Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 19, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | REALTY INCOME CORP | |
Entity Central Index Key | 726,728 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 281,785,414 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Real estate, at cost: | ||
Land | $ 3,974,972 | $ 3,752,204 |
Buildings and improvements | 10,634,965 | 10,112,212 |
Total real estate, at cost | 14,609,937 | 13,864,416 |
Less accumulated depreciation and amortization | (2,265,035) | (1,987,200) |
Net real estate held for investment | 12,344,902 | 11,877,216 |
Real estate held for sale, net | 2,874 | 26,575 |
Net real estate | 12,347,776 | 11,903,791 |
Cash and cash equivalents | 3,199 | 9,420 |
Accounts receivable, net | 113,721 | 104,584 |
Acquired lease intangible assets, net | 1,165,013 | 1,082,320 |
Goodwill | 14,989 | 15,067 |
Other assets, net | 56,721 | 37,689 |
Total assets | 13,701,419 | 13,152,871 |
LIABILITIES AND EQUITY | ||
Distributions payable | 60,104 | 55,235 |
Accounts payable and accrued expenses | 92,947 | 121,156 |
Acquired lease intangible liabilities, net | 272,377 | 264,206 |
Other liabilities | 115,037 | 85,616 |
Line of credit payable | 658,000 | 1,120,000 |
Term loans, net | 319,347 | 319,127 |
Mortgages payable, net | 341,015 | 466,045 |
Notes payable, net | 4,468,665 | 3,934,433 |
Total liabilities | 6,327,492 | 6,365,818 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock and paid in capital, par value $0.01 per share, 69,900,000 shares authorized, no shares issued and outstanding as of September 30, 2017 and 16,350,000 issued and outstanding as of December 31, 2016, liquidation preference $25.00 per share | 395,378 | |
Common stock and paid in capital, par value $0.01 per share, 370,100,000 shares authorized, 281,778,537 shares issued and outstanding as of September 30, 2017 and 260,168,259 shares issued and outstanding as of December 31, 2016 | 9,488,043 | 8,228,594 |
Distributions in excess of net income | (2,133,614) | (1,857,168) |
Total stockholders' equity | 7,354,429 | 6,766,804 |
Noncontrolling interests | 19,498 | 20,249 |
Total equity | 7,373,927 | 6,787,053 |
Total liabilities and equity | $ 13,701,419 | $ 13,152,871 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock and paid in capital, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock and paid in capital, shares authorized | 69,900,000 | 69,900,000 |
Preferred stock and paid in capital, shares issued | 0 | 16,350,000 |
Preferred stock and paid in capital, shares outstanding | 0 | 16,350,000 |
Preferred stock liquidation preference (in dollars per share) | $ 25 | $ 25 |
Common stock and paid in capital, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock and paid in capital, shares authorized | 370,100,000 | 370,100,000 |
Common stock and paid in capital, shares issued | 281,778,537 | 260,168,259 |
Common stock and paid in capital, shares outstanding | 281,778,537 | 260,168,259 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUE | ||||
Rental | $ 293,455 | $ 265,332 | $ 867,325 | $ 782,189 |
Tenant reimbursements | 11,933 | 11,524 | 34,918 | 31,741 |
Other | 1,532 | 318 | 2,872 | 1,399 |
Total revenue | 306,920 | 277,174 | 905,115 | 815,329 |
EXPENSES | ||||
Depreciation and amortization | 127,569 | 113,917 | 371,755 | 332,192 |
Interest | 62,951 | 52,952 | 185,935 | 171,039 |
General and administrative | 13,881 | 12,103 | 43,227 | 38,407 |
Property (including reimbursable) | 17,267 | 15,678 | 52,828 | 45,454 |
Income taxes | 1,133 | 894 | 2,621 | 2,812 |
Provisions for impairment | 365 | 8,763 | 8,072 | 16,955 |
Total expenses | 223,166 | 204,307 | 664,438 | 606,859 |
Gain on sales of real estate | 4,319 | 4,335 | 17,689 | 15,283 |
Net income | 88,073 | 77,202 | 258,366 | 223,753 |
Net income attributable to noncontrolling interests | (133) | (130) | (420) | (623) |
Net income attributable to the Company | 87,940 | 77,072 | 257,946 | 223,130 |
Preferred stock dividends | (6,770) | (3,911) | (20,310) | |
Excess of redemption value over carrying value of preferred shares redeemed | (13,373) | |||
Net income available to common stockholders | $ 87,940 | $ 70,302 | $ 240,662 | $ 202,820 |
Amounts available to common stockholders per common share: | ||||
Net income, basic and diluted (in dollars per share) | $ 0.32 | $ 0.27 | $ 0.89 | $ 0.80 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 275,511,870 | 258,085,633 | 270,584,365 | 253,953,149 |
Diluted (in shares) | 276,050,671 | 258,673,914 | 271,126,114 | 254,540,323 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 258,366 | $ 223,753 |
Adjustments to net income: | ||
Depreciation and amortization | 371,755 | 332,192 |
Amortization of share-based compensation | 10,641 | 9,204 |
Non-cash revenue adjustments | (2,783) | (7,583) |
Amortization of net premiums on mortgages payable | (1,580) | (2,669) |
Amortization of deferred financing costs | 6,819 | 6,510 |
(Gain) loss on interest rate swaps | (1,228) | 5,835 |
Gain on sales of real estate | (17,689) | (15,283) |
Provisions for impairment on real estate | 8,072 | 16,955 |
Change in assets and liabilities | ||
Accounts receivable and other assets | (2,342) | 2,964 |
Accounts payable, accrued expenses and other liabilities | 10,067 | 7,332 |
Net cash provided by operating activities | 640,098 | 579,210 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Investment in real estate | (964,719) | (1,027,917) |
Improvements to real estate, including leasing costs | (11,834) | (5,295) |
Proceeds from sales of real estate | 69,486 | 55,114 |
Insurance proceeds received | 12,746 | |
Collection of loans receivable | 92 | 12,486 |
Restricted escrow deposits for Section 1031 tax-deferred exchanges and pending acquisitions | (19,452) | (7,757) |
Net cash used in investing activities | (913,681) | (973,369) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Cash distributions to common stockholders | (509,987) | (453,774) |
Cash dividends to preferred stockholders | (6,168) | (20,310) |
Borrowings on line of credit | 1,189,000 | 3,120,000 |
Payments on line of credit | (1,651,000) | (2,276,000) |
Proceeds from notes and bonds payable issued | 711,812 | |
Principal payments on notes payable | (175,000) | (275,000) |
Proceeds from mortgages payable | 9,963 | |
Principal payments on mortgages payable | (123,524) | (183,697) |
Redemption of preferred stock | (408,750) | |
Proceeds from common stock offerings, net | 704,938 | 383,572 |
Proceeds from dividend reinvestment and stock purchase plan | 67,813 | 8,174 |
Procceds from At-the-Market (ATM) program | 487,998 | 85,780 |
Redemption of common units | (9,026) | |
Distributions to noncontrolling interests | (1,652) | (1,018) |
Debt issuance costs | (6,663) | |
Other items, including shares withheld upon vesting | (11,455) | (4,998) |
Net cash provided by financing activities | 267,362 | 383,666 |
Net increase (decrease) in cash and cash equivalents | (6,221) | (10,493) |
Cash and cash equivalents, beginning of period | 9,420 | 40,294 |
Cash and cash equivalents, end of period | $ 3,199 | $ 29,801 |
Management Statement
Management Statement | 9 Months Ended |
Sep. 30, 2017 | |
Management Statement | |
Management Statement | 1. Management Statement The consolidated financial statements of Realty Income Corporation (“Realty Income”, the “Company”, “we”, “our” or “us”) were prepared from our books and records without audit and include all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of results for the interim periods presented. Readers of this quarterly report should refer to our audited consolidated financial statements for the year ended December 31, 2016, which are included in our 2016 Annual Report on Form 10-K, as certain disclosures that would substantially duplicate those contained in the audited financial statements have not been included in this report. At September 30, 2017, we owned 5,062 properties, located in 49 states and Puerto Rico, containing over 86.4 million leasable square feet. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | 2. Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements A. The accompanying consolidated financial statements include the accounts of Realty Income and other entities for which we make operating and financial decisions (i.e., control), after elimination of all material intercompany balances and transactions. We consolidate entities that we control and record a noncontrolling interest for the portion that we do not own. Noncontrolling interest that was created or assumed as part of a business combination was recognized at fair value as of the date of the transaction (see note 11). We have no unconsolidated investments. B. We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. We believe we have qualified and continue to qualify as a REIT. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income, we generally will not be required to pay federal corporate income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements, except for federal income taxes of our taxable REIT subsidiaries. The income taxes recorded on our consolidated statements of income represent amounts paid by Realty Income and its subsidiaries for city and state income and franchise taxes. C. We assign a portion of goodwill to our applicable property sales, which results in a reduction of the carrying amount of our goodwill. In order to allocate goodwill to the carrying amount of properties that we sell, we utilize a relative fair value approach based on the original methodology for assigning goodwill. As we sell properties, our goodwill will likely continue to gradually decrease over time. Based on our analyses of goodwill during the second quarters of 2017 and 2016, we determined there was no impairment on our existing goodwill. D . In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers . This ASU, as amended by ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date , outlines a comprehensive model for companies to use in accounting for revenue arising from contracts with customers, and will apply to transactions such as the sale of real estate. This ASU, which is effective for interim and annual periods beginning after December 15, 2017, requires an entity to 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 and also to provide certain additional disclosures. We will adopt this standard effective as of January 1, 2018 and will utilize the cumulative effect transition method of adoption. The adoption of this guidance will not have a material impact on our financial position or results of operations. We expect this standard will have an impact on the disclosure of certain lease and non-lease components of revenue from leases upon the adoption of the update ASU 2016-02, Leases , but will not have a material impact on “total revenues.” In February 2016, FASB issued ASU 2016-02 (Topic 842, Leases) , which amended Topic 840, Lea ses. Under this amended topic, the accounting applied by a lessor is largely unchanged from that applied under Topic 840, Leases . The large majority of operating leases should remain classified as operating leases, and lessors should continue to recognize lease income for those leases on a generally straight-line basis over the lease term . The amendments included in this topic are effective, on a retrospective or modified retrospective basis, for interim and annual periods beginning after December 15, 2018. We have not yet adopted this topic and are currently evaluating the impact this amendment may have on our consolidated financial statements. In January 2017, FASB issued ASU 2017-01, which amends Topic 805, Business Combinations . The FASB issued this ASU to clarify 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 ASU is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. We elected to adopt this ASU early, effective October 1, 2017. As a result of this new guidance, we believe the majority of our future real estate transactions will qualify as asset acquisitions (or disposals), and future transaction costs associated with these acquisitions will be capitalized. The adoption of this topic will not have a material impact on our consolidated financial statements or related disclosures. |
Supplemental Detail for Certain
Supplemental Detail for Certain Components of Consolidated Balance Sheets | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Detail for Certain Components of Consolidated Balance Sheets | |
