | |||||||||
Share-based compensation | 3,780 | 3,780 | |||||||||
Contributions from parent, net | 17,114 | 17,114 | |||||||||
Contributions in connection with Spin-Off | 1,117,257 | 23,336 | |||||||||
Stock issued during period, value, new issues | 49 | 1 | 5,000 | ||||||||
Balance at end of period at Dec. 31, 2016 | 1,151,922 | $ 49 | $ 1 | $ 5,000 | $ 1,138,151 | $ (14,316) | $ 23,037 | ||||
Balance at end of period at Dec. 31, 2016 | $ 1,128,885 |
Consolidated Statement of Chan6
Consolidated Statement of Changes in Equity (Parenthetical) | 6 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Preferred dividends declared (in dollars per share) | $ / shares | $ 1,889 |
Series A Preferred Stock | |
Series A preferred stock, dividend rate | 8.00% |
Common Stock | Common Stock | |
Stock issued during period, new issues (in shares) | 49,110,645 |
Common Stock | Limited Voting Stock | |
Stock issued during period, new issues (in shares) | 858,417 |
Preferred Stock | |
Stock issued during period, new issues (in shares) | 50 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating activities | |||||
Net income | $ (14,222,000) | ||||
Net loss | (14,521,000) | ||||
Adjustments to reconcile net loss to cash provided by operating activities: | |||||
Depreciation and amortization | 25,139,000 | ||||
Amortization of above/below market leases, net | (1,285,000) | ||||
Amortization of financing costs | 805,000 | ||||
Amortization of debt premium | (555,000) | ||||
Share-based compensation expense | 3,780,000 | ||||
Deferred income tax expense | 135,000 | ||||
Gain on sale of non-depreciable real estate | (1,097,000) | ||||
Non-cash operating activities paid by Parkway Properties, Inc. | 7,790,000 | ||||
Bad debt expense | 9,000 | ||||
Increase in deferred leasing costs | (1,317,000) | ||||
Changes in operating assets and liabilities: | |||||
Change in receivables and other assets | 977,000 | ||||
Change in accounts payable and other accrued expenses | 18,728,000 | ||||
Cash provided by operating activities | 38,579,000 | ||||
Investing activities | |||||
Proceeds from sale of non-depreciable real estate | 2,653,000 | ||||
Improvements to real estate | (6,975,000) | ||||
Cash used in investing activities | (4,322,000) | ||||
Financing activities | |||||
Principal payments on mortgage notes payable | (1,679,000) | ||||
Proceeds from bank borrowings | 350,000,000 | ||||
Change in parent investment, net | $ 0 | $ 0 | $ 1,546,000 | ||
Distribution of cash to Cousins Properties Incorporated in connection with Spin-Off | (157,245,000) | ||||
Proceeds from issuance of preferred stock | 5,000,000 | ||||
Cash provided by financing activities | 196,076,000 | ||||
Change in cash and cash equivalents | 230,333,000 | ||||
Cash and cash equivalents at beginning of period | 0 | ||||
Cash and cash equivalents at end of period | 230,333,000 | ||||
Supplemental cash flow information: | |||||
Cash paid for interest | 5,243,000 | ||||
Cash paid for income taxes | 0 | ||||
Contribution of real estate, net in connection with Spin-Off | 1,712,449,000 | ||||
Contribution of receivables and other assets in connection with Spin-Off | 91,165,000 | ||||
Contribution of intangibles, net in connection with Spin-Off | 143,705,000 | ||||
Mortgage notes payable, net assumed in connection with Spin-Off | 453,769,000 | ||||
Contribution of accounts payable and other liabilities, accrued tenant improvements, accrued property taxes and below market leases, net in connection with Spin-Off | 195,662,000 | ||||
Financing activities paid by Parkway Properties, Inc. | 9,161,000 | ||||
Contribution of capital by noncontrolling interests in connection with Spin-Off | 23,336,000 | ||||
Accrued capital expenditures | 5,889,000 | 594,000 | 0 | 0 | |
Common Stock | |||||
Supplemental cash flow information: | |||||
Stock Issued | 49,000 | ||||
Limited Voting Stock | |||||
Supplemental cash flow information: | |||||
Stock Issued | $ 1,000 | ||||
Cousins Houston | |||||
Operating activities | |||||
Net income | $ 12,456,000 | 25,621,000 | 11,708,000 | ||
Adjustments to reconcile net loss to cash provided by operating activities: | |||||
Depreciation and amortization | 47,345,000 | 63,791,000 | 77,760,000 | ||
Amortization of financing costs | 136,000 | 179,000 | 177,000 | ||
Effect of certain non-cash adjustments to rental revenues | (9,479,000) | (14,626,000) | (17,895,000) | ||
Bad debt expense | 112,000 | (321,000) | 464,000 | ||
Changes in operating assets and liabilities: | |||||
Change in receivables and other assets | (2,926,000) | (1,224,000) | 482,000 | ||
Change in accounts payable and other accrued expenses | (4,977,000) | 2,975,000 | 7,524,000 | ||
Cash provided by operating activities | 42,667,000 | 76,395,000 | 80,220,000 | ||
Investing activities | |||||
Improvements to real estate | (30,095,000) | (55,085,000) | (37,478,000) | ||
Cash used in investing activities | (30,095,000) | (55,085,000) | (37,478,000) | ||
Financing activities | |||||
Principal payments on mortgage notes payable | (2,893,000) | (3,339,000) | (3,200,000) | ||
Change in parent investment, net | (9,788,000) | (18,546,000) | (38,858,000) | ||
Cash provided by financing activities | (12,681,000) | (21,885,000) | (42,058,000) | ||
Change in cash and cash equivalents | (109,000) | (575,000) | 684,000 | ||
Cash and cash equivalents at beginning of period | 109,000 | 109,000 | 684,000 | 0 | |
Cash and cash equivalents at end of period | 0 | 109,000 | 684,000 | ||
Supplemental cash flow information: | |||||
Cash paid for interest | 6,407,000 | 7,821,000 | 7,960,000 | ||
Accrued capital expenditures | (1,998,000) | (214,000) | (731,000) | ||
Parkway Houston | |||||
Operating activities | |||||
Net income | (2,381,000) | (15,782,000) | (23,051,000) | ||
Net loss | (2,381,000) | (15,789,000) | (22,903,000) | ||
Adjustments to reconcile net loss to cash provided by operating activities: | |||||
Depreciation and amortization | 30,791,000 | 55,570,000 | 64,012,000 | ||
Amortization of above/below market leases, net | (5,000,000) | (17,100,000) | (16,300,000) | ||
Amortization of management contract intangibles, net | 378,000 | 755,000 | 7,881,000 | ||
Amortization of below market leases, net | (4,650,000) | (16,937,000) | (16,118,000) | ||
Amortization of financing costs | 32,000 | 42,000 | 42,000 | ||
Amortization of debt premium | (1,701,000) | (3,992,000) | (3,940,000) | ||
Deferred income tax expense | 566,000 | 363,000 | (4,763,000) | ||
Impairment loss on management contracts | 0 | 0 | 4,750,000 | ||
Gain on extinguishment of debt | (154,000) | 0 | 0 | ||
Bad debt expense | 106,000 | 261,000 | 88,000 | ||
Increase in deferred leasing costs | (6,230,000) | (7,735,000) | (14,661,000) | ||
Changes in operating assets and liabilities: | |||||
Change in condominium units | 0 | 9,318,000 | 10,582,000 | ||
Change in receivables and other assets | (1,841,000) | (9,369,000) | (20,396,000) | ||
Change in accounts payable and other liabilities | (3,546,000) | 630,000 | (1,294,000) | ||
Cash provided by operating activities | 11,264,000 | 12,856,000 | 3,192,000 | ||
Investing activities | |||||
Improvements to real estate | (13,420,000) | (46,421,000) | (4,360,000) | ||
Cash used in investing activities | (13,420,000) | (46,421,000) | (4,360,000) | ||
Financing activities | |||||
Principal payments on mortgage notes payable | (118,637,000) | (6,360,000) | (3,547,000) | ||
Change in parent investment, net | 122,503,000 | 44,795,000 | 4,573,000 | ||
Distributions to noncontrolling interest holders in properties | 0 | (901,000) | (2,290,000) | ||
Cash provided by financing activities | 3,866,000 | 37,534,000 | (1,264,000) | ||
Change in cash and cash equivalents | 1,710,000 | 3,969,000 | (2,432,000) | ||
Cash and cash equivalents at beginning of period | $ 11,961,000 | 11,961,000 | 7,992,000 | 10,424,000 | |
Cash and cash equivalents at end of period | 13,671,000 | 11,961,000 | 7,992,000 | ||
Supplemental cash flow information: | |||||
Cash paid for interest | 12,924,000 | 20,064,000 | 20,313,000 | ||
Cash paid for income taxes | $ 1,044,000 | $ 1,783,000 | $ 4,383,000 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate Properties [Line Items] | |
Organization | Organization Parkway, Inc. (“the Company”) is an independent, publicly traded, self-managed real estate investment trust (“REIT”) that owns and operates high-quality office properties located in submarkets in Houston, Texas. The Company’s portfolio consists of five assets comprising 19 buildings and totaling approximately 8.7 million rentable square feet (unaudited) in the Galleria, Greenway and Westchase submarkets of Houston, providing geographic focus and significant operational scale and efficiencies. In addition, the Company operates a fee-based real estate service (the “Third-Party Services Business”) through a wholly owned subsidiary, Eola Office Partners, LLC and its wholly owned subsidiaries (collectively, “Eola”), which in total managed approximately 3.8 million square feet (unaudited) for primarily third-party owners as of December 31, 2016 . Unless otherwise indicated, all references to square feet represent net rentable square feet. The Company’s Spin-Off from Cousins On October 7, 2016, Cousins Properties Incorporated (“Cousins”) completed the spin-off of the Company, by distributing all of the Company’s outstanding shares of common and limited voting stock to the holders of Cousins common and limited voting preferred stock as of the record date, October 6, 2016 (the “Spin-Off”). The Spin-Off was effected pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of April 28, 2016, by and among Parkway Properties, Inc. (“Legacy Parkway”), Parkway Properties LP (“Parkway LP”), Cousins and Clinic Sub Inc., a wholly owned subsidiary of Cousins, and pursuant to that certain Separation, Distribution and Transition Services Agreement (the “Separation and Distribution Agreement”), dated as of October 5, 2016, among the Company, Cousins and certain other parties thereto. Prior to the Spin-Off, the Company was incorporated on June 3, 2016 as a wholly owned subsidiary of Legacy Parkway. On October 6, 2016, pursuant to the Merger Agreement, Legacy Parkway merged with and into Clinic Sub Inc., with Clinic Sub Inc. continuing as the surviving corporation and a wholly owned subsidiary of Cousins (the “Merger”). In connection with the Merger, the Company became a subsidiary of Cousins. Immediately following the effective time of the Merger, in accordance with the Merger Agreement, Cousins separated the portion of its combined businesses relating to the ownership of real properties in Houston, Texas, as well as Legacy Parkway’s fee-based real estate services (the “Third-Party Services Business” and together with the Houston real properties, the “Houston Business”), from the remainder of the combined businesses (the “Separation”). In connection with the Separation, the Company and Cousins reorganized the businesses through a series of transactions (the “UPREIT Reorganization”), pursuant to which the Houston Business was transferred to the Company, and the remainder of the combined business was transferred to Cousins Properties LP, a Delaware limited partnership (“Cousins LP”), the operating partnership of Cousins. Following the Separation and UPREIT Reorganization, Cousins effected the Spin-Off on October 7, 2016. The Company's consolidated financial statements include operational activity for the 86 day period following the Spin-Off. Prior to the Spin-Off, the Company had not conducted any business as a separate company other than start-up related activities and had no material assets or liabilities. Expenses prior to the Spin-Off of $7.8 million associated with these start-up related activities are reflected in general and administrative expense on the Company's consolidated statement of operations. The financial statements reflect the common shares and units as if they were outstanding for the entire period presented. The following represents the net contribution from the Spinoff (in thousands): Amount Assets Office properties $ 1,854,257 Accumulated depreciation (141,808 ) Cash and cash equivalents 192,755 Receivables and other assets 91,165 Intangible assets, net of accumulated amortization of $72,909 143,705 Total assets $ 2,140,074 Liabilities Notes payable to banks $ 350,000 Mortgage notes payable, net 453,769 Accounts payable and other liabilities 40,965 Accrued tenant improvements 60,654 Accrued property taxes 40,289 Unamortized below market leases, net of accumulated amortization of $24,797 53,754 Total liabilities 999,431 Net contribution from Cousins $ 1,140,643 |
Parkway Houston | |
Real Estate Properties [Line Items] | |
Organization | Organization On April 28, 2016, the board of directors of Cousins Properties Incorporated, a Georgia corporation (“Cousins”), and the board of directors of Parkway Properties, Inc., a Maryland corporation (“Legacy Parkway”), each approved an Agreement and Plan of Merger, dated as of April 28, 2016 (the “Merger Agreement”). On October 6, 2016, pursuant to the Merger Agreement, Legacy Parkway merged with and into Clinic Sub Inc., with Clinic Sub Inc. continuing as the surviving corporation and a wholly owned subsidiary of Cousins (the “Merger”). Immediately following the effective time of the Merger, in accordance with the Merger Agreement, Cousins separated the portion of its combined businesses relating to the ownership of real properties in Houston, Texas, as well as Legacy Parkway’s fee-based real estate services (the “Third-Party Services Business” and together with the Houston real properties, the “Houston Business”), from the remainder of the combined businesses (the “Separation”). In connection with the Separation, Cousins and Legacy Parkway reorganized the combined businesses through a series of transactions (the “Reorganization”) pursuant to which the Houston Business was transferred to Parkway, Inc. (the “Company”). On October 7, 2016, Cousins completed the Spin-Off of the Company, by distributing all of the outstanding shares of common and limited voting stock of the Company to the holders of Cousins common and limited voting preferred stock as of the record date, October 6, 2016 (the “Spin-Off”). The combined financial statements included herein represent the combined accounts and combined operations of the Houston Business previously owned and operated by Legacy Parkway through October 5, 2016 (“Parkway Houston”). Basis of Presentation and Combination The accompanying combined financial statements include the accounts of Parkway Houston presented on a combined basis as the ownership interests previously were under common control and ownership of Legacy Parkway during the reported periods. All significant intercompany balances and transactions have been eliminated. These combined financial statements are derived from the books and records of Legacy Parkway and were carved out from Legacy Parkway at a carrying value reflective of such historical cost in such Legacy Parkway records. Parkway Houston’s historical financial results reflect charges for certain corporate costs and Parkway Houston believes such charges are reasonable; however, such results do not necessarily reflect what Parkway Houston’s expenses would have been had Parkway Houston been operating as an independent, stand-alone public company. Costs of the services that were charged to Parkway Houston were based on either actual costs incurred or a proportion of costs estimated to be applicable to Parkway Houston. The historical combined financial information presented may therefore not be indicative of the results of operations, financial position or cash flows that would have been obtained if Parkway Houston had been an independent, stand-alone public company during the periods presented or of Parkway Houston’s future performance as an independent, stand-alone company. Parkway Houston is a predecessor, as defined in applicable rules and regulations for the Securities and Exchange Commission, to the Houston Business, which commenced operations on the date of the Spin-Off. These combined financial statements reflect the consolidation of properties that are wholly owned or properties in which, prior to the Merger, the Separation, the Reorganization and the Spin-off, Legacy Parkway owned less than a 100% interest but that Legacy Parkway controlled. Control of a property is demonstrated by, among other factors, Parkway Houston’s ability to refinance debt and sell the property without the consent of any other partner or owner and the inability of any other partner or owner to replace Legacy Parkway. Eola Capital, LLC (“Eola”), Phoenix Tower, CityWestPlace and San Felipe Plaza were all wholly owned by Legacy Parkway for all periods presented. Parkway Houston consolidates its Murano residential condominium project which it controls. Parkway Houston’s unaffiliated partner’s interest is reflected on its combined balance sheets under the “Noncontrolling Interests” caption. Parkway Houston’s partner has a stated ownership interest of 27% . Net proceeds from the project will be distributed, to the extent available, based on an order of preferences described in the partnership agreement. Parkway Houston may receive distributions, if any, in excess of its stated 73% ownership interest if certain return thresholds are met. |
Cousins Houston | |
Real Estate Properties [Line Items] | |
Organization | Organization and Basis of Presentation Merger and Spin-Off On October 6, 2016, Cousins Properties Incorporated (“Cousins”) and Parkway Properties, Inc. (“Parkway”) completed a stock-for-stock merger (the “Merger”) followed on October 7, 2016 by a spin-off (the “Spin-Off”) of the combined Houston-based assets of both companies (the “Houston Business”) into a new publicly-traded real estate investment trust (“REIT”), Parkway, Inc. (“New Parkway”). Basis of Presentation The combined financial statements included herein represent the combined accounts and combined operations of the Houston Business owned by Cousins (“Cousins Houston” or the “Company”). The assets and liabilities in these combined financial statements represent historical carrying amounts of the following properties: Acquisition Date Number of Office Buildings Total Square Feet Post Oak Central February 7, 2013 3 1,280,000 Greenway Plaza September 9, 2013 10 4,348,000 13 5,628,000 The Company is a predecessor, as defined in applicable rules and regulations of the Securities and Exchange Commission, to the Houston Business and commenced operations on the date of the Spin-off. The Company presents its financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) as outlined in the Financial Accounting Standard Board’s Accounting Standards Codification (the “Codification” or “ASC”). The Codification is the single source of authoritative accounting principles applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Intercompany transactions and balances have been eliminated. For the periods presented, there were no items of other comprehensive income. Therefore, no presentation of comprehensive income is required. Allocated Costs The historical financial results for Cousins Houston include certain allocated corporate costs which Cousins Houston believes are reasonable. These costs were incurred by Cousins and estimated to be applicable to Cousins Houston based on proportionate leasable square footage. Such costs do not necessarily reflect what the actual costs would have been if Cousins Houston were operating as a separate stand-alone public company. Additionally, the historical results for Cousins Houston include transaction costs that were incurred by Cousins related to the Spin-Off. These costs are discussed further in Note 3, “Related Party Transactions.” |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate Properties [Line Items] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Company is the sole, indirect general partner of Parkway Operating Partnership LP (the “Operating Partnership”) and as of December 31, 2016, owned a 97.9% interest in the Operating Partnership directly and through its subsidiaries Parkway Properties General Partners, Inc. and Parkway LP. The remaining 2.1% interest is indirectly held by certain persons, through Parkway LP. As the sole, indirect general partner of the Operating Partnership, the Company has full and complete authority over the Operating Partnership’s operations and management. The accompanying financial statements have been prepared by the Company’s management (“management”) in accordance with accounting principles generally accepted in the United States (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company also consolidates subsidiaries where the entity is a variable interest entity (a “VIE”) and it is the primary beneficiary and has the power to direct the activities of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Operating Partnership was determined to be a VIE and the Company is considered to be the primary beneficiary. All significant intercompany transactions and accounts have been eliminated in the accompanying financial statements. Business The Company’s operations are exclusively in the real estate industry, principally the operation, leasing, acquisition and ownership of office buildings in Houston. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company believes the assumptions and estimates made are reasonable and appropriate, as discussed in the applicable sections throughout these consolidated financial statements, different assumptions and estimates could materially impact reported results. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions; therefore, changes in market conditions could impact the Company’s future operating results. The Company’s most significant estimates relate to purchase price assignments and impairments on real estate and other assets. Actual results could differ from these estimates and assumptions. Real Estate Properties Real estate properties are carried at cost less accumulated depreciation. Cost includes the carrying amount of the Company’s investment plus any additional consideration paid, liabilities assumed and improvements made subsequent to acquisition. Depreciation of buildings and building improvements is computed using the straight-line method over the estimated useful lives of the assets. Depreciation of tenant improvements, including personal property, is computed using the straight-line method over the lesser of the useful life or the term of the lease involved. Maintenance and repair expenses are charged to expense as incurred. The Company evaluates its real estate assets for impairment upon occurrence of significant adverse changes in its operations to assess whether any impairment indicators are present that affect the recovery of the carrying amount. The carrying amount includes the net book value of tangible and intangible assets and liabilities. Real estate assets are classified as held for sale or held and used. The Company classifies certain assets as held for sale based on management having the authority and intent of entering into commitments for sale transactions to close in the next 12 months. The Company considers an office property as held for sale once it has executed a contract for sale, allowed the buyer to complete its due diligence review and received a substantial non-refundable deposit. Until a buyer has completed its due diligence review of the asset, necessary approvals have been received and substantive conditions to the buyer’s obligation to perform have been satisfied, the Company does not consider a sale to be probable. When the Company identifies an asset as held for sale, it estimates the net realizable value of such asset and discontinues recording depreciation on the asset. The Company records assets held for sale at the lower of the carrying amount or fair value less cost to sell. If the fair value of the asset net of estimated selling costs is less than the carrying amount, the Company records an impairment loss. With respect to assets classified as held and used, the Company recognizes an impairment loss if the carrying amount is not recoverable and exceeds the sum of undiscounted future cash flows expected to result from the use and eventual disposition of the asset. Upon impairment, the Company recognizes an impairment loss to reduce the carrying value of the real estate asset to the estimate of its fair value. The cash flow and fair value estimates are based on assumptions about employing the asset for its remaining useful life. Factors considered in projecting future cash flows include, but are not limited to: existing leases, future leasing and terminations, market rental rates, capital improvements, tenant improvements, leasing commissions, inflation, discount rates, capitalization rates and other known variables, and contractual purchase and sale agreements, if any. This market information is considered a Level 2 or Level 3 input as defined by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” (“ASC 820”). The Company recognizes gains or losses on sales of real estate at times and in amounts determined in accordance with the accounting guidance for sales of real estate. The guidance takes into account the terms of the transaction and any continuing involvement, including in the form of management, leasing of space or financial assistance associated with the properties. If the sales criteria for the full accrual method are not met, then the Company defers gain recognition and accounts for the transaction by applying the deposit, finance, installment or cost recovery methods, as appropriate. Initial Recognition, Measurement and Assignment of the Cost of Real Estate Acquired Accounting for the Spin-Off The Merger was accounted for as a “purchase,” as that term is used under GAAP, for accounting and financial reporting purposes. Under purchase accounting, the assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of Legacy Parkway as of the effective time of the Merger were recorded at their respective fair values and added to the assets and liabilities of Cousins. The separation of the assets and liabilities related to the Houston Business from the remainder of Cousins’ businesses in the Separation and the UPREIT Reorganization were at Cousins’ carryover basis after adjusting the Legacy Parkway assets and liabilities to fair value. As a result, the financial statements initially reflected carryover basis for Cousins Houston properties and fair value basis for the Legacy Parkway assets. Operating Property Acquisitions The Company assigns the purchase price of real estate to tangible and intangible assets and liabilities based on fair value. Tangible assets consist of land, building, garage, building improvements and tenant improvements. Intangible assets and liabilities consist of the value of above and below market leases, lease costs, the value of in-place leases and any value attributable to above or below market debt assumed with the acquisition. The Company engages independent third-party appraisers to perform the valuations used to determine the fair value of these identifiable tangible and intangible assets. These valuations and appraisals use commonly employed valuation techniques, such as discounted cash flow analyses. Factors considered in these analyses include an estimate of costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods depending on specific local market conditions and the type of property acquired. Additionally, the Company estimates costs to execute similar leases including leasing commissions, legal and other related expenses. The fair value of above or below market in-place lease values is the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the estimated current market lease rate expected over the remaining non-cancelable life of the lease. The capitalized above market lease values are amortized as a reduction of rental income over the remaining term of the respective leases. The portion of the values of the leases associated with below-market renewal options that are likely to be exercised are amortized to rental income over the respective renewal. The capitalized below market lease values are amortized as an increase to rental income over the remaining term of the respective leases. As of December 31, 2016, the weighted average amortization periods for above market leases and below market leases were 7.1 years and 8.1 years , respectively. Total amortization for above and below market leases was a net increase of rental income of $1.3 million for the period from June 29, 2016 (date of capitalization) to December 31, 2016 . As of December 31, 2016 , the remaining amortization of above/below market leases, net is projected as a net increase to rental income as follows (in thousands): Amount 2017 $ 5,308 2018 4,496 2019 4,368 2020 2,806 2021 2,799 Thereafter 15,605 Total $ 35,382 The fair value of in-place leases is the present value associated with re-leasing the in-place lease as if the property was vacant. Factors to be considered include estimates of costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating costs, the Company includes estimates of lost rentals at market rates during the expected lease-up periods. The value of at market in-place leases is amortized as a lease cost amortization expense over the expected life of the lease. As of December 31, 2016, the weighted average amortization period for in-place leases was 6.1 years . Total amortization expense for the value of in-place leases was $6.7 million period from June 29, 2016 (date of capitalization) to December 31, 2016 . As of December 31, 2016 , the remaining amortization expense for the value of in-place leases is projected as follows (in thousands): Amount 2017 $ 24,365 2018 18,136 2019 15,247 2020 11,832 2021 10,227 Thereafter 37,436 Total $ 117,243 A separate component of the fair value of in-place leases is identified for the lease costs. The fair value of lease costs represents the estimated commissions and legal fees paid in connection with the current leases in place. Lease costs are amortized over the non-cancelable terms of the respective leases as amortization expense. In no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a customer terminate its lease, the unamortized portion of the tenant improvement, in-place lease value and lease cost intangibles would be charged to expense. Additionally, the unamortized portion of above market in-place leases would be recorded as a reduction to rental income and the below market in-place lease value would be recorded as an increase to rental income. The Company calculates the fair value of mortgage notes payable by discounting the remaining contractual cash flows on each instrument at the current market rate for these borrowings. Capitalization of Costs Costs related to planning, developing, leasing and constructing a property, including costs of development personnel working directly on projects under development, are capitalized. The Company also capitalizes certain costs of leasing personnel in connection with the completion of leasing arrangements. Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents. Allowance for Doubtful Accounts Accounts receivable are reduced by an allowance for amounts that the Company estimates to be uncollectible. The receivable balance is comprised primarily of rent and expense reimbursement income due from the customers. Management evaluates the adequacy of the allowance for doubtful accounts considering such factors as the credit quality of the customers, delinquency of payment, historical trends and current economic conditions. The Company provides an allowance for doubtful accounts for customer balances that are over 90 days past due and for specific customer receivables for which collection is considered doubtful. The components of allowance for doubtful accounts for the period from June 29, 2016 (date of capitalization) to December 31, 2016 is as follows (in thousands): Beginning balance: $ — Contribution from Spin-Off 567 Bad debt expense 9 Write-offs (140 ) Ending balance: $ 436 Amortization of Debt Origination Costs and Leasing Costs Debt origination costs are deferred and amortized using a method that approximates the effective interest method over the term of the loan. These costs are classified within the consolidated balance sheet as a direct deduction from the carrying amount of debt within total liabilities. Leasing costs are deferred and amortized using the straight-line method over the term of the respective lease. Fair Value Measurements Level 1 fair value inputs are quoted prices for identical assets or liabilities in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information for similar assets or liabilities in active or inactive markets, and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect the Company’s best estimate of inputs and assumptions market participants would use in pricing an asset or liability at the measurement date. These inputs are unobservable in the market and significant to the valuation estimate. Noncontrolling Interest A noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. In addition, consolidated net income is required to be reported as amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the consolidated statement of operations. Income is allocated to noncontrolling interests based on the weighted average percentage ownership during the period. Noncontrolling interests in the Operating Partnership represent common Operating Partnership units that are not owned by the Company. Certain holders of Operating Partnership units have registration rights with respect to shares of common stock issuable upon conversion of such units, or have shares of common stock available for issuance under effective registration statements. Limited partners have the right under the partnership agreement of the Operating Partnership to tender their units for redemption in exchange for cash or unregistered shares of the Company’s common stock, as selected by the Company in its sole and absolute discretion. Accordingly, the Company classifies the common Operating Partnership units held by limited partners in permanent equity because the Company may elect to issue shares of its common stock to limited partners exercising their redemption rights rather than using cash. Revenue Recognition Revenue from real estate rentals is recognized on a straight-line basis over the noncancelable lease term at the inception of each respective lease in accordance with FASB ASC 840, Leases. The cumulative difference between lease revenue recognized under this method and contractual lease payment terms is recorded as straight-line rent receivable on the accompanying balance sheets. The straight-line rent adjustment increased revenue by $3.8 million for the period from June 29, 2016 (date of capitalization) to December 31, 2016 . When the Company is the owner of the tenant improvements, the leased space is ready for its intended use when the tenant improvements are substantially completed, at which point revenue recognition begins. In limited instances, when the tenant is the owner of the customer improvements, straight-line rent is recognized when the tenant takes possession of the unimproved space. The leases also typically provide for tenant reimbursement of a portion of common area maintenance, real estate taxes and other operating expenses. Property operating cost recoveries from customers (“expense reimbursements”) are recognized as revenue in the period in which the expenses are incurred. The computation of expense reimbursements is dependent on the provisions of individual customer leases. Most customers make monthly fixed payments of estimated expense reimbursements. The Company makes adjustments, positive or negative, to expense reimbursement income quarterly to adjust the recorded amounts to the Company’s best estimate of the final property operating costs based on the most recent annual estimate. After the end of the calendar year, the Company computes each customer’s final expense reimbursements and issues a bill or credit for the difference between the actual amount and the amounts billed monthly during the year. Differences between actual billed amounts and accrued amounts are considered immaterial. Management company income represents market-based fees earned from providing management, construction, leasing, brokerage and acquisition services to third parties and related parties. Management fee income is computed and recorded monthly in accordance with the terms set forth in the management service agreements. Leasing and brokerage commissions, as well as salary and administrative fees, are recognized pursuant to the terms of the agreements at the time underlying leases are signed, which is the point at which the earnings process is complete and collection of fees is reasonably assured. Fees relating to the purchase or sale of property are recognized when the earnings process is complete and collection of fees is reasonably assured, which usually occurs at closing. All fees on Company-owned properties are eliminated in consolidation. Share-Based and Long-Term Compensation Compensation expense for service-based awards is recognized over the expected vesting period of such awards. The total compensation expense for the long-term equity incentive awards is based upon the fair value of the shares on the grant date. Time-vesting restricted shares are valued based on the New York Stock Exchange closing market price of the Company’s common shares as of the date of grant. The grant date fair value for performance-vesting restricted stock units (“RSUs”) is determined using a simulation pricing model developed to specifically accommodate the unique features of the awards. The total compensation expense for stock options is estimated based on the fair value of the options as of the date of grant using the Black-Scholes model. Use of peer company data was used for assumptions in the Black-Scholes model due to the lack of history for the Company. Forfeitures will be recognized in the period as they occur. Net Income (Loss) Per Common Share Basic earnings per share (“EPS”) is computed by dividing income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period. In arriving at net income (loss) attributable to common stockholders, preferred stock dividends are deducted. Diluted EPS reflects the potential dilution that could occur if share equivalents such as Operating Partnership units, employee stock options, and time-vesting and performance-vesting RSUs were exercised or converted into common stock that then shared in the earnings of the Company. Income Taxes The Company intends to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes, beginning with its short taxable year that commenced on the day prior to Spin-Off and ended on December 31, 2016. