Document and Entity Information
Document and Entity Information - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Registrant Name | Phillips Edison & Company, Inc. | |
Entity Central Index Key | 0001476204 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 283.5 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Investment in real estate: | ||
Land and improvements | $ 1,595,005 | $ 1,598,063 |
Building and improvements | 3,241,923 | 3,250,420 |
In-place lease assets | 460,994 | 464,721 |
Above-market lease assets | 66,740 | 67,140 |
Total investment in real estate assets | 5,364,662 | 5,380,344 |
Accumulated depreciation and amortization | (667,037) | (565,507) |
Net investment in real estate assets | 4,697,625 | 4,814,837 |
Investment in unconsolidated joint ventures | 42,418 | 45,651 |
Total investment in real estate assets, net | 4,740,043 | 4,860,488 |
Cash and cash equivalents | 17,772 | 16,791 |
Restricted cash | 34,784 | 67,513 |
Accounts receivable - affiliates | 3,409 | 5,125 |
Corporate intangible assets, net | 4,401 | 14,054 |
Goodwill | 29,066 | 29,066 |
Other assets, net | 131,101 | 153,076 |
Real estate investment and other assets held for sale | 15,877 | 17,364 |
Total assets | 4,976,453 | 5,163,477 |
Liabilities: | ||
Debt obligations, net | 2,423,405 | 2,438,826 |
Below-market lease liabilities, net | 125,041 | 131,559 |
Earn-out liability | 32,000 | 39,500 |
Deferred income | 14,899 | 14,025 |
Accounts payable and other liabilities | 138,780 | 126,074 |
Liabilities of real estate investment held for sale | 302 | 596 |
Total liabilities | 2,734,427 | 2,750,580 |
Commitments and contingencies (Note 10) | 0 | 0 |
Equity: | ||
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 0 | 0 |
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 283,770 and 279,803 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 2,838 | 2,798 |
Additional paid-in capital | 2,718,871 | 2,674,871 |
Accumulated other comprehensive (loss) income (“AOCI”) | (20,538) | 12,362 |
Accumulated deficit | (830,358) | (692,045) |
Total stockholders’ equity | 1,870,813 | 1,997,986 |
Noncontrolling interests | 371,213 | 414,911 |
Total equity | 2,242,026 | 2,412,897 |
Total liabilities and equity | $ 4,976,453 | $ 5,163,477 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued and outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued and outstanding | 283,770,000 | 279,803,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Rental income | $ 129,030 | $ 94,410 | $ 257,890 | $ 188,296 |
Fees and management income | 3,051 | 9,137 | 6,312 | 17,849 |
Other property income | 500 | 626 | 1,148 | 1,227 |
Total revenues | 132,581 | 104,173 | 265,350 | 207,372 |
Expenses: | ||||
Property operating | 20,933 | 16,901 | 43,799 | 35,016 |
Real estate taxes | 17,930 | 13,326 | 35,278 | 26,473 |
General and administrative | 13,540 | 13,450 | 26,750 | 23,911 |
Depreciation and amortization | 59,554 | 46,385 | 120,543 | 92,812 |
Impairment of real estate assets | 25,199 | 10,939 | 38,916 | 10,939 |
Total expenses | 137,156 | 101,001 | 265,286 | 189,151 |
Other: | ||||
Interest expense, net | (25,758) | (17,051) | (50,842) | (33,830) |
(Loss) gain on disposal of property, net | (1,266) | 985 | 5,855 | 985 |
Other impairment charges | (9,661) | 0 | (9,661) | 0 |
Other (expense) income, net | (912) | (1,182) | 6,624 | (1,289) |
Net loss | (42,172) | (14,076) | (47,960) | (15,913) |
Net loss attributable to noncontrolling interests | 5,602 | 2,725 | 6,195 | 2,962 |
Net loss attributable to stockholders | $ (36,570) | $ (11,351) | $ (41,765) | $ (12,951) |
Earnings per common share: | ||||
Net loss per share attributable to stockholders - basic and diluted (see Note 13) | $ (0.13) | $ (0.06) | $ (0.15) | $ (0.07) |
Comprehensive (loss) income: | ||||
Net loss | $ (42,172) | $ (14,076) | $ (47,960) | $ (15,913) |
Other comprehensive (loss) income | ||||
Change in unrealized value on interest rate swaps | (23,645) | 4,855 | (38,006) | 18,343 |
Comprehensive (loss) income | (65,817) | (9,221) | (85,966) | 2,430 |
Net loss attributable to noncontrolling interests | 5,602 | 2,725 | 6,195 | 2,962 |
Comprehensive loss (income) attributable to noncontrolling interests | 3,168 | 1,782 | 5,106 | (584) |
Comprehensive (loss) income attributable to stockholders | $ (57,047) | $ (4,714) | $ (74,665) | $ 4,808 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | AOCI | Accumulated Deficit | Total Stockholders' Equity | Noncontrolling Interest |
Balance, shares at Dec. 31, 2017 | 185,233 | ||||||
Balance, value at Dec. 31, 2017 | $ 1,478,682 | $ 1,852 | $ 1,629,130 | $ 16,496 | $ (601,238) | $ 1,046,240 | $ 432,442 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share repurchases, shares | (4,196) | ||||||
Share repurchases, value | (46,152) | $ (42) | (46,110) | (46,152) | |||
Dividend reinvestment plan (DRIP), shares | 2,262 | ||||||
Dividend reinvestment plan (DRIP), value | 24,899 | $ 23 | 24,876 | 24,899 | |||
Change in unrealized value on interest rate swaps | 18,343 | 14,797 | 14,797 | 3,546 | |||
Common distributions declared | (62,484) | (62,484) | (62,484) | ||||
Distributions to noncontrolling interests | (14,097) | (14,097) | |||||
Share-based compensation expense | 2,019 | 719 | 719 | 1,300 | |||
Share-based awards vesting, shares | 5 | ||||||
Other | (25) | (25) | (25) | ||||
Net loss | (15,913) | (12,951) | (12,951) | (2,962) | |||
Balance, shares at Jun. 30, 2018 | 183,304 | ||||||
Balance, value at Jun. 30, 2018 | 1,385,272 | $ 1,833 | 1,608,590 | 31,293 | (676,673) | 965,043 | 420,229 |
Balance, shares at Mar. 31, 2018 | 186,027 | ||||||
Balance, value at Mar. 31, 2018 | 1,461,272 | $ 1,860 | 1,638,176 | 27,381 | (634,164) | 1,033,253 | 428,019 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share repurchases, shares | (3,830) | ||||||
Share repurchases, value | (42,137) | $ (38) | (42,099) | (42,137) | |||
Dividend reinvestment plan (DRIP), shares | 1,102 | ||||||
Dividend reinvestment plan (DRIP), value | 12,135 | $ 11 | 12,124 | 12,135 | |||
Change in unrealized value on interest rate swaps | 4,855 | 3,912 | 3,912 | 943 | |||
Common distributions declared | (31,158) | (31,158) | (31,158) | ||||
Distributions to noncontrolling interests | (7,308) | (7,308) | |||||
Share-based compensation expense | 1,701 | 401 | 401 | 1,300 | |||
Share-based awards vesting, shares | 5 | ||||||
Other | (12) | (12) | (12) | ||||
Net loss | (14,076) | (11,351) | (11,351) | (2,725) | |||
Balance, shares at Jun. 30, 2018 | 183,304 | ||||||
Balance, value at Jun. 30, 2018 | 1,385,272 | $ 1,833 | 1,608,590 | 31,293 | (676,673) | 965,043 | 420,229 |
Balance, shares at Dec. 31, 2018 | 279,803 | ||||||
Balance, value at Dec. 31, 2018 | 2,412,897 | $ 2,798 | 2,674,871 | 12,362 | (692,045) | 1,997,986 | 414,911 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of new accounting pronouncement (see Note 3) | (528) | (528) | (528) | ||||
Balance, shares at Jan. 01, 2019 | 279,803 | ||||||
Balance, value at Jan. 01, 2019 | 2,412,369 | $ 2,798 | 2,674,871 | 12,362 | (692,573) | 1,997,458 | 414,911 |
Balance, shares at Dec. 31, 2018 | 279,803 | ||||||
Balance, value at Dec. 31, 2018 | 2,412,897 | $ 2,798 | 2,674,871 | 12,362 | (692,045) | 1,997,986 | 414,911 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share repurchases, shares | (1,146) | ||||||
Share repurchases, value | (12,674) | $ (11) | (12,663) | (12,674) | |||
Dividend reinvestment plan (DRIP), shares | 3,161 | ||||||
Dividend reinvestment plan (DRIP), value | 34,958 | $ 31 | 34,927 | 34,958 | |||
Change in unrealized value on interest rate swaps | (38,006) | (32,900) | (32,900) | (5,106) | |||
Common distributions declared | (96,020) | (96,020) | (96,020) | ||||
Distributions to noncontrolling interests | (14,228) | (14,228) | |||||
Share-based compensation expense | 3,793 | 1,063 | 1,063 | 2,730 | |||
Share-based awards vesting, shares | 82 | ||||||
Share-based awards vesting, value | 0 | $ 1 | (1) | 0 | |||
Shares-based awards retained for taxes, shares | (18) | ||||||
Share-based awards retained for taxes, value | (206) | (206) | (206) | ||||
Conversion of noncontrolling interests, shares | 1,888 | ||||||
Conversion of noncontrolling interests, value | 0 | $ (19) | (20,880) | (20,899) | (20,899) | ||
Net loss | (47,960) | (41,765) | (41,765) | (6,195) | |||
Balance, shares at Jun. 30, 2019 | 283,770 | ||||||
Balance, value at Jun. 30, 2019 | 2,242,026 | $ 2,838 | 2,718,871 | (20,538) | (830,358) | 1,870,813 | 371,213 |
Balance, shares at Mar. 31, 2019 | 281,549 | ||||||
Balance, value at Mar. 31, 2019 | 2,349,185 | $ 2,815 | 2,693,946 | (61) | (745,740) | 1,950,960 | 398,225 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share repurchases, shares | (541) | ||||||
Share repurchases, value | (5,994) | $ (5) | (5,989) | (5,994) | |||
Dividend reinvestment plan (DRIP), shares | 1,558 | ||||||
Dividend reinvestment plan (DRIP), value | 17,240 | $ 15 | 17,225 | 17,240 | |||
Change in unrealized value on interest rate swaps | (23,645) | (20,477) | (20,477) | (3,168) | |||
Common distributions declared | (48,048) | (48,048) | (48,048) | ||||
Distributions to noncontrolling interests | (7,061) | (7,061) | |||||
Share-based compensation expense | 2,521 | 630 | 630 | 1,891 | |||
Share-based awards vesting, shares | 24 | ||||||
Share-based awards vesting, value | 0 | $ 1 | (1) | 0 | |||
Conversion of noncontrolling interests, shares | 1,180 | ||||||
Conversion of noncontrolling interests, value | 0 | $ (12) | (13,060) | (13,072) | (13,072) | ||
Net loss | (42,172) | (36,570) | (36,570) | (5,602) | |||
Balance, shares at Jun. 30, 2019 | 283,770 | ||||||
Balance, value at Jun. 30, 2019 | $ 2,242,026 | $ 2,838 | $ 2,718,871 | $ (20,538) | $ (830,358) | $ 1,870,813 | $ 371,213 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common distributions declared, per share | $ 0.17 | $ 0.17 | $ 0.34 | $ 0.34 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (47,960) | $ (15,913) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization of real estate assets | 117,170 | 84,216 |
Impairment of real estate assets | 38,916 | 10,939 |
Depreciation and amortization of corporate assets | 3,373 | 7,672 |
Amortization of deferred financing expenses | 2,522 | 2,401 |
Net amortization of above- and below-market leases | (2,224) | (1,990) |
Gain on disposal of property, net | 5,855 | 877 |
Change in fair value of earn-out liability | (7,500) | 1,500 |
Straight-line rent | (4,456) | (2,471) |
Share-based compensation expense | 3,793 | 1,994 |
Equity in net loss of unconsolidated joint ventures | 976 | 0 |
Other impairment charges | 9,661 | 0 |
Other | 5,211 | 229 |
Changes in operating assets and liabilities: | ||
Other assets, net | (1,553) | (702) |
Accounts payable and other liabilities | (12,005) | (9,186) |
Net cash provided by operating activities | 100,069 | 77,812 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions | (49,880) | (9,222) |
Capital expenditures | (27,221) | (17,346) |
Proceeds from sale of real estate | 47,857 | 13,300 |
Return of investment in unconsolidated joint ventures | 2,257 | 0 |
Net cash used in investing activities | (26,987) | (13,268) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net change in credit facility | (73,359) | (15,000) |
Proceeds from mortgages and loans payable | 60,000 | 65,000 |
Payments on outstanding indebtedness | (4,835) | (20,542) |
Distributions paid, net of DRIP | (60,787) | (37,819) |
Distributions to noncontrolling interests | (13,841) | (14,096) |
Repurchases of common stock | (11,802) | (44,494) |
Other | (206) | 0 |
Net cash used in financing activities | (104,830) | (66,951) |
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (31,748) | (2,407) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: | ||
Beginning of period | 84,304 | 27,445 |
End of period | 52,556 | 25,038 |
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS | ||
Cash, cash equivalents, and restricted cash at end of the period | 84,304 | 27,445 |
SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Cash paid for interest | 44,169 | 32,422 |
Accrued capital expenditures | 2,960 | 2,428 |
Change in distributions payable | 275 | (235) |
Change in distributions payable - noncontrolling interests | 387 | 2 |
Change in accrued share repurchase obligation | 872 | 1,658 |
Distributions reinvested | $ 34,958 | $ 24,899 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. ORGANIZATION Phillips Edison & Company, Inc. (“we,” the “Company,” “our,” or “us”) was formed as a Maryland corporation in October 2009. Substantially all of our business is conducted through Phillips Edison Grocery Center Operating Partnership I, L.P., (the “Operating Partnership”), a Delaware limited partnership formed in December 2009. We are a limited partner of the Operating Partnership, and our wholly owned subsidiary, Phillips Edison Grocery Center OP GP I LLC, is the sole general partner of the Operating Partnership. We invest primarily in well-occupied, grocery-anchored, neighborhood and community shopping centers that have a mix of creditworthy national, regional, and local retailers that sell necessity-based goods and services in strong demographic markets throughout the United States. In addition to managing our own properties, our third-party investment management business provides comprehensive real estate and asset management services to (i) Phillips Edison Grocery Center REIT III, Inc. (“PECO III”), a non-traded publicly registered REIT; (ii) three institutional joint ventures; and (iii) one private fund (collectively, the “Managed Funds”). In November 2018 , we completed a merger (the “Merger”) with Phillips Edison Grocery Center REIT II, Inc. (“REIT II”), a public non-traded REIT that was advised and managed by us, in a 100% stock-for-stock transaction valued at approximately $1.9 billion . As a result of the Merger, we acquired 86 properties and a 20% equity interest in Necessity Retail Partners (“NRP” or the “NRP joint venture”), a joint venture that owned 13 properties. For a more detailed discussion, see Note 4 . In November 2018 , through our direct or indirect subsidiaries, we entered into a joint venture with The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”). At formation, we contributed or sold 17 grocery-anchored shopping centers with a fair value of approximately $359 million to the new joint venture, Grocery Retail Partners I LLC (“GRP I” or the “GRP I joint venture”). GRP I also assumed a portfolio loan from us as part of this transaction. In exchange, we received a 15% ownership interest in GRP I and cash of $161.8 million . For a more detailed discussion, see Note 6 . As of June 30, 2019 , we wholly-owned fee simple interests in 298 real estate properties. In addition, we owned a 20% equity interest in NRP and a 15% interest in GRP I, as described previously. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by management. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, and other fair value measurement assessments required for the preparation of the consolidated financial statements. As a result, these estimates are subject to a degree of uncertainty. Other than those noted below, there have been no changes to our significant accounting policies during the six months ended June 30, 2019 . For a full summary of our accounting policies, refer to our 2018 Annual Report on Form 10-K filed with the SEC on March 13, 2019. Basis of Presentation and Principles of Consolidation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to our audited consolidated financial statements for the year ended December 31, 2018 , which are included in our 2018 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three and six months ended June 30, 2019 , are not necessarily indicative of the operating results expected for the full year. The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation. Leases —We are party to a number of lease agreements, both as a lessor as well as a lessee of various types of assets. Lessor —The majority of our revenue is lease revenue derived from our real estate assets, which is accounted for under Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”). We adopted the accounting guidance contained within ASC 842 on January 1, 2019, the effective date of the standard for public companies. We record lease and lease-related revenue as Rental Income on the consolidated statements of operations and comprehensive (loss) income , also referred to herein as our “consolidated statements of operations”, in accordance with ASC 842. We enter into leases primarily as a lessor as part of our real estate operations, and leases represent the majority of our revenue. We lease space in our properties generally in the form of operating leases. Our leases typically provide for reimbursements from tenants for common area maintenance, insurance, and real estate tax expenses. Common area maintenance reimbursements can be fixed, with revenue earned on a straight-line basis over the term of the lease, or variable, with revenue recognized as services are performed for which we will be reimbursed. The terms and expirations of our operating leases with our tenants are generally similar. The majority of leases for inline (non-anchor) tenants have terms that range from 2 to 10 years, and the majority of leases for anchor tenants range from 3 to 13 years. In both cases, the full term of the lease prior to our acquisition or assumption of the lease will generally be longer, however, we are measuring the commencement date for these purposes as being the date that we acquired or assumed the lease, excluding option periods. The lease agreements frequently contain fixed-price renewal options to extend the terms of leases and other terms and conditions as negotiated. In calculating the term of our leases, we consider whether these options are reasonably certain to be exercised. Our determination involves a combination of contract-, asset-, entity-, and market-based factors and involves considerable judgment. We retain substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Currently, our tenants have no options to purchase at the end of the lease term, although in a small number of leases, a tenant, usually the anchor tenant, may have the right of first refusal to purchase one of our properties if we elect to sell the center. Beginning January 1, 2019, we evaluate whether a lease is an operating, sales-type, or direct financing lease using the criteria established in ASC 842. Leases will be considered either sales-type or direct financing leases if any of the following criteria are met: • if the lease transfers ownership of the underlying asset to the lessee by the end of the term; • if the lease grants the lessee an option to purchase the underlying asset that is reasonably certain to be exercised; • if the lease term is for the major part of the remaining economic life of the underlying asset; or • if the present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. We utilize substantial judgment in determining the fair value of the leased asset, the economic life of the leased asset, and the relevant borrowing rate in performing our lease classification analysis. If none of the criteria listed above are met, the lease is classified as an operating lease. Currently all of our leases are classified as operating leases, and we expect that the majority, if not all, of our leases will continue to be classified as operating leases based upon our typical lease terms. We commence revenue recognition on our leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. The determination of when revenue recognition under a lease begins, as well as the nature of the leased asset, is dependent upon our assessment of who is the owner, for accounting purposes, of any related tenant improvements. If we are the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space, and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If we conclude that we are not the owner, for accounting purposes, of the tenant improvements (i.e., the lessee is the owner), then the leased asset is the unimproved space and any tenant allowances funded under the lease are treated as lease incentives, which reduce revenue recognized over the term of the lease. In these circumstances, we begin revenue recognition when the lessee takes possession of the unimproved space to construct their own improvements. We consider a number of different factors in evaluating whether the lessee or we are the owner of the tenant improvements for accounting purposes. These factors include: • whether the lease stipulates how and on what a tenant improvement allowance may be spent; • whether the tenant or landlord retains legal title to the improvements; • the uniqueness of the improvements; • the expected economic life of the tenant improvements relative to the length of the lease; and • who constructs or directs the construction of the improvements. The majority of our leases provide for fixed rental escalations, and we recognize rental income on a straight-line basis over the term of each lease in such instances. