x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Maryland | 34-2019608 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
2809 Butterfield Road, Suite 360, Oak Brook, Illinois | 60523 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer ¨ | Accelerated filer ¨ | |
Non-accelerated filer x | Smaller reporting company ¨ | |
(Do not check if a smaller reporting company) | Emerging growth company ¨ |
Part I - Financial Information | Page | |
Item 1. | Financial Statements (unaudited) | |
Consolidated Balance Sheets at March 31, 2017 and December 31, 2016 | ||
Consolidated Statements of Operations and Comprehensive (Loss) Income for the three months ended March 31, 2017 and 2016 | ||
Consolidated Statements of Changes in Equity for the three months ended March 31, 2017 and 2016 | ||
Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 | ||
Notes to Consolidated Financial Statements | ||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosures 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 |
As of | |||||||
March 31, 2017 | December 31, 2016 | ||||||
(unaudited) | |||||||
Assets | |||||||
Investment properties | |||||||
Land | $ | 637,312 | $ | 572,260 | |||
Building and other improvements | 1,772,935 | 1,650,560 | |||||
Construction in progress | 3,139 | 1,316 | |||||
Total | 2,413,386 | 2,224,136 | |||||
Less accumulated depreciation | (341,521 | ) | (353,989 | ) | |||
Net investment properties | 2,071,865 | 1,870,147 | |||||
Cash and cash equivalents | 243,243 | 397,250 | |||||
Restricted cash | 25,652 | 18,325 | |||||
Investment in marketable securities | 110,629 | 183,883 | |||||
Investment in unconsolidated entities | 180,437 | 178,728 | |||||
Intangible assets, net | 92,018 | 72,258 | |||||
Accounts and rents receivable (net of allowance of $942 and $1,032) | 25,789 | 30,480 | |||||
Deferred costs and other assets | 42,006 | 35,308 | |||||
Assets of discontinued operations | — | 375 | |||||
Total assets | $ | 2,791,639 | $ | 2,786,754 | |||
Liabilities | |||||||
Debt, net | $ | 772,532 | $ | 730,605 | |||
Accounts payable and accrued expenses | 26,945 | 38,251 | |||||
Distributions payable | 13,436 | 13,041 | |||||
Intangible liabilities, net | 50,057 | 43,939 | |||||
Other liabilities | 22,775 | 11,265 | |||||
Liabilities of discontinued operations | — | 125 | |||||
Total liabilities | 885,745 | 837,226 | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Preferred stock, $.001 par value, 40,000,000 shares authorized, none outstanding | — | — | |||||
Common stock, $.001 par value, 1,460,000,000 shares authorized, 773,318,492 shares issued and outstanding at March 31, 2017 and 773,304,997 shares issued and outstanding at December 31, 2016, respectively | 773 | 773 | |||||
Additional paid in capital | 5,678,949 | 5,676,639 | |||||
Distributions in excess of accumulated net income | (3,798,283 | ) | (3,786,943 | ) | |||
Accumulated comprehensive income | 24,455 | 59,059 | |||||
Total stockholders' equity | 1,905,894 | 1,949,528 | |||||
Total liabilities and stockholders' equity | $ | 2,791,639 | $ | 2,786,754 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Income | |||||||
Rental income | $ | 48,646 | $ | 47,772 | |||
Tenant recovery income | 13,888 | 13,030 | |||||
Other property income | 466 | 1,502 | |||||
Other fee income | 1,092 | 1,004 | |||||
Total income | 64,092 | 63,308 | |||||
Expenses | |||||||
General and administrative expenses | 12,339 | 13,381 | |||||
Property operating expenses | 7,847 | 8,027 | |||||
Real estate taxes | 8,332 | 9,544 | |||||
Depreciation and amortization | 23,446 | 20,749 | |||||
Provision for asset impairment | 16,440 | 8,390 | |||||
Total expenses | 68,404 | 60,091 | |||||
Operating (loss) income | (4,312 | ) | 3,217 | ||||
Interest and dividend income | 2,170 | 2,703 | |||||
Gain on sale of investment properties | 1,021 | 24,026 | |||||
Loss on extinguishment of debt | — | (948 | ) | ||||
Other (expense) income | (3,202 | ) | 175 | ||||
Interest expense | (8,254 | ) | (14,727 | ) | |||
Equity in earnings of unconsolidated entities | 572 | 1,295 | |||||
Marketable securities realized gain | 14,530 | 555 | |||||
Income from continuing operations before income taxes | 2,525 | 16,296 | |||||
Income tax expense | (282 | ) | (258 | ) | |||
Net income from continuing operations | 2,243 | 16,038 | |||||
Net (loss) income from discontinued operations | (147 | ) | 9,370 | ||||
Net income | $ | 2,096 | $ | 25,408 | |||
Weighted average number of common shares outstanding, basic and diluted | 773,316,262 | 862,205,672 | |||||
Net income per common share, from continuing operations, basic and diluted | $ | 0.00 | $ | 0.02 | |||
Net income per common share, from discontinued operations, basic and diluted | 0.00 | 0.01 | |||||
Net income per common share, basic and diluted | $ | 0.00 | $ | 0.03 | |||
Distributions declared per common share outstanding | $ | 0.02 | $ | 0.03 | |||
Distributions paid per common share outstanding | $ | 0.02 | $ | 0.03 | |||
Comprehensive (loss) income | |||||||
Net income | $ | 2,096 | $ | 25,408 | |||
Unrealized (loss) gain on investment securities | (20,571 | ) | 5,212 | ||||
Unrealized gain (loss) on derivatives | 497 | (4,323 | ) | ||||
Reclassification for amounts recognized in net income | (14,530 | ) | — | ||||
Comprehensive (loss) income | $ | (32,508 | ) | $ | 26,297 |
Number of Shares | Common Stock | Additional Paid-in Capital | Distributions in excess of accumulated net income | Accumulated Other Comprehensive Income | Total | |||||||||||||||||
Balance at January 1, 2017 | 773,304,997 | $ | 773 | $ | 5,676,639 | $ | (3,786,943 | ) | $ | 59,059 | $ | 1,949,528 | ||||||||||
Net income | — | — | — | 2,096 | — | 2,096 | ||||||||||||||||
Unrealized loss on investment securities | — | — | — | — | (20,571 | ) | (20,571 | ) | ||||||||||||||
Unrealized gain on derivatives | — | — | — | — | 497 | 497 | ||||||||||||||||
Reclassification for amounts recognized in net income | — | — | — | — | (14,530 | ) | (14,530 | ) | ||||||||||||||
Distributions declared | — | — | — | (13,436 | ) | — | (13,436 | ) | ||||||||||||||
Stock-based compensation | 13,495 | — | 2,310 | — | — | 2,310 | ||||||||||||||||
Balance at March 31, 2017 | 773,318,492 | $ | 773 | $ | 5,678,949 | $ | (3,798,283 | ) | $ | 24,455 | $ | 1,905,894 |
Number of Shares | Common Stock | Additional Paid-in Capital | Distributions in excess of accumulated net income | Accumulated Other Comprehensive Income | Total | |||||||||||||||||
Balance at January 1, 2016 | 862,205,672 | $ | 862 | $ | 6,066,583 | $ | (3,956,032 | ) | $ | 37,290 | $ | 2,148,703 | ||||||||||
Net income | — | — | — | 25,408 | — | 25,408 | ||||||||||||||||
Unrealized gain on investment securities | — | — | — | — | 5,212 | 5,212 | ||||||||||||||||
Unrealized loss on derivatives | — | — | — | — | (4,323 | ) | (4,323 | ) | ||||||||||||||
Distributions declared | — | — | — | (28,023 | ) | — | (28,023 | ) | ||||||||||||||
Stock-based compensation | — | — | 263 | — | — | 263 | ||||||||||||||||
Balance at March 31, 2016 | 862,205,672 | $ | 862 | $ | 6,066,846 | $ | (3,958,647 | ) | $ | 38,179 | $ | 2,147,240 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities | |||||||
Net income | $ | 2,096 | $ | 25,408 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 23,477 | 38,775 | |||||
Amortization of above and below market leases, net | (1,641 | ) | (553 | ) | |||
Amortization of debt premiums, discounts and financing costs | 380 | 1,931 | |||||
Straight-line rental income | (342 | ) | 768 | ||||
Provision for asset impairment | 16,440 | 8,390 | |||||
Gain on sale of investment properties, net | (1,021 | ) | (24,026 | ) | |||
Loss on extinguishment of debt | — | 948 | |||||
Equity in earnings of unconsolidated entities | (572 | ) | (1,276 | ) | |||
Distributions from unconsolidated entities | 351 | 729 | |||||
Gain on sale of investment in unconsolidated entities | — | (1,434 | ) | ||||
Marketable securities realized gain | (14,530 | ) | (555 | ) | |||
Non-cash stock-based compensation | 995 | 422 | |||||
Prepayment penalties and defeasance costs | — | (823 | ) | ||||
Changes in assets and liabilities: | |||||||
Accounts and rents receivable | 5,828 | 3,221 | |||||
Deferred costs and other assets | (4,650 | ) | (466 | ) | |||
Accounts payable and accrued expenses | (12,096 | ) | (13,988 | ) | |||
Other assets (liabilities) | 11,776 | (1,330 | ) | ||||
Net cash provided by operating activities | $ | 26,491 | $ | 36,141 | |||
Cash flows from investing activities | |||||||
Purchase of investment properties | (230,623 | ) | — | ||||
Acquired in-place and market lease intangibles, net | (17,651 | ) | — | ||||
Capital expenditures and tenant improvements | (2,774 | ) | (1,091 | ) | |||
Investment in development projects | — | (29,003 | ) | ||||
Proceeds from sale of investment properties, net | 28,474 | 107,587 | |||||
Proceeds from sale of marketable securities | 57,927 | 1,506 | |||||
Proceeds from the sale of and return of capital from unconsolidated entities | — | 5,480 | |||||
Contributions to unconsolidated entities | (1,819 | ) | (1,350 | ) | |||
Distributions from unconsolidated entities | 331 | 2,562 | |||||
Payment of leasing fees | (1,153 | ) | (595 | ) | |||
Restricted cash and other assets | 9,111 | (808 | ) | ||||
Other assets | (10,375 | ) | (10,481 | ) | |||
Net cash (used in) provided by investing activities | $ | (168,552 | ) | $ | 73,807 | ||
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from financing activities | |||||||
Distributions paid | $ | (13,041 | ) | $ | (28,013 | ) | |
Funds returned from tender offer | 1,700 | — | |||||
Proceeds from debt | — | 215,960 | |||||
Payoffs of debt | — | (58,315 | ) | ||||
Principal payments of mortgage debt | (317 | ) | (7,193 | ) | |||
Payment of loan fees and deposits | (288 | ) | (20 | ) | |||
Net cash (used in) provided by financing activities | $ | (11,946 | ) | $ | 122,419 | ||
Net (decrease) increase in cash and cash equivalents | (154,007 | ) | 232,367 | ||||
Cash and cash equivalents, at beginning of period | 397,250 | 203,285 | |||||
Cash and cash equivalents, at end of period | $ | 243,243 | $ | 435,652 | |||
Supplemental disclosure of cash flow information | |||||||
Cash paid for interest, net of capitalized interest of $0 and $623 | $ | 7,896 | $ | 22,407 | |||
Supplemental schedule of non-cash investing and financing activities | |||||||
Assumption of mortgage debt upon acquisition of investment property | $ | 41,717 | $ | — | |||
Assumption of lender held escrows | 586 | — |
• | the classification of fees earned from providing property management, asset management, leasing commissions and other services to our joint venture partnerships from other income to other fee income for the three months ended March 31, 2016 of $1,004; and |
• | the classification of depreciation and amortization incurred on corporate level assets from general and administrative expenses to depreciation and amortization for the three months ended March 31, 2016 of $234, of which $32 was included as part of net income from discontinued operations. |
Asset | Location | Acquisition Date | Gross Acquisition Price | Square Feet | ||||||
Campus Marketplace | San Marcos, CA | 1/6/2017 | $ | 73,350 | 144,000 | |||||
Paraiso Parc and Westfork Plaza | Pembroke Pines, FL | 2/1/2017 | 163,000 | 369,000 | ||||||
The Shops at Town Center | Germantown, MD | 2/21/2017 | 53,550 | 125,000 | ||||||
$ | 289,900 | 638,000 |
2017 Acquisitions | |||
Land | $ | 75,194 | |
Building and other improvements | 181,389 | ||
Total investment properties | 256,583 | ||
Intangible assets (a) | 25,193 | ||
Intangible liabilities (b) | (8,516 | ) | |
Net other assets and liabilities | 16,640 | ||
Total fair value of assets acquired and liabilities assumed | $ | 289,900 |
(a) | Intangible assets include in-place leases, above market leases, tenant improvement allowance and leasing commissions. |