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute annually at least 90% of its “REIT taxable income,” determined without regard to the dividends paid deduction and excluding any net capital gain to its stockholders. It is management’s current intention to adhere to these requirements and the Company believes that it was in compliance with all REIT requirements for the Company's taxable year ended December 31, 2016. As a REIT, the Company generally will not be subject to corporate level U.S. federal income tax on its “REIT taxable income,” determined without regard to the dividends paid deduction and excluding any net capital gain, that it distributes currently to its stockholders, provided that the REIT meets the applicable REIT distribution requirements and other requirements for qualification as a REIT under the Code. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through the Company's taxable TRS is subject to federal, state and local income taxes. The Company provides for income taxes based on pretax income and applicable tax rates in the various jurisdictions in which it operates. The Company's effective tax rate reflects the impact of earnings attributable to REIT operations and noncontrolling interests for which no federal income taxes have been provided. Through October 6, 2016, the Company was a qualified REIT subsidiary of Cousins generally not subject to federal income taxes as all of the Company's taxable income and deductions were treated as if realized by Cousins directly. The Company recognizes the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination, based on the technical merits of the position with the taxing authority having full knowledge of all relevant information. The tax benefit recognized in the financial statements for a particular tax position is based on the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company's policy is to recognize interest and penalties related to income taxes, including accrued interest and penalties, if any, associated with unrecognized tax benefits, as components of income tax expense. Segment Reporting FASB ASC 280, “Segment Reporting,” established standards for disclosure about operating segments and related disclosures about products and services, geographic areas and major customers. The Company currently operates in one business segment, the acquisition, development, ownership and management of commercial real estate. Additionally, the Company operates in one geographic area, Houston, Texas. Our chief operating decision maker reviews operating and financial data on a consolidated basis. Allocated Costs The historical financial results include certain allocated corporate costs which the Company believes are reasonable. These costs incurred by Legacy Parkway are reflected as an equity contribution and are estimated to be applicable to the Company based on an analysis of key metrics such as leasable square feet, personnel hours or expenses that were otherwise specifically identifiable. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contract with Customers (Topic 606)” (“ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company's revenues that will be impacted by this standard include revenues earned from fee-based real estate services, sales of real estate assets including land parcels and operating properties and other ancillary income. The Company expects that the amount and timing of revenue recognition from our fee-based real estate services referenced above will be generally consistent with our current measurement and pattern of recognition. The Company currently anticipates utilizing the modified retrospective method of adoption on January 1, 2018 and continues to evaluate the adoption impacts of this standard. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities of lessees on the balance sheet and disclosing key information about leasing arrangements. Lessor accounting will remain substantially similar to the current accounting; however, certain refinements were made to conform the standard with the recently issued revenue recognition guidance in ASU 2014-09, specifically related to the allocation and recognition of contract consideration earned from lease and non-lease revenue components. Additionally, certain leasing costs that are eligible to be capitalized as initial direct costs are also limited by ASU 2016-02. The Company expects to adopt this guidance effective January 1, 2019 and will utilize the modified retrospective method of adoption. Substantially all of the Company's revenues are earned from arrangements that are within the scope of ASU 2016-02, thus we anticipate that the timing of recognition and financial statement presentation of certain revenues, including revenues that related to consideration from non-lease components, may be affected. The Company is still assessing the impact of adopting this guidance. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805)” (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for periods beginning after December 15, 2017, including interim periods within those periods. The Company will early adopt this standard prospectively as of January 1, 2017 as permitted under the standard. In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)” (“ASU 2017-05”). ASU 2017-05 clarifies the scope of asset derecognition guidance and accounting for partial sales of nonfinancial assets. Partial sales of nonfinancial assets are common in the real estate industry and include transactions in which the seller retains an equity interest in the entity that owns the assets or has an equity interest in the buyer. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company is currently assessing this guidance for future implementation. |
Basis of Presentation and Summary of Significant Accounting Policies | Organization Parkway, Inc. (“the Company”) is an independent, publicly traded, self-managed real estate investment trust (“REIT”) that owns and operates high-quality office properties located in submarkets in Houston, Texas. The Company’s portfolio consists of five assets comprising 19 buildings and totaling approximately 8.7 million rentable square feet (unaudited) in the Galleria, Greenway and Westchase submarkets of Houston, providing geographic focus and significant operational scale and efficiencies. In addition, the Company operates a fee-based real estate service (the “Third-Party Services Business”) through a wholly owned subsidiary, Eola Office Partners, LLC and its wholly owned subsidiaries (collectively, “Eola”), which in total managed approximately 3.8 million square feet (unaudited) for primarily third-party owners as of December 31, 2016 . Unless otherwise indicated, all references to square feet represent net rentable square feet. The Company’s Spin-Off from Cousins On October 7, 2016, Cousins Properties Incorporated (“Cousins”) completed the spin-off of the Company, by distributing all of the Company’s outstanding shares of common and limited voting stock to the holders of Cousins common and limited voting preferred stock as of the record date, October 6, 2016 (the “Spin-Off”). The Spin-Off was effected pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of April 28, 2016, by and among Parkway Properties, Inc. (“Legacy Parkway”), Parkway Properties LP (“Parkway LP”), Cousins and Clinic Sub Inc., a wholly owned subsidiary of Cousins, and pursuant to that certain Separation, Distribution and Transition Services Agreement (the “Separation and Distribution Agreement”), dated as of October 5, 2016, among the Company, Cousins and certain other parties thereto. Prior to the Spin-Off, the Company was incorporated on June 3, 2016 as a wholly owned subsidiary of Legacy Parkway. On October 6, 2016, pursuant to the Merger Agreement, Legacy Parkway merged with and into Clinic Sub Inc., with Clinic Sub Inc. continuing as the surviving corporation and a wholly owned subsidiary of Cousins (the “Merger”). In connection with the Merger, the Company became a subsidiary of Cousins. Immediately following the effective time of the Merger, in accordance with the Merger Agreement, Cousins separated the portion of its combined businesses relating to the ownership of real properties in Houston, Texas, as well as Legacy Parkway’s fee-based real estate services (the “Third-Party Services Business” and together with the Houston real properties, the “Houston Business”), from the remainder of the combined businesses (the “Separation”). In connection with the Separation, the Company and Cousins reorganized the businesses through a series of transactions (the “UPREIT Reorganization”), pursuant to which the Houston Business was transferred to the Company, and the remainder of the combined business was transferred to Cousins Properties LP, a Delaware limited partnership (“Cousins LP”), the operating partnership of Cousins. Following the Separation and UPREIT Reorganization, Cousins effected the Spin-Off on October 7, 2016. The Company's consolidated financial statements include operational activity for the 86 day period following the Spin-Off. Prior to the Spin-Off, the Company had not conducted any business as a separate company other than start-up related activities and had no material assets or liabilities. Expenses prior to the Spin-Off of $7.8 million associated with these start-up related activities are reflected in general and administrative expense on the Company's consolidated statement of operations. The financial statements reflect the common shares and units as if they were outstanding for the entire period presented. The following represents the net contribution from the Spinoff (in thousands): Amount Assets Office properties $ 1,854,257 Accumulated depreciation (141,808 ) Cash and cash equivalents 192,755 Receivables and other assets 91,165 Intangible assets, net of accumulated amortization of $72,909 143,705 Total assets $ 2,140,074 Liabilities Notes payable to banks $ 350,000 Mortgage notes payable, net 453,769 Accounts payable and other liabilities 40,965 Accrued tenant improvements 60,654 Accrued property taxes 40,289 Unamortized below market leases, net of accumulated amortization of $24,797 53,754 Total liabilities 999,431 Net contribution from Cousins $ 1,140,643 |
Parkway Houston | |
Real Estate Properties [Line Items] | |
Basis of Presentation and Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although Parkway Houston believes the assumptions and estimates made are reasonable and appropriate, as discussed in the applicable sections throughout these combined financial statements, different assumptions and estimates could materially impact reported results. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions; therefore, changes in market conditions could impact Parkway Houston’s future operating results. Parkway Houston’s most significant estimates relate to impairments on real estate and other assets and purchase price assignments. Actual results could differ from these estimates. Real Estate Properties Real estate properties are carried at cost less accumulated depreciation. Cost includes the carrying amount of Parkway Houston’s investment plus any additional consideration paid, liabilities assumed and improvements made subsequent to acquisition. Depreciation of buildings and building improvements is computed using the straight-line method over the estimated useful lives of the assets. Depreciation of tenant improvements, including personal property, is computed using the straight-line method over the lesser of the useful life or the term of the lease involved. Maintenance and repair expenses are charged to expense as incurred. Parkway Houston evaluates its real estate assets for impairment upon occurrence of significant adverse changes in its operations to assess whether any impairment indicators are present that affect the recovery of the carrying amount. The carrying amount includes the net book value of tangible and intangible assets and liabilities. Real estate assets are classified as held for sale or held and used. Parkway Houston classifies certain assets as held for sale based on management having the authority and intent of entering into commitments for sale transactions to close in the next 12 months. Parkway Houston considers an office property as held for sale once it has executed a contract for sale, allowed the buyer to complete its due diligence review and received a substantial non-refundable deposit. Until a buyer has completed its due diligence review of the asset, necessary approvals have been received and substantive conditions to the buyer’s obligation to perform have been satisfied, Parkway Houston does not consider a sale to be probable. When Parkway Houston identifies an asset as held for sale, it estimates the net realizable value of such asset and discontinues recording depreciation on the asset. Parkway Houston records assets held for sale at the lower of the carrying amount or fair value less cost to sell. If the fair value of the asset net of estimated selling costs is less than the carrying amount, Parkway Houston records an impairment loss. With respect to assets classified as held and used, Parkway Houston recognizes an impairment loss if the carrying amount is not recoverable and exceeds the sum of undiscounted future cash flows expected to result from the use and eventual disposition of the asset. Upon impairment, Parkway Houston recognizes an impairment loss to reduce the carrying value of the real estate asset to the estimate of its fair value. The cash flow and fair value estimates are based on assumptions about employing the asset for its remaining useful life. Factors considered in projecting future cash flows include, but are not limited to: existing leases, future leasing and terminations, market rental rates, capital improvements, tenant improvements, leasing commissions, inflation, discount rates, capitalization rates and other known variables, and contractual purchase and sale agreements. This market information is considered a Level 2 or Level 3 input as defined by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”. Parkway Houston recognizes gains or losses on sales of real estate at times and in amounts determined in accordance with the accounting guidance for sales of real estate. The guidance takes into account the terms of the transaction and any continuing involvement, including in the form of management, leasing of space or financial assistance associated with the properties. If the sales criteria for the full accrual method are not met, then Parkway Houston defers gain recognition and accounts for the transaction by applying the deposit, finance, installment or cost recovery methods, as appropriate. Purchase Price Assignment Parkway Houston assigns the purchase price of real estate to tangible and intangible assets and liabilities based on fair value. Tangible assets consist of land, building, garage, building improvements and tenant improvements. Intangible assets and liabilities consist of the value of above and below market leases, lease costs, the value of in-place leases and any value attributable to above or below market debt assumed with the acquisition. Parkway Houston engages independent third-party appraisers to perform the valuations used to determine the fair value of these identifiable tangible and intangible assets. These valuations and appraisals use commonly employed valuation techniques, such as discounted cash flow analyses. Factors considered in these analyses include an estimate of costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. Parkway Houston also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. Parkway Houston includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods depending on specific local market conditions and the type of property acquired. Additionally, Parkway Houston estimates costs to execute similar leases including leasing commissions, legal and other related expenses. The fair value of above or below market in-place lease values is the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the estimated current market lease rate expected over the remaining non-cancelable life of the lease. The capitalized above market lease values are amortized as a reduction of rental income over the remaining term of the respective leases. The portion of the values of the leases associated with below-market renewal options that are likely to be exercised are amortized to rental income over the respective renewal. The capitalized below market lease values are amortized as an increase to rental income over the remaining term of the respective leases. Total amortization for above and below market leases was a net increase of rental income of $5.0 million , $17.1 million and $16.3 million for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014, respectively. As of October 5, 2016 , the remaining amortization of above/below market leases, net is projected as a net increase to rental income as follows (in thousands): Amount 2016 $ 1,079 2017 3,705 2018 1,946 2019 1,575 2020 1,511 Thereafter 6,479 Total $ 16,295 The fair value of in-place leases is the present value associated with re-leasing the in-place lease as if the property was vacant. Factors to be considered include estimates of costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating costs, Parkway Houston includes estimates of lost rentals at market rates during the expected lease-up periods. The value of at market in-place leases is amortized as a lease cost amortization expense over the expected life of the lease. Total amortization expense for the value of in-place leases was $6.4 million , $16.7 million and $30.1 million for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014, respectively. As of October 5, 2016 , the remaining amortization expense for the value of in-place leases is projected as follows (in thousands): Amount 2016 $ 1,381 2017 4,398 2018 2,031 2019 1,454 2020 1,395 Thereafter 5,227 Total $ 15,886 A separate component of the fair value of in-place leases is identified for the lease costs. The fair value of lease costs represents the estimated commissions and legal fees paid in connection with the current leases in place. Lease costs are amortized over the non-cancelable terms of the respective leases as amortization expense. In no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a customer terminate its lease, the unamortized portion of the tenant improvement, in-place lease value and lease cost intangibles would be charged to expense. Additionally, the unamortized portion of above market in-place leases would be recorded as a reduction to rental income and the below market in-place lease value would be recorded as an increase to rental income. Parkway Houston calculates the fair value of mortgage notes payable by discounting the remaining contractual cash flows on each instrument at the current market rate for these borrowings. Capitalization of Costs Costs related to planning, developing, leasing and constructing a property, including costs of development personnel working directly on projects under development, are capitalized. In addition, Parkway Houston capitalizes interest to qualifying assets under development based on average accumulated expenditures outstanding during the period. In capitalizing interest to qualifying assets, Parkway Houston first uses the interest incurred on specific project debt, if any, and next uses Parkway Houston’s weighted average interest rate for non-project specific debt. Parkway Houston also capitalizes certain costs of leasing personnel in connection with the completion of leasing arrangements. Cash Equivalents Parkway Houston considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Restricted Cash Restricted cash, which is included in receivables and other assets, primarily consists of security deposits held on behalf of Parkway Houston’s tenants as well as capital improvements and real estate tax escrows required under certain loan agreements. There are restrictions on Parkway Houston’s ability to withdraw these funds other than for their specified usage. Allowance for Doubtful Accounts Accounts receivable are reduced by an allowance for amounts that Parkway Houston estimates to be uncollectible. The receivable balance is comprised primarily of rent and expense reimbursement income due from the customers. Management evaluates the adequacy of the allowance for doubtful accounts considering such factors as the credit quality of the customers, delinquency of payment, historical trends and current economic conditions. Parkway Houston provides an allowance for doubtful accounts for customer balances that are over 90 days past due and for specific customer receivables for which collection is considered doubtful. The components of allowance for doubtful accounts for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014, respectively, are as follows: October 5, December 31, Asset Category 2016 2015 2014 Beginning balance: $ 98 $ 38 $ 306 Bad debt expense 106 261 88 Write-offs (79 ) (201 ) (356 ) Ending balance: $ 125 $ 98 $ 38 Amortization of Debt Origination Costs and Leasing Costs Debt origination costs are deferred and amortized using a method that approximates the effective interest method over the term of the loan. These costs are classified within the combined balance sheets as a direct deduction from the carrying amount of debt within total liabilities. Leasing costs are deferred and amortized using the straight-line method over the term of the respective lease. Fair Value Measurements Level 1 fair value inputs are quoted prices for identical assets or liabilities in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information for similar assets or liabilities in active or inactive markets, and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect Parkway Houston’s best estimate of inputs and assumptions market participants would use in pricing an asset or liability at the measurement date. These inputs are unobservable in the market and significant to the valuation estimate. Noncontrolling Interest A noncontrolling interest in a subsidiary is in most cases an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. In addition, consolidated net income is required to be reported as amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the combined statements of operations. Revenue Recognition Revenue from real estate rentals is recognized on a straight-line basis over the noncancelable lease term at the inception of each respective lease in accordance with ASC 840, Leases. The cumulative difference between lease revenue recognized under this method and contractual lease payment terms is recorded as straight-line rent receivable on the accompanying balance sheets. The straight-line rent adjustment increased revenue by $4.1 million for the period from January 1, 2016 to October 5, 2016 and by $13.9 million and $6.3 million in 2015 and 2014 , respectively. When Parkway Houston is the owner of the tenant improvements, the leased space is ready for its intended use when the tenant improvements are substantially completed, at which point revenue recognition begins. In limited instances, when the tenant is the owner of the customer improvements, straight-line rent is recognized when the tenant takes possession of the unimproved space. The leases also typically provide for tenant reimbursement of a portion of common area maintenance, real estate taxes and other operating expenses. Property operating cost recoveries from customers (“expense reimbursements”) are recognized as revenue in the period in which the expenses are incurred. The computation of expense reimbursements is dependent on the provisions of individual customer leases. Most customers make monthly fixed payments of estimated expense reimbursements. Parkway Houston makes adjustments, positive or negative, to expense reimbursement income quarterly to adjust the recorded amounts to Parkway Houston’s best estimate of the final property operating costs based on the most recent annual estimate. After the end of the calendar year, Parkway Houston computes each customer’s final expense reimbursements and issues a bill or credit for the difference between the actual amount and the amounts billed monthly during the year. Differences between actual billed amounts and accrued amounts are considered immaterial. Management company income represents market-based fees earned from providing management, construction, leasing, brokerage and acquisition services to unconsolidated joint ventures, related parties and third parties. Management fee income is computed and recorded monthly in accordance with the terms set forth in the management service agreements. Leasing and brokerage commissions, as well as salary and administrative fees, are recognized pursuant to the terms of the agreements at the time underlying leases are signed, which is the point at which the earnings process is complete and collection of fees is reasonably assured. Fees relating to the purchase or sale of property are recognized when the earnings process is complete and collection of fees is reasonably assured, which usually occurs at closing. All fees on company-owned properties are eliminated in consolidation. Parkway Houston recognizes fees earned from Legacy Parkway’s unconsolidated joint ventures in management company income. Parkway Houston has one high-rise condominium project. Under the provisions of FASB ASC 360-20, “Property, Plant and Equipment” subsection “Real Estate and Sales,” revenue and costs for projects are recognized when all parties are bound by the terms of the contract, all consideration has been exchanged, any permanent financing for which the seller is responsible has been arranged and all conditions precedent to closing have been performed. This results in profit from the sale of condominium units recognized at closing. Revenue is recognized on the contract price of individual units. Total estimated costs are allocated to individual units which have closed on a relative value basis. Impairment of Intangible Assets During 2014 , Parkway Houston evaluated certain qualitative factors and determined that it was necessary to apply the two-step quantitative impairment test under ASU 2011-08. During the year ended December 31, 2014 , Parkway Houston determined that the undiscounted cash flows indicated that the carrying amounts of certain Eola management contracts were not expected to be recovered and, as a result, Parkway Houston recorded a $4.8 million pre-tax non-cash impairment loss related to these management contracts which resulted in the entire remaining balance of the Eola contracts being written off as of December 31, 2014 . During the period from January 1, 2016 to October 5, 2016 and year ended December 31, 2015 , no impairment losses were recorded on Parkway Houston’s intangible assets. Gain on Extinguishment of Debt When outstanding debt is extinguished, Parkway Houston expenses any prepayment penalties, unamortized premium/discounts and loan costs. Income Taxes Legacy Parkway elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 1997. To qualify as a REIT, Legacy Parkway was required to meet a number of organizational and operational requirements, including a requirement that it distribute annually at least 90% of its “REIT taxable income,” subject to certain adjustments and excluding any net capital gain to its stockholders. Legacy Parkway believes that it was in compliance with all REIT requirements at October 5, 2016. As a REIT, Legacy Parkway generally was not subject to corporate level federal income tax on taxable income it distributes currently to its stockholders. If Legacy Parkway fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if Legacy Parkway qualifies for taxation as a REIT, Legacy Parkway may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. The properties in the combined financial statements were owned directly or indirectly by partnerships, limited partnerships or limited liability companies and as a result, the allocated share of income or loss for each period is included in the income tax returns of the partners. In addition, taxable income from non-REIT activities managed through the taxable REIT subsidiary is subject to federal, state and local income taxes. Legacy Parkway provides for income taxes based on pretax income and applicable tax rates in the various jurisdictions in which it operates. The effective tax rate reflects the impact of earnings attributable to REIT operations and noncontrolling interests for which no U.S. income taxes have been provided. Segment Reporting Parkway Houston’s primary business was the ownership and operation of office properties. Parkway Houston has accounted for each office property or groups of related office properties as an individual operating segment. Parkway Houston has aggregated the individual operating segments into a single reporting segment due to the fact that the individual operating segments have similar operating and economic characteristics, such as being leased by the square foot, sharing the same primary operating expenses and ancillary revenue opportunities and being cyclical in economic performance based on current supply and demand conditions. The individual operating segments are also similar in that revenues are derived from the leasing of office space to customers and each office property is managed and operated consistently in accordance with standard operating procedures. The range and type of customer uses of the properties is similar throughout the portfolio regardless of location or class of building and the needs and priorities of the customers do not vary widely from building to building. Therefore, the management responsibilities do not vary widely from location to location based on the size of the building, geographic location or class. The operations of the Management Company are separately presented in the Combined Statements of Operations. Allocated Costs The historical financial results for Parkway Houston include certain allocated corporate costs which Parkway Houston believes are reasonable. These costs incurred by Legacy Parkway are reflected as an equity contribution and are estimated to be applicable to Parkway Houston based on an analysis of key metrics such as leasable square feet, personnel hours or expenses that were otherwise specifically identifiable. Such costs do not necessarily reflect what the actual costs would have been if Parkway Houston were operating as a separate stand-alone public company. Reclassifications Certain reclassifications have been made in the 2015 notes to combined financial statements to conform to the 2016 classifications with no impact on previously reported net loss or equity. Recent Accounting Pronouncements As discussed in Note 12—Subsequent Events, Parkway Houston's operations ceased on October 5, 2016, and none of the recent accounting pronouncements impacted Parkway Houston's financial statements and notes. Therefore, this section is not applicable. |
