Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 12, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | BROADSTONE NET LEASE, INC. | |
Entity Central Index Key | 0001424182 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 25,550,886.642 | |
Entity Shell Company | false | |
Entity File Number | 000-55774 | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 26-1516177 | |
Entity Address, Address Line One | 800 Clinton Square | |
Entity Address, City or Town | Rochester | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 14604 | |
City Area Code | 585 | |
Local Phone Number | 287-6500 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Accounted for using the operating method, net of accumulated depreciation | $ 3,459,626 | $ 2,641,746 |
Accounted for using the direct financing method | 41,920 | 42,000 |
Investment in rental property, net | 3,501,546 | 2,683,746 |
Cash and cash equivalents | 14,008 | 18,612 |
Accrued rental income | 81,251 | 69,247 |
Tenant and other receivables, net | 861 | 1,026 |
Prepaid expenses and other assets | 34,594 | 4,316 |
Interest rate swap, assets | 1,120 | 17,633 |
Intangible lease assets, net | 342,478 | 286,258 |
Debt issuance costs – unsecured revolver, net | 2,679 | 2,261 |
Leasing fees, net | 13,251 | 13,698 |
Total assets | 3,991,788 | 3,096,797 |
Liabilities and equity | ||
Unsecured revolver | 303,300 | 141,100 |
Mortgages and notes payable, net | 112,562 | 78,952 |
Unsecured term notes, net | 1,671,511 | 1,225,773 |
Interest rate swap, liabilities | 37,489 | 1,820 |
Accounts payable and other liabilities | 34,008 | 24,394 |
Due to related parties | 433 | 114 |
Accrued interest payable | 9,482 | 9,777 |
Intangible lease liabilities, net | 94,503 | 85,947 |
Total liabilities | 2,263,288 | 1,567,877 |
Commitments and contingencies (See Note 16) | ||
Broadstone Net Lease, Inc. stockholders' equity: | ||
Preferred stock, $0.001 par value; 20,000 shares authorized, no shares issued or outstanding | ||
Common stock, $0.001 par value; 80,000 shares authorized, 25,482 and 22,014 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 25 | 22 |
Additional paid-in capital | 1,852,038 | 1,557,421 |
Cumulative distributions in excess of retained earnings | (194,790) | (155,150) |
Accumulated other comprehensive (loss) income | (33,911) | 14,806 |
Total Broadstone Net Lease, Inc. stockholders’ equity | 1,623,362 | 1,417,099 |
Non-controlling interests | 105,138 | 111,821 |
Total equity | 1,728,500 | 1,528,920 |
Total liabilities and equity | $ 3,991,788 | $ 3,096,797 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 25,482,000 | 22,014,000 |
Common stock, shares outstanding | 25,482,000 | 22,014,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues | ||||
Lease revenues | $ 76,401 | $ 61,764 | $ 213,884 | $ 174,385 |
Operating expenses | ||||
Depreciation and amortization | 28,392 | 21,869 | 77,989 | 61,303 |
Property and operating expense | 3,855 | 2,777 | 11,497 | 7,926 |
General and administrative | 1,315 | 1,664 | 3,807 | 4,451 |
State, franchise and foreign tax | 405 | 58 | 1,153 | 811 |
Provision for impairment of investment in rental properties | 2,435 | 2,061 | 3,452 | 2,061 |
Total operating expenses | 44,110 | 34,772 | 119,864 | 94,463 |
Other income (expenses) | ||||
Preferred distribution income | 65 | 440 | ||
Interest income | 5 | 16 | 6 | 178 |
Interest expense | (18,465) | (14,484) | (51,025) | (38,115) |
Cost of debt extinguishment | (455) | (50) | (1,176) | (101) |
Gain on sale of real estate | 12,585 | 2,025 | 16,772 | 9,620 |
Gain on sale of investment in related party | 8,500 | 8,500 | ||
Internalization expenses | (923) | (1,195) | ||
Net income | 25,038 | 23,064 | 57,402 | 60,444 |
Net income attributable to non-controlling interests | (1,650) | (1,797) | (3,942) | (4,631) |
Net income attributable to Broadstone Net Lease, Inc. | $ 23,388 | $ 21,267 | $ 53,460 | $ 55,813 |
Weighted average number of common shares outstanding | ||||
Basic | 24,642 | 20,554 | 23,394 | 19,850 |
Diluted | 26,379 | 22,291 | 25,131 | 21,496 |
Net earnings per common share | ||||
Basic and diluted | $ 0.95 | $ 1.03 | $ 2.28 | $ 2.81 |
Comprehensive income | ||||
Net income | $ 25,038 | $ 23,064 | $ 57,402 | $ 60,444 |
Other comprehensive income | ||||
Change in fair value of interest rate swaps | (16,380) | 6,299 | (52,182) | 30,296 |
Realized gain on interest rate swaps | (41) | (4) | (163) | (4) |
Comprehensive income | 8,617 | 29,359 | 5,057 | 90,736 |
Comprehensive income attributable to non-controlling interests | (557) | (2,288) | (315) | (6,931) |
Comprehensive income attributable to Broadstone Net Lease, Inc. | 8,060 | 27,071 | 4,742 | 83,805 |
Asset Management Fees | ||||
Operating expenses | ||||
Operating expenses | 5,610 | 4,663 | 16,048 | 13,119 |
Property Management Fees | ||||
Operating expenses | ||||
Operating expenses | $ 2,098 | $ 1,680 | $ 5,918 | $ 4,792 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Subscriptions Receivable | Cumulative Distributions in Excess of Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Non-controlling Interests |
Beginning Balance at Dec. 31, 2017 | $ 1,284,201 | $ 19 | $ 1,301,979 | $ (15) | $ (120,280) | $ 5,122 | $ 97,376 |
Net income | 18,995 | 17,573 | 1,422 | ||||
Issuance of shares of common stock | 57,026 | 1 | 57,154 | (129) | |||
Other offering costs | (224) | (224) | |||||
Distributions declared | (26,948) | (24,476) | (2,472) | ||||
Change in fair value of interest rate swap agreements | 16,955 | 15,685 | 1,270 | ||||
Conversion of eight membership units to eight shares of common stock | 684 | (684) | |||||
Redemption of shares of common stock, value | (3,577) | (3,577) | |||||
Cancellation of nine shares of common stock | (748) | (748) | |||||
Ending Balance at Mar. 31, 2018 | 1,345,680 | 20 | 1,355,268 | (144) | (127,183) | 20,807 | 96,912 |
Beginning Balance at Dec. 31, 2017 | 1,284,201 | 19 | 1,301,979 | (15) | (120,280) | 5,122 | 97,376 |
Net income | 60,444 | ||||||
Realized gain on interest rate swap agreements | (4) | ||||||
Redemption of shares of common stock, value | (8,564) | ||||||
Cancellation of nine shares of common stock | (748) | ||||||
Ending Balance at Sep. 30, 2018 | 1,482,371 | 21 | 1,479,339 | (1,690) | (141,117) | 33,114 | 112,704 |
Beginning Balance at Mar. 31, 2018 | 1,345,680 | 20 | 1,355,268 | (144) | (127,183) | 20,807 | 96,912 |
Net income | 18,386 | 16,974 | 1,412 | ||||
Issuance of shares of common stock | 56,530 | 56,886 | (356) | ||||
Other offering costs | (301) | (301) | |||||
Issuance of membership units | 15,797 | 15,797 | |||||
Distributions declared | (28,003) | (25,620) | (2,383) | ||||
Change in fair value of interest rate swap agreements | 7,042 | 6,503 | 539 | ||||
Redemption of shares of common stock, value | (2,312) | (2,312) | |||||
Ending Balance at Jun. 30, 2018 | 1,412,819 | 20 | 1,409,541 | (500) | (135,829) | 27,310 | 112,277 |
Net income | 23,064 | 21,267 | 1,797 | ||||
Issuance of shares of common stock | 71,581 | 1 | 72,770 | (1,190) | |||
Other offering costs | (297) | (297) | |||||
Distributions declared | (28,416) | (26,555) | (1,861) | ||||
Change in fair value of interest rate swap agreements | 6,299 | 5,807 | 492 | ||||
Realized gain on interest rate swap agreements | (4) | (3) | (1) | ||||
Redemption of shares of common stock, value | (2,675) | (2,675) | |||||
Ending Balance at Sep. 30, 2018 | 1,482,371 | 21 | 1,479,339 | (1,690) | (141,117) | 33,114 | 112,704 |
Beginning Balance at Dec. 31, 2018 | 1,528,920 | 22 | 1,557,421 | (155,150) | 14,806 | 111,821 | |
Net income | 15,022 | 13,938 | 1,084 | ||||
Issuance of shares of common stock | 74,875 | 1 | 75,099 | (225) | |||
Other offering costs | (300) | (300) | |||||
Distributions declared | (31,983) | (29,635) | (2,348) | ||||
Change in fair value of interest rate swap agreements | (12,624) | (11,713) | (911) | ||||
Realized gain on interest rate swap agreements | (81) | (75) | (6) | ||||
Redemption of shares of common stock, value | (1,803) | (1,803) | |||||
Ending Balance at Mar. 31, 2019 | 1,572,026 | 23 | 1,630,417 | (225) | (170,847) | 3,018 | 109,640 |
Beginning Balance at Dec. 31, 2018 | 1,528,920 | 22 | 1,557,421 | (155,150) | 14,806 | 111,821 | |
Net income | 57,402 | ||||||
Realized gain on interest rate swap agreements | (163) | ||||||
Redemption of shares of common stock, value | (12,374) | ||||||
Ending Balance at Sep. 30, 2019 | 1,728,500 | 25 | 1,852,038 | (194,790) | (33,911) | 105,138 | |
Beginning Balance at Mar. 31, 2019 | 1,572,026 | 23 | 1,630,417 | (225) | (170,847) | 3,018 | 109,640 |
Net income | 17,342 | 16,134 | 1,208 | ||||
Issuance of shares of common stock | 76,230 | 1 | 76,004 | $ 225 | |||
Other offering costs | (300) | (300) | |||||
Distributions declared | (33,231) | (30,934) | (2,297) | ||||
Change in fair value of interest rate swap agreements | (23,178) | (21,564) | (1,614) | ||||
Realized gain on interest rate swap agreements | (41) | (38) | (3) | ||||
Redemption of shares of common stock, value | (3,210) | (3,210) | |||||
Ending Balance at Jun. 30, 2019 | 1,605,638 | 24 | 1,702,911 | (185,647) | (18,584) | 106,934 | |
Net income | 25,038 | 23,388 | 1,650 | ||||
Issuance of shares of common stock | 157,192 | 1 | 157,191 | ||||
Other offering costs | (703) | (703) | |||||
Distributions declared | (34,883) | (32,531) | (2,352) | ||||
Change in fair value of interest rate swap agreements | (16,380) | (15,288) | (1,092) | ||||
Realized gain on interest rate swap agreements | (41) | (39) | (2) | ||||
Redemption of shares of common stock, value | (7,361) | (7,361) | |||||
Ending Balance at Sep. 30, 2019 | $ 1,728,500 | $ 25 | $ 1,852,038 | $ (194,790) | $ (33,911) | $ 105,138 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Number of membership units exchanged | 8 | |
Common Stock | ||
Issuance of shares of common stock, shares | 883 | 710 |
Issuance of shares common stock upon conversion of membership units | 8 | |
Redemption of shares of common stock, shares | 21 | 46 |
Cancellation shares of common stock, shares | 9 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net income | $ 57,402 | $ 60,444 |
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: | ||
Depreciation and amortization including intangibles associated with investment in rental property | 75,661 | 61,515 |
Provision for impairment of investment in rental properties | 3,452 | 2,061 |
Amortization of debt issuance costs charged to interest expense | 1,655 | 1,303 |
Straight-line rent and financing lease adjustments | (15,882) | (15,640) |
Cost of debt extinguishment | 1,176 | 101 |
Gain on sale of real estate | (16,772) | (9,620) |
Settlement of interest rate swap | 760 | |
Gain on sale of investment in related party | (8,500) | |
Leasing fees paid | (747) | (1,325) |
Other non-cash items | 277 | 468 |
Changes in assets and liabilities: | ||
Tenant and other receivables | 165 | (65) |
Prepaid expenses and other assets | (393) | (799) |
Accounts payable and other liabilities | 5,234 | (893) |
Accrued interest payable | (295) | 3,707 |
Net cash provided by operating activities | 110,933 | 93,517 |
Investing activities | ||
Acquisition of rental property accounted for using the operating method, net of mortgages assumed | (957,820) | (329,664) |
Acquisition of rental property accounted for using the direct financing method | (430) | |
Capital expenditures and improvements | (4,044) | (4,326) |
Proceeds from sale of investment in related party | 18,500 | |
Proceeds from disposition of rental property, net | 90,137 | 41,330 |
Change in deposits on investments in rental property | 1,500 | |
Net cash used in investing activities | (870,227) | (274,590) |
Financing activities | ||
Proceeds from issuance of common stock, net | 260,475 | 146,791 |
Redemptions of common stock | (12,374) | (8,564) |
Borrowings on mortgages, notes payable and unsecured term notes, net of mortgages assumed of $49,782 and $20,845 in 2019 and 2018, respectively | 750,000 | 415,000 |
Principal payments on mortgages, notes payable and unsecured term notes | (316,191) | (33,930) |
Borrowings on unsecured revolver | 389,100 | 189,500 |
Repayments on unsecured revolver | (226,900) | (462,500) |
Cash distributions paid to stockholders | (45,219) | (38,410) |
Cash distributions paid to non-controlling interests | (6,980) | (6,630) |
Debt issuance and extinguishment costs paid | (7,491) | (2,255) |
Net cash provided by financing activities | 784,420 | 199,002 |
Net increase in cash and cash equivalents and restricted cash | 25,126 | 17,929 |
Cash and cash equivalents and restricted cash at beginning of period | 18,989 | 10,099 |
Cash and cash equivalents and restricted cash at end of period | 44,115 | 28,028 |
Reconciliation of cash and cash equivalents and restricted cash | ||
Cash and cash equivalents at beginning of period | 18,612 | 9,355 |
Restricted cash at beginning of period | 377 | 744 |
Cash and cash equivalents and restricted cash at beginning of period | 18,989 | 10,099 |
Cash and cash equivalents at end of period | 14,008 | 17,301 |
Restricted cash at end of period | 30,107 | 10,727 |
Cash and cash equivalents and restricted cash at end of period | $ 44,115 | $ 28,028 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Mortgages assumed | $ 49,782 | $ 20,845 |
Rental Property Acquisition | ||
Mortgages assumed | $ 49,782 | $ 20,845 |
Business Description
Business Description | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business Description | 1. Business Description Broadstone Net Lease, Inc. (the “Corporation”) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (“REIT”) commencing with the taxable year ended December 31, 2008. The Corporation focuses on investing in income-producing, net leased commercial properties, primarily in the United States. The Corporation leases properties to retail, healthcare, industrial, office, and other commercial businesses under long-term lease agreements. At September 30, 2019, the Corporation owned a diversified portfolio of 662 individual net leased commercial properties located in 42 states throughout the continental United States and in British Columbia, Canada. Broadstone Net Lease, LLC (the “Operating Company”), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties. The Corporation is the sole managing member of the Operating Company. The remaining interests in the Operating Company, which are referred to as non-controlling interests, are held by members who acquired their interest by contributing property to the Operating Company in exchange for membership units of the Operating Company. As the Corporation conducts substantially all of its operations through the Operating Company, it is structured as what is referred to as an umbrella partnership real estate investment trust (“UPREIT”). The following table summarizes the economic ownership interest in the Operating Company: Percentage of shares owned by September 30, 2019 December 31, 2018 Corporation 93.6 % 92.7 % Non-controlling interests 6.4 % 7.3 % 100.0 % 100.0 % The Corporation operates under the direction of its board of directors (the “Board of Directors”), which is responsible for the management and control of the Company’s (as defined below) affairs. The Corporation is currently externally managed and its Board of Directors has retained the Corporation’s sponsor, Broadstone Real Estate, LLC (the “Manager”) and Broadstone Asset Management, LLC (the “Asset Manager”) to manage the Corporation’s day-to-day affairs, to implement the Corporation’s investment strategy, and to provide certain property management services for the Corporation’s properties, subject to the Board of Directors’ direction, oversight, and approval. The Asset Manager is a wholly owned subsidiary of the Manager and all of the Corporation’s officers are employees of the Manager. Accordingly, both the Manager and the Asset Manager are related parties of the Company. Refer to Note 3 for further discussion concerning related parties and related party transactions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Interim Information The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting Summary of Significant Accounting Policies Principles of Consolidation The Condensed Consolidated Financial Statements include the accounts and operations of the Corporation, the Operating Company and its consolidated subsidiaries, all of which are wholly owned by the Operating Company (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation. To the extent the Corporation has a variable interest in entities that are not evaluated under the variable interest entity (“VIE”) model, the Corporation evaluates its interests using the voting interest entity model. The Corporation has complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Company. Based on consolidation guidance, the Corporation has concluded that the Operating Company is a VIE as the members in the Operating Company do not possess kick-out rights or substantive participating rights. Accordingly, the Corporation consolidates its interest in the Operating Company. However, as the Corporation holds the majority voting interest in the Operating Company, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs. The portion of the Operating Company not owned by the Corporation is presented as non-controlling interests as of and during the periods presented. Basis of Accounting The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include, but are not limited to, the allocation of purchase price between investment in rental property and intangible assets acquired and liabilities assumed, the value of long-lived assets, the provision for impairment, the depreciable lives of rental property, the amortizable lives of intangible assets and liabilities, the allowance for doubtful accounts, the fair value of assumed debt and notes payable, the fair value of the Company’s interest rate swap agreements, and the determination of any uncertain tax positions. Accordingly, actual results may differ from those estimates. Long-lived Asset Impairment The Company reviews long-lived assets to be held and used for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If, and when, such events or changes in circumstances are present, an impairment exists to the extent the carrying value of the asset or asset group exceeds the sum of the undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition. Such cash flows include expected future operating income, as adjusted for trends and prospects, as well as the effects of demand, competition, and other factors. An impairment loss is measured as the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. A significant judgment is made as to if and when impairment should be taken. If the Company’s strategy, or one or more of the assumptions described above were to change in the future, an impairment may need to be recognized. Inputs used in establishing fair value for real estate assets generally fall within Level 3 of the fair value hierarchy, which are characterized as requiring significant judgment as little or no current market activity may be available for validation. The main indicator used to establish the classification of the inputs is current market conditions, as derived through the use of published commercial real estate market information. The Company determines the valuation of impaired assets using generally accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations, and bona fide purchase offers received from third parties. Management may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate. During the three and nine months ended September 30, 2019, the Company recorded impairment charges of $ 2,435 Revenue Recognition The Company commences revenue recognition on its leases based on a number of factors, including the initial determination that the contract is or contains a lease. Generally, all of the Company’s property related contracts are or contain leases, and therefore revenue is recognized when the lessee takes possession of or controls the physical use of the leased assets. In most instances this occurs on the lease commencement date. At the time of lease assumption or at the inception of a new lease, including new leases that arise from amendments, the Company assesses the terms and conditions of the lease to determine the proper lease classification. Certain of the Company’s leases require tenants to pay rent based upon a percentage of the property’s net sales (“percentage rent”) or contain rent escalators indexed to future changes in the Consumer Price Index. Lease income associated with such provisions is considered variable lease income and therefore is not included in the initial measurement of the lease receivable, or in the calculation of straight-line rent revenue. Such amounts are recognized as income when the amounts are determinable. As described in Recently Adopted Accounting Standards Leases (Topic 842) Leases Executed on or After Adoption of ASC 842 A lease is classified as an operating lease if none of the following criteria are met: (i) ownership transfers to the lessee at the end of the lease term, (ii) the lessee has a purchase option that is reasonably expected to be exercised, (iii) the lease term is for a major part of the economic life of the leased property, (iv) the present value of the future lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the leased property, and (v) the leased property is of such a specialized nature that it is expected to have no future alternative use to the Company at the end of the lease term. If one or more of these criteria are met, the lease will generally be classified as a sales-type lease, unless the lease contains a residual value guarantee from a third party other than the lessee, in which case it would be classified as a direct financing lease under certain circumstances in accordance with ASC 842. ASC 842 requires the Company to account for the right to use land as a separate lease component, unless the accounting effect of doing so would be insignificant. Determination of significance requires management judgment. In determining whether the accounting effect of separately reporting the land component from other components for its real estate leases is significant, the Company assesses: (i) whether separating the land component impacts the classification of any lease component, (ii) the value of the land component in the context of the overall contract, and (iii) whether the right to use the land is coterminous with the rights to use the other assets. Leases Executed Prior to Adoption of ASC 842 A lease arrangement was classified as an operating lease if none of the following criteria were met: (i) ownership transferred to the lessee prior to or shortly after the end of the lease term, (ii) the lessee had a bargain purchase option during or at the end of the lease term, (iii) the lease term was greater than or equal to 75% of the underlying property’s estimated useful life, or (iv) the present value of the future minimum lease payments (excluding executory costs) was greater than or equal to 90% of the fair value of the leased property. If one or more of these criteria were met, and the minimum lease payments were determined to be reasonably predictable and collectible, the lease arrangement was generally accounted for as a direct financing lease. Consistent with ASC 840 , Leases, Revenue recognition methods for operating leases, direct financing leases, and sales-type leases are described below: Rental property accounted for under operating leases – Revenue is recognized as rents are earned on a straight-line basis over the non-cancelable terms of the related leases. For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as Accrued rental income on the Condensed Consolidated Balance Sheets. Rental property accounted for under direct financing leases – The Company utilizes the direct finance method of accounting to record direct financing lease income. The net investment in the direct financing lease represents receivables for the sum of future lease payments to be received and the estimated residual value of the leased property, less unamortized unearned income (which represents the difference between undiscounted cash flows and discounted cash flows). Unearned income is deferred and amortized into income over the lease terms so as to produce a constant periodic rate of return on the Company’s net investment in the leases. Rental property accounted for under sales-type leases – For leases accounted for as