Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 26, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | FRANKLIN STREET PROPERTIES CORP /MA/ | |
Entity Central Index Key | 1,031,316 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 107,231,155 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Real estate assets: | ||
Land | $ 191,578 | $ 191,578 |
Buildings and improvements | 1,833,470 | 1,811,631 |
Fixtures and equipment | 7,565 | 5,614 |
Total real estate assets, gross | 2,032,613 | 2,008,823 |
Less accumulated depreciation | 405,115 | 376,131 |
Real estate assets, net | 1,627,498 | 1,632,692 |
Acquired real estate leases, less accumulated amortization of $96,899 and $109,771, respectively | 71,861 | 86,520 |
Investment in non-consolidated REITs | 69,067 | 70,164 |
Cash, cash equivalents and restricted cash | 10,448 | 9,819 |
Tenant rent receivables, less allowance for doubtful accounts of $170 and $250, respectively | 4,039 | 3,123 |
Straight-line rent receivable, less allowance for doubtful accounts of $50 and $50, respectively | 53,294 | 53,194 |
Prepaid expenses and other assets | 7,444 | 8,387 |
Related party mortgage loan receivables | 71,190 | 71,720 |
Other assets: derivative asset | 21,196 | 13,925 |
Office computers and furniture, net of accumulated depreciation of $1,473 and $1,420, respectively | 236 | 289 |
Deferred leasing commissions, net of accumulated amortization of $23,698 and $22,276, respectively | 43,254 | 40,679 |
Total assets | 1,979,527 | 1,990,512 |
Liabilities: | ||
Bank note payable | 98,000 | 78,000 |
Term loans payable, less unamortized financing costs of $4,382 and $5,099, respectively | 765,618 | 764,901 |
Series A&B Senior Notes, less unamortized financing costs of $1,232 and $1,308, respectively | 198,768 | 198,692 |
Accounts payable and accrued expenses | 52,651 | 61,039 |
Accrued compensation | 1,778 | 3,641 |
Tenant security deposits | 5,576 | 5,383 |
Other liabilities: derivative liabilities | 1,759 | |
Acquired unfavorable real estate leases, less accumulated amortization of $8,118 and $7,638, respectively | 4,749 | 5,805 |
Total liabilities | 1,127,140 | 1,119,220 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding | ||
Common stock, $.0001 par value, 180,000,000 shares authorized, 107,231,155 and 107,231,155 shares issued and outstanding, respectively | 11 | 11 |
Additional paid-in capital | 1,356,457 | 1,356,457 |
Accumulated other comprehensive income | 21,196 | 12,166 |
Accumulated distributions in excess of accumulated earnings | (525,277) | (497,342) |
Total stockholders' equity | 852,387 | 871,292 |
Total liabilities and stockholders' equity | $ 1,979,527 | $ 1,990,512 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Consolidated Balance Sheets | ||
Acquired real estate leases, accumulated amortization | $ 96,899 | $ 109,771 |
Tenant rent receivables, allowance for doubtful accounts | 170 | 250 |
Straight-line rent receivable, allowance for doubtful accounts | 50 | 50 |
Office computers and furniture, accumulated depreciation | 1,473 | 1,420 |
Deferred leasing commissions, accumulated amortization | 23,698 | 22,276 |
Term loan payable, unamortized financing costs | 4,382 | 5,099 |
Series A & Series B Senior notes, unamortized financing costs | 1,232 | 1,308 |
Acquired unfavorable real estate leases, accumulated amortization | $ 8,118 | $ 7,638 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 180,000,000 | 180,000,000 |
Common stock, shares issued (in shares) | 107,231,155 | 107,231,155 |
Common stock, shares outstanding (in shares) | 107,231,155 | 107,231,155 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Total revenues | $ 66,694,000 | $ 68,371,000 | $ 133,587,000 | $ 137,127,000 |
Expenses: | ||||
Real estate operating expenses | 16,954,000 | 17,286,000 | 34,105,000 | 34,594,000 |
Real estate taxes and insurance | 12,292,000 | 11,595,000 | 23,469,000 | 23,998,000 |
Depreciation and amortization | 23,591,000 | 25,279,000 | 47,626,000 | 50,611,000 |
General and administrative | 3,082,000 | 3,077,000 | 6,514,000 | 6,520,000 |
Interest | 9,753,000 | 7,893,000 | 19,239,000 | 15,472,000 |
Total expenses | 65,672,000 | 65,130,000 | 130,953,000 | 131,195,000 |
Income before equity in losses of non-consolidated REITs, other and gain on sale of properties and properties held for sale, less applicable income tax and taxes | 1,022,000 | 3,241,000 | 2,634,000 | 5,932,000 |
Equity in losses of non-consolidated REITs | (282,000) | (201,000) | (387,000) | (598,000) |
Other | 129,000 | 151,000 | ||
Gain (loss) on sale of properties and properties held for sale, less applicable income tax | (20,492,000) | (18,203,000) | ||
Income (loss) before taxes on income | 740,000 | (17,323,000) | 2,247,000 | (12,718,000) |
Taxes on income | 75,000 | 72,000 | 157,000 | 197,000 |
Net income (loss) | $ 665,000 | $ (17,395,000) | $ 2,090,000 | $ (12,915,000) |
Weighted average number of shares outstanding, basic and diluted (in shares) | 107,231 | 107,231 | 107,231 | 107,231 |
Net income (loss) per share, basic and diluted | $ 0.01 | $ (0.16) | $ 0.02 | $ (0.12) |
Rental | ||||
Revenues: | ||||
Total revenues | $ 65,409,000 | $ 66,995,000 | $ 131,037,000 | $ 134,371,000 |
Related party revenue, Management fees and interest income from loans | ||||
Revenues: | ||||
Total revenues | 1,276,000 | 1,366,000 | 2,532,000 | 2,736,000 |
Other | ||||
Revenues: | ||||
Total revenues | $ 9,000 | $ 10,000 | $ 18,000 | $ 20,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Consolidated Statements of Comprehensive Income | ||||
Net income (loss) | $ 665 | $ (17,395) | $ 2,090 | $ (12,915) |
Comprehensive income (loss): | ||||
Unrealized gain (loss) on derivative financial instruments | 2,455 | (2,411) | 9,030 | (538) |
Total comprehensive income (loss) | 2,455 | (2,411) | 9,030 | (538) |
Comprehensive income (loss) | $ 3,120 | $ (19,806) | $ 11,120 | $ (13,453) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 2,090,000 | $ (12,915,000) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 49,050,000 | 51,823,000 |
Amortization of above and below market leases | (208,000) | (855,000) |
Hedge ineffectiveness | (151,000) | |
(Gain) loss on sale of properties and properties held for sale, less applicable income tax | 18,203,000 | |
Equity in losses of non-consolidated REITs | 387,000 | 598,000 |
Increase (decrease) in allowance for doubtful accounts | (80,000) | 25,000 |
Changes in operating assets and liabilities: | ||
Tenant rent receivables | (836,000) | (1,618,000) |
Straight-line rents | 299,000 | (1,897,000) |
Lease acquisition costs | (398,000) | (318,000) |
Prepaid expenses and other assets | 325,000 | (503,000) |
Accounts payable, accrued expenses and other items | (8,609,000) | (6,829,000) |
Accrued compensation | (1,863,000) | (1,855,000) |
Tenant security deposits | 193,000 | 12,000 |
Payment of deferred leasing commissions | (6,641,000) | (3,632,000) |
Net cash provided by operating activities | 33,709,000 | 40,088,000 |
Cash flows from investing activities: | ||
Property improvements, fixtures and equipment | (24,281,000) | (28,464,000) |
Distributions in excess of earnings from non-consolidated REITs | 710,000 | 691,000 |
Repayment of related party mortgage receivable | 530,000 | 9,530,000 |
Proceeds received on sales of real estate assets | 6,160,000 | |
Net cash used in investing activities | (23,041,000) | (12,083,000) |
Cash flows from financing activities: | ||
Distributions to stockholders | (30,025,000) | (40,748,000) |
Borrowings under bank note payable | 30,000,000 | 40,000,000 |
Repayments of bank note payable | (10,000,000) | (25,000,000) |
Deferred financing costs | (14,000) | |
Net cash used in financing activities | (10,039,000) | (25,748,000) |
Net increase in cash, cash equivalents and restricted cash | 629,000 | 2,257,000 |
Cash, cash equivalents and restricted cash, beginning of year | 9,819,000 | 9,366,000 |
Cash, cash equivalents and restricted cash, end of period | 10,448,000 | 11,623,000 |
Cash paid for: | ||
Interest | 18,001,000 | 14,542,000 |
Taxes | 485,000 | 583,000 |
Non-cash investing and financing activities: | ||
Accrued costs for purchases of real estate assets | $ 5,360,000 | $ 10,041,000 |
Organization, Properties, Basis
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards | |
