Maryland | 001-35263 | 45-2482685 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
405 Park Avenue New York, New York 10022 |
(Address, including zip code, of principal executive offices) |
(212) 415-6500 |
Registrant’s telephone number, including area code: |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
23.1 | Consent of Grant Thornton LLP | |
99.1 | Audited Consolidated Financial Statements of ARCT III as of December 31, 2012 and for the three year period beginning October 15, 2010 and ending December 31, 2012 | |
99.2 | Unaudited Pro Forma Condensed Consolidated Financial Statements of ARCP as of and for the year ended December 31, 2012 |
AMERICAN REALTY CAPITAL PROPERTIES, INC. | ||
Date: March 7, 2013 | By: | /s/ Nicholas S. Schorsch |
Name: | Nicholas S. Schorsch | |
Title: | Chief Executive Officer and | |
Chairman of the Board of Directors |
Page | |
Financial Statements | |
December 31, | |||||||
2012 | 2011 | ||||||
ASSETS | |||||||
Real estate investments, at cost: | |||||||
Land | $ | 215,196 | $ | 7,135 | |||
Buildings, fixtures and improvements | 1,130,796 | 54,585 | |||||
Acquired intangible lease assets | 183,819 | 10,733 | |||||
Total real estate investments, at cost | 1,529,811 | 72,453 | |||||
Less: accumulated depreciation and amortization | (31,877 | ) | (499 | ) | |||
Total real estate investments, net | 1,497,934 | 71,954 | |||||
Cash and cash equivalents | 154,125 | 16,183 | |||||
Investment securities, at fair value | 41,654 | — | |||||
Restricted cash | 1,108 | — | |||||
Prepaid expenses and other assets | 4,197 | 252 | |||||
Receivable for issuance of common stock | — | 969 | |||||
Deferred costs, net | 10,365 | 639 | |||||
Total assets | $ | 1,709,383 | $ | 89,997 | |||
LIABILITIES AND EQUITY | |||||||
Mortgage notes payable | $ | 229,360 | $ | 5,060 | |||
Derivatives, at fair value | 3,830 | 98 | |||||
Accounts payable and accrued expenses | 5,677 | 716 | |||||
Deferred rent and other liabilities | 3,573 | 163 | |||||
Distributions payable | 9,946 | 504 | |||||
Total liabilities | 252,386 | 6,541 | |||||
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized, none issued or outstanding at December 31, 2012 and 2011 | — | — | |||||
Common stock, $0.01 par value per share, 300,000,000 shares authorized, 176,852,072 and 10,356,402 shares issued and outstanding at December 31, 2012 and 2011, respectively | 1,769 | 104 | |||||
Additional paid-in capital | 1,552,263 | 86,643 | |||||
Accumulated other comprehensive loss | (3,923 | ) | (98 | ) | |||
Accumulated deficit | (100,367 | ) | (3,193 | ) | |||
Total stockholders' equity | 1,449,742 | 83,456 | |||||
Non-controlling interests | 7,255 | — | |||||
Total equity | 1,456,997 | 83,456 | |||||
Total liabilities and equity | $ | 1,709,383 | $ | 89,997 |
Year Ended December 31, | Period from October 15, 2010 (Date of Inception) to December 31, 2010 | ||||||||||
2012 | 2011 | ||||||||||
Revenues: | |||||||||||
Rental income | $ | 48,457 | $ | 740 | $ | — | |||||
Operating expense reimbursements | 1,514 | 55 | — | ||||||||
Total revenues | 49,971 | 795 | — | ||||||||
Operating expenses: | |||||||||||
Acquisition and transaction related | 38,773 | 2,023 | — | ||||||||
Property operating | 2,386 | 67 | — | ||||||||
Operating fees to affiliates | 212 | — | — | ||||||||
General and administrative | 2,831 | 295 | — | ||||||||
Depreciation and amortization | 31,378 | 499 | — | ||||||||
Total operating expenses | 75,580 | 2,884 | — | ||||||||
Operating loss | (25,609 | ) | (2,089 | ) | — | ||||||
Other income (expenses): | |||||||||||
Interest expense | (7,500 | ) | (36 | ) | — | ||||||
Income from investments | 534 | — | — | ||||||||
Other income, net | 424 | 1 | — | ||||||||
Total other expenses | (6,542 | ) | (35 | ) | — | ||||||
Net loss | (32,151 | ) | (2,124 | ) | — | ||||||
Net loss attributable to non-controlling interests | 30 | — | — | ||||||||
Net loss attributable to stockholders | $ | (32,121 | ) | $ | (2,124 | ) | $ | — | |||
Other comprehensive loss: | |||||||||||
Designated derivatives, fair value adjustment | (3,732 | ) | (98 | ) | — | ||||||
Unrealized loss on investment securities, net | (93 | ) | — | — | |||||||
Total other comprehensive loss | $ | (3,825 | ) | $ | (98 | ) | $ | — | |||
Comprehensive loss attributable to stockholders | $ | (35,946 | ) | $ | (2,222 | ) | $ | — | |||
Basic and diluted weighted-average shares outstanding | 98,277,041 | 1,763,190 | 20,000 | ||||||||
Basic and diluted net loss per share attributable to stockholders | $ | (0.33 | ) | $ | (1.20 | ) | NM |
Common Stock | |||||||||||||||||||||||||||||||
Number of Shares | Par Value | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | Non-Controlling Interests | Total Equity | ||||||||||||||||||||||||
Balance, October 15, 2010 | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of common stock | 20,000 | — | 200 | — | — | 200 | — | 200 | |||||||||||||||||||||||
Balance, December 31, 2010 | 20,000 | — | 200 | — | — | 200 | — | 200 | |||||||||||||||||||||||
Issuance of common stock | 10,298,053 | 104 | 102,092 | — | — | 102,196 | — | 102,196 | |||||||||||||||||||||||
Common stock offering costs, commissions and dealer manager fees | — | — | (15,940 | ) | — | — | (15,940 | ) | — | (15,940 | ) | ||||||||||||||||||||
Common stock issued through distribution reinvestment plan | 28,599 | — | 271 | — | — | 271 | — | 271 | |||||||||||||||||||||||
Distributions declared | — | — | — | — | (1,069 | ) | (1,069 | ) | — | (1,069 | ) | ||||||||||||||||||||
Common stock repurchases | — | — | (25 | ) | — | — | (25 | ) | — | (25 | ) | ||||||||||||||||||||
Contribution from affiliate | — | — | 2 | — | — | 2 | — | 2 | |||||||||||||||||||||||
Share-based compensation | 9,750 | — | 43 | — | — | 43 | — | 43 | |||||||||||||||||||||||
Net loss | — | — | — | — | (2,124 | ) | (2,124 | ) | — | (2,124 | ) | ||||||||||||||||||||
Other comprehensive loss | — | — | — | (98 | ) | — | (98 | ) | — | (98 | ) | ||||||||||||||||||||
Balance, December 31, 2011 | 10,356,402 | $ | 104 | $ | 86,643 | $ | (98 | ) | $ | (3,193 | ) | $ | 83,456 | $ | — | $ | 83,456 | ||||||||||||||
Issuances of common stock | 163,851,640 | 1,639 | 1,621,233 | — | — | 1,622,872 | — | 1,622,872 | |||||||||||||||||||||||
Common stock offering costs, commissions and dealer manager fees | — | — | (180,551 | ) | — | — | (180,551 | ) | — | (180,551 | ) | ||||||||||||||||||||
Common stock issued through distribution reinvestment plan | 2,819,422 | 28 | 26,756 | — | — | 26,784 | — | 26,784 | |||||||||||||||||||||||
Distributions declared | — | — | — | — | (65,053 | ) | (65,053 | ) | — | (65,053 | ) | ||||||||||||||||||||
Common stock repurchases | (191,031 | ) | (2 | ) | (1,872 | ) | — | — | (1,874 | ) | — | (1,874 | ) | ||||||||||||||||||
Share-based compensation, net of forfeitures | 15,639 | — | 54 | — | — | 54 | — | 54 | |||||||||||||||||||||||
Contributions from non-controlling interest holders | — | — | — | — | — | — | 7,375 | 7,375 | |||||||||||||||||||||||
Distributions to non-controlling interest holders | — | — | — | — | — | — | (90 | ) | (90 | ) | |||||||||||||||||||||
Net loss | — | — | — | — | (32,121 | ) | (32,121 | ) | (30 | ) | (32,151 | ) | |||||||||||||||||||
Other comprehensive loss | — | — | — | (3,825 | ) | — | (3,825 | ) | — | (3,825 | ) | ||||||||||||||||||||
