Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 08, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 000-54687 | ||
Entity Registrant Name | KBS REAL ESTATE INVESTMENT TRUST III, INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 27-1627696 | ||
Entity Address, Address Line One | 800 Newport Center Drive | ||
Entity Address, Address Line Two | Suite 700 | ||
Entity Address, City or Town | Newport Beach | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92660 | ||
City Area Code | 949 | ||
Local Phone Number | 417-6500 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 185,149,002 | ||
Entity Central Index Key | 0001482430 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Documents Incorporated by Reference | Portions of the Registrant’s Definitive Proxy Statement with respect to its 2021 Annual Meeting of Stockholders to be filed not later than 120 days after the end of the Registrant’s fiscal year are incorporated by reference into Part III, Items 10, 11, 12, 13 and 14 hereof as noted therein. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Real estate: | ||
Land | $ 292,971 | $ 295,020 |
Buildings and improvements | 2,087,990 | 2,013,857 |
Tenant origination and absorption costs | 75,664 | 91,343 |
Total real estate held for investment, cost | 2,456,625 | 2,400,220 |
Less accumulated depreciation and amortization | (502,556) | (425,228) |
Total real estate held for investment, net | 1,954,069 | 1,974,992 |
Real estate held for sale, net | 74,874 | 200,629 |
Total real estate, net | 2,028,943 | 2,175,621 |
Cash and cash equivalents | 72,523 | 43,984 |
Restricted cash | 5,288 | 5,288 |
Investment in an unconsolidated entity | 233,592 | 253,371 |
Rents and other receivables, net | 86,034 | 81,083 |
Above-market leases, net | 449 | 566 |
Assets related to real estate held for sale, net | 4,238 | 4,036 |
Prepaid expenses and other assets | 73,258 | 74,978 |
Total assets | 2,504,325 | 2,638,927 |
Notes payable, net | ||
Notes payable, net | 1,388,365 | 1,410,879 |
Notes payable related to real estate held for sale, net | 0 | 49,000 |
Total notes payable, net | 1,388,365 | 1,459,879 |
Accounts payable and accrued liabilities | 55,814 | 71,381 |
Due to affiliate | 8,626 | 7,886 |
Distributions payable | 9,187 | 9,392 |
Below-market leases, net | 6,116 | 8,668 |
Liabilities related to real estate held for sale, net | 874 | 1,286 |
Other liabilities | 90,584 | 43,421 |
Total liabilities | 1,559,566 | 1,601,913 |
Commitments and contingencies (Note 13) | ||
Redeemable common stock | 46,723 | 51,704 |
KBS Real Estate Investment Trust III, Inc. stockholders’ equity | ||
Preferred stock, $.01 par value per share; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $.01 par value per share; 1,000,000,000 shares authorized, 184,249,076 and 180,970,743 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 1,842 | 1,810 |
Additional paid-in capital | 1,641,184 | 1,600,416 |
Cumulative distributions in excess of net income | (744,990) | (617,171) |
Total KBS Real Estate Investment Trust III, Inc. stockholders’ equity | 898,036 | 985,055 |
Noncontrolling interest | 0 | 255 |
Total equity | 898,036 | 985,310 |
Total liabilities and equity | $ 2,504,325 | $ 2,638,927 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 184,249,076 | 180,970,743 |
Common stock, shares outstanding (in shares) | 184,249,076 | 180,970,743 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Rental income | $ 282,527,000 | $ 355,438,000 | $ 393,121,000 |
Interest income from real estate loan receivable | 5,666,000 | 0 | 0 |
Other operating income | 18,725,000 | 29,834,000 | 33,136,000 |
Total revenues | 306,918,000 | 385,272,000 | 426,257,000 |
Expenses: | |||
Operating, maintenance and management | 71,470,000 | 92,271,000 | 101,759,000 |
Real estate taxes and insurance | 57,234,000 | 62,989,000 | 69,405,000 |
Asset management fees to affiliate | 20,990,000 | 24,614,000 | 27,152,000 |
General and administrative expenses | 6,600,000 | 8,418,000 | 9,597,000 |
Depreciation and amortization | 110,806,000 | 141,102,000 | 158,847,000 |
Interest expense | 81,139,000 | 114,272,000 | 72,209,000 |
Impairment charges on real estate | 19,896,000 | 8,706,000 | 0 |
Total expenses | 368,135,000 | 452,372,000 | 438,969,000 |
Other income (loss): | |||
Other income | 0 | 4,089,000 | 1,905,000 |
Other interest income | 72,000 | 655,000 | 312,000 |
Equity in (loss) income from unconsolidated entities | (465,000) | (1,443,000) | 2,088,000 |
Loss from extinguishment of debt | (199,000) | (2,229,000) | (225,000) |
Gain on sale of real estate, net | 49,457,000 | 327,211,000 | 11,942,000 |
Total other income, net | 48,865,000 | 328,283,000 | 16,022,000 |
Net (loss) income | (12,352,000) | 261,183,000 | 3,310,000 |
Net (income) loss attributable to noncontrolling interest | (6,145,000) | 28,000 | 17,000 |
Net (loss) income attributable to common stockholders | $ (18,497,000) | $ 261,211,000 | $ 3,327,000 |
Net (loss) income per common share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.10) | $ 1.49 | $ 0.02 |
Weighted-average number of common shares outstanding, basic and diluted (in shares) | 182,806,753 | 174,874,422 | 177,594,478 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (12,352) | $ 261,183 | $ 3,310 |
Net (loss) income | (18,497) | 261,211 | 3,327 |
Other comprehensive income (loss): | |||
Unrealized income on derivative instruments designated as cash flow hedges | 0 | 0 | 95 |
Reclassification adjustment realized in net income (effective portion) | 0 | 0 | (205) |
Total other comprehensive loss | 0 | 0 | (110) |
Total comprehensive (loss) income | (12,352) | 261,183 | 3,217 |
Total comprehensive (income) loss attributable to noncontrolling interest | (6,145) | 28 | 17 |
Total comprehensive (loss) income attributable to common stockholders | $ (18,497) | $ 261,211 | $ 3,234 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Additional Paid-in Capital | Cumulative Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Balance (in shares) at Dec. 31, 2017 | 180,864,707 | ||||||
Balance, value at Dec. 31, 2017 | $ 1,079,408 | $ 1,079,108 | $ 1,809 | $ 1,591,640 | $ (514,451) | $ 110 | $ 300 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | 3,310 | 3,327 | 3,327 | (17) | |||
Other comprehensive loss | (110) | (110) | (110) | ||||
Issuance of common stock (in shares) | 5,034,086 | ||||||
Issuance of common stock | 56,136 | 56,136 | $ 50 | 56,086 | |||
Transfers from redeemable common stock | 3,649 | 3,649 | 3,649 | ||||
Redemptions of common stock (in shares) | (8,374,940) | ||||||
Redemptions of common stock | (96,064) | (96,064) | $ (84) | (95,980) | |||
Distributions declared | (115,419) | (115,419) | (115,419) | ||||
Other offering costs | (15) | (15) | (15) | ||||
Balance (in shares) at Dec. 31, 2018 | 177,523,853 | ||||||
Balance, value at Dec. 31, 2018 | 930,895 | 930,612 | $ 1,775 | 1,555,380 | (626,543) | 0 | 283 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | 261,183 | 261,211 | 261,211 | (28) | |||
Other comprehensive loss | 0 | ||||||
Issuance of common stock (in shares) | 4,527,465 | ||||||
Issuance of common stock | 51,704 | 51,704 | $ 45 | 51,659 | |||
Transfers from redeemable common stock | 4,427 | 4,427 | 4,427 | ||||
Redemptions of common stock (in shares) | (8,801,788) | ||||||
Redemptions of common stock | (100,996) | (100,996) | $ (88) | (100,908) | |||
Stock distributions issued (in shares) | 7,721,213 | ||||||
Stock distribution issued | 0 | 0 | $ 78 | 89,874 | (89,952) | ||
Distributions declared | (161,887) | (161,887) | (161,887) | ||||
Other offering costs | $ (16) | (16) | (16) | ||||
Balance (in shares) at Dec. 31, 2019 | 180,970,743 | 180,970,743 | |||||
Balance, value at Dec. 31, 2019 | $ 985,310 | 985,055 | $ 1,810 | 1,600,416 | (617,171) | 0 | 255 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net (loss) income | (12,352) | (18,497) | (18,497) | 6,145 | |||
Other comprehensive loss | 0 | ||||||
Issuance of common stock (in shares) | 4,220,684 | ||||||
Issuance of common stock | 46,722 | 46,722 | $ 42 | 46,680 | |||
Transfers from redeemable common stock | 4,981 | 4,981 | 4,981 | ||||
Redemptions of common stock (in shares) | (942,351) | ||||||
Redemptions of common stock | (10,877) | (10,877) | $ (10) | (10,867) | |||
Distributions declared | (109,322) | (109,322) | (109,322) | ||||
Other offering costs | (26) | (26) | (26) | ||||
Distribution to noncontrolling interest | $ (6,400) | 0 | (6,400) | ||||
Balance (in shares) at Dec. 31, 2020 | 184,249,076 | 184,249,076 | |||||
Balance, value at Dec. 31, 2020 | $ 898,036 | $ 898,036 | $ 1,842 | $ 1,641,184 | $ (744,990) | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities: | |||
Net (loss) income | $ (12,352,000) | $ 261,183,000 | $ 3,310,000 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Depreciation and amortization | 110,806,000 | 141,102,000 | 158,847,000 |
Impairment charges on real estate | 19,896,000 | 8,706,000 | 0 |
Noncash interest income on real estate loan receivable | (2,415,000) | 0 | 0 |
Equity in loss (income) of unconsolidated entities | 465,000 | 1,443,000 | (2,088,000) |
Distribution of operating cash flow from an unconsolidated entity | 19,314,000 | 0 | 0 |
Deferred rents | (4,564,000) | (6,224,000) | (9,063,000) |
Bad debt expense | 0 | 0 | 1,230,000 |
Amortization of above- and below-market leases, net | (2,807,000) | (3,515,000) | (5,350,000) |
Amortization of deferred financing costs | 4,293,000 | 5,385,000 | 6,356,000 |
Unrealized losses (gains) on derivative instruments | 25,165,000 | 35,664,000 | (11,192,000) |
Loss from extinguishment of debt | 199,000 | 2,229,000 | 225,000 |
Gain on sale of real estate | (49,457,000) | (327,211,000) | (11,942,000) |
Interest rate swap settlements for off-market swap instruments | 476,000 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Rents and other receivables | (2,698,000) | (10,600,000) | (11,230,000) |
Prepaid expenses and other assets | (9,015,000) | (32,947,000) | (21,476,000) |
Accounts payable and accrued liabilities | (6,696,000) | (933,000) | 1,236,000 |
Other liabilities | 9,247,000 | (7,114,000) | 1,154,000 |
Due to affiliates | 1,873,000 | 3,460,000 | 910,000 |
Net cash provided by operating activities | 101,730,000 | 70,628,000 | 100,927,000 |
Cash Flows from Investing Activities: | |||
Improvements to real estate | (87,630,000) | (79,931,000) | (88,721,000) |
Proceeds from sale of real estate, net | 25,091,000 | 931,489,000 | 41,649,000 |
Proceeds from payoff of real estate loan receivable | 150,213,000 | 0 | 0 |
Proceeds from the sale of equity securities | 0 | 16,186,000 | 0 |
Payments for construction in progress | (3,277,000) | (21,706,000) | (34,229,000) |
Investment in an unconsolidated entity | 0 | 0 | (426,000) |
Origination costs on real estate loan receivable | (120,000) | 0 | 0 |
Payments of post-closing acquisition costs | 0 | (1,014,000) | 0 |
Purchase of joint venture partner’s equity interest | 0 | 0 | (28,268,000) |
Escrow deposits for tenant improvements | 0 | 972,000 | 1,111,000 |
Insurance proceeds received for property damage | 0 | 867,000 | 4,629,000 |
Net cash provided by (used in) investing activities | 84,277,000 | 846,863,000 | (104,255,000) |
Cash Flows from Financing Activities: | |||
Proceeds from notes payable | 421,760,000 | 377,589,000 | 507,909,000 |
Principal payments on notes payable | (491,391,000) | (1,107,369,000) | (335,243,000) |
Payments of deferred financing costs | (6,339,000) | (2,609,000) | (3,243,000) |
Interest rate swap settlements for off-market swap instruments | (231,000) | 0 | 0 |
Payments to redeem common stock | (10,877,000) | (100,996,000) | (96,064,000) |
Payments of prepaid other offering costs | (1,159,000) | (264,000) | 0 |
Payments of other offering costs | (26,000) | (16,000) | (15,000) |
Distribution to noncontrolling interest | (6,400,000) | 0 | 0 |
Distributions paid to common stockholders | (62,805,000) | (110,592,000) | (59,464,000) |
Net cash (used in) provided by financing activities | (157,468,000) | (944,257,000) | 13,880,000 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 28,539,000 | (26,766,000) | 10,552,000 |
Cash, cash equivalents and restricted cash, beginning of period | 49,272,000 | 76,038,000 | 65,486,000 |
Cash, cash equivalents and restricted cash, end of period | 77,811,000 | 49,272,000 | 76,038,000 |
Supplemental Disclosure of Cash Flow Information: | |||
Interest paid, net of capitalized interest $0, $1,711 and $2,832 for the years ended December 31, 2020, 2019 and 2018, respectively | 51,576,000 | 75,471,000 | 76,107,000 |
Supplemental Disclosure of Noncash Investing and Financing Activities: | |||
Equity securities received in connection with the portfolio sale | 0 | 271,000,000 | 0 |
Distributions payable | 9,187,000 | 9,392,000 | 9,801,000 |
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan | 46,722,000 | 51,704,000 | 56,136,000 |
Redeemable common stock payable | 0 | 0 | 31,647,000 |
Accrued improvements to real estate | 18,589,000 | 26,310,000 | 17,426,000 |
Capital improvements paid by tenant | 16,283,000 | 0 | 0 |
Construction in progress payable | 0 | 2,144,000 | 5,148,000 |
Acquisition fee related to construction in progress due to affiliate | 0 | 1,133,000 | 916,000 |
Accrued prepaid other offering costs | 782,000 | 33,000 | 0 |
Financing of interest rate swap liability through off-market swap instruments | 8,156,000 | 0 | 0 |
Accrued interest rate swap settlements related to off-market swap instruments | 245,000 | 0 | 0 |
Real estate consolidated in connection with joint venture purchase | 0 | 0 | 132,100,000 |
Note payable assumed in connection with joint venture purchase | 0 | 0 | 66,570,000 |
Liabilities assumed in connection with joint venture purchase | $ 0 | $ 0 | $ 3,173,000 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Cash Flows [Abstract] | |||
Interest capitalized | $ 0 | $ 1,711 | $ 2,832 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION KBS Real Estate Investment Trust III, Inc. (the “Company”) was formed on December 22, 2009 as a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2011 and it intends to continue to operate in such manner. Substantially all of the Company’s business is conducted through KBS Limited Partnership III (the “Operating Partnership”), a Delaware limited partnership. The Company is the sole general partner of and owns a 0.1% partnership interest in the Operating Partnership. KBS REIT Holdings III LLC (“REIT Holdings III”), the limited partner of the Operating Partnership, owns the remaining 99.9% interest in the Operating Partnership and is its sole limited partner. The Company is the sole member and manager of REIT Holdings III. Subject to certain restrictions and limitations, the business of the Company is externally managed by KBS Capital Advisors LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement the Company entered into with the Advisor (the “Advisory Agreement”). On January 26, 2010, the Company issued 20,000 shares of its common stock to the Advisor at a purchase price of $10.00 per share. As of December 31, 2020, the Advisor owned 20,857 shares of the Company’s common stock. The Company owns a diverse portfolio of real estate investments. As of December 31, 2020, the Company owned 18 office properties (one of which was held for sale and subsequently sold on January 19, 2021), one mixed-use office/retail property and an investment in the equity securities of Prime US REIT, a Singapore real estate investment trust (the “SREIT”), which is accounted for as an investment in an unconsolidated entity under the equity method of accounting. The Company commenced its initial public offering (the “Offering”) on October 26, 2010. Upon commencing the Offering, the Company retained KBS Capital Markets Group LLC (the “Dealer Manager”), an affiliate of the Company, to serve as the dealer manager of the Offering pursuant to a dealer manager agreement, as amended and restated (the “Dealer Manager Agreement”). The Company ceased offering shares of common stock in the primary Offering on May 29, 2015 and terminated the primary Offering on July 28, 2015. The Company sold 169,006,162 shares of common stock in the primary Offering for gross proceeds of $1.7 billion. As of December 31, 2020, the Company had also sold 36,674,686 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $379.3 million. Also as of December 31, 2020, the Company had redeemed or repurchased 29,431,448 shares sold in the Offering for $322.3 million. Additionally, on October 3, 2014, the Company issued 258,462 shares of common stock for $2.4 million in private transactions exempt from the registration requirements pursuant to Section 4(a)(2) of the Securities Act of 1933. The Company continues to offer shares of common stock under its dividend reinvestment plan. In some states, the Company will need to renew the registration statement annually or file a new registration statement to continue its dividend reinvestment plan offering. The Company may terminate its dividend reinvestment plan offering at any time. COVID-19 Pandemic One of the most significant risks and uncertainties facing the Company and the real estate industry generally continues to be the effect of the ongoing public health crisis of the novel coronavirus disease (“COVID-19”) pandemic. The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business, including how the pandemic is affecting its tenants and its investment in the SREIT. During the year ended December 31, 2020, the Company did not experience significant disruptions in its operations from the COVID-19 pandemic. The Company did, however, recognize an impairment charge on an office/retail property due to the continued deterioration of retail demand at the property which was further impacted by the COVID-19 pandemic. Many of the Company’s tenants have experienced disruptions in their business, some more severely than others. In general, the Company’s retail and restaurant tenants, which comprise approximately 4% of its annualized base rent, have been more severely impacted by the COVID-19 pandemic than its office tenants. In addition, during the year ended December 31, 2020, the Company granted rent relief to a number of tenants as a result of the pandemic, but as the impact of the pandemic continues to be felt, these tenants or additional tenants may request rent relief in future periods or become unable to pay rent and therefore, the Company is unable to predict the ultimate impact the pandemic will have on its financial condition, results of operations and cash flows due to numerous uncertainties. The Company is evaluating each tenant rent relief request on an individual basis, considering a number of factors. Not all tenant requests will ultimately result in modified agreements, nor is the Company forgoing its contractual rights under its lease agreements. Further, significant reductions in rental revenue in the future related to the impact of the COVID-19 pandemic may limit the Company’s ability to draw on its revolving credit facilities or exercise extension options due to covenants described in the Company’s loan agreements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The consolidated financial statements include the accounts of the Company, REIT Holdings III, the Operating Partnership, their direct and indirect wholly owned subsidiaries, and through May 7, 2020, a joint venture in which the Company held a controlling interest. All significant intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements and accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. Upon adoption of the lease accounting standards of Topic 842 on January 1, 2019 (described below), the Company accounted for tenant reimbursements for property taxes, insurance and common area maintenance as variable lease payments and recorded these amounts as rental income on the statement of operations. For the year ended December 31, 2018, the Company reclassified $72.2 million of tenant reimbursement revenue for property taxes, insurance, and common area maintenance to rental income for comparability purposes. In addition, during the year ended December 31, 2019, the Company sold 11 office properties. During the year ended December 31, 2020, the Company sold a multifamily apartment complex held through a consolidated joint venture and classified an office property as held for sale. As a result, certain assets and liabilities related to these properties were reclassified to held for sale on the consolidated balance sheets for all periods presented. Revenue Recognition - Operating Leases Real Estate On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) including the package of practical expedients (“Topic 842”) for all leases that commenced before the effective date of January 1, 2019. Accordingly, the Company (i) did not reassess whether any expired or existing contracts are or contain leases, (ii) did not reassess the lease classification for any expired or existing lease, and (iii) did not reassess initial direct costs for any existing leases. The Company did not elect the practical expedient related to using hindsight to reevaluate the lease term. In addition, the Company adopted the practical expedient for land easements and did not assess whether existing or expired land easements that were not previously accounted for as leases under the lease accounting standards of Topic 840 are or contain a lease under Topic 842. In addition, Topic 842 provides an optional transition method to allow entities to apply the new lease accounting standards at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. The Company adopted this transition method upon its adoption of the lease accounting standards of Topic 842, which did not result in a cumulative effect adjustment to the opening balance of retained earnings on January 1, 2019. The Company’s comparative periods presented in the financial statements will continue to be reported under the lease accounting standards of Topic 840. In accordance with Topic 842, tenant reimbursements for property taxes and insurance are included in the single lease component of the lease contract (the right of the lessee to use the leased space) and therefore are accounted for as variable lease payments and are recorded as rental income on the Company’s statement of operations beginning January 1, 2019. In addition, the Company adopted the practical expedient available under Topic 842 to not separate nonlease components from the associated lease component and instead to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue recognition standard (Topic 606) and if certain conditions are met, specifically related to tenant reimbursements for common area maintenance which would otherwise be accounted for under the revenue recognition standard. The Company believes the two conditions have been met for tenant reimbursements for common area maintenance as (i) the timing and pattern of transfer of the nonlease components and associated lease components are the same and (ii) the lease component would be classified as an operating lease. Accordingly, tenant reimbursements for common area maintenance are also accounted for as variable lease payments and recorded as rental income on the Company’s statement of operations beginning January 1, 2019. The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is probable and records amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that can be taken in the form of cash or a credit against the tenant’s rent) that is funded is treated as a lease incentive and amortized as a reduction of rental revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how a tenant improvement allowance may be spent; • whether the lessee or lessor supervises the construction and bears the risk of cost overruns; • whether the amount of a tenant improvement allowance is in excess of market rates; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease. The Company leased apartment units under operating leases with terms generally of one year or less. Generally, credit investigations were performed for prospective residents and security deposits were obtained. The Company recognized rental revenue, net of concessions, on a straight-line basis over the term of the lease, when collectibility was determined to be probable. In accordance with Topic 842, the Company makes a determination of whether the collectibility of the lease payments in an operating lease is probable. If the Company determines the lease payments are not probable of collection, the Company would fully reserve for any contractual lease payments, deferred rent receivable, and variable lease payments and would recognize rental income only if cash is received. Beginning January 1, 2019, these changes to the Company’s collectibility assessment are reflected as an adjustment to rental income. Prior to January 1, 2019, bad debt expense related to uncollectible accounts receivable and deferred rent receivable was included in operating, maintenance, and management expense in the statement of operations. Any subsequent changes to the collectibility of the allowance for doubtful accounts as of December 31, 2018, which was recorded prior to the adoption of Topic 842, are recorded in operating, maintenance, and management expense in the statement of operations. Beginning January 1, 2019, the Company, as a lessor, records costs to negotiate or arrange a lease that would have been incurred regardless of whether the lease was obtained, such as legal costs incurred to negotiate an operating lease, as an expense and classifies such costs as operating, maintenance, and management expense on the Company’s consolidated statement of operations, as these costs are no longer capitalizable under the definition of initial direct costs under Topic 842. Sales of Real Estate Effective January 1, 2018, the Company adopted the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), which applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business. Generally, the Company’s sales of real estate would be considered a sale of a nonfinancial asset as defined by ASC 610-20. ASC 610-20 refers to the revenue recognition principles under ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . Under ASC 610-20, if the Company determines it does 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, the Company would derecognize 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. Real Estate Loan Receivable Interest income on the Company’s real estate loan receivable was recognized on an accrual basis over the life of the investment using the interest method. Direct loan origination fees and origination or acquisition costs, as well as premiums or discounts, were amortized over the term of the loan as an adjustment to interest income. Cash and Cash Equivalents The Company recognizes interest income on its cash and cash equivalents as it is earned and classifies such amounts as other interest income. Real Estate Depreciation and Amortization Real estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Land N/A Buildings 25-40 years Building improvements 10-25 years Tenant improvements Shorter of lease term or expected useful life Tenant origination and absorption costs Remaining term of related leases, including below-market renewal periods Real Estate Acquisition Valuation As a result of the Company’s adoption of ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , acquisitions of real estate beginning January 1, 2017 could qualify as asset acquisitions (as opposed to business combinations). The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination or an asset acquisition. If substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. For purposes of this test, land and buildings can be combined along with the intangible assets for any in-place leases and accordingly, most acquisitions of investment properties would not meet the definition of a business and would be accounted for as an asset acquisition. To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. For asset acquisitions, the cost of the acquisition is allocated to individual assets and liabilities on a relative fair value basis. Acquisition costs associated with business combinations are expensed as incurred. Acquisition costs associated with asset acquisitions are capitalized. The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease-up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining non-cancelable term of the leases. Subsequent to the acquisition of a property, the Company may incur and capitalize costs necessary to get the property ready for its intended use. During that time, certain costs such as legal fees, real estate taxes and insurance and financing costs are also capitalized. Impairment of Real Estate and Related Intangible Assets and Liabilities The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. During the years ended December 31, 2020 and 2019, the Company recorded impairment losses of $19.9 million and $8.7 million, respectively, on its real estate and related intangible assets. See Note 3, “Real Estate - Impairment of Real Estate.” The Company did not record any impairment loss on its real estate and related intangible assets during the year ended December 31, 2018. Real Estate Held for Sale and Discontinued Operations The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate held for sale are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Operating results of properties and related gains on sale of properties that were disposed of or classified as held for sale in the ordinary course of business during the years ended December 31, 2020, 2019 and 2018 are included in continuing operations on the Company’s consolidated statements of operations. Real Estate Loans Receivable The Company recorded its real estate loan receivable at amortized cost, net of an allowance for credit losses (if any). The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of a real estate loan receivable to present the net amount expected to be collected. This allowance is accounted for under the current expected credit loss (CECL) model and is measured and recorded upon the initial recognition of the real estate loan receivable and is re-measured at each balance sheet date based on changes in facts and circumstances. The allowance is adjusted through “Provision for credit loss” on the Company’s consolidated statements of operations and is increased or decreased based on the re-measurement of the allowance for credit loss at each balance sheet date. If the Company determines that all or a portion of the real estate loan receivable is no longer collectible, the portion that is deemed uncollectible will be written off and the allowance for credit losses reduced. Recoveries of real estate loans receivable that were previously written off are recorded when cash is received. The Company applies a probability-of-default method to measure the allowance for credit losses which applies the probability of default within a given timeframe by the percentage of the real estate loan receivable not expected to be collected due to default. Additionally, the Company evaluates the potential for adverse changes in the value of the collateral over the contractual life of the real estate loan receivable, the financial condition of the borrower, the probability that it will grant the borrower a concession through modification of the loan terms and other market conditions in calculating the allowance for credit losses. Failure to properly measure an allowance for credit loss could result in the overstatement of earnings and the carrying value of the real estate loan receivable. Actual losses, if any, could differ significantly from estimated amounts. Investments in Unconsolidated Joint Ventures The Company accounts for investments in joint ventures or entities over which the Company may exercise significant influence, but does not control, and for investments in joint ventures that qualify as variable interest entities of which the Company is not the primary beneficiary using the equity method of accounting. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to reflect additional contributions or distributions and the Company’s proportionate share of equity in the entity’s income (loss). The Company recognizes its proportionate share of the ongoing income or loss of the unconsolidated entity as equity in income (loss) of unconsolidated entities on the consolidated statements of operations. In addition, the Company accounts for any share issuances by the unconsolidated entity as if the Company sold a proportionate share of its investment. Any gain or loss as a result of the unconsolidated entity’s share issuance is recognized in equity in income (loss) of unconsolidated entities on the consolidated statement of operations. On a quarterly basis, the Company evaluates its investment in an unconsolidated entity for other-than-temporary impairments. As of December 31, 2020, the Company did not identify any indicators of impairment related to its unconsolidated real estate entity accounted for under the equity method. Construction in Progress Direct investments in undeveloped land or properties without leases in place at the time of acquisition are accounted for as an asset acquisition and not as a business combination. Acquisition fees and expenses are capitalized into the cost basis of an asset acquisition. Additionally, during the time that the Company is incurring costs necessary to bring these investments to their intended use, certain costs such as legal fees, real estate taxes and insurance and financing costs are also capitalized. Once construction in progress is substantially completed, the amounts capitalized to construction in progress are transferred to land and buildings and improvements and are depreciated over their respective useful lives. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short term investments. Cash and cash equivalents are stated at cost, which approximates fair value. There are no restrictions on the use of the Company’s cash and cash equivalents as of December 31, 2020. The Company’s cash and cash equivalents balance exceeds federally insurable limits as of December 31, 2020. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. Restricted Cash Restricted cash is composed of lender impound reserve accounts on the Company’s borrowings for capital improvements. Rents and Other Receivables The Company makes a determination of whether the collectibility of the lease payments in its operating leases is probable. If the Company determines the lease payments are not probable of collection, the Company would fully reserve for any outstanding rent receivables related to contractual lease payments and variable leases payments, would write-off any deferred rent receivable and would recognize rental income only if cash is received. The Company exercises judgment in assessing collectibility and considers payment history, current credit status, the tenant’s financial condition, security deposits, letters of credit, lease guarantees and current market conditions that may impact the tenant’s ability to make payments in accordance with its lease agreements, including the impact of the COVID-19 pandemic on the tenant’s business, in making the determination. Derivative Instruments The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate notes payable. The Company records these derivative instruments at fair value on the accompanying consolidated balance sheets. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) and consolidated statements of equity. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as gain or loss on derivative instruments and included in interest expense as presented in the accompanying consolidated statements of operations. Fair Value Election of Hybrid Financial Instruments with Embedded Derivatives When the Company enters into interest rate swaps which include off-market terms, the Company determines if these contracts are hybrid financial instruments with embedded derivatives requiring bifurcation between the host contract and the derivative instrument. The Company elected to initially and subsequently measure these hybrid financial instruments in their entirety at fair value with concurrent documentation of this election. Changes in the fair value of the hybrid financial instrument under this fair value election are recorded in earnings and are included in interest expense in the accompanying consolidated statements of operations. The cash flows for these off-market swap instruments which contain an other-than-insignificant financing element at inception are included in cash flows provided by or used in financing activities on the accompanying consolidated statements of cash flows. Deferred Financing Costs Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. Fair Value Measurements Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. When available, the Company utilizes quoted market prices from independent third-party sources to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market). The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities. Dividend Reinvestment Plan The Company has adopted a di |
REAL ESTATE
REAL ESTATE | 12 Months Ended |
Dec. 31, 2020 | |
Real Estate [Abstract] | |
REAL ESTATE | REAL ESTATE Real Estate Held for Investment As of December 31, 2020, the Company’s real estate portfolio held for investment was composed of 17 office properties and one mixed-use office/retail property encompassing in the aggregate approximately 7.5 million rentable square feet. As of December 31, 2020, the Company’s real estate portfolio held for investment was collectively 86% occupied. The following table summarizes the Company’s investments in real estate as of December 31, 2020 (in thousands): Property Date City State Property Total Real Estate, at Cost (1) Accumulated Depreciation and Amortization (1) Total Real Estate, Net (1) Domain Gateway 09/29/2011 Austin TX Office $ 69,460 $ (12,191) $ 57,269 Town Center 03/27/2012 Plano TX Office 131,347 (37,728) 93,619 McEwen Building 04/30/2012 Franklin TN Office 36,027 (8,249) 27,778 Gateway Tech Center 05/09/2012 Salt Lake City UT Office 29,558 (7,154) 22,404 RBC Plaza 01/31/2013 Minneapolis MN Office 154,799 (51,483) 103,316 Preston Commons 06/19/2013 Dallas TX Office 134,267 (27,405) 106,862 Sterling Plaza 06/19/2013 Dallas TX Office 84,759 (20,458) 64,301 201 Spear Street 12/03/2013 San Francisco CA Office 149,671 (25,653) 124,018 Accenture Tower 12/16/2013 Chicago IL Office 461,061 (102,370) 358,691 Ten Almaden 12/05/2014 San Jose CA Office 128,508 (26,478) 102,030 Towers at Emeryville 12/23/2014 Emeryville CA Office 208,601 (39,972) 168,629 3003 Washington Boulevard 12/30/2014 Arlington VA Office 151,395 (30,547) 120,848 Park Place Village 06/18/2015 Leawood KS Office/Retail 76,921 (2,634) 74,287 201 17th Street 06/23/2015 Atlanta GA Office 104,003 (23,600) 80,403 515 Congress 08/31/2015 Austin TX Office 126,502 (20,568) 105,934 The Almaden 09/23/2015 San Jose CA Office 186,836 (29,395) 157,441 3001 Washington Boulevard 11/06/2015 Arlington VA Office 60,859 (8,946) 51,913 Carillon 01/15/2016 Charlotte NC Office 162,051 (27,725) 134,326 $ 2,456,625 $ (502,556) $ 1,954,069 _____________________ (1) Amounts presented are net of impairment charges and write-offs of fully depreciated/amortized assets. As of December 31, 2020, the following property represented more than 10% of the Company’s total assets: Property Location Rentable Total Percentage of Annualized Base Rent (in thousands) (1) Average Occupancy Accenture Tower Chicago, IL 1,457,724 $ 358,691 14.3 % $ 32,399 $ 27.64 80.4 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2020, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. Operating Leases The Company’s office and office/retail properties are leased to tenants under operating leases for which the terms and expirations vary. As of December 31, 2020, the leases had remaining terms, excluding options to extend, of up to 16.6 years with a weighted-average remaining term of 4.8 years. Some of the leases have provisions to extend the term of the leases, options for early termination for all or a part of the leased premises after paying a specified penalty, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but generally is not a significant amount. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $8.6 million and $8.8 million as of December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company excluded from rental income $9.9 million and $2.0 million, respectively, related to lease payments that were deemed not probable of collection. During the years ended December 31, 2019 and 2018, the Company recorded a net recovery of bad debt of $0.4 million and bad debt expense of $1.2 million, respectively, which was included in operating, maintenance and management expense in the accompanying consolidated statements of operations. No bad debt expense or recovery was recorded during the year ended December 31, 2020. During the years ended December 31, 2020, 2019 and 2018, the Company recognized deferred rent from tenants of $4.6 million, $6.2 million and $9.1 million, respectively. As of December 31, 2020 and 2019, the cumulative deferred rent balance was $81.2 million and $77.6 million, respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $19.1 million and $20.6 million of unamortized lease incentives as of December 31, 2020 and 2019, respectively. As of December 31, 2020, the future minimum rental income from the Company’s properties held for investment under its non-cancelable operating leases was as follows (in thousands): 2021 $ 214,835 2022 191,958 2023 165,736 2024 150,021 2025 131,700 Thereafter 555,765 $ 1,410,015 As of December 31, 2020, the Company’s office and office/retail properties were leased to approximately 590 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows: Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Finance 122 $ 43,403 19.4 % Real Estate 52 25,108 11.2 % $ 68,511 30.6 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2020, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. As of December 31, 2020, no other tenant industries accounted for more than 10% of annualized base rent and no tenant accounted for more than 10% of annualized base rent. Geographic Concentration Risk As of December 31, 2020, the Company’s net investments in real estate in California, Texas and Illinois represented 22%, 17%, and 14% of the Company’s total assets, respectively. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the California, Texas and Illinois real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results and its ability to pay distributions to stockholders. Impairment of Real Estate |
REAL ESTATE DISPOSITIONS AND RE
REAL ESTATE DISPOSITIONS AND REAL ESTATE HELD FOR SALE | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
REAL ESTATE DISPOSITIONS AND REAL ESTATE HELD FOR SALE | REAL ESTATE DISPOSITIONS AND REAL ESTATE HELD FOR SALE During the year ended December 31, 2020, the Company sold a multifamily apartment complex held through a consolidated joint venture to a buyer unaffiliated with the Hardware Village Joint Venture, the Company or the Advisor for $178.0 million, before third-party closing costs, credits and the disposition fee payable to the Advisor. The Company recognized a gain on sale of $49.5 million related to the disposition of Hardware Village. In connection with the sale, the Company, through an indirect wholly owned subsidiary, provided seller financing to the purchaser by originating a real estate loan receivable. See Note 6, “Real Estate Loan Receivable - Hardware Village First Mortgage.” As of December 31, 2020, the Company classified one office property as held for sale. During the year ended December 31, 2019, the Company, through 12 indirect wholly owned subsidiaries, sold 11 of its properties (the “Singapore Portfolio”) to various subsidiaries of the SREIT, which was listed on the Singapore Stock Exchange (“SGX-ST”) on July 19, 2019 (the “Singapore Transaction”). The Singapore Portfolio consisted of the following properties: Tower I at Emeryville, Emeryville, California; 222 Main, Salt Lake City, Utah; Village Center Station, Greenwood Village, Colorado; Village Center Station II, Greenwood Village, Colorado; 101 South Hanley, St. Louis, Missouri; Tower on Lake Carolyn, Irving, Texas; Promenade I & II at Eilan, San Antonio, Texas; CrossPoint at Valley Forge, Wayne, Pennsylvania; One Washingtonian Center, Gaithersburg, Maryland; Reston Square, Reston, Virginia; and 171 17th Street, Atlanta, Georgia. The Company sold the Singapore Portfolio to the SREIT on July 18, 2019. The sale price of the Singapore Portfolio was $1.2 billion, before third-party closing costs, closing credits and other costs of approximately $20.0 million and excluding disposition fees paid to the Advisor of $9.5 million. The Company recognized a gain on sale of $327.2 million related to the disposition of the Singapore Portfolio. During the year ended December 31, 2018, the Company, through an indirect wholly owned subsidiary, disposed of one office property, Rocklin Corporate Center. On May 25, 2018, the Company sold Rocklin Corporate Center to a purchaser unaffiliated with the Company or the Advisor for $42.9 million before closing costs and credits and excluding disposition fees paid to the Advisor. The Company recognized a gain on sale of $11.9 million related to the disposition of Rocklin Corporate Center. The following summary presents the major components of assets and liabilities related to real estate held for sale as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Assets related to real estate held for sale: Total real estate, at cost $ 97,947 $ 224,782 Accumulated depreciation and amortization (23,073) (24,153) Real estate held for sale, net 74,874 200,629 Other assets 4,238 4,036 Total assets related to real estate held for sale $ 79,112 $ 204,665 Liabilities related to real estate held for sale: Notes payable, net $ — $ 49,000 Other liabilities 874 1,286 Total liabilities related to real estate held for sale $ 874 $ 50,286 The results of operations for the properties sold during the years ended December 31, 2020, 2019 and 2018 and an office property classified as held for sale as of December 31, 2020 are included in continuing operations on the Company’s consolidated statements of operations. The following table summarizes certain revenues and expenses related to the Company’s real estate properties that were sold during the years ended December 31, 2020, 2019 and 2018 and an office property classified as held for sale as of December 31, 2020, which were included in continuing operations (in thousands): Years Ended December 31, 2020 2019 2018 Revenues Rental income $ 11,804 $ 75,670 $ 116,949 Other operating income 1,167 7,194 10,935 Total revenues $ 12,971 $ 82,864 $ 127,884 Expenses Operating, maintenance, and management $ 4,053 $ 20,731 $ 32,195 Real estate taxes and insurance 1,863 10,495 17,225 Asset management fees to affiliate 1,068 5,827 8,775 General and administrative expenses 163 103 90 Depreciation and amortization 4,729 34,278 51,625 Interest expense 1,142 20,072 23,288 Total expenses $ 13,018 $ 91,506 $ 133,198 |
TENANT ORIGINATION AND ABSORPTI
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES | TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW MARKET LEASE LIABILITIES As of December 31, 2020 and 2019, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): Tenant Origination and Above-Market Below-Market December 31, December 31, December 31, December 31, December 31, December 31, Cost $ 75,664 $ 91,343 $ 1,146 $ 2,661 $ (20,239) $ (22,351) Accumulated Amortization (48,714) (53,982) (697) (2,095) 14,123 13,683 Net Amount $ 26,950 $ 37,361 $ 449 $ 566 $ (6,116) $ (8,668) Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the years ended December 31, 2020, 2019 and 2018 were as follows (in thousands): Tenant Origination and Above-Market Below-Market For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, 2020 2019 2018 2020 2019 2018 2020 2019 2018 Amortization $ (9,971) $ (21,072) $ (31,201) $ (117) $ (955) $ (1,712) $ 2,924 $ 4,470 $ 7,062 The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2020 is estimated to be amortized for the years ending December 31 as follows (in thousands): Tenant Origination and Above-Market Below-Market 2021 $ (7,864) $ (101) $ 2,309 2022 (5,639) (86) 1,636 2023 (3,995) (73) 1,092 2024 (2,833) (69) 534 2025 (2,367) (68) 314 Thereafter (4,252) (52) 231 $ (26,950) $ (449) $ 6,116 Weighted-Average Remaining Amortization Period 5.2 years 5.3 years 3.5 years |
REAL ESTATE LOAN RECEIVABLE
REAL ESTATE LOAN RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
REAL ESTATE LOAN RECEIVABLE | REAL ESTATE LOAN RECEIVABLE Hardware Village First Mortgage On May 7, 2020, the Company through a consolidated joint venture (the “Hardware Village Joint Venture”) sold a multi-family apartment project (“Hardware Village”) to a buyer unaffiliated with the Hardware Village Joint Venture, the Company or the Advisor for a purchase price of $178.0 million, before third-party closing costs, credits and the disposition fee payable to the Advisor. The purchase price was paid in a combination of approximately $27.8 million in cash and approximately $150.2 million in seller financing provided by an indirect wholly owned subsidiary of the Company (the “Lender”), as described below. The Company’s joint venture partner received a distribution of $6.4 million of the proceeds from the sale, assigned its interest in the Hardware Village Joint Venture to the Company and ceased to be a member of the Hardware Village Joint Venture effective May 7, 2020. In connection with the sale and seller financing, on May 7, 2020, the buyer entered into a promissory note with the Lender for $150.2 million. The promissory note was secured by a first mortgage on Hardware Village (the “Hardware Village First Mortgage”). For the period commencing on May 7, 2020 through July 31, 2020, interest on the Hardware Village First Mortgage accrued based on the higher of 2.95% and 250 basis points plus one-month LIBOR. For the period commencing on August 1, 2020 and until the payoff date, interest on the Hardware Village First Mortgage accrued based on the higher of 3.95% and 350 basis points plus one-month LIBOR. Monthly payments were interest only, with the outstanding principal due and payable at maturity on May 6, 2021; however, the buyer/borrower had the option to prepay the outstanding principal and any unpaid accrued interest at any time without fee, premium or penalty. On December 11, 2020, the buyer/borrower on the Hardware Village First Mortgage exercised its prepayment option available under the promissory note, pursuant to which the buyer/borrower paid off the entire outstanding principal balance and accrued interest in the amount of $150.4 million, without fee, premium or penalty. The following summarizes the activity related to the real estate loan receivable for the year ended December 31, 2020 (in thousands): Real estate loan receivable, net - December 31, 2019 $ — Face value of real estate loan receivable originated 150,213 Discount on real estate loan receivable originated (2,535) Accretion of discount on real estate loan receivable originated 2,535 Origination costs on real estate loan receivable 120 Amortization of origination costs on real estate loan receivable (120) Provision for credit loss (680) Reversal of provision for credit loss at payoff 680 Payoff of the Hardware Village First Mortgage (150,213) Real estate loan receivable, net - December 31, 2020 $ — For the year ended December 31, 2020, interest income from the real estate loan receivable consisted of the following (in thousands): For the Year Ended December 31, 2020 Contractual interest income $ 3,251 Accretion of origination discount 2,535 Amortization of origination costs (120) Interest income from real estate loan receivable $ 5,666 |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITIES | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED ENTITIES | INVESTMENT IN UNCONSOLIDATED ENTITIES Investment in Prime US REIT In connection with the Singapore Transaction, on July 19, 2019, the Company, through an indirect wholly owned subsidiary (“REIT Properties III”), acquired 307,953,999 units in the SREIT at a price of $271.0 million, or $0.88 per unit, representing a 33.3% ownership interest in the SREIT. On August 21, 2019, REIT Properties III sold 18,392,100 of its units in the SREIT for $16.2 million pursuant to an over-allotment option granted to the underwriters of the SREIT’s offering, reducing REIT Properties III’s ownership in the SREIT to 31.3% of the outstanding units of the SREIT as of that date. As of December 31, 2020, REIT Properties III held 289,561,899 units of the SREIT which represented 27.4% of the outstanding units of the SREIT. As of December 31, 2020, the aggregate value of the Company’s investment in the units of the SREIT was $228.8 million, which was based on the closing price of the SREIT units on the SGX-ST of $0.79 per unit as of December 31, 2020. The Company has concluded that based on its 27.4% ownership interest as of December 31, 2020, it exercises significant influence over the operations, financial policies and decision making with respect to its investment in the SREIT. Accordingly, the Company has accounted for its investment in the SREIT under the equity method of accounting as of December 31, 2020. Income is allocated according to the Company’s ownership interest at each month-end and recorded as equity income (loss) from unconsolidated entity. Any dividends received from the SREIT reduces the carrying amount of the investment. As of December 31, 2020, the carrying value of the Company’s investment in the SREIT was $233.6 million. During the year ended December 31, 2020, the Company recorded equity in loss from an unconsolidated entity of $0.5 million related to its investment in the SREIT. Equity in loss from an unconsolidated entity for the year ended December 31, 2020 included $2.6 million related to the Company’s share of net losses from the SREIT offset by a gain of $2.1 million to reflect the net effect to the Company’s investment as a result of the net proceeds raised by the SREIT in a private offering in February 2020. For the period from July 19, 2019 to December 31, 2019, the Company recorded $1.4 million of equity in loss from an unconsolidated entity related to its investment in the SREIT. During the year ended December 31, 2020, the Company received $19.3 million of dividends from its investment in the SREIT, which was recorded as a reduction of the Company’s carrying value of the investment. The Company elected to apply the nature of the distribution approach for purposes of presentation of the dividends on the statement of consolidated cash flows and classified the dividends received as operating activities on the statement of consolidated cash flows as of December 31, 2020. The nature of the distribution approach requires the Company to classify distributions from equity method investments on the basis of the nature of the activities of the investee that generated the distribution as either a return on investment (classified as a cash inflow of operating activities) or a return of investment (classified as a cash inflow from investing activities) when such information is available. The SREIT reports its financial statements in accordance with the International Financial Reporting Standards and uses the US dollar as its reporting currency, as such, the Company must make certain adjustments to the SREIT’s financial information to reflect U.S. GAAP before applying the equity method of accounting. Summarized financial information for the SREIT in accordance with U.S. GAAP follows (in thousands): As of December 31, 2020 December 31, 2019 Real estate, net $ 1,318,527 $ 1,201,050 Total assets 1,383,372 1,260,540 Notes payable, net 480,352 432,824 Total liabilities 546,486 473,540 Total equity 836,886 787,000 For the Year Ended December 31, 2020 For the Period from July 19, 2019 to December 31, 2019 Total revenues $ 145,000 $ 61,183 Net loss (9,385) (4,605) Company’s share of net loss (1) $ (2,562) $ (1,443) _____________________ (1) The Company’s share of net loss for the year ended December 31, 2020 excludes the $2.1 million gain recorded to reflect the net effect to the Company’s investment as a result of the net proceeds raised by the SREIT in a private offering in February 2020, which was classified in equity in loss from an unconsolidated entity on the consolidated statement of operations. Investment in Village Center Station II On March 3, 2017, the Company, through an indirect wholly owned subsidiary, acquired a 75% equity interest in an existing company and created a joint venture (the “Village Center Station II Joint Venture”) with an unaffiliated developer, Shea Village Center Station II, LLC (the “Developer”), to develop and subsequently operate a 12-story office building and an adjacent two-story office/retail building in the Denver submarket of Greenwood Village, Colorado (together, “Village Center Station II”). The total cost of the development was $111.2 million and the Company’s initial capital contribution to the Village Center Station II Joint Venture was $32.3 million. The Village Center Station II Joint Venture funded the construction of Village Center Station II with capital contributions from its members and proceeds from a construction loan of $78.5 million. The Company concluded that the Village Center Station II Joint Venture qualified as a variable interest entity (“VIE”) and determined that it was not the primary beneficiary of this VIE and to account for its investment in the project under the equity method of accounting. Village Center Station II was substantially completed in May 2018. On October 11, 2018, the Company purchased the Developer’s 25% equity interest for $28.2 million. Upon acquisition of the Developer’s interest, the Company accounted for Village Center Station II on a consolidated basis. In accordance with the FASB ASC 810, Consolidation , upon the initial consolidation of a VIE that is not considered a business, the difference between (a) the sum of the total fair value of the consideration plus the reported amount of previously held interests and (b) the sum of the individual fair values of the net assets is recognized as a gain or loss. At acquisition, the fair value based on a third-party appraisal of Village Center Station II was $132.1 million, which was allocated to the assets and liabilities acquired. The Company allocated $8.6 million to land, $109.0 million to building and improvements and $14.5 million to tenant origination and absorption costs. The Company’s total cost basis was $130.1 million, which includes the Company’s investment in the unconsolidated joint venture, the consideration paid to purchase the Developer’s 25% equity interest, debt assumed from the joint venture, and acquisition fees and expenses. As a result, the Company recorded a remeasurement gain of $2.0 million as a result of change in control, which was included in equity income from unconsolidated entities during the year ended December 31, 2018. During the year ended December 31, 2018, the Company recognized $2.1 million of equity in income from the Village Center Station II Joint Venture. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE As of December 31, 2020 and 2019, the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands): Book Value as of Book Value as of Contractual Interest Rate as of December 31, 2020 (1) Effective Interest Rate as of December 31, 2020 (1) Payment Type Maturity Date (2) Anchor Centre Mortgage Loan (3) $ — $ 49,043 (3) (3) (3) (3) 201 17th Street Mortgage Loan (4) — 64,750 (4) (4) (4) (4) The Almaden Mortgage Loan (5) 123,000 93,000 3.65% 3.65% Interest Only 12/01/2023 201 Spear Street Mortgage Loan 125,000 125,000 One-month LIBOR + 1.45% 1.59% Interest Only 01/05/2024 Carillon Mortgage Loan (6) 88,800 111,000 One-month LIBOR + 1.40% 1.54% Interest Only 04/11/2024 Modified Portfolio Loan Facility (7) 472,950 684,225 One-month LIBOR + 1.80% 1.94% Interest Only 11/03/2021 Modified Portfolio Revolving Loan Facility (8) 162,500 196,113 One-month LIBOR + 1.50% 1.64% Interest Only 03/01/2023 3001 & 3003 Washington Mortgage Loan 143,245 143,245 One-month LIBOR + 1.45% 1.59% Interest Only (9) 06/01/2024 Accenture Tower Revolving Loan (10) 281,250 — One-month LIBOR + 2.25% 2.39% Interest Only 11/02/2023 Total notes payable principal outstanding $ 1,396,745 $ 1,466,376 Deferred financing costs, net (8,380) (6,497) Total Notes Payable, net $ 1,388,365 $ 1,459,879 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2020. Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2020, consisting of the contractual interest rate and using interest rate indices as of December 31, 2020, where applicable. For information regarding the Company’s derivative instruments, see Note 9, “Derivative Instruments.” (2) Represents the maturity date as of December 31, 2020; subject to certain conditions, the maturity dates of certain loans may be extended beyond the dates shown. (3) On December 30, 2020, the Company repaid the entire principal balance and all other sums due under the Anchor Centre Mortgage Loan. (4) On January 23, 2020, the 201 17th Street Mortgage Loan was paid off and the 201 17th Street property was added to the collateral of the Portfolio Revolving Loan Facility. See below, “- Recent Financing Transactions - Modified Portfolio Revolving Loan Facility.” (5) On November 18, 2020, the Company refinanced The Almaden Mortgage Loan with an unaffiliated lender for borrowings of $123.0 million. See below, “ – Recent Financing Transactions – Refinancing of The Almaden Mortgage Loan.” (6) As of December 31, 2020, $88.8 million of term debt of the Carillon Mortgage Loan was outstanding and $22.2 million of revolving debt remained available for future disbursements, subject to certain terms and conditions set forth in the loan documents. (7) See below, “- Recent Financing Transactions - Modified Portfolio Loan Facility.” (8) See below, “- Recent Financing Transactions - Modified Portfolio Revolving Loan Facility.” (9) Represents the payment type required as of December 31, 2020. Certain future monthly payments due under the loan also include amortizing principal payments. For more information on the Company’s contractual obligations under its notes payable, see the five-year maturity table below. (10) See below, “- Recent Financing Transactions - Accenture Tower Revolving Loan.” During the years ended December 31, 2020, 2019 and 2018, the Company incurred $81.1 million, $114.3 million and $72.2 million of interest expense, respectively. Included in interest expense was: (i) the amortization of deferred financing costs of $4.3 million, $5.5 million and $6.5 million for the years ended December 31, 2020, 2019 and 2018, respectively, and (ii) interest expense (including gains and losses) incurred as a result of the Company’s derivative instruments, which increased interest expense by $39.1 million and $33.1 million for the years ended December 31, 2020 and 2019, respectively, and reduced interest expense by $11.1 million for the year ended December 31, 2018. Additionally, the Company capitalized $1.7 million and $2.8 million of interest related to construction in progress for the years ended December 31, 2019 and December 31, 2018, respectively. No interest was capitalized during the year ended December 31, 2020. As of December 31, 2020 and 2019, $4.0 million and $4.5 million of interest expense were payable, respectively. The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of December 31, 2020 (in thousands): 2021 $ 472,950 2022 — 2023 566,750 2024 357,045 2025 — Thereafter — $ 1,396,745 The Company’s notes payable contain financial debt covenants. As of December 31, 2020, the Company was in compliance with these debt covenants. Recent Financing Transactions Modified Portfolio Revolving Loan Facility On October 17, 2018, the Company, through indirect wholly owned subsidiaries, entered into a three On January 23, 2020, the Company, through indirect wholly owned subsidiaries (collectively, the “Borrower”), entered into a first modification and additional advance agreement (the “Modified Portfolio Revolving Loan Facility”) with the Agent and the Lenders (defined below) to (i) increase the committed amount by $110.0 million to $325.0 million, subject to certain conditions in the loan agreement, (ii) add 201 17th Street as collateral for the Modified Portfolio Revolving Loan Facility, and (iii) reset the loan term. The Modified Portfolio Revolving Loan Facility is composed of $162.5 million of term debt and $162.5 million of revolving debt. The lenders under the Modified Portfolio Revolving Loan Facility are U.S. Bank, N.A., Regions Bank, Citizens Bank, City National Bank and Associated Bank, N.A. (the “Lenders”). On January 23, 2020, the Company drew $66.5 million on the Modified Portfolio Revolving Loan Facility of which $64.9 million was used to pay off the 201 17th Street Mortgage Loan and the remaining amount was used to pay origination fees and accrued interest. As of December 31, 2020, the outstanding balance under the Modified Portfolio Revolving Loan Facility consisted of $162.5 million of term debt. As of December 31, 2020, an additional $162.5 million of revolving debt remained available upon satisfaction of certain loan conditions set forth in the loan documents. The Modified Portfolio Revolving Loan Facility may be used for working capital, capital expenditures, real property acquisitions and other corporate purposes. The initial maturity date of the Modified Portfolio Revolving Loan Facility is March 1, 2023, with two 12-month extension options, subject to certain terms, conditions and fees as described in the loan documents. The Modified Portfolio Revolving Loan Facility bears interest at a floating rate of 150 basis points over one-month LIBOR. Monthly payments are interest only with the entire balance and all outstanding interest and fees due at maturity. The Company will have the right to prepay all or a portion of the Modified Portfolio Revolving Loan Facility, subject to certain expenses potentially incurred by the Lender as a result of the prepayment and subject to certain conditions contained in the loan documents. During the term of the Modified Portfolio Revolving Loan Facility, the Company has an option to increase the committed amount of the Modified Portfolio Revolving Loan Facility up to four times with each increase of the committed amount to be at least $15.0 million but no greater than, in the aggregate, an additional $325.0 million so that the committed amount will not exceed $650.0 million, of which 50% would be term debt and 50% would be revolving debt, with the addition of one or more properties to secure the loan, subject to certain terms and conditions contained in the loan documents. In addition, the Modified Portfolio Revolving Loan Facility contains customary representations and warranties, financial and other covenants, events of default and remedies typical for this type of facility. The Modified Portfolio Revolving Loan Facility is secured by 515 Congress, Domain Gateway, the McEwen Building, Gateway Tech Center and 201 17th Street. Accenture Tower Revolving Loan On November 2, 2020, the Company, through an indirect wholly owned subsidiary (the “Accenture Tower Borrower”), entered into a three The Accenture Tower Revolving Loan matures on November 2, 2023, with two 12-month extension options, subject to certain terms and conditions contained in the loan documents. The Accenture Tower Revolving Loan bears interest at a floating rate of 225 basis points over one-month LIBOR so long as the loan is subject to a lender provided swap. The Accenture Tower Revolving Loan includes provisions for a “LIBOR Successor Rate” in the event LIBOR is unascertainable or ceases to be available. Monthly payments are interest only with the entire balance and all outstanding interest and fees due at maturity. The Company will have the right to repay the loan in part and in whole subject to certain conditions contained in the loan documents. On March 1, 2021, U.S. Bank, National Association, assigned $50.0 million of its portion of the committed amount of the Accenture Tower Revolving Loan to the National Bank of Kuwait S.A.K.P. Effective March 1, 2021, the Accenture Tower Lenders include U.S. Bank, National Association, Bank of America, N.A., Deutsche Pfandbriefbank AG and National Bank of Kuwait S.A.K.P. There were no changes to the original terms of the Accenture Tower Revolving Loan. Modified Portfolio Loan Facility On November 3, 2017, the Company, through indirectly wholly owned subsidiaries, entered into a three On November 3, 2020, the Company, through indirect wholly owned subsidiaries, entered into a loan extension and modification agreement (the “Modified Portfolio Loan Facility”) with Bank of America, N.A., as administrative agent for the Portfolio Loan Facility Lenders, to (i) extend the maturity date of the Modified Portfolio Loan Facility to November 3, 2021 and (ii) modify the loan documents to include provisions for a “LIBOR Successor Rate” in the event LIBOR is unascertainable or ceases to be available. The face amount of the Portfolio Loan Facility is $630.6 million, of which $472.9 million is term debt and $157.7 million is revolving debt. As of December 31, 2020, the outstanding balance under the Portfolio Loan Facility consisted of $472.9 million of term debt. The entire revolving portion of the Portfolio Loan Facility remains available for future disbursements, subject to certain terms and conditions contained in the loan documents. The Modified Portfolio Loan Facility has one additional 12-month extension option, subject to certain terms and conditions as described in the loan documents. The Modified Portfolio Loan Facility is secured by RBC Plaza, Preston Commons, Sterling Plaza, Towers at Emeryville, Ten Almaden and Town Center. Accenture Tower was released as security from the loan in connection with the entry into the Accenture Tower Revolving Loan. Refinancing of The Almaden Mortgage Loan three |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates. The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes. The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. As of December 31, 2020, the Company has entered into eight interest rate swaps, which were not designated as hedging instruments. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of December 31, 2020 and 2019. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands): December 31, 2020 December 31, 2019 Weighted-Average Weighted-Average Remaining Term in Years Derivative Instruments Number of Instruments Notional Amount Number of Instruments Notional Amount Reference Rate as of December 31, 2020 Derivative instruments not designated as hedging instruments Interest rate swaps (1) 8 $ 1,121,590 11 $ 960,963 One-month LIBOR/ Fixed at 0.70% - 2.11% 1.7% 2.2 _____________________ (1) During the year ended December 31, 2020, two of the Company’s interest rate swaps matured. In November 2020, the Company early terminated three interest rate swaps with an aggregate notional amount of $232.5 million maturing in November 2022, January 2023 and February 2023 and entered into two new interest rate swaps with an aggregate notional amount of $281.3 million, both maturing on November 2, 2023. The two new interest rate swaps were determined to be hybrid financial instruments with an embedded derivative and the Company elected the fair value option under ASC 815, Derivatives and Hedging , to measure these two interest rate swaps at fair value. The Company elected the fair value option to account for these two interest rate swaps at fair value to be consistent with the Company’s presentation of its existing interest rate swaps which are recorded at fair value. The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of December 31, 2020 and 2019 (dollars in thousands): December 31, 2020 December 31, 2019 Derivative Instruments Balance Sheet Location Number of Fair Value Number of Fair Value Derivative instruments not designated as hedging instruments Interest rate swaps Prepaid expenses and other assets, at fair value — $ — 3 $ 1,553 Interest rate swaps Other liabilities, at fair value (1) 8 $ (35,331) 8 $ (11,404) _____________________ (1) As of December 31, 2020, other liabilities includes a $7.8 million liability related to the fair value of two off-market interest rate swaps determined to be hybrid financial instruments for which the Company elected to apply the fair value option. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) and as other comprehensive income (loss) on the accompanying consolidated statements of equity. Amounts in other comprehensive income (loss) will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flows. The change in fair value of the ineffective portion is recognized directly in earnings. With respect to swap agreements that are terminated for which it remains probable that the original hedged forecasted transactions (i.e., LIBOR-based debt service payments) will occur, the loss related to the termination of these swap agreements is included in accumulated other comprehensive income (loss) and is reclassified into earnings over the period of the original forecasted hedged transaction. The change in fair value of a derivative instrument that is not designated as a cash flow hedge is recorded as interest expense in the accompanying consolidated statements of operations. The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations (in thousands): For the Years Ended December 31, 2020 2019 2018 Income statement related Derivatives designated as hedging instruments Amount of income recognized on interest rate swaps (effective portion) $ — $ — $ (205) — — (205) Derivatives not designated as hedging instruments Realized loss (gain) recognized on interest rate swaps 13,947 (2,561) 295 Unrealized loss (gain) on interest rate swaps (1) 25,165 35,664 (11,200) Fair value loss on interest rate cap — — 8 39,112 33,103 (10,897) Increase (decrease) in interest expense as a result of derivatives $ 39,112 $ 33,103 $ (11,102) Other comprehensive income related Unrealized income on derivative instruments $ — $ — $ 95 _____________________ (1) For the year ended December 31, 2020, unrealized loss on interest rate swaps included a $7.8 million unrealized loss related to the change in fair value of two off-market interest rate swaps determined to be hybrid financial instruments for which the Company elected to apply the fair value option. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of assets and liabilities for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, rent and other receivables, and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items. Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk. Notes payable: The fair values of the Company’s notes payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of a liability in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs. The following were the face values, carrying amounts and fair values of the Company’s notes payable as of December 31, 2020 and 2019, which carrying amounts generally do not approximate the fair values (in thousands): December 31, 2020 December 31, 2019 Face Value Carrying Fair Value Face Value Carrying Fair Value Financial liabilities: Notes payable $ 1,396,745 $ 1,388,365 $ 1,380,143 $ 1,466,376 $ 1,459,879 $ 1,469,293 Disclosure of the fair values of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. Low levels of transaction volume for certain financial instruments have made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. As of December 31, 2020, the Company measured the following derivative instruments at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Significant Other Significant Recurring Basis: Liability derivatives - interest rate swaps (1) $ (35,331) $ — $ (35,331) $ — _____________________ (1) Includes a $7.8 million liability related to the fair value of two off-market interest rate swaps determined to be hybrid financial instruments for which the Company elected to apply the fair value option. During the year ended December 31, 2020, the Company measured the following asset at fair value on a nonrecurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Significant Other Significant Nonrecurring Basis: Impaired real estate (1) $ 80,500 $ — $ — $ 80,500 _____________________ (1) Amount represents the fair value for a real estate asset impacted by an impairment charge during the year ended December 31, 2020, as of the date that the fair value measurement was made, which was March 31, 2020. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company has entered into the Advisory Agreement with the Advisor and the Dealer Manager Agreement with the Dealer Manager. These agreements entitled the Advisor and/or the Dealer Manager to specified fees upon the provision of certain services with regard to the Offering and reimbursement of organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company and entitle the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, as well as entitle the Advisor and/or the Dealer Manager to reimbursement of offering costs related to the dividend reinvestment plan incurred by the Advisor and the Dealer Manager on behalf of the Company and certain costs incurred by the Advisor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Company has also entered into a fee reimbursement agreement with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor and Dealer Manager also serve or served as the advisor and dealer manager, respectively, for KBS REIT I (which liquidated in December 2018), KBS REIT II, Pacific Oak Strategic Opportunity REIT (advisory agreement terminated as of October 31, 2019 and the dealer manager agreement terminated as of December 31, 2019), KBS Legacy Partners Apartment REIT (which liquidated in December 2018), Pacific Oak Strategic Opportunity REIT II (advisory agreement terminated as of October 31, 2019 and the dealer manager agreement terminated as of December 31, 2019) and KBS Growth & Income REIT. On November 1, 2019, Pacific Oak Strategic Opportunity REIT and Pacific Oak Strategic Opportunity REIT II each entered into advisory agreements with a new external advisor, Pacific Oak Capital Advisors, LLC. Pacific Oak Capital Advisors, LLC is part of a group of companies formed, owned and managed by Keith D. Hall and Peter McMillan III. Together, through GKP Holding LLC, Messrs. Hall and McMillan continue to indirectly own a 33 1/3% interest in the Advisor and the Dealer Manager. As of January 1, 2018, the Company, together with KBS REIT II, KBS Growth & Income REIT, Pacific Oak Strategic Opportunity REIT, KBS Legacy Partners Apartment REIT, Pacific Oak Strategic Opportunity REIT II, the Dealer Manager, the Advisor and other KBS-affiliated entities, had entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage were shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the program, and is billed directly to each entity. At the June 2018 renewal, Pacific Oak Strategic Opportunity REIT, Pacific Oak Strategic Opportunity REIT II and KBS Legacy Partners Apartment REIT elected to cease participation in the program and obtained separate insurance coverage. In June 2020, the Company renewed its participation in the program. The program is effective through June 30, 2021. Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2020, 2019 and 2018, respectively, and any related amounts payable as of December 31, 2020 and 2019 (in thousands): Incurred Years Ended Payable as of 2020 2019 2018 2020 2019 Expensed Asset management fees (1) $ 20,990 $ 24,614 $ 27,152 $ 8,529 $ 6,674 Reimbursement of operating expenses (2) (3) 479 1,453 3,612 97 79 Disposition fees (4) 1,715 9,483 429 — — Capitalized Acquisition fee on development project 34 217 350 — 1,133 Acquisition fee on unconsolidated joint venture — — 674 — — $ 23,218 $ 35,767 $ 32,217 $ 8,626 $ 7,886 _____________________ (1) See “Deferral of Asset Management Fees” below. (2) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $338,000, $357,000 and $325,000 for the years ended December 31, 2020, 2019 and 2018, respectively, and were the only type of employee costs reimbursed under the Advisory Agreement for the years ended December 31, 2020, 2019 and 2018. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition or origination fees or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. (3) Prior to the Singapore Transaction closing on July 19, 2019, the Company and the Advisor had agreed to evenly divide certain costs and expenses related to the Singapore Transaction. The Company incurred a total of $4.1 million of costs related to the Singapore Transaction, which were reimbursable by the SREIT upon a successful closing. These costs included legal, audit, tax, printing and other out-of-pocket costs that the Company incurred related to the Singapore Transaction. In October 2019, all of these costs had been reimbursed to the Company from the Advisor upon the Advisor receiving the reimbursement from the SREIT. (4) Disposition fees with respect to real estate sold are included in the gain on sale of real estate, net, in the accompanying consolidated statements of operations . In connection with the Offering, Messrs. Bren, Hall, McMillan and Schreiber agreed to provide additional indemnification to one of the participating broker-dealers. The Company agreed to add supplemental coverage to its directors’ and officers’ insurance coverage to insure Messrs. Bren, Hall, McMillan and Schreiber’s obligations under this indemnification agreement in exchange for reimbursement by Messrs. Bren, Hall, McMillan and Schreiber to the Company for all costs, expenses and premiums related to this supplemental coverage. During each of the years ended December 31, 2020, 2019 and 2018, the Advisor incurred $0.1 million for the costs of the supplemental coverage obtained by the Company. For the year ended December 31, 2018, the Advisor reimbursed the Company $0.2 million for property insurance rebates. Deferral of Asset Management Fees Pursuant to the Advisory Agreement, with respect to asset management fees accruing from March 1, 2014, the Advisor has agreed to defer, without interest, the Company’s obligation to pay asset management fees for any month in which the Company’s modified funds from operations (“MFFO”) for such month, as such term is defined in the practice guideline issued by the Institute for Portfolio Alternatives (formerly known as the Investment Program Association) in November 2010 and interpreted by the Company, excluding asset management fees, does not exceed the amount of distributions declared by the Company for record dates of that month. The Company remains obligated to pay the Advisor an asset management fee in any month in which the Company’s MFFO, excluding asset management fees, for such month exceeds the amount of distributions declared for the record dates of that month (such excess amount, an “MFFO Surplus”); however, any amount of such asset management fee in excess of the MFFO Surplus will also be deferred under the Advisory Agreement. If the MFFO Surplus for any month exceeds the amount of the asset management fee payable for such month, any remaining MFFO Surplus will be applied to pay any asset management fee amounts previously deferred in accordance with the Advisory Agreement. However, notwithstanding the foregoing, any and all deferred asset management fees that are unpaid will become immediately due and payable at such time as the Company’s stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) an 8.0% per year cumulative, noncompounded return on such net invested capital (the “Stockholders’ 8% Return”) and (ii) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to the Company’s share redemption program. The Stockholders’ 8% Return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of the Company’s stockholders to have received any minimum return in order for the Advisor to receive deferred asset management fees. As of December 31, 2020 and 2019, the Company had accrued and deferred payment of $8.5 million and $6.7 million of asset management fees under the Advisory Agreement, respectively. Lease to Affiliate On May 29, 2015, the indirect wholly owned subsidiary (the “Lessor”) of the Company that owns 3003 Washington Boulevard entered into a lease with an affiliate of the Advisor (the “Lessee”) for 5,046 rentable square feet, or approximately 2.4% of the total rentable square feet, at 3003 Washington Boulevard. The lease commenced on October 1, 2015 and was to terminate on August 31, 2019. The annualized base rent, which represents annualized contractual base rental income, adjusted to straight-line any contractual tenant concessions (including free rent) and rent increases from the lease’s inception through the balance of the initial lease term, for this lease was approximately $0.2 million, and the average annual rental rate (net of rental abatements) over the lease term was $46.38 per square foot. On March 14, 2019, the Lessor entered into a First Amendment to Deed of Lease with the Lessee to extend the lease period commencing on September 1, 2019 and terminating on August 31, 2024 (the “Amended Lease”) and set the annual base rent during the extension period. The annualized base rent from the commencement of the Amended Lease is approximately $0.3 million, and the average annual rental rate (net of rental abatements) over the term of the Amended Lease through its termination is $62.55 per square foot. During the years ended December 31, 2020, 2019 and 2018 the Company recognized $0.3 million, $0.3 million and $0.2 million of revenue related to this lease, respectively. Prior to their approval of the lease and the Amended Lease, the Company’s conflicts committee and board of directors determined the lease to be fair and reasonable to the Company. Portfolio Sale On July 18, 2019, the Company sold the Singapore Portfolio to the SREIT, which is affiliated with Charles J. Schreiber, Jr., the Company’s Chief Executive Officer, President, Chairman of the Board and one of the Company’s directors. See Note 7, “Investment in Unconsolidated Entities” for information related to the investment the Company made in the SREIT in connection with the Singapore Transaction. The SREIT is externally managed by a joint venture (the “Manager”) among KBS Asia Partners Pte. Ltd. (“KAP”), an entity in which Charles J. Schreiber, Jr. currently holds an indirect 50% ownership interest, and other entities unaffiliated with the Company. The SREIT is expected to pay the Manager an annual base fee of 10% of annual distributable income and an annual performance fee of 25% of the increase in distributions per unit of the SREIT from the preceding year; however, there was not any performance fee for 2019, and in 2020 such fee was determined based on an increase over projected distributions per unit. In addition, for acquisitions, the SREIT will pay the Manager an acquisition fee of 1% of the acquisition price of any real estate acquired. No acquisition fee was paid with respect to the SREIT’s acquisition of the Singapore Portfolio. The SREIT will also pay the Manager a divestment fee of 0.5% of the sale price of any real estate sold or divested and a development management fee of 3% of the total project costs incurred for development projects, to the extent the SREIT acquires a development project. A portion of these fees paid to the Manager will be paid to KBS Realty Advisors LLC, an affiliate of the Advisor and an entity controlled by Mr. Schreiber, for sub-advisory services. The Schreiber Trust, a trust whose beneficiaries are Charles J. Schreiber, Jr. and his family members, and the Linda Bren 2017 Trust also acquired units in the SREIT. The Schreiber Trust agreed that for the benefit of the Company it will not sell any portion of its respective units in the SREIT unless and until it has received the Company’s prior written consent, including the consent of the Company’s conflicts committee. The Linda Bren 2017 Trust has agreed for the benefit of the Company that it will not sell $5.0 million of its $10.0 million aggregate investment in the SREIT unless and until it has received the Company’s prior written consent, including the consent of the Company’s conflicts committee. Linda Bren is the spouse of the Company’s former director and president, who passed away in April 2019. In addition, Barbara R. Cambon, one of the Company’s former directors, accepted the positions of Chief Executive Officer and Chief Investment Officer of the Manager and will receive compensation for her services. In connection with her acceptance of these positions, Ms. Cambon resigned from the Company’s board of directors effective June 26, 2019. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2020 and 2019 (in thousands, except per share amounts): 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 77,702 $ 75,971 $ 75,503 $ 77,742 Net (loss) income attributable to common stockholders $ (58,903) $ 39,508 $ 1,119 $ (221) Net (loss) income per common share attributable to common stockholders, basic and diluted $ (0.32) $ 0.22 $ 0.01 $ (0.01) Distributions declared per common share (1) $ 0.149 $ 0.149 $ 0.150 $ 0.150 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 111,378 $ 114,509 $ 82,981 $ 76,404 Net (loss) income attributable to common stockholders $ (26,678) $ (28,115) $ 316,884 $ (880) Net (loss) income per common share attributable to common stockholders, basic and diluted $ (0.15) $ (0.16) $ 1.82 $ (0.02) Distributions declared per common share (1) $ 0.163 $ 0.163 $ 0.163 $ 0.961 __________________ |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Economic Dependency The Company is dependent on the Advisor for certain services that are essential to the Company, including the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that the Advisor is unable to provide the respective services, the Company will be required to obtain such services from other sources. Legal Matters From time to time, the Company may be party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Compliance with existing environmental laws is not expected to have a material adverse effect on the Company’s financial condition and results of operations as of December 31, 2020. Participation Fee Liability In accordance with the Advisory Agreement with the Advisor, the Advisor is entitled to receive a participation fee equal to 15.0% of the Company’s net cash flows, whether from continuing operations, net sale proceeds or otherwise, after the Company’s stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to the share redemption program, and (ii) an 8.0% per year cumulative, noncompounded return on such net invested capital. Net sales proceeds means the net cash proceeds realized by the Company after deduction of all expenses incurred in connection with a sale, including disposition fees paid to the Advisor. The 8.0% per year cumulative, noncompounded return on net invested capital is calculated on a daily basis. In making this calculation, the net invested capital is reduced to the extent distributions in excess of a cumulative, noncompounded, annual return of 8.0% are paid (from whatever source), except to the extent such distributions would be required to supplement prior distributions paid in order to achieve a cumulative, noncompounded, annual return of 8.0% (invested capital is only reduced as described in this sentence; it is not reduced simply because a distribution constitutes a return of capital for federal income tax purposes). The 8.0% per year cumulative, noncompounded return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of the Company’s stockholders to have received any minimum return in order for the Advisor to participate in the Company’s net cash flows. In fact, if the Advisor is entitled to participate in the Company’s net cash flows, the returns of the Company’s stockholders will differ, and some may be less than an 8.0% per year cumulative, noncompounded return. This fee is payable only if the Company is not listed on an exchange. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Distributions Paid On January 4, 2021, the Company paid distributions of $9.2 million, which related to distributions in the amount of $0.04983333 per share of common stock to stockholders of record as of the close of business on December 18, 2020. On February 1, 2021, the Company paid distributions of $9.2 million, which related to distributions in the amount of $0.04983333 per share of common stock to stockholders of record as of the close of business on January 21, 2021. On March 1, 2021, the Company paid distributions of $9.2 million, which related to distributions in the amount of $0.04983333 per share of common stock to stockholders of record as of the close of business on February 19, 2021. Distributions Authorized On March 11, 2021, the Company’s board of directors authorized a March 2021 distribution in the amount of $0.04983333 per share of common stock to stockholders of record as of the close of business on March 19, 2021, which the Company expects to pay in April 2021, and an April 2021 distribution in the amount of $0.04983333 per share of common stock to stockholders of record as of the close of business on April 20, 2021, which the Company expects to pay in May 2021. Investors may choose to receive cash distributions or purchase additional shares through the Company’s dividend reinvestment plan. Disposition of Anchor Centre |
SCHEDULE III REAL ESTATE ASSETS
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION | Initial Cost to Company Gross Amount at which Description Location Ownership Encumbrances Land Building and Improvements (1) Total Cost Capitalized Subsequent to Acquisition (2) Land Building and Improvements (1) Total (3) Accumulated Original Date of Date Properties Held for Investment Domain Gateway Austin, TX 100% (4) $ 2,850 $ 44,523 $ 47,373 $ 22,087 $ 2,850 $ 66,610 $ 69,460 $ (12,191) 2009 09/29/2011 Town Center Plano, TX 100% (5) 7,428 108,547 115,975 15,372 7,428 123,919 131,347 (37,728) 2001/2002/2006 03/27/2012 McEwen Building Franklin, TN 100% (4) 5,600 34,704 40,304 (4,277) 5,600 30,427 36,027 (8,249) 2009 04/30/2012 Gateway Tech Center Salt Lake City, UT 100% (4) 5,617 20,051 25,668 3,890 5,617 23,941 29,558 (7,154) 1909 05/09/2012 RBC Plaza Minneapolis, MN 100% (5) 16,951 109,191 126,142 28,657 16,951 137,848 154,799 (51,483) 1991 01/31/2013 Preston Commons Dallas, TX 100% (5) 17,188 96,330 113,518 20,749 17,188 117,079 134,267 (27,405) 1958/1986 06/19/2013 Sterling Plaza Dallas, TX 100% (5) 6,800 68,292 75,092 9,667 6,800 77,959 84,759 (20,458) 1984 06/19/2013 201 Spear Street San Francisco, CA 100% $ 125,000 40,279 85,941 126,220 23,451 40,279 109,392 149,671 (25,653) 1984 12/03/2013 Accenture Tower Chicago, IL 100% 281,250 49,306 370,662 419,968 41,093 49,306 411,755 461,061 (102,370) 1987 12/16/2013 Ten Almaden San Jose, CA 100% (5) 7,000 110,292 117,292 11,216 7,000 121,508 128,508 (26,478) 1988 12/05/2014 Towers at Emeryville Emeryville, CA 100% (5) 35,774 147,167 182,941 25,660 35,774 172,827 208,601 (39,972) 1972/1975/1985 12/23/2014 3003 Washington Boulevard Arlington, VA 100% (6) 18,800 129,820 148,620 2,775 18,800 132,595 151,395 (30,547) 2014 12/30/2014 Park Place Village Leawood, KS 100% — 11,009 117,070 128,079 (51,158) 8,101 68,820 76,921 (2,634) 2007 06/18/2015 201 17th Street Atlanta, GA 100% (4) 5,277 86,859 92,136 11,867 5,277 98,726 104,003 (23,600) 2007 06/23/2015 515 Congress Austin, TX 100% (4) 8,000 106,261 114,261 12,241 8,000 118,502 126,502 (20,568) 1975 08/31/2015 The Almaden San Jose, CA 100% 123,000 29,000 130,145 159,145 27,691 29,000 157,836 186,836 (29,395) 1980/1981 09/23/2015 3001 Washington Boulevard Arlington, VA 100% (6) 9,900 41,551 51,451 9,408 9,900 50,959 60,859 (8,946) 2015 11/06/2015 Carillon Charlotte, NC 100% 88,800 19,100 126,979 146,079 15,972 19,100 142,951 162,051 (27,725) 1991 01/15/2016 Total Properties Held for Investment 295,879 1,934,385 2,230,264 226,361 292,971 2,163,654 2,456,625 (502,556) Property Held for Sale Anchor Centre Phoenix, AZ 100% — 13,900 73,480 87,380 10,567 13,900 84,047 97,947 (23,073) 1984 05/22/2014 Total Property Held for Sale 13,900 73,480 87,380 10,567 13,900 84,047 97,947 (23,073) TOTAL $ 309,779 $ 2,007,865 $ 2,317,644 $ 236,928 $ 306,871 $ 2,247,701 $ 2,554,572 $ (525,629) ____________________ (1) Building and improvements includes tenant origination and absorption costs and construction in progress. (2) Costs capitalized subsequent to acquisition is net of impairment charges, write-offs of fully depreciated/amortized assets and property damage. (3) The aggregate cost of real estate for federal income tax purposes was $2.8 billion (unaudited) as of December 31, 2020. (4) As of December 31, 2020, these properties served as the security for the Modified Portfolio Revolving Loan Facility, which had an outstanding principal balance of $162.5 million. (5) As of December 31, 2020, these properties served as the security for the Modified Portfolio Loan Facility, which had an outstanding principal balance of $472.9 million. (6) As of December 31, 2020, these properties served as the security for the 3001 & 3003 Washington Mortgage Loan, which had an outstanding principal balance of $143.2 million. 2020 2019 2018 Real Estate: (1) Balance at the beginning of the year $ 2,625,002 $ 3,573,511 $ 3,403,500 Acquisitions — — 132,100 Improvements 96,191 102,921 84,362 Construction in progress — 19,035 35,518 Write off of fully depreciated and fully amortized assets (18,832) (50,590) (48,388) Impairments (19,395) (8,490) — Sale (128,394) (1,011,385) (33,581) Balance at the end of the year $ 2,554,572 $ 2,625,002 $ 3,573,511 Accumulated depreciation and amortization: (1) Balance at the beginning of the year $ (449,381) $ (536,990) $ (441,366) Depreciation and amortization expense (100,162) (136,040) (149,569) Write off of fully depreciated and fully amortized assets 18,832 50,590 48,388 Sale 5,082 173,059 5,557 Balance at the end of the year $ (525,629) $ (449,381) $ (536,990) _____________________ (1) Amounts include properties held for sale. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The consolidated financial statements include the accounts of the Company, REIT Holdings III, the Operating Partnership, their direct and indirect wholly owned subsidiaries, and through May 7, 2020, a joint venture in which the Company held a controlling interest. All significant intercompany balances and transactions are eliminated in consolidation. |
Use of Estimates | The preparation of the consolidated financial statements and accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Reclassifications | Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. Upon adoption of the lease accounting standards of Topic 842 on January 1, 2019 (described below), the Company accounted for tenant reimbursements for property taxes, insurance and common area maintenance as variable lease payments and recorded these amounts as rental income on the statement of operations. For the year ended December 31, 2018, the Company reclassified $72.2 million of tenant reimbursement revenue for property taxes, insurance, and common area maintenance to rental income for comparability purposes. In addition, during the year ended December 31, 2019, the Company sold 11 office properties. During the year ended December 31, 2020, the Company sold a multifamily apartment complex held through a consolidated joint venture and classified an office property as held for sale. As a result, certain assets and liabilities related to these properties were reclassified to held for sale on the consolidated balance sheets for all periods presented. |
Revenue Recognition, Operating Leases | Real Estate On January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) including the package of practical expedients (“Topic 842”) for all leases that commenced before the effective date of January 1, 2019. Accordingly, the Company (i) did not reassess whether any expired or existing contracts are or contain leases, (ii) did not reassess the lease classification for any expired or existing lease, and (iii) did not reassess initial direct costs for any existing leases. The Company did not elect the practical expedient related to using hindsight to reevaluate the lease term. In addition, the Company adopted the practical expedient for land easements and did not assess whether existing or expired land easements that were not previously accounted for as leases under the lease accounting standards of Topic 840 are or contain a lease under Topic 842. In addition, Topic 842 provides an optional transition method to allow entities to apply the new lease accounting standards at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. The Company adopted this transition method upon its adoption of the lease accounting standards of Topic 842, which did not result in a cumulative effect adjustment to the opening balance of retained earnings on January 1, 2019. The Company’s comparative periods presented in the financial statements will continue to be reported under the lease accounting standards of Topic 840. In accordance with Topic 842, tenant reimbursements for property taxes and insurance are included in the single lease component of the lease contract (the right of the lessee to use the leased space) and therefore are accounted for as variable lease payments and are recorded as rental income on the Company’s statement of operations beginning January 1, 2019. In addition, the Company adopted the practical expedient available under Topic 842 to not separate nonlease components from the associated lease component and instead to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue recognition standard (Topic 606) and if certain conditions are met, specifically related to tenant reimbursements for common area maintenance which would otherwise be accounted for under the revenue recognition standard. The Company believes the two conditions have been met for tenant reimbursements for common area maintenance as (i) the timing and pattern of transfer of the nonlease components and associated lease components are the same and (ii) the lease component would be classified as an operating lease. Accordingly, tenant reimbursements for common area maintenance are also accounted for as variable lease payments and recorded as rental income on the Company’s statement of operations beginning January 1, 2019. The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is probable and records amounts expected to be received in later years as deferred rent receivable. If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that can be taken in the form of cash or a credit against the tenant’s rent) that is funded is treated as a lease incentive and amortized as a reduction of rental revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how a tenant improvement allowance may be spent; • whether the lessee or lessor supervises the construction and bears the risk of cost overruns; • whether the amount of a tenant improvement allowance is in excess of market rates; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease. The Company leased apartment units under operating leases with terms generally of one year or less. Generally, credit investigations were performed for prospective residents and security deposits were obtained. The Company recognized rental revenue, net of concessions, on a straight-line basis over the term of the lease, when collectibility was determined to be probable. |
Revenue Recognition | Sales of Real Estate Effective January 1, 2018, the Company adopted the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), which applies to sales or transfers to noncustomers of nonfinancial assets or in substance nonfinancial assets that do not meet the definition of a business. Generally, the Company’s sales of real estate would be considered a sale of a nonfinancial asset as defined by ASC 610-20. ASC 610-20 refers to the revenue recognition principles under ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . Under ASC 610-20, if the Company determines it does 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, the Company would derecognize 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. Real Estate Loan Receivable |
Cash and Cash Equivalents | The Company recognizes interest income on its cash and cash equivalents as it is earned and classifies such amounts as other interest income. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short term investments. Cash and cash equivalents are stated at cost, which approximates fair value. There are no restrictions on the use of the Company’s cash and cash equivalents as of December 31, 2020. The Company’s cash and cash equivalents balance exceeds federally insurable limits as of December 31, 2020. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts. |
Depreciation and Amortization | Real estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterments are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. |
Real Estate Acquisition Valuation | As a result of the Company’s adoption of ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , acquisitions of real estate beginning January 1, 2017 could qualify as asset acquisitions (as opposed to business combinations). The Company records the acquisition of income-producing real estate or real estate that will be used for the production of income as a business combination or an asset acquisition. If substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. For purposes of this test, land and buildings can be combined along with the intangible assets for any in-place leases and accordingly, most acquisitions of investment properties would not meet the definition of a business and would be accounted for as an asset acquisition. To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets acquired and liabilities assumed in a business combination are measured at their acquisition-date fair values. For asset acquisitions, the cost of the acquisition is allocated to individual assets and liabilities on a relative fair value basis. Acquisition costs associated with business combinations are expensed as incurred. Acquisition costs associated with asset acquisitions are capitalized. The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining non-cancelable terms of the respective lease, including any below-market renewal periods. The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease-up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining non-cancelable term of the leases. Subsequent to the acquisition of a property, the Company may incur and capitalize costs necessary to get the property ready for its intended use. During that time, certain costs such as legal fees, real estate taxes and insurance and financing costs are also capitalized. |
Impairment of Real Estate and Related Intangible Assets and Liabilities | The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets and liabilities may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangible assets and liabilities through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangible assets and liabilities, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets and liabilities. During the years ended December 31, 2020 and 2019, the Company recorded impairment losses of $19.9 million and $8.7 million, respectively, on its real estate and related intangible assets. |
Real Estate Held for Sale and Discontinued Operations | The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate held for sale” and “assets related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Notes payable and other liabilities related to real estate held for sale are classified as “notes payable related to real estate held for sale” and “liabilities related to real estate held for sale,” respectively, for all periods presented in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Operating results of properties and related gains on sale of properties that were disposed of or classified as held for sale in the ordinary course of business during the years ended December 31, 2020, 2019 and 2018 are included in continuing operations on the Company’s consolidated statements of operations. |
Real Estate Loans Receivable | The Company recorded its real estate loan receivable at amortized cost, net of an allowance for credit losses (if any). The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of a real estate loan receivable to present the net amount expected to be collected. This allowance is accounted for under the current expected credit loss (CECL) model and is measured and recorded upon the initial recognition of the real estate loan receivable and is re-measured at each balance sheet date based on changes in facts and circumstances. The allowance is adjusted through “Provision for credit loss” on the Company’s consolidated statements of operations and is increased or decreased based on the re-measurement of the allowance for credit loss at each balance sheet date. If the Company determines that all or a portion of the real estate loan receivable is no longer collectible, the portion that is deemed uncollectible will be written off and the allowance for credit losses reduced. Recoveries of real estate loans receivable that were previously written off are recorded when cash is received. The Company applies a probability-of-default method to measure the allowance for credit losses which applies the probability of default within a given timeframe by the percentage of the real estate loan receivable not expected to be collected due to default. Additionally, the Company evaluates the potential for adverse changes in the value of the collateral over the contractual life of the real estate loan receivable, the financial condition of the borrower, the probability that it will grant the borrower a concession through modification of the loan terms and other market conditions in calculating the allowance for credit losses. |
Investments in Unconsolidated Joint Ventures | The Company accounts for investments in joint ventures or entities over which the Company may exercise significant influence, but does not control, and for investments in joint ventures that qualify as variable interest entities of which the Company is not the primary beneficiary using the equity method of accounting. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to reflect additional contributions or distributions and the Company’s proportionate share of equity in the entity’s income (loss). The Company recognizes its proportionate share of the ongoing income or loss of the unconsolidated entity as equity in income (loss) of unconsolidated entities on the consolidated statements of operations. In addition, the Company accounts for any share issuances by the unconsolidated entity as if the Company sold a proportionate share of its investment. Any gain or loss as a result of the unconsolidated entity’s share issuance is recognized in equity in income (loss) of unconsolidated entities on the consolidated statement of operations. On a quarterly basis, the Company evaluates its investment in an unconsolidated entity for other-than-temporary impairments. As of December 31, 2020, the Company did not identify any indicators of impairment related to its unconsolidated real estate entity accounted for under the equity method. |
Construction in Progress | Direct investments in undeveloped land or properties without leases in place at the time of acquisition are accounted for as an asset acquisition and not as a business combination. Acquisition fees and expenses are capitalized into the cost basis of an asset acquisition. Additionally, during the time that the Company is incurring costs necessary to bring these investments to their intended use, certain costs such as legal fees, real estate taxes and insurance and financing costs are also capitalized. Once construction in progress is substantially completed, the amounts capitalized to construction in progress are transferred to land and buildings and improvements and are depreciated over their respective useful lives. |
Restricted Cash | Restricted cash is composed of lender impound reserve accounts on the Company’s borrowings for capital improvements. |
Rents and Other Receivables | The Company makes a determination of whether the collectibility of the lease payments in its operating leases is probable. If the Company determines the lease payments are not probable of collection, the Company would fully reserve for any outstanding rent receivables related to contractual lease payments and variable leases payments, would write-off any deferred rent receivable and would recognize rental income only if cash is received. The Company exercises judgment in assessing collectibility and considers payment history, current credit status, the tenant’s financial condition, security deposits, letters of credit, lease guarantees and current market conditions that may impact the tenant’s ability to make payments in accordance with its lease agreements, including the impact of the COVID-19 pandemic on the tenant’s business, in making the determination. |
Derivative Instruments | The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate notes payable. The Company records these derivative instruments at fair value on the accompanying consolidated balance sheets. Derivative instruments designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are considered cash flow hedges. The change in fair value of the effective portion of a derivative instrument that is designated as a cash flow hedge is recorded as other comprehensive income (loss) on the accompanying consolidated statements of comprehensive income (loss) and consolidated statements of equity. The changes in fair value for derivative instruments that are not designated as a hedge or that do not meet the hedge accounting criteria are recorded as gain or loss on derivative instruments and included in interest expense as presented in the accompanying consolidated statements of operations. Fair Value Election of Hybrid Financial Instruments with Embedded Derivatives |
Deferred Financing Costs | Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing and are presented on the balance sheet as a direct deduction from the carrying value of the associated debt liability. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheet. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close. |