Supplemental Detail for Certain Components of Consolidated Balance Sheets | 3. Supplemental Detail for Certain Components of Consolidated Balance Sheets A. Acquired lease intangible assets, net, consist of the following September 30, December 31, (dollars in thousands) at: Acquired in-place leases $ $ Accumulated amortization of acquired in-place leases ) ) Acquired above-market leases Accumulated amortization of acquired above-market leases ) ) $ $ September 30, December 31, B. Other assets, net, consist of the following (dollars in thousands) at: Restricted escrow deposits Prepaid expenses Corporate assets, net Notes receivable issued in connection with property sales Credit facility origination costs, net Impounds related to mortgages payable Other items $ $ C. Distributions payable consist of the following declared September 30, December 31, distributions (dollars in thousands) at: Common stock distributions $ $ Preferred stock dividends - Noncontrolling interests distributions $ $ D. Accounts payable and accrued expenses consist of the September 30, December 31, following (dollars in thousands) at: Notes payable - interest payable $ $ Property taxes payable Accrued costs on properties under development Mortgages, term loans, credit line - interest payable and interest rate swaps Other items $ $ E. Acquired lease intangible liabilities, net, consist of the September 30, December 31, following (dollars in thousands) at: Acquired below-market leases $ $ Accumulated amortization of acquired below-market leases ) ) $ $ F. Other liabilities consist of the following September 30, December 31, (dollars in thousands) at: Rent received in advance and other deferred revenue (1) $ $ Security deposits Capital lease obligations $ $ (1) In connection with Diageo’s sale of its wine business to Treasury Wine Estates, we agreed to release Diageo from its guarantee of our leases in exchange for Diageo’s payment of $75 million of additional rent to us. The additional rent was paid in two equal installments, one of which was received in August 2016 for $37.5 million and was recorded as prepaid rent. The final payment of $37.5 million was received in January 2017, at which time Treasury Wine Estates became the guarantor of our leases on those properties. We have accounted for this transaction as a lease modification and the additional rent will be recognized on a straight-line basis over the remaining lease terms of approximately 15 years. |
Investments in Real Estate
Investments in Real Estate | 9 Months Ended |
Sep. 30, 2017 | |
Investments in Real Estate | |
Investments in Real Estate | 4. Investments in Real Estate We acquire land, buildings and improvements necessary for the successful operations of commercial tenants. A. Acquisitions During the First Nine Months of 2017 and 2016 During the first nine months of 2017, we invested $956.9 million in 177 new properties and properties under development or expansion with an initial weighted average contractual lease rate of 6.5%. The 177 new properties and properties under development or expansion are located in 35 states, will contain approximately 4.3 million leasable square feet, and are 100% leased with a weighted average lease term of 14.9 years. The tenants occupying the new properties operate in 21 industries and the property types consist of 96.6% retail and 3.4% industrial, based on rental revenue. None of our investments during 2017 caused any one tenant to be 10% or more of our total assets at September 30, 2017. The $956.9 million invested during the first nine months of 2017 was allocated as follows: $233.7 million to land, $585.0 million to buildings and improvements, $152.7 million to intangible assets related to leases, and $14.5 million to intangible liabilities related to leases and other assumed liabilities. There was no contingent consideration associated with these acquisitions. The properties acquired during the first nine months of 2017 generated total revenues of $19.7 million and net income of $9.4 million during the nine months ended September 30, 2017. In comparison, during the first nine months of 2016, we invested $1.1 billion in 236 properties and properties under development or expansion with an initial weighted average contractual lease rate of 6.4%. The 236 properties and properties under development or expansion are located in 36 states, contain approximately 5.2 million leasable square feet, and are 100% leased with a weighted average lease term of 15.0 years. The tenants occupying those properties operate in 24 industries and the property types are 80.7% retail and 19.3% industrial, based on rental revenue. The $1.1 billion invested during the first nine months of 2016 was allocated as follows: $267.8 million to land, $691.9 million to buildings and improvements, $140.4 million to intangible assets related to leases, and $26.3 million to intangible liabilities related to leases and other assumed liabilities. We also recorded mortgage premiums of $692,000. There was no contingent consideration associated with these acquisitions. The properties acquired during the first nine months of 2016 generated total revenues of $22.5 million and net income of $11.2 million during the nine months ended September 30, 2016. The estimated initial weighted average contractual lease rate for a property is generally computed as estimated contractual net operating income, which, in the case of a net leased property, is equal to the aggregate base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a tenant could default on the payment of contractual rent, we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. In the case of a property under development or expansion, the contractual lease rate is generally fixed such that rent varies based on the actual total investment in order to provide a fixed rate of return. When the lease does not provide for a fixed rate of return on a property under development or expansion, the estimated initial weighted average contractual lease rate is computed as follows: estimated net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs. Of the $956.9 million we invested during the first nine months of 2017, $16.4 million was invested in 13 properties under development or expansion with an estimated initial weighted average contractual lease rate of 7.3%. Of the $1.1 billion we invested during the first nine months of 2016, $87.7 million was invested in 30 properties under development or expansion with an estimated initial weighted average contractual lease rate of 7.1%. B. Acquisition Transaction Costs Acquisition transaction costs of $229,000 and $119,000 were recorded to general and administrative expense on our consolidated statements of income during the first nine months of 2017 and 2016, respectively. C. Investments in Existing Properties During the first nine months of 2017, we capitalized costs of $9.5 million on existing properties in our portfolio, consisting of $1.2 million for re-leasing costs, $536,000 for recurring capital expenditures and $7.8 million for non-recurring building improvements. In comparison, during the first nine months of 2016, we capitalized costs of $5.3 million on existing properties in our portfolio, consisting of $564,000 for re-leasing costs, $486,000 for recurring capital expenditures and $4.2 million for non-recurring building improvements. D. Properties with Existing Leases Of the $956.9 million we invested during the first nine months of 2017, approximately $562.1 million was used to acquire 68 properties with existing leases. In comparison, of the $1.1 billion we invested during the first nine months of 2016, approximately $574.0 million was used to acquire 75 properties with existing leases. The value of the in-place and above-market leases is recorded to acquired lease intangible assets, net on our consolidated balance sheets, and the value of the below-market leases is recorded to acquired lease intangible liabilities, net on our consolidated balance sheets. The values of the in-place leases are amortized as depreciation and amortization expense. The amounts amortized to expense for all of our in-place leases, for the first nine months of 2017 and 2016 were $79.1 million and $69.6 million, respectively. The values of the above-market and below-market leases are amortized over the term of the respective leases, including any bargain renewal options, as an adjustment to rental revenue on our consolidated statements of income. The amounts amortized as a net decrease to rental revenue for capitalized above-market and below-market leases for the first nine months of 2017 and 2016 were $10.2 million and $6.7 million, respectively. If a lease was to be terminated prior to its stated expiration, all unamortized amounts relating to that lease would be recorded to revenue or expense, as appropriate. The following table presents the estimated impact during the next five years and thereafter related to the amortization of the acquired above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at September 30, 2017 (in thousands): Net Increase to decrease to amortization rental revenue expense 2017 $ ) $ 2018 ) 2019 ) 2020 ) 2021 ) Thereafter ) Totals $ ) $ |
Credit Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2017 | |
Credit Facility | |
Credit facility | |
Debt | 5. Credit Facility We have a $2.0 billion unsecured revolving credit facility, or our credit facility with an initial term that expires in June 2019 and includes, at our option, two six-month extensions. Our credit facility has a $1.0 billion accordion expansion option. Under our credit facility, our investment grade credit ratings as of September 30, 2017 provide for financing at the London Interbank Offered Rate, commonly referred to as LIBOR, plus 0.90% with a facility commitment fee of 0.15%, for all-in drawn pricing of 1.05% over LIBOR. The borrowing rate is subject to an interest rate floor and may change if our investment grade credit ratings change. We also have other interest rate options available to us under our credit facility. Our credit facility is unsecured and, accordingly, we have not pledged any assets as collateral for this obligation. At September 30, 2017, credit facility origination costs of $5.1 million are included in other assets, net on our consolidated balance sheet. These costs are being amortized over the remaining term of our credit facility. At September 30, 2017, we had a borrowing capacity of $1.34 billion available on our credit facility (subject to customary conditions to borrowing) and an outstanding balance of $658.0 million as compared to an outstanding balance of $1.12 billion at December 31, 2016. The weighted average interest rate on outstanding borrowings under our credit facility was 1.9% during the first nine months of 2017 and 1.4% during the first nine months of 2016. At September 30, 2017 and 2016, the weighted average interest rate on borrowings outstanding was 2.2% and 1.4%, respectively. Our credit facility is subject to various leverage and interest coverage ratio limitations, and at September 30, 2017 we were in compliance with the covenants on our credit facility. |
Term Loans
Term Loans | 9 Months Ended |
Sep. 30, 2017 | |
Senior Unsecured Term Loans | |
Term Loans | |
Debt | 6. Term Loans In June 2015, in conjunction with entering into our credit facility, we entered into a $250 million senior unsecured term loan maturing on June 30, 2020. Borrowing under this term loan bears interest at the current one-month LIBOR, plus 0.95%. In conjunction with this term loan, we also entered into an interest rate swap which effectively fixes our per annum interest rate on this term loan at 2.67%. In January 2013, in conjunction with our acquisition of American Realty Capital Trust, Inc., or ARCT, we entered into a $70 million senior unsecured term loan maturing January 2018. Borrowing under this term loan bears interest at the current one-month LIBOR, plus 1.20%. In conjunction with this term loan, we also entered into an interest rate swap which effectively fixes our per annum interest rate on this term loan at 2.15%. Deferred financing costs of $1.2 million incurred in conjunction with the $250 million term loan and $303,000 incurred in conjunction with the $70 million term loan are being amortized over the remaining terms of each respective term loan. The net balance of these deferred financing costs, which was $653,000 at September 30, 2017, and $873,000 at December 31, 2016, is included within term loans, net on our consolidated balance sheets. |
Mortgages Payable
Mortgages Payable | 9 Months Ended |
Sep. 30, 2017 | |
Mortgages Payable | |
Debt | |
