x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2018 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to | |
Commission File Number: 001-32268 (Kite Realty Group Trust) | |
Commission File Number: 333-202666-01 (Kite Realty Group, L.P.) | |
Kite Realty Group Trust | |
Kite Realty Group, L.P. | |
(Exact Name of Registrant as Specified in its Charter) |
Maryland (Kite Realty Group Trust) | 11-3715772 | |
Delaware (Kite Realty Group, L.P.) | 20-1453863 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
30 S. Meridian Street, Suite 1100 Indianapolis, Indiana 46204 | ||
(Address of principal executive offices) (Zip code) | ||
Telephone: (317) 577-5600 | ||
(Registrant’s telephone number, including area code) | ||
Not Applicable | ||
(Former name, former address and former fiscal year, if changed since last report) |
Kite Realty Group Trust | Yes x | No o | Kite Realty Group, L.P. | Yes x | No o |
Kite Realty Group Trust | Yes x | No o | Kite Realty Group, L.P. | Yes x | No o |
Large accelerated filer | x | Accelerated filer | o | Non-accelerated filer | o | Smaller reporting company | o | |
Emerging growth company | o |
Large accelerated filer | o | Accelerated filer | o | Non-accelerated filer | x | Smaller reporting company | o | |
Emerging growth company | o |
Kite Realty Group Trust | Yes o | No x | Kite Realty Group, L.P. | Yes o | No x |
• | enhancing investors' understanding of the Parent Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; |
• | eliminating duplicative disclosure and providing a more streamlined and readable presentation of information because a substantial portion of the Company's disclosure applies to both the Parent Company and the Operating Partnership; and |
• | creating time and cost efficiencies through the preparation of one combined report instead of two separate reports. |
Page | ||
Part I. | ||
Item 1. | ||
Kite Realty Group Trust: | ||
Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017 | ||
Consolidated Statements of Operations and Comprehensive Income for the Three and Six Months Ended June 30, 2018 and 2017 | ||
Consolidated Statement of Shareholders' Equity for the Six Months Ended June 30, 2018 | ||
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017 | ||
Kite Realty Group, L.P. and subsidiaries: | ||
Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017 | ||
Consolidated Statements of Operations and Comprehensive Income for the Three and Six Months Ended June 30, 2018 and 2017 | ||
Consolidated Statement of Partners' Equity for the Six Months Ended June 30, 2018 | ||
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017 | ||
Kite Realty Group Trust and Kite Realty Group, L.P. and subsidiaries: | ||
Notes to Consolidated Financial Statements | ||
Item 2. | Cautionary Note About Forward-Looking Statements | |
Management's Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3. | Quantitative and Qualitative Disclosure about Market Risk | |
Item 4. | Controls and Procedures | |
Part II. | OTHER INFORMATION | |
Item 1. | Legal Proceedings | |
Item 1A. | Risk Factors | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. | Defaults upon Senior Securities | |
Item 4. | Mine Safety Disclosures | |
Item 5. | Other Information | |
Item 6. | Exhibits | |
SIGNATURES |
June 30, 2018 | December 31, 2017 | ||||||
Assets: | |||||||
Investment properties, at cost | $ | 3,753,966 | $ | 3,957,884 | |||
Less: accumulated depreciation | (677,124 | ) | (664,614 | ) | |||
3,076,842 | 3,293,270 | ||||||
Cash and cash equivalents | 32,384 | 24,082 | |||||
Tenant and other receivables, including accrued straight-line rent of $31,164 and $31,747 respectively, net of allowance for uncollectible accounts | 53,109 | 58,328 | |||||
Restricted cash and escrow deposits | 10,948 | 8,094 | |||||
Deferred costs and intangibles, net | 100,809 | 112,359 | |||||
Prepaid and other assets | 14,232 | 12,465 | |||||
Investments in unconsolidated subsidiaries | 13,873 | 3,900 | |||||
Total Assets | $ | 3,302,197 | $ | 3,512,498 | |||
Liabilities and Equity: | |||||||
Mortgage and other indebtedness, net | $ | 1,565,429 | $ | 1,699,239 | |||
Accounts payable and accrued expenses | 101,180 | 78,482 | |||||
Deferred revenue and intangibles, net and other liabilities | 87,338 | 96,564 | |||||
Total Liabilities | 1,753,947 | 1,874,285 | |||||
Commitments and contingencies | — | — | |||||
Limited partners' interests in Operating Partnership and other redeemable noncontrolling interests | 48,120 | 72,104 | |||||
Equity: | |||||||
Kite Realty Group Trust Shareholders' Equity: | |||||||
Common Shares, $.01 par value, 225,000,000 shares authorized, 83,672,700 and 83,606,068 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 837 | 836 | |||||
Additional paid in capital | 2,075,191 | 2,071,418 | |||||
Accumulated other comprehensive income | 5,649 | 2,990 | |||||
Accumulated deficit | (582,245 | ) | (509,833 | ) | |||
Total Kite Realty Group Trust Shareholders' Equity | 1,499,432 | 1,565,411 | |||||
Noncontrolling Interest | 698 | 698 | |||||
Total Equity | 1,500,130 | 1,566,109 | |||||
Total Liabilities and Shareholders' Equity | $ | 3,302,197 | $ | 3,512,498 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue: | |||||||||||||||
Minimum rent | $ | 68,182 | $ | 68,395 | $ | 137,147 | $ | 137,341 | |||||||
Tenant reimbursements | 17,664 | 18,521 | 36,036 | 37,091 | |||||||||||
Other property related revenue | 4,927 | 5,733 | 5,991 | 8,330 | |||||||||||
Fee income | 963 | — | 2,325 | — | |||||||||||
Total revenue | 91,736 | 92,649 | 181,499 | 182,762 | |||||||||||
Expenses: | |||||||||||||||
Property operating | 12,621 | 12,139 | 25,091 | 25,091 | |||||||||||
Real estate taxes | 10,392 | 11,228 | 21,146 | 21,559 | |||||||||||
General, administrative, and other | 5,553 | 5,488 | 11,499 | 10,958 | |||||||||||
Depreciation and amortization | 40,451 | 42,710 | 79,006 | 88,540 | |||||||||||
Impairment charges | 14,777 | — | 38,847 | 7,411 | |||||||||||
Total expenses | 83,794 | 71,565 | 175,589 | 153,559 | |||||||||||
Operating income | 7,942 | 21,084 | 5,910 | 29,203 | |||||||||||
Interest expense | (16,746 | ) | (16,433 | ) | (33,084 | ) | (32,878 | ) | |||||||
Income tax benefit (expense) of taxable REIT subsidiary | 28 | (3 | ) | 51 | 30 | ||||||||||
Other expense, net | (115 | ) | (80 | ) | (265 | ) | (219 | ) | |||||||
(Loss) income from continuing operations | (8,891 | ) | 4,568 | (27,388 | ) | (3,864 | ) | ||||||||
Gains on sales of operating properties | 7,829 | 6,290 | 8,329 | 15,160 | |||||||||||
Net (loss) income | (1,062 | ) | 10,858 | (19,059 | ) | 11,296 | |||||||||
Net income attributable to noncontrolling interests | (304 | ) | (678 | ) | (225 | ) | (1,110 | ) | |||||||
Net (loss) income attributable to Kite Realty Group Trust common shareholders | $ | (1,366 | ) | $ | 10,180 | $ | (19,284 | ) | $ | 10,186 | |||||
(Loss) income per common share - basic and diluted | $ | (0.02 | ) | $ | 0.12 | $ | (0.23 | ) | $ | 0.12 | |||||
Weighted average common shares outstanding - basic | 83,672,896 | 83,585,736 | 83,651,402 | 83,575,587 | |||||||||||
Weighted average common shares outstanding - diluted | 83,672,896 | 83,652,627 | 83,651,402 | 83,640,327 | |||||||||||
Cash dividends declared per common share | $ | 0.3175 | $ | 0.3025 | $ | 0.6350 | $ | 0.6050 | |||||||
Net (loss) income | $ | (1,062 | ) | $ | 10,858 | $ | (19,059 | ) | $ | 11,296 | |||||
Change in fair value of derivatives | 514 | (420 | ) | 2,727 | 1,076 | ||||||||||
Total comprehensive income (loss) | (548 | ) | 10,438 | (16,332 | ) | 12,372 | |||||||||
Comprehensive income attributable to noncontrolling interests | (316 | ) | (668 | ) | (293 | ) | (1,134 | ) | |||||||
Comprehensive (loss) income attributable to Kite Realty Group Trust | $ | (864 | ) | $ | 9,770 | $ | (16,625 | ) | $ | 11,238 |
Common Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances, December 31, 2017 | 83,606,068 | $ | 836 | $ | 2,071,418 | $ | 2,990 | $ | (509,833 | ) | $ | 1,565,411 | ||||||||||
Stock compensation activity | 66,632 | 1 | 3,350 | — | — | 3,351 | ||||||||||||||||
Other comprehensive income attributable to Kite Realty Group Trust | — | — | — | 2,659 | — | 2,659 | ||||||||||||||||
Distributions declared to common shareholders | — | — | — | — | (53,128 | ) | (53,128 | ) | ||||||||||||||
Net loss attributable to Kite Realty Group Trust | — | — | — | — | (19,284 | ) | (19,284 | ) | ||||||||||||||
Adjustment to redeemable noncontrolling interests | — | — | 423 | — | — | 423 | ||||||||||||||||
Balances, June 30, 2018 | 83,672,700 | $ | 837 | $ | 2,075,191 | $ | 5,649 | $ | (582,245 | ) | $ | 1,499,432 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Consolidated net (loss) income | $ | (19,059 | ) | $ | 11,296 | ||
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: | |||||||
Straight-line rent | (1,562 | ) | (2,420 | ) | |||
Depreciation and amortization | 80,565 | 89,749 | |||||
Gains on sales of operating properties | (8,329 | ) | (15,160 | ) | |||
Impairment charge | 38,847 | 7,411 | |||||
Provision for credit losses | 1,164 | 1,790 | |||||
Compensation expense for equity awards | 3,021 | 3,122 | |||||
Amortization of debt fair value adjustment | (1,536 | ) | (1,486 | ) | |||
Amortization of in-place lease liabilities, net | (4,641 | ) | (1,800 | ) | |||
Changes in assets and liabilities: | |||||||
Tenant receivables and other | 3,198 | (1,606 | ) | ||||
Deferred costs and other assets | (6,615 | ) | (6,028 | ) | |||
Accounts payable, accrued expenses, deferred revenue and other liabilities | (3,016 | ) | (2,688 | ) | |||
Net cash provided by operating activities | 82,037 | 82,180 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures, net | (34,600 | ) | (36,349 | ) | |||
Net proceeds from sales of operating properties | 161,499 | 76,076 | |||||
Investment in unconsolidated subsidiaries | (9,973 | ) | — | ||||
Change in construction payables | 1,209 | (1,598 | ) | ||||
Net cash provided by investing activities | 118,135 | 38,129 | |||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common shares, net | 34 | — | |||||
Repurchases of common shares upon the vesting of restricted shares | (319 | ) | (780 | ) | |||
Acquisition of partner's interest in Fishers Station operating property | — | (3,750 | ) | ||||
Loan proceeds | 112,869 | 54,200 | |||||
Loan transaction costs | (2,597 | ) | — | ||||
Loan payments and related financing escrows | (243,913 | ) | (109,933 | ) | |||
Distributions paid – common shareholders | (53,112 | ) | (50,553 | ) | |||
Distributions paid – redeemable noncontrolling interests | (1,978 | ) | (2,053 | ) | |||
Net cash used in financing activities | (189,016 | ) | (112,869 | ) | |||
Net change in cash, cash equivalents, and restricted cash | 11,156 | 7,440 | |||||
Cash, cash equivalents, and restricted cash beginning of period | 32,176 | 28,912 | |||||
Cash, cash equivalents, and restricted cash end of period | $ | 43,332 | $ | 36,352 |
June 30, 2018 | December 31, 2017 | ||||||
Assets: | |||||||
Investment properties, at cost | $ | 3,753,966 | $ | 3,957,884 | |||
Less: accumulated depreciation | (677,124 | ) | (664,614 | ) | |||
3,076,842 | 3,293,270 | ||||||
Cash and cash equivalents | 32,384 | 24,082 | |||||
Tenant and other receivables, including accrued straight-line rent of $31,164 and $31,747 respectively, net of allowance for uncollectible accounts | 53,109 | 58,328 | |||||
Restricted cash and escrow deposits | 10,948 | 8,094 | |||||
Deferred costs and intangibles, net | 100,809 | 112,359 | |||||
Prepaid and other assets | 14,232 | 12,465 | |||||
Investments in unconsolidated subsidiaries | 13,873 | 3,900 | |||||
Total Assets | $ | 3,302,197 | $ | 3,512,498 | |||
Liabilities and Equity: | |||||||
Mortgage and other indebtedness, net | $ | 1,565,429 | $ | 1,699,239 | |||
Accounts payable and accrued expenses | 101,180 | 78,482 | |||||
Deferred revenue and intangibles, net and other liabilities | 87,338 | 96,564 | |||||
Total Liabilities | 1,753,947 | 1,874,285 | |||||
Commitments and contingencies | — | — | |||||
Redeemable Limited Partners’ and other redeemable noncontrolling interests | 48,120 | 72,104 | |||||
Partners Equity: | |||||||
Parent Company: | |||||||
Common equity, 83,672,700 and 83,606,068 units issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 1,493,783 | 1,562,421 | |||||
Accumulated other comprehensive income | 5,649 | 2,990 | |||||
Total Partners Equity | 1,499,432 | 1,565,411 | |||||
Noncontrolling Interests | 698 | 698 | |||||
Total Equity | 1,500,130 | 1,566,109 | |||||
Total Liabilities and Equity | $ | 3,302,197 | $ | 3,512,498 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue: | |||||||||||||||
Minimum rent | $ | 68,182 | $ | 68,395 | $ | 137,147 | $ | 137,341 | |||||||
Tenant reimbursements | 17,664 | 18,521 | 36,036 | 37,091 | |||||||||||
Other property related revenue | 4,927 | 5,733 | 5,991 | 8,330 | |||||||||||
Fee income | 963 | — | 2,325 | — | |||||||||||
Total revenue | 91,736 | 92,649 | 181,499 | 182,762 | |||||||||||
Expenses: | |||||||||||||||
Property operating | 12,621 | 12,139 | 25,091 | 25,091 | |||||||||||
Real estate taxes | 10,392 | 11,228 | 21,146 | 21,559 | |||||||||||
General, administrative, and other | 5,553 | 5,488 | 11,499 | 10,958 | |||||||||||
Depreciation and amortization | 40,451 | 42,710 | 79,006 | 88,540 | |||||||||||
Impairment charges | 14,777 | — | 38,847 | 7,411 | |||||||||||
Total expenses | 83,794 | 71,565 | 175,589 | 153,559 | |||||||||||
Operating income | 7,942 | 21,084 | 5,910 | 29,203 | |||||||||||
Interest expense | (16,746 | ) | (16,433 | ) | (33,084 | ) | (32,878 | ) | |||||||
Income tax benefit (expense) of taxable REIT subsidiary | 28 | (3 | ) | 51 | 30 | ||||||||||
Other expense, net | (115 | ) | (80 | ) | (265 | ) | (219 | ) | |||||||
(Loss) income from continuing operations | (8,891 | ) | 4,568 | (27,388 | ) | (3,864 | ) | ||||||||
Gains on sales of operating properties | 7,829 | 6,290 | 8,329 | 15,160 | |||||||||||
Consolidated net (loss) income | (1,062 | ) | 10,858 | (19,059 | ) | 11,296 | |||||||||
Net income attributable to noncontrolling interests | (343 | ) | (438 | ) | (695 | ) | (870 | ) | |||||||
Net (loss) income attributable to common unitholders | $ | (1,405 | ) | $ | 10,420 | $ | (19,754 | ) | $ | 10,426 | |||||
Allocation of net (loss) income: | |||||||||||||||
Limited Partners | $ | (39 | ) | $ | 240 | $ | (470 | ) | $ | 240 | |||||
Parent Company | (1,366 | ) | 10,180 | (19,284 | ) | 10,186 | |||||||||
$ | (1,405 | ) | $ | 10,420 | $ | (19,754 | ) | $ | 10,426 | ||||||
Net (loss) income per unit - basic & diluted | $ | (0.02 | ) | $ | 0.12 | $ | (0.23 | ) | $ | 0.12 | |||||
Weighted average common units outstanding - basic | 85,739,745 | 85,572,566 | 85,691,306 | 85,551,356 | |||||||||||
Weighted average common units outstanding - diluted | 85,739,745 | 85,639,457 | 85,691,306 | 85,616,096 | |||||||||||
Distributions declared per common unit | $ | 0.3175 | $ | 0.3025 | $ | 0.6350 | $ | 0.6050 | |||||||
Consolidated net (loss) income | $ | (1,062 | ) | $ | 10,858 | $ | (19,059 | ) | $ | 11,296 | |||||
Change in fair value of derivatives | 514 | (420 | ) | 2,727 | 1,076 | ||||||||||
Total comprehensive income (loss) | (548 | ) | 10,438 | (16,332 | ) | 12,372 | |||||||||
Comprehensive income attributable to noncontrolling interests | (343 | ) | (438 | ) | (695 | ) | (870 | ) | |||||||