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of Other Assets, Net. Due to the impact of the straight-line adjustments, rental income generally will be greater than the cash collected in the early years and will be less than the cash collected in the later years of a lease. Reimbursements from tenants for recoverable real estate taxes and operating expenses that are fixed per the terms of the applicable lease agreements are recorded on a straight-line basis, as described above. The majority of our lease agreements with tenants, however, provide for tenant reimbursements that are variable depending upon the applicable expenses incurred. These reimbursements are accrued as revenue in the period in which the applicable expenses are incurred. We make certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. We do not expect the actual results to materially differ from the estimated reimbursements. Both fixed and variable tenant reimbursements are recorded as Rental Income in the consolidated statements of operations. In certain cases, the lease agreement may stipulate that a tenant make a direct payment for real estate taxes to the relevant taxing authorities. In these cases, beginning on January 1, 2019, we no longer record any revenue or expense related to these tenant expenditures. Although we expect such cases to be rare, in the event that a direct-paying tenant failed to make their required payment to the taxing authorities, we would potentially be liable for such amounts, although they are not recorded as a liability in our consolidated balance sheets per the requirements of ASC 842. We have made a policy election to exclude amounts collected from customers for all sales tax and other similar taxes from the transaction price in our recognition of lease revenue. Additionally, we record an immaterial amount of variable revenue in the form of percentage rental income. Our policy for percentage rental income is to defer recognition of contingent rental income until the specified target (i.e., breakpoint) that triggers the contingent rental income is achieved. In some instances, as part of our negotiations, we may offer lease incentives to our tenants. These incentives usually take the form of payments made to or on behalf of the tenant, and such incentives will be deducted from the lease payment and recorded on a straight-line basis over the term of the new lease. We record lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, collectability is reasonably assured and the tenant is no longer occupying the property. Upon early lease termination, we provide for losses related to unrecovered tenant-specific intangibles and other assets. We record lease termination income as Rental Income in the consolidated statements of operations. Historically, we periodically reviewed the collectability of outstanding receivables. Following the adoption of ASC 842, as of January 1, 2019, lease receivables are reviewed continually to determine whether or not it is likely that we will realize all amounts receivable for each of our tenants (i.e., whether a tenant is deemed to be a credit risk). If we determine that the tenant is not a credit risk, no reserve or reduction of revenue is recorded, except in the case of disputed charges. If we determine that the tenant is a credit risk, revenue for that tenant is recorded on a cash basis, including any amounts relating to straight-line rent receivables and/or receivables for recoverable expenses. Under ASC 842, the aforementioned adjustments as well as any reserve for disputed charges are recorded as a reduction of Rental Income rather than in Property Operating, where our reserves were previously recorded, on the consolidated statements of operations. Lessee —We enter into leases as a lessee as part of our real estate operations in the form of ground leases of land for certain properties, and as part of our corporate operations in the form of office space and office equipment leases. Ground leases typically have initial terms of 15 - 40 years with one or more options to renew for additional terms of 3 - 5 years, and may include options that grant us, as the lessee, the right to terminate the lease, without penalty, in advance of the full lease term. Our office space leases generally have terms of less than ten years with no renewal options. Office equipment leases typically have terms ranging from 3 - 5 years with options to extend the term for a year or less, but contain minimal termination rights. In calculating the term of our leases, we consider whether we are reasonably certain to exercise renewal and/or termination options. Our determination involves a combination of contract-, asset-, entity-, and market-based factors and involves considerable judgment. Currently, neither our operating leases nor our finance leases have residual value guarantees or other restrictions or covenants, but a small number may contain nonlease components which have been deemed not material. Beginning January 1, 2019, we evaluate whether a lease is a finance or operating lease using the criteria established in ASC 842. The criteria we use to determine whether a lease is a finance lease are the same as those we use to determine whether a lease is sales-type lease as a lessor. If none of the finance lease criteria is met, we classify the lease as an operating lease. We record right-of-use (“ROU”) assets and liabilities in the consolidated balance sheets based upon the terms and conditions of the applicable lease agreement. We use discount rates to calculate the present value of lease payments when determining lease classification and measuring our lease liability. We use the rate implicit in the lease as our discount rate unless that rate cannot be readily determined, in which case we consider various factors to select an appropriate discount rate. This requires the application of judgment, and we consider the length of the lease as well as the length and securitization of our outstanding debt agreements in selecting an appropriate rate. Refer to Note 3 for further detail. Revenue Recognition —In addition to our lease-related revenue, we also earn fee revenues by providing services to the Managed Funds. These fees are accounted for within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), and are recorded as Fees and Management Income on the consolidated statements of operations. We provide services to the Managed Funds, all of which are considered related parties. These services primarily include asset acquisition and disposition services, asset management, operating and leasing of properties, construction management, and other general and administrative responsibilities. These services are currently provided under various combinations of advisory agreements, property management agreements, and other service agreements (the “Management Agreements”). The wide variety of duties within the Management Agreements makes determining the performance obligations within the contracts a matter of judgment. We have concluded that each of the separately disclosed fee types in the below table represents a separate performance obligation within the Management Agreements. The table below shows the most significant of these fee types in the Management Agreements: Fee Performance Obligation Satisfied Form and Timing of Payment Description Asset Management Over time In cash and/or ownership units, monthly Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each reporting period based upon asset base and the applicable rate. Property Management Over time In cash, monthly Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each month based on a percentage of the properties’ cash receipts. Leasing Commissions Point in time (upon close of a transaction) In cash, upon completion Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location. Construction Management Point in time (upon close of a project) In cash, upon completion Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location. Acquisition/Disposition Point in time (upon close of a transaction) In cash, upon close of the transaction Revenue is recognized based on a percentage of the purchase price or disposition price of the property acquired or sold. Due to the nature of the services being provided under our Management Agreements, each performance obligation has a variable component. Therefore, when we determine the transaction price for the contracts, we are required to constrain our estimate to an amount that is not probable of significant revenue reversal. For most of these fee types, such as acquisition fees and leasing commissions, compensation only occurs if a transaction takes place and the amount of compensation is dependent upon the terms of the transaction. For our property and asset management fees, due to the large number and broad range of possible consideration amounts, we calculate the amount earned at the end of each month. In addition to the fees listed above, certain of our Management Agreements include the potential for additional revenues if certain market conditions are in place or certain events take place. We have not recognized revenue related to these fees, nor will we until it is no longer highly probable that there would be a material reversal of revenue. Additionally, effective January 1, 2018, sales or transfers to non-customers of non-financial assets or in substance non-financial assets that do not meet the definition of a business are accounted for within the scope of ASC Topic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). Generally, our sales of real estate would be considered a sale of a non-financial asset as defined by ASC 610-20. Under ASC 610-20, if we determine we do not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, we would de-recognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer. Further, we may defer a tax gain through an Internal Revenue Code (the “Code”) Section 1031 like-kind exchange by purchasing another property within a specified time period. For additional information regarding gain on sale of assets, refer to Note 5 . Income Taxes —Our consolidated financial statements include the operations of wholly owned subsidiaries that have jointly elected to be treated as Taxable REIT Subsidiaries (“TRS”) and are subject to U.S. federal, state, and local income taxes at regular corporate tax rates. During the three and six months ended June 30, 2019 and 2018 , no federal income tax expense or benefit was reported, and we recorded a full valuation allowance for our net deferred tax asset. We recognized an immaterial amount of state and local income tax expense, which is included in Other (Expense) Income, Net on the consolidated statements of operations. Recently Issued and Newly Adopted Accounting Pronouncements —The following table provides a brief description of recent accounting pronouncements that could have a material effect on our consolidated financial statements: Standard Description Date of Adoption Effect on the Consolidated Financial Statements or Other Significant Matters Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2018-19, Financial Instruments - Credit Losses (Topic 326): Codification Improvements ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. It clarifies that receivables arising from operating leases are not within the scope of Topic 326. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842. It also allows election of the fair value option on certain financial instruments. This update is effective for public entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted after December 15, 2018. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. The majority of our financial instruments result from operating leasing transactions, which are not within the scope of this standard. ASU 2018-13, Fair Value Measurement (Topic 820) This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the Financial Accounting Standards Board’s disclosure framework project. It is effective for annual and interim reporting periods beginning after December 15, 2019, but early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements, which is expected to only impact fair value measurement disclosures. ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities This ASU amends two aspects of the related-party guidance in ASC 810: (1) adds an elective private-company scope exception to the variable interest entity guidance for entities under common control and (2) indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. For entities other than private companies, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. All entities are required to apply the amendments in this update retrospectively with a cumulative effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments This ASU amends a variety of topics, improving certain aspects of previously issued ASUs, including ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendment is effective for fiscal years beginning after December 15, 2019, but early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. The following table provides a brief description of newly adopted accounting pronouncements and their effect on our consolidated financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2016-02, Leases (Topic 842) ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors ASU 2019-01, Leases (Topic 842): Codification Improvements These updates amended existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. January 1, 2019 We adopted this standard on January 1, 2019 and a modified retrospective transition approach was required. We determined that the adoption had a material impact on our consolidated financial statements; please refer to Note 3 for additional details. We elected to utilize the following optional practical expedients upon adoption: - Package of practical expedients which permits us not to reassess our prior conclusions about lease identification, lease classification, and initial direct costs. - Practical expedient permitting us not to assess whether existing, expired, or current land easements either are or contain a lease. - Practical expedient which permits us as a lessor not to separate non-lease components, such as common area maintenance reimbursements, from the associated lease component, provided that the timing and pattern of transfer of the services are substantially the same. Because of our decision to elect this practical expedient, we will no longer present our Rental Income and Tenant Recovery Income amounts separately on our consolidated statements of operations, and have reclassified Tenant Recovery Income amounts to Rental Income for all periods presented on the consolidated statements of operations. - Practical expedient which permits us not to record a right of use asset or lease liability related to leases of twelve months or fewer, but instead allows us to record expense related to any such leases as it is incurred. ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting The amendments in this update expanded the scope of Topic 718: Compensation - Stock Compensation to include share-base payment transactions for acquiring goods and services from non-employees, except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). January 1, 2019 The adoption of this standard did not have a material impact on our consolidated financial statements. 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 This update permitted use of the OIS rate based on the SOFR as a US benchmark interest rate for hedge accounting purposes under Topic 815. The purpose of this was to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes. January 1, 2019 The adoption of this standard did not have a material impact on our consolidated financial statements. Reclassifications —The following line items on our consolidated statements of operations for the three and six months ended June 30, 2018 , were reclassified to conform to current year presentation: • Tenant Recovery was combined with Rental Income, and • Other Expense, Net previously included activity from property disposals, and this is now presented as (Loss) Gain on Disposal of Property, Net. The following line items on our consolidated statements of cash flows for the six months ended June 30, 2018 , were reclassified to conform to current year presentation: • Accounts Receivable - Affiliates was combined with Other Assets, Net; • Accounts Payable - Affiliates was combined with Accounts Payable and Other Liabilities; and • Net Loss on Write-off of Unamortized Capitalized Leasing Commissions, Market Debt Adjustments, and Deferred Financing Expenses were reclassified to Other. |
Leases (Notes)
Leases (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases of Lessor Disclosure | 3. LEASES Standard Adoption —Effective January 1, 2019, we adopted ASU 2016-02, Leases . This standard was adopted in conjunction with the related updates, ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 ; ASU 2018-10, C odification Improvements to Topic 842, Leases ; ASU 2018-11, Leases (Topic 842): Targeted Improvements ; and ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors , collectively “ASC 842,” using a modified-retrospective approach, as required. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The adoption of ASC 842 resulted in a $0.5 million adjustment to the current year’s opening balance in Accumulated Deficit on the consolidated balance sheets as a result of recognizing ROU assets and lease liabilities as well as adjustments to our collectability reserve. Beginning in January 1, 2019, due to the new standard’s narrowed definition of initial direct costs, we now expense significant lease origination costs as incurred, which were previously capitalized as initial direct costs and amortized to expense over the lease term. We capitalized $6.2 million of internal costs for the year ended December 31, 2018 , some of which we will continue to capitalize in accordance with the standard. During the six months ended June 30, 2019 , the amounts capitalized were $1.9 million , compared to $2.9 million during the six months ended June 30, 2018 . Amounts that were capitalized prior to the adoption of ASC 842 will continue to be amortized over their remaining lives. Additionally, ASC 842 requires that lessors exclude from variable payments all costs paid by a lessee directly to a third party. For the year ended December 31, 2018 , $8.0 million in real estate tax payments made by tenants directly to third parties was recorded by us as both Tenant Recovery Income and Real Estate Taxes. This amount was approximately $1.3 million and $2.7 million for the three and six months ended June 30, 2018 , respectively. Beginning January 1, 2019, such amounts are no longer recognized by us. As the recorded expense was completely offset by the tenant recovery income recorded, this has no net impact to earnings. Beginning January 1, 2019, operating lease receivables are accounted for under ASC 842, which requires us to recognize changes in the collectability assessment for an operating lease as an adjustment to lease income. For the year ended December 31, 2018 , $2.9 million of expense was recorded as Property Operating on our consolidated statements of operations, which would have been recorded as a reduction to Rental Income under the new standard. For the three and six months ended June 30, 2019 , the total amount recorded as a reduction to Rental Income as a result of collectability reserves was $0.1 million and $0.7 million , respectively. Lessor —The majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations. All of our leases are currently classified as operating leases. Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of June 30, 2019 , assuming no new or renegotiated leases or option extensions on lease agreements, are as follows (in thousands): Year Amount Remaining 2019 $ 191,571 2020 360,997 2021 316,521 2022 274,713 2023 223,940 2024 and thereafter 636,772 Total $ 2,004,514 No single tenant comprised 10% or more of our aggregate annualized base rent (“ABR”) as of June 30, 2019 . As of June 30, 2019 , our real estate investments in Florida and California represented 12.3% and 10.0% of our ABR, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse economic or weather developments in the Florida and California real estate markets. Lessee —As a lessee, we recognized additional operating lease liabilities of $6.2 million with corresponding ROU assets of $6.0 million , and the difference between them was recorded as an adjustment to Accumulated Deficit on the consolidated balance sheets. On adoption of ASC 842, these asset and liability amounts represented the present value of the remaining fixed minimum rental payments under current leasing standards for existing leases, adjusted as appropriate for amounts written off in transition to the new guidance. The initial measurement of a ROU asset may differ from the initial measurement of the corresponding lease liability due to initial direct costs, prepaid lease payments, and lease incentives. Lease assets, grouped by balance sheet line where they are recorded, consisted of the following as of June 30, 2019 (in thousands): June 30, 2019 Assets Investment in Real Estate: ROU asset - operating leases $ 4,707 Less: accumulated amortization (217 ) Total in Investment in Real Estate 4,490 Other Assets: ROU asset - operating leases 2,540 ROU asset - finance leases 705 Less: accumulated amortization (595 ) Total in Other Assets 2,650 Total ROU lease assets (1) $ 7,140 Liabilities Accounts Payable and Other Liabilities: Operating lease liability $ 6,790 Debt Obligations, Net: Finance lease liability 581 Total lease liabilities (1) $ 7,371 (1) As of June 30, 2019 , the weighted average remaining lease term was approximately 2.4 years for finance leases and 18.3 years for operating leases. The weighted average discount rate was 3.54% for finance leases and 4.07% for operating leases. Below are the amounts recorded in our consolidated statements of operations related to our ROU assets and lease liabilities by lease type (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Statements of operations information: Finance lease cost: Amortization of ROU assets $ 64 $ 128 Interest on lease liabilities 4 9 Operating lease costs 449 797 Short term lease expense 376 767 Below are the amounts recorded in our consolidated statements of cash flows related to our leases by type (in thousands): Six Months Ended June 30, 2019 Statements of cash flows information: Operating cash flows used for operating leases $ (620 ) Financing cash flows used for finance leases (122 ) ROU assets obtained in exchange for new lease liabilities 1,444 Future undiscounted payments for fixed lease charges by lease type as of June 30, 2019 , are as follows (in thousands): Undiscounted Operating Finance Remaining 2019 $ 745 $ 148 2020 1,174 295 2021 723 98 2022 684 26 2023 529 20 Thereafter 6,419 15 Total undiscounted cash flows from leases 10,274 602 Total lease liabilities recorded at present value 6,790 581 Difference between undiscounted cash flows and present value of lease liabilities $ 3,484 $ 21 |