Debt | 7. Mortgages Payable During the first nine months of 2017, we made $123.5 million in principal payments, including the repayment of seven mortgages in full for $118.6 million. No mortgages were assumed during the first nine months of 2017. During the first nine months of 2016, we made $183.7 million in principal payments, including the repayment of eight mortgages in full for $161.5 million. Additionally, we assumed mortgages totaling $32.5 million, excluding net premiums. During the third quarter of 2016, we refinanced one of these assumed mortgages and received an additional $10.0 million in proceeds. The assumed mortgages are secured by the properties on which the debt was placed and are considered non-recourse debt with limited customary exceptions for items such as solvency, bankruptcy, misrepresentation, fraud, misapplication of payments, environmental liabilities, failure to pay taxes, insurance premiums, liens on the property, violations of the single purpose entity requirements, and uninsured losses. We expect to pay off our outstanding mortgages as soon as prepayment penalties make it economically feasible to do so. During the first nine months of 2016, aggregate net premiums totaling $692,000 were recorded upon the assumption of a mortgage with an above-market interest rate. Amortization of our net premiums is recorded as a reduction to interest expense over the remaining term of the respective mortgages, using a method that approximates the effective-interest method. Our mortgages contain customary covenants, such as limiting our ability to further mortgage each applicable property or to discontinue insurance coverage without the prior consent of the lender. At September 30, 2017, we were in compliance with these covenants. The balance of our deferred financing costs, which are classified as part of mortgages payable, net, on our consolidated balance sheets, was $249,000 at September 30, 2017 and $324,000 at December 31, 2016. These costs are being amortized over the remaining term of each mortgage. The following is a summary of all our mortgages payable as of September 30, 2017 and December 31, 2016, respectively (dollars in thousands): Weighted Weighted Weighted Unamortized Average Average Average Premium Stated Effective Remaining Remaining and Deferred Mortgage Number of Interest Interest Years Until Principal Finance Costs Payable As Of Properties (1) Rate (2) Rate (3) Maturity Balance Balance, net Balance 9/30/17 4.3 $ $ $ 12/31/16 4.0 $ $ $ (1) At September 30, 2017, there were 29 mortgages on 63 properties, while at December 31, 2016, there were 36 mortgages on 127 properties. The mortgages require monthly payments with principal payments due at maturity. The mortgages are at fixed interest rates, except for four mortgages on four properties with a principal balance totaling $44.9 million at September 30, 2017, and six mortgages on 15 properties with a principal balance totaling $76.3 million at December 31, 2016. After factoring in arrangements which limit our exposure to interest rate risk and effectively fix our per annum interest rates, our mortgage debt subject to variable rates totals $22.5 million at September 30, 2017 and $38.2 million at December 31, 2016. (2) Stated interest rates ranged from 3.2% to 6.9% at September 30, 2017, while stated interest rates ranged from 2.4% to 6.9% at December 31, 2016. (3) Effective interest rates ranged from 3.0% to 5.5% at September 30, 2017, while effective interest rates ranged from 2.5% to 8.8% at December 31, 2016. The following table summarizes the maturity of mortgages payable, excluding net premiums of $4.8 million and deferred finance costs of $249,000, as of September 30, 2017 (dollars in millions): Year of Maturity Principal 2017 $ 2018 2019 2020 2021 Thereafter Totals $ |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Notes Payable | |
Debt | |
Debt | 8. Notes Payable A. General Our senior unsecured notes and bonds consist of the following, sorted by maturity date (dollars in millions): September 30, December 31, 5.375% notes, issued in September 2005 and due in September 2017 $ - $ 2.000% notes, issued in October 2012 and due in January 2018 6.750% notes, issued in September 2007 and due in August 2019 5.750% notes, issued in June 2010 and due in January 2021 3.250% notes, issued in October 2012 and due in October 2022 4.650% notes, issued in July 2013 and due in August 2023 3.875% notes, issued in June 2014 and due in July 2024 4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 3.000% notes, issued in October 2016 and due in January 2027 5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 4.650% notes, issued in March 2017 and due in March 2047 - Total principal amount Unamortized original issuance discounts and deferred financing costs ) ) $ $ The following table summarizes the maturity of our notes and bonds payable as of September 30, 2017, excluding unamortized original issuance discounts and deferred financing costs (dollars in millions): Year of Maturity Principal 2017 $ - 2018 2019 2020 - 2021 Thereafter Totals $ As of September 30, 2017, the weighted average interest rate on our notes and bonds payable was 4.3% and the weighted average remaining years until maturity was 7.9 years. B. Note Repayment In September 2017, we repaid our $175.0 million of outstanding 5.375% notes, plus accrued and unpaid interest. C. Note Issuances In March 2017, we issued $300 million of 4.650% senior unsecured notes due 2047, or the 2047 Notes, and $400 million of 4.125% senior unsecured notes due 2026, or the 2026 Notes. The public offering price for the 2047 Notes was 99.97% of the principal amount for an effective yield to maturity of 4.65%. The public offering price for the 2026 Notes was 102.98% of the principal amount for an effective yield to maturity of 3.75%. The 2026 Notes constituted a further issuance of, and formed a single series with, the $250 million aggregate principal amount of senior notes due 2026, issued in September 2014. The net proceeds of approximately $705.2 million from the offerings were used to repay borrowings outstanding under our credit facility to fund investment opportunities, and for other general corporate purposes. |
Redemption of Preferred Stock
Redemption of Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
Redemption of Preferred Stock | |
Redemption of Preferred Stock | 9. Redemption of Preferred Stock In April 2017, we redeemed all of the 16,350,000 shares of our 6.625% Monthly Income Class F Preferred Stock for $25 per share, plus accrued dividends. During the first nine months of 2017, we incurred a charge of $13.4 million, representing the Class F preferred stock original issuance costs that we paid in 2012. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity | |
Equity | 10. Equity A. Issuance of Common Stock In March 2017, we issued 11,850,000 shares of common stock. After underwriting discounts and other offering costs of $29.7 million, the net proceeds of $704.9 million were used to repay borrowings under our credit facility. In May 2016, we issued 6,500,000 shares of common stock. After underwriting discounts and other offering costs of $12.1 million, the net proceeds of $383.6 million were used to repay borrowings under our credit facility. B. Dividend Reinvestment and Stock Purchase Plan Our Dividend Reinvestment and Stock Purchase Plan, or the DRSPP, provides our common stockholders, as well as new investors, with a convenient and economical method of purchasing our common stock and reinvesting their distributions. Our DRSPP also allows our current stockholders to buy additional shares of common stock by reinvesting all or a portion of their distributions. The DRSPP authorizes up to 26,000,000 common shares to be issued. During the first nine months of 2017, we issued 1,155,883 shares and raised approximately $67.8 million under the DRSPP. During the first nine months of 2016, we issued 133,432 shares and raised approximately $8.2 million under the DRSPP. From the inception of the DRSPP through September 30, 2017, we have issued 14,025,772 shares and raised approximately $659.7 million. Our DRSPP includes a waiver approval process, allowing larger investors or institutions, per a formal approval process, to purchase shares at a small discount, if approved by us. During the first nine months of 2017, we issued 927,695 shares and raised $54.7 million under the waiver approval process. These shares are included in the total activity for 2017 noted in the preceding paragraph. We did not issue shares under the waiver approval process during the first nine months of 2016. C. At-the-Market (ATM) Program Through our “at-the-market” equity distribution program, or our ATM program, we were permitted to offer and sell shares of common stock to, or through, a consortium of banks acting as our sales agents either by means of ordinary brokers’ transactions on the NYSE at prevailing market prices or at negotiated prices. During the first nine months of 2017, we issued 8,506,559 shares and raised approximately $488.0 million under the ATM program. During the first nine months of 2016, we issued 1,312,269 shares and raised approximately $85.8 million under the ATM program. From the inception of our ATM program through September 30, 2017, we have issued all 12,000,000 shares authorized by our ATM program and raised $691.1 million. |
Noncontrolling Interests
Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2017 | |
Noncontrolling Interests | |
Noncontrolling Interests | 11. Noncontrolling Interests In January 2013, we completed our acquisition of ARCT. Equity issued as consideration for this transaction included common and preferred partnership units issued by Tau Operating Partnership, L.P., or Tau Operating Partnership, the consolidated subsidiary which owns properties acquired through the ARCT acquisition. We and our subsidiaries hold a 99.4% interest in Tau Operating Partnership, and consolidate the entity. In June 2013, we completed the acquisition of a portfolio of properties by issuing common partnership units in Realty Income, L.P. The units were issued as consideration for the acquisition. At September 30, 2017, the remaining units from this issuance represent a 0.4% ownership in Realty Income, L.P. We hold the remaining 99.6% interests in this entity and consolidate the entity. Neither of the common partnership units have voting rights. Both common partnership units are entitled to monthly distributions equal to the amount paid to common stockholders of Realty Income, and are redeemable in cash or Realty Income common stock, at our option, and at a conversion ratio of one to one, subject to certain exceptions. Noncontrolling interests with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the balance sheet was appropriate. We determined that the units meet the requirements to qualify for presentation as permanent equity. In 2016, we completed the acquisition of two properties by acquiring a controlling interest in two separate joint ventures. We are the managing member of each of these joint ventures, and possess the ability to control the business and manage the affairs of these entities. At September 30, 2017, we and our subsidiaries held 95.0% and 74.0% interests, respectively, and fully consolidated these entities in our consolidated financial statements. The following table represents the change in the carrying value of all noncontrolling interests through September 30, 2017 (dollars in thousands): Tau Operating Realty Income, L.P. Other Partnership units (1) units (2) Interests Total Carrying value at December 31, 2016 $ $ $ $ Reallocation of equity ) Distributions ) ) ) ) Allocation of net income Carrying value at September 30, 2017 $ $ $ (1) 317,022 Tau Operating Partnership units were issued on January 22, 2013 and remained outstanding as of September 30, 2017 and December 31, 2016. (2) 534,546 Realty Income, L.P. units were issued on June 27, 2013, and 88,182 remain outstanding as of December 31, 2016 and September 30, 2017. Both Tau Operating Partnership and Realty Income, L.P. are considered VIEs in which we are deemed the primary beneficiary based on our controlling financial interests. Below is a summary of selected financial data of consolidated VIEs, including the joint ventures acquired during 2016, for which we are the primary beneficiary included in the consolidated balance sheets at September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Net real estate $ $ Total assets Total debt Total liabilities |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 12. Fair Value of Financial Instruments Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The disclosure for assets and liabilities measured at fair value requires allocation to a three-level valuation hierarchy. This valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. Categorization within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. We believe that the carrying values reflected in our consolidated balance sheets reasonably approximate the fair values for cash and cash equivalents, accounts receivable, escrow deposits, loans receivable, line of credit payable, term loans and all other liabilities, due to their short-term nature or interest rates and terms that are consistent with market, except for our notes receivable issued in connection with property sales, mortgages payable and our senior notes and bonds payable, which are disclosed as follows (dollars in millions): Carrying value per Estimated fair At September 30, 2017 balance sheet value Notes receivable issued in connection with property sales $ $ Mortgages payable assumed in connection with acquisitions (1) Notes and bonds payable (2) Carrying value per Estimated fair At December 31, 2016 balance sheet value Notes receivable issued in connection with property sales $ $ Mortgages payable assumed in connection with acquisitions (1) Notes and bonds payable (2) (1) Excludes non-cash net premiums recorded on the mortgages payable. The unamortized balance of these net premiums is $4.8 million at September 30, 2017, and $6.4 million at December 31, 2016. Also excludes deferred financing costs of $249,000 at September 30, 2017, and $324,000 at December 31, 2016. (2) Excludes non-cash original issuance discounts recorded on notes payable. The unamortized balance of the original issuance discounts is $7.1 million at September 30, 2017, and $19.8 million at December 31, 2016. Also excludes deferred financing costs of $24.2 million at September 30, 2017 and $20.8 million at December 31, 2016. The estimated fair values of our notes receivable issued in connection with property sales and our mortgages payable have been calculated by discounting the future cash flows using an interest rate based upon the relevant Treasury yield curve, plus an applicable credit-adjusted spread. Because this methodology includes unobservable inputs that reflect our own internal assumptions and calculations, the measurement of estimated fair values related to our notes receivable and mortgages payable is categorized as level three on the three-level valuation hierarchy. The estimated fair values of our senior notes and bonds payable are based upon indicative market prices and recent trading activity of our senior notes and bonds payable. Because this methodology includes inputs that are less observable by the public and are not necessarily reflected in active markets, the measurement of the estimated fair values, related to our notes and bonds payable, is categorized as level two on the three-level valuation hierarchy. We record interest rate swaps on the consolidated balance sheet at fair value. At September 30, 2017, interest rate swaps in a liability position valued at $871,000 were included in accounts payable and accrued expenses and interest rate swaps in an asset position valued at $73,000 were included in other assets, net on the consolidated balance sheet. The fair value of our interest rate swaps are based on valuation techniques including discounted cash flow analysis on the expected cash flows of each swap, using both observable and unobservable market-based inputs, including interest rate curves. Because this methodology uses observable and unobservable inputs, and the unobservable inputs are not significant to the fair value measurement, the measurement of interest rate swaps is categorized as level two on the three-level valuation hierarchy. |