Comprehensive (loss) income attributable to common unitholders | $ | (891 | ) | $ | 10,000 | $ | (17,027 | ) | $ | 11,502 |
General Partner | Total | ||||||||||
Common Equity | Accumulated Other Comprehensive Income | ||||||||||
Balances, December 31, 2017 | $ | 1,562,421 | $ | 2,990 | $ | 1,565,411 | |||||
Stock compensation activity | 3,351 | — | 3,351 | ||||||||
Other comprehensive income attributable to Parent Company | — | 2,659 | 2,659 | ||||||||
Distributions declared to Parent Company | (53,128 | ) | — | (53,128 | ) | ||||||
Net loss | (19,284 | ) | — | (19,284 | ) | ||||||
Adjustment to redeemable noncontrolling interests | 423 | — | 423 | ||||||||
Balances, June 30, 2018 | $ | 1,493,783 | $ | 5,649 | $ | 1,499,432 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Consolidated net (loss) income | $ | (19,059 | ) | $ | 11,296 | ||
Adjustments to reconcile consolidated net (loss) income to net cash provided by operating activities: | |||||||
Straight-line rent | (1,562 | ) | (2,420 | ) | |||
Depreciation and amortization | 80,565 | 89,749 | |||||
Gains on sales of operating properties | (8,329 | ) | (15,160 | ) | |||
Impairment charge | 38,847 | 7,411 | |||||
Provision for credit losses | 1,164 | 1,790 | |||||
Compensation expense for equity awards | 3,021 | 3,122 | |||||
Amortization of debt fair value adjustment | (1,536 | ) | (1,486 | ) | |||
Amortization of in-place lease liabilities, net | (4,641 | ) | (1,800 | ) | |||
Changes in assets and liabilities: | |||||||
Tenant receivables and other | 3,198 | (1,606 | ) | ||||
Deferred costs and other assets | (6,615 | ) | (6,028 | ) | |||
Accounts payable, accrued expenses, deferred revenue and other liabilities | (3,016 | ) | (2,688 | ) | |||
Net cash provided by operating activities | 82,037 | 82,180 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures, net | (34,600 | ) | (36,349 | ) | |||
Net proceeds from sales of operating properties | 161,499 | 76,076 | |||||
Investment in unconsolidated subsidiaries | (9,973 | ) | — | ||||
Change in construction payables | 1,209 | (1,598 | ) | ||||
Net cash provided by investing activities | 118,135 | 38,129 | |||||
Cash flows from financing activities: | |||||||
Contributions from the General Partner | 34 | — | |||||
Repurchases of common shares upon the vesting of restricted shares | (319 | ) | (780 | ) | |||
Acquisition of partner's interest in Fishers Station operating property | — | (3,750 | ) | ||||
Loan proceeds | 112,869 | 54,200 | |||||
Loan transaction costs | (2,597 | ) | — | ||||
Loan payments and related financing escrows | (243,913 | ) | (109,933 | ) | |||
Distributions paid – common unitholders | (53,112 | ) | (50,553 | ) | |||
Distributions paid – redeemable noncontrolling interests | (1,978 | ) | (2,053 | ) | |||
Net cash used in financing activities | (189,016 | ) | (112,869 | ) | |||
Net change in cash, cash equivalents, and restricted cash | 11,156 | 7,440 | |||||
Cash, cash equivalents, and restricted cash beginning of period | 32,176 | 28,912 | |||||
Cash, cash equivalents, and restricted cash end of period | $ | 43,332 | $ | 36,352 |
Balance at | ||||||||
June 30, 2018 | December 31, 2017 | |||||||
Investment properties, at cost: | ||||||||
Land, buildings and improvements | $ | 3,670,110 | $ | 3,873,149 | ||||
Furniture, equipment and other | 9,022 | 8,453 | ||||||
Land held for development | 31,142 | 31,142 | ||||||
Construction in progress | 43,692 | 45,140 | ||||||
$ | 3,753,966 | $ | 3,957,884 |
2018 | 2017 | ||||||
Noncontrolling interests balance January 1 | $ | 698 | $ | 692 | |||
Net income allocable to noncontrolling interests, excluding redeemable noncontrolling interests | — | 6 | |||||
Noncontrolling interests balance at June 30 | $ | 698 | $ | 698 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Parent Company’s weighted average basic interest in Operating Partnership | 97.6 | % | 97.7 | % | 97.6 | % | 97.7 | % | |||
Limited partners' weighted average basic interests in Operating Partnership | 2.4 | % | 2.3 | % | 2.4 | % | 2.3 | % |
2018 | 2017 | ||||||
Redeemable noncontrolling interests balance January 1 | $ | 72,104 | $ | 88,165 | |||
Net income allocable to redeemable noncontrolling interests | 225 | 1,105 | |||||
Distributions declared to redeemable noncontrolling interests | (2,008 | ) | (2,066 | ) | |||
Liability reclassification due to exercise of redemption option by joint venture partner | (22,461 | ) | (8,261 | ) | |||
Other, net, including adjustments to redemption value | 260 | (5,892 | ) | ||||
Total limited partners' interests in Operating Partnership and other redeemable noncontrolling interests balance at June 30 | $ | 48,120 | $ | 73,051 | |||
Limited partners' interests in Operating Partnership | $ | 38,050 | $ | 40,520 | |||
Other redeemable noncontrolling interests in certain subsidiaries | 10,070 | 32,531 | |||||
Total limited partners' interests in Operating Partnership and other redeemable noncontrolling interests balance at June 30 | $ | 48,120 | $ | 73,051 |
• | Level 1 fair value inputs are quoted prices in active markets for identical instruments to which we have access. |
• | Level 2 fair value inputs are inputs other than quoted prices included in Level 1 that are observable for similar instruments, either directly or indirectly, and appropriately consider counterparty creditworthiness in the valuations. |
• | Level 3 fair value inputs reflect our best estimate of inputs and assumptions market participants would use in pricing an instrument at the measurement date. The inputs are unobservable in the market and significant to the valuation estimate. |
For the Six Months Ended June 30, | ||||||
2018 | 2017 | |||||
Cash and cash equivalents | 32,384 | 27,635 | ||||
Restricted cash | 10,948 | 8,717 | ||||
Total cash, cash equivalents, and restricted cash | 43,332 | 36,352 | ||||
As of June 30, 2018 | |||||||||||||||
Principal | Unamortized Net Premiums | Unamortized Debt Issuance Costs | Total | ||||||||||||
Senior unsecured notes - fixed rate | $ | 550,000 | $ | — | $ | (5,249 | ) | $ | 544,751 | ||||||
Unsecured revolving credit facility | 9,100 | — | (4,248 | ) | 4,852 | ||||||||||
Unsecured term loans | 400,000 | — | (1,481 | ) | 398,519 | ||||||||||
Mortgage notes payable - fixed rate | 536,806 | 7,660 | (685 | ) | 543,781 | ||||||||||
Mortgage notes payable - variable rate | 73,830 | — | (304 | ) | 73,526 | ||||||||||
Total mortgage and other indebtedness | $ | 1,569,736 | $ | 7,660 | $ | (11,967 | ) | $ | 1,565,429 |
As of December 31, 2017 | |||||||||||||||
Principal | Unamortized Net Premiums | Unamortized Debt Issuance Costs | Total | ||||||||||||
Senior unsecured notes - fixed rate | $ | 550,000 | $ | — | $ | (5,599 | ) | $ | 544,401 | ||||||
Unsecured revolving credit facility | 60,100 | — | (1,895 | ) | 58,205 | ||||||||||
Unsecured term loans | 400,000 | — | (1,759 | ) | 398,241 | ||||||||||
Mortgage notes payable - fixed rate | 576,927 | 9,196 | (755 | ) | 585,368 | ||||||||||
Mortgage notes payable - variable rate | 113,623 | — | (599 | ) | 113,024 | ||||||||||
Total mortgage and other indebtedness | $ | 1,700,650 | $ | 9,196 | $ | (10,607 | ) | $ | 1,699,239 |
Outstanding Amount | Ratio | Weighted Average Interest Rate | Weighted Average Maturity (Years) | ||||||||
Fixed rate Debt 1 | $ | 1,465,330 | 93 | % | 4.10 | % | 5.3 | ||||
Variable Rate Debt | 104,406 | 7 | % | 3.55 | % | 3.7 | |||||
Net debt premiums and issuance costs, net | (4,307 | ) | N/A | N/A | N/A | ||||||
$ | 1,565,429 | 100 | % | 4.08 | % | 5.2 |
____________________ | |
1 | Fixed rate debt includes, and variable rate date excludes, the portion of such debt that has been hedged by interest rate derivatives. As of June 30, 2018, $378.5 million in variable rate debt is hedged for a weighted average 2.8 years. |
Six Months Ended June 30, | ||||||||
2018 | 2017 | |||||||
Amortization of debt issuance costs | $ | 1,558 | $ | 1,350 |
• | We retired the $33.3 million loan secured by our Perimeter Woods operating property through a draw on our Credit Facility; |
• | We retired the $33.0 million loan secured by our Killingly Commons operating property through a draw on our Credit Facility; |
• | We retired the $4.3 million loan secured by our Whitehall Pike operating property and the $6.4 million loan secured by our Fishers Station redevelopment property utilizing cash flow from operations; |
• | We borrowed $39.1 million on the Credit Facility to fund development activities, redevelopment activities, tenant improvement costs, and other working capital needs; |
• | We used the $89.0 million of net proceeds from the formation of the TH Real Estate joint venture to pay down the Credit Facility; |
• | We used the $63.0 million of net proceeds from the sale of two operating properties to pay down the Credit Facility; and |
• | We made scheduled principal payments on indebtedness totaling $2.9 million. |
June 30, 2018 | December 31, 2017 | ||||||
Acquired lease intangible assets | $ | 90,105 | $ | 107,668 | |||
Deferred leasing costs and other | 68,491 | 68,335 | |||||
158,596 | 176,003 | ||||||
Less—accumulated amortization | (57,787 | ) | (63,644 | ) | |||
Total | $ | 100,809 | $ | 112,359 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Amortization of deferred leasing costs, lease intangibles and other | $ | 10,290 | $ | 12,113 | |||
Amortization of above market lease intangibles | 1,457 | 2,199 |
June 30, 2018 | December 31, 2017 | ||||||
Unamortized below market lease liabilities | $ | 73,653 | $ | 83,117 | |||
Retainage payables and other | 4,051 | 3,954 | |||||
Tenant rent payments received in advance | 9,634 | 9,493 | |||||
Total | $ | 87,338 | $ | 96,564 |
• | national and local economic, business, real estate and other market conditions, particularly in light of low growth in the U.S. economy as well as economic uncertainty caused by fluctuations in the prices of oil and other energy sources and inflationary trends or outlook; |
• | financing risks, including the availability of, and costs associated with, sources of liquidity; |
• | our ability to refinance, or extend the maturity dates of, our indebtedness; |
• | the level and volatility of interest rates; |
• | the financial stability of tenants, including their ability to pay rent and the risk of tenant bankruptcies; |
• | the competitive environment in which we operate; |
• | acquisition, disposition, development and joint venture risks; |
• | property ownership and management risks; |
• | our ability to maintain our status as a real estate investment trust for federal income tax purposes; |
• | potential environmental and other liabilities; |
• | impairment in the value of real estate property we own; |
• | the impact of online retail competition and the perception that such competition has on the value of shopping center assets; |
• | risks related to the geographical concentration of our properties in Florida, Indiana and Texas; |
• | insurance costs and coverage; |
• | risks associated with cybersecurity attacks and the loss of confidential information and other business disruptions; |
• | other factors affecting the real estate industry generally; and |
• | other risks identified in this Quarterly Report on Form 10-Q and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate, including, in particular, the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. |
• | TH Real Estate Joint Venture. In June 2018, we formed a joint venture with a fund managed by TH Real Estate (the "TH Real Estate joint venture") to acquire high-quality retail properties. We contributed three properties valued at $99.8 million in exchange for a 20% ownership interest and $89.0 million in net proceeds. These proceeds were utilized to reduce outstanding debt. |
• | Under Construction Redevelopment, Reposition, and Repurpose (“3-R”) Projects. Our 3-R initiative, which includes a total of eight projects under construction or active evaluation for modification, continued to progress in the second quarter of 2018. There are four projects currently under construction, which have an estimated combined annualized return of approximately 9.5% to 10.5%, with aggregate costs for these projects expected to range from $36.5 million to $40.0 million. |
◦ | Portofino Shopping Center in Houston, Texas – We completed construction of a new Nordstrom Rack, a right-sized Old Navy, and new shop tenants. |
◦ | City Center in New York City – We completed the construction that reactivated the street retail component of this center, which included new restaurants and enhanced overall shopping experience. |
Property Name | MSA | Disposition Date | Owned GLA | ||||
Cove Center | Stuart, FL | March 2017 | 155,063 | ||||
Clay Marketplace | Birmingham, AL | June 2017 | 63,107 | ||||
The Shops at Village Walk | Fort Myers, FL | June 2017 | 78,533 | ||||
Wheatland Towne Crossing | Dallas, TX | June 2017 | 194,727 | ||||
Trussville Promenade | Birmingham, AL | February 2018 | 463,836 | ||||
Memorial Commons | Goldsboro, NC | March 2018 | 111,022 | ||||
Plaza Volente 1 | Austin, TX | June 2018 | 156,215 | ||||
Livingston Shopping Center 1 | Newark, NJ | June 2018 | 139,559 | ||||
Tamiami Crossing 1 | Naples, FL | June 2018 | 121,705 |
Property Name | MSA | Transition to Operating Portfolio | Owned GLA | ||||
Parkside Town Commons – Phase II | Raleigh, NC | June 2017 | 291,713 |
Property Name | MSA | Transition to Redevelopment1 | Transition to Operations | Owned GLA | |||||
Courthouse Shadows2 | Naples, FL | June 2013 | Pending | 124,802 | |||||
Hamilton Crossing Centre2 | Indianapolis, IN | June 2014 | Pending | 92,283 | |||||
City Center 3 | White Plains, NY | December 2015 | June 2018 | 360,880 | |||||
Fishers Station2 | Indianapolis, IN | December 2015 | Pending | 175,229 | |||||
Beechwood Promenade2 | Athens, GA | December 2015 | Pending | 348,815 | |||||
The Corner2 | Indianapolis, IN | December 2015 | Pending | 26,500 | |||||
Rampart Commons2 | Las Vegas, NV | March 2016 | Pending | 79,455 | |||||
Northdale Promenade4 | Tampa, FL | March 2016 | June 2017 | 173,862 | |||||
Burnt Store Marketplace5 | Punta Gorda, FL | June 2016 | March 2018 | 95,795 |
____________________ | |
1 | Transition date represents the date the property was transferred from our operating portfolio into redevelopment status. |
2 | This property has been identified as a redevelopment property and is not included in the operating portfolio or the same property pool. |
3 | This property was transitioned to the operating portfolio in the second quarter of 2018; however, it remains excluded from the same property pool because it has not yet been in the operating portfolio four full quarters after the property was transitioned to operations. |
4 | This property was transitioned to the operating portfolio in the second quarter of 2017; however, it remains excluded from the same property pool because it has not yet been in the operating portfolio four full quarters after the property was transitioned to operations. |
5 | This property was transitioned to the operating portfolio in the first quarter of 2018; however, it remains excluded from the same property pool because it has not yet been in the operating portfolio four full quarters after the property was transitioned to operations. |
Three Months Ended June 30, | |||||||||||
($ in thousands) | 2018 | 2017 | Net change 2017 to 2018 | ||||||||
Revenue: | |||||||||||