Balance, December 31, 2012 | 176,852,072 | $ | 1,769 | $ | 1,552,263 | $ | (3,923 | ) | $ | (100,367 | ) | $ | 1,449,742 | $ | 7,255 | $ | 1,456,997 |
Year Ended December 31, | Period from October 15, 2010 (Date of Inception) to December 31, 2010 | ||||||||||
2012 | 2011 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (32,151 | ) | $ | (2,124 | ) | $ | — | |||
Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Depreciation | 25,524 | 414 | — | ||||||||
Amortization of intangible assets | 5,854 | 85 | — | ||||||||
Amortization of deferred financing costs | 1,214 | 5 | — | ||||||||
Share-based compensation | 54 | 43 | — | ||||||||
Changes in assets and liabilities: | |||||||||||
Prepaid expenses and other assets | (3,465 | ) | (232 | ) | — | ||||||
Accounts payable and accrued expenses | 5,102 | 469 | — | ||||||||
Deferred rent and other liabilities | 3,410 | 163 | — | ||||||||
Net cash provided by (used in) operating activities | 5,542 | (1,177 | ) | — | |||||||
Cash flows from investing activities: | |||||||||||
Investment in real estate and other assets | (1,457,358 | ) | (72,453 | ) | — | ||||||
Deposits for real estate investments | (500 | ) | — | — | |||||||
Purchase of investment securities | (41,747 | ) | — | — | |||||||
Net cash used in investing activities | (1,499,605 | ) | (72,453 | ) | — | ||||||
Cash flows from financing activities: | |||||||||||
Proceeds from mortgage notes payable | 224,300 | 5,060 | — | ||||||||
Payments of deferred financing costs | (10,940 | ) | (644 | ) | — | ||||||
Common stock repurchases | (1,534 | ) | — | — | |||||||
Proceeds from issuance of common stock | 1,623,841 | 101,227 | — | ||||||||
Payments of offering costs and fees related to stock issuances | (181,032 | ) | (15,538 | ) | — | ||||||
Distributions paid | (28,827 | ) | (294 | ) | — | ||||||
Advances from affiliates, net | 20 | — | — | ||||||||
Contribution from affiliate | — | 2 | — | ||||||||
Contributions from non-controlling interest holders | 7,375 | — | — | ||||||||
Distributions to non-controlling interest holders | (90 | ) | — | — | |||||||
Restricted cash | (1,108 | ) | — | — | |||||||
Net cash provided by financing activities | 1,632,005 | 89,813 | — | ||||||||
Net change in cash and cash equivalents | 137,942 | 16,183 | — | ||||||||
Cash and cash equivalents, beginning of period | 16,183 | — | — | ||||||||
Cash and cash equivalents, end of period | $ | 154,125 | $ | 16,183 | $ | — | |||||
Supplemental Disclosures: | |||||||||||
Cash paid for interest | $ | 5,570 | $ | 32 | $ | — | |||||
Cash paid for income taxes | 25 | — | — | ||||||||
Non-Cash Investing and Financing Activities: | |||||||||||
Common stock issued through distribution reinvestment plan | $ | 26,784 | $ | 271 | $ | — | |||||
Reclassification of deferred offering costs | — | — | 402 |
December 31, | ||||||||
(In thousands) | 2012 | 2011 | ||||||
Intangible assets: | ||||||||
In-place leases, net of accumulated amortization of $5,939 and $85 at December 31, 2012 and 2011, respectively | $ | 177,880 | $ | 10,648 |
(Dollar amounts in thousands) | Weighted- Average Amortization Period | 2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||
In-place leases | 12.6 years | $ | 15,577 | $ | 15,615 | $ | 15,519 | $ | 15,519 | $ | 15,518 |
Number of Requests | Number of Shares | Average Price per Share | |||||||
Year ended December 31, 2011 | 1 | 2,500 | $ | 10.00 | |||||
Year ended December 31, 2012 | 73 | 188,531 | 9.93 | ||||||
Cumulative repurchase requests as of December 31, 2012 (1) | 74 | 191,031 | $ | 9.93 |
(1) | Includes unfulfilled repurchase requests for 37,032 shares at a average price per share of $9.86, which were approved for repurchase as of December 31, 2012. |
Year Ended December 31, | |||||||
2012 | 2011 | ||||||
Real estate investments, at cost: | |||||||
Land | $ | 208,061 | $ | 7,135 | |||
Buildings, fixtures and improvements | 1,076,211 | 54,585 | |||||
Total tangible assets | 1,284,272 | 61,720 | |||||
Acquired intangibles: | |||||||
In-place leases | 173,086 | 10,733 | |||||
Cash paid for acquired real estate investments, at cost | $ | 1,457,358 | $ | 72,453 | |||
Number of properties purchased | 466 | 41 |
Number of Properties | Base Purchase Price (1) | |||||
Year ended December 31, 2011 | 41 | $ | 72,453 | |||
Year ended December 31, 2012 (2) | 466 | 1,457,358 | ||||
Total portfolio as of December 31, 2012 | 507 | $ | 1,529,811 |
(1) | Contract purchase price, excluding acquisition related costs. |
(2) | Buildings, fixtures and improvements have been provisionally allocated for two properties with and aggregate purchase price $183.9 million of pending receipt of the cost segregation analyses on such assets being prepared by a third party specialist. |
Year Ended December 31, | Period from October 15, 2010 (Date of Inception) to December 31, 2010 | |||||||||||
(In thousands) | 2012 | 2011 | ||||||||||
Pro forma revenues | $ | 123,309 | $ | 120,569 | $ | 25,057 | ||||||
Pro forma net income (loss) attributable to stockholders | $ | 28,640 | $ | 26,328 | $ | (29,884 | ) |
(In thousands) | Future Minimum Base Rent Payments | |||
2013 | $ | 117,087 | ||
2014 | 117,632 | |||
2015 | 118,139 | |||
2016 | 118,771 | |||
2017 | 119,650 | |||
Thereafter | 905,526 | |||
Total | $ | 1,496,805 |
Tenant | December 31, 2012 | December 31, 2011 | ||
Dollar General | 13.4% | 43.4% | ||
FedEx | 11.1% | 16.2% | ||
Walgreens | * | 27.9% |
State | December 31, 2012 | December 31, 2011 | ||
Illinois | 12.5% | * | ||
Texas | * | 14.7% | ||
Montana | * | 12.2% |
Encumbered Properties | Outstanding Loan Amount | Weighted-Average Effective Interest Rate (1) | Weighted-Average Maturity (2) | |||||||
December 31, 2012 | 135 | $ | 229,360 | 4.24% | 5.82 | |||||
December 31, 2011 | 1 | $ | 5,060 | 3.75% | 4.84 |
(1) | Mortgage notes payable have fixed rates or rates that are fixed through the use of interest rate hedging instruments. Effective interest rates range from 3.32% to 6.13% at December 31, 2012. The effective interest rate was 3.75% on the one mortgage note payable at December 31, 2011. |
(2) | Weighted-average remaining years until maturity as of the periods presented. |
Future Principal Payments | ||||
2013 | $ | — | ||
2014 | — | |||
2015 | — | |||
2016 | 5,060 | |||
2017 | 155,000 | |||
Thereafter | 69,300 | |||
Total | $ | 229,360 |
December 31, 2012 | ||||||||||||||||
Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Investment securities | $ | 41,747 | $ | 223 | $ | (316 | ) | $ | 41,654 |
Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | |||||||||||||
December 31, 2012 | ||||||||||||||||
Investment securities | $ | 41,654 | $ | — | $ | — | $ | 41,654 | ||||||||
Interest rate swaps | $ | — | $ | (3,830 | ) | $ | — | $ | (3,830 | ) | ||||||
December 31, 2011 | ||||||||||||||||
Interest rate swap | $ | — | $ | (98 | ) | $ | — | $ | (98 | ) |
Carrying Amount at | Fair Value at | Carrying Amount at | Fair Value at | ||||||||||||||
Level | December 31, 2012 | December 31, 2012 | December 31, 2011 | December 31, 2011 | |||||||||||||
Mortgage notes payable | 3 | $ | 229,360 | $ | 235,263 | $ | 5,060 | $ | 5,060 |
Interest Rate Derivative | Balance Sheet Location | Number of Instruments | Notional Amount | Fair Value | |||||||||
Interest Rate Swaps | Derivatives, at fair value | 7 | $ | 152,590 | $ | (3,830 | ) |
Interest Rate Derivative | Balance Sheet Location | Number of Instruments | Notional Amount | Fair Value | |||||||||