(b) | Intangible liabilities include below market leases. |
Carrying Value of Investment at | ||||||||||||
Entity | Description | Ownership % | March 31, 2017 | December 31, 2016 | ||||||||
IAGM Retail Fund I, LLC | Multi-tenant retail shopping centers | 55% | $ | 126,028 | $ | 126,090 | ||||||
Downtown Railyard Venture, LLC | Land development | (a) | 54,148 | 52,365 | ||||||||
Other unconsolidated entities | Various real estate investments | Various | 261 | 273 | ||||||||
$ | 180,437 | $ | 178,728 |
(a) | The Company's ownership percentage in Downtown Railyard Venture, LLC ("DRV") is based upon a waterfall calculation outlined in the operating agreement. |
As of | |||||||
March 31, 2017 | December 31, 2016 | ||||||
Assets: | |||||||
Real estate assets, net of accumulated depreciation | $ | 628,013 | $ | 628,667 | |||
Other assets | 66,145 | 71,288 | |||||
Total assets | $ | 694,158 | $ | 699,955 | |||
Liabilities and equity: | |||||||
Mortgage debt | 311,427 | 311,378 | |||||
Other liabilities | 57,980 | 65,225 | |||||
Equity | 324,751 | 323,352 | |||||
Total liabilities and equity | $ | 694,158 | $ | 699,955 | |||
Company's share of equity | $ | 193,684 | $ | 192,124 | |||
Net excess of the net book value of underlying assets over the cost of investments (net of accumulated amortization of $2,378 and $2,229, respectively) | (13,247 | ) | (13,396 | ) | |||
Carrying value of investments in unconsolidated entities | $ | 180,437 | $ | 178,728 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues | $ | 16,820 | $ | 17,288 | |||
Expenses: | |||||||
Interest expense and loan cost amortization | 3,251 | 3,318 | |||||
Depreciation and amortization | 6,192 | 6,315 | |||||
Operating expenses, ground rent and general and administrative expenses | 6,284 | 6,163 | |||||
Total expenses | 15,727 | 15,796 | |||||
Net income | $ | 1,093 | $ | 1,492 | |||
Company's share of net (loss) income, net of excess basis depreciation of $130 and $130, respectively | $ | 572 | $ | 1,019 | |||
Distributions from unconsolidated entities in excess of the investments' carrying value | — | 276 | |||||
Equity in earnings of unconsolidated entities | $ | 572 | $ | 1,295 |
Maturities during the year ended December 31, | Amount | |||
2017 | $ | — | ||
2018 | 203,881 | |||
2019 | 16,247 | |||
2020 | — | |||
2021 | 22,962 | |||
Thereafter | 68,337 | |||
$ | 311,427 |
March 31, 2017 | December 31, 2016 | ||||||
Mortgages payable (a) | $ | 475,979 | $ | 434,746 | |||
Premium, net of accumulated amortization | 657 | — | |||||
Discount, net of accumulated amortization | (223 | ) | (317 | ) | |||
Debt issuance costs, net of accumulated amortization | (3,846 | ) | (3,789 | ) | |||
Total mortgages payable, net | $ | 472,567 | $ | 430,640 |
(a) | Mortgages payable had fixed interest rates ranging from 3.49% to 11.24%, with a weighted average interest rate of 5.17%, as of March 31, 2017 and 3.49% to 11.24%, with a weighted average interest rate of 4.85%, as of December 31, 2016. |
Maturities during the year ended December 31, | |||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||
Mortgages payable | $ | 138,690 | $ | 59,575 | $ | — | $ | 41,000 | $ | 13,020 | $ | 223,694 | $ | 475,979 |
March 31, 2017 | December 31, 2016 | ||||||||||||
Aggregate Principal Balance | Interest Rate | Aggregate Principal Balance | Interest Rate | Maturity Date | |||||||||
Unsecured term loan credit facility, 5 year - swapped to fixed rate (a) | $ | 90,000 | 1.3510% | $ | 90,000 | 1.3510% | 1/15/2021 | ||||||
Unsecured term loan credit facility, 5 year - swapped to fixed rate (b) | $ | 60,000 | 1.3525% | $ | 60,000 | 1.3525% | 1/15/2021 | ||||||
Unsecured term loan credit facility, 5 year - variable rate (c) | 50,000 | 2.2828% | 50,000 | 1.9167% | 1/15/2021 | ||||||||
Unsecured term loan credit facility, 7 year - variable rate (d) | 100,000 | 2.5828% | 100,000 | 2.2167% | 11/5/2022 | ||||||||
Total unsecured term loans | 300,000 | 300,000 | |||||||||||
Debt issuance costs, net of accumulated amortization | (35 | ) | (35 | ) | |||||||||
Total, unsecured term loan credit facilities, net | $ | 299,965 | $ | 299,965 |
(a) | The Company swapped $90,000 of variable rate debt at an interest rate of 1-Month LIBOR plus 1.3% to a fixed rate of 1.3510%. As of March 31, 2017, the swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $90,000. |
(b) | The Company swapped $60,000 of variable rate debt at an interest rate of 1-Month LIBOR plus 1.3% to a fixed rate of 1.3525%. As of March 31, 2017, the swap has an effective date of December 10, 2015, a termination date of December 1, 2019, and a notional amount of $60,000. |
(c) | Interest rate reflects 1-Month LIBOR plus 1.3% as of March 31, 2017 and December 31, 2016. |
(d) | Interest rate reflects 1-Month LIBOR plus 1.6% as of March 31, 2017 and December 31, 2016. |
• | Level 1 – Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. |
• | Level 2 – Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
• | Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
Fair Value Measurements at March 31, 2017 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets | ||||||||||||
Available-for-sale marketable securities | $ | 110,057 | $ | — | $ | — | ||||||
Real estate related bonds | — | 572 | — | |||||||||
Derivative interest rate instruments | — | 983 | — | |||||||||
Total assets | $ | 110,057 | $ | 1,555 | $ | — |
Fair Value Measurements at December 31, 2016 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets | ||||||||||||
Available-for-sale marketable securities | $ | 182,569 | $ | — | $ | — | ||||||
Real estate related bonds | — | 1,314 | — | |||||||||
Derivative interest rate instruments | — | 487 | — | |||||||||
Total assets | $ | 182,569 | $ | 1,801 | $ | — |
For the three months ended | |||||||||||||||
March 31, 2017 | March 31, 2016 | ||||||||||||||
Level 3 | Total Impairment Losses | Level 3 | Total Impairment Losses | ||||||||||||
Investment properties | $ | 36,676 | $ | 16,440 | $ | 39,150 | $ | 8,390 |
March 31, 2017 | December 31, 2016 | ||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||
Mortgages payable | $ | 475,979 | $ | 478,773 | $ | 434,746 | $ | 435,513 | |||||
Line of credit and term loan | $ | 300,000 | $ | 299,749 | $ | 300,000 | $ | 299,741 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Net income from continuing operations | $ | 2,243 | $ | 16,038 | |||
Net (loss) income from discontinued operations | (147 | ) | 9,370 | ||||
Net income | $ | 2,096 | $ | 25,408 | |||
Weighted average shares outstanding, basic and diluted | 773,316,262 | 862,205,672 | |||||
Income from continuing operations allocated to common shareholders per share | $ | 0.00 | $ | 0.02 | |||
Income from discontinued operations allocated to common shareholders per share | $ | 0.00 | $ | 0.01 | |||
Net income per common share, basic and diluted | $ | 0.00 | $ | 0.03 |
Restricted Stock Units | Share Price at Grant Date | |||
Outstanding at December 31, 2016 | 1,646,523 | (a) | ||
Restricted stock units granted | 35,829 | $3.14 | ||
Restricted stock units vested, granted in 2015 | (5,473 | ) | 4.00 | |
Restricted stock units vested, granted in 2016 | (6,167 | ) | 3.14 | |
Restricted stock units vested, granted in 2017 | (11,824 | ) | 3.14 | |
Restricted stock units forfeited, granted in 2015 | (8,547 | ) | 4.00 | |
Restricted stock units forfeited, granted in 2016 | (35,046 | ) | 3.14 | |
Outstanding at March 31, 2017 | 1,615,295 | (a) |
(a) | The weighted average grant date price per share of common stock underlying the unvested restricted stock units based on total outstanding restricted stock units as of March 31, 2017 and December 31, 2016 was $3.29. |
• | Funds From Operations ("FFO"), a supplemental non-GAAP measure to net income determined in accordance with GAAP; |
• | Property net operating income ("NOI"), which excludes interest expense, depreciation and amortization, general and administrative expenses, net income of noncontrolling interest, and other investment income from corporate investments; |
• | Modified NOI, which reflects the income from operations excluding lease termination income and GAAP rent adjustments (such as straight-line rent and above/below market lease amortization); |
• | Cash flow from operations as determined in accordance with GAAP; |
• | Economic and physical occupancy and rental rates; |
• | Leasing activity and lease rollover; |
• | Management of operating expenses; |
• | Management of general and administrative expenses; |
• | Debt maturities and leverage ratios; and |
• | Liquidity levels. |
• | Acquisition of three multi-tenant retail assets for an aggregate gross acquisition price of approximately $289.9 million (see Note 3. Acquired Properties, in the consolidated financial statements for details); and |
• | Disposition of one multi-tenant retail asset for a gross disposition price of approximately $29.1 million (see Note 4. Disposed Properties, in the consolidated financial statements for details). |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Net income from continuing operations | $ | 2,243 | $ | 16,038 | |||
Net (loss) income from discontinued operations | (147 | ) | 9,370 | ||||
Net income | 2,096 | 25,408 | |||||
Net income per common share, from continuing operations, basic and diluted | — | 0.02 | |||||
Net income per common share, from discontinued operations, basic and diluted | — | 0.01 |
Three months ended March 31, | Increase (Decrease) | ||||||||||
2017 | 2016 | ||||||||||
Operating income: | |||||||||||
Rental income | $ | 48,646 | $ | 47,772 | $ | 874 | |||||
Tenant recovery income | 13,888 | 13,030 | 858 | ||||||||
Other property income | 466 | 1,502 | (1,036 | ) | |||||||
Other fee income | 1,092 | 1,004 | 88 | ||||||||
Operating expenses: | |||||||||||
Property operating expenses | $ | 7,847 | $ | 8,027 | $ | (180 | ) | ||||
Real estate taxes | 8,332 | 9,544 | (1,212 | ) | |||||||
Depreciation and amortization | 23,446 | 20,749 | 2,697 | ||||||||
Provision for asset impairment | 16,440 | 8,390 | 8,050 | ||||||||
General and administrative expenses | 12,339 | 13,381 | (1,042 | ) |
• | Total operating income increased $0.8 million when comparing the three months ended March 31, 2017 to the same period in 2016 as a result of an increase in rental and tenant recovery income of approximately $13.4 million from 11 assets acquired since March 31, 2016 and was offset by a decrease in rental and tenant recovery income of approximately $12.7 million from the disposal of 24 assets that did not qualify as discontinued operations since March 31, 2016, as well as a reduction of termination fee income of $0.6 million within other property income. |
• | Property operating expenses and depreciation and amortization increased $2.5 million when comparing the three months ended March 31, 2017 to the same period in 2016 as a result of an increase in property operating expenses of approximately $1.7 million and an increase in depreciation and amortization of $7.1 million from 11 assets acquired since March 31, 2016 and was offset by a decrease in property operating expenses of approximately $2.1 million and a decrease in depreciation and amortization expense of approximately $3.9 million from the disposal of 24 assets that did not qualify as discontinued operations since March 31, 2016. |
• | Real estate tax expense decreased $1.2 million when comparing the three months ended March 31, 2017 to the same period in 2016 primarily as a result of real estate taxes on one asset. |
Three months ended March 31, | Increase (Decrease) | ||||||||||
2017 | 2016 | ||||||||||
Property management fee | $ | 741 | $ | 736 | $ | 5 | |||||
Asset management fee | 303 | 303 | — | ||||||||
Leasing commissions and other fees | 48 | (35 | ) | 83 | |||||||
Other fee income | $ | 1,092 | $ | 1,004 | $ | 88 |
