Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 13, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PILLARSTONE CAPITAL REIT | |
Entity Central Index Key | 0000928953 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Entity Current Reporting Status | Yes | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Common Stock, Shares Outstanding | 405,169 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | |
ASSETS | |||
Property | $ 79,351,000 | $ 77,944,000 | |
Accumulated depreciation | (7,325,000) | (5,281,000) | |
Total real estate assets | 72,026,000 | 72,663,000 | |
Cash and cash equivalents | 2,292,000 | 2,010,000 | |
Escrows and utility deposits | 1,939,000 | 1,835,000 | |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 1,848,000 | 1,360,000 | |
Receivable due from related party | 73,000 | 58,000 | |
Unamortized lease commissions and deferred legal cost, net | 1,046,000 | 1,164,000 | |
Prepaid expenses and other assets | 118,000 | 60,000 | [1] |
Total assets | 79,342,000 | 79,150,000 | |
Liabilities: | |||
Notes payable | 46,281,000 | 47,064,000 | |
Accounts payable and accrued expenses | 2,919,000 | 2,817,000 | [2] |
Payable due to related party | 315,000 | 372,000 | |
Convertible notes payable - related parties | 197,780 | 198,000 | |
Accrued interest payable | 275,000 | 258,000 | |
Stock redemption payable - related party | 0 | 143,000 | |
Tenants' security deposits | 1,329,000 | 1,236,000 | |
Total liabilities | 51,317,000 | 52,088,000 | |
Commitments and contingencies | 0 | 0 | |
Shareholders' Equity: | |||
Common Shares - $0.01 par value, 400,000,000 authorized: 443,299 shares issued and 405,169 outstanding at September 30, 2019 and December 31, 2018 | 4,000 | 4,000 | |
Additional paid-in capital | 28,175,000 | 28,147,000 | |
Accumulated deficit | (26,028,000) | (26,319,000) | |
Treasury stock, at cost, 38,130 shares | (801,000) | (801,000) | |
Total Pillarstone Capital REIT shareholders' equity | 1,355,000 | 1,036,000 | |
Noncontrolling interest in subsidiary | 26,670,000 | 26,026,000 | |
Total equity | 28,025,000 | 27,062,000 | |
Total liabilities and equity | 79,342,000 | 79,150,000 | |
Operating lease right of use assets | 11,000 | ||
Operating lease liabilities | 11,000 | ||
Preferred A Shares | |||
Shareholders' Equity: | |||
Preferred stock | 3,000 | 3,000 | |
Preferred C Shares | |||
Shareholders' Equity: | |||
Preferred stock | 2,000 | 2,000 | |
Variable Interest Entity | |||
ASSETS | |||
Property | 79,348,000 | 77,941,000 | |
Accumulated depreciation | (7,323,000) | (5,281,000) | |
Total real estate assets | 72,025,000 | 72,660,000 | |
Cash and cash equivalents | 2,218,000 | 1,872,000 | |
Escrows and utility deposits | 1,939,000 | 1,835,000 | |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 1,703,000 | 1,360,000 | |
Receivable due from related party | 73,000 | 58,000 | |
Unamortized lease commissions and deferred legal cost, net | 1,046,000 | 1,164,000 | |
Prepaid expenses and other assets | 106,000 | 51,000 | |
Total assets | 79,110,000 | 79,000,000 | |
Liabilities: | |||
Notes payable | 46,281,000 | 47,064,000 | |
Accounts payable and accrued expenses | 2,835,000 | 2,617,000 | |
Payable due to related party | 313,000 | 373,000 | |
Accrued interest payable | 199,000 | 197,000 | |
Tenants' security deposits | 1,329,000 | 1,236,000 | |
Total liabilities | $ 50,957,000 | $ 51,487,000 | |
[1] | Operating lease right of use assets (net) (related to adoption of Topic 842) | ||
[2] | Operating lease liabilities (related to adoption of Topic 842) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Revenues | |||||
Rental | [1] | $ 3,854 | $ 11,504 | ||
Rental | [1] | $ 4,438 | $ 12,915 | ||
Transaction and other fees | 9 | 12 | 32 | 76 | |
Total revenues | 3,863 | 4,450 | 11,536 | 12,991 | |
Operating expenses | |||||
Depreciation and amortization | 801 | 860 | 2,360 | 2,612 | |
Operating and maintenance (2) | 873 | 1,023 | 2,595 | 2,875 | |
Real estate taxes | 659 | 874 | 1,954 | 2,135 | |
General and administrative | [2] | 137 | 285 | 511 | 578 |
Management fees | 224 | 249 | 660 | 755 | |
Total operating expenses | 2,694 | 3,291 | 8,080 | 8,955 | |
Other expenses | |||||
Interest expense | 521 | 686 | 1,566 | 2,051 | |
Loss on disposal of assets | 16 | 12 | 24 | 12 | |
Total other expenses | 537 | 698 | 1,590 | 2,063 | |
Income before income taxes | 632 | 461 | 1,866 | 1,973 | |
Provision for income taxes | 133 | (23) | 35 | (67) | |
Net income | 765 | 438 | 1,901 | 1,906 | |
Less: Noncontrolling interest in subsidiary | 551 | 529 | 1,610 | 1,842 | |
Net income (loss) attributable to Common Shareholders | $ 214 | $ (91) | $ 291 | $ 64 | |
Basic income (loss) per Common Share: | |||||
Net income (loss) available to Common Shareholders (usd per share) | $ 0.53 | $ (0.22) | $ 0.72 | $ 0.16 | |
Diluted income (loss) per Common Share: | |||||
Net income (loss) available to Common Shareholders (usd per share) | $ 0.07 | $ (0.22) | $ 0.10 | $ 0.02 | |
Weighted average number of Common Shares outstanding: | |||||
Basic (shares) | 405,169 | 405,169 | 405,169 | 405,169 | |
Diluted (shares) | 2,868,281 | 405,169 | 2,808,240 | 2,903,219 | |
Operating Leases, Lease Income [Abstract] | |||||
Rental revenues | $ 3,250 | $ 9,769 | |||
Recoveries | 609 | 1,859 | |||
Bad debt | (5) | (124) | |||
Total rental | [1] | $ 3,854 | $ 11,504 | ||
Operating Leases, Income Statement, Lease Revenue [Abstract] | |||||
Rental revenues | $ 3,602 | $ 10,768 | |||
Recoveries | 836 | 2,147 | |||
Total rental | [1] | 4,438 | 12,915 | ||
Bad debt (prior to adoption of Topic 842) | $ 53 | $ 153 | |||
[1] | Rental Rental revenues $3,250 $3,602 $9,769 $10,768; Recoveries 609 836 1,859 2,147; Bad debt (5) N/A (124) N/A; Total rental $3,854 $4,438 $11,504 $12,915 | ||||
[2] | Bad debt included in operating and maintenance expenses prior to adoption of Topic 842 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, issued (in shares) | 443,299 | 443,299 |
Common stock, outstanding (in shares) | 405,169 | 405,169 |
Treasury stock (in shares) | 38,130 | 38,130 |
Preferred A Shares | ||
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 | 256,636 |
Preferred stock, outstanding (in shares) | 256,636 | 256,636 |
Preferred stock, liquidation preference (in dollars per share) | $ 10 | $ 10 |
Preferred C Shares | ||
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) | 231,944 | 231,944 |
Preferred stock, outstanding (in shares) | 231,944 | 231,944 |
Preferred stock, liquidation preference (in dollars per share) | $ 10 | $ 10 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 1,901 | $ 1,906 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,360 | 2,612 |
Amortization of deferred loan costs | 75 | 75 |
Loss on disposal of assets | 24 | 12 |
Bad debt | 124 | 153 |
Share-based Compensation | 28 | 0 |
Changes in operating assets and liabilities: | ||
Accrued rents and accounts receivable | (612) | (824) |
Receivable due from related party | (15) | (17) |
Escrows and utility deposits | (104) | (361) |
Unamortized lease commissions and deferred legal cost | (175) | (404) |
Prepaid expenses and other assets | (83) | 42 |
Accounts payable and accrued expenses | 119 | (83) |
Payable due to related party | (57) | (708) |
Stock redemption payable - related party | (143) | 0 |
Tenants' security deposits | 93 | 219 |
Net cash provided by operating activities | 3,535 | 2,622 |
Cash flows from investing activities: | ||
Additions to real estate | (1,389) | (2,143) |
Net cash used in investing activities | (1,389) | (2,143) |
Cash flows from financing activities: | ||
Distributions paid to noncontrolling interest in subsidiary | (1,006) | (505) |
Repayments of notes payable | (858) | (1,977) |
Net cash used in financing activities | (1,864) | (2,482) |
Net change in cash and cash equivalents | 282 | (2,003) |
Cash and cash equivalents at beginning of period | 2,010 | 2,991 |
Cash and cash equivalents at end of period | 2,292 | 988 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 1,474 | 1,974 |
Cash paid for taxes | 204 | 88 |
Non cash investing activities: | ||
Disposal of fully depreciated real estate | 22 | 7 |
Additions to real estate contributed by related party | $ 40 | $ 45 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes In Equity (Deficit) - USD ($) $ in Thousands | Total | Total Shareholders' Equity (Deficit) | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Cost of Shares Held in Treasury | Noncontrolling Interest | Preferred A SharesPreferred Shares | Preferred C SharesPreferred Shares |
Beginning balance at Dec. 31, 2017 | $ 18,581 | $ (280) | $ 4 | $ 28,147 | $ (27,635) | $ (801) | $ 18,861 | $ 3 | $ 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Distributions to operating partnership limited partner | (506) | (506) | |||||||
Net income | 754 | 54 | 54 | 700 | |||||
Ending balance at Mar. 31, 2018 | 18,829 | (226) | 4 | 28,147 | (27,581) | (801) | 19,055 | 3 | 2 |
Beginning balance at Dec. 31, 2017 | 18,581 | (280) | 4 | 28,147 | (27,635) | (801) | 18,861 | 3 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 1,906 | ||||||||
Ending balance at Sep. 30, 2018 | 19,979 | (219) | 4 | 28,147 | (27,574) | (801) | 20,198 | 3 | 2 |
Beginning balance at Mar. 31, 2018 | 18,829 | (226) | 4 | 28,147 | (27,581) | (801) | 19,055 | 3 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Reallocation of ownership between parent and noncontrolling interest | 0 | (1) | (1) | 1 | |||||
Net income | 714 | 101 | 101 | 613 | |||||
Ending balance at Jun. 30, 2018 | 19,543 | (126) | 4 | 28,147 | (27,481) | (801) | 19,669 | 3 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Reallocation of ownership between parent and noncontrolling interest | (2) | (2) | (2) | 0 | |||||