Interest Rate Swap | Derivatives, at fair value | 1 | $ | 5,060 | $ | (98 | ) |
Balance Sheet Location | December 31, 2012 | December 31, 2011 | ||||||||
Interest Rate Swaps | Derivatives, at fair value | $ | (3,830 | ) | $ | (98 | ) |
Years Ended December 31, | |||||||
2012 | 2011 | ||||||
Amount of loss recognized in accumulated other comprehensive loss from interest rate derivatives (effective portion) | $ | (4,672 | ) | $ | (111 | ) | |
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense (effective portion) | $ | (940 | ) | $ | (13 | ) | |
Amount of loss recognized in income on derivative (ineffective portion, reclassifications of missed forecasted transactions and amounts excluded from effectiveness testing) * | $ | (1 | ) | $ | — |
Years Ended December 31, | Payable as of December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Total commissions and fees from Dealer Manager | $ | 160,600 | $ | 9,833 | $ | — | $ | 92 |
Years Ended December 31, | Payable as of December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Fees and expense reimbursements from the Advisor and Dealer Manager | $ | 16,081 | $ | 4,383 | $ | — | $ | 220 |
Year Ended December 31, | ||||||||||||||||||||||||
2012 | 2011 | Payable as of December 31, | ||||||||||||||||||||||
Incurred | Forgiven | Incurred | Forgiven | 2012 | 2011 | |||||||||||||||||||
One-time fees and reimbursements: | ||||||||||||||||||||||||
Acquisition fees and related cost reimbursements | $ | 24,785 | $ | — | $ | 1,292 | $ | — | $ | — | $ | 37 | ||||||||||||
Financing coordination fees | 2,505 | — | 51 | — | — | — | ||||||||||||||||||
Other expense reimbursements | 460 | — | 13 | — | — | — | ||||||||||||||||||
Ongoing fees: | ||||||||||||||||||||||||
Asset management fees(1) | 1,060 | 848 | 72 | 72 | — | — | ||||||||||||||||||
Property management and leasing fees | 918 | 918 | 15 | 15 | — | — | ||||||||||||||||||
Total related party operations-related fees and reimbursements | $ | 29,728 | $ | 1,766 | $ | 1,443 | $ | 87 | $ | — | $ | 37 |
(1) | Effective July 1, 2012, the Company issued (subject to approval by the board of directors) to the Advisor restricted performance-based Class B units for asset management services, which were forfeited immediately if certain conditions occur. |
Number of Common Shares | Weighted-Average Issue Price | |||||||
Unvested, January 1, 2011 | — | — | $ | — | ||||
Granted | 6,000 | 0.01 | 10.00 | |||||
Unvested, December 31, 2011 | 6,000 | 10.00 | ||||||
Granted | 15,000 | 9.40 | ||||||
Vested | (600 | ) | 10.00 | |||||
Forfeitures | (3,000 | ) | 10.00 | |||||
Unvested, December 31, 2012 | 17,400 | $ | 9.48 |
Year Ended December 31, | |||||||
2012 | 2011 | ||||||
Shares issued in lieu of cash | 3,639 | 3,750 | |||||
Value of shares issued in lieu of cash (in thousands) | $ | 33 | $ | 34 |
Years Ended December 31, | Period from October 15, 2010 (Date of Inception) to December 31, 2010 | ||||||||||
2012 | 2011 | ||||||||||
Net loss attributable to stockholders | $ | (32,121 | ) | $ | (2,124 | ) | $ | — | |||
Weighted-average common shares outstanding | 98,277,041 | 1,763,190 | 20,000 | ||||||||
Net loss per share attributable to stockholders, basic and diluted | $ | (0.33 | ) | $ | (1.20 | ) | NM |
December 31, | |||||||||
2012 | 2011 | 2010 | |||||||
Unvested restricted stock | 17,400 | 6,000 | — | ||||||
OP units | 773,656 | — | — | ||||||
Class B units | 145,022 | — | — | ||||||
Total common share equivalents | 936,078 | 6,000 | — |
Quarters Ended | ||||||||||||||||
(In thousands, except share and per share amounts) | March 31, 2012 | June 30, 2012 | September 30, 2012 | December 31, 2012 | ||||||||||||
Total revenues | $ | 3,296 | $ | 8,186 | $ | 14,064 | $ | 24,425 | ||||||||
Net loss attributable to stockholders | (4,398 | ) | (5,030 | ) | (11,887 | ) | (10,806 | ) | ||||||||
Weighted-average shares outstanding | 17,299,553 | 63,852,013 | 134,186,453 | 176,337,952 | ||||||||||||
Basic and diluted net loss per share attributable to stockholders | $ | (0.25 | ) | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.06 | ) |
Quarters Ended | ||||||||||||||||
(In thousands, except share and per share amounts) | March 31, 2011 | June 30, 2011 | September 30, 2011 | December 31, 2011 | ||||||||||||
Total revenues | $ | — | $ | — | $ | 8 | $ | 732 | ||||||||
Net loss attributable to stockholders | (16 | ) | (82 | ) | (496 | ) | (1,530 | ) | ||||||||
Weighted-average shares outstanding | 20,000 | 20,000 | 685,340 | 6,270,579 | ||||||||||||
Basic and diluted net loss per share attributable to stockholders | $ | (0.80 | ) | $ | (4.10 | ) | $ | (0.72 | ) | $ | (0.24 | ) |
No. of Buildings | Square Feet | Base Purchase Price (1) | ||||||
Total Portfolio – December 31, 2012 | 507 | 13,009,361 | $ | 1,529,811 | ||||
Acquisitions | 26 | 808,268 | 151,232 | |||||
Total portfolio – February 28, 2013 | 533 | 13,817,629 | $ | 1,681,043 |
(1) | Contract purchase price, excluding acquisition and transaction related costs. |
(In thousands) | ARCT III Historical (1) | ARCP Historical (2) | Pro Forma Future Acquisition Adjustments (3) | Pro Forma | Pro Forma Merger Adjustments (4) | ARCP Pro Forma | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Real estate investments, at cost: | ||||||||||||||||||||||||
Land | $ | 215,196 | $ | 34,345 | $ | 64,203 | 313,744 | $ | — | 313,744 | ||||||||||||||
Buildings, fixtures and improvements | 1,130,796 | 205,930 | 324,416 | 1,661,142 | — | 1,661,142 | ||||||||||||||||||
Acquired intangible lease assets | 183,819 | 28,404 | 52,081 | 264,304 | — | 264,304 | ||||||||||||||||||
Total real estate investments, at cost | 1,529,811 | 268,679 | 440,700 | 2,239,190 | — | 2,239,190 | ||||||||||||||||||
Less: accumulated depreciation and amortization | (31,877 | ) | (24,233 | ) | — | (56,110 | ) | — | (56,110 | ) | ||||||||||||||
Total real estate investments, net | 1,497,934 | 244,446 | 440,700 | 2,183,080 | — | 2,183,080 | ||||||||||||||||||
Cash and cash equivalents | 154,125 | 2,748 | (115,700 | ) | 41,173 | (1,335 | ) | (6) | 39,838 | |||||||||||||||
Investment securities, at fair value | 41,654 | — | — | 41,654 | — | 41,654 | ||||||||||||||||||
Restricted cash | 1,108 | — | — | 1,108 | — | 1,108 | ||||||||||||||||||
Prepaid expenses and other assets | 4,197 | 3,219 | — | 7,416 | 2,085 | (6) | 9,501 | |||||||||||||||||
Deferred costs, net | 10,365 | 4,991 | — | 15,356 | — | 15,356 | ||||||||||||||||||
Assets held for sale | — | 665 | — | 665 | — | 665 | ||||||||||||||||||
Total assets | $ | 1,709,383 | $ | 256,069 | $ | 325,000 | $ | 2,290,452 | $ | 750 | $ | 2,291,202 | ||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||
Mortgage notes payable | $ | 229,360 | $ | 35,758 | $ | — | $ | 265,118 | $ | — | $ | 265,118 | ||||||||||||
Derivatives, at fair value | 3,830 | — | — | 3,830 | — | 3,830 | ||||||||||||||||||
Senior secured revolving credit facility | — | 124,604 | — | 124,604 | (124,604 | ) | (7) | — | ||||||||||||||||
Unsecured credit facility | — | — | 325,000 | (5) | 325,000 | 475,312 | (8) | 800,312 | ||||||||||||||||
Accounts payable and accrued expenses | 5,677 | 3,782 | — | 9,459 | — | 9,459 | ||||||||||||||||||
Deferred rent | 3,573 | 763 | — | 4,336 | — | 4,336 | ||||||||||||||||||
Distributions payable | 9,946 | — | — | 9,946 | — | 9,946 | ||||||||||||||||||
