☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
March 31, 2020
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 98-1141883 | |||
(State or other jurisdiction of incorporation or )z ation | (I.R.S. Employer
Identificatio n No.) |
Former name, former address and former fiscal year, if changed since last report: N/A
Title of Each Class | Trading Symbol(s) | Name of each Exchange on Which Registered | ||
Common Stock, $0.01 par value | “CIO” | New York Stock Exchange | ||
6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share |
“CIO.PrA” | New York Stock Exchange
|
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
| ||||||
| 3 | |||||
3 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
6 | ||||||
7 | ||||||
8 | ||||||
| ||||||
17 | ||||||
| ||||||
26 | ||||||
| ||||||
| 26 | |||||
| ||||||
| 27 | |||||
| ||||||
27 | ||||||
27 | ||||||
28 | ||||||
| ||||||
29 | ||||||
| ||||||
29 | ||||||
| ||||||
29 | ||||||
29 | ||||||
31 |
September 30, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Real estate properties | ||||||||
Land | $ | 230,034 | $ | 223,789 | ||||
Building and improvement | 782,576 | 704,113 | ||||||
Tenant improvement | 91,016 | 77,426 | ||||||
Furniture, fixtures and equipment | 285 | 319 | ||||||
|
|
|
| |||||
1,103,911 | 1,005,647 | |||||||
Accumulated depreciation | (93,623 | ) | (70,484 | ) | ||||
|
|
|
| |||||
1,010,288 | 935,163 | |||||||
|
|
|
| |||||
Cash and cash equivalents | 12,281 | 16,138 | ||||||
Restricted cash | 20,240 | 17,007 | ||||||
Rents receivable, net | 31,844 | 26,095 | ||||||
Deferred leasing costs, net | 11,235 | 10,402 | ||||||
Acquired lease intangible assets, net | 73,394 | 75,501 | ||||||
Other assets | 16,830 | 2,755 | ||||||
Assets held for sale | 13,905 | 17,370 | ||||||
|
|
|
| |||||
Total Assets | $ | 1,190,017 | $ | 1,100,431 | ||||
|
|
|
| |||||
Liabilities and Equity | ||||||||
Liabilities: | ||||||||
Debt | $ | 651,693 | $ | 645,354 | ||||
Accounts payable and accrued liabilities | 28,431 | 25,892 | ||||||
Deferred rent | 5,574 | 5,331 | ||||||
Tenant rent deposits | 5,691 | 4,564 | ||||||
Acquired lease intangible liabilities, net | 8,763 | 8,887 | ||||||
Other liabilities | 21,349 | 11,148 | ||||||
Liabilities related to assets held for sale | 356 | 878 | ||||||
|
|
|
| |||||
Total Liabilities | 721,857 | 702,054 | ||||||
|
|
|
| |||||
Commitments and Contingencies (Note 9) | ||||||||
Equity: | ||||||||
6.625% Series A Preferred stock, $0.01 par value per share, 5,600,000 shares authorized, 4,480,000 issued and outstanding | 112,000 | 112,000 | ||||||
Common stock, $0.01 par value, 100,000,000 shares authorized, 47,647,063 and 39,544,073 shares issued and outstanding | 476 | 395 | ||||||
Additionalpaid-in capital | 483,200 | 377,126 | ||||||
Accumulated deficit | (128,823 | ) | (92,108 | ) | ||||
Accumulated other comprehensive income | 247 | — | ||||||
|
|
|
| |||||
Total Stockholders’ Equity | 467,100 | 397,413 | ||||||
Non-controlling interests in properties | 1,060 | 964 | ||||||
|
|
|
| |||||
Total Equity | 468,160 | 398,377 | ||||||
|
|
|
| |||||
Total Liabilities and Equity | $ | 1,190,017 | $ | 1,100,431 | ||||
|
|
|
| |||||
Subsequent Events (Note 11) |
March 31, 2020 | December 31, 2019 | |||||||
Assets | ||||||||
Real estate properties | ||||||||
Land | $ | 230,034 | $ | 230,034 | ||||
Building and improvement | 786,939 | 784,636 | ||||||
Tenant improvement | 97,474 | 94,218 | ||||||
Furniture, fixtures and equipment | 285 | 285 | ||||||
1,114,732 | 1,109,173 | |||||||
Accumulated depreciation | (111,177 | ) | (101,835 | ) | ||||
1,003,555 | 1,007,338 | |||||||
Cash and cash equivalents | 146,509 | 70,129 | ||||||
Restricted cash | 18,328 | 17,394 | ||||||
Rents receivable, net | 32,875 | 32,112 | ||||||
Deferred leasing costs, net | 14,249 | 12,393 | ||||||
Acquired lease intangibles assets, net | 62,104 | 67,533 | ||||||
Other assets | 16,054 | 17,061 | ||||||
Assets held for sale | 4,543 | 4,514 | ||||||
Total Assets | $ | 1,298,217 | $ | 1,228,474 | ||||
Liabilities and Equity | ||||||||
Liabilities: | ||||||||
Debt | $ | 706,031 | $ | 607,250 | ||||
Accounts payable and accrued liabilities | 27,354 | 28,786 | ||||||
Deferred re nt | 5,298 | 6,593 | ||||||
Tenant rent deposits | 5,660 | 5,658 | ||||||
Acquired lease intangible liabilities, net | 7,604 | 8,194 | ||||||
Other liabilities | 19,711 | 22,794 | ||||||
Liabilities related to assets held for sale | 87 | 67 | ||||||
Total Liabilities | 771,745 | 679,342 | ||||||
Commitments and Contingencies (Note 9) | ||||||||
Equity: | ||||||||
6.625% Series A Preferred stock, $0.01 par value per share, 5,600,000 shares authorized, 4,480,000 issued and outstanding | 112,000 | 112,000 | ||||||
Common stock, $0.01 par value, 100,000,000 shares authorized, 53,175,051 and 54,591,047 shares issued and outstanding | 531 | 545 | ||||||
Additional paid-in capital | 566,122 | 577,131 | ||||||
Accumulated deficit | (151,264 | ) | (142,383 | ) | ||||
Accumulated other comprehensive (loss)/ income | (2,026 | ) | 715 | |||||
Total Stockholders’ Equity | 525,363 | 548,008 | ||||||
Non-controlling interests in properties | 1,109 | 1,124 | ||||||
Total Equity | 526,472 | 549,132 | ||||||
Total Liabilities and Equity | $ | 1,298,217 | $ | 1,228,474 | ||||
Subsequent Events (Note 11) |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Rental and other revenues | $ | 40,122 | $ | 37,120 | ||||
Operating expenses: | ||||||||
Property operating expens es | 14,694 | 13,844 | ||||||
General and administrative | 2,783 | 2,299 | ||||||
Depreciation and amortization | 14,953 | 14,417 | ||||||
Total operating expenses | 32,430 | 30,560 | ||||||
Operating income | 7,692 | 6,560 | ||||||
Interest expense: | ||||||||
Contractual interest expense | (6,362 | ) | (7,143 | ) | ||||
Amortization of deferred financing costs and debt fair value | (324 | ) | (337 | ) | ||||
(6,686 | ) | (7,480 | ) | |||||
Net income/(loss) | 1,006 | (920 | ) | |||||
Less: | ||||||||
Net income attributable to non-controlling interests in properties | (182 | ) | (169 | ) | ||||
Net income/(loss) attributable to the Company | 824 | (1,089 | ) | |||||
Preferred stock distributions | (1,855 | ) | (1,855 | ) | ||||
Net loss attributable to common stockholders | $ | (1,031 | ) | $ | (2,944 | ) | ||
Net loss per common share: | ||||||||
Basic | $ | (0.02 | ) | $ | (0.07 | ) | ||
Diluted | $ | (0.02 | ) | $ | (0.07 | ) | ||
Weighted average common shares outstanding: | ||||||||
Basic | 54,458 | 39,565 | ||||||
Diluted | 54,458 | 39,565 | ||||||
Dividends distributions declared per common share | $ | 0.150 | $ | 0.235 | ||||
Comprehensive Income
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Rental and other revenues | $ | 38,946 | $ | 33,547 | $ | 117,236 | $ | 95,317 | ||||||||
Operating expenses: | ||||||||||||||||
Property operating expenses | 14,384 | 13,253 | 42,754 | 36,627 | ||||||||||||
General and administrative | 2,775 | 1,850 | 8,435 | 5,793 | ||||||||||||
Depreciation and amortization | 15,035 | 13,379 | 44,057 | 37,044 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating expenses | 32,194 | 28,482 | 95,246 | 79,464 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating income | 6,752 | 5,065 | 21,990 | 15,853 | ||||||||||||
Interest expense: | ||||||||||||||||
Contractual interest expense | (7,378 | ) | (5,915 | ) | (22,022 | ) | (16,184 | ) | ||||||||
Amortization of deferred financing costs and debt fair value | (321 | ) | (311 | ) | (992 | ) | (1,297 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
(7,699 | ) | (6,226 | ) | (23,014 | ) | (17,481 | ) | |||||||||
Net gain on sale of real estate property | — | — | 478 | 46,980 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss)/income | (947 | ) | (1,161 | ) | (546 | ) | 45,352 | |||||||||
Less: | ||||||||||||||||
Net income attributable tonon-controlling interests in properties | (164 | ) | (135 | ) | (498 | ) | (384 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss)/income attributable to the Company | (1,111 | ) | (1,296 | ) | (1,044 | ) | 44,968 | |||||||||
Preferred stock distributions | (1,855 | ) | (1,855 | ) | (5,565 | ) | (5,565 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net (loss)/income attributable to common stockholders | $ | (2,966 | ) | $ | (3,151 | ) | $ | (6,609 | ) | $ | 39,403 | |||||
|
|
|
|
|
|
|
| |||||||||
Net (loss)/income per common share: | ||||||||||||||||
Basic | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | 1.08 | |||||
|
|
|
|
|
|
|
| |||||||||
Diluted | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | 1.07 | |||||
|
|
|
|
|
|
|
| |||||||||
Weighted average common shares outstanding: | ||||||||||||||||