• | During the three months ended March 31, 2017, we identified certain assets which may have a reduction in the expected holding period and reviewed the probability of these assets' disposition. Our estimated fair value relating to the investment assets' impairment analysis was based on broker opinions of value and letters of intent. For the three months ended March 31, 2017, we recorded a provision for asset impairment of $16.4 million in continuing operations on three multi-tenant retail assets. |
• | During the three months ended March 31, 2016, we identified certain assets which may have a reduction in the expected holding period and reviewed the probability of these properties' disposition. Our estimated fair value relating to the investment assets' impairment analysis was based on purchase contracts. For the three months ended March 31, 2016, we recorded a provision for asset impairment of $8.4 million in continuing operations on two multi-tenant retail assets. |
• | General and administrative expenses decreased $1.0 million when comparing the three months ended March 31, 2017 to the same period in 2016 as a result of being a less diversified company resulting in a smaller operating platform. |
Three months ended March 31, | Increase (Decrease) | ||||||||||
2017 | 2016 | ||||||||||
Interest and dividend income | $ | 2,170 | $ | 2,703 | $ | (533 | ) | ||||
Gain on sale of investment properties | 1,021 | 24,026 | (23,005 | ) | |||||||
Loss on extinguishment of debt | — | (948 | ) | 948 | |||||||
Other (expense) income | (3,202 | ) | 175 | (3,377 | ) | ||||||
Interest expense | (8,254 | ) | (14,727 | ) | (6,473 | ) | |||||
Equity in earnings of unconsolidated entities | 572 | 1,295 | (723 | ) | |||||||
Marketable securities realized gain | 14,530 | 555 | 13,975 | ||||||||
Net (loss) income from discontinued operations | (147 | ) | 9,370 | (9,517 | ) |
• | During the three months ended March 31, 2017, we sold one multi-tenant retail asset and recognized a gain on the sale of this asset of $1.0 million as part of continuing operations. |
• | During the three months ended March 31, 2016, we sold five multi-tenant retail assets and recognized a gain on the sale of these assets of $24.0 million as part of continuing operations. |
• | We have accrued for a potential loss contingency of $3.0 million as of March 31, 2017 on the consolidated balance sheet and the consolidated statement of operations and comprehensive (loss) income for the three months ended March 31, 2017 as a result of punitive damages levied against the Company in a personal injury lawsuit. See "Note 12. Commitments and Contingencies" to our consolidated financial statements for additional information. |
• | During the three months ended March 31, 2017, we recognized interest expense of $8.3 million compared to $14.7 million during the same period in 2016. This decrease of $6.5 million is primarily a result of the payoff of debt since March 31, 2016 of approximately $745.6 million, offset by new borrowings of approximately $277.8 million since March 31, 2016, with an overall net decrease in debt of $464.2 million, from $1,236.7 million at March 31, 2016 to $772.5 million at March 31, 2017. |
• | During the three months ended March 31, 2017, we recognized equity in earnings of unconsolidated entities of $0.6 million for the three months ended March 31, 2017 compared to $1.3 million for the three months ended March 31, 2016. This decrease of $0.7 million was primarily the result of distributions received from one unconsolidated entity of $0.3 million during the three months ended March 31, 2017, compared to $0.7 million received during the three months ended March 31, 2016. |
• | During the three months ended March 31, 2017, we realized a gain on sale of marketable securities, net, of $14.5 million compared to $0.6 million for the three months ended March 31, 2016, an increase of $14.0 million. The larger gain realized during the three months ended March 31, 2017 is the result of increased sales of our marketable securities since March 31, 2016. |
• | Community or neighborhood centers, which are generally open air and designed for tenants that offer a wide array of types of merchandise including groceries, apparel and other soft goods. Typically, community centers contain large anchor stores and a significant presence of national retail tenants. Our neighborhood shopping centers are generally smaller open air centers with a grocery store anchor and/or drugstore, and other small service type retailers. |
• | Power centers are generally larger and consist of several anchors, such as discount department stores, off-price stores, specialty grocers, warehouse clubs or stores that offer a large selection of merchandise. Typically, the number of specialty tenants is limited and most are national or regional in scope. |
Multi-tenant Retail Platform March 31, | Wholly-owned Retail Assets March 31, | IAGM Retail Assets (a) March 31, | |||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||
No. of assets | 88 | 77 | 73 | 62 | 15 | 15 | |||||
GLA (square feet) | 15,694,867 | 13,551,815 | 12,717,360 | 10,574,141 | 2,977,507 | 2,977,674 | |||||
Economic occupancy (b) | 93.4% | 93.4% | 93.3% | 93.0% | 94.1% | 94.7% | |||||
ABR per square foot (c) | $15.84 | $14.86 | $15.65 | $14.49 | $16.66 | $16.15 |
(a) | Of the 15 assets owned through an interest in IAGM, one asset is under re-development and has been classified as unstabilized. This asset has been removed from the results shown for GLA, economic occupancy, and ABR per square foot. The asset is included in the property counts at March 31, 2017 and 2016. |
(b) | Economic occupancy is defined as the percentage of total GLA for which a tenant is obligated to pay rent under the terms of its lease agreement, regardless of the actual use or occupancy by that tenant of the area being leased. Actual use may be less than economic square footage. Prior year economic occupancy excludes assets sold. |
(c) | ABR is computed as revenue for the last month of the period multiplied by twelve months. ABR includes the effect of rent abatements, lease inducements, straight-line rent GAAP adjustments and ground rent income. ABR per square foot is computed as ABR divided by the total occupied square footage at the end of the period. Specialty leasing represents leases of less than one year in duration for inline space |
Power Centers | |||||||||||
Multi-tenant Retail Platform March 31, | Wholly-owned Retail Assets March 31, | IAGM Retail Assets March 31, | |||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||
No. of assets | 41 | 38 | 33 | 30 | 8 | 8 | |||||
GLA (square feet) | 10,606,692 | 9,332,811 | 8,896,781 | 7,622,860 | 1,709,911 | 1,709,951 | |||||
Economic occupancy | 93.5% | 93.7% | 93.4% | 93.7% | 93.5% | 93.9% | |||||
ABR per square foot | $15.19 | $14.40 | $15.18 | $14.38 | $15.24 | $14.53 |
Community and Neighborhood Centers | |||||||||||
Multi-tenant Retail Platform March 31, | Wholly-owned Retail Assets March 31, | IAGM Retail Assets March 31, | |||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||
No. of assets | 47 | 39 | 40 | 32 | 7 | 7 | |||||
GLA (square feet) | 5,088,175 | 4,219,004 | 3,820,579 | 2,951,281 | 1,267,596 | 1,267,723 | |||||
Economic occupancy | 93.4% | 92.7% | 93.0% | 91.3% | 94.8% | 95.9% | |||||
ABR per square foot | $17.20 | $15.88 | $16.76 | $14.80 | $18.52 | $18.28 |
Lease Expiration Year | No. of Expiring Leases | GLA of Expiring Leases (square feet) | ABR of Expiring Leases | Percent of Total GLA | Percent of Total ABR | Expiring ABR per sq. ft. | ||||||
2017 | 169 | 582,316 | $12,188 | 4.0% | 5.3% | $20.93 | ||||||
2018 | 303 | 1,604,041 | 27,462 | 11.0% | 11.9% | 17.12 | ||||||
2019 | 320 | 2,183,704 | 33,325 | 14.9% | 14.4% | 15.26 | ||||||
2020 | 290 | 1,508,371 | 26,566 | 10.3% | 11.5% | 17.61 | ||||||
2021 | 278 | 1,831,732 | 30,214 | 12.5% | 13.1% | 16.49 | ||||||
2022 | 240 | 2,004,846 | 32,043 | 13.7% | 13.9% | 15.98 | ||||||
2023 | 69 | 864,206 | 12,430 | 5.9% | 5.4% | 14.38 | ||||||
2024 | 77 | 1,024,126 | 13,690 | 7.0% | 5.9% | 13.37 | ||||||
2025 | 74 | 850,417 | 12,311 | 5.8% | 5.3% | 14.48 | ||||||
2026 | 72 | 407,268 | 7,641 | 2.8% | 3.3% | 18.76 | ||||||
Month to Month | 45 | 123,968 | 2,464 | 0.8% | 1.1% | 19.88 | ||||||
Thereafter | 90 | 1,521,882 | 20,161 | 10.4% | 8.7% | 13.25 | ||||||
Specialty Leasing (a) | 180 | 129,555 | 393 | 0.9% | 0.2% | 3.03 | ||||||
2,207 | 14,636,432 | $230,888 | 100.0% | 100.0% | $15.77 |
(a) | Specialty leasing represents leases of less than one year in duration for inline space and includes any term length for a common area space. Examples include retail holiday stores, storage, and short-term clothing and furniture consignment stores. Specialty leasing includes, but is not limited to, any term length for a common area space, including but not limited to: tent sales, automated teller machines, cell towers, billboards, and vending. |
No. of Leases Commenced as of March 31, 2017 | GLA SF | New Contractual Rent ($PSF) (b) | Prior Contractual Rent ($PSF) (b) | % Change over Prior Contract Rent (b) | Weighted Average Lease Term (Years) | Tenant Improvement Allowance ($PSF) | Lease Commissions ($PSF) | |
All tenants | ||||||||
Comparable Renewal Leases (a) | 96 | 867,685 | $15.41 | $14.87 | 3.6% | 4.97 | $0.21 | $0.04 |
Comparable New Leases (a) | 9 | 15,154 | 25.72 | 25.59 | 0.5% | 7.25 | 7.16 | 4.62 |
Non-Comparable Renewal and New Leases | 15 | 88,532 | 13.26 | N/A | N/A | 5.31 | 25.18 | 6.11 |
Total | 120 | 971,371 | $15.59 | $15.05 | 3.6% | 5.04 | $2.59 | $0.66 |
Anchor Tenants (leases over 10,000 square feet) | ||||||||
Comparable Renewal Leases (a) | 23 | 644,811 | $12.44 | $12.16 | 2.3% | 4.94 | $— | $— |
Non-Comparable Renewal and New Leases | 4 | 59,324 | $6.88 | N/A | N/A | 4.35 | $26.51 | $6.11 |
Total | 27 | 704,135 | $12.44 | $12.16 | 2.3% | 4.89 | $2.23 | $0.51 |
Non-anchor tenants (leases under 10,000 square feet) | ||||||||
Comparable Renewal Leases (a) | 73 | 222,874 | $23.99 | $22.69 | 5.7% | 5.08 | $0.80 | $0.16 |
Comparable New Leases (a) | 9 | 15,154 | $25.72 | $25.59 | 0.5% | 7.25 | $7.16 | $4.62 |
Non-Comparable Renewal and New Leases | 11 | 29,208 | $26.24 | N/A | N/A | 7.25 | $22.46 | $6.13 |
Total | 93 | 267,236 | $24.10 | $22.87 | 5.4% | 5.44 | $3.53 | $1.06 |
(a) | Comparable lease is defined as a lease that meets all of the following criteria: same unit, square footage of unit remains unchanged or within 10% of prior unit square footage, consistent rent structure, and, for new leases, leased within one year of the prior tenant. |
(b) | Non-comparable leases are not included in totals. |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 2,096 | $ | 25,408 | |||
Net loss (income) from discontinued operations | 147 | (9,370 | ) | ||||
Net income from continuing operations | 2,243 | 16,038 | |||||
Other fee income | (1,092 | ) | (1,004 | ) | |||
Provision for asset impairment | 16,440 | 8,390 | |||||
Equity in earnings of unconsolidated entities | (572 | ) | (1,295 | ) | |||
Other income and expenses (a) | (5,983 | ) | (11,526 | ) | |||
Non-allocated expenses (b) | 35,785 | 34,130 | |||||
Net operating income | 46,821 | 44,733 | |||||
Adjustments to modified net operating income | |||||||
GAAP rental adjustments | (1,852 | ) | (493 | ) | |||
Termination fee income | (6 | ) | (860 | ) | |||
Total modified net operating income | $ | 44,963 | $ | 43,380 |
(a) | Other income and expenses consist of interest and dividend income, gain on sale of investment properties, loss on extinguishment of debt, other (expense) income, interest expense, marketable securities realized gain and income tax expense. |
(b) | Non-allocated expenses consist of general and administrative expenses and depreciation and amortization. |
Three months ended March 31, | Increase (Decrease) | Variance | |||||||||||
2017 | 2016 | ||||||||||||
No. of same store properties | 62 | 62 | |||||||||||
Operating income | |||||||||||||
