10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________________________________

FORM 10-Q

_______________________________________

(Mark One)

ý QuarterlyReportPursuanttoSection 13or15(d) oftheSecuritiesExchangeActof1934

For the quarterly period endedJune 30, 2017

Or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from  to  .

Commission File No. 000-52596

_______________________________________

DIVIDEND CAPITALDIVERSIFIEDPROPERTYFUNDINC.

(Exact name of registrant as specified in its charter)

_______________________________________

Maryland	30-0309068
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
518 Seventeenth Street, 17th Floor Denver, CO	80202
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 228-2200

_______________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ☐ 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	ý (Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No   ý

As of August 7, 2017, 101,016,479 unclassified shares of common stock (referred to as “Class E” shares), 2,083,881 shares of Class A common stock, 2,508,869 shares of Class W common stock, and 34,351,448 shares of Class I common stock of Dividend Capital Diversified Property Fund Inc., each with a par value $0.01 per share, were outstanding.

Dividend Capital Diversified Property Fund Inc.

Quarterly Report onForm 10-Q

For the Three and Six Months Ended June 30, 2017

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Income (Loss)	4
Condensed Consolidated Statements of Comprehensive Income	5
Condensed Consolidated Statement of Equity	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3. Quantitative and Qualitative Disclosures About Market Risk	42
Item 4. Controls and Procedures	42
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	43
Item 1A. Risk Factors	43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3. Defaults Upon Senior Securities	44
Item 4. Mine Safety Disclosures	44
Item 5. Other Information	44
Item 6. Exhibits	46

2

PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATEDBALANCE SHEETS

(In thousands, except share and footnoted information)

໿

໿

	As of
	June 30, 2017			December 31, 2016
	(Unaudited)
ASSETS
Investments in real property	$	2,178,358		$	2,204,322
Accumulated depreciation and amortization	(515,840		)	(492,911		)
Total net investments in real property	1,662,518			1,711,411
Debt-related investments, net	14,941			15,209
Total net investments	1,677,459			1,726,620
Cash and cash equivalents	5,362			13,864
Restricted cash	7,160			7,282
Other assets, net	35,297			35,962
Total Assets	$	1,725,278		$	1,783,728
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued expenses (1)	$	32,725		$	34,085
Mortgage notes	380,934			342,247
Unsecured borrowings	724,218			706,554
Intangible lease liabilities, net	56,637			59,545
Other liabilities	25,087			33,206
Total Liabilities	1,219,601			1,175,637
Equity:
Stockholders’ equity:
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 139,913,429 and 150,636,393 shares issued and outstanding, as of June 30, 2017 and December 31, 2016, respectively (2)	1,399			1,506
Additional paid-in capital	1,280,621			1,361,638
Distributions in excess of earnings	(857,792		)	(839,896		)
Accumulated other comprehensive loss	(5,550		)	(6,905		)
Total stockholders’ equity	418,678			516,343
Noncontrolling interests	86,999			91,748
Total Equity	505,677			608,091
Total Liabilities and Equity	$	1,725,278		$	1,783,728

(1) Includes approximately $2.5 million and $3.6 million that we owed to Dividend Capital Total Advisors LLC (our "Advisor") and affiliates of our Advisor for services and reimbursement of certain expenses as of June 30, 2017 and December 31, 2016, respectively.

(2) See Note 7 for the number of shares outstanding of each class of common stock as of June 30, 2017 and December 31, 2016.  

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATEDSTATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share and footnoted information)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
REVENUE:
Rental revenue	$	50,036		$	52,702		$	102,544		$	108,246
Debt-related income	229			237			460			475
Total Revenue	50,265			52,939			103,004			108,721
EXPENSES:
Rental expense	16,561			15,632			34,004			31,950
Real estate depreciation and amortization expense	18,798			20,198			36,734			40,034
General and administrative expenses (1)	2,024			2,338			4,274			4,958
Advisory fees, related party	3,451			3,671			6,941			7,436
Acquisition-related expenses	—			474			—			525
Impairment of real estate property (2)	1,116			—			1,116			587
Total Operating Expenses	41,950			42,313			83,069			85,490
OTHER INCOME (EXPENSES):
Other income and (expense)	(89		)	(69		)	(198		)	(11		)
Interest expense	(10,163		)	(10,422		)	(19,847		)	(21,383		)
Gain on extinguishment of debt and financing commitments	—			—			—			5,136
Gain on sale of real property (3)	10,352			—			10,352			41,400
Net income	8,415			135			10,242			48,373
Net income attributable to noncontrolling interests	(1,610		)	(18		)	(1,776		)	(4,474		)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	6,805		$	117		$	8,466		$	43,899
NET INCOME PER BASIC AND DILUTED COMMON SHARE	$	0.05		$	0.00		$	0.06		$	0.27
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic	145,288			161,209			147,577			162,581
Diluted	157,209			173,669			159,551			175,179
Distributions declared per common share	$	0.0891		$	0.0893		$	0.1782		$	0.1785

(1) Includes approximately $1.4 million and $1.6 million of reimbursable expenses incurred by our Advisor and its affiliates during the three months ended June 30, 2017 and 2016, respectively, and approximately $3.1 million and $3.5 million of reimbursable expenses incurred by our Advisor and its affiliates during the six months ended June 30, 2017 and 2016.

(2) Includes approximately $45,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $79,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

(3) Includes approximately $241,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $1.8 million paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATEDSTATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands)

໿

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Net income	$	8,415		$	135		$	10,242		$	48,373
Other Comprehensive Income (Loss):
Change in value of cash flow hedging derivatives	(677		)	(3,703		)	1,412			(12,781		)
Comprehensive income (loss)	7,738			(3,568		)	11,654			35,592
Comprehensive (income) loss attributable to noncontrolling interests	(1,557		)	266			(1,833		)	(3,527		)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	6,181		$	(3,302	)	$	9,821		$	32,065

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATEDSTATEMENT OF EQUITY

(Unaudited)

(In thousands)

໿

	Stockholders’ Equity
															Accumulated
							Additional				Distributions				Other
	Common Stock						Paid-in				in Excess of				Comprehensive				Noncontrolling				Total
	Shares		Amount				Capital				Earnings				Loss				Interests				Equity
Balances, December 31, 2016	150,636			$	1,506			$	1,361,638			$	(839,896	)		$	(6,905	)		$	91,748			$	608,091
Comprehensive income (loss):
Net income	—			—				—				8,466				—				1,776				10,242
Unrealized change in value of cash flow hedging derivatives	—			—				—				—				1,355				57				1,412
Common stock:
Issuance of common stock, net of offering costs	2,896			29				20,079				—				—				—				20,108
Issuance of common stock, stock-based compensation plans	(99	)		(1		)		(647		)		—				—				—				(648		)
Redemptions of common stock	(13,520	)		(135		)		(101,533		)		—				—				—				(101,668		)
Amortization of stock-based compensation	—			—				1,317				—				—				—				1,317
Distributions declared on common stock	—			—				—				(26,312		)		—				—				(26,312		)
Distributions on unvested Advisor RSUs	—			—				—				(50		)		—				—				(50		)
Noncontrolling interests:
Contributions of noncontrolling interests	—			—				—				—				—				106				106
Distributions declared to noncontrolling interests	—			—				—				—				—				(4,780		)		(4,780		)
Redemptions of noncontrolling interests	—			—				(233		)		—				—				(1,908		)		(2,141		)
Balances, June 30, 2017	139,913			$	1,399			$	1,280,621			$	(857,792	)		$	(5,550	)		$	86,999			$	505,677

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENTS OFCASH FLOWS

(Unaudited)

(In thousands)

	For the Six Months Ended June 30,
	2017			2016
OPERATING ACTIVITIES:
Net income	$	10,242		$	48,373
Adjustments to reconcile net income to net cash provided by operating activities:
Real estate depreciation and amortization expense	36,734			40,034
Gain on disposition of real property	(10,352		)	(41,400		)
Impairment of real estate property	1,116			587
Gain on extinguishment of debt and financing commitments	—			(5,136		)
Other adjustments to reconcile net income to net cash provided by operating activities	3,134			3,608
Changes in operating assets and liabilities	(5,283		)	(2,705		)
Net cash provided by operating activities	35,591			43,361
INVESTING ACTIVITIES:
Acquisition of real property	—			(65,861		)
Capital expenditures in real property	(9,268		)	(11,531		)
Proceeds from disposition of real property	29,089			175,965
Principal collections on debt-related investments	246			231
Other investing activities	(881		)	(828		)
Net cash provided by investing activities	19,186			97,976
FINANCING ACTIVITIES:
Mortgage note proceeds	201,886			32,100
Mortgage note principal repayments	(161,618		)	(140,494		)
Net proceeds from (repayments of) revolving line of credit borrowings	17,000			44,000
Redemption of common shares	(101,939		)	(94,973		)
Distributions on common stock	(17,031		)	(19,381		)
Proceeds from sale of common stock	11,172			49,005
Offering costs for issuance of common stock	(2,309		)	(3,819		)
Distributions to noncontrolling interest holders	(4,780		)	(3,830		)
Redemption of OP Unit holder interests	(1,518		)	(3,573		)
Other financing activities	(4,142		)	947
Net cash used in financing activities	(63,279		)	(140,018		)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(8,502		)	1,319
CASH AND CASH EQUIVALENTS, beginning of period	13,864			15,769
CASH AND CASH EQUIVALENTS, end of period	$	5,362		$	17,088
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	18,009		$	20,501
Supplemental Disclosure of Noncash Investing and Financing Activities:
Common stock issued pursuant to the distribution reinvestment plan	$	10,215		$	10,192
Non-cash disposition of real property *	$	—		$	7,830

* Represents the amount of sales proceeds from the disposition of real property that we did not receive or pay in cash, primarily due to the repayment of related borrowings by the purchaser at closing.

The accompanying notes are an integral part of these condensed consolidated financial statements.  

7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2017

(Unaudited)

	Page
Note 1 - Organization	9
Note 2 - Summary of Significant Accounting Policies	10
Note 3 – Investments in Real Property	10
Note 4 – Debt Obligations	12
Note 5 – Derivatives and Hedging Activities	15
Note 6 – Fair Value of Financial Instruments	18
Note 7 – Stockholders’ Equity	18
Note 8 – Related Party Transactions	19
Note 9 – Net Income per Common Share	24
Note 10 – Segment Information	24

8

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2017

(Unaudited)

1. ORGANIZATION

Dividend Capital Diversified Property Fund Inc. is a Maryland corporation formed on April 11, 2005 to invest in a diverse portfolio of real property and real estate related investments. As used herein, “the Company,” “we,” “our” and “us” refer to Dividend Capital Diversified Property Fund Inc. and its consolidated subsidiaries and partnerships except where the context otherwise requires.

We operate in such a manner so as to qualify as a real estate investment trust (“REIT”) for federal income tax purposes, and we utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) organizational structure to hold all or substantially all of our assets through our operating partnership, Dividend Capital Total Realty Operating Partnership, L.P. (our “Operating Partnership”).

We are the sole general partner of our Operating Partnership. In addition, we have contributed 100% of the proceeds received from our offerings of common stock to our Operating Partnership in exchange for partnership units (“OP Units”) representing our interest as a limited partner of our Operating Partnership. Our Operating Partnership qualifies as a variable interest entity for accounting purposes and substantially all of the assets of the Company are held by our Operating Partnership, which, subject to certain Operating Partnership and subsidiary level financing restrictions, can be used to settle its obligations. Creditors of certain liabilities of our Operating Partnership have recourse to the Company. Under our Operating Partnership, we historically had variable interest entities that were joint ventures in which we had real estate investments. The accompanying condensed consolidated balance sheets included approximately $48.2 million, after accumulated depreciation and amortization, in net investments in real property in these consolidated variable interest entities as of December 31, 2016. As of June 30, 2017, we did not hold any investment in any joint ventures.

As of June 30, 2017 and December 31, 2016, we owned approximately 92.2% and 92.6%, respectively, of the limited partnership interests in our Operating Partnership, and the remaining limited partnership interests in our Operating Partnership were owned by third-party investors. Our Operating Partnership has classes of OP Units that correspond to our four classes of common stock: Class E OP Units, Class A OP Units, Class W OP Units, and Class I OP Units. As of June 30, 2017 and December 31, 2016, our Operating Partnership had issued and outstanding approximately 11.9 million and 12.0 million Class E OP Units held by third party investors, respectively, which represent limited partnership interests issued in connection with its private placement offerings. As of June 30, 2017 and December 31, 2016, such Class E OP Units had a maximum approximate redemption value of $89.1 million and $91.2 million, respectively, based on the most recent selling price of our common stock pursuant to our primary offering.

Our Advisor, a related party, manages our day-to-day activities under the terms and conditions of an advisory agreement (as amended from time to time, the “Advisory Agreement”). Our Advisor and its affiliates receive various forms of compensation, reimbursements and fees for services relating to the investment and management of our real estate assets.

On July 12, 2012, the Securities and Exchange Commission (the “Commission”) declared effective our Registration Statement on Form S-11 (Registration Number 333-175989) (as amended, the “Prior Registration Statement”). The Prior Registration Statement applied to the offer and sale (the “Prior Offering”) of up to $3,000,000,000 of our shares of common stock, of which $2,250,000,000 of shares were expected to be offered to the public in a primary offering and $750,000,000 of shares were expected to be offered to our stockholders pursuant to an amended and restated distribution reinvestment plan (subject to our right to reallocate such amounts). In the Prior Offering, we offered to the public three classes of shares: Class A shares, Class W shares and Class I shares with net asset value (“NAV”) based pricing. On September 15, 2015, we terminated the Prior Offering. Through September 15, 2015, the date our Prior Offering terminated, we had raised gross proceeds of approximately $183.0 million from the sale of approximately 25.8 million shares in the Prior Offering, including approximately $3.4 million through our distribution reinvestment plan.

On September 16, 2015, the Commission declared effective our Registration Statement on Form S-11 (Registration Number 333-197767) (the “Follow-On Registration Statement”). The Follow-On Registration Statement applies to the Company’s follow-on “best efforts” offering of up to $1,000,000,000 of the Company’s Class A, Class I and Class W shares of common stock, of which $750,000,000 of shares are expected to be offered to the public in a primary offering and $250,000,000 of shares are expected to be offered to stockholders of the Company pursuant to its distribution reinvestment plan (subject to the Company’s right to reallocate such amounts) (the “Follow-On Offering”). As of June 30, 2017, we had raised gross proceeds of approximately $125.3 million from the sale of approximately 16.8 million shares in the Follow-On Offering.

9

As of June 30, 2017, we were offering to sell any combination of Class A shares, Class W shares and Class I shares with a dollar value up to the maximum offering amount pursuant to the Follow-On Offering. We also sold shares of our unclassified common stock, which we refer to as “Class E” shares, pursuant to our distribution reinvestment plan offering registered on our Registration Statement on Form S-3 (Registration Number 333-162636). In the event of a liquidation event, our assets, or the proceeds therefrom, will be distributed ratably in proportion to the respective NAV for each class until the NAV for each class has been paid. Other than differing allocable fees and liquidation rights, Class E shares, Class A shares, Class W shares, and Class I shares have identical rights and privileges.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying interim condensed consolidated financial statements (herein referred to as “financial statements,” “balance sheets,” “statements of income,” “statements of comprehensive income (loss),” “statement of equity,” or “statements of cash flows”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the Commission's instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these financial statements do not include all the information and disclosure required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments and eliminations, consisting only of normal recurring items necessary for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of operating results for a full year. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Commission on March 3, 2017. There have been no significant changes to the Company’s significant accounting policies during the six months ended June 30, 2017 other than the updates described below.

New Accounting Pronouncements

In February 2017,the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update 2017-05, Other Income- Gain and Losses from Derecognition of Nonfinancial Assets (Topic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets ("ASU 2017-05"), which clarifies that a financial asset is within the scope of ASU 2017-05 if it is deemed an "in substance nonfinancial asset." Additionally, ASU 2017-05 adds guidance for partial sales of nonfinancial assets. The guidance will be effective for annual reporting periods beginning after December 15, 2017, and will require full or modified retrospective application. Early adoption is permitted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. We plan to adopt ASU 2017-05 at the same time we adopt Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) when the standard becomes effective for us beginning January 1, 2018 and have not determined whether the full or modified retrospective application will be applied. We do not anticipate the adoption will have a significant impact on our financial statements.

Newly Adopted Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update 2017-01 ("ASU 2017-01"), which clarifies the definition of a business in order to provide additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Earlier adoption is permitted. The guidance in ASU 2017-01 should be adopted on a prospective basis. We adopted ASU 2017-01 as of January 1, 2017 and anticipate that future acquisitions of real property will likely be accounted for as asset acquisitions rather than business combinations. Among other things, accounting for an asset acquisition requires capitalization of acquisition costs as a component of the acquired assets whereas accounting for business combinations requires acquisition costs to be expensed. Additionally, goodwill is not recognized and contingent consideration is recorded when probable and reasonably estimable under accounting for asset acquisitions.

3. INVESTMENTS IN REAL PROPERTY

Currently, our consolidated investments in real property consist of investments in office, industrial and retail properties. The following tables summarize our consolidated investments in real property as of June 30, 2017 and December 31, 2016 (amounts in thousands):

Real Property	Land		Building and Improvements			Intangible Lease Assets			Total Investment Amount			Intangible Lease Liabilities			Net Investment Amount
As of June 30, 2017:
Office	$	171,176	$	708,126		$	230,807		$	1,110,109		$	(15,014	)	$	1,095,095
Industrial	5,895		46,266			14,533			66,694			—			66,694
Retail	292,483		597,142			111,930			1,001,555			(75,265		)	926,290
Total gross book value	469,554		1,351,534			357,270			2,178,358			(90,279		)	2,088,079
Accumulated depreciation/amortization	—		(228,577		)	(287,263		)	(515,840		)	33,642			(482,198		)
Total net book value	$	469,554	$	1,122,957		$	70,007		$	1,662,518		$	(56,637	)	$	1,605,881
As of December 31, 2016:
Office	$	171,176	$	701,859		$	236,143		$	1,109,178		$	(15,121	)	$	1,094,057
Industrial	8,821		63,999			16,308			89,128			(344		)	88,784
Retail	293,973		599,020			113,023			1,006,016			(75,515		)	930,501
Total gross book value	473,970		1,364,878			365,474			2,204,322			(90,980		)	2,113,342
Accumulated depreciation/amortization	—		(215,858		)	(277,053		)	(492,911		)	31,435			(461,476		)
Total net book value	$	473,970	$	1,149,020		$	88,421		$	1,711,411		$	(59,545	)	$	1,651,866

Dispositions

During the six months ended June 30, 2017 and 2016, we disposed of the following properties (dollar amounts and square footage in thousands):

Property Type	Market	Ownership	Net Rentable Square Feet	Percentage Leased		Disposition Date	Contract  Sales Price		Gain on Sale
For the six months ended June 30, 2017
Retail	Greater Boston	100%	51	61	%	5/31/2017	$	4,500	$	—
Industrial Portfolio (1)	Louisville, KY	90%	609	100	%	6/9/2017	26,800		10,352
Total/ Weighted Average			660	97	%		$	31,300	$	10,352
For the six months ended June 30, 2016
Office	Washington, DC	100%	574	100	%	2/18/2016	$	158,400	$	41,241
Office	Chicago, IL	80%	107	66	%	3/1/2016	9,850		—
Office	Chicago, IL	80%	199	81	%	3/1/2016	18,000		159
Total/ Weighted Average			880	92	%		$	186,250	$	41,400

(1) Industrial portfolio included three properties.

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Real Property Impairment

During the three and six months ended June 30, 2017, we recorded a $1.1 million impairment charge related to a consolidated retail property located in the Greater Boston market ("Hanover"), which we acquired in August 2007. We held a 100% ownership interest in Hanover. We sold Hanover in May 2017. Prior to the disposition, the net book value of Hanover exceeded the contract sales price less the cost to sell by approximately $1.1 million. Accordingly, we recorded an impairment charge to reduce the net book value of Hanover to our estimate of its fair value less the cost to sell.

During the six months ended June 30, 2016, we recorded a $587,000 impairment charge related to a consolidated office property located in the Chicago, IL market ("40 Boulevard"), which we acquired in January 2007 and we held through a joint venture in which we were not the managing partner. We held an 80% ownership interest in 40 Boulevard. We sold 40 Boulevard in March 2016. Prior to the disposition, the net book value of 40 Boulevard exceeded the contract sales price less the cost to sell by approximately $587,000. Accordingly, we recorded an impairment charge to reduce the net book value of 40 Boulevard to our estimate of its fair value less the cost to sell.

The fair value measurement for the impairment charges related to Hanover and 40 Boulevard was based on the contract sales price less selling costs. We considered the Level 3 inputs used in determining the fair value of these real property investments to be significant. As such, the investments fall under the Level 3 category of the fair value hierarchy as defined in ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820").

In the calculation of our daily NAV, our real estate assets are carried at fair value using valuation methodologies consistent with ASC Topic 820. As a result, the timing of valuation changes recorded in our NAV will not necessarily be the same as for impairment charges recorded to our consolidated financial statements prepared pursuant to GAAP. Since we determine our NAV daily, impairment charges pursuant to GAAP will likely always be delayed and potentially significantly delayed compared to the change in fair value of our properties included in the calculation of our daily NAV.

Rental Revenue

The following table summarizes the adjustments to rental revenue related to the amortization of above-market lease assets, below-market lease liabilities, and straight-line rental adjustments for the three and six months ended June 30, 2017 and 2016. In addition, the following table summarizes tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue (amounts in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Straight-line rent adjustments	$	(238	)	$	(205	)	$	(355	)	$	(446	)
Above-market lease assets	(648		)	(1,261		)	(1,514		)	(2,528		)
Below-market lease liabilities	1,358			1,544			2,783			3,079
Total increase to rental revenue	$	472		$	78		$	914		$	105
Tenant recovery income (1)	$	9,993		$	9,996		$	21,046		$	20,560

(1) Tenant recovery income presented in this table excludes real estate taxes that were paid directly by our tenants that are subject to triple net lease contracts. Such payments totaled approximately $516,000 and $876,000 during the three months ended June 30, 2017 and 2016, respectively, and approximately $1.1 million and $2.3 million during the six months ended June 30, 2017 and 2016, respectively.

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Concentration of Credit Risk

The following is a summary of amounts related to the top five tenants based on annualized base rent, as of June 30, 2017 (dollar amounts and square feet in thousands):

Tenant	Locations	Industry	Annualized Base Rent (1)		% of Total Annualized Base Rent		Square Feet	% of Total Portfolio Square Feet
Charles Schwab & Co, Inc (2)	2	Securities, Commodities, Fin. Inv./Rel. Activities	$	23,646	15.6	%	602	8.3	%
Stop & Shop	14	Food and Beverage Stores	14,125		9.3	%	853	11.7	%
Novo Nordisk	1	Chemical Manufacturing	4,721		3.1	%	167	2.3	%
Seton Health Care	1	Hospitals	4,339		2.9	%	156	2.1	%
Shaw's Supermarket	4	Food and Beverage Stores	4,055		2.7	%	240	3.3	%
	22		$	50,886	33.6	%	2,018	27.7	%

(1) Annualized base rent represents the annualized monthly base rent of executed leases as of June 30, 2017.

(2) The amount presented for Charles Schwab & Co., Inc. ("Schwab") reflects the total annualized base rent for our two leases in place with Schwab as of June 30, 2017. One of these leases, which expires in September 2017, entails the lease of all 594,000 square feet of our 3 Second Street office property (defined below in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources") and accounts for $23.5 million or 15.5% of our annualized base rent as of June 30, 2017. We do not expect Schwab to renew this lease. Schwab has subleased 100% of 3 Second Street to 25 sub-tenants through September 2017. We have executed leases directly with 11 of these subtenants that comprise 368,000 square feet or 62% of 3 Second Street that effectively extend their leases beyond the Schwab lease expiration. These direct leases will expire between September 2020 and September 2032.

The top tenant in the table above comprises 15.6% of annualized base rent as of June 30, 2017. However, due to the near-term expiration of the Schwab lease at 3 Second Street, Schwab is no longer in the top 20 tenants based on future minimum rental revenue, comprising less than 1% of our total future minimum rental revenue as of June 30, 2017. Alternatively, based on future minimum rental revenue as of June 30, 2017, our top five tenants rank as follows: 1) Stop & Shop, 2) Mizuho Bank Ltd., 3) Shaw's Supermarket, 4) WeWork LLC, and 5) Novo Nordisk.

Our properties in New Jersey, Massachusetts, California, and Texas accounted for approximately 21%, 20%, 14%, and 12% respectively, of our total gross investment in real property portfolio as of June 30, 2017. A deterioration of general economic or other relevant conditions, changes in governmental laws and regulations, acts of nature, demographics or other factors in any of those states or the geographical region in which they are located could result in the loss of tenants, a decrease in the demand for our properties and a decrease in our revenues from those markets, which in turn may have a disproportionate and material adverse effect on our results of operations and financial condition.

4. DEBT OBLIGATIONS

The following table describes our borrowings as of June 30, 2017 and December 31, 2016 (dollar amounts in thousands):

	Principal Balance as of						Weighted Average Stated Interest Rate as of				Gross Investment Amount Securing Borrowings as of(1)
	June 30, 2017			December 31, 2016			June 30, 2017		December 31, 2016		June 30, 2017		December 31, 2016
Fixed-rate mortgages (2)	$	129,352		$	290,970		4.0	%	4.9	%	$	188,526	$	462,954
Floating-rate mortgages (3)	254,500			52,500			3.2	%	2.3	%	407,561		70,485
Total secured borrowings	383,852			343,470			3.5	%	4.5	%	596,087		533,439
Line of credit (4)	253,000			236,000			2.9	%	2.3	%	N/A		N/A
Term loans (5)	475,000			475,000			3.4	%	3.2	%	N/A		N/A
Total unsecured borrowings	728,000			711,000			3.3	%	2.9	%	N/A		N/A
Total borrowings	$	1,111,852		$	1,054,470		3.3	%	3.4	%	N/A		N/A
Less: net debt issuance costs	(7,260		)	(6,295		)
Add: mark-to-market adjustment on assumed debt	560			626
Total borrowings (net basis)	$	1,105,152		$	1,048,801

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(1) “Gross Investment Amount” as used here and throughout this document represents the allocated gross basis of real property after certain adjustments. Gross Investment Amount for real property (i) includes the effect of intangible lease liabilities, (ii) excludes accumulated depreciation and amortization, and (iii) includes the impact of impairments. 

(2) Amount as of June 30, 2017 and December 31, 2016 includes a floating-rate mortgage note that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing.

(3) As of June 30, 2017, our floating rate mortgage notes were subject to a weighted average interest rate spread of 2.13% over one-month LIBOR. As of December 31, 2016, our floating rate mortgage note was subject to an interest rate spread of 1.65% over one-month LIBOR.

(4) As of June 30, 2017 and December 31, 2016, borrowings under our line of credit were subject to interest at a floating rate of 1.70% and 1.55% over one-month LIBOR, respectively. However, as of December 31, 2016, we had effectively fixed the interest rate of approximately $12.1 million of the total of $236.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total line of credit of 2.28%.

(5) As of June 30, 2017 and December 31, 2016, borrowings under our term loans were subject to interest at a weighted average floating rate of 1.75% and 1.60% over one-month LIBOR, respectively. However, we have effectively fixed the interest rate of approximately $350.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total term loans of 3.44% and 3.17% as of June 30, 2017 and December 31, 2016, respectively.

Mortgage Notes

As of June 30, 2017, five mortgage notes were interest-only and four mortgage notes were fully amortizing with outstanding principal balances of approximately $357.5 million and $26.4 million, respectively. None of our mortgage notes are currently recourse to us. The assets and credit of our consolidated properties pledged as collateral for our mortgage notes are not available to satisfy our debt and obligations unless we first satisfy the mortgage note payable on the underlying property.  

Revolving Credit Facility and Five-Year Term Loan

Through a syndicate of 14 lenders (the "BofA Lenders") led by Bank of America, N.A., as Administrative Agent ("BofA"), we have a $675 million senior unsecured term loan and revolving line of credit (the “Facility”). The Facility provides us with the ability from time to time to increase the size of the Facility up to a total of $900 million less the amount of any prepayments under the term loan component of the Facility, subject to receipt of lender commitments and other conditions.

The Facility consists of a $400 million revolving credit facility (the “Revolving Credit Facility”) and a $275 millionfive-year term loan (the “Term Loan”). The Revolving Credit Facility contains a sublimit of $50 million for letters of credit and a sublimit of $50 million for swing line loans. The primary interest rate for the Revolving Credit Facility is based on LIBOR, plus a margin ranging from 1.40% to 2.30%, depending on our consolidated leverage ratio. The maturity date of the Revolving Credit Facility is January 31, 2019 and contains one one-year extension option that we may exercise upon (i) payment of an extension fee equal to 0.15% of the sum of the amount outstanding under the Revolving Credit Facility and the unused portion of the Revolving Credit Facility at the time of the extension, and (ii) compliance with the other conditions set forth in the credit agreement. The primary interest rate within the Term Loan is based on LIBOR, plus a margin ranging from 1.35% to 2.20%, depending on our consolidated leverage ratio. The maturity date of the Term Loan is January 31, 2018 and contains twoone-year extension options that we may exercise upon (i) payment of an extension fee equal to 0.125% of the sum of the amount outstanding under the Term Loan at the time of each extension, and (ii) compliance with the other conditions set forth in the credit agreement.

Borrowings under the Facility are available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties. As of June 30, 2017 and December 31, 2016, the unused portion of the Facility was approximately $124.7 million and $164.0 million, respectively, and we had full access to the unused portion of the Facility.

Seven-Year Term Loan

Through a syndicate of six lenders led by Wells Fargo Bank, National Association as Administrative Agent and Regions Bank as Syndication Agent, we have a $200 millionseven-year term loan credit agreement (the “$200 million Term Loan”). The primary interest rate within the $200 million Term Loan is based on LIBOR, plus a margin ranging from 1.65% to 2.55%, depending on our consolidated leverage ratio. The maturity date of the $200 million Term Loan is February 27, 2022 with no extension options.

Borrowings under the $200 million Term Loan are available for general business purposes including, but not limited to financing the acquisition of permitted investments, including commercial properties.

As of June 30, 2017, we were in compliance with all our debt covenants, including those under the Facility and the $200 million Term Loan.

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Mortgage Note Borrowing

Duringthe six months ended June 30, 2017, we entered into two mortgage note borrowings. The following table describes the new borrowings in more detail (dollar amounts in thousands):

Borrowings	Date Borrowed	Principal Balance		Fixed or Floating Interest Rate	Stated Interest Rate (1)		Contractual Maturity Date	Extension Options	Collateral Type	Collateral Market
3 Second Street (2)	1/10/2017	$	127,000	Floating	3.38	%	1/10/2020	2 one-year extensions	Office Property	Northern New Jersey
Centerton Square (3)	6/5/2017	75,000		Floating	3.33	%	7/10/2019	2 one-year extensions	Retail Property	Philadelphia, PA
Total/weighted average borrowings		$	202,000		3.36	%

(1) For floating-rate mortgage note borrowings, the stated interest rate is as of June 30, 2017.

(2) On January 10, 2017, we received proceeds of $127.0 million from the $146.6 million 3 Second Street mortgage note, and we can request the remaining proceeds anytime prior to October 10, 2019 as reimbursement for certain approved capital expenditures, tenant improvement costs and leasing commissions. As of June 30, 2017, the term loan was subject to an interest rate spread of 2.25% over one-month LIBOR. As a result of this borrowing, we entered into an interest rate protection agreement ("Interest Rate Cap") with a notional amount of $146.6 million and a LIBOR strike rate of 3.00%. See Note 5 for additional discussion related to the Interest Rate Cap.

(3) On June 5, 2017, we received proceeds of $75.0 million from the $81.3 million Centerton Square mortgage note, and we can obtain the remaining proceeds subject to meeting certain financial ratios. As of June 30, 2017, the term loan was subject to an interest rate spread of 2.25% over one-month LIBOR. As a result of this borrowing, we entered into an Interest Rate Cap with a notional amount of $81.3 million and a LIBOR strike rate of 3.00%. See Note 5 for additional discussion related to the Interest Rate Cap.

Repayment of Mortgage Note

During the six months ended June 30, 2017, we repaid four mortgage note borrowings in full during the respective free-prepayment periods prior to their scheduled maturities using proceeds from our Facility or our 3 Second Street borrowing. The following table describes these repayments in more detail (dollar amounts in thousands):

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Debt Obligation	Repayment Date	Balance Repaid/Extinguished		Interest Rate Fixed or Floating	Stated Interest Rate		Contractual Maturity Date	Collateral Type	Collateral Market
Eastern Retail Portfolio	1/10/2017	$	110,000	Fixed	5.51	%	6/11/2017	Retail Property	Various (1)
Wareham	5/8/2017	24,400		Fixed	6.13	%	8/8/2017	Retail Property	Greater Boston
Kingston	6/1/2017	10,574		Fixed	6.33	%	11/1/2017	Retail Property	Greater Boston
Sandwich	6/1/2017	15,825		Fixed	6.33	%	11/1/2017	Retail Property	Greater Boston
Total/weighted average borrowings		$	160,799		5.74	%

(1) The Eastern Retail Portfolio was collateralized by three retail properties located in Raleigh, NC, Philadelphia, PA and Greater Boston.

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The following table reflects our contractual debt maturities as of June 30, 2017, specifically our obligations under our mortgage notes and unsecured borrowings (dollar amounts in thousands):

	As of June 30, 2017
	Mortgage Notes				Unsecured Borrowings				Total
Year Ending December 31,	Number of Borrowings Maturing	Outstanding Principal Balance			Number of Borrowings Maturing	Outstanding Principal Balance			Outstanding Principal Balance
2017	—	$	842		—	$	—		$	842
2018	—	2,698			1	275,000			277,698
2019	1	78,698			1	253,000			331,698
2020	1	130,860			—	—			130,860
2021	1	12,764			—	—			12,764
2022	1	3,660			1	200,000			203,660
2023	2	77,899			—	—			77,899
2024	—	1,034			—	—			1,034
2025	1	71,094			—	—			71,094
2026	—	1,157			—	—			1,157
Thereafter	2	3,146			—	—			3,146
Total	9	$	383,852		3	$	728,000		$	1,111,852
Less: net debt issuance costs		(3,478		)		(3,782		)
Add: mark-to-market adjustment on assumed debt		560				—
Total borrowings (net basis)		$	380,934			$	724,218

5. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

We maintain risk management control systems to monitor interest rate risk attributable to both our outstanding and forecasted debt obligations. We generally seek to limit the impact of interest rate changes on earnings and cash flows by selectively utilizing derivative instruments to hedge exposures to changes in interest rates on our secured and unsecured floating rate borrowings. While this hedging strategy is designed to minimize the impact on our net income (loss) and cash provided by operating activities from changes in interest rates, the overall returns on our investments may be reduced. Our board of directors has established policies and procedures regarding our use of derivative instruments for hedging or other purposes to achieve these risk management objectives.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from counterparties in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amounts. We have entered into and plan to enter into certain interest rate derivatives with the goal of mitigating our exposure to adverse fluctuations in the interest payments on our one-month LIBOR-indexed debt. Certain of our floating rate borrowings are not hedged and therefore, to an extent, we have ongoing exposure to interest rate movements.