Basic | 42,591 | 37,494 | 40,610 | 36,572 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Diluted | 42,591 | 37,494 | 40,610 | 36,920 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Dividend distributions declared per common share | $ | 0.235 | $ | 0.235 | $ | 0.705 | $ | 0.705 | ||||||||
|
|
|
|
|
|
|
|
thousands)
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Net income/(loss) | $ | 1,006 | $ | (920 | ) | |||
Other comprehensive loss: | ||||||||
Unrealized cash flow hedge loss | (2,690 | ) | — | |||||
Amounts reclassified to interest expense | (51 | ) | — | |||||
Other comprehensive loss | (2,741 | ) | — | |||||
Comprehensive loss | (1,735 | ) | (920 | ) | ||||
Less: | ||||||||
Comprehensive income attributable to non-controlling interests in properties | (182 | ) | (169 | ) | ||||
Comprehensive loss attributable to the Company | (1,917 | ) | (1,089 | ) | ||||
Preferred stock distributions | (1,855 | ) | (1,855 | ) | ||||
Comprehensive loss attributable to common stockholders | $ | (3,772 | ) | $ | (2,944 | ) | ||
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(In thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net (loss)/income | $ | (947 | ) | $ | (1,161 | ) | $ | (546 | ) | $ | 45,352 | |||||
Unrealized cash flow hedge gains | 247 | — | 247 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Comprehensive (loss)/income | (700 | ) | (1,161 | ) | (299 | ) | 45,352 | |||||||||
Less: | ||||||||||||||||
Comprehensive income attributable tonon-controlling interests in properties | (164 | ) | (135 | ) | (498 | ) | (384 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Comprehensive (loss)/income attributable to the Company | (864 | ) | (1,296 | ) | (797 | ) | 44,968 | |||||||||
Preferred stock distributions | (1,855 | ) | (1,855 | ) | (5,565 | ) | (5,565 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Comprehensive (loss)/income attributable to common stockholders | $ | (2,719 | ) | $ | (3,151 | ) | $ | (6,362 | ) | $ | 39,403 | |||||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
Number of shares of preferred stock | Preferred stock | Number of shares of common stock | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income | Total stockholders’ equity | Non- controlling interests in properties | Total equity | |||||||||||||||||||||||||||||||
Balance – December 31, 2018 | 4,480 | $ | 112,000 | 39,544 | $ | 395 | $ | 377,126 | $ | (92,108 | ) | $ | — | $ | 397,413 | $ | 964 | $ | 398,377 | |||||||||||||||||||||
Restricted stock award grants and vesting | — | — | 92 | 1 | 302 | (83 | ) | — | 220 | — | 220 | |||||||||||||||||||||||||||||
Common stock dividend distributions declared | — | — | — | — | — | (9,314 | ) | — | (9,314 | ) | — | (9,314 | ) | |||||||||||||||||||||||||||
Preferred stock dividend distributions declared | — | — | — | — | — | (1,855 | ) | — | (1,855 | ) | — | (1,855 | ) | |||||||||||||||||||||||||||
Contributions | — | — | — | — | — | — | — | — | 12 | 12 | ||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | — | (134 | ) | (134 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | (1,089 | ) | — | (1,089 | ) | 169 | (920 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Balance – March 31, 2019 | 4,480 | $ | 112,000 | 39,636 | $ | 396 | $ | 377,428 | $ | (104,449 | ) | $ | — | $ | 385,375 | $ | 1,011 | $ | 386,386 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Restricted stock award grants and vesting | — | — | 11 | — | 509 | (99 | ) | — | 410 | — | 410 | |||||||||||||||||||||||||||||
Common stock dividend distributions declared | — | — | — | — | — | (9,318 | ) | — | (9,318 | ) | — | (9,318 | ) | |||||||||||||||||||||||||||
Preferred stock dividend distributions declared | — | — | — | — | — | (1,855 | ) | — | (1,855 | ) | — | (1,855 | ) | |||||||||||||||||||||||||||
Contributions | — | — | — | — | — | — | — | — | 10 | 10 | ||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | — | (156 | ) | (156 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 1,156 | — | 1,156 | 165 | 1,321 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Balance – June 30, 2019 | 4,480 | $ | 112,000 | 39,647 | $ | 396 | $ | 377,937 | $ | (114,565 | ) | $ | — | $ | 375,768 | $ | 1,030 | $ | 376,798 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Restricted stock award grants and vesting | — | — | — | — | 527 | (95 | ) | — | 432 | — | 432 | |||||||||||||||||||||||||||||
Net proceeds from sale of common stock | — | — | 8,000 | 80 | 104,736 | — | — | 104,816 | — | 104,816 | ||||||||||||||||||||||||||||||
Common stock dividend distributions declared | — | — | — | — | — | (11,197 | ) | — | (11,197 | ) | — | (11,197 | ) | |||||||||||||||||||||||||||
Preferred stock dividend distributions declared | — | — | — | — | — | (1,855 | ) | — | (1,855 | ) | — | (1,855 | ) | |||||||||||||||||||||||||||
Contributions | — | — | — | — | — | — | — | — | 46 | 46 | ||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | — | (180 | ) | (180 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | (1,111 | ) | — | (1,111 | ) | 164 | (947 | ) | |||||||||||||||||||||||||||
Unrealized cash flow hedge gains | — | — | — | — | — | — | 247 | 247 | — | 247 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Balance – September 30, 2019 | 4,480 | $ | 112,000 | 47,647 | $ | 476 | $ | 483,200 | $ | (128,823 | ) | $ | 247 | $ | 467,100 | $ | 1,060 | $ | 468,160 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares of preferred stock | Preferred stock | Number of shares of common stock | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income | Total stockholders’ equity | Non- controlling interests in properties | Total equity | |||||||||||||||||||||||||||||||
Balance—December 31, 2017 | 4,480 | $ | 112,000 | 36,012 | $ | 360 | $ | 334,241 | $ | (86,977 | ) | $ | — | $ | 359,624 | $ | 208 | $ | 359,832 | |||||||||||||||||||||
Restricted stock award grants and vesting | — | — | 120 | 1 | 356 | (72 | ) | — | 285 | — | 285 | |||||||||||||||||||||||||||||
Common stock dividend distributions declared | — | — | — | — | — | (8,491 | ) | — | (8,491 | ) | — | (8,491 | ) | |||||||||||||||||||||||||||
Preferred stock dividend distributions declared | — | — | — | — | — | (1,855 | ) | — | (1,855 | ) | — | (1,855 | ) | |||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | — | (29 | ) | (29 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 47,063 | — | 47,063 | 135 | 47,198 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Balance—March 31, 2018 | 4,480 | $ | 112,000 | 36,132 | $ | 361 | $ | 334,597 | $ | (50,332 | ) | $ | — | $ | 396,626 | $ | 314 | $ | 396,940 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Restricted stock award grants and vesting | — | — | 1 | — | 412 | (80 | ) | — | 332 | — | 332 | |||||||||||||||||||||||||||||
Common stock dividend distributions declared | — | — | — | — | — | (8,491 | ) | — | (8,491 | ) | — | (8,491 | ) | |||||||||||||||||||||||||||
Preferred stock dividend distributions declared | — | — | — | — | — | (1,855 | ) | — | (1,855 | ) | — | (1,855 | ) | |||||||||||||||||||||||||||
Contributions | — | — | — | — | — | — | — | — | 43 | 43 | ||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | — | (135 | ) | (135 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | (798 | ) | — | (798 | ) | 114 | (684 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Balance—June 30, 2018 | 4,480 | $ | 112,000 | 36,133 | $ | 361 | $ | 335,009 | $ | (61,556 | ) | $ | — | $ | 385,814 | $ | 336 | $ | 386,150 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Restricted stock award grants and vesting | — | — | — | — | 436 | (79 | ) | — | 357 | — | 357 | |||||||||||||||||||||||||||||
Net proceeds from sale of common stock | — | — | 3,411 | 34 | 42,868 | — | — | 42,902 | — | 42,902 | ||||||||||||||||||||||||||||||
Common stock dividend distributions declared | — | — | — | — | — | (9,293 | ) | — | (9,293 | ) | — | (9,293 | ) | |||||||||||||||||||||||||||
Preferred stock dividend distributions declared | — | — | — | — | — | (1,855 | ) | — | (1,855 | ) | — | (1,855 | ) | |||||||||||||||||||||||||||
Minority interest buyout | — | — | — | — | (1,624 | ) | — | — | (1,624 | ) | 485 | (1,139 | ) | |||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | — | (210 | ) | (210 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | (1,296 | ) | — | (1,296 | ) | 135 | (1,161 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Balance—September 30, 2018 | 4,480 | $ | 112,000 | 39,544 | $ | 395 | $ | 376,689 | $ | (74,079 | ) | $ | — | $ | 415,005 | $ | 746 | $ | 415,751 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares of preferred stock | Preferred stock | Number of shares of common stock | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive (loss)/income | Total stockholders’ equity | Non- controlling interests in properties | Total equity | |||||||||||||||||||||||||||||||
