Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 15, 2018 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | PILLARSTONE CAPITAL REIT | ||
Entity Central Index Key | 928,953 | ||
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 448,845 | ||
Entity Common Stock, Shares Outstanding | 405,169 | ||
Amendment Description | Restatement of Consolidated Financial Statements This Amendment No. 1 on Form 10-K/A (this “Form 10-K/A”) amends and restates certain items noted below in the Annual Report on Form 10-K of Pillarstone Capital REIT (the “Company”) for the fiscal year ended December 31, 2017, as originally filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2018 (the “Original Filing”). This Form 10-K/A restates the Company's consolidated financial statements and related disclosures for the year ended December 31, 2017 to reflect the correction of an accounting error described below. Background and Effect of Restatement As previously disclosed, on December 8, 2016, the Company and Pillarstone Capital REIT Operating Partnership LP, a subsidiary and the operating partnership of the Company (the “Operating Partnership” or “Pillarstone OP”), entered into a Contribution Agreement (the “Contribution Agreement”) with Whitestone REIT Operating Partnership, L.P. (“Whitestone OP”), a subsidiary and the operating partnership of Whitestone REIT (“Whitestone”), both of which are related parties to the Company and the Operating Partnership. Pursuant to the Contribution Agreement, Whitestone OP contributed to the Operating Partnership all of the equity interests in four of its wholly-owned subsidiaries (the "Subsidiaries"): Whitestone CP Woodland Ph. 2, LLC, a Delaware limited liability company; Whitestone Industrial-Office, LLC, a Texas limited liability company; Whitestone Offices, LLC, a Texas limited liability company; and Whitestone Uptown Tower, LLC, a Delaware limited liability company. The Subsidiaries own 14 real estate assets and, in exchange for this contribution, Whitestone OP received aggregate consideration of approximately $84.0 million, consisting of (i) approximately $18.1 million of Class A units representing limited partnership interests in the Operating Partnership (“OP Units”), issued at a price of $1.331 per OP Unit; and (ii) the assumption of approximately $65.9 million of liabilities by the Operating Partnership (collectively, the “Acquisition”). The Company is the general partner of the Operating Partnership and, immediately after the Acquisition, had an equity ownership interest in the Operating Partnership representing approximately 18.6% and valued at approximately $4.1 million. In connection with the Contribution Agreement, on December 8, 2016, the Company, as the general partner of the Operating Partnership, entered into an Amended and Restated Agreement of Limited Partnership of the Operating Partnership (as amended and restated, the “Limited Partnership Agreement”). Pursuant to the Limited Partnership Agreement, subject to certain protective rights of the limited partners described below, the general partner has responsibility and discretion in the management and control of the Operating Partnership, including the ability to cause the Operating Partnership to enter into certain major transactions including a merger of the Operating Partnership or a sale of substantially all of the assets of the Operating Partnership. The limited partners have no power to remove the general partner without the general partner's consent. In addition, pursuant to the Limited Partnership Agreement, the general partner may not conduct any business other than in connection with the ownership, acquisition and disposition of the Operating Partnership’s interest and management of its business without the consent of a majority of the limited partners other than in connection with certain actions described therein. As such, the Company was deemed to exercise significant influence but not complete control over the Operating Partnership. As of the date of the Acquisition, the Company determined that it was not the primary beneficiary of the Operating Partnership under the variable interest entity (“VIE”) rules prescribed by U.S. generally accepted accounting principles (“U.S. GAAP”), and thus the Company’s investment in the Operating Partnership qualified for usage of the equity method of accounting. In November 2017, the Company and Whitestone each received a comment letter from the Staff (the “Staff”) of the Division of Corporation Finance of the SEC relating to the Company’s and Whitestone’s Annual Reports on Form 10-K for the year ended December 31, 2016. In the respective letters, the Staff requested that the Company and Whitestone provide them with an analysis to support the determination that the Operating Partnership is a VIE of which Whitestone is the primary beneficiary. In response to the Staff’s comment, Whitestone, on its own behalf and on behalf of the Company, provided the Staff with its analysis of Whitestone’s accounting and financial reporting obligations relating to its interest in the Operating Partnership. After communicating its analysis and conclusions to the Staff and responding to additional questions from the Staff relating to this matter, the Staff did not object to or otherwise take exception to the initial determinations at the time of the consummation of the Acquisition in December 2016 but provided a verbal reminder in that the determination of the primary beneficiary of a VIE should be continually reassessed, and recommended that Whitestone consider pre-clearing future accounting treatment of the Operating Partnership with the Staff of the Office of the Chief Accountant (“OCA”). In connection with the preparation and review of its financial statements for the quarter ended March 31, 2018, Whitestone concluded, in accordance with the Staff’s recommendation, and after consultation with its outside accounting advisors, that it would be prudent to seek pre-clearance from the OCA of Whitestone's proposed treatment of the Operating Partnership in its financial statements for such quarter. Accordingly, in April 2018, Whitestone submitted a letter to the OCA seeking their concurrence with its determinations that Whitestone maintained its status as the primary beneficiary of the Operating Partnership and, accordingly, should continue to consolidate the Operating Partnership in its financial statements for the quarter ended March 31, 2018 in accordance U.S. GAAP. After further correspondence, including telephonic meetings between Whitestone, its advisors and the OCA, the OCA informed Whitestone that it objected to Whitestone’s and the Company’s conclusions that Whitestone was the primary beneficiary of the Operating Partnership since the Acquisition in December 2016 and during the subsequent periods. Whitestone and the Company respectfully disagreed with the OCA’s determination and Whitestone, on its own behalf and on behalf of the Company, made a formal appeal to the Chief Accountant of the SEC in June 2018. In July 2018, Whitestone and its advisory team of accounting and legal professionals met with the Chief Accountant, members of the OCA and Division of Corporate Finance. On July 30, 2018, the Chief Accountant of the SEC informed Whitestone that its formal appeal was denied and that the OCA objected to Whitestone’s and the Company’s presentation of their investments in the Operating Partnership under the VIE accounting guidance since the consummation of the Acquisition in December 2016. As a result, the Company’s management has determined that the Company should not have used the equity method of accounting to present its investment in the Operating Partnership in its audited consolidated financial statements for the years ended December 31, 2016 and December 31, 2017 and unaudited consolidated financial statements for the quarters ended March 31, 2017; June 30, 2017; September 30, 2017 and March 31, 2018 (collectively, the “Prior Period Financial Statements”). After consideration of the OCA’s objection to Whitestone’s original accounting, the Company evaluated its original accounting of the equity method and the materiality of the error quantitatively and qualitatively and concluded that it was material to the Prior Period Financial Statements. The Company will revise its original accounting treatment accordingly in the amended filings. The Company has determined that it is the primary beneficiary of the Operating Partnership through the Company's power to direct the activities that most significantly impact the Operating Partnership’s economic performance and the Company's right to receive benefits based on its ownership percentage in the Operating Partnership. Accordingly, the Company will account for the Operating Partnership as a VIE and will fully consolidate it in the Company's financial statements prospectively and in the amended filings. Whitestone OP’s 81.4% interest in the Operating Partnership will be accounted for as a non-controlling interest and deducted from the Company’s share of net income and equity in the Operating Partnership. Items Amended in This Filing This Form 10-K/A amends and restates the following indicated parts of the Original Filing: Part I, Item 2. Properties Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Part II, Item 9A. Controls and Procedures Part IV, Item 15. Exhibits and Financial Statement Schedules |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 20, 2015 |
Real estate assets, at cost | ||||
Property | $ 83,144,000 | $ 80,564,000 | ||
Accumulated depreciation | (2,934,000) | (150,000) | ||
Total real estate assets | 80,210,000 | 80,414,000 | ||
Cash and cash equivalents | 2,991,000 | 1,243,000 | ||
Escrows and acquisition deposits | 2,188,000 | 2,274,000 | ||
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 798,000 | 213,000 | ||
Receivable due from related party | 1,304,000 | 2,818,000 | ||
Unamortized lease commissions and deferred legal costs, net | 1,265,000 | 1,150,000 | ||
Prepaid expenses and other assets | 160,000 | 149,000 | ||
Total assets | 88,916,000 | 88,261,000 | ||
Liabilities: | ||||
Notes payable | 64,313,000 | 65,474,000 | ||
Accounts payable and accrued expenses | 3,586,000 | 3,509,000 | ||
Payable due to related party | 1,005,000 | 265,000 | ||
Convertible notes payable - related parties | 197,780 | 197,780 | $ 197,780 | |
Accrued interest payable | 42,000 | 22,000 | ||
Tenants' security deposits | 1,191,000 | 996,000 | ||
Total liabilities | 70,335,000 | 70,464,000 | ||
Commitments and contingencies | 0 | 0 | ||
Shareholders' Equity (Deficit): | ||||
Common stock | 4,000 | 4,000 | ||
Additional paid-in capital | 28,147,000 | 28,147,000 | ||
Accumulated deficit | (27,635,000) | (27,850,000) | ||
Treasury stock, at cost, 38,130 shares | (801,000) | (801,000) | ||
Total Pillarstone Capital REIT shareholders' deficit | (280,000) | (495,000) | ||
Noncontrolling interest in subsidiary | 18,861,000 | 18,292,000 | ||
Total equity | 18,581,000 | 17,797,000 | $ (30,000) | |
Total liabilities and equity | 88,916,000 | 88,261,000 | ||
Redeemable Convertible Series A Preferred Stock [Member] | ||||
Shareholders' Equity (Deficit): | ||||
Preferred stock | 3,000 | 3,000 | ||
Total equity | 3,000 | 3,000 | 3,000 | |
Redeemable Convertible Series C Preferred Stock [Member] | ||||
Shareholders' Equity (Deficit): | ||||
Preferred stock | 2,000 | 2,000 | ||
Total equity | $ 2,000 | $ 2,000 | $ 2,000 |
Consolidated Balance Sheets - V
Consolidated Balance Sheets - Variable Interest Entity - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Property | $ 83,144 | $ 80,564 |
Accumulated depreciation | (2,934) | (150) |
Total real estate assets | 80,210 | 80,414 |
Cash and cash equivalents | 2,991 | 1,243 |
Escrows and acquisition deposits | 2,188 | 2,274 |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 798 | 213 |
Receivable due from related party | 1,304 | 2,818 |
Unamortized lease commissions and deferred legal costs, net | 1,265 | 1,150 |
Prepaid expenses and other assets | 160 | 149 |
Total assets | 88,916 | 88,261 |
Notes payable | 64,313 | 65,474 |
Accounts payable and accrued expenses | 3,586 | 3,509 |
Payable due to related party | 1,005 | 265 |
Tenants' security deposits | 1,191 | 996 |
Total liabilities | 70,335 | 70,464 |
Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Property | 83,141 | 80,564 |
Accumulated depreciation | (2,934) | (150) |
Total real estate assets | 80,207 | 80,414 |
Cash and cash equivalents | 2,812 | 1,236 |
Escrows and acquisition deposits | 2,188 | 2,274 |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 798 | 213 |
Receivable due from related party | 1,304 | 2,818 |
Unamortized lease commissions and deferred legal costs, net | 1,265 | 1,150 |
Prepaid expenses and other assets | 150 | 134 |
Total assets | 88,724 | 88,239 |
Notes payable | 64,313 | 65,474 |
Accounts payable and accrued expenses | 3,494 | 3,481 |
Payable due to related party | 1,005 | 265 |
Tenants' security deposits | 1,191 | 996 |
Total liabilities | $ 70,003 | $ 70,216 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, authorized (in shares) | 50,000,000 | 10,000,000 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 400,000,000 | 100,000,000 | 400,000,000 |
Common stock, issued (in shares) | 443,299 | 443,226 | |
Common stock, outstanding (in shares) | 405,169 | 405,096 | |
Treasury stock (in shares) | 38,130 | 38,130 | |
Redeemable Convertible Series A Preferred Stock [Member] | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, authorized (in shares) | 1,518,000 | 1,518,000 | |
Preferred stock, issued (in shares) | 256,636 | 258,236 | |
Preferred stock, outstanding (in shares) | 256,636 | 258,236 | |
Preferred stock, liquidation preference (in dollars per share) | $ 10 | $ 10 | |
Redeemable Convertible Series C Preferred Stock [Member] | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, authorized (in shares) | 300,000 | 300,000 | |
Preferred stock, issued (in shares) | 244,444 | 244,444 | |
Preferred stock, outstanding (in shares) | 244,444 | 244,444 | |
Preferred stock, liquidation preference (in dollars per share) | $ 10 | $ 10 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Real estate taxes | ||
Rental revenues | $ 14,218,000 | $ 983,000 |
Other revenues | 2,550,000 | 157,000 |
Total property revenues | 16,768,000 | 1,140,000 |
Property expenses | ||
Property operation and maintenance | 5,029,000 | 397,000 |
Real estate taxes | 2,672,000 | 174,000 |
Total property expenses | 7,701,000 | 571,000 |
Other expenses | ||
General and administrative | 508,000 | 492,000 |
Depreciation and amortization | 3,268,000 | 163,000 |
Interest expense | 2,725,000 | 176,000 |
Total other expense | 6,501,000 | 831,000 |
Income (loss) before loss on disposal of assets and income taxes | 2,566,000 | (262,000) |
Loss on disposal of assets | (31,000) | 0 |
Provision for income taxes | (88,000) | 0 |
Net income (loss) | 2,447,000 | (262,000) |
Less: noncontrolling interest in subsidiary | 2,232,000 | 203,000 |
Net income (loss) attributable to Common Shareholders | $ 215,000 | $ (465,000) |
Basic income (loss) per Common Share: | ||
Net income (loss) available to common shareholders (in dollars per share) | $ 0.53 | $ (1.15) |
Diluted income (loss) per Common Share: | ||
Net income (loss) available to common shareholders (in dollars per share) | $ 0.07 | $ (1.15) |
Weighted average number of Common Shares outstanding: | ||
Basic (in shares) | 405,169 | 405,169 |
Diluted (in shares) | 2,903,219 | 405,169 |
Consolidated Statements of Chan
Consolidated Statements of Changes In Equity (Deficit) - USD ($) $ in Thousands | Total | Parent [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | Redeemable Convertible Series A Preferred Stock [Member] | Redeemable Convertible Series C Preferred Stock [Member] |
Beginning balance at Dec. 31, 2015 | $ (30) | $ (30) | $ 4 | $ 28,147 | $ (27,385) | $ (801) | $ 0 | $ 3 | $ 2 |
Contributions in Operating Partnership | 22,210 | 4,121 | 4,121 | 18,089 | |||||
Distributions in kind | (4,121) | (4,121) | (4,121) | ||||||
Net income (loss) | (262) | (465) | (465) | 203 | |||||
Ending balance at Dec. 31, 2016 | 17,797 | (495) | 4 | 28,147 | (27,850) | (801) | 18,292 | 3 | 2 |
Distributions to operating partnership limited partner (restated) | (1,663) | (1,663) | |||||||
Net income (loss) | 2,447 | 215 | 215 | 2,232 | |||||
Ending balance at Dec. 31, 2017 | $ 18,581 | $ (280) | $ 4 | $ 28,147 | $ (27,635) | $ (801) | $ 18,861 | $ 3 | $ 2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 2,447 | $ (262) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3,268 | 163 |
Deferred loan costs | 97 | 0 |
Loss on disposal of assets | 31 | 0 |
Bad debt expense | 412 | 127 |
Changes in operating assets and liabilities: | ||
Escrows and acquisition deposits | 86 | 0 |
Accrued rent and accounts receivable | (997) | (340) |
Receivable from related party | 120 | (1,542) |
Unamortized lease commissions and deferred legal costs | (567) | (7) |
Prepaid expenses and other assets | (11) | (8) |
Accounts payable and accrued expenses | 97 | 1,200 |
Accounts payable due to related party | 740 | 265 |
Tenants' security deposits | 195 | 61 |
Net cash provided by (used in) operating activities | 5,918 | (343) |
Cash flows from investing activities: | ||
Additions to real estate | (1,249) | 0 |
Net cash used in investing activities | (1,249) | 0 |
Cash flows from financing activities: | ||
Proceeds from issuance of OP units, net of offering costs | 0 | 1,412 |
Distributions paid to noncontrolling interest in Consolidated Partnership | (1,663) | 0 |
Repayments of notes payable | (1,258) | 0 |
Net cash provided by (used in) financing activities | (2,921) | 1,412 |
Net increase in cash and cash equivalents | 1,748 | 1,069 |
Cash and cash equivalents at beginning of period | 1,243 | 174 |
Cash and cash equivalents at end of period | 2,991 | 1,243 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 2,611 | 0 |
Non cash investing and financing activities: | ||
Disposal of fully depreciated real estate | 20 | 0 |
Investment in Pillarstone Capital REIT Operating Partnership LP | 0 | 4,121 |
Distribution in kind from Pillarstone Capital REIT Operating Partnership LP | 0 | (4,121) |
Debt assumed with acquisitions of real estate | 0 | 65,937 |
Value of OP units exchanged for real estate | 0 | 16,667 |
Fair value of assets acquired | 0 | (82,614) |
Additions to real estate contributed by related party | $ 1,394 | $ 0 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Pillarstone Capital REIT (the “Company,” “Pillarstone,” “we,” “our,” or “us”) is a Maryland real estate investment trust ("REIT") engaged in investing in, owning and operating commercial properties. In 2016, the shareholders of Pillarstone approved changing the Company's name from Paragon Real Estate Equity and Investment Trust to Pillarstone Capital REIT. Future real estate investments may include (i) acquisition and development of retail, office, office warehouse, industrial, multifamily, hotel, and other commercial properties, (ii) acquisition of or merger with a real estate investment trust (“REIT”) or real estate operating company and (iii) joint venture investments. We serve as the general partner of Pillarstone Capital REIT Operating Partnership LP (the “Operating Partnership” or “Pillarstone OP”), which was formed on September 23, 2016 as a Delaware limited partnership. We currently conduct substantially all operations and activities through Pillarstone OP. As the general partner of Pillatstone OP, we have the exclusive power to manage and conduct the business of Pillarstone OP, subject to certain customary exceptions. |