Total liabilities | 252,386 | 164,907 | 325,000 | 742,293 | 350,708 | 1,093,001 | ||||||||||||||||||
— | — | — | ||||||||||||||||||||||
Series A convertible preferred stock | — | 5 | — | 5 | — | 5 | ||||||||||||||||||
Series B convertible preferred stock | — | 3 | — | 3 | — | 3 | ||||||||||||||||||
Convertible equity units | — | — | — | — | — | — | ||||||||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||||||||||||||
Common stock | 1,769 | 112 | — | 1,881 | (359 | ) | (9) | 1,522 | ||||||||||||||||
Additional paid-in capital | 1,552,263 | 101,548 | — | 1,653,811 | (448,904 | ) | (10) | 1,204,907 | ||||||||||||||||
Accumulated other comprehensive loss | (3,923 | ) | (11 | ) | — | (3,934 | ) | — | (3,934 | ) | ||||||||||||||
Accumulated deficit | (100,367 | ) | (19,705 | ) | — | (120,072 | ) | — | (120,072 | ) | ||||||||||||||
Total stockholders equity | 1,449,742 | 81,952 | — | 1,531,694 | (449,263 | ) | 1,082,431 | |||||||||||||||||
Non-controlling interests | 7,255 | 9,210 | — | 16,465 | 99,305 | (11) | 115,770 | |||||||||||||||||
Total equity | 1,456,997 | 91,162 | — | 1,548,159 | (349,958 | ) | 1,198,201 | |||||||||||||||||
Total liabilities and equity | $ | 1,709,383 | $ | 256,069 | $ | 325,000 | $ | 2,290,452 | $ | 750 | $ | 2,291,202 |
(1) | Reflects the historical Balance Sheet of ARCT III for the period indicated. | |||
(2) | Reflects the historical Balance Sheet of ARCP for the period indicated. | |||
(3) | Adjustments and pro forma balances represent amounts for properties probable to be acquired by ARCP and ARCT III as if they had been acquired as of the beginning of the period with related financing thereon. All properties probable to be acquired are net leased properties whereby the tenant is responsible for all operating expenses of the property. Allocations of the purchase price of the property between asset categories is based on allocations of similar types of assets acquired previously by the companies. | |||
(4) | Adjustments and pro forma balances based on the offering of 0.95 shares of the Company’s common stock for every share of ARCT III’s common stock in addition to other arrangements made with the Company’s advisor in conjunction with the Merger. | |||
(5) | Property acquisitions will be partially financed with proceeds from the Company’s New Credit Facility. The Company has obtained a New Credit Facility that permits borrowing of up to $1.0 billion for the funding of such purchases. | |||
(6) | In conjunction with the Merger and Internalization of certain functions performed for ARCT III by its advisor prior to the Merger, the Company agreed to acquire certain corporate furniture, fixtures, equipment and other assets for $2.0 million. An additional $3.8 million will be paid for transaction and offering related costs in conjunction with the Merger. In addition in conjunction with the Merger, the Sponsor indirectly contributed $0.8 million to the ARCT III OP in exchange for ARCP OP units which represented approximately 56,700 ARCP OP Units after the Merger. | |||
(7) | Adjustment represents repayment of ARCP's existing secured line of credit with borrowings on the New Credit Facility obtained prior to the Merger. | |||
(8) | Adjustment represents repayment of ARCP's existing secured line of credit with borrowings on the New Credit Facility obtained prior to the Merger and borrowings to fund the purchase of 29.2 million shares of ARCT III common stock from its stockholders. The Merger Agreement provided for the purchase of up to 30% of the outstanding shares of ARCT III’s common stock at $12.00 per share. The costs of redeeming these shares was $350.7 million. The Company has obtained a New Credit Facility that permits borrowing of up to $1.0 billion for the funding of such share re-purchases and other corporate debt. | |||
(9) | Represents the exchange of 148.4 million shares of ARCT III common stock representing all remaining shares as of December 31, 2012 after the effect of the shares purchased as described in note (8) above, at an exchange rate of 0.95, equal to 141.0 million shares of ARCP common stock. | |||
(10) | Calculated as follows (in thousands): | |||
Purchase of 29.2 million shares of ARCT III at $12.00 per share | $ | 350,708 | ||
Issuance of ARCP OP Units to sponsor of ARCT III for incentive fees (a) | 98,360 | |||
Issuance of ARCP OP Units to advisor of ARCT III for asset management fees (a) | 195 | |||
Less: par value of exchanged shares of ARCT III common stock net of ARCP shares issued | (359 | ) | ||
$ | 448,904 | |||
(a) See note (11) regarding the issuance of ARCP OP units to the sponsor of ARCT III. Amount represents the amount that will be recorded as an offset to income for this fee. | ||||
(11) | The sponsor of ARCT III, through its sole ownership of the Special Limited Partner, is entitled to a subordinated incentive distribution from the ARCT III OP based on the achievement of certain total return to the ARCT III stockholders. Upon the Merger the distribution was calculated to be $98.4 million, which, in accordance with the Contribution and Exchange Agreement, was paid in 7.3 million ARCP OP Units (on a converted basis). In addition, as of December 31, 2012, ARCT III issued ARCT III OP Units to the ARCT III advisor for asset management fees, which contained certain performance conditions that were required to be met before vesting. The performance conditions with respect to such ARCT III OP Units were satisfied in conjunction with the Merger and these ARCT III OP Units converted to 137,771 ARCP OP Units on the Merger date. Amount excludes an additional $8.0 million paid in ARCT III OP units that were converted to 573,419 ARCP OP Units (on a converted basis) which were issued to the ARCT III advisor for asset management fees subsequent to December 31, 2012 that also vested on the Merger date. |
(In thousands) | ARCT III Historical(1) | ARCP Historical (2) | Pro Forma Acquisition Adjustments (3) | Pro Forma Future Acquisition Adjustments (4) | Pro Forma | Pro Forma Merger Adjustments (5) | ARCP Pro Forma | |||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Rental income | $ | 48,457 | $ | 16,334 | $ | 79,458 | (6) | $ | 34,750 | (6) | $ | 178,999 | $ | — | $ | 178,999 | ||||||||||||
Operating expense reimbursements | 1,514 | 488 | — | — | 2,002 | 2,002 | ||||||||||||||||||||||
Total revenues | 49,971 | 16,822 | 79,458 | 34,750 | 181,001 | — | 181,001 | |||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Acquisition related | 36,781 | 3,988 | — | — | 40,769 | (27,138 | ) | (10) | 13,631 | |||||||||||||||||||
Merger and transaction related | 1,992 | 2,603 | — | — | 4,595 | (4,595 | ) | (11) | — | |||||||||||||||||||
Property operating | 2,386 | 1,098 | — | — | 3,484 | — | 3,484 | |||||||||||||||||||||
Operating fees to affiliates | 212 | — | — | 1,653 | 1,865 | 9,331 | (12) | 11,196 | ||||||||||||||||||||
General and administrative | 2,831 | 2,261 | — | — | 5,092 | — | (13) | 5,092 | ||||||||||||||||||||
Depreciation and amortization | 31,378 | 9,322 | 56,160 | (7) | 14,385 | (7) | 111,245 | — | 111,245 | |||||||||||||||||||
Total operating expenses | 75,580 | 19,272 | 56,160 | 16,038 | 167,050 | (22,402 | ) | 144,648 | ||||||||||||||||||||
Operating income (loss) | (25,609 | ) | (2,450 | ) | 23,298 | 18,712 | 13,951 | 22,402 | 36,353 | |||||||||||||||||||
Other income (expenses): | ||||||||||||||||||||||||||||