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The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges under ASC Topic 815 is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the next 12 months, we estimate that approximately $1.7 million will be reclassified as an increase to interest expense related to active effective hedges of existing floating-rate debt, and we estimate that approximately $2.0 million will be reclassified as an increase to interest expense related to effective interest rate swaps where the hedging instrument has been terminated. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.

The table below presents a reconciliation of the beginning and ending balances, between December 31, 2016 and June 30, 2017, of our accumulated other comprehensive loss (“AOCI”), net of amounts attributable to noncontrolling interests, related to the effective portion of our cash flow hedges as presented on our condensed consolidated financial statements, as well as amounts related to our available-for-sale securities (amounts in thousands):  

	(Losses) and Gains on Cash Flow Hedges			Unrealized (Losses) and Gains on Available-For-Sale Securities			Accumulated Other Comprehensive Loss
Beginning balance as of December 31, 2016	$	(5,849	)	$	(1,056	)	$	(6,905	)
Other comprehensive income:
Amount of loss reclassified from AOCI into interest expense (effective portion) (net of tax benefit of $0)	2,744			—			2,744
Change in fair value recognized in AOCI (effective portion) (net of tax benefit of $0)	(1,332		)	—			(1,332		)
Net current-period other comprehensive income	1,412			—			1,412
Attribution of and other adjustments to AOCI attributable to noncontrolling interests	(84		)	27			(57		)
Ending balance as of June 30, 2017	$	(4,521	)	$	(1,029	)	$	(5,550	)

Fair Values of Derivative Instruments

The valuation of interest rate derivatives is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

The majority of the inputs used to value our derivative instruments fall within Level 2 of the fair value hierarchy. However, the credit valuation adjustments associated with our derivative instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of potential default by us and our counterparties. As of June 30, 2017, we had assessed the significance of the impact of the credit valuation adjustments and had determined that it was not significant to the overall valuation of our derivative instruments. As a result, we have determined that our derivative valuations are classified in Level 2 of the fair value hierarchy.

As of June 30, 2017 and December 31, 2016, we had 10 and 11 outstanding interest rate swaps, respectively, that were designated as cash flow hedges of interest rate risk, with a total notional amount of $383.0 million and $395.1 million, respectively. In addition, as of June 30, 2017 and December 31, 2016, we had one interest rate swap with a total notional amount of $52.5 million that will become effective in July 2018 and mature in July 2021, which was designated as a cash flow hedge of interest rate risk.

As of June 30, 2017, we had two outstanding interest rate caps that were not designated as hedges, with a total notional amount of $227.9 million. Derivatives not designated as hedges are not speculative and are used to hedge our exposure to interest rate movements and other identified risks but do not meet the strict requirements for hedge accounting. In certain instances, including our current derivative not designated for hedge accounting, we elected not to apply hedge accounting.

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The table below presents the gross fair value of our designated and non-designated derivative financial instruments as well as their classification on our accompanying condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 (amounts in thousands, except for footnoted information):

		Fair Value of Asset Derivatives as of					Fair Value of Liability Derivatives as of
	Balance Sheet Location	June 30, 2017		December 31, 2016		Balance Sheet Location	June 30, 2017			December 31, 2016
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets, net (1)	$	1,937	$	2,135	Other liabilities (1)	$	(2,133	)	$	(2,777	)
Derivatives not designated as hedging instruments:
Interest rate contracts	Other assets, net (1)	$	14	$	—	Other liabilities (1)	$	—		$	—
Total derivatives		$	1,951	$	2,135		$	(2,133	)	$	(2,777	)

(1) Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on our accompanying condensed consolidated balance sheets. If we did net our derivative fair values on our accompanying condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016, there would be no impact.

Effect of Derivative Instruments on the Statements of Income and Comprehensive Income (Loss)

The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Derivatives Designated as Hedging Instruments
Derivative type	Interest rate contracts			Interest rate contracts			Interest rate contracts			Interest rate contracts
Amount of loss recognized in OCI (effective portion)	$	(1,928	)	$	(4,902	)	$	(1,332	)	$	(15,098	)
Location of loss reclassified from accumulated OCI into income (effective portion)	Interest expense			Interest expense			Interest expense			Interest expense
Amount of loss reclassified from accumulated OCI into income (effective portion)	$	1,251		$	1,199		$	2,744		$	2,317
Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Other income and (expense)			Other income and (expense)			Other income and (expense)			Other income and (expense)
Amount of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	$	(47	)	$	—		$	—		$	—
Derivatives Not Designated as Hedging Instruments
Derivative type	Interest rate cap			Interest rate cap			Interest rate cap			Interest rate cap
Amount of loss recognized in income	$	(21	)	$	—		$	(101	)	$	—
Location of loss recognized in income	Other income and (expense)			Other income and (expense)			Other income and (expense)			Other income and (expense)

Credit-Risk-Related Contingent Features

We have agreements with certain of our derivative counterparties that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. We have agreements with certain other derivative counterparties that contain a provision whereby if we default on any of our indebtedness held by our Operating Partnership, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations.

As of June 30, 2017, the fair value of derivatives in a net liability position, which included accrued interest but excluded any credit valuation adjustments related to these agreements, was approximately $2.2 million. As of June 30, 2017,

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we have not posted any collateral related to these agreements. If we had breached any of these provisions at June 30, 2017, we could have been required to settle our obligations under the agreements at their termination value of $2.2 million.

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

We use the framework established in ASC Topic 820, to measure the fair value of our financial instruments as disclosed in the table below. The fair values estimated below are indicative of certain interest rate and other assumptions as of June 30, 2017 and December 31, 2016, and may not take into consideration the effects of subsequent interest rate or other assumption fluctuations, or changes in the values of underlying collateral. The fair values of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses approximate their carrying values because of the short-term nature of these instruments.

The table below presents the carrying amounts and estimated fair values of our other financial instruments, other than derivatives which are disclosed in Note 5, as of June 30, 2017 and December 31, 2016 (amounts in thousands):  

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	As of June 30, 2017				As of December 31, 2016
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Fixed-rate debt-related investments, net	$	14,941	$	15,463	$	15,209	$	15,784
Liabilities:
Fixed-rate mortgage notes (1)	$	128,750	$	131,552	$	290,329	$	291,624
Floating-rate mortgage notes	252,184		253,580		51,918		51,942
Floating-rate unsecured borrowings	724,218		728,000		706,554		711,000

(1) Amount includes a floating-rate mortgage note of approximately $32.6 million as of June 30, 2017 and $32.5 million as of December 31, 2016 that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing.

The methodologies used and key assumptions made to estimate fair values of the financial instruments, other than derivatives disclosed in Note 5, described in the above table are as follows:

Debt-Related Investments — The fair value of our performing debt-related investments are estimated using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Credit spreads and market interest rates used to determine the fair value of these instruments are based on unobservable Level 3 inputs which management has determined to be its best estimate of current market values.

Mortgage Notes and Other Borrowings — The fair value of our mortgage notes and other borrowings are estimated using a discounted cash flow analysis, based on our estimate of market interest rates. Credit spreads relating to the underlying instruments are based on unobservable Level 3 inputs, which we have determined to be our best estimate of current market spreads of similar instruments.

7. STOCKHOLDERS’ EQUITY

Common Stock

During the six months ended June 30, 2017, we completed two self-tender offers pursuant to which we accepted for purchase approximately 11.8 million unclassified shares of common stock, which we refer to as “Class E” shares, at a weighted average purchase price of $7.50 per share for an aggregate cost of approximately $88.2 million.

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The following table describes the changes in each class of common shares during the six months ended June 30, 2017 (shares and dollar amounts in thousands):

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	Class E					Class A					Class W					Class I					Total
	Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)
Balances, December 31, 2016	112,325		$	1,298,189		2,001		$	14,758		2,271		$	16,381		34,039		$	243,049		150,636		$	1,572,377
Issuance of common stock:
Shares sold	—		—			107		836			254		1,916			1,178		8,870			1,539		11,622
Distribution reinvestment plan	872		6,568			25		190			30		222			430		3,235			1,357		10,215
Stock-based compensation (2)	—		—			—		—			—		—			(99	)	(669		)	(99	)	(669		)
Redemptions and repurchases of common stock	(12,320	)	(92,421		)	(75	)	(567		)	(69	)	(521		)	(1,056	)	(7,939		)	(13,520	)	(101,448		)
Balances, June 30, 2017	100,877		$	1,212,336		2,058		$	15,217		2,486		$	17,998		34,492		$	246,546		139,913		$	1,492,097

(1) Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem or repurchase common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans, share redemption programs, and self-tender offers.

(2) During the six months ended June 30, 2017, approximately 140,000 shares that we had previously recognized as issued and outstanding were relinquished pursuant to an amendment to the Restricted Stock Unit Agreements (as defined in Note 8). Please see Note 8 for further discussion.

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8. RELATED PARTY TRANSACTIONS

Advisory Agreement

Our day-to-day activities are managed by our Advisor, a related party, under the terms and conditions of the Advisory Agreement. Our Advisor is considered to be a related party as certain indirect owners and employees of our Advisor serve as two of our directors and all of our executive officers. The responsibilities of our Advisor cover all facets of our business, and include the selection and underwriting of our real property and debt-related investments, the negotiations for these investments, the asset management and financing of these investments and the oversight of real property dispositions.

On June 27, 2017, we, our Operating Partnership and our Advisor entered into the Eleventh Amended and Restated Advisory Agreement, effective June 30, 2017, which clarified that all expense reimbursements available to the Advisor under the agreement are also available to affiliates of the Advisor and/or product specialists engaged by the Advisor to perform services under the agreement. The Advisory Agreement may be renewed for an unlimited number of successive one-year terms. The current term of the Advisory Agreement expires on June 30, 2018. Per the Advisory Agreement, in consideration for asset management services performed, we pay our Advisor an advisory fee comprised of two separate components: (1) a fixed amount that accrues daily in an amount equal to 1/365th of 1.15% of (a) the “Aggregate Fund NAV” (i.e., the aggregate net asset value or “NAV” of our Class E shares, Class A shares, Class W shares and Class I shares, along with the OP Units held by third parties) for such day and (b) the consideration received by us or our affiliate for selling Interests (defined below) in DST Properties (defined below) to third party investors, net of up-front fees and expense reimbursements payable out of gross sale proceeds from the sale of such Interests, including but not limited to sales commissions, dealer manager fees and non-accountable expense allowances, and (2) a performance component that is based on the annual non-compounded investment return provided to holders of “Fund Interests” (defined as our Class E shares, Class A shares, Class W shares, Class I shares, and OP Units held by third parties) such that our Advisor will receive 25% of the overall return in excess of 6%; provided that in no event may the performance condition exceed 10% of the overall return for such year, and subject to certain other limitations. Additionally, our Advisor will provide us with a waiver of a portion of its fees generally equal to the amount of the performance component that would have been payable with respect to the Class E shares and the Class E OP Units held by third parties until the NAV of such shares or units exceeds $10.00 per share or unit, the benefit of which will be shared among all holders of Fund Interests.  

In addition, we will pay our Advisor a fee of 1.0% of the total consideration we receive upon the sale of real property assets (excluding DST Properties). For these purposes, a “sale” means any transaction or series of transactions whereby we or our Operating Partnership directly or indirectly (including through the sale of any interest in a joint venture or through a sale by a joint venture in which we hold an interest) sells, grants, transfers, conveys, or relinquishes its ownership of any real property or portion thereof, including the lease of any real property consisting of a building only, and including any event with respect to any real property which gives rise to a significant amount of insurance proceeds or condemnation awards.

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Further, for providing a substantial amount of services in connection with the sale of a property (excluding DST Properties), as determined by a majority of our independent directors, we will pay our Advisor up to 50.0% of the reasonable, customary and competitive commission paid for the sale of a comparable real property, provided that such amount shall not exceed 1.0% of the contract price of the property sold and, when added to all other real estate commissions paid to unaffiliated parties in connection with the sale, may not exceed the lesser of a competitive real estate commission or 6.0% of the sales price of the property.

In addition, pursuant to the Advisory Agreement, we will pay directly, or reimburse our Advisor and our Dealer Manager (defined below) if they pay on our behalf any organizational and offering expenses (other than selling commissions, the dealer manager fee, distribution fees and non-transaction based compensation allocated to sales-related activities of employees of our Dealer Manager in connection with the offering) relating to any public offerings as and when incurred. After the termination of the primary portion of the offering and again after termination of the distribution reinvestment plan portion of the offering, our Advisor has agreed to reimburse us to the extent that total cumulative organization and offering expenses (including selling commissions, the dealer manager fee and distribution fees) that we incur exceed 15% of our gross proceeds from the applicable offering.

The Advisory Agreement also provides that we must reimburse our Advisor for any private offering organization and offering expenses, such as those of the DST Program (defined below), it incurs on our behalf, including Advisor personnel costs, unless it has agreed to receive a fee in lieu of reimbursement.

Subject to certain limitations, we reimburse our Advisor for all of the costs it incurs in connection with the services it provides to us, including, without limitation, our allocable share of the personnel (and related employment) costs and overhead (including, but not limited to, allocated rent paid to both third parties and an affiliate of the advisor, equipment, utilities, insurance, travel and entertainment, and other costs) incurred by our Advisor or its affiliates, including, but not limited to, total compensation, benefits and other overhead of all employees involved in the performance of such services.

Public Offering Dealer Manager Agreement

Black Creek Capital Markets, LLC (f/k/a Dividend Capital Securities LLC) (our “Dealer Manager”), a related party, is distributing the shares of our common stock in our public offering on a “best efforts” basis. Our Dealer Manager is a member of the Financial Industry Regulatory Authority, Inc., or FINRA. Our Dealer Manager coordinates our distribution effort and manages our relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to marketing our public offering.

On September 16, 2015, we entered into a Second Amended and Restated Dealer Manager Agreement (the “Second Amended Dealer Manager Agreement”) with our Dealer Manager. The Dealer Manager served as dealer manager for the Prior Offering and will serve as dealer manager for the Follow-On Offering. The purpose of the Second Amended Dealer Manager Agreement is to engage our Dealer Manager with respect to the Follow-On Offering while still paying dealer manager fees and distribution fees with respect to the Prior Offering. As amended, the Second Amended Dealer Manager Agreement may be made to apply to future offerings by naming them in a schedule to the agreement, with the consent of the Company and our Dealer Manager. Pursuant to the Second Amended Dealer Manager Agreement, we pay (i) selling commissions on Class A shares sold in the primary offering of up to 3.0% of the public offering price per share, (ii) a dealer manager fee which accrues daily in an amount equal to 1/365th of 0.6% of our NAV per share of Class A and Class W shares outstanding and an amount equal to 1/365th of 0.1% of our NAV per share of Class I shares outstanding on such day on a continuous basis, and (iii) a distribution fee which accrues daily in an amount equal to 1/365th of 0.5% of our NAV per Class A share outstanding on such day on a continuous basis. Subject to FINRA limitations on underwriting compensation, we will continue to pay the dealer manager fee and distribution fee until the earlier to occur of the following: (i) a listing of the class of such shares on a national securities exchange or (ii) such shares no longer being outstanding.

Pursuant to the Second Amended Dealer Manager Agreement, we may pay to our Dealer Manager a primary dealer fee in the amount of up to 5.0% of the gross proceeds raised from the sale of Class I shares in the primary offering, provided that (i) the total gross proceeds raised with respect to which the primary dealer fee will apply may not exceed $100,000,000, subject to further increase by our board of directors, in its discretion; (ii) the primary dealer fee will only be paid with respect to sales made by participating broker-dealers specifically approved by us as being eligible; and (iii) the primary dealer fee will only be paid with respect to sales made at times approved by us. The Dealer Manager may reallow a portion of the primary dealer fee to the participating broker-dealers involved in selling such Class I shares based on the portion of the gross proceeds raised from their customers. The Dealer Manager will consider the primary dealer fee to be underwriting compensation subject to certain limits. The primary dealer fee will be paid by us and will not be considered to be a class-specific expense.

On June 23, 2016, our board of directors increased the maximum amount of total gross proceeds raised with respect to which the primary dealer fee will apply to $150 million. Such amount is subject to further increase by our board of directors, in its discretion.

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Independent Director RSU Awards

On December 5, 2013, our board of directors approved revised compensation for our independent directors. In connection with the revised compensation plan, at each annual meeting of stockholders the independent directors will automatically, upon election, each receive an annual $10,000 grant of Restricted Stock Units ("RSUs") with respect to Class I shares of our common stock, with the number of RSUs based on the NAV per Class I share as of the end of the day of the annual meeting.

Restricted Stock Unit Agreements 

We have entered into Restricted Stock Unit Agreements (the “Advisor RSU Agreements”) with our Advisor. The purposes of our Advisor RSU Agreements are to promote an alignment of interests among our stockholders, our Advisor and the personnel of our Advisor and its affiliates, and to promote retention of the personnel of our Advisor and its affiliates. Each restricted stock unit that we grant pursuant to our Advisor RSU Agreements (the "Company RSUs") will, upon vesting, be settled in one share of our Class I common stock. The Company RSUs are subject to specified vesting and settlement provisions and, upon settlement in Class I shares of Company common stock, require offsets of advisory fees and expenses otherwise payable from the Company to our Advisor as described further below based on the NAV per Class I share on the grant date of the applicable Company RSU. Pursuant to the terms of the Advisor RSU Agreements, we have granted our Advisor approximately 842,000 Company RSUs. On April 13, 2017, we entered into an amendment to the Advisor RSU Agreements pursuant to which the Advisor agreed that approximately 208,000 of the RSUs originally granted under the Agreements would not vest (the "Relinquished RSUs"). Because the underlying shares will not vest and be delivered to the Advisor, no offset of advisory fees and expenses otherwise payable from the Company to the Advisor will occur with respect to the Relinquished RSUs. However, in consideration for the Advisor's agreement, we agreed to reduce future offsets of advisory fees and expenses in connection with vesting and settlement of other RSUs by approximately $33,000, which amount reflects an increase in net asset value per Class I share since the grants of certain of the Relinquished RSUs. As of June 30, 2017, approximately 123,000 Company RSUs remained unvested and unsettled.

As of June 30, 2017, our Advisor did not have any shares of Class I common stock issued upon settlement of Company RSUs that remained subject to fee offset. The Advisor is expected to redistribute a significant portion of the Company RSUs and/or shares to senior level employees of our Advisor and its affiliates that provide services to us, although the terms of such redistributions (including the timing, amount and recipients) remain solely in the discretion of our Advisor. The weighted average grant-date NAV per Class I share with respect to the unsettled Company RSUs is $7.29 as of June 30, 2017.

Vesting and Payment Offset

Following specified vesting provisions, an equal percentage of the Company RSUs vest on each of the applicable vesting dates. On each vesting date, an offset amount (each, an “Offset Amount”) will be calculated and deducted on a pro rata basis over the next 12 months from the cash payments otherwise due and payable to our Advisor under our then-current Advisory Agreement for any fees or expense reimbursements. Each Offset Amount equals the number of Company RSUs vesting on such date multiplied by the NAV per Class I share publicly disclosed by us (the “Class I NAV”) as of the end of the applicable grant date (the “Grant Date NAV per Class I Share”). Each Offset Amount is always calculated based on the Grant Date NAV per Class I Share, even beyond the initial grant and vesting date. At the end of each 12-month period following each vesting date, if the Offset Amount has not been fully realized by offsets from the cash payments otherwise due and payable to our Advisor under the Advisory Agreement, our Advisor shall promptly pay any shortfall to us.

The chart below shows the grant dates, vesting dates, number of unvested shares as of June 30, 2017, and Grant Date NAV per Class I Share (share amounts in thousands).

Award	Grant Date	Vesting Dates	Number of Unvested Shares	Grant Date NAV per Class I Share
Company RSU	2/25/2015	4/13/2018	66	$	7.18
Company RSU	2/4/2016	4/15/2019	57	7.41
Total/ weighted average			123	$	7.29

Termination

The Advisor RSU Agreements will automatically terminate upon termination or non-renewal of the Advisory Agreement by any party for any reason. In addition, upon a change in control of us, then either our Advisor or we may immediately terminate the Advisor RSU Agreements. Further, our Advisor may immediately terminate the Advisor RSU Agreements if we exercise certain rights under the Advisor RSU Agreements to replace the Company RSUs with another form of compensation.

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Upon termination of the Advisor RSU Agreements, our Advisor will promptly pay any unused offset amounts to us or, at our Advisor’s election, return Class I shares in equal value based on the Class I NAV as of the date of termination of the Advisor RSU Agreements. In addition, upon termination of the Advisor RSU Agreements, all unvested Company RSUs will be forfeited except that, unless the Advisor RSU Agreements were terminated at the election of our Advisor following a change in control of us or as a result of a premature termination of the Advisory Agreement at our election for cause (as defined in the Advisory Agreement) or upon the bankruptcy of our Advisor, then following such forfeiture of Company RSUs, our Advisor will have the right to acquire from us the number of Class I shares equal to the number of Company RSUs forfeited, in return for a purchase price equal to such number of Class I shares multiplied by the Grant Date NAV per Class I Share. The Advisor must notify us of its election to exercise the foregoing acquisition right within 30 days following the termination of the Advisor RSU Agreements, and the parties will close the transaction within 60 days following the termination of the Advisor RSU Agreements. 

Dividend Equivalent Payments

If our board of directors declares and we pay a cash dividend on Class I shares for any period in which the Company RSUs are outstanding (regardless of whether such Company RSUs are then vested), our Advisor will be entitled to dividend equivalents (the “Dividend Equivalents”) with respect to that cash dividend equal to the cash dividends that would have been payable on the same number of Class I shares as the number of Company RSUs subject to the Advisor RSU Agreements had such Class I shares been outstanding during the same portion of such period as the Company RSUs were outstanding. Any such Dividend Equivalents may be paid in cash or Class I shares, at our Advisor’s election.

Restricted Stock Grant

Effective February 2, 2017, we granted approximately 58,000 restricted shares of Class I common stock to certain employees of our Advisor and its affiliates at a price of $7.56 per share, of which 25% vested on the grant date with the remaining 75% vesting ratably over the next three anniversaries of the grant date. During the six months ended June 30, 2017, approximately 38,000 shares of restricted stock vested at a weighted average price of $7.55, based on our NAV per share as of the vesting dates. During the six months ended June 30, 2017, we recorded approximately $210,000 within “general and administrative expenses” in the accompanying condensed consolidated statements of income. Our restricted stock generally vests ratably over a period of three to four years.

Private Placements of Delaware Statutory Trust Interests

Private Placements

In March 2016, we, through our Operating Partnership, initiated a program to raise capital in private placements exempt from registration under the Securities Act of 1933, as amended (“Private Placements”), through the sale of beneficial interests (“Interests”) in specific Delaware statutory trusts holding real properties, including properties currently indirectly owned by our Operating Partnership (the “DST Program”). From 2006 through 2009, we, through our subsidiaries, conducted similar private placement offerings of fractional interests in which it raised a total of $183.1 million in gross proceeds. These fractional interests were all subsequently acquired by our Operating Partnership in exchange for an aggregate of 17.7 million OP Units. As of June 30, 2017, we had sold approximately $6.1 million in Interests, which we include in "other liabilities" in our accompanying condensed consolidated balance sheets.

Each Private Placement will offer Interests in one or more real properties placed into one or more Delaware statutory trust(s) by our Operating Partnership or its affiliates (“DST Properties”). We anticipate that these Interests may serve as replacement properties for investors seeking to complete like-kind exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended. Additionally, properties underlying Interests sold to investors pursuant to such Private Placements will be leased-back by an indirect wholly owned subsidiary of our Operating Partnership on a long term basis of up to 29 years. The lease agreements are expected to be fully guaranteed by our Operating Partnership. Additionally, our Operating Partnership will retain a fair market value purchase option (“FMV Option”) giving it the right, but not the obligation, to acquire the Interests from the investors at a later time in exchange for OP Units.

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DST Program Dealer Manager Agreement

In connection with the DST Program, in March 2016, Dividend Capital Exchange LLC (“DCX”), a wholly owned subsidiary of our taxable REIT subsidiary that is wholly owned by our Operating Partnership, entered into a Dealer Manager Agreement with our Dealer Manager, pursuant to which our Dealer Manager agreed to conduct Private Placements for Interests reflecting an indirect ownership of up to $500 million of Interests. DCX will pay certain up-front fees and reimburse certain related expenses to the Dealer Manager with respect to capital raised through any such Private Placements. DCX is obligated to pay our Dealer Manager a dealer manager fee of up to 1.5% of gross equity proceeds raised and a commission of up to 5% of gross equity proceeds raised through the Private Placements. The Dealer Manager may re-allow such commissions and a portion of such dealer manager fee to participating broker dealers.

In addition, we, or our subsidiaries, are obligated to pay directly or reimburse our Advisor and our Dealer Manager if they pay on our behalf, any organization and offering expenses (other than selling commissions and the dealer manager fee) as and when incurred. These expenses may include reimbursements for the bona fide due diligence expenses of participating broker-dealers, supported by detailed and itemized invoices, and similar diligence expenses of investment advisers, legal fees of our Dealer Manager, reimbursements for customary travel, lodging, meals and reasonable entertainment expenses of registered persons associated with our Dealer Manager, the cost of educational conferences held by us, including costs reimbursement for registered persons associated with our Dealer Manager and registered representatives of participating broker-dealers to attend educational conferences sponsored by us, and attendance fees and costs reimbursement for registered persons associated with our Dealer Manager to attend seminars conducted by participating broker-dealers and promotional items.

We intend to recoup the costs of the selling commissions and dealer manager fees described above through a purchase price “mark-up” of the initial estimated fair value of the DST Properties to be sold to investors, thereby placing the economic burden of these up-front fees on the investors purchasing such Interests. In addition, to offset some or all of our organization and offering expenses associated with the Private Placements, we will add a purchase price mark-up of the estimated fair value of the DST Properties to be sold to investors in the amount of 1.5% of the gross equity proceeds. Collectively, these purchase price mark-ups total up to 8% of the gross equity proceeds raised in the Private Placements. Additionally, we will be paid, by investors purchasing Interests, a non-accountable reimbursement equal to 1.0% of gross equity proceeds for real estate transaction costs that we expect to incur in selling or buying these Interests. Also, investors purchasing Interests will be required to pay their own respective closing costs upon the initial sale of the interests.

Limited Partnership Agreement

In connection with the launch of the DST Program, the Company, on behalf of itself as general partner and on behalf of all the limited partners thereto, entered into the Fifth Amended and Restated Limited Partnership Agreement of our Operating Partnership, dated as of March 2, 2016, which was further amended on August 2, 2016 (the “Amended and Restated Operating Partnership Agreement”). The Amended and Restated Operating Partnership Agreement amends the prior operating partnership agreement by establishing two series of Class E OP Units, with different redemption and registration rights. The currently existing third-party holders of Class E OP Units will now hold Series 1 Class E OP Units, and will continue to have the same redemption and registration rights they had previously, which include the right, in certain circumstances to require our Operating Partnership to redeem the OP Units for Class E shares of the Company or cash. Any purchasers of Interests in the DST Program that ultimately acquire OP Units through the FMV Option will acquire Series 2 Class E OP Units, which will have similar redemption and registration rights to those of the holders of Series 1 Class E OP Units, except that their redemption rights will in certain circumstances require our Operating Partnership to redeem the OP Units for either Class I shares of the Company or cash (as determined by our Operating Partnership in its sole discretion). In addition, the Amended and Restated Operating Partnership Agreement provides that a redemption fee of 1.5% of the shares otherwise payable to a limited partner upon redemption of Series 2 Class E Units will be paid to an affiliate of the Manager (defined below). Holders of Series 1 or Series 2 Class E OP Units cannot require us to redeem their Series 1 or Series 2 Class E OP Units with cash.

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Delaware Statutory Trust Agreement

DCX Manager LLC (the “Manager”), an affiliate of our Advisor, will be engaged to act as the manager of each Delaware statutory trust holding a DST Property. Although the intention is to sell 100% of the interests to third parties, DCX may hold an interest for a period of time and therefore could be subject to the following description of fees and reimbursements paid to the Manager. The Manager will have primary responsibility for performing administrative actions in connection with the trust and any DST Property and has the sole power to determine when it is appropriate for a trust to sell a DST Property. The Manager will be entitled to the following payments from the trust: (i) a management fee equal to a stated percentage (e.g., 1.0%) of the gross rents payable to the trust, with such amount to be set on a deal-by-deal basis, (ii) a disposition fee of 1.0% of the gross sales price of any DST Property sold to a third party, and (iii) reimbursement of certain expenses associated with the establishment, maintenance and operation of the trust and DST Properties. Additionally, the Manager or its affiliate may earn a 1.0% loan fee for any financing arrangement sourced, negotiated and executed in connection with the DST Program. This loan fee is only payable to the Manager by new investors that purchase Interests and therefore is not paid by the Company or its affiliates.

Summary of Fees and Other Amounts

The following table summarizes fees and other amounts earned by our Advisor and its related parties in connection with services performed for us during the three and six months ended June 30, 2017 and 2016 (amounts in thousands, except footnoted information):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2017		2016		2017		2016
Advisory fees (1)	$	3,451	$	3,671	$	6,941	$	7,436
Other reimbursements paid to our Advisor (2)	2,026		2,092		4,304		4,304
Other reimbursements paid to our Dealer Manager	155		32		338		83
Advisory fees related to the disposition of real properties	286		—		286		1,807
Development management fee (3)	—		10		—		29
Primary dealer fee (4)	—		1,697		—		1,697
Selling commissions	5		17		25		67
Dealer manager fees	116		89		228		174
Distribution fees	19		17		38		34
Total	$	6,058	$	7,625	$	12,160	$	15,631

(1) Amounts reported for the three months ended June 30, 2017 and 2016 include approximately $154,000 and $282,000, respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor. Amounts reported for the six months ended June 30, 2017 and 2016 include approximately $443,000 and $565,000, respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor.

(2) Other reimbursements paid to our Advisor for the three months ended June 30, 2017 and 2016 include approximately $1.7 million and $1.7 million, respectively, and include approximately $3.5 million and $3.6 million for the six months ended June 30, 2017 and 2016, respectively, to reimburse a portion of the salary, bonus and benefits for employees of our Advisor, including our executive officers, for services provided to us for which our Advisor does not otherwise receive a separate fee. The balance of such reimbursements are made up primarily of other general overhead and administrative expenses, including, but not limited to, allocated rent paid to both third parties and affiliates of our advisor, equipment, utilities, insurance, travel and entertainment, and other costs.

(3) Pursuant to our amended Advisory Agreement, our Advisor no longer receives a development management fee in exchange for providing development management services.

(4) Amounts reported represent primary dealer fees we paid to our Dealer Manager based on the gross proceeds raised by participating broker-dealers pursuant to certain selected dealer agreements. Of the primary dealer fee earned during the six months ended June 30, 2016, our Dealer Manager reallowed approximately $1.5 million to participating third-party broker-dealers and retained approximately $170,000.

See the accompanying condensed consolidated balance sheets for the amounts we owed to our Advisor and affiliates of our Advisor for such services and reimbursement of certain expenses as of June 30, 2017 and December 31, 2016. Pursuant to the Advisory Agreement, we accrue the advisory fee on a daily basis and pay our Advisor amounts due subsequent to each month-end. In addition, we recorded a liability of approximately $3.9 million for dealer manager and distribution fees that we estimate that we may pay to our Dealer Manager in future periods for shares of our common stock sold in our Follow-On Offering as of June 30, 2017. We anticipate that our Dealer Manager will reallow a significant portion of such fees to third-party broker dealers.

9. NET INCOME PER COMMON SHARE 

Reconciliations of the numerator and denominator used to calculate basic net income per common share to the numerator and denominator used to calculate diluted net income per common share for the three and six months ended June 30, 2017 and 2016 are described in the following table (amounts in thousands, except per share information):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
Numerator	2017			2016			2017			2016
Net income	$	8,415		$	135		$	10,242		$	48,373
Net income attributable to noncontrolling interests	(1,610		)	(18		)	(1,776		)	(4,474		)
Net income attributable to common stockholders	6,805			117			8,466			43,899
Dilutive noncontrolling interests share of net income	558			9			691			3,410
Numerator for diluted earnings per share – adjusted net income	$	7,363		$	126		$	9,157		$	47,309
Denominator
Weighted average shares outstanding-basic	145,288			161,209			147,577			162,581
Incremental weighted average shares effect of conversion of OP units	11,921			12,460			11,974			12,598
Weighted average shares outstanding-diluted	157,209			173,669			159,551			175,179
INCOME PER COMMON SHARE -BASIC AND DILUTED	$	0.05		$	0.00		$	0.06		$	0.27

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10. SEGMENT INFORMATION

We have three reportable operating segments, which include our three real property operating sectors (office, industrial, and retail), and we measure our profit and loss of our operating segments based on net operating income (“NOI”). We organize and analyze the operations and results of each of these segments independently, due to inherently different considerations for each segment. Such considerations include, but are not limited to, the nature and characteristics of the investment, investment strategies and objectives. Specifically, the physical characteristics of our buildings, the related operating characteristics, the geographic markets, and the type of tenants are inherently different for each of our segments. The following tables set forth revenue and the components of NOI of our segments for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):  

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	For the Three Months Ended June 30,
	Revenues				NOI
	2017		2016		2017		2016
Office	$	27,624	$	30,983	$	16,224	$	20,846
Industrial	1,330		1,534		975		1,110
Retail	21,082		20,185		16,276		15,114
Total	$	50,036	$	52,702	$	33,475	$	37,070

	For the Six Months Ended June 30,
	Revenues				NOI
	2017		2016		2017		2016
Office	$	57,063	$	64,952	$	34,522	$	44,130
Industrial	2,901		3,245		1,978		2,377
Retail	42,580		40,049		32,040		29,789
Total	$	102,544	$	108,246	$	68,540	$	76,296

We consider NOI to be an appropriate supplemental financial performance measure because NOI reflects the specific operating performance of our real properties, and excludes certain items that are not considered to be controllable in connection with the management of each property, such as depreciation and amortization, general and administrative expenses, advisory fees, acquisition-related expenses, interest and other (expense) income, interest expense, (gain) loss on extinguishment of debt and financing commitments, gain on the sale of real property, and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our financial performance as a whole, since it excludes such items that could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance.