Gain on Sales of Real Estate
Gain on Sales of Real Estate | 9 Months Ended |
Sep. 30, 2017 | |
Gain on Sales of Real Estate | |
Gain on Sales of Real Estate | 13. Gain on Sales of Real Estate During the third quarter of 2017, we sold 17 properties for $25.5 million, which resulted in a gain of $4.3 million. During the first nine months of 2017, we sold 46 properties for $69.5 million, which resulted in a gain of $17.7 million. During the third quarter of 2016, we sold 24 properties for $19.6 million, which resulted in a gain of $4.3 million. During the first nine months of 2016, we sold 51 properties for $55.2 million, which resulted in a gain of $15.3 million. |
Impairments
Impairments | 9 Months Ended |
Sep. 30, 2017 | |
Impairments | |
Impairments | 14. Impairments We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. A provision is made for impairment if estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property. Key factors that we utilize in this analysis include projected rental rates, estimated holding periods, historical sales and releases, capital expenditures and property sales capitalization rates. If a property is classified as held for sale, it is carried at the lower of carrying cost or estimated fair value, less estimated cost to sell, and depreciation of the property ceases. During the third quarter of 2017, we recorded total provisions for impairment of $365,000 on three sold properties. For the first nine months of 2017, we recorded total provisions for impairment of $8.1 million on ten sold properties, one property classified as held for sale, and six properties classified as held for investment. In comparison, for the third quarter of 2016, we recorded total provisions for impairment of $8.8 million on 15 sold properties, two properties classified as held for investment, and one property classified as held for sale. For the first nine months of 2016, we recorded total provisions for impairment of $17.0 million on 29 sold properties, two properties classified as held for investment, and one property classified as held for sale. |
Distributions Paid and Payable
Distributions Paid and Payable | 9 Months Ended |
Sep. 30, 2017 | |
Distributions Paid and Payable | |
Distributions Paid and Payable | 15. Distributions Paid and Payable A. Common Stock We pay monthly distributions to our common stockholders. The following is a summary of monthly distributions paid per common share for the first nine months of 2017 and 2016: Month January $ $ February March April May June July August September Total $ $ At September 30, 2017, a distribution of $0.212 per common share was payable and was paid in October 2017. B. Class F Preferred Stock In April 2017, we redeemed all 16,350,000 shares of our Class F preferred stock. During the first three months of 2017, we paid three monthly dividends to holders of our Class F preferred stock totaling $0.414063 per share, or $3.9 million. In April 2017, we paid a final monthly dividend of $0.101215 per share, or $1.7 million, which was recorded as interest expense. During the first nine months of 2016, we paid nine monthly dividends to holders of our Class F preferred stock totaling $1.242189 per share, or $20.3 million. |
Net Income per Common Share
Net Income per Common Share | 9 Months Ended |
Sep. 30, 2017 | |
Net Income per Common Share | |
Net Income per Common Share | 16. Net Income per Common Share Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted net income per common share is computed by dividing net income available to common stockholders, plus income attributable to dilutive shares and convertible common units, for the period by the weighted average number of common shares that would have been outstanding assuming the issuance of common shares for all potentially dilutive common shares outstanding during the reporting period. The following is a reconciliation of the denominator of the basic net income per common share computation to the denominator of the diluted net income per common share computation. Three months ended Nine months ended September 30, September 30, Weighted average shares used for the basic net income per share computation Incremental shares from share-based compensation Weighted average partnership common units convertible to common shares that were dilutive Weighted average shares used for diluted net income per share computation Unvested shares from share-based compensation that were anti-dilutive Weighted average partnership common units convertible to common shares that were anti-dilutive |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Disclosures of Cash Flow Information | |
Supplemental Disclosures of Cash Flow Information | 17. Supplemental Disclosures of Cash Flow Information Cash paid for interest was $198.8 million in the first nine months of 2017 and $190.8 million in the first nine months of 2016. Interest capitalized to properties under development was $347,000 in the first nine months of 2017 and $344,000 in the first nine months of 2016. Cash paid for income taxes was $4.0 million in the first nine months of 2017 and $3.6 million in the first nine months of 2016. The following non-cash activities are included in the accompanying consolidated financial statements: A. During the first nine months of 2016, we assumed mortgages payable to third-party lenders of $32.5 million, and recorded $692,000 of net premiums. B. Accrued costs on properties under development resulted in an increase in buildings and improvements and accounts payable of $1.5 million at September 30, 2016. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information | |
Segment Information | 18. Segment Information We evaluate performance and make resource allocation decisions on an industry by industry basis. For financial reporting purposes, we have grouped our tenants into 47 activity segments. All of the properties are incorporated into one of the applicable segments. Because almost all of our leases require the tenant to pay operating expenses, rental revenue is the only component of segment profit and loss we measure. The following tables set forth certain information regarding the properties owned by us, classified according to the business of the respective tenants (dollars in thousands): September 30, December 31, Assets, as of: Segment net real estate: Apparel $ $ Automotive service Automotive tire services Beverages Child care Convenience stores Dollar stores Drug stores Financial services General merchandise Grocery stores Health and fitness Home improvement Motor vehicle dealerships Restaurants-casual dining Restaurants-quick service Theaters Transportation services Wholesale club Other non-reportable segments Total segment net real estate Intangible assets: Apparel Automotive service Automotive tire services Beverages Convenience stores Dollar stores Drug stores Financial services General merchandise Grocery stores Health and fitness Home improvement Motor vehicle dealerships Restaurants-casual dining Restaurants-quick service Theaters Transportation services Wholesale club Other non-reportable segments Goodwill: Automotive service Automotive tire services Child care Convenience stores Restaurants-casual dining Restaurants-quick service Other non-reportable segments Other corporate assets Total assets $ $ Three months ended Nine months ended September 30, September 30, Revenue Segment rental revenue: Apparel $ $ $ $ Automotive service Automotive tire services Beverages Child care Convenience stores Dollar stores Drug stores Financial services General merchandise Grocery stores Health and fitness Home improvement Motor vehicle dealerships Restaurants-casual dining Restaurants-quick service Theaters Transportation services Wholesale club Other non-reportable segments Total rental revenue Tenant reimbursements Other revenue Total revenue $ $ $ $ |
Common Stock Incentive Plan
Common Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2017 | |
Common Stock Incentive Plan | |
Common Stock Incentive Plan | 19. Common Stock Incentive Plan In 2012, our Board of Directors adopted and stockholders approved the Realty Income Corporation 2012 Incentive Award Plan, or the 2012 Plan, to enable us to motivate, attract and retain the services of directors and employees considered essential to our long-term success. The 2012 Plan offers our directors and employees an opportunity to own our stock or rights that will reflect our growth, development and financial success. Under the terms of the 2012 plan, the aggregate number of shares of our common stock subject to options, restricted stock, stock appreciation rights, restricted stock units and other awards, will be no more than 3,985,734 shares. The 2012 Plan has a term of ten years from the date it was adopted by our Board of Directors. The amount of share-based compensation costs recognized in general and administrative expense on our consolidated statements of income was $3.4 million during the third quarter of 2017, $2.7 million during the third quarter of 2016, $10.6 million during the first nine months of 2017 and $9.2 million during the first nine months of 2016. A. Restricted Stock During the first nine months of 2017, we granted 119,564 shares of common stock to employees under the 2012 Plan. Of these shares, 72,626 vest over a four-year service period, and 46,938 shares vest over a five-year service period. Additionally, we granted 28,000 shares under the 2012 Plan to the independent members of our Board of Directors in May 2017 as their annual grant of shares, of which 20,000 shares vested immediately and 8,000 shares vest annually, in equal parts, over a three-year service period. As of September 30, 2017, the remaining unamortized share-based compensation expense related to restricted stock totaled $20.2 million, which is being amortized on a straight-line basis over the service period of each applicable award. The amount of share-based compensation is based on the fair value of the stock at the grant date. We define the grant date as the date the recipient and Realty Income have a mutual understanding of the key terms and condition of the award, and the recipient of the grant begins to benefit from, or be adversely affected by, subsequent changes in the price of the shares. B. Performance Shares and Restricted Stock Units During the first nine months of 2017, we granted 111,637 performance shares, as well as dividend equivalent rights, to our executive officers. The performance shares are earned based on our TSR performance relative to select industry indices and peer groups as well as achievement of certain operating metrics, and vest 50% on the first and second January 1 after the end of the three year performance period, subject to continued service. During the first nine months of 2017, we also granted 10,191 restricted stock units of which 6,161 vest over a four-year service period, and the remaining 4,030 vest over a five-year service period. These restricted stock units have the same economic rights as shares of restricted stock. As of September 30, 2017, the remaining share-based compensation expense related to the performance shares and restricted stock units totaled $10.0 million. The fair value of the performance share was estimated on the date of grant using a Monte Carlo Simulation model. The performance shares are being recognized on a tranche-by-tranche basis over the service period. The amount of share-based compensation for the restricted stock units is based on the fair value of our common stock at the grant date. The restricted stock units are being recognized on a straight-line basis over the service period. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 20. Commitments and Contingencies In the ordinary course of business, we are party to various legal actions which we believe are routine in nature and incidental to the operation of our business. We believe that the outcome of the proceedings will not have a material adverse effect upon our consolidated financial position or results of operations. At September 30, 2017, we had commitments of $8.8 million for re-leasing costs, recurring capital expenditures, and non-recurring building improvements. In addition, as of September 30, 2017, we had committed $78.9 million under construction contracts, which is expected to be paid in the next twelve months. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events | |