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards | 1. Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards Organization Franklin Street Properties Corp. (“FSP Corp.” or the “Company”) holds, directly and indirectly, 100% of the interest in FSP Investments LLC, FSP Property Management LLC, FSP Holdings LLC and FSP Protective TRS Corp. FSP Property Management LLC provides asset management and property management services. The Company also has a non-controlling common stock interest in five corporations organized to operate as real estate investment trusts (“REIT”) and a non-controlling preferred stock interest in two of those REITs. Collectively, the five REITs are referred to as the “Sponsored REITs”. As of June 30, 2018, the Company owned and operated a portfolio of real estate consisting of 34 operating properties, one property that was substantially redeveloped and is in lease-up and five managed Sponsored REITs; and held four promissory notes secured by mortgages on real estate owned by Sponsored REITs, including two mortgage loans and two revolving lines of credit. From time-to-time, the Company may acquire, develop or redevelop real estate, make additional secured loans or acquire a Sponsored REIT. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons. Properties The following table summarizes the Company’s number of operating properties and rentable square feet of real estate. In January 2016, the Company classified one property as non-operating that was substantially redeveloped and is in lease-up, which is excluded as of June 30, 2018 and 2017. As of June 30, 2018 2017 Commercial real estate: Number of properties 34 35 Rentable square feet 9,760,699 10,084,710 Basis of Presentation The unaudited consolidated financial statements of the Company include all of the accounts of the Company and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2017, as filed with the Securities and Exchange Commission. The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or for any other period. Financial Instruments As disclosed in Note 4, the Company’s derivatives are recorded at fair value using Level 2 inputs. The Company estimates that the carrying values of cash, cash equivalents and restricted cash, receivables and tenant security deposits approximate their fair values based on their short-term maturity and the loan receivable, bank note and term loans payable approximate their fair values as they bear interest at variable interest rates at spreads that approximate market. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows. June 30, June 30, (in thousands) 2018 2017 Cash and cash equivalents $ 10,448 $ 11,537 Restricted cash — 86 Total cash, cash equivalents and restricted cash $ 10,448 $ 11,623 Amounts included in restricted cash represent amounts set aside for the payments to be made pursuant to our employees’ flexible medical spending accounts. Recent Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. This update is effective for interim and annual reporting periods beginning after December 15, 2017. A substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from Topic 606. The Company adopted Topic 606 using the modified retrospective approach effective January 1, 2018 and the adoption did not have an impact on the amount or timing of revenue recognition in the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to establish a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term on their balance sheets. Lessees will continue to recognize lease expenses on their income statements in a manner similar to current accounting. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. This new standard is effective for annual periods beginning after December 15, 2018, and interim periods thereafter with early adoption permitted. The Company is currently evaluating the potential changes from ASU 2016-02 to future financial reporting and disclosures. The Company expects the adoption of this standard in 2019 will increase its assets and liabilities by approximately $3 million for the addition of right-of-use assets and lease liabilities related to an operating lease for office space in which the Comanpany is a tenant; however, the Company does not expect the standard to have a material impact to its results of operations or liquidity. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the potential impact the adoption of ASU 2016-13 will have on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how reporting entities should present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this guidance during the first quarter of 2018 and applied it retrospectively. Pursuant to the adoption, the Company elected the cumulative earnings approach related to the distributions received from its equity method investments. The adoption did not have an impact on the Company’s Consolidated Statements of Cash Flows. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash (“ASU 2016-18”), which clarifies how reporting entities should present restricted cash and restricted cash equivalents. Reporting entities will show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheets. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Upon the adoption of ASU 2016-18, the Company reconciled both cash and cash equivalents and restricted cash and restricted cash equivalents, whereas under the previous guidance the Company explained the changes during the period for cash and cash equivalents only. Prior periods were retrospectively adjusted to conform to the current period’s presentation. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”), which provides additional guidance on evaluating whether transactions should be accounted for as an acquisition (or disposal) of assets of a business. The update defines three requirements for a set of assets and activities (collectively referred to as a “set”) to be considered a business: inputs, processes and outputs. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. This update will be applied prospectively to any transactions occurring within the period of adoption. Certain property acquisitions which under previous guidance would have been accounted for as business combinations will be accounted for as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized as opposed to expensed under business combination guidance. |
Related Party Transactions and
Related Party Transactions and Investments in Non-Consolidated Entities | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions and Investments in Non-Consolidated Entities | |
Related Party Transactions and Investments in Non-Consolidated Entities | 2. Related Party Transactions and Investments in Non-Consolidated Entities Investment in Sponsored REITs: At June 30, 2018 and December 31, 2017, the Company held a common stock interest in five and six Sponsored REITs, respectively. The Company holds a non-controlling preferred stock investment in two of these Sponsored REITs, FSP 303 East Wacker Drive Corp. (“East Wacker”) and FSP Grand Boulevard Corp. (“Grand Boulevard”), from which it continues to derive economic benefits and risks. Equity in losses of investment in non-consolidated REITs: The following table includes equity in losses of investments in non-consolidated REITs Six Months Ended June 30, (in thousands) 2018 2017 Equity in losses of East Wacker $ 26 $ 251 Equity in losses of Grand Boulevard 52 347 Impairment charge 309 — $ 387 $ 598 Equity in losses of investments in non-consolidated REITs is derived from the Company’s share of income or loss in the operations of those entities. The Company exercises influence over, but does not control these entities, and investments are accounted for using the equity method. Equity in losses of East Wacker is derived from the Company’s preferred stock investment in the entity. In December 2007, the Company purchased 965.75 preferred shares or 43.7% of the outstanding preferred shares of East Wacker for $82,813,000 (which represented $96,575,000 at the offering price net of commissions of $7,726,000, loan fees of $5,553,000 and acquisition fees of $483,000 that were excluded). Equity in losses of Grand Boulevard is derived from the Company’s preferred stock investment in the entity. In May 2009, the Company purchased 175.5 preferred shares or 27.0% of the outstanding preferred shares of Grand Boulevard for $15,049,000 (which represented $17,550,000 at the offering price net of commissions of $1,404,000, loan fees of $1,009,000 and acquisition fees of $88,000 that were excluded). At June 30, 2018, the Company recognized an impairment charge of $309,000, which represented the other-than-temporary decline in the fair value below the carrying value of one of the Company’s investments in non-consolidated REITs. The Company estimated the fair value of its equity investment by estimating the fair value of the property, less estimated costs to sell using a purchase and sale agreement to purchase the property made by third parties (Level 3 inputs, as there is no active market). The Company received distributions of $710,000 and $691,000 from non-consolidated REITs during the six months ended June 30, 2018 and 2017, respectively. Management fees and interest income from loans: Asset management fees range from 1% to 5% of collected rents and the applicable contracts are cancelable with 30 days notice. Asset management fee income from non-consolidated entities amounted to approximately $271,000 and $316,000 for the six months ended June 30, 2018 and 2017, respectively. From time to time the Company may make secured loans (“Sponsored REIT Loans”) to Sponsored REITs in the form of mortgage loans or revolving lines of credit to fund construction costs, capital expenditures, leasing costs and for other purposes. The Company reviews Sponsored REIT loans for impairment each reporting period. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts recorded on the balance sheet. The Company applies normal loan review and underwriting procedures (as may be implemented or modified from time to time) in making that judgment. None of the Sponsored REIT loans have been impaired. The Company anticipates that each Sponsored REIT Loan will be repaid at maturity or earlier from long term financings of the underlying properties, cash flows from the underlying properties or some other capital event. Each Sponsored REIT Loan is secured by a mortgage on the underlying property and has a term of approximately one to three years. Except for two mortgage loans which bear interest at a fixed rate, advances under each Sponsored REIT Loan bear interest at a rate equal to the 30-day LIBOR rate plus an agreed upon amount of basis points and also require a 50 basis point draw fee. The following is a summary of the Sponsored REIT Loans outstanding as of June 30, 2018: Maximum Amount Interest (dollars in thousands) Maturity Amount Drawn at Interest Draw Rate at Sponsored REIT Location Date of Loan 30-Jun-18 Rate (1) Fee (2) 30-Jun-18 Secured revolving lines of credit FSP Satellite Place Corp. Duluth, GA 31-Dec-19 $ 5,500 $ 1,590 L+ 4.4 % 0.5 % 6.40 % FSP Energy Tower I Corp. Houston, TX 30-Jun-19 20,000 15,600 L+ 5.0 % 0.5 % 7.00 % Mortgage loan secured by property FSP Monument Circle LLC (3) Indianapolis, IN 7-Dec-18 21,000 21,000 4.90 % n/a 4.90 % FSP Energy Tower I Corp. (4) Houston, TX 30-Jun-19 33,000 33,000 6.41 % n/a 6.41 % $ 79,500 $ 71,190 (1) The interest rate is 30-day LIBOR rate plus the additional rate indicated, otherwise a fixed rate. (2) The draw fee is a percentage of each new advance, and is paid at the time of each new draw. (3) This mortgage loan includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower. (4) This mortgage loan includes an annual extension fee of $108,900 paid by the borrower. The Company recognized interest income and fees from the Sponsored REIT Loans of approximately $2,262,000 and $2,420,000 for the six months ended June 30, 2018 and 2017, respectively. Non-consolidated REITs: The balance sheet data below for 2018 and 2017 includes the 5 Sponsored REITs the Company held an interest in as of June 30, 2018 and the 6 Sponsored REITs the Company held an interest in as of December 31, 2017. The operating data below for 2018 and 2017 include the operations of the 6 and 7 Sponsored REITs in which the Company held an interest in during the six months ended June 30, 2018 and 2017, respectively. Summarized financial information for these Sponsored REITs is as follows: June 30, December 31, (in thousands) 2018 2017 Balance Sheet Data (unaudited): Real estate, net $ 296,588 $ 312,861 Other assets 69,439 74,076 Total liabilities (148,896) (151,092) Shareholders’ equity $ 217,131 $ 235,845 For the Six Months Ended June 30, (in thousands) 2018 2017 Operating Data (unaudited): Rental revenues $ 25,755 $ 28,084 Other revenues 1 4 Operating and maintenance expenses (13,175) (14,466) Depreciation and amortization (8,606) (9,943) Interest expense (4,030) (4,226) Gain (loss) on sale, less applicable income tax 9,393 — Net income (loss) $ 9,338 $ (547) |
Bank Note Payable and Term Note
Bank Note Payable and Term Note Payable | 6 Months Ended |
Jun. 30, 2018 | |
Bank Note Payable and Term Note Payable | |
Bank Note Payable and Term Note Payable | 3. Bank Note Payable and Term Note Payable JPM Term Loan On October 18, 2017, the Company entered into a First Amendment (the “JPM First Amendment”) to the Credit Agreement, dated November 30, 2016, among the Company, JPMorgan Chase Bank, N.A., as administrative agent and lender, and the other lending institutions party thereto (as amended by the JPM First Amendment, the “JPM Credit Agreement”), which provides a single unsecured bridge loan in the aggregate principal amount of $150 million (the “JPM Term Loan”) that remains fully advanced and outstanding. The JPM Term Loan has a two year term that matures on November 30, 2018. The JPM Term Loan bears interest at either (i) a number of basis points over the Eurodollar Rate depending on the Company’s credit rating (135.0 basis points over the Eurodollar Rate at June 30, 2018) or (ii) a number of basis points over the base rate depending on the Company’s credit rating (35.0 basis points over the base rate at June 30, 2018). Based upon the Company’s credit rating, as of June 30, 2018, the interest rate on the JPM Term Loan was 3.48% per annum. The weighted average interest rate on the JPM Term Loan during the six months ended June 30, 2018 was approximately 3.16% per annum. The weighted average interest rate on the JPM Term Loan during the year ended December 31, 2017 was approximately 2.45% per annum. The JPM Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The JPM Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a minimum fixed charge coverage ratio, a maximum secured leverage ratio, a maximum leverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The JPM Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the JPM Credit Agreement). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the JPM Credit Agreement immediately due and payable, and enforce any and all rights of the lenders or administrative agent under the JPM Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, all outstanding obligations of the Company will become immediately due and payable. The Company was in compliance with the JPM Term Loan financial covenants as of June 30, 2018. The Company used the net proceeds of the JPM Term Loan to acquire the property located at 600 17th Street, Denver, Colorado on December 1, 2016 and for other general business purposes. BMO Term Loan On July 21, 2016, the Company entered into a First Amendment (the “BMO First Amendment”), and on October 18, 2017, the Company entered into a Second Amendment (the “BMO Second Amendment”), to the Amended and Restated Credit Agreement dated October 29, 2014, among the Company, the lending institutions party thereto and Bank of Montreal, as administrative agent (as amended by the BMO First Amendment and the BMO Second Amendment, the “BMO Credit Agreement”). The BMO Credit Agreement provides for a single, unsecured term loan borrowing in the amount of $220 million (the “BMO Term Loan”) that remains fully advanced and outstanding. The BMO Term Loan matures on August 26, 2020. The BMO Credit Agreement also includes an accordion feature that allows up to $50 million of additional loans, subject to receipt of lender commitments and satisfaction of certain customary conditions. The BMO Term Loan bears interest at either (i) a number of basis points over LIBOR depending on the Company’s credit rating (165 basis points over LIBOR at June 30, 2018) or (ii) a number of basis points over the base rate depending on the Company’s credit rating (65 basis points over the base rate at June 30, 2018). Although the interest rate on the BMO Term Loan is variable under the BMO Credit Agreement, the Company fixed the base LIBOR interest rate by entering into an interest rate swap agreement. On August 26, 2013, the Company entered into an ISDA Master Agreement with Bank of Montreal that fixed the base LIBOR interest rate on the BMO Term Loan at 2.32% per annum for seven years, until the August 26, 2020 maturity date. Accordingly, based upon the Company’s credit rating, as of June 30, 2018, the effective interest rate on the BMO Term Loan was 3.97% per annum. The BMO Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The BMO Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The BMO Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BMO Credit Agreement). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the BMO Credit Agreement immediately due and payable, terminate the lenders’ commitments to make loans under the BMO Credit Agreement, and enforce any and all rights of the lenders or BMO administrative agent under the BMO Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable. The Company was in compliance with the BMO Term Loan financial covenants as of June 30, 2018. The Company may use the proceeds of the loans under the BMO Credit Agreement to finance the acquisition of real properties and for other permitted investments; to finance investments associated with Sponsored REITs to refinance or retire indebtedness and for working capital and other general business purposes, in each case to the extent permitted under the BMO Credit Agreement. BAML Credit Facility On July 21, 2016, the Company entered into a First Amendment (the “BAML First Amendment”), and on October 18, 2017, the Company entered into a Second Amendment (the “BAML Second Amendment”), to the Second Amended and Restated Credit Agreement dated October 29, 2014 among the Company, the lending institutions party thereto and Bank of America, N.A., as administrative agent, L/C Issuer and Swing Line Lender (as amended by the BAML First Amendment and the BAML Second Amendment, the “BAML Credit Facility”) that continued an existing unsecured revolving line of credit (the “BAML Revolver”) and an existing term loan (the “BAML Term Loan”). BAML Revolver Highlights · The BAML Revolver is for borrowings, at the Company's election, of up to $600 million. Borrowings made pursuant to the BAML Revolver may be revolving loans, swing line loans or letters of credit, the combined sum of which may not exceed $600 million outstanding at any time. · Borrowings made pursuant to the BAML Revolver may be borrowed, repaid and reborrowed from time to time until the maturity date of January 12, 2022. The Company has the right to extend the maturity date of the BAML Revolver by two additional 6 month periods, or until January 12, 2023, upon payment of a fee and satisfaction of certain customary conditions. · The BAML Credit Facility includes an accordion feature that allows for an aggregate amount of up to $500 million of additional borrowing capacity applicable to the BAML Revolver and/or the BAML Term Loan, subject to receipt of lender commitments and satisfaction of certain customary conditions. As of June 30, 2018, there were borrowings of $98 million outstanding under the BAML Revolver. The BAML Revolver bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating (1.20% over LIBOR at June 30, 2018) or (ii) a margin over the base rate depending on the Company’s credit rating (0.20% over the base rate at June 30, 2018). The BAML Credit Facility also obligates the Company to pay an annual facility fee in an amount that is also based on the Company’s credit rating. The facility fee is assessed against the total amount of the BAML Revolver, or $600 million (0.25% at June 30, 2018). Based upon the Company’s credit rating, as of June 30, 2018 the interest rate on the BAML Revolver was 3.24% per annum and there were borrowings of $98 million outstanding. The weighted average interest rate on all amounts outstanding on the BAML Revolver during the six months ended June 30, 2018 was approximately 2.96% per annum. As of December 31, 2017, there were borrowings of $78 million outstanding under the BAML Revolver at an interest rate of 2.63% per annum. BAML Term Loan Highlights · The BAML Term Loan is for $400 million. · The BAML Term Loan matures on January 12, 2023. · The BAML Credit Facility includes an accordion feature that allows for an aggregate amount of up to $500 million of additional borrowing capacity to the BAML Revolver and/or the BAML Term Loan, subject to receipt of lender commitments and satisfaction of certain customary conditions. · On September 27, 2012, the Company drew down the entire $400 million under the BAML Term Loan and such amount remains fully advanced and outstanding under the BAML Term Loan. The BAML Term Loan bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating (1.35% over LIBOR at June 30, 2018) or (ii) a margin over the base rate depending on the Company’s credit rating (0.35% over the base rate at June 30, 2018). Although the interest rate on the BAML Credit Facility is variable, the Company fixed the base LIBOR interest rate on the BAML Term Loan by entering into an interest rate swap agreement. On September 27, 2012, the Company entered into an ISDA Master Agreement with Bank of America, N.A. that fixed the base LIBOR interest rate on the BAML Term Loan at 0.75% per annum for five years, until September 27, 2017. On July 22, 2016, the Company entered into ISDA Master Agreements with a group of banks that fixed the base LIBOR interest rate on the BAML Term Loan at 1.12% per annum for the period beginning on September 27, 2017 and ending on September 27, 2021. Accordingly, based upon the Company’s credit rating, as of June 30, 2018, the effective interest rate on the BAML Term Loan was 2.47% per annum. BAML Credit Facility General Information The BAML Credit Facility contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The BAML Credit Facility also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The BAML Credit Facility provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BAML Credit Facility). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the BAML Credit Facility immediately due and payable, terminate the lenders’ commitments to make loans under the BAML Credit Facility, and enforce any and all rights of the lenders or administrative agent under the BAML Credit Facility and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable. The Company was in compliance with the BAML Credit Facility financial covenants as of June 30, 2018. The Company may use the proceeds of the loans under the BAML Credit Facility to finance the acquisition of real properties and for other permitted investments; to finance investments associated with Sponsored REITs to refinance or retire indebtedness and for working capital and other general business purposes, in each case to the extent permitted under the BAML Credit Facility. Senior Notes On October 24, 2017, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) with the various purchasers named therein (the “Purchasers”) in connection with a private placement of senior unsecured notes. Under the Note Purchase Agreement, the Company agreed to sell to the Purchasers an aggregate principal amount of $200 million of senior unsecured notes consisting of (i) 3.99% Series A Senior Notes due December 20, 2024 in an aggregate principal amount of $116 million (the “Series A Notes”) and (ii) 4.26% Series B Senior Notes due December 20, 2027 in an aggregate principal amount of $84 million (the “Series B Notes”) and, together with the Series A Notes, the (“Senior Notes”). On December 20, 2017, the Senior Notes were funded and proceeds were used to reduce the outstanding balance of the BAML Revolver. The Note Purchase Agreement contains customary financial covenants, including a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, and a maximum unencumbered leverage ratio. The Note Purchase Agreement also contains restrictive covenants that, among other things, restrict the ability of the Company and its subsidiaries to enter into transactions with affiliates, merge, consolidate, create liens, make certain restricted payments, enter into certain agreements or prepay certain indebtedness. Such financial and restrictive covenants are substantially similar to the corresponding covenants contained in the BAML Credit Facility, the BMO Credit Agreement and the JPM Credit Agreement. The Senior Notes financial covenants require, among other things, the maintenance of a fixed charge coverage ratio of at least 1.50; a maximum leverage ratio and an unsecured leverage ratio of no more than 60% (65% if there were a significant acquisition for a short period of time). In addition, the Note Purchase Agreement provides that the Note Purchase Agreement will automatically incorporate additional financial and other specified covenants (such as limitations on investments and distributions) that are effective from time to time under the existing credit agreements, other material indebtedness or certain other private placements of debt of the Company and its subsidiaries. The Note Purchase Agreement contains customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events. In the case of an event of default, the Purchasers may, among other remedies, accelerate the payment of all obligations. |
Financial Instruments_ Derivati
Financial Instruments: Derivatives and Hedging | 6 Months Ended |
Jun. 30, 2018 | |
Financial Instruments: Derivatives and Hedging | |