Balance—December 31, 2019 | 4,480 | $ | 112,000 | 54,591 | $ | 545 | $ | 577,131 | $ | (142,383 | ) | $ | 715 | $ | 548,008 | $ | 1,124 | $ | 549,132 | |||||||||||||||||||||
Restricted stock award grants and vesting | — | — | 35 | — | 599 | (79 | ) | — | 520 | — | 520 | |||||||||||||||||||||||||||||
Common stock repurchased | — | — | (1,451 | ) | (14 | ) | (11,608 | ) | — | — | (11,622 | ) | — | (11,622 | ) | |||||||||||||||||||||||||
Common stock dividend distribution declared | — | — | — | — | — | (7,771 | ) | — | (7,771 | ) | — | (7,771 | ) | |||||||||||||||||||||||||||
Preferred stock dividend distribution declared | — | — | — | — | — | (1,855 | ) | — | (1,855 | ) | — | (1,855 | ) | |||||||||||||||||||||||||||
Contributions | — | — | — | — | — | — | — | — | 3 | 3 | ||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | — | (200 | ) | (200 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | 824 | — | 824 | 182 | 1,006 | ||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | (2,741 | ) | (2,741 | ) | — | (2,741 | ) | |||||||||||||||||||||||||||
Balance—March 31, 2020 | 4,480 | $ | 112,000 | 53,175 | $ | 531 | $ | 566,122 | $ | (151,264 | ) | $ | (2,026 | ) | $ | 525,363 | $ | 1,109 | $ | 526,472 | ||||||||||||||||||||
Nu mber shares of preferred | Preferred stock | Number of shares o common | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive (loss)/income | Total stockholders’ equity | Non - controlling interests properties | Total equity | |||||||||||||||||||||||||||||||
Balance—December 31, 2018 | 4,480 | $ | 112,000 | 39,544 | $ | 395 | $ | 377,126 | $ | (92,108 | ) | $ | — | $ | 397,413 | $ | 964 | $ | 398,377 | |||||||||||||||||||||
Restricted stock award grants and vesting | — | — | 92 | 1 | 302 | (83 | ) | — | 220 | — | 220 | |||||||||||||||||||||||||||||
Common stock dividend distribution declared | — | — | — | — | — | (9,314 | ) | — | (9,314 | ) | — | (9,314 | ) | |||||||||||||||||||||||||||
Preferred stock dividend distribution declared | — | — | — | — | — | (1,855 | ) | — | (1,855 | ) | — | (1,855 | ) | |||||||||||||||||||||||||||
Contributions | — | — | — | — | — | — | — | — | 12 | 12 | ||||||||||||||||||||||||||||||
Distributions | — | — | — | — | — | — | — | — | (134 | ) | (134 | ) | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | (1,089 | ) | — | (1,089 | ) | 169 | (920 | ) | |||||||||||||||||||||||||||
Balance—March 31, 2019 | 4,480 | $ | 112,000 | 39,636 | $ | 396 | $ | 377,428 | $ | (104,449 | ) | $ | — | $ | 385,375 | $ | 1,011 | $ | 386,386 | |||||||||||||||||||||
Nine Months Ended September 30, | ||||||||
2019 | 2018 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net (loss)/income | $ | (546 | ) | $ | 45,352 | |||
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 44,057 | 37,044 | ||||||
Amortization of deferred financing costs and debt fair value | 992 | 1,297 | ||||||
Amortization of above/below market leases | (67 | ) | (143 | ) | ||||
Increase in straight-line rent/expense | (4,591 | ) | (3,491 | ) | ||||
Non-cash stock compensation | 1,310 | 1,061 | ||||||
Net gain on sale of real estate property | (478 | ) | (46,980 | ) | ||||
Changes innon-cash working capital: | ||||||||
Rents receivable, net | (1,512 | ) | (1,177 | ) | ||||
Other assets | (337 | ) | (162 | ) | ||||
Accounts payable and accrued liabilities | (1,217 | ) | (1,434 | ) | ||||
Deferred rent | 73 | (1,428 | ) | |||||
Tenant rent deposits | (421 | ) | 140 | |||||
|
|
|
| |||||
Net Cash Provided By Operating Activities | 37,263 | 30,079 | ||||||
|
|
|
| |||||
Cash Flows to Investing Activities: | ||||||||
Additions to real estate properties | (13,855 | ) | (15,785 | ) | ||||
Acquisition of real estate | (108,358 | ) | (162,462 | ) | ||||
Net proceeds from sale of real estate | 33,941 | 84,839 | ||||||
Deferred leasing costs | (2,474 | ) | (3,222 | ) | ||||
|
|
|
| |||||
Net Cash Used In Investing Activities | (90,746 | ) | (96,630 | ) | ||||
|
|
|
| |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from sale of common stock | 104,816 | 42,902 | ||||||
Debt issuance and extinguishment costs | (995 | ) | (2,662 | ) | ||||
Proceeds from borrowings | 154,750 | 269,824 | ||||||
Repayment of borrowings | (171,575 | ) | (212,128 | ) | ||||
Shares withheld for payment of taxes on restricted stock unit vesting | (246 | ) | (87 | ) | ||||
Minority interest buyout | — | (1,139 | ) | |||||
Contributions fromnon-controlling interests in properties | 68 | 43 | ||||||
Distributions tonon-controlling interests in properties | (470 | ) | (374 | ) | ||||
Dividend distributions paid to stockholders and Operating Partnership unitholders | (33,489 | ) | (31,010 | ) | ||||
|
|
|
| |||||
Net Cash Provided By Financing Activities | 52,859 | 65,369 | ||||||
|
|
|
| |||||
Net Decrease in Cash, Cash Equivalents and Restricted Cash | (624 | ) | (1,182 | ) | ||||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period | 33,145 | 35,014 | ||||||
|
|
|
| |||||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ | 32,521 | $ | 33,832 | ||||
|
|
|
| |||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash: | ||||||||
Cash and Cash Equivalents, End of Period | $ | 12,281 | $ | 13,696 | ||||
Restricted Cash, End of Period | 20,240 | 20,136 | ||||||
|
|
|
| |||||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ | 32,521 | $ | 33,832 | ||||
|
|
|
| |||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash paid for interest | $ | 22,262 | $ | 15,967 | ||||
Purchases of additions in real estate properties included in accounts payable | $ | 2,264 | $ | 4,379 | ||||
Purchases of deferred leasing costs included in accounts payable | $ | 298 | $ | 430 | ||||
Unrealized cash flow hedge gains | $ | 247 | $ | — | ||||
Debt assumed on acquisition of real estate | $ | 22,473 | $ | — |
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income/(loss) | $ | 1,006 | $ | (920 | ) | |||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 14,953 | 14,417 | ||||||
Amortization of deferred financing costs and debt fair value | 324 | 337 | ||||||
Amortization of above/below market leases | 14 | (27 | ) | |||||
Increase in straight-line rent/expense | (704 | ) | (1,454 | ) | ||||
Non-cash stock compensation | 569 | 444 | ||||||
Changes in non-cash working capital: | ||||||||
Rents receivable, net | (38 | ) | (225 | ) | ||||
Other assets | 190 | (1,710 | ) | |||||
Accounts payable and | (4,282 | ) | (7,506 | ) | ||||
Deferred rent | (1,295 | ) | (485 | ) | ||||
Tenant rent deposits | 2 | (45 | ) | |||||
Net Cash Provided By Operating Activities | 10,739 | 2,826 | ||||||
Cash Flows to Investing Activities: | ||||||||
Additions to real estate properties | (3,137 | ) | (2,292 | ) | ||||
Acquisition of real estate | — | (51,070 | ) | |||||
Net proceeds from sale of real estate | — | 17,426 | ||||||
Deferred leasing costs | (2,195 | ) | (811 | ) | ||||
Net Cash Used In Investing Activities | (5,332 | ) | (36,747 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Repurchases of common stock | (11,622 | ) | — | |||||
Debt issuance and extinguishment costs | — | (516 | ) | |||||
Proceeds from borrowings | 100,000 | 75,950 | ||||||
Repayment of borrowings | (1,541 | ) | (26,137 | ) | ||||
Shares withheld for payment of taxes on restricted stock unit vesting | (49 | ) | (224 | ) | ||||
Contributions from non-controlling interests in properties | 3 | 12 | ||||||
Distributions to non-controlling interests in properties | (200 | ) | (134 | ) | ||||
Dividend distributions paid to stockholders | (14,684 | ) | (11,148 | ) | ||||
Net Cash Provided By Financing Activities | 71,907 | 37,803 | ||||||
Net Increase in Cash, Cash Equivalents and Restricted Cash | 77,314 | 3,882 | ||||||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period | 87,523 | 33,145 | ||||||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ | 164,837 | $ | 37,027 | ||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash: | ||||||||
Cash and Cash Equivalents, End of Period | 146,509 | 15,314 | ||||||
Restricted Cash, End of Period | 18,328 | 21,713 | ||||||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ | 164,837 | $ | 37,027 | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash paid for interest | $ | 6,111 | $ | 6,679 | ||||
Purchase of additions in real estate properties included in accounts payable | $ | 2,587 | $ | 4,161 | ||||
Purchase of deferred leasing costs included in accounts payable | $ | 284 | $ | 192 |
New2019.