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The following table is a reconciliation of our reported net income attributable to common stockholders to our NOI for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Net income attributable to common stockholders	$	6,805		$	117		$	8,466		$	43,899
Debt-related income	(229		)	(237		)	(460		)	(475		)
Real estate depreciation and amortization expense	18,798			20,198			36,734			40,034
General and administrative expenses	2,024			2,338			4,274			4,958
Advisory fees, related party	3,451			3,671			6,941			7,436
Acquisition-related expenses	—			474			—			525
Impairment of real estate property	1,116			—			1,116			587
Other (income) and expense	89			69			198			11
Interest expense	10,163			10,422			19,847			21,383
Gain on extinguishment of debt and financing commitments	—			—			—			(5,136		)
Gain on sale of real property	(10,352		)	—			(10,352		)	(41,400		)
Net income attributable to noncontrolling interests	1,610			18			1,776			4,474
Net operating income	$	33,475		$	37,070		$	68,540		$	76,296

The following table reflects our total assets by business segment as of June 30, 2017 and December 31, 2016 (amounts in thousands):

	As of
	June 30, 2017		December 31, 2016
Segment assets:
Office	$	808,079	$	825,961
Industrial	41,595		57,651
Retail	812,844		827,799
Total segment assets, net	1,662,518		1,711,411
Non-segment assets:
Debt-related investments, net	14,941		15,209
Cash and cash equivalents	5,362		13,864
Other non-segment assets (1)	42,457		43,244
Total assets	$	1,725,278	$	1,783,728

(1) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Such forward-looking statements may relate to, without limitation, our future capital expenditures, distributions and acquisitions (including the amount and nature thereof), other development trends of the real estate industry, business strategies, and the growth of our operations. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are subject to a number of assumptions, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements are generally identifiable by the use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “continue,” or the negative of these words, or other similar words or terms. Readers are cautioned not to place undue reliance on these forward-looking statements. Among the factors that may cause our results to vary are general economic and business (particularly real estate and capital market) conditions being less favorable than expected, the business opportunities that may be presented to and pursued by us, changes in laws or regulations (including changes to laws governing the taxation of REITs), risk of acquisitions, availability and creditworthiness of prospective tenants, availability of capital (debt and equity), interest rate fluctuations, competition, supply and demand for properties in our current and any proposed market areas, tenants’ ability to pay rent at current or increased levels, accounting principles, policies and guidelines applicable to REITs, environmental, regulatory and/or safety requirements, tenant bankruptcies and defaults, the availability and cost of comprehensive insurance, including coverage for terrorist acts, and other factors, many of which are beyond our control. For a further discussion of these factors and other risk factors that could lead to actual results materially different from those described in the forward-looking statements, see "Risk Factors" under (i) Item 1A of Part 1 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("the Commission") on March 3, 2017 and available at www.sec.gov and (ii) Part II, Item 1A of this Quarterly Report on Form 10-Q.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

This section of our Quarterly Report on Form 10-Q provides an overview of what management believes to be the key elements for understanding (i) our company and how we manage our business, (ii) how we measure our performance and our operating results, (iii) our liquidity and capital resources, and (iv) the financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Overview

Dividend Capital Diversified Property Fund Inc. is a Maryland corporation formed on April 11, 2005 to invest in a diverse portfolio of real property and real estate related investments. As used herein, “the Company,” “we,” “our” and “us” refer to Dividend Capital Diversified Property Fund Inc. and its consolidated subsidiaries and partnerships except where the context otherwise requires.

We operate in such a manner so as to qualify as a real estate investment trust (“REIT”) for federal income tax purposes, and we utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) organizational structure to hold all or substantially all of our assets through our operating partnership, Dividend Capital Total Realty Operating Partnership, L.P. (our “Operating Partnership”). Furthermore, our Operating Partnership wholly owns a taxable REIT subsidiary, DCTRT Leasing Corp., through which we execute certain business transactions that might otherwise have an adverse impact on our status as a REIT if such business transactions were to occur directly or indirectly through our Operating Partnership. We are an externally managed REIT and have no employees. Our day-to-day activities are managed by Dividend Capital Total Advisors LLC (our “Advisor”), a related party, under the terms and conditions of an advisory agreement (as amended from time to time, the “Advisory Agreement”).

The primary sources of our revenue and earnings include rent received from customers under operating leases at our properties, including reimbursements from customers for certain operating costs. Our primary expenses include rental expenses, depreciation and amortization expenses, general and administrative expenses, advisory fees and interest expenses.

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We currently have three business segments, consisting of investments in (i) office property, (ii) industrial property, and (iii) retail property. We may have additional segments in the future to the extent we enter into additional real property sectors, such as multifamily, hospitality, and other real property types. For a discussion of our business segments and the associated revenue and net operating income by segment, see Note 10 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. We also have investments in real estate related-debt investments (which we refer to as “debt-related investments”). 

The following table summarizes our investments in real properties, by segment, using our estimated fair value of these investments as of June 30, 2017 (amounts in thousands):

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	Geographic Markets	Number of Properties	Net Rentable Square Feet	% Leased(1)		Aggregate Fair Value
Office properties	13	16	3,404	81.3	%	$	1,187,550
Industrial properties	2	2	1,173	75.3	%	54,850
Retail properties	9	33	3,738	95.7	%	1,007,600
Real properties	19(2)	51	8,315	86.9	%	$	2,250,000

(1) Percentage leased is based on executed leases as of June 30, 2017.

(2) The total number of our geographic markets does not equal the sum of the number of geographic markets by segment, as we have more than one segment in certain geographic markets.

We may target investments in four primary property categories of office, industrial, retail and multifamily. Although we may own properties in each of these categories, we are not tied to specific allocation targets and we may not always have significant holdings, or any holdings at all, in each category. For example, we do not currently own multifamily investments, although we intend to consider multifamily investment opportunities in the future. Also, through the disposition of assets, our ownership of industrial assets has declined to less than 5% of our portfolio as of June 30, 2017. From 2013 through the first half of 2016, our investment strategy primarily focused on multi-tenant office and necessity-oriented, multi-tenant retail investments located in what we believe are strong markets poised for long-term growth. Our current investment strategy will continue to focus on these multi-tenant office and necessity-oriented, multi-tenant retail investments. We intend to also incorporate industrial properties into our current investment strategy. We are currently working on selling certain non-strategic office and retail assets. If successful, the disposition of these assets will help us to increase our allocation to industrial real estate assets and our shorter term liquidity. However, there can be no assurance that we will be successful in this investment strategy, including with respect to any particular asset class. To a lesser extent we may invest in other types of real estate including, but not limited to, hospitality, medical offices, student housing and unimproved land. We anticipate that the majority of our real property investments will be made in the United States, although we may also invest in Canada and Mexico, and potentially elsewhere on a limited basis, to the extent that opportunities exist that may help us meet our investment objectives.

Any future and near-term obligations are expected to be funded primarily through the use of cash on hand, cash generated from operations, proceeds from our public offerings and other equity offerings, proceeds from the sale of existing investments, and the issuance and assumption of debt obligations.

• Cash on hand — As of June 30, 2017, we had approximately $5.4 million of cash and cash equivalents.

• Cash available under our credit facility — As of June 30, 2017, the unused portion of our line of credit was approximately $124.7 million, all of which was available to us.

• Cash generated from operations — During the six months ended June 30, 2017, we generated approximately $35.6 million from operations of our real properties and income from debt-related investments.

• Proceeds from offerings of equity securities — We currently maintain a public offering of our shares of common stock. During the six months ended June 30, 2017, we raised approximately $15.3 million in proceeds from the sale of Class A, W, and I shares in our current follow-on public offering, which commenced on September 16, 2015, including approximately $3.6 million under the distribution reinvestment plan. Additionally, during the six months ended June 30, 2017, we received approximately $6.6 million in proceeds from the distribution reinvestment plan offering of our unclassified shares of common stock, which we refer to as “Class E” shares (the “Class E DRIP Offering”). Additionally, during the six months ended June 30, 2017, we had raised approximately $3.5 million in proceeds from the sale of beneficial interests in specific Delaware statutory trusts holding real properties, which we include in "other liabilities" in our accompanying condensed consolidated balance sheets.

We believe that our existing cash balance, cash generated from operations, proceeds from our public offerings and our ability to sell investments and to issue debt obligations remains adequate to meet our expected capital obligations for the next twelve months.

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Significant Transactions During the Six Months Ended June 30, 2017

Investment Activities

Real Property Dispositions

During the six months ended June 30, 2017, we completed the disposition of four properties aggregating approximately 660,000 net rentable square feet for an aggregate sales price of approximately $31.3 million. For additional discussion of our real property dispositions, see Note 3 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Please see "Subsequent Events" included in "Item 2. Management's Discussion and Analysis" of this Quarterly Report on Form 10-Q for additional information regarding investment activities occurring subsequent to June 30, 2017.

Financing Activities

Self-Tender Offer

During the six months ended June 30, 2017, we completed two self-tender offers pursuant to which we accepted for purchase approximately 11.8 million unclassified shares of common stock, which we refer to as “Class E” shares, at a weighted average purchase price of $7.50 per share for an aggregate cost of approximately $88.2 million. We funded the purchases with draws on our revolving credit facility.

Repayment of Mortgage Borrowing

During the six months ended June 30, 2017, we repaid four mortgage note borrowings in full with an aggregate balance of approximately $160.8 million at the time of the payoffs and a weighted average interest rate of 5.74%. We funded the repayment with proceeds from our revolving credit facility and our mortgage note borrowings discussed below.  For additional information on this repayment, see Note 4 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Mortgage NoteBorrowing

During the six months ended June 30, 2017, we received proceeds of approximately $202.0 million from two mortgage note borrowings both subject to an interest rate spread of 2.25% over one-month LIBOR. For additional information on these borrowings, see Note 4 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Please see "Subsequent Events" included in "Item 2. Management's Discussion and Analysis" of this Quarterly Report on Form 10-Q for additional information regarding financing activities occurring subsequent to June 30, 2017.

Net Asset Value Calculation

Our board of directors, including a majority of our independent directors, has adopted valuation procedures that contain a comprehensive set of methodologies to be used in connection with the calculation of our NAV on a daily basis. One fundamental element of the valuation process, the valuation of our real property portfolio, is managed by Altus Group U.S., Inc., an independent valuation firm (“the Independent Valuation Firm”) approved by our board of directors, including a majority of our independent directors. All parties engaged by us in the calculation of our NAV, including the Advisor, are subject to the oversight of our board of directors. As part of this process, our Advisor reviews the estimates of the values of our real property portfolio and real estate-related assets for consistency with our valuation guidelines and the overall reasonableness of the valuation conclusions, and informs our board of directors of its conclusions (as needed, but at least once per year as part of their annual review, described below). Although our Independent Valuation Firm or other pricing sources may consider any comments received from us or our Advisor to their individual valuations, the final estimated values of our real properties or certain other assets and liabilities are determined by the Independent Valuation Firm or other pricing source. Our Independent Valuation Firm is available to meet with our board of directors to review valuation information, as well as our valuation guidelines and the operation and results of the valuation process generally. Our board of directors has the right to engage additional valuation firms and pricing sources to review the valuation process or valuations, if deemed appropriate. Every month our senior management team and our Independent Valuation Firm hold an NAV committee meeting to review the prior month’s adjustments to NAV and discuss any possible changes to the NAV policies and procedures which may be recommended to the board of directors. The information reviewed by this committee is summarized for the audit committee. At least once each calendar year our board of directors, including a majority of our independent directors, reviews the

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appropriateness of our valuation procedures. With respect to the valuation of our properties, the Independent Valuation Firm provides the board of directors with periodic valuation reports. From time to time our board of directors, including a majority of our independent directors, may adopt changes to the valuation procedures if it (1) determines that such changes are likely to result in a more accurate reflection of NAV or a more efficient or less costly procedure for the determination of NAV without having a material adverse effect on the accuracy of such determination or (2) otherwise reasonably believes a change is appropriate for the determination of NAV. We will publicly announce material changes to our valuation procedures or the identity or role of the Independent Valuation Firm.

The following table sets forth the components of NAV for the Company as of June 30, 2017 and March 31, 2017 (amounts in thousands except per share information). As used below, “Fund Interests” means our Class E shares, Class A shares, Class W shares, and Class I shares, along with the OP Units held by third parties, and “Aggregate Fund NAV” means the NAV of all of the Fund Interests.

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	As of June 30, 2017			As of March 31, 2017
Office properties	$	1,187,550		$	1,186,100
Industrial properties	54,850			81,050
Retail properties	1,007,600			1,013,300
Real properties	$	2,250,000		$	2,280,450
Debt-related investments	14,941			15,076
Total Investments	$	2,264,941		$	2,295,526
Cash and other assets, net of other liabilities	(15,449		)	(13,843		)
Debt obligations	(1,111,852		)	(1,095,063		)
Outside investors' interests	—			(2,599		)
Aggregate Fund NAV	$	1,137,640		$	1,184,021
Total Fund Interests outstanding	151,738			157,409
NAV per Fund Interest	$	7.50		$	7.52

When the fair value of our real estate assets is calculated for the purposes of determining our NAV per share, the calculation is done using the fair value methodologies detailed within the Financial Accounting Standards Board ("FASB") Accounting Standards Codification under Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). However, our valuation procedures and our NAV are not subject to accounting principles generally accepted in the United States (“GAAP”) and will not be subject to independent audit. In the determination of our NAV, the value of certain of our assets and liabilities are generally determined based on their carrying amounts under GAAP; however, those principles are generally based upon historic cost and therefore may not be determined in accordance with ASC Topic 820. Readers should refer to our financial statements for our net book value determined in accordance with GAAP from which one can derive our net book value per share by dividing our stockholders’ equity by shares of our common stock outstanding as of the date of measurement.

Our valuation procedures, which address specifically each category of our assets and liabilities and are applied separately from the preparation of our financial statements in accordance with GAAP, involve adjustments from historical cost. There are certain factors which cause NAV to be different from net book value on a GAAP basis. Most significantly, the valuation of our real estate assets, which is the largest component of our NAV calculation, will be provided to us by the Independent Valuation Firm on a daily basis. For GAAP purposes, these assets are generally recorded at depreciated or amortized cost. We generally do not undertake to mark-to-market our debt-related investments or real estate-related liabilities, but rather these assets and liabilities are usually included in our determination of NAV at amounts determined in accordance with GAAP, which amounts have been and could in the future be materially different from the amount of these assets and liabilities if we were to undertake to mark-to-market our debt. Also for NAV purposes, we mark-to-market our hedging instruments on a frequency that management determines to be practicable under the circumstances and currently we seek to mark-to-market our hedging instruments on a weekly basis. However, our NAV policies and procedures allow for that frequency to change to be more or less frequent. Other examples that will cause our NAV to differ from our GAAP net book value include the straight-lining of rent, which results in a receivable for GAAP purposes that is not included in the determination of our NAV, and, for purposes of determining our NAV, the assumption of a value of zero in certain instances where the balance of a loan exceeds the value of the underlying real estate properties, where GAAP net book value would reflect a negative equity value for such real estate properties, even if such loans are non-recourse. Third party appraisers may value our individual real estate assets using appraisal standards that deviate from fair value standards under GAAP. The use of such appraisal standards may cause our NAV to deviate from GAAP fair value principles. We did not develop our valuation procedures with the intention of complying with fair value concepts under GAAP and, therefore, there could be differences

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between our fair values and the fair values derived from the principal market or most advantageous market concepts of establishing fair value under GAAP.

Under GAAP, we record liabilities for dealer manager and distribution fees that we (i) currently owe Black Creek Capital Markets, LLC (f/k/a Dividend Capital Securities LLC) (our “Dealer Manager”) under the terms of our Dealer Manager agreement and (ii) for an estimate that we may pay to our Dealer Manager in future periods for shares of our common stock sold pursuant to the prior offering, which commenced on July 12, 2012 and terminated on September 15, 2015, and the current follow-on offering, which commenced on September 16, 2015. As of June 30, 2017, we recorded a total liability for dealer manager and distribution fees of approximately $3.9 million, comprised of a $45,000 current payable to our dealer manager and a $3.9 million estimated liability for dealer manager and distributions fees that we may pay to our dealer manager in future periods. We do not deduct the $3.9 million liability for estimated future dealer manager and distribution fees in our calculation of NAV since we intend for our NAV to reflect our estimated value on the date that we determine our NAV. Accordingly, our estimated NAV at any given time should not include consideration of any estimated future dealer manager and distribution fees that may become payable after such date.

We include no discounts to our NAV for the illiquid nature of our shares, including the limitations on your ability to redeem shares under our share redemption programs or tender pursuant to self-tender offers and our ability to suspend or terminate our share redemption programs or tender pursuant to self-tender offers at any time. Our NAV generally does not consider exit costs (e.g. selling costs and commissions related to the sale of a property) that would likely be incurred if our assets and liabilities were liquidated or sold. While we may use market pricing concepts to value individual components of our NAV, our per share NAV is not derived from the market pricing information of open-end real estate funds listed on stock exchanges.

Please note that our NAV is not a representation, warranty or guarantee that: (1) we would fully realize our NAV upon a sale of our assets; (2) shares of our common stock would trade at our per share NAV on a national securities exchange; and (3) a stockholder would be able to realize the per share NAV if such stockholder attempted to sell his or her shares to a third party.

The June 30, 2017 valuation for our real properties was provided by the Independent Valuation Firm in accordance with our valuation procedures and determined starting with the appraised value. The aggregate real property valuation of $2.25 billion compares to a GAAP basis of real properties (before accumulated amortization and depreciation and the impact of intangible lease liabilities) of $2.09 billion, representing an increase of approximately $161.9 million or 7.8%. Certain key assumptions that were used by our Independent Valuation Firm in the discounted cash flow analysis are set forth in the following table based on weighted averages by property type. 

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	Office		Industrial		Retail		Weighted Average Basis
Exit capitalization rate	6.59	%	8.00	%	6.41	%	6.55	%
Discount rate / internal rate of return ("IRR")	7.31	%	8.44	%	6.96	%	7.18	%
Annual market rent growth rate	3.17	%	3.00	%	2.81	%	3.00	%
Average holding period (years)	10.2		12.0		10.1		10.2

A change in the rates used would impact the calculation of the value of our real properties. For example, assuming all other factors remain constant, an increase in the weighted-average annual discount rate/IRR and the exit capitalization rate of 0.25% would reduce the value of our real properties by approximately 1.95% and 2.32%, respectively.

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The following table sets forth the quarterly changes to the components of NAV for the Company and the reconciliation of NAV changes for each class of shares (amounts in thousands, except per share information):

	Total			Class E Common Stock			Class A Common Stock			Class W Common Stock			Class I Common Stock			Class E OP Units
NAV as of March 31, 2017	$	1,184,021		$	803,618		$	15,300		$	18,166		$	257,250		$	89,687
Fund level changes to NAV
Realized/unrealized losses on net assets	(6,011		)	(4,010		)	(81		)	(97		)	(1,353		)	(470		)
Income accrual	19,923			13,474			260			316			4,363			1,510
Dividend accrual	(14,020		)	(9,573		)	(142		)	(196		)	(3,036		)	(1,073		)
Advisory fee	(3,431		)	(2,321		)	(45		)	(54		)	(751		)	(260		)
Performance-based fee	—			—			—			—			—			—
Class specific changes to NAV
Dealer Manager fee	(116		)	—			(23		)	(28		)	(65		)	—
Distribution fee	(19		)	—			(19		)	—			—			—
NAV as of June 30, 2017 before share/unit sale/redemption activity	$	1,180,347		$	801,188		$	15,250		$	18,107		$	256,408		$	89,394
Dollar/unit sale/redemption activity
Amount sold	11,535			3,208			264			781			7,282			—
Amount redeemed	(54,242		)	(48,083		)	(86		)	(248		)	(5,578		)	(247		)
NAV as of June 30, 2017	$	1,137,640		$	756,313		$	15,428		$	18,640		$	258,112		$	89,147
Shares/units outstanding as of March 31, 2017	157,409			106,837			2,034			2,415			34,200			11,923
Shares/units sold	1,535			427			35			104			969			—
Shares/units redeemed	(7,206		)	(6,387		)	(11		)	(33		)	(742		)	(33		)
Shares/units outstanding as of June 30, 2017	151,738			100,877			2,058			2,486			34,427			11,890
NAV per share/unit as of March 31, 2017				$	7.52		$	7.52		$	7.52		$	7.52		$	7.52
Change in NAV per share/unit				(0.02		)	(0.02		)	(0.02		)	(0.02		)	(0.02		)
NAV per share/unit as of June 30, 2017				$	7.50		$	7.50		$	7.50		$	7.50		$	7.50

Our Operating Results

Set forth below is a discussion of our operating results, followed by a discussion of FFO (as defined below), which we consider to be a meaningful supplemental measure of our operating performance. We also use net operating income ("NOI") as a supplemental financial performance measure because NOI reflects the specific operating performance of our real properties and debt-related investments and excludes certain items that are not considered to be controllable in connection with the management of each property, such as other-than-temporary impairment, losses related to provisions for losses on debt-related investments, gains or losses on derivatives, acquisition-related expenses, gains or losses on extinguishment of debt and financing commitments, interest income, depreciation and amortization, general and administrative expenses, advisory fees, interest expense and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our operating financial performance as a whole, since it does exclude such items that could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance. We present NOI in the tables below, and include a reconciliation to net income, as defined by GAAP, in Note 10 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Net Income Attributable to Common Stockholders

Our net income attributable to common stockholders increased to approximately $6.8 million for the three months ended June 30, 2017 from approximately $117,000 for the three months ended June 30, 2016. The increase was primarily a result of a gain on sale of real property, largely driven by the disposition of three industrial properties ("the Industrial Portfolio") during the three months ended June 30, 2017, partially offset by (i) a decrease in real property NOI from continuing operations primarily as a result of the expiration of our lease with Sybase Inc. ("Sybase") in January 2017 and 2016 real estate property disposition activity and (ii) an impairment of real estate property during the three months ended June 30, 2017.

Our net income attributable to common stockholders decreased to approximately $8.5 million for the six months ended June 30, 2017 from approximately $43.9 million for the six months ended June 30, 2016. The decrease was primarily a result of (i) a decrease in gain on sale of real property and a decrease in gain on extinguishment of debt and financing, largely driven by the disposition of three office properties during the six months ended June 30, 2016 and (ii) a decrease in real

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property NOI from continuing operations primarily as a result of the expiration of our lease with Sybase in January 2017 and 2016 real estate property disposition activity, partially offset by a decrease in interest expense.

The following series of tables and discussions describe in more detail our results of operations, including those items specifically mentioned above, for the three and six months ended June 30, 2017 compared to the three and six months ended June 30, 2016.

Three and Six-Months Comparison

Our results of rental activities are presented in two groups: (i) all operating properties that we acquired prior to January 1, 2016 and owned through June 30, 2017 (the “Same Store Portfolio”), providing meaningful comparisons for the three and six months ended June 30, 2017 and the three and six months ended June 30, 2016, and (ii) all other operating properties, which were acquired or disposed during the same period (the “Non-Same Store Portfolio”). The Same Store Portfolio includes 50 properties, comprising approximately 8.2 million square feet or 99.0% of our total portfolio when measured by square feet.

The following table illustrates the changes in rental revenues, rental expenses, and net operating income for the three and six months ended June 30, 2017 compared to the three and six months ended June 30, 2016 (dollar amounts in thousands, except footnoted information). 

	For the Three Months Ended June 30,											For the Six Months Ended June 30,
	2017			2016			$ Change			% Change		2017			2016			$ Change			% Change
Revenue
Base rental revenue - Same Store Portfolio (1)	$	36,689		$	40,925		$	(4,236	)	-10	%	$	75,188		$	81,528		$	(6,340	)	-8	%
Average % leased	86.7		%	92.5		%	(5.8		)%	-6	%	88.3		%	92.4		%	(4.1		)%	-4	%
Other rental revenue - Same Store Portfolio (2)	11,477			10,447			1,030			10	%	23,432			21,183			2,249			11	%
Total rental revenue - Same Store Portfolio	48,166			51,372			(3,206		)	-6	%	98,620			102,711			(4,091		)	-4	%
Rental revenue - Non-Same Store Portfolio	1,870			1,330			540			41	%	3,924			5,535			(1,611		)	-29	%
Total rental revenue	$	50,036		$	52,702		$	(2,666	)	-5	%	$	102,544		$	108,246		$	(5,702	)	-5	%
Rental Expenses
Same Store Portfolio	$	16,038		$	15,077		$	961		6	%	$	32,759		$	30,364		$	2,395		8	%
Non-Same Store Portfolio	523			555			(32		)	-6	%	1,245			1,586			(341		)	-22	%
Total rental expenses	$	16,561		$	15,632		$	929		6	%	$	34,004		$	31,950		$	2,054		6	%
Net Operating Income
Real property - Same Store Portfolio (2)	$	32,128		$	36,295		$	(4,167	)	-11	%	$	65,861		$	72,347		$	(6,486	)	-9	%
Real property - Non-Same Store Portfolio	1,347			775			572			74	%	2,679			3,949			(1,270		)	-32	%
Total net operating income (3)	$	33,475		$	37,070		$	(3,595	)	-10	%	$	68,540		$	76,296		$	(7,756	)	-10	%

(1) Base rental revenue represents contractual base rental revenue earned by us from our tenants and does not include the impact of certain GAAP adjustments to rental revenue, such as straight-line rent adjustments, amortization of above-market intangible lease assets or the amortization of below-market lease intangible liabilities. Such GAAP adjustments and other rental revenue such as expense recovery revenue are included in the line item referred to as “other rental revenue.”

(2) Our same store NOI includes certain non-cash GAAP adjustments for rental revenue for straight line rent and amortization of above market lease assets and below market lease liabilities that caused a increase to GAAP NOI of approximately $376,000 and $67,000 for the three months ended June 30, 2017 and 2016, respectively, and approximately $709,000 and $200,000 for the six months ended June 30, 2017 and 2016, respectively.

(3) For a discussion as to why we view net operating income to be an appropriate supplemental performance measure, refer to “Our Operating Results” above. See also Note 10 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

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Net Operating Income

Base Rental Revenue - Same Store

The table below presents the factors contributing to the decrease in our same store base rental revenue for the three months ended June 30, 2017 and 2016 (dollar amounts other than annualized base rent per square foot in thousands):

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Same Store Portfolio	Base Rent for the Three Months Ended June 30,							Average % Leased for the Three Months Ended June 30,				Annualized Base Rent per Square Foot for the Three Months Ended June 30 (1),
	2017		2016		$ Change			2017		2016		2017		2016
Office	$	20,918	$	25,322	$	(4,404	)	82.0	%	95.8	%	$	29.98	$	31.05
Industrial	860		838		22			75.3	%	75.3	%	3.89		3.79
Retail	14,911		14,765		146			94.8	%	94.9	%	17.21		17.03
Total base rental     revenue - same store	$	36,689	$	40,925	$	(4,236	)	86.7	%	92.5	%	$	20.55	$	21.50

(1) Represents contractual base rent and does not include the impact of tenant concessions, such as free rent and tenant reimbursements. 

Base rental revenue in our Same Store Portfolio decreased for the three months ended June 30, 2017, compared to the same period in 2016, primarily due to a decrease in our office portfolio as a result of the Sybase lease expiration in January 2017. Excluding the impact of the Sybase lease expiration, base rental revenue in our Same Store Portfolio increased approximately $422,000 to $36.7 million for the three months ended June 30, 2017 from approximately $36.3 million for the same period in 2016 primarily due to an increase in annualized base rent per square foot in our office portfolio for the three months ended June 30, 2017, resulting from scheduled rent escalations for existing leases and improving rental rates for new and renewal leases.

The table below presents the factors contributing to the decrease in our same store base rental revenue for the six months ended June 30, 2017 and 2016 (dollar amounts other than annualized base rent per square foot in thousands):

Same Store Portfolio	Base Rent For the Six Months Ended June 30,							Average % Leased For the Six Months Ended June 30,				Annualized Base Rent per Square Foot for the Six Months Ended June 30 (1),
	2017		2016		$ Change			2017		2016		2017		2016
Office	$	43,668	$	50,297	$	(6,629	)	85.9	%	95.8	%	$	29.85	$	30.83
Industrial	1,720		1,675		45			75.3	%	75.3	%	3.89		3.79
Retail	29,800		29,556		244			94.6	%	94.6	%	17.23		17.09
Total base rental     revenue - same store	$	75,188	$	81,528	$	(6,340	)	88.3	%	92.4	%	$	20.69	$	21.44

(1) Represents contractual base rent and does not include the impact of tenant concessions, such as free rent and tenant reimbursements.

Base rental revenue in our Same Store Portfolio decreased for the six months ended June 30, 2017, compared to the same period in 2016, primarily due to a decrease in our office portfolio as a result of the Sybase lease expiration in January 2017. Excluding the impact of the Sybase lease expiration, base rental revenue in our Same Store Portfolio increased approximately $1.4 million to $73.6 million for the six months ended June 30, 2017, from approximately $72.2 million for the same period in 2016 primarily due to an increase in annualized base rent per square foot in our office portfolio for the six months ended June 30, 2017, resulting from scheduled rent escalations for existing leases and improving rental rates for new and renewal leases.

Other Rental Revenue - Same Store  

Same store other rental revenue increased for the three and six months ended June 30, 2017, compared to the same periods in 2016, primarily due to a decrease in unfavorable straight-line and above-market rent adjustments resulting from the Sybase lease expiration in January 2017. Excluding the impact of the Sybase lease expiration, other rental revenue in our Same Store Portfolio was relatively flat for the three and six months ended June 30, 2017, compared to the same periods in 2016.

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Rental Expenses - Same Store

The table below presents the amounts recorded and changes in rental expense of our Same Store Portfolio for the three and six months ended June 30, 2017 and 2016 (dollar amounts in thousands):

	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2017		2016		$ Change			% Change	2017		2016		$ Change			% Change
Real estate taxes	$	6,832	$	5,852	$	980		16.7%	$	13,538	$	11,858	$	1,680		14.2%
Repairs and maintenance	4,665		4,233		432			10.2%	9,661		8,589		1,072			12.5%
Utilities	1,875		1,846		29			1.6%	3,774		3,929		(155		)	-3.9%
Property management fees	1,216		1,217		(1		)	-0.1%	2,422		2,382		40			1.7%
Insurance	361		318		43			13.5%	717		637		80			12.6%
Other	1,089		1,611		(522		)	-32.4%	2,647		2,969		(322		)	-10.8%
Total same store rental expense	$	16,038	$	15,077	$	961		6.4%	$	32,759	$	30,364	$	2,395		7.9%

The increase in real estate taxes of the Same Store Portfolio for the three and six months ended June 30, 2017, compared to the same periods in 2016, is primarily attributable to (i) certain real estate taxes are no longer tenant paid as a result of the Sybase lease expiration in January 2017 and (ii) an increase in property values. The increase in repairs and maintenance expenses of the Same Store Portfolio for the three and six months ended June 30, 2017, compared to the same periods in 2016, is primarily attributable to an increase in the number of painting and parking lot repairs during the three and six months ended June 30, 2017 compared to the same periods in 2016. The decrease in other expenses of the Same Store Portfolio for the three and six months ended June 30, 2017, compared to the same periods in 2016 is primarily attributable to decrease in reserves for bad debt in our retail portfolio.

Real Property – Non-Same Store Portfolio

The increase in rental revenue and NOI in our Non-Same Store Portfolio for the three months ended June 30, 2017, compared to the same period in 2016 is primarily attributable to the acquisition of a retail property in May 2016 partially offset by the disposition of real properties during 2017 and 2016.

The decrease in rental revenue and NOI in our Non-Same Store Portfolio for the six months ended June 30, 2017, compared to the same period in 2016 is primarily attributable to the disposition of an office property in Washington, DC in February 2016 partially offset by the acquisition of a retail property in May 2016.

Other Operating Expenses

Real Estate Depreciation and Amortization Expense

Depreciation and amortization expense decreased for three and six months ended June 30, 2017 compared to the same periods in 2016 primarily due to certain intangible lease assets becoming fully amortized partially offset by the write-off of certain intangible lease assets as a result of early lease terminations.

General and Administrative Expenses

General and administrative expenses decreased for three and six months ended June 30, 2017 compared to the same periods in 2016, primarily due to a decrease in reimbursements paid to our Advisor due to lower acquisition activity during the three and six months ended June 30, 2017.

Advisory Fees

The decrease in advisory fees for three and six months ended June 30, 2017 compared to the same periods in 2016 primarily resulted from the common stock redemptions pursuant to our self-tender offerings in 2016 and 2017. See Note 8 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for further discussion of all fees and reimbursements that we paid to our Advisor during the three and six months ended June 30, 2017 and 2016.

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Impairment of Real Estate Property

We recorded $1.1 million in impairment charges during the three and six months ended June 30, 2017 due to the net book value of a retail property exceeding the contract sales price less cost prior to disposition. We recorded approximately $587,000 in impairment charges related to our real properties during the six months ended June 30, 2016.

See Note 3 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for further discussion of impairment charges recorded during the three and six months ended June 30, 2017 and 2016.

Other Income (Expenses)

Interest Expense

Interest expense decreased for the three and six months ended June 30, 2017, compared to the same periods in 2016, primarily due to a decrease of the weighted average interest rate to 3.3% as of June 30, 2017 from 3.6% as of June 30, 2016. During 2017 and 2016, we repaid $487.0 million of mortgage note borrowings with proceeds from our revolving line of credit and issued $287.5 million of new mortgage note borrowings. The following table further describes our interest expense by debt obligation, and includes amortization of deferred financing costs, amortization related to our derivatives, and amortization of discounts and premiums for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):  

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
Debt Obligation	2017		2016		2017		2016
Mortgage notes	$	3,496	$	6,263	$	7,123	$	13,109
Unsecured borrowings	6,606		4,155		12,627		8,270
Financing obligations	61		4		97		4
Total interest expense	$	10,163	$	10,422	$	19,847	$	21,383

Gain onExtinguishment ofDebt andFinancingCommitments

During the six months ended June 30, 2016, we had a gain of approximately $5.1 million on extinguishment of debt and financing commitments. The gain in 2016 resulted from the extinguishment of a $5.1 million contingently payable mortgage note that was not ultimately required to be repaid. There was no comparable transaction in 2017.

Gain onSale ofRealProperty

During the three months ended June 30, 2017, we had a gain on sale of real property of approximately $10.4 million. During the six months ended June 30, 2017 and 2016, we had a gain on sale of real property of approximately $10.4 million and $41.4 million, respectively. For a detailed discussion of the real properties we disposed of during the three and six months ended June 30, 2017 and 2016, see Note 3 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

How We Measure Our Operating Performance

Funds From Operations

FFO Definition (“FFO”)

We believe that FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), is a meaningful supplemental measure of our operating performance because historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization expense. However, since real estate values have historically risen or fallen with market and other conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient. Thus, NAREIT created FFO as a supplemental measure of operating performance for real estate investment trusts that consists of net income (loss), calculated in accordance with GAAP, plus real estate-related depreciation and amortization and impairment of depreciable real estate, less gains (or losses) from dispositions of real estate held for investment purposes.