Subsequent Events | 21. Subsequent Events In October 2017, we declared a dividend of $0.212 per share to our common stockholders, which will be paid in November 2017. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | |
Principles of Consolidation | A. The accompanying consolidated financial statements include the accounts of Realty Income and other entities for which we make operating and financial decisions (i.e., control), after elimination of all material intercompany balances and transactions. We consolidate entities that we control and record a noncontrolling interest for the portion that we do not own. Noncontrolling interest that was created or assumed as part of a business combination was recognized at fair value as of the date of the transaction (see note 11). We have no unconsolidated investments. |
Federal Income Taxes | B. We have elected to be taxed as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended. We believe we have qualified and continue to qualify as a REIT. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income, we generally will not be required to pay federal corporate income taxes on such income. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements, except for federal income taxes of our taxable REIT subsidiaries. The income taxes recorded on our consolidated statements of income represent amounts paid by Realty Income and its subsidiaries for city and state income and franchise taxes. |
Goodwill | C. We assign a portion of goodwill to our applicable property sales, which results in a reduction of the carrying amount of our goodwill. In order to allocate goodwill to the carrying amount of properties that we sell, we utilize a relative fair value approach based on the original methodology for assigning goodwill. As we sell properties, our goodwill will likely continue to gradually decrease over time. Based on our analyses of goodwill during the second quarters of 2017 and 2016, we determined there was no impairment on our existing goodwill. |
Recent Accounting Pronouncements | D . In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers . This ASU, as amended by ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date , outlines a comprehensive model for companies to use in accounting for revenue arising from contracts with customers, and will apply to transactions such as the sale of real estate. This ASU, which is effective for interim and annual periods beginning after December 15, 2017, requires an entity to 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 and also to provide certain additional disclosures. We will adopt this standard effective as of January 1, 2018 and will utilize the cumulative effect transition method of adoption. The adoption of this guidance will not have a material impact on our financial position or results of operations. We expect this standard will have an impact on the disclosure of certain lease and non-lease components of revenue from leases upon the adoption of the update ASU 2016-02, Leases , but will not have a material impact on “total revenues.” In February 2016, FASB issued ASU 2016-02 (Topic 842, Leases) , which amended Topic 840, Lea ses. Under this amended topic, the accounting applied by a lessor is largely unchanged from that applied under Topic 840, Leases . The large majority of operating leases should remain classified as operating leases, and lessors should continue to recognize lease income for those leases on a generally straight-line basis over the lease term . The amendments included in this topic are effective, on a retrospective or modified retrospective basis, for interim and annual periods beginning after December 15, 2018. We have not yet adopted this topic and are currently evaluating the impact this amendment may have on our consolidated financial statements. In January 2017, FASB issued ASU 2017-01, which amends Topic 805, Business Combinations . The FASB issued this ASU to clarify 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 ASU is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. We elected to adopt this ASU early, effective October 1, 2017. As a result of this new guidance, we believe the majority of our future real estate transactions will qualify as asset acquisitions (or disposals), and future transaction costs associated with these acquisitions will be capitalized. The adoption of this topic will not have a material impact on our consolidated financial statements or related disclosures. |
Supplemental Detail for Certa28
Supplemental Detail for Certain Components of Consolidated Balance Sheets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Detail for Certain Components of Consolidated Balance Sheets | |
Schedule of acquired lease intangible assets, net | A. Acquired lease intangible assets, net, consist of the following September 30, December 31, (dollars in thousands) at: Acquired in-place leases $ $ Accumulated amortization of acquired in-place leases ) ) Acquired above-market leases Accumulated amortization of acquired above-market leases ) ) $ $ |
Schedule of other assets, net | September 30, December 31, B. Other assets, net, consist of the following (dollars in thousands) at: Restricted escrow deposits Prepaid expenses Corporate assets, net Notes receivable issued in connection with property sales Credit facility origination costs, net Impounds related to mortgages payable Other items $ $ |
Schedule of distributions payable | C. Distributions payable consist of the following declared September 30, December 31, distributions (dollars in thousands) at: Common stock distributions $ $ Preferred stock dividends - Noncontrolling interests distributions $ $ |
Schedule of accounts payable and accrued expenses | D. Accounts payable and accrued expenses consist of the September 30, December 31, following (dollars in thousands) at: Notes payable - interest payable $ $ Property taxes payable Accrued costs on properties under development Mortgages, term loans, credit line - interest payable and interest rate swaps Other items $ $ |
Schedule of acquired lease intangible liabilities, net | E. Acquired lease intangible liabilities, net, consist of the September 30, December 31, following (dollars in thousands) at: Acquired below-market leases $ $ Accumulated amortization of acquired below-market leases ) ) $ $ |
Schedule of other liabilities | F. Other liabilities consist of the following September 30, December 31, (dollars in thousands) at: Rent received in advance and other deferred revenue (1) $ $ Security deposits Capital lease obligations $ $ (1) In connection with Diageo’s sale of its wine business to Treasury Wine Estates, we agreed to release Diageo from its guarantee of our leases in exchange for Diageo’s payment of $75 million of additional rent to us. The additional rent was paid in two equal installments, one of which was received in August 2016 for $37.5 million and was recorded as prepaid rent. The final payment of $37.5 million was received in January 2017, at which time Treasury Wine Estates became the guarantor of our leases on those properties. We have accounted for this transaction as a lease modification and the additional rent will be recognized on a straight-line basis over the remaining lease terms of approximately 15 years. |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments in Real Estate | |
Schedule of future impact of above-market, below-market and in-place lease intangibles | The following table presents the estimated impact during the next five years and thereafter related to the amortization of the acquired above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at September 30, 2017 (in thousands): Net Increase to decrease to amortization rental revenue expense 2017 $ ) $ 2018 ) 2019 ) 2020 ) 2021 ) Thereafter ) Totals $ ) $ |
Mortgages Payable (Tables)
Mortgages Payable (Tables) - Mortgages Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Summary of debt | The following is a summary of all our mortgages payable as of September 30, 2017 and December 31, 2016, respectively (dollars in thousands): Weighted Weighted Weighted Unamortized Average Average Average Premium Stated Effective Remaining Remaining and Deferred Mortgage Number of Interest Interest Years Until Principal Finance Costs Payable As Of Properties (1) Rate (2) Rate (3) Maturity Balance Balance, net Balance 9/30/17 4.3 $ $ $ 12/31/16 4.0 $ $ $ (1) At September 30, 2017, there were 29 mortgages on 63 properties, while at December 31, 2016, there were 36 mortgages on 127 properties. The mortgages require monthly payments with principal payments due at maturity. The mortgages are at fixed interest rates, except for four mortgages on four properties with a principal balance totaling $44.9 million at September 30, 2017, and six mortgages on 15 properties with a principal balance totaling $76.3 million at December 31, 2016. After factoring in arrangements which limit our exposure to interest rate risk and effectively fix our per annum interest rates, our mortgage debt subject to variable rates totals $22.5 million at September 30, 2017 and $38.2 million at December 31, 2016. (2) Stated interest rates ranged from 3.2% to 6.9% at September 30, 2017, while stated interest rates ranged from 2.4% to 6.9% at December 31, 2016. (3) Effective interest rates ranged from 3.0% to 5.5% at September 30, 2017, while effective interest rates ranged from 2.5% to 8.8% at December 31, 2016. |
Schedule of maturity of debt, net | The following table summarizes the maturity of mortgages payable, excluding net premiums of $4.8 million and deferred finance costs of $249,000, as of September 30, 2017 (dollars in millions): Year of Maturity Principal 2017 $ 2018 2019 2020 2021 Thereafter Totals $ |
Notes Payable (Tables)
Notes Payable (Tables) - Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Summary of debt | Our senior unsecured notes and bonds consist of the following, sorted by maturity date (dollars in millions): September 30, December 31, 5.375% notes, issued in September 2005 and due in September 2017 $ - $ 2.000% notes, issued in October 2012 and due in January 2018 6.750% notes, issued in September 2007 and due in August 2019 5.750% notes, issued in June 2010 and due in January 2021 3.250% notes, issued in October 2012 and due in October 2022 4.650% notes, issued in July 2013 and due in August 2023 3.875% notes, issued in June 2014 and due in July 2024 4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 3.000% notes, issued in October 2016 and due in January 2027 5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 4.650% notes, issued in March 2017 and due in March 2047 - Total principal amount Unamortized original issuance discounts and deferred financing costs ) ) $ $ |
Schedule of maturity of debt, net | The following table summarizes the maturity of our notes and bonds payable as of September 30, 2017, excluding unamortized original issuance discounts and deferred financing costs (dollars in millions): Year of Maturity Principal 2017 $ - 2018 2019 2020 - 2021 Thereafter Totals $ |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Noncontrolling Interests | |
Schedule of the change in the carrying value of all noncontrolling interests | The following table represents the change in the carrying value of all noncontrolling interests through September 30, 2017 (dollars in thousands): Tau Operating Realty Income, L.P. Other Partnership units (1) units (2) Interests Total Carrying value at December 31, 2016 $ $ $ $ Reallocation of equity ) Distributions ) ) ) ) Allocation of net income Carrying value at September 30, 2017 $ $ $ (1) 317,022 Tau Operating Partnership units were issued on January 22, 2013 and remained outstanding as of September 30, 2017 and December 31, 2016. (2) 534,546 Realty Income, L.P. units were issued on June 27, 2013, and 88,182 remain outstanding as of December 31, 2016 and September 30, 2017. |
Summary selected financial data of consolidated VIEs | Below is a summary of selected financial data of consolidated VIEs, including the joint ventures acquired during 2016, for which we are the primary beneficiary included in the consolidated balance sheets at September 30, 2017 and December 31, 2016 (in thousands): September 30, 2017 December 31, 2016 Net real estate $ $ Total assets Total debt Total liabilities |
Fair Value of Financial Instr33
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value of Financial Instruments | |
Schedule of fair value by balance sheet groupings | We believe that the carrying values reflected in our consolidated balance sheets reasonably approximate the fair values for cash and cash equivalents, accounts receivable, escrow deposits, loans receivable, line of credit payable, term loans and all other liabilities, due to their short-term nature or interest rates and terms that are consistent with market, except for our notes receivable issued in connection with property sales, mortgages payable and our senior notes and bonds payable, which are disclosed as follows (dollars in millions): Carrying value per Estimated fair At September 30, 2017 balance sheet value Notes receivable issued in connection with property sales $ $ Mortgages payable assumed in connection with acquisitions (1) Notes and bonds payable (2) Carrying value per Estimated fair At December 31, 2016 balance sheet value Notes receivable issued in connection with property sales $ $ Mortgages payable assumed in connection with acquisitions (1) Notes and bonds payable (2) (1) Excludes non-cash net premiums recorded on the mortgages payable. The unamortized balance of these net premiums is $4.8 million at September 30, 2017, and $6.4 million at December 31, 2016. Also excludes deferred financing costs of $249,000 at September 30, 2017, and $324,000 at December 31, 2016. (2) Excludes non-cash original issuance discounts recorded on notes payable. The unamortized balance of the original issuance discounts is $7.1 million at September 30, 2017, and $19.8 million at December 31, 2016. Also excludes deferred financing costs of $24.2 million at September 30, 2017 and $20.8 million at December 31, 2016. |