Basis of Presentation and Summary of Significant Accounting Policies | Organization On April 28, 2016, the board of directors of Cousins Properties Incorporated, a Georgia corporation (“Cousins”), and the board of directors of Parkway Properties, Inc., a Maryland corporation (“Legacy Parkway”), each approved an Agreement and Plan of Merger, dated as of April 28, 2016 (the “Merger Agreement”). On October 6, 2016, pursuant to the Merger Agreement, Legacy Parkway merged with and into Clinic Sub Inc., with Clinic Sub Inc. continuing as the surviving corporation and a wholly owned subsidiary of Cousins (the “Merger”). Immediately following the effective time of the Merger, in accordance with the Merger Agreement, Cousins separated the portion of its combined businesses relating to the ownership of real properties in Houston, Texas, as well as Legacy Parkway’s fee-based real estate services (the “Third-Party Services Business” and together with the Houston real properties, the “Houston Business”), from the remainder of the combined businesses (the “Separation”). In connection with the Separation, Cousins and Legacy Parkway reorganized the combined businesses through a series of transactions (the “Reorganization”) pursuant to which the Houston Business was transferred to Parkway, Inc. (the “Company”). On October 7, 2016, Cousins completed the Spin-Off of the Company, by distributing all of the outstanding shares of common and limited voting stock of the Company to the holders of Cousins common and limited voting preferred stock as of the record date, October 6, 2016 (the “Spin-Off”). The combined financial statements included herein represent the combined accounts and combined operations of the Houston Business previously owned and operated by Legacy Parkway through October 5, 2016 (“Parkway Houston”). Basis of Presentation and Combination The accompanying combined financial statements include the accounts of Parkway Houston presented on a combined basis as the ownership interests previously were under common control and ownership of Legacy Parkway during the reported periods. All significant intercompany balances and transactions have been eliminated. These combined financial statements are derived from the books and records of Legacy Parkway and were carved out from Legacy Parkway at a carrying value reflective of such historical cost in such Legacy Parkway records. Parkway Houston’s historical financial results reflect charges for certain corporate costs and Parkway Houston believes such charges are reasonable; however, such results do not necessarily reflect what Parkway Houston’s expenses would have been had Parkway Houston been operating as an independent, stand-alone public company. Costs of the services that were charged to Parkway Houston were based on either actual costs incurred or a proportion of costs estimated to be applicable to Parkway Houston. The historical combined financial information presented may therefore not be indicative of the results of operations, financial position or cash flows that would have been obtained if Parkway Houston had been an independent, stand-alone public company during the periods presented or of Parkway Houston’s future performance as an independent, stand-alone company. Parkway Houston is a predecessor, as defined in applicable rules and regulations for the Securities and Exchange Commission, to the Houston Business, which commenced operations on the date of the Spin-Off. These combined financial statements reflect the consolidation of properties that are wholly owned or properties in which, prior to the Merger, the Separation, the Reorganization and the Spin-off, Legacy Parkway owned less than a 100% interest but that Legacy Parkway controlled. Control of a property is demonstrated by, among other factors, Parkway Houston’s ability to refinance debt and sell the property without the consent of any other partner or owner and the inability of any other partner or owner to replace Legacy Parkway. Eola Capital, LLC (“Eola”), Phoenix Tower, CityWestPlace and San Felipe Plaza were all wholly owned by Legacy Parkway for all periods presented. Parkway Houston consolidates its Murano residential condominium project which it controls. Parkway Houston’s unaffiliated partner’s interest is reflected on its combined balance sheets under the “Noncontrolling Interests” caption. Parkway Houston’s partner has a stated ownership interest of 27% . Net proceeds from the project will be distributed, to the extent available, based on an order of preferences described in the partnership agreement. Parkway Houston may receive distributions, if any, in excess of its stated 73% ownership interest if certain return thresholds are met. |
Cousins Houston | |
Real Estate Properties [Line Items] | |
Basis of Presentation and Significant Accounting Policies | Significant Accounting Policies Real Estate Assets Cost Capitalization Cousins Houston capitalizes costs related to property and tenant improvements, including allocated costs of Cousins’ personnel working directly on projects. Cousins Houston capitalizes direct leasing costs related to leases that are probable of being executed. These costs include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement, and costs incurred by personnel of Cousins that are based on time spent on successful leases. Cousins Houston allocates these costs to individual tenant leases and amortizes them over the related lease term. Impairment For real estate assets that are considered to be held for sale according to accounting guidance or are distributed to stockholders in a spin-off, Cousins Houston records impairment losses if the fair value of the asset net of estimated selling costs is less than the carrying amount. For those long-lived assets that are held and used according to accounting guidance, management reviews each asset for the existence of any indicators of impairment. If indicators of impairment are present, Cousins Houston calculates the expected undiscounted future cash flows to be derived from such assets. If the undiscounted cash flows are less than the carrying amount of the asset, Cousins Houston reduces the asset to its fair value. Acquisition of Operating Properties Cousins Houston records the acquired tangible and intangible assets and assumed liabilities of operating property acquisitions at fair value at the acquisition date. The acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, and identified tangible and intangible assets and liabilities associated with in-place leases, including leasing costs, value of above-market and below-market tenant leases, value of above-market and below-market ground leases, acquired in-place lease values, and tenant relationships, if any. The fair value of land is derived from comparable sales of land within the same submarket and/or region. The fair value of buildings and improvements, tenant improvements, and leasing costs are based upon current market replacement costs and other relevant market rate information. The fair value of the above-market or below-market component of an acquired in-place lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining term and (ii) management’s estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition over the remaining term of the lease. The amounts recorded for above-market and below-market leases are included in intangible assets and intangible liabilities, respectively, and are amortized on a straight-line basis into rental property operating revenues over the remaining terms of the applicable leases. The fair value of acquired in-place leases is derived based on management’s assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. The amount recorded for acquired in-place leases is included in intangible assets and amortized as an increase to depreciation and amortization expense over the remaining term of the applicable leases. Depreciation and Amortization Real estate assets are stated at depreciated cost less impairment losses, if any. Buildings are depreciated over their estimated useful lives, which range from 30 to 42 years . The life of a particular building depends upon a number of factors including whether the building was developed or acquired and the condition of the building upon acquisition. Furniture, fixtures and equipment are depreciated over their estimated useful lives of five years . Tenant improvements, leasing costs and leasehold improvements are amortized over the term of the applicable leases or the estimated useful life of the assets, whichever is shorter. Cousins Houston accelerates the depreciation of tenant assets if it estimates that the lease term will end prior to the termination date. This acceleration may occur if a tenant files for bankruptcy, vacates its premises or defaults in another manner on its lease. Deferred expenses are amortized over the period of estimated benefit. Cousins Houston uses the straight-line method for all depreciation and amortization. Revenue Recognition Cousins Houston recognizes contractual revenues from leases on a straight-line basis over the term of the respective lease. In addition, leases typically provide for reimbursement of the tenants’ share of real estate taxes, insurance, and other operating expenses to Cousins Houston. Operating expense reimbursements are recognized as the related expenses are incurred. For the period from January 1, 2016 to October 6, 2016, and the years ended December 31, 2015 and 2014, Cousins Houston recognized $47.9 million , $59.1 million and $59.2 million , respectively, in revenues from tenants related to reimbursement of operating expenses. Cousins Houston makes valuation adjustments to all tenant-related accounts receivable based upon its estimate of the likelihood of collectability. The amount of any valuation adjustment is based on the tenant’s credit and business risk, history of payment, and other factors considered by management. Income Taxes Through October 6, 2016, Cousins Houston’s properties were owned by Cousins, which has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, Cousins is not subject to federal income tax provided it distributes annually its adjusted taxable income, as defined in the Code, to stockholders and meets certain other organizational and operating requirements. Accordingly, the combined financial statements of Cousins Houston do not include a provision for federal income tax. Cash and Cash Equivalents Cash and cash equivalents include cash and highly-liquid money market instruments with maturities of three months or less. Segment Disclosure Cousins Houston is in the business of the ownership, development and management of office real estate. Cousins Houston has aggregated its office operations into one reportable segment. This segment is the aggregation of the aforementioned Cousins Houston office properties as reported to the Chief Operating Decision Maker and is aggregated due to the properties having similar economic and geographic characteristics. Fair Value Measurements Level 1 fair value inputs are quoted prices for identical items in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information for similar items in active or inactive markets and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect Cousins Houston’s best estimate of inputs and assumptions market participants would use in pricing an asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate. Cousins Houston has no investments for which fair value is measured on a recurring basis using Level 3 inputs. Note 5 includes fair values of debt measured using Level 2 inputs. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Recent Accounting Pronouncements Cousins Houston's operations ceased on October 6, 2016, and none of the recent accounting pronouncements impacted Cousins Houston's financial statements and notes. Therefore, this section is not applicable. |
Basis of Presentation and Summary of Significant Accounting Policies | Organization and Basis of Presentation Merger and Spin-Off On October 6, 2016, Cousins Properties Incorporated (“Cousins”) and Parkway Properties, Inc. (“Parkway”) completed a stock-for-stock merger (the “Merger”) followed on October 7, 2016 by a spin-off (the “Spin-Off”) of the combined Houston-based assets of both companies (the “Houston Business”) into a new publicly-traded real estate investment trust (“REIT”), Parkway, Inc. (“New Parkway”). Basis of Presentation The combined financial statements included herein represent the combined accounts and combined operations of the Houston Business owned by Cousins (“Cousins Houston” or the “Company”). The assets and liabilities in these combined financial statements represent historical carrying amounts of the following properties: Acquisition Date Number of Office Buildings Total Square Feet Post Oak Central February 7, 2013 3 1,280,000 Greenway Plaza September 9, 2013 10 4,348,000 13 5,628,000 The Company is a predecessor, as defined in applicable rules and regulations of the Securities and Exchange Commission, to the Houston Business and commenced operations on the date of the Spin-off. The Company presents its financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) as outlined in the Financial Accounting Standard Board’s Accounting Standards Codification (the “Codification” or “ASC”). The Codification is the single source of authoritative accounting principles applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Intercompany transactions and balances have been eliminated. For the periods presented, there were no items of other comprehensive income. Therefore, no presentation of comprehensive income is required. Allocated Costs The historical financial results for Cousins Houston include certain allocated corporate costs which Cousins Houston believes are reasonable. These costs were incurred by Cousins and estimated to be applicable to Cousins Houston based on proportionate leasable square footage. Such costs do not necessarily reflect what the actual costs would have been if Cousins Houston were operating as a separate stand-alone public company. Additionally, the historical results for Cousins Houston include transaction costs that were incurred by Cousins related to the Spin-Off. These costs are discussed further in Note 3, “Related Party Transactions.” |
Real Estate Related Investments
Real Estate Related Investments, Net | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate [Line Items] | |
Real Estate Related Investments, Net | Real Estate Related Investments, Net Included in real estate related investments, net are five office assets located in the Galleria, Greenway and Westchase submarkets of Houston, Texas, comprising 19 buildings and two adjacent parcels of land totaling approximately 8.7 million square feet (unaudited). Balances of major classes of depreciable assets and their respective estimated useful lives are (in thousands): Asset Category Useful Life December 31, Land Non-depreciable $ 417,315 Buildings and garages 7 to 40 years 1,095,815 Building improvements 5 to 40 years 55,093 Tenant improvements Lesser of useful life or term of lease 296,445 $ 1,864,668 Depreciation expense related to these assets utilizing the straight-line method over the estimated original useful life was $17.0 million for the period from June 29, 2016 (date of capitalization) to December 31, 2016 . The Company is geographically concentrated in Houston, Texas. For the period from June 29, 2016 (date of capitalization) to December 31, 2016, four tenants in the Company's portfolio represented 11.4% , 8.6% , 6.8% and 5.0% of income from office properties, respectively. |
Parkway Houston | |
Real Estate [Line Items] | |
Real Estate Related Investments, Net | Real Estate Related Investments, Net Included in real estate related investment, net are three office assets located in the Galleria, Greenway and Westchase submarkets of Houston, Texas, comprising six buildings and two adjacent parcels of land totaling approximately 3.1 million square feet (unaudited). Balances of major classes of depreciable assets (in thousands) and their respective estimated useful lives are: October 5, December 31, Asset Category Estimated Useful Life 2016 2015 Land Non-depreciable $ 106,323 $ 106,323 Buildings and garages 40 years 600,197 600,562 Building improvements 7 to 40 years 18,464 14,426 Tenant improvements Lesser of useful life or term of lease 106,489 97,283 $ 831,473 $ 818,594 Depreciation expense related to these assets of $ 20.5 million , $32.0 million and $28.8 million was recognized in the period from January 1, 2016 to October 5, 2016 and in the years ended December 31, 2015 and 2014, respectively. Contractual Obligations and Minimum Rental Receipts Obligations for tenant improvement allowances and lease commission costs for leases in place and commitments for building improvements at October 5, 2016 are as follows (in thousands): 2016 $ 11,646 2017 696 2018 10 2019 — 2020 — Thereafter — Total $ 12,352 The following is a schedule by year of future minimum rental receipts under noncancelable leases for office buildings owned at October 5, 2016 (in thousands): 2016 $ 21,376 2017 82,035 2018 77,687 2019 73,419 2020 70,907 Thereafter 477,340 Total $ 802,764 Parkway Houston is geographically concentrated in Houston, Texas. For the period from January 1, 2016 to October 5, 2016, four tenants in Parkway Houston's portfolio represented 21.9% , 9.5% , 7.1% and 6.0% of income from office properties, respectively. During the year ended December 31, 2015, four tenants in Parkway Houston's portfolio represented 27.9% , 12.0% , 6.9% and 5.5% of income from office properties, respectively. During the year ended December 31, 2014, four tenants in Parkway Houston's portfolio represented 21.2% , 15.0% , 6.6% and 5.1% of income from office properties, respectively. |
Receivables and Other Assets Re
Receivables and Other Assets Receivables and Other Assets | 12 Months Ended |
Dec. 31, 2016 | |
Receivables and Other Assets [Line Items] | |
Receivables and Other Assets | Receivables and Other Assets The following represents the composition of Receivables and Other Assets as of December 31, 2016 (in thousands): December 31, 2016 Rents and fees receivable $ 3,289 Allowance for doubtful accounts (436 ) Straight-line rent receivable 32,000 Other receivables 4,761 Unamortized lease costs, net of accumulated amortization of $8,581 44,799 Prepaid assets 1,620 Deferred tax asset, non-current 3,648 Other assets 2,576 $ 92,257 |
Parkway Houston | |
Receivables and Other Assets [Line Items] | |
Receivables and Other Assets | Receivables and Other Assets The following represents the composition of Receivables and Other Assets as of October 5, 2016 and December 31, 2015 (in thousands): October 5, 2016 December 31, 2015 Rents and fees receivable $ 350 $ 300 Allowance for doubtful accounts (125 ) (98 ) Straight-line rent receivable 25,159 21,073 Other receivables 1,284 3,593 Lease costs, net of accumulated amortization of $17,473 and $13,257, respectively 42,780 40,451 Escrow and other deposits 845 1,865 Prepaid expenses 825 482 Cost method investment 3,500 3,500 Deferred tax asset, non-current 4,686 4,999 Other assets 119 135 $ 79,423 $ 76,300 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Assets, Net | Intangible Assets, Net The following table reflects the portion of the purchase price of office properties assigned to other intangible assets, net as discussed in “Note 2—Basis of Presentation and Summary of Significant Accounting Policies” (in thousands): December 31, 2016 Above market lease value $ 20,555 Accumulated amortization (4,125 ) Management contracts 2,099 Accumulated amortization (78 ) $ 18,451 |
Parkway Houston | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Assets, Net | Intangible Assets, Net The following table reflects the portion of the purchase price of office properties assigned to intangible assets, as discussed in “Note 3—Summary of Significant Accounting Policies” (in thousands): October 5, 2016 December 31, 2015 Lease in place value $ 73,064 $ 73,064 Accumulated amortization (57,178 ) (50,787 ) Above market lease value 3,044 3,044 Accumulated amortization (1,478 ) (882 ) $ 17,452 $ 24,439 |
Cousins Houston | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible Assets, Net | Intangible Assets Intangible assets on the balance sheets at October 6, 2016 and December 31, 2015 included the following (in thousands): October 6, December 31, In-place leases, net of accumulated amortization of $69,434 and $58,715 in 2016 and 2015, respectively $ 58,580 $ 69,300 Above-market leases, net of accumulated amortization of $3,475 and $2,852 in 2016 and 2015, respectively 2,244 2,866 Goodwill 1,688 — $ 62,512 $ 72,166 Net amortization expense related to intangible assets and liabilities was $6.7 million , $11.9 million , and $21.6 million , for the period from January 1 to October 6, 2016, and the years ended December 31, 2015 and 2014, respectively. Over the next five years and thereafter, aggregate amortization of these intangible assets and liabilities is anticipated to be as follows (in thousands): Below Market Rents Above Market Rents In-Place Leases Total 2016 $ (1,398 ) $ 104 $ 2,928 $ 1,634 2017 (5,808 ) 407 11,471 6,070 2018 (5,471 ) 360 10,093 4,982 2019 (5,202 ) 303 8,615 3,716 2020 (3,470 ) 251 5,884 2,665 Thereafter (15,050 ) 819 19,589 5,358 $ (36,399 ) $ 2,244 $ 58,580 $ 24,425 Weighted average remaining lease term 12.0 years 12.1 years 10.2 years 11.0 years |
Capital and Financing Transacti
Capital and Financing Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instrument [Line Items] | |
Capital and Financing Transactions | Capital and Financing Transactions Notes Payable to Banks, Net A summary of notes payable to banks, net at December 31, 2016 is as follows (dollars in thousands): Interest Rate Initial Maturity Outstanding Balance $100.0 Million Revolving Credit Facility 3.8% 10/06/2019 $ — $350.0 Million Three-Year Term Loan 3.7% 10/06/2019 350,000 Notes payable to banks outstanding 350,000 Unamortized debt issuance costs, net (8,398 ) Total notes payable to banks, net $ 341,602 Credit Facility In connection with the Separation and the UPREIT Reorganization, on October 6, 2016, the Company and the Operating Partnership, as borrower, entered into a credit agreement providing for (i) the three -year, $100 million senior secured revolving credit facility (the “Revolving Credit Facility”), and (ii) the three -year, $350 million senior secured term loan facility (the “Term Loan” and, together with the Revolving Credit Facility, the “Credit Facility”), with Bank of America, N.A., as Administrative Agent and the lenders party thereto (collectively, the “Lenders”). The Credit Facility has an initial maturity date of October 6, 2019, but is subject to a one -year extension option at the election of the Operating Partnership. The exercise of the extension option requires the payment of an extension fee and the satisfaction of certain other customary conditions. The credit agreement also permits the Operating Partnership to utilize up to $15 million of the Revolving Credit Facility for the issuance of letters of credit. Interest on the Credit Facility will accrue at a rate based on LIBOR or a base rate plus an applicable margin. The Credit Facility will be prepayable at the election of the borrower (upon not less than three business days’ written notice to the administrative agent) without premium or penalty (other than customary breakage fees), and will not require any scheduled repayments of principal prior to the maturity date. The Credit Facility is guaranteed pursuant to a Guaranty Agreement entered into on October 6, 2016, by the Company, all wholly owned material subsidiaries of the Operating Partnership that are not otherwise prohibited from guarantying the Credit Facility, Parkway Properties General Partners, Inc. and Parkway LP. As of December 31, 2016, no amounts have been drawn on the Revolving Credit Facility, and the Term Loan was fully funded on October 6, 2016 in connection with the Separation and the UPREIT Reorganization, whereby the Company contributed approximately $167 million of the proceeds of the Term Loan, directly or indirectly, to Cousins LP, which used such funds to repay certain indebtedness of Cousins and its subsidiaries, including Legacy Parkway’s previously-existing credit facilities. The Operating Partnership has retained the remaining proceeds of the Term Loan as working capital that will be used for the general corporate purposes of the Operating Partnership. Mortgage Notes Payable, Net A summary of mortgage notes payable, net at December 31, 2016 is as follows (dollars in thousands): Office Properties Fixed Rate Maturity Date December 31, 2016 San Felipe Plaza 4.8% 12/01/2018 $ 106,085 CityWestPlace III and IV 5.0% 03/05/2020 88,700 Post Oak Central 4.3% 10/01/2020 178,285 Phoenix Tower 3.9% 03/01/2023 76,561 Unamortized premium, net 2,600 Unamortized debt issuance costs, net (654 ) Total mortgage notes payable, net $ 451,577 The aggregate annual maturities and weighted average interest rates of mortgage notes payable, net at December 31, 2016 are as follows (dollars in thousands): Weighted Average Interest Rate Total Mortgage Maturities Balloon Payments Principal Amortization 2017 4.4% $ 9,306 $ — $ 9,306 2018 4.8% 111,960 102,402 9,558 2019 4.3% 8,097 — 8,097 2020 4.5% 252,499 246,765 5,734 2021 3.9% 2,418 — 2,418 Thereafter 3.9% 65,351 62,193 3,158 Total principal maturities 449,631 $ 411,360 $ 38,271 Unamortized premium, net 2,600 Unamortized debt issuance costs, net (654 ) Total mortgage notes payable, net 4.5% $ 451,577 |
Parkway Houston | |
Debt Instrument [Line Items] | |
Capital and Financing Transactions | Mortgage Notes Payable, Net A summary of mortgage notes payable at October 5, 2016 and December 31, 2015 is as follows (dollars in thousands): Fixed Maturity October 5, December 31, Office Properties Rate Date 2016 2015 Phoenix Tower 3.9% 03/01/2023 $ 77,067 $ 78,555 CityWestPlace I and II 6.2% 07/06/2016 — 114,460 CityWestPlace III and IV 5.0% 03/05/2020 88,978 90,334 San Felipe Plaza 4.8% 12/01/2018 106,389 107,877 Unamortized premium, net 4,281 5,981 Unamortized debt issuance costs, net (274 ) (306 ) Total mortgage notes payable, net $ 276,441 $ 396,901 On April 6, 2016, Legacy Parkway paid in full the $114.0 million mortgage debt secured by CityWestPlace I and II and recognized a gain on extinguishment of debt of $154,000 during the period from January 1, 2016 to October 5, 2016. This paydown has been reflected as a capital contribution for Parkway Houston. The aggregate annual maturities of mortgage notes payable, net at October 5, 2016 are as follows (dollars in thousands): Weighted Average Interest Rate Total Mortgage Maturities Balloon Payments Principal Amortization Schedule of Mortgage Maturities by Years: 2016 4.4% $ 1,088 $ — $ 1,088 2017 4.5% 5,670 — 5,670 2018 4.8% 108,166 102,402 5,764 2019 4.4% 4,138 — 4,138 2020 5.0% 85,602 82,949 2,653 Thereafter 3.9% 67,770 62,193 5,577 Total principal maturities 272,434 $ 247,544 $ 24,890 Unamortized premium, net N/A 4,281 Unamortized debt issuance costs, net N/A (274 ) Total mortgage notes payable, net 4.6% $ 276,441 The fair value of mortgage notes payable was $278.3 million and $394.3 million as of October 5, 2016 and December 31, 2015 , respectively. The fair value was determined using Level 2 inputs. Level 2 inputs are observable information for similar items in active or inactive markets and appropriately consider counterparty creditworthiness in the valuations. |
Cousins Houston | |
Debt Instrument [Line Items] | |
Capital and Financing Transactions | Note Payable In September 2013, the Company entered into a $188.8 million non-recourse mortgage note payable secured by Post Oak Central. The note bears interest at 4.26% , and the maturity date is October 1, 2020. In connection with this note payable, the Company incurred $1.2 million in loan costs. These costs, net of accumulated amortization of $553,000 and $416,000 in 2016 and 2015, respectively, are reflected as a reduction of the loan balance on the accompanying balance sheets. Future principal payments due on the note at October 6, 2016 are as follows (in thousands): Amount 2016 $ 591 2017 3,636 2018 3,794 2019 3,959 2020 166,896 178,876 Less unamortized debt issuance costs (696 ) Balance at October 6, 2016 $ 178,180 Fair value of debt is calculated by discounting the debt’s remaining contractual cash flows at estimated rates at which similar loans could have been obtained. The estimate of the current market rate is intended to replicate debt of similar maturity and loan-to-value relationship. These fair value calculations are considered to be Level 2 under the guidelines set forth in ASC 820, as Cousins Houston utilizes market rates for similar type loans from third party brokers. At October 6, 2016 and December 31, 2015, the fair values of this financial instrument and the related discount rate assumptions are summarized as follows ($ in thousands): October 6, 2016 December 31, 2015 Carrying value $ 178,180 $ 180,937 Fair value $ 185,373 $ 186,449 Discount rate assumed in calculating fair value 3.25 % 3.65 % |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Values of Financial Instruments FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also provides guidance for using fair value to measure financial assets and liabilities. The Codification requires disclosure of the level within the fair value hierarchy in which the fair value measurements fall, including measurements using quoted prices in active markets for identical assets or liabilities (Level 1), quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active (Level 2), and significant valuation assumptions that are not readily observable in the market (Level 3). Fair values of financial instruments were as follows (in thousands): December 31, 2016 Carrying Amount Fair Value Financial Assets: Cash and cash equivalents $ 230,333 $ 230,333 Financial Liabilities: Notes payable to banks (1) $ 350,000 $ 349,372 Mortgage notes payable (1) 449,631 452,753 (1) The carrying amounts of notes payable to banks and mortgage notes payable represent par values. The methods and assumptions used to estimate fair value for each class of financial asset or liability are discussed below: Cash and cash equivalents: The carrying amount for cash and cash equivalents approximates fair value. Notes payable to banks: The fair value of the Company’s notes payable to banks is estimated by discounting expected cash flows at current market rates. This information is considered a Level 2 input as defined by ASC 820. Mortgage notes payable: The fair value of mortgage notes payable is estimated by discounting expected cash flows at current market rates. This information is considered a Level 2 input as defined by ASC 820. Non-financial assets and liabilities recorded at fair value on a non-recurring basis include the following: (1) non-financial assets and liabilities measured at fair value in a business combination and (2) impairment or disposal of long-lived assets measured at fair value. The fair values assigned to the Company’s purchase price assignments utilize Level 2 and Level 3 inputs as defined by ASC 820. The fair value assigned to the long-lived assets for which there could be impairment recorded utilize Level 2 inputs as defined by ASC 820. |
Accounts Payable and Other Liab
Accounts Payable and Other Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities [Line Items] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities The following represents the composition of Accounts Payable and Other Liabilities as of December 31, 2016 (in thousands): December 31, 2016 Office property payables: Prepaid rents $ 8,546 Security deposits 3,490 Accrued lease commissions 4,584 Accrued lease incentives 4,275 Accrued building improvements 3,713 Accrued recoveries 3,837 Other accrued expenses and accounts payable 4,396 Corporate payables 7,528 Deferred tax liability, non-current 4,336 Interest payable 2,514 $ 47,219 |
Parkway Houston | |
Accounts Payable and Accrued Liabilities [Line Items] | |
Accounts Payable and Other Liabilities | Accounts Payable and Other Liabilities The following represents the composition of Accounts Payable and Other Liabilities as of October 5, 2016 and December 31, 2015 (in thousands): October 5, December 31, 2016 2015 Accounts payable $ — $ 5,911 Accrued property taxes 16,279 9,300 Accrued tenant improvements 3,862 4,346 Accrued common area maintenance 425 3,930 Other accrued expenses 1,813 2,878 Prepaid rents 6,226 5,319 Security deposits 1,250 1,052 Deferred tax liability 1,047 793 Accrued payroll 742 1,248 Interest payable 367 1,522 $ 32,011 $ 36,299 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |
Commitments and Contingencies | Commitments and Contingencies The Company and its subsidiaries are, from time to time, parties to litigation arising from the ordinary course of business. The Company does not believe that any such litigation will materially affect its financial position or operations. The Company has a 1% limited partnership interest in 2121 Market Street Associates, LP (“2121 Market Street”). A mortgage loan secured by a first trust deed on 2121 Market Street is guaranteed by the Company up to a maximum amount of $14.0 million expiring in December 2022. Obligations for tenant improvements, lease commissions and lease incentives recorded on the consolidated balance sheet at December 31, 2016 are as follows (in thousands): Amount 2017 $ 44,424 2018 8,426 2019 10,668 2020 11,445 2021 — Thereafter — Total $ 74,963 |
Parkway Houston | |
Loss Contingencies [Line Items] | |
Commitments and Contingencies | Commitments and Contingencies Parkway Houston and its subsidiaries are, from time to time, parties to litigation arising from the ordinary course of business. Parkway Houston does not believe that any such litigation will materially affect its financial position or operations. Parkway Houston has a 1% limited partnership interest in 2121 Market Street Associates LLC (“2121 Market Street”), which it acquired in the Thomas Properties Group, Inc. merger transactions. A mortgage loan secured by a first trust deed on 2121 Market Street is guaranteed by Parkway Houston up to a maximum amount of $14.0 million expiring in December 2022. |
Cousins Houston | |
Loss Contingencies [Line Items] | |