Restatement of Previously Issue
Restatement of Previously Issued Consolidated Financial Statements | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of Previously Issued Consolidated Financial Statements | RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS In November 2017, the Company and Whitestone each received a comment letter from the Staff (the “Staff”) of the Division of Corporation Finance of the SEC relating to the Company’s and Whitestone’s Annual Reports on Form 10-K for the year ended December 31, 2016. In the respective letters, the Staff requested that the Company and Whitestone provide them with an analysis to support the determination that the Operating Partnership is a variable interest entity (“VIE”) of which Whitestone is the primary beneficiary. In response to the Staff’s comment, Whitestone, on its own behalf and on behalf of the Company, provided the Staff with its analysis of Whitestone’s accounting and financial reporting obligations relating to its interest in the Operating Partnership. After communicating its analysis and conclusions to the Staff and responding to additional questions from the Staff relating to this matter, the Staff did not object to or otherwise take exception to the initial determinations at the time of the consummation of the acquisition in December 2016 but provided a verbal reminder in that the determination of the primary beneficiary of a VIE should be continually reassessed, and recommended that Whitestone consider pre-clearing future accounting treatment of the Operating Partnership with the Staff of the Office of the Chief Accountant (“OCA”). In connection with the preparation and review of its financial statements for the quarter ended March 31, 2018, Whitestone concluded, in accordance with the Staff’s recommendation, and after consultation with its outside accounting advisors, that it would be prudent to seek pre-clearance from the OCA of Whitestone's proposed treatment of the Operating Partnership in its financial statements for such quarter. Accordingly, in April 2018, Whitestone submitted a letter to the OCA seeking their concurrence with its determinations that Whitestone maintained its status as the primary beneficiary of the Operating Partnership and, accordingly, should continue to consolidate the Operating Partnership in its financial statements for the quarter ended March 31, 2018 in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). After further correspondence, including telephonic meetings between Whitestone, its advisors and the OCA, the OCA informed Whitestone that it objected to Whitestone’s and the Company’s conclusions that Whitestone was the primary beneficiary of the Operating Partnership since the Acquisition in December 2016 and during the subsequent periods. Whitestone and the Company respectfully disagreed with the OCA’s determination and Whitestone, on its own behalf and on behalf of the Company, made a formal appeal to the Chief Accountant of the SEC in June 2018. In July 2018, Whitestone and its advisory team of accounting and legal professionals met with the Chief Accountant, members of the OCA and Division of Corporate Finance. On July 30, 2018, the Chief Accountant of the SEC informed Whitestone that its formal appeal was denied and that the OCA objected to Whitestone’s and the Company’s presentation of their investments in the Operating Partnership under the VIE accounting guidance since the consummation of the acquisition in December 2016. As a result, the Company’s management has determined that the Company should not have used the equity method of accounting to present its investment in the Operating Partnership in each of the Forms 10-K for the years ended December 31, 2016 and December 31, 2017 and the Forms 10-Q for the quarters ended March 31, 2017; June 30, 2017; September 30, 2017 and March 31, 2018 (the “Prior Period Financial Statements”). After consideration of the OCA’s objection to Whitestone’s original accounting, the Company evaluated its original accounting of the equity method and the materiality of the error quantitatively and qualitatively and concluded that it was material to the Prior Period Financial Statements. The Company will revise its original accounting treatment accordingly in the amended filings. The Company has determined that it is the primary beneficiary of the Operating Partnership through the Company's power to direct the activities that most significantly impact the Operating Partnership’s economic performance and the Company's right to receive benefits based on its ownership percentage in the Operating Partnership. Accordingly, the Company will account for the Operating Partnership as a VIE and fully consolidate it in the Company's financial statements prospectively and in the amended filings. Whitestone OP’s 81.4% interest in the Operating Partnership will be accounted for as a non-controlling interest and deducted from the Company’s share of net income and equity in the Operating Partnership. The following table presents the effects of the restatement on the consolidated balance sheet as of December 31, 2017 (in thousands): December 31, 2017 As Reported Effect of Restatement As Restated Real estate assets, at cost Property $ 3 $ 83,141 $ 83,144 Accumulated depreciation — (2,934 ) (2,934 ) Total real estate assets 3 80,207 80,210 Cash and cash equivalents 179 2,812 2,991 Escrows and acquisition deposits — 2,188 2,188 Accrued rents and accounts receivable, net of allowance for doubtful accounts — 798 798 Receivable due from related party — 1,304 1,304 Unamortized lease commissions and deferred legal costs, net — 1,265 1,265 Prepaid expenses and other assets 10 150 160 Total assets $ 192 $ 88,724 $ 88,916 December 31, 2017 As Reported Effect of Restatement As Restated Notes payable $ — $ 64,313 $ 64,313 Accounts payable and accrued expenses 92 3,494 3,586 Accounts payable - related party 316 689 1,005 Convertible notes payable - related parties 198 — 198 Accrued interest payable 42 — 42 Tenants' security deposits — 1,191 1,191 Negative equity investment in Pillarstone Capital REIT LP 88 (88 ) — Total liabilities 736 69,599 70,335 Commitments and contingencies — — — Shareholders' Equity (Deficit): Preferred A Shares - $0.01 par value, 1,518,000 authorized: 256,636 Class A cumulative convertible shares issued and outstanding at December 31, 2017 and 2016, $10.00 per share liquidation preference 3 — 3 Preferred C Shares - $0.01 par value, 300,000 authorized: 244,444 Class C cumulative convertible shares issued and outstanding at December 31, 2017 and 2016, $10.00 per share liquidation preference 2 — 2 Common Shares - $0.01 par value, 400,000,000 authorized: 443,299 shares issued and 405,169 outstanding at December 31, 2017 and 2016 4 — 4 Additional paid-in capital 28,147 — 28,147 Accumulated deficit (27,899 ) 264 (27,635 ) Treasury stock, at cost, 38,130 shares (801 ) — (801 ) Total Pillarstone Capital REIT shareholders' deficit (544 ) 264 (280 ) Noncontrolling interest in subsidiary — 18,861 18,861 Total equity (deficit) (544 ) 19,125 18,581 Total liabilities and equity $ 192 $ 88,724 $ 88,916 The following table presents the effects of the restatement on the consolidated statement of operations for the year ended December 31, 2017 (in thousands, except per share data): Year Ended December 31, 2017 As Reported Effect of Restatement As Restated Property revenues Rental revenues $ — $ 14,218 $ 14,218 Other revenues — 2,550 2,550 Total property revenues — 16,768 16,768 Property expenses Property operation and maintenance — 5,029 5,029 Real estate taxes — 2,672 2,672 Total property expenses — 7,701 7,701 Other expenses General and administrative 273 235 508 Depreciation and amortization — 3,268 3,268 Interest expense 19 2,706 2,725 Total other expense 292 6,209 6,501 Income (loss) before loss on disposal of assets and income taxes (292 ) 2,858 2,566 Loss on disposal of assets — (31 ) (31 ) Equity in income of Pillarstone Capital REIT Operating Partnership LP 275 (275 ) — Provision for income taxes — (88 ) (88 ) Net income (loss) (17 ) 2,464 2,447 Less: non-controlling interest in subsidiary — 2,232 2,232 Net income (loss) attributable to Common Shareholders $ (17 ) $ 232 $ 215 Net income (loss) attributable to Common Shareholders per Common Share: Basic $ (0.04 ) $ 0.57 $ 0.53 Diluted $ (0.04 ) $ 0.11 $ 0.07 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION Basis of consolidation . We have prepared the consolidated financial statements pursuant to the rules and regulations of the SEC and U.S. GAAP. In our opinion, all adjustments (consisting solely of normal recurring items) necessary for a fair presentation of our financial position as of December 31, 2017 and 2016 , the results of our operations for the years ended December 31, 2017 and 2016 , and of our cash flows for the years ended December 31, 2017 and 2016 have been included. We also consolidate a VIE when we are determined to be the primary beneficiary. Determination of the primary beneficiary is based on whether an entity has (1) the power to direct activities that most significantly impact the economic performance of the VIE and (2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our determination of the primary beneficiary considers all relationships between us and the VIE, including management and other contractual agreements. Consequently, the accompanying consolidated financial statements include the accounts of Pillarstone OP and a wholly-owned subsidiary that discontinued operations in 2002. See Note 5 for additional disclosure on our VIE. Noncontrolling interest in the accompanying consolidated financial statements represents the share of equity and earnings of Pillarstone OP allocable to holders of partnership interests other than us. Net income or loss is allocated to noncontrolling interest based on the weighted-average percentage ownership of Pillarstone OP during the year. Issuance of additional units of limited partnership interest in Pillarstone OP changes the percentage of ownership interests of both the noncontrolling interest and Pillarstone. Going concern. The financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continued operations as a public company and paying liabilities in the normal course of business. The Company, through Pillarstone OP, acquired 14 real estate assets in December 2016 and its distributions of cash from Pillarstone OP are expected to be sufficient for the Company to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting. Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred. Use of estimates. In order to conform with U.S. GAAP, management, in preparation of our consolidated financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2017 and 2016 , and the reported amounts of revenues and expenses for the years ended December 31, 2017 and 2016 . Actual results could differ from those estimates. Significant estimates include deferred taxes and the related valuation allowance for deferred taxes, and these significant estimates, as well as other estimates and assumptions, may change in the near term. Cash and cash equivalents. We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents as of December 31, 2017 and 2016 consisted of demand deposits at commercial banks and brokerage accounts. We maintain our cash in bank accounts that are federally insured. Acquired Properties and Acquired Lease Intangibles. We allocate the purchase price of the acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values at the time of purchase. Identifiable intangibles include amounts allocated to acquired out-of-market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt. Depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of 5 to 39 years for improvements and buildings, respectively. Tenant improvements are depreciated using the straight-line method over the life of the improvement or remaining term of the lease, whichever is shorter. Impairment. We review our properties for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. We determine whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the estimated residual value of the property, with the carrying cost of the property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the property exceeds its fair value. Management has determined that there has been no impairment in the carrying value of our real estate assets as of December 31, 2017 . Accrued Rents and Accounts Receivable. Included in accrued rent and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. As of December 31, 2017 and 2016 , we had an allowance for uncollectible accounts of $539,000 and $125,000 , respectively, and bad debt expense of $412,000 and $127,000 , respectively. Unamortized Lease Commissions and Deferred Legal Costs. Leasing commissions and deferred legal costs are amortized using the straight-line method over the terms of the related lease agreements. Loan costs are amortized on the straight-line method over the terms of the loans, which approximates the interest method. Costs allocated to in-place leases whose terms differ from market terms related to acquired properties are amortized over the remaining life of the respective leases. Prepaids and Other assets . Prepaids and other assets include escrows established pursuant to certain mortgage financing arrangements for real estate taxes and insurance. Noncontrolling Interests. Noncontrolling interests are the portion of equity in a subsidiary not attributable to a parent. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, we have reported noncontrolling interest in equity on the consolidated balance sheets but separate from Pillarstone’s equity. On the consolidated statements of operations, subsidiaries are reported at the consolidated amount, including both the amount attributable to Pillarstone and noncontrolling interest. Consolidated statements of changes in equity are included for both quarterly and annual financial statements, including beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interest and total equity. Revenue recognition . All leases on our properties are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases. Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable. Percentage rents are recognized as rental income when the thresholds upon which they are based have been met. Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred. We have established an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Stock-based compensation . The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation," which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. ASC 718 generally requires that these transactions be accounted for using a fair-value-based method. The Company uses the Black-Scholes option-pricing model to determine the fair-value of stock-based awards. Income taxes . Because we have not elected to be taxed as a REIT for federal income tax purposes, we account for income taxes using the liability method under which deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the period in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company evaluates potential uncertain tax positions on an annual basis in conjunction with the board of trustees and its tax accountants. Authoritative literature provides a two-step approach to recognize and measure tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50% . The Company has no uncertain tax positions that required adjustments to our consolidated financial statements in 2017 or 2016 . At December 31, 2017 , we have net operating loss carry-forwards totaling $777,000 . While these losses created a deferred tax asset, a valuation allowance was applied against the asset because of the uncertainty of whether we will be able to use these loss carry-forwards, which will expire in varying amounts through the year 2037 . Fair Value of Financial Instruments. Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts and notes payable and investments in marketable securities. The carrying value of cash, cash equivalents, accounts receivable and accounts payable are representative of their respective fair values due to their short-term nature. The fair value of our long-term debt, consisting of fixed rate secured notes aggregate to approximately $65.1 million and $65.9 million as compared to the book value of approximately $64.7 million and $65.9 million as of December 31, 2017 and 2016 , respectively. The fair value of our long-term debt is estimated on a Level 2 basis (as provided by ASC 820, “Fair Value Measurements and Disclosures ”), using a discounted cash flow analysis based on the borrowing rates currently available to us for loans with similar terms and maturities, discounting the future contractual interest and principal payments. Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2017 and 2016. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2017 and current estimates of fair value may differ significantly from the amounts presented herein. Concentration of Risk. Substantially all of our revenues are obtained from office and warehouse locations in the Dallas-Fort Worth and Houston metropolitan areas. We maintain cash accounts in major U.S. financial institutions. The terms of these deposits are on demand to minimize risk. The balances of these accounts sometimes exceed the federally insured limits, although no losses have been incurred in connection with these deposits. Recent accounting pronouncements . In February 2016, the FASB issued guidance requiring lessees to recognize a lease liability and a right-of-use asset for all leases. Lessor accounting will remain largely unchanged with the exception of changes related to costs which qualify as initial direct costs. The guidance will also require new qualitative and quantitative disclosures to help financial statement users better understand the timing, amount and uncertainty of cash flows arising from leases. This guidance will be effective for reporting periods beginning on or after December 15, 2018, with early adoption permitted. We will adopt this guidance on a modified retrospective basis beginning January 1, 2019, and such adoption will result in certain costs (primarily legal costs related to lease negotiations) being expensed rather than capitalized. We capitalized $47,000 in legal related costs for the year ended December 31, 2017 . We had no capitalized legal related costs for the year ended December 31, 2016. In November 2016, the FASB issued guidance requiring that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash quivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will become effective for the reporting periods beginning on or after December 15, 2017, and interim periods within those fiscal years. We adopted this guidance effective January 1, 2018, and we have reconciled cash and cash equivalents and restricted cash and restricted cash equivalents on a retrospective basis, whereas under the previous guidance, we reported restricted cash and restricted cash equivalents under cash flows from financing activities. In January 2017, the FASB issued guidance clarifying 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. This guidance will become effective for the reporting periods beginning on or after December 15, 2017, and interim periods within those fiscal years. We adopted this guidance on a prospective basis beginning January 1, 2018 and believe the majority of our future acquisitions will qualify as asset acquisitions and the associated transaction costs will be capitalized as opposed to expensed under previous guidance. In February 2017, the FASB issued guidance clarifying the scope of asset derecognition guidance, added guidance for partial sales of nonfinancial assets and clarified recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. This guidance will become effective for the reporting periods beginning on or after December 15, 2017, and interim periods within those fiscal years. We adopted this guidance on a modified retrospective basis beginning January 1, 2018, and the adoption of this guidance did not have a material impact on our consolidated financial statements. |