Financial Instruments: Derivatives and Hedging | 4. Financial Instruments: Derivatives and Hedging On July 22, 2016, the Company fixed the interest rate for the period beginning on September 27, 2017 and ending on September 27, 2021 on the BAML Term Loan with multiple interest rate swap agreements (the “2017 Interest Rate Swap”). On August 26, 2013, the Company fixed the interest rate until August 26, 2020 on the BMO Term Loan with an interest rate swap agreement (the “BMO Interest Rate Swap”). On September 27, 2012, the Company fixed the interest rate until September 27, 2017 on the BAML Term Loan with an interest rate swap agreement (the “BAML Interest Rate Swap”). The variable rates that were fixed under the 2017 Interest Rate Swap, the BMO Interest Rate Swap and the BAML Interest Rate Swap are described in Note 3. The 2017 Interest Rate Swap and the BMO Interest Rate Swap qualify as cash flow hedges and have been recognized on the consolidated balance sheet at fair value. If a derivative qualifies as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings, which may increase or decrease reported net income and stockholders’ equity prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. The following table summarizes the notional and fair value of our derivative financial instruments at June 30, 2018. The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks. Notional Strike Effective Expiration Fair (in thousands) Value Rate Date Date Value 2017 Interest Rate Swap $ 400,000 1.12 % Sep-17 Sep-21 $ 19,824 BMO Interest Rate Swap $ 220,000 2.32 % Aug-13 Aug-20 $ 1,372 On June 30, 2018, the 2017 Interest Rate Swap was reported as an asset at its fair value of approximately $19.8 million and the BMO Interest Rate Swap was reported as an asset at its fair value of approximately $1.4 million. These are included in other assets: derivative asset on the consolidated balance sheet at June 30, 2018. Offsetting adjustments are reported as unrealized gains or losses on derivative financial instruments in accumulated other comprehensive income of $9.7 million. During the six months ended June 30, 2018, $0.7 million was reclassified out of other comprehensive income and into interest expense. Over time, the unrealized gains and losses held in accumulated other comprehensive income will be reclassified into earnings as an increase or reduction to interest expense in the same periods in which the hedged interest payments affect earnings. The Company estimates that approximately $6.7 million of the current balance held in accumulated other comprehensive income will be reclassified into earnings within the next 12 months. The Company is hedging the exposure to variability in anticipated future interest payments on existing debt. The fair value of the Company’s derivative instruments are determined using the net discounted cash flows of the expected cash flows of the derivative based on the market based interest rate curve and are adjusted to reflect credit or nonperformance risk. The risk is estimated by the Company using credit spreads and risk premiums that are observable in the market. These financial instruments were classified within Level 2 of the fair value hierarchy and were classified as an asset or liability on the consolidated balance sheets. The Company’s derivatives are recorded at fair value in other assets in the consolidated balance sheets. The effective portion of the derivatives’ fair value is recorded to comprehensive income in the consolidated statements of other comprehensive income and the ineffective portion of the derivatives’ fair value is recognized directly into earnings as Other in the consolidated statements of income. The interest rate swaps effectively fix the interest rate on the BAML Term Loan and BMO Term Loan; however, prior to October 18, 2017, there was no floor on the variable interest rate of the swaps whereas the BAML Term Loan and BMO Term Loan were subject to a zero percent floor. As a result there was a mismatch and the ineffective portion of the derivatives’ changes in fair value were recognized directly into earnings. On October 18, 2017, the Company amended the BMO Term Loan and BAML Term Loan to, among other changes, provide that the deemed zero percent interest rate floor is not applicable to any loan where there is a corresponding interest rate swap contract in place. During the three and six months ended June 30, 2017, the Company recorded $129,000 and $151,000, respectively, of hedge ineffectiveness in earnings. Hedge ineffectiveness is included in “Other” in the consolidated statements of income. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Net Income Per Share | |
Net Income Per Share | 5. Net Income Per Share Basic net income per share is computed by dividing net income by the weighted average number of Company shares outstanding during the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised or converted into shares. There were no potential dilutive shares outstanding at each of June 30, 2018 and 2017. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 6. Stockholders’ Equity As of June 30, 2018, the Company had 107,231,155 shares of common stock outstanding. The Company declared and paid dividends as follows (in thousands, except per share amounts): Dividends Per Total Quarter Paid Share Dividends First quarter of 2018 $ 0.19 $ 20,374 Second quarter of 2018 $ 0.09 $ 9,651 First quarter of 2017 $ 0.19 $ 20,374 Second quarter of 2017 $ 0.19 $ 20,374 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Taxes | |
Income Taxes | 7. Income Taxes General The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, the Company generally is entitled to a tax deduction for distributions paid to its shareholders, thereby effectively subjecting the distributed net income of the Company to taxation at the shareholder level only. The Company must comply with a variety of restrictions to maintain its status as a REIT. These restrictions include the type of income it can earn, the type of assets it can hold, the number of shareholders it can have and the concentration of their ownership, and the amount of the Company’s taxable income that must be distributed annually. One such restriction is that the Company generally cannot own more than 10% of the voting power or value of the securities of any one issuer unless the issuer is itself a REIT or a taxable REIT subsidiary (“TRS”). In the case of TRSs, the Company’s ownership of securities in all TRSs generally cannot exceed 20% of the value of all of the Company’s assets beginning with calendar year 2018 and 25% for previous years and, when considered together with other non-real estate assets, cannot exceed 25% of the value of all of the Company’s assets. FSP Investments LLC and FSP Protective TRS Corp. are the Company’s taxable REIT subsidiaries operating as taxable corporations under the Code. Income taxes are recorded based on the future tax effects of the difference between the tax and financial reporting bases of the Company’s assets and liabilities. In estimating future tax consequences, potential future events are considered except for potential changes in income tax law or in rates. The Tax Cuts and Job Act of 2017 is not expected to have a material impact on the Company’s income taxes. Interest and penalties will be recorded as income tax expense, if the Company records a liability in the future. The Company and one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The statute of limitations for the Company’s income tax returns is generally three years and as such, the Company’s returns that remain subject to examination would be primarily from 2014 and thereafter. The Company is subject to a business tax known as the Revised Texas Franchise Tax. Some of the Company’s leases allow reimbursement by tenants for these amounts because the Revised Texas Franchise Tax replaces a portion of the property tax for school districts. Because the tax base on the Revised Texas Franchise Tax is derived from an income based measure, it is considered an income tax. The Company recorded a provision for the Revised Texas Franchise Tax of $134,000 and $176,000 for the six months ended June 30, 2018 and 2017, respectively. Net operating losses Section 382 of the Code restricts a corporation’s ability to use net operating losses (“NOLs”) to offset future taxable income following certain “ownership changes.” Such ownership changes occurred with past mergers and accordingly a portion of the NOLs incurred by the Sponsored REITs available for use by the Company in any particular future taxable year will be limited. To the extent that the Company does not utilize the full amount of the annual NOLs limit, the unused amount may be carried forward to offset taxable income in future years. NOLs expire 20 years after the year in which they arise, and the last of the Company’s NOLs will expire in 2027. A valuation allowance is provided for the full amount of the NOLs as the realization of any tax benefits from such NOLs is not assured. The Tax Cuts and Jobs Act of 2017 is not expected to have an impact on the Company’s ability to use NOLs or the valuation allowance. The gross amount of NOLs available to the Company was $13,041,000 as of each of June 30, 2018 and December 31, 2017. Income Tax Expense The income tax expense reflected in the consolidated statements of income relates primarily to a franchise tax on our Texas properties. FSP Protective TRS Corp. provides taxable services to tenants at some of the Company’s properties and the tax expenses associated with these activities are reported as Other Taxes in the table below: For the Six Months Ended June 30, (Dollars in thousands) 2018 2017 Revised Texas franchise tax $ 134 $ 176 Other Taxes 23 21 Taxes on income $ 157 $ 197 Taxes on income are a current tax expense. No deferred income taxes were provided as there were no material temporary differences between the financial reporting basis and the tax basis of the TRSs. |
Dispositions of Properties
Dispositions of Properties | 6 Months Ended |