Net income | 438 | (91) | (91) | 529 | |||||
Ending balance at Sep. 30, 2018 | 19,979 | (219) | 4 | 28,147 | (27,574) | (801) | 20,198 | 3 | 2 |
Beginning balance at Dec. 31, 2018 | 27,062 | 1,036 | 4 | 28,147 | (26,319) | (801) | 26,026 | 3 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Contributions to operating partnership | 40 | 40 | |||||||
Distributions to operating partnership limited partner | (302) | (302) | |||||||
Net income | 614 | 46 | 46 | 568 | |||||
Ending balance at Mar. 31, 2019 | 27,414 | 1,082 | 4 | 28,147 | (26,273) | (801) | 26,332 | 3 | 2 |
Beginning balance at Dec. 31, 2018 | 27,062 | 1,036 | 4 | 28,147 | (26,319) | (801) | 26,026 | 3 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 1,901 | ||||||||
Ending balance at Sep. 30, 2019 | 28,025 | 1,355 | 4 | 28,175 | (26,028) | (801) | 26,670 | 3 | 2 |
Beginning balance at Mar. 31, 2019 | 27,414 | 1,082 | 4 | 28,147 | (26,273) | (801) | 26,332 | 3 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Distributions to operating partnership limited partner | (588) | (588) | |||||||
Net income | 522 | 31 | 31 | 491 | |||||
Ending balance at Jun. 30, 2019 | 27,348 | 1,113 | 4 | 28,147 | (26,242) | (801) | 26,235 | 3 | 2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Distributions to operating partnership limited partner | (116) | (116) | |||||||
Share-based compensation | 28 | 28 | 28 | ||||||
Net income | 765 | 214 | 214 | 551 | |||||
Ending balance at Sep. 30, 2019 | $ 28,025 | $ 1,355 | $ 4 | $ 28,175 | $ (26,028) | $ (801) | $ 26,670 | $ 3 | $ 2 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting. Pillarstone Capital REIT's (the “Company”, “Pillarstone”, “we”, “our”, or “us”) 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. generally accepted accounting principles (“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 September 30, 2019 and December 31, 2018 , and the reported amounts of revenues and expenses for the three and nine months ended September 30, 2019 and 2018 . Actual results could differ from those estimates. Significant estimates that we use include the estimated fair values of properties acquired, the estimated useful lives for depreciable and amortizable assets and costs, and deferred taxes and the related valuation allowance for deferred taxes. Actual results could differ from those estimates. Reclassifications. We have reclassified certain prior period amounts in the accompanying consolidated financial statements in order to be consistent with the current period presentation. These reclassifications had no effect on net income, total assets, total liabilities or equity. Change in accounting estimate. The calculation of the Company's tax provision is performed using management's best judgment with the assistance of tax advisers and re-evaluated as changes in facts and circumstances occur that may impact the application of tax laws. The Company seeks to reduce its overall tax burden and to minimize or delay cash outflows for taxes by implementing tax-efficient business structures, entering into tax-advantaged transactions, and seeking tax-optimal transactions. During the three months ended September 30, 2019, a change in facts and circumstances occurred involving the timing and amount of gains on sales of properties in relation to the timing of the Company's potential election of REIT status. This new information resulted in the change in tax strategy that is described in more detail below under Income taxes . Based on the change in tax strategy, we reversed an estimated $141,000 federal income tax liability recorded as of December 31, 2018 and a $9,000 federal income tax liability recorded as of June 30, 2019. The impact of these changes resulted in a decrease in tax expense for the three and nine months ended September 30, 2019 of $154,000 and $141,000 , respectively, which increased our reported net income by $154,000 and $141,000 or $0.05 per diluted share for the three and nine months ended September 30, 2019, respectively. 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 September 30, 2019 and December 31, 2018 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. 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 September 30, 2019 . Accrued Rents and Accounts Receivable. Included in accrued rents and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. We review the collectability of charges under our tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. With the adoption of Accounting Standards Codification (“ASC”) No. 842, " Leases" (“Topic 842”) effective January 1, 2019, we will recognize an adjustment to rental revenue if we deem it probable that the receivable will not be collected. Prior to the adoption of Topic 842, we recognized an allowance for doubtful accounts and bad debt expense of the specific rents receivable. Our review of collectability under our operating leases includes any accrued rental revenues related to the straight-line method of reporting rental revenue. As of September 30, 2019 and December 31, 2018 , we had an allowance for uncollectible accounts of approximately $247,000 and $53,000 , respectively. For the three and nine months ended September 30, 2019 , we recorded an adjustment to rental revenue in the amount of approximately $5,000 and $124,000 , respectively. For the three and nine months ended September 30, 2018 , we recorded bad debt expense in the amount of approximately $53,000 and $153,000 , respectively. Unamortized Lease Commissions and Loan Costs. Leasing commissions 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 effective 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. 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. 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. Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred. We combine lease and non lease components in lease contracts, which includes combining base rent and recoveries into a single line item, Rental , within the consolidated statements of operations. We recognize lease termination fees in the year that the lease is terminated and collection of the fee is reasonably assured. Additionally, if we have tenants who pay real estate taxes directly to the taxing authority, we exclude these costs paid directly by the tenant to third parties on our behalf from revenue recognized and the associated property operating expense. Stock-based compensation . The Company accounts for stock-based compensation in accordance with the Financial Accounting Standards Board's (“FASB”) 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% . Embedded in the effective tax rate for the three and nine months ended September 30, 2019 are the tax effects of the Company's operating activities. For the three and nine months ended September 30, 2019, the Company's effective tax rate applied to its income before income taxes decreased in relation to the statutory tax rate as a result of a change in the treatment of the gain on certain property sales described below. Please reference the Company's 2018 10-K for additional details on the differences between the Federal statutory rate and our effective rate. On December 9, 2016, Whitestone REIT Operating Partnership LP ("WROP") contributed 14 real estate assets (the "Real Estate Assets") to Pillarstone Capital REIT Operating Partnership ("Pillarstone OP" or "Operating Partnership") in exchange for operating partnership units of Pillarstone OP. The contribution of these assets in exchange for Pillarstone OP units resulted in a “built in tax gain” in the Pillarstone OP units owned by WROP. The amount of the “built in tax gain” represented the difference between the contribution amount and WROP’s tax basis in the properties. On December 27, 2018, Pillarstone OP sold three of the fourteen contributed Real Estate Assets. As a result of new information and facts obtained, and changes in circumstances that occurred in the three months ended September 30, 2019, including but not limited to, new contracts entered into for property sales and the expected timing of the Company’s potential REIT status election, the Company changed its tax strategy regarding the recognition of the “built in tax gain” by the Company. Under Internal Revenue Code Section 704(c), the Company adopted a method in which it allocates all tax gains from the sale of the contributed properties to WROP until the full amount of the "built in tax gain" has been depleted. The original tax position which determined the Company’s accounting estimates recorded in prior periods was taken before the Company had knowledge of additional information and facts, and changes in circumstances that occurred in the three months ended September 30, 2019. The impact of these changes resulted in a decrease in tax expense for the three and nine months ended September 30, 2019 of $154,000 and $141,000 , respectively, which increased our reported net income by $154,000 and $141,000 or $0.05 per diluted share for the three and nine months ended September 30, 2019, respectively. Concentration of Risk. Substantially all of our revenues are obtained from office and warehouse locations in the Dallas 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 May 2014, the FASB issued guidance, as amended in subsequent updates, establishing a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. The standard also requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. This guidance became effective for the reporting periods beginning on or after December 15, 2017, and interim periods within those fiscal