Commitments and Contingencies | Commitments And Contingencies Commitments The Company had a total of $63.1 million in future obligations under leases to fund tenant improvements at October 6, 2016. Amounts due under these lease commitments are as follows (in thousands): Amount 2016 $ 29,779 2017 8,504 2018 8,504 2019 8,174 2020 8,174 $ 63,135 Litigation The Company is subject to various legal proceedings, claims and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. The Company records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, the Company accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, the Company discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, the Company discloses the nature and estimate of the possible loss of the litigation. The Company does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business or financial condition of the Company. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity The Company’s authorized stock consists of 200,000,000 shares of common stock, par value $0.001 per share, 1,000,000 shares of limited voting stock, par value $0.001 per share, 48,999,950 shares of preferred stock, par value $0.001 per share, and 50 shares of non-voting preferred stock, par value $0.001 per share. Common Stock As of the date of the Spin-Off, October 7, 2016, and December 31, 2016, there were 49,110,645 shares of common stock issued and outstanding. All of the shares of the Company’s common stock are duly authorized, fully paid and nonassessable. Subject to the preferential rights of any other class or series of the Company’s stock and the provisions of the Company’s Articles of Amendment and Restatement (the “Charter”) that restrict transfer and ownership of stock, the holders of shares of the Company’s common stock generally are entitled to receive dividends on such stock out of funds available for distribution to the stockholders when, as and if authorized by the Board of Directors of the Company (the “Board”) and declared by the Company. Holders of shares of the Company’s common stock generally have no preference, conversion, exchange, sinking fund, redemption or appraisal rights. Other than TPG VI Pantera Holdings, L.P.’s (“TPG Pantera”) rights pursuant to that certain Stockholders Agreement, dated as of October 7, 2016, by and among the Company, TPG Pantera and TPG VI Management, LLC (“TPG Management,” and together with TPG Pantera, the “TPG Parties”), holders of shares of the Company’s common stock have no preemptive rights to subscribe for any of the Company’s securities. Limited Voting Stock As of the date of the Spin-Off, October 7, 2016, and December 31, 2016, there were 858,417 shares of limited voting stock issued and outstanding. All of the outstanding shares of the Company’s limited voting stock are duly authorized, fully paid and nonassessable. Each share of the Company’s limited voting stock is “paired” with an Operating Partnership unit (“OP unit”) of Parkway LP. Holders of shares of the Company’s limited voting stock are entitled to vote only on certain matters including, the election of directors. Holders of the Company’s limited voting stock vote on such matters together with holders of the Company’s common stock as a single class, except as otherwise required by the Maryland General Corporation Law. Holders of shares of the Company’s limited voting stock are not entitled to any dividends or distributions, including in the event of any liquidation or dissolution. Preferred Stock As of date of the Spin-Off, October 7, 2016, and December 31, 2016, there were no shares of preferred stock issued and outstanding. Pursuant to the Company’s Charter, the Company’s Board may from time to time establish and cause the Company to issue one or more classes or series of preferred stock and set the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or distributions, qualifications or terms or conditions of redemption of such classes or series. Non-Voting Preferred Stock As of the date of the Spin-Off, October 7, 2016, and December 31, 2016, there were 50 shares of non-voting preferred stock issued and outstanding, all owned by Cousins LP. All of the shares of non-voting preferred stock are duly authorized, fully paid and nonassessable. The Company’s non-voting preferred stock ranks senior to the Company’s common stock with respect to the payment of dividends and distribution of assets upon liquidation, dissolution or winding up of our affairs. Subject to any preferential rights of any other class or series of stock that may rank senior to the non-voting preferred stock in the future, holders of non-voting preferred stock, are entitled to receive, when, as and if authorized by our Board and declared by the Company, a cumulative preferential dividend payable quarterly at the rate of 8.00% per annum per share of their $100,000 liquidation preference (equivalent to a fixed annual amount of $8,000 per share), which dividend shall accrue, accumulate and be payable in accordance with the Company’s Charter. The non-voting preferred stock does not have any voting rights, except that without approval of two-thirds of the non-voting preferred stock, the Company may not create, authorize, increase or decrease the number of stock senior to the non-voting preferred stock or amend the Company’s Charter or Bylaws to change rights or preferences of the non-voting preferred stock materially and adversely. |
Share-Based and Long-Term Compe
Share-Based and Long-Term Compensation Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based and Long-Term Compensation Plans | Share-Based and Long-Term Compensation Plans In September 2016, the Company adopted the Parkway, Inc. and Parkway Operating Partnership LP 2016 Omnibus Equity Incentive Plan (the “2016 Plan”), pursuant to which the following types of awards may be granted to the Company’s employees, directors and consultants: (i) options, including nonstatutory stock options and incentive stock options; (ii) stock appreciation rights; (iii) restricted shares; (iv) restricted stock units; (v) profits interest units (LTIP units); (vi) dividend equivalents; (vii) other forms of awards payable in or denominated by reference to shares of common stock; or (viii) cash. The 2016 Plan permits the grant of awards with respect to 6,002,596 shares of the Company’s common stock, which is equal to the sum of (i) 5,000,000 shares, plus (ii) any shares of the Company’s common stock issuable pursuant to awards resulting from awards originally granted under the Parkway Properties, Inc. and Parkway Properties LP 2015 Omnibus Equity Incentive Plan (as successor to the Parkway Properties, Inc. and Parkway Properties LP 2013 Omnibus Equity Incentive Plan) that were outstanding immediately prior to the Spin-Off, replaced with awards with respect to shares of Cousins’ common stock pursuant to the Merger Agreement and further replaced with awards with respect to shares of the Company’s common stock pursuant to and as described in that certain Employee Matters Agreement, dated October 5, 2016, by and among the Company, the Operating Partnership, Cousins and certain other parties, which was entered into in connection with the Spin-Off. Through December 31, 2016 , the Company had stock options and RSUs outstanding under the 2016 Plan, each as described below. Long-Term Equity Incentives At December 31, 2016 , a total of 773,617 shares underlying stock options with an aggregate fair value of $1.2 million had been granted to officers of the Company and former officers of Legacy Parkway and remain outstanding and exercisable under the 2016 Equity Plan, of which 33,011 options were unvested until they vested fully on March 2, 2017. The options have exercise prices that range from $21.91 to $22.00 . The unvested stock options are valued at $52,000 , which equates to an average price per option of $1.57 . The options expire on March 2, 2023. The following table presents the weighted-average assumptions used to estimate the fair values of the options granted in the periods presented, using the Black-Scholes model: For the Period From June 29, 2016 (Date of Capitalization) to December 31, 2016 Risk-free interest rate 1.06% Expected volatility 20% Expected life (in years) 3.2 Dividend yield 4.1% Weighted-average estimated fair value of options granted during the year $1.57 At December 31, 2016 , a total of 270,815 time-vesting RSUs had been granted to officers of the Company and remain outstanding under the 2016 Equity Plan. The time-vesting RSUs are valued at $5.6 million , which equates to an average price per share of $20.85 . A total of 114,490 time-vesting RSU awards will vest on January 1, 2017, 22,467 time-vesting RSU awards will vest in increments of 25% per year on each of the first, second, third and fourth anniversaries of the grant date and 133,858 time-vesting RSU awards will vest in increments of 33% per year on each of the first, second and third anniversaries of the grant date, subject to the grantee’s continued service. At December 31, 2016 , a total of 159,899 performance-vesting RSUs had been granted to officers of the Company and remain outstanding under the 2016 Equity Plan. The performance-vesting RSUs are valued at approximately $1.9 million , which equates to an average price per share of $11.82 . Grant date fair values of the performance-vesting RSUs units are estimated using a Monte Carlo simulation model and the resulting expense is recorded regardless of whether the total stockholder return (“TSR”) performance measures are achieved if the required service is delivered. Each performance-vesting RSU will vest based on the attainment of TSR targets during the applicable performance period, subject to the grantee’s continued service. Total compensation expense related to stock options and RSUs of $3.8 million was recognized in general and administrative expenses on the Company’s consolidated statement of operations during the period from June 29, 2016 (date of capitalization) to December 31, 2016. Total compensation expense related to non-vested awards not yet recognized was $5.0 million at December 31, 2016 . The weighted average period over which this expense is expected to be recognized is approximately two years . Options Time-Vesting RSUs Performance-Vesting RSUs # of Options Weighted Average Grant-Date Fair Value # of Stock Units Weighted Average Grant-Date Fair Value # of Stock Units Weighted Average Grant-Date Fair Value Balance at 6/29/2016 — $ — — $ — — $ — Granted 773,617 1.57 270,815 20.85 159,899 11.82 Vested (740,606 ) 1.57 — — — — Balance at 12/31/2016 33,011 $ 1.57 270,815 $ 20.85 159,899 $ 11.82 Defined Contribution Plan The Company maintains a 401(k) plan for its employees. The Company makes matching contributions of 50% of the employee’s contribution (limited to 10% of compensation as defined by the plan) and may also make annual discretionary contributions. The Company’s total expense for this plan was approximately $31,000 for the period from June 29, 2016 to December 31, 2016 . |
Future Minimum Rents
Future Minimum Rents | 12 Months Ended |
Dec. 31, 2016 | |
Operating Leased Assets [Line Items] | |
Future Minimum Rents | Future Minimum Rents The Company leases properties to tenants under operating leases with various expiration dates extending to 2032. Minimum future rentals on non-cancelable leases at December 31, 2016 (excluding operating expense reimbursements) are as follows (in thousands): Amount 2017 $ 171,757 2018 142,426 2019 143,306 2020 123,600 2021 117,788 Thereafter 547,895 Total $ 1,246,772 |
Cousins Houston | |
Operating Leased Assets [Line Items] | |
Future Minimum Rents | Future Minimum Rents The Company’s leases typically contain escalation provisions and provisions requiring tenants to pay its pro rata share of operating expenses. The leases typically include renewal options and are classified and accounted for as operating leases. At October 6, 2016, future minimum rents, excluding tenants' pro rata share of operating expenses, to be received under existing non-cancellable leases are as follows (in thousands): Amount 2016 $ 21,945 2017 94,533 2018 97,589 2019 91,966 2020 71,500 Thereafter 318,438 $ 695,971 |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Net Loss Per Common Share As described in “Note 1—Organization,” the financial statements reflect the common shares and units as if they were outstanding for the entire period presented. The computation of basic and diluted EPS is as follows (in thousands, except per share data): For the Period From June 29, 2016 (Date of Capitalization) to December 31, 2016 Numerator: Basic and diluted net loss attributable to common stockholders $ (14,316 ) Denominator: Basic and diluted weighted average shares outstanding 49,111 Basic net loss per common share attributable to common stockholders $ (0.29 ) Diluted net loss per common share attributable to common stockholders $ (0.29 ) The computation of diluted EPS for the period from June 29, 2016 to December 31, 2016 does not include the effect of net loss attributable to noncontrolling interest - unitholders in the numerator and Operating Partnership units and time-vesting RSUs in the denominator as their inclusion would have been anti-dilutive. Terms and conditions of these awards are described in “Note 11—Share-Based and Long-Term Compensation Plans.” |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |
Income Taxes | Note 14—Income Taxes The Company intends to qualify and elect to be taxed as a REIT for U.S. federal income tax purposes commencing with its taxable year ended December 31, 2016 . As a REIT, the Company generally will not be subject to corporate level U.S. federal income tax on taxable income it distributes currently to its stockholders. The Company has elected to treat certain consolidated subsidiaries as Taxable REIT Subsidiaries (“TRSs”), which are tax paying entities for income tax purposes and are taxed separately from the Company. TRSs may participate in non-real estate related activities and/or perform non-customary services for customers and are subject to U.S. federal and state income tax at regular corporate tax rates. The income tax benefit (expense) and related income tax assets and liabilities are based on actual and expected future income. As of December 31, 2016 , the Company recorded net deferred tax liabilities of $688,000 . Deferred income taxes are provided for income and deductions that are recognized in different years for financial statement and income tax reporting purposes. The significant components of the net deferred tax assets (liabilities) as of December 31, 2016 are as follows (in thousands): December 31, Deferred tax assets Capitalizable transaction costs $ 591 Contingent consideration 1,059 Depreciation 191 Loss carryforward 1,057 Management contracts 1,792 Other 2 Deferred tax assets 4,692 Deferred tax asset valuation allowance (1,044 ) Total deferred tax assets 3,648 Deferred tax liabilities Deferred revenue (3,615 ) Management contracts (718 ) Other (3 ) Total deferred tax liabilities (4,336 ) Total deferred tax liabilities, net $ (688 ) As of December 31, 2016 , the Company had a U.S. federal capital loss carryforward totaling $1.1 million which will expire in 2020. Utilization of this loss is subject to annual limitations. The Company considered all available evidence, including future reversal of existing taxable temporary differences, carryback potential, tax-planning strategies and its ability to generate sufficient taxable income in future years and determined that valuation allowance of $1.0 million was required as of October 6, 2016 (closing date of the Merger) for loss that is not expected to provide future tax benefits. As of December 31, 2016, the valuation allowance of $1.0 million remains unchanged. As of December 31, 2016 , there were no material unrecognized tax benefits, interest or penalties and the Company does no t anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months. The components of income tax expense for the period from June 29, 2016 (date of capitalization) to December 31, 2016 are as follows (in thousands): For the period from June 29, 2016 (Date of Capitalization) to December 31, 2016 Current: Federal $ — State (318 ) Total current (318 ) Deferred: Federal (126 ) State (9 ) Total deferred (135 ) Total income tax expense $ (453 ) The reconciliation of income tax expense computed at the U.S. statutory income tax rate and the income tax expense in the consolidated statement of operations is shown below (dollars in thousands): For the period from June 29, 2016 (Date of Capitalization) to December 31, 2016 Amount Percentage Income tax expense at U.S. federal statutory rate $ 4,783 34.0 % REIT earnings without income tax provision (4,901 ) (34.8 )% State income tax, net of federal tax benefit (327 ) (2.3 )% Other (8 ) (0.1 )% Total income tax expense $ (453 ) (3.2 )% |
Parkway Houston | |
Operating Loss Carryforwards [Line Items] | |
Income Taxes | Income Taxes As a REIT, Legacy Parkway generally was not subject to corporate level U.S. federal income tax on taxable income it distributes currently to its stockholders. If Legacy Parkway fails to qualify as a REIT in any taxable year, it will be subject to U.S. federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if Legacy Parkway qualifies for taxation as a REIT, Legacy Parkway may be subject to certain state and local taxes on its income and property, and to U.S. federal income taxes on its undistributed taxable income. The properties in the combined financial statements were owned directly or indirectly by a limited partnership or limited liability companies and as a result, the allocated share of income or loss for each period is included in the income tax returns of the partners. Parkway Houston has certain entities as taxable REIT subsidiaries (“TRSs”), which are tax paying entities for income tax purposes and are taxed separately from Parkway Houston. TRSs may participate in non-real estate related activities and/or perform non-customary services for customers and are subject to U.S. federal and state income tax at regular corporate tax rates. The income tax benefit (expense) and related income tax assets and liabilities are based on actual and expected future income. As of October 5, 2016 and December 31, 2015 , Parkway Houston recorded net deferred tax assets of $3.6 million and $4.2 million , respectively, related to the TRSs. Deferred tax assets generally represent items that can be used as a tax deduction in Parkway Houston’s tax returns in future years for which Parkway Houston has already recorded a tax benefit in its combined statements of operations. The significant components of the net deferred tax assets (liabilities) as of October 5, 2016 and December 31, 2015 are as follows (in thousands): October 5, December 31, 2016 2015 Deferred tax assets Capitalizable transaction costs $ 619 $ 667 Contingent consideration 1,109 1,198 Management contracts 1,876 2,022 Condominium sales 1,064 1,064 Other 15 48 Total deferred tax assets 4,683 4,999 Deferred tax liabilities Cost method investment (936 ) (670 ) Other (108 ) (123 ) Total deferred tax liabilities (1,044 ) (793 ) Total deferred tax assets, net $ 3,639 $ 4,206 FASB ASC 740-10-30 “Accounting for Income Taxes” subsection “Initial Measurement,” requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. In determining whether the deferred tax asset is realizable, Parkway Houston considers all available positive and negative evidence, including future reversal of existing taxable temporary differences, carryback potential, tax-planning strategies and its ability to generate sufficient taxable income in future years. As of October 5, 2016 , Parkway Houston concludes that a valuation allowance against its deferred tax asset is not necessary. The components of income tax benefit (expense) for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014 are as follows (in thousands): Period From January 1 to October 5, Years Ended December 31, 2016 2015 2014 Current: Federal $ (188 ) $ (854 ) $ (2,870 ) State (359 ) (418 ) (1,713 ) Total current (547 ) (1,272 ) (4,583 ) Deferred: Federal (514 ) 124 3,868 State (52 ) (487 ) 895 Total deferred (566 ) (363 ) 4,763 Total income tax (expense) benefit $ (1,113 ) $ (1,635 ) $ 180 The reconciliation of income tax expense computed at the U.S. statutory income tax rate and the income tax expense in the consolidated statements operations is shown below (dollars in thousands): Period From January 1 to October 5, Years Ended December 31, 2016 2015 2014 Amount Percentage Amount Percentage Amount Percentage Pre-tax income (loss) from continuing operations $ 431 34.0 % $ 4,812 34.0 % $ 7,848 34.0 % REIT earnings without income tax provision (1,149 ) (90.6 )% (5,596 ) (39.5 )% (7,003 ) (30.3 )% Noncontrolling interest — — % (2 ) — % 50 0.2 % State income tax, net of federal tax benefit (401 ) (31.6 )% (510 ) (3.6 )% (778 ) (3.4 )% Effect of permanent differences — — % (6 ) — % (41 ) (0.2 )% Valuation allowance — — % — — % 479 2.1 % Other - Peachtree — — % — — % (422 ) (1.8 )% Other 6 0.5 % (333 ) (2.4 )% 47 0.2 % Total income tax (expense) benefit $ (1,113 ) (87.7 )% $ (1,635 ) (11.5 )% $ 180 0.8 % FASB ASC 740-10-25, “Accounting for Income Taxes” subsection “Recognition,” clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Parkway Houston’s policy is to recognize interest and penalties related to unrecognized tax benefits as components of income tax expense. As of October 5, 2016 , there were no material unrecognized tax benefits and Parkway Houston does no t anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |
Related Party Transactions | Related Party Transactions Certain of the Company’s executive officers own interests in properties that are managed and leased by Eola. During the period from June 29, 2016 (date of capitalization) to December 31, 2016 , the Company recorded approximately $66,000 in management fees and approximately $164,000 in reimbursements related to the management and leasing of these assets. During the period from June 29, 2016 (date of capitalization) to December 31, 2016, the Company incurred director fees for TPG Pantera–nominated members of the Company’s Board in the aggregate amount of $92,000 , which is paid directly to TPG Pantera. On September 28, 2016, Eola entered into an agreement and side letter with affiliates of the TPG Parties pursuant to which Eola performs property management, accounting and finance services for such TPG Party affiliates at certain assets owned by such TPG Party affiliates (collectively, the “TPG Owner”) that were purchased from the Legacy Parkway on September 27, 2016. The agreement has a one -year term. Pursuant to the agreement and side letter, Eola will receive a monthly management fee equal to approximately 2.5% of the aggregate gross revenues received from the operation of the properties and is reimbursed for certain personnel expenses. Eola recorded $193,000 and $90,000 for management fees and salary reimbursements, respectively, for the period from June 29, 2016 (date of capitalization) to December 31, 2016 . Concurrently with the execution of the Merger Agreement, Legacy Parkway and Parkway LP entered into a letter agreement (the “Thomas Letter Agreement”) with Mr. James A. Thomas, then chairman of the Legacy Parkway board of directors and the current chairman of the Company’s board of directors, and certain unitholders of Parkway LP who are affiliated with Mr. Thomas. Pursuant to the Separation and Distribution Agreement, the Thomas Letter Agreement is binding on the Company. On March 14, 2017, the Operating Partnership and Parkway LP entered into a Debt Guaranty Agreement (the “Debt Guaranty Agreement”) with Mr. Thomas and certain affiliates of Mr. Thomas (the “Thomas Investors”) that implements those provisions of the Thomas Letter Agreement regarding debt guarantee opportunities made available to Mr. Thomas and the Thomas Investors. Consistent with the Thomas Letter Agreement, pursuant to the Debt Guaranty Agreement, the Operating Partnership made available to Mr. Thomas and the Thomas Investors certain debt guarantee opportunities corresponding to specified mortgage loans of the Company, of which Mr. Thomas and the Thomas Investors entered into contribution agreements with respect to $109 million (representing an additional $70 million over their existing $39 million guarantee). In the event these specified mortgage loans become unavailable for guarantee (whether because the Company repays them, sells the corresponding asset, or otherwise), the Company is required to use commercially reasonable efforts to provide a replacement guarantee or contribution opportunity to the extent of the Company’s remaining qualifying debt (but not in excess of $109 million ). The Company has agreed to maintain any such debt for the remainder of the five -year period following October 2016, subject to early termination in the event of a going private transaction, sale of all or substantially all of the Company’s assets or certain similar transactions. |
Parkway Houston | |
Related Party Transaction [Line Items] | |
Related Party Transactions | Related Party Transactions As discussed in Note 1 and Note 2, the accompanying combined financial statements present the operations of Parkway Houston as carved out from the financial statements of Legacy Parkway. Transactions between the entities have been eliminated in the combined presentation. The combined financial statements include payroll costs and benefits for on-site personnel employed by Legacy Parkway. These costs are reflected in property operating expenses on the combined statements of operations. A summary of these for each of the periods presented is as follows (in thousands): Period From January 1 to October 5, Years Ended December 31, 2016 2015 2014 Charged to property operating expense: Direct payroll charges $ 2,454 $ 2,747 $ 2,823 Management fees 2,173 2,298 3,087 Other allocated expenses 1,149 1,637 2,393 Total $ 5,776 $ 6,682 $ 8,303 Lease commissions and development fees paid to Legacy Parkway’s personnel and other leasing costs incurred by Parkway Houston are capitalized and amortized over the respective lease term. For the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014 , Parkway Houston capitalized $403,000 , $1.6 million and $982,000 , respectively, in commissions and other leasing costs to the properties. The expenses charged to Parkway Houston for these services are not necessarily indicative of the expenses that would have been incurred had Parkway Houston been a separate, independent entity. On May 18, 2011, Legacy Parkway entered into a contribution agreement pursuant to which Eola contributed its property management company (the “Management Company”) to Legacy Parkway. In connection with the Eola contribution of its Management Company to Legacy Parkway, a subsidiary of Legacy Parkway made a $3.5 million preferred equity investment in an entity 21% owned by Mr. James R. Heistand, and which is included in receivables and other assets on Parkway Houston’s combined balance sheets. This investment provides that Legacy Parkway will be paid a preferred equity return equal to 7% per annum of the preferred equity outstanding. For the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014 , Legacy Parkway received preferred equity distributions on this investment in the aggregate amounts of approximately $187,043 , $245,000 and $265,000 , respectively. This preferred equity investment was approved by the board of directors of Legacy Parkway, and is recorded as a cost method investment in receivables and other assets on the combined balance sheets. Certain of Legacy Parkway’s executive officers own interests in properties that are managed and leased by the Management Company. Parkway Houston recorded in management company income $240,500 , $398,000 and $3.5 million in management fees and $586,000 , $869,000 and $8.8 million in reimbursements related to the management and leasing of these assets for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014 , respectively. On September 28, 2016, Eola entered into an agreement and side letter with affiliates of TPG VI Pantera Holdings, L.P. (“TPG Pantera”) and TPG VI Management, LLC (“TPG Management,” and, together with TPG Pantera, the “TPG Parties”) pursuant to which Eola performs property management, accounting and finance services for such TPG Party affiliates at certain assets owned by such TPG Party affiliates (collectively, the “TPG Owner”). The agreement has a one -year term. Pursuant to the agreement and side letter, Eola will receive a monthly management fee equal to approximately 2.5% of the aggregate gross revenues received from the operation of the properties and is reimbursed for certain personnel expenses. Eola has not recorded any management fees or reimbursements related to this agreement for the periods presented. |
Cousins Houston | |
Related Party Transaction [Line Items] | |
Related Party Transactions | Related Party Transactions The combined financial statements include direct payroll costs and benefits for on-site personnel employed by Cousins. These costs are reflected in rental property operating expenses on the Combined Statements of Operations. As described in Note 1, also included are costs for certain functions and services performed by Cousins including, but not limited to, corporate-level salaries and other related costs, stock compensation, and other general and administrative costs. These costs were allocated to Cousins Houston based on proportionate leasable square footage which management believes is an appropriate estimate of usage. These costs are reflected as general and administrative expenses on the Combined Statements of Operations. As described in Note 1, also included are transaction costs that were incurred by Cousins related to the Spin-Off. The amounts included are based on the estimated direct costs incurred by Cousins. The expenses allocated to Cousins Houston for these services are not necessarily indicative of the expenses that would have been incurred had Cousins Houston been a separate, independent entity that had otherwise managed these functions. A summary of these costs for each of the periods presented is as follows (in thousands): For the Period Ended October 6, For the Years Ended December 31, 2016 2015 2014 Charged to property operating expense: Direct payroll charges $ 5,308 $ 6,826 $ 6,678 Other allocated expenses 1,501 2,043 2,178 Charged to general and administrative expense: Office rental expense 271 337 329 Payroll and other expenses 6,516 5,991 7,018 Transaction costs 6,349 — — Leasing commissions paid to Cousins’ personnel and other leasing costs incurred by Cousins are capitalized and amortized over the respective lease term. For the period from January 1, 2016 to October 6, 2016, and the years ended December 31, 2015 and 2014, the Company incurred and capitalized $1.3 million , $3.8 million , and $2.5 million , respectively, in commissions and other leasing costs. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) Summarized quarterly financial data for the period from June 29, 2016 (date of capitalization) to December 31, 2016 is as follows (in thousands, except per share data): 2016 Period from June 29, 2016 (date of capitalization) to September 30, 2016 Fourth Quarter Revenues (other than gains) $ — $ 68,931 Expenses (5,372 ) (70,845 ) Operating loss (5,372 ) (1,914 ) Interest and other income — 1,225 Interest expense — (8,007 ) Income tax expense — (453 ) Net loss (5,372 ) (9,149 ) Net loss attributable to noncontrolling interest - unitholders — 299 Net loss attributable to Parkway, Inc. (5,372 ) (8,850 ) Dividends on preferred stock — (94 ) Net loss attributable to common stockholders $ (5,372 ) $ (8,944 ) Basic and diluted net loss per common share attributable to common stockholders (1) $ (0.11 ) $ (0.18 ) Dividends per common share (1) $ — $ — Weighted average shares outstanding: Basic (1) 49,111 49,111 Diluted (1) 49,111 49,111 (1) As described in “Note 1—Organization,” the financial statements reflect the common shares and units as if they were outstanding for the entire period presented. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Event [Line Items] | |
Subsequent Events | Subsequent Events On February 17, 2017, the Company, through its Operating Partnership and certain other subsidiaries, entered into an Omnibus Contribution and Partial Interest Assignment Agreement (the “Contribution Agreement”) with an affiliate of Canada Pension Plan Investment Board (“CPPIB”) and an entity controlled by TH Real Estate Global Asset Management and Silverpeak Real Estate Partners (“TIAA/SP”). Pursuant to the Contribution Agreement, the Company has agreed to sell to these two investors, indirectly through a new joint venture, an aggregate 49% interest in our Greenway Plaza and Phoenix Tower properties. The new joint venture is expected to be owned 51% through subsidiaries of the Operating Partnership (with 1% being held by a subsidiary acting as the general partner and 50% being held by a subsidiary acting as a limited partner) and 24.5% by each of CPPIB and TIAA/SP, each as a limited partner of the joint venture. The Company will serve as general partner and also will provide property management and leasing services to the joint venture. The Company expects to record an impairment loss of approximately $25 million (unaudited) in the first quarter of 2017 related to the joint venture transaction. Subject to certain closing conditions, the Company expects the closing of the joint venture and associated financing to occur in the second quarter of 2017, subject to extension to an outside date of May 31, 2017, which may be further extended to June 21, 2017 in certain circumstances. As of December 31, 2016, total assets and liabilities of the Greenway Plaza and Phoenix Tower properties were $1.1 billion and $200.8 million , respectively. Although the Company has not paid any dividends on its common stock as of the date of this Annual Report on Form 10-K, in accordance with its Charter and as authorized by the Board, the Company has declared a quarterly dividend in the amount of $0.10 per share of common stock to holders of record of its common stock on March 16, 2017. The common dividend will be paid on March 30, 2017. In addition, the Company declared a dividend in the amount of $2,000 per share of Series A non-voting preferred stock to Cousins LP, the holder of record of all outstanding shares of such stock. A preferred dividend totaling approximately $100,000 will be paid on March 31, 2017 to the holder of record of Series A non-voting preferred stock on March 17, 2017. |
Parkway Houston | |
Subsequent Event [Line Items] | |
Subsequent Events | Subsequent Events The Merger was consummated on October 6, 2016, and the Spin-Off was completed on October 7, 2016. |
Schedule III _ Real Estate and
Schedule III – Real Estate and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2016 | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule III – Real Estate and Accumulated Depreciation | SCHEDULE III – REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2016 (In thousands) Initial Cost to the Company Description Encumbrances (1) Land Building and Improvements Subsequent Capitalized Costs Total Real Estate Texas CityWestPlace $ 93,295 $ 43,322 $ 303,764 $ 2,810 $ 349,896 San Felipe Plaza 109,612 5,579 162,777 2,417 170,773 Phoenix Tower 71,039 8,686 71,874 1,647 82,207 Greenway Plaza — 273,651 733,996 2,577 1,010,224 Post Oak Central 177,631 86,077 163,344 2,147 251,568 Total Real Estate Owned $ 451,577 $ 417,315 $ 1,435,755 $ 11,598 $ 1,864,668 (1) Encumbrances represent face amount of mortgage debt and exclude any premiums or discounts. Gross Amount at Which Carried at Close of Period Description Land Building and Improvements Total (1) Accumulated Depreciation Net Book Value of Real Estate Year Acquired Year Constructed Depreciable Lives (Yrs.) Texas CityWestPlace $ 43,322 $ 306,574 $ 349,896 $ 2,618 $ 347,278 2016 1993-2001 (2) San Felipe Plaza 5,579 165,194 170,773 1,639 169,134 2016 1984 (2) Phoenix Tower 8,686 73,521 82,207 753 81,454 2016 1984/2011 (2) Greenway Plaza 273,651 736,573 1,010,224 119,640 890,584 2016 1969-1981 (2) Post Oak Central 86,077 165,491 251,568 34,407 217,161 2016 1974-1980 (2) Total Real Estate Owned $ 417,315 $ 1,447,353 $ 1,864,668 $ 159,057 $ 1,705,611 (1) The aggregate cost for federal income tax purposes, without adjustments for gain recognized and/or loss disallowed by Cousins in connection with transactions occurring on October 6, 2016, was approximately $ 1.6 billion (unaudited). (2) Depreciation of buildings is 7 - 40 years from acquisition date. A summary of activity for real estate and accumulated depreciation for the period from June 29, 2016 (date of capitalization) to December 31, 2016 is as follows: Real Estate: Office Properties: Balance at June 29, 2016 (Date of Capitalization) $ — Contributions from the Spin-Off 1,854,257 Improvements 11,598 Non-depreciable real estate sold (1,187 ) Balance at December 31, 2016 $ 1,864,668 Accumulated Depreciation: Balance at June 29, 2016 (Date of Capitalization) $ — Contributions from the Spin-Off 142,102 Depreciation expense 16,955 Balance at December 31, 2016 $ 159,057 |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies - (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate Properties [Line Items] | |