Rental income | $ | 36,204 | $ | 35,649 | $ | 555 | 1.6% | ||||||
Tenant recovery income | 10,452 | 11,025 | (573 | ) | (5.2)% | ||||||||
Other property income | 386 | 424 | (38 | ) | (9.0)% | ||||||||
Total income | 47,042 | 47,098 | (56 | ) | (0.1)% | ||||||||
Operating expenses | |||||||||||||
Property operating expenses | 5,851 | 5,814 | 37 | 0.6% | |||||||||
Real estate taxes | 6,056 | 7,314 | (1,258 | ) | (17.2)% | ||||||||
Total operating expenses | 11,907 | 13,128 | (1,221 | ) | (9.3)% | ||||||||
Same store modified NOI | 35,135 | 33,970 | 1,165 | 3.4% | |||||||||
Other investments modified NOI (a) | 9,828 | 9,410 | 418 | 4.4% | |||||||||
Total modified NOI | 44,963 | 43,380 | 1,583 | 3.6% | |||||||||
Adjustments | |||||||||||||
GAAP rental adjustments | 1,852 | 493 | 1,359 | 275.7% | |||||||||
Termination fee income | 6 | 860 | (854 | ) | (99.3)% | ||||||||
Total adjustments | 1,858 | 1,353 | 505 | 37.3% | |||||||||
Net operating income | $ | 46,821 | $ | 44,733 | $ | 2,088 | 4.7% |
(a) | Other investments includes assets that did not meet our same store criteria, as defined earlier, including assets acquired and disposed during 2017 and 2016, and the non-core office asset. |
Same Store Results | |||||||||||
Multi-tenant Retail Platform March 31, | Wholly-owned Retail Assets March 31, | IAGM Retail Assets March 31, | |||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||
No. of same store assets | 76 | 76 | 62 | 62 | 14 | 14 | |||||
GLA (square feet) | 13,556,981 | 13,551,815 | 10,579,474 | 10,574,141 | 2,977,507 | 2,977,674 | |||||
Economic occupancy | 93.0% | 93.4% | 92.7% | 93.0% | 94.1% | 94.7% | |||||
ABR per square foot | $15.20 | $14.86 | $14.79 | $14.49 | $16.66 | $16.15 |
• | to pay our operating expenses; |
• | to make distributions to our stockholders; |
• | to service or pay down our debt; |
• | to fund capital expenditures and leasing related costs; |
• | to invest in properties and portfolios of properties; and |
• | to fund development or re-development investments. |
• | cash flows from our investment properties; |
• | income earned on our investment in marketable securities; |
• | distributions from our joint venture investments; |
• | proceeds from sales of properties and marketable securities; |
• | proceeds from borrowings on properties; and |
• | proceeds from our line of credit. |
Maturities during the year ended December 31, | |||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||
Mortgages payable | $ | 138,690 | $ | 59,575 | $ | — | $ | 41,000 | $ | 13,020 | $ | 223,694 | $ | 475,979 |
March 31, 2017 | |||||||
Aggregate Principal Balance | Interest Rate | Maturity Date | |||||
Unsecured term loan credit facility, 5 year - swapped to fixed rate | $ | 90,000 | 1.3510% | 1/15/2021 | |||
Unsecured term loan credit facility, 5 year - swapped to fixed rate | 60,000 | 1.3525% | 1/15/2021 | ||||
Unsecured term loan credit facility, 5 year - variable rate | 50,000 | 2.2828% | 1/15/2021 | ||||
Unsecured term loan credit facility, 7 year - variable rate | 100,000 | 2.5828% | 11/5/2022 | ||||
Total unsecured term loans | $ | 300,000 |
Three months ended March 31, | Change | ||||||||||
2017 | 2016 | ||||||||||
Cash provided by operating activities | $ | 26,491 | $ | 36,141 | $ | (9,650 | ) | ||||
Cash (used in) provided by investing activities | (168,552 | ) | 73,807 | (242,359 | ) | ||||||
Cash (used in) provided by financing activities | (11,946 | ) | 122,419 | (134,365 | ) | ||||||
Increase (decrease) in cash and cash equivalents | (154,007 | ) | 232,367 | (386,374 | ) | ||||||
Cash and cash equivalents, at beginning of period | 397,250 | 203,285 | 193,965 | ||||||||
Cash and cash equivalents, at end of period | $ | 243,243 | $ | 435,652 | $ | (192,409 | ) |
Payments due by year ended December 31, | |||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||
Long term debt: | |||||||||||||||||||||||||||
Total fixed rate debt (a) | $ | 138,690 | $ | 59,575 | $ | — | $ | 41,000 | $ | 163,020 | $ | 223,694 | $ | 625,979 | |||||||||||||
Total variable rate debt | — | — | — | — | 50,000 | 100,000 | 150,000 | ||||||||||||||||||||
Interest | 17,889 | 23,111 | 22,366 | 21,477 | 14,991 | 18,287 | 118,121 | ||||||||||||||||||||
Total long term debt | 156,579 | 82,686 | 22,366 | 62,477 | 228,011 | 341,981 | 894,100 | ||||||||||||||||||||
Operating lease obligations (b) | 999 | 762 | 743 | 643 | 556 | 1,339 | 5,042 | ||||||||||||||||||||
Grand total | $ | 157,578 | $ | 83,448 | $ | 23,109 | $ | 63,120 | $ | 228,567 | $ | 343,320 | $ | 899,142 |
(a) | Includes $150.0 million of variable rate unsecured term loan credit facility debt that has been swapped to a fixed rate as of March 31, 2017. |
(b) | Includes long term ground leases on two underlying multi-tenant retail assets and leases on corporate office space. |
As of | |||||||
March 31, 2017 | December 31, 2016 | ||||||
Balance Sheet Data: | |||||||
Total assets | $ | 2,791,639 | $ | 2,786,754 | |||
Debt, net | $ | 772,532 | $ | 730,605 |
For the three months ended March 31, | |||||||
2017 | 2016 | ||||||
Operating Data: | |||||||
Total income | $ | 64,092 | $ | 63,308 | |||
Total interest and dividend income | $ | 2,170 | $ | 2,703 | |||
Net income | $ | 2,096 | $ | 25,408 | |||
Net income per common share, basic and diluted | $ | 0.00 | $ | 0.03 | |||
Common Stock Distributions: | |||||||
Distributions declared to common stockholders | $ | 13,436 | $ | 28,023 | |||
Distributions paid to common stockholders | $ | 13,041 | $ | 28,013 | |||
Distributions declared per weighted average common share | $ | 0.02 | $ | 0.03 | |||
Distributions paid per weighted average common share | $ | 0.02 | $ | 0.03 | |||
Supplemental Non-GAAP Measures: | |||||||
Funds from operations (a) | $ | 43,785 | $ | 50,911 | |||
Modified net operating income (b) | $ | 44,963 | $ | 43,380 | |||
Cash Flow Data: | |||||||
Cash provided by operating activities | $ | 26,491 | $ | 36,141 | |||
Cash (used in) provided by investing activities | $ | (168,552 | ) | $ | 73,807 | ||
Cash (used in) provided by financing activities | $ | (11,946 | ) | $ | 122,419 | ||
Other Information: | |||||||
Weighted average number of common shares outstanding, basic and diluted | 773,316,262 | 862,205,672 |
(a) | The National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a standard known as FFO, or Funds from Operations. Our FFO, which is based on the NAREIT definition, is net income (loss) in accordance with GAAP excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable property, after adjustments for unconsolidated partnerships and joint ventures in which we hold an interest, and extraordinary items. We have adopted the NAREIT definition in our calculation of NAREIT FFO Applicable to Common Shares as management considers FFO a widely accepted and appropriate measure of performance for REITs. |
For the three months ended March 31, | ||||||||
2017 | 2016 | |||||||
Funds from Operations: | ||||||||
Net income | $ | 2,096 | $ | 25,408 | ||||
Add: | Depreciation and amortization related to investment properties | 22,864 | 38,542 | |||||
Our share of depreciation and amortization related to investment in unconsolidated entities | 3,406 | 4,031 | ||||||
Provision for asset impairment, continuing operations | 16,440 | 8,390 | ||||||
Less: | Gains from property sales and transfer of assets | 1,021 | 24,026 | |||||
Gains from sales of investment in unconsolidated entities, discontinued operations | — | 1,434 | ||||||
FFO Applicable to Common Shares | $ | 43,785 | $ | 50,911 |
For the three months ended March 31, | |||||||
2017 | 2016 | ||||||
Amortization of above and below market leases | $ | (1,641 | ) | $ | (553 | ) | |
Amortization of mark to market debt discounts | 34 | 1,258 | |||||
Loss on extinguishment of debt, continuing operations | — | 948 | |||||
Straight-line rental income adjustment | (342 | ) | 768 | ||||
Acquisition costs | 3 | 221 | |||||
Stock-based compensation expense | 1,008 | 437 |
(b) | The Company believes modified net operating income provides comparability across periods when evaluating financial condition and operating performance. Modified net operating income reflects the income from operations excluding lease termination income and GAAP rent adjustments (such as straight line rent and above/below market lease amortization). Net operating income excludes interest expense, depreciation and amortization, general and administrative expenses, net income of noncontrolling interest, and other investment income from corporate investments. |
For the three months ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 2,096 | $ | 25,408 | |||
Reconciliation of modified NOI to Net income | |||||||
Modified NOI | 44,963 | 43,380 | |||||
Adjustments to modified NOI (i) | 1,858 | 1,353 | |||||
Net operating income | 46,821 | 44,733 | |||||
Other fee income | 1,092 | 1,004 | |||||
Non-allocated expenses (ii) | (35,785 | ) | (34,130 | ) | |||
Other income and expenses (iii) | 5,983 | 11,526 | |||||
Equity in earnings of unconsolidated entities | 572 | 1,295 | |||||
Provision for asset impairment | (16,440 | ) | (8,390 | ) | |||
Net income from continuing operations | 2,243 | 16,038 | |||||
Net (loss) income from discontinued operations | (147 | ) | 9,370 | ||||
Net income | $ | 2,096 | $ | 25,408 |
(i) | Includes adjustments for items that affect the comparability of, and were excluded from results. Such adjustments include lease termination fee income and GAAP rent adjustments (such as straight-line rent and above/below market lease amortization). |
(ii) | Non-allocated expenses consist of general and administrative expenses and depreciation and amortization. |
(iii) | Other income and expenses consist of interest and dividend income, gain on sale of investment properties, loss on extinguishment of debt, other (expenses) income, interest expense, marketable securities realized gain and income tax expense. |
Fair Value as of | ||||||||||||||||||||
Variable Rate Debt Swapped to Fixed Rate | Effective Date | Termination Date | Bank Pays Variable Rate of | InvenTrust Pays Fixed Rate of | Notional Amount as of Mar. 31, 2017 | March 31, 2017 | December 31, 2016 | |||||||||||||
5 year - fixed portion | 12/10/2015 | 12/1/2019 | 1-Month LIBOR + 1.3% | 1.3510% | $ | 90,000 | $ | 588 | $ | 294 | ||||||||||
5 year - fixed portion | 12/10/2015 | 12/1/2019 | 1-Month LIBOR + 1.3% | 1.3525% | 60,000 | 395 | 193 | |||||||||||||
Total 5 year, fixed portion | $ | 150,000 | $ | 983 | $ | 487 |
Cost | Fair Value | Fair Value after Hypothetical 10% Decrease in Market Value | Fair Value after Hypothetical 10% Increase in Market Value | ||||
Equity securities | $86,827 | $110,057 | $99,051 | $121,063 |
Date: | May 12, 2017 |
By: | /s/ Thomas P. McGuinness |
Name: | Thomas P. McGuinness |
Title: | President and Chief Executive Officer (Principal Executive Officer) |
Date: | May 12, 2017 |
By: | /s/ Michael E. Podboy |
Name: | Michael E. Podboy |
Title: | Executive Vice President, Chief Financial Officer, Chief Investment Officer and Treasurer (Principal Financial Officer) |
EXHIBIT NO. | DESCRIPTION | |
31.1* | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2* | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1* | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2* | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101 | The following financial information from our Quarterly Report on Form 10-Q for the period ended March 31, 2017, filed with the SEC on May 12, 2017, is formatted in Extensible Business Reporting Language (“XBRL”): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive (Loss) Income, (iii) Consolidated Statements of Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to Consolidated Financial Statements (tagged as blocks of text). |
1. | I have reviewed this Quarterly Report on Form 10-Q of InvenTrust Properties Corp.; |
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: | May 12, 2017 |