Variable Interest Entity
Variable Interest Entity | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Variable Interest Entity | VARIABLE INTEREST ENTITIES On December 8, 2016, Pillarstone and Pillarstone OP, entered into a Contribution Agreement (the “Contribution Agreement”) with Whitestone REIT Operating Partnership, L.P. (“Whitestone OP”), a subsidiary and the operating partnership of Whitestone, both of which are related parties to Pillarstone and Pillarstone OP, pursuant to which Whitestone OP contributed to Pillarstone OP all of the equity interests in four of its wholly-owned subsidiaries (the “Subsidiaries”): Whitestone CP Woodland Ph. 2, LLC, a Delaware limited liability company; Whitestone Industrial-Office, LLC, a Texas limited liability company; Whitestone Offices, LLC, a Texas limited liability company; and Whitestone Uptown Tower, LLC, a Delaware limited liability company (“Uptown Tower”). The Subsidiaries own 14 real estate assets (the “Real Estate Assets” and, together with the Subsidiaries, the “Property”) for aggregate consideration of approximately $84 million , consisting of (1) approximately $18.1 million of Class A units representing limited partnership interests in Pillarstone OP (“OP Units”), issued at a price of $1.331 per OP Unit; and (2) the assumption of approximately $65.9 million of liabilities by Pillarstone OP. Pursuant to the Contribution Agreement, Pillarstone became the general partner of Pillarstone OP with an equity ownership interest in Pillarstone OP totaling approximately a 18.6% valued at $4.1 million as of the date of the agreement. In connection with the Contribution Agreement, on December 8, 2016, the Company, as the general partner of Pillarstone OP, entered into an Amended and Restated Agreement of Limited Partnership of Pillarstone OP (as amended and restated, the “Amended and Restated Agreement of Limited Partnership”). Pursuant to the Amended and Restated Agreement of Limited Partnership, subject to certain protective rights of the limited partners described below, the general partner has full, exclusive and complete responsibility and discretion in the management and control of Pillarstone OP, including the ability to cause Pillarstone OP to enter into certain major transactions including a merger of Pillarstone OP or a sale of substantially all of the assets of Pillarstone OP. The limited partners have no power to remove the general partner without the general partner's consent. In addition, pursuant to the Amended and Restated Agreement of Limited Partnership, the general partner may not conduct any business without the consent of a majority of the limited partners other than in connection with certain actions described therein. The Company is deemed to exercise significant influence over Pillarstone OP as it has the power to direct the activities that most significantly impact Pillarstone OP's economic performance and the Company's right to receive benefits based on its ownership percentage in Pillarstone OP. Accordingly, the Company accounts for Pillarstone OP as a VIE. The Amended and Restated Agreement of Limited Partnership designates two classes of units of limited partnership interest in Pillarstone OP: the OP Units and LTIP units. In general, LTIP units are similar to the OP Units and will receive the same quarterly per-unit profit distributions as the OP Units. The rights, privileges, and obligations related to each series of LTIP units will be established at the time the LTIP units are issued. As profits interests, LTIP units initially will not have full parity, on a per-unit basis, with OP Units with respect to liquidating distributions. Upon the occurrence of specified events, LTIP units can over time achieve full parity with the OP Units and therefore accrete to an economic value for the holder equivalent to OP Units. If such parity is achieved, vested LTIP units may be converted on a one -for-one basis into OP Units, which in turn are redeemable by the holder for cash or, at the Company’s election, exchangeable for Common Shares on a one -for-one basis. During the period from December 8, 2016 through December 31, 2016, Pillarstone received a distribution in kind equal to the value of the original investment of $4.1 million . The carrying amounts and classification of certain assets and liabilities for Pillarstone OP in our consolidated balance sheet as of December 31, 2017 and 2016 consists of the following (in thousands): December 31, 2017 2016 Real estate assets, at cost Property $ 83,141 $ 80,564 Accumulated depreciation (2,934 ) (150 ) Total real estate assets 80,207 80,414 Cash and cash equivalents 2,812 1,236 Escrows and acquisition deposits 2,188 2,274 Accrued rents and accounts receivable, net of allowance for doubtful accounts (1) 798 213 Receivable due from related party 1,304 2,818 Unamortized lease commissions and deferred legal costs, net 1,265 1,150 Prepaid expenses and other assets 150 134 Total assets $ 88,724 $ 88,239 Liabilities Notes payable 64,313 65,474 Accounts payable and accrued expenses 3,494 3,481 Payable due to related party 1,005 265 Tenants' security deposits 1,191 996 Total liabilities $ 70,003 $ 70,216 (1) Excludes approximately $0.3 million in accounts receivable due from Pillarstone that was eliminated in consolidation as of December 31, 2017 and 2016 . |
Real Estate (Notes)
Real Estate (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate [Abstract] | |
Real Estate | REAL ESTATE As of December 31, 2017 , Pillarstone OP owned 14 commercial properties in the Dallas and Houston areas comprised of approximately 1.5 million square feet of gross leasable area. Unaudited pro forma results of operations. Revenue and net income attributable to the Property of $16.8 million and $2.7 million , respectively, have been included in our results of operations for the year ended December 31, 2017 . The following unaudited pro forma results summarized below reflect our consolidated results of operations as if the Contribution Agreement had occurred on January 1, 2016. The unaudited consolidated pro forma results of operations is not necessarily indicative of what the actual results of operations would have been, assuming the transactions had been completed as set forth above, nor do they purport to represent our results of operations for future periods. Year Ended December 31, 2017 2016 (in thousands, except per share data) (Restated) (Unaudited) Total property revenues $ 16,768 $ 15,323 Net income $ 2,447 $ 2,148 Net income attributable to Common Shareholders $ 215 $ (19 ) Basic earnings per share: $ 0.53 $ (0.05 ) Diluted earnings per share: $ 0.07 $ (0.05 ) |
Accrued Rents and Accounts Rece
Accrued Rents and Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accrued Rents and Accounts Receivable, Net | ACCRUED RENTS AND ACCOUNTS RECEIVABLE, NET Accrued rents and accounts receivable, net consists of amounts accrued, billed and due from tenants, allowance for doubtful accounts and other receivables as follows (in thousands): December 31, 2017 2016 Tenant receivables $ 680 $ 293 Accrued rents and other recoveries 657 45 Allowance for doubtful accounts (539 ) (125 ) Total $ 798 $ 213 |
Unamortized Lease Commissions a
Unamortized Lease Commissions and Deferred Legal Costs, Net | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Unamortized Lease Commissions and Deferred Legal Costs, Net | UNAMORTIZED LEASE COMMISSIONS AND DEFERRED LEGAL COSTS, NET Costs which have been deferred consist of the following (in thousands): December 31, 2017 2016 Leasing commissions $ 1,577 $ 1,163 Deferred legal costs 47 — Total cost 1,624 1,163 Less: leasing commissions accumulated amortization (350 ) (13 ) Less: deferred legal costs accumulated amortization (9 ) — Total cost, net of accumulated amortization $ 1,265 $ 1,150 A summary of expected future amortization of deferred costs is as follows (in thousands): Years Ended December 31, Leasing Commissions Deferred Legal Costs Total 2018 $ 380 $ 11 $ 391 2019 272 9 281 2020 222 7 229 2021 155 5 160 2022 100 4 104 Thereafter 98 2 100 Total $ 1,227 $ 38 $ 1,265 |
Future Minimum Lease Income
Future Minimum Lease Income | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Future Minimum Lease Income | FUTURE MINIMUM LEASE INCOME We lease the majority of our properties under noncancelable operating leases, which provide for minimum base rents plus, in some instances, contingent rents based upon a percentage of the tenants' gross receipts. A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements and contingent rents) under noncancelable operating leases in existence as of December 31, 2017 is as follows (in thousands): Years Ended December 31, Minimum Future Rents 2018 $ 11,532 2019 8,568 2020 6,839 2021 4,429 2022 2,584 Thereafter 13,160 Total $ 47,112 |
Debt Debt
Debt Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Mortgages and other notes payable consist of the following (in thousands): December 31, Description 2017 2016 Fixed rate notes $37.0 million 3.76% Note, due December 1, 2020 $ 33,148 $ 34,166 $16.5 million 4.97% Note, due September 26, 2023 16,058 16,298 Floating rate notes Related party Note, LIBOR plus 1.40% to 1.95%, due December 8, 2018 15,473 15,473 Total notes payable principal 64,679 65,937 Less deferred financing costs, net of accumulated amortization (366 ) (463 ) Total notes payable $ 64,313 $ 65,474 Our mortgage debt was collateralized by 10 operating properties as of December 31, 2017 and 2016 with a combined net book value of $63.0 million and $62.9 million , respectively. Our loans contain restrictions that would require the payment of prepayment penalties for the acceleration of outstanding debt and are secured by deeds of trust on certain of our properties and the assignment of certain rents and leases associated with those properties. Certain other of our loans are subject to customary covenants. As of December 31, 2017 , we were in compliance with all loan covenants. Annual maturities of notes payable as of December 31, 2017 are due during the following years: Year Amount Due (in thousands) 2018 $ 16,817 2019 1,376 2020 31,286 2021 308 2022 323 Thereafter 14,569 Total $ 64,679 |
Convertible Notes Payable - Rel
Convertible Notes Payable - Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable - Related Parties | CONVERTIBLE NOTES PAYABLE - RELATED PARTIES On November 20, 2015, five trustees on our board of trustees loaned $197,780 to the Company in exchange for convertible notes payable. The convertible notes payable accrue interest at 10% per annum and mature on November 20, 2018. The convertible notes payable can be converted by the noteholders into Common Shares at the rate of $1.331 per Common Share at any time. After six months, the Company can convert the notes payable into Common Shares. At maturity or when the Company chooses to convert the convertible notes payable into Common Shares, the noteholders have the option to receive cash plus accrued interest or convert the convertible notes payable into Common Shares. RELATED PARTY TRANSACTIONS On December 8, 2016, the Company entered into the Contribution Agreement with Pillarstone OP and Whitestone OP, both of which are related parties, resulting in the contribution of an equity ownership interest in Pillarstone OP to the Company valued at $4,121,312 and representing approximately 18.6% of the outstanding equity in Pillarstone OP. The terms of the Contribution Agreement were determined through arm's-length negotiations and were recommended to the board of trustees by a special committee of the board of trustees consisting solely of disinterested trustees of the Company and approved by the full board. Pursuant to the Contribution Agreement, the Company has agreed to file with the SEC on or prior to June 8, 2018, a shelf registration statement to register for sale under the Securities Act, the issuance of the Common Shares of beneficial interest in the Company (the “Common Shares”) that may be issued upon redemption of the OP Units issued pursuant to each of the Contribution Agreement and the OP Unit Purchase Agreement (as defined below) and the offer and resale of such Common Shares by the holders thereof. In addition, pursuant to the Contribution Agreement, in the event of a Change of Control (as defined therein) of Whitestone, Pillarstone OP shall have the right, but not the obligation, to repurchase the OP Units issued thereunder from Whitestone OP at their initial issue price of $1.331 per OP Unit. In connection with the Contribution Agreement, on December 8, 2016, the Company and Pillarstone OP entered into an OP Unit Purchase Agreement (the “OP Unit Purchase Agreement”) with Whitestone OP pursuant to which Pillarstone OP may require Whitestone OP to purchase up to an aggregate of $3.0 million of OP Units at a price of $1.331 per OP Unit over the two -year term of the OP Unit Purchase Agreement on the terms set forth therein. In addition, pursuant to the OP Unit Purchase Agreement, in the event of a Change of Control (as defined therein) of Whitestone, Pillarstone OP shall have the right, but not the obligation, to repurchase the OP Units issued thereunder from Whitestone OP at their initial issue price of $1.331 per OP Unit. Pillarstone and Whitestone agreed to extend the filing of the shelf registration statement to a date not later than June 8, 2019, or the date that the Company closes a public equity offering. In connection with the Contribution Agreement, on December 8, 2016, the Company and Pillarstone OP entered into a Tax Protection Agreement (the “Tax Protection Agreement”) with Whitestone OP pursuant to which Pillarstone OP agreed to indemnify Whitestone OP for certain tax liabilities resulting from its recognition of income or gain prior to December 8, 2021 if such liabilities result from a transaction involving a direct or indirect taxable disposition of all or a portion of the Property or if Pillarstone OP fails to maintain and allocate to Whitestone OP for taxation purposes minimum levels of liabilities as specified in the Tax Protection Agreement, the result of which causes such recognition of income or gain and Whitestone incurs taxes that must be paid to maintain its REIT status for federal tax purposes. During the ordinary course of business, we have transactions with Whitestone that include, but are not limited to, rental income, interest expense, general and administrative costs, commissions, management and asset management fees, and property expenses. In connection with the Contribution Agreement, on December 8, 2016, the Company and Pillarstone OP entered into a Management Agreement (collectively, the “Management Agreements”) with Whitestone TRS, Inc., a subsidiary of Whitestone (“Whitestone TRS”). Pursuant to the Management Agreements with respect to each property, other than Uptown Tower, Whitestone TRS agreed to provide certain property management, leasing and day-to-day advisory and administrative services to such properties in exchange for (1) a monthly property management fee equal to 5.0% of the monthly revenues of each property and (2) a monthly asset management fee equal to 0.125% of GAV (as defined in each Management Agreement as, generally, the purchase price of the respective property based upon the purchase price allocations determined pursuant to the Contribution Agreement, excluding all indebtedness, liabilities or claims of any nature) of such property. Pursuant to the Management Agreement with respect to Uptown Tower, Whitestone TRS agreed to provide certain property management, leasing and day-to-day advisory and administrative services in exchange for (1) a monthly property management fee equal to 3.0% of the monthly revenues of Uptown Tower and (y) a monthly asset management fee equal to 0.125% of GAV of Uptown Tower. The following table presents the revenue and expenses with Whitestone included in our consolidated statements of operations for the years ended December 31, 2017 and 2016 (in thousands): Year Ended December 31, Location of Revenue (Expense) 2017 2016 Rent Rental revenues $ 782 $ 58 Property management fees Property operation and maintenance $ (732 ) $ (57 ) Asset management fees Property operation and maintenance $ (264 ) $ (17 ) Interest expense Interest expense $ (528 ) $ (26 ) Receivables due from related parties consisted of the following as of December 31, 2017 and 2016 (in thousands): Year Ended December 31, 2017 2016 Construction in process (1) $ 45 $ 1,439 Tenant receivables and other receivables 1,259 1,379 Total $ 1,304 $ 2,818 (1) Amount relates to future tenant and building improvement expenditures implicit within the Contribution Agreement to be paid by Whitestone and capitalized by the Company in subsequent periods when placed in service. Payables due to related parties consisted of the following as of December 31, 2017 and 2016 (in thousands): Year Ended December 31, 2017 2016 Payables due to related party $ 1,005 $ 265 Total $ 1,005 $ 265 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Shareholders' Equity | SHAREHOLDERS' EQUITY Operating partnership units. Substantially all of our business is conducted through Pillarstone OP and we are the sole general partner. As of December 31, 2017 , we owned a 18.6% interest in Pillarstone OP. At any time on or after six months following the date of the initial issuance thereof, limited partners in Pillarstone OP holding OP units have the right to convert their OP units for cash, or at our option, Common Shares of Pillarstone. As of December 31, 2017 , there were 16,688,167 OP units outstanding. Recent developments. Our common shareholders, Preferred Class A shareholders, and Preferred Class C shareholders approved changes to our declaration of trust, as amended and restated, in March 2016. We presently have authority to issue up to 450,000,000 shares of beneficial interest, $0.01 par value per share, of which 400,000,000 are classified as Common Shares of beneficial interest, $0.01 par value per share and 50,000,000 are classified as preferred shares of beneficial interest, $0.01 par value per share. Of the 50,000,000 preferred shares of beneficial interest, 1,518,000 shares are designated as Preferred Class A Shares and 300,000 shares are designated as Preferred Class C Shares. Previously, we had authority to issue up to 110,000,000 shares of beneficial interest, $0.01 par value per share, of which 100,000,000 were classified as Common Shares of beneficial interest, $0.01 par value per share, and 10,000,000 were classified as preferred shares of beneficial interest, $0.01 par value per share, with 1,518,000 shares designated as Preferred Class A Shares and 300,000 shares designated as Preferred Class C Shares. Preferred shares . The Company has outstanding 95,226 Class A Cumulative Convertible Preferred Shares (“Class A Preferred Shares”) that were issued to the public. The Class A Preferred Shares bear a liquidation value of $10.00 per share. The Class A Preferred Shares are each convertible into 0.046 Common Shares subject to certain formulas. We have the right to redeem the Class A Preferred Shares. Effective June 30, 2003, we issued 696,078 Class A Preferred Shares valued at approximately $2.4 million to James C. Mastandrea, our Chairman, Chief Executive Officer and President, and John J. Dee, our Chief Financial Officer and Senior Vice President, pursuant to separate restricted share agreements. Under each restricted share agreement, the restricted shares vest upon the later of the following dates: • the date our gross assets exceed $50 million , or • 50% of the restricted shares on March 4, 2004; 25% of the shares on March 4, 2005 and the remaining 25% of the shares on March 4, 2006. The Company has not vested any of the above shares. While the Company's gross assets exceed $50 million , when considering its 18.6% ownership of Pillarstone OP, its effective ownership of gross assets is less than $50 million . In conjunction with a one-time incentive exchange offer for Class A Preferred shareholders, Messrs. Mastandrea and Dee exchanged 534,668 of these restricted Class A Preferred Shares into 163,116 restricted Common Shares. The restrictions described above are also applicable to their Common Shares. The remaining 161,410 restricted Class A Preferred Shares held by Messrs. Mastandrea and Dee can each be converted into 0.305 restricted Common Shares . The market value of 161,410 restricted Class A Preferred Shares and 163,116 restricted Common Shares is approximately $590,000 at December 31, 2017 and there is limited trading volume of the Common Shares on OTC Bulletin Board. The number of Common Shares and the conversion factor have been revised to reflect the 1-for- 75 reverse split of the Common Shares that occurred in July 2006. During 2017 , no Class A Preferred Shares were converted into Common Shares, and during 2016, 1,600 Class A Preferred Shares were converted into 73 Common Shares. Effective September 29, 2006, Pillarstone filed articles supplementary to its Declaration of Trust, as amended, restated and supplemented with the State Department of Assessment and Taxation of Maryland designating 300,000 Class C Convertible Preferred Shares (“Class C Preferred Shares”). The Class C Preferred Shares have voting rights equal to the number of Common Shares into which they are convertible. Each Class C Preferred Share is convertible into Common Shares by dividing by the sum of $10.00 and any accrued but unpaid dividends on the Class C Preferred Shares by the conversion price of $1.00 . The Class C Preferred Shares have a liquidation preference of $10.00 per share, plus any accrued but unpaid dividends, and can be redeemed by the board of trustees at any time, with notice, at the same price per share. Effective September 29, 2006, three independent trustees of Pillarstone signed subscription agreements to purchase 125,000 Class C Preferred Shares for an aggregate contribution of $500,000 to maintain Pillarstone as a corporate shell current in its SEC filings. In addition, on September 29, 2006, Mr. Mastandrea signed a subscription agreement to purchase 44,444 restricted shares of Class C Preferred Shares. The consideration for the purchase was Mr. Mastandrea’s services as an officer of Pillarstone for the period beginning September 29, 2006 and ending September 29, 2008. The Class C Preferred Shares are subject to forfeiture and are restricted from being sold by Mr. Mastandrea until the latest to occur of a public offering by Pillarstone sufficient to liquidate the Class C Preferred Shares, an exchange of Pillarstone’s existing shares for new shares, or September 29, 2008. These shares were fully amortized by the original date in 2008. Each of the trustees of Pillarstone signed a restricted share agreement with Pillarstone, dated September 29, 2006, to receive a total of 12,500 restricted Class C Preferred Shares in lieu of receiving fees in cash for service as a trustee for the two years ending September 29, 2008. The restrictions on the Class C Preferred Shares were to be removed upon the latest to occur of a public offering by Pillarstone sufficient to liquidate the Class C Preferred Shares, an exchange of Pillarstone's existing shares for new shares, or September 29, 2008. These shares were fully amortized by the original date in 2008. Shares held in treasury . On October 1, 2003, we completed the sale of our 92.9% general partnership interest in our four commercial properties. A portion of the proceeds from the sale was paid in 38,130 of our Common Shares at an average closing price for the 30 calendar days prior to June 27, 2003 of $21.00 or approximately $801,000 . These shares are recorded at cost in the accompanying consolidated balance sheets under treasury shares. Restricted Common Shares . The following table summarizes the activity of our unvested restricted Common Shares for the years ended December 31, 2017 and 2016 : Unvested Restricted Common Shares Weighted-Average Number of Grant-Date Shares Fair Value Unvested at December 31, 2015 168,449 $11.44 Vested — — Unvested at December 31, 2016 168,449 $11.44 Vested — — Unvested at December 31, 2017 168,449 $11.44 In the above table, 163,116 restricted shares vest upon meeting performance goals as discussed under “Preferred Shares.” Since the grant date, we have determined that meeting these performance goals is not probable and no compensation expense has been recognized related to this grant. The grant date fair value of $1,847,000 would be recognized at the point we deem it probable that we would meet the performance goals. The balance of 5,333 restricted shares had grant date fair values totaling $79,000 , which was recognized in prior periods though the restrictions remain on the shares. On June 30, 2003, our shareholders approved the issuance of an agreement to issue additional Common Shares to Paragon Real Estate Development, LLC of which Mr. Mastandrea is the managing member, and Mr. Dee is a member. In September 2006, Pillarstone amended this agreement to include each of the trustees to the agreement so that if a trustee brings a new transaction to Pillarstone, he would receive additional Common Shares of Pillarstone in accordance with a formula in the agreement. In January 2016, the non-employee trustees and Mr. Mastandrea agreed to make this agreement for only non-employee trustees. The agreement is intended to serve as an incentive for our trustees to increase the asset base, net operating income, funds from operations, and share value of Pillarstone. The exact number of Common Shares that would be issued will be calculated in accordance with a formula in the agreement based on future acquisition, development or redevelopment transactions. Any of these transactions would be subject to approval by the members of our board of trustees who are not receiving the additional Common Shares. We would issue our Common Shares only upon the closing of a transaction. The maximum number of Common Shares a trustee may receive under the additional contribution agreement is limited to a total value of $26 million based on the average closing price of our Common Shares for 30 calendar days preceding the closing of any acquisition transaction. The Common Shares will be restricted until we achieve the five years -year pro forma income target for the acquisition, as approved by the board of trustees, and an increase of 5% in Pillarstone's net operating income and funds from operations. The restricted shares would vest immediately upon any “shift in ownership,” as defined in the agreement. Options . On November 16, 1998, we adopted the 1998 Share Option Plan. In 2004 the board of trustees unanimously recommended and the shareholders approved amendments to our 1998 Share Option Plan to increase the number of shares available for grant from 42,222 to 46,666 and to conform with current tax regulations (“2004 Plan”). The 2004 Plan expired in 2014 ; the one outstanding grant of 667 options remains effective until 90 days after the term ends of the individual trustee. The following table summarizes the activity for outstanding stock options: Options Outstanding Weighted-Average Weighted-Average Remaining Number of Exercise Contractual Term Aggregate Shares Price (in years) Intrinsic Value (1) Balance at December 31, 2015 667 $ 33.75 1.3 $ — Granted — — Exercised — — Canceled / forfeited / expired — $ — Balance at December 31, 2016 667 $ 33.75 1.25 $ — Granted — — Exercised — — Canceled / forfeited / expired — — Balance at December 31, 2017 667 $ 33.75 1.25 $ — Vested and exercisable as of December 31, 2017 — $ — — $ — (1) The aggregate intrinsic value is calculated as approximately the difference between the weighted average exercise price of the underlying awards and the Company’s estimated current fair market value at December 31, 2017 . Because the weighted average exercise price exceeds fair market value at December 31, 2017 , there is no aggregate intrinsic value for the options. The Company did not recognize any stock-based compensation expense during the years ending December 31, 2017 and 2016 . As of December 31, 2017 and 2016 , there was no remaining unrecognized cost related to stock options. |
Incentive Equity Plan
Incentive Equity Plan | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Incentive Equity Plan | INCENTIVE EQUITY PLAN At the 2016 Annual Meeting of Shareholders, our shareholders approved the 2016 Equity Plan (“2016 Plan”). The 2016 Plan provides that awards may be made in Common Shares of the Company or units in the Company’s operating partnership, which may be converted into Common Shares. Subject to adjustment as provided by the terms of the 2016 Plan, the maximum aggregate number of Common Shares with respect to which awards may be granted under the 2016 Plan will be increased based on future issuances of Common Shares and units of the operating partnership, including issuances pursuant to the 2016 Plan, so that at any time the maximum number of shares that may be issued under the 2016 Plan shall equal 12.5% of the aggregate number of Common Shares and units of the operating partnership issued and outstanding (other than treasury shares and/or units issued to or held by the Company). The Management, Organization and Compensation Committee (the “Committee”) administers the 2016 Plan, except with respect to awards to non-employee trustees, for which the 2016 Plan is administered by the board of trustees. Subject to the terms of the 2016 Plan, the Committee is authorized to select participants, determine the type and number of awards to be granted, determine and later amend (subject to certain limitations) the terms and conditions of any award, interpret and specify the rules and regulations relating to the 2016 Plan, and make all other determinations which may be necessary or desirable for the administration of the 2016 Plan. The 2016 Plan includes the types of awards for grants and the types of financial performance measures. As of December 31, 2017, the maximum number of Common Shares or OP Units available to be granted is 2,356,426 and no grants have been issued under the 2016 Plan. DIVIDENDS AND DISTRIBUTIONS No cash distributions were declared during 2017 and 2016 with respect to the common or preferred shares. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | EARNINGS (LOSS) PER SHARE The Company applies the guidance of ASC 260, "Earnings Per Share," for all periods presented herein. Net earnings (loss) per weighted average Common Share outstanding, basic and diluted, is computed based on the weighted average number of Common Shares outstanding for the period. The following table shows the weighted average number of Common Shares outstanding and reconciles the numerator and denominator of both earnings (loss) per Common Share calculations for the years ended December 31, 2017 and 2016 . For the year ended December 31, 2016, Class A Preferred Shares and Class C Preferred Shares were not included in net income (loss) per weighted average Common Share outstanding-diluted as they would be anti-dilutive. During the years ended December 31, 2017 and 2016 , the Company had $197,780 of convertible notes payable as discussed in Note 11. The convertible notes payable were not included in the computation of diluted earnings per share because the effect of conversion would be anti-dilutive. For the year ended December 31, (in thousands, except share and per share data) 2017 2016 (Restated) Numerator: Net income (loss) available to Common Shareholders $ 215 $ (465 ) Dilutive effect of interest from convertible notes payable — — Net income (loss) available to Common Shareholders with assumed conversion $ 215 $ (465 ) Denominator: Weighted average number of Common Shares - basic 405,169 405,169 Effect of dilutive securities: Assumed conversion of Preferred A Shares 53,610 — Assumed conversion of Preferred C Shares 2,444,440 — Assumed conversion of convertible notes payable — — Weighted average number of Common Shares - dilutive 2,903,219 405,169 Earnings (Loss) Per Share: Basic income (loss) per Common Share: Net income (loss) available to Common Shareholders $ 0.53 $ (1.15 ) Diluted income (loss) per Common Share: Net income (loss) available to Common Shareholders $ 0.07 $ (1.15 ) |
Dividends and Distributions
Dividends and Distributions | 12 Months Ended |
Dec. 31, 2017 | |
Distributions Made to Members or Limited Partners [Abstract] | |
Dividends and Distributions | INCENTIVE EQUITY PLAN At the 2016 Annual Meeting of Shareholders, our shareholders approved the 2016 Equity Plan (“2016 Plan”). The 2016 Plan provides that awards may be made in Common Shares of the Company or units in the Company’s operating partnership, which may be converted into Common Shares. Subject to adjustment as provided by the terms of the 2016 Plan, the maximum aggregate number of Common Shares with respect to which awards may be granted under the 2016 Plan will be increased based on future issuances of Common Shares and units of the operating partnership, including issuances pursuant to the 2016 Plan, so that at any time the maximum number of shares that may be issued under the 2016 Plan shall equal 12.5% of the aggregate number of Common Shares and units of the operating partnership issued and outstanding (other than treasury shares and/or units issued to or held by the Company). The Management, Organization and Compensation Committee (the “Committee”) administers the 2016 Plan, except with respect to awards to non-employee trustees, for which the 2016 Plan is administered by the board of trustees. Subject to the terms of the 2016 Plan, the Committee is authorized to select participants, determine the type and number of awards to be granted, determine and later amend (subject to certain limitations) the terms and conditions of any award, interpret and specify the rules and regulations relating to the 2016 Plan, and make all other determinations which may be necessary or desirable for the administration of the 2016 Plan. The 2016 Plan includes the types of awards for grants and the types of financial performance measures. As of December 31, 2017, the maximum number of Common Shares or OP Units available to be granted is 2,356,426 and no grants have been issued under the 2016 Plan. DIVIDENDS AND DISTRIBUTIONS No cash distributions were declared during 2017 and 2016 with respect to the common or preferred shares. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For financial reporting purposes, income before federal income taxes attributable to Common Shareholders includes the following components (in thousands): For the year ended December 31, 2017 2016 Net income (loss) $ 2,447 $ (262 ) Less: noncontrolling interest in subsidiary 2,232 203 Net income (loss) attributable to Common Shareholders $ 215 $ (465 ) The Company follows the provisions of ASC Topic 740 which provides for recognition of deferred tax assets and liabilities for deductible temporary timing differences, net of a valuation allowance for any asset for which it is more-likely-than-not will not be realized in the Company’s tax return. Income tax provisions were $88,000 and $0 for the years ended December 31, 2017 and 2016 , respectively. The income tax expense (benefit) included in the consolidated statements of operations for the years ended December 31, 2017 and 2016 was comprised of the following components (in thousands): For the year ended December 31, 2017 2016 Federal: Deferred $ 46 $ 8 Change in deferred rate from 34% to 21% for 2017 and 40% to 34% for 2016 331 156 Change in valuation allowance (377 ) (164 ) $ — $ — State: Current $ 88 $ — $ 88 $ — Total tax expense $ 88 $ — The items accounting for the difference between income taxes computed at the Federal statutory rate and our effective rate were as follows: For the year ended December 31, 2017 2016 Federal statutory rate 34 % 34 % Effect of: Noncontrolling interest (31 )% 26 % State income tax benefit, net of Federal tax effect 4 % — % Change in deferred valuations — % (63 )% Change in deferred rate from 34% to 21% for 2017 and 40% to 34% for 2016 12 % (59 )% Change in valuation allowance (15 )% 62 % Effective rate 4 % — % Deferred tax assets and liabilities consist of the following (in thousands): At December 31, 2017 2016 Deferred tax assets and liabilities: Net operating loss carry-forwards $ 164 $ 250 Depreciation and amortization 209 449 Acquisition and organizational costs 72 125 Accruals and others 45 43 Total deferred tax assets and liabilities 490 867 Valuation allowance (490 ) (867 ) Deferred tax assets and liabilities net of valuation allowance $ — $ — Realization of deferred tax assets is dependent upon generation of sufficient future taxable income and the effects of other loss utilization provisions. Management has determined that sufficient uncertainty exists regarding the realizability of the net deferred tax assets and has provided a full valuation allowance of $490,000 and $867,000 , against the net deferred tax assets of the Company as of December 31, 2017 and 2016 , respectively. A valuation allowance is considered to be a significant estimate that may change in the near term. As of December 31, 2017 , the Company had net operating loss carry-forwards of $777,000 available to be carried to future periods. The loss carry-forwards expire as follows (in thousands): Year Expiring Net Operating Loss 2026 $ 41 2027 114 2028 60 2029 81 2030 52 2031 39 2032 61 2033 54 2034 57 2035 67 2036 108 2037 43 Total loss carry-forwards $ 777 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | CONVERTIBLE NOTES PAYABLE - RELATED PARTIES On November 20, 2015, five trustees on our board of trustees loaned $197,780 to the Company in exchange for convertible notes payable. The convertible notes payable accrue interest at 10% per annum and mature on November 20, 2018. The convertible notes payable can be converted by the noteholders into Common Shares at the rate of $1.331 per Common Share at any time. After six months, the Company can convert the notes payable into Common Shares. At maturity or when the Company chooses to convert the convertible notes payable into Common Shares, the noteholders have the option to receive cash plus accrued interest or convert the convertible notes payable into Common Shares. RELATED PARTY TRANSACTIONS On December 8, 2016, the Company entered into the Contribution Agreement with Pillarstone OP and Whitestone OP, both of which are related parties, resulting in the contribution of an equity ownership interest in Pillarstone OP to the Company valued at $4,121,312 and representing approximately 18.6% of the outstanding equity in Pillarstone OP. The terms of the Contribution Agreement were determined through arm's-length negotiations and were recommended to the board of trustees by a special committee of the board of trustees consisting solely of disinterested