sales-type leases, the Company records selling profit arising from the lease at inception, along with the net investment in the lease. The Company leases assets through the assumption of existing leases or through sale-leaseback transactions, and records such assets at their fair value at the time of acquisition, which in most cases coincides with lease inception. As a result, the Company does not generally recognize selling profit on sales-type leases. The net investment in the sales-type lease represents receivables for the sum of future lease payments and the estimated unguaranteed residual value of the leased property, each measured at net present value. Interest income is recorded over the lease terms so as to produce a constant periodic rate of return on the Company’s net investment in the leases. Certain of the Company’s contracts contain nonlease components ( e.g. i.e. Rent Received in Advance Rent received in advance represents tenant payments received prior to the contractual due date, and is included in Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets. Rent received in advance is as follows: (in thousands) September 30, 2019 December 31, 2018 Rent received in advance $ 10,694 $ 7,832 Allowance for Doubtful Accounts Prior to the adoption of ASC 842, provisions for doubtful accounts were recorded as bad debt expense and included in General and administrative expenses on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. Subsequent to the adoption of ASC 842, provisions for doubtful accounts are recorded prospectively as an offset to Lease revenues on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures, The balances of financial instruments measured at fair value on a recurring basis are as follows (see Note 10): September 30, 2019 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 1,120 $ — $ 1,120 $ — Interest rate swap, liabilities (37,489 ) — (37,489 ) — $ (36,369 ) $ — $ (36,369 ) $ — December 31, 2018 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 17,633 $ — $ 17,633 $ — Interest rate swap, liabilities (1,820 ) — (1,820 ) — $ 15,813 $ — $ 15,813 $ — The Company has estimated that the carrying amount reported on the Condensed Consolidated Balance Sheets for Cash and cash equivalents, Prepaid expenses and other assets, Tenant and other receivables, net, and Accounts payable and other liabilities, approximates their fair values due to their short-term nature. The fair value of the Company’s debt was estimated using Level 2 and Level 3 inputs based on recent financing transactions, estimates of the fair value of the property that serves as collateral for such debt, historical risk premiums for loans of comparable quality, current London Interbank Offered Rate (“LIBOR”), U.S. treasury obligation interest rates, and on the discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect the Company’s judgment as to the approximate current lending rates for loans or groups of loans with similar maturities and assumes that the debt is outstanding through maturity. Market information, as available, or present value techniques were utilized to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist on specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation. The following table summarizes the carrying amount reported on the Condensed Consolidated Balance Sheets and the Company’s estimate of the fair value of the Mortgages and notes payable, net, Unsecured term notes, net, and Unsecured revolver: (in thousands) September 30, 2019 December 31, 2018 Carrying amount $ 2,096,235 $ 1,450,551 Fair value 2,180,100 1,439,264 As disclosed under Long-lived Asset Impairment Right-of-Use Assets and Lease Liabilities In accordance with ASC 842, the Company records right-of-use assets and lease liabilities associated with leases of land where it is the lessee under non-cancelable operating leases (“ground leases”). The lease liability is equal to the net present value of the future payments to be made under the lease, discounted using estimates based on observable market factors. The right-of-use asset is generally equal to the lease liability plus initial direct costs associated with the leases. The Company includes in the recognition of the right-of-use asset and lease liability those renewal periods that are reasonably certain to be exercised, based on the facts and circumstances that exist at lease inception. Amounts associated with percentage rent provisions are considered variable lease costs and are not included in the initial measurement of the right-of-use asset or lease liability. As allowed under ASC 842, the Company has made an accounting policy election, applicable to all asset types, to not separate lease from nonlease components when allocating contract consideration related to ground leases. Right-of-use assets and lease liabilities associated with ground leases were included in the accompanying Condensed Consolidated Balance Sheets as follows: September 30, (in thousands) Financial Statement Presentation 2019 Right-of-use assets Prepaid expenses and other assets $ 1,654 Lease liabilities Accounts payable and other liabilities 1,246 Taxes Collected From Tenants and Remitted to Governmental Authorities A majority of the Company’s properties are leased on a triple-net basis, which provides that the tenants are responsible for the payment of all property operating expenses, including, but not limited to, property taxes, maintenance, insurance, repairs, and capital costs, during the lease term. The Company records such expenses on a net basis. In other situations, the Company may collect property taxes from its tenants and remit those taxes to governmental authorities. Taxes collected from tenants and remitted to governmental authorities are presented on a gross basis, where amounts billed to tenants are included in Lease revenues, and the corresponding expense is included in Property and operating expense, in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. Rental Expense Rental expense associated with ground leases is recorded on a straight-line basis over the term of each lease, for leases that have fixed and measurable rent escalations. Under the provisions of ASC 842, the difference between rental expense incurred on a straight-line basis and the cash rental payments due under the provisions of the lease is recorded as part of the right-of-use asset in the accompanying September 30, 2019 Condensed Consolidated Balance Sheet. Prior to the adoption of ASC 842, at December 31, 2018, this difference was recorded as a deferred liability and was included as a component of Accounts payable and other liabilities in the accompanying Condensed Consolidated Balance Sheets. Amounts associated with percentage rent provisions based on the achievement of sales targets are recognized as variable rental expense when achievement of the sales targets is considered probable. Rental expense is included in Property and operating expenses on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic ASC 842) • The “Package of Three,” which allows an entity to not reassess (i) whether any expired or existing contracts are, or contain, leases, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for existing leases. • The optional transition method to initially apply the guidance of ASC 842 at the adoption date and to recognize a cumulative-effect adjustment to the opening balance of retained earnings. As a result of electing this practical expedient, the Company’s reporting for the comparative periods presented will continue to be in accordance with ASC 840, including the required disclosures. • The ability to make an accounting policy election, by class of underlying asset, to not separate nonlease components from the associated lease component and to account for those components as a single component if certain conditions are met. ASC 842 requires all income from leases to be presented as a single line item, rather than the prior presentation where rental income from leases was shown separately from amounts billed and collected as reimbursements from tenants on the Condensed Consolidated Statements of Income and Comprehensive Income. In addition, bad debt expense is required to be recorded as an adjustment to Lease revenues, rather than recorded within Operating expenses on the Condensed Consolidated Statements of Income and Comprehensive Income, as had previously been the case. The Company is primarily a lessor and therefore adoption of ASC 842 did not have a material impact on its Condensed Consolidated Financial Statements. Upon adoption of ASC 842, it was not necessary for the Company to record a cumulative-effect adjustment to the opening balance of retained earnings, however the Company recognized a right-of-use asset and corresponding lease liability as of January 1, 2019, of $1,687 and $1,261, respectively, related to operating leases where it is the lessee (see Note 16). The right-of-use asset was recorded net of a previously recorded straight-line rent liability of $7 and ground lease intangible asset, net of $432 as of the date of adoption. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . Other Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses Codification Improvements to Topic 326, Financial Instruments – Credit Losses Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Reclassifications Certain prior-period amounts have been reclassified to conform with the current period’s presentation, including certain items described below which resulted from the adoption of ASC 842. Components of revenue that were previously reported as Rental income from operating leases, Earned income from direct financing leases, Operating expenses reimbursed from tenants, and Other income from real estate transactions, on the Condensed Consolidated Statements of Income and Comprehensive Income, have been combined and reported as Lease revenues on the Condensed Consolidated Statements of Income and Comprehensive Income as follows: As originally reported For the three months ended For the nine months ended (in thousands) September 30, 2018 September 30, 2018 Revenues Rental income from operating leases $ 58,189 $ 163,611 Earned income from direct financing leases 1,017 2,936 Operating expenses reimbursed from tenants 2,529 7,764 Other income from real estate transactions 29 74 Total revenues $ 61,764 $ 174,385 As revised For the three months ended For the nine months ended (in thousands) September 30, 2018 September 30, 2018 Revenues Lease revenues $ 61,764 $ 174,385 In addition, as discussed above, in connection with recording the transition adjustment for the right-of-use asset related to operating leases where the Company is the lessee, amounts reported as ground lease intangible assets, net and ground lease straight-line rent liabilities on the Condensed Consolidated Balance Sheet at December 31, 2018, were reclassified as of January 1, 2019, and are now included as components of the right-of-use asset. The Company reclassified Restricted cash of $377 and Tenant and capital reserves of $1,136 to Prepaid expenses and other assets on the Condensed Consolidated Balance Sheets at December 31, 2018, to conform with the current period presentation. Additionally, Tenant improvement allowances of $2,125 were reclassified to Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets at December 31, 2018, to conform with the current presentation. The reclassifications are changes from one acceptable presentation to another acceptable presentation. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | 3. Related-Party Transactions Property Management Agreement The Corporation and the Operating Company are a party to a property management agreement (as amended, the “Property Management Agreement”) with the Manager, a related party in which certain directors of the Corporation have either a direct or indirect ownership interest. Under the terms of the Property Management Agreement, the Manager manages and coordinates certain aspects of the leasing of the Corporation’s rental property. In exchange for services provided under the Property Management Agreement, the Manager receives certain fees and other compensation as follows: ( i ) 3% of gross rentals collected each month from the rental property for property management services (other than one property, which calls for 5% of gross rentals under the Property Management Agreement); and (ii) Re-leasing fees for existing rental property equal to one month’s rent for a new lease with an existing tenant and two months’ rent for a new lease with a new tenant. The Property Management Agreement automatically renewed on January 1, 2019 for three years ending December 31, 2021, subject to earlier termination pursuant to the terms of the Property Management Agreement. The Property Management Agreement provides for termination: (i) immediately by the Corporation’s Independent Directors Committee (“IDC”) for Cause, as defined in the Property Management Agreement, (ii) by the IDC, upon 30 days’ written notice to the Manager, in connection with a change in control of the Manager, as defined in the Property Management Agreement, (iii) by the IDC, by providing the Manager with written notice of termination not less than one year prior to the last calendar day of any renewal term, (iv) by the Manager upon written notice to the Company not less than one year prior to the last calendar day of any renewal period, (v) automatically in the event of a Termination Event, as defined in the Property Management Agreement, and (vi) by the IDC upon a Key Person Event, as defined in the Property Management Agreement. If the Corporation terminates the agreement prior to any renewal term or in any manner described above, other than termination by the Corporation for Cause, the Corporation will be subject to a termination fee equal to three times the Management Fees, as defined in the Property Management Agreement, to which the Manager was entitled during the 12-month period immediately preceding the date of such termination. Although not terminable at September 30, 2019, if the Property Management Agreement had been terminated at September 30, 2019, subject to the conditions noted above, the termination fee would have been $22,965. Asset Management Agreement The Corporation and the Operating Company are party to an asset management agreement (as amended, the “Asset Management Agreement”) with the Asset Manager, a single member limited liability company with the Manager as the single member, and therefore a related party in which certain directors of the Corporation have an indirect ownership interest. Under the terms of the Asset Management Agreement, the Asset Manager is responsible for, among other things, the Corporation’s acquisition, initial leasing, and disposition strategies, financing activities, and providing support to the Corporation’s IDC for its valuation functions and other duties. The Asset Manager also nominates two individuals to serve on the Board of Directors of the Corporation. Under the terms of the Asset Management Agreement, the Asset Manager is compensated as follows: (i) a quarterly asset management fee equal to 0.25% of the aggregate value of common stock, based on the per share value as determined by the IDC each quarter, on a fully diluted basis as if all interests in the Operating Company had been converted into shares of the Corporation’s common stock; (ii) 0.5% of the proceeds from future equity closings as reimbursement for offering, marketing, and brokerage expenses; (iii) 1% of the gross purchase price paid for each rental property acquired (other than acquisitions described in (iv) below), including any property contributed in exchange for membership interests in the Operating Company; (iv) 2% of the gross purchase price paid for each rental property acquired in the event that the acquisition of a rental property requires a new lease (as opposed to the assumption of an existing lease), such as a sale-leaseback transaction; (v) 1% of the gross sale price received for each rental property disposition; and (vi) 1% of the Aggregate Consideration, as defined in the Asset Management Agreement, received in connection with a Disposition Event. The Asset Management Agreement defines a Disposition Event in the same manner as a Termination Event is defined in the Property Management Agreement discussed above. The Asset Management Agreement automatically renewed on January 1, 2019 for three years ending December 31, 2021, subject to earlier termination pursuant to the terms of the Asset Management Agreement. The Asset Management Agreement provides for termination: (i) immediately by the IDC for Cause, as defined in the Asset Management Agreement, (ii) by the IDC, upon 30 days’ written notice to the Asset Manager, in connection with a change in control of the Asset Manager, as defined in the Asset Management Agreement, (iii) by the IDC, by providing the Asset Manager with written notice of termination not less than one year prior to the last calendar day of any renewal term, (iv) by the Asset Manager upon written notice to the Company not less than one year prior to the last calendar day of any renewal period, (v) automatically in the event of a Disposition Event, as defined in the Asset Management Agreement, and (vi) by the IDC upon a Key Person Event, as defined in the Asset Management Agreement. If the Corporation terminates the agreement prior to any renewal term or in any manner described above, other than termination by the Corporation for Cause, the Corporation will be required to pay to the Asset Manager a termination fee equal to three times the Asset Management Fee to which the Asset Manager was entitled during the 12-month period immediately preceding the date of such termination. Although not terminable at September 30, 2019, if the Asset Management Agreement had been terminated at September 30, 2019, subject to the conditions noted above, the termination fee would have been $63,306. Total fees incurred under the Property Management Agreement and Asset Management Agreement are as follows: (in thousands) For the three months ended September 30, For the nine months ended September 30, Type of Fee Financial Statement Presentation 2019 2018 2019 2018 Asset management fee Asset management fees $ 5,610 $ 4,663 $ 16,048 $ 13,119 Property management fee Property management fees 2,098 1,680 5,918 4,792 Total management fee expense 7,708 6,343 21,966 17,911 Marketing fee (offering costs) Additional paid-in capital 703 297 1,303 822 Acquisition fee Capitalized as a component of assets acquired 7,932 1,105 9,937 3,491 Leasing fee Leasing fees, net 312 148 747 1,325 Disposition fee Gain on sale of real estate 596 116 947 439 Total management fees $ 17,251 $ 8,009 $ 34,900 $ 23,988 Included in Due to related parties on the Condensed Consolidated Balance Sheets at September 30, 2019 and December 31, 2018, are $433 and $114 of unpaid management fees, respectively. All fees related to the Property Management Agreement and the Asset Management Agreement are paid for in cash within the Company’s normal payment cycle for vendors. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | 4. Acquisitions The Company closed on the following acquisitions during the nine months ended September 30, 2019: (in thousands, except number of properties) Number of Real Estate Date Property Type Properties Acquisition Price January 31, 2019 Healthcare 1 $ 4,747 March 12, 2019 Industrial 1 10,217 March 15, 2019 Retail 10 13,185 March 19, 2019 Retail 14 19,128 March 26, 2019 Industrial 1 25,801 April 30, 2019 Other 1 76,000 (a) May 21, 2019 Retail 2 6,500 May 31, 2019 Retail 1 3,192 June 7, 2019 Other 1 30,589 June 26, 2019 Industrial 2 11,180 July 15, 2019 Retail 1 3,214 July 15, 2019 Industrial 1 11,330 July 31, 2019 Healthcare 5 27,277 August 27, 2019 Industrial 1 4,404 August 29, 2019 Industrial/Office/Other 23 735,740 September 17, 2019 Industrial 1 11,185 66 $ 993,689 (b) (a) (b) The Company closed on the following acquisitions during the nine months ended September 30, 2018: (in thousands, except number of properties) Number of Real Estate Date Property Type Properties Acquisition Price March 27, 2018 Industrial 1 $ 22,000 March 30, 2018 Industrial/Retail 26 78,530 April 30, 2018 Other 1 16,170 June 6, 2018 Industrial 1 8,500 June 14, 2018 Industrial 1 39,700 June 14, 2018 Retail 6 14,479 June 21, 2018 Retail 1 20,231 June 21, 2018 Industrial 1 38,340 (c) June 29, 2018 Industrial 1 10,400 June 29, 2018 Retail 2 6,433 July 12, 2018 Industrial 1 11,212 July 17, 2018 Retail 5 14,845 July 17, 2018 Office 1 34,670 August 6, 2018 Industrial 2 4,802 August 10, 2018 Retail 20 44,977 70 $ 365,289 (d) (c) (d) The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocation for completed acquisitions: For the nine months ended September 30, (in thousands) 2019 2018 Land $ 155,434 $ 47,930 Land improvements 44,929 20,815 Buildings and other improvements 745,116 271,696 Equipment — 2,891 Acquired in-place leases (e) 77,868 36,342 Acquired above-market leases (f) 2,800 3,347 Acquired below-market leases (g) (15,811 ) (10,143 ) Direct financing investments — 430 Mortgages payable (49,782 ) (20,845 ) $ 960,554 $ 352,463 (e) (f) (g) The above acquisitions were funded using a combination of available cash on hand, borrowings under the Company’s unsecured revolving line of credit and unsecured term loan agreements, and proceeds from equity issuances. All acquisitions closed during the nine months ended September 30, 2019 and 2018, qualified as asset acquisitions and, as such, acquisition costs were capitalized. Subsequent to September 30, 2019, the Company closed on the following acquisitions (see Note 17): (in thousands, except number of properties) Number of Real Estate Date Property Type Properties Acquisition Price October 31, 2019 Retail/Healthcare 3 $ 12,922 November 7, 2019 Retail 1 3,142 4 $ 16,064 The Company has not completed the allocation of the acquisition date fair values for the properties acquired subsequent to September 30, 2019; however, it expects the acquisitions to qualify as asset acquisitions and that the purchase price of these properties will primarily be allocated to land, land improvements, building and acquired lease intangibles. |
Sale of Real Estate
Sale of Real Estate | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Sale of Real Estate | 5. Sale of Real Estate The Company closed on the following sales of real estate, none of which qualified as discontinued operations: For the three months ended September 30, For the nine months ended September 30, (in thousands, except number of properties) 2019 2018 2019 2018 Number of properties disposed 16 4 25 15 Aggregate sale price $ 59,691 $ 11,609 $ 94,791 $ 43,951 Aggregate carrying value (43,920 ) (9,016 ) (73,365 ) (31,710 ) Additional sales expenses (3,186 ) (568 ) (4,654 ) (2,621 ) Gain on sale of real estate $ 12,585 $ 2,025 $ 16,772 $ 9,620 |
Investment in Rental Property a