Jun. 30, 2018 | |
Dispositions of property | |
Dispositions of properties | 8. Dispositions of properties During the three months ended June 30, 2017, the Company reached a decision to classify an office property located in Baltimore, Maryland as an asset held for sale. In evaluating the Baltimore, Maryland property, management considered various subjective factors, including the time, cost and likelihood of successfully leasing the property, the effect of the property’s results on its unencumbered asset value, which is part of the leverage ratio used to compare to a maximum leverage covenant in the JPM Term Loan, BMO Term Loan and the BAML Credit Facility, future capital costs to upgrade and reposition the multi-tenant property and to lease up the building, recent leasing and economic activity in the local area, and offers to purchase the property. The Company concluded that selling the property was the more prudent decision and outweighed the potential future benefit of continuing to hold the property. The property was expected to sell within one year at a loss, which was recorded as a provision for loss on a property held for sale of $20.5 million net of applicable income taxes and was classified as an asset held for sale of $31.9 million at June 30, 2017. During the three months ended September 30, 2017, the Company increased the provision for loss by $0.3 million to $20.7 million net of applicable income taxes, and the property was classified as an asset held for sale in the amount of $31.6 million at September 30, 2017. The Company sold the property on October 20, 2017 for net proceeds of $31.6 million resulting in a total loss of $20.8 million, net of applicable income taxes. During the three months ended December 31, 2016, the Company reached an agreement to sell an office property located in Milpitas, California. The property was classified as an asset held for sale at December 31, 2016 and was sold on January 6, 2017 at approximately a $2.3 million gain. The disposals did not represent a strategic shift that has a major effect on the Company's operations and financial results. Accordingly, the properties remain classified within continuing operations for all periods presented. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events | |
Subsequent Events | 9. Subsequent Events On July 6, 2018, the Board of Directors of the Company declared a cash distribution of $0.09 per share of common stock payable on August 9, 2018 to stockholders of record on July 20, 2018. On July 19, 2018, an office property owned by a Sponsored REIT, Grand Boulevard, was sold to a third party. The Company held an equity investment in Grand Boulevard and anticipates receiving distributions of approximately $6.3 million as this investment is liquidated. |
Organization, Properties, Bas16
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards | |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements of the Company include all of the accounts of the Company and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2017, as filed with the Securities and Exchange Commission. The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 or for any other period. |
Financial Instruments | Financial Instruments As disclosed in Note 4, the Company’s derivatives are recorded at fair value using Level 2 inputs. The Company estimates that the carrying values of cash, cash equivalents and restricted cash, receivables and tenant security deposits approximate their fair values based on their short-term maturity and the loan receivable, bank note and term loans payable approximate their fair values as they bear interest at variable interest rates at spreads that approximate market. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows. June 30, June 30, (in thousands) 2018 2017 Cash and cash equivalents $ 10,448 $ 11,537 Restricted cash — 86 Total cash, cash equivalents and restricted cash $ 10,448 $ 11,623 Amounts included in restricted cash represent amounts set aside for the payments to be made pursuant to our employees’ flexible medical spending accounts. |
Recent Accounting Standards | Recent Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (“Topic 606”), which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. This update is effective for interim and annual reporting periods beginning after December 15, 2017. A substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from Topic 606. The Company adopted Topic 606 using the modified retrospective approach effective January 1, 2018 and the adoption did not have an impact on the amount or timing of revenue recognition in the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires lessees to establish a lease liability for the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term on their balance sheets. Lessees will continue to recognize lease expenses on their income statements in a manner similar to current accounting. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. This new standard is effective for annual periods beginning after December 15, 2018, and interim periods thereafter with early adoption permitted. The Company is currently evaluating the potential changes from ASU 2016-02 to future financial reporting and disclosures. The Company expects the adoption of this standard in 2019 will increase its assets and liabilities by approximately $3 million for the addition of right-of-use assets and lease liabilities related to an operating lease for office space in which the Comanpany is a tenant; however, the Company does not expect the standard to have a material impact to its results of operations or liquidity. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently assessing the potential impact the adoption of ASU 2016-13 will have on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how reporting entities should present and classify certain cash receipts and cash payments in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted this guidance during the first quarter of 2018 and applied it retrospectively. Pursuant to the adoption, the Company elected the cumulative earnings approach related to the distributions received from its equity method investments. The adoption did not have an impact on the Company’s Consolidated Statements of Cash Flows. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash (“ASU 2016-18”), which clarifies how reporting entities should present restricted cash and restricted cash equivalents. Reporting entities will show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheets. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Upon the adoption of ASU 2016-18, the Company reconciled both cash and cash equivalents and restricted cash and restricted cash equivalents, whereas under the previous guidance the Company explained the changes during the period for cash and cash equivalents only. Prior periods were retrospectively adjusted to conform to the current period’s presentation. In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business (“ASU 2017-01”), which provides additional guidance on evaluating whether transactions should be accounted for as an acquisition (or disposal) of assets of a business. The update defines three requirements for a set of assets and activities (collectively referred to as a “set”) to be considered a business: inputs, processes and outputs. ASU 2017-01 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. This update will be applied prospectively to any transactions occurring within the period of adoption. Certain property acquisitions which under previous guidance would have been accounted for as business combinations will be accounted for as acquisitions of assets. In an acquisition of assets, certain acquisition costs are capitalized as opposed to expensed under business combination guidance. |
Organization, Properties, Bas17
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards | |
Summary of the entity's investment in real estate assets, including number of properties and rentable square feet of real estate | As of June 30, 2018 2017 Commercial real estate: Number of properties 34 35 Rentable square feet 9,760,699 10,084,710 |
Reconciliation of cash, cash equivalents, and restricted cash | June 30, June 30, (in thousands) 2018 2017 Cash and cash equivalents $ 10,448 $ 11,537 Restricted cash — 86 Total cash, cash equivalents and restricted cash $ 10,448 $ 11,623 |
Related Party Transactions an18
Related Party Transactions and Investments in Non-Consolidated Entities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions and Investments in Non-Consolidated Entities | |
Schedule of equity in losses of investments in non-consolidated REITs | Six Months Ended June 30, (in thousands) 2018 2017 Equity in losses of East Wacker $ 26 $ 251 Equity in losses of Grand Boulevard 52 347 Impairment charge 309 — $ 387 $ 598 |