By: | /s/ Thomas P. McGuinness |
Name: | Thomas P. McGuinness |
Title: | President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of InvenTrust Properties Corp.; |
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: | May 12, 2017 |
By: | /s/ Michael E. Podboy |
Name: | Michael E. Podboy |
Title: | Executive Vice President, Chief Financial Officer, Chief Investment Officer and Treasurer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 12, 2017 |
By: | /s/ Thomas P. McGuinness |
Name: | Thomas P. McGuinness |
Title: | President and Chief Executive Officer (Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 12, 2017 |
By: | /s/ Michael E. Podboy |
Name: | Michael E. Podboy |
Title: | Executive Vice President, Chief Financial Officer, Chief Investment Officer and Treasurer (Principal Financial Officer) |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2017 |
May 01, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | InvenTrust Properties Corp. | |
Entity Central Index Key | 0001307748 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 773,323,406 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts and rents receivable, allowance | $ 942 | $ 1,032 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 40,000,000 | 40,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,460,000,000 | 1,460,000,000 |
Common stock, shares issued | 773,318,492 | 73,304,997 |
Common stock, shares outstanding | 773,318,492 | 73,304,997 |
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Statement of Cash Flows [Abstract] | ||
Cash paid for interest, net capitalized interest of $1,147 and $6,569 | $ 7,896 | $ 22,407 |
Capitalized interest | 0 | 623 |
Assumption of mortgage debt upon acquisition of investment property | 41,717 | 0 |
Assumption of lender held escrows | $ 586 | $ 0 |
Organization |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization The Company was incorporated as Inland American Real Estate Trust, Inc. in October 2004, as a Maryland corporation and has elected to be taxed, and currently qualifies, as a real estate investment trust ("REIT") for federal tax purposes. The Company changed its name to InvenTrust Properties Corp. in April 2015. The Company was formed to own, manage, acquire and develop a diversified portfolio of commercial real estate located throughout the United States and to own properties in development and partially own properties through joint ventures, as well as investments in marketable securities and other assets. The Company is no longer a diversified portfolio and is now focused on being a multi-tenant retail platform. As used in these Notes and throughout this Quarterly Report on Form 10-Q, the terms "Company," "InvenTrust," "we," "us," or "our" mean InvenTrust Properties Corp. and its wholly owned and unconsolidated joint venture investments. Unless otherwise noted, all dollar amounts are stated in thousands, except per share and per square foot amounts. Segment Reporting Following the Highlands REIT, Inc. ("Highlands") spin-off and sale of the student housing platform, University House Communities Group, Inc. ("University House"), in 2016, as disclosed in the Company's Annual Report, the Company no longer has a non-core or student housing segment, respectively, as previously reported. These previously reported segments have been classified as discontinued operations as they represented a strategic shift that has had a major effect on the Company's operations and financial results. The assets and liabilities related to discontinued operations are separately classified on the consolidated balance sheets as of December 31, 2016, and the operations have been classified as net (loss) income from discontinued operations on the consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2017 and 2016. With the completion of the University House sale on June 21, 2016 the Company is now focused on investing in a multi-tenant retail platform as described above. In addition, the Company's assets now have similar characteristics, such as tenant type and economic performance, and are all multi-tenant retail assets, with the exception of one non-core office asset, and the Company does not distinguish its principal business or group its operations on a geographical basis for measuring performance. Accordingly, the Company believes it has a single reportable segment for disclosure purposes in accordance with GAAP as of March 31, 2017. The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly-owned subsidiaries. Subsidiaries generally consist of limited liability companies (LLCs) and limited partnerships (LPs). All significant intercompany balances and transactions have been eliminated. Each multi-tenant retail asset is owned by a separate legal entity which maintains its own books and financial records, and each entity's assets are not available to satisfy the liabilities of other affiliated entities, except as otherwise disclosed in "Note 7. Debt". As of March 31, 2017, the Company's portfolio included 73 wholly owned multi-tenant retail assets with 12,717,360 square feet, of which approximately 93.3% was occupied, one non-core office asset with 322,326 square feet, of which approximately 69.9% was occupied, and one significant investment in a joint venture, which the Company owns an interest in and manages 15 multi-tenant retail assets with 2,977,507 square feet. As of December 31, 2016, the Company had 72 wholly owned assets, which included 71 multi-tenant retail assets and one non-core office asset. As of March 31, 2016, the Company owned a combined total of 124 assets, which included retail, student housing, and non-core assets. As of December 31, 2016 and March 31, 2016, the Company held an interest in 15 multi-tenant retail assets through an unconsolidated joint venture. |
Basis of Presentation and Summary of Significant Accounting Policies |
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Mar. 31, 2017 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Recently Issued Accounting Pronouncements The accompanying financial statements reflect the consolidated financial position of the Company as of March 31, 2017 and December 31, 2016 and the consolidated results of its operations and cash flows for the three months ended March 31, 2017 and 2016. These financial statements have been prepared in accordance with GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, judgments and assumptions are required in a number of areas, including, but not limited to, evaluating the impairment of long-lived assets, allocating the purchase price of acquired assets, determining the fair value of debt and evaluating the collectability of accounts receivable. The Company bases these estimates, judgments and assumptions on historical experience and various other factors that the Company believes to be reasonable under the circumstances. Actual results may differ from these estimates. Reclassifications Certain reclassifications have been made to the consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2016 to conform to the 2017 presentation. These reclassifications are as follows:
In addition, certain reclassifications have been made to the consolidated statements of operations and comprehensive (loss) income for the three months ended March 31, 2017 and 2016 to reflect the results of the Highlands spin-off and the University House sale as discontinued operations. Recently Issued Accounting Pronouncements Adopted In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business, with the objective of providing guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The revised guidance will result in many real estate transactions being classified as asset acquisitions with transaction costs being capitalized. The guidance is effective beginning January 1, 2018. Early adoption is permitted. The Company early adopted ASU No. 2017-01 effective as of October 1, 2016. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, which outlines improvements to Employee Share-Based Payment Accounting. The new standard impacts certain aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statements of cash flows. The Company has concluded that its adoption of ASU No. 2016-09, as issued, did not have a significant impact on the consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective, although it will not affect the accounting for rental related revenues. In April 2015, the FASB approved an amendment to the ASU, deferring the effective date one year to annual reporting periods beginning after December 15, 2017 for public entities. The standard permits the use of either the retrospective or cumulative effect transition method. Early adoption is prohibited. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. Most significantly for the real estate industry, leasing transactions are not within the scope of the new standard. A majority of the Company’s tenant-related revenue is recognized pursuant to lease agreements and will be governed by the recently issued leasing guidance discussed below. As a result, while the total revenue recognized over time would not differ under the new guidance, the recognition pattern would be different. The Company anticipates expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to this guidance. The Company is continuing to evaluate this guidance and it does not expect its adoption will have a significant impact on the consolidated financial statements. The Company is also evaluating whether it will adopt this guidance on a retrospective basis or a modified retrospective basis. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which revises an entity's accounting related to: (i) the classification and measurement of investments in equity securities; (ii) the presentation of certain fair value changes for financial liabilities measured at fair value; and (iii) amends certain disclosure requirements associated with the fair value of financial instruments, including eliminating the requirement for public business entities to disclose the method and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company is continuing to evaluate this guidance and does not expect its adoption will have a significant impact on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, amending the existing accounting standards for lease accounting for both parties to a lease contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset ("ROU") and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU No. 2016-02 will be effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted as of the standard's issuance date. 