years. We have adopted this guidance on a modified retrospective basis beginning January 1, 2018 and it did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued an accounting standard update (“ASU”) that provided the principles for the recognition, measurement, presentation and disclosure of leases. Additional guidance and targeted improvements to the February 2016 ASU were made through the issuance of supplementary ASUs in July 2018, December 2018 and March 2019. Effective January 1, 2019, we adopted the new lease accounting guidance in Topic 842. As the lessee and lessor, we have elected the package of practical expedients permitted in Topic 842. Accordingly, we have accounted for our existing operating leases as operating leases under the new guidance, without reassessing (a) whether the contract contains a lease under Topic 842, (b) whether classification of the operating lease would be different in accordance with Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments (as of December 31, 2018 ) would have met the definition of initial direct costs in Topic 842 at lease commencement. Additionally, as the lessee and lessor, we will use hindsight in determining the lease term and in assessing impairment of our right-of-use assets. As a result of the adoption of the new lease accounting guidance, as the lessee, we recognized on January 1, 2019 (a) a lease liability of approximately $21,000 , which represents the present value of the remaining lease payments of approximately $22,000 discounted using our incremental borrowing rate of 4.5% , and (b) a right-of-use asset of approximately $21,000 . Upon adoption of Topic 842, lessees and lessors are required to apply a modified retrospective transition approach. Reporting entities are permitted to choose one of two methods to recognize and measure leases within the scope of Topic 842: • Apply Topic 842 to each lease that existed at the beginning of the earliest comparative period presented in the financial statements as well as leases that commenced after that date. Under this method, prior comparative periods presented are adjusted. For leases that commenced prior to the beginning of the earliest comparative period presented, a cumulative-effect adjustment is recognized at that date. • Apply the guidance to each lease that had commenced as of the beginning of the reporting period in which the entity first applies the leases standard with a cumulative-effect adjustment as of that date. Prior comparative periods would not be adjusted under this method. We have elected an optional transition method that allows entities to initially apply Topic 842 at January 1, 2019, the date of adoption, and to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As the lessor, we have not assessed unamortized legal costs as part of the package of practical expedients, and we will not make any adjustment to retained earnings at the date of adoption to write off unamortized legal costs. We will continue to amortize unamortized legal costs as of December 31, 2018 over the life of the respective leases. We did not have a cumulative-effect adjustment as of the adoption date. Additionally, the optional transition method does allow us not to apply the new standard (including disclosure requirements) to comparative periods presented. Those periods can continue to be presented in accordance with prior generally accepted accounting principles. Topic 842 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases and operating leases. Based on our election of the package of practical expedients, our existing commercial leases, where we are the lessor, continue to be accounted for as operating leases under the new standard. However, Topic 842 changed certain requirements regarding the classification of leases that could result in us recognizing certain long-term leases entered into or modified after January 1, 2019 as sales-type leases or finance leases, as opposed to operating leases. We will continue to monitor our leases following the adoption date to ensure that they are classified in accordance with the new lease standards. We elected a practical expedient which allows lessors to not separate non-lease components from the lease component when the timing and pattern of transfer for the lease components and non-lease components are the same and if the lease component is classified as an operating lease. As a result, we now present all rentals and reimbursements from tenants as a single line item, Rental , within the consolidated statements of operations. For the three and nine months ended September 30, 2019 , we had rental revenues of approximately $3,250,000 and $9,769,000 respectively, and rental reimbursements of approximately $609,000 and $1,859,000 respectively, compared to rental revenues of approximately $3,602,000 and $10,768,000 and rental reimbursements of approximately $836,000 and $2,147,000 for the three and nine months ended September 30, 2018 , respectively. We review the collectability of charges under our tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. With the adoption of Topic 842, we will recognize an adjustment to rental revenue if we deem it probable that the receivable will not be collected. Prior to the adoption of Topic 842, we recognized an allowance for doubtful accounts and bad debt expense of the specific rents receivable. Our review of collectability under our operating leases includes any accrued rental revenues related to the straight-line method of reporting rental revenue. |
Accrued Rents and Accounts Rece
Accrued Rents and Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2019 | |
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): September 30, 2019 December 31, 2018 Tenant receivables $ 469 $ 252 Accrued rents and other recoveries 1,626 1,161 Allowance for doubtful accounts (247 ) (53 ) Total $ 1,848 $ 1,360 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | LEASES As a Lessor. All leases on our properties are classified as noncancelable 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, if applicable, 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 combine lease and nonlease components in lease contracts, which includes combining base rent, recoveries, and percentage rents into a single line item, Rental , within the consolidated statements of operations. A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, contingent rents, and collectability adjustments under Topic 842 under noncancelable operating leases in existence as of September 30, 2019 is as follows (in thousands): Years Ended December 31, Minimum Future Rents (1) 2019 (remaining) $ 3,027 2020 10,503 2021 7,671 2022 5,127 2023 3,600 Thereafter 3,610 Total $ 33,538 (1) These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses and rental increases that are not fixed. As a Lessee. We have an office space lease which qualifies as an operating lease, with a remaining lease term of less than 12 months . The following table summarizes the fixed, future minimum rental payment, excluding variable costs, which are discounted by our weighted average incremental borrowing rates to calculate the lease liability for our operating lease in which we are the lessee (in thousands): Years Ended December 31, September 30, 2019 2019 (remaining) $ 4 2020 7 Total undiscounted rental payments 11 Total lease liabilities (1) $ 11 (1) Imputed interest is immaterial and therefore not disclosed in the above table For the three and nine months ended September 30, 2019 , the total lease cost was $3,705 and $10,899 , respectively. The remaining lease term for our operating lease was less than 12 months at September 30, 2019 . We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 4.5% at September 30, 2019 . |
Leases | LEASES As a Lessor. All leases on our properties are classified as noncancelable 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, if applicable, 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 combine lease and nonlease components in lease contracts, which includes combining base rent, recoveries, and percentage rents into a single line item, Rental , within the consolidated statements of operations. A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, contingent rents, and collectability adjustments under Topic 842 under noncancelable operating leases in existence as of September 30, 2019 is as follows (in thousands): Years Ended December 31, Minimum Future Rents (1) 2019 (remaining) $ 3,027 2020 10,503 2021 7,671 2022 5,127 2023 3,600 Thereafter 3,610 Total $ 33,538 (1) These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses and rental increases that are not fixed. As a Lessee. We have an office space lease which qualifies as an operating lease, with a remaining lease term of less than 12 months . The following table summarizes the fixed, future minimum rental payment, excluding variable costs, which are discounted by our weighted average incremental borrowing rates to calculate the lease liability for our operating lease in which we are the lessee (in thousands): Years Ended December 31, September 30, 2019 2019 (remaining) $ 4 2020 7 Total undiscounted rental payments 11 Total lease liabilities (1) $ 11 (1) Imputed interest is immaterial and therefore not disclosed in the above table For the three and nine months ended September 30, 2019 , the total lease cost was $3,705 and $10,899 , respectively. The remaining lease term for our operating lease was less than 12 months at September 30, 2019 . We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 4.5% at September 30, 2019 . |
Unamortized Lease Commissions a