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The following table presents a reconciliation of FFO to net income for the three and six months ended June 30, 2017 and 2016 (amounts in thousands, except per share information):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Reconciliation of net earnings to FFO:
Net income attributable to common stockholders	$	6,805		$	117		$	8,466		$	43,899
Add (deduct) NAREIT-defined adjustments:
Depreciation and amortization expense	18,798			20,198			36,734			40,034
Gain on disposition of real property	(10,352		)	—			(10,352		)	(41,400		)
Impairment of real estate property	1,116			—			1,116			587
Noncontrolling interests’ share of net income	1,610			18			1,776			4,474
Noncontrolling interests’ share of FFO	(1,410		)	(1,499		)	(2,937		)	(4,578		)
FFO attributable to common shares-basic	16,567			18,834			34,803			43,016
FFO attributable to dilutive OP Units	1,360			1,456			2,823			3,334
FFO attributable to common shares-diluted	$	17,927		$	20,290		$	37,626		$	46,350
FFO per share-basic and diluted	$	0.11		$	0.12		$	0.24		$	0.26
Weighted average number of shares outstanding
Basic	145,288			161,209			147,577			162,581
Diluted	157,209			173,669			159,551			175,179

Limitations of FFO

FFO is presented herein as a supplemental financial measure and has inherent limitations. We do not use FFO as, nor should it be considered to be, an alternative to net income (loss) computed under GAAP as an indicator of our operating performance, or as an alternative to cash from operating activities computed under GAAP, or as an indicator of liquidity or our ability to fund our short or long-term cash requirements, including distributions to stockholders. Management uses FFO, in addition to net income (loss) computed under GAAP and cash flows from operating activities computed under GAAP, to evaluate our consolidated operating performance and as a guide to making decisions about future investments. Our FFO calculation does not present, nor do we intend it to present, a complete picture of our financial condition and operating performance. We caution investors against using FFO to determine a price to earnings ratio or yield relative to our NAV. We believe that net income (loss) computed under GAAP remains the primary measure of performance and that FFO is only meaningful when used in conjunction with net income (loss) computed under GAAP. Further, we believe that our consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of our financial condition and operating performance.

Further, FFO is not comparable to the performance measure established by the Investment Program Association (the “IPA”), referred to as “modified funds from operations,” or “MFFO,” as MFFO makes further adjustments including certain mark-to-market items and adjustments for the effects of straight-line rent. As such, FFO may not be comparable to the MFFO of non-listed REITs that disclose MFFO in accordance with the IPA standard.

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Liquidity and Capital Resources

Liquidity Outlook

We believe our existing cash balance, our available credit under our revolving credit facilities, cash from operations, additional proceeds from our public offerings, proceeds from the sale of existing investments, and prospective debt or equity issuances will be sufficient to meet our liquidity and capital needs for the foreseeable future, including the next 12 months. Our capital requirements over the next 12 months are anticipated to include, but are not limited to, operating expenses, distribution payments, debt service payments, including debt maturities of approximately $277.2 million, redemption payments, issuer tender offers, and acquisitions of real property and debt-related investments. Borrowings that are subject to extension options are also subject to certain lender covenants and restrictions that we must meet to extend the initial maturity date. We currently believe that we will qualify for these extension options. However, we cannot guarantee that we will meet the requirements to extend the notes upon initial maturity. In the event that we do not qualify to extend the notes, we expect to repay them with proceeds from new borrowings or available proceeds from our revolving credit facility.

In order to maintain a reasonable level of liquidity for redemptions of Class A, Class W and Class I shares pursuant to our Second Amended and Restated Class A, W and I Share Redemption Program (the “Class AWI SRP”), we intend to generally maintain under normal circumstances the following aggregate allocation to sources of liquidity, which include liquid assets and capacity under our borrowing facilities: (1) 10% of the aggregate NAV of our outstanding Class A, Class W and Class I shares up to $1 billion of collective Class A, Class W and Class I share NAV, and (2) 5% of the aggregate NAV of our outstanding Class A, Class W and Class I shares in excess of $1 billion of collective Class A, Class W and Class I share NAV. However, as set forth in the Class AWI SRP, no assurance can be given that we will maintain this allocation to liquid assets. Our board of directors has the right to modify, suspend or terminate our Class AWI SRP if it deems such action to be in the best interest of our stockholders. As of June 30, 2017, the aggregate NAV of our outstanding Class A, Class W and Class I shares was approximately $292.2 million.

We calculate our leverage for reporting purposes as the outstanding principal balance of our total borrowings divided by the fair value of our real property and debt-related investments. Based on this methodology, our leverage was 49.1% as of June 30, 2017.  There are other methods of calculating our overall leverage ratio that may differ from this methodology, such as the methodology used in determining our compliance with corporate borrowing covenants. Our leverage, as calculated under our corporate borrowing covenants, was 52.3% as of June 30, 2017.

As of June 30, 2017, we had approximately $5.4 million of cash and cash equivalents compared to $13.9 million as of December 31, 2016. The following discussion summarizes the sources and uses of our cash during the six months ended June 30, 2017.

Operating Activities

Net cash provided by operating activities decreased by approximately $7.8 million to approximately $35.6 million for the six months ended June 30, 2017 from approximately $43.4 million for the same period in 2016. The decrease is primarily due to (i) a decrease in NOI as discussed previously under "Our Operating Results.

Lease Expirations

Our primary source of funding for our property-level operating expenses and debt service payments is rent collected pursuant to our tenant leases. Our operating portfolio was approximately 86.9% leased as of June 30, 2017, compared to approximately 90.2% as of June 30, 2016. Our properties are generally leased to tenants for terms ranging from three to ten years. As of June 30, 2017,  the weighted average remaining term of our leases was approximately 4.4 years, based on annualized base rent, and 4.8 years, based on leased square footage.

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The following is a schedule of expiring leases for our consolidated operating properties by annualized base rent and square footage as of June 30, 2017 and assuming no exercise of lease renewal options (dollar amounts and square footage amounts in thousands, except footnoted information):  

	Lease Expirations
Year (1)	Number of Leases Expiring	Annualized Base Rent (2)		%		Square Feet	%
2017 (3)	44	$	13,832	9.1	%	442	6.1	%
2018	110	10,538		7.0	%	454	6.3	%
2019	107	24,885		16.4	%	1,122	15.4	%
2020	116	24,412		16.1	%	1,117	15.4	%
2021	63	16,384		10.8	%	1,260	17.3	%
2022	63	12,803		8.5	%	690	9.5	%
2023	43	17,604		11.6	%	690	9.5	%
2024	26	5,364		3.5	%	335	4.6	%
2025	17	4,029		2.7	%	149	2.1	%
2026	17	3,241		2.1	%	182	2.5	%
Thereafter	40	18,374		12.2	%	822	11.3	%
Total	646	$	151,466	100.0	%	7,263	100.0	%

(1) The lease expiration year does not include the consideration of any renewal or extension options. Also, the lease expiration year is based on noncancellable lease terms and does not extend beyond any early termination rights that the tenant may have under the lease.

(2) Annualized base rent represents the annualized monthly base rent of leases executed as of June 30, 2017.  

(3) Represents the number of leases expiring and annualized base rent for the remainder of 2017. Includes 11 leases with annualized base rent of approximately $319,000 that are on a month-to-month basis. In January 2017, our lease with Sybase, our second largest tenant as of December 31, 2016 based upon annualized base rent, was terminated and is no longer included in the above table.

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Our most significant lease is Charles Schwab & Co., Inc. ("Schwab") which leases 100% of a 594,000 square foot office property in Northern New Jersey (“3 Second Street", formerly known as Harborside). The Schwab lease will expire September 2017 and we do not expect the lease to be renewed or extended. The Schwab lease comprises $23.5 million, or 15.5%, of our total annualized base rent as of June 30, 2017 and $8.1 million, or 11.8%, of our total NOI for the six months ended June 30, 2017. As of June 30, 2017, the Schwab lease comprises 7.1% of our total portfolio when measured in square feet.

However, 3 Second Street is 100% subleased to 25 tenants through September 2017 and furthermore 11 of these subleases comprising 368,000 square feet or 62% of 3 Second Street, have executed leases directly with us that effectively extend their leases beyond the Schwab lease expiration. These direct leases will expire between September 2020 and September 2032. As a result, the above lease expiration table includes these direct leases in the years in which the leases will expire, as opposed to reflecting the full impact of the lease expiration of the current in-place lease with Schwab in 2017.

When the Schwab lease expires we may be forced to offer concessions in order to attract new tenants. In addition, we may be required to expend substantial funds to construct new tenant improvements in the vacated space and incur leasing costs. As a result, and until this property is released, we would expect the expiration of the Schwab lease to negatively impact our operating results and cash flows.

During the six months ended June 30, 2017, we signed new leases for approximately 337,000 square feet and renewal leases for approximately 239,000 square feet. Notable new leases during the three months ended June 30, 2017 includes (i) a 53,000 square foot lease with WeWork LLC to replace HotWire, Inc. at an office property in San Fransisco, CA and (ii) a 40,000 square foot lease with Burlington Stores Inc. to replace a vacant space at a retail property in Philadelphia, PA due to Sports Authority's bankruptcy. Subsequent to June 30, 2017, we entered into a 73,000 square foot lease with Trinet Group, Inc. at an office property in East Bay, CA to partially replace Sybase.

Tenant improvements and leasing commissions related to these leases were approximately $9.9 million and $3.0 million, respectively, or $17.19 and $5.27 per square foot, respectively. Of the leases, approximately 168,000 square feet were considered comparable leases, with average straight line rent growth of 54.8%, and tenant improvements and incentives of approximately $89.17 per square foot. Comparable leases comprise leases for which prior leases were in place for the same suite within twelve months of executing a new lease. Comparable leases must have terms of at least six months and the square footage of the suite occupied by the prior tenant cannot be more or less than 50% different from the size of the new lease's suite.

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Investing Activities

We had net cash used in investing activities of approximately $19.2 million for the six months ended June 30, 2017, compared to net cash provided by investing activities of approximately $98.0 million for the same period in 2016. The $78.8 million change is primarily due to a $146.9 milliondecrease in proceeds from disposition of real properties, partially offset by a (i) a $65.9 million decrease in cash paid to acquire operating properties and (ii) a $2.3 milliondecrease in capital expenditures.

Financing Activities

Net cash used in financing activities decreased approximately $76.7 million to approximately $63.3 million for the six months ended June 30, 2017 from $140.0 million for the same period in 2016. The decrease is primarily due to a $121.7 million increase in cash received from net borrowing activities, partially offset by (i) a $7.0 million increase in cash paid for redemption of common shares and (ii) a $37.8 million decrease in proceeds from the sale of our common shares.

During the six months ended June 30, 2017 and 2016, we raised approximately $15.3 million and $51.4 million in proceeds from the sale of Class A, W, and I shares, respectively, including approximately $3.6 million and $2.6 million under the distribution reinvestment plan, respectively. The decline in proceeds largely resulted from a primary dealer offering during the three months ended June 30, 2016. We have offered and will continue to offer Class E shares of common stock through the Class E DRIP Offering. The amount raised under the Class E DRIP Offering decreased by approximately $1.0 million to approximately $6.6 million for the six months ended June 30, 2017, from approximately $7.6 million for the same period in 2016.

Debt Maturities

One of our borrowings with an aggregate outstanding balance as of June 30, 2017 of approximately $275.0 million has a maturity before January 1, 2019; however, this borrowing is subject to two one-year extension options. For additional information on our upcoming debt maturities, see Note 4 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Distributions

To obtain the favorable tax treatment accorded to REITs, we normally will be required each year to distribute to our stockholders at least 90% of our real estate investment trust taxable income, determined without regard to the deduction for distributions paid and by excluding net capital gains. The payment of distributions is determined by our board of directors and may be adjusted at its discretion at any time. Distribution levels are set by our board of directors at a level it believes to be appropriate and sustainable based upon a review of a variety of factors including the current and anticipated market conditions, current and anticipated future performance and make-up of our investments, our overall financial projections and expected future cash needs.

The following table sets forth the amounts and sources of distributions declared for the three and six months ended June 30, 2017 and 2016 (dollar amounts in thousands, except footnoted information):

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	For the Three Months Ended								For the Six Months Ended
Distributions:	June 30, 2017		% of Total Distributions		June 30, 2016		% of Total Distributions		June 30, 2017		% of Total Distributions		June 30, 2016		% of Total Distributions
Common stock distributions paid in cash	$	8,027	56.3	%	$	9,284	59.2	%	$	16,316	56.5	%	$	18,840	59.5	%
Other cash distributions (1)	1,300		9.2	%	1,267		8.1	%	2,550		8.9	%	2,581		8.2	%
Total cash distributions	$	9,327	65.5	%	$	10,551	67.3	%	$	18,866	65.4	%	$	21,421	67.7	%
Common stock distributions reinvested in common shares	4,920		34.5	%	5,120		32.7	%	9,996		34.6	%	10,219		32.3	%
Total distributions	$	14,247	100.0	%	$	15,671	100.0	%	$	28,862	100.0	%	$	31,640	100.0	%
Sources of distributions:
Cash flow from operations (2)	$	18,285	128.3	%	$	28,147	179.6	%	$	35,591	123.3	%	$	43,361	137.0	%
Financial performance metric:
NAREIT-defined FFO (3)	$	17,927	125.8	%	$	20,290	129.5	%	$	37,626	130.4	%	$	46,350	146.5	%

(1) Other cash distributions include (i) distributions declared for OP Units for the respective period, (ii) regular distributions made during the period to our joint venture partners that are noncontrolling interest holders, which exclude distributions of disposition proceeds related to properties sold by the joint ventures, (iii) dealer manager and distribution fees we pay to our dealer manager with respect to the Class A, Class W and Class I shares, and (iv) dividend equivalents declared during the period to the unvested restricted stock units granted by the Company to our Advisor. 

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(2) Prior to January 1, 2017, expenses associated with the acquisition of real property were recorded to earnings and as a deduction to our cash from operations. As of January 1, 2017, we adopted Accounting Standards Update 2017-01 ("ASU 2017-01") and anticipate that our future acquisitions of real property will likely be accounted for as asset acquisitions which requires capitalization of acquisition costs as a component of the acquired assets. See Note 2 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for additional discussion regarding ASU 2017-01. We did not incur any acquisition-related expenses for the three and six months ended June 30, 2017. We incurred acquisition-related expenses of approximately $474,000 and $525,000 for the three and six months ended June 30, 2016, respectively.

(3) NAREIT-defined FFO is an operating metric and should not be used as a liquidity measure. However, management believes the relationship between NAREIT-defined FFO and distributions may be meaningful for investors to better understand the sustainability of our operating performance compared to distributions made. The definition of NAREIT-defined FFO, a reconciliation to GAAP net income (loss), and a discussion of NAREIT-defined FFO’s inherent limitations are provided in “How We Measure Our Operating Performance” in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Quarterly Report on Form 10-Q.

Redemptions

Below is a summary of (i) Class E common stock repurchases pursuant to our self-tender offers, (ii) repurchases pursuant to our Class E Share Redemption Program (the “Class E SRP”), and (iii) repurchases pursuant to our Second Amended and Restated Class A, W and I Share Redemption Program (the “Class AWI SRP”) for each of the last four quarterly periods (number of shares in thousands).  

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For the Quarter Ended:	Number of  Shares Requested for Redemption or Purchase	Number of Shares Redeemed or Purchased	Percentage of Shares Requested for Redemption Redeemed or for Purchase Purchased		Price Paid  per Share
September 30, 2016
Class E SRP – Death or Disability Redemptions	466	466	100.0	%	$	7.40
Self-Tender Offer Purchases (1)	10,897	6,606	60.6	%	7.35
Class AWI SRP	464	464	100.0	%	7.42
Total / Average	11,827	7,536	63.7	%	7.35
December 31, 2016
Class E SRP – Death or Disability Redemptions	360	360	100.0	%	7.48
Self-Tender Offer Purchases (1)	7,697	7,697	100.0	%	7.44
Class AWI SRP	301	301	100.0	%	7.47
Total / Average	8,358	8,358	100.0	%	7.44
March 31, 2017
Class E SRP – Death or Disability Redemptions	249	249	100.0	%	7.56
Self-Tender Offer Purchases (1)	5,685	5,685	100.0	%	7.51
Class AWI SRP	414	414	100.0	%	7.55
Total / Average	6,348	6,348	100	%	7.51
June 30, 2017
Class E SRP – Death or Disability Redemptions	315	315	100.0	%	7.52
Self-Tender Offer Purchases (1)	6,071	6,071	100.0	%	7.49
Class AWI SRP	786	786	100.0	%	7.51
Total / Average	7,172	7,172	100.0	%	7.49
Average	8,426	7,354	87.3	%	$	7.45

  (1) Amounts represent Class E shares purchased pursuant to self-tender offers, which we completed on September 13, 2016, December 9, 2016, March 10, 2017, and June 14, 2017.

See “Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” of this Quarterly Report on Form 10-Q for more information regarding redemptions of shares during the three months ended June 30, 2017.  

Subsequent Events

The following occurred subsequent to June 30, 2017.

40

Acquisitions

On July 21, 2017, we acquired an industrial property in Livermore, CA comprising approximately 96,000 net rentable square feet from an unrelated third party, for a gross purchase price of approximately $16.2 million. At acquisition, the property was approximately 100% leased to four tenants. We acquired the property using proceeds from our revolving credit facility. 

On July 26, 2017, we acquired an industrial property in Las Vegas, NV comprising approximately 248,000 net rentable square feet from an unrelated third party, for a gross purchase price of approximately $24.5 million. At acquisition, the property was approximately 100% leased to one tenant. We acquired the property using proceeds from our revolving credit facility.

Dispositions

On July 21, 2017, we disposed of one building of a multi-building industrial property in Dallas, TX comprising approximately 128,000 net rentable square feet to an unrelated third party. We sold the property, which had a net basis of approximately $7.3 million as of June 30, 2017, for a total sales price of $7.7 million.

New Accounting Pronouncements and Significant Accounting Policies

For information regarding new accounting pronouncements and significant accounting policies, see Note 2 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. 

41

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the adverse effect on the value of assets and liabilities that results from a change in the applicable market resulting from a variety of factors such as perceived risk, interest rate changes, inflation and overall general economic changes. Accordingly, we manage our market risk by matching projected cash inflows from operating, investing and financing activities with projected cash outflows for debt service, acquisitions, capital expenditures, distributions to stockholders and unit holders, and other cash requirements. Our outstanding borrowings are directly impacted by changes in market conditions. This impact is largely mitigated by the fact that the majority of our outstanding borrowings have fixed interest rates, which minimize our exposure to the risk that fluctuating interest rates may pose to our operating results and liquidity.

As of June 30, 2017, the fair value of our fixed-rate borrowings was $131.6 million and the carrying value of our fixed-rate borrowings was $128.8 million. The fair value estimate of our fixed-rate borrowings was estimated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated as of June 30, 2017. As we expect to hold our fixed-rate borrowings to maturity and the amounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our fixed-rate borrowings, would have a significant impact on our operations.

As of June 30, 2017, we had approximately $632.5 million of unhedged floating-rate borrowings outstanding indexed to LIBOR rates. If the LIBOR rates relevant to our remaining variable rate borrowings were to increase 10%, we estimate that our quarterly interest expense would increase by approximately $194,000 based on our outstanding floating-rate debt as of June 30, 2017.

 We may seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs by selectively utilizing derivative instruments to hedge exposures to changes in interest rates on loans secured by our assets. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both our outstanding and forecasted debt obligations as well as our potential offsetting hedge positions. While this hedging strategy is designed to minimize the impact on our net income (loss) and funds from operations from changes in interest rates, the overall returns on our investments may be reduced. Our board of directors has established policies and procedures regarding our use of derivative instruments for hedging or other purposes. During the six months ended June 30, 2017, we recorded a decrease in our net liability value of approximately $460,000 as a result of changes in the value of our derivatives. Changes in the interest rate yield curve directly impact the value of our derivatives and, as capital market expectations of future interest rates have declined, so have the value of our derivatives.

ITEM 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act, is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

42

PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Please see the risk factors discussed in Item 1A of Part I of our Annual Report on Form 10-K filed with the Commission on March 3, 2017.

The following new risk factors update these previously disclosed risk factors under the same heading in our Annual Report on Form 10-K.

We are exposed to risks arising from a small number of tenants comprising a significant portion of our income.

As of June 30, 2017, a significant portion of our annualized base rent comes from one tenant, Schwab, which leases 100% of 3 Second Street. As a result, we are particularly exposed to Schwab's ability and willingness to perform according to the contractual terms of the existing lease. The Schwab lease will expire in September 2017, and we do not expect the Schwab lease to be renewed or extended. When the lease expires, we may be forced to lower the rental rates or offer other concessions in order to retain the current subtenants. Any reduction in the rental rates or other lease terms may have a meaningful impact to our operating results. Further, when the Schwab lease expires, we will likely suffer from periods of receiving no rent while we seek replacement tenants, and incur costs related to finding replacement tenants. The Schwab lease comprises approximately 15.5% of our annualized base rent as of June 30, 2017. This lease includes 11 subleases comprising approximately 8.7% of our annualized base rent as of June 30, 2017, which are scheduled to expire between September 2020 and September 2032. We expect our rental income to be materially reduced during the periods we are seeking replacement tenants for this property. These factors could adversely affect our results of operations, financial condition, NAV and ability to pay distributions to our stockholders. For additional information regarding this lease expiration, see our discussion under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Operating Activities - Lease Expirations” included in this Quarterly Report on Form 10-Q.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Share Redemption Program and Other Redemptions or Repurchases

As of June 30, 2017, no material changes had occurred to our Class E SRP or our separate Class AWI SRP as discussed in Item 5 of our Annual Report on Form 10-K filed with the Commission on March 3, 2017.

Pursuant to the Class E SRP as of June 30, 2017, on an ongoing basis, redemptions are only available for redemptions in connection with the death or disability of a stockholder. With respect to all other Class E stockholders, our board of directors evaluates each quarter whether to make liquidity available through our Class E SRP or through a tender offer process. Although no assurances can be made, our board of directors currently intends to make liquidity available to Class E stockholders each quarter (other than liquidity made available in the event of the death or disability of a stockholder through the Class E SRP) in an amount that is at least equal to the greater of (A) (i) funds received from the sale of Class E shares under our distribution reinvestment plan during such calendar quarter, plus (ii) 50% of the difference between (a) the proceeds (net of sales commissions) received by us from the sale of Class A, Class W and Class I shares in any public primary offering and under our distribution reinvestment plan during the most recently completed calendar quarter, and (b) the dollar amount used to redeem Class A, Class W and Class I shares during the most recently completed calendar quarter pursuant to the Class AWI SRP, less (iii) funds used for redemptions of Class E shares in the most recently completed quarter due to qualifying death or disability requests of a stockholder during such calendar quarter and (B) the amount that would result in repurchases or redemptions, during any consecutive twelve month period, at least equal to five percent of the number of Class E shares outstanding at the beginning of such twelve-month period (the “Class E Liquidity Amount”), regardless of whether such liquidity will be made available through the Class E SRP or a tender offer, and excluding liquidity made available in the event of the death or disability of a stockholder through the Class E SRP. Our board of directors may at any time decide to reduce or eliminate the Class E Liquidity Amount.

Currently, the Class AWI SRP imposes a quarterly cap on the aggregate “net redemptions” of our Class A, Class W and Class I share classes equal to the amount of shares of such classes with a value (based on the redemption price per share on the day the redemption is effected) of up to 5% of the aggregate NAV of the outstanding shares of such classes as of the last day of the previous calendar quarter (the “Quarterly Cap”). We use the term “net redemptions” to mean, for any quarter, the excess of our share redemptions (capital outflows) of our Class A, Class W and Class I share classes over the share purchases net of sales commissions (capital inflows) of such classes in any ongoing public offering of Class A, Class W or Class I shares,

43

whether in a primary offering or pursuant to a distribution reinvestment plan. On any business day during a calendar quarter, the maximum amount available for redemptions will be equal to (1) 5% of the NAV of our outstanding Class A, Class W and Class I shares, calculated as of the last day of the previous calendar quarter, plus (2) proceeds from sales of new Class A, Class W and Class I shares in our public offering (including reinvestment of distributions but net of sales commissions) since the beginning of the current calendar quarter, less (3) proceeds paid to redeem shares of such classes since the beginning of the current calendar quarter through the prior business day. For each future quarter, our board of directors reserves the right to choose whether the Quarterly Cap will be applied to “gross redemptions,” meaning, for any class and any quarter, amounts paid to redeem shares of such class since the beginning of such calendar quarter, or “net redemptions.” In addition, for each future quarter, our board of directors reserves the right to choose whether the Quarterly Cap and the “net redemptions” test will be applied to our Class A, Class W and Class I shares on a class-specific basis rather than on the aggregate basis described above. If our board of directors chooses to have the Quarterly Cap and the “net redemptions” test apply on a class-specific basis, then “net redemptions” of our Class A, Class W and Class I share classes will mean, for any class and any quarter, the excess of our share redemptions (capital outflows) of such class over the share purchases net of sales commissions (capital inflows) of such class in any ongoing public offering of Class A, Class W or Class I shares, whether in a primary offering or pursuant to a distribution reinvestment plan. Further, the quarterly cap will mean a quarterly cap on the “net redemptions” of each of our Class A, Class W and Class I share classes equal to the amount of shares of such class with an aggregate value (based on the redemption price per share on the day the redemption is effected) of up to 5% of the NAV of the outstanding shares of such class as of the last day of the previous calendar quarter. Additionally, our board of directors has the right to modify, suspend or terminate our share redemption programs if it deems such action to be in the best interest of our stockholders.

In aggregate, for the three months ended June 30, 2017, we redeemed (i) approximately 6.1 million Class E shares pursuant to a self-tender offer for approximately $45.5 million and (ii) approximately 1.1 million shares of common stock pursuant to the Class E SRP and the Class AWI SRP for approximately $8.3 million, as described further in the table below (number of shares in thousands, except footnoted information).

Period	Total Number of Shares Redeemed or Repurchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Pursuant to the Program (1)
April 1 - April 30, 2017	137	$	7.49	137	—
May 1 - May 31, 2017	549	7.52		549	—
June 1 - June 30, 2017 (2)	6,486	7.49		6,486	—
Total	7,172	$	7.49	7,172	—

(1) Redemptions and repurchases are limited under the Class E SRP and the Class AWI SRP as described above and pursuant to the terms of self-tender offers announced from time to time. We redeemed all Class A, W, and I shares that were requested to be redeemed during the three months ended June 30, 2017. As of June 30, 2017, we had capacity under the Class AWI SRP to redeem up to an aggregate of $17.0 million of Class A, W, and I shares. Pursuant to the Class AWI SRP, this capacity resets at the beginning of each quarter.

(2) Number of shares includes approximately 6.1 million Class E shares repurchased at $7.49 per share for an aggregate cost of approximately $45.5 million pursuant to a self-tender offer.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

Distribution Reinvestment Plan Suitability Requirements

Pursuant to the terms of our distribution reinvestment plan (“DRP”), participants in the DRP must promptly notify us if at any time they fail to meet the current suitability requirements for making an investment in us.

The current suitability standards require that Class E stockholders participating in the DRP other than investors in Arizona, California, Ohio and Oregon have either:

• a net worth (exclusive of home, home furnishings and automobiles) of $150,000 or more; or

• a net worth (exclusive of home, home furnishings and automobiles) of at least $45,000 and had during the last tax year, or estimate that such investor will have during the current tax year, a minimum of $45,000 annual gross income.

44

The current suitability standards require that Class E stockholders participating in the DRP in Arizona, California, Ohio and Oregon must have either:

• a net worth (exclusive of home, home furnishings and automobiles) of $250,000 or more; or

• a net worth (exclusive of home, home furnishings and automobiles) of at least $70,000 and had during the last tax year, or estimate that such investor will have during the current tax year, a minimum of $70,000 annual gross income.

In addition, Class E stockholders participating in the DRP in Ohio and Oregon must have a net worth of at least 10 times their investment in us and any of our affiliates (namely, Industrial Property Trust Inc.).

The current suitability standards for Class A, Class W and Class I stockholders participating in the DRP are listed in the section entitled “Suitability Standards” in our current Class A, Class W and Class I public offering prospectus on file at www.sec.gov and on our website at www.dividendcapitaldiversified.com.

Stockholders can notify us of any changes to their ability to meet the suitability requirements or change their DRP election by contacting us at Dividend Capital Diversified Property Fund Inc., Investor Relations, 518 17th Street, Suite 1700, Denver, Colorado 80202, Telephone: (303) 228-2200.

45

ITEM 6. EXHIBITS

໿

Exhibit Number	Description
3.1	Articles of Restatement, incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed March 21, 2012
3.2	Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed July 12, 2012
3.3	Articles Supplementary (Class A shares), incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed July 12, 2012
3.4	Articles Supplementary (Class W shares), incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed July 12, 2012
3.5	Articles Supplementary (Class I shares), incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K, filed July 12, 2012
3.6	Certificate of Correction to Articles of Restatement, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on March 26, 2014
3.7	Certificate of Correction to Articles of Restatement, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on August 30, 2016
3.8	Sixth Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed December 8, 2014
4.1	Fourth Amended and Restated Distribution Reinvestment Plan, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed July 12, 2012
4.2	Second Amended and Restated Class E Share Redemption Program, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed December 16, 2015
4.3	Statement regarding transfer restrictions, preferences, limitations and rights of holders of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates), incorporated by reference to Exhibit 4.5 of the Company’s Registration Statement on Form S-11 (File No. 333-175989), filed April 15, 2013
4.4	Second Amended and Restated Class A, W and I Share Redemption Program, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed December 17, 2014
10.1	Amendment to Restricted Stock Unit Agreements, by and between the Company,  Dividend Capital Total Realty Operating Partnership LP and Dividend Capital Total Advisors LLC, dated April 13, 2017, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed April 19, 2017
10.2	Eleventh Amended and Restated Advisory Agreement, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed June 30, 2017
31.1	Rule 13a-14(a) Certification of Principal Executive Officer*
31.2	Rule 13a-14(a) Certification of Principal Financial Officer*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
99.1	Consent of Altus Group U.S., Inc.*
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase*
101.DEF	XBRL Taxonomy Extension Definition Linkbase*

__________________

*    Filed or furnished herewith.

46

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.
Date: August 14, 2017	/s/ DWIGHT L. MERRIMAN III
	Dwight L. Merriman III Chief Executive Officer
Date: August 14, 2017	/s/ M. KIRK SCOTT
	M. Kirk Scott Chief Financial Officer and Treasurer

47

EX-31.1

Dividend Capital Diversified Property Fund Inc. Form 10-Q

Exhibit 31.1

Certification of Principal Executive Officer Pursuant to

Rule 13a-14(a), Under the Securities Exchange Act of 1934, As Amended

I, Dwight L. Merriman III, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Dividend Capital Diversified Property Fund Inc.;

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.

		/S/ DWIGHT L. MERRIMAN III
	Name:	Dwight L. Merriman III
	Title:	Chief Executive Officer
Date: August 14, 2017

EX-31.2

Dividend Capital Diversified Property Fund Inc Form 10-Q

Exhibit 31.2

Certification of Principal Financial Officer Pursuant to

Rule 13a-14(a), Under the Securities Exchange Act of 1934, As Amended

I, M. Kirk Scott, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Dividend Capital Diversified Property Fund Inc.;

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.

		/s/ M. KIRK SCOTT
	Name:	M. Kirk Scott
	Title:	Chief Financial Officer and Treasurer
Date: August 14, 2017

EX-32.1

Dividend Capital Diversified Property Fund Inc. Form 10-Q

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to

18 U.S.C. Section 1350

I, Dwight L. Merriman III, as Chief Executive Officer of Dividend Capital Diversified Property Fund Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2017 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 14, 2017

	/s/ DWIGHT L. MERRIMAN III
Name:	Dwight L. Merriman III
Title:	Chief Executive Officer

EX-32.2

Dividend Capital Diversified Property Fund Inc. Form 10-Q

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to

18 U.S.C. Section 1350

I, M. Kirk Scott, as Chief Financial Officer of Dividend Capital Diversified Property Fund Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2017 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 14, 2017

	/s/ M. KIRK SCOTT
Name:	M. Kirk Scott
Title:	Chief Financial Officer and Treasurer

EX-99.1

Dividend Capital Diversified Property Fund Inc. Form 10-Q

Exhibit 99.1

CONSENT OF INDEPENDENT VALUATION FIRM

We hereby consent to the reference to our name, the description of our role and the valuation of the real properties and related assumptions provided under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Net Asset Value Calculation” in Part I, Item 2 of the Quarterly Report on Form 10-Q for the period ended June 30, 2017 of Dividend Capital Diversified Property Fund Inc., being incorporated by reference in (i) the Registration Statement on Form S-3 (No. 333-162636) of Dividend Capital Diversified Property Fund Inc., and the related prospectus, and (ii) the Registration Statement on Form S-8 (No. 333-194237) of Dividend Capital Diversified Property Fund Inc. We also hereby consent to the same information and the reference to our firm under the caption “Experts” being included in a supplement to the prospectus related to the Registration Statement on Form S-11 (File No. 333-197767) of Dividend Capital Diversified Property Fund Inc. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933.

	/s/ Altus Group U.S., Inc.
	Altus Group U.S., Inc.
August 14, 2017

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 07, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Entity Registrant Name	Dividend Capital Diversified Property Fund Inc.
Entity Central Index Key	0001327978
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Class E
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		101,016,479.258
Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		2,083,881.300
Class W
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		2,508,869.070
Class I
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		34,351,448.240

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 31, 2016
ASSETS
Investments in real property		$ 2,178,358	$ 2,204,322
Accumulated depreciation and amortization		(515,840)	(492,911)
Total net investments in real property		1,662,518	1,711,411
Debt-related investments, net		14,941	15,209
Total net investments		1,677,459	1,726,620
Cash and cash equivalents		5,362	13,864
Restricted cash		7,160	7,282
Other assets, net		35,297	35,962
Total Assets		1,725,278	1,783,728
Liabilities:
Accounts payable and accrued expenses	[1]	32,725	34,085
Mortgage notes		380,934	342,247
Unsecured borrowings		724,218	706,554
Intangible lease liabilities, net		56,637	59,545
Other liabilities		25,087	33,206
Total Liabilities		1,219,601	1,175,637
Stockholders' equity:
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 139,913,429 and 150,636,393 shares issued and outstanding, as of June 30, 2017 and December 31, 2016, respectively	[2]	1,399	1,506
Additional paid-in capital		1,280,621	1,361,638
Distributions in excess of earnings		(857,792)	(839,896)
Accumulated other comprehensive loss		(5,550)	(6,905)
Total stockholders’ equity		418,678	516,343
Noncontrolling interests		86,999	91,748
Total Equity		505,677	608,091
Total Liabilities and Equity		$ 1,725,278	$ 1,783,728

[1] Includes approximately $2.5 million and $3.6 million that we owed to Dividend Capital Total Advisors LLC (our "Advisor") and affiliates of our Advisor for services and reimbursement of certain expenses as of June 30, 2017 and December 31, 2016, respectively.