Basis of Presentation | The accompanying financial statements have been prepared by the Company’s management (“management”) in accordance with accounting principles generally accepted in the United States (“GAAP”) and the requirements of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company also consolidates subsidiaries where the entity is a variable interest entity (a “VIE”) and it is the primary beneficiary and has the power to direct the activities of the VIE and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Operating Partnership was determined to be a VIE and the Company is considered to be the primary beneficiary. All significant intercompany transactions and accounts have been eliminated in the accompanying financial statements. The accompanying combined financial statements include the accounts of Parkway Houston presented on a combined basis as the ownership interests previously were under common control and ownership of Legacy Parkway during the reported periods. All significant intercompany balances and transactions have been eliminated. These combined financial statements are derived from the books and records of Legacy Parkway and were carved out from Legacy Parkway at a carrying value reflective of such historical cost in such Legacy Parkway records. Parkway Houston’s historical financial results reflect charges for certain corporate costs and Parkway Houston believes such charges are reasonable; however, such results do not necessarily reflect what Parkway Houston’s expenses would have been had Parkway Houston been operating as an independent, stand-alone public company. Costs of the services that were charged to Parkway Houston were based on either actual costs incurred or a proportion of costs estimated to be applicable to Parkway Houston. The historical combined financial information presented may therefore not be indicative of the results of operations, financial position or cash flows that would have been obtained if Parkway Houston had been an independent, stand-alone public company during the periods presented or of Parkway Houston’s future performance as an independent, stand-alone company. Parkway Houston is a predecessor, as defined in applicable rules and regulations for the Securities and Exchange Commission, to the Houston Business, which commenced operations on the date of the Spin-Off. These combined financial statements reflect the consolidation of properties that are wholly owned or properties in which, prior to the Merger, the Separation, the Reorganization and the Spin-off, Legacy Parkway owned less than a 100% interest but that Legacy Parkway controlled. Control of a property is demonstrated by, among other factors, Parkway Houston’s ability to refinance debt and sell the property without the consent of any other partner or owner and the inability of any other partner or owner to replace Legacy Parkway. Eola Capital, LLC (“Eola”), Phoenix Tower, CityWestPlace and San Felipe Plaza were all wholly owned by Legacy Parkway for all periods presented. Parkway Houston consolidates its Murano residential condominium project which it controls. Parkway Houston’s unaffiliated partner’s interest is reflected on its combined balance sheets under the “Noncontrolling Interests” caption. Parkway Houston’s partner has a stated ownership interest of 27% . Net proceeds from the project will be distributed, to the extent available, based on an order of preferences described in the partnership agreement. Parkway Houston may receive distributions, if any, in excess of its stated 73% ownership interest if certain return thresholds are met. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although the Company believes the assumptions and estimates made are reasonable and appropriate, as discussed in the applicable sections throughout these consolidated financial statements, different assumptions and estimates could materially impact reported results. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions; therefore, changes in market conditions could impact the Company’s future operating results. The Company’s most significant estimates relate to purchase price assignments and impairments on real estate and other assets. Actual results could differ from these estimates and assumptions. |
Real Estate Properties and Capitalization of Costs | Costs related to planning, developing, leasing and constructing a property, including costs of development personnel working directly on projects under development, are capitalized. The Company also capitalizes certain costs of leasing personnel in connection with the completion of leasing arrangements. Real estate properties are carried at cost less accumulated depreciation. Cost includes the carrying amount of the Company’s investment plus any additional consideration paid, liabilities assumed and improvements made subsequent to acquisition. Depreciation of buildings and building improvements is computed using the straight-line method over the estimated useful lives of the assets. Depreciation of tenant improvements, including personal property, is computed using the straight-line method over the lesser of the useful life or the term of the lease involved. Maintenance and repair expenses are charged to expense as incurred. The Company evaluates its real estate assets for impairment upon occurrence of significant adverse changes in its operations to assess whether any impairment indicators are present that affect the recovery of the carrying amount. The carrying amount includes the net book value of tangible and intangible assets and liabilities. Real estate assets are classified as held for sale or held and used. The Company classifies certain assets as held for sale based on management having the authority and intent of entering into commitments for sale transactions to close in the next 12 months. The Company considers an office property as held for sale once it has executed a contract for sale, allowed the buyer to complete its due diligence review and received a substantial non-refundable deposit. Until a buyer has completed its due diligence review of the asset, necessary approvals have been received and substantive conditions to the buyer’s obligation to perform have been satisfied, the Company does not consider a sale to be probable. When the Company identifies an asset as held for sale, it estimates the net realizable value of such asset and discontinues recording depreciation on the asset. The Company records assets held for sale at the lower of the carrying amount or fair value less cost to sell. If the fair value of the asset net of estimated selling costs is less than the carrying amount, the Company records an impairment loss. With respect to assets classified as held and used, the Company recognizes an impairment loss if the carrying amount is not recoverable and exceeds the sum of undiscounted future cash flows expected to result from the use and eventual disposition of the asset. Upon impairment, the Company recognizes an impairment loss to reduce the carrying value of the real estate asset to the estimate of its fair value. The cash flow and fair value estimates are based on assumptions about employing the asset for its remaining useful life. Factors considered in projecting future cash flows include, but are not limited to: existing leases, future leasing and terminations, market rental rates, capital improvements, tenant improvements, leasing commissions, inflation, discount rates, capitalization rates and other known variables, and contractual purchase and sale agreements, if any. This market information is considered a Level 2 or Level 3 input as defined by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” (“ASC 820”). The Company recognizes gains or losses on sales of real estate at times and in amounts determined in accordance with the accounting guidance for sales of real estate. The guidance takes into account the terms of the transaction and any continuing involvement, including in the form of management, leasing of space or financial assistance associated with the properties. If the sales criteria for the full accrual method are not met, then the Company defers gain recognition and accounts for the transaction by applying the deposit, finance, installment or cost recovery methods, as appropriate. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents. |
Acquisition of Operating Properties/Purchase Price Assignment | Accounting for the Spin-Off The Merger was accounted for as a “purchase,” as that term is used under GAAP, for accounting and financial reporting purposes. Under purchase accounting, the assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of Legacy Parkway as of the effective time of the Merger were recorded at their respective fair values and added to the assets and liabilities of Cousins. The separation of the assets and liabilities related to the Houston Business from the remainder of Cousins’ businesses in the Separation and the UPREIT Reorganization were at Cousins’ carryover basis after adjusting the Legacy Parkway assets and liabilities to fair value. As a result, the financial statements initially reflected carryover basis for Cousins Houston properties and fair value basis for the Legacy Parkway assets. Operating Property Acquisitions The Company assigns the purchase price of real estate to tangible and intangible assets and liabilities based on fair value. Tangible assets consist of land, building, garage, building improvements and tenant improvements. Intangible assets and liabilities consist of the value of above and below market leases, lease costs, the value of in-place leases and any value attributable to above or below market debt assumed with the acquisition. The Company engages independent third-party appraisers to perform the valuations used to determine the fair value of these identifiable tangible and intangible assets. These valuations and appraisals use commonly employed valuation techniques, such as discounted cash flow analyses. Factors considered in these analyses include an estimate of costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods depending on specific local market conditions and the type of property acquired. Additionally, the Company estimates costs to execute similar leases including leasing commissions, legal and other related expenses. The fair value of above or below market in-place lease values is the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the estimated current market lease rate expected over the remaining non-cancelable life of the lease. The capitalized above market lease values are amortized as a reduction of rental income over the remaining term of the respective leases. The portion of the values of the leases associated with below-market renewal options that are likely to be exercised are amortized to rental income over the respective renewal. The capitalized below market lease values are amortized as an increase to rental income over the remaining term of the respective leases. As of December 31, 2016, the weighted average amortization periods for above market leases and below market leases were 7.1 years and 8.1 years , respectively. Total amortization for above and below market leases was a net increase of rental income of $1.3 million for the period from June 29, 2016 (date of capitalization) to December 31, 2016 . As of December 31, 2016 , the remaining amortization of above/below market leases, net is projected as a net increase to rental income as follows (in thousands): Amount 2017 $ 5,308 2018 4,496 2019 4,368 2020 2,806 2021 2,799 Thereafter 15,605 Total $ 35,382 The fair value of in-place leases is the present value associated with re-leasing the in-place lease as if the property was vacant. Factors to be considered include estimates of costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating costs, the Company includes estimates of lost rentals at market rates during the expected lease-up periods. The value of at market in-place leases is amortized as a lease cost amortization expense over the expected life of the lease. As of December 31, 2016, the weighted average amortization period for in-place leases was 6.1 years . Total amortization expense for the value of in-place leases was $6.7 million period from June 29, 2016 (date of capitalization) to December 31, 2016 . As of December 31, 2016 , the remaining amortization expense for the value of in-place leases is projected as follows (in thousands): Amount 2017 $ 24,365 2018 18,136 2019 15,247 2020 11,832 2021 10,227 Thereafter 37,436 Total $ 117,243 A separate component of the fair value of in-place leases is identified for the lease costs. The fair value of lease costs represents the estimated commissions and legal fees paid in connection with the current leases in place. Lease costs are amortized over the non-cancelable terms of the respective leases as amortization expense. In no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a customer terminate its lease, the unamortized portion of the tenant improvement, in-place lease value and lease cost intangibles would be charged to expense. Additionally, the unamortized portion of above market in-place leases would be recorded as a reduction to rental income and the below market in-place lease value would be recorded as an increase to rental income. The Company calculates the fair value of mortgage notes payable by discounting the remaining contractual cash flows on each instrument at the current market rate for these borrowings. |
Allowance for Doubtful Accounts | Accounts receivable are reduced by an allowance for amounts that the Company estimates to be uncollectible. The receivable balance is comprised primarily of rent and expense reimbursement income due from the customers. Management evaluates the adequacy of the allowance for doubtful accounts considering such factors as the credit quality of the customers, delinquency of payment, historical trends and current economic conditions. The Company provides an allowance for doubtful accounts for customer balances that are over 90 days past due and for specific customer receivables for which collection is considered doubtful. |
Amortization of Debt Origination Costs and Leasing Costs | Debt origination costs are deferred and amortized using a method that approximates the effective interest method over the term of the loan. These costs are classified within the consolidated balance sheet as a direct deduction from the carrying amount of debt within total liabilities. Leasing costs are deferred and amortized using the straight-line method over the term of the respective lease. |
Fair Value Measurements | Level 1 fair value inputs are quoted prices for identical assets or liabilities in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information for similar assets or liabilities in active or inactive markets, and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect the Company’s best estimate of inputs and assumptions market participants would use in pricing an asset or liability at the measurement date. These inputs are unobservable in the market and significant to the valuation estimate. |
Noncontrolling Interest | A noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. In addition, consolidated net income is required to be reported as amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the consolidated statement of operations. Income is allocated to noncontrolling interests based on the weighted average percentage ownership during the period. Noncontrolling interests in the Operating Partnership represent common Operating Partnership units that are not owned by the Company. Certain holders of Operating Partnership units have registration rights with respect to shares of common stock issuable upon conversion of such units, or have shares of common stock available for issuance under effective registration statements. Limited partners have the right under the partnership agreement of the Operating Partnership to tender their units for redemption in exchange for cash or unregistered shares of the Company’s common stock, as selected by the Company in its sole and absolute discretion. Accordingly, the Company classifies the common Operating Partnership units held by limited partners in permanent equity because the Company may elect to issue shares of its common stock to limited partners exercising their redemption rights rather than using cash. |
Revenue Recognition | Revenue from real estate rentals is recognized on a straight-line basis over the noncancelable lease term at the inception of each respective lease in accordance with FASB ASC 840, Leases. The cumulative difference between lease revenue recognized under this method and contractual lease payment terms is recorded as straight-line rent receivable on the accompanying balance sheets. The straight-line rent adjustment increased revenue by $3.8 million for the period from June 29, 2016 (date of capitalization) to December 31, 2016 . When the Company is the owner of the tenant improvements, the leased space is ready for its intended use when the tenant improvements are substantially completed, at which point revenue recognition begins. In limited instances, when the tenant is the owner of the customer improvements, straight-line rent is recognized when the tenant takes possession of the unimproved space. The leases also typically provide for tenant reimbursement of a portion of common area maintenance, real estate taxes and other operating expenses. Property operating cost recoveries from customers (“expense reimbursements”) are recognized as revenue in the period in which the expenses are incurred. The computation of expense reimbursements is dependent on the provisions of individual customer leases. Most customers make monthly fixed payments of estimated expense reimbursements. The Company makes adjustments, positive or negative, to expense reimbursement income quarterly to adjust the recorded amounts to the Company’s best estimate of the final property operating costs based on the most recent annual estimate. After the end of the calendar year, the Company computes each customer’s final expense reimbursements and issues a bill or credit for the difference between the actual amount and the amounts billed monthly during the year. Differences between actual billed amounts and accrued amounts are considered immaterial. Management company income represents market-based fees earned from providing management, construction, leasing, brokerage and acquisition services to third parties and related parties. Management fee income is computed and recorded monthly in accordance with the terms set forth in the management service agreements. Leasing and brokerage commissions, as well as salary and administrative fees, are recognized pursuant to the terms of the agreements at the time underlying leases are signed, which is the point at which the earnings process is complete and collection of fees is reasonably assured. Fees relating to the purchase or sale of property are recognized when the earnings process is complete and collection of fees is reasonably assured, which usually occurs at closing. All fees on Company-owned properties are eliminated in consolidation. |
Share-Based and Long-Term Compensation | Compensation expense for service-based awards is recognized over the expected vesting period of such awards. The total compensation expense for the long-term equity incentive awards is based upon the fair value of the shares on the grant date. Time-vesting restricted shares are valued based on the New York Stock Exchange closing market price of the Company’s common shares as of the date of grant. The grant date fair value for performance-vesting restricted stock units (“RSUs”) is determined using a simulation pricing model developed to specifically accommodate the unique features of the awards. The total compensation expense for stock options is estimated based on the fair value of the options as of the date of grant using the Black-Scholes model. Use of peer company data was used for assumptions in the Black-Scholes model due to the lack of history for the Company. Forfeitures will be recognized in the period as they occur. |
Net Income (Loss) Per Common Share | Basic earnings per share (“EPS”) is computed by dividing income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding for the period. In arriving at net income (loss) attributable to common stockholders, preferred stock dividends are deducted. Diluted EPS reflects the potential dilution that could occur if share equivalents such as Operating Partnership units, employee stock options, and time-vesting and performance-vesting RSUs were exercised or converted into common stock that then shared in the earnings of the Company. |
Incomes Taxes | he Company intends to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes, beginning with its short taxable year that commenced on the day prior to Spin-Off and ended on December 31, 2016. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that it distribute annually at least 90% of its “REIT taxable income,” determined without regard to the dividends paid deduction and excluding any net capital gain to its stockholders. It is management’s current intention to adhere to these requirements and the Company believes that it was in compliance with all REIT requirements for the Company's taxable year ended December 31, 2016. As a REIT, the Company generally will not be subject to corporate level U.S. federal income tax on its “REIT taxable income,” determined without regard to the dividends paid deduction and excluding any net capital gain, that it distributes currently to its stockholders, provided that the REIT meets the applicable REIT distribution requirements and other requirements for qualification as a REIT under the Code. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes, and to federal income and excise taxes on its undistributed taxable income. In addition, taxable income from non-REIT activities managed through the Company's taxable TRS is subject to federal, state and local income taxes. The Company provides for income taxes based on pretax income and applicable tax rates in the various jurisdictions in which it operates. The Company's effective tax rate reflects the impact of earnings attributable to REIT operations and noncontrolling interests for which no federal income taxes have been provided. Through October 6, 2016, the Company was a qualified REIT subsidiary of Cousins generally not subject to federal income taxes as all of the Company's taxable income and deductions were treated as if realized by Cousins directly. The Company recognizes the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination, based on the technical merits of the position with the taxing authority having full knowledge of all relevant information. The tax benefit recognized in the financial statements for a particular tax position is based on the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company's policy is to recognize interest and penalties related to income taxes, including accrued interest and penalties, if any, associated with unrecognized tax benefits, as components of income tax expense. |
Segment Reporting | FASB ASC 280, “Segment Reporting,” established standards for disclosure about operating segments and related disclosures about products and services, geographic areas and major customers. The Company currently operates in one business segment, the acquisition, development, ownership and management of commercial real estate. Additionally, the Company operates in one geographic area, Houston, Texas. Our chief operating decision maker reviews operating and financial data on a consolidated basis. |
Allocated Costs | The historical financial results include certain allocated corporate costs which the Company believes are reasonable. These costs incurred by Legacy Parkway are reflected as an equity contribution and are estimated to be applicable to the Company based on an analysis of key metrics such as leasable square feet, personnel hours or expenses that were otherwise specifically identifiable. |
Recent Accounting Pronouncements | In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contract with Customers (Topic 606)” (“ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company's revenues that will be impacted by this standard include revenues earned from fee-based real estate services, sales of real estate assets including land parcels and operating properties and other ancillary income. The Company expects that the amount and timing of revenue recognition from our fee-based real estate services referenced above will be generally consistent with our current measurement and pattern of recognition. The Company currently anticipates utilizing the modified retrospective method of adoption on January 1, 2018 and continues to evaluate the adoption impacts of this standard. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities of lessees on the balance sheet and disclosing key information about leasing arrangements. Lessor accounting will remain substantially similar to the current accounting; however, certain refinements were made to conform the standard with the recently issued revenue recognition guidance in ASU 2014-09, specifically related to the allocation and recognition of contract consideration earned from lease and non-lease revenue components. Additionally, certain leasing costs that are eligible to be capitalized as initial direct costs are also limited by ASU 2016-02. The Company expects to adopt this guidance effective January 1, 2019 and will utilize the modified retrospective method of adoption. Substantially all of the Company's revenues are earned from arrangements that are within the scope of ASU 2016-02, thus we anticipate that the timing of recognition and financial statement presentation of certain revenues, including revenues that related to consideration from non-lease components, may be affected. The Company is still assessing the impact of adopting this guidance. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805)” (“ASU 2017-01”). ASU 2017-01 clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for periods beginning after December 15, 2017, including interim periods within those periods. The Company will early adopt this standard prospectively as of January 1, 2017 as permitted under the standard. In February 2017, the FASB issued ASU No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)” (“ASU 2017-05”). ASU 2017-05 clarifies the scope of asset derecognition guidance and accounting for partial sales of nonfinancial assets. Partial sales of nonfinancial assets are common in the real estate industry and include transactions in which the seller retains an equity interest in the entity that owns the assets or has an equity interest in the buyer. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company is currently assessing this guidance for future implementation. |
Parkway Houston | |
Real Estate Properties [Line Items] | |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although Parkway Houston believes the assumptions and estimates made are reasonable and appropriate, as discussed in the applicable sections throughout these combined financial statements, different assumptions and estimates could materially impact reported results. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions; therefore, changes in market conditions could impact Parkway Houston’s future operating results. Parkway Houston’s most significant estimates relate to impairments on real estate and other assets and purchase price assignments. Actual results could differ from these estimates. |
Real Estate Properties and Capitalization of Costs | Costs related to planning, developing, leasing and constructing a property, including costs of development personnel working directly on projects under development, are capitalized. In addition, Parkway Houston capitalizes interest to qualifying assets under development based on average accumulated expenditures outstanding during the period. In capitalizing interest to qualifying assets, Parkway Houston first uses the interest incurred on specific project debt, if any, and next uses Parkway Houston’s weighted average interest rate for non-project specific debt. Parkway Houston also capitalizes certain costs of leasing personnel in connection with the completion of leasing arrangements. Real estate properties are carried at cost less accumulated depreciation. Cost includes the carrying amount of Parkway Houston’s investment plus any additional consideration paid, liabilities assumed and improvements made subsequent to acquisition. Depreciation of buildings and building improvements is computed using the straight-line method over the estimated useful lives of the assets. Depreciation of tenant improvements, including personal property, is computed using the straight-line method over the lesser of the useful life or the term of the lease involved. Maintenance and repair expenses are charged to expense as incurred. Parkway Houston evaluates its real estate assets for impairment upon occurrence of significant adverse changes in its operations to assess whether any impairment indicators are present that affect the recovery of the carrying amount. The carrying amount includes the net book value of tangible and intangible assets and liabilities. Real estate assets are classified as held for sale or held and used. Parkway Houston classifies certain assets as held for sale based on management having the authority and intent of entering into commitments for sale transactions to close in the next 12 months. Parkway Houston considers an office property as held for sale once it has executed a contract for sale, allowed the buyer to complete its due diligence review and received a substantial non-refundable deposit. Until a buyer has completed its due diligence review of the asset, necessary approvals have been received and substantive conditions to the buyer’s obligation to perform have been satisfied, Parkway Houston does not consider a sale to be probable. When Parkway Houston identifies an asset as held for sale, it estimates the net realizable value of such asset and discontinues recording depreciation on the asset. Parkway Houston records assets held for sale at the lower of the carrying amount or fair value less cost to sell. If the fair value of the asset net of estimated selling costs is less than the carrying amount, Parkway Houston records an impairment loss. With respect to assets classified as held and used, Parkway Houston recognizes an impairment loss if the carrying amount is not recoverable and exceeds the sum of undiscounted future cash flows expected to result from the use and eventual disposition of the asset. Upon impairment, Parkway Houston recognizes an impairment loss to reduce the carrying value of the real estate asset to the estimate of its fair value. The cash flow and fair value estimates are based on assumptions about employing the asset for its remaining useful life. Factors considered in projecting future cash flows include, but are not limited to: existing leases, future leasing and terminations, market rental rates, capital improvements, tenant improvements, leasing commissions, inflation, discount rates, capitalization rates and other known variables, and contractual purchase and sale agreements. This market information is considered a Level 2 or Level 3 input as defined by the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”. Parkway Houston recognizes gains or losses on sales of real estate at times and in amounts determined in accordance with the accounting guidance for sales of real estate. The guidance takes into account the terms of the transaction and any continuing involvement, including in the form of management, leasing of space or financial assistance associated with the properties. If the sales criteria for the full accrual method are not met, then Parkway Houston defers gain recognition and accounts for the transaction by applying the deposit, finance, installment or cost recovery methods, as appropriate. |
Cash and Cash Equivalents | Parkway Houston considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Restricted Cash | Restricted cash, which is included in receivables and other assets, primarily consists of security deposits held on behalf of Parkway Houston’s tenants as well as capital improvements and real estate tax escrows required under certain loan agreements. There are restrictions on Parkway Houston’s ability to withdraw these funds other than for their specified usage. |
Acquisition of Operating Properties/Purchase Price Assignment | Parkway Houston assigns the purchase price of real estate to tangible and intangible assets and liabilities based on fair value. Tangible assets consist of land, building, garage, building improvements and tenant improvements. Intangible assets and liabilities consist of the value of above and below market leases, lease costs, the value of in-place leases and any value attributable to above or below market debt assumed with the acquisition. Parkway Houston engages independent third-party appraisers to perform the valuations used to determine the fair value of these identifiable tangible and intangible assets. These valuations and appraisals use commonly employed valuation techniques, such as discounted cash flow analyses. Factors considered in these analyses include an estimate of costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. Parkway Houston also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. Parkway Houston includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods depending on specific local market conditions and the type of property acquired. Additionally, Parkway Houston estimates costs to execute similar leases including leasing commissions, legal and other related expenses. The fair value of above or below market in-place lease values is the present value of the difference between the contractual amount to be paid pursuant to the in-place lease and the estimated current market lease rate expected over the remaining non-cancelable life of the lease. The capitalized above market lease values are amortized as a reduction of rental income over the remaining term of the respective leases. The portion of the values of the leases associated with below-market renewal options that are likely to be exercised are amortized to rental income over the respective renewal. The capitalized below market lease values are amortized as an increase to rental income over the remaining term of the respective leases. Total amortization for above and below market leases was a net increase of rental income of $5.0 million , $17.1 million and $16.3 million for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014, respectively. As of October 5, 2016 , the remaining amortization of above/below market leases, net is projected as a net increase to rental income as follows (in thousands): Amount 2016 $ 1,079 2017 3,705 2018 1,946 2019 1,575 2020 1,511 Thereafter 6,479 Total $ 16,295 The fair value of in-place leases is the present value associated with re-leasing the in-place lease as if the property was vacant. Factors to be considered include estimates of costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating costs, Parkway Houston includes estimates of lost rentals at market rates during the expected lease-up periods. The value of at market in-place leases is amortized as a lease cost amortization expense over the expected life of the lease. Total amortization expense for the value of in-place leases was $6.4 million , $16.7 million and $30.1 million for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014, respectively. As of October 5, 2016 , the remaining amortization expense for the value of in-place leases is projected as follows (in thousands): Amount 2016 $ 1,381 2017 4,398 2018 2,031 2019 1,454 2020 1,395 Thereafter 5,227 Total $ 15,886 A separate component of the fair value of in-place leases is identified for the lease costs. The fair value of lease costs represents the estimated commissions and legal fees paid in connection with the current leases in place. Lease costs are amortized over the non-cancelable terms of the respective leases as amortization expense. In no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. Should a customer terminate its lease, the unamortized portion of the tenant improvement, in-place lease value and lease cost intangibles would be charged to expense. Additionally, the unamortized portion of above market in-place leases would be recorded as a reduction to rental income and the below market in-place lease value would be recorded as an increase to rental income. Parkway Houston calculates the fair value of mortgage notes payable by discounting the remaining contractual cash flows on each instrument at the current market rate for these borrowings. |