Interest expense | (7,500 | ) | (4,356 | ) | (2,491 | ) | (8) | (8,450 | ) | (8) | (22,797 | ) | (9,479 | ) | (14) | (32,276 | ) | |||||||||||
Other income, net | 958 | 2 | — | — | 960 | — | 960 | |||||||||||||||||||||
Total other expenses | (6,542 | ) | (4,354 | ) | (2,491 | ) | (8,450 | ) | (21,837 | ) | (9,479 | ) | (31,316 | ) | ||||||||||||||
Income (loss) from continuing operations | (32,151 | ) | (6,804 | ) | 20,807 | 10,262 | (7,886 | ) | 12,923 | 5,037 | ||||||||||||||||||
Net income (loss) from continuing operations attributable to non-controlling interests | 30 | 225 | (2,010 | ) | (9) | (992 | ) | (9) | (2,747 | ) | 2,260 | (9) | (487 | ) | ||||||||||||||
Net income (loss) from continuing operations attributable to stockholders | (32,121 | ) | (6,579 | ) | 18,797 | 9,270 | (10,633 | ) | 15,183 | 4,550 | ||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||
Income (loss) from operations of held for sale properties | — | (145 | ) | — | — | (145 | ) | — | (145 | ) | ||||||||||||||||||
Loss on held for sale properties | — | (600 | ) | — | — | (600 | ) | — | (600 | ) | ||||||||||||||||||
Net loss from discontinued operations | — | (745 | ) | — | — | (745 | ) | — | (745 | ) | ||||||||||||||||||
— | — | |||||||||||||||||||||||||||
Net from discontinued operations attributable to non-controlling interests | — | 46 | — | — | 46 | — | 46 | |||||||||||||||||||||
Net from discontinued operations attributable to stockholders | — | (699 | ) | — | — | (699 | ) | — | (699 | ) | ||||||||||||||||||
Net income (loss) | (32,151 | ) | (7,549 | ) | 20,807 | 10,262 | (8,631 | ) | 12,923 | 4,292 | ||||||||||||||||||
Net income (loss) attributable to non-controlling interests | 30 | 271 | (2,010 | ) | (992 | ) | (2,701 | ) | 2,260 | (441 | ) | |||||||||||||||||
Net income (loss) attributable to stockholders | $ | (32,121 | ) | $ | (7,278 | ) | $ | 18,797 | $ | 9,270 | $ | (11,332 | ) | $ | 15,183 | $ | 3,851 | |||||||||||
Earnings per share: | ||||||||||||||||||||||||||||
Basic | $ | (0.33 | ) | $ | (0.84 | ) | $ | 0.03 | ||||||||||||||||||||
Fully Diluted | $ | (0.33 | ) | $ | (0.84 | ) | $ | 0.02 | ||||||||||||||||||||
Weighted average common shares: | ||||||||||||||||||||||||||||
Basic | 98,227,041 | 9,150,785 | 150,130,841 | |||||||||||||||||||||||||
Fully Diluted | 98,227,041 | 9,150,785 | 159,547,585 |
(1) | Reflects the historical Statement of Operations of ARCT III for the period indicated. Certain balances have been reclassified to confirm to current presentation. | |
(2) | Reflects the historical Statement of Operations of ARCP for the period indicated. | |
(3) | Adjustments reflect the annualization of certain income and expense items for property acquisitions made in 2011 and up to December 31, 2012 as if they were made at the beginning of each period. | |
(4) | Adjustments and pro forma balances reflect income and expenses related to properties intended to be acquired by ARCP and ARCT as if they had been acquired as of the beginning of the period with related financing thereon. All properties intended to be acquired are net leased properties whereby the tenant is responsible for all operating expenses of the property. | |
(5) | Adjustments and pro forma balances based on the offering of 0.95 shares of the Company's common stock for every share of ARCT III's common stock in addition to other arrangements made with the Company's advisor in conjunction with the Merger. | |
(6) | Rental income, operating expense reimbursements and property operating expense adjustments reflect income and expenses for properties as if all properties were acquired during the period by the Company and ARCT III were acquired at the beginning of the period. | |
(7) | Depreciation and amortization expense adjustment reflects the expense that would have been recorded if all properties acquired by the Company and ARCT III during each period had been acquired as of the beginning of each period. | |
(8) | Interest expense adjustment reflects the expense that would have been recognized had the properties acquired for which the funding was used by the Company and ARCT III during each period had been acquired as of the beginning of each period. Amounts were calculated based on ending period debt balances and average interest rates for lines of credit and mortgage loans. | |
(9) | Non-controlling interest adjustment reflects interests of operating partnership unit holders including those issued to the sponsor of ARCT III in conjunction with the Merger. | |
(10) | Acquisition related adjustment relates to contractual charges from the Manager and ARCT III's advisor for property acquisitions, which will no longer be charged in accordance with the revised management agreement. | |
(11) | Adjustment related to fees incurred for the Merger which will not be incurred in future operations. Adjustment does not include approximately $98.4 million of incentive distributions to be paid indirectly to ARCT III's sponsor in conjunction with the Merger, which are to be paid in ARCP OP Units, $0.2 million of asset management fees paid to the ARCT III advisor that will be paid in conjunction with the Merger as certain performance requirements had been met on that date, $8.0 million of asset management fees which were issued to the ARCT III advisor in the form of ARCP OP Units subsequent to December 31, 2012 which were also paid on the Merger date, and $23.0 million of estimated Merger related costs mainly related to investment banker, legal, proxy solicitation and accounting fees. | |
(12) | Fees to affiliate adjustment related to contractual asset management fee of 0.50% of real estate held up to total real estate held of $3.0 billion when the fee decreases to 0.40% of real estate held of more than $3.0 billion. | |
(13) | General and administrative expenses exclude certain costs such as salary and benefits for certain property acquisition, accounting and property management personnel which will be borne by ARCP after the Merger as well as certain additional costs that may be incurred to manage a larger public company such as legal, accounting, insurance and other costs. Total general and administrative expenses are expected to increase approximately $1.0 million annually. | |
(14) | Interest expense adjustment reflects interest on an additional $350.7 million borrowing on ARCP's New Credit Facility at the expected interest rate of 2.60% reflecting the repurchase of 29.2 million shares of ARCT III's common stock at $12.00 per share as provided for in the Merger Agreement. The Company has obtained a facility that permits borrowing of up to $1.0 billion for the funding of such share purchases and other corporate debts. This amount is partially offset by a reduction of interest expense for the refinancing of $124.6 million of secured revolving debt at an average interest rate of 3.11% with funds from the New Credit Facility. |
Real Estate Investments (Schedule of Assets and Liabilities Assumed) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |
---|---|---|
Dec. 31, 2012
property
|
Dec. 31, 2011
property
|
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Land | $ 208,061 | $ 7,135 |
Buildings fixtures and improvements | 1,076,211 | 54,585 |
Total tangible assets | 1,284,272 | 61,720 |
Cash paid for acquired real estate investments | 1,457,358 | 72,453 |
Number of properties purchased, in properties | 466 | 41 |