Fair Value Measurements | Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable. When available, the Company utilizes quoted market prices from independent third-party sources to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument. |
Dividend Reinvestment Plan | The Company has adopted a dividend reinvestment plan pursuant to which common stockholders may elect to have all or a portion of their dividends and other distributions, exclusive of dividends and other distributions that the Company’s board of directors designates as ineligible for reinvestment through the dividend reinvestment plan, reinvested in additional shares of the Company’s common stock in lieu of receiving cash distributions. Participants in the dividend reinvestment plan acquire shares of the Company’s common stock at a price equal to 95% of the estimated value per share of the Company’s common stock, as determined by the Advisor or another firm chosen by the Company’s board of directors for that purpose. On December 3, 2018, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $12.02 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding, all as of September 30, 2018, with the exception of an adjustment to the Company’s net asset value for the acquisition and assumed loan costs related to the Company’s buyout of a joint venture partner’s equity interest in a joint venture that closed subsequent to September 30, 2018 and a reduction to the Company’s net asset value for deferred financing costs related to a portfolio revolving loan facility that closed subsequent to September 30, 2018. The change in the dividend reinvestment plan purchase price was effective for the January 2, 2019 dividend reinvestment plan purchase date and was effective until the estimated value per share was updated. Commencing with the January 2, 2019 purchase date and until the estimated value per share was updated, the purchase price per share under the dividend reinvestment plan was $11.42. On December 4, 2019, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $11.65 (unaudited) based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding, all as of September 30, 2019, with the exception of adjustments to the Company’s net asset value to give effect to (i) the October 23, 2019 authorization of a special dividend of $0.80 per share on the outstanding shares of common stock of the Company to the stockholders of record as of the close of business on November 4, 2019 (the “Special Dividend”) and (ii) the change in the estimated value of the Company’s investment in units of the SREIT (SGX-ST Ticker: “OXMU”) as of December 3, 2019. The change in the dividend reinvestment plan purchase price was effective for the January 2, 2020 dividend reinvestment plan purchase date and was effective until the estimated value per share was updated. Commencing with the January 2, 2020 purchase date and until the estimated value per share was updated, the purchase price per share under the dividend reinvestment plan was $11.07. |
Redeemable Common Stock | The Company’s board of directors has adopted a share redemption program that may enable stockholders to sell their shares to the Company in limited circumstances. The restrictions of the Company’s share redemption program will severely limit its stockholders’ ability to sell their shares should they require liquidity and will limit the stockholders’ ability to recover an amount equal to the Company’s estimated value per share. There are several limitations on the Company’s ability to redeem shares under the share redemption program: • Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program, and together with redemptions sought in connection with a stockholder’s death, “Special Redemptions;” all redemptions that do not meet the requirements for a Special Redemption are “Ordinary Redemptions”), the Company may not redeem shares unless the stockholder has held the shares for one year. • During any calendar year, the share redemption program limits the number of shares the Company may redeem to those that the Company could purchase with the amount of net proceeds from the sale of shares under the dividend reinvestment plan during the prior calendar year, provided that once the Company has received requests for redemptions, whether in connection with Special Redemptions or otherwise, that if honored, and when combined with all prior redemptions made during the calendar year, would result in the amount of remaining funds available for the redemption of additional shares in such calendar year being $10.0 million or less, the last $10.0 million of available funds shall be reserved exclusively for Special Redemptions. Notwithstanding anything contained in the share redemption program to the contrary, the Company may increase or decrease the funding available for the redemption of shares pursuant to the program upon ten • During any calendar year, the Company may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year. • The Company has no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland General Corporation Law, as amended from time to time, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency. Pursuant to the share redemption program, redemptions made in connection with Special Redemptions are made at a price per share equal to the most recent estimated value per share of the Company’s common stock as of the applicable redemption date. From January 1, 2018 through June 8, 2018, the redemption price for Ordinary Redemptions was as follows: • For those shares held by the redeeming stockholder for at least one year, 92.5% of the Company’s most recent estimated value per share as of the applicable redemption date; • For those shares held by the redeeming stockholder for at least two years, 95.0% of the Company’s most recent estimated value per share as of the applicable redemption date; • For those shares held by the redeeming stockholder for at least three years, 97.5% of the Company’s most recent estimated value per share as of the applicable redemption date; and • For those shares held by the redeeming stockholder for at least four years, 100% of the Company’s most recent estimated value per share as of the applicable redemption date. Effective June 8, 2018, Ordinary Redemptions are made at a price per share equal to 95% of the Company’s most recent estimated value per share as of the applicable redemption date. On December 3, 2018, the Company’s board of directors approved an estimated value per share of its common stock of $12.02 (unaudited) as described above under “— Dividend Reinvestment Plan.” This estimated value per share became effective for the December 2018 redemption date, which was December 31, 2018. On December 4, 2019, the Company’s board of directors approved an estimated value per share of its common stock of $11.65 (unaudited) as described above under “— Dividend Reinvestment Plan.” This estimated value per share became effective for the December 2019 redemption date, which was December 31, 2019. On December 7, 2020, the Company’s board of directors approved an estimated value per share of its common stock of $10.74 (unaudited) as described above under “— Dividend Reinvestment Plan.” This estimated value per share became effective for the December 2020 redemption date, which was December 31, 2020. The Company currently expects to utilize an independent valuation firm to update its estimated value per share no later than December 2021. For purposes of determining the time period a redeeming stockholder has held each share, the time period begins as of the date the stockholder acquired the share; provided, that shares purchased by the redeeming stockholder pursuant to the dividend reinvestment plan will be deemed to have been acquired on the same date as the initial share to which the dividend reinvestment plan shares relate. The date of the share’s original issuance by the Company is not determinative. Based on the amount of net proceeds raised from the sale of shares under the Company’s dividend reinvestment plan during 2019, the Company had an aggregate of $51.7 million available for redemptions in 2020, including the reserve for Special Redemptions. In connection with the Company’s pursuit of a net asset value (“NAV”) REIT strategy, in December 2019, the Company’s board of directors determined to temporarily suspend Ordinary Redemptions under the share redemption program, and Ordinary Redemptions remain suspended as the Company navigates through the impact of the COVID-19 pandemic and evaluates its proposed conversion to an NAV REIT. Upon suspension, all Ordinary Redemption requests that had been received were cancelled and no Ordinary Redemption requests were accepted or collected during the suspension of the share redemption program. However, any redemptions sought in connection with and meeting the requirements for Special Redemptions would still be eligible and continue to be processed in accordance with the current share redemption program, subject to the amount of net proceeds raised from the sale of shares under the Company’s dividend reinvestment plan during 2020, or $46.7 million for redemptions in 2021, including the reserve for Special Redemptions. However, because the amounts that can be redeemed are determinable and only contingent on an event that is likely to occur (e.g., the passage of time), the Company presents the amounts available for redemptions in future periods as redeemable common stock in the accompanying balance sheets. The Company will classify as liabilities financial instruments that represent a mandatory obligation of the Company to redeem shares. The Company’s redeemable common shares are contingently redeemable at the option of the holder. When the Company determines it has a mandatory obligation to repurchase shares under the share redemption program, it will reclassify such obligations from temporary equity to a liability based upon their respective settlement values. |
Related Party Transactions | The Company has entered into the Advisory Agreement with the Advisor and the Dealer Manager Agreement with the Dealer Manager. These agreements entitled the Advisor and/or the Dealer Manager to specified fees upon the provision of certain services with regard to the Offering and reimbursement of organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company and entitle the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, as well as entitle the Advisor and/or the Dealer Manager to reimbursement of offering costs related to the dividend reinvestment plan incurred by the Advisor and the Dealer Manager on behalf of the Company and certain costs incurred by the Advisor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Company has also entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor and Dealer Manager also serve or served as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust, Inc. (“KBS REIT I”) (which liquidated in December 2018), KBS Real Estate Investment Trust II, Inc. (“KBS REIT II”), Pacific Oak Strategic Opportunity REIT, Inc., formerly KBS Strategic Opportunity REIT, Inc. (“Pacific Oak Strategic Opportunity REIT”) (advisory agreement terminated as of October 31, 2019 and the dealer manager agreement terminated as of December 31, 2019), KBS Legacy Partners Apartment REIT, Inc. (“KBS Legacy Partners Apartment REIT”) (which liquidated in December 2018), Pacific Oak Strategic Opportunity REIT II, Inc., formerly KBS Strategic Opportunity REIT II, Inc. (“Pacific Oak Strategic Opportunity REIT II”) (advisory agreement terminated as of October 31, 2019 and the dealer manager agreement terminated as of December 31, 2019) and KBS Growth & Income REIT, Inc. (“KBS Growth & Income REIT”). On November 1, 2019, Pacific Oak Strategic Opportunity REIT and Pacific Oak Strategic Opportunity REIT II each entered into advisory agreements with a new external advisor, Pacific Oak Capital Advisors, LLC. Pacific Oak Capital Advisors, LLC is part of a group of companies formed, owned and managed by Keith D. Hall and Peter McMillan III. Together, through GKP Holding LLC, Messrs. Hall and McMillan, continue to indirectly own a 33 1/3% interest in the Advisor and the Dealer Manager. |
Related Party Transactions, Acquisition and Origination Fees | The Company pays the Advisor an acquisition fee equal to 1.0% of the cost of investments acquired, including the sum of the amount actually paid or allocated to the purchase, development, construction or improvement of such investments, acquisition expenses and any debt attributable to such investments. With respect to investments in and originations of loans, the Company pays an origination fee equal to 1.0% of the amount to be funded by the Company to acquire or originate mortgage, mezzanine, bridge or other loans, including any expenses related to such investments and any debt the Company uses to fund the acquisition or origination of these loans. The Company does not pay an acquisition fee with respect to investments in loans. |
Related Party Transactions, Operating Expenses | Under the Advisory Agreement, the Advisor has the right to seek reimbursement from the Company for all costs and expenses it incurs in connection with the provision of services to the Company, including the Company’s allocable share of the Advisor’s overhead, such as rent, employee costs, utilities, accounting software and cybersecurity costs. The Company also reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. In the future, the Advisor may seek reimbursement for additional employee costs. The Company will not reimburse the Advisor for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries and benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. |
Related Party Transactions, Asset Management Fee | With respect to investments in real estate, the Company pays the Advisor a monthly asset management fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, plus the cost of any subsequent development, construction or improvements to the property. This amount includes any portion of the investment that was debt financed and is inclusive of acquisition expenses related thereto (but excludes acquisition fees paid or payable to the Advisor). In the case of investments made through joint ventures, the asset management fee will be determined based on the Company’s proportionate share of the underlying investment. With respect to investments in loans and any investments other than real estate, the Company pays the Advisor a monthly fee calculated, each month, as one-twelfth of 0.75% of the lesser of (i) the amount paid or allocated to acquire or fund the loan or other investment (which amount includes any portion of the investment that is debt financed and is inclusive of acquisition or origination expenses related thereto but is exclusive of acquisition or origination fees paid or payable to the Advisor) and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition or origination expenses related to the acquisition or funding of such investment (but excluding acquisition or origination fees paid or payable to the Advisor), as of the time of calculation. No asset management fee is currently paid on the Company’s investment in units of the SREIT. Pursuant to the Advisory Agreement, with respect to asset management fees accruing from March 1, 2014, the Advisor has agreed to defer, without interest, the Company’s obligation to pay asset management fees for any month in which the Company’s modified funds from operations (“MFFO”) for such month, as such term is defined in the practice guideline issued by the Institute of Portfolio Alternatives (formerly known as the Investment Program Association) (“IPA”) in November 2010 and interpreted by the Company, excluding asset management fees, does not exceed the amount of distributions declared by the Company for record dates of that month. The Company remains obligated to pay the Advisor an asset management fee in any month in which the Company’s MFFO, excluding asset management fees, for such month exceeds the amount of distributions declared for the record dates of that month (such excess amount, an “MFFO Surplus”); however, any amount of such asset management fee in excess of the MFFO Surplus will also be deferred under the Advisory Agreement. If the MFFO Surplus for any month exceeds the amount of the asset management fee payable for such month, any remaining MFFO Surplus will be applied to pay any asset management fee amounts previously deferred in accordance with the Advisory Agreement. |
Related Party Transactions, Disposition Fee | For substantial assistance in connection with the sale of properties or other investments, the Company pays the Advisor or one of its affiliates 1.0% of the contract sales price of each property or other investment sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with the Advisor or one of its affiliates, the fee paid to the Advisor or one of its affiliates may not exceed the commissions paid to such unaffiliated third parties, and provided further that the disposition fees paid to the Advisor or one of its affiliates and unaffiliated third parties may not exceed 6.0% of the contract sales price. The Company will not pay a disposition fee upon the maturity, prepayment or workout of a loan or other debt-related investment, provided that if the Company takes ownership of a property as a result of a workout or foreclosure of a loan, the Company will pay a disposition fee upon the sale of such property. No disposition fees will be paid with respect to any sales of the Company’s investment in units of the SREIT. |
Income Taxes | The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To continue to qualify as a REIT, the Company must continue to meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax on income that it distributes as dividends to its stockholders. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and operates in such a manner as to qualify for treatment as a REIT. The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries has been assessed interest or penalties by any major tax jurisdictions. The Company’s evaluations were performed for all open tax years through December 31, 2020. As of December 31, 2020, the returns for calendar years 2016 through 2019 remain subject to examination by major tax jurisdictions. |
Per Share Data | Basic net income (loss) per share of common stock is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the years ended December 31, 2020, 2019 and 2018, respectively. On October 23, 2019, the Company’s board of directors authorized the Special Dividend in the amount of $0.80 per share of common stock to stockholders of record as of the close of business on November 4, 2019. Accordingly on December 12, 2019, the Company paid $48.5 million (35%) in cash and issued $90.0 million (65%) in stock pursuant to the Special Dividend. |
Segments | The Company has invested in core real estate properties and real estate-related investments with the goal of acquiring a portfolio of income-producing investments. The Company’s real estate properties exhibit similar long-term financial performance and have similar economic characteristics to each other. Accordingly, the Company aggregated its investments in real estate properties into one reportable business segment. |
Square Footage, Occupancy and Other Measures | Square footage, occupancy, number of tenants and other measures, including annualized base rent and annualized base rent per square foot, used to describe real estate investments included in these notes to the consolidated financial statements are presented on an unaudited basis. |
Recently Issued Accounting Standards Update | In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No. 2020-04”) to provide temporary optional expedients and exceptions to the guidance in GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (SOFR). Modified contracts that meet the following criteria are eligible for relief from the modification accounting requirements under GAAP: (1) the contract references LIBOR or another rate that is expected to be discontinued due to reference rate reform, (2) the modified terms directly replace or have the potential to replace the reference rate that is expected to be discontinued due to reference rate reform, and (3) any contemporaneous changes to other terms (i.e., those that do not directly replace or have the potential to replace the reference rate) that change or have the potential to change the amount and timing of contractual cash flows must be related to the replacement of the reference rate. For a contract that meets the criteria, the guidance generally allows an entity to account for and present modifications as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. That is, the modified contract is accounted for as a continuation of the existing contract. In addition, ASU No. 2020-04 provides various optional expedients for hedging relationships affected by reference rate reform, if certain criteria are met. The amendments in ASU No. 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. An entity may elect to apply the amendments in ASU No. 2020-04 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. For the period from January 1, 2020 (the earliest date the Company may elect to apply ASU No. 2020-04) through December 31, 2020, the Company did not have any contract modifications that meet the criteria described above, specifically contract modifications that have been modified from LIBOR to an alternative reference rate. The Company’s loan agreements, derivative instruments, and certain lease agreements use LIBOR as the current reference rate. For eligible contract modifications, the Company expects to adopt the temporary optional expedients described in ASU No. 2020-04. The optional expedients for hedging relationships described in ASU No. 2020-04 are not expected to have an impact to the Company as the Company has elected to not designate its derivative instruments as a hedge. In April 2020, the FASB issued a FASB Staff Q&A related to Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic (the “Topic 842 Q&A”). The Company adopted the lease accounting standards of Topic 842 beginning January 1, 2019. Under Topic 842, subsequent changes to lease payments that are not stipulated in the original lease contract are generally accounted for as lease modifications. Some contracts may contain explicit or implicit enforceable rights and obligations that require lease concessions if certain circumstances arise that are beyond the control of the parties to the contract. If a lease contract provides enforceable rights and obligations for concessions in the contract and no changes are made to that contract, the concessions are not accounted for under the lease modification guidance in Topic 842. If concessions granted by lessors are beyond the enforceable rights and obligations in the contract, entities would generally account for those concessions in accordance with the lease modification guidance in Topic 842. Because of the unprecedented and global nature of the COVID-19 pandemic, the FASB staff is aware that it may be exceedingly challenging for entities to determine whether existing contracts provide enforceable rights and obligations for lease concessions and whether those concessions are consistent with the terms of the contract or are modifications to the contract. As such, the FASB staff believes that it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Topic 842 as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in Topic 842 to those contracts. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. For example, this election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than total payments required by the original contract. The FASB staff expects that reasonable judgment will be exercised in making those determinations. Some concessions will provide a deferral of payments with no substantive changes to the consideration in the original contract. A deferral affects the timing, but the amount of the consideration is substantially the same as that required by the original contract. The staff expects that there will be multiple ways to account for those deferrals, none of which the staff believes are more preferable than the others. Two of those methods are: (1) Account for the concessions as if no changes to the lease contract were made. Under that accounting, a lessor would increase its lease receivable, and a lessee would increase its accounts payable as receivables/payments accrue. In its income statement, a lessor would continue to recognize income, and a lessee would continue to recognize expense during the deferral period and (2) Account for the deferred payments as variable lease payments. In accordance with the Topic 842 Q&A, the Company made the election to account for lease concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the Company as lessor consistent with how those concessions would be accounted for under Topic 842 as though enforceable rights and obligations for those concessions existed. Accordingly, the Company does not analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and elected not to apply the lease modification guidance in Topic 842. For deferrals, the Company accounts for the concessions as if no changes to the lease contract were made and continues to recognize rental income during the deferral period. The amount of deferred rent is assessed for collectability at the end of each reporting period. For rental abatements, the Company recognizes negative variable lease income for the forgiven rent, thereby reversing the rental income and rent receivable for the abated period. The Company has granted a number of lease concessions related to the effects of the COVID-19 pandemic but these lease concessions did not have a material impact to the Company’s consolidated balance sheets as of December 31, 2020 or consolidated statements of operations for the year ended December 31, 2020. As of December 31, 2020, the Company had entered into lease amendments related to the effects of the COVID-19 pandemic, granting $3.5 million of rent deferrals for the period from March 2020 through March 2021 and granting $1.8 million in rental abatements. As of December 31, 2020, the Company had $2.9 million of receivables for lease payments that had been deferred as lease concessions related to the effects of the COVID-19 pandemic, of which $1.5 million was reserved for payments not probable of collection, which were included in rent and other receivables, net on the accompanying consolidated balance sheets. For the year ended December 31, 2020, the Company recorded $1.5 million of rental abatements granted to tenants as a result of the COVID-19 pandemic. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Life | The Company anticipates the estimated useful lives of its assets by class to be generally as follows: Land N/A Buildings 25-40 years Building improvements 10-25 years Tenant improvements Shorter of lease term or expected useful life Tenant origination and absorption costs Remaining term of related leases, including below-market renewal periods |
REAL ESTATE (Tables)
REAL ESTATE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Real Estate [Abstract] | |
Schedule of Real Estate Investments | The following table summarizes the Company’s investments in real estate as of December 31, 2020 (in thousands): Property Date City State Property Total Real Estate, at Cost (1) Accumulated Depreciation and Amortization (1) Total Real Estate, Net (1) Domain Gateway 09/29/2011 Austin TX Office $ 69,460 $ (12,191) $ 57,269 Town Center 03/27/2012 Plano TX Office 131,347 (37,728) 93,619 McEwen Building 04/30/2012 Franklin TN Office 36,027 (8,249) 27,778 Gateway Tech Center 05/09/2012 Salt Lake City UT Office 29,558 (7,154) 22,404 RBC Plaza 01/31/2013 Minneapolis MN Office 154,799 (51,483) 103,316 Preston Commons 06/19/2013 Dallas TX Office 134,267 (27,405) 106,862 Sterling Plaza 06/19/2013 Dallas TX Office 84,759 (20,458) 64,301 201 Spear Street 12/03/2013 San Francisco CA Office 149,671 (25,653) 124,018 Accenture Tower 12/16/2013 Chicago IL Office 461,061 (102,370) 358,691 Ten Almaden 12/05/2014 San Jose CA Office 128,508 (26,478) 102,030 Towers at Emeryville 12/23/2014 Emeryville CA Office 208,601 (39,972) 168,629 3003 Washington Boulevard 12/30/2014 Arlington VA Office 151,395 (30,547) 120,848 Park Place Village 06/18/2015 Leawood KS Office/Retail 76,921 (2,634) 74,287 201 17th Street 06/23/2015 Atlanta GA Office 104,003 (23,600) 80,403 515 Congress 08/31/2015 Austin TX Office 126,502 (20,568) 105,934 The Almaden 09/23/2015 San Jose CA Office 186,836 (29,395) 157,441 3001 Washington Boulevard 11/06/2015 Arlington VA Office 60,859 (8,946) 51,913 Carillon 01/15/2016 Charlotte NC Office 162,051 (27,725) 134,326 $ 2,456,625 $ (502,556) $ 1,954,069 _____________________ (1) Amounts presented are net of impairment charges and write-offs of fully depreciated/amortized assets. |