Leases of Lessee Disclosure | 3. LEASES Standard Adoption —Effective January 1, 2019, we adopted ASU 2016-02, Leases . This standard was adopted in conjunction with the related updates, ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 ; ASU 2018-10, C odification Improvements to Topic 842, Leases ; ASU 2018-11, Leases (Topic 842): Targeted Improvements ; and ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors , collectively “ASC 842,” using a modified-retrospective approach, as required. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The adoption of ASC 842 resulted in a $0.5 million adjustment to the current year’s opening balance in Accumulated Deficit on the consolidated balance sheets as a result of recognizing ROU assets and lease liabilities as well as adjustments to our collectability reserve. Beginning in January 1, 2019, due to the new standard’s narrowed definition of initial direct costs, we now expense significant lease origination costs as incurred, which were previously capitalized as initial direct costs and amortized to expense over the lease term. We capitalized $6.2 million of internal costs for the year ended December 31, 2018 , some of which we will continue to capitalize in accordance with the standard. During the six months ended June 30, 2019 , the amounts capitalized were $1.9 million , compared to $2.9 million during the six months ended June 30, 2018 . Amounts that were capitalized prior to the adoption of ASC 842 will continue to be amortized over their remaining lives. Additionally, ASC 842 requires that lessors exclude from variable payments all costs paid by a lessee directly to a third party. For the year ended December 31, 2018 , $8.0 million in real estate tax payments made by tenants directly to third parties was recorded by us as both Tenant Recovery Income and Real Estate Taxes. This amount was approximately $1.3 million and $2.7 million for the three and six months ended June 30, 2018 , respectively. Beginning January 1, 2019, such amounts are no longer recognized by us. As the recorded expense was completely offset by the tenant recovery income recorded, this has no net impact to earnings. Beginning January 1, 2019, operating lease receivables are accounted for under ASC 842, which requires us to recognize changes in the collectability assessment for an operating lease as an adjustment to lease income. For the year ended December 31, 2018 , $2.9 million of expense was recorded as Property Operating on our consolidated statements of operations, which would have been recorded as a reduction to Rental Income under the new standard. For the three and six months ended June 30, 2019 , the total amount recorded as a reduction to Rental Income as a result of collectability reserves was $0.1 million and $0.7 million , respectively. Lessor —The majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations. All of our leases are currently classified as operating leases. Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of June 30, 2019 , assuming no new or renegotiated leases or option extensions on lease agreements, are as follows (in thousands): Year Amount Remaining 2019 $ 191,571 2020 360,997 2021 316,521 2022 274,713 2023 223,940 2024 and thereafter 636,772 Total $ 2,004,514 No single tenant comprised 10% or more of our aggregate annualized base rent (“ABR”) as of June 30, 2019 . As of June 30, 2019 , our real estate investments in Florida and California represented 12.3% and 10.0% of our ABR, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse economic or weather developments in the Florida and California real estate markets. Lessee —As a lessee, we recognized additional operating lease liabilities of $6.2 million with corresponding ROU assets of $6.0 million , and the difference between them was recorded as an adjustment to Accumulated Deficit on the consolidated balance sheets. On adoption of ASC 842, these asset and liability amounts represented the present value of the remaining fixed minimum rental payments under current leasing standards for existing leases, adjusted as appropriate for amounts written off in transition to the new guidance. The initial measurement of a ROU asset may differ from the initial measurement of the corresponding lease liability due to initial direct costs, prepaid lease payments, and lease incentives. Lease assets, grouped by balance sheet line where they are recorded, consisted of the following as of June 30, 2019 (in thousands): June 30, 2019 Assets Investment in Real Estate: ROU asset - operating leases $ 4,707 Less: accumulated amortization (217 ) Total in Investment in Real Estate 4,490 Other Assets: ROU asset - operating leases 2,540 ROU asset - finance leases 705 Less: accumulated amortization (595 ) Total in Other Assets 2,650 Total ROU lease assets (1) $ 7,140 Liabilities Accounts Payable and Other Liabilities: Operating lease liability $ 6,790 Debt Obligations, Net: Finance lease liability 581 Total lease liabilities (1) $ 7,371 (1) As of June 30, 2019 , the weighted average remaining lease term was approximately 2.4 years for finance leases and 18.3 years for operating leases. The weighted average discount rate was 3.54% for finance leases and 4.07% for operating leases. Below are the amounts recorded in our consolidated statements of operations related to our ROU assets and lease liabilities by lease type (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Statements of operations information: Finance lease cost: Amortization of ROU assets $ 64 $ 128 Interest on lease liabilities 4 9 Operating lease costs 449 797 Short term lease expense 376 767 Below are the amounts recorded in our consolidated statements of cash flows related to our leases by type (in thousands): Six Months Ended June 30, 2019 Statements of cash flows information: Operating cash flows used for operating leases $ (620 ) Financing cash flows used for finance leases (122 ) ROU assets obtained in exchange for new lease liabilities 1,444 Future undiscounted payments for fixed lease charges by lease type as of June 30, 2019 , are as follows (in thousands): Undiscounted Operating Finance Remaining 2019 $ 745 $ 148 2020 1,174 295 2021 723 98 2022 684 26 2023 529 20 Thereafter 6,419 15 Total undiscounted cash flows from leases 10,274 602 Total lease liabilities recorded at present value 6,790 581 Difference between undiscounted cash flows and present value of lease liabilities $ 3,484 $ 21 |
REIT II Merger
REIT II Merger | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
REIT II Merger | 4. MERGER WITH REIT II In November 2018 , we acquired 86 properties as part of the Merger with REIT II. Under the terms of the Merger, at the time of closing, the following consideration was given in exchange for REIT II common stock (in thousands): Amount Fair value of PECO common stock issued (1) $ 1,054,745 Fair value of REIT II debt: Corporate debt 719,181 Mortgages and notes payable 102,727 Derecognition of REIT II management contracts, net (2) 30,428 Transaction costs 11,587 Total consideration and debt activity 1,918,668 Less: debt assumed 464,462 Total consideration $ 1,454,206 (1) The total number of shares of common stock issued was 95.5 million . (2) Previously a component of Other Assets, Net. To complete the Merger, we issued 2.04 shares of our common stock in exchange for each issued and outstanding share of REIT II common stock, which was equivalent to $22.54 based on our most recent estimated value per share (“EVPS”), as of the date of the transaction, of $11.05 . The exchange ratio was based on a thorough review of the relative valuation of each entity, including factoring in our investment management business as well as each company’s transaction costs. Upon completion of the Merger, our continuing stockholders owned approximately 71% of the issued and outstanding shares of the Company on a fully diluted basis (determined as if each Operating Partnership unit (“OP unit”) were exchanged for one share of our common stock) and former REIT II stockholders owned approximately 29% of the issued and outstanding shares of the Company on a fully diluted basis (determined as if each OP unit were exchanged for one share of our common stock). Assets Acquired and Liabilities Assumed —After consideration of all applicable factors pursuant to the business combination accounting rules under ASC 805, Business Combinations (“ASC 805”), including the application of a screen test to evaluate if substantially all the fair value of the acquired properties is concentrated in a single asset or group of similar assets, we concluded that the Merger qualified as an asset acquisition. Additionally, prior to the close of the Merger, all of REIT II’s real properties were managed and leased by us, under the terms of various management agreements. As we had contractual relationships with REIT II, we considered the provisions of ASC 805 regarding the settlement of pre-existing relationships. This guidance provides that a transaction that in effect settles pre-existing relationships between the acquirer and acquiree should be evaluated under the guidance set forth in ASC 805 for possible gain/loss recognition. In applying the relevant guidance to the settlement of our contractual relationships with REIT II, we noted that the provisions of the various agreements provided both parties to each of the agreements with substantial termination rights. The agreements permitted either party to terminate without cause or penalty upon prior written notice within a specified number of days’ notice. Therefore, we determined that the termination of the agreements did not result in a settlement gain or loss under the relevant guidance, and thus no gain or loss was recorded in the consolidated financial statements. Prior to the consummation of the Merger, we did, however, have an existing intangible asset related to our acquisition of certain REIT II management contracts. Because this relationship was internalized as part of the Merger, we derecognized the carrying value of these intangible assets upon completion of the Merger and have included the derecognized contract value of $30.4 million in our calculation of total consideration in the table above. As of December 31, 2018 , we capitalized approximately $11.6 million in costs related to the Merger. The following table summarizes the final purchase price allocation based on a valuation report prepared by a third-party valuation specialist that was subject to management’s review and approval (in thousands): Amount Assets: Land and improvements $ 561,100 Building and improvements 1,198,884 Intangible lease assets 197,384 Fair value of unconsolidated joint venture 16,470 Cash and cash equivalents 354 Restricted cash 5,159 Accounts receivable and other assets 33,045 Total assets acquired 2,012,396 Liabilities: Debt assumed 464,462 Intangible lease liabilities 60,421 Accounts payable and other liabilities 33,307 Total liabilities assumed 558,190 Net assets acquired $ 1,454,206 The allocation of the purchase price is based on management’s assessment, which requires a significant amount of judgment and represents management’s best estimate of the fair value as of the acquisition date. |
Real Estate Activity
Real Estate Activity | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Acquisitions | 5. REAL ESTATE ACTIVITY Acquisitions —The following table summarizes our real estate acquisitions during the six months ended June 30, 2019 and 2018 (dollars in thousands): Property Name Location Anchor Tenant Acquisition Date Purchase Price Leased % of Rentable Square Feet at Acquisition Murray Landing Outparcel Columbia, SC N/A 5/16/2019 $ 295 N/A Naperville Crossings Naperville, IL ALDI 4/26/2019 49,585 88.0% Shoppes of Lake Village Leesburg, FL Publix 2/26/2018 8,423 71.3% The fair value and weighted-average useful life at acquisition for lease intangibles acquired as part of the above acquisitions are as follows (dollars in thousands, weighted-average useful life in years): Six Months Ended June 30, 2019 June 30, 2018 Fair Value Weighted-Average Useful Life Fair Value Weighted-Average Useful Life In-place lease assets $ 4,736 11 $ 946 6 Above-market lease assets 825 8 74 3 Below-market lease liabilities (2,097 ) 16 (457 ) 16 Property Sales —The following table summarizes our property sales activity (dollars in thousands): Six Months Ended June 30, 2019 2018 Number of properties sold 6 2 Number of outparcels sold 1 — Proceeds from sale of real estate $ 47,857 $ 13,300 Gain on sale of properties, net (1) 6,627 985 (1) The gain on sale of properties, net does not include miscellaneous write-off activity, which is also recorded in Gain on Disposal of Property, Net on the consolidated statements of operations. Property Held for Sale —As of June 30, 2019 , two properties were classified as held for sale. For information regarding the disposition of held for sale property, refer to Note 16 . As of December 31, 2018 , we had two properties that were classified as held for sale, and both were sold in the first quarter of 2019 . Properties classified as held for sale as of June 30, 2019 and December 31, 2018 , were under contract to sell, with no substantive contingencies, and the prospective buyers had significant funds at risk as of the respective reporting date. A summary of assets and liabilities for the properties held for sale as of June 30, 2019 and December 31, 2018 , is below (in thousands): June 30, 2019 December 31, 2018 ASSETS Total investment in real estate assets, net $ 15,555 $ 16,889 Other assets, net 322 475 Total assets $ 15,877 $ 17,364 LIABILITIES Below-market lease liabilities, net $ 117 $ 208 Accounts payable and other liabilities 185 388 Total liabilities $ 302 $ 596 Impairment of Real Estate Assets —During the three and six months ended June 30, 2019 , we recognized impairment charges totaling $25.2 million and $38.9 million , respectively. During the three and six months ended June 30, 2018 , we recognized an impairment charge totaling $10.9 million . The impairments were associated with certain anticipated property dispositions where the net book value exceeded the estimated fair value. Our estimated fair value was based upon the contracted price to sell or the marketed price for disposition, less costs to sell. We have applied reasonable estimates and judgments in determining the amount of impairment recognized. |
Investment in Unconsolidated Jo
Investment in Unconsolidated Joint Ventures (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure | 6. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES We co-invest with third parties in joint ventures that own multiple properties. As a result of the Merger in November 2018, we acquired a 20% interest in the NRP joint venture. In November 2018, we also entered into an agreement (the “Joint Venture Agreement”) with Northwestern Mutual to create the GRP I joint venture. Under the terms of the Joint Venture Agreement, we contributed or sold all of our ownership interests in 17 grocery-anchored shopping centers to the GRP I joint venture. The following table details our investment balances in these unconsolidated joint ventures, which are accounted for using the equity method of accounting and are considered to be related parties to us as of June 30, 2019 and December 31, 2018 (dollars in thousands): June 30, 2019 December 31, 2018 NRP GRP I NRP GRP I Ownership percentage 20 % 15 % 20 % 15 % Number of properties 13 17 13 17 Investment balance $ 14,454 $ 27,964 $ 16,198 $ 29,453 Unamortized basis adjustments (1) 5,317 — 6,026 — (1) Our investment in NRP differs from our proportionate share of the entity’s underlying net assets due to basis differences initially recorded at $6.2 million arising from the Merger and recording the investment at fair value. The following table summarizes the operating information of the unconsolidated joint ventures and their impact on our consolidated statements of operations and consolidated statements of equity. We did not have any investments in unconsolidated joint ventures during the three and six months ended June 30, 2018 (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 NRP GRP I NRP GRP I Loss from unconsolidated joint ventures, net $ 114 $ 52 $ 202 $ 65 Amortization of basis adjustments (1) 354 — 709 — Distributions 551 509 833 1,424 (1) These amounts are amortized starting at the date of the Merger and recorded as an offset to earnings from the NRP joint venture in Other Expense, Net on our consolidated statements of operations. |
Other Assets, Net
Other Assets, Net | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets, Net | 7. OTHER ASSETS, NET The following is a summary of Other Assets, Net as of June 30, 2019 and December 31, 2018 , excluding amounts related to assets classified as held for sale (in thousands): June 30, 2019 December 31, 2018 Other assets, net: Deferred leasing commissions and costs $ 35,518 $ 32,957 Deferred financing expenses 13,971 13,971 Office equipment, ROU assets, and other 18,016 14,315 Total depreciable and amortizable assets 67,505 61,243 Accumulated depreciation and amortization (28,603 ) (24,382 ) Net depreciable and amortizable assets 38,902 36,861 Accounts receivable, net 50,681 56,104 Deferred rent receivable, net 25,778 21,261 Derivative asset 5,324 29,708 Investment in affiliates 700 700 Prepaids and other 9,716 8,442 Total other assets, net $ 131,101 $ 153,076 |
Debt Obligations