Adopted in the Current Year
The Company adopted the new standard effective January 1, 2019 and elected the effective date method for the transition. The Company elected the following practical expedients:
Transition method practical expedient – permits the Company to use the effective date as the date of initial application. Upon adoption, the Company did not have a cumulative-effect adjustmentexceptions to the opening balance of retained earnings. Financial informationguidance on contract modifications and disclosures for periods before January 1, 2019 werehedge accounting to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. For contracts affected by reference rate reform, if certain criteria are met, companies can elect to not updated.
Package of practicalremeasure contracts at the modification date or reassess a previous accounting conclusion. Companies can also elect various optional expedients – permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs. This allowed the Companythat would allow them to continue classifying its leases at transition in substantially the same manner.
Single component practical expedient – permits the Company to not separate lease andnon-lease components of leases. Upon transition, rental income, expense reimbursement, and other were aggregated into a single line within rental and other revenues on the condensed consolidated statement of operations.
Land easement practical expedient – permits the Company not to reassess under the new standard its prior conclusions about land easements.
Short-term lease practical expedient – permits the Company not to recognize leases with a term equal to or less than 12 months.
Lessor Accounting
Theapplying hedge accounting for lessors underhedging relationships affected by reference rate reform, if certain criteria are met. ASU
Lessee Accounting
optional use through December 31, 2022. The new standard requires lesseesapplies prospectively to recognize aright-of-use assetcontract modifications and lease liability hedging relationships and may be elected over time as reference rate reform activities occur. The Company continues to evaluate the impact of ASU
reference rate reform activities occur.
| ||||||||
| ||||||||
Property | Date Acquired | Percentage Owned | ||||||
Canyon Park | February 2019 | 100 | % | |||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
|
Each of the
7601 Tech | Canyon Park | Cascade Station | Total Sept. 30, 2019 | |||||||||||||
Land | $ | 10,865 | $ | 7,098 | $ | — | $ | 17,963 | ||||||||
Buildings and improvements | 25,677 | 36,619 | 25,141 | 87,437 | ||||||||||||
Tenant improvements | 3,858 | 1,797 | 2,080 | 7,735 | ||||||||||||
Lease intangible assets | 7,401 | 8,109 | 3,134 | 18,644 | ||||||||||||
Other assets | 293 | 10 | 3,164 | 3,467 | ||||||||||||
Debt | — | — | (697 | ) | (697 | ) | ||||||||||
Accounts payable and other liabilities | (668 | ) | (1,266 | ) | (186 | ) | (2,120 | ) | ||||||||
Lease intangible liabilities | (79 | ) | (1,297 | ) | (220 | ) | (1,596 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets acquired | $ | 47,347 | $ | 51,070 | $ | 32,416 | $ | 130,833 | ||||||||
|
|
|
|
|
|
|
|
The acquisition of the Cascade Station property was partially funded through an assumption of debt in the amount of $22.5 million.
The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed during the nine months ended September 30, 2018 (in thousands):
The Quad | Circle Point | Pima Center | Total Sept. 30, 2018 | |||||||||||||
Land | $ | 8,079 | $ | 8,744 | $ | — | $ | 16,823 | ||||||||
Buildings and improvements | 38,060 | 33,708 | 42,235 | 114,003 | ||||||||||||
Tenant improvements | 1,798 | 5,393 | 2,898 | 10,089 | ||||||||||||
Lease intangible assets | 4,209 | 10,299 | 10,691 | 25,199 | ||||||||||||
Other assets | 15 | 25 | 95 | 135 | ||||||||||||
Accounts payable and other liabilities | (527 | ) | (1,157 | ) | (337 | ) | (2,021 | ) | ||||||||
Lease intangible liabilities | (1,247 | ) | (390 | ) | (129 | ) | (1,766 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net assets acquired | $ | 50,387 | $ | 56,622 | $ | 55,453 | $ | 162,462 | ||||||||
|
|
|
|
|
|
|
|
Canyon | ||||
Land | $ | 7,098 | ||
Buildings and improvements | 36,619 | |||
Tenant improvements | 1,797 | |||
Lease intangible assets | 8,109 | |||
Other assets | 10 | |||
Accounts payable and other liabilities | (1,266 | ) | ||
Lease intangible liabilities | (1,297 | ) | ||
Net assets acquired | $ | 51,070 | ||
On May 7, 2019, the Company sold the 10455 Pacific Center building of the Sorrento Mesa property in San Diego, California for $16.5 million, resulting in an aggregate gain of $0.5 million net of disposal-related costs, which has been classified as net gain on sale of real estate property in the condensed consolidated statements of operations.
On March 8, 2018, the Company sold the Washington Group Plaza property in Boise, Idaho for $86.5 million, resulting in an aggregate net gain of $47.0 million, net of $1.7 million in costs, which has been classified as net gain on sale of real estate property in the condensed consolidated statements of operations. In connection with the sale of the property, certain debt repayments were made.
As of September 30, 2019 the Company determined that the Logan Tower
These properties havehas been classified as held for sale as of September 30,March 31, 2020 and December 31, 2019 (in thousands):
September 30, 2019 | Logan Tower | Circle Point Land | Total | |||||||||
Real estate properties, net | $ | 9,034 | $ | 4,441 | $ | 13,475 | ||||||
Deferred leasing costs, net | 239 | — | 239 | |||||||||
Acquired lease intangible assets, net | 2 | — | 2 | |||||||||
Rents receivable, prepaid expenses and other assets | 189 | — | 189 | |||||||||
|
|
|
|
|
| |||||||
Assets held for sale | $ | 9,464 | $ | 4,441 | $ | 13,905 | ||||||
|
|
|
|
|
| |||||||
Acquired lease intangible liabilities, net | (10 | ) | — | (10 | ) | |||||||
Accounts payable, accrued expenses, deferred rent and tenant rent deposits | (296 | ) | (50 | ) | (346 | ) | ||||||
|
|
|
|
|
| |||||||
Liabilities related to assets held for sale | $ | (306 | ) | $ | (50 | ) | $ | (356 | ) | |||
|
|
|
|
|
|
On November 30, 2018, the Company entered into a Purchase and Sale agreement to sell the Plaza 25 property for $17.9 million. The transaction closed in February 2019. The property was presented as held for sale as of December 31, 2018 (in thousands):
December 31, 2018 | Plaza 25 | |||
Real estate properties, net | $ | 16,149 | ||
Deferred leasing costs, net | 419 | |||
Acquired lease intangible assets, net | 11 | |||
Rents receivable, prepaid expenses and other assets | 791 | |||
|
| |||
Assets held for sale | $ | 17,370 | ||
|
| |||
Accounts payable, accrued expenses, deferred rent and tenant rent deposits | (878 | ) | ||
|
| |||
Liabilities related to assets held for sale | $ | (878 | ) | |
|
|
Circle Point Land | March 31, 2020 | December 31, 2019 | ||||||
Real estate properties, net | $ | 4,543 | $ | 4,514 | ||||
Assets held for sale | $ | 4,543 | $ | 4,514 | ||||
Accounts payable, accrued expenses, deferred rent and tenant rent deposits | $ | (87 | ) | $ | (67 | ) | ||
Liabilities related to assets held for sale | $ | (87 | ) | $ | (67 | ) | ||
Lease Intangible Assets | Lease Intangible Liabilities | |||||||||||||||||||||||||||||||
September 30, 2019 | Above Market Leases | Below Market Ground Lease(1) | In Place Leases | Leasing Commissions | Total | Below Market Leases | Below Market Ground Lease(1) | Total | ||||||||||||||||||||||||
Cost | $ | 15,510 | $ | — | $ | 87,957 | $ | 36,523 | $ | 139,990 | $ | (14,181 | ) | $ | (138 | ) | $ | (14,319 | ) | |||||||||||||
Accumulated amortization | (6,363 | ) | — | (44,822 | ) | (15,411 | ) | (66,596 | ) | 5,517 | 39 | 5,556 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
$ | 9,147 | $ | — | $ | 43,135 | $ | 21,112 | $ | 73,394 | $ | (8,664 | ) | $ | (99 | ) | $ | (8,763 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Intangible Assets | Lease Intangible Liabilities | |||||||||||||||||||||||||||