trustees of the Company and approved by the full board. Pursuant to the Contribution Agreement, the Company has agreed to file with the SEC on or prior to June 8, 2018, a shelf registration statement to register for sale under the Securities Act, the issuance of the Common Shares of beneficial interest in the Company (the “Common Shares”) that may be issued upon redemption of the OP Units issued pursuant to each of the Contribution Agreement and the OP Unit Purchase Agreement (as defined below) and the offer and resale of such Common Shares by the holders thereof. In addition, pursuant to the Contribution Agreement, in the event of a Change of Control (as defined therein) of Whitestone, Pillarstone OP shall have the right, but not the obligation, to repurchase the OP Units issued thereunder from Whitestone OP at their initial issue price of $1.331 per OP Unit. In connection with the Contribution Agreement, on December 8, 2016, the Company and Pillarstone OP entered into an OP Unit Purchase Agreement (the “OP Unit Purchase Agreement”) with Whitestone OP pursuant to which Pillarstone OP may require Whitestone OP to purchase up to an aggregate of $3.0 million of OP Units at a price of $1.331 per OP Unit over the two -year term of the OP Unit Purchase Agreement on the terms set forth therein. In addition, pursuant to the OP Unit Purchase Agreement, in the event of a Change of Control (as defined therein) of Whitestone, Pillarstone OP shall have the right, but not the obligation, to repurchase the OP Units issued thereunder from Whitestone OP at their initial issue price of $1.331 per OP Unit. Pillarstone and Whitestone agreed to extend the filing of the shelf registration statement to a date not later than June 8, 2019, or the date that the Company closes a public equity offering. In connection with the Contribution Agreement, on December 8, 2016, the Company and Pillarstone OP entered into a Tax Protection Agreement (the “Tax Protection Agreement”) with Whitestone OP pursuant to which Pillarstone OP agreed to indemnify Whitestone OP for certain tax liabilities resulting from its recognition of income or gain prior to December 8, 2021 if such liabilities result from a transaction involving a direct or indirect taxable disposition of all or a portion of the Property or if Pillarstone OP fails to maintain and allocate to Whitestone OP for taxation purposes minimum levels of liabilities as specified in the Tax Protection Agreement, the result of which causes such recognition of income or gain and Whitestone incurs taxes that must be paid to maintain its REIT status for federal tax purposes. During the ordinary course of business, we have transactions with Whitestone that include, but are not limited to, rental income, interest expense, general and administrative costs, commissions, management and asset management fees, and property expenses. In connection with the Contribution Agreement, on December 8, 2016, the Company and Pillarstone OP entered into a Management Agreement (collectively, the “Management Agreements”) with Whitestone TRS, Inc., a subsidiary of Whitestone (“Whitestone TRS”). Pursuant to the Management Agreements with respect to each property, other than Uptown Tower, Whitestone TRS agreed to provide certain property management, leasing and day-to-day advisory and administrative services to such properties in exchange for (1) a monthly property management fee equal to 5.0% of the monthly revenues of each property and (2) a monthly asset management fee equal to 0.125% of GAV (as defined in each Management Agreement as, generally, the purchase price of the respective property based upon the purchase price allocations determined pursuant to the Contribution Agreement, excluding all indebtedness, liabilities or claims of any nature) of such property. Pursuant to the Management Agreement with respect to Uptown Tower, Whitestone TRS agreed to provide certain property management, leasing and day-to-day advisory and administrative services in exchange for (1) a monthly property management fee equal to 3.0% of the monthly revenues of Uptown Tower and (y) a monthly asset management fee equal to 0.125% of GAV of Uptown Tower. The following table presents the revenue and expenses with Whitestone included in our consolidated statements of operations for the years ended December 31, 2017 and 2016 (in thousands): Year Ended December 31, Location of Revenue (Expense) 2017 2016 Rent Rental revenues $ 782 $ 58 Property management fees Property operation and maintenance $ (732 ) $ (57 ) Asset management fees Property operation and maintenance $ (264 ) $ (17 ) Interest expense Interest expense $ (528 ) $ (26 ) Receivables due from related parties consisted of the following as of December 31, 2017 and 2016 (in thousands): Year Ended December 31, 2017 2016 Construction in process (1) $ 45 $ 1,439 Tenant receivables and other receivables 1,259 1,379 Total $ 1,304 $ 2,818 (1) Amount relates to future tenant and building improvement expenditures implicit within the Contribution Agreement to be paid by Whitestone and capitalized by the Company in subsequent periods when placed in service. Payables due to related parties consisted of the following as of December 31, 2017 and 2016 (in thousands): Year Ended December 31, 2017 2016 Payables due to related party $ 1,005 $ 265 Total $ 1,005 $ 265 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Employment Agreements On April 3, 2006, the board of trustees authorized modifications to Mr. Mastandrea’s employment agreement. The modification agreement allows Mr. Mastandrea to devote time to other business and personal investments while performing his duties for Pillarstone. The original employment agreement with Mr. Mastandrea provides for an annual salary of $60,000 effective as of March 4, 2003. The initial term of Mr. Mastandrea’s employment is for two years and may be extended for terms of one year . Mr. Mastandrea’s base annual salary may be adjusted from time to time, except that the adjustment may not be lower than the preceding year’s base salary. The employment agreement provides that Mr. Mastandrea will be entitled to base salary and bonus at the rate in effect before any termination for a period of three years in the event that his employment is terminated without cause by us or for good reason by Mr. Mastandrea. Effective September 29, 2006, in lieu of an annual salary of $100,000 and to conserve cash, Mr. Mastandrea agreed to receive 44,444 Class C Preferred Shares for his services as an officer of Pillarstone through September 29, 2008. The shares were fully amortized by the original date in 2008. Mr. Dee’s employment agreement was also modified on April 3, 2006 in a similar way to Mr. Mastandrea’s employment agreement as explained above, except Mr. Dee does not receive any Class C Preferred Shares for his services as an officer of Pillarstone. Mr. Dee’s base annual salary may be adjusted from time to time, except that the adjustment may not be lower than the preceding year’s base salary. The employment agreement provides that Mr. Dee will be entitled to base salary and bonus at the rate in effect before any termination for a period of three years in the event that his employment is terminated without cause by us or for good reason by Mr. Dee. On September 29, 2006, the board of trustees approved compensation to Mr. Dee of $125 per hour, up to a maximum of $5,000 per month. However, Mr. Dee has forgone receiving any cash compensation under this arrangement in order to preserve the Company’s cash. |
Segment Information Segment Inf
Segment Information Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Our management historically has not differentiated by property types and therefore does not present segment information. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | (in thousands) Balance at Charged to Deductions Balance at Beginning Costs and from End of Description of Year Expense Reserves Year Deferred tax asset allowance: Year ended December 31, 2017 $ 867 $ (377 ) $ — $ 490 Year ended December 31, 2016 1,031 (164 ) — 867 Year ended December 31, 2015 1,004 27 — 1,031 Allowance for doubtful accounts: Year ended December 31, 2017 $ 125 412 2 $ 539 Year ended December 31, 2016 — 127 (2 ) 125 Year ended December 31, 2015 — — — — |
Schedule III - Real Estate and
Schedule III - Real Estate and Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2017 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
Schedule III - Real Estate and Accumulated Depreciation | Costs Capitalized Subsequent Gross Amount at which Carried at Initial Cost (in thousands) to Acquisition (in thousands) End of Period (in thousands) (1) (2) Building and Improvements Carrying Building and Property Name Land Improvements (net) Costs Land Improvements Total Pillarstone OP Properties: 9101 LBJ Freeway $ 3,590 $ 2,811 $ 82 $ — $ 3,590 $ 2,893 $ 6,483 Corporate Park Northwest 1,326 5,009 189 — 1,326 5,198 6,524 Corporate Park West 2,772 10,144 501 — 2,772 10,645 13,417 Corporate Park Woodland 1,144 4,764 65 — 1,144 4,829 5,973 Corporate Park Woodland II 2,730 24 — — 2,730 24 2,754 Dairy Ashford 325 920 2 — 325 922 1,247 Holly Hall Industrial Park 2,730 1,768 1 — 2,730 1,769 4,499 Holly Knight 807 1,231 110 — 807 1,341 2,148 Interstate 10 Warehouse 2,915 765 110 — 2,915 875 3,790 Main Park 1,176 1,626 432 — 1,176 2,058 3,234 Plaza Park 1,527 1,660 50 — 1,527 1,710 3,237 Uptown Tower 7,304 15,493 690 — 7,304 16,183 23,487 Westbelt Plaza 1,171 1,393 81 — 1,171 1,474 2,645 Westgate Service Center 937 2,502 267 — 937 2,769 3,706 Total - Pillarstone OP Properties $ 30,454 $ 50,110 $ 2,580 $ — $ 30,454 $ 52,690 $ 83,144 Accumulated Depreciation Date Depreciation Property Name Encumbrances (in thousands) Acquired Life Pillarstone OP Properties: 9101 LBJ Freeway $ 213 12/8/2016 5-39 years Corporate Park Northwest 416 12/8/2016 5-39 years Corporate Park West (3) 333 12/8/2016 5-39 years Corporate Park Woodland (3) 194 12/8/2016 5-39 years Corporate Park Woodland II 3 12/8/2016 5-39 years Dairy Ashford (3) 26 12/8/2016 5-39 years Holly Hall Industrial Park (3) 95 12/8/2016 5-39 years Holly Knight 48 12/8/2016 5-39 years Interstate 10 Warehouse (3) 48 12/8/2016 5-39 years Main Park (3) 155 12/8/2016 5-39 years Plaza Park (3) 152 12/8/2016 5-39 years Uptown Tower (4) 913 12/8/2016 5-39 years Westbelt Plaza (3) 163 12/8/2016 5-39 years Westgate Service Center (3) 175 12/8/2016 5-39 years Total - Pillarstone OP Properties $ 2,934 (1) Reconciliations of total real estate carrying value for the years ended December 31, 2017 and 2016 follows: (in thousands) 2017 2016 Balance at beginning of period $ 80,564 $ — Additions during the period: Acquisitions — 80,564 Improvements 2,641 — 2,641 80,564 Deductions - cost of real estate sold or retired (61 ) — Balance at close of period $ 83,144 $ 80,564 (2) The aggregate cost of real estate (in thousands) for federal income tax purposes is $84,646 . (3) These properties secure a $37.0 million mortgage note. (4) This property secures a $16.5 million mortgage note. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting. Our financial records are maintained on the accrual basis of accounting whereby revenues are recognized when earned and expenses are recorded when incurred. |
Use of estimates | Use of estimates. In order to conform with U.S. GAAP, management, in preparation of our consolidated financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2017 and 2016 , and the reported amounts of revenues and expenses for the years ended December 31, 2017 and 2016 . Actual results could differ from those estimates. Significant estimates include deferred taxes and the related valuation allowance for deferred taxes, and these significant estimates, as well as other estimates and assumptions, may change in the near term. |
Cash and cash equivalents | Cash and cash equivalents. We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents as of December 31, 2017 and 2016 consisted of demand deposits at commercial banks and brokerage accounts. We maintain our cash in bank accounts that are federally insured. |
Business combinations | Acquired Properties and Acquired Lease Intangibles. We allocate the purchase price of the acquired properties to land, building and improvements, identifiable intangible assets and to the acquired liabilities based on their respective fair values at the time of purchase. Identifiable intangibles include amounts allocated to acquired out-of-market leases, the value of in-place leases and customer relationship value, if any. We determine fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in our analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt. |
Depreciation | Depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of 5 to 39 years for improvements and buildings, respectively. Tenant improvements are depreciated using the straight-line method over the life of the improvement or remaining term of the lease, whichever is shorter. |
Impairment | Impairment. We review our properties for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the assets, including accrued rental income, may not be recoverable through operations. We determine whether an impairment in value has occurred by comparing the estimated future cash flows (undiscounted and without interest charges), including the estimated residual value of the property, with the carrying cost of the property. If impairment is indicated, a loss will be recorded for the amount by which the carrying value of the property exceeds its fair value. |
Accrued Rents and Accounts Receivable | Accrued Rents and Accounts Receivable. Included in accrued rent and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. An allowance for the uncollectible portion of accrued rents and accounts receivable is determined based upon customer credit-worthiness (including expected recovery of our claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. |
Unamortized Lease Commissions and Loan Costs Policy | Unamortized Lease Commissions and Deferred Legal Costs. Leasing commissions and deferred legal costs are amortized using the straight-line method over the terms of the related lease agreements. Loan costs are amortized on the straight-line method over the terms of the loans, which approximates the interest method. Costs allocated to in-place leases whose terms differ from market terms related to acquired properties are amortized over the remaining life of the respective leases. |
Investment in equipment | Prepaids and Other assets . Prepaids and other assets include escrows established pursuant to certain mortgage financing arrangements for real estate taxes and insurance. |
Revenue Recognition | Revenue recognition . All leases on our properties are classified as operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases. Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable. Percentage rents are recognized as rental income when the thresholds upon which they are based have been met. Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred. We have established an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. |
Stock-based compensation | Stock-based compensation . The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation," which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. ASC 718 generally requires that these transactions be accounted for using a fair-value-based method. The Company uses the Black-Scholes option-pricing model to determine the fair-value of stock-based awards. |
Income taxes | Income taxes . Because we have not elected to be taxed as a REIT for federal income tax purposes, we account for income taxes using the liability method under which deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the period in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company evaluates potential uncertain tax positions on an annual basis in conjunction with the board of trustees and its tax accountants. Authoritative literature provides a two-step approach to recognize and measure tax benefits when realization of the benefits is uncertain. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50% . The Company has no uncertain tax positions that required adjustments to our consolidated financial statements in 2017 or 2016 . At December 31, 2017 , we have net operating loss carry-forwards totaling $777,000 . While these losses created a deferred tax asset, a valuation allowance was applied against the asset because of the uncertainty of whether we will be able to use these loss carry-forwards, which will expire in varying amounts through the year 2037 . |
Fair value of financial instruments | Fair Value of Financial Instruments. Our financial instruments consist primarily of cash, cash equivalents, accounts receivable, accounts and notes payable and investments in marketable securities. The carrying value of cash, cash equivalents, accounts receivable and accounts payable are representative of their respective fair values due to their short-term nature. The fair value of our long-term debt, consisting of fixed rate secured notes aggregate to approximately $65.1 million and $65.9 million as compared to the book value of approximately $64.7 million and $65.9 million as of December 31, 2017 and 2016 , respectively. The fair value of our long-term debt is estimated on a Level 2 basis (as provided by ASC 820, “Fair Value Measurements and Disclosures ”), using a discounted cash flow analysis based on the borrowing rates currently available to us for loans with similar terms and maturities, discounting the future contractual interest and principal payments. Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2017 and 2016. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2017 and current estimates of fair value may differ significantly from the amounts presented herein. |
Concentration of Risk | Concentration of Risk. Substantially all of our revenues are obtained from office and warehouse locations in the Dallas-Fort Worth and Houston metropolitan areas. We maintain cash accounts in major U.S. financial institutions. The terms of these deposits are on demand to minimize risk. The balances of these accounts sometimes exceed the federally insured limits, although no losses have been incurred in connection with these deposits. |