Unamortized Lease Commissions and Deferred Legal Cost, Net | 9 Months Ended |
Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Unamortized Lease Commissions and Deferred Legal Cost, Net | UNAMORTIZED LEASE COMMISSIONS AND DEFERRED LEGAL COST, NET Costs which have been deferred consist of the following (in thousands): September 30, 2019 December 31, 2018 Leasing commissions $ 1,903 $ 1,780 Deferred legal cost 34 34 Total cost 1,937 1,814 Less: leasing commissions accumulated amortization (872 ) (636 ) Less: deferred legal cost accumulated amortization (19 ) (14 ) Total cost, net of accumulated amortization $ 1,046 $ 1,164 |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Variable Interest Entity | VARIABLE INTEREST ENTITY 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 REIT (“Whitestone”), both of which are related parties to Pillarstone and Pillarstone OP. Pursuant to the terms of the Contribution Agreement, 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”) that owned 14 real estate assets (the “Real Estate Assets” and, together with the Subsidiaries, the “Property”) for aggregate consideration of approximately $84 million , consisting of (i) 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 (ii) 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 an 18.6% interest valued at $4.1 million as of the date of the Contribution 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 Variable Interest Entity. 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. The carrying amounts and classification of certain assets and liabilities for Pillarstone OP in our condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018 consists of the following (in thousands): September 30, 2019 December 31, 2018 (unaudited) Real estate assets, at cost Property $ 79,348 $ 77,941 Accumulated depreciation (7,323 ) (5,281 ) Total real estate assets 72,025 72,660 Cash and cash equivalents 2,218 1,872 Escrows and utility deposits 1,939 1,835 Accrued rents and accounts receivable, net of allowance for doubtful accounts 1,703 1,360 Receivable due from related party (1) 73 58 Unamortized lease commissions and deferred legal cost, net 1,046 1,164 Prepaid expenses and other assets 106 51 Total assets $ 79,110 $ 79,000 Liabilities Notes payable $ 46,281 $ 47,064 Accounts payable and accrued expenses 2,835 2,617 Payable due to related party 313 373 Accrued interest payable 199 197 Tenants' security deposits 1,329 1,236 Total liabilities $ 50,957 $ 51,487 (1) Excludes approximately $0.5 million in accounts receivable due from Pillarstone that was eliminated in consolidation as of September 30, 2019 and approximately $0.3 million as of December 31, 2018 . |
Real Estate
Real Estate | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Real Estate | REAL ESTATE As of September 30, 2019 , Pillarstone OP owned 11 Real Estate Assets in the Dallas and Houston areas comprised of approximately 1.3 million square feet of gross leasable area. Pillarstone OP results of operations. Property revenue attributable to the Real Estate Assets was $3.9 million and $11.5 million for the three and nine months ended September 30, 2019 , respectively, and $4.5 million and $13.0 million for the three and nine months ended September 30, 2018 , respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Mortgages and other notes payable consist of the following (in thousands): Description September 30, 2019 December 31, 2018 Fixed rate notes $37.0 million 3.76% Note, due December 1, 2020 $ 25,203 $ 25,863 $16.5 million 4.97% Note, due September 26, 2023 15,607 15,805 Floating rate notes Related party Note, LIBOR plus 1.40% to 1.90%, due December 31, 2019 5,661 5,661 Total notes payable principal 46,471 47,329 Less deferred financing costs, net of accumulated amortization (190 ) (265 ) Total notes payable $ 46,281 $ 47,064 Our mortgage debt was collateralized by seven operating properties as of September 30, 2019 with a combined net book value of $55.4 million . 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 of our other loans are subject to customary covenants. As of September 30, 2019 , we were in compliance with all loan covenants. Scheduled maturities of notes payable as of September 30, 2019 were as follows: Year Amount Due (in thousands) 2019 $ 5,999 2020 25,272 2021 308 2022 323 2023 14,569 Total $ 46,471 CONVERTIBLE NOTES PAYABLE - RELATED PARTIES On November 20, 2015, five trustees on our board of trustees at that time loaned $197,780 to the Company in exchange for convertible notes payable. The convertible notes payable accrue interest at 10% per annum and originally matured on November 20, 2018. In 2019, the Pillarstone board of trustees approved an extension of the maturity date to November 20, 2021. 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 and 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. |
Convertible Notes Payable - Rel
Convertible Notes Payable - Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable - Related Parties | DEBT Mortgages and other notes payable consist of the following (in thousands): Description September 30, 2019 December 31, 2018 Fixed rate notes $37.0 million 3.76% Note, due December 1, 2020 $ 25,203 $ 25,863 $16.5 million 4.97% Note, due September 26, 2023 15,607 15,805 Floating rate notes Related party Note, LIBOR plus 1.40% to 1.90%, due December 31, 2019 5,661 5,661 Total notes payable principal 46,471 47,329 Less deferred financing costs, net of accumulated amortization (190 ) (265 ) Total notes payable $ 46,281 $ 47,064 Our mortgage debt was collateralized by seven operating properties as of September 30, 2019 with a combined net book value of $55.4 million . 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 of our other loans are subject to customary covenants. As of September 30, 2019 , we were in compliance with all loan covenants. Scheduled maturities of notes payable as of September 30, 2019 were as follows: Year Amount Due (in thousands) 2019 $ 5,999 2020 25,272 2021 308 2022 323 2023 14,569 Total $ 46,471 CONVERTIBLE NOTES PAYABLE - RELATED PARTIES On November 20, 2015, five trustees on our board of trustees at that time loaned $197,780 to the Company in exchange for convertible notes payable. The convertible notes payable accrue interest at 10% per annum and originally matured on November 20, 2018. In 2019, the Pillarstone board of trustees approved an extension of the maturity date to November 20, 2021. 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 and 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. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
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 earnings per Common Share calculations for the three and nine month periods ended September 30, 2019 and 2018 . For the three and nine month periods ended September 30, 2019 and the nine month period ended September 30, 2018, Class A Cumulative Preferred Shares ("Preferred A Shares") and Class C Convertible Preferred Shares ("Preferred C Shares") were included in net income per weighted average number of Common Shares - dilutive. For the three month period ended September 30, 2018, 2,498,050 common share equivalents represented by Preferred Class A and C shares were not included in the computation of diluted loss per share because the effect of conversion would be anti-dilutive. During the three and nine month periods ended September 30, 2019 and 2018 , the Company had $197,780 of convertible notes payable as discussed in Note 8. The convertible notes payable weighted average shares of 206,038 and 202,306 were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2019 because the effect of the conversion would be anti-dilutive. The convertible notes payable were not included in the computation of diluted earnings (loss) per share for the three and nine months ended September 30, 2018 because the effect of the conversion would be anti-dilutive. Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share data) 2019 2018 2019 2018 Numerator: Net income (loss) attributable to common shareholders $ 214 $ (91 ) $ 291 $ 64 Dilutive effect of interest from convertible notes payable — — — — Net income (loss) available to common shareholders with assumed conversion $ 214 $ (91 ) $ 291 $ 64 Denominator: Weighted average number of common shares - basic 405,169 405,169 405,169 405,169 Effect of dilutive securities: Dilutive effect of restricted common stock 90,062 — 30,021 — Assumed conversion of Preferred A Shares 53,610 — 53,610 53,610 Assumed conversion of Preferred C Shares 2,319,440 — 2,319,440 2,444,440 Assumed conversion of convertible notes payable — — — — Weighted average number of common shares - dilutive 2,868,281 405,169 2,808,240 2,903,219 Earnings (Loss) Per Share: Basic income (loss) per common share: Net income (loss) available to common shareholders $ 0.53 $ (0.22 ) $ 0.72 $ 0.16 Diluted income (loss) per common share: Net income (loss) available to common shareholders $ 0.07 $ (0.22 ) $ 0.10 $ 0.02 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS On December 8, 2016, the Company entered into the Contribution Agreement with Whitestone OP, a related party, resulting in the contribution of an equity ownership interest in Pillarstone OP by 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 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 of 1933, as amended, the issuance of the common shares in the Company that may be issued upon redemption of the OP Units issued pursuant to the Contribution Agreement 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. Pillarstone and Whitestone agreed to extend the filing of the shelf registration statement to the date that the Company closes a public equity offering. In connection with the Contribution Agreement, on December 8, 2016, the Company 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. In December 2018, Pillarstone OP sold three properties, which did not create additional tax liabilities for Whitestone OP. 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 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 (2) 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 statement of operations for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Location of Revenue (Expense) 2019 2018 2019 2018 Rent Rental $ 211 $ 201 $ 524 $ 606 Property management fees Management fees (168 ) (183 ) (510 ) (557 ) Asset management fees Management fees (56 ) (66 ) (150 ) (198 ) Interest expense Interest expense (52 ) (149 ) (161 ) (435 ) Receivables due from and payables due to related parties consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands): Location of Receivable / Payable September 30, 2019 December 31, 2018 Tenant receivables and other receivables Accrued rents and accounts receivable $ 73 $ 58 Accrued interest due to related party Accrued interest payable 129 112 Other payables due to related party Payable due to related party 315 372 |