March 31, 2020 | Above Market Leases | In Place Leases | Leasing Commissions | Total | Below Market Leases | Below Ground | Total | |||||||||||||||||||||
Cost | $ | 14,985 | $ | 87,320 | $ | 35,988 | $ | 138,293 | $ | (13,878 | ) | $ | (138 | ) | $ | (14,016 | ) | |||||||||||
Accumulated amortization | (7,051 | ) | (51,847 | ) | (17,291 | ) | (76,189 | ) | 6,371 | 41 | 6,412 | |||||||||||||||||
$ | 7,934 | $ | 35,473 | $ | 18,697 | $ | 62,104 | $ | (7,507 | ) | $ | (97 | ) | $ | (7,604 | ) | ||||||||||||
Lease Intangible Assets | Lease Intangible Liabilities | |||||||||||||||||||||||||||||||
December 31, 2018 | Above Market Leases | Below Market Ground Lease(1) | In Place Leases | Leasing Commissions | Total | Below Market Leases | Below Market Ground Lease(1) | Total | ||||||||||||||||||||||||
Cost | $ | 10,595 | $ | 1,855 | $ | 82,474 | $ | 31,706 | $ | 126,630 | $ | (12,925 | ) | $ | (138 | ) | $ | (13,063 | ) | |||||||||||||
Accumulated amortization | (4,800 | ) | (19 | ) | (34,273 | ) | (12,037 | ) | (51,129 | ) | 4,140 | 36 | 4,176 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
| �� |
|
|
|
| |||||||||||||||||
$ | 5,795 | $ | 1,836 | $ | 48,201 | $ | 19,669 | $ | 75,501 | $ | (8,785 | ) | $ | (102 | ) | $ | (8,887 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Intangible Assets | Lease Intangible Liabilities | |||||||||||||||||||||||||||
December 31, 2019 | Above Market Leases | In Place Leases | Leasing Commissions | Total | Below Market Leases | Below Ground | Total | |||||||||||||||||||||
Cost | $ | 15,242 | $ | 87,320 | $ | 36,048 | $ | 138,610 | $ | (13,878 | ) | $ | (138 | ) | $ | (14,016 | ) | |||||||||||
Accumulated amortization | (6,704 | ) | (48,229 | ) | (16,144 | ) | (71,077 | ) | 5,782 | 40 | 5,822 | |||||||||||||||||
$ | 8,538 | $ | 39,091 | $ | 19,904 | $ | 67,533 | $ | (8,096 | ) | $ | (98 | ) | $ | (8,194 | ) | ||||||||||||
2019 | $ | 5,098 | ||
2020 | 19,302 | |||
2021 | 15,990 | |||
2022 | 8,223 | |||
2023 | 5,361 | |||
Thereafter | 10,657 | |||
|
| |||
$ | 64,631 | |||
|
|
2020 | $ | 14,129 | ||
2021 | 15,894 | |||
2022 | 8,233 | |||
2023 | 5,359 | |||
2024 | 3,191 | |||
Thereafter | 7,694 | |||
$ | 54,500 | |||
Property | September 30, 2019 | December 31, 2018 | Interest Rate as of September 30, 2019(1) | Maturity | ||||||||||||
Unsecured Credit Facility (3) | $ | 43,325 | $ | 147,500 | LIBOR +1.50 | %(2) | March 2022 | |||||||||
Term Loan (4) | 50,000 | — | LIBOR +1.40 | (2) | September 2024 | |||||||||||
Midland Life Insurance (5) | 85,720 | 86,973 | 4.34 | May 2021 | ||||||||||||
Mission City | 47,000 | 47,000 | 3.78 | November 2027 | ||||||||||||
190 Office Center | 41,007 | 41,250 | 4.79 | October 2025 | ||||||||||||
Canyon Park(6) | 40,950 | — | 4.30 | March 2027 | ||||||||||||
Circle Point | 39,650 | 39,650 | 4.49 | September 2028 | ||||||||||||
SanTan | 34,250 | 34,682 | 4.56 | March 2027 | ||||||||||||
Intellicenter | 33,102 | 33,481 | 4.65 | October 2025 | ||||||||||||
The Quad | 30,600 | 30,600 | 4.20 | September 2028 | ||||||||||||
FRP Collection (7) | 29,142 | 29,589 | 3.10 | September 2023 | ||||||||||||
2525 McKinnon | 27,000 | 27,000 | 4.24 | April 2027 | ||||||||||||
Cascade Station | 22,390 | — | 4.55 | May 2024 | ||||||||||||
Greenwood Blvd (7) | 22,425 | 22,425 | 3.15 | December 2025 | ||||||||||||
5090 N 40th St | 22,000 | 22,000 | 3.92 | January 2027 | ||||||||||||
AmberGlen | 20,000 | 20,000 | 3.69 | May 2027 | ||||||||||||
Lake Vista Pointe | 17,800 | 18,044 | 4.28 | August 2024 | ||||||||||||
Central Fairwinds (8) | 17,626 | 17,882 | 3.15 | September 2024 | ||||||||||||
FRP Ingenuity Drive | 17,000 | 17,000 | 4.44 | December 2024 | ||||||||||||
Carillon Point (7) | 16,067 | 16,330 | 3.10 | October 2023 | ||||||||||||
|
|
|
| |||||||||||||
Total Principal | 657,054 | 651,406 | ||||||||||||||
Deferred financing costs, net | (6,058 | ) | (6,052 | ) | ||||||||||||
Unamortized fair value adjustments | 697 | — | ||||||||||||||
|
|
|
| |||||||||||||
Total | $ | 651,693 | $ | 645,354 | ||||||||||||
|
|
|
|
Property | March 31, 2020 | December 31, 2019 | Interest Rate as of March 31, 2020 (1) | Maturity | ||||||||||||
Unsecured Credit Facility (3)(4) | $ | 100,000 | $ | — | LIBOR +1.50 | % (2) | March 2022 | |||||||||
Term Loan (4) | 50,000 | 50,000 | LIBOR +1.40 | % (2) | September 2024 | |||||||||||
Midland Life Insurance (5) | 84,861 | 85,293 | 4.34 | May 2021 | ||||||||||||
Mission City | 47,000 | 47,000 | 3.78 | November 2027 | ||||||||||||
Canyon Park (6) | 40,950 | 40,950 | 4.30 | March 2027 | ||||||||||||
190 Office Center | 40,700 | 40,854 | 4.79 | October 2025 | ||||||||||||
Circle Point | 39,650 | 39,650 | 4.49 | September 2028 | ||||||||||||
SanTan | 33,903 | 34,053 | 4.56 | March 2027 | ||||||||||||
Intellicenter | 32,839 | 32,971 | 4.65 | October 2025 | ||||||||||||
The Quad | 30,600 | 30,600 | 4.20 | September 2028 | ||||||||||||
FRP Collection | 28,795 | 28,969 | 3.10 | September 2023 | ||||||||||||
2525 McKinnon | 27,000 | 27,000 | 4.24 | April 2027 |
Property | March 31, 2020 | December 31, 2019 | Interest Rate as of March 31, 2020 (1) | Maturity | ||||||||||||
Greenwood Blvd | 22,425 | 22,425 | 3.15 | December 2025 | ||||||||||||
Cascade Station | 22,216 | 22,304 | 4.55 | May 2024 | ||||||||||||
5090 N 40 th St | 21,936 | 22,000 | 3.92 | January 2027 | ||||||||||||
AmberGlen | 20,000 | 20,000 | 3.69 | May 2027 | ||||||||||||
Lake Vista Pointe | 17,632 | 17,717 | 4.28 | August 2024 | ||||||||||||
Central Fairwinds | 17,433 | 17,534 | 3.15 | June 2024 | ||||||||||||
FRP Ingenuity Drive | 16,934 | 17,000 | 4.44 | December 2024 | ||||||||||||
Carillon Point | 15,877 | 15,972 | 3.10 | October 2023 | ||||||||||||
Total Principal | 710,751 | 612,292 | ||||||||||||||
Deferred financing costs, net | (5,302 | ) | (5,660 | ) | ||||||||||||
Unamortized fair value adjustments | 582 | 618 | ||||||||||||||
Total | $ | 706,031 | $ | 607,250 |
(1 ) |
ll interest rates are fixed interest rates with the exception of the U nsecuredC reditF acility (“Unsecured Credit Facility”) and the and 4 below. |
(2) | As of - month LIBOR rate was |
(3) |
the Credit Agreementfor the Unsecured Credit Facility that provides for commitments of up to $250 million, which includes an accordion feature that During the three months ended March 31, 2020, The Unsecured Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than 1.50x.the Company drew approximately $100 million under the Unsecured Credit Facility. As of March 31, 2020, the Unsecured Credit Facility had $100 million drawn and $7.0 million of letters of credit to satisfy escrow requirements for mortgage lenders. |
(4) | In September 2019, the Company entered into a five-year $50 million Term Loan (the “Term Loan”) increasing its authorized borrowings under the Unsecured Credit Facility from $250 million to $300 million. Borrowings under the Term Loan30-day LIBOR payments. |
(5) | The mortgage loan is cross-collateralized by Cherry Creek, City Center and 7595 Tech (formerly “DTC |
(6) | The mortgage loan anticipated repayment date (“ARD”) is March 1, 2027. The final scheduled maturity date can be extended up to 5 years beyond the ARD. If the loan is not paid off at ARD, loan’s interest rate shall be adjusted to the greater of (i) the initial interest rate plus 200 basis points or (ii) the yield on the five year “on the run” treasury reported by Bloomberg market data service plus 450 basis points. |
|
|
2019 | $ | 1,400 | ||
2020 | 6,328 | |||
2021 | 89,314 | |||
2022 | 49,853 | |||
2023 | 48,528 | |||
Thereafter | 461,631 | |||
|
| |||
$ | 657,054 | |||
|
|
2020 | $ | 4,738 | ||
2021 | 89,355 | |||
2022 | 106,529 | |||
2023 | 48,529 | |||
2024 | 124,725 | |||
Thereafter | 336,875 | |||
$ | 710,751 | |||
During the three months ended
Accordingly, the fair value of the Interest Rate Swap has been classified as a Level 2 fair value measurement.