Schedules of Concentration of Risk, by Risk Factor | As of December 31, 2020, the following property represented more than 10% of the Company’s total assets: Property Location Rentable Total Percentage of Annualized Base Rent (in thousands) (1) Average Occupancy Accenture Tower Chicago, IL 1,457,724 $ 358,691 14.3 % $ 32,399 $ 27.64 80.4 % _____________________ (1) Annualized base rent represents annualized contractual base rental income as of December 31, 2020, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term. Industry Number of Tenants Annualized Base Rent (1) (in thousands) Percentage of Finance 122 $ 43,403 19.4 % Real Estate 52 25,108 11.2 % $ 68,511 30.6 % _____________________ |
Lessor, Operating Lease, Payments to be Received, Maturity | As of December 31, 2020, the future minimum rental income from the Company’s properties held for investment under its non-cancelable operating leases was as follows (in thousands): 2021 $ 214,835 2022 191,958 2023 165,736 2024 150,021 2025 131,700 Thereafter 555,765 $ 1,410,015 |
REAL ESTATE DISPOSITIONS AND _2
REAL ESTATE DISPOSITIONS AND REAL ESTATE HELD FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities of Real Estate Held-for-Sale | The following summary presents the major components of assets and liabilities related to real estate held for sale as of December 31, 2020 and 2019 (in thousands): December 31, 2020 December 31, 2019 Assets related to real estate held for sale: Total real estate, at cost $ 97,947 $ 224,782 Accumulated depreciation and amortization (23,073) (24,153) Real estate held for sale, net 74,874 200,629 Other assets 4,238 4,036 Total assets related to real estate held for sale $ 79,112 $ 204,665 Liabilities related to real estate held for sale: Notes payable, net $ — $ 49,000 Other liabilities 874 1,286 Total liabilities related to real estate held for sale $ 874 $ 50,286 |
Schedule of Revenue and Expenses of Real Estate Held-for-Sale | The following table summarizes certain revenues and expenses related to the Company’s real estate properties that were sold during the years ended December 31, 2020, 2019 and 2018 and an office property classified as held for sale as of December 31, 2020, which were included in continuing operations (in thousands): Years Ended December 31, 2020 2019 2018 Revenues Rental income $ 11,804 $ 75,670 $ 116,949 Other operating income 1,167 7,194 10,935 Total revenues $ 12,971 $ 82,864 $ 127,884 Expenses Operating, maintenance, and management $ 4,053 $ 20,731 $ 32,195 Real estate taxes and insurance 1,863 10,495 17,225 Asset management fees to affiliate 1,068 5,827 8,775 General and administrative expenses 163 103 90 Depreciation and amortization 4,729 34,278 51,625 Interest expense 1,142 20,072 23,288 Total expenses $ 13,018 $ 91,506 $ 133,198 |
TENANT ORIGINATION AND ABSORP_2
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities | As of December 31, 2020 and 2019, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands): Tenant Origination and Above-Market Below-Market December 31, December 31, December 31, December 31, December 31, December 31, Cost $ 75,664 $ 91,343 $ 1,146 $ 2,661 $ (20,239) $ (22,351) Accumulated Amortization (48,714) (53,982) (697) (2,095) 14,123 13,683 Net Amount $ 26,950 $ 37,361 $ 449 $ 566 $ (6,116) $ (8,668) |
Amortization of Tenant Origination and Absorption Costs, Above-Market Leases and Below-Market Lease Liabilities | Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the years ended December 31, 2020, 2019 and 2018 were as follows (in thousands): Tenant Origination and Above-Market Below-Market For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, 2020 2019 2018 2020 2019 2018 2020 2019 2018 Amortization $ (9,971) $ (21,072) $ (31,201) $ (117) $ (955) $ (1,712) $ 2,924 $ 4,470 $ 7,062 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2020 is estimated to be amortized for the years ending December 31 as follows (in thousands): Tenant Origination and Above-Market Below-Market 2021 $ (7,864) $ (101) $ 2,309 2022 (5,639) (86) 1,636 2023 (3,995) (73) 1,092 2024 (2,833) (69) 534 2025 (2,367) (68) 314 Thereafter (4,252) (52) 231 $ (26,950) $ (449) $ 6,116 Weighted-Average Remaining Amortization Period 5.2 years 5.3 years 3.5 years |
REAL ESTATE LOAN RECEIVABLE (Ta
REAL ESTATE LOAN RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Activity Related to Loans Receivable | The following summarizes the activity related to the real estate loan receivable for the year ended December 31, 2020 (in thousands): Real estate loan receivable, net - December 31, 2019 $ — Face value of real estate loan receivable originated 150,213 Discount on real estate loan receivable originated (2,535) Accretion of discount on real estate loan receivable originated 2,535 Origination costs on real estate loan receivable 120 Amortization of origination costs on real estate loan receivable (120) Provision for credit loss (680) Reversal of provision for credit loss at payoff 680 Payoff of the Hardware Village First Mortgage (150,213) Real estate loan receivable, net - December 31, 2020 $ — |
Schedule of Interest Income from Real Estate Loans Receivable | For the year ended December 31, 2020, interest income from the real estate loan receivable consisted of the following (in thousands): For the Year Ended December 31, 2020 Contractual interest income $ 3,251 Accretion of origination discount 2,535 Amortization of origination costs (120) Interest income from real estate loan receivable $ 5,666 |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Financial Information for Joint Ventures | The SREIT reports its financial statements in accordance with the International Financial Reporting Standards and uses the US dollar as its reporting currency, as such, the Company must make certain adjustments to the SREIT’s financial information to reflect U.S. GAAP before applying the equity method of accounting. Summarized financial information for the SREIT in accordance with U.S. GAAP follows (in thousands): As of December 31, 2020 December 31, 2019 Real estate, net $ 1,318,527 $ 1,201,050 Total assets 1,383,372 1,260,540 Notes payable, net 480,352 432,824 Total liabilities 546,486 473,540 Total equity 836,886 787,000 For the Year Ended December 31, 2020 For the Period from July 19, 2019 to December 31, 2019 Total revenues $ 145,000 $ 61,183 Net loss (9,385) (4,605) Company’s share of net loss (1) $ (2,562) $ (1,443) _____________________ |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | As of December 31, 2020 and 2019, the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands): Book Value as of Book Value as of Contractual Interest Rate as of December 31, 2020 (1) Effective Interest Rate as of December 31, 2020 (1) Payment Type Maturity Date (2) Anchor Centre Mortgage Loan (3) $ — $ 49,043 (3) (3) (3) (3) 201 17th Street Mortgage Loan (4) — 64,750 (4) (4) (4) (4) The Almaden Mortgage Loan (5) 123,000 93,000 3.65% 3.65% Interest Only 12/01/2023 201 Spear Street Mortgage Loan 125,000 125,000 One-month LIBOR + 1.45% 1.59% Interest Only 01/05/2024 Carillon Mortgage Loan (6) 88,800 111,000 One-month LIBOR + 1.40% 1.54% Interest Only 04/11/2024 Modified Portfolio Loan Facility (7) 472,950 684,225 One-month LIBOR + 1.80% 1.94% Interest Only 11/03/2021 Modified Portfolio Revolving Loan Facility (8) 162,500 196,113 One-month LIBOR + 1.50% 1.64% Interest Only 03/01/2023 3001 & 3003 Washington Mortgage Loan 143,245 143,245 One-month LIBOR + 1.45% 1.59% Interest Only (9) 06/01/2024 Accenture Tower Revolving Loan (10) 281,250 — One-month LIBOR + 2.25% 2.39% Interest Only 11/02/2023 Total notes payable principal outstanding $ 1,396,745 $ 1,466,376 Deferred financing costs, net (8,380) (6,497) Total Notes Payable, net $ 1,388,365 $ 1,459,879 _____________________ (1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2020. Effective interest rate is calculated as the actual interest rate in effect as of December 31, 2020, consisting of the contractual interest rate and using interest rate indices as of December 31, 2020, where applicable. For information regarding the Company’s derivative instruments, see Note 9, “Derivative Instruments.” (2) Represents the maturity date as of December 31, 2020; subject to certain conditions, the maturity dates of certain loans may be extended beyond the dates shown. (3) On December 30, 2020, the Company repaid the entire principal balance and all other sums due under the Anchor Centre Mortgage Loan. (4) On January 23, 2020, the 201 17th Street Mortgage Loan was paid off and the 201 17th Street property was added to the collateral of the Portfolio Revolving Loan Facility. See below, “- Recent Financing Transactions - Modified Portfolio Revolving Loan Facility.” (5) On November 18, 2020, the Company refinanced The Almaden Mortgage Loan with an unaffiliated lender for borrowings of $123.0 million. See below, “ – Recent Financing Transactions – Refinancing of The Almaden Mortgage Loan.” (6) As of December 31, 2020, $88.8 million of term debt of the Carillon Mortgage Loan was outstanding and $22.2 million of revolving debt remained available for future disbursements, subject to certain terms and conditions set forth in the loan documents. (7) See below, “- Recent Financing Transactions - Modified Portfolio Loan Facility.” (8) See below, “- Recent Financing Transactions - Modified Portfolio Revolving Loan Facility.” (9) Represents the payment type required as of December 31, 2020. Certain future monthly payments due under the loan also include amortizing principal payments. For more information on the Company’s contractual obligations under its notes payable, see the five-year maturity table below. |
Schedule of Maturities of Long-term Debt | The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of December 31, 2020 (in thousands): 2021 $ 472,950 2022 — 2023 566,750 2024 357,045 2025 — Thereafter — $ 1,396,745 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional and Fair Value of Interest Rate Swaps Designated as Cash Flow Hedges | The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of December 31, 2020 and 2019. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands): December 31, 2020 December 31, 2019 Weighted-Average Weighted-Average Remaining Term in Years Derivative Instruments Number of Instruments Notional Amount Number of Instruments Notional Amount Reference Rate as of December 31, 2020 Derivative instruments not designated as hedging instruments Interest rate swaps (1) 8 $ 1,121,590 11 $ 960,963 One-month LIBOR/ Fixed at 0.70% - 2.11% 1.7% 2.2 _____________________ (1) During the year ended December 31, 2020, two of the Company’s interest rate swaps matured. In November 2020, the Company early terminated three interest rate swaps with an aggregate notional amount of $232.5 million maturing in November 2022, January 2023 and February 2023 and entered into two new interest rate swaps with an aggregate notional amount of $281.3 million, both maturing on November 2, 2023. The two new interest rate swaps were determined to be hybrid financial instruments with an embedded derivative and the Company elected the fair value option under ASC 815, Derivatives and Hedging |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of December 31, 2020 and 2019 (dollars in thousands): December 31, 2020 December 31, 2019 Derivative Instruments Balance Sheet Location Number of Fair Value Number of Fair Value Derivative instruments not designated as hedging instruments Interest rate swaps Prepaid expenses and other assets, at fair value — $ — 3 $ 1,553 Interest rate swaps Other liabilities, at fair value (1) 8 $ (35,331) 8 $ (11,404) _____________________ |
Schedule of Derivative Instruments in Statement of Operations | The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations (in thousands): For the Years Ended December 31, 2020 2019 2018 Income statement related Derivatives designated as hedging instruments Amount of income recognized on interest rate swaps (effective portion) $ — $ — $ (205) — — (205) Derivatives not designated as hedging instruments Realized loss (gain) recognized on interest rate swaps 13,947 (2,561) 295 Unrealized loss (gain) on interest rate swaps (1) 25,165 35,664 (11,200) Fair value loss on interest rate cap — — 8 39,112 33,103 (10,897) Increase (decrease) in interest expense as a result of derivatives $ 39,112 $ 33,103 $ (11,102) Other comprehensive income related Unrealized income on derivative instruments $ — $ — $ 95 _____________________ (1) For the year ended December 31, 2020, unrealized loss on interest rate swaps included a $7.8 million unrealized loss related to the change in fair value of two off-market interest rate swaps determined to be hybrid financial instruments for which the Company elected to apply the fair value option. |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Face Value, Carrying Amounts and Fair Value | The following were the face values, carrying amounts and fair values of the Company’s notes payable as of December 31, 2020 and 2019, which carrying amounts generally do not approximate the fair values (in thousands): December 31, 2020 December 31, 2019 Face Value Carrying Fair Value Face Value Carrying Fair Value Financial liabilities: Notes payable $ 1,396,745 $ 1,388,365 $ 1,380,143 $ 1,466,376 $ 1,459,879 $ 1,469,293 |
Schedule of Assets and Liabilities at Fair Value | As of December 31, 2020, the Company measured the following derivative instruments at fair value (in thousands): Fair Value Measurements Using Total Quoted Prices in Significant Other Significant Recurring Basis: Liability derivatives - interest rate swaps (1) $ (35,331) $ — $ (35,331) $ — _____________________ (1) Includes a $7.8 million liability related to the fair value of two off-market interest rate swaps determined to be hybrid financial instruments for which the Company elected to apply the fair value option. During the year ended December 31, 2020, the Company measured the following asset at fair value on a nonrecurring basis (in thousands): Fair Value Measurements Using Total Quoted Prices in Significant Other Significant Nonrecurring Basis: Impaired real estate (1) $ 80,500 $ — $ — $ 80,500 _____________________ |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Costs | Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2020, 2019 and 2018, respectively, and any related amounts payable as of December 31, 2020 and 2019 (in thousands): Incurred Years Ended Payable as of 2020 2019 2018 2020 2019 Expensed Asset management fees (1) $ 20,990 $ 24,614 $ 27,152 $ 8,529 $ 6,674 Reimbursement of operating expenses (2) (3) 479 1,453 3,612 97 79 Disposition fees (4) 1,715 9,483 429 — — Capitalized Acquisition fee on development project 34 217 350 — 1,133 Acquisition fee on unconsolidated joint venture — — 674 — — $ 23,218 $ 35,767 $ 32,217 $ 8,626 $ 7,886 _____________________ (1) See “Deferral of Asset Management Fees” below. (2) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $338,000, $357,000 and $325,000 for the years ended December 31, 2020, 2019 and 2018, respectively, and were the only type of employee costs reimbursed under the Advisory Agreement for the years ended December 31, 2020, 2019 and 2018. The Company will not reimburse for employee costs in connection with services for which the Advisor earns acquisition or origination fees or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company. (3) Prior to the Singapore Transaction closing on July 19, 2019, the Company and the Advisor had agreed to evenly divide certain costs and expenses related to the Singapore Transaction. The Company incurred a total of $4.1 million of costs related to the Singapore Transaction, which were reimbursable by the SREIT upon a successful closing. These costs included legal, audit, tax, printing and other out-of-pocket costs that the Company incurred related to the Singapore Transaction. In October 2019, all of these costs had been reimbursed to the Company from the Advisor upon the Advisor receiving the reimbursement from the SREIT. (4) Disposition fees with respect to real estate sold are included in the gain on sale of real estate, net, in the accompanying consolidated statements of operations |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Financial Information | Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2020 and 2019 (in thousands, except per share amounts): 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 77,702 $ 75,971 $ 75,503 $ 77,742 Net (loss) income attributable to common stockholders $ (58,903) $ 39,508 $ 1,119 $ (221) Net (loss) income per common share attributable to common stockholders, basic and diluted $ (0.32) $ 0.22 $ 0.01 $ (0.01) Distributions declared per common share (1) $ 0.149 $ 0.149 $ 0.150 $ 0.150 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Revenues $ 111,378 $ 114,509 $ 82,981 $ 76,404 Net (loss) income attributable to common stockholders $ (26,678) $ (28,115) $ 316,884 $ (880) Net (loss) income per common share attributable to common stockholders, basic and diluted $ (0.15) $ (0.16) $ 1.82 $ (0.02) Distributions declared per common share (1) $ 0.163 $ 0.163 $ 0.163 $ 0.961 __________________ |
ORGANIZATION (Details)
ORGANIZATION (Details) $ / shares in Units, $ in Thousands | Jan. 19, 2021numberOfProperties | Dec. 31, 2020USD ($)numberOfPropertiesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | May 29, 2016USD ($)shares | Dec. 31, 2020USD ($)numberOfPropertiesshares | Oct. 03, 2014USD ($)shares | Jan. 26, 2010$ / sharesshares |
Organizational Structure [Line Items] | ||||||||
Common stock, shares issued (in shares) | shares | 184,249,076 | 180,970,743 | 184,249,076 | 258,462 | ||||
Issuance of common stock, value | $ | $ 46,722 | $ 51,704 | $ 56,136 | |||||
Redemptions of common stock, value | $ | 10,877 | 100,996 | $ 96,064 | |||||
Common stock, value, issued | $ | $ 1,842 | $ 1,810 | $ 1,842 | $ 2,400 | ||||
Percent of total rental income from retail and restaurant tenants | 4.00% | |||||||
Common Stock | ||||||||
Organizational Structure [Line Items] | ||||||||
Shares held by affiliate | shares | 20,857 | 20,857 | ||||||
Issuance of common stock (in shares) | shares | 4,220,684 | 4,527,465 | 5,034,086 | 169,006,162 | ||||
Issuance of common stock, value | $ | $ 42 | $ 45 | $ 50 | $ 1,700,000 | ||||
Shares of common stock sold under dividend reinvestment plan, shares | shares | 36,674,686 | |||||||
Shares of common stock sold under dividend reinvestment plan, value | $ | $ 379,300 | |||||||
Redemptions of common stock (in shares) | shares | 942,351 | 8,801,788 | 8,374,940 | 29,431,448 | ||||
Redemptions of common stock, value | $ | $ 10 | $ 88 | $ 84 | $ 322,300 | ||||
Subsequent Event | ||||||||
Organizational Structure [Line Items] | ||||||||
Number of real estate properties disposed | numberOfProperties | 1 | |||||||
Held-for-sale | ||||||||
Organizational Structure [Line Items] | ||||||||
Number of real estate properties | numberOfProperties | 1 | 1 | ||||||
Office Building | ||||||||
Organizational Structure [Line Items] | ||||||||
Number of real estate properties, including held-for-sale | numberOfProperties | 18 | 18 | ||||||
Office Building | Held for Investment | ||||||||
Organizational Structure [Line Items] | ||||||||
Number of real estate properties | numberOfProperties | 17 | 17 | ||||||
Mixed-use Office/Retail Property | Held for Investment | ||||||||
Organizational Structure [Line Items] | ||||||||
Number of real estate properties | numberOfProperties | 1 | 1 | ||||||
KBS Capital Advisors LLC | ||||||||
Organizational Structure [Line Items] | ||||||||
Common stock, shares issued (in shares) | shares | 20,000 | |||||||
Common stock, purchase price per share (in dollars per share) | $ / shares | $ 10 | |||||||
Operating Partnership | ||||||||
Organizational Structure [Line Items] | ||||||||
Partnership interest in Operating Partnership | 0.10% | |||||||
Partnership interest in the Operating Partnership and is its sole limited partner | 99.90% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) | Jan. 19, 2021numberOfProperties | Dec. 12, 2019USD ($)shares | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($)$ / shares | Sep. 30, 2020$ / shares | Jun. 30, 2020$ / shares | Mar. 31, 2020$ / shares | Dec. 31, 2019$ / shares | Sep. 30, 2019$ / shares | Jun. 30, 2019$ / shares | Mar. 31, 2019$ / shares | Dec. 31, 2020USD ($)numberOfSegments$ / sharesshares | Dec. 31, 2019USD ($)numberOfProperties$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Jan. 04, 2021$ / shares | Dec. 07, 2020$ / shares | Jan. 02, 2020$ / shares | Dec. 04, 2019$ / shares | Oct. 23, 2019$ / shares | Jan. 02, 2019$ / shares | Dec. 03, 2018$ / shares |
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Impairment of real estate | $ 19,896,000 | $ 8,706,000 | $ 0 | ||||||||||||||||||
Dividend reinvestment plan, purchase price per share as percent of estimated value | 95.00% | 95.00% | |||||||||||||||||||
Purchase price per share (in dollars per share) | $ / shares | $ 11.07 | $ 11.42 | |||||||||||||||||||
Estimated value per share of company's common stock (in dollars per share) | $ / shares | $ 10.74 | $ 11.65 | $ 12.02 | ||||||||||||||||||
Period of termination notice | 10 days | ||||||||||||||||||||
Antidilutive securities | shares | 0 | 0 | 0 | ||||||||||||||||||
Special dividends declared (in dollars per share) | $ / shares | $ 0.80 | ||||||||||||||||||||
Special dividends, paid | $ 48,500,000 | ||||||||||||||||||||
Special dividends, paid, percent | 35.00% | ||||||||||||||||||||
Special dividends shares issues (in shares) | shares | 90,000,000 | ||||||||||||||||||||
Special dividends shares issued, percent | 65.00% | ||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 0.150 | $ 0.150 | $ 0.149 | $ 0.149 | $ 0.961 | $ 0.163 | $ 0.163 | $ 0.163 | $ 0.598 | $ 1.450 | $ 0.650 | ||||||||||
Distribution rate per share per day, declared (in dollars per share) | $ / shares | $ 0.00178082 | ||||||||||||||||||||
Common share, monthly distribution rate per share, declared (in dollars per share) | $ / shares | $ 0.04983333 | $ 0.05416667 | |||||||||||||||||||
Number of reportable segments | numberOfSegments | 1 | ||||||||||||||||||||
Grants of rental abatements | $ 1,800,000 | $ 1,800,000 | |||||||||||||||||||
Deferred lease concessions | 2,900,000 | 2,900,000 | |||||||||||||||||||
Reserve for payments not probable to collect | $ 1,500,000 | 1,500,000 | |||||||||||||||||||
Reversal of rental income for abatements granted to tenants | $ 1,500,000 | ||||||||||||||||||||
Forecast | |||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||
Grants of rent deferrals | $ 3,500,000 | ||||||||||||||||||||
Subsequent Event | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Number of real estate properties disposed | numberOfProperties | 1 | ||||||||||||||||||||
Purchase price per share (in dollars per share) | $ / shares | $ 10.21 | ||||||||||||||||||||
Office Building | Disposed of by Sale | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Number of real estate properties disposed | numberOfProperties | 11 | ||||||||||||||||||||
Accounting Standards Update 2016-02 | |||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||||||||||
Tenant reimbursement revenue | $ 72,200,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Useful Life) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 25 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Building improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Building improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 25 years |
Tenant improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Shorter of lease term or expected useful life |
Tenant origination and absorption costs | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | Remaining term of related leases, including below-market renewal periods |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Redeemable Common Stock) (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 08, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 08, 2018 | Dec. 07, 2020 | Dec. 04, 2019 | Dec. 03, 2018 |
Equity, Class of Treasury Stock [Line Items] | |||||||
Period of increase or decrease of funding available for redemption | 10 days | ||||||
Maximum percentage of weighted-average shares outstanding available for redemption during any calendar year | 5.00% | ||||||
Redemption price percentage of most recent estimated value per share | 95.00% | ||||||
Estimated value per share of company's common stock (in dollars per share) | $ 10.74 | $ 11.65 | $ 12.02 | ||||
Funds available for redemption of shares | $ 51.7 | ||||||
Share redemption program, termination period | 10 days | ||||||
Forecast | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Funds available for redemption of shares | $ 46.7 | ||||||
Held for One Year | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Share holding term | 1 year | 1 year | |||||
Redemption price percentage of most recent estimated value per share | 92.50% | ||||||
Held for Two Years | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Share holding term | 2 years | ||||||
Redemption price percentage of most recent estimated value per share | 95.00% | ||||||
Held for Three Years | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Share holding term | 3 years | ||||||
Redemption price percentage of most recent estimated value per share | 97.50% | ||||||
Held for Four Years | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Share holding term | 4 years | ||||||
Redemption price percentage of most recent estimated value per share | 100.00% | ||||||
Maximum | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Share redemption program, additional amount | $ 10 | ||||||
Share redemption program, special redemptions | $ 10 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Related Party Transactions and Other) (Details) | Dec. 31, 2020 | Nov. 01, 2019 |
Related Party Transaction [Line Items] | ||
Origination fee, percent | 1.00% | |
Return on net invested capital | 8.00% | |
GKP Holding LLC | Advisor and Dealer Manager | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 33.33% | |
KBS Capital Advisors LLC | ||
Related Party Transaction [Line Items] | ||
Acquisition advisory fee, percent | 1.00% | |
Monthly asset management fee, percent of acquisition expense, excluding acquisition fees related to thereto | 0.0625% | |
KBS Capital Advisors LLC or Affiliates | ||
Related Party Transaction [Line Items] | ||
Disposition fees paid, percent of sales price | 1.00% | |
Maximum | KBS Capital Advisors LLC, Affiliates or Unaffiliated Third Parties | ||
Related Party Transaction [Line Items] | ||
Disposition fees paid, percent of sales price | 6.00% |
REAL ESTATE (Narrative) (Detail
REAL ESTATE (Narrative) (Details) ft² in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)ft²numberOfProperties | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Real Estate [Abstract] | |||
Impairment of real estate | $ | $ 19,896,000 | $ 8,706,000 | $ 0 |
Real Estate Properties [Line Items] | |||
Rentable square feet | ft² | 7.5 | ||
Percentage of portfolio occupied | 86.00% | ||
Held-for-sale | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties | 1 | ||
Office Building | Held for Investment | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties | 17 | ||
Mixed-use Office/Retail Property | Held for Investment | |||
Real Estate Properties [Line Items] | |||
Number of real estate properties | 1 |
REAL ESTATE (Summary of Investm
REAL ESTATE (Summary of Investments) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Real Estate Properties [Line Items] | ||
Total real estate held for investment, cost | $ 2,456,625 | $ 2,400,220 |
Accumulated Depreciation and Amortization | (502,556) | $ (425,228) |
Total real estate held for investment, net | $ 1,954,069 | |
Domain Gateway | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Sep. 29, 2011 | |
Total real estate held for investment, cost | $ 69,460 | |
Accumulated Depreciation and Amortization | (12,191) | |
Total real estate held for investment, net | $ 57,269 | |
Town Center | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Mar. 27, 2012 | |
Total real estate held for investment, cost | $ 131,347 | |
Accumulated Depreciation and Amortization | (37,728) | |
Total real estate held for investment, net | $ 93,619 | |
McEwen Building | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Apr. 30, 2012 | |
Total real estate held for investment, cost | $ 36,027 | |
Accumulated Depreciation and Amortization | (8,249) | |
Total real estate held for investment, net | $ 27,778 | |
Gateway Tech Center | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | May 9, 2012 | |