Allowance for Doubtful Accounts | Accounts receivable are reduced by an allowance for amounts that Parkway Houston estimates to be uncollectible. The receivable balance is comprised primarily of rent and expense reimbursement income due from the customers. Management evaluates the adequacy of the allowance for doubtful accounts considering such factors as the credit quality of the customers, delinquency of payment, historical trends and current economic conditions. Parkway Houston provides an allowance for doubtful accounts for customer balances that are over 90 days past due and for specific customer receivables for which collection is considered doubtful. |
Amortization of Debt Origination Costs and Leasing Costs | Debt origination costs are deferred and amortized using a method that approximates the effective interest method over the term of the loan. These costs are classified within the combined balance sheets as a direct deduction from the carrying amount of debt within total liabilities. Leasing costs are deferred and amortized using the straight-line method over the term of the respective lease. |
Fair Value Measurements | Level 1 fair value inputs are quoted prices for identical assets or liabilities in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information for similar assets or liabilities in active or inactive markets, and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect Parkway Houston’s best estimate of inputs and assumptions market participants would use in pricing an asset or liability at the measurement date. These inputs are unobservable in the market and significant to the valuation estimate. |
Noncontrolling Interest | A noncontrolling interest in a subsidiary is in most cases an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. In addition, consolidated net income is required to be reported as amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the combined statements of operations. |
Revenue Recognition | Revenue from real estate rentals is recognized on a straight-line basis over the noncancelable lease term at the inception of each respective lease in accordance with ASC 840, Leases. The cumulative difference between lease revenue recognized under this method and contractual lease payment terms is recorded as straight-line rent receivable on the accompanying balance sheets. The straight-line rent adjustment increased revenue by $4.1 million for the period from January 1, 2016 to October 5, 2016 and by $13.9 million and $6.3 million in 2015 and 2014 , respectively. When Parkway Houston is the owner of the tenant improvements, the leased space is ready for its intended use when the tenant improvements are substantially completed, at which point revenue recognition begins. In limited instances, when the tenant is the owner of the customer improvements, straight-line rent is recognized when the tenant takes possession of the unimproved space. The leases also typically provide for tenant reimbursement of a portion of common area maintenance, real estate taxes and other operating expenses. Property operating cost recoveries from customers (“expense reimbursements”) are recognized as revenue in the period in which the expenses are incurred. The computation of expense reimbursements is dependent on the provisions of individual customer leases. Most customers make monthly fixed payments of estimated expense reimbursements. Parkway Houston makes adjustments, positive or negative, to expense reimbursement income quarterly to adjust the recorded amounts to Parkway Houston’s best estimate of the final property operating costs based on the most recent annual estimate. After the end of the calendar year, Parkway Houston computes each customer’s final expense reimbursements and issues a bill or credit for the difference between the actual amount and the amounts billed monthly during the year. Differences between actual billed amounts and accrued amounts are considered immaterial. Management company income represents market-based fees earned from providing management, construction, leasing, brokerage and acquisition services to unconsolidated joint ventures, related parties and third parties. Management fee income is computed and recorded monthly in accordance with the terms set forth in the management service agreements. Leasing and brokerage commissions, as well as salary and administrative fees, are recognized pursuant to the terms of the agreements at the time underlying leases are signed, which is the point at which the earnings process is complete and collection of fees is reasonably assured. Fees relating to the purchase or sale of property are recognized when the earnings process is complete and collection of fees is reasonably assured, which usually occurs at closing. All fees on company-owned properties are eliminated in consolidation. Parkway Houston recognizes fees earned from Legacy Parkway’s unconsolidated joint ventures in management company income. Parkway Houston has one high-rise condominium project. Under the provisions of FASB ASC 360-20, “Property, Plant and Equipment” subsection “Real Estate and Sales,” revenue and costs for projects are recognized when all parties are bound by the terms of the contract, all consideration has been exchanged, any permanent financing for which the seller is responsible has been arranged and all conditions precedent to closing have been performed. This results in profit from the sale of condominium units recognized at closing. Revenue is recognized on the contract price of individual units. Total estimated costs are allocated to individual units which have closed on a relative value basis. |
Impairment of Intangible Assets | During 2014 , Parkway Houston evaluated certain qualitative factors and determined that it was necessary to apply the two-step quantitative impairment test under ASU 2011-08. During the year ended December 31, 2014 , Parkway Houston determined that the undiscounted cash flows indicated that the carrying amounts of certain Eola management contracts were not expected to be recovered and, as a result, Parkway Houston recorded a $4.8 million pre-tax non-cash impairment loss related to these management contracts which resulted in the entire remaining balance of the Eola contracts being written off as of December 31, 2014 . During the period from January 1, 2016 to October 5, 2016 and year ended December 31, 2015 , no impairment losses were recorded on Parkway Houston’s intangible assets. |
Gain on Extinguishment of Debt | When outstanding debt is extinguished, Parkway Houston expenses any prepayment penalties, unamortized premium/discounts and loan costs. |
Incomes Taxes | Legacy Parkway elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), commencing with its taxable year ended December 31, 1997. To qualify as a REIT, Legacy Parkway was required to meet a number of organizational and operational requirements, including a requirement that it distribute annually at least 90% of its “REIT taxable income,” subject to certain adjustments and excluding any net capital gain to its stockholders. Legacy Parkway believes that it was in compliance with all REIT requirements at October 5, 2016. As a REIT, Legacy Parkway generally was not subject to corporate level federal income tax on taxable income it distributes currently to its stockholders. If Legacy Parkway fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years. Even if Legacy Parkway qualifies for taxation as a REIT, Legacy Parkway may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed taxable income. The properties in the combined financial statements were owned directly or indirectly by partnerships, limited partnerships or limited liability companies and as a result, the allocated share of income or loss for each period is included in the income tax returns of the partners. In addition, taxable income from non-REIT activities managed through the taxable REIT subsidiary is subject to federal, state and local income taxes. Legacy Parkway provides for income taxes based on pretax income and applicable tax rates in the various jurisdictions in which it operates. The effective tax rate reflects the impact of earnings attributable to REIT operations and noncontrolling interests for which no U.S. income taxes have been provided. |
Segment Reporting | Parkway Houston’s primary business was the ownership and operation of office properties. Parkway Houston has accounted for each office property or groups of related office properties as an individual operating segment. Parkway Houston has aggregated the individual operating segments into a single reporting segment due to the fact that the individual operating segments have similar operating and economic characteristics, such as being leased by the square foot, sharing the same primary operating expenses and ancillary revenue opportunities and being cyclical in economic performance based on current supply and demand conditions. The individual operating segments are also similar in that revenues are derived from the leasing of office space to customers and each office property is managed and operated consistently in accordance with standard operating procedures. The range and type of customer uses of the properties is similar throughout the portfolio regardless of location or class of building and the needs and priorities of the customers do not vary widely from building to building. Therefore, the management responsibilities do not vary widely from location to location based on the size of the building, geographic location or class. The operations of the Management Company are separately presented in the Combined Statements of Operations. |
Allocated Costs | The historical financial results for Parkway Houston include certain allocated corporate costs which Parkway Houston believes are reasonable. These costs incurred by Legacy Parkway are reflected as an equity contribution and are estimated to be applicable to Parkway Houston based on an analysis of key metrics such as leasable square feet, personnel hours or expenses that were otherwise specifically identifiable. Such costs do not necessarily reflect what the actual costs would have been if Parkway Houston were operating as a separate stand-alone public company. |
Reclassifications | Certain reclassifications have been made in the 2015 notes to combined financial statements to conform to the 2016 classifications with no impact on previously reported net loss or equity. |
Cousins Houston | |
Real Estate Properties [Line Items] | |
Basis of Presentation | Basis of Presentation The combined financial statements included herein represent the combined accounts and combined operations of the Houston Business owned by Cousins (“Cousins Houston” or the “Company”). The assets and liabilities in these combined financial statements represent historical carrying amounts of the following properties: Acquisition Date Number of Office Buildings Total Square Feet Post Oak Central February 7, 2013 3 1,280,000 Greenway Plaza September 9, 2013 10 4,348,000 13 5,628,000 The Company is a predecessor, as defined in applicable rules and regulations of the Securities and Exchange Commission, to the Houston Business and commenced operations on the date of the Spin-off. The Company presents its financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) as outlined in the Financial Accounting Standard Board’s Accounting Standards Codification (the “Codification” or “ASC”). The Codification is the single source of authoritative accounting principles applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Intercompany transactions and balances have been eliminated. For the periods presented, there were no items of other comprehensive income. Therefore, no presentation of comprehensive income is required. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Real Estate Properties and Capitalization of Costs | Cousins Houston capitalizes costs related to property and tenant improvements, including allocated costs of Cousins’ personnel working directly on projects. Cousins Houston capitalizes direct leasing costs related to leases that are probable of being executed. These costs include commissions paid to outside brokers, legal costs incurred to negotiate and document a lease agreement, and costs incurred by personnel of Cousins that are based on time spent on successful leases. Cousins Houston allocates these costs to individual tenant leases and amortizes them over the related lease term. |
Cash and Cash Equivalents | Cash and cash equivalents include cash and highly-liquid money market instruments with maturities of three months or less. |
Acquisition of Operating Properties/Purchase Price Assignment | Cousins Houston records the acquired tangible and intangible assets and assumed liabilities of operating property acquisitions at fair value at the acquisition date. The acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, and identified tangible and intangible assets and liabilities associated with in-place leases, including leasing costs, value of above-market and below-market tenant leases, value of above-market and below-market ground leases, acquired in-place lease values, and tenant relationships, if any. The fair value of land is derived from comparable sales of land within the same submarket and/or region. The fair value of buildings and improvements, tenant improvements, and leasing costs are based upon current market replacement costs and other relevant market rate information. The fair value of the above-market or below-market component of an acquired in-place lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining term and (ii) management’s estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition over the remaining term of the lease. The amounts recorded for above-market and below-market leases are included in intangible assets and intangible liabilities, respectively, and are amortized on a straight-line basis into rental property operating revenues over the remaining terms of the applicable leases. The fair value of acquired in-place leases is derived based on management’s assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. The amount recorded for acquired in-place leases is included in intangible assets and amortized as an increase to depreciation and amortization expense over the remaining term of the applicable leases. |
Fair Value Measurements | Level 1 fair value inputs are quoted prices for identical items in active, liquid and visible markets such as stock exchanges. Level 2 fair value inputs are observable information for similar items in active or inactive markets and appropriately consider counterparty creditworthiness in the valuations. Level 3 fair value inputs reflect Cousins Houston’s best estimate of inputs and assumptions market participants would use in pricing an asset or liability at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate. Cousins Houston has no investments for which fair value is measured on a recurring basis using Level 3 inputs. Note 5 includes fair values of debt measured using Level 2 inputs. |
Depreciation and Amortization | Real estate assets are stated at depreciated cost less impairment losses, if any. Buildings are depreciated over their estimated useful lives, which range from 30 to 42 years . The life of a particular building depends upon a number of factors including whether the building was developed or acquired and the condition of the building upon acquisition. Furniture, fixtures and equipment are depreciated over their estimated useful lives of five years . Tenant improvements, leasing costs and leasehold improvements are amortized over the term of the applicable leases or the estimated useful life of the assets, whichever is shorter. Cousins Houston accelerates the depreciation of tenant assets if it estimates that the lease term will end prior to the termination date. This acceleration may occur if a tenant files for bankruptcy, vacates its premises or defaults in another manner on its lease. Deferred expenses are amortized over the period of estimated benefit. Cousins Houston uses the straight-line method for all depreciation and amortization. |
Revenue Recognition | Cousins Houston recognizes contractual revenues from leases on a straight-line basis over the term of the respective lease. In addition, leases typically provide for reimbursement of the tenants’ share of real estate taxes, insurance, and other operating expenses to Cousins Houston. Operating expense reimbursements are recognized as the related expenses are incurred. For the period from January 1, 2016 to October 6, 2016, and the years ended December 31, 2015 and 2014, Cousins Houston recognized $47.9 million , $59.1 million and $59.2 million , respectively, in revenues from tenants related to reimbursement of operating expenses. Cousins Houston makes valuation adjustments to all tenant-related accounts receivable based upon its estimate of the likelihood of collectability. The amount of any valuation adjustment is based on the tenant’s credit and business risk, history of payment, and other factors considered by management. |
Impairment of Intangible Assets | For real estate assets that are considered to be held for sale according to accounting guidance or are distributed to stockholders in a spin-off, Cousins Houston records impairment losses if the fair value of the asset net of estimated selling costs is less than the carrying amount. For those long-lived assets that are held and used according to accounting guidance, management reviews each asset for the existence of any indicators of impairment. If indicators of impairment are present, Cousins Houston calculates the expected undiscounted future cash flows to be derived from such assets. If the undiscounted cash flows are less than the carrying amount of the asset, Cousins Houston reduces the asset to its fair value. |
Incomes Taxes | Through October 6, 2016, Cousins Houston’s properties were owned by Cousins, which has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, Cousins is not subject to federal income tax provided it distributes annually its adjusted taxable income, as defined in the Code, to stockholders and meets certain other organizational and operating requirements. Accordingly, the combined financial statements of Cousins Houston do not include a provision for federal income tax. |
Segment Reporting | Cousins Houston is in the business of the ownership, development and management of office real estate. Cousins Houston has aggregated its office operations into one reportable segment. This segment is the aggregation of the aforementioned Cousins Houston office properties as reported to the Chief Operating Decision Maker and is aggregated due to the properties having similar economic and geographic characteristics. |
Organization - (Tables)
Organization - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate Properties [Line Items] | |
Real Estate Investments | Balances of major classes of depreciable assets and their respective estimated useful lives are (in thousands): Asset Category Useful Life December 31, Land Non-depreciable $ 417,315 Buildings and garages 7 to 40 years 1,095,815 Building improvements 5 to 40 years 55,093 Tenant improvements Lesser of useful life or term of lease 296,445 $ 1,864,668 |
Cousins Properties Incorporated | |
Real Estate Properties [Line Items] | |
Net Contribution to Spin-Off | The following represents the net contribution from the Spinoff (in thousands): Amount Assets Office properties $ 1,854,257 Accumulated depreciation (141,808 ) Cash and cash equivalents 192,755 Receivables and other assets 91,165 Intangible assets, net of accumulated amortization of $72,909 143,705 Total assets $ 2,140,074 Liabilities Notes payable to banks $ 350,000 Mortgage notes payable, net 453,769 Accounts payable and other liabilities 40,965 Accrued tenant improvements 60,654 Accrued property taxes 40,289 Unamortized below market leases, net of accumulated amortization of $24,797 53,754 Total liabilities 999,431 Net contribution from Cousins $ 1,140,643 |
Cousins Houston | |
Real Estate Properties [Line Items] | |
Real Estate Investments | The assets and liabilities in these combined financial statements represent historical carrying amounts of the following properties: Acquisition Date Number of Office Buildings Total Square Feet Post Oak Central February 7, 2013 3 1,280,000 Greenway Plaza September 9, 2013 10 4,348,000 13 5,628,000 |
Basis of Presentation and Sum28
Basis of Presentation and Summary of Significant Accounting Policies - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate Properties [Line Items] | |
Below Market Lease, Future Amortization Income | As of December 31, 2016 , the remaining amortization of above/below market leases, net is projected as a net increase to rental income as follows (in thousands): Amount 2017 $ 5,308 2018 4,496 2019 4,368 2020 2,806 2021 2,799 Thereafter 15,605 Total $ 35,382 |
Remaining Amortization Expense | As of December 31, 2016 , the remaining amortization expense for the value of in-place leases is projected as follows (in thousands): Amount 2017 $ 24,365 2018 18,136 2019 15,247 2020 11,832 2021 10,227 Thereafter 37,436 Total $ 117,243 |
Schedule of Receivables and Other Assets | The components of allowance for doubtful accounts for the period from June 29, 2016 (date of capitalization) to December 31, 2016 is as follows (in thousands): Beginning balance: $ — Contribution from Spin-Off 567 Bad debt expense 9 Write-offs (140 ) Ending balance: $ 436 The following represents the composition of Receivables and Other Assets as of December 31, 2016 (in thousands): December 31, 2016 Rents and fees receivable $ 3,289 Allowance for doubtful accounts (436 ) Straight-line rent receivable 32,000 Other receivables 4,761 Unamortized lease costs, net of accumulated amortization of $8,581 44,799 Prepaid assets 1,620 Deferred tax asset, non-current 3,648 Other assets 2,576 $ 92,257 |
Parkway Houston | |
Real Estate Properties [Line Items] | |
Below Market Lease, Future Amortization Income | As of October 5, 2016 , the remaining amortization of above/below market leases, net is projected as a net increase to rental income as follows (in thousands): Amount 2016 $ 1,079 2017 3,705 2018 1,946 2019 1,575 2020 1,511 Thereafter 6,479 Total $ 16,295 |
Remaining Amortization Expense | As of October 5, 2016 , the remaining amortization expense for the value of in-place leases is projected as follows (in thousands): Amount 2016 $ 1,381 2017 4,398 2018 2,031 2019 1,454 2020 1,395 Thereafter 5,227 Total $ 15,886 |
Schedule of Receivables and Other Assets | The components of allowance for doubtful accounts for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014, respectively, are as follows: October 5, December 31, Asset Category 2016 2015 2014 Beginning balance: $ 98 $ 38 $ 306 Bad debt expense 106 261 88 Write-offs (79 ) (201 ) (356 ) Ending balance: $ 125 $ 98 $ 38 The following represents the composition of Receivables and Other Assets as of October 5, 2016 and December 31, 2015 (in thousands): October 5, 2016 December 31, 2015 Rents and fees receivable $ 350 $ 300 Allowance for doubtful accounts (125 ) (98 ) Straight-line rent receivable 25,159 21,073 Other receivables 1,284 3,593 Lease costs, net of accumulated amortization of $17,473 and $13,257, respectively 42,780 40,451 Escrow and other deposits 845 1,865 Prepaid expenses 825 482 Cost method investment 3,500 3,500 Deferred tax asset, non-current 4,686 4,999 Other assets 119 135 $ 79,423 $ 76,300 |
Real Estate Related Investmen29
Real Estate Related Investments, Net - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Real Estate [Line Items] | |
Real Estate Investments | Balances of major classes of depreciable assets and their respective estimated useful lives are (in thousands): Asset Category Useful Life December 31, Land Non-depreciable $ 417,315 Buildings and garages 7 to 40 years 1,095,815 Building improvements 5 to 40 years 55,093 Tenant improvements Lesser of useful life or term of lease 296,445 $ 1,864,668 |
Other Commitments | Obligations for tenant improvements, lease commissions and lease incentives recorded on the consolidated balance sheet at December 31, 2016 are as follows (in thousands): Amount 2017 $ 44,424 2018 8,426 2019 10,668 2020 11,445 2021 — Thereafter — Total $ 74,963 |
Operating Leases of Lessee Disclosure | Minimum future rentals on non-cancelable leases at December 31, 2016 (excluding operating expense reimbursements) are as follows (in thousands): Amount 2017 $ 171,757 2018 142,426 2019 143,306 2020 123,600 2021 117,788 Thereafter 547,895 Total $ 1,246,772 |
Parkway Houston | |
Real Estate [Line Items] | |
Real Estate Investments | Balances of major classes of depreciable assets (in thousands) and their respective estimated useful lives are: October 5, December 31, Asset Category Estimated Useful Life 2016 2015 Land Non-depreciable $ 106,323 $ 106,323 Buildings and garages 40 years 600,197 600,562 Building improvements 7 to 40 years 18,464 14,426 Tenant improvements Lesser of useful life or term of lease 106,489 97,283 $ 831,473 $ 818,594 |
Other Commitments | Obligations for tenant improvement allowances and lease commission costs for leases in place and commitments for building improvements at October 5, 2016 are as follows (in thousands): 2016 $ 11,646 2017 696 2018 10 2019 — 2020 — Thereafter — Total $ 12,352 |
Operating Leases of Lessee Disclosure | The following is a schedule by year of future minimum rental receipts under noncancelable leases for office buildings owned at October 5, 2016 (in thousands): 2016 $ 21,376 2017 82,035 2018 77,687 2019 73,419 2020 70,907 Thereafter 477,340 Total $ 802,764 |
Receivables and Other Assets -
Receivables and Other Assets - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables and Other Assets [Line Items] | |
Schedule of Receivables and Other Assets | The components of allowance for doubtful accounts for the period from June 29, 2016 (date of capitalization) to December 31, 2016 is as follows (in thousands): Beginning balance: $ — Contribution from Spin-Off 567 Bad debt expense 9 Write-offs (140 ) Ending balance: $ 436 The following represents the composition of Receivables and Other Assets as of December 31, 2016 (in thousands): December 31, 2016 Rents and fees receivable $ 3,289 Allowance for doubtful accounts (436 ) Straight-line rent receivable 32,000 Other receivables 4,761 Unamortized lease costs, net of accumulated amortization of $8,581 44,799 Prepaid assets 1,620 Deferred tax asset, non-current 3,648 Other assets 2,576 $ 92,257 |
Parkway Houston | |
Receivables and Other Assets [Line Items] | |
Schedule of Receivables and Other Assets | The components of allowance for doubtful accounts for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014, respectively, are as follows: October 5, December 31, Asset Category 2016 2015 2014 Beginning balance: $ 98 $ 38 $ 306 Bad debt expense 106 261 88 Write-offs (79 ) (201 ) (356 ) Ending balance: $ 125 $ 98 $ 38 The following represents the composition of Receivables and Other Assets as of October 5, 2016 and December 31, 2015 (in thousands): October 5, 2016 December 31, 2015 Rents and fees receivable $ 350 $ 300 Allowance for doubtful accounts (125 ) (98 ) Straight-line rent receivable 25,159 21,073 Other receivables 1,284 3,593 Lease costs, net of accumulated amortization of $17,473 and $13,257, respectively 42,780 40,451 Escrow and other deposits 845 1,865 Prepaid expenses 825 482 Cost method investment 3,500 3,500 Deferred tax asset, non-current 4,686 4,999 Other assets 119 135 $ 79,423 $ 76,300 |
Intangible Assets, Net - (Table
Intangible Assets, Net - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Finite-Lived Intangible Assets | The following table reflects the portion of the purchase price of office properties assigned to other intangible assets, net as discussed in “Note 2—Basis of Presentation and Summary of Significant Accounting Policies” (in thousands): December 31, 2016 Above market lease value $ 20,555 Accumulated amortization (4,125 ) Management contracts 2,099 Accumulated amortization (78 ) $ 18,451 |
Remaining Amortization Expense | As of December 31, 2016 , the remaining amortization expense for the value of in-place leases is projected as follows (in thousands): Amount 2017 $ 24,365 2018 18,136 2019 15,247 2020 11,832 2021 10,227 Thereafter 37,436 Total $ 117,243 |
Parkway Houston | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Finite-Lived Intangible Assets | The following table reflects the portion of the purchase price of office properties assigned to intangible assets, as discussed in “Note 3—Summary of Significant Accounting Policies” (in thousands): October 5, 2016 December 31, 2015 Lease in place value $ 73,064 $ 73,064 Accumulated amortization (57,178 ) (50,787 ) Above market lease value 3,044 3,044 Accumulated amortization (1,478 ) (882 ) $ 17,452 $ 24,439 |
Remaining Amortization Expense | As of October 5, 2016 , the remaining amortization expense for the value of in-place leases is projected as follows (in thousands): Amount 2016 $ 1,381 2017 4,398 2018 2,031 2019 1,454 2020 1,395 Thereafter 5,227 Total $ 15,886 |
Cousins Houston | |
Finite-Lived Intangible Assets [Line Items] | |
Schedule of Finite-Lived Intangible Assets and Goodwill | Intangible assets on the balance sheets at October 6, 2016 and December 31, 2015 included the following (in thousands): October 6, December 31, In-place leases, net of accumulated amortization of $69,434 and $58,715 in 2016 and 2015, respectively $ 58,580 $ 69,300 Above-market leases, net of accumulated amortization of $3,475 and $2,852 in 2016 and 2015, respectively 2,244 2,866 Goodwill 1,688 — $ 62,512 $ 72,166 |
Remaining Amortization Expense | Over the next five years and thereafter, aggregate amortization of these intangible assets and liabilities is anticipated to be as follows (in thousands): Below Market Rents Above Market Rents In-Place Leases Total 2016 $ (1,398 ) $ 104 $ 2,928 $ 1,634 2017 (5,808 ) 407 11,471 6,070 2018 (5,471 ) 360 10,093 4,982 2019 (5,202 ) 303 8,615 3,716 2020 (3,470 ) 251 5,884 2,665 Thereafter (15,050 ) 819 19,589 5,358 $ (36,399 ) $ 2,244 $ 58,580 $ 24,425 Weighted average remaining lease term 12.0 years 12.1 years 10.2 years 11.0 years |
Capital and Financing Transac32
Capital and Financing Transactions - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instrument [Line Items] | |
Schedule of Line of Credit Facilities | A summary of notes payable to banks, net at December 31, 2016 is as follows (dollars in thousands): Interest Rate Initial Maturity Outstanding Balance $100.0 Million Revolving Credit Facility 3.8% 10/06/2019 $ — $350.0 Million Three-Year Term Loan 3.7% 10/06/2019 350,000 Notes payable to banks outstanding 350,000 Unamortized debt issuance costs, net (8,398 ) Total notes payable to banks, net $ 341,602 |
Summary of Mortgage Notes Payable | A summary of mortgage notes payable, net at December 31, 2016 is as follows (dollars in thousands): Office Properties Fixed Rate Maturity Date December 31, 2016 San Felipe Plaza 4.8% 12/01/2018 $ 106,085 CityWestPlace III and IV 5.0% 03/05/2020 88,700 Post Oak Central 4.3% 10/01/2020 178,285 Phoenix Tower 3.9% 03/01/2023 76,561 Unamortized premium, net 2,600 Unamortized debt issuance costs, net (654 ) Total mortgage notes payable, net $ 451,577 |
Aggregate Annual Maturities and Interest Rates of Mortgage Notes Payable, Net | The aggregate annual maturities and weighted average interest rates of mortgage notes payable, net at December 31, 2016 are as follows (dollars in thousands): Weighted Average Interest Rate Total Mortgage Maturities Balloon Payments Principal Amortization 2017 4.4% $ 9,306 $ — $ 9,306 2018 4.8% 111,960 102,402 9,558 2019 4.3% 8,097 — 8,097 2020 4.5% 252,499 246,765 5,734 2021 3.9% 2,418 — 2,418 Thereafter 3.9% 65,351 62,193 3,158 Total principal maturities 449,631 $ 411,360 $ 38,271 Unamortized premium, net 2,600 Unamortized debt issuance costs, net (654 ) Total mortgage notes payable, net 4.5% $ 451,577 |
Cousins Houston | |
Debt Instrument [Line Items] | |
Aggregate Annual Maturities and Interest Rates of Mortgage Notes Payable, Net | Future principal payments due on the note at October 6, 2016 are as follows (in thousands): Amount 2016 $ 591 2017 3,636 2018 3,794 2019 3,959 2020 166,896 178,876 Less unamortized debt issuance costs (696 ) Balance at October 6, 2016 $ 178,180 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | At October 6, 2016 and December 31, 2015, the fair values of this financial instrument and the related discount rate assumptions are summarized as follows ($ in thousands): October 6, 2016 December 31, 2015 Carrying value $ 178,180 $ 180,937 Fair value $ 185,373 $ 186,449 Discount rate assumed in calculating fair value 3.25 % 3.65 % |
Parkway Houston | |
Debt Instrument [Line Items] | |
Summary of Mortgage Notes Payable | A summary of mortgage notes payable at October 5, 2016 and December 31, 2015 is as follows (dollars in thousands): Fixed Maturity October 5, December 31, Office Properties Rate Date 2016 2015 Phoenix Tower 3.9% 03/01/2023 $ 77,067 $ 78,555 CityWestPlace I and II 6.2% 07/06/2016 — 114,460 CityWestPlace III and IV 5.0% 03/05/2020 88,978 90,334 San Felipe Plaza 4.8% 12/01/2018 106,389 107,877 Unamortized premium, net 4,281 5,981 Unamortized debt issuance costs, net (274 ) (306 ) Total mortgage notes payable, net $ 276,441 $ 396,901 |