Debt Obligations | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt Obligations | 8. DEBT OBLIGATIONS The following is a summary of the outstanding principal balances and interest rates, which include the effect of derivative financial instruments, on our debt obligations as of June 30, 2019 and December 31, 2018 (dollars in thousands): Interest Rate (1) June 30, 2019 December 31, 2018 Revolving credit facility (2) LIBOR + 1.40% $ — $ 73,359 Term loans 2.06%-4.59% 1,918,410 1,858,410 Secured portfolio loan facility 3.52% 195,000 195,000 Mortgages 3.45%-7.91% 329,404 334,117 Finance lease liability 581 552 Assumed market debt adjustments, net (3,841 ) (4,571 ) Deferred financing expenses, net (16,149 ) (18,041 ) Total $ 2,423,405 $ 2,438,826 (1) Interest rates are as of June 30, 2019 . (2) The gross borrowings and payments under our revolving credit facility were $105.6 million and $179.0 million , respectively, during the six months ended June 30, 2019 . The gross borrowings and payments under our revolving credit facility were $151.0 million and $166.0 million , respectively, during the six months ended June 30, 2018 . In May 2019, we executed a $60 million delayed draw feature on one of our term loans. We used the proceeds from this draw to pay down our revolver balance. As of June 30, 2019 and December 31, 2018 , the weighted-average interest rate, including the effect of derivative financial instruments, for all of our debt obligations was 3.5% . The allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments and deferred financing expenses, net, as of June 30, 2019 and December 31, 2018 , is summarized below (in thousands): June 30, 2019 December 31, 2018 As to interest rate: (1) Fixed-rate debt $ 2,111,985 $ 2,216,669 Variable-rate debt 331,410 244,769 Total $ 2,443,395 $ 2,461,438 As to collateralization: Unsecured debt $ 1,918,410 $ 1,931,769 Secured debt 524,985 529,669 Total $ 2,443,395 $ 2,461,438 (1) Includes the effects of derivative financial instruments (see Notes 9 and 15 ). |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | 9. DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives —We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposure to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding, and through the use of derivative financial instruments. Specifically, we enter into interest rate swaps to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings. Cash Flow Hedges of Interest Rate Risk —Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the six months ended June 30, 2019 and 2018 , such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. Amounts reported in AOCI related to these derivatives will be reclassified to Interest Expense, Net as interest payments are made on the variable-rate debt. During the next twelve months, we estimate that an additional $3.5 million will be reclassified from AOCI as an increase to Interest Expense, Net. The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of June 30, 2019 and December 31, 2018 (notional amounts in thousands): June 30, 2019 December 31, 2018 Count 11 12 Notional amount $ 1,587,000 $ 1,687,000 Fixed LIBOR 0.7% - 2.9% 0.7% - 2.9% Maturity date 2019 - 2025 2019 - 2025 The table below details the nature of the gain or loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Amount of (loss) gain recognized in other comprehensive income on derivatives (1) $ (22,348 ) $ 5,608 $ (35,205 ) $ 19,047 Amount of gain reclassified from AOCI into interest expense (1) (1,297 ) (753 ) (2,801 ) (704 ) (1) Changes in value are solely driven from changes in LIBOR futures as a result of various economic factors. Credit-risk-related Contingent Features —We have agreements with our derivative counterparties that contain provisions where, if we default, or are capable of being declared in default, on any of our indebtedness, we could also be declared to be in default on our derivative obligations. As of June 30, 2019 , the fair value of our derivatives in a net liability position, which included accrued interest but excluded any adjustment for nonperformance risk related to these agreements, was approximately $21.0 million . As of June 30, 2019 , we had not posted any collateral related to these agreements and were not in breach of any agreement provisions. If we had breached any of these provisions, we could have been required to settle our obligations under the agreements at their termination value of $21.0 million . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. COMMITMENTS AND CONTINGENCIES Litigation —We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the resolution of such claims and litigation will not have a material adverse effect on our consolidated financial statements. Environmental Matters —In connection with the ownership and operation of real estate, we may potentially be liable for costs and damages related to environmental matters. In addition, we may own or acquire certain properties that are subject to environmental remediation. Depending on the nature of the environmental matter, the seller of the property, a tenant of the property, and/or another third party may be responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify us against future remediation costs. We also carry environmental liability insurance on our properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which we may be liable. We are not aware of any environmental matters which we believe are reasonably likely to have a material effect on our consolidated financial statements. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Equity | 11. EQUITY General —The holders of common stock are entitled to one vote per share on all matters voted on by stockholders, including one vote per nominee in the election of our board of directors (“Board”). Our charter does not provide for cumulative voting in the election of directors. On May 8, 2019, our Board increased the EVPS of our common stock to $11.10 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2019. We engaged a third-party valuation firm to provide a calculation of the range in EVPS of our common stock as of March 31, 2019, which reflected certain balance sheet assets and liabilities as of that date. Previously, on May 9, 2018, our Board increased the EVPS of our common stock to $11.05 from $11.00 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2018. Shares of our common stock are issued under the DRIP, as discussed below, at the same price as the EVPS in effect at the time of issuance. Dividend Reinvestment Plan —The DRIP allows stockholders to invest distributions in additional shares of our common stock, subject to certain limits. Stockholders who elect to participate in the DRIP may choose to invest all or a portion of their cash distributions in shares of our common stock at a price equal to our most recent estimated value per share. Stockholders who elect to participate in the DRIP, and who are subject to U.S. federal income taxation laws, will incur a tax liability on an amount equal to the fair value on the relevant distribution date of the shares of our common stock purchased with reinvested distributions, even though such stockholders have elected not to receive the distributions in cash. Share Repurchase Program (“SRP”) —Our SRP provides an opportunity for stockholders to have shares of common stock repurchased, subject to certain restrictions and limitations. The Board reserves the right, in its sole discretion, at any time and from time to time, to reject any request for repurchase. Due to the funding limits, no proceeds were available for standard share repurchases during the six months ended June 30, 2019 . Repurchase requests in connection with a stockholder’s death, “qualifying disability,” or “determination of incompetence” were completed in full. In July 2019, approximately 1.2 million shares of our common stock were repurchased under the SRP. On August 7, 2019, the Board suspended the SRP with respect to standard repurchases. We will continue to fulfill repurchases sought upon a stockholder's death, “qualifying disability,” or “determination of incompetence” in accordance with the terms of the amended SRP, adopted on August 7, 2019 and described in Part II, Item 5 of this Quarterly Report on Form 10-Q. Convertible Noncontrolling Interests —Under the terms of the Partnership Agreement, OP unit holders may elect to exchange OP units. The Operating Partnership controls the form of the redemption, and may elect to exchange OP units for shares of our common stock, provided that the OP units have been outstanding for at least one year. As the form of redemption for OP units is within our control, the OP units outstanding as of June 30, 2019 and December 31, 2018 , are classified as Noncontrolling Interests within permanent equity on our consolidated balance sheets. The distributions that have been paid on OP units are included in Distributions to Noncontrolling Interests on the consolidated statements of equity. During the six months ended June 30, 2019 , OP units were converted into shares of our common stock at a 1:1 ratio. There were approximately 42.7 million and 44.5 million OP units outstanding as of June 30, 2019 and December 31, 2018 , respectively. Nonconvertible Noncontrolling Interests —In addition to partnership units of the Operating Partnership, Noncontrolling Interests also includes a 25% ownership share of one of our subsidiaries who provides advisory services, which was not significant to our results. |
Compensation (Notes)
Compensation (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments | 12. COMPENSATION Awards to employees under our Amended and Restated 2010 Long-Term Incentive Plan are typically granted and vest during the first quarter of each year. We also grant restricted stock to our independent directors under our Amended and Restated 2010 Independent Director Stock Plan, which vest based upon the completion of a service period. Certain of our executives have made the election to receive OP units in lieu of shares of common stock upon vesting of their award grants. All share-based compensation awards, regardless of the form of payout upon vesting, are presented in the following table, which summarizes our stock-based award activity (number of units in thousands): Six Months Ended June 30, 2019 Restricted Stock Awards Performance Stock Awards (1) Phantom Stock Units Weighted-Average Grant-Date Fair Value (2) Nonvested at December 31, 2018 808 199 998 $ 10.60 Granted 464 1,275 — 11.05 Vested (196 ) — — 10.99 Forfeited (26 ) — (12 ) 10.76 Nonvested at June 30, 2019 1,050 1,474 986 $ 10.80 (1) Certain performance-based awards granted during the period contain terms which dictate that the number of award units to be issued will vary based upon actual performance compared to target performance. The number of shares deemed to be issued per this table reflect our probability-weighted estimate of the number of shares that will vest based upon current and expected company performance. The maximum number of award units to be issued under all outstanding grants, excluding phantom stock units as they are settled in cash, was 4.0 million and 1.2 million as of June 30, 2019 and December 31, 2018 , respectively. (2) On an annual basis, we engage an independent third-party valuation advisory consulting firm to estimate the EVPS of our common stock. On March 12, 2019, the Compensation Committee of the Company’s Board of Directors (the “Committee”) approved a new form of award agreement under the Company’s Amended and Restated 2010 Long-Term Incentive Plan for performance-based long term incentive units (“Performance LTIP Units”) and made one-time grants of Performance LTIP Units to certain of our executives. Any amounts earned under the Performance LTIP Unit award agreements will be issued in the form of LTIP Units, which represent OP units that are structured as a profits interest in the Operating Partnership. Dividends will accrue on the Performance LTIP Units until the measurement date, subject to a quarterly distribution of 10% of the regular quarterly distributions. During the three months ended June 30, 2019 and 2018 , the expense for all stock-based awards, including phantom stock units, was $3.3 million and $3.1 million , respectively. During the six months ended June 30, 2019 and 2018 , the expense was $5.3 million and $4.7 million , respectively. We had $22.6 million of unrecognized compensation costs related to these awards that we expect to recognize over a weighted average period of approximately 4.3 years. The fair value at the vesting date for stock-based awards that vested during the six months ended June 30, 2019 was $2.2 million . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 13. EARNINGS PER SHARE We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing Net Loss Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. OP units held by limited partners other than us are considered to be participating securities because they contain non-forfeitable rights to dividends or dividend equivalents, and have the potential to be exchanged for an equal number of shares of our common stock in accordance with the terms of the Fourth Amended and Restated Agreement of Limited Partnership of the Operating Partnership. Phantom stock units are not considered to be participating securities, as they are not convertible into common stock. The impact of OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the OP units based on dividends declared and the OP units’ participation rights in undistributed earnings. The effects of the two-class method on basic and diluted EPS were immaterial to the consolidated financial statements as of June 30, 2019 and 2018 . The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net loss attributable to stockholders - basic $ (36,570 ) $ (11,351 ) $ (41,765 ) $ (12,951 ) Net loss attributable to convertible OP units (1) (5,643 ) (2,756 ) (6,426 ) (3,090 ) Net loss - diluted $ (42,213 ) $ (14,107 ) $ (48,191 ) $ (16,041 ) Denominator: Weighted-average shares - basic 283,010 184,450 282,148 185,171 OP units (1) 43,288 44,453 43,640 44,453 Adjusted weighted-average shares - diluted 326,298 228,903 325,788 229,624 Earnings per common share: Basic and diluted $ (0.13 ) $ (0.06 ) $ (0.15 ) $ (0.07 ) (1) OP units include units that are convertible into common stock or cash, at the Operating Partnership’s option. The Operating Partnership loss attributable to these OP units, which is included as a component of Net Loss Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator as these OP units were included in the denominator for all years presented. Approximately 2.5 million and 1.0 million unvested restricted stock awards were outstanding as of June 30, 2019 and 2018 , respectively. These securities were anti-dilutive, and, as a result, their impact was excluded from the weighted-average common shares used to calculate diluted EPS. |
Revenue Recognition and Related
Revenue Recognition and Related Party Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Revenue Recognition and Related Party Revenue | 14. REVENUE RECOGNITION AND RELATED PARTY TRANSACTIONS Revenue —Summarized below are amounts included in Fee and Management Income. The revenue includes the fees and reimbursements earned by us from the Managed Funds, and other revenues that are not in the scope of ASC 606 but are included in this table for the purpose of disclosing all related party revenues (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 PECO III Joint Ventures Other Parties (1) Total PECO III Joint Ventures Other Parties (1) Total Recurring fees (2) $ 228 $ 1,352 $ 59 $ 1,639 $ 422 $ 2,681 $ 118 $ 3,221 Transactional revenue and reimbursements (3) 204 621 2 827 1,016 1,026 7 2,049 Insurance premiums 21 72 492 585 24 72 946 1,042 Total fees and management income $ 453 $ 2,045 $ 553 $ 3,051 $ 1,462 $ 3,779 $ 1,071 $ 6,312 (1) Insurance premium income from other parties includes amounts from third parties not affiliated with us in the amount of $0.5 million and $1.0 million for the three and six months ended June 30, 2019 . (2) Recurring fees include asset management fees and property management fees. (3) Transaction revenue includes items such as leasing commissions, construction management fees, and acquisition fees. Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 REIT II (1) PECO III and Joint Ventures Other Parties (2) Total REIT II (1) PECO III and Joint Ventures Other Parties (2) Total Recurring fees $ 5,189 $ 581 $ 77 $ 5,847 $ 10,333 $ 1,139 $ 152 $ 11,624 Transactional revenue and reimbursements 2,240 515 (11 ) 2,744 3,951 1,184 20 5,155 Insurance premiums 109 — 437 546 189 — 881 1,070 Total fees and management income $ 7,538 $ 1,096 $ 503 $ 9,137 $ 14,473 $ 2,323 $ 1,053 $ 17,849 (1) All amounts earned from REIT II were earned prior to the close of the Merger in November 2018, and ceased upon its acquisition by us. (2) Recurring fees and other revenue from other parties includes amounts from third parties not affiliated with us in the amount of $0.5 million and $0.9 million for the three and six months ended June 30, 2018 . Organization and Offering Costs —Under the terms of one of our Management Agreements, we have incurred organization and offering costs related to PECO III’s private placement and public offering since 2017. In June 2019, PECO III’s Board of Directors approved the suspension of the public offering, effective June 14, 2019. In connection with the suspension, we reduced our organization and offering cost receivable to the contractually obligated amount a s of June 30, 2019 , which resulted in a reduction of $2.3 million to Accounts Receivable - Affiliates on our consolidated balance sheets. As of June 30, 2019 and December 31, 2018 , we had receivables for organization and offering costs of $2.5 million and $4.5 million , respectively, which were recorded in Accounts Receivable - Affiliates on our consolidated balance sheets. In addition to organization and offering costs, we have receivables related to Management Agreements from related parties of $0.9 million and $0.6 million as of June 30, 2019 and December 31, 2018 , respectively. These amounts were recorded in Accounts Receivable - Affiliates on the consolidated balance sheets. Other Related Party Matters —Griffin Capital Company, LLC (“Griffin sponsor”) owns a 25% interest, and we own a 75% interest, in the PECO III advisor. A portion of organization and offering costs was incurred by the Griffin sponsor. In connection with the suspension of PECO III’s public offering, we have reduced our organization and offering cost payable to the contractually obligated amount as of June 30, 2019 , which resulted in a $0.4 million reduction to Accounts Payable and Other Liabilities on our consolidated balance sheets. This reduction, coupled with the $2.3 million reduction to Accounts Receivable - Affiliates, resulted in a net increase in expense of $1.9 million recorded in Other Impairment Charges in our consolidated statements of operations. As such, of the receivable we have from PECO III, $0.9 million and $1.2 million were reimbursable to the Griffin sponsor as of June 30, 2019 and December 31, 2018 , respectively, and were recorded in Accounts Payable and Other Liabilities on the consolidated balance sheets. PECO Air L.L.C. (“PECO Air”), an entity in which Mr. Edison, our Chairman, Chief Executive Officer, and President, owns a 50% interest, owns an airplane that we use for business purposes in the course of our operations. We paid approximately $0.2 million to PECO Air for use of its airplane for the three months ended June 30, 2019 and 2018 . For the six months ended June 30, 2019 and 2018 , we paid $0.5 million and $0.4 million , respectively. We are the limited guarantor for up to $200 million , capped at $50 million in most instances, of debt for our NRP joint venture. Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor. Additionally, as a part of the GRP I joint venture, GRP I assumed from us a $175 million mortgage loan for which we assumed the obligation of limited guarantor. Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor. We entered into a separate agreement with Northwestern Mutual in which we agree to apportion any potential liability under this guaranty between us and them based on our respective ownership percentages. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 15. FAIR VALUE MEASUREMENTS The following describes the methods we use to estimate the fair value of our financial and nonfinancial assets and liabilities: Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, and Accounts Payable —We consider the carrying values of these financial instruments to approximate fair value because of the short period of time between origination of the instruments and their expected realization. Real Estate Investments —The purchase prices of the investment properties, including related lease intangible assets and liabilities, were allocated at estimated fair value based on Level 3 inputs, such as discount rates, capitalization rates, comparable sales, replacement costs, income and expense growth rates, and current market rents and allowances as determined by management. Debt Obligations —We estimate the fair value of our debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by our lenders using Level 3 inputs. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assuming the debt is outstanding through maturity and considering the debt’s collateral (if applicable). We have utilized market information, as available, or present value techniques to estimate the amounts required to be disclosed. The following is a summary of borrowings as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 December 31, 2018 Fair value $ 2,467,023 $ 2,467,317 Recorded value (1) 2,439,554 2,456,867 (1) Recorded value does not include net deferred financing expenses of $16.1 million and $18.0 million as of June 30, 2019 and December 31, 2018 , respectively. Recurring and Nonrecurring Fair Value Measurements —Our earn-out liability and interest rate swaps are measured and recognized at fair value on a recurring basis, while certain assets and liabilities are measured and recognized at fair value as needed. The fair value measurements that occurred during the six months ended June 30, 2019 , and during the year ended December 31, 2018 , were as follows (in thousands): June 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Recurring Derivative assets (1) $ — $ 5,324 $ — $ — $ 29,708 $ — Derivative liability (1) — (21,007 ) — — (3,633 ) — Earn-out liability — — (32,000 ) — — (39,500 ) Nonrecurring Impaired real estate assets, net (2) — 120,510 — — 71,991 — Impaired corporate intangible asset, net — — 4,401 — — — (1) We record derivative assets in Other Assets, Net and derivative liabilities in Accounts Payable and Other Liabilities on our consolidated balance sheets. (2) The carrying value of impaired real estate assets may have subsequently increased or decreased after the measurement date due to capital improvements, depreciation, or sale. Derivative Instruments— As of June 30, 2019 and December 31, 2018 , we had interest rate swaps that fixed LIBOR on portions of our unsecured term loan facilities. All interest rate swap agreements are measured at fair value on a recurring basis. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of ASC Topic 820, Fair Value Measurement , we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although we determined that the significant inputs used to value our derivatives fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties. However, as of June 30, 2019 and December 31, 2018 , we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. Earn-out —In connection with the PELP transaction, the Company entered into a contribution agreement (the “Contribution Agreement”), dated as of May 18, 2017, with the Operating Partnership and the contributors listed therein. The Contribution Agreement established an earn-out structure by which PELP was given the opportunity to earn a maximum of 12.5 million additional OP units if certain milestones related to (i) fundraising in the investment management business, and (ii) the timing and valuation related to a liquidity event for PECO, were achieved by certain dates. The liquidity event earn-out provisions provided, in relevant part, that the contributors would have the right to receive a minimum of three million and a maximum of five million OP units as contingent consideration if a “liquidity event” (as defined in the Contribution Agreement) was successfully achieved by the Company by December 31, 2019. On March 12, 2019, the Company entered into an amendment to the Contribution Agreement (“Amendment”). Pursuant to the terms of the Amendment, the initial liquidity earn-out term has been extended by two years through December 31, 2021 and the threshold for the maximum payout of five million OP units has been raised to $11.20 per share from $10.20 per share. We estimate the fair value of this liability using weighted-average probabilities of likely outcomes. These estimates require us to make various assumptions about future share prices, timing of liquidity events, equity raise projections, and other items that are unobservable and are considered Level 3 inputs in the fair value hierarchy. In calculating the fair value of this liability, we have determined that the most likely range of potential outcomes includes a possibility of no additional OP units issued as well as up to five million out of the maximum 12.5 million units being issued. The following table presents a reconciliation of the change in the earn-out liability measured at fair value on a recurring basis using Level 3 inputs (in thousands): Earn-Out Liability Balance at December 31, 2018 $ 39,500 Change in fair value recognized in Other Income (Expense), Net (7,500 ) Balance at June 30, 2019 $ 32,000 Real Estate Asset Impairment —Our real estate assets are measured and recognized at fair value less costs to sell on a nonrecurring basis dependent upon when we determine an impairment has occurred. During the three and six months ended June 30, 2019 and 2018 , we impaired assets that were under contract or actively marketed for sale at a disposition price that was less than carrying value, or had other operational impairment indicators. The valuation technique used for the fair value of all impaired real estate assets was the expected net sales proceeds. We determined that valuation to fall under Level 2 of the fair value hierarchy. We recorded the following expense as a result of the impaired real estate assets (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Impairment of real estate assets $ 25,199 $ 10,939 $ 38,916 $ 10,939 Corporate Intangible Asset Impairment —In connection with the PELP transaction, we acquired a corporate intangible asset consisting of in-place management contracts. We evaluate our corporate intangible asset for impairment when a triggering event occurs, or circumstances change, that indicate the carrying value may not be recoverable. For the three months ended June 30, 2019, the suspension of the PECO III public offering constituted a triggering event for further review of the corporate intangible asset’s fair value compared to its carrying value. We estimate the fair value of the corporate intangible asset using a discounted cash flow model, leveraging certain Level 3 inputs. The evaluation of corporate intangible assets for potential impairment requires management to exercise significant judgment and to make certain assumptions. The assumptions utilized in the evaluation include future cash flows and a discount rate. For our most recent impairment test for the corporate intangible asset during the three months ended June 30, 2019, we used a discount rate of 19% in our discounted cash flow model. Based on this analysis, we concluded the carrying value exceeded the estimated fair value of the corporate intangible asset, and an impairment charge of $7.8 million was recorded in Other Impairment Charges on the consolidated statements of operations. As a result of this impairment, the estimated remaining future amortization of the management contracts is as follows: $0.7 million in 2019, $1.4 million in 2020, $1.4 million in 2021, and $0.9 million in 2022. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. SUBSEQUENT EVENTS Distributions —Distributions paid to stockholders and OP unit holders of record subsequent to June 30, 2019 , were as follows (in thousands, except distribution rate): Month Date of Record Distribution Rate Date Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through the DRIP Net Cash Distribution June 6/15/2019 $0.05583344 7/1/2019 $ 18,101 $ 5,571 $ 12,530 July 7/15/2019 $0.05583344 8/1/2019 18,118 5,412 12,706 In August 2019, our Board authorized distributions for September, October, and November 2019 to the stockholders of record at the close of business on September 16, 2019 , October 15, 2019 , and November 15, 2019 , respectively, equal to a monthly amount of $0.05583344 per share of common stock. The distributions for August 2019 were previously authorized by our Board and are expected to be paid on September 3, 2019. OP unit holders will receive distributions at the same rate as common stockholders. We pay distributions to stockholders and OP unit holders based on monthly record dates. We expect to pay these distributions on the first business day after the end of each month. Property Sales —Subsequent to June 30, 2019 , we sold the following real estate property, which was classified as held for sale as of June 30, 2019 (dollars in thousands): Property Name Location Anchor Tenant Square Footage Disposition Date Sale Price Winery Square Fairfield, CA Food Maxx 118,370 7/19/2019 $ 14,250 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to our audited consolidated financial statements for the year ended December 31, 2018 , which are included in our 2018 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three and six months ended June 30, 2019 , are not necessarily indicative of the operating results expected for the full year. The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation. |
Leases, Lessor | Leases —We are party to a number of lease agreements, both as a lessor as well as a lessee of various types of assets. Lessor —The majority of our revenue is lease revenue derived from our real estate assets, which is accounted for under Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”). We adopted the accounting guidance contained within ASC 842 on January 1, 2019, the effective date of the standard for public companies. We record lease and lease-related revenue as Rental Income on the consolidated statements of operations and comprehensive (loss) income , also referred to herein as our “consolidated statements of operations”, in accordance with ASC 842. We enter into leases primarily as a lessor as part of our real estate operations, and leases represent the majority of our revenue. We lease space in our properties generally in the form of operating leases. Our leases typically provide for reimbursements from tenants for common area maintenance, insurance, and real estate tax expenses. Common area maintenance reimbursements can be fixed, with revenue earned on a straight-line basis over the term of the lease, or variable, with revenue recognized as services are performed for which we will be reimbursed. The terms and expirations of our operating leases with our tenants are generally similar. The majority of leases for inline (non-anchor) tenants have terms that range from 2 to 10 years, and the majority of leases for anchor tenants range from 3 to 13 years. In both cases, the full term of the lease prior to our acquisition or assumption of the lease will generally be longer, however, we are measuring the commencement date for these purposes as being the date that we acquired or assumed the lease, excluding option periods. The lease agreements frequently contain fixed-price renewal options to extend the terms of leases and other terms and conditions as negotiated. In calculating the term of our leases, we consider whether these options are reasonably certain to be exercised. Our determination involves a combination of contract-, asset-, entity-, and market-based factors and involves considerable judgment. We retain substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Currently, our tenants have no options to purchase at the end of the lease term, although in a small number of leases, a tenant, usually the anchor tenant, may have the right of first refusal to purchase one of our properties if we elect to sell the center. Beginning January 1, 2019, we evaluate whether a lease is an operating, sales-type, or direct financing lease using the criteria established in ASC 842. Leases will be considered either sales-type or direct financing leases if any of the following criteria are met: • if the lease transfers ownership of the underlying asset to the lessee by the end of the term; • if the lease grants the lessee an option to purchase the underlying asset that is reasonably certain to be exercised; • if the lease term is for the major part of the remaining economic life of the underlying asset; or • if the present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. We utilize substantial judgment in determining the fair value of the leased asset, the economic life of the leased asset, and the relevant borrowing rate in performing our lease classification analysis. If none of the criteria listed above are met, the lease is classified as an operating lease. Currently all of our leases are classified as operating leases, and we expect that the majority, if not all, of our leases will continue to be classified as operating leases based upon our typical lease terms. We commence revenue recognition on our leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. The determination of when revenue recognition under a lease begins, as well as the nature of the leased asset, is dependent upon our assessment of who is the owner, for accounting purposes, of any related tenant improvements. If we are the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space, and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If we conclude that we are not the owner, for accounting purposes, of the tenant improvements (i.e., the lessee is the owner), then the leased asset is the unimproved space and any tenant allowances funded under the lease are treated as lease incentives, which reduce revenue recognized over the term of the lease. In these circumstances, we begin revenue recognition when the lessee takes possession of the unimproved space to construct their own improvements. We consider a number of different factors in evaluating whether the lessee or we are the owner of the tenant improvements for accounting purposes. These factors include: • whether the lease stipulates how and on what a tenant improvement allowance may be spent; • whether the tenant or landlord retains legal title to the improvements; • the uniqueness of the improvements; • the expected economic life of the tenant improvements relative to the length of the lease; and • who constructs or directs the construction of the improvements. The majority of our leases provide for fixed rental escalations, and we recognize rental income on a straight-line basis over the term of each lease in such instances. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of Other Assets, Net. Due to the impact of the straight-line adjustments, rental income generally will be greater than the cash collected in the early years and will be less than the cash collected in the later years of a lease. Reimbursements from tenants for recoverable real estate taxes and operating expenses that are fixed per the terms of the applicable lease agreements are recorded on a straight-line basis, as described above. The majority of our lease agreements with tenants, however, provide for tenant reimbursements that are variable depending upon the applicable expenses incurred. These reimbursements are accrued as revenue in the period in which the applicable expenses are incurred. We make certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. We do not expect the actual results to materially differ from the estimated reimbursements. Both fixed and variable tenant reimbursements are recorded as Rental Income in the consolidated statements of operations. In certain cases, the lease agreement may stipulate that a tenant make a direct payment for real estate taxes to the relevant taxing authorities. In these cases, beginning on January 1, 2019, we no longer record any revenue or expense related to these tenant expenditures. Although we expect such cases to be rare, in the event that a direct-paying tenant failed to make their required payment to the taxing authorities, we would potentially be liable for such amounts, although they are not recorded as a liability in our consolidated balance sheets per the requirements of ASC 842. We have made a policy election to exclude amounts collected from customers for all sales tax and other similar taxes from the transaction price in our recognition of lease revenue. Additionally, we record an immaterial amount of variable revenue in the form of percentage rental income. Our policy for percentage rental income is to defer recognition of contingent rental income until the specified target (i.e., breakpoint) that triggers the contingent rental income is achieved. In some instances, as part of our negotiations, we may offer lease incentives to our tenants. These incentives usually take the form of payments made to or on behalf of the tenant, and such incentives will be deducted from the lease payment and recorded on a straight-line basis over the term of the new lease. We record lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, collectability is reasonably assured and the tenant is no longer occupying the property. Upon early lease termination, we provide for losses related to unrecovered tenant-specific intangibles and other assets. We record lease termination income as Rental Income in the consolidated statements of operations. Historically, we periodically reviewed the collectability of outstanding receivables. Following the adoption of ASC 842, as of January 1, 2019, lease receivables are reviewed continually to determine whether or not it is likely that we will realize all amounts receivable for each of our tenants (i.e., whether a tenant is deemed to be a credit risk). If we determine that the tenant is not a credit risk, no reserve or reduction of revenue is recorded, except in the case of disputed charges. If we determine that the tenant is a credit risk, revenue for that tenant is recorded on a cash basis, including any amounts relating to straight-line rent receivables and/or receivables for recoverable expenses. Under ASC 842, the aforementioned adjustments as well as any reserve for disputed charges are recorded as a reduction of Rental Income rather than in Property Operating, where our reserves were previously recorded, on the consolidated statements of operations. |
Leases, Lessee | Lessee —We enter into leases as a lessee as part of our real estate operations in the form of ground leases of land for certain properties, and as part of our corporate operations in the form of office space and office equipment leases. Ground leases typically have initial terms of 15 - 40 years with one or more options to renew for additional terms of 3 - 5 years, and may include options that grant us, as the lessee, the right to terminate the lease, without penalty, in advance of the full lease term. Our office space leases generally have terms of less than ten years with no renewal options. Office equipment leases typically have terms ranging from 3 - 5 years with options to extend the term for a year or less, but contain minimal termination rights. In calculating the term of our leases, we consider whether we are reasonably certain to exercise renewal and/or termination options. Our determination involves a combination of contract-, asset-, entity-, and market-based factors and involves considerable judgment. Currently, neither our operating leases nor our finance leases have residual value guarantees or other restrictions or covenants, but a small number may contain nonlease components which have been deemed not material. Beginning January 1, 2019, we evaluate whether a lease is a finance or operating lease using the criteria established in ASC 842. The criteria we use to determine whether a lease is a finance lease are the same as those we use to determine whether a lease is sales-type lease as a lessor. If none of the finance lease criteria is met, we classify the lease as an operating lease. We record right-of-use (“ROU”) assets and liabilities in the consolidated balance sheets based upon the terms and conditions of the applicable lease agreement. We use discount rates to calculate the present value of lease payments when determining lease classification and measuring our lease liability. We use the rate implicit in the lease as our discount rate unless that rate cannot be readily determined, in which case we consider various factors to select an appropriate discount rate. This requires the application of judgment, and we consider the length of the lease as well as the length and securitization of our outstanding debt agreements in selecting an appropriate rate. |
Revenue Recognition | Revenue Recognition —In addition to our lease-related revenue, we also earn fee revenues by providing services to the Managed Funds. These fees are accounted for within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), and are recorded as Fees and Management Income on the consolidated statements of operations. We provide services to the Managed Funds, all of which are considered related parties. These services primarily include asset acquisition and disposition services, asset management, operating and leasing of properties, construction management, and other general and administrative responsibilities. These services are currently provided under various combinations of advisory agreements, property management agreements, and other service agreements (the “Management Agreements”). The wide variety of duties within the Management Agreements makes determining the performance obligations within the contracts a matter of judgment. We have concluded that each of the separately disclosed fee types in the below table represents a separate performance obligation within the Management Agreements. The table below shows the most significant of these fee types in the Management Agreements: Fee Performance Obligation Satisfied Form and Timing of Payment Description Asset Management Over time In cash and/or ownership units, monthly Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each reporting period based upon asset base and the applicable rate. Property Management Over time In cash, monthly Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each month based on a percentage of the properties’ cash receipts. Leasing Commissions Point in time (upon close of a transaction) In cash, upon completion Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location. Construction Management Point in time (upon close of a project) In cash, upon completion Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location. Acquisition/Disposition Point in time (upon close of a transaction) In cash, upon close of the transaction Revenue is recognized based on a percentage of the purchase price or disposition price of the property acquired or sold. Due to the nature of the services being provided under our Management Agreements, each performance obligation has a variable component. Therefore, when we determine the transaction price for the contracts, we are required to constrain our estimate to an amount that is not probable of significant revenue reversal. For most of these fee types, such as acquisition fees and leasing commissions, compensation only occurs if a transaction takes place and the amount of compensation is dependent upon the terms of the transaction. For our property and asset management fees, due to the large number and broad range of possible consideration amounts, we calculate the amount earned at the end of each month. In addition to the fees listed above, certain of our Management Agreements include the potential for additional revenues if certain market conditions are in place or certain events take place. We have not recognized revenue related to these fees, nor will we until it is no longer highly probable that there would be a material reversal of revenue. Additionally, effective January 1, 2018, sales or transfers to non-customers of non-financial assets or in substance non-financial assets that do not meet the definition of a business are accounted for within the scope of ASC Topic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). Generally, our sales of real estate would be considered a sale of a non-financial asset as defined by ASC 610-20. Under ASC 610-20, if we determine we do not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, we would de-recognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer. Further, we may defer a tax gain through an Internal Revenue Code (the “Code”) Section 1031 like-kind exchange by purchasing another property within a specified time period. For additional information regarding gain on sale of assets, refer to Note 5 . |