[2] See Note 7 for the number of shares outstanding of each class of common stock as of June 30, 2017 and December 31, 2016.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands		Jun. 30, 2017	Dec. 31, 2016
Accounts payable and accrued expenses	[1]	$ 32,725	$ 34,085
Common stock, par value (usd per share)		$ 0.01	$ 0.01
Common stock, shares authorized		1,000,000,000	1,000,000,000
Common stock, shares issued		139,913,429	150,636,393
Common stock, shares outstanding		139,913,429	150,636,393
Advisor And Advisor Affiliates [Member]
Accounts payable and accrued expenses		$ 2,500	$ 3,600

[1] Includes approximately $2.5 million and $3.6 million that we owed to Dividend Capital Total Advisors LLC (our "Advisor") and affiliates of our Advisor for services and reimbursement of certain expenses as of June 30, 2017 and December 31, 2016, respectively.

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
REVENUE:
Rental revenue		$ 50,036	$ 52,702	$ 102,544	$ 108,246
Debt-related income		229	237	460	475
Total Revenue		50,265	52,939	103,004	108,721
EXPENSES:
Rental expense		16,561	15,632	34,004	31,950
Real estate depreciation and amortization expense		18,798	20,198	36,734	40,034
General and administrative expenses	[1]	2,024	2,338	4,274	4,958
Advisory fees, related party		3,451	3,671	6,941	7,436
Acquisition-related expenses		0	474	0	525
Impairment of real estate property	[2]	1,116	0	1,116	587
Total Operating Expenses		41,950	42,313	83,069	85,490
OTHER INCOME (EXPENSES):
Other income and (expense)		(89)	(69)	(198)	(11)
Interest expense		(10,163)	(10,422)	(19,847)	(21,383)
Gain on extinguishment of debt and financing commitments		0	0	0	5,136
Gain on sale of real property	[3]	10,352	0	10,352	41,400
Net income		8,415	135	10,242	48,373
Net income attributable to noncontrolling interests		(1,610)	(18)	(1,776)	(4,474)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS		$ 6,805	$ 117	$ 8,466	$ 43,899
NET INCOME PER BASIC AND DILUTED COMMON SHARE (usd per share)		$ 0.05	$ 0.00	$ 0.06	$ 0.27
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic (shares)		145,288	161,209	147,577	162,581
Diluted (shares)		157,209	173,669	159,551	175,179
Distributions declared per common share (usd per share)		$ 0.0891	$ 0.0893	$ 0.1782	$ 0.1785

[1] Includes approximately $1.4 million and $1.6 million of reimbursable expenses incurred by our Advisor and its affiliates during the three months ended June 30, 2017 and 2016, respectively, and approximately $3.1 million and $3.5 million of reimbursable expenses incurred by our Advisor and its affiliates during the six months ended June 30, 2017 and 2016.

[2] Includes approximately $45,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $79,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

[3] Includes approximately $241,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $1.8 million paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
General and administrative expenses	[1]	$ 2,024	$ 2,338	$ 4,274	$ 4,958
Impairment charges	[2]	1,116	0	1,116	587
Gain on sale of real property	[3]	10,352	0	10,352	41,400
Affiliated Entity [Member]
General and administrative expenses		1,400	$ 1,600	3,100	3,500
Advisory Fees Related to the Disposition Of Real Properties
Impairment charges		45		45	79
Gain on sale of real property		$ 241		$ 241	$ 1,800

[1] Includes approximately $1.4 million and $1.6 million of reimbursable expenses incurred by our Advisor and its affiliates during the three months ended June 30, 2017 and 2016, respectively, and approximately $3.1 million and $3.5 million of reimbursable expenses incurred by our Advisor and its affiliates during the six months ended June 30, 2017 and 2016.

[2] Includes approximately $45,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $79,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

[3] Includes approximately $241,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $1.8 million paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net Income	$ 8,415	$ 135	$ 10,242	$ 48,373
Other Comprehensive Income (Loss):
Change in value of cash flow hedging derivatives	(677)	(3,703)	1,412	(12,781)
Comprehensive income (loss)	7,738	(3,568)	11,654	35,592
Comprehensive (income) loss attributable to noncontrolling interests	(1,557)	266	(1,833)	(3,527)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 6,181	$ (3,302)	$ 9,821	$ 32,065

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CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Distributions in Excess of Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interests
Beginning Balances, shares at Dec. 31, 2016	150,636,393	150,636,000
Beginning Balances at Dec. 31, 2016	$ 608,091	$ 1,506	$ 1,361,638	$ (839,896)	$ (6,905)	$ 91,748
Comprehensive income (loss):
Net income	10,242			8,466		1,776
Unrealized change in value of cash flow hedging derivatives	1,412				1,355	57
Common stock:
Issuance of common stock, net of offering costs, shares		2,896,000
Issuance of common stock, net of offering costs	20,108	$ 29	20,079
Issuance of common stock, stock-based compensation plans, shares		(99,000)
Issuance of common stock, stock-based compensation plans	$ (648)	$ (1)	(647)
Redemptions of common stock, shares	(11,800,000)	(13,520,000)
Redemptions of common stock	$ (101,668)	$ (135)	(101,533)
Amortization of stock-based compensation	1,317		1,317
Distributions declared on common stock	(26,312)			(26,312)
Distributions on unvested Advisor RSUs	(50)			(50)
Noncontrolling interests:
Contributions of noncontrolling interests	106					106
Distributions declared to noncontrolling interests	(4,780)					(4,780)
Redemptions of noncontrolling interests	$ (2,141)		(233)		0	(1,908)
Ending Balances, shares at Jun. 30, 2017	139,913,429	139,913,000
Ending Balances at Jun. 30, 2017	$ 505,677	$ 1,399	$ 1,280,621	$ (857,792)	$ (5,550)	$ 86,999

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016
OPERATING ACTIVITIES:
Net income		$ 10,242	$ 48,373
Adjustments to reconcile net income to net cash provided by operating activities:
Real estate depreciation and amortization expense		36,734	40,034
Gain on disposition of real property		(10,352)	(41,400)
Impairment of real estate property	[1]	1,116	587
Gain on extinguishment of debt and financing commitments		0	(5,136)
Other adjustments to reconcile net income to net cash provided by operating activities		3,134	3,608
Changes in operating assets and liabilities		(5,283)	(2,705)
Net cash provided by operating activities		35,591	43,361
INVESTING ACTIVITIES:
Acquisition of real property		0	(65,861)
Capital expenditures in real property		(9,268)	(11,531)
Proceeds from disposition of real property		29,089	175,965
Principal collections on debt-related investments		246	231
Other investing activities		(881)	(828)
Net cash provided by investing activities		19,186	97,976
FINANCING ACTIVITIES:
Mortgage note proceeds		201,886	32,100
Mortgage note principal repayments		(161,618)	(140,494)
Net proceeds from (repayments of) revolving line of credit borrowings		17,000	44,000
Redemption of common shares		(101,939)	(94,973)
Distributions on common stock		(17,031)	(19,381)
Proceeds from sale of common stock		11,172	49,005
Offering costs for issuance of common stock		(2,309)	(3,819)
Distributions to noncontrolling interest holders		(4,780)	(3,830)
Redemption of OP Unit holder interests		(1,518)	(3,573)
Other financing activities		(4,142)	947
Net cash used in financing activities		(63,279)	(140,018)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(8,502)	1,319
CASH AND CASH EQUIVALENTS, beginning of period		13,864	15,769
CASH AND CASH EQUIVALENTS, end of period		5,362	17,088
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest		18,009	20,501
Supplemental Disclosure of Noncash Investing and Financing Activities:
Common stock issued pursuant to the distribution reinvestment plan		10,215	10,192
Non-cash disposition of real property	[2]	$ 0	$ 7,830

[1] Includes approximately $45,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $79,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

[2] Represents the amount of sales proceeds from the disposition of real property that we did not receive or pay in cash, primarily due to the repayment of related borrowings by the purchaser at closing.

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Organization

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

ORGANIZATION

Dividend Capital Diversified Property Fund Inc. is a Maryland corporation formed on April 11, 2005 to invest in a diverse portfolio of real property and real estate related investments. As used herein, “the Company,” “we,” “our” and “us” refer to Dividend Capital Diversified Property Fund Inc. and its consolidated subsidiaries and partnerships except where the context otherwise requires.

We operate in such a manner so as to qualify as a real estate investment trust (“REIT”) for federal income tax purposes, and we utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) organizational structure to hold all or substantially all of our assets through our operating partnership, Dividend Capital Total Realty Operating Partnership, L.P. (our “Operating Partnership”).

We are the sole general partner of our Operating Partnership. In addition, we have contributed 100% of the proceeds received from our offerings of common stock to our Operating Partnership in exchange for partnership units (“OP Units”) representing our interest as a limited partner of our Operating Partnership. Our Operating Partnership qualifies as a variable interest entity for accounting purposes and substantially all of the assets of the Company are held by our Operating Partnership, which, subject to certain Operating Partnership and subsidiary level financing restrictions, can be used to settle its obligations. Creditors of certain liabilities of our Operating Partnership have recourse to the Company. Under our Operating Partnership, we historically had variable interest entities that were joint ventures in which we had real estate investments. The accompanying condensed consolidated balance sheets included approximately $48.2 million, after accumulated depreciation and amortization, in net investments in real property in these consolidated variable interest entities as of December 31, 2016. As of June 30, 2017, we did not hold any investment in any joint ventures.

As of June 30, 2017 and December 31, 2016, we owned approximately 92.2% and 92.6%, respectively, of the limited partnership interests in our Operating Partnership, and the remaining limited partnership interests in our Operating Partnership were owned by third-party investors. Our Operating Partnership has classes of OP Units that correspond to our four classes of common stock: Class E OP Units, Class A OP Units, Class W OP Units, and Class I OP Units. As of June 30, 2017 and December 31, 2016, our Operating Partnership had issued and outstanding approximately 11.9 million and 12.0 million Class E OP Units held by third party investors, respectively, which represent limited partnership interests issued in connection with its private placement offerings. As of June 30, 2017 and December 31, 2016, such Class E OP Units had a maximum approximate redemption value of $89.1 million and $91.2 million, respectively, based on the most recent selling price of our common stock pursuant to our primary offering.

Our Advisor, a related party, manages our day-to-day activities under the terms and conditions of an advisory agreement (as amended from time to time, the “Advisory Agreement”). Our Advisor and its affiliates receive various forms of compensation, reimbursements and fees for services relating to the investment and management of our real estate assets.

On July 12, 2012, the Securities and Exchange Commission (the “Commission”) declared effective our Registration Statement on Form S-11 (Registration Number 333-175989) (as amended, the “Prior Registration Statement”). The Prior Registration Statement applied to the offer and sale (the “Prior Offering”) of up to $3,000,000,000 of our shares of common stock, of which $2,250,000,000 of shares were expected to be offered to the public in a primary offering and $750,000,000 of shares were expected to be offered to our stockholders pursuant to an amended and restated distribution reinvestment plan (subject to our right to reallocate such amounts). In the Prior Offering, we offered to the public three classes of shares: Class A shares, Class W shares and Class I shares with net asset value (“NAV”) based pricing. On September 15, 2015, we terminated the Prior Offering. Through September 15, 2015, the date our Prior Offering terminated, we had raised gross proceeds of approximately $183.0 million from the sale of approximately 25.8 million shares in the Prior Offering, including approximately $3.4 million through our distribution reinvestment plan.

On September 16, 2015, the Commission declared effective our Registration Statement on Form S-11 (Registration Number 333-197767) (the “Follow-On Registration Statement”). The Follow-On Registration Statement applies to the Company’s follow-on “best efforts” offering of up to $1,000,000,000 of the Company’s Class A, Class I and Class W shares of common stock, of which $750,000,000 of shares are expected to be offered to the public in a primary offering and $250,000,000 of shares are expected to be offered to stockholders of the Company pursuant to its distribution reinvestment plan (subject to the Company’s right to reallocate such amounts) (the “Follow-On Offering”). As of June 30, 2017, we had raised gross proceeds of approximately $125.3 million from the sale of approximately 16.8 million shares in the Follow-On Offering.

As of June 30, 2017, we were offering to sell any combination of Class A shares, Class W shares and Class I shares with a dollar value up to the maximum offering amount pursuant to the Follow-On Offering. We also sold shares of our unclassified common stock, which we refer to as “Class E” shares, pursuant to our distribution reinvestment plan offering registered on our Registration Statement on Form S-3 (Registration Number 333-162636). In the event of a liquidation event, our assets, or the proceeds therefrom, will be distributed ratably in proportion to the respective NAV for each class until the NAV for each class has been paid. Other than differing allocable fees and liquidation rights, Class E shares, Class A shares, Class W shares, and Class I shares have identical rights and privileges.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying interim condensed consolidated financial statements (herein referred to as “financial statements,” “balance sheets,” “statements of income,” “statements of comprehensive income (loss),” “statement of equity,” or “statements of cash flows”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the Commission's instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these financial statements do not include all the information and disclosure required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments and eliminations, consisting only of normal recurring items necessary for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of operating results for a full year. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Commission on March 3, 2017. There have been no significant changes to the Company’s significant accounting policies during the six months ended June 30, 2017 other than the updates described below.

New Accounting Pronouncements

In February 2017,the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update 2017-05, Other Income- Gain and Losses from Derecognition of Nonfinancial Assets (Topic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets ("ASU 2017-05"), which clarifies that a financial asset is within the scope of ASU 2017-05 if it is deemed an "in substance nonfinancial asset." Additionally, ASU 2017-05 adds guidance for partial sales of nonfinancial assets. The guidance will be effective for annual reporting periods beginning after December 15, 2017, and will require full or modified retrospective application. Early adoption is permitted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. We plan to adopt ASU 2017-05 at the same time we adopt Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) when the standard becomes effective for us beginning January 1, 2018 and have not determined whether the full or modified retrospective application will be applied. We do not anticipate the adoption will have a significant impact on our financial statements.

Newly Adopted Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update 2017-01 ("ASU 2017-01"), which clarifies the definition of a business in order to provide additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Earlier adoption is permitted. The guidance in ASU 2017-01 should be adopted on a prospective basis. We adopted ASU 2017-01 as of January 1, 2017 and anticipate that future acquisitions of real property will likely be accounted for as asset acquisitions rather than business combinations. Among other things, accounting for an asset acquisition requires capitalization of acquisition costs as a component of the acquired assets whereas accounting for business combinations requires acquisition costs to be expensed. Additionally, goodwill is not recognized and contingent consideration is recorded when probable and reasonably estimable under accounting for asset acquisitions.

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Investments in Real Property

6 Months Ended

Jun. 30, 2017

Real Estate [Abstract]

Investments in Real Property

INVESTMENTS IN REAL PROPERTY

Currently, our consolidated investments in real property consist of investments in office, industrial and retail properties. The following tables summarize our consolidated investments in real property as of June 30, 2017 and December 31, 2016 (amounts in thousands):

Real Property	Land		Building and Improvements			Intangible Lease Assets			Total Investment Amount			Intangible Lease Liabilities			Net Investment Amount
As of June 30, 2017:
Office	$	171,176	$	708,126		$	230,807		$	1,110,109		$	(15,014	)	$	1,095,095
Industrial	5,895		46,266			14,533			66,694			—			66,694
Retail	292,483		597,142			111,930			1,001,555			(75,265		)	926,290
Total gross book value	469,554		1,351,534			357,270			2,178,358			(90,279		)	2,088,079
Accumulated depreciation/amortization	—		(228,577		)	(287,263		)	(515,840		)	33,642			(482,198		)
Total net book value	$	469,554	$	1,122,957		$	70,007		$	1,662,518		$	(56,637	)	$	1,605,881
As of December 31, 2016:
Office	$	171,176	$	701,859		$	236,143		$	1,109,178		$	(15,121	)	$	1,094,057
Industrial	8,821		63,999			16,308			89,128			(344		)	88,784
Retail	293,973		599,020			113,023			1,006,016			(75,515		)	930,501
Total gross book value	473,970		1,364,878			365,474			2,204,322			(90,980		)	2,113,342
Accumulated depreciation/amortization	—		(215,858		)	(277,053		)	(492,911		)	31,435			(461,476		)
Total net book value	$	473,970	$	1,149,020		$	88,421		$	1,711,411		$	(59,545	)	$	1,651,866

Dispositions

During the six months ended June 30, 2017 and 2016, we disposed of the following properties (dollar amounts and square footage in thousands):

Property Type	Market	Ownership	Net Rentable Square Feet	Percentage Leased		Disposition Date	Contract  Sales Price		Gain on Sale
For the six months ended June 30, 2017
Retail	Greater Boston	100%	51	61	%	5/31/2017	$	4,500	$	—
Industrial Portfolio (1)	Louisville, KY	90%	609	100	%	6/9/2017	26,800		10,352
Total/ Weighted Average			660	97	%		$	31,300	$	10,352
For the six months ended June 30, 2016
Office	Washington, DC	100%	574	100	%	2/18/2016	$	158,400	$	41,241
Office	Chicago, IL	80%	107	66	%	3/1/2016	9,850		—
Office	Chicago, IL	80%	199	81	%	3/1/2016	18,000		159
Total/ Weighted Average			880	92	%		$	186,250	$	41,400

(1) Industrial portfolio included three properties.

Real Property Impairment

During the three and six months ended June 30, 2017, we recorded a $1.1 million impairment charge related to a consolidated retail property located in the Greater Boston market ("Hanover"), which we acquired in August 2007. We held a 100% ownership interest in Hanover. We sold Hanover in May 2017. Prior to the disposition, the net book value of Hanover exceeded the contract sales price less the cost to sell by approximately $1.1 million. Accordingly, we recorded an impairment charge to reduce the net book value of Hanover to our estimate of its fair value less the cost to sell.

During the six months ended June 30, 2016, we recorded a $587,000 impairment charge related to a consolidated office property located in the Chicago, IL market ("40 Boulevard"), which we acquired in January 2007 and we held through a joint venture in which we were not the managing partner. We held an 80% ownership interest in 40 Boulevard. We sold 40 Boulevard in March 2016. Prior to the disposition, the net book value of 40 Boulevard exceeded the contract sales price less the cost to sell by approximately $587,000. Accordingly, we recorded an impairment charge to reduce the net book value of 40 Boulevard to our estimate of its fair value less the cost to sell.

The fair value measurement for the impairment charges related to Hanover and 40 Boulevard was based on the contract sales price less selling costs. We considered the Level 3 inputs used in determining the fair value of these real property investments to be significant. As such, the investments fall under the Level 3 category of the fair value hierarchy as defined in ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820").

In the calculation of our daily NAV, our real estate assets are carried at fair value using valuation methodologies consistent with ASC Topic 820. As a result, the timing of valuation changes recorded in our NAV will not necessarily be the same as for impairment charges recorded to our consolidated financial statements prepared pursuant to GAAP. Since we determine our NAV daily, impairment charges pursuant to GAAP will likely always be delayed and potentially significantly delayed compared to the change in fair value of our properties included in the calculation of our daily NAV.

Rental Revenue

The following table summarizes the adjustments to rental revenue related to the amortization of above-market lease assets, below-market lease liabilities, and straight-line rental adjustments for the three and six months ended June 30, 2017 and 2016. In addition, the following table summarizes tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue (amounts in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Straight-line rent adjustments	$	(238	)	$	(205	)	$	(355	)	$	(446	)
Above-market lease assets	(648		)	(1,261		)	(1,514		)	(2,528		)
Below-market lease liabilities	1,358			1,544			2,783			3,079
Total increase to rental revenue	$	472		$	78		$	914		$	105
Tenant recovery income (1)	$	9,993		$	9,996		$	21,046		$	20,560

(1) Tenant recovery income presented in this table excludes real estate taxes that were paid directly by our tenants that are subject to triple net lease contracts. Such payments totaled approximately $516,000 and $876,000 during the three months ended June 30, 2017 and 2016, respectively, and approximately $1.1 million and $2.3 million during the six months ended June 30, 2017 and 2016, respectively.

Concentration of Credit Risk

The following is a summary of amounts related to the top five tenants based on annualized base rent, as of June 30, 2017 (dollar amounts and square feet in thousands):

Tenant	Locations	Industry	Annualized Base Rent (1)		% of Total Annualized Base Rent		Square Feet	% of Total Portfolio Square Feet
Charles Schwab & Co, Inc (2)	2	Securities, Commodities, Fin. Inv./Rel. Activities	$	23,646	15.6	%	602	8.3	%
Stop & Shop	14	Food and Beverage Stores	14,125		9.3	%	853	11.7	%
Novo Nordisk	1	Chemical Manufacturing	4,721		3.1	%	167	2.3	%
Seton Health Care	1	Hospitals	4,339		2.9	%	156	2.1	%
Shaw's Supermarket	4	Food and Beverage Stores	4,055		2.7	%	240	3.3	%
	22		$	50,886	33.6	%	2,018	27.7	%

(1) Annualized base rent represents the annualized monthly base rent of executed leases as of June 30, 2017.

(2) The amount presented for Charles Schwab & Co., Inc. ("Schwab") reflects the total annualized base rent for our two leases in place with Schwab as of June 30, 2017. One of these leases, which expires in September 2017, entails the lease of all 594,000 square feet of our 3 Second Street office property (defined below in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources") and accounts for $23.5 million or 15.5% of our annualized base rent as of June 30, 2017. We do not expect Schwab to renew this lease. Schwab has subleased 100% of 3 Second Street to 25 sub-tenants through September 2017. We have executed leases directly with 11 of these subtenants that comprise 368,000 square feet or 62% of 3 Second Street that effectively extend their leases beyond the Schwab lease expiration. These direct leases will expire between September 2020 and September 2032.

The top tenant in the table above comprises 15.6% of annualized base rent as of June 30, 2017. However, due to the near-term expiration of the Schwab lease at 3 Second Street, Schwab is no longer in the top 20 tenants based on future minimum rental revenue, comprising less than 1% of our total future minimum rental revenue as of June 30, 2017. Alternatively, based on future minimum rental revenue as of June 30, 2017, our top five tenants rank as follows: 1) Stop & Shop, 2) Mizuho Bank Ltd., 3) Shaw's Supermarket, 4) WeWork LLC, and 5) Novo Nordisk.

Our properties in New Jersey, Massachusetts, California, and Texas accounted for approximately 21%, 20%, 14%, and 12% respectively, of our total gross investment in real property portfolio as of June 30, 2017. A deterioration of general economic or other relevant conditions, changes in governmental laws and regulations, acts of nature, demographics or other factors in any of those states or the geographical region in which they are located could result in the loss of tenants, a decrease in the demand for our properties and a decrease in our revenues from those markets, which in turn may have a disproportionate and material adverse effect on our results of operations and financial condition.

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Debt Obligations

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Debt Obligations

DEBT OBLIGATIONS

The following table describes our borrowings as of June 30, 2017 and December 31, 2016 (dollar amounts in thousands):

	Principal Balance as of						Weighted Average Stated Interest Rate as of				Gross Investment Amount Securing Borrowings as of(1)
	June 30, 2017			December 31, 2016			June 30, 2017		December 31, 2016		June 30, 2017		December 31, 2016
Fixed-rate mortgages (2)	$	129,352		$	290,970		4.0	%	4.9	%	$	188,526	$	462,954
Floating-rate mortgages (3)	254,500			52,500			3.2	%	2.3	%	407,561		70,485
Total secured borrowings	383,852			343,470			3.5	%	4.5	%	596,087		533,439
Line of credit (4)	253,000			236,000			2.9	%	2.3	%	N/A		N/A
Term loans (5)	475,000			475,000			3.4	%	3.2	%	N/A		N/A
Total unsecured borrowings	728,000			711,000			3.3	%	2.9	%	N/A		N/A
Total borrowings	$	1,111,852		$	1,054,470		3.3	%	3.4	%	N/A		N/A
Less: net debt issuance costs	(7,260		)	(6,295		)
Add: mark-to-market adjustment on assumed debt	560			626
Total borrowings (net basis)	$	1,105,152		$	1,048,801

(1) “Gross Investment Amount” as used here and throughout this document represents the allocated gross basis of real property after certain adjustments. Gross Investment Amount for real property (i) includes the effect of intangible lease liabilities, (ii) excludes accumulated depreciation and amortization, and (iii) includes the impact of impairments. 

(2) Amount as of June 30, 2017 and December 31, 2016 includes a floating-rate mortgage note that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing.

(3) As of June 30, 2017, our floating rate mortgage notes were subject to a weighted average interest rate spread of 2.13% over one-month LIBOR. As of December 31, 2016, our floating rate mortgage note was subject to an interest rate spread of 1.65% over one-month LIBOR.

(4) As of June 30, 2017 and December 31, 2016, borrowings under our line of credit were subject to interest at a floating rate of 1.70% and 1.55% over one-month LIBOR, respectively. However, as of December 31, 2016, we had effectively fixed the interest rate of approximately $12.1 million of the total of $236.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total line of credit of 2.28%.

(5) As of June 30, 2017 and December 31, 2016, borrowings under our term loans were subject to interest at a weighted average floating rate of 1.75% and 1.60% over one-month LIBOR, respectively. However, we have effectively fixed the interest rate of approximately $350.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total term loans of 3.44% and 3.17% as of June 30, 2017 and December 31, 2016, respectively.

Mortgage Notes

As of June 30, 2017, five mortgage notes were interest-only and four mortgage notes were fully amortizing with outstanding principal balances of approximately $357.5 million and $26.4 million, respectively. None of our mortgage notes are currently recourse to us. The assets and credit of our consolidated properties pledged as collateral for our mortgage notes are not available to satisfy our debt and obligations unless we first satisfy the mortgage note payable on the underlying property.  

Revolving Credit Facility and Five-Year Term Loan

Through a syndicate of 14 lenders (the "BofA Lenders") led by Bank of America, N.A., as Administrative Agent ("BofA"), we have a $675 million senior unsecured term loan and revolving line of credit (the “Facility”). The Facility provides us with the ability from time to time to increase the size of the Facility up to a total of $900 million less the amount of any prepayments under the term loan component of the Facility, subject to receipt of lender commitments and other conditions.

The Facility consists of a $400 million revolving credit facility (the “Revolving Credit Facility”) and a $275 millionfive-year term loan (the “Term Loan”). The Revolving Credit Facility contains a sublimit of $50 million for letters of credit and a sublimit of $50 million for swing line loans. The primary interest rate for the Revolving Credit Facility is based on LIBOR, plus a margin ranging from 1.40% to 2.30%, depending on our consolidated leverage ratio. The maturity date of the Revolving Credit Facility is January 31, 2019 and contains one one-year extension option that we may exercise upon (i) payment of an extension fee equal to 0.15% of the sum of the amount outstanding under the Revolving Credit Facility and the unused portion of the Revolving Credit Facility at the time of the extension, and (ii) compliance with the other conditions set forth in the credit agreement. The primary interest rate within the Term Loan is based on LIBOR, plus a margin ranging from 1.35% to 2.20%, depending on our consolidated leverage ratio. The maturity date of the Term Loan is January 31, 2018 and contains twoone-year extension options that we may exercise upon (i) payment of an extension fee equal to 0.125% of the sum of the amount outstanding under the Term Loan at the time of each extension, and (ii) compliance with the other conditions set forth in the credit agreement.

Borrowings under the Facility are available for general business purposes including, but not limited to, refinancing of existing indebtedness and financing the acquisition of permitted investments, including commercial properties. As of June 30, 2017 and December 31, 2016, the unused portion of the Facility was approximately $124.7 million and $164.0 million, respectively, and we had full access to the unused portion of the Facility.

Seven-Year Term Loan

Through a syndicate of six lenders led by Wells Fargo Bank, National Association as Administrative Agent and Regions Bank as Syndication Agent, we have a $200 millionseven-year term loan credit agreement (the “$200 million Term Loan”). The primary interest rate within the $200 million Term Loan is based on LIBOR, plus a margin ranging from 1.65% to 2.55%, depending on our consolidated leverage ratio. The maturity date of the $200 million Term Loan is February 27, 2022 with no extension options.

Borrowings under the $200 million Term Loan are available for general business purposes including, but not limited to financing the acquisition of permitted investments, including commercial properties.

As of June 30, 2017, we were in compliance with all our debt covenants, including those under the Facility and the $200 million Term Loan.

Mortgage Note Borrowing

Duringthe six months ended June 30, 2017, we entered into two mortgage note borrowings. The following table describes the new borrowings in more detail (dollar amounts in thousands):

Borrowings	Date Borrowed	Principal Balance		Fixed or Floating Interest Rate	Stated Interest Rate (1)		Contractual Maturity Date	Extension Options	Collateral Type	Collateral Market
3 Second Street (2)	1/10/2017	$	127,000	Floating	3.38	%	1/10/2020	2 one-year extensions	Office Property	Northern New Jersey
Centerton Square (3)	6/5/2017	75,000		Floating	3.33	%	7/10/2019	2 one-year extensions	Retail Property	Philadelphia, PA
Total/weighted average borrowings		$	202,000		3.36	%

(1) For floating-rate mortgage note borrowings, the stated interest rate is as of June 30, 2017.

(2) On January 10, 2017, we received proceeds of $127.0 million from the $146.6 million 3 Second Street mortgage note, and we can request the remaining proceeds anytime prior to October 10, 2019 as reimbursement for certain approved capital expenditures, tenant improvement costs and leasing commissions. As of June 30, 2017, the term loan was subject to an interest rate spread of 2.25% over one-month LIBOR. As a result of this borrowing, we entered into an interest rate protection agreement ("Interest Rate Cap") with a notional amount of $146.6 million and a LIBOR strike rate of 3.00%. See Note 5 for additional discussion related to the Interest Rate Cap.

(3) On June 5, 2017, we received proceeds of $75.0 million from the $81.3 million Centerton Square mortgage note, and we can obtain the remaining proceeds subject to meeting certain financial ratios. As of June 30, 2017, the term loan was subject to an interest rate spread of 2.25% over one-month LIBOR. As a result of this borrowing, we entered into an Interest Rate Cap with a notional amount of $81.3 million and a LIBOR strike rate of 3.00%. See Note 5 for additional discussion related to the Interest Rate Cap.

Repayment of Mortgage Note

During the six months ended June 30, 2017, we repaid four mortgage note borrowings in full during the respective free-prepayment periods prior to their scheduled maturities using proceeds from our Facility or our 3 Second Street borrowing. The following table describes these repayments in more detail (dollar amounts in thousands):

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Debt Obligation	Repayment Date	Balance Repaid/Extinguished		Interest Rate Fixed or Floating	Stated Interest Rate		Contractual Maturity Date	Collateral Type	Collateral Market
Eastern Retail Portfolio	1/10/2017	$	110,000	Fixed	5.51	%	6/11/2017	Retail Property	Various (1)
Wareham	5/8/2017	24,400		Fixed	6.13	%	8/8/2017	Retail Property	Greater Boston
Kingston	6/1/2017	10,574		Fixed	6.33	%	11/1/2017	Retail Property	Greater Boston
Sandwich	6/1/2017	15,825		Fixed	6.33	%	11/1/2017	Retail Property	Greater Boston
Total/weighted average borrowings		$	160,799		5.74	%

(1) The Eastern Retail Portfolio was collateralized by three retail properties located in Raleigh, NC, Philadelphia, PA and Greater Boston.

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The following table reflects our contractual debt maturities as of June 30, 2017, specifically our obligations under our mortgage notes and unsecured borrowings (dollar amounts in thousands):

	As of June 30, 2017
	Mortgage Notes				Unsecured Borrowings				Total
Year Ending December 31,	Number of Borrowings Maturing	Outstanding Principal Balance			Number of Borrowings Maturing	Outstanding Principal Balance			Outstanding Principal Balance
2017	—	$	842		—	$	—		$	842
2018	—	2,698			1	275,000			277,698
2019	1	78,698			1	253,000			331,698
2020	1	130,860			—	—			130,860
2021	1	12,764			—	—			12,764
2022	1	3,660			1	200,000			203,660
2023	2	77,899			—	—			77,899
2024	—	1,034			—	—			1,034
2025	1	71,094			—	—			71,094
2026	—	1,157			—	—			1,157
Thereafter	2	3,146			—	—			3,146
Total	9	$	383,852		3	$	728,000		$	1,111,852
Less: net debt issuance costs		(3,478		)		(3,782		)
Add: mark-to-market adjustment on assumed debt		560				—
Total borrowings (net basis)		$	380,934			$	724,218

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Derivatives and Hedging Activities

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

We maintain risk management control systems to monitor interest rate risk attributable to both our outstanding and forecasted debt obligations. We generally seek to limit the impact of interest rate changes on earnings and cash flows by selectively utilizing derivative instruments to hedge exposures to changes in interest rates on our secured and unsecured floating rate borrowings. While this hedging strategy is designed to minimize the impact on our net income (loss) and cash provided by operating activities from changes in interest rates, the overall returns on our investments may be reduced. Our board of directors has established policies and procedures regarding our use of derivative instruments for hedging or other purposes to achieve these risk management objectives.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from counterparties in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amounts. We have entered into and plan to enter into certain interest rate derivatives with the goal of mitigating our exposure to adverse fluctuations in the interest payments on our one-month LIBOR-indexed debt. Certain of our floating rate borrowings are not hedged and therefore, to an extent, we have ongoing exposure to interest rate movements.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges under ASC Topic 815 is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the next 12 months, we estimate that approximately $1.7 million will be reclassified as an increase to interest expense related to active effective hedges of existing floating-rate debt, and we estimate that approximately $2.0 million will be reclassified as an increase to interest expense related to effective interest rate swaps where the hedging instrument has been terminated. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.

The table below presents a reconciliation of the beginning and ending balances, between December 31, 2016 and June 30, 2017, of our accumulated other comprehensive loss (“AOCI”), net of amounts attributable to noncontrolling interests, related to the effective portion of our cash flow hedges as presented on our condensed consolidated financial statements, as well as amounts related to our available-for-sale securities (amounts in thousands):  

	(Losses) and Gains on Cash Flow Hedges			Unrealized (Losses) and Gains on Available-For-Sale Securities			Accumulated Other Comprehensive Loss
Beginning balance as of December 31, 2016	$	(5,849	)	$	(1,056	)	$	(6,905	)
Other comprehensive income:
Amount of loss reclassified from AOCI into interest expense (effective portion) (net of tax benefit of $0)	2,744			—			2,744
Change in fair value recognized in AOCI (effective portion) (net of tax benefit of $0)	(1,332		)	—			(1,332		)
Net current-period other comprehensive income	1,412			—			1,412
Attribution of and other adjustments to AOCI attributable to noncontrolling interests	(84		)	27			(57		)
Ending balance as of June 30, 2017	$	(4,521	)	$	(1,029	)	$	(5,550	)

Fair Values of Derivative Instruments

The valuation of interest rate derivatives is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

The majority of the inputs used to value our derivative instruments fall within Level 2 of the fair value hierarchy. However, the credit valuation adjustments associated with our derivative instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of potential default by us and our counterparties. As of June 30, 2017, we had assessed the significance of the impact of the credit valuation adjustments and had determined that it was not significant to the overall valuation of our derivative instruments. As a result, we have determined that our derivative valuations are classified in Level 2 of the fair value hierarchy.