In-Place Leases [Member]
|
||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
In-place leases | $ 173,086 | $ 10,733 |
Derivatives and Hedging Activities Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) (Cash Flow Hedging [Member], Designated as Hedging Instrument [Member], USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
Swap [Member]
Derivatives at Fair Value [Member]
|
Dec. 31, 2011
Swap [Member]
Derivatives at Fair Value [Member]
|
Dec. 31, 2012
Interest Expense [Member]
Interest Rate Swap [Member]
|
|
Derivatives, Fair Value [Line Items] | |||
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer | 12 months | ||
Derivative at fair value | $ (3,830) | $ (98) |
Fair Value of Financial Instruments (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Investment Securities [Member] | Fair Value [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities | $ 41,654 | |
Investment Securities [Member] | Quoted Prices in Active Markets Level 1 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities | 41,654 | |
Investment Securities [Member] | Significant Other Observable Inputs Level 2 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities | 0 | |
Investment Securities [Member] | Significant Unobservable Inputs Level 3 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities | 0 | |
Interest Rate Swap [Member] | Fair Value [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | (3,830) | (98) |
Interest Rate Swap [Member] | Quoted Prices in Active Markets Level 1 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | 0 | 0 |
Interest Rate Swap [Member] | Significant Other Observable Inputs Level 2 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | (3,830) | (98) |
Interest Rate Swap [Member] | Significant Unobservable Inputs Level 3 [Member]
|
||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | $ 0 | $ 0 |
Common Stock (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
1 Months Ended | 12 Months Ended | 15 Months Ended | 27 Months Ended | |
---|---|---|---|---|---|
Oct. 31, 2011
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2012
|
Jul. 31, 2011
|
|
Stockholders' Equity Note [Abstract] | |||||
Common stock, shares outstanding | 176,852,072 | 10,356,402 | 176,852,072 | ||
Proceeds from Issuance of stock | $ 102.7 | $ 1,800.0 | |||
Annualized dividend, common Stock, percentage | 6.60% | ||||
Shares issued or available for issuance under initial public offering, price per share | $ 10.00 | ||||
Dividends declared per day, in dollars per share | $ 0.001803279 |
Mortgage Notes Payable (Schedule of Mortgage Notes Payable) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2012
property
|
Dec. 31, 2011
property
|
||||
Debt Instrument [Line Items] | |||||
Outstanding Loan Amount | $ 229,360 | $ 5,060 | |||
Mortgages [Member]
|
|||||
Debt Instrument [Line Items] | |||||
Encumbered Properties, in properties | 135 | 1 | |||
Outstanding Loan Amount | $ 229,360 | $ 5,060 | |||
Debt, Weighted Average Interest Rate | 4.24% | 3.75% | [1] | ||
Debt, Weighted Average Maturity Term | 5 years 9 months 27 days | 4 years 10 months 2 days | |||
Effective Interest Rate | 3.75% | ||||
Minimum [Member] | Mortgages [Member]
|
|||||
Debt Instrument [Line Items] | |||||
Effective Interest Rate | 3.32% | ||||
Maximum [Member] | Mortgages [Member]
|
|||||
Debt Instrument [Line Items] | |||||
Effective Interest Rate | 6.13% | ||||
|
Net Loss Per Share (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the basic and diluted net loss per share computation for the years ended December 31, 2012 and 2011 and the period from October 15, 2010 (date of inception) through December 31, 2010 (in thousands, except share and per share data):
|
Related Party Transactions and Arrangements (Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services) (Details) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Payable [Member] | Acquisition and Related Expenses [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | $ 0 | $ 37,000 |
Payable [Member] | Financing Coordination Fees [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 0 |
Payable [Member] | Other Expense Reimbursements [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 0 |
Payable [Member] | Asset Management Fees [Member] | Ongoing Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 0 |
Payable [Member] | Property Management and Leasing Fees [Member] | Ongoing Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 0 |
Payable [Member] | Operation Fees and Reimbursements [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 37,000 |
Incurred [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 29,728,000 | 1,443,000 |
Incurred [Member] | Acquisition and Related Expenses [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 24,785,000 | 1,292,000 |
Incurred [Member] | Financing Coordination Fees [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 2,505,000 | 51,000 |
Incurred [Member] | Other Expense Reimbursements [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 460,000 | 13,000 |
Incurred [Member] | Asset Management Fees [Member] | Ongoing Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 1,060,000 | 72,000 |
Incurred [Member] | Property Management and Leasing Fees [Member] | Ongoing Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 918,000 | 15,000 |
Forgiven [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 1,766,000 | 87,000 |
Forgiven [Member] | Acquisition and Related Expenses [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 0 |
Forgiven [Member] | Financing Coordination Fees [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 0 |
Forgiven [Member] | Other Expense Reimbursements [Member] | One-time Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 0 |
Forgiven [Member] | Asset Management Fees [Member] | Ongoing Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 848,000 | 72,000 |
Forgiven [Member] | Property Management and Leasing Fees [Member] | Ongoing Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 918,000 | 15,000 |
Advisor and Dealer Manager [Member] | American Realty Capital Healthcare Advisors, LLC and Realty Capital Securities, LLC [Member] | Fees and Expense Reimbursement, Stock Offering [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 16,081,000 | 4,383,000 |
Advisor and Dealer Manager [Member] | American Realty Capital Healthcare Advisors, LLC and Realty Capital Securities, LLC [Member] | Payable [Member] | Fees and Expense Reimbursement, Stock Offering [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 0 | 220,000 |
Dealer Manager [Member] | Realty Capital Securities, LLC [Member] | Sales Commissions and Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | 160,600,000 | 9,833,000 |
Dealer Manager [Member] | Realty Capital Securities, LLC [Member] | Payable [Member] | Sales Commissions and Fees [Member]
|
||
Related Party Transaction [Line Items] | ||
Fees paid to related parties | $ 0 | $ 92,000 |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
|
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Treasury Stock by Class [Table Text Block] | The following table reflects the number of shares repurchased for the years ended December 31, 2012 and 2011. There were no repurchases requested or fulfilled during the period from October 15, 2010 (date of inception) to December 31, 2010.