Summary of the Sponsored REIT Loans outstanding | Maximum Amount Interest (dollars in thousands) Maturity Amount Drawn at Interest Draw Rate at Sponsored REIT Location Date of Loan 30-Jun-18 Rate (1) Fee (2) 30-Jun-18 Secured revolving lines of credit FSP Satellite Place Corp. Duluth, GA 31-Dec-19 $ 5,500 $ 1,590 L+ 4.4 % 0.5 % 6.40 % FSP Energy Tower I Corp. Houston, TX 30-Jun-19 20,000 15,600 L+ 5.0 % 0.5 % 7.00 % Mortgage loan secured by property FSP Monument Circle LLC (3) Indianapolis, IN 7-Dec-18 21,000 21,000 4.90 % n/a 4.90 % FSP Energy Tower I Corp. (4) Houston, TX 30-Jun-19 33,000 33,000 6.41 % n/a 6.41 % $ 79,500 $ 71,190 (1) The interest rate is 30-day LIBOR rate plus the additional rate indicated, otherwise a fixed rate. (2) The draw fee is a percentage of each new advance, and is paid at the time of each new draw. (3) This mortgage loan includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower. (4) This mortgage loan includes an annual extension fee of $108,900 paid by the borrower. |
Summary of financial information of Sponsored REITs | June 30, December 31, (in thousands) 2018 2017 Balance Sheet Data (unaudited): Real estate, net $ 296,588 $ 312,861 Other assets 69,439 74,076 Total liabilities (148,896) (151,092) Shareholders’ equity $ 217,131 $ 235,845 For the Six Months Ended June 30, (in thousands) 2018 2017 Operating Data (unaudited): Rental revenues $ 25,755 $ 28,084 Other revenues 1 4 Operating and maintenance expenses (13,175) (14,466) Depreciation and amortization (8,606) (9,943) Interest expense (4,030) (4,226) Gain (loss) on sale, less applicable income tax 9,393 — Net income (loss) $ 9,338 $ (547) |
Financial Instruments_ Deriva19
Financial Instruments: Derivatives and Hedging (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Financial Instruments: Derivatives and Hedging | |
Schedule of notional and fair value of derivative financial instruments | Notional Strike Effective Expiration Fair (in thousands) Value Rate Date Date Value 2017 Interest Rate Swap $ 400,000 1.12 % Sep-17 Sep-21 $ 19,824 BMO Interest Rate Swap $ 220,000 2.32 % Aug-13 Aug-20 $ 1,372 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity | |
Schedule of dividends declared and paid | Dividends Per Total Quarter Paid Share Dividends First quarter of 2018 $ 0.19 $ 20,374 Second quarter of 2018 $ 0.09 $ 9,651 First quarter of 2017 $ 0.19 $ 20,374 Second quarter of 2017 $ 0.19 $ 20,374 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Income Taxes | |
Schedule of income tax expense reflected in the condensed consolidated statements of income | For the Six Months Ended June 30, (Dollars in thousands) 2018 2017 Revised Texas franchise tax $ 134 $ 176 Other Taxes 23 21 Taxes on income $ 157 $ 197 |
Organization, Properties, Bas22
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards (Detail) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2018USD ($)ft²entitypropertyitem | Dec. 31, 2017USD ($)entity | Jun. 30, 2017USD ($)ft²property | Dec. 31, 2016USD ($) | |
Organization | ||||
Number of REITs in which the entity holds non-controlling common stock interest | entity | 5 | 6 | ||
Number of REITs in which the entity holds non-controlling preferred stock interest | entity | 2 | |||
Number of Sponsored REITs | entity | 5 | 6 | ||
Number of properties in redevelopment | property | 1 | |||
Number of promissory notes secured by mortgages on real estate owned by Sponsored REITs | item | 4 | |||
Properties | ||||
Number of properties | property | 34 | 35 | ||
Rentable square feet | ft² | 9,760,699 | 10,084,710 | ||
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | $ 10,448 | $ 11,537 | ||
Restricted cash | 86 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | $ 10,448 | $ 9,819 | $ 11,623 | $ 9,366 |
FSP Investments LLC | ||||
Organization | ||||
Ownership interest (as a percent) | 100.00% | |||
FSP Property Management LLC | ||||
Organization | ||||
Ownership interest (as a percent) | 100.00% | |||
FSP Holdings LLC | ||||
Organization | ||||
Ownership interest (as a percent) | 100.00% | |||
FSP Protective TRS Corp. | ||||
Organization | ||||
Ownership interest (as a percent) | 100.00% | |||
ASU 2016-02 | ||||
Recent Accounting Standards | ||||
Increase in assets and liabilities | $ 3,000 | |||
Mortgage loan secured by property | ||||
Organization | ||||
Number of promissory notes secured by mortgages on real estate owned by Sponsored REITs | item | 2 | |||
Secured revolving lines of credit | ||||
Organization | ||||
Number of promissory notes secured by mortgages on real estate owned by Sponsored REITs | item | 2 |
Related Party Transactions an23
Related Party Transactions and Investments in Non-Consolidated Entities - Investment in Sponsored REITs (Details) - entity | Jun. 30, 2018 | Dec. 31, 2017 |
Related Party Transactions and Investments in Non-Consolidated Entities | ||
Number of REITs in which the entity holds non-controlling common stock interest | 5 | 6 |
Number of REITs in which the entity holds non-controlling preferred stock interest | 2 |
Related Party Transactions an24
Related Party Transactions and Investments in Non-Consolidated Entities - Equity in losses of investment in non-consolidated REITs (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2009 | Dec. 31, 2007 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Sponsored REITs | ||||||
Equity in losses of non-consolidated REITs | $ 282,000 | $ 201,000 | $ 387,000 | $ 598,000 | ||
Impairment charge | 309,000 | |||||
Distributions received from non-consolidated REITs | ||||||
Distributions from non-consolidated REITs | 710,000 | 691,000 | ||||
East Wacker | ||||||
Sponsored REITs | ||||||
Equity in losses of non-consolidated REITs | 26,000 | 251,000 | ||||
Preferred shares purchased | 965.75 | |||||
Percentage of outstanding preferred shares purchased | 43.70% | |||||
Net cost of preferred shares purchased | $ 82,813,000 | |||||
Offering price of preferred shares purchased | 96,575,000 | |||||
Commissions excluded | 7,726,000 | |||||
Loan fees excluded | 5,553,000 | |||||
Acquisition fees excluded | $ 483,000 | |||||
Grand Boulevard | ||||||
Sponsored REITs | ||||||
Equity in losses of non-consolidated REITs | $ 52,000 | $ 347,000 | ||||
Preferred shares purchased | 175.5 | |||||
Percentage of outstanding preferred shares purchased | 27.00% | |||||
Net cost of preferred shares purchased | $ 15,049,000 | |||||
Offering price of preferred shares purchased | 17,550,000 | |||||
Commissions excluded | 1,404,000 | |||||
Loan fees excluded | 1,009,000 | |||||
Acquisition fees excluded | $ 88,000 |
Related Party Transactions an25
Related Party Transactions and Investments in Non-Consolidated Entities - Management fees and interest income from loans (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Management Fees And Interest Income From Loans Abstract | ||
Asset management fees, low end of range (as a percent) | 1.00% | |
Asset management fees, high end of range (as a percent) | 5.00% | |
Notice period for cancellation of applicable contracts | 30 days | |
Sponsored REITs | ||
Management Fees And Interest Income From Loans Abstract | ||
Impairment of Sponsored REIT | $ 0 | |
Asset Management | ||
Management Fees And Interest Income From Loans Abstract | ||
Revenue from Contract with Customer, Including Assessed Tax | $ 271,000 | $ 316,000 |
Related Party Transactions an26
Related Party Transactions and Investments in Non-Consolidated Entities - Sponsored REIT Loans outstanding (Details) | 6 Months Ended | ||
Jun. 30, 2018USD ($)loan | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Sponsored REITs | |||
Number of Sponsored REIT loans which bear interest at a fixed rate | loan | 2 | ||
Maximum amount of loan | $ 79,500,000 | ||
Amount Drawn | $ 71,190,000 | $ 71,720,000 | |
Sponsored REITs | |||
Sponsored REITs | |||
Term of sponsored REIT loan secured by mortgage, minimum | 1 year | ||
Term of sponsored REIT loan secured by mortgage, maximum | 3 years | ||
Interest income and fees from the Sponsored REIT Loans | $ 2,262,000 | $ 2,420,000 | |
Secured revolving lines of credit | FSP Satellite Place Corp. | |||
Sponsored REITs | |||
Maximum amount of loan | 5,500,000 | ||
Amount Drawn | $ 1,590,000 | ||
Sponsored REIT loans, base rate | 30-day LIBOR | ||
Sponsored REIT loans, base rate margin (as a percent) | 4.40% | ||
Draw Fee (as a percent) | 0.50% | ||
Interest rate (as a percent) | 6.40% | ||
Secured revolving lines of credit | FSP Energy Tower I Corp. | |||
Sponsored REITs | |||
Maximum amount of loan | $ 20,000,000 | ||
Amount Drawn | $ 15,600,000 | ||
Sponsored REIT loans, base rate | 30-day LIBOR | ||
Sponsored REIT loans, base rate margin (as a percent) | 5.00% | ||
Draw Fee (as a percent) | 0.50% | ||
Interest rate (as a percent) | 7.00% | ||
Mortgage loan secured by property | FSP Energy Tower I Corp. | |||
Sponsored REITs | |||
Maximum amount of loan | $ 33,000,000 | ||
Amount Drawn | $ 33,000,000 | ||
Fixed rate of interest (as a percent) | 6.41% | ||
Interest rate (as a percent) | 6.41% | ||