As of June 30, 2017 and December 31, 2016, we had 10 and 11 outstanding interest rate swaps, respectively, that were designated as cash flow hedges of interest rate risk, with a total notional amount of $383.0 million and $395.1 million, respectively. In addition, as of June 30, 2017 and December 31, 2016, we had one interest rate swap with a total notional amount of $52.5 million that will become effective in July 2018 and mature in July 2021, which was designated as a cash flow hedge of interest rate risk.

As of June 30, 2017, we had two outstanding interest rate caps that were not designated as hedges, with a total notional amount of $227.9 million. Derivatives not designated as hedges are not speculative and are used to hedge our exposure to interest rate movements and other identified risks but do not meet the strict requirements for hedge accounting. In certain instances, including our current derivative not designated for hedge accounting, we elected not to apply hedge accounting.

The table below presents the gross fair value of our designated and non-designated derivative financial instruments as well as their classification on our accompanying condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 (amounts in thousands, except for footnoted information):

		Fair Value of Asset Derivatives as of					Fair Value of Liability Derivatives as of
	Balance Sheet Location	June 30, 2017		December 31, 2016		Balance Sheet Location	June 30, 2017			December 31, 2016
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets, net (1)	$	1,937	$	2,135	Other liabilities (1)	$	(2,133	)	$	(2,777	)
Derivatives not designated as hedging instruments:
Interest rate contracts	Other assets, net (1)	$	14	$	—	Other liabilities (1)	$	—		$	—
Total derivatives		$	1,951	$	2,135		$	(2,133	)	$	(2,777	)

(1) Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on our accompanying condensed consolidated balance sheets. If we did net our derivative fair values on our accompanying condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016, there would be no impact.

Effect of Derivative Instruments on the Statements of Income and Comprehensive Income (Loss)

The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Derivatives Designated as Hedging Instruments
Derivative type	Interest rate contracts			Interest rate contracts			Interest rate contracts			Interest rate contracts
Amount of loss recognized in OCI (effective portion)	$	(1,928	)	$	(4,902	)	$	(1,332	)	$	(15,098	)
Location of loss reclassified from accumulated OCI into income (effective portion)	Interest expense			Interest expense			Interest expense			Interest expense
Amount of loss reclassified from accumulated OCI into income (effective portion)	$	1,251		$	1,199		$	2,744		$	2,317
Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Other income and (expense)			Other income and (expense)			Other income and (expense)			Other income and (expense)
Amount of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	$	(47	)	$	—		$	—		$	—
Derivatives Not Designated as Hedging Instruments
Derivative type	Interest rate cap			Interest rate cap			Interest rate cap			Interest rate cap
Amount of loss recognized in income	$	(21	)	$	—		$	(101	)	$	—
Location of loss recognized in income	Other income and (expense)			Other income and (expense)			Other income and (expense)			Other income and (expense)

Credit-Risk-Related Contingent Features

We have agreements with certain of our derivative counterparties that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. We have agreements with certain other derivative counterparties that contain a provision whereby if we default on any of our indebtedness held by our Operating Partnership, including default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations.

As of June 30, 2017, the fair value of derivatives in a net liability position, which included accrued interest but excluded any credit valuation adjustments related to these agreements, was approximately $2.2 million. As of June 30, 2017, we have not posted any collateral related to these agreements. If we had breached any of these provisions at June 30, 2017, we could have been required to settle our obligations under the agreements at their termination value of $2.2 million.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2017

Financial Instruments, Owned, at Fair Value [Abstract]

Fair Value of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

We use the framework established in ASC Topic 820, to measure the fair value of our financial instruments as disclosed in the table below. The fair values estimated below are indicative of certain interest rate and other assumptions as of June 30, 2017 and December 31, 2016, and may not take into consideration the effects of subsequent interest rate or other assumption fluctuations, or changes in the values of underlying collateral. The fair values of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses approximate their carrying values because of the short-term nature of these instruments.

The table below presents the carrying amounts and estimated fair values of our other financial instruments, other than derivatives which are disclosed in Note 5, as of June 30, 2017 and December 31, 2016 (amounts in thousands):  

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	As of June 30, 2017				As of December 31, 2016
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Fixed-rate debt-related investments, net	$	14,941	$	15,463	$	15,209	$	15,784
Liabilities:
Fixed-rate mortgage notes (1)	$	128,750	$	131,552	$	290,329	$	291,624
Floating-rate mortgage notes	252,184		253,580		51,918		51,942
Floating-rate unsecured borrowings	724,218		728,000		706,554		711,000

(1) Amount includes a floating-rate mortgage note of approximately $32.6 million as of June 30, 2017 and $32.5 million as of December 31, 2016 that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing.

The methodologies used and key assumptions made to estimate fair values of the financial instruments, other than derivatives disclosed in Note 5, described in the above table are as follows:

Debt-Related Investments — The fair value of our performing debt-related investments are estimated using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Credit spreads and market interest rates used to determine the fair value of these instruments are based on unobservable Level 3 inputs which management has determined to be its best estimate of current market values.

Mortgage Notes and Other Borrowings — The fair value of our mortgage notes and other borrowings are estimated using a discounted cash flow analysis, based on our estimate of market interest rates. Credit spreads relating to the underlying instruments are based on unobservable Level 3 inputs, which we have determined to be our best estimate of current market spreads of similar instruments.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Attributable to Parent [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

Common Stock

During the six months ended June 30, 2017, we completed two self-tender offers pursuant to which we accepted for purchase approximately 11.8 million unclassified shares of common stock, which we refer to as “Class E” shares, at a weighted average purchase price of $7.50 per share for an aggregate cost of approximately $88.2 million.

The following table describes the changes in each class of common shares during the six months ended June 30, 2017 (shares and dollar amounts in thousands):

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	Class E					Class A					Class W					Class I					Total
	Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)
Balances, December 31, 2016	112,325		$	1,298,189		2,001		$	14,758		2,271		$	16,381		34,039		$	243,049		150,636		$	1,572,377
Issuance of common stock:
Shares sold	—		—			107		836			254		1,916			1,178		8,870			1,539		11,622
Distribution reinvestment plan	872		6,568			25		190			30		222			430		3,235			1,357		10,215
Stock-based compensation (2)	—		—			—		—			—		—			(99	)	(669		)	(99	)	(669		)
Redemptions and repurchases of common stock	(12,320	)	(92,421		)	(75	)	(567		)	(69	)	(521		)	(1,056	)	(7,939		)	(13,520	)	(101,448		)
Balances, June 30, 2017	100,877		$	1,212,336		2,058		$	15,217		2,486		$	17,998		34,492		$	246,546		139,913		$	1,492,097

(1) Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem or repurchase common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans, share redemption programs, and self-tender offers.

(2) During the six months ended June 30, 2017, approximately 140,000 shares that we had previously recognized as issued and outstanding were relinquished pursuant to an amendment to the Restricted Stock Unit Agreements (as defined in Note 8). Please see Note 8 for further discussion.

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Related Party Transactions

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

Advisory Agreement

Our day-to-day activities are managed by our Advisor, a related party, under the terms and conditions of the Advisory Agreement. Our Advisor is considered to be a related party as certain indirect owners and employees of our Advisor serve as two of our directors and all of our executive officers. The responsibilities of our Advisor cover all facets of our business, and include the selection and underwriting of our real property and debt-related investments, the negotiations for these investments, the asset management and financing of these investments and the oversight of real property dispositions.

On June 27, 2017, we, our Operating Partnership and our Advisor entered into the Eleventh Amended and Restated Advisory Agreement, effective June 30, 2017, which clarified that all expense reimbursements available to the Advisor under the agreement are also available to affiliates of the Advisor and/or product specialists engaged by the Advisor to perform services under the agreement. The Advisory Agreement may be renewed for an unlimited number of successive one-year terms. The current term of the Advisory Agreement expires on June 30, 2018. Per the Advisory Agreement, in consideration for asset management services performed, we pay our Advisor an advisory fee comprised of two separate components: (1) a fixed amount that accrues daily in an amount equal to 1/365th of 1.15% of (a) the “Aggregate Fund NAV” (i.e., the aggregate net asset value or “NAV” of our Class E shares, Class A shares, Class W shares and Class I shares, along with the OP Units held by third parties) for such day and (b) the consideration received by us or our affiliate for selling Interests (defined below) in DST Properties (defined below) to third party investors, net of up-front fees and expense reimbursements payable out of gross sale proceeds from the sale of such Interests, including but not limited to sales commissions, dealer manager fees and non-accountable expense allowances, and (2) a performance component that is based on the annual non-compounded investment return provided to holders of “Fund Interests” (defined as our Class E shares, Class A shares, Class W shares, Class I shares, and OP Units held by third parties) such that our Advisor will receive 25% of the overall return in excess of 6%; provided that in no event may the performance condition exceed 10% of the overall return for such year, and subject to certain other limitations. Additionally, our Advisor will provide us with a waiver of a portion of its fees generally equal to the amount of the performance component that would have been payable with respect to the Class E shares and the Class E OP Units held by third parties until the NAV of such shares or units exceeds $10.00 per share or unit, the benefit of which will be shared among all holders of Fund Interests.  

In addition, we will pay our Advisor a fee of 1.0% of the total consideration we receive upon the sale of real property assets (excluding DST Properties). For these purposes, a “sale” means any transaction or series of transactions whereby we or our Operating Partnership directly or indirectly (including through the sale of any interest in a joint venture or through a sale by a joint venture in which we hold an interest) sells, grants, transfers, conveys, or relinquishes its ownership of any real property or portion thereof, including the lease of any real property consisting of a building only, and including any event with respect to any real property which gives rise to a significant amount of insurance proceeds or condemnation awards.

Further, for providing a substantial amount of services in connection with the sale of a property (excluding DST Properties), as determined by a majority of our independent directors, we will pay our Advisor up to 50.0% of the reasonable, customary and competitive commission paid for the sale of a comparable real property, provided that such amount shall not exceed 1.0% of the contract price of the property sold and, when added to all other real estate commissions paid to unaffiliated parties in connection with the sale, may not exceed the lesser of a competitive real estate commission or 6.0% of the sales price of the property.

In addition, pursuant to the Advisory Agreement, we will pay directly, or reimburse our Advisor and our Dealer Manager (defined below) if they pay on our behalf any organizational and offering expenses (other than selling commissions, the dealer manager fee, distribution fees and non-transaction based compensation allocated to sales-related activities of employees of our Dealer Manager in connection with the offering) relating to any public offerings as and when incurred. After the termination of the primary portion of the offering and again after termination of the distribution reinvestment plan portion of the offering, our Advisor has agreed to reimburse us to the extent that total cumulative organization and offering expenses (including selling commissions, the dealer manager fee and distribution fees) that we incur exceed 15% of our gross proceeds from the applicable offering.

The Advisory Agreement also provides that we must reimburse our Advisor for any private offering organization and offering expenses, such as those of the DST Program (defined below), it incurs on our behalf, including Advisor personnel costs, unless it has agreed to receive a fee in lieu of reimbursement.

Subject to certain limitations, we reimburse our Advisor for all of the costs it incurs in connection with the services it provides to us, including, without limitation, our allocable share of the personnel (and related employment) costs and overhead (including, but not limited to, allocated rent paid to both third parties and an affiliate of the advisor, equipment, utilities, insurance, travel and entertainment, and other costs) incurred by our Advisor or its affiliates, including, but not limited to, total compensation, benefits and other overhead of all employees involved in the performance of such services.

Public Offering Dealer Manager Agreement

Black Creek Capital Markets, LLC (f/k/a Dividend Capital Securities LLC) (our “Dealer Manager”), a related party, is distributing the shares of our common stock in our public offering on a “best efforts” basis. Our Dealer Manager is a member of the Financial Industry Regulatory Authority, Inc., or FINRA. Our Dealer Manager coordinates our distribution effort and manages our relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to marketing our public offering.

On September 16, 2015, we entered into a Second Amended and Restated Dealer Manager Agreement (the “Second Amended Dealer Manager Agreement”) with our Dealer Manager. The Dealer Manager served as dealer manager for the Prior Offering and will serve as dealer manager for the Follow-On Offering. The purpose of the Second Amended Dealer Manager Agreement is to engage our Dealer Manager with respect to the Follow-On Offering while still paying dealer manager fees and distribution fees with respect to the Prior Offering. As amended, the Second Amended Dealer Manager Agreement may be made to apply to future offerings by naming them in a schedule to the agreement, with the consent of the Company and our Dealer Manager. Pursuant to the Second Amended Dealer Manager Agreement, we pay (i) selling commissions on Class A shares sold in the primary offering of up to 3.0% of the public offering price per share, (ii) a dealer manager fee which accrues daily in an amount equal to 1/365th of 0.6% of our NAV per share of Class A and Class W shares outstanding and an amount equal to 1/365th of 0.1% of our NAV per share of Class I shares outstanding on such day on a continuous basis, and (iii) a distribution fee which accrues daily in an amount equal to 1/365th of 0.5% of our NAV per Class A share outstanding on such day on a continuous basis. Subject to FINRA limitations on underwriting compensation, we will continue to pay the dealer manager fee and distribution fee until the earlier to occur of the following: (i) a listing of the class of such shares on a national securities exchange or (ii) such shares no longer being outstanding.

Pursuant to the Second Amended Dealer Manager Agreement, we may pay to our Dealer Manager a primary dealer fee in the amount of up to 5.0% of the gross proceeds raised from the sale of Class I shares in the primary offering, provided that (i) the total gross proceeds raised with respect to which the primary dealer fee will apply may not exceed $100,000,000, subject to further increase by our board of directors, in its discretion; (ii) the primary dealer fee will only be paid with respect to sales made by participating broker-dealers specifically approved by us as being eligible; and (iii) the primary dealer fee will only be paid with respect to sales made at times approved by us. The Dealer Manager may reallow a portion of the primary dealer fee to the participating broker-dealers involved in selling such Class I shares based on the portion of the gross proceeds raised from their customers. The Dealer Manager will consider the primary dealer fee to be underwriting compensation subject to certain limits. The primary dealer fee will be paid by us and will not be considered to be a class-specific expense.

On June 23, 2016, our board of directors increased the maximum amount of total gross proceeds raised with respect to which the primary dealer fee will apply to $150 million. Such amount is subject to further increase by our board of directors, in its discretion.

Independent Director RSU Awards

On December 5, 2013, our board of directors approved revised compensation for our independent directors. In connection with the revised compensation plan, at each annual meeting of stockholders the independent directors will automatically, upon election, each receive an annual $10,000 grant of Restricted Stock Units ("RSUs") with respect to Class I shares of our common stock, with the number of RSUs based on the NAV per Class I share as of the end of the day of the annual meeting.

Restricted Stock Unit Agreements 

We have entered into Restricted Stock Unit Agreements (the “Advisor RSU Agreements”) with our Advisor. The purposes of our Advisor RSU Agreements are to promote an alignment of interests among our stockholders, our Advisor and the personnel of our Advisor and its affiliates, and to promote retention of the personnel of our Advisor and its affiliates. Each restricted stock unit that we grant pursuant to our Advisor RSU Agreements (the "Company RSUs") will, upon vesting, be settled in one share of our Class I common stock. The Company RSUs are subject to specified vesting and settlement provisions and, upon settlement in Class I shares of Company common stock, require offsets of advisory fees and expenses otherwise payable from the Company to our Advisor as described further below based on the NAV per Class I share on the grant date of the applicable Company RSU. Pursuant to the terms of the Advisor RSU Agreements, we have granted our Advisor approximately 842,000 Company RSUs. On April 13, 2017, we entered into an amendment to the Advisor RSU Agreements pursuant to which the Advisor agreed that approximately 208,000 of the RSUs originally granted under the Agreements would not vest (the "Relinquished RSUs"). Because the underlying shares will not vest and be delivered to the Advisor, no offset of advisory fees and expenses otherwise payable from the Company to the Advisor will occur with respect to the Relinquished RSUs. However, in consideration for the Advisor's agreement, we agreed to reduce future offsets of advisory fees and expenses in connection with vesting and settlement of other RSUs by approximately $33,000, which amount reflects an increase in net asset value per Class I share since the grants of certain of the Relinquished RSUs. As of June 30, 2017, approximately 123,000 Company RSUs remained unvested and unsettled.

As of June 30, 2017, our Advisor did not have any shares of Class I common stock issued upon settlement of Company RSUs that remained subject to fee offset. The Advisor is expected to redistribute a significant portion of the Company RSUs and/or shares to senior level employees of our Advisor and its affiliates that provide services to us, although the terms of such redistributions (including the timing, amount and recipients) remain solely in the discretion of our Advisor. The weighted average grant-date NAV per Class I share with respect to the unsettled Company RSUs is $7.29 as of June 30, 2017.

Vesting and Payment Offset

Following specified vesting provisions, an equal percentage of the Company RSUs vest on each of the applicable vesting dates. On each vesting date, an offset amount (each, an “Offset Amount”) will be calculated and deducted on a pro rata basis over the next 12 months from the cash payments otherwise due and payable to our Advisor under our then-current Advisory Agreement for any fees or expense reimbursements. Each Offset Amount equals the number of Company RSUs vesting on such date multiplied by the NAV per Class I share publicly disclosed by us (the “Class I NAV”) as of the end of the applicable grant date (the “Grant Date NAV per Class I Share”). Each Offset Amount is always calculated based on the Grant Date NAV per Class I Share, even beyond the initial grant and vesting date. At the end of each 12-month period following each vesting date, if the Offset Amount has not been fully realized by offsets from the cash payments otherwise due and payable to our Advisor under the Advisory Agreement, our Advisor shall promptly pay any shortfall to us.

The chart below shows the grant dates, vesting dates, number of unvested shares as of June 30, 2017, and Grant Date NAV per Class I Share (share amounts in thousands).

Award	Grant Date	Vesting Dates	Number of Unvested Shares	Grant Date NAV per Class I Share
Company RSU	2/25/2015	4/13/2018	66	$	7.18
Company RSU	2/4/2016	4/15/2019	57	7.41
Total/ weighted average			123	$	7.29

Termination

The Advisor RSU Agreements will automatically terminate upon termination or non-renewal of the Advisory Agreement by any party for any reason. In addition, upon a change in control of us, then either our Advisor or we may immediately terminate the Advisor RSU Agreements. Further, our Advisor may immediately terminate the Advisor RSU Agreements if we exercise certain rights under the Advisor RSU Agreements to replace the Company RSUs with another form of compensation.

Upon termination of the Advisor RSU Agreements, our Advisor will promptly pay any unused offset amounts to us or, at our Advisor’s election, return Class I shares in equal value based on the Class I NAV as of the date of termination of the Advisor RSU Agreements. In addition, upon termination of the Advisor RSU Agreements, all unvested Company RSUs will be forfeited except that, unless the Advisor RSU Agreements were terminated at the election of our Advisor following a change in control of us or as a result of a premature termination of the Advisory Agreement at our election for cause (as defined in the Advisory Agreement) or upon the bankruptcy of our Advisor, then following such forfeiture of Company RSUs, our Advisor will have the right to acquire from us the number of Class I shares equal to the number of Company RSUs forfeited, in return for a purchase price equal to such number of Class I shares multiplied by the Grant Date NAV per Class I Share. The Advisor must notify us of its election to exercise the foregoing acquisition right within 30 days following the termination of the Advisor RSU Agreements, and the parties will close the transaction within 60 days following the termination of the Advisor RSU Agreements. 

Dividend Equivalent Payments

If our board of directors declares and we pay a cash dividend on Class I shares for any period in which the Company RSUs are outstanding (regardless of whether such Company RSUs are then vested), our Advisor will be entitled to dividend equivalents (the “Dividend Equivalents”) with respect to that cash dividend equal to the cash dividends that would have been payable on the same number of Class I shares as the number of Company RSUs subject to the Advisor RSU Agreements had such Class I shares been outstanding during the same portion of such period as the Company RSUs were outstanding. Any such Dividend Equivalents may be paid in cash or Class I shares, at our Advisor’s election.

Restricted Stock Grant

Effective February 2, 2017, we granted approximately 58,000 restricted shares of Class I common stock to certain employees of our Advisor and its affiliates at a price of $7.56 per share, of which 25% vested on the grant date with the remaining 75% vesting ratably over the next three anniversaries of the grant date. During the six months ended June 30, 2017, approximately 38,000 shares of restricted stock vested at a weighted average price of $7.55, based on our NAV per share as of the vesting dates. During the six months ended June 30, 2017, we recorded approximately $210,000 within “general and administrative expenses” in the accompanying condensed consolidated statements of income. Our restricted stock generally vests ratably over a period of three to four years.

Private Placements of Delaware Statutory Trust Interests

Private Placements

In March 2016, we, through our Operating Partnership, initiated a program to raise capital in private placements exempt from registration under the Securities Act of 1933, as amended (“Private Placements”), through the sale of beneficial interests (“Interests”) in specific Delaware statutory trusts holding real properties, including properties currently indirectly owned by our Operating Partnership (the “DST Program”). From 2006 through 2009, we, through our subsidiaries, conducted similar private placement offerings of fractional interests in which it raised a total of $183.1 million in gross proceeds. These fractional interests were all subsequently acquired by our Operating Partnership in exchange for an aggregate of 17.7 million OP Units. As of June 30, 2017, we had sold approximately $6.1 million in Interests, which we include in "other liabilities" in our accompanying condensed consolidated balance sheets.

Each Private Placement will offer Interests in one or more real properties placed into one or more Delaware statutory trust(s) by our Operating Partnership or its affiliates (“DST Properties”). We anticipate that these Interests may serve as replacement properties for investors seeking to complete like-kind exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended. Additionally, properties underlying Interests sold to investors pursuant to such Private Placements will be leased-back by an indirect wholly owned subsidiary of our Operating Partnership on a long term basis of up to 29 years. The lease agreements are expected to be fully guaranteed by our Operating Partnership. Additionally, our Operating Partnership will retain a fair market value purchase option (“FMV Option”) giving it the right, but not the obligation, to acquire the Interests from the investors at a later time in exchange for OP Units.

DST Program Dealer Manager Agreement

In connection with the DST Program, in March 2016, Dividend Capital Exchange LLC (“DCX”), a wholly owned subsidiary of our taxable REIT subsidiary that is wholly owned by our Operating Partnership, entered into a Dealer Manager Agreement with our Dealer Manager, pursuant to which our Dealer Manager agreed to conduct Private Placements for Interests reflecting an indirect ownership of up to $500 million of Interests. DCX will pay certain up-front fees and reimburse certain related expenses to the Dealer Manager with respect to capital raised through any such Private Placements. DCX is obligated to pay our Dealer Manager a dealer manager fee of up to 1.5% of gross equity proceeds raised and a commission of up to 5% of gross equity proceeds raised through the Private Placements. The Dealer Manager may re-allow such commissions and a portion of such dealer manager fee to participating broker dealers.

In addition, we, or our subsidiaries, are obligated to pay directly or reimburse our Advisor and our Dealer Manager if they pay on our behalf, any organization and offering expenses (other than selling commissions and the dealer manager fee) as and when incurred. These expenses may include reimbursements for the bona fide due diligence expenses of participating broker-dealers, supported by detailed and itemized invoices, and similar diligence expenses of investment advisers, legal fees of our Dealer Manager, reimbursements for customary travel, lodging, meals and reasonable entertainment expenses of registered persons associated with our Dealer Manager, the cost of educational conferences held by us, including costs reimbursement for registered persons associated with our Dealer Manager and registered representatives of participating broker-dealers to attend educational conferences sponsored by us, and attendance fees and costs reimbursement for registered persons associated with our Dealer Manager to attend seminars conducted by participating broker-dealers and promotional items.

We intend to recoup the costs of the selling commissions and dealer manager fees described above through a purchase price “mark-up” of the initial estimated fair value of the DST Properties to be sold to investors, thereby placing the economic burden of these up-front fees on the investors purchasing such Interests. In addition, to offset some or all of our organization and offering expenses associated with the Private Placements, we will add a purchase price mark-up of the estimated fair value of the DST Properties to be sold to investors in the amount of 1.5% of the gross equity proceeds. Collectively, these purchase price mark-ups total up to 8% of the gross equity proceeds raised in the Private Placements. Additionally, we will be paid, by investors purchasing Interests, a non-accountable reimbursement equal to 1.0% of gross equity proceeds for real estate transaction costs that we expect to incur in selling or buying these Interests. Also, investors purchasing Interests will be required to pay their own respective closing costs upon the initial sale of the interests.

Limited Partnership Agreement

In connection with the launch of the DST Program, the Company, on behalf of itself as general partner and on behalf of all the limited partners thereto, entered into the Fifth Amended and Restated Limited Partnership Agreement of our Operating Partnership, dated as of March 2, 2016, which was further amended on August 2, 2016 (the “Amended and Restated Operating Partnership Agreement”). The Amended and Restated Operating Partnership Agreement amends the prior operating partnership agreement by establishing two series of Class E OP Units, with different redemption and registration rights. The currently existing third-party holders of Class E OP Units will now hold Series 1 Class E OP Units, and will continue to have the same redemption and registration rights they had previously, which include the right, in certain circumstances to require our Operating Partnership to redeem the OP Units for Class E shares of the Company or cash. Any purchasers of Interests in the DST Program that ultimately acquire OP Units through the FMV Option will acquire Series 2 Class E OP Units, which will have similar redemption and registration rights to those of the holders of Series 1 Class E OP Units, except that their redemption rights will in certain circumstances require our Operating Partnership to redeem the OP Units for either Class I shares of the Company or cash (as determined by our Operating Partnership in its sole discretion). In addition, the Amended and Restated Operating Partnership Agreement provides that a redemption fee of 1.5% of the shares otherwise payable to a limited partner upon redemption of Series 2 Class E Units will be paid to an affiliate of the Manager (defined below). Holders of Series 1 or Series 2 Class E OP Units cannot require us to redeem their Series 1 or Series 2 Class E OP Units with cash.

Delaware Statutory Trust Agreement

DCX Manager LLC (the “Manager”), an affiliate of our Advisor, will be engaged to act as the manager of each Delaware statutory trust holding a DST Property. Although the intention is to sell 100% of the interests to third parties, DCX may hold an interest for a period of time and therefore could be subject to the following description of fees and reimbursements paid to the Manager. The Manager will have primary responsibility for performing administrative actions in connection with the trust and any DST Property and has the sole power to determine when it is appropriate for a trust to sell a DST Property. The Manager will be entitled to the following payments from the trust: (i) a management fee equal to a stated percentage (e.g., 1.0%) of the gross rents payable to the trust, with such amount to be set on a deal-by-deal basis, (ii) a disposition fee of 1.0% of the gross sales price of any DST Property sold to a third party, and (iii) reimbursement of certain expenses associated with the establishment, maintenance and operation of the trust and DST Properties. Additionally, the Manager or its affiliate may earn a 1.0% loan fee for any financing arrangement sourced, negotiated and executed in connection with the DST Program. This loan fee is only payable to the Manager by new investors that purchase Interests and therefore is not paid by the Company or its affiliates.

Summary of Fees and Other Amounts

The following table summarizes fees and other amounts earned by our Advisor and its related parties in connection with services performed for us during the three and six months ended June 30, 2017 and 2016 (amounts in thousands, except footnoted information):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2017		2016		2017		2016
Advisory fees (1)	$	3,451	$	3,671	$	6,941	$	7,436
Other reimbursements paid to our Advisor (2)	2,026		2,092		4,304		4,304
Other reimbursements paid to our Dealer Manager	155		32		338		83
Advisory fees related to the disposition of real properties	286		—		286		1,807
Development management fee (3)	—		10		—		29
Primary dealer fee (4)	—		1,697		—		1,697
Selling commissions	5		17		25		67
Dealer manager fees	116		89		228		174
Distribution fees	19		17		38		34
Total	$	6,058	$	7,625	$	12,160	$	15,631

(1) Amounts reported for the three months ended June 30, 2017 and 2016 include approximately $154,000 and $282,000, respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor. Amounts reported for the six months ended June 30, 2017 and 2016 include approximately $443,000 and $565,000, respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor.

(2) Other reimbursements paid to our Advisor for the three months ended June 30, 2017 and 2016 include approximately $1.7 million and $1.7 million, respectively, and include approximately $3.5 million and $3.6 million for the six months ended June 30, 2017 and 2016, respectively, to reimburse a portion of the salary, bonus and benefits for employees of our Advisor, including our executive officers, for services provided to us for which our Advisor does not otherwise receive a separate fee. The balance of such reimbursements are made up primarily of other general overhead and administrative expenses, including, but not limited to, allocated rent paid to both third parties and affiliates of our advisor, equipment, utilities, insurance, travel and entertainment, and other costs.

(3) Pursuant to our amended Advisory Agreement, our Advisor no longer receives a development management fee in exchange for providing development management services.

(4) Amounts reported represent primary dealer fees we paid to our Dealer Manager based on the gross proceeds raised by participating broker-dealers pursuant to certain selected dealer agreements. Of the primary dealer fee earned during the six months ended June 30, 2016, our Dealer Manager reallowed approximately $1.5 million to participating third-party broker-dealers and retained approximately $170,000.

See the accompanying condensed consolidated balance sheets for the amounts we owed to our Advisor and affiliates of our Advisor for such services and reimbursement of certain expenses as of June 30, 2017 and December 31, 2016. Pursuant to the Advisory Agreement, we accrue the advisory fee on a daily basis and pay our Advisor amounts due subsequent to each month-end. In addition, we recorded a liability of approximately $3.9 million for dealer manager and distribution fees that we estimate that we may pay to our Dealer Manager in future periods for shares of our common stock sold in our Follow-On Offering as of June 30, 2017. We anticipate that our Dealer Manager will reallow a significant portion of such fees to third-party broker dealers.

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Net Income Per Common Share

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Net Income Per Common Share

NET INCOME PER COMMON SHARE 

Reconciliations of the numerator and denominator used to calculate basic net income per common share to the numerator and denominator used to calculate diluted net income per common share for the three and six months ended June 30, 2017 and 2016 are described in the following table (amounts in thousands, except per share information):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
Numerator	2017			2016			2017			2016
Net income	$	8,415		$	135		$	10,242		$	48,373
Net income attributable to noncontrolling interests	(1,610		)	(18		)	(1,776		)	(4,474		)
Net income attributable to common stockholders	6,805			117			8,466			43,899
Dilutive noncontrolling interests share of net income	558			9			691			3,410
Numerator for diluted earnings per share – adjusted net income	$	7,363		$	126		$	9,157		$	47,309
Denominator
Weighted average shares outstanding-basic	145,288			161,209			147,577			162,581
Incremental weighted average shares effect of conversion of OP units	11,921			12,460			11,974			12,598
Weighted average shares outstanding-diluted	157,209			173,669			159,551			175,179
INCOME PER COMMON SHARE -BASIC AND DILUTED	$	0.05		$	0.00		$	0.06		$	0.27

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Segment Information

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We have three reportable operating segments, which include our three real property operating sectors (office, industrial, and retail), and we measure our profit and loss of our operating segments based on net operating income (“NOI”). We organize and analyze the operations and results of each of these segments independently, due to inherently different considerations for each segment. Such considerations include, but are not limited to, the nature and characteristics of the investment, investment strategies and objectives. Specifically, the physical characteristics of our buildings, the related operating characteristics, the geographic markets, and the type of tenants are inherently different for each of our segments. The following tables set forth revenue and the components of NOI of our segments for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):  

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	For the Three Months Ended June 30,
	Revenues				NOI
	2017		2016		2017		2016
Office	$	27,624	$	30,983	$	16,224	$	20,846
Industrial	1,330		1,534		975		1,110
Retail	21,082		20,185		16,276		15,114
Total	$	50,036	$	52,702	$	33,475	$	37,070

	For the Six Months Ended June 30,
	Revenues				NOI
	2017		2016		2017		2016
Office	$	57,063	$	64,952	$	34,522	$	44,130
Industrial	2,901		3,245		1,978		2,377
Retail	42,580		40,049		32,040		29,789
Total	$	102,544	$	108,246	$	68,540	$	76,296

We consider NOI to be an appropriate supplemental financial performance measure because NOI reflects the specific operating performance of our real properties, and excludes certain items that are not considered to be controllable in connection with the management of each property, such as depreciation and amortization, general and administrative expenses, advisory fees, acquisition-related expenses, interest and other (expense) income, interest expense, (gain) loss on extinguishment of debt and financing commitments, gain on the sale of real property, and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our financial performance as a whole, since it excludes such items that could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance.

The following table is a reconciliation of our reported net income attributable to common stockholders to our NOI for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Net income attributable to common stockholders	$	6,805		$	117		$	8,466		$	43,899
Debt-related income	(229		)	(237		)	(460		)	(475		)
Real estate depreciation and amortization expense	18,798			20,198			36,734			40,034
General and administrative expenses	2,024			2,338			4,274			4,958
Advisory fees, related party	3,451			3,671			6,941			7,436
Acquisition-related expenses	—			474			—			525
Impairment of real estate property	1,116			—			1,116			587
Other (income) and expense	89			69			198			11
Interest expense	10,163			10,422			19,847			21,383
Gain on extinguishment of debt and financing commitments	—			—			—			(5,136		)
Gain on sale of real property	(10,352		)	—			(10,352		)	(41,400		)
Net income attributable to noncontrolling interests	1,610			18			1,776			4,474
Net operating income	$	33,475		$	37,070		$	68,540		$	76,296

The following table reflects our total assets by business segment as of June 30, 2017 and December 31, 2016 (amounts in thousands):

	As of
	June 30, 2017		December 31, 2016
Segment assets:
Office	$	808,079	$	825,961
Industrial	41,595		57,651
Retail	812,844		827,799
Total segment assets, net	1,662,518		1,711,411
Non-segment assets:
Debt-related investments, net	14,941		15,209
Cash and cash equivalents	5,362		13,864
Other non-segment assets (1)	42,457		43,244
Total assets	$	1,725,278	$	1,783,728

(1) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable.

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Summary of Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Interim Financial Statements

Interim Financial Statements

The accompanying interim condensed consolidated financial statements (herein referred to as “financial statements,” “balance sheets,” “statements of income,” “statements of comprehensive income (loss),” “statement of equity,” or “statements of cash flows”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the Commission's instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these financial statements do not include all the information and disclosure required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments and eliminations, consisting only of normal recurring items necessary for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of operating results for a full year. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Commission on March 3, 2017. There have been no significant changes to the Company’s significant accounting policies during the six months ended June 30, 2017 other than the updates described below.