Investment in Rental Property and Lease Arrangements | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Investment in Rental Property and Lease Arrangements | 6. Investment in Rental Property and Lease Arrangements The Company generally leases its investment rental property to established tenants in the retail, healthcare, manufacturing, office and other industries. At September 30, 2019, the Company had 642 real estate properties which were leased under leases that have been classified as operating leases and 16 that have been classified as direct financing leases. Of the 16 leases classified as direct financing leases, four include land portions which are accounted for as operating leases (see Revenue Recognition The Company’s leases do not include residual value guarantees. To protect the residual value of its assets under lease, the Company requires tenants to maintain certain levels of property insurance, and in some cases will purchase supplemental policies directly. Management physically inspects each property on a regular basis, to ensure the tenant is maintaining the property so that it will be in a condition at the end of the lease term that is suitable for the Company to lease to a new tenant without the need for significant additional investment. For assets other than land, at lease inception the Company estimates the residual value taking into consideration the original fair value of the asset, less anticipated depreciation over the lease term. In general, at lease inception the Company assumes the value ascribed to land will be fully recoverable at the end of the lease term. Investment in Rental Property – Accounted for Using the Operating Method Rental property subject to non-cancelable operating leases with tenants are as follows: (in thousands) September 30, 2019 December 31, 2018 Land $ 551,903 $ 411,043 Land improvements 279,629 239,701 Buildings and improvements 2,871,761 2,186,499 Equipment 11,492 11,492 3,714,785 2,848,735 Less accumulated depreciation (255,159 ) (206,989 ) $ 3,459,626 $ 2,641,746 Depreciation expense on investment in rental property was as follows: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Depreciation $ 21,843 $ 17,196 $ 60,128 $ 48,345 Estimated lease payments to be received under non-cancelable operating leases with tenants at September 30, 2019 are as follows: (in thousands) Remainder of 2019 $ 72,718 2020 294,220 2021 298,899 2022 301,996 2023 304,828 Thereafter 2,562,223 $ 3,834,884 Since lease renewal periods are exercisable at the option of the tenant, the above amounts only include future lease payments due during the initial lease terms. In addition, such amounts exclude any potential variable rent increases that are based on changes in the Consumer Price Index or future variable rents which may be received under the leases based on a percentage of the tenant’s gross sales. Investment in Rental Property – Direct Financing Leases The Company’s net investment in direct financing leases is comprised of the following: (in thousands) September 30, 2019 December 31, 2018 Undiscounted estimated lease payments to be received $ 73,775 $ 76,829 Estimated unguaranteed residual values 20,358 20,358 Unearned income (52,213 ) (55,187 ) Net investment in direct financing leases $ 41,920 $ 42,000 Undiscounted estimated lease payments to be received under non-cancelable direct financing leases with tenants at September 30, 2019 are as follows: (in thousands) Remainder of 2019 $ 1,022 2020 4,194 2021 4,283 2022 4,369 2023 4,456 Thereafter 55,451 $ 73,775 The above rental receipts do not include future lease payments for renewal periods, potential variable Consumer Price Index rent increases, or variable percentage rent payments that may become due in future periods. The following table summarizes amounts reported as Lease revenues on the Condensed Consolidated Statements of Income and Comprehensive Income: For the three months ended For the nine months ended (in thousands) September 30, 2019 September 30, 2019 Contractual rental amounts billed for operating leases $ 65,579 $ 184,292 Adjustment to recognize contractual operating lease billings on a straight-line basis 5,575 16,015 Adjustment to revenue recognized for uncollectible rental amounts billed — (440 ) Total operating lease rental revenues 71,154 199,867 Earned income from direct financing leases 1,005 3,014 Operating expenses billed to tenants 3,811 10,572 Other income from real estate transactions 431 431 Total lease revenues $ 76,401 $ 213,884 |
Intangible Assets And Liabiliti
Intangible Assets And Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Liabilities | 7. Intangible Assets and Liabilities The following is a summary of intangible assets and liabilities and related accumulated amortization: (in thousands) September 30, 2019 December 31, 2018 Lease intangibles: Acquired above-market leases $ 64,931 $ 64,164 Less accumulated amortization (17,275 ) (14,740 ) Acquired above-market leases, net 47,656 49,424 Acquired in-place leases 351,720 277,659 Less accumulated amortization (56,898 ) (40,825 ) Acquired in-place leases, net 294,822 236,834 Total intangible lease assets, net $ 342,478 $ 286,258 Acquired below-market leases $ 114,316 $ 101,602 Less accumulated amortization (19,813 ) (15,655 ) Intangible lease liabilities, net $ 94,503 $ 85,947 Leasing fees $ 17,316 $ 17,274 Less accumulated amortization (4,065 ) (3,576 ) Leasing fees, net $ 13,251 $ 13,698 Amortization for intangible lease assets and liabilities is as follows: (in thousands) For the three months ended September 30, For the nine months ended September 30, Intangible Financial Statement Presentation 2019 2018 2019 2018 Acquired in-place leases and leasing fees Depreciation and amortization $ 6,549 $ 4,673 $ 17,861 $ 12,958 Above-market and below-market leases Increase (decrease) to lease revenues 875 255 2,335 (212 ) Estimated future amortization of intangible assets and liabilities at September 30, 2019 is as follows: (in thousands) Remainder of 2019 $ 6,113 2020 24,267 2021 23,856 2022 23,241 2023 22,862 Thereafter 160,887 $ 261,226 |
Unsecured Credit Agreements
Unsecured Credit Agreements | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Unsecured Credit Agreements | 8. Unsecured Credit Agreements The following table summarizes the Company’s unsecured credit agreements: Outstanding Balance (in thousands, except interest rates) September 30, 2019 December 31, 2018 Interest Rate (d) Maturity Date 2019 Unsecured Term Loan (a) $ — $ 300,000 one-month LIBOR + 1.40% Feb. 2020 (g) 2020 Unsecured Term Loan (a) 300,000 — one-month LIBOR + 1.25% Aug. 2020 (h) Unsecured Revolving Credit and Term Loan Agreement (a) Revolver (b) 303,300 141,100 one-month LIBOR + 1.20% (e) Jan. 2022 2023 Unsecured Term Loan 265,000 265,000 one-month LIBOR + 1.35% Jan. 2023 2024 Unsecured Term Loan 190,000 190,000 one-month LIBOR + 1.25% (f) Jun. 2024 758,300 596,100 2026 Unsecured Term Loan (a) 450,000 — one-month LIBOR + 1.85% Feb. 2026 Senior Notes (a) Series A 150,000 150,000 4.84% Apr. 2027 Series B 225,000 225,000 5.09% Jul. 2028 Series C 100,000 100,000 5.19% Jul. 2030 475,000 475,000 Total 1,983,300 1,371,100 Debt issuance costs, net (c) (8,489 ) (4,227 ) $ 1,974,811 $ 1,366,873 (a) The Company believes it was in compliance with all financial covenants for all periods presented. (b) ( c) Amounts presented include debt issuance costs, net, related to the unsecured term notes and senior notes only. (d) (e) (f) (g) (h) On February 27, 2019, the Company entered into a $450,000 seven-year unsecured term loan agreement (the “2026 Unsecured Term Loan”) with Capital One, National Association as administrative agent. The 2026 Unsecured Term Loan provides an accordion feature for up to a total of $550,000 borrowing capacity. The 2026 Unsecured Term Loan has an initial maturity date of February 27, 2026. Borrowings under the 2026 Unsecured Term Loan are subject to interest only payments at variable rates equal to LIBOR plus a margin between 1.45% and 2.40% per annum based on the Operating Company’s credit rating. Based on the Operating Company’s current credit rating of Baa3, the applicable margin under the 2026 Unsecured Term Loan is 1.85%. The 2026 Unsecured Term Loan is subject to a fee of 0.25% per annum on the amount of the commitment, reduced by the amount of term loans outstanding. At closing, $300,000 of the commitment was funded and used to repay the 2019 Unsecured Term Loan in full. The remaining $150,000 commitment was drawn on August 27, 2019 and used to fund acquisitions. On February 28, 2019, the Company amended the Unsecured Revolving Credit and Term Loan Agreement to increase the amount available under the Revolver from $425,000 to $600,000. This increased the total available borrowings under the Unsecured Revolving Credit and Term Loan Agreement to $1,055,000. All other terms and conditions of the Unsecured Revolving Credit and Term Loan Agreement remain the same as those in effect prior to this amendment. On July 1, 2019, the Company amended the Unsecured Revolving Credit and Term Loan Agreement. Prior to the amendment, the borrowings under the 2024 Unsecured Term Loan were subject to interest at variable rates based on LIBOR plus a margin based on the Operating Company’s credit rating ranging between 1.50% and 2.45% per annum with the applicable margin being 1.90% at December 31, 2018. The amendment reduced the margin to a range between 0.85% and 1.65% per annum and based on the Operating Company’s current credit rating of Baa3, the applicable margin is 1.25% beginning on July 1, 2019. All other terms and conditions of the Unsecured Revolving Credit and Term Loan Agreement remained materially the same as those in effect prior to this amendment. On August 2, 2019, the Company entered into a $300,000 term loan agreement (the “2020 Unsecured Term Loan”) with JP Morgan Chase Bank, N.A. as administrative agent. The 2020 Unsecured Term Loan was subject to a fee of 0.25% per annum on the amount of the commitment, reduced by the amount of term loans outstanding. The entire amount of $300,000 was funded on August 28, 2019 and used to fund acquisitions. Borrowings under the 2020 Unsecured Term Loan are subject to interest only payments at variable rates equal to LIBOR plus a margin based on the Operating Company’s credit rating between 0.85% and 1.65% per annum. Based on the Operating Company’s current credit rating of Baa3, the applicable margin is 1.25%. At September 30, 2019, the weighted average interest rate on all outstanding borrowings was For the three and nine months ended September 30, 2019, the Company paid $1,281 and $6,510, respectively, in debt issuance costs associated with the 2020 Unsecured Term Loan, the 2026 Unsecured Term Loan and the amended Unsecured Revolving Credit and Term Loan Agreement. For each separate debt instrument, on a lender by lender basis, in accordance with ASC 470-50, Debt Modifications and Extinguishment Debt issuance costs are amortized as a component of interest expense in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. The following table summarizes debt issuance cost amortization: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Debt issuance costs amortization $ 611 $ 477 $ 1,761 $ 1,410 |
Mortgages and Notes Payable
Mortgages and Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Mortgages and Notes Payable | 9. Mortgages and Notes Payable The Company’s mortgages and notes payable consist of the following: Origination Maturity (in thousands, except interest rates) Date Date Interest September 30, December 31, Lender (Month/Year) (Month/Year) Rate 2019 2018 (1) Wilmington Trust National Association Apr-19 Feb-28 4.92% $ 49,340 $ — (a) (b) (c) (n) (2) Wilmington Trust National Association Jun-18 Aug-25 4.36% 20,409 20,674 (a) (b) (c) (m) (3) PNC Bank Oct-16 Nov-26 3.62% 17,980 18,260 (b) (c) (4) Sun Life Mar-12 Oct-21 5.13% 10,990 11,288 (b) (g) (5) Aegon Apr-12 Oct-23 6.38% 7,968 8,496 (b) (h) (6) M&T Bank Oct-17 Aug-21 one - month LIBOR+3% 4,949 5,051 (b) (d) (i) (j) (7) Note holders Dec-08 Dec-23 6.25% 750 750 (d) (8) Standard Insurance Co. Jul-10 Aug-30 6.75% 549 563 (b) (c) (d) (f) (9) Symetra Financial Nov-17 Oct-26 3.65% — 6,467 (a) (b) (k) (l) (10) Columbian Mutual Life Insurance Company Aug-10 Sep-25 7.00% — 1,459 (b) (c) (d) (11) Legg Mason Mortgage Capital Corporation Aug-10 Aug-22 7.06% — 4,692 (b) (e) (12) Standard Insurance Co. Apr-09 May-34 6.88% — 1,751 (b) (c) 112,935 79,451 Debt issuance costs, net (373 ) (499 ) $ 112,562 $ 78,952 (a) Non-recourse debt includes the indemnification/guaranty of the Corporation and/or Operating Company pertaining to fraud, environmental claims, insolvency and other matters. (b) Debt secured by related rental property and lease rents. (c) Debt secured by guaranty of the Operating Company. (d) Debt secured by guaranty of the Corporation. (e) Debt is guaranteed by a third party. (f) The interest rate represents the initial interest rate on the respective note. The interest rate will be adjusted at Standard Insurance’s discretion (based on prevailing rates) at 119 months from the first payment date, and the monthly installments will be adjusted accordingly. At the time Standard Insurance may adjust the interest rate for the note payable, the Company has the right to prepay the note without penalty. (g) Mortgage was assumed in March 2012 as part of an UPREIT transaction. The debt was recorded at fair value at the time of the assumption. (h) Mortgage was assumed in April 2012 as part of the acquisition of the related property. The debt was recorded at fair value at the time of the assumption. ( i ) The Company entered into an interest rate swap agreement in connection with the mortgage note, as further described in Note 10. (j) Mortgage was assumed in October 2017 as part of an UPREIT transaction. The debt was recorded at fair value at the time of the assumption. (k) Mortgage was assumed in November 2017 as part of the acquisition of the related property. The debt was recorded at fair value at the time of the assumption. (l) The interest rate will be adjusted to the holder’s quoted five-year commercial mortgage rate for similar size and quality. (m) Mortgage was assumed in June 2018 as part of the acquisition of the related property. The debt was recorded at fair value at the time of assumption. (n) Mortgage was assumed in April 2019 as part of the acquisition of the related property. The debt was recorded at fair value at the time of assumption. At September 30, 2019, investment in rental property of $179,769 is pledged as collateral against the Company’s mortgages and notes payable. The following table summarizes the mortgages extinguished by the Company: (in thousands, except number of mortgages) For the nine months ended September 30, 2019 For the year ended December 31, 2018 Number of mortgages 4 2 Outstanding balance of mortgages $ 13,905 $ 6,666 The following table summarizes the cost of mortgage extinguishment: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Cost of mortgage extinguishment $ 336 $ 50 $ 842 $ 101 Estimated future principal payments to be made under the above mortgage and note payable agreements, and the Company’s unsecured credit agreements (see Note 8) at September 30, 2019 are as follows: (in thousands) Remainder of 2019 $ 784 2020 303,210 2021 18,028 2022 306,230 2023 273,356 Thereafter 1,194,627 $ 2,096,235 Certain of the Company’s mortgage and note payable agreements provide for prepayment fees and can be terminated under certain events of default as defined under the related agreements. These prepayment fees are not reflected as part of the table above. |
Interest Rate Swaps
Interest Rate Swaps | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Interest Rate Swaps | 10. Interest Rate Swaps Interest rate swaps were entered into with certain financial institutions in order to mitigate the impact of interest rate variability over the term of the related debt agreements. The interest rate swaps are considered cash flow hedges. In order to reduce counterparty concentration risk, the Company has a diversification policy for institutions that serve as swap counterparties. Under these agreements, the Company receives monthly payments from the counterparties on these interest rate swaps equal to the related variable interest rates multiplied by the outstanding notional amounts. Certain interest rate swaps amortize on a monthly basis. In turn, the Company pays the counterparties each month an amount equal to a fixed rate multiplied by the related outstanding notional amounts. The intended net impact of these transactions is that the Company pays a fixed interest rate on its variable-rate borrowings. The following is a summary of the Company’s outstanding interest rate swap agreements: (in thousands, except interest rates) Fair Value Counterparty Maturity Date Fixed Rate Variable Rate Index Notional Amount September 30, 2019 December 31, 2018 Bank of America, N.A. November 2023 2.80 % one-month LIBOR $ 25,000 $ (1,389 ) $ (411 ) Bank of Montreal July 2024 1.16 % one-month LIBOR 40,000 421 2,702 Bank of Montreal January 2025 1.91 % one-month LIBOR 25,000 (694 ) 769 Bank of Montreal July 2025 2.32 % one-month LIBOR 25,000 (1,333 ) 222 Bank of Montreal January 2026 1.92 % one-month LIBOR 25,000 (833 ) 915 Bank of Montreal January 2026 2.05 % one-month LIBOR 40,000 (1,643 ) 1,130 Bank of Montreal December 2026 2.33 % one-month LIBOR 10,000 (662 ) 132 Bank of Montreal December 2026 1.99 % one-month LIBOR 25,000 (1,058 ) — Bank of Montreal December 2027 2.37 % one-month LIBOR 25,000 (1,905 ) 355 Bank of Montreal May 2029 2.09 % one-month LIBOR 25,000 (1,502 ) — Capital One, National Association December 2021 1.05 % one-month LIBOR 15,000 133 605 Capital One, National Association December 2024 1.58 % one-month LIBOR 15,000 (165 ) 727 Capital One, National Association January 2026 2.08 % one-month LIBOR 35,000 (1,515 ) 930 Capital One, National Association April 2026 2.68 % one-month LIBOR 15,000 (1,243 ) (189 ) Capital One, National Association July 2026 1.32 % one-month LIBOR 35,000 118 2,877 Capital One, National Association December 2027 2.37 % one-month LIBOR 25,000 (1,932 ) 345 M&T Bank August 2021 1.02 % one-month LIBOR 4,948 42 177 (a), (b) M&T Bank September 2022 2.83 % one-month LIBOR 25,000 (1,031 ) (362 ) M&T Bank November 2023 2.65 % one-month LIBOR 25,000 (1,284 ) (254 ) Regions Bank May 2020 2.12 % one-month LIBOR 50,000 (104 ) 271 Regions Bank December 2023 1.18 % one-month LIBOR 25,000 199 1,484 Regions Bank May 2029 2.11 % one-month LIBOR 25,000 (1,562 ) — Regions Bank June 2029 2.03 % one-month LIBOR 25,000 (1,383 ) — SunTrust Bank April 2024 1.99 % one-month LIBOR 25,000 (745 ) 554 SunTrust Bank April 2025 2.20 % one-month LIBOR 25,000 (1,181 ) 382 SunTrust Bank July 2025 1.99 % one-month LIBOR 25,000 (934 ) 728 SunTrust Bank December 2025 2.30 % one-month LIBOR 25,000 (1,474 ) 299 SunTrust Bank January 2026 1.93 % one-month LIBOR 25,000 (915 ) 903 U.S. Bank National Association June 2029 2.03 % one-month LIBOR 25,000 (1,395 ) — U.S. Bank National Association August 2029 1.35 % one-month LIBOR 25,000 207 — Wells Fargo Bank, N.A. February 2021 2.39 % one-month LIBOR 35,000 (385 ) 59 Wells Fargo Bank, N.A. October 2024 2.72 % one-month LIBOR 15,000 (994 ) (222 ) Wells Fargo Bank, N.A. April 2027 2.72 % one-month LIBOR 25,000 (2,427 ) (382 ) Wells Fargo Bank, N.A. January 2028 2.37 % one-month LIBOR 75,000 (5,801 ) 1,067 $ (36,369 ) $ 15,813 (a) (b) Interest rate swap was assumed in October 2017 as part of an UPREIT transaction. The total amounts recognized, and the location in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income, from converting from variable rates to fixed rates under these agreements are as follows: Reclassification from Total Interest Expense Amount of (Loss) Gain Accumulated Other Presented in the Recognized in Comprehensive (Loss) Income Consolidated Statements of (in thousands) Accumulated Other Amount of Income and Comprehensive For the three months ended September 30, Comprehensive (Loss) Income Location Gain (Loss) Income 2019 $ (16,380 ) Interest expense $ 387 $ 18,465 2018 6,299 Interest expense (20 ) 14,484 Reclassification from Total Interest Expense Amount of (Loss) Gain Accumulated Other Presented in the Recognized in Comprehensive (Loss) Income Consolidated Statements of (in thousands) Accumulated Other Amount of Income and Comprehensive For the nine months ended September 30, Comprehensive (Loss) Income Location Gain (Loss) Income 2019 $ (52,182 ) Interest expense $ 2,001 $ 51,025 2018 30,296 Interest expense (1,287 ) 38,115 Amounts related to the interest rate swaps expected to be reclassified out of Accumulated other comprehensive (loss) income to Interest expense during the next twelve months are estimated to be a loss of $3,688. The Company is exposed to credit risk in the event of non-performance by the counterparties of the swaps. The Company minimizes the risk exposure by limiting counterparties to major banks who meet established credit and capital guidelines. |
Noncontrolling Interest
Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests | 11. Non-Controlling Interests Under the Company’s UPREIT structure, entities and individuals can contribute their properties in exchange for membership interests in the Operating Company. Properties contributed as part of UPREIT transactions were valued at $15,797 during the nine months ended September 30, 2018, which represents the estimated fair value of the properties contributed, less any assumed debt. There were no UPREIT transactions during the three and nine months ended September 30, 2019. |
Credit Risk Concentrations
Credit Risk Concentrations | 9 Months Ended |
Sep. 30, 2019 | |
Risks And Uncertainties [Abstract] | |
Credit Risk Concentrations | 12. Credit Risk Concentrations The Company maintained bank balances that, at times, exceeded the federally insured limit during the nine months ended September 30, 2019. The Company has not experienced losses relating to these deposits and management does not believe that the Company is exposed to any significant credit risk with respect to these amounts. The Company’s rental property is managed by the Manager and the Asset Manager as described in Note 3. Management fees paid to the Manager and Asset Manager represent 17% and 20% of total operating expenses for the three months ended September 30, 2019 and 2018, respectively, and 18% and 19% of total operating expenses for the nine months ended September 30, 2019 and 2018, respectively. These amounts do not include acquisition fees paid to the Asset Manager that were capitalized (see Note 3). The Company has mortgages and notes payable with three institutions that comprise 62%, 16%, and 10% of total mortgages and notes payable at September 30, 2019. The Company has mortgages and notes payable with four institutions that comprise 26%, 23%, 14%, and 11% of total mortgages and notes payable at December 31, 2018. For the three and nine months ended September 30, 2019 and 2018, the Company had no individual tenants or common franchises that accounted for more than 10% of total revenues. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Equity | 13. Equity Share Redemption Program The following table summarizes redemptions under the Share Redemption Program: For the three months ended September 30, For the nine months ended September 30, (in thousands, except number of redemptions) 2019 2018 2019 2018 Number of redemptions requested 20 11 49 33 Number of shares 88 32 147 106 Aggregate redemption price $ 7,361 $ 2,675 $ 12,374 $ 8,564 Distribution Reinvestment Plan The Corporation has adopted a Distribution Reinvestment Plan (“DRIP”), pursuant to which the Corporation’s stockholders and holders of membership units in the Operating Company (other than the Corporation), may elect to have cash distributions reinvested in additional shares of the Corporation’s common stock. Cash distributions will be reinvested in additional shares of common stock pursuant to the DRIP at a per share price equal to 98% of the Determined Share Value as of the applicable distribution date. The Corporation may amend the DRIP at any time upon written notice to each participant at least 10 days prior to the effective date of the amendment. The Corporation may terminate the DRIP upon written notice to each participant at least 30 days prior to the effective date of the termination. At September 30, 2019 and December 31, 2018, a total of 2,797 and 2,233 shares of common stock, respectively, have been issued under the DRIP. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 14. Earnings per Share The following table summarizes the components used in the calculation of basic and diluted earnings per share (“EPS”): For the three months ended September 30, For the nine months ended September 30, (in thousands, except per share) 2019 2018 2019 2018 Basic earnings: Net earnings attributable to Broadstone Net Lease, Inc. $ 23,388 $ 21,267 $ 53,460 $ 55,813 Diluted earnings: Net earnings attributable to Broadstone Net Lease, Inc. $ 23,388 $ 21,267 $ 53,460 $ 55,813 Net earnings attributable to non-controlling interests 1,650 1,797 3,942 4,631 $ 25,038 $ 23,064 $ 57,402 $ 60,444 Basic and diluted weighted average shares outstanding: Weighted average number of common shares outstanding used in basic earnings per share 24,642 20,554 23,394 19,850 Effects of convertible membership units 1,737 1,737 1,737 1,646 Weighted average number of common shares outstanding used in diluted earnings per share 26,379 22,291 25,131 21,496 Basic and diluted net earnings per common share $ 0.95 $ 1.03 $ 2.28 $ 2.81 In the table above, outstanding membership units are included in the diluted earnings per share calculation. However, because such membership units would also require that the share of the Operating Company income attributable to such membership units (which are currently presented as non-controlling interest) also be added back to net income, there is no effect on EPS. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Disclosures | 15. Supplemental Cash Flow Disclosures Cash paid for interest was $49,828 and $33,108 for the nine months ended September 30, 2019 and 2018, respectively. Cash paid for state income, franchise and foreign taxes was $809 and $307 for the nine months ended September 30, 2019 and 2018, respectively. The following are non-cash transactions and have been excluded from the accompanying Condensed Consolidated Statements of Cash Flows: • During the nine months ended September 30, 2019 and 2018, the Corporation issued 550 and 458 shares, respectively, of common stock with a value of approximately $46,084 and $37,055, respectively, under the terms of the DRIP (see Note 13). • During the nine months ended September 30, 2018, the Company issued 194 membership units of the Operating Company in exchange for property contributed in UPREIT transactions valued at $15,797 (see Note 11). • During the nine months ended September 30, 2018, the Corporation cancelled nine thousand shares of common stock with a value of $748 that were pledged as collateral by a tenant. The cancellation of the shares was used to settle $748 in outstanding receivables associated with the tenant. • At September 30, 2019 and 2018, dividend amounts declared and accrued but not yet paid amounted to $11,932 and $9,722, respectively. • Upon adoption of ASC 842 on January 1, 2019, described in Note 2, the Company recorded right-of-use assets of $1,687 and lease liabilities of $1,261 associated with ground leases where it is the lessee. The right-of-use asset was recorded net of a straight-line rent liability of $7 and ground lease intangible asset, net of $432 as of the date of adoption. • In connection with real estate transactions conducted during the nine months ended September 30, 2018, the Company settled notes receivable in the amount of $6,527 in exchange for a reduction to the cash paid for the associated real estate assets. • In connection with real estate transactions conducted during the nine months ended September 30, 2019, the Company assumed tenant improvement allowances of $2,517 in exchange for a reduction to the cash paid to acquire the associated real estate assets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Litigation From time to time, the Company is a party to various litigation matters incidental to the conduct of the Company’s business. While the resolution of such matters cannot be predicted with certainty, based on currently available information, the Company does not believe that the final outcome of any of these matters will have a material effect on its consolidated financial position, results of operations, or liquidity. Property and Acquisition Related In connection with ownership and operation of real estate, the Company may potentially be liable for cost and damages related to environmental matters. The Company is not aware of any non-compliance, liability, claim, or other environmental condition that would have a material effect on its consolidated financial position, results of operations, or liquidity. As part of acquisitions closed during the nine months ended September 30, 2019, the company assumed three lease agreements that provided for a total of $2,517 in tenant improvement allowances. Balances associated with tenant improvement allowances are included in Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets as follows: (in thousands) September 30, 2019 December 31, 2018 Tenant improvement allowances $ 3,664 $ 2,125 Obligations Under Operating Leases The Company leases land at certain properties under non-cancellable operating leases with initial lease terms ranging from 2025 to 2066. These leases contain provisions for fixed monthly payments, subject to rent escalations. One lease requires the Company to make annual rent payments calculated based upon sales generated at the property (“percentage rent”). None of the leases are subject to any sublease agreement. The following table summarizes the total lease costs associated with these leases, reported as a component of Property and operating expense in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Operating lease costs $ 35 $ 23 $ 105 $ 26 Variable lease costs 11 11 34 13 Total lease costs $ 46 $ 34 $ 139 $ 39 The following table summarizes payments associated with obligations under operating leases, reported as Cash flows from operating activities on the accompanying Condensed Consolidated Statements of Cash Flows: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Operating lease payments $ 27 $ 20 $ 127 $ 23 Estimated future lease payments required under non-cancelable operating leases at September 30, 2019, and a reconciliation to the lease liabilities, is as follows: (in thousands) Remainder of 2019 $ 29 2020 120 2021 122 2022 124 2023 125 Thereafter 2,540 Total undiscounted cash flows 3,060 Less imputed interest (1,814 ) Lease liabilities $ 1,246 The above rental payments include future minimum lease payments due during the initial lease terms. Such amounts exclude any variable lease payments associated with percentage rent or changes in the Consumer Price Index that may become due in future periods. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events Through November 12, 2019, the Company has raised $5,789 equivalent to 69 shares of the Corporation’s common stock through the DRIP. Through November 12, 2019, the Company has paid $11,932 in distributions, including dividend reinvestments. Subsequent to September 30, 2019, the Company continued to expand its operations through the acquisition of additional rental property and associated intangible assets and liabilities. The Company acquired approximately $16,064 of rental property and associated intangible assets and liabilities. Through November 12, 2019, the Company sold five properties with an aggregate carrying value of $10,922 for total proceeds of $13,731. The Company incurred additional expenses related to the sales of approximately $745, resulting in a gain on sale of real estate of approximately $2,064. On October 31, 2019, the Board of Directors declared a distribution of $0.44 per share on the Corporation’s common stock and approved a distribution of $0.44 per membership unit of the Operating Company for monthly distributions through January 2020. The distributions are payable on or prior to the 15th day of the following month to stockholders and unit holders of record on the record date, which is generally the next-to-the-last business day of the prior month. In addition, the IDC determined the share value for the Corporation’s common stock to be $85.00 per share for the period from November 1, 2019 through January 31, 2020. Subsequent to September 30, 2019, the Operating Company paid off borrowings on the Revolver in the aggregate amount of $6,000. Internalization On November 11, 2019, the Company entered into a definitive merger agreement (the “Merger Agreement”) with the Manager and other parties providing for the internalization of the external management functions currently performed for the Company by the Manager (the “Internalization”). Upon consummation of the Internalization, the Company’s current management team and corporate staff, who are currently employed by the Manager, will become employed by an indirect subsidiary of the Company, and the Company will become internally managed. Subject to the satisfaction of specified closing conditions, the Internalization is scheduled to close during the first quarter of 2020. The Internalization is not considered a termination event under the Property Management Agreement and the Asset Management Agreement (see Note 3). The Property Management Agreement and Asset Management Agreement, however, will be terminated upon closing of the Internalization, but no fees will be payable under them as a result of that termination. The consideration paid pursuant to the Merger Agreement will consist of (i) base consideration of approximately $206 million plus assumption of debt of approximately $94 million, payable upon closing and (ii) additional consideration of up to $75 million payable in four tranches of $10 million, $15 million, $25 million, and $25 million if certain milestones related to either (a) the dollar volume-weighted average price of a share of the Company’s common stock (“VWAP per REIT Share”), following the completion of an initial public offering of the Company’s common stock (“IPO”), or (b) the Company’s adjusted funds from operations (“AFFO”) per share, prior to the completion of an IPO, are achieved during specified periods of time following the closing of the Internalization (the “Earnout Periods”). The consideration will consist of a combination of cash, shares of the Company’s common stock, and Operating Company membership units, at the election of the owners of the Manager. The earnout tranches, applicable VWAP of a REIT Share and AFFO per share, and the applicable Earnout Periods are as follows: If the Company has completed an IPO If the Company has not completed an IPO Earnout Tranche VWAP of a REIT Share Applicable Earnout Period AFFO per Share Applicable Earnout Period $10 million $90.00 The two-year period beginning on the earlier of (i) the IPO closing date or (ii) December 31, 2020. $5.85 The two-year period consisting of the calendar years ended December 31, 2020 and December 31, 2021. $15 million $95.00 The two-year period beginning on the earlier of (i) the IPO closing date or (ii) December 31, 2020. $5.95 The two-year period consisting of the calendar years ended December 31, 2020 and December 31, 2021. $25 million $97.50 The four-year period beginning on the date that is exactly one year after the earnout period begins for the first and second tranches above. $6.30 The four-year period consisting of the calendar years ended December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. $25 million $100.00 The four-year period beginning on the date that is exactly one year after the earnout period begins for the first and second tranches above. $6.70 The four-year period consisting of the calendar years ended December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. Upon closing of the Internalization, the Company’s existing management team, who are currently employees of the Manager, including the Company’s current executive officers, will become employees of the Company, providing a seamless transition and clarity as to future senior leadership. Each of Christopher J. Czarnecki, Ryan M. Albano, John D. Moragne, and Sean T. Cutt are expected to terminate their employment with the Manager and enter into employment agreements with the Company or its subsidiary to serve as the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and Chief Investment Officer, respectively. The Merger Agreement contains customary representations, warranties and covenants. Each party’s obligation to consummate the transactions contemplated by the Merger Agreement is subject to customary closing conditions. The Merger Agreement does not provide that the completion of an IPO is a condition to the closing of the Internalization. Under the terms of the Merger Agreement, however, if the Company does not complete an IPO by December 31, 2020, then the former owners of the Manager who receive shares of the Company’s common stock and/or membership units of the Operating Company will be granted certain redemption rights as a means to provide additional liquidity in the absence of an IPO. Prior to closing the Internalization, the Company has agreed to repurchase all of the outstanding shares of Company common stock held by the Manager in exchange for cash at a per share price equal to $85.00, the current Determined Share Value. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Interim Information | Interim Information The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information (Accounting Standards Codification (“ASC”) 270, Interim Reporting Summary of Significant Accounting Policies |
Principles of Consolidation | Principles of Consolidation The Condensed Consolidated Financial Statements include the accounts and operations of the Corporation, the Operating Company and its consolidated subsidiaries, all of which are wholly owned by the Operating Company (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation. To the extent the Corporation has a variable interest in entities that are not evaluated under the variable interest entity (“VIE”) model, the Corporation evaluates its interests using the voting interest entity model. The Corporation has complete responsibility for the day-to-day management, authority to make decisions, and control of the Operating Company. Based on consolidation guidance, the Corporation has concluded that the Operating Company is a VIE as the members in the Operating Company do not possess kick-out rights or substantive participating rights. Accordingly, the Corporation consolidates its interest in the Operating Company. However, as the Corporation holds the majority voting interest in the Operating Company, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs. The portion of the Operating Company not owned by the Corporation is presented as non-controlling interests as of and during the periods presented. |
Basis of Accounting | Basis of Accounting The Condensed Consolidated Financial Statements have been prepared in accordance with GAAP. |
Use of Estimates | Use of Estimates The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include, but are not limited to, the allocation of purchase price between investment in rental property and intangible assets acquired and liabilities assumed, the value of long-lived assets, the provision for impairment, the depreciable lives of rental property, the amortizable lives of intangible assets and liabilities, the allowance for doubtful accounts, the fair value of assumed debt and notes payable, the fair value of the Company’s interest rate swap agreements, and the determination of any uncertain tax positions. Accordingly, actual results may differ from those estimates. |
Long-lived Asset Impairment | Long-lived Asset Impairment The Company reviews long-lived assets to be held and used for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. If, and when, such events or changes in circumstances are present, an impairment exists to the extent the carrying value of the asset or asset group exceeds the sum of the undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition. Such cash flows include expected future operating income, as adjusted for trends and prospects, as well as the effects of demand, competition, and other factors. An impairment loss is measured as the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. A significant judgment is made as to if and when impairment should be taken. If the Company’s strategy, or one or more of the assumptions described above were to change in the future, an impairment may need to be recognized. Inputs used in establishing fair value for real estate assets generally fall within Level 3 of the fair value hierarchy, which are characterized as requiring significant judgment as little or no current market activity may be available for validation. The main indicator used to establish the classification of the inputs is current market conditions, as derived through the use of published commercial real estate market information. The Company determines the valuation of impaired assets using generally accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations, and bona fide purchase offers received from third parties. Management may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate. During the three and nine months ended September 30, 2019, the Company recorded impairment charges of $ 2,435 |
Revenue Recognition | Revenue Recognition The Company commences revenue recognition on its leases based on a number of factors, including the initial determination that the contract is or contains a lease. Generally, all of the Company’s property related contracts are or contain leases, and therefore revenue is recognized when the lessee takes possession of or controls the physical use of the leased assets. In most instances this occurs on the lease commencement date. At the time of lease assumption or at the inception of a new lease, including new leases that arise from amendments, the Company assesses the terms and conditions of the lease to determine the proper lease classification. Certain of the Company’s leases require tenants to pay rent based upon a percentage of the property’s net sales (“percentage rent”) or contain rent escalators indexed to future changes in the Consumer Price Index. Lease income associated with such provisions is considered variable lease income and therefore is not included in the initial measurement of the lease receivable, or in the calculation of straight-line rent revenue. Such amounts are recognized as income when the amounts are determinable. As described in Recently Adopted Accounting Standards Leases (Topic 842) Leases Executed on or After Adoption of ASC 842 A lease is classified as an operating lease if none of the following criteria are met: (i) ownership transfers to the lessee at the end of the lease term, (ii) the lessee has a purchase option that is reasonably expected to be exercised, (iii) the lease term is for a major part of the economic life of the leased property, (iv) the present value of the future lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the leased property, and (v) the leased property is of such a specialized nature that it is expected to have no future alternative use to the Company at the end of the lease term. If one or more of these criteria are met, the lease will generally be classified as a sales-type lease, unless the lease contains a residual value guarantee from a third party other than the lessee, in which case it would be classified as a direct financing lease under certain circumstances in accordance with ASC 842. ASC 842 requires the Company to account for the right to use land as a separate lease component, unless the accounting effect of doing so would be insignificant. Determination of significance requires management judgment. In determining whether the accounting effect of separately reporting the land component from other components for its real estate leases is significant, the Company assesses: (i) whether separating the land component impacts the classification of any lease component, (ii) the value of the land component in the context of the overall contract, and (iii) whether the right to use the land is coterminous with the rights to use the other assets. Leases Executed Prior to Adoption of ASC 842 A lease arrangement was classified as an operating lease if none of the following criteria were met: (i) ownership transferred to the lessee prior to or shortly after the end of the lease term, (ii) the lessee had a bargain purchase option during or at the end of the lease term, (iii) the lease term was greater than or equal to 75% of the underlying property’s estimated useful life, or (iv) the present value of the future minimum lease payments (excluding executory costs) was greater than or equal to 90% of the fair value of the leased property. If one or more of these criteria were met, and the minimum lease payments were determined to be reasonably predictable and collectible, the lease arrangement was generally accounted for as a direct financing lease. Consistent with ASC 840 , Leases, Revenue recognition methods for operating leases, direct financing leases, and sales-type leases are described below: Rental property accounted for under operating leases – Revenue is recognized as rents are earned on a straight-line basis over the non-cancelable terms of the related leases. For leases that have fixed and measurable rent escalations, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as Accrued rental income on the Condensed Consolidated Balance Sheets. Rental property accounted for under direct financing leases – The Company utilizes the direct finance method of accounting to record direct financing lease income. The net investment in the direct financing lease represents receivables for the sum of future lease payments to be received and the estimated residual value of the leased property, less unamortized unearned income (which represents the difference between undiscounted cash flows and discounted cash flows). Unearned income is deferred and amortized into income over the lease terms so as to produce a constant periodic rate of return on the Company’s net investment in the leases. Rental property accounted for under sales-type leases – For leases accounted for as sales-type leases, the Company records selling profit arising from the lease at inception, along with the net investment in the lease. The Company leases assets through the assumption of existing leases or through sale-leaseback transactions, and records such assets at their fair value at the time of acquisition, which in most cases coincides with lease inception. As a result, the Company does not generally recognize selling profit on sales-type leases. The net investment in the sales-type lease represents receivables for the sum of future lease payments and the estimated unguaranteed residual value of the leased property, each measured at net present value. Interest income is recorded over the lease terms so as to produce a constant periodic rate of return on the Company’s net investment in the leases. Certain of the Company’s contracts contain nonlease components ( e.g. i.e. |
Rent Received in Advance | Rent Received in Advance Rent received in advance represents tenant payments received prior to the contractual due date, and is included in Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets. Rent received in advance is as follows: (in thousands) September 30, 2019 December 31, 2018 Rent received in advance $ 10,694 $ 7,832 |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Prior to the adoption of ASC 842, provisions for doubtful accounts were recorded as bad debt expense and included in General and administrative expenses on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. Subsequent to the adoption of ASC 842, provisions for doubtful accounts are recorded prospectively as an offset to Lease revenues on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures, The balances of financial instruments measured at fair value on a recurring basis are as follows (see Note 10): September 30, 2019 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 1,120 $ — $ 1,120 $ — Interest rate swap, liabilities (37,489 ) — (37,489 ) — $ (36,369 ) $ — $ (36,369 ) $ — December 31, 2018 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 17,633 $ — $ 17,633 $ — Interest rate swap, liabilities (1,820 ) — (1,820 ) — $ 15,813 $ — $ 15,813 $ — The Company has estimated that the carrying amount reported on the Condensed Consolidated Balance Sheets for Cash and cash equivalents, Prepaid expenses and other assets, Tenant and other receivables, net, and Accounts payable and other liabilities, approximates their fair values due to their short-term nature. The fair value of the Company’s debt was estimated using Level 2 and Level 3 inputs based on recent financing transactions, estimates of the fair value of the property that serves as collateral for such debt, historical risk premiums for loans of comparable quality, current London Interbank Offered Rate (“LIBOR”), U.S. treasury obligation interest rates, and on the discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect the Company’s judgment as to the approximate current lending rates for loans or groups of loans with similar maturities and assumes that the debt is outstanding through maturity. Market information, as available, or present value techniques were utilized to estimate the amounts required to be disclosed. Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist on specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation. The following table summarizes the carrying amount reported on the Condensed Consolidated Balance Sheets and the Company’s estimate of the fair value of the Mortgages and notes payable, net, Unsecured term notes, net, and Unsecured revolver: (in thousands) September 30, 2019 December 31, 2018 Carrying amount $ 2,096,235 $ 1,450,551 Fair value 2,180,100 1,439,264 As disclosed under Long-lived Asset Impairment |