Income Tax | Income Taxes —Our consolidated financial statements include the operations of wholly owned subsidiaries that have jointly elected to be treated as Taxable REIT Subsidiaries (“TRS”) and are subject to U.S. federal, state, and local income taxes at regular corporate tax rates. |
Newly Adopted and Recently Issued Accounting Pronouncements | The following table provides a brief description of recent accounting pronouncements that could have a material effect on our consolidated financial statements: Standard Description Date of Adoption Effect on the Consolidated Financial Statements or Other Significant Matters Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2018-19, Financial Instruments - Credit Losses (Topic 326): Codification Improvements ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. It clarifies that receivables arising from operating leases are not within the scope of Topic 326. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842. It also allows election of the fair value option on certain financial instruments. This update is effective for public entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted after December 15, 2018. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. The majority of our financial instruments result from operating leasing transactions, which are not within the scope of this standard. ASU 2018-13, Fair Value Measurement (Topic 820) This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the Financial Accounting Standards Board’s disclosure framework project. It is effective for annual and interim reporting periods beginning after December 15, 2019, but early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements, which is expected to only impact fair value measurement disclosures. ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities This ASU amends two aspects of the related-party guidance in ASC 810: (1) adds an elective private-company scope exception to the variable interest entity guidance for entities under common control and (2) indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. For entities other than private companies, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. All entities are required to apply the amendments in this update retrospectively with a cumulative effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments This ASU amends a variety of topics, improving certain aspects of previously issued ASUs, including ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendment is effective for fiscal years beginning after December 15, 2019, but early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. The following table provides a brief description of newly adopted accounting pronouncements and their effect on our consolidated financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2016-02, Leases (Topic 842) ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors ASU 2019-01, Leases (Topic 842): Codification Improvements These updates amended existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. January 1, 2019 We adopted this standard on January 1, 2019 and a modified retrospective transition approach was required. We determined that the adoption had a material impact on our consolidated financial statements; please refer to Note 3 for additional details. We elected to utilize the following optional practical expedients upon adoption: - Package of practical expedients which permits us not to reassess our prior conclusions about lease identification, lease classification, and initial direct costs. - Practical expedient permitting us not to assess whether existing, expired, or current land easements either are or contain a lease. - Practical expedient which permits us as a lessor not to separate non-lease components, such as common area maintenance reimbursements, from the associated lease component, provided that the timing and pattern of transfer of the services are substantially the same. Because of our decision to elect this practical expedient, we will no longer present our Rental Income and Tenant Recovery Income amounts separately on our consolidated statements of operations, and have reclassified Tenant Recovery Income amounts to Rental Income for all periods presented on the consolidated statements of operations. - Practical expedient which permits us not to record a right of use asset or lease liability related to leases of twelve months or fewer, but instead allows us to record expense related to any such leases as it is incurred. ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting The amendments in this update expanded the scope of Topic 718: Compensation - Stock Compensation to include share-base payment transactions for acquiring goods and services from non-employees, except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). January 1, 2019 The adoption of this standard did not have a material impact on our consolidated financial statements. 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 This update permitted use of the OIS rate based on the SOFR as a US benchmark interest rate for hedge accounting purposes under Topic 815. The purpose of this was to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes. January 1, 2019 The adoption of this standard did not have a material impact on our consolidated financial statements. |
Reclassifications | The following line items on our consolidated statements of operations for the three and six months ended June 30, 2018 , were reclassified to conform to current year presentation: • Tenant Recovery was combined with Rental Income, and • Other Expense, Net previously included activity from property disposals, and this is now presented as (Loss) Gain on Disposal of Property, Net. The following line items on our consolidated statements of cash flows for the six months ended June 30, 2018 , were reclassified to conform to current year presentation: • Accounts Receivable - Affiliates was combined with Other Assets, Net; • Accounts Payable - Affiliates was combined with Accounts Payable and Other Liabilities; and • Net Loss on Write-off of Unamortized Capitalized Leasing Commissions, Market Debt Adjustments, and Deferred Financing Expenses were reclassified to Other. |
Earnings Per Share Earnings Per
Earnings Per Share Earnings Per Share (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Policy | We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing Net Loss Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Revenue Recognition, Multiple-deliverable Arrangements | The table below shows the most significant of these fee types in the Management Agreements: Fee Performance Obligation Satisfied Form and Timing of Payment Description Asset Management Over time In cash and/or ownership units, monthly Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each reporting period based upon asset base and the applicable rate. Property Management Over time In cash, monthly Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each month based on a percentage of the properties’ cash receipts. Leasing Commissions Point in time (upon close of a transaction) In cash, upon completion Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location. Construction Management Point in time (upon close of a project) In cash, upon completion Revenue is recognized in an amount equal to the fees charged by unaffiliated persons rendering comparable services in the same geographic location. Acquisition/Disposition Point in time (upon close of a transaction) In cash, upon close of the transaction Revenue is recognized based on a percentage of the purchase price or disposition price of the property acquired or sold. |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table provides a brief description of recent accounting pronouncements that could have a material effect on our consolidated financial statements: Standard Description Date of Adoption Effect on the Consolidated Financial Statements or Other Significant Matters Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2018-19, Financial Instruments - Credit Losses (Topic 326): Codification Improvements ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. It clarifies that receivables arising from operating leases are not within the scope of Topic 326. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842. It also allows election of the fair value option on certain financial instruments. This update is effective for public entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted after December 15, 2018. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. The majority of our financial instruments result from operating leasing transactions, which are not within the scope of this standard. ASU 2018-13, Fair Value Measurement (Topic 820) This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the Financial Accounting Standards Board’s disclosure framework project. It is effective for annual and interim reporting periods beginning after December 15, 2019, but early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements, which is expected to only impact fair value measurement disclosures. ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities This ASU amends two aspects of the related-party guidance in ASC 810: (1) adds an elective private-company scope exception to the variable interest entity guidance for entities under common control and (2) indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. For entities other than private companies, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. All entities are required to apply the amendments in this update retrospectively with a cumulative effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments This ASU amends a variety of topics, improving certain aspects of previously issued ASUs, including ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendment is effective for fiscal years beginning after December 15, 2019, but early adoption is permitted. January 1, 2020 We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements. The following table provides a brief description of newly adopted accounting pronouncements and their effect on our consolidated financial statements: Standard Description Date of Adoption Effect on the Financial Statements or Other Significant Matters ASU 2016-02, Leases (Topic 842) ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors ASU 2019-01, Leases (Topic 842): Codification Improvements These updates amended existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. January 1, 2019 We adopted this standard on January 1, 2019 and a modified retrospective transition approach was required. We determined that the adoption had a material impact on our consolidated financial statements; please refer to Note 3 for additional details. We elected to utilize the following optional practical expedients upon adoption: - Package of practical expedients which permits us not to reassess our prior conclusions about lease identification, lease classification, and initial direct costs. - Practical expedient permitting us not to assess whether existing, expired, or current land easements either are or contain a lease. - Practical expedient which permits us as a lessor not to separate non-lease components, such as common area maintenance reimbursements, from the associated lease component, provided that the timing and pattern of transfer of the services are substantially the same. Because of our decision to elect this practical expedient, we will no longer present our Rental Income and Tenant Recovery Income amounts separately on our consolidated statements of operations, and have reclassified Tenant Recovery Income amounts to Rental Income for all periods presented on the consolidated statements of operations. - Practical expedient which permits us not to record a right of use asset or lease liability related to leases of twelve months or fewer, but instead allows us to record expense related to any such leases as it is incurred. ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting The amendments in this update expanded the scope of Topic 718: Compensation - Stock Compensation to include share-base payment transactions for acquiring goods and services from non-employees, except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). January 1, 2019 The adoption of this standard did not have a material impact on our consolidated financial statements. 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 This update permitted use of the OIS rate based on the SOFR as a US benchmark interest rate for hedge accounting purposes under Topic 815. The purpose of this was to facilitate the LIBOR to SOFR transition and provide sufficient lead time for entities to prepare for changes to interest rate risk hedging strategies for both risk management and hedge accounting purposes. January 1, 2019 The adoption of this standard did not have a material impact on our consolidated financial statements. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lessor - Operating Lease, Payments to be Received, Maturity | Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of June 30, 2019 , assuming no new or renegotiated leases or option extensions on lease agreements, are as follows (in thousands): Year Amount Remaining 2019 $ 191,571 2020 360,997 2021 316,521 2022 274,713 2023 223,940 2024 and thereafter 636,772 Total $ 2,004,514 |
Schedule of Capital Leased Assets | Lease assets, grouped by balance sheet line where they are recorded, consisted of the following as of June 30, 2019 (in thousands): June 30, 2019 Assets Investment in Real Estate: ROU asset - operating leases $ 4,707 Less: accumulated amortization (217 ) Total in Investment in Real Estate 4,490 Other Assets: ROU asset - operating leases 2,540 ROU asset - finance leases 705 Less: accumulated amortization (595 ) Total in Other Assets 2,650 Total ROU lease assets (1) $ 7,140 Liabilities Accounts Payable and Other Liabilities: Operating lease liability $ 6,790 Debt Obligations, Net: Finance lease liability 581 Total lease liabilities (1) $ 7,371 (1) As of June 30, 2019 , the weighted average remaining lease term was approximately 2.4 years for finance leases and 18.3 years for operating leases. The weighted average discount rate was 3.54% for finance leases and 4.07% for operating leases. |
Schedule of Right-of-Use Lease Cost and Amortization | Below are the amounts recorded in our consolidated statements of operations related to our ROU assets and lease liabilities by lease type (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Statements of operations information: Finance lease cost: Amortization of ROU assets $ 64 $ 128 Interest on lease liabilities 4 9 Operating lease costs 449 797 Short term lease expense 376 767 |
Schedule of Cash Flow, Leases | Below are the amounts recorded in our consolidated statements of cash flows related to our leases by type (in thousands): Six Months Ended June 30, 2019 Statements of cash flows information: Operating cash flows used for operating leases $ (620 ) Financing cash flows used for finance leases (122 ) ROU assets obtained in exchange for new lease liabilities 1,444 |
Lessee, Operating Lease Liability, Maturity | Future undiscounted payments for fixed lease charges by lease type as of June 30, 2019 , are as follows (in thousands): Undiscounted Operating Finance Remaining 2019 $ 745 $ 148 2020 1,174 295 2021 723 98 2022 684 26 2023 529 20 Thereafter 6,419 15 Total undiscounted cash flows from leases 10,274 602 Total lease liabilities recorded at present value 6,790 581 Difference between undiscounted cash flows and present value of lease liabilities $ 3,484 $ 21 |
Lessee, Finance Lease, Liability, Maturity | Future undiscounted payments for fixed lease charges by lease type as of June 30, 2019 , are as follows (in thousands): Undiscounted Operating Finance Remaining 2019 $ 745 $ 148 2020 1,174 295 2021 723 98 2022 684 26 2023 529 20 Thereafter 6,419 15 Total undiscounted cash flows from leases 10,274 602 Total lease liabilities recorded at present value 6,790 581 Difference between undiscounted cash flows and present value of lease liabilities $ 3,484 $ 21 |
REIT II Merger (Tables)
REIT II Merger (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | Under the terms of the Merger, at the time of closing, the following consideration was given in exchange for REIT II common stock (in thousands): Amount Fair value of PECO common stock issued (1) $ 1,054,745 Fair value of REIT II debt: Corporate debt 719,181 Mortgages and notes payable 102,727 Derecognition of REIT II management contracts, net (2) 30,428 Transaction costs 11,587 Total consideration and debt activity 1,918,668 Less: debt assumed 464,462 Total consideration $ 1,454,206 (1) The total number of shares of common stock issued was 95.5 million . (2) Previously a component of Other Assets, Net. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final purchase price allocation based on a valuation report prepared by a third-party valuation specialist that was subject to management’s review and approval (in thousands): Amount Assets: Land and improvements $ 561,100 Building and improvements 1,198,884 Intangible lease assets 197,384 Fair value of unconsolidated joint venture 16,470 Cash and cash equivalents 354 Restricted cash 5,159 Accounts receivable and other assets 33,045 Total assets acquired 2,012,396 Liabilities: Debt assumed 464,462 Intangible lease liabilities 60,421 Accounts payable and other liabilities 33,307 Total liabilities assumed 558,190 Net assets acquired $ 1,454,206 The following table summarizes our real estate acquisitions during the six months ended June 30, 2019 and 2018 (dollars in thousands): Property Name Location Anchor Tenant Acquisition Date Purchase Price Leased % of Rentable Square Feet at Acquisition Murray Landing Outparcel Columbia, SC N/A 5/16/2019 $ 295 N/A Naperville Crossings Naperville, IL ALDI 4/26/2019 49,585 88.0% Shoppes of Lake Village Leesburg, FL Publix 2/26/2018 8,423 71.3% |
Real Estate Activity (Tables)
Real Estate Activity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate Investments, Net [Abstract] | |
Schedule of Real Estate Acquisition | The following table summarizes the final purchase price allocation based on a valuation report prepared by a third-party valuation specialist that was subject to management’s review and approval (in thousands): Amount Assets: Land and improvements $ 561,100 Building and improvements 1,198,884 Intangible lease assets 197,384 Fair value of unconsolidated joint venture 16,470 Cash and cash equivalents 354 Restricted cash 5,159 Accounts receivable and other assets 33,045 Total assets acquired 2,012,396 Liabilities: Debt assumed 464,462 Intangible lease liabilities 60,421 Accounts payable and other liabilities 33,307 Total liabilities assumed 558,190 Net assets acquired $ 1,454,206 The following table summarizes our real estate acquisitions during the six months ended June 30, 2019 and 2018 (dollars in thousands): Property Name Location Anchor Tenant Acquisition Date Purchase Price Leased % of Rentable Square Feet at Acquisition Murray Landing Outparcel Columbia, SC N/A 5/16/2019 $ 295 N/A Naperville Crossings Naperville, IL ALDI 4/26/2019 49,585 88.0% Shoppes of Lake Village Leesburg, FL Publix 2/26/2018 8,423 71.3% |
