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Transactions with Norfolk Southern Railway Company
 12 Months Ended
Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract]  
TRANSACTIONS WITH NORFOLK SOUTHERN RAILWAY COMPANY TRANSACTIONS WITH TIER REIT, INC.
    On June 14, 2019, pursuant to the Agreement and Plan of Merger dated March 25, 2019 (the “Merger Agreement”), by and among the Company and TIER REIT, Inc. (“TIER”), TIER merged with and into a subsidiary of the Company (the “Merger”) with this subsidiary continuing as the surviving corporation of the Merger. The Merger has enhanced the Company's position in its existing markets of Austin and Charlotte, provided a strategic entry into Dallas, and rebalanced the Company's portfolio across its markets. In accordance with the terms and conditions of the Merger Agreement, each share of TIER common stock issued and outstanding immediately prior to the Merger, was converted into 2.98 newly issued, pre-reverse split shares of the Company’s common stock with fractional shares being settled in cash. In the Merger, former TIER common stockholders received approximately 166 million pre-reverse split shares of common stock of the Company. As discussed in note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, immediately following the Merger, the Company completed a 1-for-4 reverse stock split.
The Merger has been accounted for as a business combination with the Company as the accounting acquirer, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their acquisition date fair value. The total value of the transaction is based on the closing stock price of the Company's common stock on June 13, 2019, the day immediately prior to the closing of the Merger. Based on the shares issued in the transaction, the total fair value of the assets acquired net of liabilities assumed in the Merger was $1.6 billion. During the years ended December 31, 2020 and December 31, 2019, the Company incurred expenses related to the Merger of $428,000 and $52.9 million, respectively. During 2021, there were no expenses incurred related to the Merger.
Management engaged a third party valuation specialist to assist with valuing the real estate assets acquired and liabilities assumed in the Merger. The third party used cash flow analyses, as well as a market approach, an income approach, and a cost approach to determine the fair value of real estate assets acquired.
The purchase price was allocated as follows (in thousands):
Real estate assets$2,202,073 
Real estate assets held for sale20,835 
Cash and cash equivalents84,042 
Restricted cash1,947 
Notes and other receivables8,278 
Investment in unconsolidated joint ventures331 
Intangible assets141,184 
Other assets10,040 
2,468,730 
Notes payable747,549 
Accounts payable and accrued expenses53,321 
Deferred income8,388 
Intangible liabilities47,988 
Other liabilities7,793 
Nonredeemable noncontrolling interests5,329 
870,368 
Total purchase price$1,598,362 

The following unaudited supplemental pro forma information is based upon the Company's historical consolidated statements of operations, adjusted as if the Merger had occurred on January 1, 2018. The supplemental pro forma information is not necessarily indicative of future results, or of actual results, that would have been achieved had the Merger been consummated at the beginning of the period.
Year ended
December 31, 2019
(unaudited, in thousands)
Revenues$750,080 
Net income232,136 
Net income available to common stockholders229,503 

2019 supplemental pro forma earnings were adjusted to exclude the $52.9 million of transaction costs incurred in the year ended December 31, 2019.
TRANSACTIONS WITH NORFOLK SOUTHERN RAILWAY COMPANY
On March 1, 2019, the Company entered into a series of agreements and executed related transactions with Norfolk Southern Railway Company (“NS”) as follows:
•Sold land to NS for $52.5 million.
•Executed a Development Agreement with NS whereby the Company will receive fees totaling $5 million in consideration for development services for NS’s corporate headquarters that is being constructed on the land sold to NS.
•Executed a Consulting Agreement with NS whereby the Company will receive fees totaling $32 million in consideration for consulting services for NS’s corporate headquarters. The Development Agreement and Consulting Agreement are collectively referred to below as the “Fee Agreements.”
•Purchased a building from NS (“Promenade Central fka 1200 Peachtree”) for $82 million subject to a three-year market rate lease with NS that covers the entire building.
The Company sold the land to NS for $5.0 million above its carrying amount, which included $37.0 million of land purchased in 2018, $6.5 million of land purchased in 2019, and $4.0 million of site preparation work. The Company purchased Promenade Central fka 1200 Peachtree from NS for an amount it determined to be $10.3 million below the building’s fair value.
The Company determined that all contracts and transactions associated with NS should be combined for accounting purposes, and the amounts exchanged under the combined contracts should be allocated to the various components of the overall transaction at fair value or market value as discussed below. The Company determined that the purchase of Promenade Central fka 1200 Peachtree should be recorded at fair value of $92.3 million. The Company determined that the lease with NS at the Promenade Central fka 1200 Peachtree building was at market value under ASC 842. The land sale was accounted for under ASC 610-20, and no gain or loss was recorded on the derecognition of this non-financial asset as the fair value was determined to equal the carrying amount. Consideration related to various services provided to NS, and accounted for under ASC 606, was determined to be $52.3 million and represents the negotiated market value for the services agreed to by the Company and NS in the contracts. This amount included non-cash consideration of the $10.3 million discount on the purchase of Promenade Central fka 1200 Peachtree as well as cash consideration of $5.0 million from the land sale contract (difference between fair value and contract amount), $5.0 million from the Development Agreement, and $32.0 million from the Consulting Agreement. Since all of the agreements and contracts above were executed for the purpose of delivering and constructing a corporate headquarters for NS and all of the services and deliverables are highly interdependent, the Company determined that the services represent a single performance obligation under ASC 606.
The Company determined that control of the services to be provided is being transferred over time and, thus, the Company must recognize the $52.3 million contract price in revenue as it satisfies the performance obligation. The Company determined that the inputs method of measuring progress of satisfying the performance obligation was the most appropriate method of recognizing revenue for the services component. Therefore, the Company began recognizing revenue on March 1, 2019, based upon the time spent by the Company’s employees in providing these services as compared to the total estimated time required to satisfy the performance obligation. During the years ended December 31, 2021, 2020, and 2019, the Company recognized $11.9 million, $14.9 million, and $21.4 million, respectively, in fee income in the consolidated statements of operations related to the services provided to NS. As of December 31, 2021 and December 31, 2020, the Company had deferred income related to NS included in the consolidated balance sheet of $1.8 million and $5.7 million, respectively.