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Risk Management and Use of Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The following table sets forth certain information regarding our derivative instruments (in thousands):
 
 
 
 
Asset Derivatives Fair Value at
 
Liability Derivatives Fair Value at
Derivatives Designated as Hedging Instruments
 
Balance Sheet Location
 
June 30, 2014
 
December 31, 2013
 
June 30, 2014
 
December 31, 2013
Interest rate caps
 
Other assets, net
 
$
12

 
$
2

 
$
—

 
$
—

Interest rate swaps
 
Other assets, net
 
806

 
1,618

 
—

 
—

Foreign currency forward contracts (a)
 
Accounts payable, accrued expenses and other liabilities
 
—

 
—

 
(12,506
)
 
(7,083
)
Interest rate swaps (a)
 
Accounts payable, accrued expenses and other liabilities
 
—

 
—

 
(5,894
)
 
(2,734
)
Derivatives Not Designated as Hedging Instruments
 
 
 
 
 
 
 
 
 
 
Stock warrants (b)
 
Other assets, net
 
3,485

 
2,160

 
—

 
—

Interest rate swaps (c)
 
Accounts payable, accrued expenses and other liabilities
 
—

 
—

 
(10,734
)
 
(11,995
)
Total derivatives
 
 
 
$
4,303

 
$
3,780

 
$
(29,134
)
 
$
(21,812
)
__________
(a)
In connection with the CPA®:16 Merger, we acquired interest rate cap and swaps, and foreign currency forward contracts, which were in a net liability position, had fair values of $2.5 million and $5.1 million, respectively, at June 30, 2014.
(b)
In connection with the CPA®:16 Merger, we acquired warrants from CPA®:16 – Global, which had previously been granted by Hellweg 2 to CPA®:16 – Global, that had a fair value of $1.3 million at June 30, 2014. These warrants give us participation rights to any distributions made by Hellweg 2 and entitle us to a cash distribution that equals a certain percentage of the liquidity event price of Hellweg 2, should a liquidity event occur.
(c)
These interest rate swaps do not qualify for hedge accounting; however, they do protect against fluctuations in interest rates related to the underlying variable-rate debt.
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)
(a)
Excludes net gains recognized on unconsolidated jointly-owned investments of less than $0.1 million and $0.3 million for the three months ended June 30, 2014 and 2013, respectively, and less than $0.1 million and $0.4 million for the six months ended June 30, 2014 and 2013, respectively.
(b)
Excludes net gains recognized on unconsolidated jointly-owned investments of $0.2 million and $0.3 million for the three months ended June 30, 2014 and 2013, respectively, and $0.3 million and $0.4 million for the six months ended June 30, 2014 and 2013, respectively.
The following tables present the impact of our derivative instruments on the consolidated financial statements (in thousands):
 
 
Amount of Gain (Loss) Recognized in
Other Comprehensive (Loss) Income 
on Derivatives (Effective Portion) (a)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships 
 
2014
 
2013
 
2014
 
2013
Interest rate swaps
 
$
(1,431
)
 
$
2,825

 
$
(1,617
)
 
$
3,653

Interest rate caps
 
(4
)
 
13

 
(21
)
 
10

Foreign currency forward contracts
 
(451
)
 
(1,070
)
 
(3,115
)
 
1,178

Total
 
$
(1,886
)
 
$
1,768

 
$
(4,753
)
 
$
4,841


 
 
Amount of Gain (Loss) Reclassified 
from Other Comprehensive
(Loss) Income into Income (Effective Portion) (b)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships 
 
2014
 
2013
 
2014
 
2013
Interest rate swaps
 
$
(634
)
 
$
441

 
$
(1,335
)
 
$
875

Foreign currency forward contracts
 
(440
)
 
23

 
(824
)
 
(24
)
Total
 
$
(1,074
)
 
$
464

 
$
(2,159
)
 
$
851
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance
 
 
 
 
Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not in Cash Flow Hedging Relationships
 
Location of Gain (Loss) Recognized in Income
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2014
 
2013
 
2014
 
2013
Interest rate swaps
 
Interest expense
 
$
507

 
$
1,729

 
$
985

 
$
3,408

Stock warrants
 
Other income and (expenses)
 
(134
)
 
—

 
(134
)
 
280

Total
 
 
 
$
373

 
$
1,729

 
$
851

 
$
3,688
Schedule of Derivative Instruments
The following table presents the foreign currency derivative contracts we had outstanding at June 30, 2014, which were designated as cash flow hedges (currency in thousands):
 
 
 Number of Instruments
 
Notional Amount
 
Fair Value at
June 30, 2014 (a)
Foreign Currency Derivatives
 
 
 
Foreign currency forward contracts
 
76
 
€
170,435

 
$
(11,376
)
Foreign currency forward contracts
 
18
 
£
9,630

 
(1,130
)
 
 
 
 
 
 
 
$
(12,506
)
 __________ 
(a)
Fair value amounts are based on the applicable exchange rate of the foreign currency at June 30, 2014.
The interest rate swaps and caps that we had outstanding on our consolidated subsidiaries at June 30, 2014 are summarized as follows (currency in thousands):
 
 
 Number of Instruments

Notional Amount

Fair Value at
June 30, 2014 (a)
Interest Rate Derivatives
 


Designated as Cash Flow Hedging Instruments
 
 
 
 
 
 
 
Interest rate swaps
 
14
 
$
131,277

 
$
(3,846
)
Interest rate swaps
 
2
 
€
8,276

 
(1,243
)
Interest rate caps (b)
 
2
 
€
109,907

 
12

Not Designated as Cash Flow Hedging Instruments
 
 
 

 
 
 
Interest rate swaps (c)
 
3
 
€
108,695

 
(10,733
)
 
 
 
 
 
 
 
$
(15,810
)
__________ 
(a)
Fair value amounts are based on the exchange rate of the euro at June 30, 2014, as applicable.
(b)
The applicable interest rates of the related debt were 1.3% and 1.2%, which were below the strike prices of the caps of 3.0% and 2.0%, respectively, at June 30, 2014.
(c)
These interest rate swaps do not qualify for hedge accounting; however, they do protect against fluctuations in interest rates related to the underlying variable-rate debt.
Schedules of Concentration of Risk, by Risk Factor
The percentages in the table below represent our directly-owned real estate properties and do not include our share of equity investments.
 
 
June 30, 2014
Region:
 
 
Total U.S.
 
66
%
Germany
 
12
%
Other Europe
 
21
%
Total Europe
 
33
%
Other international
 
1
%
Total international
 
34
%
Total
 
100
%
 
 
 
Asset Type:
 
 
Office
 
25
%
Industrial
 
25
%
Warehouse/Distribution
 
20
%
Retail
 
16
%
All other
 
14
%
Total
 
100
%
 
 
 
Tenant Industry:
 
 
Retail Stores
 
22
%
Electronics
 
10
%
All other
 
68
%
Total
 
100
%
 
 
 
Significant Tenants:
 
 
Hellweg Die Profi-Baumärkte GmbH & Co. KG
 
7
%
Carrefour France SAS
 
5
%
U-Haul Moving Partners Inc. and Mercury Partners, LP
 
5
%
 
 
17
%