Subsequent Events (Notes)
Subsequent Events (Notes) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On October 8, 2019, Pillarstone OP, through an indirect wholly owned subsidiary, Whitestone Industrial-Office, LLC, sold a portfolio of three Real Estate Assets in Houston, Texas to an unaffiliated third party for $39.7 million in cash. Pillarstone OP used the net proceeds, after customary closing deductions, to pay off mortgage debt on several Real Estate Assets, and repay the remaining $5.7 million of its $15.5 million loan from Whitestone. In addition to the $5.7 million loan repayment, Whitestone received a $5.4 million cash distribution from its stake in Pillarstone OP as a result of the sale |
Incentive Equity Plan
Incentive Equity Plan | 9 Months Ended |
Sep. 30, 2019 | |
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. On July 1, 2019, the Committee approved the grant of 45,031 Restricted Common Share Units (the "Units") subject to the restrictions, terms and conditions set forth in the Restricted Unit Award Agreement (the "Award"). These Units are time-based shares that vest each year over the next three years and will be fully vested on July 1, 2022. On July 1, 2019, the Committee approved the grant of 45,031 Units subject to the restrictions and terms and conditions set forth in the Award. These Units are performance-based shares linked to five specific goals set forth in the Award. If the Company does not attain the performance goals before July 1, 2022, the Units still subject to restriction will be forfeited to the Company. As of September 30, 2019, the maximum number of Common Shares or OP Units available to be granted is 2,248,507 . During the three months ended September 30, 2019, the following shares were granted: Description Shares Weighted-Average Grant Date Fair Value (1) Non-vested at January 1, 2019 — $ — Granted 90,062 2.18 Non-vested at September 30, 2019 90,062 $ 2.18 Available for grant at September 30, 2019 2,248,507 (1) The fair value of the shares granted were determined based on the weighted average OTC share price for the nine months ended September 30, 2019. As of September 30, 2019, per the Award, the Company has determined that the time-based shares and the majority of the performance-based shares will vest by July 1, 2022. Time-based shares granted during the three months ended September 30, 2019 are amortized over their respective amortization periods. Performance-based shares granted during the three months ended September, 2019, with the exception of one of the performance based awards, that will be amortized over one year , will be amortized for three years . Performance-based shares that have not been achieved as of July 1, 2022 will be forfeited to the Company. The total value of the time-based and performance-based shares granted on July 1, 2019 is approximately $196,000 . As of September 30, 2019, amortization expense for the time-based and performance-based shares is approximately $15,000 and $13,000 , respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting. Pillarstone Capital REIT's (the “Company”, “Pillarstone”, “we”, “our”, or “us”) 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. generally accepted accounting principles (“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 September 30, 2019 and December 31, 2018 , and the reported amounts of revenues and expenses for the three and nine months ended September 30, 2019 and 2018 . Actual results could differ from those estimates. Significant estimates that we use include the estimated fair values of properties acquired, the estimated useful lives for depreciable and amortizable assets and costs, and deferred taxes and the related valuation allowance for deferred taxes. Actual results could differ from those estimates. |
Reclassifications | Reclassifications. We have reclassified certain prior period amounts in the accompanying consolidated financial statements in order to be consistent with the current period presentation. These reclassifications had no effect on net income, total assets, total liabilities or equity. |
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 September 30, 2019 and December 31, 2018 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 | 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. 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 rents and accounts receivable are base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. We review the collectability of charges under our tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. With the adoption of Accounting Standards Codification (“ASC”) No. 842, " Leases" (“Topic 842”) effective January 1, 2019, we will recognize an adjustment to rental revenue if we deem it probable that the receivable will not be collected. Prior to the adoption of Topic 842, we recognized an allowance for doubtful accounts and bad debt expense of the specific rents receivable. Our review of collectability under our operating leases includes any accrued rental revenues related to the straight-line method of reporting rental revenue. |
Unamortized Lease Commissions | Unamortized Lease Commissions and Loan Costs. Leasing commissions 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 effective 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 . Prepaids and other assets include escrows established pursuant to certain mortgage financing arrangements for real estate taxes and insurance. |
Noncontrolling Interests | Noncontrolling Interests. Noncontrolling interests are the portion of equity in a subsidiary not attributable to a parent. 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. |
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. Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred. We combine lease and non lease components in lease contracts, which includes combining base rent and recoveries into a single line item, Rental , within the consolidated statements of operations. |
Stock-based compensation | Stock-based compensation . The Company accounts for stock-based compensation in accordance with the Financial Accounting Standards Board's (“FASB”) 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% . Embedded in the effective tax rate for the three and nine months ended September 30, 2019 are the tax effects of the Company's operating activities. For the three and nine months ended September 30, 2019, the Company's effective tax rate applied to its income before income taxes decreased in relation to the statutory tax rate as a result of a change in the treatment of the gain on certain property sales described below. Please reference the Company's 2018 10-K for additional details on the differences between the Federal statutory rate and our effective rate. On December 9, 2016, Whitestone REIT Operating Partnership LP ("WROP") contributed 14 real estate assets (the "Real Estate Assets") to Pillarstone Capital REIT Operating Partnership ("Pillarstone OP" or "Operating Partnership") in exchange for operating partnership units of Pillarstone OP. The contribution of these assets in exchange for Pillarstone OP units resulted in a “built in tax gain” in the Pillarstone OP units owned by WROP. The amount of the “built in tax gain” represented the difference between the contribution amount and WROP’s tax basis in the properties. On December 27, 2018, Pillarstone OP sold three of the fourteen contributed Real Estate Assets. As a result of new information and facts obtained, and changes in circumstances that occurred in the three months ended September 30, 2019, including but not limited to, new contracts entered into for property sales and the expected timing of the Company’s potential REIT status election, the Company changed its tax strategy regarding the recognition of the “built in tax gain” by the Company. Under Internal Revenue Code Section 704(c), the Company adopted a method in which it allocates all tax gains from the sale of the contributed properties to WROP until the full amount of the "built in tax gain" has been depleted. The original tax position which determined the Company’s accounting estimates recorded in prior periods was taken before the Company had knowledge of additional information and facts, and changes in circumstances that occurred in the three months ended September 30, 2019. |