As of December 31, 2018, the Company did not have any hedges or derivatives.
During the three months ended September 30,
|
| Three months ended September 30, 2019 | Nine months ended September 30, 2019 | |||||||||||||
Fixed payments | $ | 33,495 | $ | 98,555 | ||||||||||||
Variable payments | 5,441 | 15,967 | ||||||||||||||
|
|
|
| |||||||||||||
$ | 38,936 | $ | 114,522 | |||||||||||||
|
|
|
|
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Fixed payments | $ | 34,092 | $ | 32,199 | ||||
Variable payments | 6,016 | 4,880 | ||||||
$ | 40,108 | $ | 37,079 | |||||
2019 | $ | 31,253 | ||
2020 | 116,812 | |||
2021 | 106,709 | |||
2022 | 89,349 | |||
2023 | 71,209 | |||
Thereafter | 161,614 | |||
|
| |||
$ | 576,946 | |||
|
|
2020 | $ | 90,339 | ||
2021 | 113,927 | |||
2022 | 95,518 | |||
2023 | 77,243 | |||
2024 | 57,558 | |||
Thereafter | 115,327 | |||
$ | 549,912 | |||
March 31, 2020.
As of September 30, 2019 | ||||
Right-of-use asset – operating leases | $ | 13,125 | ||
Lease liability – operating leases | $ | 8,213 | ||
Right-of-use asset – financing leases | $ | 85 | ||
Lease liability – financing leases | $ | 84 |
As of March 31, 2020 | As of December 31, 2019 | |||||||
Right-of-use asset – operating leases | $ | 13,031 | $ | 13,130 | ||||
Lease liability – operating leases | $ | 7,985 | $ | 8,033 | ||||
Right-of-use asset – financing leases | $ | 73 | $ | 79 | ||||
Lease liability – financing leases | $ | 73 | $ | 79 |
The Company did not have any financing leases as of the three months ended March 31, 2019.
Operating Leases | Financing Leases | |||||||
2019 | $ | 144 | $ | 6 | ||||
2020 | 782 | 27 | ||||||
2021 | 781 | 27 | ||||||
2022 | 741 | 27 | ||||||
2023 | 659 | 4 | ||||||
Thereafter | 27,277 | — | ||||||
|
|
|
| |||||
Total future minimum lease payments | 30,384 | 91 | ||||||
Discount | (22,170 | ) | (7 | ) | ||||
|
|
|
| |||||
Total | $ | 8,214 | $ | 84 | ||||
|
|
|
|
Operating Leases | Financing Leases | |||||||
2020 | $ | 364 | $ | 20 | ||||
2021 | 817 | 27 | ||||||
2022 | 798 | 27 | ||||||
2023 | 663 | 4 | ||||||
2024 | 597 | — | ||||||
Thereafter | 26,680 | — | ||||||
Total future minimum lease payments | 29,919 | 78 | ||||||
Discount | (21,934 | ) | (5 | ) | ||||
Total | $ | 7,985 | $ | 73 | ||||
The Company and
up to 1,000,000 shares of Series A Preferred Stock through the Sales Agents, acting as agents or principals (the “ATM Program”). Pursuant to the EDAs, the shares may be offered and sold through the Sales Agents in transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the New York Stock Exchange or sales made to or through a market maker other than on an exchange or, with the prior consent of the Company, in privately negotiated transactions. The Sales Agents will be entitled to compensation of up to 2.0% of the gross proceeds of shares sold through the Sales Agents from time to time under the EDAs.classified as authorized and unissued shares. The Company has no obligation to sell anyrecognizes the cost of the shares under the EDAs and may at any time suspend solicitations and offers under, or terminate, the EDAs. During the nine month period ended September 30, 2019, the Company issued 8,000,000 shares of common stock under the ATM Program. The Company raised $106.5 millionit repurchases, including direct costs incurred, as a reduction in aggregate gross proceeds, resulting in aggregate net proceedsstockholders’ equity. Such reductions of stockholders equity due to the repurchases of shares of common stock will be applied first, to reduce common stock in the amount of the par value associated with the shares of common stock repurchased and second, to reduce additional
$11.6 million. There were 0 shares repurchased during the three months ended March 31, 2019.
Restricted Stock Units
APerformance RSU award represents the right to receive shares of the Company’s common stock in the future, after the applicable vesting criteria, determined by the Plan Administrator, has been satisfied. The holder of an award of RSU has no rights as a stockholder until shares of common stock are issued in settlement of vested RSUs. The Plan Administrator may provide for a grant of dividend equivalent rights in connection with the grant of RSU; provided, however, that if the RSUs do not vest solely upon satisfaction of continued employment or service, any payment in respectAwards. There was
11. Subsequent Events
On October 7, 2019, the Company completed a public offering pursuant to which the Company sold 6,900,000repurchase of 5,872,328 shares of its common stock inclusivefor approximately $48.9 million.
uncertainty regarding the Company’s obligations under its floating rate debt instruments upon discontinuation of LIBOR;
a material increase in institutional ownership of real estate in secondary markets that could result in, among others, compression of cap rates and fewer acquisition opportunities being available to the Company; and
otherwise, except as may be required by applicable securities laws.
billed to or paid by the tenant. The full amount of the expenses for this lease type is reflected in operating expenses, and the reimbursement is reflected in tenant recoveries. All tenants in ourthe Lake Vista Pointe, 2525 McKinnon, Sorrento Mesa and Canyon Park properties have triple net leases. Certain tenants at AmberGlen, Cherry Creek, Superior Pointe, Florida Research Park, Circle Point, The Quad, Cascade Station and Denver Tech have leases on a triple net basis. We are also a lessor for a fee simple ground lease at the AmberGlen property. All of our remaining leases are full-service gross leases.
Metropolitan Area | Property | Economic Interest | NRA (000s Square Feet) | In Place Occupancy | Annualized Base Rent per Square Foot | Annualized Gross Rent per Square Foot(1) | Annualized Base Rent(2) ($000s) | |||||||||||||||||||
Phoenix, AZ (20.6% of NRA) | Pima Center | 100.0 | % | 272 | 87.0 | % | $ | 27.19 | $ | 27.19 | $ | 6,431 | ||||||||||||||
SanTan | 100.0 | % | 267 | 91.7 | % | $ | 27.85 | $ | 27.85 | $ | 6,807 | |||||||||||||||
5090 N 40th St | 100.0 | % | 175 | 95.8 | % | $ | 29.03 | $ | 29.03 | $ | 4,861 | |||||||||||||||
Camelback Square | 100.0 | % | 173 | 67.1 | % | $ | 29.89 | $ | 29.89 | $ | 3,472 | |||||||||||||||
The Quad | 100.0 | % | 163 | 100.0 | % | $ | 28.66 | $ | 28.91 | $ | 4,672 | |||||||||||||||
Papago Tech | 100.0 | % | 163 | 86.7 | % | $ | 21.78 | $ | 21.78 | $ | 3,072 | |||||||||||||||
Denver, CO (19.7%) | Cherry Creek | 100.0 | % | 356 | 100.0 | % | $ | 18.59 | $ | 18.59 | $ | 6,612 | ||||||||||||||
Circle Point | 100.0 | % | 272 | 94.3 | % | $ | 17.58 | $ | 30.47 | $ | 4,506 | |||||||||||||||
Denver Tech(4) | 100.0 | % | 380 | 66.9 | % | $ | 22.86 | $ | 27.69 | $ | 5,646 | |||||||||||||||
Superior Pointe | 100.0 | % | 151 | 96.5 | % | $ | 17.66 | $ | 29.17 | $ | 2,579 | |||||||||||||||
Tampa, FL (17.6%) | Park Tower | 94.8 | % | 471 | 92.4 | % | $ | 24.58 | $ | 24.58 | $ | 10,696 | ||||||||||||||
City Center | 95.0 | % | 241 | 91.8 | % | $ | 25.49 | $ | 25.49 | $ | 5,652 | |||||||||||||||
Intellicenter | 100.0 | % | 204 | 100.0 | % | $ | 23.99 | $ | 23.99 | $ | 4,881 | |||||||||||||||
Carillon Point | 100.0 | % | 124 | 100.0 | % | $ | 28.16 | $ | 28.16 | $ | 3,498 | |||||||||||||||
Orlando, FL (12.2%) | Florida Research Park(5) | 96.6 | % | 397 | 89.4 | % | $ | 23.44 | $ | 27.25 | $ | 8,262 | ||||||||||||||
Central Fairwinds | 97.0 | % | 168 | 92.1 | % | $ | 25.32 | $ | 25.32 | $ | 3,921 | |||||||||||||||
Greenwood Blvd | 100.0 | % | 155 | 100.0 | % | $ | 22.75 | $ | 22.75 | $ | 3,527 | |||||||||||||||
San Diego, CA (9.9%) | Sorrento Mesa | 100.0 | % | 296 | 85.3 | % | $ | 25.27 | $ | 31.27 | $ | 6,380 | ||||||||||||||
Mission City | 100.0 | % | 286 | 96.9 | % | $ | 35.01 | $ | 35.01 | $ | 9,703 | |||||||||||||||
Dallas, TX (9.8%) | 190 Office Center | 100.0 | % | 303 | 89.5 | % | $ | 25.64 | $ | 25.64 | $ | 6,960 | ||||||||||||||
Lake Vista Pointe | 100.0 | % | 163 | 100.0 | % | $ | 16.00 | $ | 24.00 | $ | 2,613 | |||||||||||||||
2525 McKinnon | 100.0 | % | 111 | 92.5 | % | $ | 27.41 | $ | 44.41 | $ | 2,823 | |||||||||||||||