Right-of-Use Assets and Lease Liabilities/Rental Expense | Right-of-Use Assets and Lease Liabilities In accordance with ASC 842, the Company records right-of-use assets and lease liabilities associated with leases of land where it is the lessee under non-cancelable operating leases (“ground leases”). The lease liability is equal to the net present value of the future payments to be made under the lease, discounted using estimates based on observable market factors. The right-of-use asset is generally equal to the lease liability plus initial direct costs associated with the leases. The Company includes in the recognition of the right-of-use asset and lease liability those renewal periods that are reasonably certain to be exercised, based on the facts and circumstances that exist at lease inception. Amounts associated with percentage rent provisions are considered variable lease costs and are not included in the initial measurement of the right-of-use asset or lease liability. As allowed under ASC 842, the Company has made an accounting policy election, applicable to all asset types, to not separate lease from nonlease components when allocating contract consideration related to ground leases. Right-of-use assets and lease liabilities associated with ground leases were included in the accompanying Condensed Consolidated Balance Sheets as follows: September 30, (in thousands) Financial Statement Presentation 2019 Right-of-use assets Prepaid expenses and other assets $ 1,654 Lease liabilities Accounts payable and other liabilities 1,246 Rental Expense Rental expense associated with ground leases is recorded on a straight-line basis over the term of each lease, for leases that have fixed and measurable rent escalations. Under the provisions of ASC 842, the difference between rental expense incurred on a straight-line basis and the cash rental payments due under the provisions of the lease is recorded as part of the right-of-use asset in the accompanying September 30, 2019 Condensed Consolidated Balance Sheet. Prior to the adoption of ASC 842, at December 31, 2018, this difference was recorded as a deferred liability and was included as a component of Accounts payable and other liabilities in the accompanying Condensed Consolidated Balance Sheets. Amounts associated with percentage rent provisions based on the achievement of sales targets are recognized as variable rental expense when achievement of the sales targets is considered probable. Rental expense is included in Property and operating expenses on the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. |
Taxes Collected From Tenants and Remitted to Governmental Authorities | Taxes Collected From Tenants and Remitted to Governmental Authorities A majority of the Company’s properties are leased on a triple-net basis, which provides that the tenants are responsible for the payment of all property operating expenses, including, but not limited to, property taxes, maintenance, insurance, repairs, and capital costs, during the lease term. The Company records such expenses on a net basis. In other situations, the Company may collect property taxes from its tenants and remit those taxes to governmental authorities. Taxes collected from tenants and remitted to governmental authorities are presented on a gross basis, where amounts billed to tenants are included in Lease revenues, and the corresponding expense is included in Property and operating expense, in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income. |
Recently Adopted Accounting Standards and Other Recently Issued Accounting Standards | Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic ASC 842) • The “Package of Three,” which allows an entity to not reassess (i) whether any expired or existing contracts are, or contain, leases, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for existing leases. • The optional transition method to initially apply the guidance of ASC 842 at the adoption date and to recognize a cumulative-effect adjustment to the opening balance of retained earnings. As a result of electing this practical expedient, the Company’s reporting for the comparative periods presented will continue to be in accordance with ASC 840, including the required disclosures. • The ability to make an accounting policy election, by class of underlying asset, to not separate nonlease components from the associated lease component and to account for those components as a single component if certain conditions are met. ASC 842 requires all income from leases to be presented as a single line item, rather than the prior presentation where rental income from leases was shown separately from amounts billed and collected as reimbursements from tenants on the Condensed Consolidated Statements of Income and Comprehensive Income. In addition, bad debt expense is required to be recorded as an adjustment to Lease revenues, rather than recorded within Operating expenses on the Condensed Consolidated Statements of Income and Comprehensive Income, as had previously been the case. The Company is primarily a lessor and therefore adoption of ASC 842 did not have a material impact on its Condensed Consolidated Financial Statements. Upon adoption of ASC 842, it was not necessary for the Company to record a cumulative-effect adjustment to the opening balance of retained earnings, however the Company recognized a right-of-use asset and corresponding lease liability as of January 1, 2019, of $1,687 and $1,261, respectively, related to operating leases where it is the lessee (see Note 16). The right-of-use asset was recorded net of a previously recorded straight-line rent liability of $7 and ground lease intangible asset, net of $432 as of the date of adoption. In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . Other Recently Issued Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses Codification Improvements to Topic 326, Financial Instruments – Credit Losses Financial Instruments – Credit Losses (Topic 326): Targeted Transition Relief In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments |
Reclassifications | Reclassifications Certain prior-period amounts have been reclassified to conform with the current period’s presentation, including certain items described below which resulted from the adoption of ASC 842. Components of revenue that were previously reported as Rental income from operating leases, Earned income from direct financing leases, Operating expenses reimbursed from tenants, and Other income from real estate transactions, on the Condensed Consolidated Statements of Income and Comprehensive Income, have been combined and reported as Lease revenues on the Condensed Consolidated Statements of Income and Comprehensive Income as follows: As originally reported For the three months ended For the nine months ended (in thousands) September 30, 2018 September 30, 2018 Revenues Rental income from operating leases $ 58,189 $ 163,611 Earned income from direct financing leases 1,017 2,936 Operating expenses reimbursed from tenants 2,529 7,764 Other income from real estate transactions 29 74 Total revenues $ 61,764 $ 174,385 As revised For the three months ended For the nine months ended (in thousands) September 30, 2018 September 30, 2018 Revenues Lease revenues $ 61,764 $ 174,385 In addition, as discussed above, in connection with recording the transition adjustment for the right-of-use asset related to operating leases where the Company is the lessee, amounts reported as ground lease intangible assets, net and ground lease straight-line rent liabilities on the Condensed Consolidated Balance Sheet at December 31, 2018, were reclassified as of January 1, 2019, and are now included as components of the right-of-use asset. The Company reclassified Restricted cash of $377 and Tenant and capital reserves of $1,136 to Prepaid expenses and other assets on the Condensed Consolidated Balance Sheets at December 31, 2018, to conform with the current period presentation. Additionally, Tenant improvement allowances of $2,125 were reclassified to Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets at December 31, 2018, to conform with the current presentation. The reclassifications are changes from one acceptable presentation to another acceptable presentation. |
Business Description (Tables)
Business Description (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Economic Ownership Interest | The following table summarizes the economic ownership interest in the Operating Company: Percentage of shares owned by September 30, 2019 December 31, 2018 Corporation 93.6 % 92.7 % Non-controlling interests 6.4 % 7.3 % 100.0 % 100.0 % |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Significant Accounting Policies [Line Items] | |
Summary of Rents Received in Advance | Rent received in advance represents tenant payments received prior to the contractual due date, and is included in Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets. Rent received in advance is as follows: (in thousands) September 30, 2019 December 31, 2018 Rent received in advance $ 10,694 $ 7,832 |
Balances of Financial Instruments Measured at Fair Value on Recurring Basis | The balances of financial instruments measured at fair value on a recurring basis are as follows (see Note 10): September 30, 2019 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 1,120 $ — $ 1,120 $ — Interest rate swap, liabilities (37,489 ) — (37,489 ) — $ (36,369 ) $ — $ (36,369 ) $ — December 31, 2018 (in thousands) Total Level 1 Level 2 Level 3 Interest rate swap, assets $ 17,633 $ — $ 17,633 $ — Interest rate swap, liabilities (1,820 ) — (1,820 ) — $ 15,813 $ — $ 15,813 $ — |
Summary of Carrying Amount Reported on Condensed Consolidated Balance Sheets | The following table summarizes the carrying amount reported on the Condensed Consolidated Balance Sheets and the Company’s estimate of the fair value of the Mortgages and notes payable, net, Unsecured term notes, net, and Unsecured revolver: (in thousands) September 30, 2019 December 31, 2018 Carrying amount $ 2,096,235 $ 1,450,551 Fair value 2,180,100 1,439,264 |
Summary of Right-of-Use Assets And Lease Liabilities Associated With Ground Leases Included In Condensed Consolidated Balance Sheets | Right-of-use assets and lease liabilities associated with ground leases were included in the accompanying Condensed Consolidated Balance Sheets as follows: September 30, (in thousands) Financial Statement Presentation 2019 Right-of-use assets Prepaid expenses and other assets $ 1,654 Lease liabilities Accounts payable and other liabilities 1,246 |
ASC 842 | |
Significant Accounting Policies [Line Items] | |
Summary of Reclassifications of Components of Revenue | Certain prior-period amounts have been reclassified to conform with the current period’s presentation, including certain items described below which resulted from the adoption of ASC 842. Components of revenue that were previously reported as Rental income from operating leases, Earned income from direct financing leases, Operating expenses reimbursed from tenants, and Other income from real estate transactions, on the Condensed Consolidated Statements of Income and Comprehensive Income, have been combined and reported as Lease revenues on the Condensed Consolidated Statements of Income and Comprehensive Income as follows: As originally reported For the three months ended For the nine months ended (in thousands) September 30, 2018 September 30, 2018 Revenues Rental income from operating leases $ 58,189 $ 163,611 Earned income from direct financing leases 1,017 2,936 Operating expenses reimbursed from tenants 2,529 7,764 Other income from real estate transactions 29 74 Total revenues $ 61,764 $ 174,385 As revised For the three months ended For the nine months ended (in thousands) September 30, 2018 September 30, 2018 Revenues Lease revenues $ 61,764 $ 174,385 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property Management Agreement and Asset Management Agreement | |
Schedule of Related Party Transactions | Total fees incurred under the Property Management Agreement and Asset Management Agreement are as follows: (in thousands) For the three months ended September 30, For the nine months ended September 30, Type of Fee Financial Statement Presentation 2019 2018 2019 2018 Asset management fee Asset management fees $ 5,610 $ 4,663 $ 16,048 $ 13,119 Property management fee Property management fees 2,098 1,680 5,918 4,792 Total management fee expense 7,708 6,343 21,966 17,911 Marketing fee (offering costs) Additional paid-in capital 703 297 1,303 822 Acquisition fee Capitalized as a component of assets acquired 7,932 1,105 9,937 3,491 Leasing fee Leasing fees, net 312 148 747 1,325 Disposition fee Gain on sale of real estate 596 116 947 439 Total management fees $ 17,251 $ 8,009 $ 34,900 $ 23,988 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions Closed | The Company closed on the following acquisitions during the nine months ended September 30, 2019: (in thousands, except number of properties) Number of Real Estate Date Property Type Properties Acquisition Price January 31, 2019 Healthcare 1 $ 4,747 March 12, 2019 Industrial 1 10,217 March 15, 2019 Retail 10 13,185 March 19, 2019 Retail 14 19,128 March 26, 2019 Industrial 1 25,801 April 30, 2019 Other 1 76,000 (a) May 21, 2019 Retail 2 6,500 May 31, 2019 Retail 1 3,192 June 7, 2019 Other 1 30,589 June 26, 2019 Industrial 2 11,180 July 15, 2019 Retail 1 3,214 July 15, 2019 Industrial 1 11,330 July 31, 2019 Healthcare 5 27,277 August 27, 2019 Industrial 1 4,404 August 29, 2019 Industrial/Office/Other 23 735,740 September 17, 2019 Industrial 1 11,185 66 $ 993,689 (b) (a) (b) The Company closed on the following acquisitions during the nine months ended September 30, 2018: (in thousands, except number of properties) Number of Real Estate Date Property Type Properties Acquisition Price March 27, 2018 Industrial 1 $ 22,000 March 30, 2018 Industrial/Retail 26 78,530 April 30, 2018 Other 1 16,170 June 6, 2018 Industrial 1 8,500 June 14, 2018 Industrial 1 39,700 June 14, 2018 Retail 6 14,479 June 21, 2018 Retail 1 20,231 June 21, 2018 Industrial 1 38,340 (c) June 29, 2018 Industrial 1 10,400 June 29, 2018 Retail 2 6,433 July 12, 2018 Industrial 1 11,212 July 17, 2018 Retail 5 14,845 July 17, 2018 Office 1 34,670 August 6, 2018 Industrial 2 4,802 August 10, 2018 Retail 20 44,977 70 $ 365,289 (d) (c) (d) Subsequent to September 30, 2019, the Company closed on the following acquisitions (see Note 17): (in thousands, except number of properties) Number of Real Estate Date Property Type Properties Acquisition Price October 31, 2019 Retail/Healthcare 3 $ 12,922 November 7, 2019 Retail 1 3,142 4 $ 16,064 |
Purchase Price Allocation for Acquisitions | The following table summarizes the purchase price allocation for completed acquisitions: For the nine months ended September 30, (in thousands) 2019 2018 Land $ 155,434 $ 47,930 Land improvements 44,929 20,815 Buildings and other improvements 745,116 271,696 Equipment — 2,891 Acquired in-place leases (e) 77,868 36,342 Acquired above-market leases (f) 2,800 3,347 Acquired below-market leases (g) (15,811 ) (10,143 ) Direct financing investments — 430 Mortgages payable (49,782 ) (20,845 ) $ 960,554 $ 352,463 (e) (f) (g) |
Sale of Real Estate (Tables)
Sale of Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Schedule of Sale of Real Estate | The Company closed on the following sales of real estate, none of which qualified as discontinued operations: For the three months ended September 30, For the nine months ended September 30, (in thousands, except number of properties) 2019 2018 2019 2018 Number of properties disposed 16 4 25 15 Aggregate sale price $ 59,691 $ 11,609 $ 94,791 $ 43,951 Aggregate carrying value (43,920 ) (9,016 ) (73,365 ) (31,710 ) Additional sales expenses (3,186 ) (568 ) (4,654 ) (2,621 ) Gain on sale of real estate $ 12,585 $ 2,025 $ 16,772 $ 9,620 |
Investment in Rental Property_2
Investment in Rental Property and Lease Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Rental Property Subject to Non-cancelable Operating Leases | Rental property subject to non-cancelable operating leases with tenants are as follows: (in thousands) September 30, 2019 December 31, 2018 Land $ 551,903 $ 411,043 Land improvements 279,629 239,701 Buildings and improvements 2,871,761 2,186,499 Equipment 11,492 11,492 3,714,785 2,848,735 Less accumulated depreciation (255,159 ) (206,989 ) $ 3,459,626 $ 2,641,746 Depreciation expense on investment in rental property was as follows: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Depreciation $ 21,843 $ 17,196 $ 60,128 $ 48,345 |
Estimated Lease Payments to be Received under Non-cancelable Operating Leases | Estimated lease payments to be received under non-cancelable operating leases with tenants at September 30, 2019 are as follows: (in thousands) Remainder of 2019 $ 72,718 2020 294,220 2021 298,899 2022 301,996 2023 304,828 Thereafter 2,562,223 $ 3,834,884 |
Net Investment in Direct Financing Leases | The Company’s net investment in direct financing leases is comprised of the following: (in thousands) September 30, 2019 December 31, 2018 Undiscounted estimated lease payments to be received $ 73,775 $ 76,829 Estimated unguaranteed residual values 20,358 20,358 Unearned income (52,213 ) (55,187 ) Net investment in direct financing leases $ 41,920 $ 42,000 |
Direct Financing Leases, Lease Receivable Maturity | Undiscounted estimated lease payments to be received under non-cancelable direct financing leases with tenants at September 30, 2019 are as follows: (in thousands) Remainder of 2019 $ 1,022 2020 4,194 2021 4,283 2022 4,369 2023 4,456 Thereafter 55,451 $ 73,775 |
Summary of Amounts Reported as Lease Revenues on the Condensed Consolidated Statements of Income and Comprehensive Income | The following table summarizes amounts reported as Lease revenues on the Condensed Consolidated Statements of Income and Comprehensive Income: For the three months ended For the nine months ended (in thousands) September 30, 2019 September 30, 2019 Contractual rental amounts billed for operating leases $ 65,579 $ 184,292 Adjustment to recognize contractual operating lease billings on a straight-line basis 5,575 16,015 Adjustment to revenue recognized for uncollectible rental amounts billed — (440 ) Total operating lease rental revenues 71,154 199,867 Earned income from direct financing leases 1,005 3,014 Operating expenses billed to tenants 3,811 10,572 Other income from real estate transactions 431 431 Total lease revenues $ 76,401 $ 213,884 |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Liabilities Relating to Amortization | The following is a summary of intangible assets and liabilities and related accumulated amortization: (in thousands) September 30, 2019 December 31, 2018 Lease intangibles: Acquired above-market leases $ 64,931 $ 64,164 Less accumulated amortization (17,275 ) (14,740 ) Acquired above-market leases, net 47,656 49,424 Acquired in-place leases 351,720 277,659 Less accumulated amortization (56,898 ) (40,825 ) Acquired in-place leases, net 294,822 236,834 Total intangible lease assets, net $ 342,478 $ 286,258 Acquired below-market leases $ 114,316 $ 101,602 Less accumulated amortization (19,813 ) (15,655 ) Intangible lease liabilities, net $ 94,503 $ 85,947 Leasing fees $ 17,316 $ 17,274 Less accumulated amortization (4,065 ) (3,576 ) Leasing fees, net $ 13,251 $ 13,698 |
Schedule of Amortization for Intangible Lease Assets and Liabilities | Amortization for intangible lease assets and liabilities is as follows: (in thousands) For the three months ended September 30, For the nine months ended September 30, Intangible Financial Statement Presentation 2019 2018 2019 2018 Acquired in-place leases and leasing fees Depreciation and amortization $ 6,549 $ 4,673 $ 17,861 $ 12,958 Above-market and below-market leases Increase (decrease) to lease revenues 875 255 2,335 (212 ) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization of intangible assets and liabilities at September 30, 2019 is as follows: (in thousands) Remainder of 2019 $ 6,113 2020 24,267 2021 23,856 2022 23,241 2023 22,862 Thereafter 160,887 $ 261,226 |
Unsecured Credit Agreements (Ta
Unsecured Credit Agreements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Debt Issuance Cost Amortization | The following table summarizes debt issuance cost amortization: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Debt issuance costs amortization $ 611 $ 477 $ 1,761 $ 1,410 |
Unsecured Debt | |
Summary of Unsecured Credit Agreements | The following table summarizes the Company’s unsecured credit agreements: Outstanding Balance (in thousands, except interest rates) September 30, 2019 December 31, 2018 Interest Rate (d) Maturity Date 2019 Unsecured Term Loan (a) $ — $ 300,000 one-month LIBOR + 1.40% Feb. 2020 (g) 2020 Unsecured Term Loan (a) 300,000 — one-month LIBOR + 1.25% Aug. 2020 (h) Unsecured Revolving Credit and Term Loan Agreement (a) Revolver (b) 303,300 141,100 one-month LIBOR + 1.20% (e) Jan. 2022 2023 Unsecured Term Loan 265,000 265,000 one-month LIBOR + 1.35% Jan. 2023 2024 Unsecured Term Loan 190,000 190,000 one-month LIBOR + 1.25% (f) Jun. 2024 758,300 596,100 2026 Unsecured Term Loan (a) 450,000 — one-month LIBOR + 1.85% Feb. 2026 Senior Notes (a) Series A 150,000 150,000 4.84% Apr. 2027 Series B 225,000 225,000 5.09% Jul. 2028 Series C 100,000 100,000 5.19% Jul. 2030 475,000 475,000 Total 1,983,300 1,371,100 Debt issuance costs, net (c) (8,489 ) (4,227 ) $ 1,974,811 $ 1,366,873 (a) The Company believes it was in compliance with all financial covenants for all periods presented. (b) ( c) Amounts presented include debt issuance costs, net, related to the unsecured term notes and senior notes only. (d) (e) (f) (g) (h) |
Mortgages and Notes Payable (Ta
Mortgages and Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Extinguished Mortgages | The following table summarizes the mortgages extinguished by the Company: (in thousands, except number of mortgages) For the nine months ended September 30, 2019 For the year ended December 31, 2018 Number of mortgages 4 2 Outstanding balance of mortgages $ 13,905 $ 6,666 |
Summary of Cost Extinguished Mortgages | The following table summarizes the cost of mortgage extinguishment: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Cost of mortgage extinguishment $ 336 $ 50 $ 842 $ 101 |
Schedule of Estimated Future Principal Payments | Estimated future principal payments to be made under the above mortgage and note payable agreements, and the Company’s unsecured credit agreements (see Note 8) at September 30, 2019 are as follows: (in thousands) Remainder of 2019 $ 784 2020 303,210 2021 18,028 2022 306,230 2023 273,356 Thereafter 1,194,627 $ 2,096,235 |
Secured Debt | |
Summary of Unsecured Credit Agreements | The Company’s mortgages and notes payable consist of the following: Origination Maturity (in thousands, except interest rates) Date Date Interest September 30, December 31, Lender (Month/Year) (Month/Year) Rate 2019 2018 (1) Wilmington Trust National Association Apr-19 Feb-28 4.92% $ 49,340 $ — (a) (b) (c) (n) (2) Wilmington Trust National Association Jun-18 Aug-25 4.36% 20,409 20,674 (a) (b) (c) (m) (3) PNC Bank Oct-16 Nov-26 3.62% 17,980 18,260 (b) (c) (4) Sun Life Mar-12 Oct-21 5.13% 10,990 11,288 (b) (g) (5) Aegon Apr-12 Oct-23 6.38% 7,968 8,496 (b) (h) (6) M&T Bank Oct-17 Aug-21 one - month LIBOR+3% 4,949 5,051 (b) (d) (i) (j) (7) Note holders Dec-08 Dec-23 6.25% 750 750 (d) (8) Standard Insurance Co. Jul-10 Aug-30 6.75% 549 563 (b) (c) (d) (f) (9) Symetra Financial Nov-17 Oct-26 3.65% — 6,467 (a) (b) (k) (l) (10) Columbian Mutual Life Insurance Company Aug-10 Sep-25 7.00% — 1,459 (b) (c) (d) (11) Legg Mason Mortgage Capital Corporation Aug-10 Aug-22 7.06% — 4,692 (b) (e) (12) Standard Insurance Co. Apr-09 May-34 6.88% — 1,751 (b) (c) 112,935 79,451 Debt issuance costs, net (373 ) (499 ) $ 112,562 $ 78,952 (a) Non-recourse debt includes the indemnification/guaranty of the Corporation and/or Operating Company pertaining to fraud, environmental claims, insolvency and other matters. (b) Debt secured by related rental property and lease rents. (c) Debt secured by guaranty of the Operating Company. (d) Debt secured by guaranty of the Corporation. (e) Debt is guaranteed by a third party. (f) The interest rate represents the initial interest rate on the respective note. The interest rate will be adjusted at Standard Insurance’s discretion (based on prevailing rates) at 119 months from the first payment date, and the monthly installments will be adjusted accordingly. At the time Standard Insurance may adjust the interest rate for the note payable, the Company has the right to prepay the note without penalty. (g) Mortgage was assumed in March 2012 as part of an UPREIT transaction. The debt was recorded at fair value at the time of the assumption. (h) Mortgage was assumed in April 2012 as part of the acquisition of the related property. The debt was recorded at fair value at the time of the assumption. ( i ) The Company entered into an interest rate swap agreement in connection with the mortgage note, as further described in Note 10. (j) Mortgage was assumed in October 2017 as part of an UPREIT transaction. The debt was recorded at fair value at the time of the assumption. (k) Mortgage was assumed in November 2017 as part of the acquisition of the related property. The debt was recorded at fair value at the time of the assumption. (l) The interest rate will be adjusted to the holder’s quoted five-year commercial mortgage rate for similar size and quality. (m) Mortgage was assumed in June 2018 as part of the acquisition of the related property. The debt was recorded at fair value at the time of assumption. (n) Mortgage was assumed in April 2019 as part of the acquisition of the related property. The debt was recorded at fair value at the time of assumption. |