|
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Schedule of Intangible Assets and Goodwill [Table Text Block] | Intangible assets and acquired lease liabilities, as applicable, consisted of following: |
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The following table provides the weighted-average amortization and accretion periods as of December 31, 2012, for intangible assets and liabilities, as applicable, and the projected amortization expense for the next five years:
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Fair Value of Financial Instruments (Fair Value, by Balance Sheet Grouping) (Details) (Fair Value, Inputs, Level 3 [Member], Mortgages [Member], USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Carrying Amount [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes fair value | $ 229,360 | $ 5,060 |
Fair Value [Member]
|
||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes fair value | $ 235,263 | $ 5,060 |
Real Estate Investments (Schedule of Future Minimum Rental Payments for Operating Leases) (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
---|---|
Real Estate [Abstract] | |
2013 | $ 117,087 |
2014 | 117,632 |
2015 | 118,139 |
2016 | 118,771 |
2017 | 119,650 |
Thereafter | 905,526 |
Total | $ 1,496,805 |
Merger Agreement Merger Agreement (Details) (USD $)
|
12 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 14, 2013
Unsecured Debt [Member]
ARCP Merger [Member]
|
Feb. 14, 2013
Term Loan [Member]
ARCP Merger [Member]
|
Feb. 14, 2013
Revolving Credit Facility [Member]
ARCP Merger [Member]
|
Dec. 31, 2012
Option Two [Member]
ARCP Merger [Member]
|
Dec. 31, 2012
Common Stock [Member]
Option One [Member]
ARCP Merger [Member]
|
Feb. 28, 2013
Common Stock [Member]
Option One [Member]
ARCP Merger [Member]
|
Dec. 31, 2012
Cash [Member]
Option Two [Member]
ARCP Merger [Member]
|
Feb. 28, 2013
Cash [Member]
Option Two [Member]
ARCP Merger [Member]
|
Dec. 31, 2012
ARCP [Member]
ARCP Merger [Member]
|
Feb. 28, 2013
Entity Wholly Owned by Sponsor [Member]
American Realty Capital III Special Limited Partnership, LLC [Member]
ARCP Merger [Member]
|
Feb. 28, 2013
External Credit Rating, Non Investment Grade [Member]
Maximum [Member]
|
Feb. 28, 2013
External Credit Rating, Non Investment Grade [Member]
Minimum [Member]
|
Feb. 28, 2013
External Credit Rating, Investment Grade [Member]
Maximum [Member]
|
Feb. 28, 2013
External Credit Rating, Investment Grade [Member]
Minimum [Member]
|
Feb. 28, 2013
Pre-Conversion [Member]
Common Stock [Member]
Entity Wholly Owned by Sponsor [Member]
American Realty Capital III Special Limited Partnership, LLC [Member]
ARCP Merger [Member]
|
Feb. 28, 2013
Post-Conversion [Member]
Common Stock [Member]
Entity Wholly Owned by Sponsor [Member]
American Realty Capital III Special Limited Partnership, LLC [Member]
ARCP Merger [Member]
|
Feb. 28, 2013
Pre-tax Non-compounded Return on Capital Contribution [Member]
Annual Targeted Investor Return [Member]
Advisor [Member]
American Realty Capital Advisors III LLC [Member]
|
Dec. 31, 2012
Pre-tax Non-compounded Return on Capital Contribution [Member]
Annual Targeted Investor Return [Member]
Advisor [Member]
American Realty Capital Advisors III LLC [Member]
|
|
Business Acquisition [Line Items] | ||||||||||||||||||
Convertible stock issued during period, shares | 0.95 | 0.95 | ||||||||||||||||
Related Party Transaction, Cumulative Capital Investment Return, as a Percentage of Benchmark | 6.00% | 6.00% | ||||||||||||||||
Related Party Transaction, Cumulative Capital Investment Return | $ 557,300,000 | |||||||||||||||||
Contributions From Non-Controlling Interest Holders | 800,000 | |||||||||||||||||
Convertible stock issued during period, value | $ 12.00 | |||||||||||||||||
Percentage of Considerating Paid in Stock | 30.00% | |||||||||||||||||
Common stock, shares outstanding | 148,200,000 | 29,200,000 | ||||||||||||||||
percentage of shares outstanding | 16.50% | |||||||||||||||||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest, Issuance of Units [Line Items] | 7,600,000 | 7,300,000 | ||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | 875,000,000 | 525,000,000 | 350,000,000 | |||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000,000 | |||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 22000.00% | 16000.00% | 20000.00% | 11500.00% |
Derivatives and Hedging Activities (Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance) (Details) (Cash Flow Hedging [Member], Interest Rate Swap [Member], USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Amount of loss recognized in accumulated other comprehensive income from interest rate derivatives (effective portion) | $ (4,672) | $ (111) | ||||
Amount of gain (loss) recognized in income on derivative instruments (ineffective portion and amount excluded from effectiveness testing) | (1) | [1] | 0 | [1] | ||
Interest Expense [Member]
|
||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income into income as interest expense (effective portion) | $ (940) | $ (13) | ||||
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Subsequent Events (Details) (USD $)
In Millions, unless otherwise specified |
2 Months Ended |
---|---|
Feb. 28, 2013
|
|
Subsequent Event [Line Items] | |
Proceeds from Sale, Maturity and Collection of Investments | $ 44.2 |
Mortgage Notes Payable (Schedule Of Aggregate Future Principal Payments On Mortgage Notes Payable) (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Debt Instrument [Line Items] | ||
Total | $ 229,360 | $ 5,060 |
Mortgages [Member]
|
||
Debt Instrument [Line Items] | ||
2013 | 0 | |
2014 | 0 | |
2015 | 0 | |
2016 | 5,060 | |
2017 | 155,000 | |
Thereafter | 69,300 | |
Total | $ 229,360 | $ 5,060 |
Summary of Significant Accounting Policies
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Accounting and Presentation The accompanying consolidated financial statements of the Company are prepared on the accrual basis of accounting in accordance with GAAP. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considered factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity for which the Company is the primary beneficiary. Reclassification Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current year presentation. Development Stage Company On August 10, 2011, the Company raised proceeds sufficient to break escrow in connection with its IPO. The Company received and accepted aggregate subscriptions in excess of the minimum $2.0 million and issued shares of common stock to its initial investors who were admitted as stockholders. The Company purchased its first property and commenced active operations on September 27, 2011, and as of such date was no longer considered to be a development stage company. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, real estate taxes and derivative financial instruments and hedging activities, as applicable. Real Estate Investments Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. The Company is required to make subjective assessments as to the useful lives of the Company's properties for purposes of determining the amount of depreciation to record on an annual basis with respect to the Company's investments in real estate. These assessments have a direct impact on net income because if the Company were to shorten the expected useful lives of the Company's investments in real estate, the Company would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis. The Company is required to present the operations related to properties that have been sold or properties that are intended to be sold as discontinued operations in the statement of operations for all periods presented. Properties that are intended to be sold are to be designated as "held for sale" on the balance sheet. Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property's use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. Purchase Price Allocation The Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired based on their respective fair values. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Amounts allocated to land, land improvements, buildings and fixtures are based on cost segregation studies performed by independent third parties or on the Company's analysis of comparable properties in the Company's portfolio. Identifiable intangible assets and liabilities, as applicable, include amounts allocated to acquire leases for above- and below-market lease rates, the value of in-place leases, and the value of customer relationships, as applicable. The aggregate value of intangible assets and liabilities, as applicable, related to in-place leases is primarily the difference between the property valued with existing in-place leases adjusted to market rental rates and the property valued as if vacant. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period, which typically ranges from six to 12 months. Estimates of costs to execute similar leases including leasing commissions, legal and other related expenses are also utilized. Above-market and below-market in-place lease values for owned properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between the contractual amounts to be paid pursuant to the in-place leases and management's estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market lease intangibles are amortized as a decrease to rental income over the remaining term of the lease. The capitalized below-market lease values are amortized as an increase to rental income over the remaining term and any fixed rate renewal periods provided within the respective leases. In determining the amortization period for below-market lease intangibles, the Company initially will consider, and periodically evaluate on a quarterly basis, the likelihood that a lessee will execute the renewal option. The likelihood that a lessee will execute the renewal option is determined by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. The aggregate value of intangibles assets related to customer relationships, as applicable, is measured based on the Company's evaluation of the specific characteristics of each tenant's lease and the Company's overall relationship with the tenant. Characteristics considered in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant's credit quality and expectations of lease renewals, among other factors. The value of in-place leases is amortized to expense over the initial term of the respective leases, which range primarily from 6 to 25 years. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. In making estimates of fair values for purposes of allocating purchase price, the Company utilized a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considered information obtained about each property as a result of the Company's pre-acquisition due diligence, as well as subsequent marketing and leasing activities, in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Intangible assets and acquired lease liabilities, as applicable, consisted of following:
The following table provides the weighted-average amortization and accretion periods as of December 31, 2012, for intangible assets and liabilities, as applicable, and the projected amortization expense for the next five years:
Cash and Cash Equivalents Cash and cash equivalents include cash in bank accounts as well as investments in highly-liquid money market funds with original maturities of three months or less. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Company ("FDIC") up to an insurance limit. At December 31, 2012, the Company had deposits of $154.1 million of which $152.3 million were in excess of the amount insured by the FDIC. Although the Company bears risk to amounts in excess of those insured by the FDIC, it does not anticipate any losses as a result. Restricted Cash Restricted cash primarily consists of reserves related to lease expirations as well as maintenance, structural, and debt service reserves. Deferred Costs, Net Deferred costs, net, consists of deferred financing costs and deferred leasing costs. Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. Deferred leasing costs, consisting primarily of lease commissions and payments made to assume existing leases, are deferred and amortized over the term of the lease. Share Repurchase Program The Company’s board of directors adopted a Share Repurchase Program (“SRP”) that enabled stockholders to sell their shares to the Company in limited circumstances. The SRP permitted investors to sell their shares back to the Company after they had held them for at least one year, subject to the significant conditions and limitations described below. Prior to the time that the Company’s shares were listed on a national securities exchange and until the Company established an estimated value for the shares, the purchase price per share was dependent on the length of time investors held such shares as follows: after one year from the purchase date — the lower of $9.25 or 92.5% of the amount they actually paid for each share; after two years from the purchase date —the lower of $9.50 or 95.0% of the amount they actually paid for each share; after three years from the purchase date — the lower of $9.75 or 97.5% of the amount they actually paid for each share; and after four years from the purchase date — the lower of $10.00 or 100% of the amount they actually paid for each share (in each case, as adjusted for any stock distributions, combinations, splits and recapitalizations). The Company expected to begin establishing an estimated value for its shares based on the value of its real estate and real estate-related investments beginning 18 months after the close of the IPO. Beginning 18 months after the completion of the IPO (excluding shares of common stock issued under the DRIP), the Board of Directors would determine the value of the properties and the other assets based on such information as the Board determined appropriate, which was expected to include independent valuations of properties or of the Company as a whole, prepared by third-party service providers. The Company was only authorized to repurchase shares pursuant to the SRP up to the value of shares issued under the DRIP and limit the amount spent to repurchase shares in a given quarter to the value of the shares issued under the DRIP in that same quarter. In addition, the board of directors may reject a request for redemption, at any time. Due to these limitations, the Company could not guarantee that it would have been able to accommodate all repurchase requests. Repurchases under the SRP by the Company were limited in any calendar year to 5% of the weighted average number of shares outstanding during the prior year (or 1.25% per calendar quarter). When a stockholder requested repurchases and the repurchases were approved by the Company's board of directors, it reclassified such obligation from equity to a liability based on the settlement value of the obligation. The following table reflects the number of shares repurchased for the years ended December 31, 2012 and 2011. There were no repurchases requested or fulfilled during the period from October 15, 2010 (date of inception) to December 31, 2010.