Rental income (including tenant reimbursements) | $ | 85,846 | $ | 86,916 | $ | (1,070 | ) | ||||
Other property related revenue | 4,927 | 5,733 | (806 | ) | |||||||
Fee income | 963 | — | 963 | ||||||||
Total revenue | 91,736 | 92,649 | (913 | ) | |||||||
Expenses: | |||||||||||
Property operating | 12,621 | 12,139 | 482 | ||||||||
Real estate taxes | 10,392 | 11,228 | (836 | ) | |||||||
General, administrative, and other | 5,553 | 5,488 | 65 | ||||||||
Depreciation and amortization | 40,451 | 42,710 | (2,259 | ) | |||||||
Impairment charge | 14,777 | — | 14,777 | ||||||||
Total expenses | 83,794 | 71,565 | 12,229 | ||||||||
Operating income | 7,942 | 21,084 | (13,142 | ) | |||||||
Interest expense | (16,746 | ) | (16,433 | ) | (313 | ) | |||||
Income tax benefit (expense) of taxable REIT subsidiary | 28 | (3 | ) | 31 | |||||||
Other expense, net | (115 | ) | (80 | ) | (35 | ) | |||||
(Loss) income from continuing operations | (8,891 | ) | 4,568 | (13,459 | ) | ||||||
Gains on sales of operating properties | 7,829 | 6,290 | 1,539 | ||||||||
Consolidated net (loss) income | (1,062 | ) | 10,858 | (11,920 | ) | ||||||
Net income attributable to noncontrolling interests | (304 | ) | (678 | ) | 374 | ||||||
Net (loss) income attributable to Kite Realty Group Trust common shareholders | $ | (1,366 | ) | $ | 10,180 | $ | (11,546 | ) | |||
Property operating expense to total revenue ratio | 13.8 | % | 13.1 | % |
($ in thousands) | Net change 2017 to 2018 | ||
Properties sold during 2017 and 2018 | $ | (3,014 | ) |
Properties under redevelopment during 2017 and/or 2018 | 669 | ||
Properties fully operational during 2017 and 2018 and other | 1,275 | ||
Total | $ | (1,070 | ) |
($ in thousands) | Net change 2017 to 2018 | ||
Properties sold during 2017 and 2018 | $ | (543 | ) |
Properties under redevelopment during 2017 and/or 2018 | 227 | ||
Properties fully operational during 2017 and 2018 and other | 798 | ||
Total | $ | 482 |
($ in thousands) | Net change 2017 to 2018 | ||
Properties sold during 2017 and 2018 | $ | (308 | ) |
Properties under redevelopment during 2017 and/or 2018 | 96 | ||
Properties fully operational during 2017 and 2018 and other | (624 | ) | |
Total | $ | (836 | ) |
($ in thousands) | Net change 2017 to 2018 | ||
Properties sold during 2017 and 2018 | $ | (1,257 | ) |
Properties under redevelopment during 2017 and/or 2018 | 787 | ||
Properties fully operational during 2017 and 2018 and other | (1,789 | ) | |
Total | $ | (2,259 | ) |
Six Months Ended June 30, | |||||||||||
($ in thousands) | 2018 | 2017 | Net change 2017 to 2018 | ||||||||
Revenue: | |||||||||||
Rental income (including tenant reimbursements) | $ | 173,183 | $ | 174,432 | $ | (1,249 | ) | ||||
Other property related revenue | 5,991 | 8,330 | (2,339 | ) | |||||||
Fee income | 2,325 | — | 2,325 | ||||||||
Total revenue | 181,499 | 182,762 | (1,263 | ) | |||||||
Expenses: | |||||||||||
Property operating | 25,091 | 25,091 | — | ||||||||
Real estate taxes | 21,146 | 21,559 | (413 | ) | |||||||
General, administrative, and other | 11,499 | 10,958 | 541 | ||||||||
Depreciation and amortization | 79,006 | 88,540 | (9,534 | ) | |||||||
Impairment charge | 38,847 | 7,411 | 31,436 | ||||||||
Total expenses | 175,589 | 153,559 | 22,030 | ||||||||
Operating income | 5,910 | 29,203 | (23,293 | ) | |||||||
Interest expense | (33,084 | ) | (32,878 | ) | (206 | ) | |||||
Income tax benefit of taxable REIT subsidiary | 51 | 30 | 21 | ||||||||
Other expense, net | (265 | ) | (219 | ) | (46 | ) | |||||
(Loss) income from continuing operations | (27,388 | ) | (3,864 | ) | (23,524 | ) | |||||
Gains on sales of operating properties | 8,329 | 15,160 | (6,831 | ) | |||||||
Consolidated net (loss) income | (19,059 | ) | 11,296 | (30,355 | ) | ||||||
Net income attributable to noncontrolling interests | (225 | ) | (1,110 | ) | 885 | ||||||
Net (loss) income attributable to Kite Realty Group Trust common shareholders | $ | (19,284 | ) | $ | 10,186 | $ | (29,470 | ) | |||
Property operating expense to total revenue ratio | 13.8 | % | 13.7 | % |
($ in thousands) | Net change 2017 to 2018 | ||
Properties sold during 2017 and 2018 | $ | (5,391 | ) |
Properties under redevelopment during 2017 and/or 2018 | 1,534 | ||
Properties fully operational during 2017 and 2018 and other | 2,608 | ||
Total | $ | (1,249 | ) |
($ in thousands) | Net change 2017 to 2018 | ||
Properties sold during 2017 and 2018 | $ | (980 | ) |
Properties under redevelopment during 2017 and/or 2018 | 599 | ||
Properties fully operational during 2017 and 2018 and other | 381 | ||
Total | $ | — |
($ in thousands) | Net change 2017 to 2018 | ||
Properties sold during 2017 and 2018 | $ | (622 | ) |
Properties under redevelopment during 2017 and/or 2018 | 141 | ||
Properties fully operational during 2017 and 2018 and other | 68 | ||
Total | $ | (413 | ) |
($ in thousands) | Net change 2017 to 2018 | ||
Properties sold during 2017 and 2018 | $ | (3,192 | ) |
Properties under redevelopment during 2017 and/or 2018 | (1,936 | ) | |
Properties fully operational during 2017 and 2018 and other | (4,406 | ) | |
Total | $ | (9,534 | ) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
($ in thousands) | 2018 | 2017 | % Change | 2018 | 2017 | % Change | |||||||||||||
Number of properties for the quarter1 | 102 | 102 | |||||||||||||||||
Leased percentage at period end | 93.7 | % | 94.7 | % | 93.7 | % | 94.7 | % | |||||||||||
Economic Occupancy percentage2 | 93.0 | % | 93.9 | % | 93.1 | % | 93.9 | % | |||||||||||
Same Property NOI3 | $ | 53,869 | $ | 53,097 | 1.5% | $ | 107,490 | $ | 105,940 | 1.5% | |||||||||
Reconciliation of Same Property NOI to Most Directly Comparable GAAP Measure: | |||||||||||||||||||
Net operating income - same properties | $ | 53,869 | $ | 53,097 | $ | 107,490 | $ | 105,940 | |||||||||||
Net operating income - non-same activity4 | 13,891 | 16,185 | 25,447 | 30,172 | |||||||||||||||
Other income (expense), net | 876 | (83 | ) | 2,111 | (189 | ) | |||||||||||||
General, administrative and other | (5,553 | ) | (5,488 | ) | (11,499 | ) | (10,958 | ) | |||||||||||
Impairment charges | (14,777 | ) | — | (38,847 | ) | (7,411 | ) | ||||||||||||
Depreciation and amortization expense | (40,451 | ) | (42,710 | ) | (79,006 | ) | (88,540 | ) | |||||||||||
Interest expense | (16,746 | ) | (16,433 | ) | (33,084 | ) | (32,878 | ) | |||||||||||
Gains on sales of operating properties | 7,829 | 6,290 | 8,329 | 15,160 | |||||||||||||||
Net income attributable to noncontrolling interests | (304 | ) | (678 | ) | (225 | ) | (1,110 | ) | |||||||||||
Net (loss) income attributable to common shareholders | $ | (1,366 | ) | $ | 10,180 | $ | (19,284 | ) | $ | 10,186 |
____________________ | ||||||||||||
1 | Same Property NOI excludes six properties in redevelopment, the recently completed City Center, Northdale Promenade, Burnt Store Marketplace, and Parkside Town Commons - Phase II, as well as office properties (Thirty South Meridian and Eddy Street Commons). | |||||||||||
2 | Excludes leases that are signed but for which tenants have not yet commenced the payment of cash rent. Calculated as a weighted average based on the timing of cash rent commencement and expiration during the period. | |||||||||||
3 | Same Property NOI excludes net gains from outlot sales, straight-line rent revenue, lease termination fees, amortization of lease intangibles and significant prior period expense recoveries and adjustments, if any. | |||||||||||
4 | Includes non-cash activity across the portfolio as well as net operating income from properties not included in the same property pool. |
Six Months Ended | |||
($ in thousands) | June 30, 2018 | ||
Development Projects | $ | 1,636 | |
Under Construction 3-R Projects | 12,498 | ||
3-R Opportunities | 2,273 | ||
Recently completed developments/redevelopments and other1 | 10,272 | ||
Recurring operating capital expenditures (primarily tenant improvement payments) | 7,921 | ||
Total | $ | 34,600 |
____________________ | |
1 | This classification includes Parkside Town Commons - Phase II, Holly Springs Towne Center - Phase II, and Burnt Store Marketplace. |
($ in thousands) | Scheduled Principal Payments | Term Maturity1 | Total | ||||||||
2018 | $ | 2,298 | $ | — | $ | 2,298 | |||||
2019 | 5,164 | — | 5,164 | ||||||||
2020 | 5,395 | 20,700 | 26,095 | ||||||||
2021 | 4,627 | 359,875 | 364,502 | ||||||||
2022 | 1,113 | 414,308 | 415,421 | ||||||||
Thereafter | 7,236 | 749,020 | 756,256 | ||||||||
$ | 25,833 | $ | 1,543,903 | $ | 1,569,736 | ||||||
Unamortized net debt premiums and issuance costs, net | (4,307 | ) | |||||||||
Total | $ | 1,565,429 |
____________________ | |
1 | The Company has the option to extend the maturity date by one year to April 22, 2023 of the Company's unsecured credit facility. The ability to exercise this option is subject to certain conditions, which the Company does not unilaterally control. |
• | Net proceeds of $151.5 million related to the sale of Trussville Promenade and Memorial Commons in the first quarter of 2018 and contribution of properties to the TH Real Estate joint venture in the second quarter of 2018, compared to net proceeds of $76.1 million over the same period in 2017, which related to the sale of Cove Center; |
• | Increase in capital expenditures of $1.7 million and an increase in construction payables of $1.2 million. In 2017, we substantially completed Parkside Towne Commons - Phase II, the expansion of Holly Springs Towne Center - Phase II, and multiple other redevelopment properties. |
• | We retired the $33.3 million loan secured by our Perimeter Woods operating property using a draw on the unsecured revolving credit facility; |
• | We retired the $33.0 million loan secured by our Killingly Commons operating property using a draw on the unsecured revolving credit facility; |
• | We borrowed $39.1 million on the unsecured revolving credit facility to fund development activities, redevelopment activities, and tenant improvement costs; |
• | We used the $89.0 million of net proceeds from the contribution of three operating properties to the TH Real Estate joint venture to pay down the unsecured revolving credit facility; |
• | We used the $63.0 million of proceeds from the sale of two operating properties to pay down the unsecured revolving credit facility; and |
• | We made distributions to common shareholders and Common Unit holders of $55.1 million. |
($ in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Consolidated net (loss) income | $ | (1,062 | ) | $ | 10,858 | $ | (19,059 | ) | $ | 11,296 | |||||
Less: net income attributable to noncontrolling interests in properties | (343 | ) | (438 | ) | (694 | ) | (870 | ) | |||||||
Less: gains on sales of operating properties | (7,829 | ) | (6,290 | ) | (8,329 | ) | (15,160 | ) | |||||||
Add: impairment charges | 14,777 | — | 38,847 | 7,411 | |||||||||||
Add: depreciation and amortization of consolidated entities, net of noncontrolling interests | 40,178 | 42,050 | 78,457 | 87,416 | |||||||||||
FFO of the Operating Partnership1 | 45,721 | 46,180 | 89,222 | 90,093 | |||||||||||
Less: Limited Partners' interests in FFO | (1,119 | ) | (1,056 | ) | (2,141 | ) | (2,045 | ) | |||||||
Funds From Operations attributable to Kite Realty Group Trust common shareholders1 | $ | 44,602 | $ | 45,124 | $ | 87,081 | $ | 88,048 |
____________________ | |
1 | “FFO of the Operating Partnership" measures 100% of the operating performance of the Operating Partnership’s real estate properties. “FFO attributable to Kite Realty Group Trust common shareholders” reflects a reduction for the redeemable noncontrolling weighted average diluted interest in the Operating Partnership. |
($ in thousands) | Three Months Ended June 30, 2018 | ||
Consolidated net loss | $ | (1,062 | ) |
Adjustments to net income | |||
Depreciation and amortization | 40,451 | ||
Interest expense | 16,746 | ||
Impairment charge | 14,777 | ||
Income tax benefit of taxable REIT subsidiary | (28 | ) | |
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) | 70,884 | ||
Adjustments to EBITDA: | |||
Unconsolidated EBITDA | 34 | ||
Gain on sale of operating property | (7,829 | ) | |
Pro-forma adjustments3 | (4,194 | ) | |
Other income and expense, net | 115 | ||
Noncontrolling interest | (351 | ) | |
Adjusted EBITDA | 58,659 | ||
Annualized Adjusted EBITDA1 | 234,636 | ||
Company share of net debt: | |||
Mortgage and other indebtedness | 1,565,429 | ||
Less: Partner share of consolidated joint venture debt2 | (10,073 | ) | |
Less: Cash, cash equivalents, and restricted cash | (43,332 | ) | |
Plus: Company Share of Unconsolidated Joint Venture Debt | 18,164 | ||
Plus: Net debt premiums and issuance costs, net | 4,307 | ||
Company Share of Net Debt | $ | 1,534,495 | |
Net Debt to Adjusted EBITDA | 6.5x |
____________________ | |
1 | Represents Adjusted EBITDA for the three months ended June 30, 2018 (as shown in the table above) multiplied by four. |
2 | Partner share of consolidated joint venture debt is calculated based upon the partner's pro-rata ownership of the joint venture, multiplied by the related secured debt balance. In all cases, this debt is the responsibility of the consolidated joint venture. |
3 | Relates to current quarter GAAP operating income, annualized, for properties sold during the quarter and a reduction to normalize other property related revenue to historical run rate. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total number of shares purchased1 | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | ||||||||
April 1 - April 30 | 3,000 | — | N/A | N/A | ||||||||
May 1 - May 31 | 1,699 | $ | — | — | N/A | |||||||
June 1 - June 30 | — | — | N/A | N/A | ||||||||
Total | 4,699 |
____________________ | |
1 | The number of shares purchased represents common shares surrendered by certain of our employees to satisfy their statutory minimum federal and state tax obligations associated with the vesting of restricted common shares of beneficial interest issued under our 2013 Plan. With respect to these shares, the price paid per share is based on the closing price of our common shares as of the date of the determination of the statutory minimum federal and state tax obligations. |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit No. | Description | Location | ||
3.1 | Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015 | |||
3.2 | Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 28, 2015 | |||
3.3 | Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 27, 2015 | |||
3.4 | Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on May 28, 2015 | |||
4.1 | Incorporated by reference to Exhibit 4.1 to Kite Realty Group Trust's registration statement on Form S-11 (File No. 333-114224) declared effective by the SEC on August 10, 2004 | |||
4.2 | Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016 | |||
4.3 | Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016 | |||
4.4 | Incorporated by reference to Exhibits 4.2 and 4.3 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on September 27, 2016 | |||
10.1 | First Amendment to Fifth Amended and Restated Credit Agreement, dated as of April 24, 2018, by and among Kite Realty Group, L.P., Kite Realty Group Trust, KeyBank National Association, as Administrative Agent, and the other lenders party thereto | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on April 25, 2018 | ||