Concentration of Risk | Concentration of Risk. Substantially all of our revenues are obtained from office and warehouse locations in the Dallas 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 May 2014, the FASB issued guidance, as amended in subsequent updates, establishing a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. The standard also requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. This guidance became effective for the reporting periods beginning on or after December 15, 2017, and interim periods within those fiscal years. We have adopted this guidance on a modified retrospective basis beginning January 1, 2018 and it did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued an accounting standard update (“ASU”) that provided the principles for the recognition, measurement, presentation and disclosure of leases. Additional guidance and targeted improvements to the February 2016 ASU were made through the issuance of supplementary ASUs in July 2018, December 2018 and March 2019. Effective January 1, 2019, we adopted the new lease accounting guidance in Topic 842. As the lessee and lessor, we have elected the package of practical expedients permitted in Topic 842. Accordingly, we have accounted for our existing operating leases as operating leases under the new guidance, without reassessing (a) whether the contract contains a lease under Topic 842, (b) whether classification of the operating lease would be different in accordance with Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments (as of December 31, 2018 ) would have met the definition of initial direct costs in Topic 842 at lease commencement. Additionally, as the lessee and lessor, we will use hindsight in determining the lease term and in assessing impairment of our right-of-use assets. As a result of the adoption of the new lease accounting guidance, as the lessee, we recognized on January 1, 2019 (a) a lease liability of approximately $21,000 , which represents the present value of the remaining lease payments of approximately $22,000 discounted using our incremental borrowing rate of 4.5% , and (b) a right-of-use asset of approximately $21,000 . Upon adoption of Topic 842, lessees and lessors are required to apply a modified retrospective transition approach. Reporting entities are permitted to choose one of two methods to recognize and measure leases within the scope of Topic 842: • Apply Topic 842 to each lease that existed at the beginning of the earliest comparative period presented in the financial statements as well as leases that commenced after that date. Under this method, prior comparative periods presented are adjusted. For leases that commenced prior to the beginning of the earliest comparative period presented, a cumulative-effect adjustment is recognized at that date. • Apply the guidance to each lease that had commenced as of the beginning of the reporting period in which the entity first applies the leases standard with a cumulative-effect adjustment as of that date. Prior comparative periods would not be adjusted under this method. We have elected an optional transition method that allows entities to initially apply Topic 842 at January 1, 2019, the date of adoption, and to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As the lessor, we have not assessed unamortized legal costs as part of the package of practical expedients, and we will not make any adjustment to retained earnings at the date of adoption to write off unamortized legal costs. We will continue to amortize unamortized legal costs as of December 31, 2018 over the life of the respective leases. We did not have a cumulative-effect adjustment as of the adoption date. Additionally, the optional transition method does allow us not to apply the new standard (including disclosure requirements) to comparative periods presented. Those periods can continue to be presented in accordance with prior generally accepted accounting principles. Topic 842 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases and operating leases. Based on our election of the package of practical expedients, our existing commercial leases, where we are the lessor, continue to be accounted for as operating leases under the new standard. However, Topic 842 changed certain requirements regarding the classification of leases that could result in us recognizing certain long-term leases entered into or modified after January 1, 2019 as sales-type leases or finance leases, as opposed to operating leases. We will continue to monitor our leases following the adoption date to ensure that they are classified in accordance with the new lease standards. We elected a practical expedient which allows lessors to not separate non-lease components from the lease component when the timing and pattern of transfer for the lease components and non-lease components are the same and if the lease component is classified as an operating lease. As a result, we now present all rentals and reimbursements from tenants as a single line item, Rental , within the consolidated statements of operations. For the three and nine months ended September 30, 2019 , we had rental revenues of approximately $3,250,000 and $9,769,000 respectively, and rental reimbursements of approximately $609,000 and $1,859,000 respectively, compared to rental revenues of approximately $3,602,000 and $10,768,000 and rental reimbursements of approximately $836,000 and $2,147,000 for the three and nine months ended September 30, 2018 , respectively. We review the collectability of charges under our tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. With the adoption of Topic 842, we will recognize an adjustment to rental revenue if we deem it probable that the receivable will not be collected. Prior to the adoption of Topic 842, we recognized an allowance for doubtful accounts and bad debt expense of the specific rents receivable. Our review of collectability under our operating leases includes any accrued rental revenues related to the straight-line method of reporting rental revenue. |
Accrued Rents and Accounts Re_2
Accrued Rents and Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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): September 30, 2019 December 31, 2018 Tenant receivables $ 469 $ 252 Accrued rents and other recoveries 1,626 1,161 Allowance for doubtful accounts (247 ) (53 ) Total $ 1,848 $ 1,360 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Minimum Future Rent Payments | A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, contingent rents, and collectability adjustments under Topic 842 under noncancelable operating leases in existence as of September 30, 2019 is as follows (in thousands): Years Ended December 31, Minimum Future Rents (1) 2019 (remaining) $ 3,027 2020 10,503 2021 7,671 2022 5,127 2023 3,600 Thereafter 3,610 Total $ 33,538 (1) These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses and rental increases that are not fixed. |
Maturities of Operating Lease Liabilities | The following table summarizes the fixed, future minimum rental payment, excluding variable costs, which are discounted by our weighted average incremental borrowing rates to calculate the lease liability for our operating lease in which we are the lessee (in thousands): Years Ended December 31, September 30, 2019 2019 (remaining) $ 4 2020 7 Total undiscounted rental payments 11 Total lease liabilities (1) $ 11 (1) Imputed interest is immaterial and therefore not disclosed in the above table |
Unamortized Lease Commissions_2
Unamortized Lease Commissions and Deferred Legal Cost, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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): September 30, 2019 December 31, 2018 Leasing commissions $ 1,903 $ 1,780 Deferred legal cost 34 34 Total cost 1,937 1,814 Less: leasing commissions accumulated amortization (872 ) (636 ) Less: deferred legal cost accumulated amortization (19 ) (14 ) Total cost, net of accumulated amortization $ 1,046 $ 1,164 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018 consists of the following (in thousands): September 30, 2019 December 31, 2018 (unaudited) Real estate assets, at cost Property $ 79,348 $ 77,941 Accumulated depreciation (7,323 ) (5,281 ) Total real estate assets 72,025 72,660 Cash and cash equivalents 2,218 1,872 Escrows and utility deposits 1,939 1,835 Accrued rents and accounts receivable, net of allowance for doubtful accounts 1,703 1,360 Receivable due from related party (1) 73 58 Unamortized lease commissions and deferred legal cost, net 1,046 1,164 Prepaid expenses and other assets 106 51 Total assets $ 79,110 $ 79,000 Liabilities Notes payable $ 46,281 $ 47,064 Accounts payable and accrued expenses 2,835 2,617 Payable due to related party 313 373 Accrued interest payable 199 197 Tenants' security deposits 1,329 1,236 Total liabilities $ 50,957 $ 51,487 (1) Excludes approximately $0.5 million in accounts receivable due from Pillarstone that was eliminated in consolidation as of September 30, 2019 and approximately $0.3 million as of December 31, 2018 . |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Mortgages and other notes payable consist of the following (in thousands): Description September 30, 2019 December 31, 2018 Fixed rate notes $37.0 million 3.76% Note, due December 1, 2020 $ 25,203 $ 25,863 $16.5 million 4.97% Note, due September 26, 2023 15,607 15,805 Floating rate notes Related party Note, LIBOR plus 1.40% to 1.90%, due December 31, 2019 5,661 5,661 Total notes payable principal 46,471 47,329 Less deferred financing costs, net of accumulated amortization (190 ) (265 ) Total notes payable $ 46,281 $ 47,064 |