Aggregate Annual Maturities and Interest Rates of Mortgage Notes Payable, Net | The aggregate annual maturities of mortgage notes payable, net at October 5, 2016 are as follows (dollars in thousands): Weighted Average Interest Rate Total Mortgage Maturities Balloon Payments Principal Amortization Schedule of Mortgage Maturities by Years: 2016 4.4% $ 1,088 $ — $ 1,088 2017 4.5% 5,670 — 5,670 2018 4.8% 108,166 102,402 5,764 2019 4.4% 4,138 — 4,138 2020 5.0% 85,602 82,949 2,653 Thereafter 3.9% 67,770 62,193 5,577 Total principal maturities 272,434 $ 247,544 $ 24,890 Unamortized premium, net N/A 4,281 Unamortized debt issuance costs, net N/A (274 ) Total mortgage notes payable, net 4.6% $ 276,441 |
Fair Values of Financial Inst33
Fair Values of Financial Instruments - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Instruments | Fair values of financial instruments were as follows (in thousands): December 31, 2016 Carrying Amount Fair Value Financial Assets: Cash and cash equivalents $ 230,333 $ 230,333 Financial Liabilities: Notes payable to banks (1) $ 350,000 $ 349,372 Mortgage notes payable (1) 449,631 452,753 (1) The carrying amounts of notes payable to banks and mortgage notes payable represent par values. |
Accounts Payable and Other Li34
Accounts Payable and Other Liabilities - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities [Line Items] | |
Composition of Accounts Payable and Other Liabilities | The following represents the composition of Accounts Payable and Other Liabilities as of December 31, 2016 (in thousands): December 31, 2016 Office property payables: Prepaid rents $ 8,546 Security deposits 3,490 Accrued lease commissions 4,584 Accrued lease incentives 4,275 Accrued building improvements 3,713 Accrued recoveries 3,837 Other accrued expenses and accounts payable 4,396 Corporate payables 7,528 Deferred tax liability, non-current 4,336 Interest payable 2,514 $ 47,219 |
Parkway Houston | |
Accounts Payable and Accrued Liabilities [Line Items] | |
Composition of Accounts Payable and Other Liabilities | The following represents the composition of Accounts Payable and Other Liabilities as of October 5, 2016 and December 31, 2015 (in thousands): October 5, December 31, 2016 2015 Accounts payable $ — $ 5,911 Accrued property taxes 16,279 9,300 Accrued tenant improvements 3,862 4,346 Accrued common area maintenance 425 3,930 Other accrued expenses 1,813 2,878 Prepaid rents 6,226 5,319 Security deposits 1,250 1,052 Deferred tax liability 1,047 793 Accrued payroll 742 1,248 Interest payable 367 1,522 $ 32,011 $ 36,299 |
Commitments and Contingencies -
Commitments and Contingencies - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |
Other Commitments | Obligations for tenant improvements, lease commissions and lease incentives recorded on the consolidated balance sheet at December 31, 2016 are as follows (in thousands): Amount 2017 $ 44,424 2018 8,426 2019 10,668 2020 11,445 2021 — Thereafter — Total $ 74,963 |
Cousins Houston | |
Loss Contingencies [Line Items] | |
Other Commitments | Amounts due under these lease commitments are as follows (in thousands): Amount 2016 $ 29,779 2017 8,504 2018 8,504 2019 8,174 2020 8,174 $ 63,135 |
Share-Based and Long-Term Com36
Share-Based and Long-Term Compensation Plans - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Weighted-Average Assumptions | The following table presents the weighted-average assumptions used to estimate the fair values of the options granted in the periods presented, using the Black-Scholes model: For the Period From June 29, 2016 (Date of Capitalization) to December 31, 2016 Risk-free interest rate 1.06% Expected volatility 20% Expected life (in years) 3.2 Dividend yield 4.1% Weighted-average estimated fair value of options granted during the year $1.57 |
Summary of Share-based Payment Award Activity | Options Time-Vesting RSUs Performance-Vesting RSUs # of Options Weighted Average Grant-Date Fair Value # of Stock Units Weighted Average Grant-Date Fair Value # of Stock Units Weighted Average Grant-Date Fair Value Balance at 6/29/2016 — $ — — $ — — $ — Granted 773,617 1.57 270,815 20.85 159,899 11.82 Vested (740,606 ) 1.57 — — — — Balance at 12/31/2016 33,011 $ 1.57 270,815 $ 20.85 159,899 $ 11.82 |
Future Minimum Rents - (Tables)
Future Minimum Rents - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Operating Leased Assets [Line Items] | |
Minimum Future Rentals on Non-Cancelable Leases | Minimum future rentals on non-cancelable leases at December 31, 2016 (excluding operating expense reimbursements) are as follows (in thousands): Amount 2017 $ 171,757 2018 142,426 2019 143,306 2020 123,600 2021 117,788 Thereafter 547,895 Total $ 1,246,772 |
Cousins Houston | |
Operating Leased Assets [Line Items] | |
Minimum Future Rentals on Non-Cancelable Leases | At October 6, 2016, future minimum rents, excluding tenants' pro rata share of operating expenses, to be received under existing non-cancellable leases are as follows (in thousands): Amount 2016 $ 21,945 2017 94,533 2018 97,589 2019 91,966 2020 71,500 Thereafter 318,438 $ 695,971 |
Net Loss Per Common Share - (Ta
Net Loss Per Common Share - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Diluted Earnings Per Share | The computation of basic and diluted EPS is as follows (in thousands, except per share data): For the Period From June 29, 2016 (Date of Capitalization) to December 31, 2016 Numerator: Basic and diluted net loss attributable to common stockholders $ (14,316 ) Denominator: Basic and diluted weighted average shares outstanding 49,111 Basic net loss per common share attributable to common stockholders $ (0.29 ) Diluted net loss per common share attributable to common stockholders $ (0.29 ) |
Income Taxes - (Tables)
Income Taxes - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |
Schedule of Deferred Tax Assets and Liabilities | The significant components of the net deferred tax assets (liabilities) as of December 31, 2016 are as follows (in thousands): December 31, Deferred tax assets Capitalizable transaction costs $ 591 Contingent consideration 1,059 Depreciation 191 Loss carryforward 1,057 Management contracts 1,792 Other 2 Deferred tax assets 4,692 Deferred tax asset valuation allowance (1,044 ) Total deferred tax assets 3,648 Deferred tax liabilities Deferred revenue (3,615 ) Management contracts (718 ) Other (3 ) Total deferred tax liabilities (4,336 ) Total deferred tax liabilities, net $ (688 ) |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense for the period from June 29, 2016 (date of capitalization) to December 31, 2016 are as follows (in thousands): For the period from June 29, 2016 (Date of Capitalization) to December 31, 2016 Current: Federal $ — State (318 ) Total current (318 ) Deferred: Federal (126 ) State (9 ) Total deferred (135 ) Total income tax expense $ (453 ) |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of income tax expense computed at the U.S. statutory income tax rate and the income tax expense in the consolidated statement of operations is shown below (dollars in thousands): For the period from June 29, 2016 (Date of Capitalization) to December 31, 2016 Amount Percentage Income tax expense at U.S. federal statutory rate $ 4,783 34.0 % REIT earnings without income tax provision (4,901 ) (34.8 )% State income tax, net of federal tax benefit (327 ) (2.3 )% Other (8 ) (0.1 )% Total income tax expense $ (453 ) (3.2 )% |
Parkway Houston | |
Operating Loss Carryforwards [Line Items] | |
Schedule of Deferred Tax Assets and Liabilities | The significant components of the net deferred tax assets (liabilities) as of October 5, 2016 and December 31, 2015 are as follows (in thousands): October 5, December 31, 2016 2015 Deferred tax assets Capitalizable transaction costs $ 619 $ 667 Contingent consideration 1,109 1,198 Management contracts 1,876 2,022 Condominium sales 1,064 1,064 Other 15 48 Total deferred tax assets 4,683 4,999 Deferred tax liabilities Cost method investment (936 ) (670 ) Other (108 ) (123 ) Total deferred tax liabilities (1,044 ) (793 ) Total deferred tax assets, net $ 3,639 $ 4,206 |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax benefit (expense) for the period from January 1, 2016 to October 5, 2016 and the years ended December 31, 2015 and 2014 are as follows (in thousands): Period From January 1 to October 5, Years Ended December 31, 2016 2015 2014 Current: Federal $ (188 ) $ (854 ) $ (2,870 ) State (359 ) (418 ) (1,713 ) Total current (547 ) (1,272 ) (4,583 ) Deferred: Federal (514 ) 124 3,868 State (52 ) (487 ) 895 Total deferred (566 ) (363 ) 4,763 Total income tax (expense) benefit $ (1,113 ) $ (1,635 ) $ 180 |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of income tax expense computed at the U.S. statutory income tax rate and the income tax expense in the consolidated statements operations is shown below (dollars in thousands): Period From January 1 to October 5, Years Ended December 31, 2016 2015 2014 Amount Percentage Amount Percentage Amount Percentage Pre-tax income (loss) from continuing operations $ 431 34.0 % $ 4,812 34.0 % $ 7,848 34.0 % REIT earnings without income tax provision (1,149 ) (90.6 )% (5,596 ) (39.5 )% (7,003 ) (30.3 )% Noncontrolling interest — — % (2 ) — % 50 0.2 % State income tax, net of federal tax benefit (401 ) (31.6 )% (510 ) (3.6 )% (778 ) (3.4 )% Effect of permanent differences — — % (6 ) — % (41 ) (0.2 )% Valuation allowance — — % — — % 479 2.1 % Other - Peachtree — — % — — % (422 ) (1.8 )% Other 6 0.5 % (333 ) (2.4 )% 47 0.2 % Total income tax (expense) benefit $ (1,113 ) (87.7 )% $ (1,635 ) (11.5 )% $ 180 0.8 % |
Related Party Transactions - (T
Related Party Transactions - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Parkway Houston | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions | A summary of these for each of the periods presented is as follows (in thousands): Period From January 1 to October 5, Years Ended December 31, 2016 2015 2014 Charged to property operating expense: Direct payroll charges $ 2,454 $ 2,747 $ 2,823 Management fees 2,173 2,298 3,087 Other allocated expenses 1,149 1,637 2,393 Total $ 5,776 $ 6,682 $ 8,303 |
Cousins Houston | |
Related Party Transaction [Line Items] | |
Schedule of Related Party Transactions | A summary of these costs for each of the periods presented is as follows (in thousands): For the Period Ended October 6, For the Years Ended December 31, 2016 2015 2014 Charged to property operating expense: Direct payroll charges $ 5,308 $ 6,826 $ 6,678 Other allocated expenses 1,501 2,043 2,178 Charged to general and administrative expense: Office rental expense 271 337 329 Payroll and other expenses 6,516 5,991 7,018 Transaction costs 6,349 — — |
Selected Quarterly Financial 41
Selected Quarterly Financial Data (Unaudited) - (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | Summarized quarterly financial data for the period from June 29, 2016 (date of capitalization) to December 31, 2016 is as follows (in thousands, except per share data): 2016 Period from June 29, 2016 (date of capitalization) to September 30, 2016 Fourth Quarter Revenues (other than gains) $ — $ 68,931 Expenses (5,372 ) (70,845 ) Operating loss (5,372 ) (1,914 ) Interest and other income — 1,225 Interest expense — (8,007 ) Income tax expense — (453 ) Net loss (5,372 ) (9,149 ) Net loss attributable to noncontrolling interest - unitholders — 299 Net loss attributable to Parkway, Inc. (5,372 ) (8,850 ) Dividends on preferred stock — (94 ) Net loss attributable to common stockholders $ (5,372 ) $ (8,944 ) Basic and diluted net loss per common share attributable to common stockholders (1) $ (0.11 ) $ (0.18 ) Dividends per common share (1) $ — $ — Weighted average shares outstanding: Basic (1) 49,111 49,111 Diluted (1) 49,111 49,111 (1) As described in “Note 1—Organization,” the financial statements reflect the common shares and units as if they were outstanding for the entire period presented. |
Organization - (Details)
Organization - (Details) ft² in Thousands, $ in Thousands | Oct. 06, 2016USD ($)ft²building | Oct. 06, 2016USD ($)ft²building | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2016ft²propertybuilding |
Real Estate Properties [Line Items] | |||||
Number of office assets | property | 5 | ||||
Total square feet | 8,700 | ||||
Days in period following spinoff | 86 days | ||||
Cousins Houston | |||||
Real Estate Properties [Line Items] | |||||
Number of office assets | building | 13 | 13 | |||
Total square feet | 5,628 | 5,628 | |||
Transaction costs | $ | $ 6,349 | $ 0 | $ 0 | ||
Eola | |||||
Real Estate Properties [Line Items] | |||||
Managed and/or leased square feet | 3,800 | ||||
Post Oak Central | Cousins Houston | |||||
Real Estate Properties [Line Items] | |||||
Number of office assets | building | 3 | 3 | |||
Total square feet | 1,280 | 1,280 | |||
Greenway Plaza | Cousins Houston | |||||
Real Estate Properties [Line Items] | |||||
Number of office assets | building | 10 | 10 | |||
Total square feet | 4,348 | 4,348 | |||
Building | |||||
Real Estate Properties [Line Items] | |||||
Number of office assets | building | 19 | ||||
General and Administrative Expense | |||||
Real Estate Properties [Line Items] | |||||
Transaction costs | $ | $ 7,800 |
Organization - Net Contribution
Organization - Net Contribution in Spin-Off (Details) - Cousins Properties Incorporated - Separation and Distribution Agreement - Spinoff $ in Thousands | Oct. 06, 2016USD ($) |
Assets | |
Office properties | $ 1,854,257 |
Accumulated depreciation | (141,808) |
Cash and cash equivalents | 192,755 |
Receivables and other assets | 91,165 |
Intangible assets, net of accumulated amortization of $72,909 | 143,705 |
Total assets | 2,140,074 |
Liabilities | |
Notes payable to banks, net | 350,000 |
Mortgage notes payable, net | 453,769 |
Accounts payable and other liabilities | 40,965 |
Accrued tenant improvements | 60,654 |
Accrued property taxes | 40,289 |
Below market lease, net of accumulated amortization | 53,754 |
Total liabilities | 999,431 |
Net contribution from Cousins | 1,140,643 |
Intangible assets, accumulated amortization | 72,909 |
Below market leases, accumulated amortization | $ 24,797 |
Basis of Presentation and Sum44
Basis of Presentation and Summary of Significant Accounting Policies - Basis of Presentation and Consolidation (Details) | Dec. 31, 2016 | Oct. 05, 2016 |
Operating Partnership | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage by parent | 97.90% | |
Ownership percentage by noncontrolling owners | 2.10% | |
Parkway Houston | Murano Residential Condominium | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage by parent | 73.00% | |
Ownership percentage by noncontrolling owners | 27.00% |
Basis of Presentation and Sum45
Basis of Presentation and Summary of Significant Accounting Policies - Operating Property Acquisitions and Purchase Price Assignment (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Oct. 05, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Below market rents, weighted average remaining lease term | 8 years 1 month | ||||
Amortization of above/below market leases, net expense (income) | $ (1,285) | ||||
Above Market Leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets, weighted average remaining lease term | 7 years 1 month | ||||
Above and Below Market Leases, Net, Fiscal Year Maturity: | |||||
Next fiscal year | 5,308 | $ 5,308 | |||
Year two | 4,496 | 4,496 | |||
Year three | 4,368 | 4,368 | |||
Year four | 2,806 | 2,806 | |||
Year five | 2,799 | 2,799 | |||
After year five | 15,605 | 15,605 | |||
Intangible assets, amortization expense | 35,382 | $ 35,382 | |||
In-place Leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets, weighted average remaining lease term | 6 years 1 month | ||||
Amortization expense | 6,700 | ||||
Value of In-Place Leases, Fiscal Year Maturity: | |||||
Next fiscal year | 24,365 | $ 24,365 | |||
In year two | 18,136 | 18,136 | |||
In year three | 15,247 | 15,247 | |||
In year four | 11,832 | 11,832 | |||
In year five | 10,227 | 10,227 | |||
After year five | 37,436 | 37,436 | |||
Intangible assets, net | $ 117,243 | $ 117,243 | |||
Parkway Houston | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of above/below market leases, net expense (income) | $ (5,000) | $ (17,100) | $ (16,300) | ||
Value of In-Place Leases, Fiscal Year Maturity: | |||||
Intangible assets, net | 17,452 | 24,439 | |||
Parkway Houston | Above Market Leases | |||||
Above and Below Market Leases, Net, Fiscal Year Maturity: | |||||
Remainder of fiscal year | 1,079 | ||||
Year two | 3,705 | ||||
Year three | 1,946 | ||||
Year four | 1,575 | ||||
Year five | 1,511 | ||||
After year five | 6,479 | ||||
Intangible assets, amortization expense | 16,295 | ||||
Parkway Houston | In-place Leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 6,400 | $ 16,700 | $ 30,100 | ||
Value of In-Place Leases, Fiscal Year Maturity: | |||||
Remainder of fiscal year | 1,381 | ||||
In year two | 4,398 | ||||
In year three | 2,031 | ||||
In year four | 1,454 | ||||
In year five | 1,395 | ||||
After year five | 5,227 | ||||
Intangible assets, net | $ 15,886 |
Basis of Presentation and Sum46
Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Millions | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($)property | Oct. 06, 2016USD ($)building | Oct. 05, 2016USD ($)propertyoffice | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Real Estate Properties [Line Items] | |||||
Straight line rent adjustments | $ 3.8 | ||||
Number of office assets | property | 5 | ||||
Parkway Houston | |||||
Real Estate Properties [Line Items] | |||||
Straight line rent adjustments | $ 4.1 | $ 13.9 | $ 6.3 | ||
Number of office assets | office | 3 | ||||
Cousins Houston | |||||
Real Estate Properties [Line Items] | |||||
Tenant reimbursements | $ 47.9 | $ 59.1 | $ 59.2 | ||
Number of office assets | building | 13 | ||||
High-Rise Condominium Project | Parkway Houston | |||||
Real Estate Properties [Line Items] | |||||
Number of office assets | property | 1 |
Basis of Presentation and Sum47
Basis of Presentation and Summary of Significant Accounting Policies - Depreciation, Amortization, and Impairment (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Parkway Houston | |||||
Real Estate Properties [Line Items] | |||||
Impairment loss on management contracts | $ 0 | $ 0 | $ 4,750,000 | ||
Parkway Houston | Building | |||||
Real Estate Properties [Line Items] | |||||
Useful life | 40 years | ||||
Cousins Houston | Furnitures, Fixtures, and Equipment | |||||
Real Estate Properties [Line Items] | |||||
Useful life | 5 years | ||||
Minimum | Building | |||||
Real Estate Properties [Line Items] | |||||
Useful life | 7 years | ||||
Minimum | Cousins Houston | Building | |||||
Real Estate Properties [Line Items] | |||||
Useful life | 30 years | ||||
Maximum | Building | |||||
Real Estate Properties [Line Items] | |||||
Useful life | 40 years | ||||
Maximum | Cousins Houston | Building | |||||
Real Estate Properties [Line Items] | |||||
Useful life | 42 years | ||||
Management Contracts | Parkway Houston | |||||
Real Estate Properties [Line Items] | |||||
Impairment loss on management contracts | $ 4,800,000 |
Basis of Presentation and Sum48
Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Oct. 05, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Threshold period for past due status of customer balances | 90 days | ||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||||
Beginning balance | $ 0 | ||||
Contribution from Spin-Off | 567 | ||||
Bad debt expense | 9 | ||||
Write-offs | (140) | ||||
Ending balance | $ 436 | $ 436 | |||
Parkway Houston | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Threshold period for past due status of customer balances | 90 days | ||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||||
Beginning balance | $ 98 | $ 98 | $ 38 | $ 306 | |
Bad debt expense | 106 | 261 | 88 | ||
Write-offs | (79) | (201) | (356) | ||
Ending balance | $ 125 | $ 98 | $ 38 |
Basis of Presentation and Sum49
Basis of Presentation and Summary of Significant Accounting Policies - Segment Disclosure (Details) | 9 Months Ended | 12 Months Ended | |
Oct. 06, 2016segment | Oct. 05, 2016segment | Dec. 31, 2016geographic_regionsegment | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | 1 | ||
Number of geographic regions | geographic_region | 1 | ||
Parkway Houston | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 1 | ||
Cousins Houston | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 1 |
Real Estate Related Investmen50
Real Estate Related Investments, Net - (Details) ft² in Millions, $ in Millions | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2016USD ($)ft²propertyparcel_of_landbuilding | Oct. 05, 2016USD ($)ft²parcel_of_landbuildingoffice | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Real Estate [Line Items] | ||||
Number of office assets | property | 5 | |||
Total square feet | ft² | 8.7 | |||
Depreciation expense | $ | $ 17 | |||
Parkway Houston | ||||
Real Estate [Line Items] | ||||
Number of office assets | office | 3 | |||
Total square feet | ft² | 3.1 | |||
Depreciation expense | $ | $ 20.5 | $ 32 | $ 28.8 | |
Buildings and garages | ||||
Real Estate [Line Items] | ||||
Number of units | building | 19 | |||
Buildings and garages | Parkway Houston | ||||
Real Estate [Line Items] | ||||
Number of units | building | 6 | |||
Land | ||||
Real Estate [Line Items] | ||||
Number of units | parcel_of_land | 2 | |||
Land | Parkway Houston | ||||
Real Estate [Line Items] | ||||
Number of units | parcel_of_land | 2 | |||
Sales Revenue, Net | Tenant One | Customer Concentration Risk | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 11.40% | |||
Sales Revenue, Net | Tenant One | Customer Concentration Risk | Parkway Houston | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 21.94% | 27.89% | 21.21% | |
Sales Revenue, Net | Tenant Two | Customer Concentration Risk | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 8.60% | |||
Sales Revenue, Net | Tenant Two | Customer Concentration Risk | Parkway Houston | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 9.53% | 11.98% | 14.98% | |
Sales Revenue, Net | Tenant Three | Customer Concentration Risk | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 6.80% | |||
Sales Revenue, Net | Tenant Three | Customer Concentration Risk | Parkway Houston | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 7.09% | 6.88% | 6.61% | |
Sales Revenue, Net | Tenant Four | Customer Concentration Risk | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 5.00% | |||
Sales Revenue, Net | Tenant Four | Customer Concentration Risk | Parkway Houston | ||||
Real Estate [Line Items] | ||||
Concentration risk, percentage | 5.99% | 5.52% | 5.14% |
Real Estate Related Investmen51
Real Estate Related Investments, Net - Schedule of Major Classes of Assets and Estimate Useful Lives (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 05, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Real Estate Investment Property, at Cost [Abstract] | |||
Land | $ 417,315 | ||
Building improvements | 1,095,815 | ||
Buildings and garages | 55,093 | ||
Tenant improvements | 296,445 | ||
Office properties | $ 1,864,668 | ||
Buildings and garages | Minimum | |||
Real Estate Investment Property, at Cost [Abstract] | |||
Useful life | 7 years | ||
Buildings and garages | Maximum | |||
Real Estate Investment Property, at Cost [Abstract] | |||
Useful life | 40 years | ||
Building Improvements | Minimum | |||
Real Estate Investment Property, at Cost [Abstract] | |||
Useful life | 5 years | ||
Building Improvements | Maximum | |||
Real Estate Investment Property, at Cost [Abstract] | |||
Useful life | 40 years | ||
Parkway Houston | |||
Real Estate Investment Property, at Cost [Abstract] | |||
Land | $ 106,323 | $ 106,323 | |
Building improvements | 600,197 | 600,562 | |
Buildings and garages | 18,464 | 14,426 | |
Tenant improvements | 106,489 | 97,283 | |
Office properties | $ 831,473 | $ 818,594 | |
Parkway Houston | Buildings and garages | |||
Real Estate Investment Property, at Cost [Abstract] | |||
Useful life | 40 years | ||
Parkway Houston | Building Improvements | Minimum | |||
Real Estate Investment Property, at Cost [Abstract] | |||
Useful life | 7 years | ||
Parkway Houston | Building Improvements | Maximum | |||
Real Estate Investment Property, at Cost [Abstract] | |||
Useful life | 40 years |
Real Estate Related Investmen52
Real Estate Related Investments, Net - Schedule of Obligation for Tenant Improvement Allowance and Lease Commission Costs (Details) - Tenant Improvement Allowances, Lease Commission Costs, and Building Improvements - Parkway Houston $ in Thousands | Oct. 05, 2016USD ($) |
Contractual Obligation, Fiscal Year Maturity [Abstract] | |
2,016 | $ 11,646 |
2,017 | 696 |
2,018 | 10 |
2,019 | 0 |
2,020 | 0 |
Thereafter | 0 |
Total | $ 12,352 |
Real Estate Related Investmen53
Real Estate Related Investments, Net - Schedule of Future Minimum Rents (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 05, 2016 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,017 | $ 142,426 | |
2,018 | 143,306 | |
2,019 | 123,600 | |
2,020 | 117,788 | |
Thereafter | 547,895 | |
Total future minimum rents | $ 1,246,772 | |
Parkway Houston | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,016 | $ 21,376 | |
2,017 | 82,035 | |
2,018 | 77,687 | |
2,019 | 73,419 | |
2,020 | 70,907 | |
Thereafter | 477,340 | |
Total future minimum rents | $ 802,764 |
Receivables and Other Assets 54
Receivables and Other Assets - (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 05, 2016 | Jun. 28, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Receivables and Other Assets [Line Items] | ||||||
Rents and fees receivable | $ 3,289 | |||||
Allowance for doubtful accounts | (436) | $ 0 | ||||
Straight-line rent receivable | 32,000 | |||||
Other receivables | 4,761 | |||||
Lease costs, net of accumulated amortization of $17,473 and $13,257, respectively | 44,799 | |||||
Prepaid assets | 1,620 | |||||
Deferred tax asset, non-current | 3,648 | |||||
Other assets | 2,576 | |||||
Receivables and other assets | 92,257 | |||||
Lease costs, accumulated amortization | $ 8,581 | |||||
Parkway Houston | ||||||
Receivables and Other Assets [Line Items] | ||||||
Rents and fees receivable | $ 350 | $ 300 | ||||
Allowance for doubtful accounts | (125) | (98) | $ (38) | $ (306) | ||
Straight-line rent receivable | 25,159 | 21,073 | ||||
Other receivables | 1,284 | 3,593 | ||||
Lease costs, net of accumulated amortization of $17,473 and $13,257, respectively | 42,780 | 40,451 | ||||
Escrow and other deposits | 845 | 1,865 | ||||
Prepaid assets | 825 | 482 | ||||
Cost method investments | 3,500 | 3,500 | ||||
Deferred tax asset, non-current | 4,686 | 4,999 | ||||
Other assets | 119 | 135 | ||||
Receivables and other assets | 79,423 | 76,300 | ||||
Lease costs, accumulated amortization | $ 17,473 | $ 13,257 |
Intangible Assets, Net - Portio
Intangible Assets, Net - Portion of Purchase Price Assigned to Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 05, 2016 | Dec. 31, 2015 |
In-place Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated amortization | $ (76,137) | ||
Intangible assets, net | 117,243 | ||
Above Market Lease Value | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 20,555 | ||
Accumulated amortization | (4,125) | ||
Management Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 2,099 | ||
Accumulated amortization | (78) | ||
Above Market Leases and Contract-Based Intangible Assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 18,451 | ||
Parkway Houston | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 17,452 | $ 24,439 | |
Parkway Houston | In-place Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 73,064 | 73,064 | |
Accumulated amortization | (57,178) | (50,787) | |
Intangible assets, net | 15,886 | ||
Parkway Houston | Above Market Lease Value | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | 3,044 | 3,044 | |
Accumulated amortization | (1,478) | (882) | |
Parkway Houston | Management Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, net | $ 0 | $ 378 |
Intangible Assets, Net - Summar
Intangible Assets, Net - Summary of Intangible Assets on the Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 06, 2016 | Dec. 31, 2015 |
In-place Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, net | $ 117,243 | ||
Intangible assets, accumulated amortization | 76,137 | ||
Above Market Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, accumulated amortization | $ 4,125 | ||
Cousins Houston | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 1,688 | $ 0 | |
Intangible assets, net of accumulated amortization of $72,909 and $61,567 in 2016 and 2015, respectively | 62,512 | 72,166 | |
Intangible assets, accumulated amortization | 72,909 | 61,567 | |
Cousins Houston | In-place Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, net | 58,580 | 69,300 | |
Intangible assets, accumulated amortization | 69,434 | 58,715 | |
Cousins Houston | Above Market Leases | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, net | 2,244 | 2,866 | |
Intangible assets, accumulated amortization | $ 3,475 | $ 2,852 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Amortization Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Oct. 06, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |||||
Below market rents, amortization expense (income) | $ (51,812) | $ (51,812) | |||
Below market rents, weighted average remaining lease term | 8 years 1 month | ||||
Cousins Houston | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 6,700 | $ 11,900 | $ 21,600 | ||
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | |||||
2016, below market rents amortization expense (income) | (1,398) | ||||
2017, below market rents amortization expense (income) | (5,808) | ||||
2018, below market rents amortization expense (income) | (5,471) | ||||
2019, below market rents amortization expense (income) | (5,202) | ||||
2020, below market rents amortization expense (income) | (3,470) | ||||
Thereafter, before market rents amortization expense (income) | (15,050) | ||||
Below market rents, amortization expense (income) | $ (36,399) | (41,089) | |||
Below market rents, weighted average remaining lease term | 12 years | ||||
Above and Below Market Leases, Net, Fiscal Year Maturity: | |||||
Remainder of fiscal year | $ 1,634 | ||||
Year two | 6,070 | ||||
Year three | 4,982 | ||||
Year four | 3,716 | ||||
Year five | 2,665 | ||||
After year five | 5,358 | ||||
Intangible assets and below market rents, total | $ 24,425 | ||||
Intangible assets and below market rents, weighted average remaining lease term | 11 years | ||||
Above Market Leases | |||||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||||
Intangible assets, weighted average remaining lease term | 7 years 1 month | ||||
Above and Below Market Leases, Net, Fiscal Year Maturity: | |||||
Year two | (4,496) | $ (4,496) | |||
Year three | (4,368) | (4,368) | |||
Year four | (2,806) | (2,806) | |||
Year five | (2,799) | (2,799) | |||
After year five | (15,605) | (15,605) | |||
Intangible assets and below market rents, total | (35,382) | (35,382) | |||
Above Market Leases | Cousins Houston | |||||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||||
Remainder of fiscal year | $ 104 | ||||
In year two | 407 | ||||
In year three | 360 | ||||
In year four | 303 | ||||
In year five | 251 | ||||
After year five | 819 | ||||
Intangible assets, net | $ 2,244 | 2,866 | |||
Intangible assets, weighted average remaining lease term | 12 years 1 month 6 days | ||||
In-place Leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 6,700 | ||||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||||
In year two | 18,136 | 18,136 | |||
In year three | 15,247 | 15,247 | |||
In year four | 11,832 | 11,832 | |||
In year five | 10,227 | 10,227 | |||
After year five | 37,436 | 37,436 | |||
Intangible assets, net | $ 117,243 | $ 117,243 | |||
Intangible assets, weighted average remaining lease term | 6 years 1 month | ||||
In-place Leases | Cousins Houston | |||||
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |||||
Remainder of fiscal year | $ 2,928 | ||||
In year two | 11,471 | ||||
In year three | 10,093 | ||||
In year four | 8,615 | ||||
In year five | 5,884 | ||||
After year five | 19,589 | ||||
Intangible assets, net | $ 58,580 | $ 69,300 | |||
Intangible assets, weighted average remaining lease term | 10 years 2 months 12 days |
Capital and Financing Transac58
Capital and Financing Transactions - Notes Payable to Banks (Details) - USD ($) | Oct. 06, 2016 | Dec. 31, 2016 |
Notes Payable to Banks | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 350,000,000 | |
Unamortized debt issuance costs, net | (8,398,000) | |
Long-term debt | $ 341,602,000 | |
Minimum notice period prior to prepayment | 3 days | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate | 3.80% | |
Revolving Credit Facility | Notes Payable to Banks | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 0 | |
Line of credit, maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 |
Debt instrument extension option, term | 1 year | |
Debt instrument, term | 3 years | |
Letter of Credit | Notes Payable to Banks | ||
Debt Instrument [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 15,000,000 | |
Three-Year Term Loan | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate | 3.70% | |
Three-Year Term Loan | Notes Payable to Banks | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 350,000,000 | |
Line of credit, maximum borrowing capacity | $ 350,000,000 | |
Debt instrument, face amount | $ 350,000,000 | |
Debt instrument extension option, term | 1 year | |
Debt instrument, term | 3 years | |
Cousins LP | ||
Debt Instrument [Line Items] | ||
Contributions to former parent | $ 167,000,000 |
Capital and Financing Transac59
Capital and Financing Transactions - Mortgage Notes Payable (Details) - USD ($) $ in Thousands | Apr. 06, 2016 | Dec. 31, 2016 | Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2013 |
Debt Instrument [Line Items] | ||||||||
Principal payments on mortgage notes payable | $ 1,679 | |||||||
Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | 449,631 | |||||||
Unamortized premium, net | 2,600 | |||||||
Unamortized debt issuance costs, net | (654) | |||||||
Long-term debt | $ 451,577 | |||||||
4.8% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 4.80% | |||||||
Long-term debt, gross | $ 106,085 | |||||||
5.0% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 5.00% | |||||||
Long-term debt, gross | $ 88,700 | |||||||
4.3% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 4.30% | |||||||
Long-term debt, gross | $ 178,285 | |||||||
3.9% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 3.90% | |||||||
Long-term debt, gross | $ 76,561 | |||||||
Cousins Houston | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal payments on mortgage notes payable | $ 2,893 | $ 3,339 | $ 3,200 | |||||
Cousins Houston | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | 178,876 | |||||||
Unamortized debt issuance costs, net | (696) | |||||||
Long-term debt | $ 178,180 | |||||||
Cousins Houston | 4.3% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 188,800 | |||||||
Debt instrument, interest rate, stated percentage | 4.26% | |||||||
Accumulated amortization, debt issuance costs | 416 | $ 553 | ||||||
Unamortized debt issuance costs, net | $ (1,200) | |||||||