Interest Rate Swaps (Tables)
Interest Rate Swaps (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Summary of Company's Outstanding Interest-rate Swap Agreement | The following is a summary of the Company’s outstanding interest rate swap agreements: (in thousands, except interest rates) Fair Value Counterparty Maturity Date Fixed Rate Variable Rate Index Notional Amount September 30, 2019 December 31, 2018 Bank of America, N.A. November 2023 2.80 % one-month LIBOR $ 25,000 $ (1,389 ) $ (411 ) Bank of Montreal July 2024 1.16 % one-month LIBOR 40,000 421 2,702 Bank of Montreal January 2025 1.91 % one-month LIBOR 25,000 (694 ) 769 Bank of Montreal July 2025 2.32 % one-month LIBOR 25,000 (1,333 ) 222 Bank of Montreal January 2026 1.92 % one-month LIBOR 25,000 (833 ) 915 Bank of Montreal January 2026 2.05 % one-month LIBOR 40,000 (1,643 ) 1,130 Bank of Montreal December 2026 2.33 % one-month LIBOR 10,000 (662 ) 132 Bank of Montreal December 2026 1.99 % one-month LIBOR 25,000 (1,058 ) — Bank of Montreal December 2027 2.37 % one-month LIBOR 25,000 (1,905 ) 355 Bank of Montreal May 2029 2.09 % one-month LIBOR 25,000 (1,502 ) — Capital One, National Association December 2021 1.05 % one-month LIBOR 15,000 133 605 Capital One, National Association December 2024 1.58 % one-month LIBOR 15,000 (165 ) 727 Capital One, National Association January 2026 2.08 % one-month LIBOR 35,000 (1,515 ) 930 Capital One, National Association April 2026 2.68 % one-month LIBOR 15,000 (1,243 ) (189 ) Capital One, National Association July 2026 1.32 % one-month LIBOR 35,000 118 2,877 Capital One, National Association December 2027 2.37 % one-month LIBOR 25,000 (1,932 ) 345 M&T Bank August 2021 1.02 % one-month LIBOR 4,948 42 177 (a), (b) M&T Bank September 2022 2.83 % one-month LIBOR 25,000 (1,031 ) (362 ) M&T Bank November 2023 2.65 % one-month LIBOR 25,000 (1,284 ) (254 ) Regions Bank May 2020 2.12 % one-month LIBOR 50,000 (104 ) 271 Regions Bank December 2023 1.18 % one-month LIBOR 25,000 199 1,484 Regions Bank May 2029 2.11 % one-month LIBOR 25,000 (1,562 ) — Regions Bank June 2029 2.03 % one-month LIBOR 25,000 (1,383 ) — SunTrust Bank April 2024 1.99 % one-month LIBOR 25,000 (745 ) 554 SunTrust Bank April 2025 2.20 % one-month LIBOR 25,000 (1,181 ) 382 SunTrust Bank July 2025 1.99 % one-month LIBOR 25,000 (934 ) 728 SunTrust Bank December 2025 2.30 % one-month LIBOR 25,000 (1,474 ) 299 SunTrust Bank January 2026 1.93 % one-month LIBOR 25,000 (915 ) 903 U.S. Bank National Association June 2029 2.03 % one-month LIBOR 25,000 (1,395 ) — U.S. Bank National Association August 2029 1.35 % one-month LIBOR 25,000 207 — Wells Fargo Bank, N.A. February 2021 2.39 % one-month LIBOR 35,000 (385 ) 59 Wells Fargo Bank, N.A. October 2024 2.72 % one-month LIBOR 15,000 (994 ) (222 ) Wells Fargo Bank, N.A. April 2027 2.72 % one-month LIBOR 25,000 (2,427 ) (382 ) Wells Fargo Bank, N.A. January 2028 2.37 % one-month LIBOR 75,000 (5,801 ) 1,067 $ (36,369 ) $ 15,813 (a) (b) Interest rate swap was assumed in October 2017 as part of an UPREIT transaction. |
Total Amounts Recognized and Location of Gain (Loss) in Condensed Consolidated Statement of Income and Comprehensive Income, from Converting from Variable Rates to Fixed Rates | The total amounts recognized, and the location in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income, from converting from variable rates to fixed rates under these agreements are as follows: Reclassification from Total Interest Expense Amount of (Loss) Gain Accumulated Other Presented in the Recognized in Comprehensive (Loss) Income Consolidated Statements of (in thousands) Accumulated Other Amount of Income and Comprehensive For the three months ended September 30, Comprehensive (Loss) Income Location Gain (Loss) Income 2019 $ (16,380 ) Interest expense $ 387 $ 18,465 2018 6,299 Interest expense (20 ) 14,484 Reclassification from Total Interest Expense Amount of (Loss) Gain Accumulated Other Presented in the Recognized in Comprehensive (Loss) Income Consolidated Statements of (in thousands) Accumulated Other Amount of Income and Comprehensive For the nine months ended September 30, Comprehensive (Loss) Income Location Gain (Loss) Income 2019 $ (52,182 ) Interest expense $ 2,001 $ 51,025 2018 30,296 Interest expense (1,287 ) 38,115 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Summary of Redemptions under Company's Share Redemption Program | The following table summarizes redemptions under the Share Redemption Program: For the three months ended September 30, For the nine months ended September 30, (in thousands, except number of redemptions) 2019 2018 2019 2018 Number of redemptions requested 20 11 49 33 Number of shares 88 32 147 106 Aggregate redemption price $ 7,361 $ 2,675 $ 12,374 $ 8,564 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Components used in Calculation of Basic and Diluted Earnings per Share | The following table summarizes the components used in the calculation of basic and diluted earnings per share (“EPS”): For the three months ended September 30, For the nine months ended September 30, (in thousands, except per share) 2019 2018 2019 2018 Basic earnings: Net earnings attributable to Broadstone Net Lease, Inc. $ 23,388 $ 21,267 $ 53,460 $ 55,813 Diluted earnings: Net earnings attributable to Broadstone Net Lease, Inc. $ 23,388 $ 21,267 $ 53,460 $ 55,813 Net earnings attributable to non-controlling interests 1,650 1,797 3,942 4,631 $ 25,038 $ 23,064 $ 57,402 $ 60,444 Basic and diluted weighted average shares outstanding: Weighted average number of common shares outstanding used in basic earnings per share 24,642 20,554 23,394 19,850 Effects of convertible membership units 1,737 1,737 1,737 1,646 Weighted average number of common shares outstanding used in diluted earnings per share 26,379 22,291 25,131 21,496 Basic and diluted net earnings per common share $ 0.95 $ 1.03 $ 2.28 $ 2.81 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Tenant Improvement Allowances Included in Accounts Payable and Other Liabilities | Balances associated with tenant improvement allowances are included in Accounts payable and other liabilities on the Condensed Consolidated Balance Sheets as follows: (in thousands) September 30, 2019 December 31, 2018 Tenant improvement allowances $ 3,664 $ 2,125 |
Summary of Total Lease Costs Associated with Operating Leases | The following table summarizes the total lease costs associated with these leases, reported as a component of Property and operating expense in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Operating lease costs $ 35 $ 23 $ 105 $ 26 Variable lease costs 11 11 34 13 Total lease costs $ 46 $ 34 $ 139 $ 39 |
Summary of Payments Associated with Obligations Under Operating Leases | The following table summarizes payments associated with obligations under operating leases, reported as Cash flows from operating activities on the accompanying Condensed Consolidated Statements of Cash Flows: For the three months ended September 30, For the nine months ended September 30, (in thousands) 2019 2018 2019 2018 Operating lease payments $ 27 $ 20 $ 127 $ 23 |
Summary of Estimated Future Lease Payments Required Under Non-cancelable Operating Leases as well as Reconciliation to Lease Liabilities | Estimated future lease payments required under non-cancelable operating leases at September 30, 2019, and a reconciliation to the lease liabilities, is as follows: (in thousands) Remainder of 2019 $ 29 2020 120 2021 122 2022 124 2023 125 Thereafter 2,540 Total undiscounted cash flows 3,060 Less imputed interest (1,814 ) Lease liabilities $ 1,246 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Summary of Earnout Tranches, Applicable VWAP of REIT Share and AFFO Per Share, and Applicable Earnout Periods | The earnout tranches, applicable VWAP of a REIT Share and AFFO per share, and the applicable Earnout Periods are as follows: If the Company has completed an IPO If the Company has not completed an IPO Earnout Tranche VWAP of a REIT Share Applicable Earnout Period AFFO per Share Applicable Earnout Period $10 million $90.00 The two-year period beginning on the earlier of (i) the IPO closing date or (ii) December 31, 2020. $5.85 The two-year period consisting of the calendar years ended December 31, 2020 and December 31, 2021. $15 million $95.00 The two-year period beginning on the earlier of (i) the IPO closing date or (ii) December 31, 2020. $5.95 The two-year period consisting of the calendar years ended December 31, 2020 and December 31, 2021. $25 million $97.50 The four-year period beginning on the date that is exactly one year after the earnout period begins for the first and second tranches above. $6.30 The four-year period consisting of the calendar years ended December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. $25 million $100.00 The four-year period beginning on the date that is exactly one year after the earnout period begins for the first and second tranches above. $6.70 The four-year period consisting of the calendar years ended December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. |
Business Description - Addition
Business Description - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019PropertyState | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Date of incorporation | Oct. 18, 2007 |
Number of leased commercial properties owned | Property | 662 |
Number of States in which properties located | State | 42 |
Business Description - Summary
Business Description - Summary of Economic Ownership Interest (Detail) - Broadstone Net Lease, LLC | Sep. 30, 2019 | Dec. 31, 2018 |
Business Description [Line Items] | ||
Percentage of shares owned by, Corporation | 93.60% | 92.70% |
Percentage of shares owned by, non-controlling interest | 6.40% | 7.30% |
Equity Method Investment, Ownership Percentage | 100.00% | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | |
Significant Accounting Policies [Line Items] | ||||||
Impairment of real estate assets | $ 2,435 | $ 2,061 | $ 3,452 | $ 2,061 | ||
Weighted average price per square foot | $ 226 | |||||
Lease term as percentage of property's useful life | 75.00% | 75.00% | ||||
Present value of future minimum lease payments as percentage of fair value of leased property | 90.00% | 90.00% | ||||
Fair value of land component as percentage of leased property | 25.00% | 25.00% | ||||
Prepaid Expenses And Other Assets | ||||||
Significant Accounting Policies [Line Items] | ||||||
Restricted cash | $ 377 | |||||
Tenant and capital reserves | 1,136 | |||||
Accounts Payable And Other Liabilities | ||||||
Significant Accounting Policies [Line Items] | ||||||
Tenant improvement allowances | $ 3,664 | $ 3,664 | $ 2,125 | |||
Capitalization Rate | ||||||
Significant Accounting Policies [Line Items] | ||||||
Impaired assets at fair value assumptions used to estimate fair value | 14.58% | 14.58% | 14.58% | |||
Capitalization Rate | Minimum | ||||||
Significant Accounting Policies [Line Items] | ||||||
Impaired assets at fair value assumptions used to estimate fair value | 7.50% | 7.50% | ||||
Capitalization Rate | Maximum | ||||||
Significant Accounting Policies [Line Items] | ||||||
Impaired assets at fair value assumptions used to estimate fair value | 10.00% | 10.00% | ||||
Discount Rate | Weighted Average | ||||||
Significant Accounting Policies [Line Items] | ||||||
Impaired assets at fair value assumptions used to estimate fair value | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Rents Received in Advance (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Revenue From Contract With Customer [Abstract] | ||
Rent received in advance | $ 10,694 | $ 7,832 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Balances of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap, assets | $ 1,120 | $ 17,633 |
Interest rate swap, liabilities | (37,489) | (1,820) |
Fair Value, Measurements, Recurring | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap, assets | 1,120 | 17,633 |
Interest rate swap, liabilities | (37,489) | (1,820) |
Interest rate derivatives, at fair value, net | (36,369) | 15,813 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Interest rate swap, assets | 1,120 | 17,633 |
Interest rate swap, liabilities | (37,489) | (1,820) |
Interest rate derivatives, at fair value, net | $ (36,369) | $ 15,813 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Carrying Amount Reported on Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Summary Of Significant Accounting Policies [Abstract] | ||
Carrying amount | $ 2,096,235 | $ 1,450,551 |
Fair value | $ 2,180,100 | $ 1,439,264 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Right-of-Use Assets And Lease Liabilities Associated With Ground Leases Included In Condensed Consolidated Balance Sheets (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Lessor Lease Description [Line Items] | |
Lease liabilities | $ 1,246 |
Prepaid Expenses And Other Assets | |
Lessor Lease Description [Line Items] | |
Right-of-use assets | 1,654 |
Accounts Payable And Other Liabilities | |
Lessor Lease Description [Line Items] | |
Lease liabilities | $ 1,246 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Reclassifications of Components of Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues | ||||
Rental income from operating leases | $ 71,154 | $ 199,867 | ||
Earned income from direct financing leases | 1,005 | 3,014 | ||
Other income from real estate transactions | 431 | 431 | ||
Total revenues | $ 76,401 | $ 61,764 | $ 213,884 | $ 174,385 |
ASC 842 | As Originally Reported | ||||
Revenues | ||||
Rental income from operating leases | 58,189 | 163,611 | ||
Earned income from direct financing leases | 1,017 | 2,936 | ||
Operating expenses reimbursed from tenants | 2,529 | 7,764 | ||
Other income from real estate transactions | 29 | 74 | ||
Total revenues | $ 61,764 | $ 174,385 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)Property | Dec. 31, 2018USD ($) | |
Related Party Transaction [Line Items] | ||
Gross rental percentage | 1.00% | |
Number of leased commercial properties owned | Property | 662 | |
Property management agreement, amendment description | The Property Management Agreement automatically renewed on January 1, 2019 for three years ending December 31, 2021, subject to earlier termination pursuant to the terms of the Property Management Agreement. The Property Management Agreement provides for termination: (i) immediately by the Corporation’s Independent Directors Committee (“IDC”) for Cause, as defined in the Property Management Agreement, (ii) by the IDC, upon 30 days’ written notice to the Manager, in connection with a change in control of the Manager, as defined in the Property Management Agreement, (iii) by the IDC, by providing the Manager with written notice of termination not less than one year prior to the last calendar day of any renewal term, (iv) by the Manager upon written notice to the Company not less than one year prior to the last calendar day of any renewal period, (v) automatically in the event of a Termination Event, as defined in the Property Management Agreement, and (vi) by the IDC upon a Key Person Event, as defined in the Property Management Agreement. | |
Asset management agreement amendment description | The Asset Management Agreement automatically renewed on January 1, 2019 for three years ending December 31, 2021, subject to earlier termination pursuant to the terms of the Asset Management Agreement. The Asset Management Agreement provides for termination: (i) immediately by the IDC for Cause, as defined in the Asset Management Agreement, (ii) by the IDC, upon 30 days’ written notice to the Asset Manager, in connection with a change in control of the Asset Manager, as defined in the Asset Management Agreement, (iii) by the IDC, by providing the Asset Manager with written notice of termination not less than one year prior to the last calendar day of any renewal term, (iv) by the Asset Manager upon written notice to the Company not less than one year prior to the last calendar day of any renewal period, (v) automatically in the event of a Disposition Event, as defined in the Asset Management Agreement, and (vi) by the IDC upon a Key Person Event, as defined in the Asset Management Agreement. | |
Due to related parties | $ 433 | $ 114 |
Manager and Asset Manager | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 433 | $ 114 |
Property Management Agreement | ||
Related Party Transaction [Line Items] | ||
Termination fees | $ 22,965 | |
Property Management Agreement | Existing Tenant | ||
Related Party Transaction [Line Items] | ||
Existing rental property re-leasing fees term | 1 month | |
Property Management Agreement | New Tenant | ||
Related Party Transaction [Line Items] | ||
Existing rental property re-leasing fees term | 2 months | |
Property Management Agreement | 3% Gross Rentals Property | ||
Related Party Transaction [Line Items] | ||
Gross rental percentage | 3.00% | |
Property Management Agreement | 5% Gross Rentals Property | ||
Related Party Transaction [Line Items] | ||
Gross rental percentage | 5.00% | |
Number of leased commercial properties owned | Property | 1 | |
Asset Management Agreement | ||
Related Party Transaction [Line Items] | ||
Receivable interest rate | 0.25% | |
Interest rate paid from proceed | 0.50% | |
Asset Management Agreement | Maximum | ||
Related Party Transaction [Line Items] | ||
Termination fees | $ 63,306 | |
Asset Management Agreement | Amendment Details | ||
Related Party Transaction [Line Items] | ||
Percentage of gross purchase price paid | 1.00% | |
Asset Management Agreement | Amendment Details One | ||
Related Party Transaction [Line Items] | ||
Percentage of gross purchase price paid | 2.00% | |
Asset Management Agreement | Amendment Details Two | ||
Related Party Transaction [Line Items] | ||
Percentage of gross sale price received | 1.00% |
Related Party Transactions - Ma
Related Party Transactions - Management Fees Incurred With Related Parties (Detail) - Property Management Agreement and Asset Management Agreement - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Related Party Transaction [Line Items] | ||||
Expenses incurred with related parties | $ 17,251 | $ 8,009 | $ 34,900 | $ 23,988 |
Asset Management Agreement | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred with related parties | 5,610 | 4,663 | 16,048 | 13,119 |
Property Management Fee | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred with related parties | 2,098 | 1,680 | 5,918 | 4,792 |
Management Fee Expense | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred with related parties | 7,708 | 6,343 | 21,966 | 17,911 |
Marketing Fee (Offering Costs) | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred with related parties | 703 | 297 | 1,303 | 822 |
Acquisition Fee | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred with related parties | 7,932 | 1,105 | 9,937 | 3,491 |
Leasing Fee | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred with related parties | 312 | 148 | 747 | 1,325 |
Disposition Fee | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred with related parties | $ 596 | $ 116 | $ 947 | $ 439 |
Acquisitions - Acquisitions Clo
Acquisitions - Acquisitions Closed - (Detail) $ in Thousands | Nov. 07, 2019USD ($)Property | Oct. 31, 2019USD ($)Property | Sep. 17, 2019USD ($)Property | Aug. 29, 2019USD ($)Property | Aug. 27, 2019USD ($)Property | Jul. 31, 2019USD ($)Property | Jul. 15, 2019USD ($)Property | Jun. 26, 2019USD ($)Property | Jun. 07, 2019USD ($)Property | May 31, 2019USD ($)Property | May 21, 2019USD ($)Property | Apr. 30, 2019USD ($)Property | Mar. 26, 2019USD ($)Property | Mar. 19, 2019USD ($)Property | Mar. 15, 2019USD ($)Property | Mar. 12, 2019USD ($)Property | Jan. 31, 2019USD ($)Property | Aug. 10, 2018USD ($)Property | Aug. 06, 2018USD ($)Property | Jul. 17, 2018USD ($)Property | Jul. 12, 2018USD ($)Property | Jun. 29, 2018USD ($)Property | Jun. 21, 2018USD ($)Property | Jun. 14, 2018USD ($)Property | Jun. 06, 2018USD ($)Property | Apr. 30, 2018USD ($)Property | Mar. 30, 2018USD ($)Property | Mar. 27, 2018USD ($)Property | Sep. 30, 2019USD ($)Property | Sep. 30, 2018USD ($)Property |
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Number of Properties | Property | 66 | |||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 993,689 | |||||||||||||||||||||||||||||
Subsequent Event | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Number of Properties | Property | 4 | |||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 16,064 | |||||||||||||||||||||||||||||
Healthcare | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Healthcare | Healthcare | ||||||||||||||||||||||||||||
Number of Properties | Property | 5 | 1 | ||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 27,277 | $ 4,747 | ||||||||||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Industrial | Industrial | Industrial | Industrial | Industrial | Industrial | Industrial | Industrial | Industrial | Industrial | Industrial | Industrial | Industrial | |||||||||||||||||
Number of Properties | Property | 1 | 1 | 1 | 2 | 1 | 1 | 2 | 1 | 1 | 1 | 1 | 1 | 1 | |||||||||||||||||
Real Estate Acquisition Price | $ | $ 11,185 | $ 4,404 | $ 11,330 | $ 11,180 | $ 25,801 | $ 10,217 | $ 4,802 | $ 11,212 | $ 10,400 | $ 38,340 | $ 39,700 | $ 8,500 | $ 22,000 | |||||||||||||||||
Retail | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Retail | Retail | Retail | Retail | Retail | Retail | Retail | Retail | Retail | Retail | ||||||||||||||||||||
Number of Properties | Property | 1 | 1 | 2 | 14 | 10 | 20 | 5 | 2 | 1 | 6 | ||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 3,214 | $ 3,192 | $ 6,500 | $ 19,128 | $ 13,185 | $ 44,977 | $ 14,845 | $ 6,433 | $ 20,231 | $ 14,479 | ||||||||||||||||||||
Retail | Subsequent Event | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Retail | |||||||||||||||||||||||||||||
Number of Properties | Property | 1 | |||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 3,142 | |||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Other | Other | Other | |||||||||||||||||||||||||||
Number of Properties | Property | 1 | 1 | 1 | |||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 30,589 | $ 76,000 | $ 16,170 | |||||||||||||||||||||||||||
Industrial/Office/Other | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Industrial/Office/Other | |||||||||||||||||||||||||||||
Number of Properties | Property | 23 | |||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 735,740 | |||||||||||||||||||||||||||||
Industrial/Retail | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Industrial/Retail | |||||||||||||||||||||||||||||
Number of Properties | Property | 26 | |||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 78,530 | |||||||||||||||||||||||||||||
Office | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Office | |||||||||||||||||||||||||||||
Number of Properties | Property | 1 | |||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 34,670 | |||||||||||||||||||||||||||||