Total real estate held for investment, cost | $ 29,558 | |
Accumulated Depreciation and Amortization | (7,154) | |
Total real estate held for investment, net | $ 22,404 | |
RBC Plaza | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jan. 31, 2013 | |
Total real estate held for investment, cost | $ 154,799 | |
Accumulated Depreciation and Amortization | (51,483) | |
Total real estate held for investment, net | $ 103,316 | |
Preston Commons | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jun. 19, 2013 | |
Total real estate held for investment, cost | $ 134,267 | |
Accumulated Depreciation and Amortization | (27,405) | |
Total real estate held for investment, net | $ 106,862 | |
Sterling Plaza | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jun. 19, 2013 | |
Total real estate held for investment, cost | $ 84,759 | |
Accumulated Depreciation and Amortization | (20,458) | |
Total real estate held for investment, net | $ 64,301 | |
201 Spear Street | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Dec. 3, 2013 | |
Total real estate held for investment, cost | $ 149,671 | |
Accumulated Depreciation and Amortization | (25,653) | |
Total real estate held for investment, net | $ 124,018 | |
Accenture Tower | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Dec. 16, 2013 | |
Total real estate held for investment, cost | $ 461,061 | |
Accumulated Depreciation and Amortization | (102,370) | |
Total real estate held for investment, net | $ 358,691 | |
Ten Almaden | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Dec. 5, 2014 | |
Total real estate held for investment, cost | $ 128,508 | |
Accumulated Depreciation and Amortization | (26,478) | |
Total real estate held for investment, net | $ 102,030 | |
Towers at Emeryville | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Dec. 23, 2014 | |
Total real estate held for investment, cost | $ 208,601 | |
Accumulated Depreciation and Amortization | (39,972) | |
Total real estate held for investment, net | $ 168,629 | |
3003 Washington Boulevard | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Dec. 30, 2014 | |
Total real estate held for investment, cost | $ 151,395 | |
Accumulated Depreciation and Amortization | (30,547) | |
Total real estate held for investment, net | $ 120,848 | |
Park Place Village | Office/Retail | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jun. 18, 2015 | |
Total real estate held for investment, cost | $ 76,921 | |
Accumulated Depreciation and Amortization | (2,634) | |
Total real estate held for investment, net | $ 74,287 | |
201 17th Street | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jun. 23, 2015 | |
Total real estate held for investment, cost | $ 104,003 | |
Accumulated Depreciation and Amortization | (23,600) | |
Total real estate held for investment, net | $ 80,403 | |
515 Congress | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Aug. 31, 2015 | |
Total real estate held for investment, cost | $ 126,502 | |
Accumulated Depreciation and Amortization | (20,568) | |
Total real estate held for investment, net | $ 105,934 | |
The Almaden | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Sep. 23, 2015 | |
Total real estate held for investment, cost | $ 186,836 | |
Accumulated Depreciation and Amortization | (29,395) | |
Total real estate held for investment, net | $ 157,441 | |
3001 Washington Boulevard | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Nov. 6, 2015 | |
Total real estate held for investment, cost | $ 60,859 | |
Accumulated Depreciation and Amortization | (8,946) | |
Total real estate held for investment, net | $ 51,913 | |
Carillon | Office Building | ||
Real Estate Properties [Line Items] | ||
Date Acquired | Jan. 15, 2016 | |
Total real estate held for investment, cost | $ 162,051 | |
Accumulated Depreciation and Amortization | (27,725) | |
Total real estate held for investment, net | $ 134,326 |
REAL ESTATE (Concentration of C
REAL ESTATE (Concentration of Credit Risk, Tenant Lease that Represents More than 10% of Annualized Base Rent) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)ft²$ / ft² | |
Concentration Risk [Line Items] | |
Rentable Square Feet | ft² | 7,500,000 |
Real estate, net | $ 1,954,069 |
Percentage of Total Assets | 30.60% |
Annualized Base Rent | $ 68,511 |
Occupancy | 86.00% |
Accenture Tower | Assets, Total | |
Concentration Risk [Line Items] | |
Rentable Square Feet | ft² | 1,457,724 |
Real estate, net | $ 358,691 |
Percentage of Total Assets | 14.30% |
Annualized Base Rent | $ 32,399 |
Average Annualized Base Rent per sq. ft. | $ / ft² | 27.64 |
Occupancy | 80.40% |
REAL ESTATE (Operating Leases)
REAL ESTATE (Operating Leases) (Narrative) (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)tenant | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Operating Leased Assets [Line Items] | |||
Bad debt expense | $ 0 | $ 0 | $ 1,230,000 |
Deferred rent recognized | 4,564,000 | 6,224,000 | 9,063,000 |
Deferred rent receivables | 81,200,000 | 77,600,000 | |
Incentive to lessee | $ 19,100,000 | 20,600,000 | |
Office/Retail | |||
Operating Leased Assets [Line Items] | |||
Number of tenants | tenant | 590 | ||
Operating Lease, Lease Income | |||
Operating Leased Assets [Line Items] | |||
Bad debt expense | $ 9,900,000 | 2,000,000 | |
Operating, Maintenance and Management Expense | |||
Operating Leased Assets [Line Items] | |||
Bad debt expense | 0 | (400,000) | $ 1,200,000 |
Other Liabilities | |||
Operating Leased Assets [Line Items] | |||
Security deposit liability | $ 8,600,000 | $ 8,800,000 | |
Maximum | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term of contract | 16 years 7 months 6 days | ||
Weighted Average | |||
Operating Leased Assets [Line Items] | |||
Operating leases, term of contract | 4 years 9 months 18 days |
REAL ESTATE (Future Minimum Ren
REAL ESTATE (Future Minimum Rental Income) (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Real Estate [Abstract] | |
2021 | $ 214,835 |
2022 | 191,958 |
2023 | 165,736 |
2024 | 150,021 |
2025 | 131,700 |
Thereafter | 555,765 |
Total | $ 1,410,015 |
REAL ESTATE (Highest Tenant Ind
REAL ESTATE (Highest Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)tenant | |
Concentration Risk [Line Items] | |
Annualized Base Rent | $ 68,511 |
Percentage of Annualized Base Rent | 30.60% |
Finance | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 122 |
Annualized Base Rent | $ 43,403 |
Percentage of Annualized Base Rent | 19.40% |
Real Estate | |
Concentration Risk [Line Items] | |
Number of Tenants | tenant | 52 |
Annualized Base Rent | $ 25,108 |
Percentage of Annualized Base Rent | 11.20% |
REAL ESTATE (Geographic Concent
REAL ESTATE (Geographic Concentration Risk) (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Concentration Risk [Line Items] | |
Percentage of total assets | 30.60% |
California | Assets, Total | |
Concentration Risk [Line Items] | |
Percentage of total assets | 22.00% |
Texas | Assets, Total | |
Concentration Risk [Line Items] | |
Percentage of total assets | 17.00% |
Illinois | Assets, Total | |
Concentration Risk [Line Items] | |
Percentage of total assets | 14.00% |
REAL ESTATE DISPOSITIONS AND _3
REAL ESTATE DISPOSITIONS AND REAL ESTATE HELD FOR SALE (Narrative) (Details) $ in Thousands | Jul. 18, 2019USD ($)numberOfPropertiessubsidiary | May 25, 2018USD ($) | Dec. 31, 2020USD ($)numberOfProperties | Dec. 31, 2019USD ($)numberOfProperties | Dec. 31, 2018USD ($)numberOfProperties | May 07, 2020USD ($) |
Real Estate Properties [Line Items] | ||||||
Gains (losses) on sales of investment real estate | $ 49,457 | $ 327,211 | $ 11,942 | |||
Disposed of by Sale | ||||||
Real Estate Properties [Line Items] | ||||||
Expenses | $ 13,018 | $ 91,506 | $ 133,198 | |||
Disposed of by Sale | Office Building | ||||||
Real Estate Properties [Line Items] | ||||||
Number of real estate properties disposed | numberOfProperties | 11 | |||||
Real Estate Held-for-sale | Office Building | ||||||
Real Estate Properties [Line Items] | ||||||
Number of real estate properties | numberOfProperties | 1 | |||||
Hardware Village | ||||||
Real Estate Properties [Line Items] | ||||||
Gains (losses) on sales of investment real estate | $ 49,500 | |||||
Hardware Village | Disposed of by Sale | Apartment Building | ||||||
Real Estate Properties [Line Items] | ||||||
Disposal group, consideration | $ 178,000 | $ 178,000 | ||||
Singapore Portfolio | ||||||
Real Estate Properties [Line Items] | ||||||
Disposal group, consideration | $ 1,200,000 | |||||
Number of wholly owned subsidiaries | subsidiary | 12 | |||||
Expenses | $ 20,000 | |||||
Singapore Portfolio | Disposed of by Sale | ||||||
Real Estate Properties [Line Items] | ||||||
Gains (losses) on sales of investment real estate | $ 327,200 | |||||
Number of real estate properties disposed | numberOfProperties | 11 | |||||
Disposition fees to affiliates | $ 9,500 | |||||
Rocklin Corporate Center | ||||||
Real Estate Properties [Line Items] | ||||||
Number of real estate properties disposed | numberOfProperties | 1 | |||||
Rocklin Corporate Center | Disposed of by Sale | ||||||
Real Estate Properties [Line Items] | ||||||
Disposal group, consideration | $ 42,900 | |||||
Gains (losses) on sales of investment real estate | $ 11,900 |
REAL ESTATE DISPOSITIONS AND _4
REAL ESTATE DISPOSITIONS AND REAL ESTATE HELD FOR SALE (Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Liabilities related to real estate held for sale: | ||
Total liabilities related to real estate held for sale | $ 0 | $ 49,000 |
Held-for-sale | ||
Assets related to real estate held for sale: | ||
Total real estate, at cost | 97,947 | 224,782 |
Accumulated depreciation and amortization | (23,073) | (24,153) |
Real estate held for sale, net | 74,874 | 200,629 |
Other assets | 4,238 | 4,036 |
Total assets related to real estate held for sale | 79,112 | 204,665 |
Liabilities related to real estate held for sale: | ||
Notes payable, net | 0 | 49,000 |
Other liabilities | 874 | 1,286 |
Total liabilities related to real estate held for sale | $ 874 | $ 50,286 |
REAL ESTATE DISPOSITIONS AND _5
REAL ESTATE DISPOSITIONS AND REAL ESTATE HELD FOR SALE (Revenue and Expenses of Real Estate Sales) (Details) - Disposed of by Sale - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||
Rental income | $ 11,804 | $ 75,670 | $ 116,949 |
Other operating income | 1,167 | 7,194 | 10,935 |
Total revenues | 12,971 | 82,864 | 127,884 |
Expenses | |||
Operating, maintenance, and management | 4,053 | 20,731 | 32,195 |
Real estate taxes and insurance | 1,863 | 10,495 | 17,225 |
Asset management fees to affiliate | 1,068 | 5,827 | 8,775 |
General and administrative expenses | 163 | 103 | 90 |
Depreciation and amortization | 4,729 | 34,278 | 51,625 |
Interest expense | 1,142 | 20,072 | 23,288 |
Total expenses | $ 13,018 | $ 91,506 | $ 133,198 |
TENANT ORIGINATION AND ABSORP_3
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Schedule of Net Amounts) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract] | |||
Tenant Origination And Absorption Costs, Cost | $ 75,664 | $ 91,343 | |
Tenant Origination and Absorption Costs, Accumulated Amortization | (48,714) | (53,982) | |
Tenant Origination and Absorption Costs, Net Amount | 26,950 | 37,361 | |
Above-Market Lease Assets, Cost | 1,146 | 2,661 | |
Above-Market Lease Assets, Accumulated Amortization | (697) | (2,095) | |
Above-Market Lease Assets, Net Amount | 449 | 566 | |
Below-Market Lease Liabilities, Cost | (20,239) | (22,351) | |
Below-Market Lease Liabilities, Accumulated Amortization | 14,123 | 13,683 | |
Below-Market Lease Liabilities, Net Amount | (6,116) | (8,668) | |
Tenant Origination and Absorption Costs, Amortization | (9,971) | (21,072) | $ (31,201) |
Above-Market Lease Assets, Amortization | (117) | (955) | (1,712) |
Below-Market Lease Liabilities, Amortization | $ 2,924 | $ 4,470 | $ 7,062 |
TENANT ORIGINATION AND ABSORP_4
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Remaining Unamortized Balance) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | ||
2021 | $ 2,309 | |
2022 | 1,636 | |
2023 | 1,092 | |
2024 | 534 | |
2025 | 314 | |
Thereafter | 231 | |
Net Amount | 6,116 | $ 8,668 |
Tenant Origination and Absorption Costs | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2021 | (7,864) | |
2022 | (5,639) | |
2023 | (3,995) | |
2024 | (2,833) | |
2025 | (2,367) | |
Thereafter | (4,252) | |
Net Amount | $ (26,950) | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | ||
Weighted-Average Remaining Amortization Period | 5 years 2 months 12 days | |
Above-Market Lease Assets | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2021 | $ (101) | |
2022 | (86) | |
2023 | (73) | |
2024 | (69) | |
2025 | (68) | |
Thereafter | (52) | |
Net Amount | $ (449) | |
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | ||
Weighted-Average Remaining Amortization Period | 5 years 3 months 18 days | |
Below-Market Lease Liabilities | ||
Below Market Lease, Net, Amortization Income, Fiscal Year Maturity [Abstract] | ||
Weighted-Average Remaining Amortization Period | 3 years 6 months |
REAL ESTATE LOAN RECEIVABLE - R
REAL ESTATE LOAN RECEIVABLE - Recent Origination (Details) - USD ($) $ in Thousands | Dec. 11, 2020 | Aug. 01, 2020 | May 07, 2020 | Jul. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gains (losses) on sales of investment real estate | $ 49,457 | $ 327,211 | $ 11,942 | ||||
Distributions to joint venture | $ 6,400 | ||||||
Financing Receivable | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Financing receivable originated | 150,200 | ||||||
Receivable, interest rate | 3.95% | 2.95% | |||||
Financing Receivable | One-month LIBOR | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Receivables, variable rate | 3.50% | 2.50% | |||||
Hardware Village | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gains (losses) on sales of investment real estate | 49,500 | ||||||
Hardware Village | Disposed of by Sale | Apartment Building | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposal group, consideration | 178,000 | $ 178,000 | |||||
Consideration paid in cash | 27,800 | ||||||
Consideration in seller financing | $ 150,200 | ||||||
Hardware Village | Disposed of by Sale | Apartment Building | Buyer/Borrower | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Notes receivable, principal and interest, payoff | $ 150,400 |
REAL ESTATE LOAN RECEIVABLE - S
REAL ESTATE LOAN RECEIVABLE - Schedules (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Real Estate Loans Receivable [Roll Forward] | ||||
Real estate loan receivable, net - December 31, 2019 | $ 0 | |||
Face value of real estate loan receivable originated | 150,213 | |||
Discount on real estate loan receivable originated | (2,535) | |||
Accretion of discount on real estate loan receivable originated | $ 2,535 | 2,535 | ||
Origination costs on real estate loan receivable | 120 | $ 0 | $ 0 | |
Amortization of origination costs on real estate loan receivable | 120 | (120) | ||
Provision for credit loss | (680) | |||
Reversal of provision for credit loss at payoff | 680 | |||
Payoff of the Hardware Village First Mortgage | (150,213) | |||
Real estate loan receivable, net - December 31, 2020 | 0 | 0 | $ 0 | |
Interest Income Components [Abstract] | ||||
Contractual interest income | 3,251 | |||
Accretion of origination discount | 2,535 | 2,535 | ||
Amortization of origination costs | 120 | $ (120) | ||
Interest income from real estate loan receivable | $ 5,666 |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED ENTITIES (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 19, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 21, 2019 |
Schedule of Equity Method Investments [Line Items] | ||||||
Investment in an unconsolidated entity | $ 253,371 | $ 233,592 | $ 253,371 | |||
Equity in (loss) income from unconsolidated entities | 1,400 | (465) | $ (1,443) | $ 2,088 | ||
SREIT | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity in (loss) income from unconsolidated entities | $ (1,443) | (2,562) | ||||
Purchase and Sales Agreement | SREIT | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Investment in an unconsolidated entity | 233,600 | |||||
Equity in (loss) income from unconsolidated entities | 2,100 | |||||
Income from equity method investments | 2,100 | |||||
Investment income, dividend | $ 19,300 | |||||
Purchase and Sales Agreement | REIT Properties III | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Units acquired (in shares) | 307,953,999 | |||||
Units acquired (in dollars per share) | $ 0.88 | |||||
Ownership percentage | 33.30% | 27.40% | 31.30% | |||
Units disposed (in shares) | 18,392,100 | |||||
Units disposed | $ 16,200 | |||||
Units held (in shares) | 289,561,899 | |||||
Investment in an unconsolidated entity | $ 228,800 | |||||
Units, closing price (in dollars per share) | $ 0.79 |
INVESTMENT IN UNCONSOLIDATED _4
INVESTMENT IN UNCONSOLIDATED ENTITIES (Financial Statements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Balance Sheets | |||||||||||||
Real estate, net | $ 1,954,069 | $ 1,954,069 | |||||||||||
Total assets | 2,504,325 | $ 2,638,927 | $ 2,638,927 | 2,504,325 | $ 2,638,927 | ||||||||
Notes payable, net | 1,388,365 | 1,459,879 | 1,459,879 | 1,388,365 | 1,459,879 | ||||||||
Total liabilities | 1,559,566 | 1,601,913 | 1,601,913 | 1,559,566 | 1,601,913 | ||||||||
Total equity | 898,036 | 985,310 | 985,310 | 898,036 | 985,310 | $ 930,895 | $ 1,079,408 | ||||||
Income Statement | |||||||||||||
Revenues | 77,742 | $ 75,503 | $ 75,971 | $ 77,702 | 76,404 | $ 82,981 | $ 114,509 | $ 111,378 | 306,918 | 385,272 | 426,257 | ||
Company's share of net loss | 1,400 | (465) | (1,443) | $ 2,088 | |||||||||
SREIT | |||||||||||||
Balance Sheets | |||||||||||||
Real estate, net | 1,318,527 | 1,201,050 | 1,201,050 | 1,318,527 | 1,201,050 | ||||||||
Total assets | 1,383,372 | 1,260,540 | 1,260,540 | 1,383,372 | 1,260,540 | ||||||||
Notes payable, net | 480,352 | 432,824 | 432,824 | 480,352 | 432,824 | ||||||||
Total liabilities | 546,486 | 473,540 | 473,540 | 546,486 | 473,540 | ||||||||
Total equity | $ 836,886 | $ 787,000 | 787,000 | 836,886 | $ 787,000 | ||||||||
Income Statement | |||||||||||||
Revenues | 61,183 | 145,000 | |||||||||||
Net loss | (4,605) | (9,385) | |||||||||||
Company's share of net loss | $ (1,443) | (2,562) | |||||||||||
SREIT | Purchase and Sales Agreement | |||||||||||||
Income Statement | |||||||||||||
Company's share of net loss | 2,100 | ||||||||||||
Income from equity method investments | $ 2,100 |
INVESTMENT IN UNCONSOLIDATED _5
INVESTMENT IN UNCONSOLIDATED ENTITIES (Investment in Village Center Station II) (Details) - USD ($) | Oct. 11, 2018 | Mar. 03, 2017 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||||||
Total real estate held for investment, cost | $ 2,400,220,000 | $ 2,456,625,000 | $ 2,400,220,000 | |||
Equity in (loss) income from unconsolidated entities | $ 1,400,000 | $ (465,000) | $ (1,443,000) | $ 2,088,000 | ||
Village Center Station II Joint Venture | Secured Debt | Village Center Station II Construction Loan | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Maximum borrowing capacity | $ 78,500,000 | |||||
Village Center Station II Joint Venture | Village Center Station II | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity interest in joint venture | 75.00% | |||||
Contributed capital | $ 32,300,000 | |||||
Equity interest in joint venture purchased | 25.00% | |||||
Equity interest in joint venture purchased, value | $ 28,200,000 | |||||
Investments acquired | 132,100,000 | |||||
Land | 8,600,000 | |||||
Buildings and improvements | 109,000,000 | |||||
Tenant origination and absorption costs | 14,500,000 | |||||
Total real estate held for investment, cost | $ 130,100,000 | |||||
Gain on investments | $ 2,000,000 | |||||
Village Center Station II Joint Venture | Village Center Station II | Development | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Cost of goods and services sold | $ 111,200,000 |
NOTES PAYABLE (Schedule of Long
NOTES PAYABLE (Schedule of Long-term Debt Instruments) (Details) - USD ($) $ in Thousands | Jan. 23, 2020 | Dec. 31, 2020 | Nov. 18, 2020 | Nov. 02, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 1,396,745 | $ 1,466,376 | |||
Deferred financing costs, net | (8,380) | (6,497) | |||
Total notes payable, net | 1,388,365 | 1,459,879 | |||
Carillon Mortgage Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | 88,800 | ||||
Carillon Mortgage Loan | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Unused borrowing capacity, amount | 22,200 | ||||
Mortgages | Anchor Centre Mortgage Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | 0 | 49,043 | |||
Mortgages | 201 17th Street Mortgage Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | 0 | 64,750 | |||
Mortgages | The Almaden Mortgage Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 123,000 | 93,000 | |||
Contractual Interest Rate | 3.65% | ||||
Effective Interest Rate | 3.65% | ||||
Mortgages | 201 Spear Street Mortgage Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 125,000 | 125,000 | |||
Effective Interest Rate | 1.59% | ||||
Mortgages | 201 Spear Street Mortgage Loan | One-month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.45% | ||||
Mortgages | Carillon Mortgage Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 88,800 | 111,000 | |||
Effective Interest Rate | 1.54% | ||||
Mortgages | Carillon Mortgage Loan | One-month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.40% | ||||
Mortgages | 3001 & 3003 Washington Mortgage Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 143,245 | 143,245 | |||
Effective Interest Rate | 1.59% | ||||
Mortgages | 3001 & 3003 Washington Mortgage Loan | One-month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.45% | ||||
Mortgages | Accenture Tower Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 123,000 | ||||
Secured Debt | The Almaden Mortgage Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 123,000 | $ 123,000 | |||
Contractual Interest Rate | 3.65% | ||||
Basis spread on variable rate | 3.50% | ||||
Secured Debt | Modified Portfolio Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 472,950 | 684,225 | |||
Effective Interest Rate | 1.94% | ||||
Secured Debt | Modified Portfolio Loan Facility | One-month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.80% | ||||
Secured Debt | Modified Portfolio Revolving Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 162,500 | 196,113 | |||
Basis spread on variable rate | 1.50% | ||||
Effective Interest Rate | 1.64% | ||||
Unused borrowing capacity, amount | $ 162,500 | ||||
Secured Debt | Modified Portfolio Revolving Loan Facility | One-month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.50% | ||||
Secured Debt | Accenture Tower Revolving Loan | |||||
Debt Instrument [Line Items] | |||||
Total notes payable principal outstanding | $ 281,250 | $ 281,300 | $ 0 | ||
Effective Interest Rate | 2.39% | ||||
Secured Debt | Accenture Tower Revolving Loan | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Unused borrowing capacity, amount | $ 93,700 | ||||
Secured Debt | Accenture Tower Revolving Loan | One-month LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.25% |
NOTES PAYABLE (Narrative) (Deta
NOTES PAYABLE (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Interest expense | $ 81,139 | $ 114,272 | $ 72,209 |
Amortization of deferred financing costs | 4,293 | 5,385 | 6,356 |
Derivatives, interest expense | 39,100 | 33,100 | (11,100) |
Interest capitalized | 0 | 1,711 | 2,832 |
Interest payable, current | 4,000 | 4,500 | |
Interest Expense | |||
Debt Instrument [Line Items] | |||
Amortization of deferred financing costs | $ 4,300 | $ 5,500 | $ 6,500 |
NOTES PAYABLE (Schedule of Matu
NOTES PAYABLE (Schedule of Maturities of Long-Term Debt) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 472,950 | |
2022 | 0 | |
2023 | 566,750 | |
2024 | 357,045 | |
2025 | 0 | |
Thereafter | 0 | |
Total notes payable principal outstanding | $ 1,396,745 | $ 1,466,376 |
NOTES PAYABLE (Recent Financing
NOTES PAYABLE (Recent Financing Transactions) (Details) | Nov. 18, 2020USD ($) | Nov. 03, 2020USD ($)extension | Nov. 02, 2020USD ($)extension | Jan. 23, 2020USD ($)extensionnumberOfTimes | Nov. 03, 2017USD ($)extension | Dec. 31, 2020USD ($)extension | Mar. 01, 2021USD ($) | Dec. 31, 2019USD ($) | Oct. 17, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||
Total notes payable principal outstanding | $ 1,396,745,000 | $ 1,466,376,000 | |||||||
Modified Portfolio Revolving Loan Facility | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, term | 3 years | ||||||||
Current borrowing capacity | $ 215,000,000 | ||||||||
Modified Portfolio Revolving Loan Facility | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 650,000,000 | ||||||||
Current borrowing capacity | 325,000,000 | ||||||||
Increase in borrowing capacity | 110,000,000 | ||||||||
Loan, amount outstanding | 162,500,000 | ||||||||
Amount drawn | $ 66,500,000 | ||||||||
Total notes payable principal outstanding | 162,500,000 | 196,113,000 | |||||||
Unused borrowing capacity, amount | $ 162,500,000 | ||||||||
Number of extensions | extension | 2 | ||||||||
Extension period | 12 months | ||||||||
Basis spread on variable rate | 1.50% | ||||||||
Number of options to increase committed amount | numberOfTimes | 4 | ||||||||
Increase in maximum borrowing capacity, increments | $ 15,000,000 | ||||||||
Additional increase | 325,000,000 | ||||||||
Modified Portfolio Revolving Loan Facility | Secured Debt | One-month LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.50% | ||||||||
Modified Portfolio Revolving Loan Facility | Secured Debt | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan, amount outstanding | $ 162,500,000 | ||||||||
Maximum borrowing capacity, percentage | 50.00% | ||||||||
Modified Portfolio Revolving Loan Facility | Secured Debt | Non-Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Total notes payable principal outstanding | $ 162,500,000 | ||||||||
Maximum borrowing capacity, percentage | 50.00% | ||||||||
201 17th Street Mortgage Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 64,900,000 | ||||||||
Accenture Tower Revolving Loan | Subsequent Event | National Bank of Kuwait | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 50,000,000 | ||||||||
Accenture Tower Revolving Loan | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, term | 3 years | ||||||||
Maximum borrowing capacity | $ 375,000,000 | ||||||||
Loan, amount outstanding | 281,300,000 | ||||||||
Total notes payable principal outstanding | $ 281,300,000 | $ 281,250,000 | 0 | ||||||
Number of extensions | extension | 2 | ||||||||
Extension period | 12 months | ||||||||
Percent of outstanding balance under guarantees | 2.25% | ||||||||
Accenture Tower Revolving Loan | Secured Debt | One-month LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.25% | ||||||||
Accenture Tower Revolving Loan | Secured Debt | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan, amount outstanding | $ 93,700,000 | ||||||||
Unused borrowing capacity, amount | 93,700,000 | ||||||||
Amount to be used for tenant improvements and lease commissions | 30,000,000 | ||||||||
Modified Portfolio Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 210,300,000 | ||||||||
Modified Portfolio Loan Facility | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, term | 3 years | ||||||||
Maximum borrowing capacity | $ 1,010,000,000 | ||||||||
Loan, amount outstanding | $ 757,500,000 | ||||||||
Number of extensions | extension | 2 | ||||||||
Extension period | 12 months | ||||||||
Modified Portfolio Loan Facility | Secured Debt | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan, amount outstanding | $ 252,500,000 | ||||||||
Modified Portfolio Loan Facility | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 630,600,000 | ||||||||
Loan, amount outstanding | $ 472,900,000 | ||||||||
Total notes payable principal outstanding | $ 472,950,000 | $ 684,225,000 | |||||||
Number of extensions | extension | 1 | ||||||||
Extension period | 12 months | ||||||||
Modified Portfolio Loan Facility | Secured Debt | One-month LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.80% | ||||||||
Modified Portfolio Loan Facility | Secured Debt | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Loan, amount outstanding | $ 157,700,000 | ||||||||
The Almaden Mortgage Loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 93,300,000 | ||||||||
The Almaden Mortgage Loan | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, term | 3 years | ||||||||
Maximum borrowing capacity | $ 123,000,000 | ||||||||
Total notes payable principal outstanding | $ 123,000,000 | $ 123,000,000 | |||||||
Number of extensions | extension | 2 | ||||||||
Extension period | 12 months | ||||||||