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 practical expedients available. The Company will continue to evaluate the impact this guidance will have on its financial position and results of operations prior to it becoming effective. As a lessee, the Company does not expect this standard will have a material effect on the consolidated financial statements. While the Company continues to assess the effect of adoption as a lessee, the Company currently believes the most significant change relates to the recognition of a new ROU asset and lease liability on the Company's consolidated balance sheets for its corporate office leases, as well as the ground lease agreements in which the Company is the lessee for land underneath all or a portion of the buildings at two multi-tenant retail assets (see Note 12). Currently, the Company accounts for both the office and the ground lease arrangements as operating leases and they are not material to the Company’s consolidated financial statements. As a lessor, the Company believes substantially all of the Company's leases will continue to be classified as operating leases under the new standard. Common area maintenance ("CAM") provided for in real estate contracts will be accounted for as a non-lease component within the scope of the new revenue standard. As a result, entities will be required to recognize revenues associated with real estate leases separately from revenues associated with CAM. The Company also has certain lease arrangements with its tenants for space at its retail assets in which the contractual amounts due under the lease by the lessee are not allocated between the rental and expense reimbursement components ("Gross Leases"). The aggregate revenue earned under Gross Leases is presented as rental income in the consolidated statements of operations. Under the new standard, the Company anticipates it will be required to allocate the fair value of the embedded revenue associated with these reimbursements under its Gross Leases, which represent an immaterial portion of the Company’s lease portfolio, and separately present such amounts in its consolidated statements of operations. The Company is continuing to evaluate whether the variable payment provisions in the new lease standard, or the allocation and recognition provisions of the new revenue standard, will affect the timing of recognition for the Company’s lease and non-lease revenue. Lastly, due to the new standard’s narrowed definition of initial direct costs, the Company expects to expense as incurred certain lease origination costs currently capitalized and amortized to expense over the lease term. However, the Company does not believe this change will have a material impact on its consolidated financial statements. The Company has not selected an adoption date and will continue to evaluate the impact of this guidance until it becomes effective. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows. The new guidance is intended to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The core principle of the ASU requires the classification of eight specific issues identified under ASC 230, Statement of Cash Flows, to be presented as either financing, investing or operating, or some combination thereof, depending upon the nature of the cash flows. ASU No. 2016-15 will be effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2017, and early adoption is permitted. Entities are required to use a retrospective transition approach for each period presented. The presentation of distributions from equity method investments may be impacted as a result of the Company adopting this guidance. The Company is continuing to evaluate this guidance and does not expect its adoption will have a significant impact on the consolidated financial statements. The Company expects to adopt this guidance on January 1, 2018. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows. This new guidance is intended to reduce the existing diversity in practice in how certain transfers between cash and restricted cash are classified as operating, investing, or financing activities within the statement of cash flows. ASU No. 2016-18 will be effective for annual reporting periods beginning after December 31, 2017, and interim periods within those fiscal years. Early adoption is permitted. This guidance requires a retrospective transition method of adoption for each period presented. The Company is continuing to evaluate this guidance and does not expect its adoption will have a significant impact on the consolidated financial statements. The Company expects to adopt this guidance on January 1, 2018. |
Acquired Properties |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Properties | Acquired Properties The Company records identifiable assets, liabilities and noncontrolling interests acquired at fair value. During the three months ended March 31, 2017, the Company acquired three wholly owned multi-tenant retail assets for a gross acquisition price of $289,900 and assumed mortgage debt of $41,717 on one acquisition as part of non-cash financing activities. Under the newly adopted ASU No. 2017-01, the Company determined these transactions should be accounted for as acquisitions of assets. Therefore, the Company capitalized transaction costs of approximately $1,168 during the three months ended March 31, 2017 related to the assets acquired in accordance with ASU No. 2017-01. The following table reflects the multi-tenant retail assets acquired during the three months ended March 31, 2017.
The following table summarizes the estimated fair value of the multi-tenant retail assets acquired and liabilities assumed for the three months ended March 31, 2017, as listed above.
For assets acquired during the three months ended March 31, 2017, the Company recorded income of $3,531 and property net income of $2,737 for the three months ended March 31, 2017. The Company had no acquisitions during the three months ended March 31, 2016. |
Disposed Properties |
3 Months Ended |
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Mar. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposed Properties | Disposed Properties Multi-tenant retail assets The Company disposed of Penn Park, a 242,000 square foot multi-tenant retail asset, on January 10, 2017 for an aggregate gross disposition price of $29,050 and generated net proceeds from the sale of this asset of $28,474. The Company recognized a net gain on sale of this disposal of $1,021 as part of income from continuing operations on the consolidated statement of operations and comprehensive (loss) income for the three months ended March 31, 2017. The Company sold five multi-tenant retail assets during the three months ended March 31, 2016 for an aggregate gross disposition price of $111,300 and generated net proceeds from the sale of those assets of $107,587. The Company recognized an aggregate net gain on sale of these disposals of $24,026 as part of income from continuing operations on the consolidated statement of operations and comprehensive (loss) income for the three months ended March 31, 2016. Discontinued operations In line with the Company's adoption of the accounting standard governing discontinued operations during the year ended December 31, 2014, only disposals representing a strategic shift that have (or will have) a major effect on results and operations qualify as discontinued operations. During the year ended December 31, 2016, the Company completed the sale of University House and the spin-off of Highlands, as disclosed in the Company's Annual Report. |
Investment in Partially Owned Entities |
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Investment in Partially Owned Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Partially Owned Entities | Investment in Partially Owned Entities Unconsolidated Entities The entities listed below are owned by the Company and other unaffiliated parties in joint ventures. Net income, distributions and capital transactions for these entities are allocated to the Company and its joint venture partners in accordance with the respective partnership agreements. The Company analyzed the joint venture agreements and determined that the joint ventures were not variable interest entities. The Company also considered the joint venture partners' participating rights under the joint venture agreements and determined that the joint venture partners have the ability to participate in major decisions, which equates to shared decision making. Accordingly, the Company has significant influence but does not control the joint venture. Therefore, these joint ventures are not consolidated by the Company and the equity method of accounting is used to account for these investments. Under the equity method of accounting, the net equity investment of the Company and the Company's share of net income or loss from the unconsolidated entity are reflected in the consolidated balance sheets and the consolidated statements of operations and comprehensive (loss) income.
A gain on the sale of a joint venture for the development of a student housing community of $1,434 was recorded for the three months ended March 31, 2016 and is included as part of discontinued operations on the consolidated statements of operations and comprehensive (loss) income. Combined Financial Information The following tables present the combined condensed financial information for the Company's unconsolidated entities.
The unconsolidated entities had total third party debt of $311,427 at March 31, 2017 that matures as follows:
Of the total outstanding debt related to assets held by the Company's unconsolidated joint ventures, approximately $23,000 is recourse to the Company. It is anticipated that the joint ventures will be able to repay or refinance all of their debt on a timely basis. |
Investment in Marketable Securities |
3 Months Ended |
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Mar. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Investment in Marketable Securities | Investment in Marketable Securities Investment in marketable securities of $110,629 and $183,883 at March 31, 2017 and December 31, 2016, respectively, consists primarily of preferred and common stock investments in other REITs and certain real estate related bonds which are classified as available-for-sale securities and recorded at fair value. The cost basis net of impairments of available-for-sale securities was $87,156 and $125,311 as of March 31, 2017 and December 31, 2016, respectively. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported as a separate component of comprehensive income until realized. The Company has net accumulated comprehensive income related to its marketable securities portfolio of $23,473 and $58,572, which includes gross unrealized losses of $47 and $598 related to its marketable securities as of March 31, 2017 and December 31, 2016, respectively. Securities with gross unrealized losses have a related fair value of $3,265 and $1,204 as of March 31, 2017 and December 31, 2016, respectively. The Company’s policy for assessing recoverability of its available-for-sale securities is to record a charge against net earnings when the Company determines that a decline in the fair value of a security drops below the cost basis and believes that decline to be other-than-temporary. Factors in the assessment of other-than-temporary impairment include determining whether (1) the Company expects the value of the security to recover, (2) the Company has the ability and intent to hold the security until it recovers, and (3) the length of time and degree to which the security’s price has declined. The Company recorded no impairment on available-for-sale securities for the three months ended March 31, 2017 and 2016. Dividend income is recognized when earned. During the three months ended March 31, 2017 and 2016, dividend income from marketable securities of $1,843 and $2,655, respectively, was recognized and is included as part of continuing operations in interest and dividend income on the consolidated statements of operations and comprehensive (loss) income. |
Debt |
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Debt | Debt Mortgages payable As of March 31, 2017 and December 31, 2016, the Company had the following mortgages payable outstanding:
Some of the mortgage loans require compliance with certain covenants, such as debt service coverage ratios, investment restrictions and distribution limitations. As of March 31, 2017, the Company was in compliance with all mortgage loan requirements except two loans in default with an aggregate carrying value of $38,308, of which $34,974 matured in 2017 and $3,334 matured in 2016. As of December 31, 2016, the Company was in compliance with all mortgage loan requirements except one loan with a carrying value of $3,151, which matured in 2016. These loans are not cross-collateralized with any other mortgage loans and are not recourse to the Company. The following table shows the scheduled maturities of the Company's mortgages payable as of March 31, 2017, for the remainder of 2017, each of the next four years, and thereafter.