Portland, OR (5.6%) | AmberGlen | 76.0 | % | 201 | 96.9 | % | $ | 21.30 | $ | 23.89 | $ | 4,151 | ||||||||||||||
Cascade Station | 100.0 | % | 128 | 100.0 | % | $ | 26.45 | $ | 32.45 | $ | 3,372 | |||||||||||||||
Seattle, WA (3.4%) | Canyon Park | 100.0 | % | 207 | 100.0 | % | $ | 21.20 | $ | 29.20 | $ | 4,384 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total / Weighted Average – Excluding Assets Held For Sale(3) |
| 5,827 | 91.4 | % | $ | 24.35 | $ | 27.18 | $ | 129,481 | ||||||||||||||||
Denver, CO (1.2%) | Logan Tower | 100.0 | % | 72 | 69.8 | % | $ | 21.60 | $ | 21.60 | $ | 1,084 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total / Weighted Average – September 30, 2019(3) |
| 5,899 | 91.2 | % | $ | 24.32 | $ | 27.13 | $ | 130,565 | ||||||||||||||||
|
|
|
|
Metropolitan Area | Property | Economic Interest | NRA (000s Square Feet) | In Place Occupancy | Annualized Base Rent per Square Foot | Annualized Gross Rent per Square Foot (1) | Annualized Base Rent (2) ($000s) | |||||||||||||||||||
Phoenix, AZ (20.8% of NRA) | Pima Center | 100.0 | % | 272 | 87.0 | % | $ | 27.44 | $ | 27.44 | $ | 6,491 | ||||||||||||||
SanTan | 100.0 | % | 267 | 91.7 | % | $ | 28.11 | $ | 28.11 | $ | 6,868 | |||||||||||||||
5090 N 40 th St | 100.0 | % | 174 | 94.6 | % | $ | 28.58 | $ | 28.58 | $ | 4,714 | |||||||||||||||
Camelback Square | 100.0 | % | 174 | 78.8 | % | $ | 31.25 | $ | 31.25 | $ | 4,284 | |||||||||||||||
The Quad | 100.0 | % | 163 | 100.0 | % | $ | 29.20 | $ | 29.51 | $ | 4,759 | |||||||||||||||
Papago Tech | 100.0 | % | 163 | 90.9 | % | $ | 22.46 | $ | 22.46 | $ | 3,322 | |||||||||||||||
Denver, CO (19.9%) | Cherry Creek | 100.0 | % | 356 | 100.0 | % | $ | 18.59 | $ | 19.31 | $ | 6,612 | ||||||||||||||
Circle Point | 100.0 | % | 272 | 94.3 | % | $ | 17.88 | $ | 31.76 | $ | 4,583 | |||||||||||||||
Denver Tech (3) | 100.0 | % | 381 | 78.0 | % | $ | 22.96 | $ | 27.02 | $ | 6,591 | |||||||||||||||
Superior Pointe | 100.0 | % | 151 | 96.5 | % | $ | 18.08 | $ | 30.55 | $ | 2,641 | |||||||||||||||
Tampa, FL (17.9%) | Park Tower | 94.8 | % | 471 | 89.8 | % | $ | 25.58 | $ | 25.58 | $ | 10,820 | ||||||||||||||
City Center | 95.0 | % | 242 | 93.1 | % | $ | 25.83 | $ | 25.83 | $ | 5,814 | |||||||||||||||
Intellicenter | 100.0 | % | 204 | 100.0 | % | $ | 23.99 | $ | 23.99 | $ | 4,881 | |||||||||||||||
Carillon Point | 100.0 | % | 124 | 100.0 | % | $ | 28.36 | $ | 28.36 | $ | 3,522 | |||||||||||||||
Orlando, FL (12.4%) | Florida Research Park (4) | 96.6 | % | 397 | 96.9 | % | $ | 23.93 | $ | 27.39 | $ | 9,171 | ||||||||||||||
Central Fairwinds | 97.0 | % | 168 | 93.7 | % | $ | 25.10 | $ | 25.10 | $ | 3,956 | |||||||||||||||
Greenwood Blvd | 100.0 | % | 155 | 100.0 | % | $ | 23.25 | $ | 23.25 | $ | 3,605 | |||||||||||||||
San Diego, CA (10.0%) | Sorrento Mesa | 100.0 | % | 296 | 85.3 | % | $ | 25.77 | $ | 33.77 | $ | 6,507 | ||||||||||||||
Mission City | 100.0 | % | 286 | 91.6 | % | $ | 35.43 | $ | 35.43 | $ | 9,276 | |||||||||||||||
Dallas, TX (9.9%) | 190 Office Center | 100.0 | % | 303 | 81.2 | % | $ | 25.55 | $ | 25.55 | $ | 6,288 | ||||||||||||||
Lake Vista Pointe | 100.0 | % | 163 | 100.0 | % | $ | 16.00 | $ | 25.00 | $ | 2,613 | |||||||||||||||
2525 McKinnon | 100.0 | % | 111 | 88.5 | % | $ | 28.23 | $ | 45.23 | $ | 2,782 | |||||||||||||||
Portland, OR (5.6%) | AmberGlen | 76.0 | % | 203 | 98.4 | % | $ | 21.78 | $ | 24.32 | $ | 4,342 | ||||||||||||||
Cascade Station | 100.0 | % | 128 | 100.0 | % | $ | 26.69 | $ | 28.06 | $ | 3,403 | |||||||||||||||
Seattle, WA (3.5%) | Canyon Park | 100.0 | % | 207 | 100.0 | % | $ | 21.84 | $ | 29.84 | $ | 4,515 | ||||||||||||||
Total / Weighted Average – March 31, 2020 (5) | 5,831 | 92.2 | % | $ | 24.66 | $ | 27.58 | $ | 132,360 | |||||||||||||||||
(1) |
|
(2) | Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended |
(3) |
|
Denver Tech |
Florida Research Park |
(5) | Averages weighted based on the property’s NRA, adjusted for occupancy. |
In addition, the recent
2019.
March 31, 2019
prior year.
property operating expenses was primarily due to the acquisitions described above. The acquisition of the The Quad, Greenwood Blvd, Camelback Square, Canyon Park, Cascade Station and 7601 Tech properties contributed an additional $0.2 million, $0.3 million, $0.4 million, $0.4 million, $0.1 million, $0.2 million and $0.1$0.6 million, respectively, in additional property operating expenses. Partially offsetting these increases, Plaza 25 decreased by $0.5$0.2 million due to the sale of that property in February 2019, the Sorrento Mesa portfolio decreased by $0.1 million due to the sale of the 10455 Pacific Center building in May 2019, and Logan Tower decreased by $0.2 million due to the sale of that property in December 2019. The remaining property operating expenses aggregate to a net $0.1an increase of $0.3 million increase in comparison to the prior-year period.
Other Expense (Income)
Interest Expense. Interest expense increased $1.5 million, or 24%, to $7.7 million for the three months ended September 30, 2019, compared to $6.2 million for the three months ended September 30, 2018. The increase was primarily due to interest expense related to acquisitions. Interest expense for the Circle Point, The Quad, Greenwood Blvd, Canyon Park and Cascade Station property level debt increased by $0.2 million, $0.2 million, $0.2 million, $0.5 million and $0.2 million, respectively, and the interest on the line of credit increased by $0.3 million as a result of acquisitions funded by our $250 million Unsecured Credit Facility (as defined below). These increases were partially offset by a $0.2 million decrease in the Plaza 25 debt as a result of its sale and the extinguishment of its property level debt.
Comparison of Nine Months Ended September 30, 2019 to Nine Months Ended September 30, 2018
Rental and Other Revenues. Revenue includes net rental income, including parking, signage and other income, as well as the recovery of operating costs and property taxes from tenants. Rental and other revenues increased $21.9 million, or 23%, to $117.2 million for the nine months ended September 30, 2019 compared to $95.3 million for the nine months ended September 30, 2018. Of this increase, $1.8 million was attributable to the acquisition of Pima Center in April 2018, $4.5 million from the acquisition of Circle Point in July 2018, $3.3 million from the acquisition of The Quad in July 2018, $3.4 million from the acquisition of Greenwood Blvd in December 2018, $3.5 million from the acquisition of Camelback Square in December 2018, $3.3 million from the acquisition of Canyon Park in February 2019, $1.1 million from the acquisition of Cascade Station in June 2019 and $0.3 million from the acquisition of 7601 Tech in September 2019. Revenue from Central Fairwinds, Park Tower, Mission City and FRP Collection also increased by $0.4 million, $0.8 million, $0.6 million and $0.5 million, respectively, as a result of increased average occupancy over the prior year. Partially offsetting these increases, Washington Group Plaza decreased by $1.7 million due to the sale of the property in March 2018 and Plaza 25 decreased by $1.7 million due to the sale of the property in February 2019. Revenue from 7595 Tech (formerly “DTC Crossroads”) decreased $0.6 million as a result of decreased occupancy over the prior year and Sorrento Mesa also decreased by $1.3 million as a result of the termination fee payment received in the prior year. The remaining properties’ revenues were modestly higher in comparison to the prior year primarily as a result of modestmark-to-market increases in rents upon renewal. Other Revenues benefited from aone-time payment of $2.6 million received as consideration for the assignment of a purchase contract. The assignment fee originated through our administrative services relationship. Upon adoption of Topic 842, prior year amounts disclosed in rental income, expense reimbursement, and other have been combined into a single line to conform to current period presentation.