Distributions Paid and Payable
Distributions Paid and Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Common stock | |
Distributions Paid and Payable | |
Summary of monthly distributions paid | Month January $ $ February March April May June July August September Total $ $ |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Net Income per Common Share | |
Schedule of reconciliation of the denominator of the basic net income per common share computation to the denominator of the diluted net income per common share computation | Three months ended Nine months ended September 30, September 30, Weighted average shares used for the basic net income per share computation Incremental shares from share-based compensation Weighted average partnership common units convertible to common shares that were dilutive Weighted average shares used for diluted net income per share computation Unvested shares from share-based compensation that were anti-dilutive Weighted average partnership common units convertible to common shares that were anti-dilutive |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Information | |
Schedule of reconciliation of assets from segment to consolidated | The following tables set forth certain information regarding the properties owned by us, classified according to the business of the respective tenants (dollars in thousands): September 30, December 31, Assets, as of: Segment net real estate: Apparel $ $ Automotive service Automotive tire services Beverages Child care Convenience stores Dollar stores Drug stores Financial services General merchandise Grocery stores Health and fitness Home improvement Motor vehicle dealerships Restaurants-casual dining Restaurants-quick service Theaters Transportation services Wholesale club Other non-reportable segments Total segment net real estate Intangible assets: Apparel Automotive service Automotive tire services Beverages Convenience stores Dollar stores Drug stores Financial services General merchandise Grocery stores Health and fitness Home improvement Motor vehicle dealerships Restaurants-casual dining Restaurants-quick service Theaters Transportation services Wholesale club Other non-reportable segments Goodwill: Automotive service Automotive tire services Child care Convenience stores Restaurants-casual dining Restaurants-quick service Other non-reportable segments Other corporate assets Total assets $ $ |
Schedule of reconciliation of revenue from segments to consolidated | Three months ended Nine months ended September 30, September 30, Revenue Segment rental revenue: Apparel $ $ $ $ Automotive service Automotive tire services Beverages Child care Convenience stores Dollar stores Drug stores Financial services General merchandise Grocery stores Health and fitness Home improvement Motor vehicle dealerships Restaurants-casual dining Restaurants-quick service Theaters Transportation services Wholesale club Other non-reportable segments Total rental revenue Tenant reimbursements Other revenue Total revenue $ $ $ $ |
Management Statement (Details)
Management Statement (Details) ft² in Millions | Sep. 30, 2017ft²propertystate |
Management Statement | |
Properties owned | property | 5,062 |
Number of U.S. states where properties are owned | state | 49 |
Leasable square feet | ft² | 86.4 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | ||
Impairment on existing goodwill | $ 0 | $ 0 |
Supplemental Detail for Certa39
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Acquired Lease Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Acquired lease intangible assets, net | ||
Acquired in-place leases | $ 1,227,780 | $ 1,164,075 |
Accumulated amortization of acquired in-place leases | (428,802) | (358,040) |
Acquired above-market leases | 479,098 | 365,005 |
Accumulated amortization of acquired above-market leases | (113,063) | (88,720) |
Total acquired lease intangible assets, net | $ 1,165,013 | $ 1,082,320 |
Supplemental Detail for Certa40
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Other assets, net | ||
Restricted escrow deposits | $ 23,698 | $ 4,246 |
Prepaid expenses | 13,267 | 14,406 |
Corporate assets, net | 5,566 | 3,585 |
Notes receivable issued in connection with property sales | 5,298 | 5,390 |
Credit facility origination costs, net | 5,094 | 7,303 |
Impounds related to mortgages payable | 3,465 | 2,015 |
Other items | 333 | 744 |
Total other assets, net | $ 56,721 | $ 37,689 |
Supplemental Detail for Certa41
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Distributions Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Distributions payable | ||
Distributions payable | $ 60,104 | $ 55,235 |
Noncontrolling interests | ||
Distributions payable | ||
Distributions payable | 86 | 82 |
Common stock | ||
Distributions payable | ||
Distributions payable | $ 60,018 | 52,896 |
Preferred stock | ||
Distributions payable | ||
Distributions payable | $ 2,257 |
Supplemental Detail for Certa42
Supplemental Detail for Certain Components of Consolidated Balance Sheets - Accounts Payable, Acquired Lease Intangibles, and Other Liabilities (Details) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2017USD ($)item | Jan. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Aug. 31, 2016USD ($) | |
Accounts payable and accrued expenses | ||||
Property taxes payable | $ 22,455 | $ 16,949 | ||
Accrued costs on properties under development | 4,235 | 9,049 | ||
Mortgages, term loans, credit line - interest payable and interest rate swaps | 3,793 | 5,432 | ||
Other items | 20,663 | 29,058 | ||
Total accounts payable and accrued expenses | 92,947 | 121,156 | ||
Acquired lease intangible liabilities, net | ||||
Acquired below-market leases | 340,504 | 318,926 | ||
Accumulated amortization of acquired below-market leases | (68,127) | (54,720) | ||
Total acquired lease intangible liabilities, net | 272,377 | 264,206 | ||
Other liabilities | ||||
Rent received in advance and other deferred revenue | 103,520 | 74,098 | ||
Security deposits | 6,268 | 6,502 | ||
Capital lease obligations | 5,249 | 5,016 | ||
Total other liabilities | 115,037 | 85,616 | ||
Additional rent | $ 75,000 | |||
Number of installments | item | 2 | |||
Deferred revenue relating to lease modification | $ 37,500 | $ 37,500 | ||
Remaining lease term | 15 years | |||
Notes Payable | ||||
Accounts payable and accrued expenses | ||||
Interest payable | $ 41,801 | $ 60,668 |
Investments in Real Estate - Ac
Investments in Real Estate - Acquisitions (Details) ft² in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)ft² | Sep. 30, 2016USD ($)ft² | Sep. 30, 2017USD ($)ft²propertyitemstate | Sep. 30, 2016USD ($)ft²propertyitemstate | |
Investments in real estate properties | ||||
Leasable square feet | ft² | 86.4 | 86.4 | ||
Total Revenue | $ 306,920,000 | $ 277,174,000 | $ 905,115,000 | $ 815,329,000 |
Net income | $ 88,073,000 | $ 77,202,000 | $ 258,366,000 | 223,753,000 |
Real Estate Investment | ||||
Investments in real estate properties | ||||
Number of investments in properties that caused any tenant to be 10% of more of total assets | item | 0 | |||
Total Revenue | $ 19,700,000 | 22,500,000 | ||
Net income | 9,400,000 | 11,200,000 | ||
Real Estate Investment | General and administrative expense | ||||
Investments in real estate properties | ||||
Acquisition transaction costs | 229,000 | 119,000 | ||
Real Estate Investment | New and under development or expansion | ||||
Investments in real estate properties | ||||
Value of properties acquired during the period | $ 956,900,000 | $ 1,100,000,000 | ||
Number of properties acquired during the period | property | 177 | 236 | ||
Initial weighted average contractual lease rate of properties acquired (as a percent) | 6.50% | 6.40% | ||
Number of states in which properties are located | state | 35 | 36 | ||
Leasable square feet | ft² | 4.3 | 5.2 | 4.3 | 5.2 |
Leased area (as a percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Weighted average lease term | 14 years 10 months 24 days | 15 years | ||
Allocated to Land | $ 233,700,000 | $ 267,800,000 | ||
Allocated to Buildings and Improvements | 585,000,000 | 691,900,000 | ||
Allocated to Intangible Assets related to Leases | 152,700,000 | 140,400,000 | ||
Allocated to Intangible Liabilities related to Leases and Other Assumed Liabilities | 14,500,000 | 26,300,000 | ||
Premiums recorded upon acquisition of mortgages | 692,000 | |||
Contingent consideration associated with acquisition | $ 0 | $ 0 | $ 0 | $ 0 |
Real Estate Investment | New properties | ||||
Investments in real estate properties | ||||
Number of industries in which tenants operate | item | 21 | 24 | ||
Real Estate Investment | New properties | Retail | ||||
Investments in real estate properties | ||||
Property type- percentage of properties acquired | 96.60% | 80.70% | ||
Real Estate Investment | New properties | Industrial | ||||
Investments in real estate properties | ||||
Property type- percentage of properties acquired | 3.40% | 19.30% | ||
Real Estate Investment | Properties under development or expansion | ||||
Investments in real estate properties | ||||
Number of properties acquired during the period | item | 13 | 30 | ||
Initial weighted average contractual lease rate of properties acquired (as a percent) | 7.30% | 7.10% | ||
Investments in properties | $ 16,400,000 | $ 87,700,000 | ||
Real Estate Investment | Maximum | ||||
Investments in real estate properties | ||||
Investments to any one tenant as a percentage of total assets | 10.00% |
Investments in Real Estate - In
Investments in Real Estate - Investments in Existing Properties (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Investments in Real Estate | ||
Capitalized costs on existing properties | $ 9,500,000 | $ 5,300,000 |
Re-leasing costs | 1,200,000 | 564,000 |
Recurring capital expenditures | 536,000 | 486,000 |
Nonrecurring capital expenditures | $ 7,800,000 | $ 4,200,000 |
Investments in Real Estate - Pr
Investments in Real Estate - Properties with Existing Leases (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)propertyitem | Sep. 30, 2016USD ($)propertyitem | |
Net decrease to rental revenue | ||
2,017 | $ (3,919) | |
2,018 | (15,439) | |
2,019 | (14,457) | |
2,020 | (13,688) | |
2,021 | (12,396) | |
Thereafter | (33,759) | |
Totals | (93,658) | |
Increase to amortization expense | ||
2,017 | 25,466 | |
2,018 | 100,085 | |
2,019 | 89,847 | |
2,020 | 83,940 | |
2,021 | 75,819 | |
Thereafter | 423,821 | |
Totals | 798,978 | |
In-Place Leases | ||
Investments in real estate properties | ||
Depreciation and amortization expense | 79,100 | $ 69,600 |
Rental Revenue | ||
Investments in real estate properties | ||
Amortization of above and below Market Leases | (10,200) | (6,700) |
Real Estate Investment | New and under development or expansion | ||
Investments in real estate properties | ||
Value of properties acquired during the period | $ 956,900 | $ 1,100,000 |
Number of properties acquired during the period | property | 177 | 236 |
Real Estate Investment | New and under development or expansion | In-Place Leases | ||
Investments in real estate properties | ||
Value of properties acquired during the period | $ 562,100 | $ 574,000 |
Number of properties acquired during the period | item | 68 | 75 |
Credit Facility (Details)
Credit Facility (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017USD ($)item | Sep. 30, 2016 | Dec. 31, 2016USD ($) | |
Credit facility | |||
Credit facility origination costs, net | $ 5,094 | $ 7,303 | |
Outstanding balance | $ 658,000 | 1,120,000 | |
Credit Facility | |||
Credit facility | |||
Variable reference rate | LIBOR | ||
Variable interest rate, basis points spread over variable reference rate (as a percent) | 0.90% | ||
Line of credit facility, commitment fee basis points (as a percent) | 0.15% | ||
Line of credit facility, all-in drawn variable interest rate (as a percent) | 1.05% | ||
Current borrowing capacity available | $ 1,340,000 | ||
Outstanding balance | $ 658,000 | $ 1,120,000 | |
Weighted average borrowing rate during the period (as a percent) | 1.90% | 1.40% | |
Weighted average interest rate at the end of the period (as a percent) | 2.20% | 1.40% | |
Credit Facility | Other assets, net | |||
Credit facility | |||
Credit facility origination costs, net | $ 5,100 | ||
Credit Facility | Unsecured debt | |||
Credit facility | |||
Maximum borrowing capacity | $ 2,000,000 | ||
Line Of Credit Facility, Number Of Extensions | item | 2 | ||
Term of extension option | 6 months | ||
Increase in the maximum borrowing capacity after amendment | $ 1,000,000 |
Term Loans (Details)
Term Loans (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jan. 31, 2013 | Sep. 30, 2017 | Dec. 31, 2016 | |
Term Loans | ||||
Term loans, net | $ 319,347,000 | $ 319,127,000 | ||
Senior Unsecured Term Loans | ||||
Term Loans | ||||
Deferred finance costs | 653,000 | $ 873,000 | ||
Senior Unsecured Term Loans | $250 million senior unsecured term loan | ||||