Recent accounting pronouncements | Recent accounting pronouncements . In February 2016, the FASB issued guidance requiring lessees to recognize a lease liability and a right-of-use asset for all leases. Lessor accounting will remain largely unchanged with the exception of changes related to costs which qualify as initial direct costs. The guidance will also require new qualitative and quantitative disclosures to help financial statement users better understand the timing, amount and uncertainty of cash flows arising from leases. This guidance will be effective for reporting periods beginning on or after December 15, 2018, with early adoption permitted. We will adopt this guidance on a modified retrospective basis beginning January 1, 2019, and such adoption will result in certain costs (primarily legal costs related to lease negotiations) being expensed rather than capitalized. We capitalized $47,000 in legal related costs for the year ended December 31, 2017 . We had no capitalized legal related costs for the year ended December 31, 2016. In November 2016, the FASB issued guidance requiring that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash quivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will become effective for the reporting periods beginning on or after December 15, 2017, and interim periods within those fiscal years. We adopted this guidance effective January 1, 2018, and we have reconciled cash and cash equivalents and restricted cash and restricted cash equivalents on a retrospective basis, whereas under the previous guidance, we reported restricted cash and restricted cash equivalents under cash flows from financing activities. In January 2017, the FASB issued guidance clarifying 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. This guidance will become effective for the reporting periods beginning on or after December 15, 2017, and interim periods within those fiscal years. We adopted this guidance on a prospective basis beginning January 1, 2018 and believe the majority of our future acquisitions will qualify as asset acquisitions and the associated transaction costs will be capitalized as opposed to expensed under previous guidance. In February 2017, the FASB issued guidance clarifying the scope of asset derecognition guidance, added guidance for partial sales of nonfinancial assets and clarified recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. This guidance will become effective for the reporting periods beginning on or after December 15, 2017, and interim periods within those fiscal years. We adopted this guidance on a modified retrospective basis beginning January 1, 2018, and the adoption of this guidance did not have a material impact on our consolidated financial statements. |
Restatement of Previously Iss30
Restatement of Previously Issued Consolidated Financial Statements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Restatement of the Balance Sheet and Income Statement | The following table presents the effects of the restatement on the consolidated balance sheet as of December 31, 2017 (in thousands): December 31, 2017 As Reported Effect of Restatement As Restated Real estate assets, at cost Property $ 3 $ 83,141 $ 83,144 Accumulated depreciation — (2,934 ) (2,934 ) Total real estate assets 3 80,207 80,210 Cash and cash equivalents 179 2,812 2,991 Escrows and acquisition deposits — 2,188 2,188 Accrued rents and accounts receivable, net of allowance for doubtful accounts — 798 798 Receivable due from related party — 1,304 1,304 Unamortized lease commissions and deferred legal costs, net — 1,265 1,265 Prepaid expenses and other assets 10 150 160 Total assets $ 192 $ 88,724 $ 88,916 December 31, 2017 As Reported Effect of Restatement As Restated Notes payable $ — $ 64,313 $ 64,313 Accounts payable and accrued expenses 92 3,494 3,586 Accounts payable - related party 316 689 1,005 Convertible notes payable - related parties 198 — 198 Accrued interest payable 42 — 42 Tenants' security deposits — 1,191 1,191 Negative equity investment in Pillarstone Capital REIT LP 88 (88 ) — Total liabilities 736 69,599 70,335 Commitments and contingencies — — — Shareholders' Equity (Deficit): Preferred A Shares - $0.01 par value, 1,518,000 authorized: 256,636 Class A cumulative convertible shares issued and outstanding at December 31, 2017 and 2016, $10.00 per share liquidation preference 3 — 3 Preferred C Shares - $0.01 par value, 300,000 authorized: 244,444 Class C cumulative convertible shares issued and outstanding at December 31, 2017 and 2016, $10.00 per share liquidation preference 2 — 2 Common Shares - $0.01 par value, 400,000,000 authorized: 443,299 shares issued and 405,169 outstanding at December 31, 2017 and 2016 4 — 4 Additional paid-in capital 28,147 — 28,147 Accumulated deficit (27,899 ) 264 (27,635 ) Treasury stock, at cost, 38,130 shares (801 ) — (801 ) Total Pillarstone Capital REIT shareholders' deficit (544 ) 264 (280 ) Noncontrolling interest in subsidiary — 18,861 18,861 Total equity (deficit) (544 ) 19,125 18,581 Total liabilities and equity $ 192 $ 88,724 $ 88,916 The following table presents the effects of the restatement on the consolidated statement of operations for the year ended December 31, 2017 (in thousands, except per share data): Year Ended December 31, 2017 As Reported Effect of Restatement As Restated Property revenues Rental revenues $ — $ 14,218 $ 14,218 Other revenues — 2,550 2,550 Total property revenues — 16,768 16,768 Property expenses Property operation and maintenance — 5,029 5,029 Real estate taxes — 2,672 2,672 Total property expenses — 7,701 7,701 Other expenses General and administrative 273 235 508 Depreciation and amortization — 3,268 3,268 Interest expense 19 2,706 2,725 Total other expense 292 6,209 6,501 Income (loss) before loss on disposal of assets and income taxes (292 ) 2,858 2,566 Loss on disposal of assets — (31 ) (31 ) Equity in income of Pillarstone Capital REIT Operating Partnership LP 275 (275 ) — Provision for income taxes — (88 ) (88 ) Net income (loss) (17 ) 2,464 2,447 Less: non-controlling interest in subsidiary — 2,232 2,232 Net income (loss) attributable to Common Shareholders $ (17 ) $ 232 $ 215 Net income (loss) attributable to Common Shareholders per Common Share: Basic $ (0.04 ) $ 0.57 $ 0.53 Diluted $ (0.04 ) $ 0.11 $ 0.07 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Variable Interest Entities | The carrying amounts and classification of certain assets and liabilities for Pillarstone OP in our consolidated balance sheet as of December 31, 2017 and 2016 consists of the following (in thousands): December 31, 2017 2016 Real estate assets, at cost Property $ 83,141 $ 80,564 Accumulated depreciation (2,934 ) (150 ) Total real estate assets 80,207 80,414 Cash and cash equivalents 2,812 1,236 Escrows and acquisition deposits 2,188 2,274 Accrued rents and accounts receivable, net of allowance for doubtful accounts (1) 798 213 Receivable due from related party 1,304 2,818 Unamortized lease commissions and deferred legal costs, net 1,265 1,150 Prepaid expenses and other assets 150 134 Total assets $ 88,724 $ 88,239 Liabilities Notes payable 64,313 65,474 Accounts payable and accrued expenses 3,494 3,481 Payable due to related party 1,005 265 Tenants' security deposits 1,191 996 Total liabilities $ 70,003 $ 70,216 (1) Excludes approximately $0.3 million in accounts receivable due from Pillarstone that was eliminated in consolidation as of December 31, 2017 and 2016 . |
Real Estate (Tables)
Real Estate (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Real Estate [Abstract] | |
Unaudited Consolidated Pro Forma Results of Operations | The unaudited consolidated pro forma results of operations is not necessarily indicative of what the actual results of operations would have been, assuming the transactions had been completed as set forth above, nor do they purport to represent our results of operations for future periods. Year Ended December 31, 2017 2016 (in thousands, except per share data) (Restated) (Unaudited) Total property revenues $ 16,768 $ 15,323 Net income $ 2,447 $ 2,148 Net income attributable to Common Shareholders $ 215 $ (19 ) Basic earnings per share: $ 0.53 $ (0.05 ) Diluted earnings per share: $ 0.07 $ (0.05 ) |
Accrued Rents and Accounts Re33
Accrued Rents and Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Accrued Rents and Accounts Receivable, Net | Accrued rents and accounts receivable, net consists of amounts accrued, billed and due from tenants, allowance for doubtful accounts and other receivables as follows (in thousands): December 31, 2017 2016 Tenant receivables $ 680 $ 293 Accrued rents and other recoveries 657 45 Allowance for doubtful accounts (539 ) (125 ) Total $ 798 $ 213 |
Unamortized Lease Commissions34
Unamortized Lease Commissions and Deferred Legal Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Tablular Disclosure of Unamortized Lease Commissions | Costs which have been deferred consist of the following (in thousands): December 31, 2017 2016 Leasing commissions $ 1,577 $ 1,163 Deferred legal costs 47 — Total cost 1,624 1,163 Less: leasing commissions accumulated amortization (350 ) (13 ) Less: deferred legal costs accumulated amortization (9 ) — Total cost, net of accumulated amortization $ 1,265 $ 1,150 A summary of expected future amortization of deferred costs is as follows (in thousands): Years Ended December 31, Leasing Commissions Deferred Legal Costs Total 2018 $ 380 $ 11 $ 391 2019 272 9 281 2020 222 7 229 2021 155 5 160 2022 100 4 104 Thereafter 98 2 100 Total $ 1,227 $ 38 $ 1,265 |
Future Minimum Lease Income (Ta
Future Minimum Lease Income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments Receivable for Operating Leases | A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements and contingent rents) under noncancelable operating leases in existence as of December 31, 2017 is as follows (in thousands): Years Ended December 31, Minimum Future Rents 2018 $ 11,532 2019 8,568 2020 6,839 2021 4,429 2022 2,584 Thereafter 13,160 Total $ 47,112 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Mortgages and other notes payable consist of the following (in thousands): December 31, Description 2017 2016 Fixed rate notes $37.0 million 3.76% Note, due December 1, 2020 $ 33,148 $ 34,166 $16.5 million 4.97% Note, due September 26, 2023 16,058 16,298 Floating rate notes Related party Note, LIBOR plus 1.40% to 1.95%, due December 8, 2018 15,473 15,473 Total notes payable principal 64,679 65,937 Less deferred financing costs, net of accumulated amortization (366 ) (463 ) Total notes payable $ 64,313 $ 65,474 |
Debt Maturity Schedule | Annual maturities of notes payable as of December 31, 2017 are due during the following years: Year Amount Due (in thousands) 2018 $ 16,817 2019 1,376 2020 31,286 2021 308 2022 323 Thereafter 14,569 Total $ 64,679 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of activity of our unvested restricted common shares | The following table summarizes the activity of our unvested restricted Common Shares for the years ended December 31, 2017 and 2016 : Unvested Restricted Common Shares Weighted-Average Number of Grant-Date Shares Fair Value Unvested at December 31, 2015 168,449 $11.44 Vested — — Unvested at December 31, 2016 168,449 $11.44 Vested — — Unvested at December 31, 2017 168,449 $11.44 |
Schedule of activity for outstanding stock options | The following table summarizes the activity for outstanding stock options: Options Outstanding Weighted-Average Weighted-Average Remaining Number of Exercise Contractual Term Aggregate Shares Price (in years) Intrinsic Value (1) Balance at December 31, 2015 667 $ 33.75 1.3 $ — Granted — — Exercised — — Canceled / forfeited / expired — $ — Balance at December 31, 2016 667 $ 33.75 1.25 $ — Granted — — Exercised — — Canceled / forfeited / expired — — Balance at December 31, 2017 667 $ 33.75 1.25 $ — Vested and exercisable as of December 31, 2017 — $ — — $ — (1) The aggregate intrinsic value is calculated as approximately the difference between the weighted average exercise price of the underlying awards and the Company’s estimated current fair market value at December 31, 2017 . Because the weighted average exercise price exceeds fair market value at December 31, 2017 , there is no aggregate intrinsic value for the options. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of loss per share | For the year ended December 31, (in thousands, except share and per share data) 2017 2016 (Restated) Numerator: Net income (loss) available to Common Shareholders $ 215 $ (465 ) Dilutive effect of interest from convertible notes payable — — Net income (loss) available to Common Shareholders with assumed conversion $ 215 $ (465 ) Denominator: Weighted average number of Common Shares - basic 405,169 405,169 Effect of dilutive securities: Assumed conversion of Preferred A Shares 53,610 — Assumed conversion of Preferred C Shares 2,444,440 — Assumed conversion of convertible notes payable — — Weighted average number of Common Shares - dilutive 2,903,219 405,169 Earnings (Loss) Per Share: Basic income (loss) per Common Share: Net income (loss) available to Common Shareholders $ 0.53 $ (1.15 ) Diluted income (loss) per Common Share: Net income (loss) available to Common Shareholders $ 0.07 $ (1.15 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Net income | For financial reporting purposes, income before federal income taxes attributable to Common Shareholders includes the following components (in thousands): For the year ended December 31, 2017 2016 Net income (loss) $ 2,447 $ (262 ) Less: noncontrolling interest in subsidiary 2,232 203 Net income (loss) attributable to Common Shareholders $ 215 $ (465 ) |
Schedule of income tax provision | The income tax expense (benefit) included in the consolidated statements of operations for the years ended December 31, 2017 and 2016 was comprised of the following components (in thousands): For the year ended December 31, 2017 2016 Federal: Deferred $ 46 $ 8 Change in deferred rate from 34% to 21% for 2017 and 40% to 34% for 2016 331 156 Change in valuation allowance (377 ) (164 ) $ — $ — State: Current $ 88 $ — $ 88 $ — Total tax expense $ 88 $ — |
Schedule of income tax rate reconciliation | The items accounting for the difference between income taxes computed at the Federal statutory rate and our effective rate were as follows: For the year ended December 31, 2017 2016 Federal statutory rate 34 % 34 % Effect of: Noncontrolling interest (31 )% 26 % State income tax benefit, net of Federal tax effect 4 % — % Change in deferred valuations — % (63 )% Change in deferred rate from 34% to 21% for 2017 and 40% to 34% for 2016 12 % (59 )% Change in valuation allowance (15 )% 62 % Effective rate 4 % — % |
Schedule of deferred tax assets and liabilities | Deferred tax assets and liabilities consist of the following (in thousands): At December 31, 2017 2016 Deferred tax assets and liabilities: Net operating loss carry-forwards $ 164 $ 250 Depreciation and amortization 209 449 Acquisition and organizational costs 72 125 Accruals and others 45 43 Total deferred tax assets and liabilities 490 867 Valuation allowance (490 ) (867 ) Deferred tax assets and liabilities net of valuation allowance $ — $ — |
Summary of loss carryovers | The loss carry-forwards expire as follows (in thousands): Year Expiring Net Operating Loss 2026 $ 41 2027 114 2028 60 2029 81 2030 52 2031 39 2032 61 2033 54 2034 57 2035 67 2036 108 2037 43 Total loss carry-forwards $ 777 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents the revenue and expenses with Whitestone included in our consolidated statements of operations for the years ended December 31, 2017 and 2016 (in thousands): Year Ended December 31, Location of Revenue (Expense) 2017 2016 Rent Rental revenues $ 782 $ 58 Property management fees Property operation and maintenance $ (732 ) $ (57 ) Asset management fees Property operation and maintenance $ (264 ) $ (17 ) Interest expense Interest expense $ (528 ) $ (26 ) Receivables due from related parties consisted of the following as of December 31, 2017 and 2016 (in thousands): Year Ended December 31, 2017 2016 Construction in process (1) $ 45 $ 1,439 Tenant receivables and other receivables 1,259 1,379 Total $ 1,304 $ 2,818 (1) Amount relates to future tenant and building improvement expenditures implicit within the Contribution Agreement to be paid by Whitestone and capitalized by the Company in subsequent periods when placed in service. Payables due to related parties consisted of the following as of December 31, 2017 and 2016 (in thousands): Year Ended December 31, 2017 2016 Payables due to related party $ 1,005 $ 265 Total $ 1,005 $ 265 |
Restatement of Previously Iss41
Restatement of Previously Issued Consolidated Financial Statements - Narrative (Details) | Dec. 31, 2017 |
Whitestone [Member] | |
Noncontrolling Interest [Line Items] | |
Ownership percentage by noncontrolling owners | 81.40% |
Restatement of Previously Iss42
Restatement of Previously Issued Consolidated Financial Statements - Balance Sheet (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 20, 2015 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Property | $ 83,144,000 | $ 80,564,000 | ||
Accumulated depreciation | (2,934,000) | (150,000) | ||
Total real estate assets | 80,210,000 | 80,414,000 | ||
Cash and cash equivalents | 2,991,000 | 1,243,000 | ||
Escrows and acquisition deposits | 2,188,000 | 2,274,000 | ||
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 798,000 | 213,000 | ||
Receivable due from related party | 1,304,000 | 2,818,000 | ||
Unamortized lease commissions and deferred legal costs, net | 1,265,000 | 1,150,000 | ||
Prepaid expenses and other assets | 160,000 | 149,000 | ||
Total assets | 88,916,000 | 88,261,000 | ||
Notes payable | 64,313,000 | 65,474,000 | ||
Accounts payable and accrued expenses | 3,586,000 | 3,509,000 | ||
Accounts payable - related party | 1,005,000 | 265,000 | ||
Convertible notes payable - related parties | 197,780 | 197,780 | $ 197,780 | |
Accrued interest payable | 42,000 | 22,000 | ||
Tenants' security deposits | 1,191,000 | 996,000 | ||
Negative equity investment in Pillarstone Capital REIT LP | 0 | |||
Total liabilities | 70,335,000 | 70,464,000 | ||
Commitments and contingencies | 0 | 0 | ||
Common stock | 4,000 | 4,000 | ||
Additional paid-in capital | 28,147,000 | 28,147,000 | ||
Accumulated deficit | (27,635,000) | (27,850,000) | ||
Treasury stock, at cost, 38,130 shares | (801,000) | (801,000) | ||
Total Pillarstone Capital REIT shareholders' deficit | (280,000) | (495,000) | ||
Noncontrolling interest in subsidiary | 18,861,000 | 18,292,000 | ||
Total equity | 18,581,000 | 17,797,000 | $ (30,000) | |
Total liabilities and equity | 88,916,000 | 88,261,000 | ||
As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Property | 3,000 | |||
Accumulated depreciation | 0 | |||
Total real estate assets | 3,000 | |||
Cash and cash equivalents | 179,000 | |||
Escrows and acquisition deposits | 0 | |||
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 0 | |||
Receivable due from related party | 0 | |||
Unamortized lease commissions and deferred legal costs, net | 0 | |||
Prepaid expenses and other assets | 10,000 | |||
Total assets | 192,000 | |||
Notes payable | 0 | |||
Accounts payable and accrued expenses | 92,000 | |||
Accounts payable - related party | 316,000 | |||
Convertible notes payable - related parties | 198,000 | |||
Accrued interest payable | 42,000 | |||
Tenants' security deposits | 0 | |||
Negative equity investment in Pillarstone Capital REIT LP | 88,000 | |||
Total liabilities | 736,000 | |||
Commitments and contingencies | 0 | |||
Common stock | 4,000 | |||
Additional paid-in capital | 28,147,000 | |||
Accumulated deficit | (27,899,000) | |||
Treasury stock, at cost, 38,130 shares | (801,000) | |||
Total Pillarstone Capital REIT shareholders' deficit | (544,000) | |||
Noncontrolling interest in subsidiary | 0 | |||
Total equity | (544,000) | |||
Total liabilities and equity | 192,000 | |||
Effect of Restatement | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Property | 83,141,000 | |||
Accumulated depreciation | (2,934,000) | |||
Total real estate assets | 80,207,000 | |||
Cash and cash equivalents | 2,812,000 | |||
Escrows and acquisition deposits | 2,188,000 | |||
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 798,000 | |||
Receivable due from related party | 1,304,000 | |||
Unamortized lease commissions and deferred legal costs, net | 1,265,000 | |||
Prepaid expenses and other assets | 150,000 | |||
Total assets | 88,724,000 | |||
Notes payable | 64,313,000 | |||
Accounts payable and accrued expenses | 3,494,000 | |||
Accounts payable - related party | 689,000 | |||
Convertible notes payable - related parties | 0 | |||
Accrued interest payable | 0 | |||
Tenants' security deposits | 1,191,000 | |||
Negative equity investment in Pillarstone Capital REIT LP | (88,000) | |||
Total liabilities | 69,599,000 | |||
Commitments and contingencies | 0 | |||