Distribution Reinvestment Plan Pursuant to the DRIP, stockholders may elect to reinvest distributions by purchasing shares of common stock in lieu of receiving cash. No dealer manager fees or selling commissions are paid with respect to shares purchased pursuant to the DRIP. Participants purchasing shares pursuant to the DRIP had the same rights and were treated in the same manner as if such shares were issued pursuant to the IPO. The board of directors may designate that certain cash or other distributions be excluded from the DRIP. The Company had the right to amend any aspect of the DRIP or terminate the DRIP with ten days' notice to participants. Shares issued under the DRIP are recorded within stockholders' equity in the accompanying consolidated balance sheets in the periods distributions are declared. During the years ended December 31, 2012 and 2011, the Company issued 2.8 million and 28,599 shares of common stock, respectively, with a value of $26.8 million and $0.3 million, respectively, in each case with a par value per share of $0.01, pursuant to the DRIP. Derivative Instruments The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and/or costs associated with the Company's operating and financial structure as well as to hedge specific anticipated transactions. The Company recorded all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elected not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statements of operations. If the derivative is designated and qualifies for hedge accounting treatment the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivative's change in fair value will be immediately recognized in earnings. Revenue Recognition The Company's revenues, which are derived primarily from rental income, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. Since many of the Company's leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable, and include in revenues, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. When the Company acquires a property, the term of existing leases is considered to commence as of the acquisition date for the purposes of this calculation. The Company continually reviews receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenant's payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. In the event that the collectability of a receivable is in doubt, the Company records an increase in the Company's allowance for uncollectible accounts or record a direct write-off of the receivable in the Company's consolidated statement of operations. Cost recoveries from tenants are included in operating expense reimbursement in the period the related costs are incurred, as applicable. Offering and Related Costs Offering and related costs include all expenses incurred in connection with the Company's IPO. Offering costs (other than selling commissions and the dealer manager fee) include costs that may be paid by the Advisor, the Dealer Manager or their affiliates on behalf of the Company. These costs include but are not limited to (i) legal, accounting, printing, mailing, and filing fees; (ii) escrow related fees; (iii) reimbursement of the Dealer Manager for amounts it may pay to reimburse the bona fide diligence expenses of broker-dealers; and (iv) reimbursement to the Advisor for the salaries of its employees and other costs in connection with preparing supplemental sales materials and related offering activities. The Company is obligated to reimburse the Advisor or its affiliates, as applicable, for organization and offering costs paid by them on behalf of the Company, provided that the Advisor is obligated to reimburse the Company to the extent organization and offering costs (excluding selling commissions and the dealer manager fee) incurred by the Company in the IPO exceed 1.5% of gross offering proceeds. As a result, these costs were only a liability of the Company to the extent selling commissions, the dealer manager fees and other organization and offering costs did not exceed 11.5% of the gross proceeds determined at the end of the IPO (See Note 12 — Related Party Transactions and Arrangements). Share-Based Compensation The Company had a stock-based incentive award plan for its directors, which is accounted for under the guidance for share based payments. The expense for such awards is included in general and administrative expenses and is recognized over the vesting period or when the requirements for exercise of the award have been met (See Note 14 — Share-Based Compensation). Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with the tax year ended December 31, 2011. If the Company qualifies for taxation as a REIT, it generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, and so long as it distributes at least 90% of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. Per Share Data Income (loss) per basic share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted income (loss) per share of common stock considers the effect of potentially dilutive instruments outstanding during such period. Reportable Segments The Company determined that it has one reportable segment, with activities related to investing in real estate. The Company's investments in real estate generate rental revenue and other income through the leasing of properties, which comprise 100% of total consolidated revenues. Management evaluates the operating performance of the Company's investments in real estate on an individual property level. Recent Accounting Pronouncements In May 2011, the Financial Accounting Standards Board (the "FASB") issued guidance that expands the existing disclosure requirements for fair value measurements, primarily for Level 3 measurements, which are measurements based on unobservable inputs such as the Company's own data. This guidance was largely consistent with current fair value measurement principles with few exceptions that did not result in a change in general practice. The guidance was applied prospectively and was effective for interim and annual reporting periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations as the guidance relates only to disclosure requirements. In June 2011, the FASB issued guidance requiring entities to present items of net income and other comprehensive income either in one continuous statement - referred to as the statement of comprehensive income - or in two separate, but consecutive, statements of net income and other comprehensive income. The new guidance did not change which components of comprehensive income are recognized in net income or other comprehensive income, or when an item of other comprehensive income must be reclassified to net income. In December 2011, the FASB deferred certain provisions of this guidance related to the presentation of certain reclassification adjustments out of accumulated other comprehensive income, by component, in both the statement and the statement where the reclassification is presented. This guidance was applied prospectively and was effective for interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations but changed the location of the presentation of other comprehensive income to more closely associate the disclosure with net income. In September 2011, the FASB issued guidance that allows entities to perform a qualitative analysis as the first step in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then a quantitative analysis for impairment is not required. The guidance was effective for interim and annual impairment tests for fiscal periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations. In December 2011, the FASB issued guidance which contains new disclosure requirements regarding the nature of and entity's rights of offset and related arrangements associated with its financial instruments and derivative instruments. The new disclosures are designed to make financial statements prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards and will give the financial statement users information about both gross and net exposures. The guidance is effective for interim and annual reporting periods beginning on or after January 1, 2013. The adoption of this guidance is not expected to have a material impact on the Company's financial position or results of operations. In July 2012, the FASB issued revised guidance intended to simplify how an entity tests indefinite-lived intangible assets for impairment. The amendments will allow an entity first to assess qualitative factors to determine whether it is necessary to perform a quantitative impairment test. An entity will no longer be required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative test unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The amendments are effective for annual and interim indefinite-lived intangible asset impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the Company's financial position or results of operations. |
Subsequent Events (Acquisition of property) (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
Total Portfolio, As of Document End Date [Member]
sqft
|
Feb. 28, 2013
Acquisitions During Subsequent Events Period [Member]
Subsequent Event [Member]
property
sqft
|
Feb. 28, 2013
Total Portfolio, End of Subsequent Events Period [Member]
Subsequent Event [Member]
sqft
property
|
Dec. 31, 2012
Total Portfolio, As of Document End Date [Member]
property
sqft
|
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Subsequent Event [Line Items] | ||||
Real Estate Investment, Aggregate Purchase Price | $ 1,529,811 | $ 151,232 | $ 1,681,043 | |
Properties in Portfolio [Roll Forward] | ||||
Number of Properties in Portfolio, beginning of period | 26 | 533 | 507 | |
Number of Properties in Portfolio, end of period | 26 | 533 | 507 | |
Square Footage of Portfolio [Roll Forward] | ||||
Area of properties, in square feet, end of period | 13,000,000 | 808,268 | 13,817,629 | 13,009,361 |