Term Loans | ||||
Term loans, net | $ 250,000,000 | |||
Variable reference rate | one-month LIBOR | |||
Variable interest rate, basis points spread over variable reference rate (as a percent) | 0.95% | |||
Deferred financing costs incurred | 1,200,000 | |||
Senior Unsecured Term Loans | Interest rate swaps | $250 million senior unsecured term loan | ||||
Term Loans | ||||
Effective yield (as a percent) | 2.67% | |||
Senior Unsecured Term Loans | ARCT | $70 million senior unsecured term loan | ||||
Term Loans | ||||
Term loans, net | $ 70,000,000 | |||
Variable reference rate | one-month LIBOR | |||
Variable interest rate, basis points spread over variable reference rate (as a percent) | 1.20% | |||
Deferred financing costs incurred | $ 303,000 | |||
Senior Unsecured Term Loans | ARCT | Interest rate swaps | $70 million senior unsecured term loan | ||||
Term Loans | ||||
Effective yield (as a percent) | 2.15% |
Mortgages Payable (Details)
Mortgages Payable (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016USD ($)item | Sep. 30, 2017USD ($)propertyloanitem | Sep. 30, 2016USD ($)item | Dec. 31, 2016USD ($)propertyloanitem | |
Debt | ||||
Proceeds from mortgages payable | $ 9,963,000 | |||
Mortgage Payable Balance | $ 341,015,000 | $ 466,045,000 | ||
Mortgages Payable | ||||
Debt | ||||
Amount repaid | 123,500,000 | 183,700,000 | ||
Assumed mortgages payable | 0 | 32,500,000 | ||
Number of assumed mortgages refinanced | item | 1 | |||
Proceeds from mortgages payable | $ 10,000,000 | |||
Net premiums recorded upon acquisition of mortgages | 692,000 | |||
Remaining balance of deferred financing costs at period end | $ 249,000 | $ 324,000 | ||
Number of Properties | item | 63 | 127 | ||
Weighted Average Stated Interest Rate (as a percent) | 4.90% | 4.90% | ||
Weighted Average Effective Interest Rate (as a percent) | 4.50% | 4.30% | ||
Weighted Average Remaining Years Until Maturity | 4 years 3 months 18 days | 4 years | ||
Remaining Principal Balance | $ 336,484,000 | $ 460,008,000 | ||
Unamortized Premium and Deferred Finance Costs Balance, net | 4,531,000 | 6,037,000 | ||
Mortgage Payable Balance | $ 341,015,000 | $ 466,045,000 | ||
Number of mortgages | loan | 29 | 36 | ||
Number of properties with mortgages | property | 63 | 127 | ||
Unamortized premium balance | $ 4,800,000 | |||
Maturity of mortgages payable, excluding net premiums | ||||
2,017 | 1,300,000 | |||
2,018 | 21,900,000 | |||
2,019 | 20,700,000 | |||
2,020 | 82,400,000 | |||
2,021 | 66,900,000 | |||
Thereafter | 143,300,000 | |||
Totals | $ 336,500,000 | |||
Mortgages Payable | Minimum | ||||
Debt | ||||
Weighted Average Stated Interest Rate (as a percent) | 3.20% | 2.40% | ||
Weighted Average Effective Interest Rate (as a percent) | 3.00% | 2.50% | ||
Mortgages Payable | Maximum | ||||
Debt | ||||
Weighted Average Stated Interest Rate (as a percent) | 6.90% | 6.90% | ||
Weighted Average Effective Interest Rate (as a percent) | 5.50% | 8.80% | ||
Mortgages Payable | Mortgages repaid in full | ||||
Debt | ||||
Amount repaid | $ 118,600,000 | $ 161,500,000 | ||
Number of mortgages repaid | item | 7 | 8 | ||
Mortgages Payable | Variable rate mortgages | ||||
Debt | ||||
Remaining Principal Balance | $ 44,900,000 | $ 76,300,000 | ||
Number of mortgages | loan | 4 | 6 | ||
Number of properties with mortgages | property | 4 | 15 | ||
Mortgages Payable | Variable rate mortgages after interest rate arrangements | ||||
Debt | ||||
Remaining Principal Balance | $ 22,500,000 | $ 38,200,000 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Debt | ||||||
Notes payable, net | $ 4,468,665 | $ 4,468,665 | $ 3,934,433 | |||
Principal payments on notes payable | $ 175,000 | $ 275,000 | ||||
Notes and bonds payable | ||||||
Debt | ||||||
Weighted average interest rate | 4.30% | 4.30% | ||||
Weighted average remaining years until maturity | 7 years 10 months 24 days | |||||
Maturity of notes and bonds payable | ||||||
2,018 | $ 350,000 | $ 350,000 | ||||
2,019 | 550,000 | 550,000 | ||||
2,021 | 250,000 | 250,000 | ||||
Thereafter | 3,350,000 | 3,350,000 | ||||
Totals | 4,500,000 | 4,500,000 | ||||
Notes Payable | ||||||
Debt | ||||||
Total principal amount | 4,500,000 | 4,500,000 | 3,975,000 | |||
Unamortized original issuance discounts and deferred financing costs | (31,000) | (31,000) | (41,000) | |||
Notes payable, net | $ 4,469,000 | $ 4,469,000 | 3,934,000 | |||
5.375% notes, issued in September 2005 and due in September 2017 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 175,000 | |||||
Interest rate (as a percent) | 5.375% | 5.375% | 5.375% | |||
Principal payments on notes payable | $ 175,000 | |||||
2.000% notes, issued in October 2012 and due in January 2018 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 350,000 | $ 350,000 | $ 350,000 | |||
Interest rate (as a percent) | 2.00% | 2.00% | 2.00% | |||
6.750% notes, issued in September 2007 and due in August 2019 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 550,000 | $ 550,000 | $ 550,000 | |||
Interest rate (as a percent) | 6.75% | 6.75% | 6.75% | |||
5.750% notes, issued in June 2010 and due in January 2021 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 250,000 | $ 250,000 | $ 250,000 | |||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |||
3.250% notes, issued in October 2012 and due in October 2022 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 450,000 | $ 450,000 | $ 450,000 | |||
Interest rate (as a percent) | 3.25% | 3.25% | 3.25% | |||
4.650% notes, issued in July 2013 and due in August 2023 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 750,000 | $ 750,000 | $ 750,000 | |||
Interest rate (as a percent) | 4.65% | 4.65% | 4.65% | |||
3.875% notes, issued in June 2014 and due in July 2024 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 350,000 | $ 350,000 | $ 350,000 | |||
Interest rate (as a percent) | 3.875% | 3.875% | 3.875% | |||
4.125% notes, $250 issued in September 2014 and $400 issued in March 2017, both due in October 2026 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 650,000 | $ 650,000 | $ 250,000 | |||
Interest rate (as a percent) | 4.125% | 4.125% | 4.125% | |||
4.125% notes, issued in September 2014 and due in October 2026 | Notes Payable | ||||||
Debt | ||||||
Issuance of Debt | $ 250,000 | |||||
4.125% notes, issued in March 2017 and due in October 2026 | Notes Payable | ||||||
Debt | ||||||
Issuance of Debt | $ 400,000 | |||||
3.000% notes, issued in October 2016 and due in January 2027 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 600,000 | $ 600,000 | $ 600,000 | |||
Interest rate (as a percent) | 3.00% | 3.00% | 3.00% | |||
5.875% bonds, $100 issued in March 2005 and $150 issued in June 2011, both due in March 2035 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 250,000 | $ 250,000 | $ 250,000 | |||
Interest rate (as a percent) | 5.875% | 5.875% | 5.875% | |||
5.875% bonds, issued in March 2005 and due in March 2035 | Notes Payable | ||||||
Debt | ||||||
Issuance of Debt | $ 100,000 | $ 100,000 | ||||
5.875% bonds, issued in June 2011 and due in March 2035 | Notes Payable | ||||||
Debt | ||||||
Issuance of Debt | 150,000 | $ 150,000 | ||||
4.650% senior unsecured notes due 2047 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 300,000 | $ 300,000 | $ 300,000 | |||
Interest rate (as a percent) | 4.65% | 4.65% | 4.65% | |||
Percentage price paid to the investor | 99.97% | |||||
Effective yield (as a percent) | 4.65% | |||||
4.125% senior unsecured notes due 2026 | Notes Payable | ||||||
Debt | ||||||
Total principal amount | $ 400,000 | $ 250,000 | ||||
Interest rate (as a percent) | 4.125% | |||||
Percentage price paid to the investor | 102.98% | |||||
Effective yield (as a percent) | 3.75% | |||||
Proceeds from issuance of debt | $ 705,200 |
Redemption of Preferred Stock (
Redemption of Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended |
Apr. 30, 2017 | Sep. 30, 2017 | |
Redemption of Preferred Stock | ||
Excess of redemption value over carrying value of preferred shares subject to redemption | $ 13,373 | |
Class F Preferred Stock | ||
Redemption of Preferred Stock | ||
Preferred stock redeemed (in shares) | 16,350,000 | |
Preferred stock, dividend rate (as a percent) | 6.625% | |
Preferred stock, redemption price per share (in dollars per share) | $ 25 | |
Excess of redemption value over carrying value of preferred shares subject to redemption | $ 13,400 |
Equity - Issuance of Common Sto
Equity - Issuance of Common Stock (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | May 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Issuance of Common Stock | ||||
Net proceeds from issuance of common shares | $ 704,938 | $ 383,572 | ||
Common stock | ||||
Issuance of Common Stock | ||||
Shares issued | 11,850,000 | 6,500,000 | ||
Underwriting discounts and offering costs | $ 29,700 | $ 12,100 | ||
Net proceeds from issuance of common shares | $ 704,900 | $ 383,600 |
Equity - Dividend Reinvestment
Equity - Dividend Reinvestment and Stock Purchase Plan (Details) - USD ($) $ in Thousands | 9 Months Ended | 79 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | |
Dividend Reinvestment and Stock Purchase Plan | |||
Proceeds from dividend reinvestment and stock purchase plan | $ 67,813 | $ 8,174 | |
Common stock | |||
Dividend Reinvestment and Stock Purchase Plan | |||
Authorized common shares to be issued | 26,000,000 | ||
Number of common shares issued | 1,155,883 | 133,432 | 14,025,772 |
Proceeds from dividend reinvestment and stock purchase plan | $ 67,800 | $ 8,200 | $ 659,700 |
Number of common shares issued under the waiver approval process | 927,695 | ||
Amount raised from share issued under the waiver approval process | $ 54,700 |
Equity - At-the-Market (ATM) Pr
Equity - At-the-Market (ATM) Program (Details) - USD ($) $ in Thousands | 9 Months Ended | 25 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | |
At-the-market (ATM) Program | |||
Procceds from At-the-Market (ATM) program | $ 487,998 | $ 85,780 | |
ATM | |||
At-the-market (ATM) Program | |||
Share issuances, net of costs (in shares) | 8,506,559 | 1,312,269 | 12,000,000 |
Procceds from At-the-Market (ATM) program | $ 488,000 | $ 85,800 | $ 691,100 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)propertyitemshares | Jun. 27, 2013shares | Jan. 22, 2013shares | |
Noncontrolling interests | |||||||
Conversion ratio | 1 | ||||||
Number of properties acquired | property | 2 | ||||||
Number of joint ventures controlling interest acquired | item | 2 | ||||||
Change in the carrying value of all noncontrolling interests | |||||||
Carrying value at beginning of the period | $ 20,249 | ||||||
Reallocation of equity | 485 | ||||||
Distributions | (1,656) | ||||||
Allocation of net income | $ 133 | $ 130 | 420 | $ 623 | |||
Carrying value at end of the period | $ 19,498 | $ 19,498 | $ 20,249 | ||||
Joint Venture One | |||||||
Noncontrolling interests | |||||||
Ownership interest (as a percent) | 95.00% | 95.00% | |||||
Joint Venture Two | |||||||
Noncontrolling interests | |||||||
Ownership interest (as a percent) | 74.00% | 74.00% | |||||
Tau Operating Partnership | |||||||
Noncontrolling interests | |||||||
Realty Income partnership units, ownership interest (as a percent) | 99.40% | 99.40% | |||||
Change in the carrying value of all noncontrolling interests | |||||||
Carrying value at beginning of the period | $ 13,405 | ||||||
Reallocation of equity | 492 | ||||||
Distributions | (602) | ||||||
Allocation of net income | 189 | ||||||
Carrying value at end of the period | $ 13,484 | $ 13,484 | $ 13,405 | ||||
Units held by third party | shares | 317,022 | 317,022 | 317,022 | 317,022 | |||
Realty Income, L.P. | |||||||
Noncontrolling interests | |||||||
Third party partnership units, ownership interest (as a percent) | 0.40% | 0.40% | |||||
Realty Income partnership units, ownership interest (as a percent) | 99.60% | 99.60% | |||||
Change in the carrying value of all noncontrolling interests | |||||||
Carrying value at beginning of the period | $ 2,216 | ||||||
Reallocation of equity | (26) | ||||||
Distributions | (167) | ||||||
Allocation of net income | 151 | ||||||
Carrying value at end of the period | $ 2,174 | $ 2,174 | $ 2,216 | ||||
Units held by third party | shares | 88,182 | 88,182 | 88,182 | 534,546 | |||
Other Noncontrolling Interests | |||||||
Change in the carrying value of all noncontrolling interests | |||||||
Carrying value at beginning of the period | $ 4,628 | ||||||
Reallocation of equity | 19 | ||||||
Distributions | (887) | ||||||
Allocation of net income | 80 | ||||||
Carrying value at end of the period | $ 3,840 | $ 3,840 | $ 4,628 |
Noncontrolling Interests - Vari
Noncontrolling Interests - Variable interest entity (Details) - Variable Interest Entities, Primary Beneficiary, Aggregated Disclosure - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Variable interest entity | ||
Net real estate | $ 2,976,562 | $ 3,040,903 |
Total assets | 3,394,991 | 3,499,481 |
Total debt | 210,998 | 251,047 |
Total liabilities | $ 313,782 | $ 364,797 |
Fair Value of Financial Instr56
Fair Value of Financial Instruments (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Level 2 | Accounts payable and accrued expenses | Interest rate swaps | ||
Fair value of financial assets and liabilities | ||
Fair value of derivative liabilities | $ 871,000 | |
Level 2 | Other assets, net | Interest rate swaps | ||
Fair value of financial assets and liabilities | ||
Fair value of derivative assets | 73,000 | |