Retail One | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Number of Properties | Property | 70 | |||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 365,289 | |||||||||||||||||||||||||||||
Retail/Healthcare | Subsequent Event | ||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||
Property Type | Retail/Healthcare | |||||||||||||||||||||||||||||
Number of Properties | Property | 3 | |||||||||||||||||||||||||||||
Real Estate Acquisition Price | $ | $ 12,922 |
Acquisitions - Acquisitions C_2
Acquisitions - Acquisitions Closed (Parenthetical) - (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Business Combinations [Abstract] | ||
Mortgages assumed | $ 49,782 | $ 20,845 |
Interest rate | 4.92% | 4.36% |
Mortgage, Maturity date | Feb. 29, 2028 | Aug. 31, 2025 |
Acquisition costs capitalized | $ 16,647 | $ 8,019 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation for Acquisitions (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Business Acquisition [Line Items] | ||
Direct financing investments | $ 430 | |
Mortgages payable | $ (49,782) | (20,845) |
Business combination, recognized identifiable assets acquired and liabilities assumed, assets | 960,554 | 352,463 |
Land | ||
Business Acquisition [Line Items] | ||
Business combination, recognized identifiable assets acquired and liabilities assumed, property, plant, and equipment | 155,434 | 47,930 |
Land Improvements | ||
Business Acquisition [Line Items] | ||
Business combination, recognized identifiable assets acquired and liabilities assumed, property, plant, and equipment | 44,929 | 20,815 |
Buildings and Other Improvements | ||
Business Acquisition [Line Items] | ||
Business combination, recognized identifiable assets acquired and liabilities assumed, property, plant, and equipment | 745,116 | 271,696 |
Equipment | ||
Business Acquisition [Line Items] | ||
Business combination, recognized identifiable assets acquired and liabilities assumed, property, plant, and equipment | 2,891 | |
Acquired In-Place Leases | ||
Business Acquisition [Line Items] | ||
Business combination, recognized identifiable assets acquired and liabilities assumed, Intangible assets | 77,868 | 36,342 |
Acquired Above-Market Leases | ||
Business Acquisition [Line Items] | ||
Business combination, recognized identifiable assets acquired and liabilities assumed, Intangible assets | 2,800 | 3,347 |
Acquired Below-Market Leases | ||
Business Acquisition [Line Items] | ||
Business combination, recognized identifiable assets acquired and liabilities assumed, Intangible assets | $ (15,811) | $ (10,143) |
Acquisitions - Purchase Price_2
Acquisitions - Purchase Price Allocation for Acquisitions (Parenthetical) - (Detail) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Acquired In-Place Leases | ||
Business Acquisition [Line Items] | ||
Weighted average amortization period | 13 years | 14 years |
Acquired Above-Market Leases | ||
Business Acquisition [Line Items] | ||
Weighted average amortization period | 18 years | 15 years |
Acquired Below-Market Leases | ||
Business Acquisition [Line Items] | ||
Weighted average amortization period | 10 years | 13 years |
Sale of Real Estate - Schedule
Sale of Real Estate - Schedule of Sale of Real Estate (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)Property | Sep. 30, 2018USD ($)Property | Sep. 30, 2019USD ($)Property | Sep. 30, 2018USD ($)Property | |
Real Estate [Line Items] | ||||
Number of properties disposed | Property | 16 | 4 | 25 | 15 |
Aggregate sale price | $ 59,691 | $ 11,609 | $ 94,791 | $ 43,951 |
Aggregate carrying value | (43,920) | (9,016) | (73,365) | (31,710) |
Gain on sale of real estate | 12,585 | 2,025 | 16,772 | 9,620 |
Real Estate | ||||
Real Estate [Line Items] | ||||
Additional sales expenses | (3,186) | (568) | (4,654) | (2,621) |
Gain on sale of real estate | $ 12,585 | $ 2,025 | $ 16,772 | $ 9,620 |
Investment in Rental Property_3
Investment in Rental Property and Lease Arrangements - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019Property | |
Lessor Lease Description [Line Items] | |
Number of real estate properties under operating leases | 642 |
Number of real estate properties under direct financing leases | 16 |
Number of real estate properties under direct financing leases that include land option | 4 |
Lessor, operating lease, existence of option to extend | true |
Lessor, direct financing lease, existence of option to extend | true |
Minimum | |
Lessor Lease Description [Line Items] | |
Lessor operating lease, initial terms | 10 years |
Lessor direct financing leases, initial terms | 10 years |
Maximum | |
Lessor Lease Description [Line Items] | |
Lessor operating lease, initial terms | 20 years |
Lessor direct financing leases, initial terms | 20 years |
Investment in Rental Property_4
Investment in Rental Property and Lease Arrangements - Rental Property Subject to Non-cancelable Operating Leases (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property Subject To Or Available For Operating Lease [Line Items] | ||
Rental property subject to non-cancelable operating leases, gross | $ 3,714,785 | $ 2,848,735 |
Less accumulated depreciation | (255,159) | (206,989) |
Rental property subject to non-cancelable operating leases, net | 3,459,626 | 2,641,746 |
Land | ||
Property Subject To Or Available For Operating Lease [Line Items] | ||
Rental property subject to non-cancelable operating leases, gross | 551,903 | 411,043 |
Land Improvements | ||
Property Subject To Or Available For Operating Lease [Line Items] | ||
Rental property subject to non-cancelable operating leases, gross | 279,629 | 239,701 |
Buildings and Improvements | ||
Property Subject To Or Available For Operating Lease [Line Items] | ||
Rental property subject to non-cancelable operating leases, gross | 2,871,761 | 2,186,499 |
Equipment | ||
Property Subject To Or Available For Operating Lease [Line Items] | ||
Rental property subject to non-cancelable operating leases, gross | $ 11,492 | $ 11,492 |
Investment in Rental Property_5
Investment in Rental Property and Lease Arrangements - Summary of Depreciation Expense on Investment in Rental Property (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Depreciation | $ 21,843 | $ 17,196 | $ 60,128 | $ 48,345 |
Investment in Rental Property_6
Investment in Rental Property and Lease Arrangements - Estimated Lease Payments to be Received under Non-cancelable Operating Leases (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Lessor Operating Lease Payments Fiscal Year Maturity [Abstract] | |
Remainder of 2019 | $ 72,718 |
2020 | 294,220 |
2021 | 298,899 |
2022 | 301,996 |
2023 | 304,828 |
Thereafter | 2,562,223 |
Estimated lease payments to be received under non-cancelable operating leases | $ 3,834,884 |
Investment in Rental Property_7
Investment in Rental Property and Lease Arrangements - Net Investment in Direct Financing Leases (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Undiscounted estimated lease payments to be received | $ 73,775 | $ 76,829 |
Estimated unguaranteed residual values | 20,358 | 20,358 |
Unearned income | (52,213) | (55,187) |
Net investment in direct financing leases | $ 41,920 | $ 42,000 |
Investment in Rental Property_8
Investment in Rental Property and Lease Arrangements - Undiscounted Estimated Lease Payments to be Received under Non-cancelable Direct Financing Leases (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Capital Leases Future Minimum Payments Receivable [Abstract] | |
Remainder of 2019 | $ 1,022 |
2020 | 4,194 |
2021 | 4,283 |
2022 | 4,369 |
2023 | 4,456 |
Thereafter | 55,451 |
Undiscounted estimated lease payments to be received under non-cancelable direct financing leases | $ 73,775 |
Investment in Rental Property_9
Investment in Rental Property and Lease Arrangements - Summary of Amounts Reported as Lease Revenues on the Condensed Consolidated Statements of Income and Comprehensive Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||
Contractual rental amounts billed for operating leases | $ 65,579 | $ 184,292 |
Adjustment to recognize contractual operating lease billings on a straight-line basis | 5,575 | 16,015 |
Adjustment to revenue recognized for uncollectible rental amounts billed | (440) | |
Total operating lease rental revenues | 71,154 | 199,867 |
Earned income from direct financing leases | 1,005 | 3,014 |
Operating expenses billed to tenants | 3,811 | 10,572 |
Other income from real estate transactions | 431 | 431 |
Total lease revenues | $ 76,401 | $ 213,884 |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities - Schedule of Intangible Assets and Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Lease intangibles: | ||
Intangible lease assets, net | $ 342,478 | $ 286,258 |
Acquired below-market leases | 114,316 | 101,602 |
Less accumulated amortization | (19,813) | (15,655) |
Intangible lease liabilities, net | 94,503 | 85,947 |
Leasing fees | 17,316 | 17,274 |
Less accumulated amortization | (4,065) | (3,576) |
Leasing fees, net | 13,251 | 13,698 |
Acquired Above-Market Leases | ||
Lease intangibles: | ||
Intangible lease assets, gross | 64,931 | 64,164 |
Less accumulated amortization | (17,275) | (14,740) |
Intangible lease assets, net | 47,656 | 49,424 |
Acquired In-Place Leases | ||
Lease intangibles: | ||
Intangible lease assets, gross | 351,720 | 277,659 |
Less accumulated amortization | (56,898) | (40,825) |
Intangible lease assets, net | $ 294,822 | $ 236,834 |
Intangible Assets and Liabili_4
Intangible Assets and Liabilities - Schedule of Amortization for Intangible Lease Assets and Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Acquired In-Place Leases | Depreciation and Amortization | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Acquired in-place leases and leasing fees | $ 6,549 | $ 4,673 | $ 17,861 | $ 12,958 |
Above and Below Market Leases | Increase (Decrease) to Lease Revenues | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Acquired in-place leases and leasing fees | $ 875 | $ 255 | $ 2,335 | $ (212) |
Intangible Assets and Liabili_5
Intangible Assets and Liabilities - Schedule of Amortizable Intangible Assets (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Remainder of 2019 | $ 6,113 |
2020 | 24,267 |
2021 | 23,856 |
2022 | 23,241 |
2023 | 22,862 |
Thereafter | 160,887 |
Total | $ 261,226 |
Unsecured Credit Agreements - S
Unsecured Credit Agreements - Summary of Unsecured Credit Agreements (Detail) - USD ($) $ in Thousands | Feb. 27, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Carrying amount of debt | $ 2,096,235 | $ 1,450,551 | |
Long-term Debt | 2,096,235 | ||
Unsecured Revolving Credit and Term Loan Agreement | 2024 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.90% | ||
2026 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Maturity Date | Feb. 27, 2026 | ||
Unsecured Debt | |||
Debt Instrument [Line Items] | |||
Carrying amount of debt | 1,983,300 | $ 1,371,100 | |
Debt issuance costs, net | (8,489) | (4,227) | |
Long-term Debt | $ 1,974,811 | 1,366,873 | |
Unsecured Debt | Revolver | |||
Debt Instrument [Line Items] | |||
Maturity Date | Jan. 31, 2022 | ||
Unsecured Debt | Senior Guaranteed Notes Series A | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 4.84% | ||
Maturity Date | Apr. 30, 2027 | ||
Carrying amount of debt | $ 150,000 | 150,000 | |
Unsecured Debt | Senior Guaranteed Notes Series B | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 5.09% | ||
Maturity Date | Jul. 31, 2028 | ||
Carrying amount of debt | $ 225,000 | 225,000 | |
Unsecured Debt | Senior Guaranteed Notes Series C | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 5.19% | ||
Maturity Date | Jul. 31, 2030 | ||
Carrying amount of debt | $ 100,000 | 100,000 | |
Unsecured Debt | Senior Notes | |||
Debt Instrument [Line Items] | |||
Carrying amount of debt | $ 475,000 | 475,000 | |
Unsecured Debt | 2019 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month LIBOR + 1.40% | ||
Maturity Date | Feb. 29, 2020 | ||
Carrying amount of debt | 300,000 | ||
Unsecured Debt | 2019 Unsecured Term Loan | 1 Month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.40% | ||
Unsecured Debt | 2020 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month LIBOR + 1.25% | ||
Maturity Date | Aug. 31, 2020 | ||
Carrying amount of debt | $ 300,000 | ||
Unsecured Debt | 2020 Unsecured Term Loan | 1 Month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
Unsecured Debt | Unsecured Revolving Credit and Term Loan Agreement | |||
Debt Instrument [Line Items] | |||
Carrying amount of debt | $ 758,300 | 596,100 | |
Unsecured Debt | Unsecured Revolving Credit and Term Loan Agreement | Revolver | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month LIBOR + 1.20% | ||
Maturity Date | Jan. 31, 2022 | ||
Carrying amount of debt | $ 303,300 | $ 141,100 | |
Unsecured Debt | Unsecured Revolving Credit and Term Loan Agreement | Revolver | 1 Month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.20% | 1.20% | |
Carrying amount of debt | $ 126,100 | ||
Unsecured Debt | Unsecured Revolving Credit and Term Loan Agreement | 2023 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month LIBOR + 1.35% | ||
Maturity Date | Jan. 31, 2023 | ||
Carrying amount of debt | $ 265,000 | 265,000 | |
Unsecured Debt | Unsecured Revolving Credit and Term Loan Agreement | 2023 Unsecured Term Loan | 1 Month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.35% | ||
Unsecured Debt | Unsecured Revolving Credit and Term Loan Agreement | 2024 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month LIBOR + 1.25% | ||
Maturity Date | Jun. 30, 2024 | ||
Carrying amount of debt | $ 190,000 | $ 190,000 | |
Unsecured Debt | Unsecured Revolving Credit and Term Loan Agreement | 2024 Unsecured Term Loan | 1 Month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.25% | ||
Unsecured Debt | 2026 Unsecured Term Loan | |||
Debt Instrument [Line Items] | |||
Interest Rate | one-month LIBOR + 1.85% | ||
Maturity Date | Feb. 28, 2026 | ||
Carrying amount of debt | $ 450,000 | ||
Unsecured Debt | 2026 Unsecured Term Loan | 1 Month LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.85% |
Unsecured Credit Agreements -_2
Unsecured Credit Agreements - Summary of Unsecured Credit Agreements (Parenthetical) (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($) | Jun. 30, 2019 | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 31, 2019Option | |
Debt Instrument [Line Items] | |||||
Carrying amount | $ 2,096,235 | $ 2,096,235 | $ 1,450,551 | ||
2020 Unsecured Term Loan | |||||
Debt Instrument [Line Items] | |||||
Debt instrument extension options, description | two six-month extensions | ||||
Maturity extension fee on outstanding principal balance percentage | 0.05% | 0.05% | |||
1 Month LIBOR | 2019 Unsecured Term Loan | |||||
Debt Instrument [Line Items] | |||||
Number of option available to extend maturity period | Option | 2 | ||||
2024 Unsecured Term Loan | Unsecured Revolving Credit and Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.90% | ||||
2024 Unsecured Term Loan | Unsecured Revolving Credit and Term Loan Agreement | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.85% | 1.50% | |||
2024 Unsecured Term Loan | Unsecured Revolving Credit and Term Loan Agreement | Maximum | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.65% | 2.45% | |||
Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | $ 1,983,300 | $ 1,983,300 | $ 1,371,100 | ||
Unsecured Debt | Unsecured Revolving Credit and Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | 758,300 | $ 758,300 | 596,100 | ||
Unsecured Debt | 2019 Unsecured Term Loan | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | $ 300,000 | ||||
Maturity date | Feb. 29, 2020 | ||||
Unsecured Debt | 2020 Unsecured Term Loan | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | $ 300,000 | $ 300,000 | |||
Maturity date | Aug. 31, 2020 | ||||
Unsecured Debt | 1 Month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Interest rate | 2.09% | 2.09% | 2.35% | ||
Unsecured Debt | 1 Month LIBOR | 2019 Unsecured Term Loan | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.40% | ||||
Unsecured Debt | 1 Month LIBOR | 2020 Unsecured Term Loan | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.25% | ||||
Unsecured Debt | Swingline Revolver | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | $ 15,000 | ||||
Unsecured Debt | Swingline Revolver | Unsecured Revolving Credit and Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | $ 15,000 | ||||
Basis spread on variable rate | 5.45% | ||||
Unsecured Debt | Revolver | |||||
Debt Instrument [Line Items] | |||||
Maturity date | Jan. 31, 2022 | ||||
Unsecured Debt | Revolver | Unsecured Revolving Credit and Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | $ 303,300 | $ 303,300 | $ 141,100 | ||
Maturity date | Jan. 31, 2022 | ||||
Unsecured Debt | Revolver | 1 Month LIBOR | Unsecured Revolving Credit and Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | $ 126,100 | ||||
Basis spread on variable rate | 1.20% | 1.20% | |||
Unsecured Debt | 2024 Unsecured Term Loan | Unsecured Revolving Credit and Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Carrying amount | $ 190,000 | $ 190,000 | $ 190,000 | ||
Maturity date | Jun. 30, 2024 | ||||
Unsecured Debt | 2024 Unsecured Term Loan | 1 Month LIBOR | Unsecured Revolving Credit and Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.25% |
Unsecured Credit Agreements - A
Unsecured Credit Agreements - Additional Information (Detail) - USD ($) | Aug. 28, 2019 | Aug. 02, 2019 | Jul. 01, 2019 | Feb. 27, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Feb. 28, 2019 |
Debt Instrument [Line Items] | |||||||||||
Debt instrument, term | 119 months | ||||||||||
Weighted average interest rate on all outstanding borrowings | 3.89% | 3.89% | |||||||||
Cost of debt extinguishment | $ (455,000) | $ (50,000) | $ (1,176,000) | $ (101,000) | |||||||
Debt Issuance Costs | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cost of debt extinguishment | 6,000 | 6,000 | |||||||||
Other Nonoperating Income (Expense) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Cost of debt extinguishment | $ 113,000 | $ 328,000 | |||||||||
Revolver | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee percentage | 0.25% | ||||||||||
LIBOR | 2024 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.25% | 1.90% | |||||||||
LIBOR | Minimum | 2024 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.85% | 1.50% | |||||||||
LIBOR | Maximum | 2024 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.65% | 2.45% | |||||||||
2026 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 450,000,000 | ||||||||||
Debt instrument, term | 7 years | ||||||||||
Commitment fee percentage | 0.25% | ||||||||||
Remaining borrowing capacity | $ 150,000,000 | ||||||||||
Line of credit, maximum accordion feature | $ 550,000,000 | ||||||||||
Maturity date | Feb. 27, 2026 | ||||||||||
2026 Unsecured Term Loan | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.85% | ||||||||||
2026 Unsecured Term Loan | LIBOR | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.45% | ||||||||||
2026 Unsecured Term Loan | LIBOR | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 2.40% | ||||||||||
2019 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayment of borrowing | $ 300,000,000 | ||||||||||
Unsecured Revolving Credit and Term Loan Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Revolving credit facility, available borrowing capacity | $ 425,000,000 | $ 600,000,000 | |||||||||
Line of credit, maximum borrowing capacity | $ 1,055,000,000 | ||||||||||
Unsecured Revolving Credit and Term Loan Agreement | 2024 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.90% | ||||||||||
Unsecured Revolving Credit and Term Loan Agreement | Minimum | 2024 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.85% | 1.50% | |||||||||
Unsecured Revolving Credit and Term Loan Agreement | Maximum | 2024 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.65% | 2.45% | |||||||||
2020 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 300,000,000 | ||||||||||
Commitment fee percentage | 0.25% | ||||||||||
Debt instrument extension options, description | two six-month extensions | ||||||||||
Maturity extension fee on outstanding principal balance percentage | 0.05% | 0.05% | |||||||||
Proceeds from issuance of debt | $ 300,000,000 | ||||||||||
2020 Unsecured Term Loan | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.25% | ||||||||||
2020 Unsecured Term Loan | LIBOR | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.85% | ||||||||||
2020 Unsecured Term Loan | LIBOR | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.65% | ||||||||||
2026 Unsecured Term Loan and Amended Unsecured Revolving Credit and Term Loan Agreement and 2020 Unsecured Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt issuance costs incurred | $ 1,281,000 | $ 6,510,000 | |||||||||
New Debt Agreements | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unamortized debt issuance costs | $ 1,275,000 | $ 6,504,000 |
Unsecured Credit Agreements -_3
Unsecured Credit Agreements - Summary of Debt Issuance Cost Amortization (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Disclosure [Abstract] | ||||
Debt issuance costs amortization | $ 611 | $ 477 | $ 1,761 | $ 1,410 |
Mortgages and Notes Payable - S
Mortgages and Notes Payable - Summary of Mortgages and Notes Payable (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Mortgages and notes payable | $ 2,096,235 | $ 1,450,551 |
Mortgages and notes payable, net | 112,562 | 78,952 |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Mortgages and notes payable | 112,935 | 79,451 |
Debt issuance costs, net | $ (373) | (499) |
Wilmington Trust National Association, Due February 28 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2019-04 | |
Maturity Date | 2028-02 | |
Debt instrument, interest rate | 4.92% | |
Mortgages and notes payable | $ 49,340 | |
Wilmington Trust National Association, Due August 25 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2018-06 | |
Maturity Date | 2025-08 | |
Debt instrument, interest rate | 4.36% | |
Mortgages and notes payable | $ 20,409 | 20,674 |
PNC Bank | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2016-10 | |
Maturity Date | 2026-11 | |
Debt instrument, interest rate | 3.62% | |
Mortgages and notes payable | $ 17,980 | 18,260 |
Sun Life | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2012-03 | |
Maturity Date | 2021-10 | |
Debt instrument, interest rate | 5.13% | |
Mortgages and notes payable | $ 10,990 | 11,288 |
Aegon | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2012-04 | |
Maturity Date | 2023-10 | |
Debt instrument, interest rate | 6.38% | |
Mortgages and notes payable | $ 7,968 | 8,496 |
M&T Bank | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2017-10 | |
Maturity Date | 2021-08 | |
Interest Rate | one - month LIBOR+3% | |
Mortgages and notes payable | $ 4,949 | 5,051 |
M&T Bank | 1 Month LIBOR | Secured Debt | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 3.00% | |
Notes holders | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2008-12 | |
Maturity Date | 2023-12 | |
Debt instrument, interest rate | 6.25% | |
Mortgages and notes payable | $ 750 | 750 |
Standard Insurance Company Due August 2030 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2010-07 | |
Maturity Date | 2030-08 | |
Debt instrument, interest rate | 6.75% | |
Mortgages and notes payable | $ 549 | 563 |
Symetra Financial | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2017-11 | |
Maturity Date | 2026-10 | |
Debt instrument, interest rate | 3.65% | |
Mortgages and notes payable | 6,467 | |
Columbian Mutual Life Insurance Company | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2010-08 | |
Maturity Date | 2025-09 | |
Debt instrument, interest rate | 7.00% | |
Mortgages and notes payable | 1,459 | |
Legg Mason Mortgage Capital | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2010-08 | |
Maturity Date | 2022-08 | |
Debt instrument, interest rate | 7.06% | |
Mortgages and notes payable | 4,692 | |
Standard Insurance Company Due May 2034 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Origination Date | 2009-04 | |
Maturity Date | 2034-05 | |
Debt instrument, interest rate | 6.88% | |
Mortgages and notes payable | $ 1,751 |
Mortgages and Notes Payable -_2
Mortgages and Notes Payable - Summary of Mortgages and Notes Payable (Parenthetical) (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Instrument [Line Items] | |
Term of note | 119 months |