Schedule of Acquired Intangible Leases | The fair value and weighted-average useful life at acquisition for lease intangibles acquired as part of the above acquisitions are as follows (dollars in thousands, weighted-average useful life in years): Six Months Ended June 30, 2019 June 30, 2018 Fair Value Weighted-Average Useful Life Fair Value Weighted-Average Useful Life In-place lease assets $ 4,736 11 $ 946 6 Above-market lease assets 825 8 74 3 Below-market lease liabilities (2,097 ) 16 (457 ) 16 |
Schedule of Real Estate Disposal | The following table summarizes our property sales activity (dollars in thousands): Six Months Ended June 30, 2019 2018 Number of properties sold 6 2 Number of outparcels sold 1 — Proceeds from sale of real estate $ 47,857 $ 13,300 Gain on sale of properties, net (1) 6,627 985 (1) The gain on sale of properties, net does not include miscellaneous write-off activity, which is also recorded in Gain on Disposal of Property, Net on the consolidated statements of operations. |
Schedule of Long Lived Assets Held-for-sale | summary of assets and liabilities for the properties held for sale as of June 30, 2019 and December 31, 2018 , is below (in thousands): June 30, 2019 December 31, 2018 ASSETS Total investment in real estate assets, net $ 15,555 $ 16,889 Other assets, net 322 475 Total assets $ 15,877 $ 17,364 LIABILITIES Below-market lease liabilities, net $ 117 $ 208 Accounts payable and other liabilities 185 388 Total liabilities $ 302 $ 596 |
Investment in Unconsolidated _2
Investment in Unconsolidated Joint Ventures (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments in Unconsolidated Joint Ventures | The following table details our investment balances in these unconsolidated joint ventures, which are accounted for using the equity method of accounting and are considered to be related parties to us as of June 30, 2019 and December 31, 2018 (dollars in thousands): June 30, 2019 December 31, 2018 NRP GRP I NRP GRP I Ownership percentage 20 % 15 % 20 % 15 % Number of properties 13 17 13 17 Investment balance $ 14,454 $ 27,964 $ 16,198 $ 29,453 Unamortized basis adjustments (1) 5,317 — 6,026 — (1) Our investment in NRP differs from our proportionate share of the entity’s underlying net assets due to basis differences initially recorded at $6.2 million arising from the Merger and recording the investment at fair value. The following table summarizes the operating information of the unconsolidated joint ventures and their impact on our consolidated statements of operations and consolidated statements of equity. We did not have any investments in unconsolidated joint ventures during the three and six months ended June 30, 2018 (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 NRP GRP I NRP GRP I Loss from unconsolidated joint ventures, net $ 114 $ 52 $ 202 $ 65 Amortization of basis adjustments (1) 354 — 709 — Distributions 551 509 833 1,424 (1) These amounts are amortized starting at the date of the Merger and recorded as an offset to earnings from the NRP joint venture in Other Expense, Net on our consolidated statements of operations. |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | The following is a summary of Other Assets, Net as of June 30, 2019 and December 31, 2018 , excluding amounts related to assets classified as held for sale (in thousands): June 30, 2019 December 31, 2018 Other assets, net: Deferred leasing commissions and costs $ 35,518 $ 32,957 Deferred financing expenses 13,971 13,971 Office equipment, ROU assets, and other 18,016 14,315 Total depreciable and amortizable assets 67,505 61,243 Accumulated depreciation and amortization (28,603 ) (24,382 ) Net depreciable and amortizable assets 38,902 36,861 Accounts receivable, net 50,681 56,104 Deferred rent receivable, net 25,778 21,261 Derivative asset 5,324 29,708 Investment in affiliates 700 700 Prepaids and other 9,716 8,442 Total other assets, net $ 131,101 $ 153,076 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | The following is a summary of the outstanding principal balances and interest rates, which include the effect of derivative financial instruments, on our debt obligations as of June 30, 2019 and December 31, 2018 (dollars in thousands): Interest Rate (1) June 30, 2019 December 31, 2018 Revolving credit facility (2) LIBOR + 1.40% $ — $ 73,359 Term loans 2.06%-4.59% 1,918,410 1,858,410 Secured portfolio loan facility 3.52% 195,000 195,000 Mortgages 3.45%-7.91% 329,404 334,117 Finance lease liability 581 552 Assumed market debt adjustments, net (3,841 ) (4,571 ) Deferred financing expenses, net (16,149 ) (18,041 ) Total $ 2,423,405 $ 2,438,826 (1) Interest rates are as of June 30, 2019 . (2) The gross borrowings and payments under our revolving credit facility were $105.6 million and $179.0 million , respectively, during the six months ended June 30, 2019 . The gross borrowings and payments under our revolving credit facility were $151.0 million and $166.0 million , respectively, during the six months ended June 30, 2018 . |
Schedule of Long-term Debt Instruments, Alternative | The allocation of total debt between fixed-rate and variable-rate as well as between secured and unsecured, excluding market debt adjustments and deferred financing expenses, net, as of June 30, 2019 and December 31, 2018 , is summarized below (in thousands): June 30, 2019 December 31, 2018 As to interest rate: (1) Fixed-rate debt $ 2,111,985 $ 2,216,669 Variable-rate debt 331,410 244,769 Total $ 2,443,395 $ 2,461,438 As to collateralization: Unsecured debt $ 1,918,410 $ 1,931,769 Secured debt 524,985 529,669 Total $ 2,443,395 $ 2,461,438 (1) Includes the effects of derivative financial instruments (see Notes 9 and 15 ). |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Derivatives | The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of June 30, 2019 and December 31, 2018 (notional amounts in thousands): June 30, 2019 December 31, 2018 Count 11 12 Notional amount $ 1,587,000 $ 1,687,000 Fixed LIBOR 0.7% - 2.9% 0.7% - 2.9% Maturity date 2019 - 2025 2019 - 2025 |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The table below details the nature of the gain or loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Amount of (loss) gain recognized in other comprehensive income on derivatives (1) $ (22,348 ) $ 5,608 $ (35,205 ) $ 19,047 Amount of gain reclassified from AOCI into interest expense (1) (1,297 ) (753 ) (2,801 ) (704 ) (1) Changes in value are solely driven from changes in LIBOR futures as a result of various economic factors. |
Compensation (Tables)
Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock Units, Roll Forward | All share-based compensation awards, regardless of the form of payout upon vesting, are presented in the following table, which summarizes our stock-based award activity (number of units in thousands): Six Months Ended June 30, 2019 Restricted Stock Awards Performance Stock Awards (1) Phantom Stock Units Weighted-Average Grant-Date Fair Value (2) Nonvested at December 31, 2018 808 199 998 $ 10.60 Granted 464 1,275 — 11.05 Vested (196 ) — — 10.99 Forfeited (26 ) — (12 ) 10.76 Nonvested at June 30, 2019 1,050 1,474 986 $ 10.80 (1) Certain performance-based awards granted during the period contain terms which dictate that the number of award units to be issued will vary based upon actual performance compared to target performance. The number of shares deemed to be issued per this table reflect our probability-weighted estimate of the number of shares that will vest based upon current and expected company performance. The maximum number of award units to be issued under all outstanding grants, excluding phantom stock units as they are settled in cash, was 4.0 million and 1.2 million as of June 30, 2019 and December 31, 2018 , respectively. (2) On an annual basis, we engage an independent third-party valuation advisory consulting firm to estimate the EVPS of our common stock. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations (in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net loss attributable to stockholders - basic $ (36,570 ) $ (11,351 ) $ (41,765 ) $ (12,951 ) Net loss attributable to convertible OP units (1) (5,643 ) (2,756 ) (6,426 ) (3,090 ) Net loss - diluted $ (42,213 ) $ (14,107 ) $ (48,191 ) $ (16,041 ) Denominator: Weighted-average shares - basic 283,010 184,450 282,148 185,171 OP units (1) 43,288 44,453 43,640 44,453 Adjusted weighted-average shares - diluted 326,298 228,903 325,788 229,624 Earnings per common share: Basic and diluted $ (0.13 ) $ (0.06 ) $ (0.15 ) $ (0.07 ) (1) OP units include units that are convertible into common stock or cash, at the Operating Partnership’s option. The Operating Partnership loss attributable to these OP units, which is included as a component of Net Loss Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator as these OP units were included in the denominator for all years presented. |
Revenue Recognition and Relat_2
Revenue Recognition and Related Party Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Fees Earned By and Expenses Reimbursable from Managed Funds | Summarized below are amounts included in Fee and Management Income. The revenue includes the fees and reimbursements earned by us from the Managed Funds, and other revenues that are not in the scope of ASC 606 but are included in this table for the purpose of disclosing all related party revenues (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 PECO III Joint Ventures Other Parties (1) Total PECO III Joint Ventures Other Parties (1) Total Recurring fees (2) $ 228 $ 1,352 $ 59 $ 1,639 $ 422 $ 2,681 $ 118 $ 3,221 Transactional revenue and reimbursements (3) 204 621 2 827 1,016 1,026 7 2,049 Insurance premiums 21 72 492 585 24 72 946 1,042 Total fees and management income $ 453 $ 2,045 $ 553 $ 3,051 $ 1,462 $ 3,779 $ 1,071 $ 6,312 (1) Insurance premium income from other parties includes amounts from third parties not affiliated with us in the amount of $0.5 million and $1.0 million for the three and six months ended June 30, 2019 . (2) Recurring fees include asset management fees and property management fees. (3) Transaction revenue includes items such as leasing commissions, construction management fees, and acquisition fees. Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 REIT II (1) PECO III and Joint Ventures Other Parties (2) Total REIT II (1) PECO III and Joint Ventures Other Parties (2) Total Recurring fees $ 5,189 $ 581 $ 77 $ 5,847 $ 10,333 $ 1,139 $ 152 $ 11,624 Transactional revenue and reimbursements 2,240 515 (11 ) 2,744 3,951 1,184 20 5,155 Insurance premiums 109 — 437 546 189 — 881 1,070 Total fees and management income $ 7,538 $ 1,096 $ 503 $ 9,137 $ 14,473 $ 2,323 $ 1,053 $ 17,849 (1) All amounts earned from REIT II were earned prior to the close of the Merger in November 2018, and ceased upon its acquisition by us. (2) Recurring fees and other revenue from other parties includes amounts from third parties not affiliated with us in the amount of $0.5 million and $0.9 million for the three and six months ended June 30, 2018 . |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Inputs, Liabilities, Quantitative Information | The following is a summary of borrowings as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 December 31, 2018 Fair value $ 2,467,023 $ 2,467,317 Recorded value (1) 2,439,554 2,456,867 (1) Recorded value does not include net deferred financing expenses of $16.1 million and $18.0 million as of June 30, 2019 and December 31, 2018 , respectively. |
Fair Value, Liabilities Measured on Recurring Basis | The fair value measurements that occurred during the six months ended June 30, 2019 , and during the year ended December 31, 2018 , were as follows (in thousands): June 30, 2019 December 31, 2018 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Recurring Derivative assets (1) $ — $ 5,324 $ — $ — $ 29,708 $ — Derivative liability (1) — (21,007 ) — — (3,633 ) — Earn-out liability — — (32,000 ) — — (39,500 ) Nonrecurring Impaired real estate assets, net (2) — 120,510 — — 71,991 — Impaired corporate intangible asset, net — — 4,401 — — — (1) We record derivative assets in Other Assets, Net and derivative liabilities in Accounts Payable and Other Liabilities on our consolidated balance sheets. (2) The carrying value of impaired real estate assets may have subsequently increased or decreased after the measurement date due to capital improvements, depreciation, or sale. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents a reconciliation of the change in the earn-out liability measured at fair value on a recurring basis using Level 3 inputs (in thousands): Earn-Out Liability Balance at December 31, 2018 $ 39,500 Change in fair value recognized in Other Income (Expense), Net (7,500 ) Balance at June 30, 2019 $ 32,000 |
Fair Value Measurements, Nonrecurring | We recorded the following expense as a result of the impaired real estate assets (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Impairment of real estate assets $ 25,199 $ 10,939 $ 38,916 $ 10,939 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Distributions to Stockholders and OP Unit Holders | Distributions paid to stockholders and OP unit holders of record subsequent to June 30, 2019 , were as follows (in thousands, except distribution rate): Month Date of Record Distribution Rate Date Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through the DRIP Net Cash Distribution June 6/15/2019 $0.05583344 7/1/2019 $ 18,101 $ 5,571 $ 12,530 July 7/15/2019 $0.05583344 8/1/2019 18,118 5,412 12,706 |
Schedule of Other Subsequent Events | Property Sales —Subsequent to June 30, 2019 , we sold the following real estate property, which was classified as held for sale as of June 30, 2019 (dollars in thousands): Property Name Location Anchor Tenant Square Footage Disposition Date Sale Price Winery Square Fairfield, CA Food Maxx 118,370 7/19/2019 $ 14,250 |
Organization (Details)
Organization (Details) $ in Millions | 1 Months Ended | |||||
Nov. 30, 2018USD ($) | Nov. 30, 2018USD ($) | Jun. 30, 2019property | Dec. 31, 2018 | Nov. 16, 2018 | Nov. 09, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Number of real estate properties | property | 298 | |||||
Necessity Retail Partners | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of real estate properties | 13 | 13 | 13 | |||
Equity method investment, ownership percentage | 20.00% | 20.00% | 20.00% | |||
Grocery Retail Partners I | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of real estate properties | 17 | 17 | 17 | |||
Other significant noncash transaction, value of consideration given | $ 359 | |||||
Equity method investment, ownership percentage | 15.00% | 15.00% | 15.00% | |||
Cash received from contribution of real estate to joint ventures | $ 161.8 | |||||
REIT II | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Business combination, consideration transferred, including equity interest in acquiree held prior to combination | $ 1,900 | |||||
Number of real estate properties | 86 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Lessor (Details) | Jun. 30, 2019 |
Inline Tenants | Minimum | |
Lessor, Lease, Description [Line Items] | |
Lessor, Operating Lease, Term of Contract | 2 years |
Inline Tenants | Maximum | |
Lessor, Lease, Description [Line Items] | |
Lessor, Operating Lease, Term of Contract | 10 years |
Anchor Tenants | Minimum | |
Lessor, Lease, Description [Line Items] | |
Lessor, Operating Lease, Term of Contract | 3 years |
Anchor Tenants | Maximum | |
Lessor, Lease, Description [Line Items] | |
Lessor, Operating Lease, Term of Contract | 13 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Lessee (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Office Building | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, option to extend | 0 |
Minimum | Office Equipment | |
Lessee, Lease, Description [Line Items] | |
Lessee, finance lease, initial term, office equipment | 3 years |
Maximum | Office Building | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, initial lease term, ground leases | 10 years |
Maximum | Office Equipment | |
Lessee, Lease, Description [Line Items] | |
Lessee, finance lease, initial term, office equipment | 5 years |
Ground Lease | Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, initial lease term, ground leases | 15 years |
Lessee, operating lease, renewal term | 3 years |
Ground Lease | Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, initial lease term, ground leases | 40 years |
Lessee, operating lease, renewal term | 5 years |
Leases Standard Adoption (Detai
Leases Standard Adoption (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Jan. 01, 2019 | |
Leases [Abstract] | |||||
Retain earning adjustment for adoption of ASC 842 | $ 0.5 | ||||
Capitalized initial lease costs | $ 1.9 | $ 2.9 | $ 6.2 | ||
Payments excluded from lease consideration | $ 1.3 | $ 2.7 | 8 | ||
Accounts Receivable, Allowance for Credit Loss | $ 2.9 | ||||
Changes in rental income allowance | $ 0.1 | $ 0.7 |
Leases Lessor (Details)
Leases Lessor (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
Remaining 2019 | $ 191,571 |
2020 | 360,997 |
2021 | 316,521 |
2022 | 274,713 |
2023 | 223,940 |
2024 and thereafter | 636,772 |
Total | $ 2,004,514 |
Florida | Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 12.30% |
California | Geographic Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 10.00% |
Leases Lessee (Details)
Leases Lessee (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | ||||
ROU assets, operating lease | $ 6,000 | |||
Amortization of other leased asset | $ (28,603) | $ (28,603) | $ (24,382) | |
Net Investment in Lease | 7,140 | 7,140 | ||
Operating Lease, Liability | 6,790 | 6,790 | 6,200 | |
Finance Lease, Liability | 581 | 581 | 552 | |
Total Lease Liability | $ 7,371 | $ 7,371 | ||
Finance lease, weighted average remaining lease term | 2 years 5 months | 2 years 5 months | ||
Operating lease, weighted average remaining lease term | 18 years 4 months | 18 years 4 months | ||
Finance lease, weighted average discount rate, percent | 3.54% | 3.54% | ||
Operating lease, weighted average discount rate, percent | 4.07% | 4.07% | ||
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 1,444 | |||
Lease, Cost [Abstract] | ||||
Finance Lease, Right-of-Use Asset, Amortization | $ 64 | 128 | ||
Finance Lease, Interest Expense | 4 | 9 | ||
Operating lease, costs | 449 | 797 | ||
Short-term Lease, Cost | 376 | 767 | ||
Statement of Cash Flow Information [Abstract] | ||||
Operating Lease, Payments | (620) | |||
Finance Lease, Principal Payments | (122) | |||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Operating lease, remaining 2019 | 745 | 745 | ||
Operating lease, 2020 | 1,174 | 1,174 | ||
Operating lease, 2021 | 723 | 723 | ||
Operating lease, 2022 | 684 | 684 | ||
Operating lease, 2023 | 529 | 529 | ||
Operating lease, thereafter | 6,419 | 6,419 | ||
Operating lease, total undiscounted cash flows from leases | 10,274 | 10,274 | ||
Operating Lease, Liability | 6,790 | 6,790 | $ 6,200 | |
Operating lease, difference between undiscounted cash flows and PV of lease liabilities | 3,484 | 3,484 | ||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Finance lease, remaining 2019 | 148 | 148 | ||
Financing lease, 2020 | 295 | 295 | ||
Financing lease, 2021 | 98 | 98 | ||
Financing lease, 2022 | 26 | 26 | ||
Financing lease, 2023 | 20 | 20 | ||
Financing lease, thereafter | 15 | 15 | ||
Finance lease, total undiscounted cash flows from leases | 602 | 602 | ||
Finance Lease, Liability | 581 | 581 | $ 552 | |
Finance lease, difference between undiscounted cash flows and PV of lease liabilities | 21 | 21 | ||
Real Estate Investment | ||||
Lessee, Lease, Description [Line Items] | ||||
ROU assets, operating lease | 4,707 | 4,707 | ||
ROU asset in real estate leases, accumulated amortization | 217 | 217 | ||
Net Investment in Lease | 4,490 | 4,490 | ||
Other Assets | ||||
Lessee, Lease, Description [Line Items] | ||||
ROU assets, operating lease | 2,540 | 2,540 | ||
ROU assets, finance lease | 705 | 705 | ||
Amortization of other leased asset | (595) | (595) | ||
Net Investment in Lease | $ 2,650 | $ 2,650 |
REIT II Merger Consideration Gi
REIT II Merger Consideration Given (Details) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | |||||
Nov. 30, 2018USD ($)shares | Jun. 30, 2019property | May 08, 2019$ / shares | Nov. 16, 2018USD ($)$ / shares | May 09, 2018$ / shares | May 08, 2018$ / shares | |
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Number of real estate properties | property | 298 | |||||
Acquirer share price | $ / shares | $ 11.10 | $ 11.05 | $ 11.05 | $ 11 | ||
REIT II | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Number of real estate properties | 86 | |||||
Fair value of PECO common stock issued | $ 1,054,745 | |||||
Derecognition of REIT II management contracts, net | $ 30,428 | |||||
Transaction costs | 11,587 | |||||
Total consideration and debt activity | 1,918,668 | |||||
Fair value of assumed debt | 464,462 | |||||