Mortgages Payable | ||
Fair value of financial assets and liabilities | ||
Unamortized balance of non-cash net premiums | 4,800,000 | $ 6,400,000 |
Remaining balance of deferred financing costs at period end | 249,000 | 324,000 |
Notes and bonds payable | ||
Fair value of financial assets and liabilities | ||
Unamortized balance of original issuance discounts | 7,100,000 | 19,800,000 |
Remaining balance of deferred financing costs at period end | 24,200,000 | 20,800,000 |
Carrying value per balance sheet | ||
Fair value of financial assets and liabilities | ||
Notes receivable issued in connection with property sales | 5,300,000 | 5,400,000 |
Mortgages payable assumed in connection with acquisitions | 336,500,000 | 460,000,000 |
Notes and bonds payable | 4,500,000,000 | 3,975,000,000 |
Estimated fair value | ||
Fair value of financial assets and liabilities | ||
Notes receivable issued in connection with property sales | 5,400,000 | 5,500,000 |
Mortgages payable assumed in connection with acquisitions | 351,000,000 | 468,700,000 |
Notes and bonds payable | $ 4,714,700,000 | $ 4,143,300,000 |
Gain on Sales of Real Estate (D
Gain on Sales of Real Estate (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | |
Gain on Sales of Real Estate | ||||
Property Sales Count | property | 17 | 24 | 46 | 51 |
Sales proceeds | $ 25.5 | $ 19.6 | $ 69.5 | $ 55.2 |
Gain on sales of properties | $ 4.3 | $ 4.3 | $ 17.7 | $ 15.3 |
Impairments (Details)
Impairments (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | Sep. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | |
Impairments | ||||
Total provisions for impairment | $ | $ 365,000 | $ 8,800,000 | $ 8,100,000 | $ 17,000,000 |
Number of impaired properties sold | 3 | 15 | 10 | 29 |
Number of impaired properties held-for-sale | 1 | 1 | 1 | |
Number of impaired properties held-for-investment | 2 | 6 | 2 |
Distributions Paid and Payabl59
Distributions Paid and Payable (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2017$ / shares | Aug. 31, 2017$ / shares | Jul. 31, 2017$ / shares | Jun. 30, 2017$ / shares | May 31, 2017$ / shares | Apr. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2017$ / shares | Feb. 28, 2017$ / shares | Jan. 31, 2017$ / shares | Sep. 30, 2016$ / shares | Aug. 31, 2016$ / shares | Jul. 31, 2016$ / shares | Jun. 30, 2016$ / shares | May 31, 2016$ / shares | Apr. 30, 2016$ / shares | Mar. 31, 2016$ / shares | Feb. 29, 2016$ / shares | Jan. 31, 2016$ / shares | Mar. 31, 2017USD ($)item$ / shares | Sep. 30, 2017$ / shares | Sep. 30, 2016USD ($)item$ / shares | |
Common stock | |||||||||||||||||||||
Distributions Paid and Payable - Common Stock | |||||||||||||||||||||
Dividends paid per common share (in dollars per share) | $ 0.2115000 | $ 0.2115000 | $ 0.2115000 | $ 0.2110000 | $ 0.2110000 | $ 0.2110000 | $ 0.2105000 | $ 0.2105000 | $ 0.2025000 | $ 0.2015000 | $ 0.1995000 | $ 0.1995000 | $ 0.1990000 | $ 0.1990000 | $ 0.1990000 | $ 0.1985000 | $ 0.1985000 | $ 0.1910000 | $ 1.8910000 | $ 1.7855000 | |
Monthly distributions payable (in dollars per share) | $ 0.212 | $ 0.212 | |||||||||||||||||||
Class F Preferred Stock | |||||||||||||||||||||
Distributions Paid and Payable - Common Stock | |||||||||||||||||||||
Preferred stock redeemed (in shares) | shares | 16,350,000 | ||||||||||||||||||||
Number of monthly distributions paid | item | 3 | 9 | |||||||||||||||||||
Dividends paid per preferred share (in dollars per share) | $ 0.101215 | $ 0.414063 | $ 1.242189 | ||||||||||||||||||
Preferred stock dividends paid | $ | $ 1.7 | $ 3.9 | $ 20.3 |
Net Income per Common Share (De
Net Income per Common Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income per Common Share | ||||
Weighted average shares used for the basic net income per share computation | 275,511,870 | 258,085,633 | 270,584,365 | 253,953,149 |
Incremental shares from share-based compensation | 221,779 | 271,259 | 224,727 | 270,152 |
Weighted average shares used for diluted net income per share computation | 276,050,671 | 258,673,914 | 271,126,114 | 254,540,323 |
Unvested Shares | ||||
Net Income per Common Share | ||||
Unvested shares from share-based compensation that were anti-dilutive | 15,798 | 224 | 17,719 | 231 |
Convertible Partnership Units | ||||
Net Income per Common Share | ||||
Weighted average partnership common units convertible to common shares that were dilutive | 317,022 | 317,022 | 317,022 | 317,022 |
Unvested shares from share-based compensation that were anti-dilutive | 88,182 | 97,312 | 88,182 | 235,446 |
Supplemental Disclosures of C61
Supplemental Disclosures of Cash Flow Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid for interest | $ 198,800,000 | $ 190,800,000 |
Interest capitalized to properties under development | 347,000 | 344,000 |
Cash paid for income taxes | $ 4,000,000 | 3,600,000 |
Non-cash activities | ||
Loans Assumed | 32,500,000 | |
Net premiums recorded on mortgages assumed | 692,000 | |
Increase in buildings and improvements and accounts payable | $ 1,500,000 |
Segment Information - Assets (D
Segment Information - Assets (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($)segment | Dec. 31, 2016USD ($) | |
Reconciliation of assets from segment to consolidated | ||
Number of activity segments | segment | 47 | |
Net real estate | $ 12,347,776 | $ 11,903,791 |
Goodwill | 14,989 | 15,067 |
Other corporate assets | 173,641 | 151,693 |
Total assets | 13,701,419 | 13,152,871 |
Apparel | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 174,162 | 175,418 |
Intangible assets | 40,553 | 43,786 |
Automotive service | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 215,004 | 152,220 |
Intangible assets | 65,017 | 33,160 |
Goodwill | 437 | 440 |
Automotive tire services | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 248,638 | 238,151 |
Intangible assets | 10,281 | 11,533 |
Goodwill | 862 | 862 |
Beverages | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 290,239 | 293,447 |
Intangible assets | 2,087 | 2,280 |
Child care | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 58,148 | 49,584 |
Goodwill | 4,924 | 4,945 |
Convenience stores | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 1,004,692 | 1,050,285 |
Intangible assets | 46,399 | 14,372 |
Goodwill | 2,004 | 2,008 |
Dollar stores | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 1,092,884 | 1,120,896 |
Intangible assets | 47,061 | 51,249 |
Drug stores | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 1,510,098 | 1,541,846 |
Intangible assets | 173,863 | 182,981 |
Financial services | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 393,395 | 408,228 |
Intangible assets | 26,155 | 29,749 |
General merchandise | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 268,059 | 248,040 |
Intangible assets | 44,425 | 43,248 |
Grocery stores | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 667,240 | 464,359 |
Intangible assets | 121,654 | 65,412 |
Health and fitness | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 842,325 | 823,697 |
Intangible assets | 67,138 | 63,574 |
Home improvement | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 360,866 | 311,459 |
Intangible assets | 52,017 | 49,932 |
Motor vehicle dealerships | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 206,732 | 197,713 |
Intangible assets | 32,618 | 25,032 |
Restaurants-casual dining | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 507,062 | 511,863 |
Intangible assets | 20,574 | 22,058 |
Goodwill | 2,080 | 2,107 |
Restaurants-quick service | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 639,812 | 574,532 |
Intangible assets | 46,300 | 43,356 |
Goodwill | 1,064 | 1,068 |
Theaters | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 538,781 | 370,732 |
Intangible assets | 22,396 | 13,822 |
Transportation services | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 782,024 | 796,717 |
Intangible assets | 90,750 | 101,664 |
Wholesale club | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 429,802 | 439,557 |
Intangible assets | 30,378 | 32,723 |
Other non-reportable segments | ||
Reconciliation of assets from segment to consolidated | ||
Net real estate | 2,117,813 | 2,135,047 |
Intangible assets | 225,347 | 252,389 |
Goodwill | $ 3,618 | $ 3,637 |
Segment Information - Revenue (
Segment Information - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment revenue information | ||||
Rental revenue | $ 293,455 | $ 265,332 | $ 867,325 | $ 782,189 |
Tenant reimbursements | 11,933 | 11,524 | 34,918 | 31,741 |
Other revenue | 1,532 | 318 | 2,872 | 1,399 |
Total revenue | 306,920 | 277,174 | 905,115 | 815,329 |
Apparel | ||||
Segment revenue information | ||||
Rental revenue | 4,718 | 5,106 | 14,613 | 14,860 |
Automotive service | ||||
Segment revenue information | ||||
Rental revenue | 6,416 | 5,322 | 18,257 | 14,814 |
Automotive tire services | ||||
Segment revenue information | ||||
Rental revenue | 7,383 | 7,135 | 22,158 | 21,618 |
Beverages | ||||
Segment revenue information | ||||
Rental revenue | 7,829 | 7,027 | 23,345 | 19,836 |
Child care | ||||
Segment revenue information | ||||
Rental revenue | 5,062 | 4,909 | 15,395 | 14,846 |
Convenience stores | ||||
Segment revenue information | ||||
Rental revenue | 27,874 | 22,757 | 83,143 | 68,410 |
Dollar stores | ||||
Segment revenue information | ||||
Rental revenue | 22,738 | 22,652 | 68,246 | 67,975 |
Drug stores | ||||
Segment revenue information | ||||
Rental revenue | 31,635 | 29,230 | 94,880 | 86,288 |
Financial services | ||||
Segment revenue information | ||||
Rental revenue | 7,058 | 4,267 | 21,377 | 12,832 |
General merchandise | ||||
Segment revenue information | ||||
Rental revenue | 6,296 | 5,149 | 17,263 | 13,702 |
Grocery stores | ||||
Segment revenue information | ||||
Rental revenue | 13,450 | 8,331 | 37,209 | 23,452 |
Health and fitness | ||||
Segment revenue information | ||||
Rental revenue | 22,416 | 21,444 | 65,810 | 64,293 |
Home improvement | ||||
Segment revenue information | ||||
Rental revenue | 7,816 | 6,732 | 21,826 | 18,884 |
Motor vehicle dealerships | ||||
Segment revenue information | ||||
Rental revenue | 5,749 | 5,215 | 18,240 | 15,025 |
Restaurants-casual dining | ||||
Segment revenue information | ||||
Rental revenue | 11,073 | 10,951 | 32,853 | 31,364 |
Restaurants-quick service | ||||
Segment revenue information | ||||
Rental revenue | 14,659 | 13,056 | 43,337 | 38,329 |
Theaters | ||||
Segment revenue information | ||||
Rental revenue | 14,947 | 12,689 | 41,405 | 38,846 |
Transportation services | ||||
Segment revenue information | ||||
Rental revenue | 15,635 | 15,196 | 46,656 | 42,038 |
Wholesale club | ||||
Segment revenue information | ||||
Rental revenue | 9,414 | 9,368 | 28,241 | 28,107 |
Other non-reportable segments | ||||
Segment revenue information | ||||
Rental revenue | $ 51,287 | $ 48,796 | $ 153,071 | $ 146,670 |
Common Stock Incentive Plan (De
Common Stock Incentive Plan (Details) - 2012 Plan - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Plan disclosures | ||||
Plan term from the date of adoption | 10 years | |||
General and administrative expense | ||||
Plan disclosures | ||||
Share-based compensation costs recognized | $ 3.4 | $ 2.7 | $ 10.6 | $ 9.2 |
Maximum | ||||
Plan disclosures | ||||
Authorized shares | 3,985,734 | 3,985,734 | ||
Restricted Stock | ||||
Plan disclosures | ||||
Shares granted | 119,564 | |||
Remaining unamortized share-based compensation expense | $ 20.2 | $ 20.2 | ||
Restricted Stock | Four year service period | ||||
Plan disclosures | ||||
Shares granted | 72,626 | |||
Vesting period | 4 years | |||
Restricted Stock | Five year service period | ||||
Plan disclosures | ||||
Shares granted | 46,938 | |||
Vesting period | 5 years | |||
Restricted Stock | Independent directors | ||||
Plan disclosures | ||||
Shares granted | 28,000 | |||
Restricted Stock | Independent directors | Immediately vested | ||||
Plan disclosures | ||||
Shares granted | 20,000 | |||
Restricted Stock | Independent directors | Three year service period | ||||
Plan disclosures | ||||
Shares granted | 8,000 | |||
Vesting period | 3 years | |||
Performance Shares and Restricted Stock Units | ||||
Plan disclosures | ||||
Remaining unamortized share-based compensation expense | $ 10 | $ 10 | ||
Performance Shares | Executive officers | ||||
Plan disclosures | ||||
Shares granted | 111,637 | |||
Performance Shares | Executive officers | Three year service period | ||||
Plan disclosures | ||||
Vesting period | 3 years | |||
Awards vesting on the first and second January1 after the end of the three year performance period (as a percent) | 50.00% | |||
Restricted Stock Units | ||||
Plan disclosures | ||||
Shares granted | 10,191 | |||
Restricted Stock Units | Four year service period | ||||
Plan disclosures | ||||
Shares granted | 6,161 | |||
Vesting period | 4 years | |||
Restricted Stock Units | Five year service period | ||||
Plan disclosures | ||||
Shares granted | 4,030 | |||
Vesting period | 5 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2017USD ($) |
Commitments and Contingencies | |
Amount of commitments for re-leasing costs, recurring capital expenditures and non-recurring building improvements | $ 8.8 |
Amount of commitments for construction contracts, which is expected to be paid in next twelve months | $ 78.9 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended |
Oct. 31, 2017$ / shares | |
Subsequent event | Common stock | |
Subsequent events | |
Common stock, dividends declared (in dollars per share) | $ 0.212 |