Debt Maturity Schedule | Scheduled maturities of notes payable as of September 30, 2019 were as follows: Year Amount Due (in thousands) 2019 $ 5,999 2020 25,272 2021 308 2022 323 2023 14,569 Total $ 46,471 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share data) 2019 2018 2019 2018 Numerator: Net income (loss) attributable to common shareholders $ 214 $ (91 ) $ 291 $ 64 Dilutive effect of interest from convertible notes payable — — — — Net income (loss) available to common shareholders with assumed conversion $ 214 $ (91 ) $ 291 $ 64 Denominator: Weighted average number of common shares - basic 405,169 405,169 405,169 405,169 Effect of dilutive securities: Dilutive effect of restricted common stock 90,062 — 30,021 — Assumed conversion of Preferred A Shares 53,610 — 53,610 53,610 Assumed conversion of Preferred C Shares 2,319,440 — 2,319,440 2,444,440 Assumed conversion of convertible notes payable — — — — Weighted average number of common shares - dilutive 2,868,281 405,169 2,808,240 2,903,219 Earnings (Loss) Per Share: Basic income (loss) per common share: Net income (loss) available to common shareholders $ 0.53 $ (0.22 ) $ 0.72 $ 0.16 Diluted income (loss) per common share: Net income (loss) available to common shareholders $ 0.07 $ (0.22 ) $ 0.10 $ 0.02 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table presents the revenue and expenses with Whitestone included in our consolidated statement of operations for the three and nine months ended September 30, 2019 and 2018 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Location of Revenue (Expense) 2019 2018 2019 2018 Rent Rental $ 211 $ 201 $ 524 $ 606 Property management fees Management fees (168 ) (183 ) (510 ) (557 ) Asset management fees Management fees (56 ) (66 ) (150 ) (198 ) Interest expense Interest expense (52 ) (149 ) (161 ) (435 ) Receivables due from and payables due to related parties consisted of the following as of September 30, 2019 and December 31, 2018 (in thousands): Location of Receivable / Payable September 30, 2019 December 31, 2018 Tenant receivables and other receivables Accrued rents and accounts receivable $ 73 $ 58 Accrued interest due to related party Accrued interest payable 129 112 Other payables due to related party Payable due to related party 315 372 |
Incentive Equity Plan (Tables)
Incentive Equity Plan (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of Share-Based Incentive Plan Activity | As of September 30, 2019, the maximum number of Common Shares or OP Units available to be granted is 2,248,507 . During the three months ended September 30, 2019, the following shares were granted: Description Shares Weighted-Average Grant Date Fair Value (1) Non-vested at January 1, 2019 — $ — Granted 90,062 2.18 Non-vested at September 30, 2019 90,062 $ 2.18 Available for grant at September 30, 2019 2,248,507 (1) The fair value of the shares granted were determined based on the weighted average OTC share price for the nine months ended September 30, 2019. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Dec. 27, 2018property | Sep. 30, 2019USD ($)property$ / shares | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($)property$ / shares | Sep. 30, 2018USD ($)$ / shares | Dec. 31, 2018USD ($) | Jan. 01, 2019USD ($) | Dec. 09, 2016property |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Income tax expense (benefit) | $ (133,000) | $ 23,000 | $ (35,000) | $ 67,000 | |||||||||
Net income | $ 765,000 | $ 522,000 | $ 614,000 | $ 438,000 | $ 714,000 | $ 754,000 | $ 1,901,000 | $ 1,906,000 | |||||
Net income (loss) available to common shareholders, diluted (usd per share) | $ / shares | $ 0.07 | $ (0.22) | $ 0.10 | $ 0.02 | |||||||||
Impairment of real estate | $ 0 | ||||||||||||
Allowance for doubtful accounts | $ 247,000 | 247,000 | $ 53,000 | ||||||||||
Rental revenue adjustment | 5,000 | $ 124,000 | |||||||||||
Bad debt expense | $ 53,000 | $ 153,000 | |||||||||||
Uncertain tax position to be recognized based on maximum cumulative probability percentage | 50.00% | ||||||||||||
Total lease liabilities | 11,000 | $ 11,000 | |||||||||||
Operating lease payments | $ 11,000 | $ 11,000 | |||||||||||
Operating lease, weighted average discount rate, percent | 4.50% | 4.50% | |||||||||||
Operating lease right of use assets | $ 11,000 | $ 11,000 | |||||||||||
Rental revenues | 3,250,000 | 9,769,000 | |||||||||||
Recoveries | 609,000 | 1,859,000 | |||||||||||
Rental revenues | 3,602,000 | 10,768,000 | |||||||||||
Recoveries | $ 836,000 | $ 2,147,000 | |||||||||||
Change in Tax Strategy [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Federal income tax liability | $ 9,000 | $ 141,000 | |||||||||||
Income tax expense (benefit) | 154,000 | 141,000 | |||||||||||
Net income | $ 154,000 | $ 141,000 | |||||||||||
Net income (loss) available to common shareholders, diluted (usd per share) | $ / shares | $ 0.05 | $ 0.05 | |||||||||||
Accounting Standards Update 2016-02 [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Total lease liabilities | $ 21,000 | ||||||||||||
Operating lease payments | $ 22,000 | ||||||||||||
Operating lease, weighted average discount rate, percent | 4.50% | ||||||||||||
Operating lease right of use assets | $ 21,000 | ||||||||||||
Building and Building Improvements [Member] | Minimum | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Estimated useful lives | 5 years | ||||||||||||
Building and Building Improvements [Member] | Maximum | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Estimated useful lives | 39 years | ||||||||||||
Pillarstone OP [Member] | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Number of real estate properties | property | 11 | 11 | 14 | ||||||||||
Number of real estate properties sold | property | 3 |
Accrued Rents and Accounts Re_3
Accrued Rents and Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Tenant receivables | $ 469 | $ 252 |
Accrued rents and other recoveries | 1,626 | 1,161 |
Allowance for doubtful accounts | (247) | (53) |
Total | $ 1,848 | $ 1,360 |
Leases - Minimum Future Rent Pa
Leases - Minimum Future Rent Payments (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (remaining) | $ 3,027 |
2020 | 10,503 |
2021 | 7,671 |
2022 | 5,127 |
2023 | 3,600 |
Thereafter | 3,610 |
Total | $ 33,538 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Leases [Abstract] | ||
Remaining lease term | 12 months | |
Operating lease cost | $ 3,705 | $ 10,899 |
Operating lease, weighted average discount rate, percent | 4.50% | 4.50% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (remaining) | $ 4 |
2020 | 7 |
Total undiscounted rental payments | 11 |
Total lease liabilities | $ 11 |
Unamortized Lease Commissions_3
Unamortized Lease Commissions and Deferred Legal Cost, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Leasing commissions | $ 1,903 | $ 1,780 |
Deferred legal cost | 34 | 34 |
Total cost | 1,937 | 1,814 |
Less: deferred legal cost accumulated amortization | (872) | (636) |
Less: deferred legal cost accumulated amortization | (19) | (14) |
Total cost, net of accumulated amortization | $ 1,046 | $ 1,164 |
Variable Interest Entity - Narr
Variable Interest Entity - Narrative (Details) $ / shares in Units, $ in Millions | Sep. 30, 2019 | Dec. 08, 2016USD ($)propertysubsidiary$ / shares |
Pillarstone OP [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 18.60% | |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | $ 4.1 | |
Conversion ratio, LTIP units to OP units (in shares) | 1 | |
Conversion ratio, OP units to common shares (in shares) | 1 | |
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 | |
Consideration, limited partnership interest | $ 18.1 | |
Consideration, limited partnership interest (in dollars per share) | $ / shares | $ 1.331 | |
Liabilities assumed | $ 65.9 |
Variable Interest Entity (Sched
Variable Interest Entity (Schedules) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Property | $ 79,351 | $ 77,944 | |
Accumulated depreciation | (7,325) | (5,281) | |
Total real estate assets | 72,026 | 72,663 | |
Cash and cash equivalents | 2,292 | 2,010 | |
Escrows and utility deposits | 1,939 | 1,835 | |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 1,848 | 1,360 | |
Receivable due from related party | 73 | 58 | |
Unamortized lease commissions and deferred legal cost, net | 1,046 | 1,164 | |
Prepaid expenses and other assets | 118 | 60 | [1] |
Total assets | 79,342 | 79,150 | |
Notes payable | 46,281 | 47,064 | |
Accounts payable and accrued expenses | 2,919 | 2,817 | [2] |
Payable due to related party | 315 | 372 | |
Accrued interest payable | 275 | 258 | |
Tenants' security deposits | 1,329 | 1,236 | |
Total liabilities | 51,317 | 52,088 | |
Variable Interest Entity | |||
Schedule of Equity Method Investments [Line Items] | |||
Property | 79,348 | 77,941 | |
Accumulated depreciation | (7,323) | (5,281) | |
Total real estate assets | 72,025 | 72,660 | |
Cash and cash equivalents | 2,218 | 1,872 | |
Escrows and utility deposits | 1,939 | 1,835 | |
Accrued rents and accounts receivable, net of allowance for doubtful accounts | 1,703 | 1,360 | |
Receivable due from related party | 73 | 58 | |
Unamortized lease commissions and deferred legal cost, net | 1,046 | 1,164 | |
Prepaid expenses and other assets | 106 | 51 | |
Total assets | 79,110 | 79,000 | |
Notes payable | 46,281 | 47,064 | |
Accounts payable and accrued expenses | 2,835 | 2,617 | |
Payable due to related party | 313 | 373 | |
Accrued interest payable | 199 | 197 | |
Tenants' security deposits | 1,329 | 1,236 | |
Total liabilities | 50,957 | 51,487 | |
Accounts receivable related party | $ 500 | $ 300 | |