Interest rate | 3.65% | ||||||||
Basis spread on variable rate | 3.50% | ||||||||
The Almaden Mortgage Loan | Secured Debt | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 3.65% |
DERIVATIVE INSTRUMENTS (Schedul
DERIVATIVE INSTRUMENTS (Schedule of Notional Amounts) (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2020USD ($)instrument | Dec. 31, 2020USD ($)instrumentinvestmentnumberOfProperties | Dec. 31, 2019USD ($)investment | |
Derivative [Line Items] | |||
Number of instruments matured | numberOfProperties | 2 | ||
Interest rate swap | Recurring Basis | |||
Derivative [Line Items] | |||
Derivative liability | $ (35,331) | ||
Interest Rate Swap at Fair Value | Recurring Basis | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 2 | ||
Derivative liability | $ (7,800) | ||
Not Designated as Hedging Instrument | Interest rate swap | |||
Derivative [Line Items] | |||
Number of Instruments | investment | 8 | 11 | |
Notional Amount | $ 1,121,590 | $ 960,963 | |
Weighted-Average Fix Pay Rate | 1.70% | ||
Weighted-Average Remaining Term in Years | 2 years 2 months 12 days | ||
Not Designated as Hedging Instrument | Interest rate swap | Prepaid Expenses and Other Current Assets | |||
Derivative [Line Items] | |||
Number of Instruments | investment | 0 | 3 | |
Derivative Asset | $ 0 | $ 1,553 | |
Not Designated as Hedging Instrument | Interest rate swap | Other Liabilities | |||
Derivative [Line Items] | |||
Number of Instruments | investment | 8 | 8 | |
Derivative Liability | $ 35,331 | $ 11,404 | |
Not Designated as Hedging Instrument | Interest rate swap | Minimum | One-month LIBOR | |||
Derivative [Line Items] | |||
Reference Rate | 0.70% | ||
Not Designated as Hedging Instrument | Interest rate swap | Maximum | One-month LIBOR | |||
Derivative [Line Items] | |||
Reference Rate | 2.11% | ||
Not Designated as Hedging Instrument | Interest Rate Swap at Fair Value | Recurring Basis | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 2 | ||
Derivative liability | $ 7,800 | ||
Not Designated as Hedging Instrument | Interest Rate Swap, Maturity between November 2022 and February 2023 | |||
Derivative [Line Items] | |||
Notional Amount | $ 232,500 | ||
Number of instruments terminated | instrument | 3 | ||
Not Designated as Hedging Instrument | Interest Rate Swap, Maturity on November 2, 2023 | |||
Derivative [Line Items] | |||
Number of Instruments | instrument | 2 | ||
Notional Amount | $ 281,300 |
DERIVATIVE INSTRUMENTS (Stateme
DERIVATIVE INSTRUMENTS (Statement of Operations) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | |||
Unrealized income on derivative instruments | $ 0 | $ 0 | $ 95 |
Increase (decrease) in interest expense as a result of derivatives | 39,112 | 33,103 | (11,102) |
Designated as Hedging Instrument | Interest rate swap | |||
Derivative [Line Items] | |||
Realized loss (gain) recognized on interest rate swaps | 0 | 0 | 205 |
Increase (decrease) in interest expense as a result of derivatives | 0 | 0 | (205) |
Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Unrealized income on derivative instruments | 39,112 | 33,103 | (10,897) |
Not Designated as Hedging Instrument | Interest rate swap | |||
Derivative [Line Items] | |||
Realized loss (gain) recognized on interest rate swaps | 13,947 | (2,561) | 295 |
Unrealized income on derivative instruments | 25,165 | 35,664 | (11,200) |
Not Designated as Hedging Instrument | Interest rate cap | |||
Derivative [Line Items] | |||
Unrealized income on derivative instruments | $ 0 | $ 0 | $ (8) |
FAIR VALUE DISCLOSURES (Schedul
FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, Face Value | $ 1,396,745 | $ 1,466,376 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, Value | 1,388,365 | 1,459,879 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, Value | $ 1,380,143 | $ 1,469,293 |
FAIR VALUE DISCLOSURES (Sched_2
FAIR VALUE DISCLOSURES (Schedule of Assets and Liabilities at Fair Value) (Details) $ in Thousands | Dec. 31, 2020USD ($)instrument | Mar. 31, 2020numberOfProperties |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of real estate properties measured at fair value | numberOfProperties | 1 | |
Measurement Input, Discount Rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 9.00% | |
Measurement Input, Terminal Cap Rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 8.25% | |
Recurring Basis | Interest rate swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability derivatives | $ (35,331) | |
Recurring Basis | Interest rate swap | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability derivatives | 0 | |
Recurring Basis | Interest rate swap | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability derivatives | (35,331) | |
Recurring Basis | Interest rate swap | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability derivatives | 0 | |
Recurring Basis | Interest Rate Swap at Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liability derivatives | $ (7,800) | |
Number of Instruments | instrument | 2 | |
Nonrecurring Basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate | $ 80,500 | |
Nonrecurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate | 0 | |
Nonrecurring Basis | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate | 0 | |
Nonrecurring Basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Real estate | $ 80,500 |
RELATED PARTY TRANSACTIONS (Thi
RELATED PARTY TRANSACTIONS (Third Party Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Payable | $ 8,626 | $ 7,886 | |
Administrative fees, amount paid | 338 | 357 | $ 325 |
Asset management fees | |||
Related Party Transaction [Line Items] | |||
Payable | 8,500 | 6,700 | |
Singapore Portfolio | |||
Related Party Transaction [Line Items] | |||
Payable | 4,100 | ||
Advisor and Dealer Manager | |||
Related Party Transaction [Line Items] | |||
Incurred | 23,218 | 35,767 | 32,217 |
Payable | 8,626 | 7,886 | |
Advisor and Dealer Manager | Asset management fees | |||
Related Party Transaction [Line Items] | |||
Expenses | 20,990 | 24,614 | 27,152 |
Payable | 8,529 | 6,674 | |
Advisor and Dealer Manager | Reimbursement of operating expenses | |||
Related Party Transaction [Line Items] | |||
Expenses | 479 | 1,453 | 3,612 |
Payable | 97 | 79 | |
Advisor and Dealer Manager | Disposition fees | |||
Related Party Transaction [Line Items] | |||
Expenses | 1,715 | 9,483 | 429 |
Payable | 0 | 0 | |
Advisor and Dealer Manager | Acquisition fee on development project | |||
Related Party Transaction [Line Items] | |||
Incurred | 34 | 217 | 350 |
Payable | 0 | 1,133 | |
Advisor and Dealer Manager | Acquisition fee on unconsolidated joint venture | |||
Related Party Transaction [Line Items] | |||
Incurred | 0 | 0 | $ 674 |
Payable | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS (Nar
RELATED PARTY TRANSACTIONS (Narrative) (Details) $ in Thousands | 8 Months Ended | 12 Months Ended | 60 Months Ended | ||||
Aug. 31, 2019USD ($)$ / ft² | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Aug. 31, 2024USD ($)$ / ft² | Nov. 01, 2019 | May 29, 2015ft² | |
Related Party Transaction [Line Items] | |||||||
Return on net invested capital | 8.00% | ||||||
Due to affiliate | $ 8,626 | $ 7,886 | |||||
Annualized base rent | 68,511 | ||||||
Asset management fees | |||||||
Related Party Transaction [Line Items] | |||||||
Due to affiliate | 8,500 | 6,700 | |||||
KBS Capital Advisors LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses | 100 | 100 | $ 100 | ||||
KBS Capital Advisors LLC | Property Insurance Rebate | |||||||
Related Party Transaction [Line Items] | |||||||
Amounts of transaction | 200 | ||||||
Affiliated Entity | Subsidiaries | |||||||
Related Party Transaction [Line Items] | |||||||
Net rentable area | ft² | 5,046 | ||||||
Percent of total rentable square feet | 2.40% | ||||||
Annualized base rent | $ 200 | ||||||
Average annualized base rent per square foot | $ / ft² | 46.38 | ||||||
Rental income | 300 | 300 | 200 | ||||
Affiliated Entity | Subsidiaries | Forecast | |||||||
Related Party Transaction [Line Items] | |||||||
Annualized base rent | $ 300 | ||||||
Average annualized base rent per square foot | $ / ft² | 62.55 | ||||||
Advisor and Dealer Manager | |||||||
Related Party Transaction [Line Items] | |||||||
Amounts of transaction | 23,218 | 35,767 | 32,217 | ||||
Due to affiliate | 8,626 | 7,886 | |||||
Advisor and Dealer Manager | Asset management fees | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses | 20,990 | 24,614 | $ 27,152 | ||||
Due to affiliate | $ 8,529 | $ 6,674 | |||||
GKP Holding LLC | Advisor and Dealer Manager | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 33.33% |
RELATED PARTY TRANSACTIONS (Por
RELATED PARTY TRANSACTIONS (Portfolio Sale) (Details) - USD ($) | Jul. 19, 2019 | Jul. 18, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 21, 2019 |
Related Party Transaction [Line Items] | |||||
Investment in an unconsolidated entity | $ 233,592,000 | $ 253,371,000 | |||
Singapore Portfolio | |||||
Related Party Transaction [Line Items] | |||||
Disposal group, consideration | $ 1,200,000,000 | ||||
Expenses | $ 20,000,000 | ||||
Purchase and Sales Agreement | Manager | |||||
Related Party Transaction [Line Items] | |||||
Annual base fee as percent of distributable income | 10.00% | ||||
Annual performance fee as percent of increase of distributions per unit | 25.00% | ||||
Acquisition fee as percent of acquisition price of real estate | 1.00% | ||||
Acquisition related costs | $ 0 | ||||
Dividend fee as percent of sale price of real estate | 0.50% | ||||
Development management fee as percent of total project cost | 3.00% | ||||
REIT Properties III | Purchase and Sales Agreement | |||||
Related Party Transaction [Line Items] | |||||
Units acquired (in shares) | 307,953,999 | ||||
Ownership percentage | 33.30% | 27.40% | 31.30% | ||
Units acquired | $ 271,000,000 | ||||
Units disposed (in shares) | 18,392,100 | ||||
Units disposed | $ 16,200,000 | ||||
Investment in an unconsolidated entity | $ 228,800,000 | ||||
Purchaser | Purchase and Sales Agreement | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 50.00% | ||||
SREIT | Linda Bren 2017 Trust | |||||
Related Party Transaction [Line Items] | |||||
Investment in an unconsolidated entity | $ 10,000,000 | ||||
SREIT | Linda Bren 2017 Trust | Not to Sell Prior to Written Consent | |||||
Related Party Transaction [Line Items] | |||||
Investment in an unconsolidated entity | $ 5,000,000 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 77,742 | $ 75,503 | $ 75,971 | $ 77,702 | $ 76,404 | $ 82,981 | $ 114,509 | $ 111,378 | $ 306,918 | $ 385,272 | $ 426,257 |
Net (loss) income attributable to common stockholders | $ (221) | $ 1,119 | $ 39,508 | $ (58,903) | $ (880) | $ 316,884 | $ (28,115) | $ (26,678) | |||
Net (loss) income per common share attributable to common stockholders, basic and diluted (in dollars per share) | $ (0.01) | $ 0.01 | $ 0.22 | $ (0.32) | $ (0.02) | $ 1.82 | $ (0.16) | $ (0.15) | $ (0.10) | $ 1.49 | $ 0.02 |
Distributions declared per common share (in dollars per share) | $ 0.150 | $ 0.150 | $ 0.149 | $ 0.149 | $ 0.961 | $ 0.163 | $ 0.163 | $ 0.163 | $ 0.598 | $ 1.450 | $ 0.650 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2020USD ($) |
Related Party Transaction [Line Items] | |
Liabilities fair value | $ 0 |
KBS Capital Advisors LLC | |
Related Party Transaction [Line Items] | |
Percent of net cash flows to be received by related party, percent | 15.00% |
Noncompounded return on invested capital as percent per year, percent | 8.00% |
Distributions paid from operating cash flows, annual return, percent | 8.00% |
SUBSEQUENT EVENTS (Distribution
SUBSEQUENT EVENTS (Distributions) (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 11, 2021 | Mar. 01, 2021 | Feb. 01, 2021 | Jan. 04, 2021 | Apr. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | ||||||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.150 | $ 0.150 | $ 0.149 | $ 0.149 | $ 0.961 | $ 0.163 | $ 0.163 | $ 0.163 | $ 0.598 | $ 1.450 | $ 0.650 | |||||
Dividend Declared | Forecast | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.04983333 | |||||||||||||||
Subsequent Event | Dividend Paid | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Distributions payable | $ 9.2 | $ 9.2 | $ 9.2 | |||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.04983333 | $ 0.04983333 | $ 0.04983333 | |||||||||||||
Subsequent Event | Dividend Declared | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Distributions declared per common share (in dollars per share) | $ 0.04983333 |
SUBSEQUENT EVENTS (Disposition)
SUBSEQUENT EVENTS (Disposition) (Details) - Disposed of by Sale - USD ($) $ in Thousands | Jan. 19, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | ||||
Expenses | $ 13,018 | $ 91,506 | $ 133,198 | |
Subsequent Event | Anchor Centre | ||||
Subsequent Event [Line Items] | ||||
Disposal group, consideration | $ 103,500 | |||
Consideration, net of credits | 100,500 | |||
Expenses | $ 1,100 |
SCHEDULE III REAL ESTATE ASSE_2
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Schedule of Assets, Depreciation and Amortization) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial Cost to Company, Land | $ 309,779 | |||
Initial Cost to Company, Building and Improvements | 2,007,865 | |||
Initial Cost to Company, Total | 2,317,644 | |||
Cost Capitalized Subsequent to Acquisition | 236,928 | |||
Gross Amount at which Carried at Close of Period, Land | 306,871 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 2,247,701 | |||
Gross Amount at which Carried at Close of Period, Total | 2,554,572 | $ 2,625,002 | $ 3,573,511 | $ 3,403,500 |
Accumulated Depreciation and Amortization | (525,629) | (449,381) | $ (536,990) | $ (441,366) |
Aggregate cost of real estate for federal income tax purposes | 2,800,000 | |||
Long-term debt | 1,396,745 | 1,466,376 | ||
Secured Debt | Modified Portfolio Revolving Loan Facility | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 162,500 | |||
Long-term debt | 162,500 | 196,113 | ||
Secured Debt | Modified Portfolio Loan Facility | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 472,900 | |||
Long-term debt | 472,950 | 684,225 | ||
Mortgages | 3001 & 3003 Washington Mortgage Loan | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 143,200 | |||
Long-term debt | 143,245 | $ 143,245 | ||
Properties Held for Investment | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial Cost to Company, Land | 295,879 | |||
Initial Cost to Company, Building and Improvements | 1,934,385 | |||
Initial Cost to Company, Total | 2,230,264 | |||
Cost Capitalized Subsequent to Acquisition | 226,361 | |||
Gross Amount at which Carried at Close of Period, Land | 292,971 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 2,163,654 | |||
Gross Amount at which Carried at Close of Period, Total | 2,456,625 | |||
Accumulated Depreciation and Amortization | $ (502,556) | |||
Properties Held for Investment | Domain Gateway | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 2,850 | |||
Initial Cost to Company, Building and Improvements | 44,523 | |||
Initial Cost to Company, Total | 47,373 | |||
Cost Capitalized Subsequent to Acquisition | 22,087 | |||
Gross Amount at which Carried at Close of Period, Land | 2,850 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 66,610 | |||
Gross Amount at which Carried at Close of Period, Total | 69,460 | |||
Accumulated Depreciation and Amortization | $ (12,191) | |||
Original Date of Construction | 2009 | |||
Date Acquired | Sep. 29, 2011 | |||
Properties Held for Investment | Town Center | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 7,428 | |||
Initial Cost to Company, Building and Improvements | 108,547 | |||
Initial Cost to Company, Total | 115,975 | |||
Cost Capitalized Subsequent to Acquisition | 15,372 | |||
Gross Amount at which Carried at Close of Period, Land | 7,428 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 123,919 | |||
Gross Amount at which Carried at Close of Period, Total | 131,347 | |||
Accumulated Depreciation and Amortization | $ (37,728) | |||
Original Date of Construction | 2001/2002/2006 | |||
Date Acquired | Mar. 27, 2012 | |||
Properties Held for Investment | McEwen Building | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 5,600 | |||
Initial Cost to Company, Building and Improvements | 34,704 | |||
Initial Cost to Company, Total | 40,304 | |||
Cost Capitalized Subsequent to Acquisition | (4,277) | |||
Gross Amount at which Carried at Close of Period, Land | 5,600 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 30,427 | |||
Gross Amount at which Carried at Close of Period, Total | 36,027 | |||
Accumulated Depreciation and Amortization | $ (8,249) | |||
Original Date of Construction | 2009 | |||
Date Acquired | Apr. 30, 2012 | |||
Properties Held for Investment | Gateway Tech Center | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 5,617 | |||
Initial Cost to Company, Building and Improvements | 20,051 | |||
Initial Cost to Company, Total | 25,668 | |||
Cost Capitalized Subsequent to Acquisition | 3,890 | |||
Gross Amount at which Carried at Close of Period, Land | 5,617 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 23,941 | |||
Gross Amount at which Carried at Close of Period, Total | 29,558 | |||
Accumulated Depreciation and Amortization | $ (7,154) | |||
Original Date of Construction | 1909 | |||
Date Acquired | May 9, 2012 | |||
Properties Held for Investment | RBC Plaza | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 16,951 | |||
Initial Cost to Company, Building and Improvements | 109,191 | |||
Initial Cost to Company, Total | 126,142 | |||
Cost Capitalized Subsequent to Acquisition | 28,657 | |||
Gross Amount at which Carried at Close of Period, Land | 16,951 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 137,848 | |||
Gross Amount at which Carried at Close of Period, Total | 154,799 | |||
Accumulated Depreciation and Amortization | $ (51,483) | |||
Original Date of Construction | 1991 | |||
Date Acquired | Jan. 31, 2013 | |||
Properties Held for Investment | Preston Commons | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 17,188 | |||
Initial Cost to Company, Building and Improvements | 96,330 | |||
Initial Cost to Company, Total | 113,518 | |||
Cost Capitalized Subsequent to Acquisition | 20,749 | |||
Gross Amount at which Carried at Close of Period, Land | 17,188 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 117,079 | |||
Gross Amount at which Carried at Close of Period, Total | 134,267 | |||
Accumulated Depreciation and Amortization | $ (27,405) | |||
Original Date of Construction | 1958/1986 | |||
Date Acquired | Jun. 19, 2013 | |||
Properties Held for Investment | Sterling Plaza | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 6,800 | |||
Initial Cost to Company, Building and Improvements | 68,292 | |||
Initial Cost to Company, Total | 75,092 | |||
Cost Capitalized Subsequent to Acquisition | 9,667 | |||
Gross Amount at which Carried at Close of Period, Land | 6,800 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 77,959 | |||
Gross Amount at which Carried at Close of Period, Total | 84,759 | |||
Accumulated Depreciation and Amortization | $ (20,458) | |||
Original Date of Construction | 1984 | |||
Date Acquired | Jun. 19, 2013 | |||
Properties Held for Investment | 201 Spear Street | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 125,000 | |||
Initial Cost to Company, Land | 40,279 | |||
Initial Cost to Company, Building and Improvements | 85,941 | |||
Initial Cost to Company, Total | 126,220 | |||
Cost Capitalized Subsequent to Acquisition | 23,451 | |||
Gross Amount at which Carried at Close of Period, Land | 40,279 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 109,392 | |||
Gross Amount at which Carried at Close of Period, Total | 149,671 | |||
Accumulated Depreciation and Amortization | $ (25,653) | |||
Original Date of Construction | 1984 | |||
Date Acquired | Dec. 3, 2013 | |||
Properties Held for Investment | Accenture Tower | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 281,250 | |||
Initial Cost to Company, Land | 49,306 | |||
Initial Cost to Company, Building and Improvements | 370,662 | |||
Initial Cost to Company, Total | 419,968 | |||
Cost Capitalized Subsequent to Acquisition | 41,093 | |||
Gross Amount at which Carried at Close of Period, Land | 49,306 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 411,755 | |||
Gross Amount at which Carried at Close of Period, Total | 461,061 | |||
Accumulated Depreciation and Amortization | $ (102,370) | |||
Original Date of Construction | 1987 | |||
Date Acquired | Dec. 16, 2013 | |||
Properties Held for Investment | Ten Almaden | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 7,000 | |||
Initial Cost to Company, Building and Improvements | 110,292 | |||
Initial Cost to Company, Total | 117,292 | |||
Cost Capitalized Subsequent to Acquisition | 11,216 | |||
Gross Amount at which Carried at Close of Period, Land | 7,000 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 121,508 | |||
Gross Amount at which Carried at Close of Period, Total | 128,508 | |||
Accumulated Depreciation and Amortization | $ (26,478) | |||
Original Date of Construction | 1988 | |||
Date Acquired | Dec. 5, 2014 | |||
Properties Held for Investment | Towers at Emeryville | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 35,774 | |||
Initial Cost to Company, Building and Improvements | 147,167 | |||
Initial Cost to Company, Total | 182,941 | |||
Cost Capitalized Subsequent to Acquisition | 25,660 | |||
Gross Amount at which Carried at Close of Period, Land | 35,774 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 172,827 | |||
Gross Amount at which Carried at Close of Period, Total | 208,601 | |||
Accumulated Depreciation and Amortization | $ (39,972) | |||
Original Date of Construction | 1972/1975/1985 | |||
Date Acquired | Dec. 23, 2014 | |||
Properties Held for Investment | 3003 Washington Boulevard | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 18,800 | |||
Initial Cost to Company, Building and Improvements | 129,820 | |||
Initial Cost to Company, Total | 148,620 | |||
Cost Capitalized Subsequent to Acquisition | 2,775 | |||
Gross Amount at which Carried at Close of Period, Land | 18,800 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 132,595 | |||
Gross Amount at which Carried at Close of Period, Total | 151,395 | |||
Accumulated Depreciation and Amortization | $ (30,547) | |||
Original Date of Construction | 2014 | |||
Date Acquired | Dec. 30, 2014 | |||
Properties Held for Investment | Park Place Village | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 0 | |||
Initial Cost to Company, Land | 11,009 | |||
Initial Cost to Company, Building and Improvements | 117,070 | |||
Initial Cost to Company, Total | 128,079 | |||
Cost Capitalized Subsequent to Acquisition | (51,158) | |||
Gross Amount at which Carried at Close of Period, Land | 8,101 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 68,820 | |||
Gross Amount at which Carried at Close of Period, Total | 76,921 | |||
Accumulated Depreciation and Amortization | $ (2,634) | |||
Original Date of Construction | 2007 | |||
Date Acquired | Jun. 18, 2015 | |||
Properties Held for Investment | 201 17th Street | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 5,277 | |||
Initial Cost to Company, Building and Improvements | 86,859 | |||
Initial Cost to Company, Total | 92,136 | |||
Cost Capitalized Subsequent to Acquisition | 11,867 | |||
Gross Amount at which Carried at Close of Period, Land | 5,277 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 98,726 | |||
Gross Amount at which Carried at Close of Period, Total | 104,003 | |||
Accumulated Depreciation and Amortization | $ (23,600) | |||
Original Date of Construction | 2007 | |||
Date Acquired | Jun. 23, 2015 | |||
Properties Held for Investment | 515 Congress | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 8,000 | |||
Initial Cost to Company, Building and Improvements | 106,261 | |||
Initial Cost to Company, Total | 114,261 | |||
Cost Capitalized Subsequent to Acquisition | 12,241 | |||
Gross Amount at which Carried at Close of Period, Land | 8,000 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 118,502 | |||
Gross Amount at which Carried at Close of Period, Total | 126,502 | |||
Accumulated Depreciation and Amortization | $ (20,568) | |||
Original Date of Construction | 1975 | |||
Date Acquired | Aug. 31, 2015 | |||
Properties Held for Investment | The Almaden | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 123,000 | |||
Initial Cost to Company, Land | 29,000 | |||
Initial Cost to Company, Building and Improvements | 130,145 | |||
Initial Cost to Company, Total | 159,145 | |||
Cost Capitalized Subsequent to Acquisition | 27,691 | |||
Gross Amount at which Carried at Close of Period, Land | 29,000 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 157,836 | |||
Gross Amount at which Carried at Close of Period, Total | 186,836 | |||
Accumulated Depreciation and Amortization | $ (29,395) | |||
Original Date of Construction | 1980/1981 | |||
Date Acquired | Sep. 23, 2015 | |||
Properties Held for Investment | 3001 Washington Boulevard | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Initial Cost to Company, Land | $ 9,900 | |||
Initial Cost to Company, Building and Improvements | 41,551 | |||
Initial Cost to Company, Total | 51,451 | |||
Cost Capitalized Subsequent to Acquisition | 9,408 | |||
Gross Amount at which Carried at Close of Period, Land | 9,900 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 50,959 | |||
Gross Amount at which Carried at Close of Period, Total | 60,859 | |||
Accumulated Depreciation and Amortization | $ (8,946) | |||
Original Date of Construction | 2015 | |||
Date Acquired | Nov. 6, 2015 | |||
Properties Held for Investment | Carillon | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 88,800 | |||
Initial Cost to Company, Land | 19,100 | |||
Initial Cost to Company, Building and Improvements | 126,979 | |||
Initial Cost to Company, Total | 146,079 | |||
Cost Capitalized Subsequent to Acquisition | 15,972 | |||
Gross Amount at which Carried at Close of Period, Land | 19,100 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 142,951 | |||
Gross Amount at which Carried at Close of Period, Total | 162,051 | |||
Accumulated Depreciation and Amortization | $ (27,725) | |||
Original Date of Construction | 1991 | |||
Date Acquired | Jan. 15, 2016 | |||
Held-for-sale | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Initial Cost to Company, Land | $ 13,900 | |||
Initial Cost to Company, Building and Improvements | 73,480 | |||
Initial Cost to Company, Total | 87,380 | |||
Cost Capitalized Subsequent to Acquisition | 10,567 | |||
Gross Amount at which Carried at Close of Period, Land | 13,900 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 84,047 | |||
Gross Amount at which Carried at Close of Period, Total | 97,947 | |||
Accumulated Depreciation and Amortization | $ (23,073) | |||
Held-for-sale | Anchor Centre | ||||
Real Estate and Accumulated Depreciation [Line Items] | ||||
Ownership Percent | 100.00% | |||
Encumbrances | $ 0 | |||
Initial Cost to Company, Land | 13,900 | |||
Initial Cost to Company, Building and Improvements | 73,480 | |||
Initial Cost to Company, Total | 87,380 | |||
Cost Capitalized Subsequent to Acquisition | 10,567 | |||
Gross Amount at which Carried at Close of Period, Land | 13,900 | |||
Gross Amount at which Carried at Close of Period, Building and Improvements | 84,047 | |||
Gross Amount at which Carried at Close of Period, Total | 97,947 | |||
Accumulated Depreciation and Amortization | $ (23,073) | |||
Original Date of Construction | 1984 | |||
Date Acquired | May 22, 2014 |
SCHEDULE III REAL ESTATE ASSE_3
SCHEDULE III REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION AND AMORTIZATION (Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Real Estate: | |||
Balance at the beginning of the year | $ 2,625,002 | $ 3,573,511 | $ 3,403,500 |
Acquisitions | 0 | 0 | 132,100 |
Improvements | 96,191 | 102,921 | 84,362 |
Construction in progress | 0 | 19,035 | 35,518 |
Write off of fully depreciated and fully amortized assets | (18,832) | (50,590) | (48,388) |
Impairments | (19,395) | (8,490) | 0 |
Sale | (128,394) | (1,011,385) | (33,581) |
Balance at the end of the year | 2,554,572 | 2,625,002 | 3,573,511 |
Accumulated depreciation and amortization: | |||
Balance at the beginning of the year | (449,381) | (536,990) | (441,366) |
Depreciation and amortization expense | (100,162) | (136,040) | (149,569) |
Write off of fully depreciated and fully amortized assets | 18,832 | 50,590 | 48,388 |
Sale | 5,082 | 173,059 | 5,557 |
Balance at the end of the year | $ (525,629) | $ (449,381) | $ (536,990) |