Common stock | 0 | |||
Additional paid-in capital | 0 | |||
Accumulated deficit | 264,000 | |||
Treasury stock, at cost, 38,130 shares | 0 | |||
Total Pillarstone Capital REIT shareholders' deficit | 264,000 | |||
Noncontrolling interest in subsidiary | 18,861,000 | |||
Total equity | 19,125,000 | |||
Total liabilities and equity | 88,724,000 | |||
Redeemable Convertible Series A Preferred Stock [Member] | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Preferred stock | 3,000 | 3,000 | ||
Total equity | 3,000 | 3,000 | 3,000 | |
Redeemable Convertible Series A Preferred Stock [Member] | As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Preferred stock | 3,000 | |||
Redeemable Convertible Series A Preferred Stock [Member] | Effect of Restatement | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Preferred stock | 0 | |||
Redeemable Convertible Series C Preferred Stock [Member] | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Preferred stock | 2,000 | 2,000 | ||
Total equity | 2,000 | $ 2,000 | $ 2,000 | |
Redeemable Convertible Series C Preferred Stock [Member] | As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Preferred stock | 2,000 | |||
Redeemable Convertible Series C Preferred Stock [Member] | Effect of Restatement | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Preferred stock | $ 0 |
Restatement of Previously Iss43
Restatement of Previously Issued Consolidated Financial Statements - Balance Sheet Paren (Details) - $ / shares | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 400,000,000 | 100,000,000 | 400,000,000 |
Common stock, issued (in shares) | 443,299 | 443,226 | |
Common stock, outstanding (in shares) | 405,169 | 405,096 | |
Treasury stock (in shares) | 38,130 | 38,130 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, authorized (in shares) | 50,000,000 | 10,000,000 | |
Redeemable Convertible Series A Preferred Stock [Member] | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, authorized (in shares) | 1,518,000 | 1,518,000 | |
Preferred stock, issued (in shares) | 256,636 | 258,236 | |
Preferred stock, outstanding (in shares) | 256,636 | 258,236 | |
Preferred stock, liquidation preference (in dollars per share) | $ 10 | $ 10 | |
Redeemable Convertible Series C Preferred Stock [Member] | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, authorized (in shares) | 300,000 | 300,000 | |
Preferred stock, issued (in shares) | 244,444 | 244,444 | |
Preferred stock, outstanding (in shares) | 244,444 | 244,444 | |
Preferred stock, liquidation preference (in dollars per share) | $ 10 | $ 10 |
Restatement of Previously Iss44
Restatement of Previously Issued Consolidated Financial Statements - Income Statement (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Rental revenues | $ 14,218,000 | $ 983,000 |
Other revenues | 2,550,000 | 157,000 |
Total property revenues | 16,768,000 | 1,140,000 |
Property operation and maintenance | 5,029,000 | 397,000 |
Real estate taxes | 2,672,000 | 174,000 |
Total property expenses | 7,701,000 | 571,000 |
General and administrative | 508,000 | 492,000 |
Depreciation and amortization | 3,268,000 | 163,000 |
Interest expense | 2,725,000 | 176,000 |
Total other expense | 6,501,000 | 831,000 |
Income (loss) before loss on disposal of assets and income taxes | 2,566,000 | |
Loss on disposal of assets | (31,000) | 0 |
Equity in income of Pillarstone Capital REIT Operating Partnership LP | 0 | |
Provision for income taxes | (88,000) | 0 |
Net income (loss) | 2,447,000 | (262,000) |
Less: noncontrolling interest in subsidiary | 2,232,000 | 203,000 |
Net income (loss) attributable to Common Shareholders | $ 215,000 | $ (465,000) |
Basic (in dollars per share) | $ 0.53 | $ (1.15) |
Diluted (in dollars per share) | $ 0.07 | $ (1.15) |
As Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Rental revenues | $ 0 | |
Other revenues | 0 | |
Total property revenues | 0 | |
Property operation and maintenance | 0 | |
Real estate taxes | 0 | |
Total property expenses | 0 | |
General and administrative | 273,000 | |
Depreciation and amortization | 0 | |
Interest expense | 19,000 | |
Total other expense | 292,000 | |
Income (loss) before loss on disposal of assets and income taxes | (292,000) | |
Loss on disposal of assets | 0 | |
Equity in income of Pillarstone Capital REIT Operating Partnership LP | 275,000 | |
Provision for income taxes | 0 | |
Net income (loss) | (17,000) | |
Less: noncontrolling interest in subsidiary | 0 | |
Net income (loss) attributable to Common Shareholders | $ (17,000) | |
Basic (in dollars per share) | $ (0.04) | |
Diluted (in dollars per share) | $ (0.04) | |
Effect of Restatement | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Rental revenues | $ 14,218,000 | |
Other revenues | 2,550,000 | |
Total property revenues | 16,768,000 | |
Property operation and maintenance | 5,029,000 | |
Real estate taxes | 2,672,000 | |
Total property expenses | 7,701,000 | |
General and administrative | 235,000 | |
Depreciation and amortization | 3,268,000 | |
Interest expense | 2,706,000 | |
Total other expense | 6,209,000 | |
Income (loss) before loss on disposal of assets and income taxes | 2,858,000 | |
Loss on disposal of assets | (31,000) | |
Equity in income of Pillarstone Capital REIT Operating Partnership LP | (275,000) | |
Provision for income taxes | (88,000) | |
Net income (loss) | 2,464,000 | |
Less: noncontrolling interest in subsidiary | 2,232,000 | |
Net income (loss) attributable to Common Shareholders | $ 232,000 | |
Basic (in dollars per share) | $ 0.57 | |
Diluted (in dollars per share) | $ 0.11 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) | 1 Months Ended |
Dec. 31, 2016property | |
Accounting Policies [Abstract] | |
Number of real estate assets acquired | 14 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 08, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Allowance for uncollectible receivables | $ 539,000 | $ 125,000 | |
Bad debt expense | $ 412,000 | 127,000 | |
Uncertain tax position to be recognized based on maximum cumulative probability percentage | 50.00% | ||
Unrecognized tax benefits | $ 0 | 0 | |
Total loss carryovers | 777,000 | ||
Prepaid expenses and other assets | 160,000 | 149,000 | |
Deferred legal costs | 47,000 | 0 | |
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Long-term Debt, Fair Value | 65,100,000 | 65,900,000 | |
Reported Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Long-term Debt, Fair Value | $ 64,700,000 | $ 65,900,000 | |
Pillarstone OP [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Ownership percentage | 18.60% | ||
Building and Building Improvements [Member] | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Building and Building Improvements [Member] | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 39 years |
Variable Interest Entity - Narr
Variable Interest Entity - Narratives (Details) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 08, 2016USD ($)propertysubsidiary$ / shares | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity in income of Pillarstone Capital REIT Operating Partnership LP | $ 0 | |||
Distributions in kind | $ 4,100,000 | $ 4,121,000 | ||
Pillarstone OP [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 18.60% | |||
Equity investment in Pillarstone Capital REIT Operating Partnership LP | $ 4,121,312 | |||
Conversion ratio, LTIP units to OP units (in shares) | 1 | |||
Conversion ratio, OP units to common shares (in shares) | 1 | |||
Variable Interest Entity | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Consideration, limited partnership interest (in dollars per share) | $ / shares | $ 1.331 | |||
Whitestone [Member] | Variable Interest Entity | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of wholly-owned subsidiaries contributed to variable interest entity | subsidiary | 4 | |||
Number of non-core properties contributed to variable interest entity | property | 14 | |||
Consideration amount | $ 84,000,000 | |||
Consideration, limited partnership interest | $ 18,100,000 | |||
Consideration, limited partnership interest (in dollars per share) | $ / shares | $ 1.331 | |||
Liabilities assumed | $ 65,900,000 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | ||
Property | $ 83,144 | $ 80,564 |
Accumulated depreciation | (2,934) | (150) |
Total real estate assets | 80,210 | 80,414 |
Cash and cash equivalents | 2,991 | 1,243 |
Escrows and acquisition deposits | 2,188 | 2,274 |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 798 | 213 |
Receivable due from related party | 1,304 | 2,818 |
Unamortized lease commissions and deferred legal costs, net | 1,265 | 1,150 |
Prepaid expenses and other assets | 160 | 149 |
Total assets | 88,916 | 88,261 |
Notes payable | 64,313 | 65,474 |
Accounts payable and accrued expenses | 3,586 | 3,509 |
Payable due to related party | 1,005 | 265 |
Tenants' security deposits | 1,191 | 996 |
Total liabilities | 70,335 | 70,464 |
Variable Interest Entity | ||
Schedule of Equity Method Investments [Line Items] | ||
Property | 83,141 | 80,564 |
Accumulated depreciation | (2,934) | (150) |
Total real estate assets | 80,207 | 80,414 |
Cash and cash equivalents | 2,812 | 1,236 |
Escrows and acquisition deposits | 2,188 | 2,274 |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 798 | 213 |
Receivable due from related party | 1,304 | 2,818 |
Unamortized lease commissions and deferred legal costs, net | 1,265 | 1,150 |
Prepaid expenses and other assets | 150 | 134 |
Total assets | 88,724 | 88,239 |
Notes payable | 64,313 | 65,474 |
Accounts payable and accrued expenses | 3,494 | 3,481 |
Payable due to related party | 1,005 | 265 |
Tenants' security deposits | 1,191 | 996 |
Total liabilities | 70,003 | 70,216 |
Accounts receivable, related party | $ 300 | $ 300 |
Real Estate - Narratives (Detai
Real Estate - Narratives (Details) ft² in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)ft²property | |
Real Estate [Line Items] | |
Number of real estate properties | property | 14 |
Area of real estate (sqft.) | ft² | 1.5 |
Pillarstone OP [Member] | |
Real Estate [Line Items] | |
Revenue attributable to the Property | $ 16.8 |
Net income attributable to the Property | $ 2.7 |
Real Estate - Unaudited Consoli
Real Estate - Unaudited Consolidated Pro Forma Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Real Estate [Abstract] | ||
Total property revenues | $ 16,768 | $ 15,323 |
Net income | 2,447 | 2,148 |
Net income attributable to Common Shareholders | $ 215 | $ (19) |
Basic Earnings Per Share (usd per share) | $ 0.53 | $ (0.05) |
Diluted Earnings Per Share (usd per share) | $ 0.07 | $ (0.05) |
Accrued Rents and Accounts Re51
Accrued Rents and Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Tenant receivables | $ 680 | $ 293 |
Accrued rents and other recoveries | 657 | 45 |
Allowance for doubtful accounts | (539) | (125) |
Total | $ 798 | $ 213 |
Unamortized Lease Commissions52
Unamortized Lease Commissions and Deferred Legal Costs, Net (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Leasing commissions | $ 1,577,000 | $ 1,163,000 |
Deferred legal costs | 47,000 | 0 |
Total cost | 1,624,000 | 1,163,000 |
Less: leasing commissions accumulated amortization | (350,000) | (13,000) |
Less: deferred legal costs accumulated amortization | (9,000) | 0 |
Total cost, net of accumulated amortization | $ 1,265,000 | $ 1,150,000 |
Unamortized Lease Commissions53
Unamortized Lease Commissions and Deferred Legal Costs, Net - Future Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
2,018 | $ 391 | |
2,019 | 281 | |
2,020 | 229 | |
2,021 | 160 | |
2,022 | 104 | |
Thereafter | 100 | |
Total cost, net of accumulated amortization | 1,265 | $ 1,150 |
Leasing Commissions | ||
Debt Instrument [Line Items] | ||
2,018 | 380 | |
2,019 | 272 | |
2,020 | 222 | |
2,021 | 155 | |
2,022 | 100 | |
Thereafter | 98 | |
Total cost, net of accumulated amortization | 1,227 | |
Deferred Legal Costs | ||
Debt Instrument [Line Items] | ||
2,018 | 11 | |
2,019 | 9 | |
2,020 | 7 | |
2,021 | 5 | |
2,022 | 4 | |
Thereafter | 2 | |
Total cost, net of accumulated amortization | $ 38 |
Future Minimum Lease Income (De
Future Minimum Lease Income (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Leases [Abstract] | |
2,018 | $ 11,532 |
2,019 | 8,568 |
2,020 | 6,839 |
2,021 | 4,429 |
2,022 | 2,584 |
Thereafter | 13,160 |
Total | $ 47,112 |
Debt (Details)
Debt (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Nov. 20, 2015 | |
Debt Instrument [Line Items] | |||
Notes payable gross | $ 64,679,000 | $ 65,937,000 | |
Deferred Financing Costs, Net of Accumulated Amortization | (366,000) | (463,000) | |
Total notes payable | 64,313,000 | 65,474,000 | |
Interest rate | 10.00% | ||
$37.0 million 3.76% Note, due December 1, 2020 | |||
Debt Instrument [Line Items] | |||
Notes payable gross | 33,148,000 | 34,166,000 | |
Debt Instrument, face amount | $ 37,000,000 | ||
Interest rate | 3.76% | ||
$16.5 million 4.97% Note, due September 26, 2023 | |||
Debt Instrument [Line Items] | |||
Notes payable gross | $ 16,058,000 | 16,298,000 | |
Debt Instrument, face amount | $ 16,500,000 | ||
Interest rate | 4.97% | ||
Related party Note, LIBOR plus 1.40% to 1.95%, due December 8, 2018 | |||
Debt Instrument [Line Items] | |||
Notes payable gross | $ 15,473,000 | $ 15,473,000 | |
Related party Note, LIBOR plus 1.40% to 1.95%, due December 8, 2018 | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.40% | ||
Related party Note, LIBOR plus 1.40% to 1.95%, due December 8, 2018 | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.95% |
Debt - Narratives (Details)
Debt - Narratives (Details) $ in Thousands | Dec. 31, 2017USD ($)property | Dec. 31, 2016USD ($)property |
Debt Instrument [Line Items] | ||
Number of real estate properties | property | 14 | |
Property | $ | $ 83,144 | $ 80,564 |
Mortgage debt | ||
Debt Instrument [Line Items] | ||
Number of real estate properties | property | 10 | 10 |
Property | $ | $ 63,000 | $ 62,900 |
Debt - Maturity Schedule (Detai
Debt - Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,018 | $ 16,817 | |
2,019 | 1,376 | |
2,020 | 31,286 | |
2,021 | 308 | |
2,022 | 323 | |
Thereafter | 14,569 | |
Total | $ 64,679 | $ 65,937 |
Convertible Notes Payable - R58
Convertible Notes Payable - Related Parties (Details) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 20, 2015USD ($)trustee$ / shares |
Debt Disclosure [Abstract] | |||
Number of trustees | trustee | 5 | ||
Convertible notes payable - related parties | $ | $ 197,780 | $ 197,780 | $ 197,780 |
Interest rate | 10.00% | ||
Conversion price (in dollars per share) | $ / shares | $ 1.331 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) | Sep. 29, 2008 | Oct. 01, 2003USD ($)CommercialProperties$ / sharesshares | Jun. 30, 2003USD ($)shares | Jul. 31, 2006 | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2004shares | Mar. 31, 2017$ / sharesshares | Dec. 08, 2016 | Sep. 29, 2006USD ($)$ / sharesshares |
Class of Stock [Line Items] | ||||||||||
Common stock, outstanding (in shares) | 405,169 | 405,096 | ||||||||
Shares authorized (in shares) | 450,000,000 | 110,000,000 | ||||||||
Common stock, authorized (in shares) | 400,000,000 | 400,000,000 | 100,000,000 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Preferred stock, authorized (in shares) | 50,000,000 | 10,000,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||
Value of preferred and common shares outstanding | $ | $ 590,000 | |||||||||
Reverse stock split conversion ratio | 75 | |||||||||
Conversion of Stock, Shares Converted | 73 | |||||||||
Share-based Compensation | $ | $ 0 | |||||||||
Service period and vesting period restriction date | 2 years | |||||||||
Sale of general partnership, percentage interest sold | 92.90% | |||||||||
Number of commercial properties | CommercialProperties | 4 | |||||||||
Treasury stock, shares received from sale of interest in general partnership | 38,130 | |||||||||
Average closing price of treasury stock shares received over a thirty day period | $ / shares | $ 21 | |||||||||
Value of common stock received into treasury as partial proceeds in sale of general partnership | $ | $ 801,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 163,116 | |||||||||
Grant date fair value of restricted shares which would be recognized upon meeting performance goals | $ | $ 1,847,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 5,333 | |||||||||
Restricted common shares, balance, grant date fair value | $ | $ 79,000 | |||||||||
Maximum value of restricted common shares issuable to each trustee for achievement of certain performance criteria | $ | $ 26,000,000 | |||||||||
Denominator, the period over which the average closing price of common stock is averaged | 30 days | |||||||||
Period over which the pro-forma acquisition income target must be meet | 5 years | |||||||||
The percentage increase in net operating income and funds from operations which must be meet | 5.00% | |||||||||
Shares granted (in shares) | 0 | 0 | ||||||||
Aggregate intrinsic value for options | $ | $ 0 | |||||||||
Unrecognized cost related to stock options | $ | 0 | $ 0 | ||||||||
Individual Trustee [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares granted (in shares) | 667 | |||||||||
Restricted Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting rights, minimum gross assets | $ | $ 50,000,000 | |||||||||
Restricted Stock [Member] | March 4, 2004 [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting rights, percentage | 50.00% | |||||||||
Restricted Stock [Member] | March 4, 2005 [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
Restricted Stock [Member] | March 4, 2006 [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Award vesting rights, percentage | 25.00% | |||||||||
1998 Share Option Plan [Member] | Minimum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 42,222 | |||||||||
1998 Share Option Plan [Member] | Maximum | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 46,666 | |||||||||
Series A Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, authorized (in shares) | 1,518,000 | 1,518,000 | ||||||||
Preferred stock, outstanding (in shares) | 95,226 | |||||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 10 | |||||||||
Conversion ratio, preferred shares to common shares | 0.046 | |||||||||
Preferred shares, issued, shares converted into restricted common shares | 534,668 | 0 | 1,600 | |||||||
Restricted common shares that restricted class A cumulative convertible preferred shares were converted into shares | 163,116 | |||||||||
Preferred shares, issued, remaining shares | 161,410 | |||||||||
Preferred shares, number of restricted common shares each preferred share can be converted into shares | 0.305 | |||||||||
Series A Preferred Stock [Member] | Restricted Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, issued (in shares) | 696,078 | |||||||||
Deferred Compensation Arrangement with Individual, Fair Value of Shares Issued | $ | $ 2,400,000 | |||||||||
Series C Preferred Stock [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, authorized (in shares) | 300,000 | 300,000 | 300,000 | |||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 10 | $ 10 | ||||||||
Preferred shares, denominator value conversion price to calculate the conversion rate to exchange preferred class C shares for common shares | $ | $ 1 | |||||||||
Preferred shares to be purchased under subscription agreement | 44,444 | |||||||||
Restricted stock agreement, number of convertible preferred shares certain trustees entitled to receive in lieu of cash for services, shares | 12,500 | |||||||||
Series C Preferred Stock [Member] | Three Independent Trustees [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred shares to be purchased under subscription agreement | 125,000 | |||||||||