10.2 | Second Amendment to Term Loan Agreement, dated as of April 24, 2018, by and among Kite Realty Group, L.P., Kite Realty Group Trust, KeyBank National Association, as Administrative Agent, and the other lenders party thereto | Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on April 25, 2018 | ||
31.1 | Filed herewith | |||
31.2 | Filed herewith | |||
31.3 | Filed herewith | |||
31.4 | Filed herewith | |||
32.1 | Filed herewith | |||
32.2 | Filed herewith | |||
101.INS | XBRL Instance Document | Filed herewith | ||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith | ||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | ||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | ||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | ||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith |
KITE REALTY GROUP TRUST | ||
August 8, 2018 | By: | /s/ John A. Kite |
(Date) | John A. Kite | |
Chairman and Chief Executive Officer | ||
(Principal Executive Officer) | ||
August 8, 2018 | By: | /s/ David E. Buell |
(Date) | David E. Buell | |
Chief Accounting Officer | ||
(Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Kite Realty Group Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: August 8, 2018 | ||
By: | /s/ John A. Kite | |
John A. Kite | ||
Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kite Realty Group Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 8, 2018 | ||
By: | /s/ David E. Buell | |
David E. Buell | ||
Chief Accounting Officer (Principal Financial Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Kite Realty Group, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 8, 2018 | ||
By: | /s/ John A. Kite | |
John A. Kite | ||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kite Realty Group, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 8, 2018 | ||
By: | /s/ David E. Buell | |
David E. Buell | ||
Chief Accounting Officer (Principal Financial Officer) |
1. | The Quarterly Report on Form 10-Q of the Parent Company for the quarter ended June 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and |
2. | The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Parent Company. |
Date: August 8, 2018 | By: | /s/ John A. Kite |
John A. Kite | ||
Chairman and Chief Executive Officer |
Date: August 8, 2018 | By: | /s/ Daniel R. Sink |
David E. Buell | ||
Chief Accounting Officer (Principal Financial Officer) |
1. | The Quarterly Report on Form 10-Q of the Operating Partnership for the quarter ended June 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and |
2. | The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. |
Date: August 8, 2018 | By: | /s/ John A. Kite |
John A. Kite | ||
Chief Executive Officer |
Date: August 8, 2018 | By: | /s/ David E. Buell |
David E. Buell | ||
Chief Accounting Officer (Principal Financial Officer) |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 03, 2018 |
|
Entity Information [Line Items] | ||
Entity Registrant Name | KITE REALTY GROUP TRUST | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 83,668,907 | |
Amendment Flag | false | |
Entity Central Index Key | 0001286043 | |
Entity Filer Category | Large Accelerated Filer | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
KRG, LP | ||
Entity Information [Line Items] | ||
Entity Registrant Name | KITE REALTY GROUP, L.P. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 0 | |
Amendment Flag | false | |
Entity Central Index Key | 0001636315 | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Accrued straight-line rent | $ 31,164 | $ 31,747 |
Common shares, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common shares, shares authorized (in shares) | 225,000,000 | 225,000,000 |
Common shares, shares issued (in shares) | 83,672,700 | 83,606,068 |
Common shares, shares outstanding (in shares) | 83,672,700 | 83,606,068 |
KRG, LP | ||
Accrued straight-line rent | $ 31,164 | $ 31,747 |
Common shares, shares issued (in shares) | 83,672,700 | 83,606,068 |
Common shares, shares outstanding (in shares) | 83,672,700 | 83,606,068 |
Consolidated Statement of Shareholders' Equity (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands |
Total |
Common Shares |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2017 | 83,606,068 | ||||
Beginning balance at Dec. 31, 2017 | $ 1,565,411 | $ 836 | $ 2,071,418 | $ 2,990 | $ (509,833) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock compensation activity (in shares) | 66,632 | ||||
Stock compensation activity | 3,351 | $ 1 | 3,350 | ||
Other comprehensive income attributable to Kite Realty Group Trust | 2,659 | 2,659 | |||
Distributions declared to common shareholders | (53,128) | (53,128) | |||
Net loss attributable to Kite Realty Group Trust | (19,284) | (19,284) | |||
Adjustment to redeemable noncontrolling interests | 423 | 423 | |||
Ending balance (in shares) at Jun. 30, 2018 | 83,672,700 | ||||
Ending balance at Jun. 30, 2018 | $ 1,499,432 | $ 837 | $ 2,075,191 | $ 5,649 | $ (582,245) |
Consolidated Statements of Partners' Equity (Unaudited) - KRG, LP - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands |
Total |
General Partner
Common Equity
|
General Partner
Accumulated Other Comprehensive Income
|
---|---|---|---|
Partners' capital, beginning balance at Dec. 31, 2017 | $ 1,565,411 | $ 1,562,421 | $ 2,990 |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Stock compensation activity | 3,351 | 3,351 | |
Other comprehensive income attributable to Parent Company | 2,659 | 2,659 | |
Distributions declared to Parent Company | (53,128) | (53,128) | |
Net loss | (19,284) | (19,284) | |
Adjustment to redeemable noncontrolling interests | 423 | 423 | |
Partners' capital, ending balance at Jun. 30, 2018 | $ 1,499,432 | $ 1,493,783 | $ 5,649 |
Organization |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Kite Realty Group Trust (the "Parent Company"), through its majority-owned subsidiary, Kite Realty Group, L.P. (the “Operating Partnership”), owns interests in various operating subsidiaries and joint ventures engaged in the ownership and operation, acquisition, development and redevelopment of high-quality neighborhood and community shopping centers in select markets in the United States. The terms "Company," "we," "us," and "our" refer to the Parent Company and the Operating Partnership, collectively, and those entities owned or controlled by the Parent Company and/or the Operating Partnership. The Operating Partnership was formed on August 16, 2004, when the Parent Company contributed properties and the net proceeds from an initial public offering of shares of its common stock to the Operating Partnership. The Parent Company was organized in Maryland in 2004 to succeed in the development, acquisition, construction and real estate businesses of its predecessor. We believe the Company qualifies as a real estate investment trust (a “REIT”) under provisions of the Internal Revenue Code of 1986, as amended. The Parent Company is the sole general partner of the Operating Partnership, and as of June 30, 2018 owned approximately 97.6% of the common partnership interests in the Operating Partnership (“General Partner Units”). The remaining 2.4% of the common partnership interests (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”) were owned by the limited partners. As the sole general partner of the Operating Partnership, the Parent Company has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership. The Parent Company and the Operating Partnership are operated as one enterprise. The management of the Parent Company consists of the same members as the management of the Operating Partnership. As the sole general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have any significant assets other than its investment in the Operating Partnership. At June 30, 2018, we owned interests in 115 operating and redevelopment properties totaling approximately 22.5 million square feet. We also owned two development projects under construction as of this date. Of the 115 properties, 112 are consolidated in these financial statements and the remaining three are accounted for under the equity method. |
Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests |
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Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests | Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) may have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the presentation not misleading. The unaudited financial statements as of June 30, 2018 and for the three and six months ended June 30, 2018 and 2017 include all adjustments, consisting of normal recurring adjustments, necessary in the opinion of management to present fairly the financial information set forth therein. The consolidated financial statements in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the combined Annual Report on Form 10-K of the Parent Company and the Operating Partnership for the year ended December 31, 2017. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported period. Actual results could differ from these estimates. The results of operations for the interim periods are not necessarily indicative of the results that may be expected on an annual basis. Components of Investment Properties The composition of the Company’s investment properties as of June 30, 2018 and December 31, 2017 was as follows:
Consolidation and Investments in Joint Ventures The accompanying financial statements are presented on a consolidated basis and include all accounts of the Parent Company, the Operating Partnership, the taxable REIT subsidiary of the Operating Partnership, subsidiaries of the Operating Partnership that are controlled and any variable interest entities (“VIEs”) in which the Operating Partnership is the primary beneficiary. In general, a VIE is a corporation, partnership, trust or any other legal structure used for business purposes that either (a) has equity investors that do not provide sufficient financial resources for the entity to support its activities, (b) does not have equity investors with voting rights or (c) has equity investors whose votes are disproportionate from their economics and substantially all of the activities are conducted on behalf of the investor with disproportionately fewer voting rights. The Operating Partnership accounts for properties that are owned by joint ventures in accordance with the consolidation guidance. The Operating Partnership evaluates each joint venture and determines first whether to follow the VIE or the voting interest entity ("VOE") model. Once the appropriate consolidation model is identified, the Operating Partnership then evaluates whether it should consolidate the joint venture. Under the VIE model, the Operating Partnership consolidates an entity when it has (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the VOE model, the Operating Partnership consolidates an entity when (i) it controls the entity through ownership of a majority voting interest if the entity is not a limited partnership or (ii) it controls the entity through its ability to remove the other partners or owners in the entity, at its discretion, when the entity is a limited partnership. In determining whether to consolidate a VIE with the Operating Partnership, we consider all relationships between the Operating Partnership and the applicable VIE, including development agreements, management agreements and other contractual arrangements, in determining whether we have the power to direct the activities of the VIE that most significantly affect the VIE's performance. As of June 30, 2018, we owned investments in three consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary. As of this date, these VIEs had total debt of $205.8 million, which were secured by assets of the VIEs totaling $441.9 million. The Operating Partnership guarantees the debts of these VIEs. On June 29, 2018, the Company formed a joint venture involving TH Real Estate (the "TH Real Estate joint venture"). The Company sold three properties to the joint venture valued in the aggregate at $99.8 million and, after considering third party debt obtained by the venture upon formation, the Company contributed $10.0 million for a 20% noncontrolling ownership interest in the venture. The Company will serve as the operating member responsible for day-to-day management of the properties and will receive property management and leasing fees. Both members have substantive participating rights over major decisions that impact the economics and operations of the joint venture. The Company is accounting for the joint venture on the equity method as it has the ability to exercise influence, but not control over operating and financial policies. The Operating Partnership is considered a VIE as the limited partners do not hold kick-out rights or substantive participating rights. The Parent Company consolidates the Operating Partnership as it is the primary beneficiary in accordance with the VIE model. Income Taxes and REIT Compliance Parent Company The Parent Company, which is considered a corporation for federal income tax purposes, has been organized and intends to continue to operate in a manner that will enable it to maintain its qualification as a REIT for federal income tax purposes. As a result, it generally will not be subject to federal income tax on the earnings that it distributes to the extent it distributes its “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) to shareholders of the Parent Company and meets certain other requirements on a recurring basis. To the extent that it satisfies this distribution requirement, but distributes less than 100% of its taxable income, it will be subject to federal corporate income tax on its undistributed REIT taxable income. REITs are subject to a number of organizational and operational requirements. If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate rates for a period of four years following the year in which qualification is lost. We may also be subject to certain federal, state and local taxes on our income and property and to federal income and excise taxes on our undistributed taxable income even if the Parent Company does qualify as a REIT. The Operating Partnership intends to continue to make distributions to the Parent Company in amounts sufficient to assist the Parent Company in adhering to REIT requirements and maintaining its REIT status. We have elected to treat Kite Realty Holdings, LLC as a taxable REIT subsidiary of the Operating Partnership, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. This election enables us to receive income and provide services that would otherwise be impermissible for a REIT. Deferred tax assets and liabilities are established for temporary differences between the financial reporting bases and the tax bases of assets and liabilities at the tax rates expected to be in effect when the temporary differences reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Operating Partnership The allocated share of income and loss, other than the operations of our taxable REIT subsidiary, is included in the income tax returns of the Operating Partnership's partners. Accordingly, the only federal income taxes included in the accompanying consolidated financial statements are in connection with the Operating Partnership's taxable REIT subsidiary. Noncontrolling Interests We report the non-redeemable noncontrolling interests in subsidiaries as equity, and the amount of consolidated net income attributable to these noncontrolling interests is set forth separately in the consolidated financial statements. The non-redeemable noncontrolling interests in consolidated properties for the six months ended June 30, 2018 and 2017 were as follows:
Redeemable Noncontrolling Interests - Limited Partners Limited Partner Units are redeemable noncontrolling interests in the Operating Partnership. We classify redeemable noncontrolling interests in the Operating Partnership in the accompanying consolidated balance sheets outside of permanent equity because we may be required to pay cash to holders of Limited Partner Units upon redemption of their interests in the Operating Partnership or deliver registered shares upon their conversion. The carrying amount of the redeemable noncontrolling interests in the Operating Partnership is reflected at the greater of historical book value or redemption value with a corresponding adjustment to additional paid-in capital. At June 30, 2018, the redemption value of the redeemable noncontrolling interests did not exceed the historical book value, and the balance was accordingly adjusted to historical book value. At December 31, 2017, the redemption value of the redeemable noncontrolling interests exceeded the historical book value, and the balance was accordingly adjusted to redemption value. We allocate net operating results of the Operating Partnership after noncontrolling interests in the consolidated properties based on the partners’ respective weighted average ownership interest. We adjust the redeemable noncontrolling interests in the Operating Partnership at the end of each reporting period to reflect their interests in the Operating Partnership or redemption value. This adjustment is reflected in our shareholders’ and Parent Company's equity. For the three and six months ended June 30, 2018 and 2017, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:
At June 30, 2018, the Parent Company's interest and the limited partners' redeemable noncontrolling ownership interests in the Operating Partnership were 97.6% and 2.4%. At December 31, 2017, the Parent Company's interest and the limited partners' redeemable noncontrolling ownership interests in the Operating Partnership were 97.7% and 2.3%. Concurrent with the Parent Company’s initial public offering and related formation transactions, certain individuals received Limited Partner Units of the Operating Partnership in exchange for their interests in certain properties. The limited partners have the right to redeem Limited Partner Units for cash or, at the Parent Company's election, common shares of the Parent Company in an amount equal to the market value of an equivalent number of common shares of the Parent Company at the time of redemption. Such common shares must be registered, which is not fully in the Parent Company’s control. Therefore, the limited partners’ interest is not reflected in permanent equity. The Parent Company also has the right to redeem the Limited Partner Units directly from the limited partner in exchange for either cash in the amount specified above or a number of its common shares equal to the number of Limited Partner Units being redeemed. There were 2,066,849 and 1,974,830 Limited Partner Units outstanding as of June 30, 2018 and December 31, 2017, respectively. The increase in Limited Partner Units outstanding from December 31, 2017 is due to non-cash compensation awards made to our executive officers in the form of Limited Partner Units. Redeemable Noncontrolling Interests - Subsidiaries Prior to the merger with Inland Diversified Real Estate Trust, Inc. ("Inland Diversified") in 2014, Inland Diversified formed joint ventures with the previous owners of certain properties and issued Class B units in three joint ventures that indirectly own those properties. The Class B units related to two of these three joint ventures remain outstanding and are accounted for as noncontrolling interests in these properties. The Class B units related to the Territory Portfolio joint venture became redeemable at the respective partner’s election in March 2017 and are discussed further below. The remaining Class B units relate to our Crossing at Killingly Commons joint venture will become redeemable at the partner's election in October 2022 and the fulfillment of certain redemption criteria. Beginning in November 2022, the Class B units can be redeemed at the election of either of our partner or us for cash or Limited Partner Units in the Operating Partnership. None of the issued Class B units have a maturity date, and none are mandatorily redeemable unless either party has elected for the units to be redeemed. We consolidate these joint ventures because we control the decision making of each of the joint ventures and our joint venture partners have limited protective rights. In February 2018, we received notice from our partners in the Territory Portfolio joint venture of their intent to exercise their right to redeem their remaining $22.0 million of Class B units for cash. The amount that will be redeemed was reclassified from Limited partners' interests in Operating Partnership and other redeemable noncontrolling interests to accounts payable and accrued expenses in the consolidated balance sheets. The Company redeemed $10 million of the interest on August 7, 2018. The Company can determine the timing of the closing for the redemption for the remainder of the interest, but it must occur before November 8, 2018. We classify the remainder of the redeemable noncontrolling interests in certain subsidiaries in the accompanying consolidated balance sheets outside of permanent equity because, under certain circumstances, we may be required to pay cash to Class B unitholders in specific subsidiaries upon redemption of their interests. The carrying amount of these redeemable noncontrolling interests is required to be reflected at the greater of initial book value or redemption value with a corresponding adjustment to additional paid-in capital. As of both June 30, 2018 and December 31, 2017, the redemption amounts of these interests did not exceed their fair value, nor did they exceed the initial book value. The redeemable noncontrolling interests in the Operating Partnership and subsidiaries for the six months ended June 30, 2018 and 2017 were as follows:
Fair Value Measurements We follow the framework established under accounting standard FASB ASC 820 for measuring fair value of non-financial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis but only in certain circumstances, such as a business combination or upon determination of an impairment. Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Recently Issued Accounting Pronouncements Adoption of New Standards On January 1, 2018, we adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) using the modified retrospective approach. ASU 2014-09 revised GAAP by offering a single comprehensive revenue recognition standard that supersedes nearly all existing GAAP revenue recognition guidance. The impacted revenue streams primarily consist of fees earned from management, development services provided to third parties, and other ancillary income earned from our properties. No adjustments were required upon adoption of this standard. We evaluated our revenue streams and less than 1% of our annual revenue was impacted by this new standard upon its initial adoption. Additionally, we adopted the clarified scope guidance of ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets" in conjunction with ASU 2014-09, using the modified retrospective approach. ASC 610-20 applies to the sale, transfer and derecognition of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales, and eliminates the guidance specific to real estate in ASC 360-20. With respect to full disposals, the recognition will generally be consistent with our current measurement and pattern of recognition. With respect to partial sales of real estate to joint ventures, the new guidance requires us to recognize a full gain where an equity investment is retained. These transactions could result in a basis difference as we will be required to measure our retained equity interest at fair value, whereas the joint venture may continue to measure the assets received at carryover basis. No adjustments were required upon adoption of this standard. During the six months ended June 30, 2018, we sold our Trussville Promenade operating property in Birmingham, Alabama and our Memorial Commons operating property in Goldsboro, North Carolina in all cash transactions with no continuing future involvement. The gains recognized were less than 1% of our total revenue for the six months ended June 30, 2018. As we do not have any continuing involvement in the operations of the operating properties, there was not a change in the accounting for the sales. In addition, we sold a controlling interest in three operating properties to a newly formed joint venture involving TH Real Estate. The Company calculated the gain in accordance with ASC 606 and ASC 610-20 that requires full gain recognition upon deconsolidation of a nonfinancial asset. The properties were sold for an agreed upon value of $99.8 million. Net proceeds from the sale were $89.0 million and a net gain of $7.8 million was recorded as a result of the sale. The Company contributed $10.0 million for a 20% ownership interest in the joint venture. On January 1, 2018 we adopted ASU 2016-15, Statement of Cash Flows (Topic 230), and ASU 2016-18, Restricted Cash, using a retrospective transition approach, which changed our statements of cash flows and related disclosures for all periods presented. ASU 2016-15 is intended to reduce diversity in practice with respect to how certain transactions are classified in the statement of cash flows and its adoption had no impact on our financial statements. ASU 2016-18 requires that a statement of cash flows explain the change during the period in total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The following is a summary of our cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the six months ended June 30, 2018 and 2017:
For the six months ended June 30, 2017, restricted cash related to cash flows provided by operating activities of $1.1 million and restricted cash related to cash flows provided by investing activities of $1.4 million were reclassified. Restricted cash primarily relates to cash held in escrows for payments of real estate taxes and property reserves for maintenance, insurance, or tenant improvements as required by our mortgage loans. New Standards Issued but Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making certain changes to lessor accounting, including the accounting for sales-type and direct financing leases. ASU 2016-02 will be effective for annual and interim reporting periods beginning on or after December 15, 2018, with early adoption permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Because of the adoption of ASU 2016-02, we expect common area maintenance reimbursements that are of a fixed nature to be recognized on a straight-line basis over the term of the lease as these tenant reimbursements will be considered a non-lease component and will be subject to ASU 2014-09. We also expect to recognize right of use assets on our balance sheet related to certain ground leases where we are the lessee. Upon adoption of the standard, we anticipate recognizing a right of use asset currently estimated to be between $35 million and $40 million. In addition to evaluating the impact of adopting the new accounting standard on our consolidated financial statements, we are evaluating our existing lease contracts, our current and future information system capabilities, and other variables. In July 2018, the FASB amended the new leases standard to approve a new transition method and lessor practical expedient for separating lease and non-lease components. This permits lessors to make an accounting policy election to not separate non-lease components, such as common area maintenance, of a contract from the leases to which they relate when specific criteria are met. The new leasing standard also amends ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers. Under ASC 340-40, incremental costs of obtaining a contract are recognized as an asset if the entity expects to recover them, which will reduce the leasing costs currently capitalized. Upon adoption of the new standard, we expect a reduction in certain capitalized costs and a corresponding increase in general, administrative, and other expense and a decrease in amortization expense on our consolidated statement of operations, but the magnitude of that change is dependent upon certain variables currently under evaluation. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. ASU 2017-02 better aligns a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 will be effective for annual and interim reporting periods beginning on or after December 15, 2018, with early adoption permitted using a modified retrospective transition method. This adoption method will require us to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update. While we continue to assess all potential impacts of the standard, we do not expect the adoption of ASU 2017-12 to have a material impact on our consolidated financial statements. |
Earnings Per Share or Unit |
6 Months Ended |
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Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share or Unit | Earnings Per Share or Unit Basic earnings per share or unit is calculated based on the weighted average number of common shares or units outstanding during the period. Diluted earnings per share or unit is determined based on the weighted average common number of shares or units outstanding during the period combined with the incremental average common shares or units that would have been outstanding assuming the conversion of all potentially dilutive common shares or units into common shares or units as of the earliest date possible. Potentially dilutive securities include outstanding options to acquire common shares; Limited Partner Units, which may be exchanged for either cash or common shares, at the Parent Company’s option and under certain circumstances; units granted under our Outperformance Incentive Compensation Plan ("Outperformance Plan"); and deferred common share units, which may be credited to the personal accounts of non-employee trustees in lieu of the payment of cash compensation or the issuance of common shares to such trustees. Limited Partner Units have been omitted from the Parent Company’s denominator for computing diluted earnings per share since the effect of including these amounts in the denominator would have no dilutive impact. Approximately 2.0 million weighted average Limited Partner Units were outstanding for both the six months ended June 30, 2018 and 2017. Approximately 0.1 million outstanding options to acquire common shares were excluded from the computations of diluted earnings per share or unit for the three and six months ended June 30, 2017, respectively because their impact was not dilutive. Due to the net loss allocable to common shareholders and Common Unit holders for the three and six months ended June 30, 2018, no securities had a dilutive impact for this period. |