Total consideration | $ 1,454,206 | |||||
Stock issued for REIT II asset acquisition, shares | shares | 95.5 | |||||
Share exchange ratio for asset acquisition | 2.04 | |||||
Business acquisition, acquiree share price | $ / shares | $ 22.54 | |||||
Business combination, percentage of voting interests retained by acquirer | 71.00% | |||||
Business combination, post-transaction acquiree ownership percentage | 29.00% | |||||
Corporate Debt | REIT II | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Fair value of debt | $ 719,181 | |||||
Mortgages and Note Payable | REIT II | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Fair value of debt | $ 102,727 |
REIT II Merger Price Allocation
REIT II Merger Price Allocation (Details) - REIT II - USD ($) $ in Thousands | 1 Months Ended | |
Nov. 30, 2018 | Nov. 16, 2018 | |
Noncash or Part Noncash Acquisitions [Line Items] | ||
Derecognition of REIT II management contracts, net | $ 30,428 | |
Transaction costs, capitalized | $ 11,587 | |
Land and improvements | 561,100 | |
Building and improvements | 1,198,884 | |
Intangible lease assets | 197,384 | |
Fair value of unconsolidated joint venture | 16,470 | |
Cash and cash equivalents | 354 | |
Restricted cash | 5,159 | |
Accounts receivable and other assets | 33,045 | |
Total assets acquired | 2,012,396 | |
Debt assumed | 464,462 | |
Intangible lease liabilities | 60,421 | |
Accounts payable and other liabilities | 33,307 | |
Total liabilities assumed | 558,190 | |
Net assets acquired | $ 1,454,206 |
Real Estate Activity Acquisitio
Real Estate Activity Acquisitions and Dispositions (Details) $ in Thousands | May 16, 2019USD ($) | Apr. 26, 2019USD ($) | Feb. 26, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) |
Real Estate Properties [Line Items] | |||||
Below market lease, acquired | $ (2,097) | $ (457) | |||
Property Sales [Abstract] | |||||
Number of properties sold | 6 | 2 | |||
Number of outparcel sold | 1 | 0 | |||
Proceeds from sale of real estate | $ 47,857 | $ 13,300 | |||
Gains on sales of properties, net | 6,627 | 985 | |||
In-Place Leases Assets | |||||
Real Estate Properties [Line Items] | |||||
Intangible lease assets acquired | $ 4,736 | $ 946 | |||
Intangible leases, weighted average useful life | 11 years | 6 years | |||
Above-Market Lease Assets | |||||
Real Estate Properties [Line Items] | |||||
Intangible lease assets acquired | $ 825 | $ 74 | |||
Intangible leases, weighted average useful life | 8 years | 3 years | |||
Below-Market Lease Liabilities | |||||
Real Estate Properties [Line Items] | |||||
Intangible leases, weighted average useful life | 16 years | 16 years | |||
Murray Landing Outparcel | |||||
Real Estate Properties [Line Items] | |||||
Purchase price | $ 295 | ||||
Naperville Crossings | |||||
Real Estate Properties [Line Items] | |||||
Purchase price | $ 49,585 | ||||
Leased percentage of rentable SF at acquisition | 88.00% | ||||
Shoppes of Lake Village | |||||
Real Estate Properties [Line Items] | |||||
Purchase price | $ 8,423 | ||||
Leased percentage of rentable SF at acquisition | 71.30% |
Real Estate Activity Property H
Real Estate Activity Property Held for Sale (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)property | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties | property | 298 | 298 | |||
Property Held for Sale [Abstract] | |||||
Total investment in real estate assets, net | $ 15,555 | $ 15,555 | $ 16,889 | ||
Other assets, net | 322 | 322 | 475 | ||
Total assets | 15,877 | 15,877 | 17,364 | ||
Below-market lease liabilities, net | 117 | 117 | 208 | ||
Accounts payable and other liabilities | 185 | 185 | 388 | ||
Total liabilities | 302 | 302 | $ 596 | ||
Impairment of Real Estate Assets [Abstract] | |||||
Impairment charge of real estate | $ 25,199 | $ 10,939 | $ 38,916 | $ 10,939 | |
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties | property | 2 | 2 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties | property | 2 |
Investment in Unconsolidated _3
Investment in Unconsolidated Joint Ventures (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019USD ($)property | Jun. 30, 2019USD ($)property | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Nov. 16, 2018USD ($) | Nov. 09, 2018 | |
Equity Method Investment, Financial Statement, Reported Amounts [Abstract] | ||||||
Number of properties | property | 298 | 298 | ||||
Investment balance | $ 42,418 | $ 42,418 | $ 45,651 | |||
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | ||||||
Loss from unconsolidated joint ventures, net | (976) | $ 0 | ||||
Amortization of basis adjustments | 3,373 | 7,672 | ||||
Distributions after formation or assumption | $ 2,257 | $ 0 | ||||
NRP | ||||||
Equity Method Investment, Financial Statement, Reported Amounts [Abstract] | ||||||
Ownership percentage | 20.00% | 20.00% | 20.00% | 20.00% | ||
Number of properties | 13 | 13 | 13 | 13 | ||
Investment balance | $ 14,454 | $ 14,454 | $ 16,198 | |||
Unamortized basis adjustments | 5,317 | 5,317 | $ 6,026 | $ 6,200 | ||
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | ||||||
Loss from unconsolidated joint ventures, net | 114 | 202 | ||||
Amortization of basis adjustments | 354 | 709 | ||||
Distributions after formation or assumption | $ 551 | $ 833 | ||||
GRP I | ||||||
Equity Method Investment, Financial Statement, Reported Amounts [Abstract] | ||||||
Ownership percentage | 15.00% | 15.00% | 15.00% | 15.00% | ||
Number of properties | 17 | 17 | 17 | 17 | ||
Investment balance | $ 27,964 | $ 27,964 | $ 29,453 | |||
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | ||||||
Loss from unconsolidated joint ventures, net | 52 | 65 | ||||
Distributions after formation or assumption | $ 509 | $ 1,424 |
Other Assets, Net (Details)
Other Assets, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Assets, Net [Abstract] | ||
Deferred leasing commissions and costs | $ 35,518 | $ 32,957 |
Deferred financing expenses | 13,971 | 13,971 |
Office equipment, ROU assets, and other | 18,016 | 14,315 |
Total depreciable and amortizable assets | 67,505 | 61,243 |
Accumulated depreciation and amortization | (28,603) | (24,382) |
Net depreciable and amortizable assets | 38,902 | 36,861 |
Accounts receivable, net | 50,681 | 56,104 |
Deferred rent receivable, net | 25,778 | 21,261 |
Derivative asset | 5,324 | 29,708 |
Investment in affiliates | 700 | 700 |
Prepaids and other | 9,716 | 8,442 |
Total other assets, net | $ 131,101 | $ 153,076 |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | ||
May 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||
Outstanding principal balance | $ 2,443,395 | $ 2,461,438 | ||
Finance Lease, Liability | 581 | 552 | ||
Assumed market debt adjustments, net | (3,841) | (4,571) | ||
Deferred financing costs, net | (16,149) | (18,041) | ||
Total | 2,423,405 | $ 2,438,826 | ||
Gross borrowings | 105,600 | $ 151,000 | ||
Gross payments | $ 179,000 | $ 166,000 | ||
Proceeds from term loan delayed draw | $ 60,000 | |||
Weighted-average interest rate on debt | 3.50% | 3.50% | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | $ 0 | $ 73,359 | ||
Line of credit variable rate base | LIBOR | |||
LIne of credit - interest spread | 1.40% | |||
Term Loans | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | $ 1,918,410 | 1,858,410 | ||
Term Loans | Minimum | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.06% | |||
Term Loans | Maximum | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.59% | |||
Secured Portfolio Loan Facilities | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | $ 195,000 | 195,000 | ||
Interest rate | 3.52% | |||
Mortgages | ||||
Debt Instrument [Line Items] | ||||
Outstanding principal balance | $ 329,404 | $ 334,117 | ||
Mortgages | Minimum | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.45% | |||
Mortgages | Maximum | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 7.91% |
Debt Obligations (Details) - De
Debt Obligations (Details) - Debt Obligations - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Fixed-rate debt | $ 2,111,985 | $ 2,216,669 |
Variable-rate debt | 331,410 | 244,769 |
Unsecured debt | 1,918,410 | 1,931,769 |
Secured debt | 524,985 | 529,669 |
Total | $ 2,443,395 | $ 2,461,438 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($)Debt_Instrument | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)Debt_Instrument | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)Debt_Instrument | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of (loss) gain recognized in other comprehensive income on derivative | $ (22,348) | $ 5,608 | $ (35,205) | $ 19,047 | |
Amount of gain reclassified from AOCI into interest expense | (1,297) | $ (753) | (2,801) | $ (704) | |
Contingent credit-risk-related derivative liabilities, fair value | $ 21,000 | 21,000 | |||
Interest Rate Swap | Designated as Hedging Instrument | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Derivative instruments, gain (loss) reclassification from OCI to income, estimated net amount to be transferred | $ 3,500 | ||||
Derivative, count | Debt_Instrument | 11 | 11 | 12 | ||
Derivative, notional amount | $ 1,587,000 | $ 1,587,000 | $ 1,687,000 | ||
Interest Rate Swap | Designated as Hedging Instrument | Minimum | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Fixed LIBOR | 0.70% | 0.70% | 0.70% | ||
Interest Rate Swap | Designated as Hedging Instrument | Maximum | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Fixed LIBOR | 2.90% | 2.90% | 2.90% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Jul. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | May 08, 2019 | Dec. 31, 2018 | Nov. 16, 2018 | May 09, 2018 | May 08, 2018 | |
Stockholders' Equity Note [Abstract] | ||||||||||
Share price | $ 11.10 | $ 11.05 | $ 11.05 | $ 11 | ||||||
OP units outstanding, shares | 42.7 | 42.7 | 44.5 | |||||||
Noncontrolling Interest [Line Items] | ||||||||||
Share repurchases, value | $ 5,994 | $ 42,137 | $ 12,674 | $ 46,152 | ||||||
Subsidiaries | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Noncontrolling interest, ownership percentage | 25.00% | 25.00% | ||||||||
Subsequent Event | ||||||||||
Noncontrolling Interest [Line Items] | ||||||||||
Share repurchases, value | $ 1,200 |
Compensation (Details)
Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Weighted average grant date fair value - nonvested at December 31 | $ 10.60 | ||||
Weighted average grant date fair value - granted | 11.05 | ||||
Weighted average grant date fair value - vested | 10.99 | ||||
Weighted average grant date fair value - forfeited | 10.76 | ||||
Weighted average grant date fair value - nonvested at June 30 | $ 10.80 | $ 10.80 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||||
Share-based compensation arrangement by share-based payment award, shares authorized | 4,000 | 4,000 | 1,200 | ||
Long-Term Incentive Plan to Executive, Dividend Restriction | 10.00% | 10.00% | |||
Share-based compensation, expense recognized in period | $ 3.3 | $ 3.1 | $ 5.3 | $ 4.7 | |
Share-based Compensation not recognized costs | $ 22.6 | $ 22.6 | |||
Estimated recognition period for not vested shares | 4 years 4 months | ||||
Stock-based awards vested in period, fair value | $ 2.2 | ||||
Restricted Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Nonvested at December 31, 2018 | 808 | ||||
Granted | 464 | ||||
Vested | (196) | ||||
Forfeited | (26) | ||||
Nonvested at June 30, 2019 | 1,050 | 1,050 | |||
Performance Stock Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Nonvested at December 31, 2018 | 199 | ||||
Granted | 1,275 | ||||
Vested | 0 | ||||
Forfeited | 0 | ||||
Nonvested at June 30, 2019 | 1,474 | 1,474 | |||
Phantom Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Nonvested at December 31, 2018 | 998 | ||||
Granted | 0 | ||||
Vested | 0 | ||||
Forfeited | (12) | ||||
Nonvested at June 30, 2019 | 986 | 986 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||
Net loss attributable to stockholders - basic | $ (36,570) | $ (11,351) | $ (41,765) | $ (12,951) |
Net loss attributable to convertible OP units | (5,643) | (2,756) | (6,426) | (3,090) |
Net loss - diluted | $ (42,213) | $ (14,107) | $ (48,191) | $ (16,041) |
Denominator: | ||||
Weighted-average shares - basic | 283,010 | 184,450 | 282,148 | 185,171 |
OP units | 43,288 | 44,453 | 43,640 | 44,453 |
Adjusted weighted-average shares - diluted | 326,298 | 228,903 | 325,788 | 229,624 |
Earnings per common share: | ||||
Basic and diluted | $ (0.13) | $ (0.06) | $ (0.15) | $ (0.07) |
Stock Compensation Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Unvested restricted stock awards, granted | 2,500 | 1,000 | 2,500 | 1,000 |
Revenue Recognition and Relat_3
Revenue Recognition and Related Party Revenue Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | $ (3,051) | $ (9,137) | $ (6,312) | $ (17,849) |
Insurance premiums | 585 | 546 | 1,042 | 1,070 |
Non-Affiliate | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (500) | (500) | (1,000) | (900) |
PECO III | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (453) | (1,462) | ||
Insurance premiums | 21 | 24 | ||
Joint Ventures | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (2,045) | (3,779) | ||
Insurance premiums | 72 | 72 | ||
Other Parties | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (553) | (503) | (1,071) | (1,053) |
Insurance premiums | 492 | 437 | 946 | 881 |
REIT II | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (7,538) | (14,473) | ||
Insurance premiums | 109 | 189 | ||
PECO III and Joint Venture [Member] | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (1,096) | (2,323) | ||
Insurance premiums | 0 | 0 | ||
Recurring Fees | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (1,639) | (5,847) | (3,221) | (11,624) |
Recurring Fees | PECO III | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (228) | (422) | ||
Recurring Fees | Joint Ventures | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (1,352) | (2,681) | ||
Recurring Fees | Other Parties | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (59) | (77) | (118) | (152) |
Recurring Fees | REIT II | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (5,189) | (10,333) | ||
Recurring Fees | PECO III and Joint Venture [Member] | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (581) | (1,139) | ||
Transactional Revenue and Reimbursements | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (827) | (2,744) | (2,049) | (5,155) |
Transactional Revenue and Reimbursements | PECO III | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (204) | (1,016) | ||
Transactional Revenue and Reimbursements | Joint Ventures | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (621) | (1,026) | ||
Transactional Revenue and Reimbursements | Other Parties | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | $ (2) | (11) | $ (7) | (20) |
Transactional Revenue and Reimbursements | REIT II | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | (2,240) | (3,951) | ||
Transactional Revenue and Reimbursements | PECO III and Joint Venture [Member] | ||||
Related Party Transaction [Line Items] | ||||
Recurring fees and management income | $ (515) | $ (1,184) |
Revenue Recognition and Relat_4
Revenue Recognition and Related Party Revenue Other Related Party Matters (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||
Reductions of account receivable, organization and offering costs from PECO III | $ 9,661 | $ 0 | $ 9,661 | $ 0 | |
Accounts receivable - organization and offering costs due from PECO III | 3,409 | 3,409 | $ 5,125 | ||
Reduction in other liabilities | (400) | ||||
Due to Affiliate | 900 | 900 | 1,200 | ||
Management Service | |||||
Related Party Transaction [Line Items] | |||||
Accounts receivable, management contracts | $ 900 | $ 900 | 600 | ||
Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Noncontrolling interest, ownership percentage | 25.00% | 25.00% | |||
Noncontrolling interest, ownership percentage by parent | 75.00% | 75.00% | |||
PECO III | |||||
Related Party Transaction [Line Items] | |||||
Reductions of account receivable, organization and offering costs from PECO III | $ 2,300 | ||||
Accounts receivable - organization and offering costs due from PECO III | $ 2,500 | 2,500 | 4,500 | ||
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Reductions of account receivable, organization and offering costs from PECO III | 1,900 | ||||
PECO Air | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Expenses from Transactions with Related Party | 200 | $ 196 | 500 | $ 400 | |
Necessity Retail Partners | |||||
Related Party Transaction [Line Items] | |||||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 200,000 | 200,000 | |||
Guarantee Obligations Expected Exposure | $ 50,000 | ||||
Grocery Retail Partners I | |||||
Related Party Transaction [Line Items] | |||||
Transfer Mortgage Payable | $ 175,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Debt Obligations - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded value | $ 2,439,554 | $ 2,456,867 |
Deferred financing costs | 16,149 | 18,041 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value | $ 2,467,023 | $ 2,467,317 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Recurring and Nonrecurring Fair Value Measurements - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | May 08, 2019 | Nov. 16, 2018 | May 09, 2018 | May 08, 2018 | May 18, 2017 | |
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
Interest rate swap-mortgage note | $ (21,000) | $ (21,000) | |||||||||
Share price | $ 11.10 | $ 11.05 | $ 11.05 | $ 11 | |||||||
Impairment charge of real estate | $ 25,199 | $ 10,939 | $ 38,916 | $ 10,939 | |||||||
Nonrecurring Fair Value Measurement Discount Rate | 19.00% | 19.00% | |||||||||
Management Contracts | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
Impairment of Intangible Assets, Finite-lived | $ 7,800 | ||||||||||
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | $ 700 | 700 | |||||||||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 1,400 | 1,400 | |||||||||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 1,400 | 1,400 | |||||||||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | $ 900 | $ 900 | |||||||||
OP Units | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
Share price | $ 11.20 | $ 11.20 | $ 10.20 | ||||||||
Maximum | Phillips Edison Limited Partnership | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
PELP transaction, OP units issued and issuable, shares | 12.5 | ||||||||||
Maximum | OP Units | Phillips Edison Limited Partnership | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
PELP transaction, OP units issued and issuable, shares | 5 | 12.5 | |||||||||
Minimum | Phillips Edison Limited Partnership | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
PELP transaction, OP units issued and issuable, shares | 3 | ||||||||||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Interest Rate Swap | Designated as Hedging Instrument | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
Interest rate swaps-term loans | $ 5,324 | $ 5,324 | $ 29,708 | ||||||||
Interest rate swap-mortgage note | (21,007) | (21,007) | (3,633) | ||||||||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
Earn-out liability | (32,000) | (32,000) | (39,500) | ||||||||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Phillips Edison Limited Partnership | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
Earn-out liability | (32,000) | (32,000) | (39,500) | ||||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings | (7,500) | ||||||||||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 2 | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
Impaired real estate assets, net | 120,510 | 120,510 | $ 71,991 | ||||||||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | |||||||||||
Fair Value, Assets (Liabilities) Measured on Recurring Basis | |||||||||||
Impaired corporate intangible asset, net | $ 4,401 | $ 4,401 |
Subsequent Events (Details) - D
Subsequent Events (Details) - Distributions - USD ($) $ / shares in Units, $ in Thousands | Aug. 01, 2019 | Jul. 01, 2019 | Aug. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Subsequent Event [Line Items] | |||||||
Distribution rate | $ 0.17 | $ 0.17 | $ 0.34 | $ 0.34 | |||
Distributions reinvested | $ 17,240 | $ 12,135 | $ 34,958 | $ 24,899 | |||
Net cash distribution | $ 60,787 | $ 37,819 | |||||
Subsequent Event | Dividend Declared | |||||||
Subsequent Event [Line Items] | |||||||
Distribution rate | $ 0.05583344 | $ 0.05583344 | $ 0.05583344 | ||||
Subsequent Event | Dividend Paid | |||||||
Subsequent Event [Line Items] | |||||||
Gross amount of distribution paid | $ 18,118 | $ 18,101 | |||||
Distributions reinvested | 5,412 | 5,571 | |||||
Net cash distribution | $ 12,706 | $ 12,530 |
Subsequent Events (Details) - A
Subsequent Events (Details) - Acquisitions and Disposition $ in Thousands | Jul. 19, 2019USD ($)ft² | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) |
Subsequent Event [Line Items] | |||
Sale price | $ 47,857 | $ 13,300 | |
Winery Square [Member] | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Square footage | ft² | 118,370 | ||
Sale price | $ 14,250 |