Extension fee | $ 108,900 | ||
Mortgage loan secured by property | FSP Monument Circle LLC | |||
Sponsored REITs | |||
Maximum amount of loan | 21,000,000 | ||
Amount Drawn | $ 21,000,000 | ||
Fixed rate of interest (as a percent) | 4.90% | ||
Interest rate (as a percent) | 4.90% | ||
Origination fee | $ 164,000 | ||
Exit fee | $ 38,000 |
Related Party Transactions an27
Related Party Transactions and Investments in Non-Consolidated Entities - Summarized financial information for Sponsored REITs (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018USD ($)entity | Jun. 30, 2017USD ($)entity | Dec. 31, 2017USD ($)entity | |
Related Party Transactions and Investments in Non-Consolidated Entities | |||
Number of REITs in which are included in the operations data | entity | 6 | 7 | |
Number of Sponsored REITs the Company held an interest in at period end | entity | 5 | 6 | |
Balance Sheet Data (unaudited): | |||
Real estate, net | $ 296,588 | $ 312,861 | |
Other assets | 69,439 | 74,076 | |
Total liabilities | (148,896) | (151,092) | |
Shareholders' equity | 217,131 | $ 235,845 | |
Operating Data (unaudited): | |||
Rental revenues | 25,755 | $ 28,084 | |
Other revenues | 1 | 4 | |
Operating and maintenance expenses | (13,175) | (14,466) | |
Depreciation and amortization | (8,606) | (9,943) | |
Interest expense | (4,030) | (4,226) | |
Gain (loss) on sale, less applicable income tax | 9,393 | ||
Net income (loss) | $ 9,338 | $ (547) |
Bank Note Payable and Term No28
Bank Note Payable and Term Note Payable (Details) $ in Thousands | Aug. 26, 2013 | Sep. 27, 2012USD ($) | Jun. 30, 2018USD ($)period | Dec. 31, 2017USD ($) | Oct. 18, 2017USD ($) |
Debt Instrument [Line Items] | |||||
Borrowings outstanding | $ 98,000 | $ 78,000 | |||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount of loan | $ 200,000 | ||||
Fixed charge coverage ratio | 1.50 | ||||
Series A Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount of loan | $ 116,000 | ||||
Interest rate (as a percent) | 3.99% | ||||
Series B Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount of loan | $ 84,000 | ||||
Interest rate (as a percent) | 4.26% | ||||
Maximum | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Unsecured leverage ratio | 60.00% | ||||
Unsecured leverage ratio for significant acquisition | 65.00% | ||||
BAML Revolver | |||||
Debt Instrument [Line Items] | |||||
Weighted average interest rate (as a percent) | 2.96% | ||||
Effective interest rate (as a percent) | 3.24% | 2.63% | |||
Total available | $ 600,000 | ||||
Number of periods of extension | period | 2 | ||||
Length of extension period | 6 months | ||||
Additional borrowing capacity allowed by exercising an accordion feature | $ 500,000 | ||||
Borrowings outstanding | $ 98,000 | $ 78,000 | |||
Facility fee at period end (as a percent) | 0.25% | ||||
BAML Revolver | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate at period end (as a percent) | 1.20% | ||||
BAML Revolver | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate at period end (as a percent) | 0.20% | ||||
BAML Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount of loan | $ 400,000 | ||||
Effective interest rate (as a percent) | 2.47% | ||||
Additional borrowing capacity allowed by exercising an accordion feature | $ 500,000 | ||||
Amount drawn down | $ 400,000 | ||||
BAML Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate at period end (as a percent) | 1.35% | ||||
Fixed rate (as a percent) | 0.75% | 1.12% | |||
Term pursuant to interest rate swap agreement | 5 years | ||||
BAML Term Loan | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate at period end (as a percent) | 0.35% | ||||
JPM Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount of loan | $ 150,000 | ||||
Term of the borrowing | 2 years | ||||
Interest rate during period (as a percent) | 3.48% | ||||
Weighted average interest rate (as a percent) | 3.16% | 2.45% | |||
JPM Term Loan | Eurodollar Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (as a percent) | 1.35% | ||||
JPM Term Loan | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate at period end (as a percent) | 35.00% | ||||
BMO Term Loan | |||||
Debt Instrument [Line Items] | |||||
Principal amount of loan | $ 220,000 | ||||
Additional loans allowed by exercising an accordion feature | $ 50,000 | ||||
Effective interest rate (as a percent) | 3.97% | ||||
BMO Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate at period end (as a percent) | 1.65% | ||||
Fixed rate (as a percent) | 2.32% | ||||
Term pursuant to interest rate swap agreement | 7 years | ||||
BMO Term Loan | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate at period end (as a percent) | 0.65% |
Financial Instruments_ Deriva29
Financial Instruments: Derivatives and Hedging (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Financial Instruments: Derivatives and Hedging | |||
Interest reclassified from accumulated other comprehensive income into interest expense | $ 700,000 | ||
Amount estimated to be reclassified into earnings within next 12 months | 6,700,000 | ||
Hedge ineffectiveness | $ 129,000 | $ 151,000 | |
Cash flow hedges | |||
Financial Instruments: Derivatives and Hedging | |||
Unrealized gains or losses on derivative financial instruments in accumulated other comprehensive income | $ 9,700,000 | ||
BMO Term Loan | BAML Term Loan | |||
Financial Instruments: Derivatives and Hedging | |||
Percentage floor of spread payable to the counterparty | 0.00% | ||
2017 Interest Rate Swap | Cash flow hedges | |||
Financial Instruments: Derivatives and Hedging | |||
Notional Value | $ 400,000,000 | ||
Strike Rate (as a percent) | 1.12% | ||
Fair Value | $ 19,824,000 | ||
BMO Interest Rate Swap | Cash flow hedges | |||
Financial Instruments: Derivatives and Hedging | |||
Notional Value | $ 220,000,000 | ||
Strike Rate (as a percent) | 2.32% | ||
Fair Value | $ 1,372,000 |
Net Income Per Share (Details)
Net Income Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Net Income Per Share | ||
Potential dilutive shares outstanding | 0 | 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | |
Stockholders' Equity | |||||
Common Stock, Shares, Outstanding | 107,231,155 | 107,231,155 | |||
Dividends declared and paid | |||||
Cash dividend declared per share (in dollars per share) | $ 0.09 | $ 0.19 | $ 0.19 | $ 0.19 | |
Total Dividends | $ 9,651 | $ 20,374 | $ 20,374 | $ 20,374 |
Income Taxes - General and Inco
Income Taxes - General and Income Tax Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Taxes | |||||
Maximum ownership as a percentage of the voting power or value of the securities of each issuer other than REIT or "TRS" | 10.00% | ||||
Maximum ownership of securities in all TRS (as a percent) | 20.00% | 25.00% | |||
Maximum ownership of securities in all TRS when considered together with other non-real estate assets (as a percent) | 25.00% | ||||
Period of statute of limitations applicable to the entity's income tax returns | 3 years | ||||
Net operating losses | |||||
NOLs expiration period | 20 years | ||||
Gross amount of NOLs available to company | $ 13,041,000 | $ 13,041,000 | $ 13,041,000 | ||
Income Tax Expense | |||||
Revised Texas franchise tax | 134,000 | $ 176,000 | |||
Other Taxes | 23,000 | 21,000 | |||
Taxes on income | $ 75,000 | $ 72,000 | 157,000 | $ 197,000 | |
Deferred income taxes | $ 0 |
Dispositions of Properties (Det
Dispositions of Properties (Details) - USD ($) $ in Thousands | Oct. 20, 2017 | Jan. 06, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2017 |
Gain (loss) on sale of property | |||||
Gain (loss) on sale of property | $ (20,492) | $ (18,203) | |||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Office Property in Baltimore Maryland | |||||
Gain (loss) on sale of property | |||||
Assets Held-for-sale, Not Part of Disposal Group | $ 31,600 | 31,900 | 31,900 | ||
Loss contingency on property held | 20,700 | $ 20,500 | $ 20,500 | ||
Provision for loss on property held | $ 300 | ||||
Disposal group disposed of by sale, not classified as discontinued operations | Office Property in Baltimore Maryland | |||||
Gain (loss) on sale of property | |||||
Gain (loss) on sale of property | $ 20,800 | ||||
Net Proceeds | $ 31,600 | ||||
Office Property In Milpitas, California | Disposal group disposed of by sale, not classified as discontinued operations | |||||
Gain (loss) on sale of property | |||||
Gain (loss) on sale of property | $ 2,300 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 19, 2018 | Jul. 06, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 |
Subsequent Events | ||||||
Cash dividend declared per share (in dollars per share) | $ 0.09 | $ 0.19 | $ 0.19 | $ 0.19 | ||
Cash distribution declared | Subsequent Events. | ||||||
Subsequent Events | ||||||
Cash dividend declared per share (in dollars per share) | $ 0.09 | |||||
Grand Boulevard | Subsequent Events. | ||||||
Subsequent Events | ||||||
Distributions from non-consolidated REITs | $ 6.3 |