The Company has the ability to repay, refinance or extend the debt maturing in 2017, and the Company believes it has adequate sources of funds to meet short-term cash needs related to these refinancings or extensions. It is anticipated that the Company will use proceeds from sales, cash on hand, capacity on term loan and line of credit to repay, refinance or extend the debt maturing in 2017 and 2018. Of the total outstanding debt for all years, approximately $26,000 is recourse to the Company at March 31, 2017, of which $23,000 is related to assets held by the Company's unconsolidated joint ventures. During the three months ended March 31, 2017, the Company assumed mortgage debt of $41,717 on one acquisition as part of non-cash financing activities. Credit agreements On November 5, 2015, the Company entered into a term loan credit agreement for a $300,000 unsecured credit facility with a syndicate of seven lenders led by Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith, Incorporated and PNC Capital Markets LLC as joint lead arrangers. The accordion feature allows the Company to increase the size of the unsecured term loan credit facility to $600,000, subject to certain conditions. The term loan credit facility consists of two tranches: a five-year tranche maturing on January 15, 2021, and a seven-year tranche maturing on November 5, 2022. Interest rates are based on the Company's total leverage ratio. Based upon the Company's total leverage ratios, the five- and seven-year tranches bear interest at rates of 1-Month LIBOR plus 1.3% and 1-Month LIBOR plus 1.6%, respectively. As of March 31, 2017, the Company has swapped $150,000 of variable rate debt on the five-year tranche to fixed rate debt through two interest rate swaps. On February 3, 2015, the Company entered into an amended and restated credit agreement for a $300,000 unsecured revolving line of credit with KeyBank National Association, JP Morgan Chase Bank National Association and other financial institutions. The accordion feature allows the Company to increase the size of its unsecured line of credit up to $600,000, subject to certain conditions. The unsecured revolving line of credit matures on February 2, 2019 and contains one twelve-month extension option that the Company may exercise upon payment of an extension fee equal to 0.15% of the commitment amount on the maturity date and subject to certain other conditions. The unsecured revolving line of credit bears interest at a rate equal to 1-Month LIBOR plus 1.40% and requires the maintenance of certain financial covenants. The Company had $300,000 available under the revolving line of credit as of March 31, 2017 and December 31, 2016. The credit facility is subject to maintenance of certain financial covenants. As of March 31, 2017 and December 31, 2016, the Company was in compliance with all of the covenants and default provisions under the credit agreement. As of March 31, 2017 and December 31, 2016, the Company had the following credit agreements outstanding:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements In accordance with ASC 820, Fair Value Measurement and Disclosures, the Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:
The Company has estimated the fair value of its financial and non-financial instruments using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition. Recurring Measurements For assets and liabilities measured at fair value on a recurring basis, quantitative disclosure of the fair value for each major category of assets and liabilities is presented below:
Level 1 At March 31, 2017 and December 31, 2016, the fair value of the available for sale marketable equity securities have been estimated based upon quoted market prices. Unrealized gains or losses on investment are reflected in unrealized gain (loss) on investment securities in comprehensive income on the consolidated statements of operations and comprehensive (loss) income. Level 2 To calculate the fair value of the real estate related bonds and the derivative interest rate instruments, the Company primarily uses quoted prices for similar securities and contracts. For the real estate related bonds, the Company reviews price histories for similar market transactions. For the derivative interest rate instruments, the Company uses inputs based on data that is observed in the forward yield curve which is widely observable in the marketplace. The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements which utilizes Level 3 inputs, such as estimates of current credit spreads. However, as of March 31, 2017 and December 31, 2016, the Company determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. As of March 31, 2017 and December 31, 2016, the Company had outstanding interest rate swap agreements with an aggregate notional value of $150,000. Level 3 At March 31, 2017 and December 31, 2016, the Company had no Level 3 recurring fair value measurements. Nonrecurring Measurements The following table summarizes activity for the Company’s assets measured at fair value on a nonrecurring basis. The Company recognized certain impairment charges to reflect the investments at their fair values for the three months ended March 31, 2017 and 2016. The asset groups that were reflected at fair value through this evaluation are:
Investment properties, continuing operations During the three months ended March 31, 2017, the Company identified certain assets which may have a reduction in the expected holding period and reviewed the probability of these assets' disposition. The Company's estimated fair value relating to the investment assets' impairment analyses was based on broker opinions of value and letters of intent. For the three months ended March 31, 2017, the Company recorded a provision for asset impairment of $16,440 in continuing operations on three multi-tenant retail assets. During the three months ended March 31, 2016, the Company identified certain assets which may have a reduction in the expected holding period and reviewed the probability of these properties' disposition. The Company's estimated fair value relating to the investment assets' impairment analysis was based on purchase contracts. For the three months ended March 31, 2016, the Company recorded a provision for asset impairment of $8,390 in continuing operations on two multi-tenant retail assets. Investment properties, discontinued operations There was no impairment recorded for the three months ended March 31, 2016 for investment properties included in discontinued operations on the statement of operations and comprehensive (loss) income. Financial Instruments Not Measured at Fair Value The table below represents the fair value of financial instruments presented at carrying values in the Company's consolidated financial statements as of March 31, 2017 and December 31, 2016.
The Company estimated the fair value of its mortgages payable and term loan using a weighted average effective market interest rate of 4.89% as of March 31, 2017 compared to 5.07% at December 31, 2016. The fair value estimate of the line of credit and term loan approximates the carrying value due to limited market volatility in pricing. The assumptions reflect the terms currently available on similar borrowing terms to borrowers with credit profiles similar to the Company's. As a result, the Company used a weighted average interest rate of 3.25% as of March 31, 2017 compared to 3.15% as of December 31, 2016 to estimate the fair value of its line of credit and term loan. The Company has determined that its debt instrument valuations are classified in Level 2 of the fair value hierarchy. |
Income Taxes |
3 Months Ended |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has elected and has operated so as to qualify to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), commencing with the tax year ended December 31, 2005. So long as it qualifies as a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed currently to stockholders. A REIT is subject to a number of organizational and operational requirements including a requirement that it currently distribute at least 90% of its REIT taxable income (subject to certain adjustments) to its stockholders each year. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal and state income tax on its taxable income at regular corporate tax rates and would not be able to re-elect REIT during the four years following the year of the failure. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income. In addition, prior to the Highlands spin-off, the Company owned substantially all of the outstanding stock of a subsidiary REIT, MB REIT (Florida), Inc. ("MB REIT"), which the Company consolidated for financial reporting purposes but which was treated as a separate REIT for federal income tax purposes until December 15, 2015, when MB REIT redeemed all of the outstanding shares of its Series B Preferred Stock and became a wholly owned subsidiary of InvenTrust. At that time, MB REIT became a Qualified REIT Subsidiary ("QRS") of the Company and ceased to be treated as a separate REIT for U.S. federal income tax purposes. As a QRS, MB REIT was disregarded as a separate entity from the Company for federal income tax purposes. All assets, liabilities and items of income, deduction and credit of MB REIT were treated for federal income tax purposes as those of the Company. As a result of the spin-off of Highlands, MB REIT became a wholly owned subsidiary of Highlands. The Company has elected to treat certain of its consolidated subsidiaries, and may in the future elect to treat newly formed subsidiaries, as taxable REIT subsidiaries pursuant to the Code. Taxable REIT subsidiaries may participate in non-real estate related activities and/or perform non-customary services for tenants and are subject to federal and state income tax at regular corporate tax rates. For the three months ended March 31, 2017 and 2016, an income tax expense of $282 and $258, respectively, was included in continuing operations on the consolidated statements of operations and comprehensive (loss) income. For the three months ended March 31, 2017 and 2016, income tax benefit of $10 and expense of $30, respectively, was included in net income from discontinued operations on the consolidated statements of operations and comprehensive (loss) income. |
Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per share Basic earnings per share ("EPS") are computed using the two-class method by dividing net income by the weighted average number of common shares outstanding for the period (the "common shares"). Diluted EPS is computed using the treasury method if more dilutive, by dividing net income by the common shares plus potential common shares issuable upon exercising options or other contracts. The following table reconciles the amounts used in calculating basic and diluted income per share (in thousands, except weighted average share and per share amounts):
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Incentive Award Plan Effective as of June 19, 2015, the Company's board of directors adopted and approved the InvenTrust Properties Corp. 2015 Incentive Award Plan (as amended, the "Incentive Award Plan"), under which the Company may grant cash and equity incentive awards to eligible employees, directors, and consultants. Under the Incentive Award Plan, the Company is authorized to grant up to 30,000,000 shares of the Company's common stock pursuant to awards under the plan. At March 31, 2017, 26,636,066 shares were available for future issuance under the Incentive Award Plan. A summary of the Company's restricted stock unit activity as of March 31, 2017 is as follows:
At March 31, 2017, there was $4,086 of total unrecognized compensation expense related to unvested stock-based compensation arrangements granted under the Incentive Award Plan related to 1,062,449 and 552,846 unvested shares vesting in 2017 and 2018, respectively. The restricted stock units outstanding as of March 31, 2017 have vesting schedules through December 2017 or 2018, as applicable. Stock-based compensation expense will be amortized on a straight-line basis over the vesting period. The Company recognized stock-based compensation expense of $1,008 and $437 related to the Incentive Award Plan for the three months ended March 31, 2017 and 2016, respectively. |
Commitments and Contingencies |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject, from time to time, to various types of third-party legal claims or litigation that arise in the ordinary course of business, including, but not limited to, property loss claims, personal injury or other damages resulting from contact with the Company’s properties. These claims and lawsuits and any resulting damages are generally covered by the Company's insurance policies. The Company accrues for legal costs associated with loss contingencies when these costs are probable and reasonably estimable. While the resolution of these matters cannot be predicted with certainty, management does not expect, based on currently available information, that the final outcome of any pending claims or legal proceedings will have a material adverse effect on the financial condition, results of operations or cash flows of the Company. On September 6, 2013, a former tenant at the Legacy Corner Apartments property in Midwest City, Oklahoma filed a complaint in the District Court of Oklahoma County against the Company and other named defendants, Case No. CJ-2013-5011, alleging premises liability and negligent maintenance. At December 31, 2016, based on the facts and circumstances of this case, the Company believed it had a viable defense and was prepared to defend the suit vigorously. Due to the pendency of the Company's defenses and insurance policies, together with the inherent difficulty and uncertainty of predicting the outcome of litigation generally, the Company did not believe a risk of loss associated with compensatory damages was probable. Furthermore, the Company did not believe a risk of loss associated with punitive damages, which would be awarded due to gross negligence, was probable based on the information known, nor did the Company know what an estimated range of uninsured punitive damages could be. Therefore, at December 31, 2016, no loss contingency amounts related to this case had been accrued. The jury trial commenced on April 3, 2017. On April 12, 2017, the jury entered a verdict against the Company’s subsidiary and the other named defendants in favor of the plaintiff of $6,000 in compensatory damages and $6,000 in punitive damages. The compensatory portion of the verdict is fully insured by the Company’s insurance policies. However, the Company's insurance carrier served the Company with a reservation of rights letter stating that insurance coverage will not be provided for punitive damages awarded in this case. As a result, the Company’s potential loss contingency exposure is $6,000. The Company is currently evaluating, in conjunction with the insurance carriers and the respective panel counsels, all alternatives and strategies available in this case, including filing any post-trial motions, appeals or potential participation in a settlement with the plaintiff. The Company has been advised by counsel that the Company has several potential mitigating factors available to it, which should result in a reduced punitive award. While it is difficult to ascertain with certainty the result of those potential mitigating factors, the Company intends to vigorously pursue all potential causes of action available to it in appealing and mitigating the damages award. Nevertheless, based on GAAP standards, the Company has accrued for a potential loss contingency of $3,000 as of March 31, 2017 on the consolidated statement of operations and comprehensive (loss) income as part of other (expense) income for the three months ended March 31, 2017. The Company recorded a $9,000 liability as part of other liabilities and a $6,000 insurance receivable as part of deferred costs and other assets on the consolidated balance sheet as of March 31, 2017. Leasing commitments Two of the Company’s multi-tenant retail assets are subject to ground leases. The Company records ground rent expense on a straight-line basis over the term of the leases. The leases require rental payments or rental payment increases based upon the appraised value of the property at specified dates, increases in pricing indexes, or certain financial calculations based on the operations of the respective property. Any incremental changes in the rental payments as a result of these adjustments are not included in the table below because the amount of the change is not determinable. In addition, the Company has non-cancelable operating leases pertaining to office space from which the Company conducts its business. During the three months ended March 31, 2017 and 2016, the Company recognized rent expense associated with ground leases of $67 and $68, respectively, and rent expense associated with office space leases of $355 and $375, respectively, within continuing operations on the statement of comprehensive (loss) income. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Effective for the quarterly distribution paid in April 2017, the Company increased its annual distribution rate from $0.0675 per share of common stock to $0.0695 per share of common stock. Distributions were paid on April 6, 2017 to each stockholder of record as of March 31, 2017 in the amount of $0.017375 per share of common stock. |
Acquired Properties (Tables) |
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Schedule of Business Acquisitions | The following table reflects the multi-tenant retail assets acquired during the three months ended March 31, 2017.