[1] | Operating lease right of use assets (net) (related to adoption of Topic 842) | ||
[2] | Operating lease liabilities (related to adoption of Topic 842) |
Real Estate (Details)
Real Estate (Details) $ in Thousands, ft² in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($)ft²property | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)ft²property | Sep. 30, 2018USD ($) | Dec. 09, 2016property | ||
Real Estate [Line Items] | ||||||
Property revenue | [1] | $ 3,854 | $ 11,504 | |||
Property revenue | [1] | $ 4,438 | $ 12,915 | |||
Pillarstone OP [Member] | ||||||
Real Estate [Line Items] | ||||||
Number of real estate properties | property | 11 | 11 | 14 | |||
Gross leasable area (sqft.) | ft² | 1.3 | 1.3 | ||||
Property revenue | $ 3,900 | $ 11,500 | ||||
Property revenue | $ 4,500 | $ 13,000 | ||||
[1] | Rental Rental revenues $3,250 $3,602 $9,769 $10,768; Recoveries 609 836 1,859 2,147; Bad debt (5) N/A (124) N/A; Total rental $3,854 $4,438 $11,504 $12,915 |
Debt - Mortgages and Other Note
Debt - Mortgages and Other Notes Payable (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Nov. 20, 2015 | |
Debt Instrument [Line Items] | |||
Stated interest rate | 10.00% | ||
$37.0 million 3.76% Note, due December 1, 2020 | |||
Debt Instrument [Line Items] | |||
Debt Instrument, face amount | $ 37,000,000 | ||
Stated interest rate | 3.76% | ||
$16.5 million 4.97% Note, due September 26, 2023 | |||
Debt Instrument [Line Items] | |||
Debt Instrument, face amount | $ 16,500,000 | ||
Stated interest rate | 4.97% | ||
Notes Payable | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 46,471,000 | $ 47,329,000 | |
Less deferred financing costs, net of accumulated amortization | (190,000) | (265,000) | |
Total notes payable | 46,281,000 | 47,064,000 | |
Notes Payable | $37.0 million 3.76% Note, due December 1, 2020 | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | 25,203,000 | 25,863,000 | |
Notes Payable | $16.5 million 4.97% Note, due September 26, 2023 | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | 15,607,000 | 15,805,000 | |
Notes Payable | Related party Note, LIBOR plus 1.40% to 1.90%, due December 31, 2019 | |||
Debt Instrument [Line Items] | |||
Notes payable, gross | $ 5,661,000 | $ 5,661,000 | |
LIBOR | Minimum | Variable Rate Note Maturing December 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.40% | ||
LIBOR | Maximum | Variable Rate Note Maturing December 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.90% |
Debt - Narrative (Details)
Debt - Narrative (Details) $ in Thousands | Sep. 30, 2019USD ($)property | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||
Property | $ 79,351 | $ 77,944 |
Mortgage debt | ||
Debt Instrument [Line Items] | ||
Number of real estate properties | property | 7 | |
Property | $ 55,400 |
Debt - Maturity Schedule (Detai
Debt - Maturity Schedule (Details) - Notes Payable - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
2019 | $ 5,999 | |
2020 | 25,272 | |
2021 | 308 | |
2022 | 323 | |
2023 | 14,569 | |
Total | $ 46,471 | $ 47,329 |
Convertible Notes Payable - R_2
Convertible Notes Payable - Related Parties (Details Narrative) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Nov. 20, 2015USD ($)trustee$ / shares |
Debt Disclosure [Abstract] | ||||
Number of trustees | trustee | 5 | |||
Convertible notes payable - related parties | $ | $ 197,780 | $ 198,000 | $ 197,780 | $ 197,780 |
Interest rate | 10.00% | |||
Conversion price (in dollars per share) | $ / shares | $ 1.331 |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | Nov. 20, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Convertible notes payable - related parties | $ 197,780 | $ 197,780 | $ 197,780 | $ 198,000 | $ 197,780 |
Antidilutive securities excluded from computation of earnings (loss) per share (shares) | 206,038 | 202,306 | |||
Preferred A and C Shares | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings (loss) per share (shares) | 2,498,050 |
Earnings (Loss) Per Share - Sch
Earnings (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net income (loss) attributable to common shareholders | $ 214 | $ (91) | $ 291 | $ 64 |
Dilutive effect of interest from convertible notes payable | 0 | 0 | 0 | 0 |
Net Income (Loss) Available to Common Stockholders | $ 214 | $ (91) | $ 291 | $ 64 |
Weighted average number of common shares - basic (shares) | 405,169 | 405,169 | 405,169 | 405,169 |
Weighted average number of common shares - dilutive (shares) | 2,868,281 | 405,169 | 2,808,240 | 2,903,219 |
Basic income (loss) per common share: | ||||
Net income (loss) available to common shareholders, basic (usd per share) | $ 0.53 | $ (0.22) | $ 0.72 | $ 0.16 |
Diluted income (loss) per common share: | ||||
Net income (loss) available to common shareholders, diluted (usd per share) | $ 0.07 | $ (0.22) | $ 0.10 | $ 0.02 |
Restricted Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (shares) | 90,062 | 0 | 30,021 | 0 |
Preferred A Shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (shares) | 53,610 | 0 | 53,610 | 53,610 |
Preferred C Shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (shares) | 2,319,440 | 0 | 2,319,440 | 2,444,440 |
Convertible Notes Payable | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (shares) | 0 | 0 | 0 | 0 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | Dec. 27, 2018property | Dec. 31, 2018property | Sep. 30, 2019 | Dec. 08, 2016USD ($)$ / shares |
Whitestone [Member] | ||||
Related Party Transaction [Line Items] | ||||
Property management fee (percentage) | 5.00% | |||
Asset management fee (percentage) | 0.125% | |||
Uptown Tower | Whitestone [Member] | ||||
Related Party Transaction [Line Items] | ||||
Property management fee (percentage) | 3.00% | |||
Asset management fee (percentage) | 0.125% | |||
Pillarstone OP [Member] | ||||
Related Party Transaction [Line Items] | ||||
Accrued rents and accounts receivable, net of allowance for doubtful accounts | $ | $ 4,100,000 | |||
Ownership percentage | 18.60% | |||
Number of real estate properties sold | property | 3 | |||
Pillarstone OP [Member] | Whitestone [Member] | ||||
Related Party Transaction [Line Items] | ||||
Accrued rents and accounts receivable, net of allowance for doubtful accounts | $ | $ 4,121,312 | |||
Ownership percentage | 18.60% | |||
Number of real estate properties sold | property | 3 | |||
Variable Interest Entity | Whitestone [Member] | ||||
Related Party Transaction [Line Items] | ||||
Consideration, limited partnership interest (in dollars per share) | $ / shares | $ 1.331 |
Related Party Transactions - In
Related Party Transactions - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Related Party Transaction [Line Items] | ||||
Asset management fees | $ (224) | $ (249) | $ (660) | $ (755) |
Rental | Whitestone [Member] | ||||
Related Party Transaction [Line Items] | ||||
Rent | 211 | 201 | 524 | 606 |
Management fees | Whitestone [Member] | ||||
Related Party Transaction [Line Items] | ||||
Property management fees | (168) | (183) | (510) | (557) |
Asset management fees | (56) | (66) | (150) | (198) |
Interest expense | Whitestone [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest expense | $ (52) | $ (149) | $ (161) | $ (435) |
Related Party Transactions - Ba
Related Party Transactions - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Tenant receivables and other receivables | $ 73 | $ 58 |
Accrued interest due to related party | 129 | 112 |
Payable due to related party | $ 315 | $ 372 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] $ in Millions | Oct. 08, 2019USD ($)property |
Subsequent Event [Line Items] | |
Number of real estate properties sold | property | 3 |
Gain on sale of properties | $ 39.7 |
Loan carrying amount | 5.7 |
Mortgage loan | 15.5 |
Whitestone [Member] | |
Subsequent Event [Line Items] | |
Cash distribution paid | $ 5.4 |
Incentive Equity Plan (Narrativ
Incentive Equity Plan (Narrative) (Details) - USD ($) $ in Thousands | Jul. 01, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 2,248,507,000 | 2,248,507 | |
2016 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percent of total shares authorized | 12.50% | ||
Restricted Common Shares and Restricted Share Units [Member] | Time-Based Vesting [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock granted (in shares) | 45,031 | ||
Award vesting period | 3 years | ||
Amortization expense | $ 15 | ||
Restricted Common Shares and Restricted Share Units [Member] | Time and Performance-Based Vesting [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shared-based compensation | 196 | ||
Restricted Common Shares and Restricted Share Units [Member] | Performance Vesting [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Amortization expense | $ 13 | ||
Restricted Common Shares and Restricted Share Units [Member] | Performance Vesting [Member] | July 1, 2020 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Restricted Common Shares and Restricted Share Units [Member] | Performance Vesting [Member] | July 1, 2022 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years |
Incentive Equity Plan Incentive
Incentive Equity Plan Incentive Equity Plan (Schedule of Share-Based Incentive Plan Activity) (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Shares | ||
Non-vested, beginning balance (in shares) | 0 | |
Granted (in shares) | 90,062,000 | |
Non-vested, ending balance (in shares) | 90,062,000 | |
Available for grant (in shares) | 2,248,507,000 | 2,248,507 |
Weighted-Average Grant Date Fair Value | ||
Non-vested, beginning balance (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 2,180 | |
Non-vested, ending balance (in dollars per share) | $ 2,180 |