Preferred shares to be purchased under subscription agreement, aggregate contribution | $ | $ 500,000 | |||||||||
Pillarstone OP [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ownership percentage | 18.60% | |||||||||
Common stock, outstanding (in shares) | 16,688,167 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Unvested Restricted Common Shares Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Unvested Restricted Common Shares, Number of Shares Unvested, Beginning | 168,449 | 168,449 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 0 | 0 |
Unvested Restricted Common Shares, Number of Shares Unvested, Ending | 168,449 | 168,449 |
Unvested Restricted Common Shares, Weighted-Average Grant-Date Fair Value, Beginning | $ 11.44 | $ 11.44 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | 0 | 0 |
Unvested Restricted Common Shares, Weighted-Average Grant-Date Fair Value, Ending | $ 11.44 | $ 11.44 |
Shareholders' Equity - Schedu61
Shareholders' Equity - Schedule of Stock Options Outstanding Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options Outstanding, Number of Shares, Beginning Balance, Shares | 667 | 667 | |
Options Outstanding, Number of Shares Granted, Shares | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 0 | 0 | |
Options Outstanding, Number of Shares Canceled/forfeited/expired, Shares | 0 | 0 | |
Options Outstanding, Number of Shares, Ending Balance, Shares | 667 | 667 | 667 |
Options Outstanding, Number of Shares, Vested and exercisable, Shares | 0 | ||
Options Outstanding, Weighted-Average Exercise Price, Beginning Balance | $ 33.75 | $ 33.75 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | 0 | 0 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price | 0 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | 0 | 0 | |
Options Outstanding, Weighted-Average Exercise Price, Ending Balance | 33.75 | $ 33.75 | $ 33.75 |
Options Outstanding, Vested and exercisable, Weighted-Average Exercise Price | $ 0 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 1 year 3 months | 1 year 3 months | 1 year 3 months |
Options Outstanding, Aggregate Intrinsic Value, Beginning | $ 0 | $ 0 | |
Options Outstanding, Aggregate Intrinsic Value, Ending | 0 | $ 0 | $ 0 |
Options Outstanding, Vested and exercisable, Aggregate Intrinsic Value | $ 0 |
Incentive Equity Plan (Details)
Incentive Equity Plan (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares authorized (in shares) | 450,000,000 | 110,000,000 |
2016 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percent of total shares authorized | 12.50% | |
Shares authorized (in shares) | 2,356,426 | |
Shares granted (in shares) | 0 |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 20, 2015 |
Earnings Per Share [Abstract] | |||
Convertible notes payable | $ 197,780 | $ 197,780 | $ 197,780 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Calculation of Numerator and Denominator in Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income (loss) available to Common Shareholders | $ 215 | $ (465) |
Dilutive effect of interest from convertible notes payable | 0 | 0 |
Net income (loss) available to Common Shareholders with assumed conversion | $ 215 | $ (465) |
Weighted average number of common shares - basic (in shares) | 405,169 | 405,169 |
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||
Weighted average number of common shares - dilutive (in shares) | 2,903,219 | 405,169 |
Basic income (loss) per Common Share: | ||
Net income (loss) available to common shareholders (in dollars per share) | $ 0.53 | $ (1.15) |
Diluted income (loss) per Common Share: | ||
Net income (loss) available to common shareholders (in dollars per share) | $ 0.07 | $ (1.15) |
Convertible notes payable | ||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||
Incremental common shares attributable to dilutive effect of conversion of debt securities (in shares) | 0 | 0 |
Preferred A Shares | ||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (in shares) | 53,610 | 0 |
Preferred C Shares | ||
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | ||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (in shares) | 2,444,440 | 0 |
Dividends_Distributions (Detail
Dividends/Distributions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Distributions Made to Members or Limited Partners [Abstract] | ||
Dividends | $ 0 | $ 0 |
Income Taxes - Net Income (Deta
Income Taxes - Net Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Net income (loss) | $ 2,447 | $ (262) |
Less: noncontrolling interest in subsidiary | 2,232 | 203 |
Net income (loss) attributable to Common Shareholders | $ 215 | $ (465) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Operating Loss Carryforwards Subject to Limitations | 10 years | |
Provision for income taxes | $ 88,000 | $ 0 |
Valuation allowance | 490,000 | $ 867,000 |
Total loss carryovers | $ 777,000 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | ||
Deferred | $ 46,000 | $ 8,000 |
Change in deferred rate from 34% to 21% for 2017 and 40% to 34% for 2016 | 331,000 | 156,000 |
Change in valuation allowance | (377,000) | (164,000) |
Deferred federal income tax, net | 0 | 0 |
Current | 88,000 | 0 |
Total state taxes | 88,000 | 0 |
Total tax provision | $ 88,000 | $ 0 |
Deferred rate | 21.00% | 34.00% |
Previously Reported | ||
Income Tax Contingency [Line Items] | ||
Total tax provision | $ 0 | |
Deferred rate | 34.00% | 40.00% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation, Percent (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate, percent | 34.00% | 34.00% |
Noncontrolling interest, percent | (31.00%) | 26.00% |
State income tax benefit, net of Federal tax effect, percent | 4.00% | 0.00% |
Change in deferred valuation, percent | 0.00% | (63.00%) |
Change in deferred rate from 34% to 21% for 2017 and 40% to 34% for 2016, percent | 12.00% | (59.00%) |
Change in valuation allowance, percent | (15.00%) | 62.00% |
Effective rate, percent | 4.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry-forwards | $ 164 | $ 250 |
Depreciation and amortization | 209 | 449 |
Acquisition and organizational costs | 72 | 125 |
Accruals and others | 45 | 43 |
Total deferred tax assets and liabilities | 490 | 867 |
Valuation allowance | (490) | (867) |
Deferred tax assets and liabilities net of valuation allowance | $ 0 | $ 0 |
Income Taxes - Schedule of Oper
Income Taxes - Schedule of Operating Loss Carryovers (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | $ 777 |
Year Expiring - 2026 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 41 |
Year Expiring - 2027 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 114 |
Year Expiring - 2028 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 60 |
Year Expiring - 2029 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 81 |
Year Expiring - 2030 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 52 |
Year Expiring - 2031 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 39 |
Year Expiring - 2032 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 61 |
Year Expiring - 2033 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 54 |
Year Expiring - 2034 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 57 |
Year Expiring - 2035 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 67 |
Year Expiring - 2036 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | 108 |
Year Expiring 2037 [Member] | |
Operating Loss Carryforwards [Line Items] | |
Total loss carryovers | $ 43 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 08, 2016 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Equity in income of Pillarstone Capital REIT Operating Partnership LP | $ 0 | |
Property management fee | 5.00% | |
Asset management fee | 0.125% | |
Uptown Tower | ||
Related Party Transaction [Line Items] | ||
Property management fee | 3.00% | |
Asset management fee | 0.125% | |
Pillarstone OP [Member] | ||
Related Party Transaction [Line Items] | ||
Equity investment in Pillarstone Capital REIT Operating Partnership LP | $ 4,121,312 | |
Ownership percentage | 18.60% | |
Variable Interest Entity | ||
Related Party Transaction [Line Items] | ||
Consideration, limited partnership interest (in dollars per share) | $ 1.331 | |
Purchase unit agreement, amount | $ 3,000,000 | |
Purchase unit agreement, share price (in dollars per share) | $ 1.331 | |
Purchase agreement term | 2 years |
Related Party Transactions - In
Related Party Transactions - Income Statement (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Rental revenues | ||
Related Party Transaction [Line Items] | ||
Rent | $ 782 | $ 58 |
Property operation and maintenance | ||
Related Party Transaction [Line Items] | ||
Property management fees | (732) | (57) |
Asset management fees | (264) | (17) |
Interest expense | ||
Related Party Transaction [Line Items] | ||
Interest expense | $ (528) | $ (26) |
Related Party Transactions - Ba
Related Party Transactions - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Receivables due from related parties | $ 1,304 | $ 2,818 |
Payable due to related party | 1,005 | 265 |
Construction in process | ||
Related Party Transaction [Line Items] | ||
Receivables due from related parties | 45 | 1,439 |
Tenant receivables and other receivables | ||
Related Party Transaction [Line Items] | ||
Receivables due from related parties | $ 1,259 | $ 1,379 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended |
Dec. 31, 2017USD ($)shares | |
James C. Mastandrea [Member] | |
Loss Contingencies [Line Items] | |
Salary and Wage, Officer, Excluding Cost of Good and Service Sold | $ 60,000 |
Initial term of CEO's employment, Duration | 2 years |
Terms of employment extension, Duration | 1 year |
Period of time after termination the officer will be entitled to his effective salary | 3 years |
Stock Issued During Period, Value, Other | $ 100,000 |
Stock Issued During Period, Shares, Other | shares | 44,444 |
John J. Dee [Member] | |
Loss Contingencies [Line Items] | |
Period of time after termination the officer will be entitled to his effective salary | 3 years |
Per hour compensation rate | $ 125 |
Maximum monthly compensation rate issued | $ 5,000 |
Schedule II - Valuation and Q76
Schedule II - Valuation and Qualifying Accounts Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax asset allowance: | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 867 | $ 1,031 | $ 1,004 |
Charged to Costs and Expense | (377) | (164) | 27 |
Deductions from Reserves | 0 | 0 | 0 |
Balance at End of Year | 490 | 867 | 1,031 |
Allowance for doubtful accounts: | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | 125 | 0 | 0 |
Charged to Costs and Expense | 412 | 127 | 0 |
Deductions from Reserves | 2 | (2) | 0 |
Balance at End of Year | $ 539 | $ 125 | $ 0 |
Schedule III - Real Estate an77
Schedule III - Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | |
Initial Cost | |||
Land | $ 30,454 | ||
Building and Improvements | 50,110 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 2,580 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 30,454 | ||
Building and Improvements | 52,690 | ||
Total | $ 80,564 | $ 0 | 83,144 |
Accumulated Depreciation | 2,934 | ||
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward] | |||
Balance at beginning of period | 80,564 | 0 | |
Additions during the period: | |||
Acquisitions | 0 | 80,564 | |
Improvements | 2,641 | 0 | |
Real estate, total additions | 2,641 | 80,564 | |
Deductions - cost of real estate sold or retired | (61) | 0 | |
Balance at close of period | 83,144 | $ 80,564 | |
Aggregate cost of real estate for federal income tax purposes | 84,646 | ||
9101 LBJ Freeway [Member] | |||
Initial Cost | |||
Land | 3,590 | ||
Building and Improvements | 2,811 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 82 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 3,590 | ||
Building and Improvements | 2,893 | ||
Total | 6,483 | 6,483 | |
Accumulated Depreciation | 213 | ||
Additions during the period: | |||
Balance at close of period | $ 6,483 | ||
9101 LBJ Freeway [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
9101 LBJ Freeway [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Corporate Park Northwest [Member] | |||
Initial Cost | |||
Land | 1,326 | ||
Building and Improvements | 5,009 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 189 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 1,326 | ||
Building and Improvements | 5,198 | ||
Total | $ 6,524 | 6,524 | |
Accumulated Depreciation | 416 | ||
Additions during the period: | |||
Balance at close of period | $ 6,524 | ||
Corporate Park Northwest [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Corporate Park Northwest [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Corporate Park West [Member] | |||
Initial Cost | |||
Land | 2,772 | ||
Building and Improvements | 10,144 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 501 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 2,772 | ||
Building and Improvements | 10,645 | ||
Total | $ 13,417 | 13,417 | |
Accumulated Depreciation | 333 | ||
Additions during the period: | |||
Balance at close of period | $ 13,417 | ||
Corporate Park West [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Corporate Park West [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Corporate Park Woodland [Member] | |||
Initial Cost | |||
Land | 1,144 | ||
Building and Improvements | 4,764 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 65 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 1,144 | ||
Building and Improvements | 4,829 | ||
Total | $ 5,973 | 5,973 | |
Accumulated Depreciation | 194 | ||
Additions during the period: | |||
Balance at close of period | $ 5,973 | ||
Corporate Park Woodland [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Corporate Park Woodland [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Corporate Park Woodland II [Member] | |||
Initial Cost | |||
Land | 2,730 | ||
Building and Improvements | 24 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 0 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 2,730 | ||
Building and Improvements | 24 | ||
Total | $ 2,754 | 2,754 | |
Accumulated Depreciation | 3 | ||
Additions during the period: | |||
Balance at close of period | $ 2,754 | ||
Corporate Park Woodland II [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Corporate Park Woodland II [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Dairy Ashford [Member] | |||
Initial Cost | |||
Land | 325 | ||
Building and Improvements | 920 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 2 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 325 | ||
Building and Improvements | 922 | ||
Total | $ 1,247 | 1,247 | |
Accumulated Depreciation | 26 | ||
Additions during the period: | |||
Balance at close of period | $ 1,247 | ||
Dairy Ashford [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Dairy Ashford [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Holly Hall Industrial Park [Member] | |||
Initial Cost | |||
Land | 2,730 | ||
Building and Improvements | 1,768 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 1 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 2,730 | ||
Building and Improvements | 1,769 | ||
Total | $ 4,499 | 4,499 | |
Accumulated Depreciation | 95 | ||
Additions during the period: | |||
Balance at close of period | $ 4,499 | ||
Holly Hall Industrial Park [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Holly Hall Industrial Park [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Holly Knight [Member] | |||
Initial Cost | |||
Land | 807 | ||
Building and Improvements | 1,231 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 110 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 807 | ||
Building and Improvements | 1,341 | ||
Total | $ 2,148 | 2,148 | |
Accumulated Depreciation | 48 | ||
Additions during the period: | |||
Balance at close of period | $ 2,148 | ||
Holly Knight [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Holly Knight [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Interstate 10 Warehouse [Member] | |||
Initial Cost | |||
Land | 2,915 | ||
Building and Improvements | 765 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 110 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 2,915 | ||
Building and Improvements | 875 | ||
Total | $ 3,790 | 3,790 | |
Accumulated Depreciation | 48 | ||
Additions during the period: | |||
Balance at close of period | $ 3,790 | ||
Interstate 10 Warehouse [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Interstate 10 Warehouse [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Main Park [Member] | |||
Initial Cost | |||
Land | 1,176 | ||
Building and Improvements | 1,626 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 432 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 1,176 | ||
Building and Improvements | 2,058 | ||
Total | $ 3,234 | 3,234 | |
Accumulated Depreciation | 155 | ||
Additions during the period: | |||
Balance at close of period | $ 3,234 | ||
Main Park [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Main Park [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Plaza Park [Member] | |||
Initial Cost | |||
Land | 1,527 | ||
Building and Improvements | 1,660 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 50 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 1,527 | ||
Building and Improvements | 1,710 | ||
Total | $ 3,237 | 3,237 | |
Accumulated Depreciation | 152 | ||
Additions during the period: | |||
Balance at close of period | $ 3,237 | ||
Plaza Park [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Plaza Park [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Uptown Tower | |||
Initial Cost | |||
Land | 7,304 | ||
Building and Improvements | 15,493 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 690 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 7,304 | ||
Building and Improvements | 16,183 | ||
Total | $ 23,487 | 23,487 | |
Accumulated Depreciation | 913 | ||
Additions during the period: | |||
Balance at close of period | $ 23,487 | ||
Amount of encumbrances | 16,500 | ||
Uptown Tower | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Uptown Tower | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Westbelt Plaza [Member] | |||
Initial Cost | |||
Land | 1,171 | ||
Building and Improvements | 1,393 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 81 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 1,171 | ||
Building and Improvements | 1,474 | ||
Total | $ 2,645 | 2,645 | |
Accumulated Depreciation | 163 | ||
Additions during the period: | |||
Balance at close of period | $ 2,645 | ||
Westbelt Plaza [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Westbelt Plaza [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Westgate Service Center [Member] | |||
Initial Cost | |||
Land | 937 | ||
Building and Improvements | 2,502 | ||
Costs Capitalized Subsequent to Acquisition | |||
Improvements (net) | 267 | ||
Carrying Costs | 0 | ||
Gross Amount at which Carried at End of Period | |||
Land | 937 | ||
Building and Improvements | 2,769 | ||
Total | $ 3,706 | 3,706 | |
Accumulated Depreciation | 175 | ||
Additions during the period: | |||
Balance at close of period | $ 3,706 | ||
Westgate Service Center [Member] | Minimum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 5 years | ||
Westgate Service Center [Member] | Maximum | |||
Gross Amount at which Carried at End of Period | |||
Depreciation Life | 39 years | ||
Various Pillarstone Properties [Member] | |||
Additions during the period: | |||
Amount of encumbrances | $ 37,000 |