Mortgage and Other Indebtedness |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage and Other Indebtedness | Mortgage and Other Indebtedness Mortgage and other indebtedness consisted of the following as of June 30, 2018 and December 31, 2017:
Consolidated indebtedness, including weighted average maturities and weighted average interest rates as of June 30, 2018, considering the impact of interest rate swaps, is summarized below:
Mortgage indebtedness is collateralized by certain real estate properties and leases, and is generally due in monthly installments of interest and principal and matures over various terms through 2030. Variable interest rates on mortgage indebtedness are based on LIBOR plus spreads ranging from 130 to 160 basis points. At June 30, 2018, the one-month LIBOR interest rate was 2.09%. Fixed interest rates on mortgage indebtedness range from 3.78% to 6.78%. Debt Issuance Costs Debt issuance costs are amortized on a straight-line basis over the terms of the respective loan agreements. The accompanying consolidated statements of operations include amortization of debt issuance costs as a component of interest expense as follows:
Unsecured Revolving Credit Facility and Unsecured Term Loans On April 24, 2018, the Company and Operating Partnership entered into the First Amendment (the “Amendment”) to the Fifth Amended and Restated Credit Agreement (the “Existing Credit Agreement,” and as amended by the Amendment, the “Amended Credit Agreement”), dated as of July 28, 2016, by and among the Operating Partnership, as borrower, the Company, as guarantor (pursuant to a springing guaranty, dated as of July 28, 2016), KeyBank National Association, as administrative agent, and the other lenders party thereto. The Amendment increases (i) the aggregate principal amount available under the unsecured revolving credit facility (the “Revolving Facility”) from $500 million to $600 million, (ii) the amount of the letter of credit issuances the Operating Partnership may utilize under the Revolving Facility from $50 million to $60 million, and (iii) swingline loan capacity from $50 million to $60 million in same day borrowings. Under the Amended Credit Agreement, the Operating Partnership has the option to increase the Revolving Facility to $1.2 billion (increased from $1 billion under the Existing Credit Agreement) upon the Operating Partnership’s request, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Amended Credit Agreement, to provide such increased amounts. The Amendment extends the scheduled maturity date of the Revolving Facility from July 28, 2020 to April 22, 2022 (which maturity date may be extended for up to two additional periods of six months at the Operating Partnership’s option subject to certain conditions). Among other things, the Amendment also improves the Operating Partnership’s leverage ratio calculation by changing the definition of capitalization rate to six and one-half percent (6.5%) from six and three-fourths percent (6.75%), which increases the Operating Partnership’s total asset value as calculated under the Amended Credit Agreement. As of June 30, 2018, $9.1 million was outstanding under the Credit Facility. Additionally, we had letters of credit outstanding which totaled $4.1 million, against which no amounts were advanced as of June 30, 2018. The amount that we may borrow under our Credit Facility is limited by the value of the assets in our unencumbered asset pool. As of June 30, 2018, the value of the assets in our unencumbered asset pool, calculated pursuant to the Credit Facility agreement, was $1.4 billion. Considering outstanding borrowings on the line of credit, term loans, unsecured notes and letters of credit, we had $459.1 million available under our Credit Facility for future borrowings as of June 30, 2018. Our ability to borrow under the Credit Facility is subject to our compliance with various restrictive and financial covenants, including with respect to liens, indebtedness, investments, dividends, mergers and asset sales. As of June 30, 2018, we were in compliance with all such covenants. Senior Unsecured Notes The Operating Partnership has $550 million of senior unsecured notes maturing at various dates through September 2027 (the "Notes"). The Notes contain a number of customary financial and restrictive covenants. As of June 30, 2018, we were in compliance with all such covenants. Other Debt Activity For the six months ended June 30, 2018, we had total new borrowings of $112.9 million and total repayments of $243.9 million. In addition to the items mentioned above, the remaining components of this activity were as follows:
Fair Value of Fixed and Variable Rate Debt As of June 30, 2018, the estimated fair value of our fixed rate debt was $1.1 billion compared to the book value of $1.1 billion. The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 4.21% to 4.69%. As of June 30, 2018, the fair value of variable rate debt was $482.8 million compared to the book value of $482.9 million. The fair value was estimated using Level 2 and 3 inputs with cash flows discounted at current borrowing rates for similar instruments, which ranged from 2.71% to 4.32%. |
Derivative Instruments, Hedging Activities and Other Comprehensive Income |
6 Months Ended |
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Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Hedging Activities and Other Comprehensive Income | Derivative Instruments, Hedging Activities and Other Comprehensive Income In order to manage potential future variable interest rate risk, we enter into interest rate derivative agreements from time to time. All such agreements are designated as cash flow hedges. We do not use interest rate derivative agreements for trading or speculative purposes. The agreements with each of our derivative counterparties provide that, in the event of default on any of our indebtedness, we could also be declared in default on our derivative obligations. As of June 30, 2018, we were party to various cash flow derivative agreements with notional amounts totaling $378.5 million. These derivative agreements effectively fix the interest rate underlying certain variable rate debt instruments over expiration dates through 2021. Utilizing a weighted average interest rate spread over LIBOR on all variable rate debt resulted in fixing the weighted average interest rate at 3.55%. These interest rate derivative agreements are the only assets or liabilities that we record at fair value on a recurring basis. The valuation of these assets and liabilities is determined using widely accepted techniques including discounted cash flow analysis. These techniques consider the contractual terms of the derivatives (including the period to maturity) and use observable market-based inputs such as interest rate curves and implied volatilities. We also incorporate credit valuation adjustments into the fair value measurements to reflect nonperformance risk on both our part and that of the respective counterparties. We determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, although the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. As of June 30, 2018 and December 31, 2017, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined our derivative valuations were classified within Level 2 of the fair value hierarchy. As of June 30, 2018, the estimated fair value of our interest rate derivatives represented a net asset of $5.6 million. As of June 30, 2018, $5.7 million was reflected in prepaid and other assets and $0.1 million was reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheets. At December 31, 2017, the estimated fair value of our interest rate hedges was a net asset of $2.4 million, including accrued interest of $0.1 million. As of December 31, 2017, $3.1 million was reflected in prepaid and other assets and $0.7 million was reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheets. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to earnings over time as the hedged items are recognized in earnings. Approximately $0.1 million was reclassified as an increase to earnings during the six months ended June 30, 2018, and $1.7 million was reclassified as a reduction to earnings during the six months ended June 30, 2017. As the interest payments on our hedges are made over the next 12 months, we estimate the decrease to interest expense to be $2.3 million, assuming the current LIBOR curve. Unrealized gains and losses on our interest rate derivative agreements are the only components of the change in accumulated other comprehensive loss. |
Shareholders' Equity |
6 Months Ended |
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Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Distribution Payments Our Board of Trustees declared a cash distribution of $0.3175 per share for the second quarter of 2018 to common shareholders and Common Unit holders of record as of July 6, 2018. The distribution was paid on July 13, 2018. |
Deferred Costs and Intangibles, net |
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Deferred Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs and Intangibles, net | Deferred Costs and Intangibles, net Deferred costs consist primarily of acquired lease intangible assets, broker fees and capitalized salaries and related benefits incurred in connection with lease originations. Deferred leasing costs, lease intangibles and similar costs are amortized on a straight-line basis over the terms of the related leases. At June 30, 2018 and December 31, 2017, deferred costs consisted of the following:
Amortization of deferred leasing costs, leasing intangibles and other is included in depreciation and amortization expense in the accompanying consolidated statements of operations. The amortization of above market lease intangibles is included as a reduction to revenue. The amounts of such amortization included in the accompanying consolidated statements of operations are as follows:
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Deferred Revenue, Intangibles, Net and Other Liabilities |
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Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue, Intangibles, Net and Other Liabilities | Deferred Revenue, Intangibles, Net and Other Liabilities Deferred revenue and other liabilities consist of the unamortized fair value of below market lease liabilities recorded in connection with purchase accounting, retainage payables for development and redevelopment projects, and tenant rent payments received in advance of the month in which they are due. The amortization of below market lease liabilities is recognized as revenue over the remaining life of the leases (including option periods for leases with below market renewal options) through 2046. Tenant rent payments received in advance are recognized as revenue in the period to which they apply, which is typically the month following their receipt. At June 30, 2018 and December 31, 2017, deferred revenue, intangibles, net and other liabilities consisted of the following:
The amortization of below market lease intangibles is included as a component of minimum rent in the accompanying consolidated statements and was $6.1 million and $4.0 million for the six months ended June 30, 2018 and 2017, respectively. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Other Commitments and Contingencies We are not subject to any material litigation nor, to management’s knowledge, is any material litigation currently threatened against us. We are parties to routine litigation, claims, and administrative proceedings arising in the ordinary course of business. Management believes that such matters will not have a material adverse impact on our consolidated financial condition, results of operations or cash flows taken as a whole. We are obligated under various completion guarantees with certain lenders and lease agreements with tenants to complete all or portions of the development and redevelopment projects. We believe we currently have sufficient financing in place to fund these projects and expect to do so primarily through borrowings on the Credit Facility. In connection with the joint venture formed for the development of the Embassy Suites at the University of Notre Dame, we provided a repayment guaranty on a $33.8 million construction loan, of which our share is $11.8 million. The outstanding loan balance as of June 30, 2018 is $22.2 million and our share is $7.8 million. As of June 30, 2018, we had outstanding letters of credit totaling $4.1 million. At that date, there were no amounts advanced against these instruments. |
Disposals of Operating Properties and Recording of Impairment Charges |
6 Months Ended |
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Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposals of Operating Properties and Recording of Impairment Charges | Disposals of Operating Properties and Recording of Impairment Charges During the three months ended June 30, 2018, we contributed our Livingston Shopping Center, Plaza Volente, and Tamiami Crossing operating properties to the TH Real Estate joint venture (see Note 2) for an agreed upon value of $99.8 million in exchange for a 20% ownership interest and $89.0 million in net proceeds that resulted in a net gain of $7.8 million. The Company calculated the gain in accordance with ASC 606 and ASC 610-20 that require full gain recognition upon deconsolidation of a nonfinancial asset. This gain was calculated as the fair value of the properties (based upon the sales price for the 80% of interests) less the aggregate carrying value. The retained 20% equity method investment was recorded at fair value as of the transaction date of June 29, 2018, or $10.0 million. Our share of income from this investment was not material to the period ended June 30, 2018. As of June 30, 2018, in connection with the preparation and review of the financial statements required to be included in this Quarterly Report on Form 10-Q, we evaluated two properties for impairment and recorded a $14.8 million impairment charge due to changes during the quarter in facts and circumstances underlying the Company's expected future hold period of these properties. A shortening of an expected future hold period is considered an impairment indicator under applicable accounting rules, and this indicator caused us to further evaluate the carrying value of these properties. We concluded the estimated undiscounted cash flows over the expected holding period did not exceed the carrying value of these assets, leading to the charge during the quarter. We estimated the fair value using Level 3 inputs within the fair value hierarchy, primarily using the market approach. We compared the estimated aggregate fair value of $30.4 million to the carrying values, which resulted in the recording of a non-cash impairment charge of $14.8 million for the three months ended June 30, 2018. During the three months ended March 31, 2018, we sold our Trussville Promenade operating property in Birmingham, Alabama, and our Memorial Commons operating property in Goldsboro, North Carolina, for aggregate gross proceeds of $63.0 million and a net gain of $0.5 million. During the three months ended June 30, 2017, we sold our Clay Marketplace operating property in Birmingham, Alabama, our Shops at Village Walk operating property in Fort Myers, Florida, and our Wheatland Towne Crossing operating property in Dallas, Texas for aggregate gross proceeds of $54.6 million and a net gain of $6.3 million During the three months ended March 31, 2017, we sold our Cove Center operating property in Stuart, Florida, for gross proceeds of $23.1 million and a net gain of $8.9 million. As of March 31, 2018, in connection with the preparation and review of the financial statements, we evaluated an operating property for impairment and recorded a $24.1 million impairment charge due to changes during the quarter in facts and circumstances underlying the Company’s expected future hold period of this property. A shortening of an expected future hold period is considered an impairment indicator under applicable accounting rules, and this indicator caused us to further evaluate the carrying value of this property. We concluded the estimated undiscounted cash flows over the expected holding period did not exceed the carrying value of a certain asset, leading to the charge during the quarter. We estimated the fair value of the property to be $24.3 million using Level 3 inputs within the fair value hierarchy, primarily using the market approach. We compared the estimated fair value to the carrying value, which resulted in the recording of a non-cash impairment charge of $24.1 million for the three months ended March 31, 2018. This property was contributed to the TH Real Estate joint venture. In connection with the preparation and review of the March 31, 2017 financial statements, we evaluated an operating property for impairment due to the shortening of the intended holding period. We concluded the estimated undiscounted cash flows over the expected holding period did not exceed the carrying value of the asset. The Company estimated the fair value of the property to be $26.0 million using Level 3 inputs within the fair value hierarchy, primarily using the market approach. We compared the fair value measurement to the carrying value, which resulted in the recording of a non-cash impairment charge of $7.4 million for the three months ended March 31, 2017. |
Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation and Investments in Joint Ventures | Consolidation and Investments in Joint Ventures The accompanying financial statements are presented on a consolidated basis and include all accounts of the Parent Company, the Operating Partnership, the taxable REIT subsidiary of the Operating Partnership, subsidiaries of the Operating Partnership that are controlled and any variable interest entities (“VIEs”) in which the Operating Partnership is the primary beneficiary. In general, a VIE is a corporation, partnership, trust or any other legal structure used for business purposes that either (a) has equity investors that do not provide sufficient financial resources for the entity to support its activities, (b) does not have equity investors with voting rights or (c) has equity investors whose votes are disproportionate from their economics and substantially all of the activities are conducted on behalf of the investor with disproportionately fewer voting rights. The Operating Partnership accounts for properties that are owned by joint ventures in accordance with the consolidation guidance. The Operating Partnership evaluates each joint venture and determines first whether to follow the VIE or the voting interest entity ("VOE") model. Once the appropriate consolidation model is identified, the Operating Partnership then evaluates whether it should consolidate the joint venture. Under the VIE model, the Operating Partnership consolidates an entity when it has (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the VOE model, the Operating Partnership consolidates an entity when (i) it controls the entity through ownership of a majority voting interest if the entity is not a limited partnership or (ii) it controls the entity through its ability to remove the other partners or owners in the entity, at its discretion, when the entity is a limited partnership. In determining whether to consolidate a VIE with the Operating Partnership, we consider all relationships between the Operating Partnership and the applicable VIE, including development agreements, management agreements and other contractual arrangements, in determining whether we have the power to direct the activities of the VIE that most significantly affect the VIE's performance. As of June 30, 2018, we owned investments in three consolidated joint ventures that were VIEs in which the partners did not have substantive participating rights and we were the primary beneficiary. As of this date, these VIEs had total debt of $205.8 million, which were secured by assets of the VIEs totaling $441.9 million. The Operating Partnership guarantees the debts of these VIEs. On June 29, 2018, the Company formed a joint venture involving TH Real Estate (the "TH Real Estate joint venture"). The Company sold three properties to the joint venture valued in the aggregate at $99.8 million and, after considering third party debt obtained by the venture upon formation, the Company contributed $10.0 million for a 20% noncontrolling ownership interest in the venture. The Company will serve as the operating member responsible for day-to-day management of the properties and will receive property management and leasing fees. Both members have substantive participating rights over major decisions that impact the economics and operations of the joint venture. The Company is accounting for the joint venture on the equity method as it has the ability to exercise influence, but not control over operating and financial policies. The Operating Partnership is considered a VIE as the limited partners do not hold kick-out rights or substantive participating rights. The Parent Company consolidates the Operating Partnership as it is the primary beneficiary in accordance with the VIE model. |
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Income Taxes | Income Taxes and REIT Compliance Parent Company The Parent Company, which is considered a corporation for federal income tax purposes, has been organized and intends to continue to operate in a manner that will enable it to maintain its qualification as a REIT for federal income tax purposes. As a result, it generally will not be subject to federal income tax on the earnings that it distributes to the extent it distributes its “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) to shareholders of the Parent Company and meets certain other requirements on a recurring basis. To the extent that it satisfies this distribution requirement, but distributes less than 100% of its taxable income, it will be subject to federal corporate income tax on its undistributed REIT taxable income. REITs are subject to a number of organizational and operational requirements. If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate rates for a period of four years following the year in which qualification is lost. We may also be subject to certain federal, state and local taxes on our income and property and to federal income and excise taxes on our undistributed taxable income even if the Parent Company does qualify as a REIT. The Operating Partnership intends to continue to make distributions to the Parent Company in amounts sufficient to assist the Parent Company in adhering to REIT requirements and maintaining its REIT status. We have elected to treat Kite Realty Holdings, LLC as a taxable REIT subsidiary of the Operating Partnership, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. This election enables us to receive income and provide services that would otherwise be impermissible for a REIT. Deferred tax assets and liabilities are established for temporary differences between the financial reporting bases and the tax bases of assets and liabilities at the tax rates expected to be in effect when the temporary differences reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. Operating Partnership The allocated share of income and loss, other than the operations of our taxable REIT subsidiary, is included in the income tax returns of the Operating Partnership's partners. Accordingly, the only federal income taxes included in the accompanying consolidated financial statements are in connection with the Operating Partnership's taxable REIT subsidiary. |
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Noncontrolling Interests | Noncontrolling Interests We report the non-redeemable noncontrolling interests in subsidiaries as equity, and the amount of consolidated net income attributable to these noncontrolling interests is set forth separately in the consolidated financial statements. The non-redeemable noncontrolling interests in consolidated properties for the six months ended June 30, 2018 and 2017 were as follows:
Redeemable Noncontrolling Interests - Limited Partners Limited Partner Units are redeemable noncontrolling interests in the Operating Partnership. We classify redeemable noncontrolling interests in the Operating Partnership in the accompanying consolidated balance sheets outside of permanent equity because we may be required to pay cash to holders of Limited Partner Units upon redemption of their interests in the Operating Partnership or deliver registered shares upon their conversion. The carrying amount of the redeemable noncontrolling interests in the Operating Partnership is reflected at the greater of historical book value or redemption value with a corresponding adjustment to additional paid-in capital. At June 30, 2018, the redemption value of the redeemable noncontrolling interests did not exceed the historical book value, and the balance was accordingly adjusted to historical book value. At December 31, 2017, the redemption value of the redeemable noncontrolling interests exceeded the historical book value, and the balance was accordingly adjusted to redemption value. We allocate net operating results of the Operating Partnership after noncontrolling interests in the consolidated properties based on the partners’ respective weighted average ownership interest. We adjust the redeemable noncontrolling interests in the Operating Partnership at the end of each reporting period to reflect their interests in the Operating Partnership or redemption value. This adjustment is reflected in our shareholders’ and Parent Company's equity. For the three and six months ended June 30, 2018 and 2017, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:
At June 30, 2018, the Parent Company's interest and the limited partners' redeemable noncontrolling ownership interests in the Operating Partnership were 97.6% and 2.4%. At December 31, 2017, the Parent Company's interest and the limited partners' redeemable noncontrolling ownership interests in the Operating Partnership were 97.7% and 2.3%. Concurrent with the Parent Company’s initial public offering and related formation transactions, certain individuals received Limited Partner Units of the Operating Partnership in exchange for their interests in certain properties. The limited partners have the right to redeem Limited Partner Units for cash or, at the Parent Company's election, common shares of the Parent Company in an amount equal to the market value of an equivalent number of common shares of the Parent Company at the time of redemption. Such common shares must be registered, which is not fully in the Parent Company’s control. Therefore, the limited partners’ interest is not reflected in permanent equity. The Parent Company also has the right to redeem the Limited Partner Units directly from the limited partner in exchange for either cash in the amount specified above or a number of its common shares equal to the number of Limited Partner Units being redeemed. There were 2,066,849 and 1,974,830 Limited Partner Units outstanding as of June 30, 2018 and December 31, 2017, respectively. The increase in Limited Partner Units outstanding from December 31, 2017 is due to non-cash compensation awards made to our executive officers in the form of Limited Partner Units. Redeemable Noncontrolling Interests - Subsidiaries Prior to the merger with Inland Diversified Real Estate Trust, Inc. ("Inland Diversified") in 2014, Inland Diversified formed joint ventures with the previous owners of certain properties and issued Class B units in three joint ventures that indirectly own those properties. The Class B units related to two of these three joint ventures remain outstanding and are accounted for as noncontrolling interests in these properties. The Class B units related to the Territory Portfolio joint venture became redeemable at the respective partner’s election in March 2017 and are discussed further below. The remaining Class B units relate to our Crossing at Killingly Commons joint venture will become redeemable at the partner's election in October 2022 and the fulfillment of certain redemption criteria. Beginning in November 2022, the Class B units can be redeemed at the election of either of our partner or us for cash or Limited Partner Units in the Operating Partnership. None of the issued Class B units have a maturity date, and none are mandatorily redeemable unless either party has elected for the units to be redeemed. We consolidate these joint ventures because we control the decision making of each of the joint ventures and our joint venture partners have limited protective rights. In February 2018, we received notice from our partners in the Territory Portfolio joint venture of their intent to exercise their right to redeem their remaining $22.0 million of Class B units for cash. The amount that will be redeemed was reclassified from Limited partners' interests in Operating Partnership and other redeemable noncontrolling interests to accounts payable and accrued expenses in the consolidated balance sheets. The Company redeemed $10 million of the interest on August 7, 2018. The Company can determine the timing of the closing for the redemption for the remainder of the interest, but it must occur before November 8, 2018. We classify the remainder of the redeemable noncontrolling interests in certain subsidiaries in the accompanying consolidated balance sheets outside of permanent equity because, under certain circumstances, we may be required to pay cash to Class B unitholders in specific subsidiaries upon redemption of their interests. The carrying amount of these redeemable noncontrolling interests is required to be reflected at the greater of initial book value or redemption value with a corresponding adjustment to additional paid-in capital. |
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Fair Value Measurements | Fair Value Measurements We follow the framework established under accounting standard FASB ASC 820 for measuring fair value of non-financial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis but only in certain circumstances, such as a business combination or upon determination of an impairment. Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. |