The following table summarizes the estimated fair value of the multi-tenant retail assets acquired and liabilities assumed for the three months ended March 31, 2017, as listed above.
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Investment in Partially Owned Entities (Tables) |
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Investment in Partially Owned Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Equity Investment and Share of Net Income or Loss | Under the equity method of accounting, the net equity investment of the Company and the Company's share of net income or loss from the unconsolidated entity are reflected in the consolidated balance sheets and the consolidated statements of operations and comprehensive (loss) income.
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Schedule of Combined Financial Information of Investment in Unconsolidated Entities | The following tables present the combined condensed financial information for the Company's unconsolidated entities.
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Schedule of Debt Maturities of the Unconsolidated Entities | The unconsolidated entities had total third party debt of $311,427 at March 31, 2017 that matures as follows:
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Maturities For Outstanding Mortgage Indebtedness | The following table shows the scheduled maturities of the Company's mortgages payable as of March 31, 2017, for the remainder of 2017, each of the next four years, and thereafter.
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Mortgages [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Debt | As of March 31, 2017 and December 31, 2016, the Company had the following mortgages payable outstanding:
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Term Loans [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Debt | As of March 31, 2017 and December 31, 2016, the Company had the following credit agreements outstanding:
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quantitative Disclosure of The Fair Value For Each Major Category Of Assets And Liabilities | For assets and liabilities measured at fair value on a recurring basis, quantitative disclosure of the fair value for each major category of assets and liabilities is presented below:
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Assets Measured at Fair Value on Non-Recurring Basis | The following table summarizes activity for the Company’s assets measured at fair value on a nonrecurring basis. The Company recognized certain impairment charges to reflect the investments at their fair values for the three months ended March 31, 2017 and 2016. The asset groups that were reflected at fair value through this evaluation are:
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Fair Value of Financial Instruments Presented at Carrying Values | The table below represents the fair value of financial instruments presented at carrying values in the Company's consolidated financial statements as of March 31, 2017 and December 31, 2016.
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Earnings per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the amounts used in calculating basic and diluted income per share (in thousands, except weighted average share and per share amounts):
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Stock-Based Compensation (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | A summary of the Company's restricted stock unit activity as of March 31, 2017 is as follows:
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Organization (Details) |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2017
Property
|
Dec. 31, 2016
Property
Properties
|
Mar. 31, 2017
Properties
|
Mar. 31, 2017
ft²
|
Mar. 31, 2017 |
|
Entity Information [Line Items] | |||||
Number of real estate properties | Properties | 72 | 124 | |||
Retail [Member] | |||||
Entity Information [Line Items] | |||||
Number of real estate properties | Properties | 71 | 73 | |||
Square Footage | ft² | 12,717,360 | ||||
Non-core [Member] | |||||
Entity Information [Line Items] | |||||
Number of real estate properties | 1 | 1 | 322,326 | ||
Assets Leased to Others [Member] | Retail [Member] | |||||
Entity Information [Line Items] | |||||
Real Estate Property, Square Footage Occupied, Percent | 93.30% | ||||
Assets Leased to Others [Member] | Non-core [Member] | |||||
Entity Information [Line Items] | |||||
Real Estate Property, Square Footage Occupied, Percent | 69.90% | ||||
Corporate Joint Venture [Member] | |||||
Entity Information [Line Items] | |||||
Number of real estate properties | Property | 1 | ||||
Number of Managed Assets | Property | 15 | 15 | |||
Square Footage | ft² | 2,977,507 |
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Debt Instrument [Line Items] | ||
Other fee income | $ 1,092 | $ 1,004 |
Depreciation and amortization | $ 23,446 | 20,749 |
Scenario, Adjustment [Member] | ||
Debt Instrument [Line Items] | ||
Depreciation and amortization | 234 | |
Net Income from Discontinued Operations [Member] | Scenario, Adjustment [Member] | ||
Debt Instrument [Line Items] | ||
Depreciation and amortization | $ 32 |
Acquired Properties - Assets Acquired and Liabilities Assumed (Details) $ in Thousands |
Mar. 31, 2017
USD ($)
|
---|---|
Business Combinations [Abstract] | |
Land | $ 75,194 |
Building and other improvements | 181,389 |
Total investment properties | 256,583 |
Intangible assets (a) | 25,193 |
Intangible liabilities (b) | (8,516) |
Net other assets and liabilities | 16,640 |
Total fair value of assets acquired and liabilities assumed | $ 289,900 |
Acquired Properties - Additional Information (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Property, Plant and Equipment [Abstract] | |
Revenue of acquiree since acquisition | $ 3,531 |
Earnings acquiree since acquisition | $ 2,737 |
Disposed Properties Narrative (Details) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jan. 10, 2017
USD ($)
ft²
|
Mar. 31, 2017
USD ($)
|
Mar. 31, 2016
USD ($)
Properties
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sale of investment properties, net | $ 28,474 | $ 107,587 | |
Gain on sale of investment properties | 1,021 | 24,026 | |
Retail [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gross disposition price | 111,300 | ||
Gain on sale of investment properties | $ 24,026 | ||
Number of disposed assets | Properties | 5 | ||
Retail [Member] | Penn Park Oklahoma City, OK [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Square Footage | ft² | 242,000 | ||
Gross disposition price | $ 29,050 | ||
Gain on sale of investment properties | $ 1,021 |
Investment in Partially Owned Entities (Details 1) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Schedule of net equity investment and share of net income or loss | ||
Investment | $ 180,437 | $ 178,728 |
IAGM Retail Fund I, LLC [Member] | ||
Schedule of net equity investment and share of net income or loss | ||
Description | Multi-tenant retail shopping centers | |
Ownership % | 55.00% | |
Investment | $ 126,028 | 126,090 |
Downtown Railyard Venture, LLC [Member] | ||
Schedule of net equity investment and share of net income or loss | ||
Description | Land development | |
Investment | $ 54,148 | 52,365 |
Other Unconsolidated Entities [Member] | ||
Schedule of net equity investment and share of net income or loss | ||
Description | Various real estate investments | |
Investment | $ 261 | $ 273 |
Investment in Partially Owned Entities (Details 3) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Schedule of Debt Maturities of the Unconsolidated Entities | ||
Mortgage debt | $ 311,427 | $ 311,378 |
Recourse debt | 26,000 | |
Unconsolidated Entities [Member] | ||
Schedule of Debt Maturities of the Unconsolidated Entities | ||
2017 | 0 | |
2018 | 203,881 | |
2019 | 16,247 | |
2020 | 0 | |
2021 | 22,962 | |
Thereafter | 68,337 | |
the Company [Member] | ||
Schedule of Debt Maturities of the Unconsolidated Entities | ||
Recourse debt | $ 23,000 |
Investment in Marketable Securities (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
|
Investment in Marketable Securities (Textual) [Abstract] | ||||
Investment in marketable securities | $ 110,629,000 | $ 183,883,000 | ||
Impairment on securities included as a component of realized gain (loss) | 87,156,000 | 125,311,000 | ||
Net accumulated other comprehensive income | 23,473,000 | $ 58,572,000 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax | 47,000 | 598,000 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 3,265,000 | $ 1,204,000 | ||
Impairments on available for sale securities | 0 | $ 0 | ||
Dividend Income, Operating | $ 1,843,000 | $ 2,655,000 |
Debt - Mortgages Payable (Details) - Mortgages [Member] - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Mortgages payable | $ 475,979 | $ 434,746 |
Premium, net of accumulated amortization | 657 | 0 |
Discount, net of accumulated amortization | (223) | (317) |
Debt issuance costs, net of accumulated amortization | (3,846) | (3,789) |
Total mortgages payable, net | $ 472,567 | $ 430,640 |
Weighted average interest rate (percent) | 5.17% | 4.85% |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (percent) | 3.49% | 3.49% |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (percent) | 11.24% | 11.24% |
- Mortgage Maturities (Details) - Mortgages [Member] - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Schedule of maturities for outstanding mortgage indebtedness | ||
2017 | $ 138,690 | |
2018 | 59,575 | |
2019 | 0 | |
2020 | 41,000 | |
2021 | 13,020 | |
Thereafter | 223,694 | |
Total | $ 475,979 | $ 434,746 |
Fair Value Measurements (Details 1) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impairment losses, investment properties | $ 16,440 | $ 8,390 |
Continuing Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total impairment losses, investment properties | 16,440 | 8,390 |
Continuing Operations [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value, investment properties | $ 36,676 | $ 39,150 |
Fair Value Measurements (Details 2) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Estimated fair value, mortgage and notes payable | $ 478,773 | $ 435,513 |
Long-term line of credit | 300,000 | 300,000 |
Estimated fair value, line of credit and term loan | 299,749 | 299,741 |
Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Mortgages payable | $ 475,979 | $ 434,746 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Percentage of taxable income distributed to shareholders | 90.00% | |
Income tax expense | $ 282 | $ 258 |
Income tax expense included in net income from discontinued operations | $ 10 | $ (30) |
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Net Income (Loss) Allocated to Common Stockholders [Abstract] | ||
Net income from continuing operations | $ 2,243 | $ 16,038 |
Net (loss) income from discontinued operations | (147) | 9,370 |
Net income | $ 2,096 | $ 25,408 |
Weighted average shares outstanding, basic and diluted (in shares) | 773,316,262 | 862,205,672 |
Income from continuing operations allocated to common shareholders per share (in USD per share) | $ 0.00 | $ 0.02 |
Income from discontinued operations allocated to common shareholders per share (in dollars per share) | 0.00 | 0.01 |
Net income per common share, basic and diluted (in dollars per share) | $ 0.00 | $ 0.03 |
Subsequent Events (Details) - $ / shares |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Apr. 06, 2017 |
Apr. 30, 2017 |
Mar. 31, 2017 |
|
Subsequent Event [Line Items] | |||
Annual distribution, per share (in USD per share) | $ 0.0675 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Annual distribution, per share (in USD per share) | $ 0.0695 | ||
Quarterly distribution, per share (in USD per share) | $ 0.017375 |