Parkway Houston | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal payments on mortgage notes payable | $ 118,637 | 6,360 | 3,547 | |||||
Gain (loss) on extinguishment of debt | 154 | 0 | $ 0 | |||||
Parkway Houston | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | 272,434 | |||||||
Unamortized premium, net | 4,281 | 5,981 | ||||||
Unamortized debt issuance costs, net | (274) | (306) | ||||||
Long-term debt | $ 276,441 | 396,901 | ||||||
Parkway Houston | 4.8% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 4.80% | |||||||
Long-term debt, gross | $ 106,389 | 107,877 | ||||||
Parkway Houston | 5.0% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 5.00% | |||||||
Long-term debt, gross | $ 88,978 | 90,334 | ||||||
Parkway Houston | 3.9% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 3.90% | |||||||
Long-term debt, gross | $ 77,067 | 78,555 | ||||||
Parkway Houston | 6.2% Mortgage Note Payable | Mortgages | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 6.20% | |||||||
Long-term debt, gross | $ 0 | $ 114,460 | ||||||
Principal payments on mortgage notes payable | $ 114,000 | |||||||
Gain (loss) on extinguishment of debt | $ 154 |
Capital and Financing Transac60
Capital and Financing Transactions - Maturities of Mortgage Notes Payable (Details) - Mortgages - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2015 |
Maturities, Weighted Average Interest Rate: | ||||
2,017 | 4.40% | |||
In year two | 4.80% | |||
In year three | 4.30% | |||
In year four | 4.50% | |||
In year five | 3.90% | |||
After year five | 3.90% | |||
Total mortgage notes payable, net | 4.50% | |||
Total Mortgage Maturities: | ||||
2,017 | $ 9,306 | |||
In year two | 111,960 | |||
In year three | 8,097 | |||
In year four | 252,499 | |||
In year five | 2,418 | |||
After year five | 65,351 | |||
Total principal maturities | 449,631 | |||
Unamortized premium, net | 2,600 | |||
Unamortized debt issuance costs, net | (654) | |||
Long-term debt | 451,577 | |||
Maturities, Balloon Payments: | ||||
2,017 | 0 | |||
In year two | 102,402 | |||
In year three | 0 | |||
In year four | 246,765 | |||
In year five | 0 | |||
After year five | 62,193 | |||
Total | 411,360 | |||
Maturities, Principal Amortization: | ||||
2,017 | 9,306 | |||
In year two | 9,558 | |||
In year three | 8,097 | |||
In year four | 5,734 | |||
In year five | 2,418 | |||
After year five | 3,158 | |||
Total | $ 38,271 | |||
Cousins Houston | ||||
Total Mortgage Maturities: | ||||
2,016 | $ 591 | |||
In year two | 3,636 | |||
In year three | 3,794 | |||
In year four | 3,959 | |||
In year five | 166,896 | |||
Total principal maturities | 178,876 | |||
Unamortized debt issuance costs, net | (696) | |||
Long-term debt | $ 178,180 | |||
Parkway Houston | ||||
Maturities, Weighted Average Interest Rate: | ||||
2,016 | 4.40% | |||
In year two | 4.50% | |||
In year three | 4.80% | |||
In year four | 4.40% | |||
In year five | 5.00% | |||
After year five | 3.90% | |||
Total mortgage notes payable, net | 4.60% | |||
Total Mortgage Maturities: | ||||
2,016 | $ 1,088 | |||
In year two | 5,670 | |||
In year three | 108,166 | |||
In year four | 4,138 | |||
In year five | 85,602 | |||
After year five | 67,770 | |||
Total principal maturities | 272,434 | |||
Unamortized premium, net | 4,281 | $ 5,981 | ||
Unamortized debt issuance costs, net | (274) | (306) | ||
Long-term debt | 276,441 | $ 396,901 | ||
Maturities, Balloon Payments: | ||||
2,016 | 0 | |||
In year two | 0 | |||
In year three | 102,402 | |||
In year four | 0 | |||
In year five | 82,949 | |||
After year five | 62,193 | |||
Total | 247,544 | |||
Maturities, Principal Amortization: | ||||
2,016 | 1,088 | |||
In year two | 5,670 | |||
In year three | 5,764 | |||
In year four | 4,138 | |||
In year five | 2,653 | |||
After year five | 5,577 | |||
Total | $ 24,890 |
Capital and Financing Transac61
Capital and Financing Transactions - Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 06, 2016 | Dec. 31, 2015 | Oct. 05, 2016 | |
Cousins Houston | Fair Value, Inputs, Level 2 | Carrying Amount | |||
Debt Instrument [Line Items] | |||
Fair value | $ 178,180 | $ 180,937 | |
Cousins Houston | Fair Value, Inputs, Level 2 | Fair Value | |||
Debt Instrument [Line Items] | |||
Fair value | $ 185,373 | 186,449 | |
Mortgages | Parkway Houston | Fair Value, Inputs, Level 2 | Fair Value | |||
Debt Instrument [Line Items] | |||
Fair value | $ 394,300 | $ 278,300 | |
Mortgages | Cousins Houston | |||
Debt Instrument [Line Items] | |||
Discount rate assumed in calculating fair value | 3.25% | 3.65% |
Fair Values of Financial Inst62
Fair Values of Financial Instruments - (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Carrying Amount | |
Financial Assets | |
Cash and cash equivalents | $ 230,333 |
Fair Value | |
Financial Assets | |
Cash and cash equivalents | 230,333 |
Notes Payable to Banks | Carrying Amount | |
Financial Liabilities | |
Notes payable to banks (1) | 350,000 |
Notes Payable to Banks | Fair Value | |
Financial Liabilities | |
Notes payable to banks (1) | 349,372 |
Mortgages | Carrying Amount | |
Financial Liabilities | |
Notes payable to banks (1) | 449,631 |
Mortgages | Fair Value | |
Financial Liabilities | |
Notes payable to banks (1) | $ 452,753 |
Accounts Payable and Other Li63
Accounts Payable and Other Liabilities - (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 05, 2016 | Dec. 31, 2015 |
Accounts Payable and Accrued Liabilities [Line Items] | |||
Accrued property taxes | $ 53,659 | ||
Accrued tenant improvements | 66,104 | ||
Prepaid rents | 8,546 | ||
Security deposits | 3,490 | ||
Accrued lease commissions | 4,584 | ||
Accrued lease incentives | 4,275 | ||
Accrued building improvements | 3,713 | ||
Accrued recoveries | 3,837 | ||
Other accrued expenses and accounts payable | 4,396 | ||
Corporate payables | 7,528 | ||
Deferred tax liability, non-current | 4,336 | ||
Interest payable | 2,514 | ||
Accounts payable and other liabilities | $ 47,219 | ||
Parkway Houston | |||
Accounts Payable and Accrued Liabilities [Line Items] | |||
Accounts payable | $ 0 | $ 5,911 | |
Accrued property taxes | 16,279 | 9,300 | |
Accrued tenant improvements | 3,862 | 4,346 | |
Accrued common area maintenance | 425 | 3,930 | |
Other accrued expenses | 1,813 | 2,878 | |
Prepaid rents | 6,226 | 5,319 | |
Security deposits | 1,250 | 1,052 | |
Deferred tax liability, non-current | 1,047 | 793 | |
Accrued payroll | 742 | 1,248 | |
Interest payable | 367 | 1,522 | |
Accounts payable and other liabilities | $ 32,011 | $ 36,299 |
Commitments and Contingencies64
Commitments and Contingencies - (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Oct. 05, 2016 | Dec. 31, 2016 | Oct. 06, 2016 | |
Lease Tenant Improvements | |||
Other Commitment, Fiscal Year Maturity [Abstract] | |||
2,017 | $ 44,424,000 | ||
Year two | 8,426,000 | ||
Year three | 10,668,000 | ||
Year four | 11,445,000 | ||
Year five | 0 | ||
Thereafter | 0 | ||
Total | $ 74,963,000 | ||
Cousins Houston | Lease Tenant Improvements | |||
Other Commitment, Fiscal Year Maturity [Abstract] | |||
2,016 | $ 29,779,000 | ||
Year two | 8,504,000 | ||
Year three | 8,504,000 | ||
Year four | 8,174,000 | ||
Year five | 8,174,000 | ||
Total | $ 63,135,000 | ||
2121 Market Street Associates LLC | |||
Other Commitments [Line Items] | |||
Ownership interest | 1.00% | ||
2121 Market Street Associates LLC | Parkway Houston | |||
Other Commitments [Line Items] | |||
Ownership interest | 1.00% | ||
Financial Guarantee | |||
Other Commitments [Line Items] | |||
Guarantor obligations, maximum exposure, undiscounted | $ 39,000,000 | ||
Financial Guarantee | 2121 Market Street Associates LLC | |||
Other Commitments [Line Items] | |||
Guarantor obligations, maximum exposure, undiscounted | $ 14,000,000 | ||
Guarantee of Indebtedness of Others | Parkway Houston | |||
Other Commitments [Line Items] | |||
Guarantor obligations, maximum exposure, undiscounted | $ 14,000,000 |
Stockholders' Equity - (Details
Stockholders' Equity - (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2016 | Oct. 07, 2016 | |
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 48,999,950 | 48,999,950 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 |
Series A Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock, shares authorized (in shares) | 50 | 50 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued (in shares) | 50 | 50 | 50 |
Preferred stock, shares outstanding (in shares) | 50 | 50 | 50 |
Series A preferred stock, dividend rate | 8.00% | 8.00% | |
Series A preferred stock, liquidation preference (in dollars) | $ 100,000 | $ 100,000 | |
Series A preferred stock, liquidation preference per share (in dollars per share) | $ 8,000 | $ 8,000 | |
Preferred stock voting percentage to amend | 66.66% | 66.66% | |
Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares issued (in shares) | 49,110,645 | 49,110,645 | 49,110,645 |
Common stock, shares outstanding (in shares) | 49,110,645 | 49,110,645 | 49,110,645 |
Limited Voting Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares issued (in shares) | 858,417 | 858,417 | 858,417 |
Common stock, shares outstanding (in shares) | 858,417 | 858,417 | 858,417 |
Share-Based and Long-Term Com66
Share-Based and Long-Term Compensation Plans - (Details) - $ / shares | Dec. 31, 2016 | Sep. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant of awards, common stock | 6,002,596 | |
2016 Equity Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant of awards, common stock | 5,000,000 | |
Employee Stock Option | Minimum | 2016 Equity Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 21.91 | |
Employee Stock Option | Maximum | 2016 Equity Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 22 |
Share-Based and Long-Term Com67
Share-Based and Long-Term Compensation Plans - Long-Term Equity Incentives Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2017 | Dec. 31, 2016 | Dec. 31, 2016 | Jun. 30, 2016 | Jun. 28, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Average price per option (dollars per share) | $ 1.57 | ||||
Compensation expense | $ 3,800 | ||||
Compensation expense, not yet recognized | $ 5,000 | $ 5,000 | |||
Weighted average recognition period | 2 years | ||||
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of stock options granted (in shares) | 773,617 | ||||
Number of options remaining unvested (in shares) | 33,011 | 33,011 | 0 | ||
Average price per option (dollars per share) | $ 1.57 | ||||
Time-vesting Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units outstanding (in shares) | 270,815 | 270,815 | 0 | ||
Average price per unit (dollars per share) | $ 20.85 | $ 20.85 | $ 0 | ||
Number of units vested (in shares) | 0 | ||||
Performance-vesting Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units outstanding (in shares) | 159,899 | 159,899 | 0 | ||
Average price per unit (dollars per share) | $ 11.82 | $ 11.82 | $ 0 | ||
Number of units vested (in shares) | 0 | ||||
2016 Equity Plan | Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Outstanding stock options (in shares) | 773,617 | 773,617 | |||
Aggregate fair value | $ 1,200 | $ 1,200 | |||
Number of options remaining unvested (in shares) | 33,011 | 33,011 | |||
Value of stock options | $ 52 | ||||
Average price per option (dollars per share) | $ 1.57 | ||||
2016 Equity Plan | Time-vesting Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units outstanding (in shares) | 270,815 | 270,815 | |||
Value of units outstanding | $ 5,600 | $ 5,600 | |||
Average price per unit (dollars per share) | $ 20.85 | $ 20.85 | |||
2016 Equity Plan | Four-Year Vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units vested (in shares) | 22,467 | ||||
2016 Equity Plan | Four-Year Vesting | Vesting on First Anniversary of Grant Date | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
2016 Equity Plan | Four-Year Vesting | Vesting on Second Anniversary of Grant Date | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
2016 Equity Plan | Four-Year Vesting | Vesting on Third Anniversary of Grant Date | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
2016 Equity Plan | Four-Year Vesting | Vesting on Fourth Anniversary of Grant Date | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | ||||
2016 Equity Plan | Three-Year Vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units vested (in shares) | 133,858 | ||||
2016 Equity Plan | Three-Year Vesting | Vesting on First Anniversary of Grant Date | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.00% | ||||
2016 Equity Plan | Three-Year Vesting | Vesting on Second Anniversary of Grant Date | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.00% | ||||
2016 Equity Plan | Three-Year Vesting | Vesting on Third Anniversary of Grant Date | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.00% | ||||
2016 Equity Plan | Performance-vesting Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units outstanding (in shares) | 159,899 | 159,899 | |||
Value of units outstanding | $ 1,900 | $ 1,900 | |||
Average price per unit (dollars per share) | $ 11.82 | $ 11.82 | |||
Subsequent Event | 2016 Equity Plan | Immediate Vesting | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units vested (in shares) | 114,490 |
Share-Based and Long-Term Com68
Share-Based and Long-Term Compensation Plans - Long-Term Equity Incentives Schedule (Details) | 6 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Options, Weighted Average Grant-Date Fair Value: | |
Average price per option (dollars per share) | $ 1.57 |
Employee Stock Option | |
Number of Options: | |
Number of shares, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 773,617 |
Vested (in shares) | shares | (740,606) |
Number of shares, ending balance (in shares) | shares | 33,011 |
Options, Weighted Average Grant-Date Fair Value: | |
Weighted average grant-date fair value, beginning balance | $ 0 |
Average price per option (dollars per share) | 1.57 |
Vested (in dollars per share) | 1.57 |
Weighted average grant-date fair value, ending balance (in dollars per share) | $ 1.57 |
Time-vesting Restricted Stock Units (RSUs) | |
Number of Stock Units: | |
Number of stock units, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 270,815 |
Vested (in shares) | shares | 0 |
Number of stock units, ending balance (in shares) | shares | 270,815 |
Stock Units, Weighted Average Grant-Date Fair Value: | |
Weighted average grant-date fair value, beginning balance (in dollars per share) | $ 0 |
Granted (in dollars per share) | 20.85 |
Vested (in dollars per share) | 0 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ 20.85 |
Performance-vesting Restricted Stock Units (RSUs) | |
Number of Stock Units: | |
Number of stock units, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 159,899 |
Vested (in shares) | shares | 0 |
Number of stock units, ending balance (in shares) | shares | 159,899 |
Stock Units, Weighted Average Grant-Date Fair Value: | |
Weighted average grant-date fair value, beginning balance (in dollars per share) | $ 0 |
Granted (in dollars per share) | 11.82 |
Vested (in dollars per share) | 0 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ 11.82 |
Share-Based and Long-Term Com69
Share-Based and Long-Term Compensation Plans - Long-Term Equity Incentives Schedule of Weighted-Average Assumptions (Details) | 6 Months Ended |
Dec. 31, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average estimated fair value of options granted during the year (in dollars per share) | $ 1.57 |
Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.06% |
Expected volatility | 20.00% |
Expected life (in years) | 3 years 2 months 12 days |
Dividend yield | 4.10% |
Weighted-average estimated fair value of options granted during the year (in dollars per share) | $ 1.57 |
Share-Based and Long-Term Com70
Share-Based and Long-Term Compensation Plans - Defined Contribution Plan (Details) $ in Thousands | 6 Months Ended |
Dec. 31, 2016USD ($) | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employer matching contribution, percent of match | 50.00% |
Employer matching contribution, percent of employees' compensation | 10.00% |
Cost recognized | $ 31 |
Future Minimum Rents - (Details
Future Minimum Rents - (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 06, 2016 |
Operating Leases, Future Minimum Payments Receivable [Abstract] | ||
2,017 | $ 171,757 | |
In year two | 142,426 | |
In three year | 143,306 | |
In year four | 123,600 | |
In year five | 117,788 | |
Thereafter | 547,895 | |
Total future minimum rents | $ 1,246,772 | |
Cousins Houston | ||
Operating Leases, Future Minimum Payments Receivable [Abstract] | ||
2,016 | $ 21,945 | |
In year two | 94,533 | |
In three year | 97,589 | |
In year four | 91,966 | |
In year five | 71,500 | |
Thereafter | 318,438 | |
Total future minimum rents | $ 695,971 |
Net Loss Per Common Share - (De
Net Loss Per Common Share - (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | |
Numerator: | |||
Basic net loss attributable to common stockholders | $ (8,944) | $ (5,372) | $ (14,316) |
Diluted net loss attributable to common stockholders | $ (14,316) | ||
Denominator: | |||
Basic and diluted weighted average shares outstanding | 49,111 | ||
Basic net loss per common share attributable to common stockholders | $ (0.29) | ||
Diluted net loss per common share attributable to common stockholders (in dollars per share) | $ (0.29) |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 05, 2016 | Dec. 31, 2015 |
Deferred tax assets | |||
Capitalizable transaction costs | $ 591 | ||
Contingent consideration | 1,059 | ||
Depreciation | 191 | ||
Loss carryforward | 1,057 | ||
Management contracts | 1,792 | ||
Other | 2 | ||
Deferred tax assets | 4,692 | ||
Deferred tax asset valuation allowance | (1,044) | ||
Total deferred tax assets, net | 3,648 | ||
Deferred tax liabilities | |||
Deferred revenue | (3,615) | ||
Management contracts | (718) | ||
Other | (3) | ||
Total deferred tax liabilities | (4,336) | ||
Total deferred tax liabilities, net | $ (688) | ||
Parkway Houston | |||
Deferred tax assets | |||
Capitalizable transaction costs | $ 619 | $ 667 | |
Contingent consideration | 1,109 | 1,198 | |
Management contracts | 1,876 | 2,022 | |
Condominium sales | 1,064 | 1,064 | |
Other | 15 | 48 | |
Deferred tax assets | 4,683 | 4,999 | |
Deferred tax liabilities | |||
Cost method investment | (936) | (670) | |
Other | (108) | (123) | |
Total deferred tax liabilities | (1,044) | (793) | |
Deferred tax asset | $ 3,639 | $ 4,206 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Benefit (Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Oct. 05, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | ||||||
Federal | $ 0 | |||||
State | (318) | |||||
Total current | (318) | |||||
Deferred: | ||||||
Federal | (126) | |||||
State | (9) | |||||
Total deferred | (135) | |||||
Total income tax expense | $ (453) | $ 0 | $ (453) | |||
Parkway Houston | ||||||
Current: | ||||||
Federal | $ (188) | $ (854) | $ (2,870) | |||
State | (359) | (418) | (1,713) | |||
Total current | (547) | (1,272) | (4,583) | |||
Deferred: | ||||||
Federal | (514) | 124 | 3,868 | |||
State | (52) | (487) | 895 | |||
Total deferred | (566) | (363) | 4,763 | |||
Total income tax expense | $ (1,113) | $ (1,635) | $ 180 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense Computed at Statutory Income Tax Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Oct. 05, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Amount | ||||||
Income tax expense at U.S. federal statutory rate | $ 4,783 | |||||
REIT earnings without income tax provision | (4,901) | |||||
State income tax, net of federal tax benefit | (327) | |||||
Other | (8) | |||||
Total income tax expense | $ (453) | $ 0 | $ (453) | |||
Percentage | ||||||
Income tax expense at U.S. federal statutory rate | 34.00% | |||||
REIT earnings without income tax provision | (34.80%) | |||||
State income tax, net of federal tax benefit | (2.30%) | |||||
Other | (0.10%) | |||||
Total income tax expense | (3.20%) | |||||
Parkway Houston | ||||||
Amount | ||||||
Income tax expense at U.S. federal statutory rate | $ 431 | $ 4,812 | $ 7,848 | |||
REIT earnings without income tax provision | (1,149) | (5,596) | (7,003) | |||
Noncontrolling interest | 0 | (2) | 50 | |||
State income tax, net of federal tax benefit | (401) | (510) | (778) | |||
Effect of permanent differences | 0 | (6) | (41) | |||
Valuation allowance | 0 | 0 | 479 | |||
Other - Peachtree | 0 | 0 | (422) | |||
Other | 6 | (333) | 47 | |||
Total income tax expense | $ (1,113) | $ (1,635) | $ 180 | |||
Percentage | ||||||
Income tax expense at U.S. federal statutory rate | 34.00% | 34.00% | 34.00% | |||
REIT earnings without income tax provision | (90.60%) | (39.50%) | (30.30%) | |||
Noncontrolling interest | (0.00%) | (0.00%) | 0.20% | |||
State income tax, net of federal tax benefit | (31.60%) | (3.60%) | (3.40%) | |||
Effect of permanent differences | (0.00%) | (0.00%) | (0.20%) | |||
Valuation allowance | 0.00% | 0.00% | 2.10% | |||
Other - Peachtree | 0.00% | 0.00% | (1.80%) | |||
Other | 0.50% | (2.40%) | 0.20% | |||
Total income tax expense | (87.70%) | (11.50%) | 0.80% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Oct. 05, 2016 | Dec. 31, 2015 |
Operating Loss Carryforwards [Line Items] | |||
Total deferred tax liabilities, net | $ 688 | ||
Loss carryforward | 1,057 | ||
Valuation allowance | 1,044 | ||
Unrecognized tax benefits | 0 | ||
Income tax penalties and interest accrued | 0 | ||
Decrease in unrecognized tax benefits is reasonably possible | 0 | ||
Increase in unrecognized tax benefits is reasonably possible | 0 | ||
Parkway Houston | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax asset | $ 3,639 | $ 4,206 | |
Unrecognized tax benefits | 0 | ||
Decrease in unrecognized tax benefits is reasonably possible | $ 0 | ||
Increase in unrecognized tax benefits is reasonably possible | $ 0 |
Related Party Transactions - (D
Related Party Transactions - (Details) - USD ($) | Mar. 14, 2017 | Sep. 28, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 18, 2011 |
Related Party Transaction [Line Items] | ||||||||||
Interest and other income | $ 1,225,000 | $ 0 | $ 1,225,000 | |||||||
Chief Executive Officer | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cost method investment, equity return percentage | 7.00% | |||||||||
Management | Management Fees | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | 66,000 | |||||||||
Management | Reimbursements | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | 164,000 | |||||||||
Parkway Houston | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cost method investments | $ 3,500,000 | $ 3,500,000 | ||||||||
Interest and other income | 196,000 | 246,000 | $ 244,000 | |||||||
Parkway Houston | Majority Shareholder | Lease Commissions | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Capitalized commissions and other leasing costs | 403,000 | 1,600,000 | 982,000 | |||||||
Parkway Houston | Management | Management Fees | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | 240,500 | 398,000 | 3,500,000 | |||||||
Parkway Houston | Management | Reimbursements | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | 586,000 | 869,000 | 8,800,000 | |||||||
Cousins Houston | Majority Shareholder | Lease Commissions | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Capitalized commissions and other leasing costs | $ 1,300,000 | 3,800,000 | 2,500,000 | |||||||
Seven Percent Preferred Equity Cost Method Investment | Parkway Houston | Chief Executive Officer | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Cost method investments | $ 3,500,000 | |||||||||
Cost method investments, related party ownership percentage | 21.00% | |||||||||
Interest and other income | $ 187,043 | $ 245,000 | $ 265,000 | |||||||
TPG Management | Monitoring Fee | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Monitoring fee expense | 92,000 | |||||||||
TPG Owner | Eola | Management Fees | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | 193,000 | |||||||||
Term of contract | 1 year | |||||||||
Related party transaction, rate | 2.50% | |||||||||
TPG Owner | Eola | Reimbursements | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Revenue from related parties | 90,000 | |||||||||
Financial Guarantee | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Guarantor obligations, maximum exposure, undiscounted | $ 39,000,000 | $ 39,000,000 | ||||||||
Subsequent Event | Financial Guarantee | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Guarantor obligations, maximum exposure, undiscounted | $ 109,000,000 | |||||||||
Guarantor obligations, maximum exposure, undiscounted, increase in maximum amount | $ 70,000,000 | |||||||||
Guarantor obligations, term | P5Y |
Related Party Transactions - Su
Related Party Transactions - Summary of Costs (Details) - Majority Shareholder - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 06, 2016 | Oct. 05, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Parkway Houston | ||||
Related Party Transaction [Line Items] | ||||
Charged to property operating expense | $ 5,776 | $ 6,682 | $ 8,303 | |
Parkway Houston | Direct payroll charges | ||||
Related Party Transaction [Line Items] | ||||
Charged to property operating expense | 2,454 | 2,747 | 2,823 | |
Parkway Houston | Management Fees | ||||
Related Party Transaction [Line Items] | ||||
Charged to property operating expense | 2,173 | 2,298 | 3,087 | |
Parkway Houston | Other allocated expenses | ||||
Related Party Transaction [Line Items] | ||||
Charged to property operating expense | $ 1,149 | 1,637 | 2,393 | |
Cousins Houston | Direct payroll charges | ||||
Related Party Transaction [Line Items] | ||||
Charged to property operating expense | $ 5,308 | 6,826 | 6,678 | |
Cousins Houston | Other allocated expenses | ||||
Related Party Transaction [Line Items] | ||||
Charged to property operating expense | 1,501 | 2,043 | 2,178 | |
Cousins Houston | Office rental expense | ||||
Related Party Transaction [Line Items] | ||||
Charged to general and administrative expense | 271 | 337 | 329 | |
Cousins Houston | Payroll and other expenses | ||||
Related Party Transaction [Line Items] | ||||
Charged to general and administrative expense | 6,516 | 5,991 | 7,018 | |
Cousins Houston | Transaction costs | ||||
Related Party Transaction [Line Items] | ||||
Charged to property operating expense | $ 6,349 | $ 0 | $ 0 |
Selected Quarterly Financial 79
Selected Quarterly Financial Data (Unaudited) - (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||
Revenues (other than gains) | $ 68,931 | $ 0 | $ 68,931 |
Expenses | (70,845) | (5,372) | (76,217) |
Operating loss | (1,914) | (5,372) | (7,286) |
Interest and other income | 1,225 | 0 | 1,225 |
Interest expense | (8,007) | 0 | (8,007) |
Income tax expense | (453) | 0 | (453) |
Net loss | (9,149) | (5,372) | (14,521) |
Net loss attributable to noncontrolling interest - unitholders | 299 | 0 | 299 |
Net loss attributable to Parkway, Inc. | (8,850) | (5,372) | (14,222) |
Dividends on preferred stock | (94) | 0 | (94) |
Net loss attributable to common stockholders | $ (8,944) | $ (5,372) | $ (14,316) |
Basic and diluted net loss per common share attributable to common stockholders (dollars per share) | $ (0.18) | $ (0.11) | |
Dividends per common share (in dollars per share) | $ 0 | $ 0 | |
Weighted average shares outstanding: | |||
Basic (in shares) | 49,111 | 49,111 | 49,111 |
Diluted (in shares) | 49,111 | 49,111 | 49,111 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) $ / shares in Units, $ in Thousands | Mar. 31, 2017USD ($)$ / shares | Mar. 16, 2017$ / shares | Jun. 30, 2017partner | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)$ / shares | Sep. 30, 2016$ / shares | Dec. 31, 2016USD ($)$ / shares |
Subsequent Event [Line Items] | |||||||
Assets | $ 2,163,895 | $ 2,163,895 | |||||
Liabilities | $ 1,011,973 | $ 1,011,973 | |||||
Dividends per common share (in dollars per share) | $ / shares | $ 0 | $ 0 | |||||
Preferred dividends declared (in dollars per share) | $ / shares | $ 1,889 | ||||||
Greenway Plaza and Phoenix Tower Joint Venture | |||||||
Subsequent Event [Line Items] | |||||||
Assets | $ 1,100,000 | $ 1,100,000 | |||||
Liabilities | $ 200,800 | $ 200,800 | |||||
Scenario, Forecast | |||||||
Subsequent Event [Line Items] | |||||||
Dividends per common share (in dollars per share) | $ / shares | $ 0.10 | ||||||
Scenario, Forecast | TIAA/SP | Greenway Plaza and Phoenix Tower Joint Venture | |||||||
Subsequent Event [Line Items] | |||||||
Limited partners, ownership interest | 24.50% | ||||||
Series A Preferred Stock | Scenario, Forecast | |||||||
Subsequent Event [Line Items] | |||||||
Preferred dividends declared (in dollars per share) | $ / shares | $ 2,000 | ||||||
Dividends to be paid | $ 100 | ||||||
Subsequent Event | Scenario, Forecast | |||||||
Subsequent Event [Line Items] | |||||||
Number of joint venture partners | partner | 2 | ||||||
Subsequent Event | Scenario, Forecast | Greenway Plaza and Phoenix Tower Joint Venture | |||||||
Subsequent Event [Line Items] | |||||||
Limited partners, ownership interest | 50.00% | ||||||
General partner, ownership interest | 1.00% | ||||||
Subsequent Event | Scenario, Forecast | CPPIB and TIAA/SP | Greenway Plaza and Phoenix Tower Joint Venture | |||||||
Subsequent Event [Line Items] | |||||||
Limited partners, ownership interest | 49.00% | ||||||
Subsequent Event | Scenario, Forecast | CPPIB | Greenway Plaza and Phoenix Tower Joint Venture | |||||||
Subsequent Event [Line Items] | |||||||
Limited partners, ownership interest | 24.50% | ||||||
Subsequent Event | Scenario, Forecast | Greenway Plaza and Phoenix Tower Joint Venture | |||||||
Subsequent Event [Line Items] | |||||||
Joint venture, ownership percentage | 51.00% | ||||||
Impairment loss on joint venture investment | $ 25,000 |
Schedule III _ Real Estate an81
Schedule III – Real Estate and Accumulated Depreciation - Initial Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Jun. 29, 2016 |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | $ 451,577 | |
Initial Cost to the Company, Land | 417,315 | |
Initial Cost to the Company, Building and Improvements | 1,435,755 | |
Subsequent Capitalized Costs | 11,598 | |
Total Real Estate | 1,864,668 | $ 0 |
Texas | CityWestPlace | ||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | 93,295 | |
Initial Cost to the Company, Land | 43,322 | |
Initial Cost to the Company, Building and Improvements | 303,764 | |
Subsequent Capitalized Costs | 2,810 | |
Total Real Estate | 349,896 | |
Texas | San Felipe Plaza | ||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | 109,612 | |
Initial Cost to the Company, Land | 5,579 | |
Initial Cost to the Company, Building and Improvements | 162,777 | |
Subsequent Capitalized Costs | 2,417 | |
Total Real Estate | 170,773 | |
Texas | Phoenix Tower | ||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | 71,039 | |
Initial Cost to the Company, Land | 8,686 | |
Initial Cost to the Company, Building and Improvements | 71,874 | |
Subsequent Capitalized Costs | 1,647 | |
Total Real Estate | 82,207 | |
Texas | Greenway Plaza | ||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | 0 | |
Initial Cost to the Company, Land | 273,651 | |
Initial Cost to the Company, Building and Improvements | 733,996 | |
Subsequent Capitalized Costs | 2,577 | |
Total Real Estate | 1,010,224 | |
Texas | Post Oak Central | ||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | ||
Encumbrances | 177,631 | |
Initial Cost to the Company, Land | 86,077 | |
Initial Cost to the Company, Building and Improvements | 163,344 | |
Subsequent Capitalized Costs | 2,147 | |
Total Real Estate | $ 251,568 |
Schedule III _ Real Estate an82
Schedule III – Real Estate and Accumulated Depreciation - Carrying Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Oct. 06, 2016 | Jun. 29, 2016 | |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Carried at Close of Period, Land | $ 417,315 | ||
Carried at Close of Period, Building and Improvements | 1,447,353 | ||
Total Real Estate | 1,864,668 | $ 0 | |
Accumulated Depreciation | 159,057 | $ 0 | |
Net Book Value of Real Estate | $ 1,705,611 | ||
Aggregate cost for federal income tax purposes | $ 1,600,000 | ||
Minimum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 7 years | ||
Maximum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 40 years | ||
CityWestPlace | Texas | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Carried at Close of Period, Land | $ 43,322 | ||
Carried at Close of Period, Building and Improvements | 306,574 | ||
Total Real Estate | 349,896 | ||
Accumulated Depreciation | 2,618 | ||
Net Book Value of Real Estate | $ 347,278 | ||
CityWestPlace | Texas | Minimum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 7 years | ||
CityWestPlace | Texas | Maximum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 40 years | ||
San Felipe Plaza | Texas | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Carried at Close of Period, Land | $ 5,579 | ||
Carried at Close of Period, Building and Improvements | 165,194 | ||
Total Real Estate | 170,773 | ||
Accumulated Depreciation | 1,639 | ||
Net Book Value of Real Estate | $ 169,134 | ||
San Felipe Plaza | Texas | Minimum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 7 years | ||
San Felipe Plaza | Texas | Maximum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 40 years | ||
Phoenix Tower | Texas | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Carried at Close of Period, Land | $ 8,686 | ||
Carried at Close of Period, Building and Improvements | 73,521 | ||
Total Real Estate | 82,207 | ||
Accumulated Depreciation | 753 | ||
Net Book Value of Real Estate | $ 81,454 | ||
Phoenix Tower | Texas | Minimum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 7 years | ||
Phoenix Tower | Texas | Maximum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 40 years | ||
Greenway Plaza | Texas | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Carried at Close of Period, Land | $ 273,651 | ||
Carried at Close of Period, Building and Improvements | 736,573 | ||
Total Real Estate | 1,010,224 | ||
Accumulated Depreciation | 119,640 | ||
Net Book Value of Real Estate | $ 890,584 | ||
Greenway Plaza | Texas | Minimum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 7 years | ||
Greenway Plaza | Texas | Maximum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 40 years | ||
Post Oak Central | Texas | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Carried at Close of Period, Land | $ 86,077 | ||
Carried at Close of Period, Building and Improvements | 165,491 | ||
Total Real Estate | 251,568 | ||
Accumulated Depreciation | 34,407 | ||
Net Book Value of Real Estate | $ 217,161 | ||
Post Oak Central | Texas | Minimum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 7 years | ||
Post Oak Central | Texas | Maximum | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Depreciable Lives | 40 years |
Schedule III _ Real Estate an83
Schedule III – Real Estate and Accumulated Depreciation - Summary of Activity (Details) $ in Thousands | 6 Months Ended |
Dec. 31, 2016USD ($) | |
Office Properties: | |
Contributions from the Spin-Off | $ 1,854,257 |
SEC Schedule III, Real Estate, Improvements | 11,598 |
Non-depreciable real estate sold | (1,187) |
Balance at December 31, 2016 | 1,864,668 |
Accumulated Depreciation: | |
Contributions from the Spin-Off | 142,102 |
Depreciation expense | 16,955 |
Balance at December 31, 2016 | $ 159,057 |