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adoption of New Standards On January 1, 2018, we adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) using the modified retrospective approach. ASU 2014-09 revised GAAP by offering a single comprehensive revenue recognition standard that supersedes nearly all existing GAAP revenue recognition guidance. The impacted revenue streams primarily consist of fees earned from management, development services provided to third parties, and other ancillary income earned from our properties. No adjustments were required upon adoption of this standard. We evaluated our revenue streams and less than 1% of our annual revenue was impacted by this new standard upon its initial adoption. Additionally, we adopted the clarified scope guidance of ASC 610-20, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets" in conjunction with ASU 2014-09, using the modified retrospective approach. ASC 610-20 applies to the sale, transfer and derecognition of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales, and eliminates the guidance specific to real estate in ASC 360-20. With respect to full disposals, the recognition will generally be consistent with our current measurement and pattern of recognition. With respect to partial sales of real estate to joint ventures, the new guidance requires us to recognize a full gain where an equity investment is retained. These transactions could result in a basis difference as we will be required to measure our retained equity interest at fair value, whereas the joint venture may continue to measure the assets received at carryover basis. No adjustments were required upon adoption of this standard. During the six months ended June 30, 2018, we sold our Trussville Promenade operating property in Birmingham, Alabama and our Memorial Commons operating property in Goldsboro, North Carolina in all cash transactions with no continuing future involvement. The gains recognized were less than 1% of our total revenue for the six months ended June 30, 2018. As we do not have any continuing involvement in the operations of the operating properties, there was not a change in the accounting for the sales. In addition, we sold a controlling interest in three operating properties to a newly formed joint venture involving TH Real Estate. The Company calculated the gain in accordance with ASC 606 and ASC 610-20 that requires full gain recognition upon deconsolidation of a nonfinancial asset. The properties were sold for an agreed upon value of $99.8 million. Net proceeds from the sale were $89.0 million and a net gain of $7.8 million was recorded as a result of the sale. The Company contributed $10.0 million for a 20% ownership interest in the joint venture. On January 1, 2018 we adopted ASU 2016-15, Statement of Cash Flows (Topic 230), and ASU 2016-18, Restricted Cash, using a retrospective transition approach, which changed our statements of cash flows and related disclosures for all periods presented. ASU 2016-15 is intended to reduce diversity in practice with respect to how certain transactions are classified in the statement of cash flows and its adoption had no impact on our financial statements. ASU 2016-18 requires that a statement of cash flows explain the change during the period in total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The following is a summary of our cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the six months ended June 30, 2018 and 2017:
For the six months ended June 30, 2017, restricted cash related to cash flows provided by operating activities of $1.1 million and restricted cash related to cash flows provided by investing activities of $1.4 million were reclassified. Restricted cash primarily relates to cash held in escrows for payments of real estate taxes and property reserves for maintenance, insurance, or tenant improvements as required by our mortgage loans. New Standards Issued but Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases. ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making certain changes to lessor accounting, including the accounting for sales-type and direct financing leases. ASU 2016-02 will be effective for annual and interim reporting periods beginning on or after December 15, 2018, with early adoption permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Because of the adoption of ASU 2016-02, we expect common area maintenance reimbursements that are of a fixed nature to be recognized on a straight-line basis over the term of the lease as these tenant reimbursements will be considered a non-lease component and will be subject to ASU 2014-09. We also expect to recognize right of use assets on our balance sheet related to certain ground leases where we are the lessee. Upon adoption of the standard, we anticipate recognizing a right of use asset currently estimated to be between $35 million and $40 million. In addition to evaluating the impact of adopting the new accounting standard on our consolidated financial statements, we are evaluating our existing lease contracts, our current and future information system capabilities, and other variables. In July 2018, the FASB amended the new leases standard to approve a new transition method and lessor practical expedient for separating lease and non-lease components. This permits lessors to make an accounting policy election to not separate non-lease components, such as common area maintenance, of a contract from the leases to which they relate when specific criteria are met. The new leasing standard also amends ASC 340-40, Other Assets and Deferred Costs - Contracts with Customers. Under ASC 340-40, incremental costs of obtaining a contract are recognized as an asset if the entity expects to recover them, which will reduce the leasing costs currently capitalized. Upon adoption of the new standard, we expect a reduction in certain capitalized costs and a corresponding increase in general, administrative, and other expense and a decrease in amortization expense on our consolidated statement of operations, but the magnitude of that change is dependent upon certain variables currently under evaluation. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities. ASU 2017-02 better aligns a company’s financial reporting for hedging activities with the economic objectives of those activities. ASU 2017-12 will be effective for annual and interim reporting periods beginning on or after December 15, 2018, with early adoption permitted using a modified retrospective transition method. This adoption method will require us to recognize the cumulative effect of initially applying the ASU as an adjustment to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the fiscal year that an entity adopts the update. While we continue to assess all potential impacts of the standard, we do not expect the adoption of ASU 2017-12 to have a material impact on our consolidated financial statements. |
Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Properties | The composition of the Company’s investment properties as of June 30, 2018 and December 31, 2017 was as follows:
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Schedule of Stockholders Equity | The non-redeemable noncontrolling interests in consolidated properties for the six months ended June 30, 2018 and 2017 were as follows:
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Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net | For the three and six months ended June 30, 2018 and 2017, the weighted average interests of the Parent Company and the limited partners in the Operating Partnership were as follows:
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Redeemable Noncontrolling Interest | The redeemable noncontrolling interests in the Operating Partnership and subsidiaries for the six months ended June 30, 2018 and 2017 were as follows:
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Cash and Cash Equivalents | The following is a summary of our cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the six months ended June 30, 2018 and 2017:
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Restricted Cash and Cash Equivalents | The following is a summary of our cash, cash equivalents, and restricted cash total as presented in our statements of cash flows for the six months ended June 30, 2018 and 2017:
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Mortgage and Other Indebtedness (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Participating Mortgage Loans | Mortgage and other indebtedness consisted of the following as of June 30, 2018 and December 31, 2017:
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Schedule of Debt | Consolidated indebtedness, including weighted average maturities and weighted average interest rates as of June 30, 2018, considering the impact of interest rate swaps, is summarized below:
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Deferred Cost Amortization | The accompanying consolidated statements of operations include amortization of debt issuance costs as a component of interest expense as follows:
The amounts of such amortization included in the accompanying consolidated statements of operations are as follows:
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Deferred Costs and Intangibles, net (Tables) |
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | At June 30, 2018 and December 31, 2017, deferred costs consisted of the following:
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Deferred Cost Amortization | The accompanying consolidated statements of operations include amortization of debt issuance costs as a component of interest expense as follows:
The amounts of such amortization included in the accompanying consolidated statements of operations are as follows:
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Deferred Revenue, Intangibles, Net and Other Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Revenue, by Arrangement, Disclosure | At June 30, 2018 and December 31, 2017, deferred revenue, intangibles, net and other liabilities consisted of the following:
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Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests - Investment Properties (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Land, buildings and improvements | $ 3,670,110 | $ 3,873,149 |
Furniture, equipment and other | 9,022 | 8,453 |
Land held for development | 31,142 | 31,142 |
Construction in progress | 43,692 | 45,140 |
Investment properties, at cost | $ 3,753,966 | $ 3,957,884 |
Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests - Noncontrolling Interests (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Beginning Balance | $ 698 | $ 692 | ||
Net income allocable to noncontrolling interests, excluding redeemable noncontrolling interests | $ 304 | $ 678 | 225 | 1,110 |
Ending Balance | $ 698 | $ 698 | 698 | 698 |
Excluding Redeemable Non-Controlling Interests | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Net income allocable to noncontrolling interests, excluding redeemable noncontrolling interests | $ 0 | $ 6 |
Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests - Weighted Average Interests in Operating Partnership (Details) - Operating Partnership |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Parent Company’s weighted average basic interest in Operating Partnership | 97.60% | 97.70% | 97.60% | 97.70% |
Limited partners' weighted average basic interests in Operating Partnership | 2.40% | 2.30% | 2.40% | 2.30% |
Basis of Presentation, Consolidation, Investments in Joint Ventures, and Noncontrolling Interests - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
Jun. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 32,384 | $ 24,082 | $ 27,635 | |
Restricted cash | 10,948 | 8,094 | 8,717 | |
Total cash, cash equivalents, and restricted cash | $ 43,332 | $ 32,176 | $ 36,352 | $ 28,912 |
Earnings Per Share or Unit (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Earnings Per Share [Abstract] | ||||
Weighted average limited partnership units outstanding, basic | 2,000,000 | 2,000,000 | ||
Antidilutive securities excluded from computation of earnings per share | 0 | 100,000 | 0 | 100,000 |
Mortgage and Other Indebtedness - Consolidated Indebtedness by Type of Interest Rate (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
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Debt Instrument [Line Items] | ||
Net debt premiums and issuance costs, net | $ (4,307) | |
Total | $ 1,565,429 | $ 1,699,239 |
Weighted Average Interest Rate (as percent) | 4.08% | |
Weighted Average Maturity (Years) | 5 years 2 months 12 days | |
Fixed rate debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,465,330 | |
Ratio (as percent) | 93.00% | |
Weighted Average Interest Rate (as percent) | 4.10% | |
Weighted Average Maturity (Years) | 5 years 3 months 18 days | |
Variable rate debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 104,406 | |
Ratio (as percent) | 7.00% | |
Weighted Average Interest Rate (as percent) | 3.55% | |
Weighted Average Maturity (Years) | 3 years 8 months 24 days | |
Floating Rate Debt Hedged | Variable rate debt | ||
Debt Instrument [Line Items] | ||
Total | $ 378,500 | |
Weighted Average Maturity (Years) | 2 years 9 months 18 days |
Shareholders' Equity (Details) |
3 Months Ended |
---|---|
Jun. 30, 2018
$ / shares
| |
Stockholders' Equity Note [Abstract] | |
Common dividends, cash paid (USD per share) | $ 0.3175 |
Deferred Costs and Intangibles, net - Deferred Costs (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Deferred Costs [Abstract] | ||
Acquired lease intangible assets | $ 90,105 | $ 107,668 |
Deferred leasing costs and other | 68,491 | 68,335 |
Deferred costs and intangibles, gross | 158,596 | 176,003 |
Less—accumulated amortization | (57,787) | (63,644) |
Total | $ 100,809 | $ 112,359 |
Deferred Costs and Intangibles, net - Amortization Expense (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
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Deferred Costs [Abstract] | ||
Amortization of deferred leasing costs, lease intangibles and other | $ 10,290 | $ 12,113 |
Amortization of above market lease intangibles | $ 1,457 | $ 2,199 |
Deferred Revenue, Intangibles, Net and Other Liabilities (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
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Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue | $ 87,338 | $ 96,564 | |
Amortization of below market lease intangibles | 6,100 | $ 4,000 | |
Unamortized below market lease liabilities | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue | 73,653 | 83,117 | |
Retainage payables and other | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue | 4,051 | 3,954 | |
Tenant rent payments received in advance | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue | $ 9,634 | $ 9,493 |
Commitments and Contingencies - Additional Information (Details) |
Jun. 30, 2018
USD ($)
|
---|---|
Guarantor Obligations [Line Items] | |
Letters of credit outstanding, amount | $ 4,100,000 |
Amount advanced | 0 |
Construction Loan | Repayment Guarantee | |
Guarantor Obligations [Line Items] | |
Amount of exposure from obligation | 11,800,000 |
Amount of obligation remaining | 7,800,000 |
Co-venturer | |
Guarantor Obligations [Line Items] | |
Outstanding balance of construction loan | 22,200,000 |
Co-venturer | Construction Loan | |
Guarantor Obligations [Line Items] | |
Amount of debt issued | $ 33,800,000.0 |
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