New Accounting Pronouncements

New Accounting Pronouncements

In February 2017,the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update 2017-05, Other Income- Gain and Losses from Derecognition of Nonfinancial Assets (Topic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets ("ASU 2017-05"), which clarifies that a financial asset is within the scope of ASU 2017-05 if it is deemed an "in substance nonfinancial asset." Additionally, ASU 2017-05 adds guidance for partial sales of nonfinancial assets. The guidance will be effective for annual reporting periods beginning after December 15, 2017, and will require full or modified retrospective application. Early adoption is permitted for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. We plan to adopt ASU 2017-05 at the same time we adopt Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) when the standard becomes effective for us beginning January 1, 2018 and have not determined whether the full or modified retrospective application will be applied. We do not anticipate the adoption will have a significant impact on our financial statements.

Newly Adopted Accounting Pronouncements

Newly Adopted Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update 2017-01 ("ASU 2017-01"), which clarifies the definition of a business in order to provide additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Earlier adoption is permitted. The guidance in ASU 2017-01 should be adopted on a prospective basis. We adopted ASU 2017-01 as of January 1, 2017 and anticipate that future acquisitions of real property will likely be accounted for as asset acquisitions rather than business combinations. Among other things, accounting for an asset acquisition requires capitalization of acquisition costs as a component of the acquired assets whereas accounting for business combinations requires acquisition costs to be expensed. Additionally, goodwill is not recognized and contingent consideration is recorded when probable and reasonably estimable under accounting for asset acquisitions.

Fair Value Measurement

Debt-Related Investments — The fair value of our performing debt-related investments are estimated using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Credit spreads and market interest rates used to determine the fair value of these instruments are based on unobservable Level 3 inputs which management has determined to be its best estimate of current market values.

Mortgage Notes and Other Borrowings — The fair value of our mortgage notes and other borrowings are estimated using a discounted cash flow analysis, based on our estimate of market interest rates. Credit spreads relating to the underlying instruments are based on unobservable Level 3 inputs, which we have determined to be our best estimate of current market spreads of similar instruments.

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Investments in Real Property (Tables)

6 Months Ended

Jun. 30, 2017

Real Estate [Abstract]

Schedule of Consolidated Investments in Real Property

The following tables summarize our consolidated investments in real property as of June 30, 2017 and December 31, 2016 (amounts in thousands):

Real Property	Land		Building and Improvements			Intangible Lease Assets			Total Investment Amount			Intangible Lease Liabilities			Net Investment Amount
As of June 30, 2017:
Office	$	171,176	$	708,126		$	230,807		$	1,110,109		$	(15,014	)	$	1,095,095
Industrial	5,895		46,266			14,533			66,694			—			66,694
Retail	292,483		597,142			111,930			1,001,555			(75,265		)	926,290
Total gross book value	469,554		1,351,534			357,270			2,178,358			(90,279		)	2,088,079
Accumulated depreciation/amortization	—		(228,577		)	(287,263		)	(515,840		)	33,642			(482,198		)
Total net book value	$	469,554	$	1,122,957		$	70,007		$	1,662,518		$	(56,637	)	$	1,605,881
As of December 31, 2016:
Office	$	171,176	$	701,859		$	236,143		$	1,109,178		$	(15,121	)	$	1,094,057
Industrial	8,821		63,999			16,308			89,128			(344		)	88,784
Retail	293,973		599,020			113,023			1,006,016			(75,515		)	930,501
Total gross book value	473,970		1,364,878			365,474			2,204,322			(90,980		)	2,113,342
Accumulated depreciation/amortization	—		(215,858		)	(277,053		)	(492,911		)	31,435			(461,476		)
Total net book value	$	473,970	$	1,149,020		$	88,421		$	1,711,411		$	(59,545	)	$	1,651,866

Schedule Of Disposed Properties

During the six months ended June 30, 2017 and 2016, we disposed of the following properties (dollar amounts and square footage in thousands):

Property Type	Market	Ownership	Net Rentable Square Feet	Percentage Leased		Disposition Date	Contract  Sales Price		Gain on Sale
For the six months ended June 30, 2017
Retail	Greater Boston	100%	51	61	%	5/31/2017	$	4,500	$	—
Industrial Portfolio (1)	Louisville, KY	90%	609	100	%	6/9/2017	26,800		10,352
Total/ Weighted Average			660	97	%		$	31,300	$	10,352
For the six months ended June 30, 2016
Office	Washington, DC	100%	574	100	%	2/18/2016	$	158,400	$	41,241
Office	Chicago, IL	80%	107	66	%	3/1/2016	9,850		—
Office	Chicago, IL	80%	199	81	%	3/1/2016	18,000		159
Total/ Weighted Average			880	92	%		$	186,250	$	41,400

(1) Industrial portfolio included three properties.

Schedule of Adjustments to Rental Revenue Related to Amortization of Above-Market Lease Assets, Below-Market Lease Liabilities, and for Straight-Line Rental Adjustments

In addition, the following table summarizes tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue (amounts in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Straight-line rent adjustments	$	(238	)	$	(205	)	$	(355	)	$	(446	)
Above-market lease assets	(648		)	(1,261		)	(1,514		)	(2,528		)
Below-market lease liabilities	1,358			1,544			2,783			3,079
Total increase to rental revenue	$	472		$	78		$	914		$	105
Tenant recovery income (1)	$	9,993		$	9,996		$	21,046		$	20,560

(1) Tenant recovery income presented in this table excludes real estate taxes that were paid directly by our tenants that are subject to triple net lease contracts. Such payments totaled approximately $516,000 and $876,000 during the three months ended June 30, 2017 and 2016, respectively, and approximately $1.1 million and $2.3 million during the six months ended June 30, 2017 and 2016, respectively.

Schedule of Top Five Tenants as Percentage of Consolidated Annual Base Rent and Square Feet

The following is a summary of amounts related to the top five tenants based on annualized base rent, as of June 30, 2017 (dollar amounts and square feet in thousands):

Tenant	Locations	Industry	Annualized Base Rent (1)		% of Total Annualized Base Rent		Square Feet	% of Total Portfolio Square Feet
Charles Schwab & Co, Inc (2)	2	Securities, Commodities, Fin. Inv./Rel. Activities	$	23,646	15.6	%	602	8.3	%
Stop & Shop	14	Food and Beverage Stores	14,125		9.3	%	853	11.7	%
Novo Nordisk	1	Chemical Manufacturing	4,721		3.1	%	167	2.3	%
Seton Health Care	1	Hospitals	4,339		2.9	%	156	2.1	%
Shaw's Supermarket	4	Food and Beverage Stores	4,055		2.7	%	240	3.3	%
	22		$	50,886	33.6	%	2,018	27.7	%

(1) Annualized base rent represents the annualized monthly base rent of executed leases as of June 30, 2017.

(2) The amount presented for Charles Schwab & Co., Inc. ("Schwab") reflects the total annualized base rent for our two leases in place with Schwab as of June 30, 2017. One of these leases, which expires in September 2017, entails the lease of all 594,000 square feet of our 3 Second Street office property (defined below in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources") and accounts for $23.5 million or 15.5% of our annualized base rent as of June 30, 2017. We do not expect Schwab to renew this lease. Schwab has subleased 100% of 3 Second Street to 25 sub-tenants through September 2017. We have executed leases directly with 11 of these subtenants that comprise 368,000 square feet or 62% of 3 Second Street that effectively extend their leases beyond the Schwab lease expiration. These direct leases will expire between September 2020 and September 2032.

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Debt Obligations (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Schedule of Borrowings

The following table describes our borrowings as of June 30, 2017 and December 31, 2016 (dollar amounts in thousands):

	Principal Balance as of						Weighted Average Stated Interest Rate as of				Gross Investment Amount Securing Borrowings as of(1)
	June 30, 2017			December 31, 2016			June 30, 2017		December 31, 2016		June 30, 2017		December 31, 2016
Fixed-rate mortgages (2)	$	129,352		$	290,970		4.0	%	4.9	%	$	188,526	$	462,954
Floating-rate mortgages (3)	254,500			52,500			3.2	%	2.3	%	407,561		70,485
Total secured borrowings	383,852			343,470			3.5	%	4.5	%	596,087		533,439
Line of credit (4)	253,000			236,000			2.9	%	2.3	%	N/A		N/A
Term loans (5)	475,000			475,000			3.4	%	3.2	%	N/A		N/A
Total unsecured borrowings	728,000			711,000			3.3	%	2.9	%	N/A		N/A
Total borrowings	$	1,111,852		$	1,054,470		3.3	%	3.4	%	N/A		N/A
Less: net debt issuance costs	(7,260		)	(6,295		)
Add: mark-to-market adjustment on assumed debt	560			626
Total borrowings (net basis)	$	1,105,152		$	1,048,801

(1) “Gross Investment Amount” as used here and throughout this document represents the allocated gross basis of real property after certain adjustments. Gross Investment Amount for real property (i) includes the effect of intangible lease liabilities, (ii) excludes accumulated depreciation and amortization, and (iii) includes the impact of impairments. 

(2) Amount as of June 30, 2017 and December 31, 2016 includes a floating-rate mortgage note that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing.

(3) As of June 30, 2017, our floating rate mortgage notes were subject to a weighted average interest rate spread of 2.13% over one-month LIBOR. As of December 31, 2016, our floating rate mortgage note was subject to an interest rate spread of 1.65% over one-month LIBOR.

(4) As of June 30, 2017 and December 31, 2016, borrowings under our line of credit were subject to interest at a floating rate of 1.70% and 1.55% over one-month LIBOR, respectively. However, as of December 31, 2016, we had effectively fixed the interest rate of approximately $12.1 million of the total of $236.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total line of credit of 2.28%.

(5) As of June 30, 2017 and December 31, 2016, borrowings under our term loans were subject to interest at a weighted average floating rate of 1.75% and 1.60% over one-month LIBOR, respectively. However, we have effectively fixed the interest rate of approximately $350.0 million in borrowings using interest rate swaps, resulting in a weighted average interest rate on the total term loans of 3.44% and 3.17% as of June 30, 2017 and December 31, 2016, respectively.

Duringthe six months ended June 30, 2017, we entered into two mortgage note borrowings. The following table describes the new borrowings in more detail (dollar amounts in thousands):

Borrowings	Date Borrowed	Principal Balance		Fixed or Floating Interest Rate	Stated Interest Rate (1)		Contractual Maturity Date	Extension Options	Collateral Type	Collateral Market
3 Second Street (2)	1/10/2017	$	127,000	Floating	3.38	%	1/10/2020	2 one-year extensions	Office Property	Northern New Jersey
Centerton Square (3)	6/5/2017	75,000		Floating	3.33	%	7/10/2019	2 one-year extensions	Retail Property	Philadelphia, PA
Total/weighted average borrowings		$	202,000		3.36	%

(1) For floating-rate mortgage note borrowings, the stated interest rate is as of June 30, 2017.

(2) On January 10, 2017, we received proceeds of $127.0 million from the $146.6 million 3 Second Street mortgage note, and we can request the remaining proceeds anytime prior to October 10, 2019 as reimbursement for certain approved capital expenditures, tenant improvement costs and leasing commissions. As of June 30, 2017, the term loan was subject to an interest rate spread of 2.25% over one-month LIBOR. As a result of this borrowing, we entered into an interest rate protection agreement ("Interest Rate Cap") with a notional amount of $146.6 million and a LIBOR strike rate of 3.00%. See Note 5 for additional discussion related to the Interest Rate Cap.

(3) On June 5, 2017, we received proceeds of $75.0 million from the $81.3 million Centerton Square mortgage note, and we can obtain the remaining proceeds subject to meeting certain financial ratios. As of June 30, 2017, the term loan was subject to an interest rate spread of 2.25% over one-month LIBOR. As a result of this borrowing, we entered into an Interest Rate Cap with a notional amount of $81.3 million and a LIBOR strike rate of 3.00%. See Note 5 for additional discussion related to the Interest Rate Cap.

Schedule Of Repayment Of Mortgage Notes And Repurchase Facility

The following table describes these repayments in more detail (dollar amounts in thousands):

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Debt Obligation	Repayment Date	Balance Repaid/Extinguished		Interest Rate Fixed or Floating	Stated Interest Rate		Contractual Maturity Date	Collateral Type	Collateral Market
Eastern Retail Portfolio	1/10/2017	$	110,000	Fixed	5.51	%	6/11/2017	Retail Property	Various (1)
Wareham	5/8/2017	24,400		Fixed	6.13	%	8/8/2017	Retail Property	Greater Boston
Kingston	6/1/2017	10,574		Fixed	6.33	%	11/1/2017	Retail Property	Greater Boston
Sandwich	6/1/2017	15,825		Fixed	6.33	%	11/1/2017	Retail Property	Greater Boston
Total/weighted average borrowings		$	160,799		5.74	%

(1) The Eastern Retail Portfolio was collateralized by three retail properties located in Raleigh, NC, Philadelphia, PA and Greater Boston.

Schedule of Borrowings Reflects Contractual Debt Maturities

The following table reflects our contractual debt maturities as of June 30, 2017, specifically our obligations under our mortgage notes and unsecured borrowings (dollar amounts in thousands):

	As of June 30, 2017
	Mortgage Notes				Unsecured Borrowings				Total
Year Ending December 31,	Number of Borrowings Maturing	Outstanding Principal Balance			Number of Borrowings Maturing	Outstanding Principal Balance			Outstanding Principal Balance
2017	—	$	842		—	$	—		$	842
2018	—	2,698			1	275,000			277,698
2019	1	78,698			1	253,000			331,698
2020	1	130,860			—	—			130,860
2021	1	12,764			—	—			12,764
2022	1	3,660			1	200,000			203,660
2023	2	77,899			—	—			77,899
2024	—	1,034			—	—			1,034
2025	1	71,094			—	—			71,094
2026	—	1,157			—	—			1,157
Thereafter	2	3,146			—	—			3,146
Total	9	$	383,852		3	$	728,000		$	1,111,852
Less: net debt issuance costs		(3,478		)		(3,782		)
Add: mark-to-market adjustment on assumed debt		560				—
Total borrowings (net basis)		$	380,934			$	724,218

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Derivatives And Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Reconciliation of Accumulated Other Comprehensive Loss

The table below presents a reconciliation of the beginning and ending balances, between December 31, 2016 and June 30, 2017, of our accumulated other comprehensive loss (“AOCI”), net of amounts attributable to noncontrolling interests, related to the effective portion of our cash flow hedges as presented on our condensed consolidated financial statements, as well as amounts related to our available-for-sale securities (amounts in thousands):  

	(Losses) and Gains on Cash Flow Hedges			Unrealized (Losses) and Gains on Available-For-Sale Securities			Accumulated Other Comprehensive Loss
Beginning balance as of December 31, 2016	$	(5,849	)	$	(1,056	)	$	(6,905	)
Other comprehensive income:
Amount of loss reclassified from AOCI into interest expense (effective portion) (net of tax benefit of $0)	2,744			—			2,744
Change in fair value recognized in AOCI (effective portion) (net of tax benefit of $0)	(1,332		)	—			(1,332		)
Net current-period other comprehensive income	1,412			—			1,412
Attribution of and other adjustments to AOCI attributable to noncontrolling interests	(84		)	27			(57		)
Ending balance as of June 30, 2017	$	(4,521	)	$	(1,029	)	$	(5,550	)

Gross Fair Value of Derivative Financial Instruments as Well as Their Classification

The table below presents the gross fair value of our designated and non-designated derivative financial instruments as well as their classification on our accompanying condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 (amounts in thousands, except for footnoted information):

		Fair Value of Asset Derivatives as of					Fair Value of Liability Derivatives as of
	Balance Sheet Location	June 30, 2017		December 31, 2016		Balance Sheet Location	June 30, 2017			December 31, 2016
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets, net (1)	$	1,937	$	2,135	Other liabilities (1)	$	(2,133	)	$	(2,777	)
Derivatives not designated as hedging instruments:
Interest rate contracts	Other assets, net (1)	$	14	$	—	Other liabilities (1)	$	—		$	—
Total derivatives		$	1,951	$	2,135		$	(2,133	)	$	(2,777	)

(1) Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on our accompanying condensed consolidated balance sheets. If we did net our derivative fair values on our accompanying condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016, there would be no impact.

Effect of Derivative Financial Instruments on Financial Statements

The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Derivatives Designated as Hedging Instruments
Derivative type	Interest rate contracts			Interest rate contracts			Interest rate contracts			Interest rate contracts
Amount of loss recognized in OCI (effective portion)	$	(1,928	)	$	(4,902	)	$	(1,332	)	$	(15,098	)
Location of loss reclassified from accumulated OCI into income (effective portion)	Interest expense			Interest expense			Interest expense			Interest expense
Amount of loss reclassified from accumulated OCI into income (effective portion)	$	1,251		$	1,199		$	2,744		$	2,317
Location of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	Other income and (expense)			Other income and (expense)			Other income and (expense)			Other income and (expense)
Amount of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	$	(47	)	$	—		$	—		$	—
Derivatives Not Designated as Hedging Instruments
Derivative type	Interest rate cap			Interest rate cap			Interest rate cap			Interest rate cap
Amount of loss recognized in income	$	(21	)	$	—		$	(101	)	$	—
Location of loss recognized in income	Other income and (expense)			Other income and (expense)			Other income and (expense)			Other income and (expense)

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2017

Financial Instruments, Owned, at Fair Value [Abstract]

Schedule of Carrying Amount and Fair Values of Other Financial Instruments

The table below presents the carrying amounts and estimated fair values of our other financial instruments, other than derivatives which are disclosed in Note 5, as of June 30, 2017 and December 31, 2016 (amounts in thousands):  

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	As of June 30, 2017				As of December 31, 2016
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Fixed-rate debt-related investments, net	$	14,941	$	15,463	$	15,209	$	15,784
Liabilities:
Fixed-rate mortgage notes (1)	$	128,750	$	131,552	$	290,329	$	291,624
Floating-rate mortgage notes	252,184		253,580		51,918		51,942
Floating-rate unsecured borrowings	724,218		728,000		706,554		711,000

(1) Amount includes a floating-rate mortgage note of approximately $32.6 million as of June 30, 2017 and $32.5 million as of December 31, 2016 that was subject to an interest rate spread of 1.60% over one-month LIBOR, which we have effectively fixed using an interest rate swap at 3.051% for the term of the borrowing.

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2017

Stockholders' Equity Attributable to Parent [Abstract]

Information of Share Transactions

The following table describes the changes in each class of common shares during the six months ended June 30, 2017 (shares and dollar amounts in thousands):

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	Class E					Class A					Class W					Class I					Total
	Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)			Shares		Amount (1)
Balances, December 31, 2016	112,325		$	1,298,189		2,001		$	14,758		2,271		$	16,381		34,039		$	243,049		150,636		$	1,572,377
Issuance of common stock:
Shares sold	—		—			107		836			254		1,916			1,178		8,870			1,539		11,622
Distribution reinvestment plan	872		6,568			25		190			30		222			430		3,235			1,357		10,215
Stock-based compensation (2)	—		—			—		—			—		—			(99	)	(669		)	(99	)	(669		)
Redemptions and repurchases of common stock	(12,320	)	(92,421		)	(75	)	(567		)	(69	)	(521		)	(1,056	)	(7,939		)	(13,520	)	(101,448		)
Balances, June 30, 2017	100,877		$	1,212,336		2,058		$	15,217		2,486		$	17,998		34,492		$	246,546		139,913		$	1,492,097

(1) Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem or repurchase common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans, share redemption programs, and self-tender offers.

(2) During the six months ended June 30, 2017, approximately 140,000 shares that we had previously recognized as issued and outstanding were relinquished pursuant to an amendment to the Restricted Stock Unit Agreements (as defined in Note 8). Please see Note 8 for further discussion.

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Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

Schedule Of RSU Grants

The chart below shows the grant dates, vesting dates, number of unvested shares as of June 30, 2017, and Grant Date NAV per Class I Share (share amounts in thousands).

Award	Grant Date	Vesting Dates	Number of Unvested Shares	Grant Date NAV per Class I Share
Company RSU	2/25/2015	4/13/2018	66	$	7.18
Company RSU	2/4/2016	4/15/2019	57	7.41
Total/ weighted average			123	$	7.29

Schedule of Fees and Other Amounts Earned by Advisor

The following table summarizes fees and other amounts earned by our Advisor and its related parties in connection with services performed for us during the three and six months ended June 30, 2017 and 2016 (amounts in thousands, except footnoted information):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2017		2016		2017		2016
Advisory fees (1)	$	3,451	$	3,671	$	6,941	$	7,436
Other reimbursements paid to our Advisor (2)	2,026		2,092		4,304		4,304
Other reimbursements paid to our Dealer Manager	155		32		338		83
Advisory fees related to the disposition of real properties	286		—		286		1,807
Development management fee (3)	—		10		—		29
Primary dealer fee (4)	—		1,697		—		1,697
Selling commissions	5		17		25		67
Dealer manager fees	116		89		228		174
Distribution fees	19		17		38		34
Total	$	6,058	$	7,625	$	12,160	$	15,631

(1) Amounts reported for the three months ended June 30, 2017 and 2016 include approximately $154,000 and $282,000, respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor. Amounts reported for the six months ended June 30, 2017 and 2016 include approximately $443,000 and $565,000, respectively, that we were not obligated to pay in consideration of the issuance of Company RSUs to our Advisor.

(2) Other reimbursements paid to our Advisor for the three months ended June 30, 2017 and 2016 include approximately $1.7 million and $1.7 million, respectively, and include approximately $3.5 million and $3.6 million for the six months ended June 30, 2017 and 2016, respectively, to reimburse a portion of the salary, bonus and benefits for employees of our Advisor, including our executive officers, for services provided to us for which our Advisor does not otherwise receive a separate fee. The balance of such reimbursements are made up primarily of other general overhead and administrative expenses, including, but not limited to, allocated rent paid to both third parties and affiliates of our advisor, equipment, utilities, insurance, travel and entertainment, and other costs.

(3) Pursuant to our amended Advisory Agreement, our Advisor no longer receives a development management fee in exchange for providing development management services.

(4) Amounts reported represent primary dealer fees we paid to our Dealer Manager based on the gross proceeds raised by participating broker-dealers pursuant to certain selected dealer agreements. Of the primary dealer fee earned during the six months ended June 30, 2016, our Dealer Manager reallowed approximately $1.5 million to participating third-party broker-dealers and retained approximately $170,000.

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Net Income Per Common Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Details of Numerator and Denominator Used to Calculate Basic and Diluted Net Income (Loss) Per Common Share

Reconciliations of the numerator and denominator used to calculate basic net income per common share to the numerator and denominator used to calculate diluted net income per common share for the three and six months ended June 30, 2017 and 2016 are described in the following table (amounts in thousands, except per share information):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
Numerator	2017			2016			2017			2016
Net income	$	8,415		$	135		$	10,242		$	48,373
Net income attributable to noncontrolling interests	(1,610		)	(18		)	(1,776		)	(4,474		)
Net income attributable to common stockholders	6,805			117			8,466			43,899
Dilutive noncontrolling interests share of net income	558			9			691			3,410
Numerator for diluted earnings per share – adjusted net income	$	7,363		$	126		$	9,157		$	47,309
Denominator
Weighted average shares outstanding-basic	145,288			161,209			147,577			162,581
Incremental weighted average shares effect of conversion of OP units	11,921			12,460			11,974			12,598
Weighted average shares outstanding-diluted	157,209			173,669			159,551			175,179
INCOME PER COMMON SHARE -BASIC AND DILUTED	$	0.05		$	0.00		$	0.06		$	0.27

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Revenue and Components of Net Operating Income

The following tables set forth revenue and the components of NOI of our segments for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):  

໿

	For the Three Months Ended June 30,
	Revenues				NOI
	2017		2016		2017		2016
Office	$	27,624	$	30,983	$	16,224	$	20,846
Industrial	1,330		1,534		975		1,110
Retail	21,082		20,185		16,276		15,114
Total	$	50,036	$	52,702	$	33,475	$	37,070

	For the Six Months Ended June 30,
	Revenues				NOI
	2017		2016		2017		2016
Office	$	57,063	$	64,952	$	34,522	$	44,130
Industrial	2,901		3,245		1,978		2,377
Retail	42,580		40,049		32,040		29,789
Total	$	102,544	$	108,246	$	68,540	$	76,296

Reconciliation of Net Operating Income to Reported Net Income

The following table is a reconciliation of our reported net income attributable to common stockholders to our NOI for the three and six months ended June 30, 2017 and 2016 (amounts in thousands):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Net income attributable to common stockholders	$	6,805		$	117		$	8,466		$	43,899
Debt-related income	(229		)	(237		)	(460		)	(475		)
Real estate depreciation and amortization expense	18,798			20,198			36,734			40,034
General and administrative expenses	2,024			2,338			4,274			4,958
Advisory fees, related party	3,451			3,671			6,941			7,436
Acquisition-related expenses	—			474			—			525
Impairment of real estate property	1,116			—			1,116			587
Other (income) and expense	89			69			198			11
Interest expense	10,163			10,422			19,847			21,383
Gain on extinguishment of debt and financing commitments	—			—			—			(5,136		)
Gain on sale of real property	(10,352		)	—			(10,352		)	(41,400		)
Net income attributable to noncontrolling interests	1,610			18			1,776			4,474
Net operating income	$	33,475		$	37,070		$	68,540		$	76,296

Summary of Total Assets by Business Segment

The following table reflects our total assets by business segment as of June 30, 2017 and December 31, 2016 (amounts in thousands):

	As of
	June 30, 2017		December 31, 2016
Segment assets:
Office	$	808,079	$	825,961
Industrial	41,595		57,651
Retail	812,844		827,799
Total segment assets, net	1,662,518		1,711,411
Non-segment assets:
Debt-related investments, net	14,941		15,209
Cash and cash equivalents	5,362		13,864
Other non-segment assets (1)	42,457		43,244
Total assets	$	1,725,278	$	1,783,728

(1) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable.

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Organization (Details) - USD ($) shares in Millions		6 Months Ended		7 Months Ended	38 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Mar. 31, 2016	Sep. 15, 2015	Dec. 31, 2016	Sep. 16, 2015	Jul. 12, 2012
Organization [Line Items]
Percentage of proceeds received from public offerings of common stock contributed to our Operating Partnership		100.00%
Net investments in real property		$ 1,662,518,000				$ 1,711,411,000
Redemption value	[1]	1,399,000				$ 1,506,000
Proceeds from issuance, DRIP		$ 10,215,000	$ 10,192,000
Class E OP Units
Organization [Line Items]
Operating Partnership units issued		11.9				12.0
Redemption value		$ 89,100,000				$ 91,200,000
NAV Offering
Organization [Line Items]
Maximum NAV share value total								$ 3,000,000,000
Maximum NAV share value primary offering								2,250,000,000
Maximum share value, DRIP								$ 750,000,000
Gross proceeds from sale of shares in the Offering					$ 183,000,000
Shares issued, shares					25.8
Proceeds from issuance, DRIP					$ 3,400,000
Follow-On Offering
Organization [Line Items]
Maximum NAV share value total							$ 1,000,000,000
Maximum NAV share value primary offering							750,000,000
Maximum share value, DRIP							$ 250,000,000
Gross proceeds from sale of shares in the Offering				$ 125,300,000
Shares issued, shares				16.8
Operating Partnership Units
Organization [Line Items]
Limited partnership interest owned in Operating Partnership		92.20%				92.60%
Variable interest entity investments
Organization [Line Items]
Net investments in real property						$ 48,200,000

[1] See Note 7 for the number of shares outstanding of each class of common stock as of June 30, 2017 and December 31, 2016.

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Investments In Real Property (Schedule of Consolidated Investments in Real Property) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Real Estate Properties [Line Items]
Investment in real property, Gross book value	$ 2,178,358	$ 2,204,322
Intangible lease liabilities, Gross book value	(90,279)	(90,980)
Real estate investments, Gross book value	2,088,079	2,113,342
Accumulated depreciation and amortization	(515,840)	(492,911)
Intangible lease liabilities, accumulated amortization	33,642	31,435
Accumulated depreciation/amortization	(482,198)	(461,476)
Investment in real property	1,662,518	1,711,411
Intangible lease liabilities, Net book value	(56,637)	(59,545)
Real estate investments, Net book value	1,605,881	1,651,866
Land
Real Estate Properties [Line Items]
Land	469,554	473,970
Building and Building Improvements
Real Estate Properties [Line Items]
Building and Improvements	1,351,534	1,364,878
Accumulated depreciation and amortization	(228,577)	(215,858)
Real estate investments, Net book value	1,122,957	1,149,020
Intangible Lease Assets
Real Estate Properties [Line Items]
Intangible Lease Assets	357,270	365,474
Accumulated depreciation and amortization	(287,263)	(277,053)
Real estate investments, Net book value	70,007	88,421
Office
Real Estate Properties [Line Items]
Investment in real property, Gross book value	1,110,109	1,109,178
Intangible lease liabilities, Gross book value	(15,014)	(15,121)
Real estate investments, Net book value	1,095,095	1,094,057
Office | Land
Real Estate Properties [Line Items]
Land	171,176	171,176
Office | Building and Building Improvements
Real Estate Properties [Line Items]
Building and Improvements	708,126	701,859
Office | Intangible Lease Assets
Real Estate Properties [Line Items]
Intangible Lease Assets	230,807	236,143
Industrial
Real Estate Properties [Line Items]
Investment in real property, Gross book value	66,694	89,128
Intangible lease liabilities, Gross book value	0	(344)
Real estate investments, Net book value	66,694	88,784
Industrial | Land
Real Estate Properties [Line Items]
Land	5,895	8,821
Industrial | Building and Building Improvements
Real Estate Properties [Line Items]
Building and Improvements	46,266	63,999
Industrial | Intangible Lease Assets
Real Estate Properties [Line Items]
Intangible Lease Assets	14,533	16,308
Retail
Real Estate Properties [Line Items]
Investment in real property, Gross book value	1,001,555	1,006,016
Intangible lease liabilities, Gross book value	(75,265)	(75,515)
Real estate investments, Net book value	926,290	930,501
Retail | Land
Real Estate Properties [Line Items]
Land	292,483	293,973
Retail | Building and Building Improvements
Real Estate Properties [Line Items]
Building and Improvements	597,142	599,020
Retail | Intangible Lease Assets
Real Estate Properties [Line Items]
Intangible Lease Assets	$ 111,930	$ 113,023

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Investments in Real Property (Schedule Of Disposed Properties) (Details) ft² in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) ft²	Jun. 30, 2016 USD ($) ft²
Business Acquisition [Line Items]
Net Rentable Square Feet | ft²	2,018
Dispositions | Land, Buildings and Improvements
Business Acquisition [Line Items]
Net Rentable Square Feet | ft²	660	880
Percentage Leased	97.00%	92.00%
Contract Sales Price	$ 31,300	$ 186,250
Gain on Sale	$ 10,352	$ 41,400
Dispositions | Land, Buildings and Improvements | Retail Property, Greater Boston Market [Member] | Office
Business Acquisition [Line Items]
Ownership	100.00%
Net Rentable Square Feet | ft²	51
Percentage Leased	61.00%
Disposition Date	May 31, 2017
Contract Sales Price	$ 4,500
Gain on Sale	$ 0
Dispositions | Land, Buildings and Improvements | Industrial Property, Louisville, KY Market [Member] | Industrial
Business Acquisition [Line Items]
Ownership	90.00%
Net Rentable Square Feet | ft²	609
Percentage Leased	100.00%
Disposition Date	Jun. 09, 2017
Contract Sales Price	$ 26,800
Gain on Sale	$ 10,352
Dispositions | Land, Buildings and Improvements | Office Property, Washington DC Market | Office
Business Acquisition [Line Items]
Ownership		100.00%
Net Rentable Square Feet | ft²		574
Percentage Leased		100.00%
Disposition Date		Feb. 18, 2016
Contract Sales Price		$ 158,400
Gain on Sale		$ 41,241
Dispositions | Land, Buildings and Improvements | Office Property, Chicago, IL Market | Office
Business Acquisition [Line Items]
Ownership		80.00%
Net Rentable Square Feet | ft²		107
Percentage Leased		66.00%
Disposition Date		Mar. 01, 2016
Contract Sales Price		$ 9,850
Gain on Sale		$ 0
Dispositions | Land, Buildings and Improvements | Office Property, Chicago, Illinois (2) Market | Office
Business Acquisition [Line Items]
Ownership		80.00%
Net Rentable Square Feet | ft²		199
Percentage Leased		81.00%
Disposition Date		Mar. 01, 2016
Contract Sales Price		$ 18,000
Gain on Sale		$ 159

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Investments in Real Property (Narrative) (Details) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	May 31, 2017
Real Estate Properties [Line Items]
Impairment charges	[1]	$ 1,116,000	$ 0	$ 1,116,000	$ 587,000
Gross Investment In Real Property | New Jersey
Real Estate Properties [Line Items]
Concentration percentage				21.00%
Gross Investment In Real Property | Massachusetts
Real Estate Properties [Line Items]
Concentration percentage				20.00%
Gross Investment In Real Property | California
Real Estate Properties [Line Items]
Concentration percentage				14.00%
Gross Investment In Real Property | Texas
Real Estate Properties [Line Items]
Concentration percentage				12.00%
Top Tenant | Annualized Base Rent
Real Estate Properties [Line Items]
Concentration percentage				15.60%
Office Property, Chicago, IL Market
Real Estate Properties [Line Items]
Ownership Interest In Property			80.00%		80.00%
Office | Dispositions | Retail Property, Greater Boston Market [Member] | Land, Buildings and Improvements
Real Estate Properties [Line Items]
Impairment charges		$ 1,100,000		$ 1,100,000
Ownership Interest In Property						100.00%
Office | Dispositions | Office Property, Chicago, IL Market | Land, Buildings and Improvements
Real Estate Properties [Line Items]
Impairment charges					$ 587,000

[1] Includes approximately $45,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $79,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

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Investments in Real Property (Schedule of Adjustments to Rental Revenue Related to Amortization of Above-Market Lease Assets, Below-Market Lease Liabilities, and for Straight-Line Rental Adjustments) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Real Estate [Abstract]
Straight-line rent adjustments	$ (238)	$ (205)	$ (355)	$ (446)
Above-market lease assets	(648)	(1,261)	(1,514)	(2,528)
Below-market lease liabilities	1,358	1,544	2,783	3,079
Total increase to rental revenue	472	78	914	105
Tenant recovery income	9,993	9,996	21,046	20,560
Real estate taxes paid directly by tenants subject to triple net lease Contracts	$ 516	$ 876	$ 1,100	$ 2,300