Operating Expenses
Total Operating Expenses. Total operating expenses consist of property operating expenses, general and administrative expenses and depreciation and amortization. Total operating expenses increased by $15.7 million, or
20%, to $95.2 million for the nine months ended September 30, 2019, from $79.5 million for the nine months ended September 30, 2018, primarily due to the acquisitions described above. Total operating expenses increased by $1.8 million, $4.0 million, $2.1 million, $2.2 million, $3.4 million, $1.6 million, $0.8 million and $0.3 million, respectively, from the acquisitions of Pima Center, Circle Point, The Quad, Greenwood Blvd, Camelback Square, Canyon Park, Cascade Station and 7601 Tech properties. Park Tower operating expenses also increased by $0.6 million due to the higher occupancy at that property. Washington Group Plaza operating expenses decreased by $0.8 million due to its sale in March 2018 and Plaza 25 operating expenses decreased by $2.1 million due to its sale in February 2019. Sorrento Mesa decreased by $1.5 million due to the sale of the 10455 Pacific Center building of the Sorrento Mesa property in May 2019. General and Administrative Expenses increased by approximately $2.4 million, of which $1.1 million was the result ofone-time expenses and accruals incurred as a result of the assignment fee income earned during the nine months ended September 30, 2019 and the balance related to higher payroll costs. The remaining operating expenses were modestly higher in comparison to the prior-year period primarily due to higher occupancy at the properties.
Property Operating Expenses. Property operating expenses are comprised mainly of building common area and maintenance expenses, insurance, property taxes, property management fees, as well as certain expenses that are not recoverable from tenants, the majority of which are related to costs necessary to maintain the appearance and marketability of vacant space. In the normal course of business, property expenses fluctuate and are impacted by various factors including, but not limited to, occupancy levels, weather, utility costs, repairs, maintenance andre-leasing costs. Property operating expenses increased $6.2 million, or 17%, to $42.8 million for the nine months ended September 30, 2019 from $36.6 million for the nine months ended September 30, 2018. The increase in property operating expenses was primarily due to the acquisitions described above. The acquisition of the Pima Center, Circle Point, The Quad, Greenwood Blvd, Camelback Square, Canyon Park, Cascade Station and 7601 Tech contributed an additional $0.7 million, $2.0 million, $1.0 million, $1.2 million, $1.1 million, $0.4 million, $0.3 million and $0.1 million, respectively, in additional property operating expenses. Park Tower operating expenses also increased by $0.2 million due to the higher occupancy at that property. Washington Group Plaza decreased by $0.8 million due to the sale of that property in March 2018 and Plaza 25 decreased by $1.1 million due to the sale of that property in February 2019. The remaining property operating expenses aggregate to an overall $1.1 million increase in comparison to the prior-year period.
General and Administrative. General and administrative expenses are comprised of public company reporting costs and the compensation of our management team and board of directors as well asnon-cash stock-based compensation expenses. General and administrative expenses increased $2.6 million, or 46%, to $8.4 million for the nine months ended September 30, 2019 compared to $5.8 million for the nine months ended September 30, 2018. Of this increase, $1.1 million can be attributed to theone-time expenses and accruals incurred as a result of the assignment fee income earned during the nine months ended September 30, 2019 as described above and the balance of the increase was primarily attributable to higher payroll costs.
Depreciation and Amortization. Depreciation and amortization increased $7.1 million, or 19%, to $44.1 million for the nine months ended September 30, 2019 compared to $37.0 million for the nine months ended September 30, 2018, primarily due to the addition of the Pima Center, Circle Point, The Quad, Greenwood Blvd, Camelback Square, Canyon Park, Cascade Station and 7601 Tech properties. These increases were partially offset by a decrease at Washington Group Plaza, Plaza 25, Logan Tower and the 10455 Pacific Center building of the Sorrento Mesa property due to the sale of those properties.
March 31, 2019
properties, including changes in working capital.
2019.
repurchases during the three months ended March 31, 2020.
March 31, 2020.
Inlender.
Thethe Company will pay a fixed rate of approximately 1.27% of the notional amount annually, payable monthly, and receive floating rate
from time to time under the EDAs. The Company has no obligation to selldid not issue any of the shares under the EDAs and may at any time suspend solicitations and offers under, or terminate, the EDAs. During the nine month period ended September 30, 2019, the Company issued 8,000,000 shares of common stock or Series A Preferred Stock under the ATM Program. The Company raised $106.5 million in aggregate gross proceeds, resulting in aggregate net proceeds toProgram during the Company of approximately $104.8 million after deducting sales commissions and offering expenses.
three months ended March 31, 2020.
Payments Due by Period(in thousands) | ||||||||||||||||||||
Contractual Obligations | Total | 2019 | 2020-2021 | 2022-2023 | More than 5 years | |||||||||||||||
Principal payments on mortgage loans | $ | 657,054 | $ | 1,400 | $ | 95,642 | $ | 98,381 | $ | 461,631 | ||||||||||
Interest payments(1) | 146,206 | 6,567 | 49,921 | 40,737 | 48,981 | |||||||||||||||
Tenant-related commitments | 11,885 | 6,304 | 4,982 | 599 | — | |||||||||||||||
Operating and financing lease obligations | 30,475 | 150 | 1,617 | 1,431 | 27,277 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 845,620 | $ | 14,421 | $ | 152,162 | $ | 141,148 | $ | 537,889 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Payments Due by Period (in thousands) | ||||||||||||||||||||
Contractual Obligations | Total | 2020 | 2021-2022 | 2023-2024 | More than 5 years | |||||||||||||||
Principal payments on mortgage loans | $ | 710,751 | $ | 4,738 | $ | 195,884 | $ | 173,254 | $ | 336,875 | ||||||||||
Interest payments (1) | 134,628 | 20,302 | 45,789 | 37,089 | 31,448 | |||||||||||||||
Tenant-related commitments | 12,530 | 11,904 | 626 | — | — | |||||||||||||||
Lease obligations | 29,997 | 384 | 1,669 | 1,264 | 26,680 | |||||||||||||||
Total | $ | 887,906 | $ | 37,328 | $ | 243,968 | $ | 211,607 | $ | 395,003 | ||||||||||
(1) | Contracted interest on the floating rate borrowings under our Unsecured Credit Facility was calculated based on the balance and interest rate at |
lender.September 30, 2019,March 31, 2020, we had $7.0a $7 million of lettersletter of credit outstanding under our Unsecured Credit Facility to satisfy escrow requirements for a mortgage lenders.
March 31, 2020.
Our commitments
We are subject to conflicts of interest arising outthe per share market price of our relationshipcommon stock or preferred stock.
Issuer Purchases of Equity Securities | ||||||||||||||||
Period | Total Number of Shares of Common Stock Purchased | Average Price Paid per Share of Common Stock Repurchased | Total Number of Shares of Common Stock Purchased as Part of Share Repurchase Plan | Approximate Dollar Value of Shares of Common Stock that May Yet Be Purchased Under the Share Repurchase Plan (1) (thousands) | ||||||||||||
January 1 – 31, 2020 | — | $ | — | — | $ | — | (2) | |||||||||
February 1 – 29, 2020 | — | — | — | — | (2) | |||||||||||
March 1 – 31, 2020 | 1,451,249 | 7.99 | 1,451,249 | 88,406 | ||||||||||||
Total | 1,451,249 | $ | 7.99 | 1,451,249 | $ | 88,406 | ||||||||||
(1) | Represents approximate dollar value of shares that could have been purchased under the plan in effect at the end of the month. |
(2) | The share repurchase plan was approved by the Company’s Board of Directors on March 9, 2020. Therefore, no purchases were authorized or made during this period. |
|
| |||
Exhibit Number | Description | |||
| ||||
1.1 | ||||
1.2 | ||||
1.3 | ||||
1.4 | ||||
1.5 | ||||
1.6 |
1.7 | ||||
3.1 | ||||
| ||||
3.2 | ||||
| ||||
4.1 |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)* | |||
† | Filed herewith. |
|
* | Submitted electronically herewith. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements. | |||
** | Compensatory Plan or arrangement |
By: | /s/ James Farrar | |||||
James Farrar | ||||||
| ||||||
Chief Executive Officer and Director | ||||||
(Principal Executive Officer) |
By: | /s/ Anthony Maretic | |||||
Anthony Maretic | ||||||
| ||||||
Chief Financial Officer, Secretary and Treasurer | ||||||
(Principal Financial Officer and Principal Accounting Officer) |
32