Segment Reporting

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting

Note 5 — Segment Reporting

The Company operates under two segments, REI and Cole Capital.

REI - Through its REI segment, the Company acquires, owns and operates primarily single-tenant, freestanding commercial real estate properties primarily subject to net leases with high credit quality tenants. The Company focuses on investing in properties that are net leased to credit tenants, which are generally large public companies with investment-grade ratings and other creditworthy tenants. The Company’s long-term business strategy is to continue to acquire a diverse portfolio consisting of approximately 70% long-term leases and 30% medium-term leases, with an average remaining primary lease term of approximately 10 to 12 years. The Company considers properties that are leased on a “medium-term” basis to mean properties originally leased long-term (10 years or longer) that currently have a primary remaining lease duration of generally three to eight years, on average. The Company seeks to acquire granular, self-originated single-tenant net lease assets, which may be purchased through sale-leaseback transactions, small portfolio acquisitions and in connection with build-to-suit opportunities, to the extent they are appropriate in terms of capitalization rate and scale. The Company expects this investment strategy to provide for stable income from credit tenants and for growth opportunities from re-leasing of current below market leases. As of June 30, 2014, the Company owned 3,966 properties comprising 106.8 million square feet of single and multi-tenant retail and commercial space located in 49 states, which include properties owned through consolidated joint ventures. As of June 30, 2014, the rentable space at these properties was 98.8% leased with a weighted average remaining lease term of 9.95 years. As of June 30, 2014, the Company also owned 25 commercial mortgage-backed securities (“CMBS”), 14 loans held for investment and, through the Unconsolidated Joint Ventures, had interests in six properties comprising 1.6 million rentable square feet of commercial and retail space.

Cole Capital - Cole Capital is contractually responsible for managing the Managed REITs’ affairs on a day-to-day basis, identifying and making acquisitions and investments on the Managed REITs’ behalf and recommending to each of the Managed REIT’s respective board of directors an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes shares of common stock for certain Managed REITs and advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to the offerings. Cole Capital receives compensation and reimbursement for services relating to the Managed REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings, including obtaining regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. (“FINRA”) and various blue sky jurisdictions for such offerings.

The Company allocates certain operating expenses, such as audit and legal fees, board of director fees, employee related costs and benefits and general overhead expenses between its two segments. The following tables present a summary of the comparative financial results and total assets for each business segment (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
REI:
Rental income	$	314,843		$	52,664		$	559,288		$	93,651
Direct financing lease income	1,181			—			2,187			—
Operating expense reimbursements	28,545			2,281			49,641			4,191
Total real estate investment revenues	344,569			54,945			611,116			97,842
Acquisition related	8,453			37,289			20,337			47,616
Merger and other transaction related	13,286			6,393			235,478			144,162
Property operating expenses	39,372			3,086			69,030			5,635
General and administrative expenses	7,033			2,361			13,629			3,815
Equity based compensation	9,338			3,458			31,848			4,339
Depreciation and amortization	234,219			33,752			385,223			60,505
Total operating expenses	311,701			86,339			755,545			266,072
Operating income (loss)	32,868			(31,394		)	(144,429		)	(168,230		)
Interest expense, net	(99,661		)	(11,068		)	(216,378		)	(17,124		)
Other (expense) income, net	(3,057		)	1,167			(3,858		)	2,020
Gain (loss) on derivative instruments, net	21,926			(40		)	1,729			(45		)
Loss on contingent value rights	—			(31,134		)	—			(31,134		)
Gain on disposition of properties, net	1,510			—			4,489			—
Gain on sale of investments	—			—			—			451
Total other expenses, net	(79,282		)	(41,075		)	(214,018		)	(45,832		)
Net loss from continuing operations	(46,414		)	(72,469		)	(358,447		)	(214,062		)
Discontinued operations:
Income from operations of held for sale properties	—			36			—			20
Gain on held for sale properties	—			—			—			14
Net income from discontinued operations	—			36			—			34
Net loss	$	(46,414	)	$	(72,433	)	$	(358,447	)	$	(214,028	)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Cole Capital:
Dealer manager and distribution fees, selling commissions and offering reimbursements	$	9,969		$	—		$	52,422		$	—
Transaction service fees	14,411			—			18,970			—
Management fees and reimbursements	13,032			—			20,087			—
Total Cole Capital revenues	37,412			—			91,479			—
Cole Capital reallowed fees and commissions	7,068			—			41,504			—
General and administrative expenses	12,030			—			31,119			—
Depreciation and amortization	24,774			—			39,133			—
Total operating expenses	43,872			—			111,756			—
Total other income	9,609			—			14,804			—
Net income (loss)	$	3,149		$	—		$	(5,473	)	$	—
Total Company:
Total revenues	$	381,981		$	54,945		$	702,595		$	97,842
Total operating expenses	$	355,573		$	86,339		$	867,301		$	266,072
Total other expense	$	(69,673	)	$	(41,075	)	$	(199,214	)	$	(45,832	)
Loss from continuing operations	$	(43,265	)	$	(72,469	)	$	(363,920	)	$	(214,062	)
Income from discontinued operations	$	—		$	36		$	—		$	34
Net loss	$	(43,265	)	$	(72,433	)	$	(363,920	)	$	(214,028	)

	Total Assets
	June 30, 2014		December 31, 2013
REI	$	20,197,707	$	7,807,504
Cole Capital	1,117,780		—
Total Company	$	21,315,487	$	7,807,504