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Investments in Real Property (Schedule of Top Five Tenants as Percentage of Consolidated Annual Base Rent and Square Feet) (Details) ft² in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) ft² property tenant lease
Revenue, Major Customer [Line Items]
Locations | property	22
Annualized Base Rent | $	$ 50,886
Percent of Total Annualized Rental Revenue	33.60%
Square Feet	2,018
Percent of Total Portfolio Square Feet	27.70%
Property, Harborside [Member]
Revenue, Major Customer [Line Items]
Number of tenants, lease agreements executed | tenant	11
Area of real estate property leased	368
Percentage of area of real estate property leased	62.00%
Charles Schwab and Company, Inc.
Revenue, Major Customer [Line Items]
Locations | property	2
Annualized Base Rent | $	$ 23,646
Percent of Total Annualized Rental Revenue	15.60%
Square Feet	602
Percent of Total Portfolio Square Feet	8.30%
Number of leases | lease	2
Charles Schwab and Company, Inc. | Property, Harborside [Member]
Revenue, Major Customer [Line Items]
Annualized Base Rent | $	$ 23,500
Area of real estate property	594
Concentration percentage	15.50%
Percentage of area of real estate property subleased	100.00%
Number of sublease tenants | tenant	25
Stop and Shop
Revenue, Major Customer [Line Items]
Locations | property	14
Annualized Base Rent | $	$ 14,125
Percent of Total Annualized Rental Revenue	9.30%
Square Feet	853
Percent of Total Portfolio Square Feet	11.70%
Novo Nordisk
Revenue, Major Customer [Line Items]
Locations | property	1
Annualized Base Rent | $	$ 4,721
Percent of Total Annualized Rental Revenue	3.10%
Square Feet	167
Percent of Total Portfolio Square Feet	2.30%
Seton Health Care
Revenue, Major Customer [Line Items]
Locations | property	1
Annualized Base Rent | $	$ 4,339
Percent of Total Annualized Rental Revenue	2.90%
Square Feet	156
Percent of Total Portfolio Square Feet	2.10%
Shaw's Supermarket
Revenue, Major Customer [Line Items]
Locations | property	4
Annualized Base Rent | $	$ 4,055
Percent of Total Annualized Rental Revenue	2.70%
Square Feet	240
Percent of Total Portfolio Square Feet	3.30%

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Debt Obligations (Schedule of Borrowings) (Details) - USD ($) $ in Thousands			6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Total borrowings	$ 1,111,852	$ 1,054,470	$ 1,111,852	$ 1,054,470
Less: net debt issuance costs	(7,260)	(6,295)	(7,260)	(6,295)
Add: mark-to-market adjustment on assumed debt	560	626	560	626
Total borrowings (GAAP basis)	$ 1,105,152	$ 1,048,801	$ 1,105,152	$ 1,048,801
Weighted Average Stated Interest Rate	3.30%	3.40%	3.30%	3.40%
Fixed-Rate Mortgage Notes
Debt Instrument [Line Items]
Total borrowings	$ 129,352	$ 290,970	$ 129,352	$ 290,970
Weighted Average Stated Interest Rate	4.00%	4.90%	4.00%	4.90%
Gross Investment Amount Securing Borrowings	$ 188,526	$ 462,954	$ 188,526	$ 462,954
Floating-Rate Mortgage Notes
Debt Instrument [Line Items]
Total borrowings	$ 254,500	$ 52,500	$ 254,500	$ 52,500
Weighted Average Stated Interest Rate	3.20%	2.30%	3.20%	2.30%
Gross Investment Amount Securing Borrowings	$ 407,561	$ 70,485	$ 407,561	$ 70,485
Outstanding borrowings spread over LIBOR			2.13%	1.65%
Total Secured Borrowings
Debt Instrument [Line Items]
Total borrowings	$ 383,852	$ 343,470	$ 383,852	$ 343,470
Weighted Average Stated Interest Rate	3.50%	4.50%	3.50%	4.50%
Gross Investment Amount Securing Borrowings	$ 596,087	$ 533,439	$ 596,087	$ 533,439
Line of Credit
Debt Instrument [Line Items]
Total borrowings	$ 253,000	$ 236,000	$ 253,000	$ 236,000
Weighted average interest rate	2.90%	2.30%	2.90%	2.30%
Line of Credit | LIBOR
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	1.70%	1.55%
Line of Credit | Interest rate swap
Debt Instrument [Line Items]
Total borrowings		$ 12,100		$ 12,100
Weighted average interest rate		2.28%		2.28%
Term Loan
Debt Instrument [Line Items]
Total borrowings	$ 475,000	$ 475,000	$ 475,000	$ 475,000
Weighted Average Stated Interest Rate	3.40%	3.20%	3.40%	3.20%
Weighted average interest rate	3.44%	3.17%	3.44%	3.17%
Term Loan | LIBOR
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR			1.75%	1.60%
Term Loan | Interest rate swap
Debt Instrument [Line Items]
Total borrowings	$ 350,000		$ 350,000
Unsecured Borrowings
Debt Instrument [Line Items]
Total borrowings	$ 728,000	$ 711,000	$ 728,000	$ 711,000
Weighted Average Stated Interest Rate	3.30%	2.90%	3.30%	2.90%

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Debt Obligations (Narrative) (Details)	6 Months Ended
	Jun. 30, 2017 USD ($) lender loan entity extension	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Number of interest-only mortgage notes | loan	5
Number of fully amortizing mortgage notes payable outstanding | loan	4
Interest-only mortgage notes, outstanding balance	$ 357,500,000
Amortizing mortgage notes outstanding balance	26,400,000
Unsecured debt	$ 724,218,000	$ 706,554,000
Revolving Credit Facility
Debt Instrument [Line Items]
Number Of Lenders | lender	14
Maximum borrowing capacity of credit facility	$ 400,000,000
Potential maximum borrowing capacity	$ 900,000,000
Credit facility extension option period	1 year
Line of credit facility extension fee	0.15%
Current borrowing capacity	$ 124,700,000	$ 164,000,000
Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	1.40%
Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	2.30%
Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility	$ 675,000,000
Letter of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility	50,000,000
Swing Line Loan
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility	50,000,000
$275 Million Term Loan | Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity of credit facility	$ 275,000,000
Term of debt	5 years
Line of credit facility extension fee	0.125%
Line of credit facility number of one year extensions | extension	2
Length of extension option (years)	1 year
$200 Million Term Loan | Term Loan
Debt Instrument [Line Items]
Number Of Lenders | entity	6
Term of debt	7 years
Line of credit facility number of one year extensions | extension	0
Unsecured debt	$ 200,000,000
LIBOR | $275 Million Term Loan | Term Loan | Minimum
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	1.35%
LIBOR | $275 Million Term Loan | Term Loan | Maximum
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	2.20%
LIBOR | $200 Million Term Loan | Term Loan | Minimum
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	1.65%
LIBOR | $200 Million Term Loan | Term Loan | Maximum
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	2.55%

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Debt Obligations (Schedule of Mortgage Note Borrowings) (Details) $ in Thousands				6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 05, 2017 USD ($)	Jan. 10, 2017 USD ($)	Jun. 30, 2017 USD ($) loan	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Number of new mortgage note borrowings during period | loan				2
Principal Balance	$ 1,111,852			$ 1,111,852	$ 1,054,470
Mortgages
Debt Instrument [Line Items]
Principal Balance	$ 202,000			$ 202,000
Stated Interest Rate	3.36%			3.36%
Mortgages | Mortgage Note, 3 Second Street
Debt Instrument [Line Items]
Proceeds from mortgage note			$ 127,000
Principal Balance	$ 127,000		$ 146,600	$ 127,000
Stated Interest Rate	3.38%			3.38%
Number of extensions	2			2
Length of extension option (years)				1 year
Mortgages | Mortgage Note, 3 Second Street | LIBOR
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	2.25%
Mortgages | Mortgage Note, 3 Second Street | Interest Rate Cap
Debt Instrument [Line Items]
Derivative notional amount	$ 146,600			$ 146,600
Strike rate on Interest Rate Cap	3.00%			3.00%
Mortgages | Mortgage Note, Centerton Square
Debt Instrument [Line Items]
Proceeds from mortgage note		$ 75,000
Principal Balance	$ 75,000	$ 81,300		$ 75,000
Stated Interest Rate	3.33%			3.33%
Number of extensions	2			2
Length of extension option (years)				1 year
Mortgages | Mortgage Note, Centerton Square | LIBOR
Debt Instrument [Line Items]
Outstanding borrowings spread over LIBOR	2.25%
Mortgages | Mortgage Note, Centerton Square | Interest Rate Cap
Debt Instrument [Line Items]
Derivative notional amount	$ 81,300			$ 81,300
Strike rate on Interest Rate Cap	3.00%			3.00%

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Debt Obligations (Schedule Of Repayment Of Mortgage Note) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) loan property
Debt Instrument [Line Items]
Number of mortgage notes repaid | loan	4
Mortgages
Debt Instrument [Line Items]
Balance Repaid/Extinguished	$ 160,799
Stated Interest Rate	3.36%
Weighted average interest rate on borrowings	5.74%
Mortgages | Mortgage Note, Eastern Retail Portfolio
Debt Instrument [Line Items]
Repayment Date	Jan. 10, 2017
Balance Repaid/Extinguished	$ 110,000
Stated Interest Rate	5.51%
Contractual Maturity Date	Jun. 11, 2017
Number of retail properties as collateral | property	3
Mortgages | Mortgage Note, Wareham
Debt Instrument [Line Items]
Repayment Date	May 08, 2017
Balance Repaid/Extinguished	$ 24,400
Stated Interest Rate	6.13%
Contractual Maturity Date	Aug. 08, 2017
Mortgages | Mortgage Note, Kingston
Debt Instrument [Line Items]
Repayment Date	Jun. 01, 2017
Balance Repaid/Extinguished	$ 10,574
Stated Interest Rate	6.33%
Contractual Maturity Date	Nov. 01, 2017
Mortgages | Mortgage Note, Sandwich
Debt Instrument [Line Items]
Repayment Date	Jun. 01, 2017
Balance Repaid/Extinguished	$ 15,825
Stated Interest Rate	6.33%
Contractual Maturity Date	Nov. 01, 2017

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Debt Obligations (Summary of Borrowings Reflects Contractual Debt Maturities Footnote) (Details) $ in Thousands	Jun. 30, 2017 USD ($) loan	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Total	$ 1,111,852	$ 1,054,470
Less: net debt issuance costs	(7,260)	(6,295)
Add: mark-to-market adjustment on assumed debt	560	626
Total borrowings (GAAP basis)	1,105,152	$ 1,048,801
2017
Debt Instrument [Line Items]
Outstanding Balance, 2017	842
2018
Debt Instrument [Line Items]
Outstanding Balance, 2018	277,698
2019
Debt Instrument [Line Items]
Outstanding Balance, 2019	331,698
2020
Debt Instrument [Line Items]
Outstanding Balance, 2020	130,860
2021
Debt Instrument [Line Items]
Outstanding Balance, 2021	12,764
2022
Debt Instrument [Line Items]
Outstanding Balance, 2022	203,660
2023
Debt Instrument [Line Items]
Outstanding Balance, 2023	77,899
2024
Debt Instrument [Line Items]
Outstanding Balance, 2024	1,034
2025
Debt Instrument [Line Items]
Outstanding Balance, 2025	71,094
2026
Debt Instrument [Line Items]
Outstanding Balance, 2026	1,157
Thereafter
Debt Instrument [Line Items]
Outstanding Balance, Thereafter	$ 3,146
Mortgage Notes
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	9
Total	$ 383,852
Less: net debt issuance costs	(3,478)
Add: mark-to-market adjustment on assumed debt	560
Total borrowings (GAAP basis)	$ 380,934
Mortgage Notes | 2017
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2017	$ 842
Mortgage Notes | 2018
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2018	$ 2,698
Mortgage Notes | 2019
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	1
Outstanding Balance, 2019	$ 78,698
Mortgage Notes | 2020
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	1
Outstanding Balance, 2020	$ 130,860
Mortgage Notes | 2021
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	1
Outstanding Balance, 2021	$ 12,764
Mortgage Notes | 2022
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	1
Outstanding Balance, 2022	$ 3,660
Mortgage Notes | 2023
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	2
Outstanding Balance, 2023	$ 77,899
Mortgage Notes | 2024
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2024	$ 1,034
Mortgage Notes | 2025
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	1
Outstanding Balance, 2025	$ 71,094
Mortgage Notes | 2026
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2026	$ 1,157
Mortgage Notes | Thereafter
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	2
Outstanding Balance, Thereafter	$ 3,146
Unsecured Borrowings
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	3
Total	$ 728,000
Less: net debt issuance costs	(3,782)
Total borrowings (GAAP basis)	$ 724,218
Unsecured Borrowings | 2017
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2017	$ 0
Unsecured Borrowings | 2018
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	1
Outstanding Balance, 2018	$ 275,000
Unsecured Borrowings | 2019
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	1
Outstanding Balance, 2019	$ 253,000
Unsecured Borrowings | 2020
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2020	$ 0
Unsecured Borrowings | 2021
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2021	$ 0
Unsecured Borrowings | 2022
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	1
Outstanding Balance, 2022	$ 200,000
Unsecured Borrowings | 2023
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2023	$ 0
Unsecured Borrowings | 2024
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2024	$ 0
Unsecured Borrowings | 2025
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2025	$ 0
Unsecured Borrowings | 2026
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, 2026	$ 0
Unsecured Borrowings | Thereafter
Debt Instrument [Line Items]
Number of Borrowings Maturing | loan	0
Outstanding Balance, Thereafter	$ 0

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Derivatives and Hedging Activities (Narrative) (Details)	Jun. 30, 2017 USD ($) security	Dec. 31, 2016 USD ($) security
Derivative [Line Items]
Estimated increase to interest expense related to active effective hedges of floating rate debt	$ 1,700,000
Designated Hedges
Derivative [Line Items]
Total notional amount	$ 383,000,000	$ 395,100,000
Not Designated as Hedging Instrument
Derivative [Line Items]
Number of derivatives | security	2
Total notional amount	$ 227,900,000
Interest rate swap
Derivative [Line Items]
Estimated increase to interest expense related to termination of hedging instrument	$ 2,000,000
Interest rate swap | Designated Hedges
Derivative [Line Items]
Number of derivatives | security	10	11
Interest Rate Swap Maturing July 2021 | Designated Hedges
Derivative [Line Items]
Number of derivatives | security	1
Total notional amount	$ 52,500,000
Other Liabilities
Derivative [Line Items]
Derivative liability	2,200,000
Posted collateral related to agreements	$ 0

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Derivatives and Hedging Activities (Reconciliation of Accumulated Other Comprehensive Loss, Net of Amounts Attributable to Noncontrolling Interests) (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
December 31, 2016	$ 516,343,000
June 30, 2017	418,678,000
Amounts reclassified from accumulated other comprehensive income, tax benefit	0
Change in fair value recognized in OCI, Tax	0
Gains And Losses On Cash Flow Hedges, Parent
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
December 31, 2016	(5,849,000)
June 30, 2017	(4,521,000)
Unrealized Losses On Available-For-Sale Securities, Parent
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
December 31, 2016	(1,056,000)
June 30, 2017	(1,029,000)
Accumulated Other Comprehensive Loss, Parent
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
December 31, 2016	(6,905,000)
June 30, 2017	(5,550,000)
Gains and Losses on Cash Flow Hedges, including noncontrolling interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Amount of loss reclassified from OCI into interest expense (effective portion) (net of tax benefit of $0)	2,744,000
Change in fair value recognized in OCI (effective portion) (net of tax benefit of $0)	(1,332,000)
Net current-period other comprehensive income	1,412,000
Accumulated Other Comprehensive Loss, including noncontrolling interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Amount of loss reclassified from OCI into interest expense (effective portion) (net of tax benefit of $0)	2,744,000
Change in fair value recognized in OCI (effective portion) (net of tax benefit of $0)	(1,332,000)
Net current-period other comprehensive income	1,412,000
Gains and Losses on Cash Flow Hedges, Noncontrolling interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Attribution of and other adjustments to OCI attributable to noncontrolling interests	(84,000)
Unrealized Losses On Available-For-Sale Securities, Noncontrolling interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Attribution of and other adjustments to OCI attributable to noncontrolling interests	27,000
Accumulated Other Comprehensive Loss, Noncontrolling interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Attribution of and other adjustments to OCI attributable to noncontrolling interests	$ (57,000)

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Derivatives and Hedging Activities (Gross Fair Value of Derivative Financial Instruments as Well as Their Classification) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Other Assets
Derivatives, Fair Value [Line Items]
Fair Value of Asset Derivatives	$ 1,951	$ 2,135
Other Liabilities
Derivatives, Fair Value [Line Items]
Fair Value of Liability Derivatives	(2,133)	(2,777)
Derivative liability	2,200
Designated Hedges | Interest Rate Contract | Other Assets
Derivatives, Fair Value [Line Items]
Fair Value of Asset Derivatives	1,937	2,135
Designated Hedges | Interest Rate Contract | Other Liabilities
Derivatives, Fair Value [Line Items]
Fair Value of Liability Derivatives	(2,133)	(2,777)
Not Designated as Hedging Instrument | Interest Rate Contract | Other Assets
Derivatives, Fair Value [Line Items]
Fair Value of Asset Derivatives	14	0
Not Designated as Hedging Instrument | Interest Rate Contract | Other Liabilities
Derivatives, Fair Value [Line Items]
Fair Value of Liability Derivatives	$ 0	$ 0

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Derivatives and Hedging Activities (Effect of Derivative Financial Instruments on Financial Statements) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Designated Hedges | Interest expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss reclassified from accumulated OCI into income (effective portion)	$ 1,251	$ 1,199	$ 2,744	$ 2,317
Designated Hedges | Interest and other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss recognized in income (ineffective portion and amount excluded from effectiveness testing)	(47)	0	0	0
Designated Hedges | Interest Rate Contract
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (loss) gain recognized in OCI (effective portion)	(1,928)	(4,902)	(1,332)	(15,098)
Not Designated as Hedging Instrument | Interest Rate Contract | Interest and other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss recognized in income	$ (21)	$ 0	$ (101)	$ 0

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Fair Value of Financial Instruments (Schedule of Carrying Amount and Fair Values of Other Financial Instruments) (Details) - USD ($) $ in Thousands			6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2017	Dec. 31, 2016
Carrying Amount | Fixed-Rate Mortgage Notes
Liabilities:
Fixed-rate mortgage notes	$ 128,750	$ 290,329	$ 128,750	$ 290,329
Carrying Amount | Floating-Rate Mortgage Notes
Liabilities:
Floating-rate mortgage notes	252,184	51,918	252,184	51,918
Carrying Amount | Floating-Rate Unsecured Borrowings
Liabilities:
Floating-rate unsecured borrowings	724,218	706,554	724,218	706,554
Carrying Amount | Fixed-Rate Debt Related Investments, Net
Assets:
Fixed-rate debt related investments, net	14,941	15,209	14,941	15,209
Estimated Fair Value | Fixed-Rate Mortgage Notes
Liabilities:
Fixed-rate mortgage notes	131,552	291,624	131,552	291,624
Estimated Fair Value | Floating-Rate Mortgage Notes
Liabilities:
Floating-rate mortgage notes	253,580	51,942	253,580	51,942
Estimated Fair Value | Floating-Rate Unsecured Borrowings
Liabilities:
Floating-rate unsecured borrowings	728,000	711,000	728,000	711,000
Estimated Fair Value | Fixed-Rate Debt Related Investments, Net
Assets:
Fixed-rate debt related investments, net	$ 15,463	$ 15,784	$ 15,463	$ 15,784
Floating-Rate Mortgage Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Outstanding borrowings spread over LIBOR			2.13%	1.65%
Floating-Rate Mortgage Notes, Effectively Fixed-Rate Mortgage Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Outstanding borrowings spread over LIBOR	1.60%	1.60%		1.60%
Liabilities:
Effective interest rate on debt	3.051%	3.051%	3.051%	3.051%
Floating-Rate Mortgage Notes, Effectively Fixed-Rate Mortgage Notes | Floating-Rate Mortgage Notes
Liabilities:
Long-term debt, fair value	$ 32,600	$ 32,500	$ 32,600	$ 32,500

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Stockholders' Equity (Narrative) (Details) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) $ / shares shares
Stockholders Equity Note Disclosure [Line Items]
Repurchase of common stock, shares	11,800
Shares repurchased, value | $	$ 101,668
Class E
Stockholders Equity Note Disclosure [Line Items]
Repurchase of common stock, shares	12,320
Share price (usd per share) | $ / shares	$ 7.50
Shares repurchased, value | $	$ 88,200
Class I
Stockholders Equity Note Disclosure [Line Items]
Repurchase of common stock, shares	1,056
Number of granted units that were relinquished (shares)	140

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Stockholders' Equity (Information of Share Transactions) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($) shares
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, Shares	150,636,393
Redemptions of common stock, shares	(11,800,000)
Balance, Shares	139,913,429
Class E
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, amount | $	$ 1,298,189
Balance, Shares	112,325,000
Distribution reinvestment plan | $	$ 6,568
Distribution reinvestment plan, shares	872,000
Redemptions of common stock | $	$ (92,421)
Redemptions of common stock, shares	(12,320,000)
Balance, Shares	100,877,000
Balance, amount | $	$ 1,212,336
Class A
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, amount | $	$ 14,758
Balance, Shares	2,001,000
Shares sold | $	$ 836
Shares sold, shares	107,000
Distribution reinvestment plan | $	$ 190
Distribution reinvestment plan, shares	25,000
Redemptions of common stock | $	$ (567)
Redemptions of common stock, shares	(75,000)
Balance, Shares	2,058,000
Balance, amount | $	$ 15,217
Class W
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, amount | $	$ 16,381
Balance, Shares	2,271,000
Shares sold | $	$ 1,916
Shares sold, shares	254,000
Distribution reinvestment plan | $	$ 222
Distribution reinvestment plan, shares	30,000
Redemptions of common stock | $	$ (521)
Redemptions of common stock, shares	(69,000)
Balance, Shares	2,486,000
Balance, amount | $	$ 17,998
Class I
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, amount | $	$ 243,049
Balance, Shares	34,039,000
Shares sold | $	$ 8,870
Shares sold, shares	1,178,000
Distribution reinvestment plan | $	$ 3,235
Distribution reinvestment plan, shares	430,000
Stock-based compensation | $	$ (669)
Stock-based compensation, shares	(99,000)
Redemptions of common stock | $	$ (7,939)
Redemptions of common stock, shares	(1,056,000)
Balance, Shares	34,492,000
Balance, amount | $	$ 246,546
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, amount | $	$ 1,572,377
Balance, Shares	150,636,000
Shares sold | $	$ 11,622
Shares sold, shares	1,539,000
Distribution reinvestment plan | $	$ 10,215
Distribution reinvestment plan, shares	1,357,000
Stock-based compensation | $	$ (669)
Stock-based compensation, shares	(99,000)
Redemptions of common stock | $	$ (101,448)
Redemptions of common stock, shares	(13,520,000)
Balance, Shares	139,913,000
Balance, amount | $	$ 1,492,097

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Related Party Transactions (Advisory Agreement) (Details)		6 Months Ended
	Jun. 23, 2016	Jun. 30, 2017 employee $ / shares
Related Party Transaction [Line Items]
Number of advisor employees serving as directors and officers | employee		2
Component of advisory fee as percent of overall return		25.00%
Percentage of return not payable to advisor		6.00%
Maximum annual advisory fee performance condition as percentage of overall return		10.00%
Class E dealer manager fee portion waived under NAV per share threshold | $ / shares		$ 10.00
Maximum advisor real property disposition fee as percentage of sales price of real property assets		1.00%
Maximum percentage of reasonable customary and commission payable to advisor upon disposition of property		50.00%
Fee payable to advisor as percentage of sales price of real property assets		1.00%
Maximum commissions payable as percent of sales price of property sold		6.00%
Maximum advisor reimbursement of cumulative organization and offering costs as percentage of gross proceeds from offering		15.00%
Amended Advisory Agreement
Related Party Transaction [Line Items]
Dealer management fee daily accrual, percentage	0.315%

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Related Party Transactions (Public Offering Dealer Manager Agreement) (Details) - USD ($)			3 Months Ended		6 Months Ended
	Jun. 23, 2016	Sep. 16, 2015	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Related Party Transaction [Line Items]
Proceeds from sale of common stock					$ 11,172,000	$ 49,005,000
Related party transaction expense			$ 6,058,000	$ 7,625,000	12,160,000	15,631,000
Dealer Manager
Related Party Transaction [Line Items]
Related party transaction expense			$ 116,000	$ 89,000	$ 228,000	$ 174,000
Maximum
Related Party Transaction [Line Items]
Proceeds from sale of common stock		$ 100,000,000
Maximum | Dealer Manager
Related Party Transaction [Line Items]
Related party transaction expense	$ 150,000,000
Follow-On Offering
Related Party Transaction [Line Items]
Maximum primary dealer fee as percentage of gross proceeds from sale of class shares		5.00%
Follow-On Offering | Maximum
Related Party Transaction [Line Items]
Class A Dealer Manager selling commission		3.00%
Class A and Class W | Follow-On Offering
Related Party Transaction [Line Items]
Dealer management fee daily accrual, percentage		0.164%
Class I | Follow-On Offering
Related Party Transaction [Line Items]
Dealer management fee daily accrual, percentage		0.274%
Class A | Follow-On Offering
Related Party Transaction [Line Items]
Class A distribution fee		0.137%

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Related Party Transactions (Restricted Stock) (Details) - USD ($)			3 Months Ended		6 Months Ended
	Apr. 13, 2017	Feb. 02, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 05, 2013
Related Party Transaction [Line Items]
Related party transaction expense			$ 6,058,000	$ 7,625,000	$ 12,160,000	$ 15,631,000
Advisor agreement termination, notification period					30 days
Advisor agreement termination, transaction close period					60 days
Class I
Related Party Transaction [Line Items]
Number of granted units that were relinquished (shares)					140,000
Restricted Stock Units (RSUs)
Related Party Transaction [Line Items]
Number of unvested and unsettled shares (shares)			123,000		123,000
Weighted average grant-date NAV per Class I share (usd per share)			$ 7.29		$ 7.29
Offset period					12 months
Restricted Stock | Class I
Related Party Transaction [Line Items]
Number of awards granted (shares)		58,000
Restricted stock granted, price per share (usd per share)		$ 7.56
Awards vested (shares)					38,000
Vested in period, weighted average price per share					$ 7.55
Restricted stock granted, expense recorded in general and administrative expenses					$ 210,000
Restricted Stock | Class I | Minimum
Related Party Transaction [Line Items]
Vesting period of restricted stock					3 years
Restricted Stock | Class I | Maximum
Related Party Transaction [Line Items]
Vesting period of restricted stock					4 years
Restricted Stock | Class I | Percentage vested in first year
Related Party Transaction [Line Items]
Vesting percentage of restricted stock granted		25.00%
Restricted Stock | Class I | Percentage vested in years two through four, ratably
Related Party Transaction [Line Items]
Vesting percentage of restricted stock granted		75.00%
Director [Member] | Restricted Stock Units (RSUs) | Class I
Related Party Transaction [Line Items]
Annual grant of Restricted Stock Units (RSUs) to directors							$ 10,000
Company Advisor | Restricted Stock Units (RSUs) | Class I
Related Party Transaction [Line Items]
Number of awards granted (shares)					842,000
Number of granted units that were relinquished (shares)	208,000
Advisory Fees
Related Party Transaction [Line Items]
Related party transaction expense			$ 3,451,000	3,671,000	$ 6,941,000	7,436,000
Advisory Fees | Restricted Stock Units (RSUs)
Related Party Transaction [Line Items]
Related party transaction expense	$ (33,000)		$ 154,000	$ 282,000	$ 443,000	$ 565,000

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Related Party Transactions (Schedule Of RSU Grants) (Details) - Restricted Stock Units (RSUs)	Jun. 30, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Unvested Shares (shares) | shares	123,000
Grant Date NAV per Class I share (usd per share) | $ / shares	$ 7.29
February 25, 2015 Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Unvested Shares (shares) | shares	66,000
Grant Date NAV per Class I share (usd per share) | $ / shares	$ 7.18
February 4, 2016 Grant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Unvested Shares (shares) | shares	57,000
Grant Date NAV per Class I share (usd per share) | $ / shares	$ 7.41

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Related Party Transactions (Private Placements of Delaware Statutory Trust Interests) (Details) - USD ($) $ in Thousands, shares in Millions	1 Months Ended	6 Months Ended
	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016
Related Party Transaction [Line Items]
Proceeds from sale of common stock		$ 11,172	$ 49,005
Amended And Restated Operating Partnership Agreement
Related Party Transaction [Line Items]
Redemption fee, payable to manager	1.50%
DST Properties
Related Party Transaction [Line Items]
Percent of interests intended to sell to third parties		100.00%
Management fee upon disposition, percent of gross sale price		1.00%
Management loan fee, percent of financing arranged		1.00%
Private Placements
Related Party Transaction [Line Items]
Lease-back term period	29 years
Private Placements | Operating Parnership (DST Program)
Related Party Transaction [Line Items]
Proceeds from sale of common stock	$ 183,100	$ 6,100
Units exchanged	17.7
Private Placements | Dealer Manager Agreement | Dividend Capital Exchange LLC (DCX)
Related Party Transaction [Line Items]
Private placement, amount of interests placed with dealer	$ 500,000
Private placement, dealer fee, percent of gross equity proceeds	1.50%
Private placement, commission, percent of gross equity proceeds	5.00%
Private Placements | DST Properties
Related Party Transaction [Line Items]
Private placement, offering expense mark-up, percent of gross equity proceeds	1.50%
Private placement, purchase price mark-up, percent of gross equity proceeds	8.00%
Non-accountable reimbursement by investors, percent of gross equity proceeds for real estate transaction costs	1.00%

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Related Party Transactions (Summary of Fees and Other Amounts Earned by Advisor and Its Related Parties) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Apr. 13, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Related Party Transaction [Line Items]
Related party transaction expense		$ 6,058	$ 7,625	$ 12,160	$ 15,631
Advisory Fees
Related Party Transaction [Line Items]
Related party transaction expense		3,451	3,671	6,941	7,436
Advisory Fees | Restricted Stock Units (RSUs)
Related Party Transaction [Line Items]
Related party transaction expense	$ (33)	154	282	443	565
Other Reimbursements Paid to our Advisor
Related Party Transaction [Line Items]
Related party transaction expense		2,026	2,092	4,304	4,304
Other Reimbursements Paid to our Dealer Manager
Related Party Transaction [Line Items]
Related party transaction expense		155	32	338	83
Advisory Fees Related to the Disposition Of Real Properties
Related Party Transaction [Line Items]
Related party transaction expense		286	0	286	1,807
Development Management Fees
Related Party Transaction [Line Items]
Related party transaction expense		0	10	0	29
Primary Dealer Fee [Member]
Related Party Transaction [Line Items]
Related party transaction expense		0	1,697	0	1,697
Selling Commissions
Related Party Transaction [Line Items]
Related party transaction expense		5	17	25	67
Dealer Manager
Related Party Transaction [Line Items]
Related party transaction expense		116	89	228	174
Dealer manager and distribution fees liability		3,900		3,900
Reallowed amount to third party brokers					1,500
Retained amount to third party brokers					170
Distribution fees
Related Party Transaction [Line Items]
Related party transaction expense		19	17	38	34
Reimbursements For Portion Of Compensation Costs
Related Party Transaction [Line Items]
Related party transaction expense		$ 1,700	$ 1,700	$ 3,500	$ 3,600

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Net Income Per Common Share (Details of Numerator and Denominator Used to Calculate Basic and Diluted Net Income Per Common Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Numerator
Net income	$ 8,415	$ 135	$ 10,242	$ 48,373
Net income attributable to noncontrolling interests	(1,610)	(18)	(1,776)	(4,474)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	6,805	117	8,466	43,899
Dilutive noncontrolling interests share of net income	558	9	691	3,410
Numerator for diluted earnings per share - adjusted net income	$ 7,363	$ 126	$ 9,157	$ 47,309
Denominator
Weighted average shares outstanding-basic (shares)	145,288	161,209	147,577	162,581
Incremental weighted average shares effect of conversion of OP units (shares)	11,921	12,460	11,974	12,598
Weighted average shares outstanding-diluted (shares)	157,209	173,669	159,551	175,179
INCOME PER COMMON SHARE-BASIC AND DILUTED (usd per share)	$ 0.05	$ 0.00	$ 0.06	$ 0.27

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Segment Information (Revenue and Components of Net Operating Income) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) segment	Jun. 30, 2016 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments | segment			3
Revenues	$ 50,036	$ 52,702	$ 102,544	$ 108,246
NOI	33,475	37,070	$ 68,540	76,296
Real property operating sector
Segment Reporting Information [Line Items]
Number of operating segments | segment			3
Office
Segment Reporting Information [Line Items]
Revenues	27,624	30,983	$ 57,063	64,952
NOI	16,224	20,846	34,522	44,130
Industrial
Segment Reporting Information [Line Items]
Revenues	1,330	1,534	2,901	3,245
NOI	975	1,110	1,978	2,377
Retail
Segment Reporting Information [Line Items]
Revenues	21,082	20,185	42,580	40,049
NOI	$ 16,276	$ 15,114	$ 32,040	$ 29,789

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Segment Information (Reconciliation of Net Operating Income to Reported Net Income) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reconciliation of net operating income attributable to common shareholders
Net income attributable to common stockholders		$ 6,805	$ 117	$ 8,466	$ 43,899
Debt-related income		(229)	(237)	(460)	(475)
Real estate depreciation and amortization expense		18,798	20,198	36,734	40,034
General and administrative expenses	[1]	2,024	2,338	4,274	4,958
Advisory fees, related party		3,451	3,671	6,941	7,436
Acquisition-related expenses		0	474	0	525
Impairment of real estate property	[2]	1,116	0	1,116	587
Interest and other (expense) income		89	69	198	11
Interest expense		10,163	10,422	19,847	21,383
Gain on extinguishment of debt and financing commitments		0	0	0	(5,136)
Gain on sale of real property	[3]	(10,352)	0	(10,352)	(41,400)
Net income attributable to noncontrolling interests		1,610	18	1,776	4,474
Net operating income		$ 33,475	$ 37,070	$ 68,540	$ 76,296

[1] Includes approximately $1.4 million and $1.6 million of reimbursable expenses incurred by our Advisor and its affiliates during the three months ended June 30, 2017 and 2016, respectively, and approximately $3.1 million and $3.5 million of reimbursable expenses incurred by our Advisor and its affiliates during the six months ended June 30, 2017 and 2016.

[2] Includes approximately $45,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $79,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

[3] Includes approximately $241,000 paid to our Advisor for advisory fees associated with the disposition of real properties during the three and six months ended June 30, 2017, and $1.8 million paid to our Advisor for advisory fees associated with the disposition of real properties during the six months ended June 30, 2016.

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Segment Information (Schedule of Total Assets by Business Segment) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Segment assets:
Total segment assets, net	$ 1,662,518	$ 1,711,411
Non-segment assets:
Debt related investments, net	14,941	15,209
Cash and cash equivalents	5,362	13,864	$ 17,088	$ 15,769
Total Assets	1,725,278	1,783,728
Operating segments | Office
Segment assets:
Total segment assets, net	808,079	825,961
Operating segments | Industrial
Segment assets:
Total segment assets, net	41,595	57,651
Operating segments | Retail
Segment assets:
Total segment assets, net	812,844	827,799
Non-segment
Non-segment assets:
Debt related investments, net	14,941	15,209
Cash and cash equivalents	5,362	13,864
Other non-segment assets	$ 42,457	$ 43,244