Commercial Mortgage Rate | |
Debt Instrument [Line Items] | |
Term of note | 5 years |
Mortgages and Notes Payable - A
Mortgages and Notes Payable - Additional Information (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
Investment in rental property pledges as collateral | $ 179,769 |
Mortgages and Notes Payable -_3
Mortgages and Notes Payable - Summary of Extinguished Mortgages (Detail) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)Mortgage | Dec. 31, 2018USD ($)Mortgage | |
Debt Disclosure [Abstract] | ||
Number of mortgages | Mortgage | 4 | 2 |
Outstanding balance of mortgages | $ | $ 13,905 | $ 6,666 |
Mortgages and Notes Payable -_4
Mortgages and Notes Payable - Summary of Cost Extinguished Mortgages (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Cost of mortgage extinguishment | $ 336 | $ 50 | $ 842 | $ 101 |
Mortgages and Notes Payable -_5
Mortgages and Notes Payable - Schedule of Estimated Future Principal Payments (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2019 | $ 784 |
2020 | 303,210 |
2021 | 18,028 |
2022 | 306,230 |
2023 | 273,356 |
Thereafter | 1,194,627 |
Long-term Debt | $ 2,096,235 |
Interest Rate Swaps - Summary o
Interest Rate Swaps - Summary of Interest-rate Swap Agreements (Detail) - Interest Rate Swap - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Fair Value | $ (36,369,000) | $ 15,813,000 |
Bank of America | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Nov. 30, 2023 | |
Derivative, Fixed rate | 2.80% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,389,000) | (411,000) |
Bank of Montreal One | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jul. 31, 2024 | |
Derivative, Fixed rate | 1.16% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 40,000,000 | |
Fair Value | $ 421,000 | 2,702,000 |
Bank of Montreal Two | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jan. 31, 2025 | |
Derivative, Fixed rate | 1.91% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (694,000) | 769,000 |
Bank of Montreal Three | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jul. 31, 2025 | |
Derivative, Fixed rate | 2.32% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,333,000) | 222,000 |
Bank of Montreal Four | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jan. 31, 2026 | |
Derivative, Fixed rate | 1.92% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (833,000) | 915,000 |
Bank of Montreal Five | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jan. 31, 2026 | |
Derivative, Fixed rate | 2.05% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 40,000,000 | |
Fair Value | $ (1,643,000) | 1,130,000 |
Bank of Montreal Six | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Dec. 31, 2026 | |
Derivative, Fixed rate | 2.33% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 10,000,000 | |
Fair Value | $ (662,000) | 132,000 |
Bank of Montreal Seven | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Dec. 31, 2026 | |
Derivative, Fixed rate | 1.99% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,058,000) | |
Bank of Montreal Eight | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Dec. 31, 2027 | |
Derivative, Fixed rate | 2.37% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,905,000) | 355,000 |
Bank of Montreal Nine | ||
Derivative [Line Items] | ||
Derivative, Maturity date | May 31, 2029 | |
Derivative, Fixed rate | 2.09% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,502,000) | |
Capital One, National Association One | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Dec. 31, 2021 | |
Derivative, Fixed rate | 1.05% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 15,000,000 | |
Fair Value | $ 133,000 | 605,000 |
Capital One, National Association Two | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Dec. 31, 2024 | |
Derivative, Fixed rate | 1.58% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 15,000,000 | |
Fair Value | $ (165,000) | 727,000 |
Capital One, National Association Three | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jan. 31, 2026 | |
Derivative, Fixed rate | 2.08% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 35,000,000 | |
Fair Value | $ (1,515,000) | 930,000 |
Capital One, National Association Four | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Apr. 30, 2026 | |
Derivative, Fixed rate | 2.68% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 15,000,000 | |
Fair Value | $ (1,243,000) | (189,000) |
Capital One, National Association Five | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jul. 31, 2026 | |
Derivative, Fixed rate | 1.32% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 35,000,000 | |
Fair Value | $ 118,000 | 2,877,000 |
Capital One, National Association Six | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Dec. 31, 2027 | |
Derivative, Fixed rate | 2.37% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,932,000) | 345,000 |
M&T Bank | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Aug. 31, 2021 | |
Derivative, Fixed rate | 1.02% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 4,948,000 | 5,051,000 |
Fair Value | $ 42,000 | 177,000 |
M&T Bank One | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Sep. 30, 2022 | |
Derivative, Fixed rate | 2.83% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,031,000) | (362,000) |
M&T Bank Two | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Nov. 30, 2023 | |
Derivative, Fixed rate | 2.65% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,284,000) | (254,000) |
Regions Bank | ||
Derivative [Line Items] | ||
Derivative, Maturity date | May 31, 2020 | |
Derivative, Fixed rate | 2.12% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 50,000,000 | |
Fair Value | $ (104,000) | 271,000 |
Regions Bank One | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Dec. 31, 2023 | |
Derivative, Fixed rate | 1.18% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ 199,000 | 1,484,000 |
Regions Bank Two | ||
Derivative [Line Items] | ||
Derivative, Maturity date | May 31, 2029 | |
Derivative, Fixed rate | 2.11% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,562,000) | |
Regions Bank Three | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jun. 30, 2029 | |
Derivative, Fixed rate | 2.03% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,383,000) | |
Sun Trust Bank One | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Apr. 30, 2024 | |
Derivative, Fixed rate | 1.99% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (745,000) | 554,000 |
Sun Trust Bank Two | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Apr. 30, 2025 | |
Derivative, Fixed rate | 2.20% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,181,000) | 382,000 |
Sun Trust Bank Three | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jul. 31, 2025 | |
Derivative, Fixed rate | 1.99% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (934,000) | 728,000 |
Sun Trust Bank Four | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Dec. 31, 2025 | |
Derivative, Fixed rate | 2.30% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,474,000) | 299,000 |
Sun Trust Bank Five | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jan. 31, 2026 | |
Derivative, Fixed rate | 1.93% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (915,000) | 903,000 |
U.S. Bank National Association | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jun. 30, 2029 | |
Derivative, Fixed rate | 2.03% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (1,395,000) | |
U S Bank National Association One | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Aug. 31, 2029 | |
Derivative, Fixed rate | 1.35% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ 207,000 | |
Wells Fargo Bank One | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Feb. 28, 2021 | |
Derivative, Fixed rate | 2.39% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 35,000,000 | |
Fair Value | $ (385,000) | 59,000 |
Wells Fargo Bank Two | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Oct. 31, 2024 | |
Derivative, Fixed rate | 2.72% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 15,000,000 | |
Fair Value | $ (994,000) | (222,000) |
Wells Fargo Bank Three | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Apr. 30, 2027 | |
Derivative, Fixed rate | 2.72% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 25,000,000 | |
Fair Value | $ (2,427,000) | (382,000) |
Wells Fargo Bank Four | ||
Derivative [Line Items] | ||
Derivative, Maturity date | Jan. 31, 2028 | |
Derivative, Fixed rate | 2.37% | |
Variable Rate Index | one-month LIBOR | |
Notional Amount | $ 75,000,000 | |
Fair Value | $ (5,801,000) | $ 1,067,000 |
Interest Rate Swaps - Summary_2
Interest Rate Swaps - Summary of Interest-rate Swap Agreements (Parenthetical) (Detail) - Interest Rate Swap - M&T Bank - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Notional Amount | $ 4,948,000 | $ 5,051,000 |
Umbrella Partnership Real Estate Investment Trust Transaction | ||
Derivative [Line Items] | ||
Interest rate swap assumed month and year | 2017-10 |
Interest Rate Swaps - Total Amo
Interest Rate Swaps - Total Amounts Recognized From Converting Variable Rates to Fixed Rates and Location of Gain (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative [Line Items] | ||||
Total Interest Expense Presented in the Consolidated Statements of Income and Comprehensive Income | $ 18,465 | $ 14,484 | $ 51,025 | $ 38,115 |
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Amount of (Loss) Gain Recognized in Accumulated Other Comprehensive (Loss) Income | $ (16,380) | $ 6,299 | $ (52,182) | $ 30,296 |
Reclassification from Accumulated Other Comprehensive (Loss) Income, Location | Interest expense | Interest expense | Interest expense | Interest expense |
Reclassification from Accumulated Other Comprehensive (Loss) Income, Amount of Gain (Loss) | $ 387 | $ (20) | $ 2,001 | $ (1,287) |
Total Interest Expense Presented in the Consolidated Statements of Income and Comprehensive Income | $ 18,465 | $ 14,484 | $ 51,025 | $ 38,115 |
Interest Rate Swaps - Additiona
Interest Rate Swaps - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Derivative Instrument Detail [Abstract] | |
Interest rate swaps expected to be reclassified - (loss) | $ (3,688) |
Non-Controlling Interests - Add
Non-Controlling Interests - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |||
Properties contributed as part of UPREIT transactions, value | $ 0 | $ 0 | $ 15,797,000 |
Credit Risk Concentrations - Ad
Credit Risk Concentrations - Additional Information (Detail) - customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Concentration Risk [Line Items] | |||||
Number of tenants or common franchises | 0 | 0 | 0 | 0 | |
Operating Expenses | Management Contracts Concentration Risk | |||||
Concentration Risk [Line Items] | |||||
Concentrations risk percentage | 17.00% | 20.00% | 18.00% | 19.00% | |
Mortgages and Notes Payable | Credit Availability Concentration Risk | Financial Institution One | |||||
Concentration Risk [Line Items] | |||||
Concentrations risk percentage | 62.00% | 26.00% | |||
Mortgages and Notes Payable | Credit Availability Concentration Risk | Financial Institution Two | |||||
Concentration Risk [Line Items] | |||||
Concentrations risk percentage | 16.00% | 23.00% | |||
Mortgages and Notes Payable | Credit Availability Concentration Risk | Financial Institution Three | |||||
Concentration Risk [Line Items] | |||||
Concentrations risk percentage | 10.00% | 14.00% | |||
Mortgages and Notes Payable | Credit Availability Concentration Risk | Financial Institution Four | |||||
Concentration Risk [Line Items] | |||||
Concentrations risk percentage | 11.00% |
Equity - Summary of Redemptions
Equity - Summary of Redemptions under Company's Share Redemption Program (Detail) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019USD ($)Stockholdershares | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($)Stockholdershares | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($)Stockholdershares | Sep. 30, 2018USD ($)Stockholdershares | |
Equity [Abstract] | ||||||||
Number of redemptions requested | Stockholder | 20 | 11 | 49 | 33 | ||||
Number of shares | shares | 88 | 32 | 147 | 106 | ||||
Aggregate redemption price | $ | $ 7,361 | $ 3,210 | $ 1,803 | $ 2,675 | $ 2,312 | $ 3,577 | $ 12,374 | $ 8,564 |
Equity - Additional Information
Equity - Additional Information (Detail) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Equity [Line Items] | ||
Common stock, shares issued | 25,482,000 | 22,014,000 |
Distribution Reinvestment Plan | ||
Equity [Line Items] | ||
Percentage of shares in value offered | 98.00% | |
Common stock, shares issued | 2,797,000 | 2,233,000 |
Earnings per Share - Summary of
Earnings per Share - Summary of Components used in Calculation of Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Basic earnings: | ||||
Net earnings attributable to Broadstone Net Lease, Inc. | $ 23,388 | $ 21,267 | $ 53,460 | $ 55,813 |
Diluted earnings: | ||||
Net earnings attributable to Broadstone Net Lease, Inc. | 23,388 | 21,267 | 53,460 | 55,813 |
Net earnings attributable to non-controlling interests | 1,650 | 1,797 | 3,942 | 4,631 |
Net income (loss) attributable to parent, Diluted | $ 25,038 | $ 23,064 | $ 57,402 | $ 60,444 |
Basic and diluted weighted average shares outstanding: | ||||
Weighted average number of common shares outstanding used in basic earnings per share | 24,642 | 20,554 | 23,394 | 19,850 |
Effects of convertible membership units | 1,737 | 1,737 | 1,737 | 1,646 |
Weighted average number of common shares outstanding used in diluted earnings per share | 26,379 | 22,291 | 25,131 | 21,496 |
Basic and diluted net earnings per common share | $ 0.95 | $ 1.03 | $ 2.28 | $ 2.81 |
Supplemental Cash Flow Disclo_2
Supplemental Cash Flow Disclosures - Additional Information (Detail) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | |
Supplemental Cash Flow Elements [Line Items] | |||||
Cash paid for interest | $ 49,828 | $ 33,108 | |||
State income, franchise and foreign taxes paid | 809 | $ 307 | |||
Issuance of membership units, number of units | 194 | 194 | |||
Membership units issued in exchange of property contributed in UPREIT transactions | $ 15,797 | ||||
Cancellation shares of common stock, shares | 9 | ||||
Common stock cancelled, values | $ 748 | $ 748 | |||
Settlement of outstanding receivable with common stock | 748 | ||||
Dividend declared and accrued but not yet paid | 11,932 | 9,722 | |||
Lease liabilities | 1,246 | ||||
Notes receivables settled | $ 6,527 | ||||
Payments for tenant improvements | $ 2,517 | ||||
ASC 842 | |||||
Supplemental Cash Flow Elements [Line Items] | |||||
Right-of-use assets | $ 1,687 | ||||
Lease liabilities | 1,261 | ||||
Rent liability | 7 | ||||
Ground lease intangible asset, net | $ 432 | ||||
Distribution Reinvestment Plan | |||||
Supplemental Cash Flow Elements [Line Items] | |||||
Issuance of shares of common stock, shares | 550 | 458 | |||
Common stock issued | $ 46,084 | $ 37,055 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)Agreement | |
Loss Contingencies [Line Items] | |
Number of lease agreements assumed in acquisitions | Agreement | 3 |
Tenant improvement allowances in acquisitions | $ | $ 2,517 |
Minimum | |
Loss Contingencies [Line Items] | |
Non-cancellable operating leases term | 2025 |
Maximum | |
Loss Contingencies [Line Items] | |
Non-cancellable operating leases term | 2066 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Tenant Improvement Allowances Included in Accounts Payable and Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts Payable And Other Liabilities | ||
Loss Contingencies [Line Items] | ||
Tenant improvement allowances | $ 3,664 | $ 2,125 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Total Lease Costs Associated with Operating Leases (Detail) - Property and Operating Expense - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Lessee Lease Description [Line Items] | ||||
Operating lease costs | $ 35 | $ 23 | $ 105 | $ 26 |
Variable lease costs | 11 | 11 | 34 | 13 |
Total lease costs | $ 46 | $ 34 | $ 139 | $ 39 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Payments Associated with Obligations Under Operating Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flow Operating Activities Lessee [Abstract] | ||||
Operating lease payments | $ 27 | $ 20 | $ 127 | $ 23 |
Commitments and Contingencies_5
Commitments and Contingencies - Summary of Estimated Future Lease Payments Required Under Non-cancelable Operating Leases as well as Reconciliation to Lease Liabilities (Detail) $ in Thousands | Sep. 30, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Remainder of 2019 | $ 29 |
2020 | 120 |
2021 | 122 |
2022 | 124 |
2023 | 125 |
Thereafter | 2,540 |
Total undiscounted cash flows | 3,060 |
Less imputed interest | (1,814) |
Lease liabilities | $ 1,246 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | Nov. 11, 2019USD ($)Tranche | Oct. 31, 2019$ / shares | Oct. 01, 2019USD ($) | Nov. 12, 2019USD ($)Propertyshares | Jan. 31, 2019$ / shares | Jan. 31, 2018$ / shares | Mar. 31, 2019$ / shares | Mar. 31, 2018$ / shares | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($)$ / shares | Jun. 30, 2019$ / shares | Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2018$ / shares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Mar. 30, 2020$ / shares | Jan. 31, 2020$ / shares |
Subsequent Event [Line Items] | |||||||||||||||||
Proceeds from issuance of common stock, net | $ 260,475,000 | $ 146,791,000 | |||||||||||||||
Aggregate carrying value | $ 43,920,000 | $ 9,016,000 | 73,365,000 | 31,710,000 | |||||||||||||
Aggregate sale price | 59,691,000 | 11,609,000 | 94,791,000 | 43,951,000 | |||||||||||||
Gain on sale of real estate | $ 12,585,000 | $ 2,025,000 | 16,772,000 | 9,620,000 | |||||||||||||
Distribution declared per share | $ / shares | $ 0.43 | $ 0.415 | $ 0.44 | $ 0.43 | $ 0.44 | $ 0.44 | $ 0.43 | $ 0.43 | |||||||||
Repayment of borrowing | 226,900,000 | 462,500,000 | |||||||||||||||
Scenario Forecast | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Price per share or unit | $ / shares | $ 85 | ||||||||||||||||
Scenario Forecast | Merger Agreement | Manager | Repurchase of Outstanding Common Shares | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Price per share or unit | $ / shares | $ 85 | ||||||||||||||||
Scenario Forecast | Merger Agreement | Property Management Agreement and Asset Management Agreement | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Termination fees | $ 0 | ||||||||||||||||
Real Estate | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Additional sales expenses | $ 3,186,000 | $ 568,000 | 4,654,000 | 2,621,000 | |||||||||||||
Gain on sale of real estate | $ 12,585,000 | $ 2,025,000 | $ 16,772,000 | $ 9,620,000 | |||||||||||||
Subsequent Event | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Proceeds from issuance of common stock, net | $ 5,789,000 | ||||||||||||||||
Issuance of shares of common stock, shares | shares | 69,000 | ||||||||||||||||
Cash distributions paid to stockholders | $ 11,932,000 | ||||||||||||||||
Rental property acquired | $ 16,064,000 | ||||||||||||||||
Number of properties sold | Property | 5 | ||||||||||||||||
Aggregate carrying value | $ 10,922,000 | ||||||||||||||||
Aggregate sale price | 13,731,000 | ||||||||||||||||
Distribution declared per share | $ / shares | $ 0.44 | ||||||||||||||||
Monthly distribution approved per membership unit | $ / shares | $ 0.44 | ||||||||||||||||
Repayment of borrowing | $ 6,000,000 | ||||||||||||||||
Subsequent Event | Merger Agreement | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Base consideration payable | $ 206,000,000 | ||||||||||||||||
Assumption of debt | 94,000,000 | ||||||||||||||||
Additional consideration payable | $ 75,000,000 | ||||||||||||||||
Number of tranches | Tranche | 4 | ||||||||||||||||
Subsequent Event | Merger Agreement | Tranche One | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Additional consideration payable | $ 10,000,000 | ||||||||||||||||
Subsequent Event | Merger Agreement | Tranche Two | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Additional consideration payable | 15,000,000 | ||||||||||||||||
Subsequent Event | Merger Agreement | Tranche Three | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Additional consideration payable | 25,000,000 | ||||||||||||||||
Subsequent Event | Merger Agreement | Tranche Four | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Additional consideration payable | $ 25,000,000 | ||||||||||||||||
Subsequent Event | Real Estate | |||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||
Additional sales expenses | 745,000 | ||||||||||||||||
Gain on sale of real estate | $ 2,064,000 |
Subsequent Events - Summary of
Subsequent Events - Summary of Earnout Tranches, Applicable VWAP of REIT Share and AFFO Per Share, and Applicable Earnout Periods (Detail) - Merger Agreement - USD ($) | Nov. 11, 2019 | Sep. 30, 2019 |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Earnout Tranche | $ 75,000,000 | |
Tranche One | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Earnout Tranche | $ 10,000,000 | |
Tranche One | If the Company has completed an IPO | ||
Subsequent Event [Line Items] | ||
Applicable Earnout Period | The two-year period beginning on the earlier of (i) the IPO closing date or (ii) December 31, 2020. | |
Tranche One | If the Company has completed an IPO | Subsequent Event | ||
Subsequent Event [Line Items] | ||
VWAP of a REIT Share | $ 90 | |
Tranche One | If the Company has not completed an IPO | ||
Subsequent Event [Line Items] | ||
Applicable Earnout Period | The two-year period consisting of the calendar years ended December 31, 2020 and December 31, 2021. | |
Tranche One | If the Company has not completed an IPO | Subsequent Event | ||
Subsequent Event [Line Items] | ||
AFFO per Share | $ 5.85 | |
Tranche Two | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Earnout Tranche | $ 15,000,000 | |
Tranche Two | If the Company has completed an IPO | ||
Subsequent Event [Line Items] | ||
Applicable Earnout Period | The two-year period beginning on the earlier of (i) the IPO closing date or (ii) December 31, 2020. | |
Tranche Two | If the Company has completed an IPO | Subsequent Event | ||
Subsequent Event [Line Items] | ||
VWAP of a REIT Share | $ 95 | |
Tranche Two | If the Company has not completed an IPO | ||
Subsequent Event [Line Items] | ||
Applicable Earnout Period | The two-year period consisting of the calendar years ended December 31, 2020 and December 31, 2021. | |
Tranche Two | If the Company has not completed an IPO | Subsequent Event | ||
Subsequent Event [Line Items] | ||
AFFO per Share | $ 5.95 | |
Tranche Three | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Earnout Tranche | $ 25,000,000 | |
Tranche Three | If the Company has completed an IPO | ||
Subsequent Event [Line Items] | ||
Applicable Earnout Period | The four-year period beginning on the date that is exactly one year after the earnout period begins for the first and second tranches above. | |
Tranche Three | If the Company has completed an IPO | Subsequent Event | ||
Subsequent Event [Line Items] | ||
VWAP of a REIT Share | $ 97.50 | |
Tranche Three | If the Company has not completed an IPO | ||
Subsequent Event [Line Items] | ||
Applicable Earnout Period | The four-year period consisting of the calendar years ended December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. | |
Tranche Three | If the Company has not completed an IPO | Subsequent Event | ||
Subsequent Event [Line Items] | ||
AFFO per Share | $ 6.30 | |
Tranche Four | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Earnout Tranche | $ 25,000,000 | |
Tranche Four | If the Company has completed an IPO | ||
Subsequent Event [Line Items] | ||
Applicable Earnout Period | The four-year period beginning on the date that is exactly one year after the earnout period begins for the first and second tranches above. | |
Tranche Four | If the Company has completed an IPO | Subsequent Event | ||
Subsequent Event [Line Items] | ||
VWAP of a REIT Share | $ 100 | |
Tranche Four | If the Company has not completed an IPO | ||
Subsequent Event [Line Items] | ||
Applicable Earnout Period | The four-year period consisting of the calendar years ended December 31, 2021, December 31, 2022, December 31, 2023 and December 31, 2024. | |
Tranche Four | If the Company has not completed an IPO | Subsequent Event | ||
Subsequent Event [Line Items] | ||
AFFO per Share | $ 6.70 |