Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37390 | |
Entity Registrant Name | Global Net Lease, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 45-2771978 | |
Entity Address, Address Line One | 650 Fifth Ave., 30th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10019 | |
City Area Code | 212 | |
Local Phone Number | 415-6500 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Shares, Shares Outstanding | 89,482,566 | |
Entity Central Index Key | 0001526113 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock, $0.01 par value | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | GNL | |
Security Exchange Name | NYSE | |
7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value | |
Trading Symbol | GNL PR A | |
Security Exchange Name | NYSE | |
6.875% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 6.875% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | |
Trading Symbol | GNL PR B | |
Security Exchange Name | NYSE | |
Preferred Stock Purchase Rights | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NYSE | |
No Trading Symbol Flag | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Real estate investments, at cost (Note 3): | ||
Land | $ 443,555 | $ 414,446 |
Buildings, fixtures and improvements | 2,832,166 | 2,685,325 |
Construction in progress | 4,905 | 11,725 |
Acquired intangible lease assets | 670,575 | 651,768 |
Total real estate investments, at cost | 3,951,201 | 3,763,264 |
Less accumulated depreciation and amortization | (625,098) | (517,123) |
Total real estate investments, net | 3,326,103 | 3,246,141 |
Cash and cash equivalents | 300,000 | 270,302 |
Restricted cash | 808 | 3,985 |
Derivative assets, at fair value (Note 7) | 1,898 | 4,151 |
Unbilled straight-line rent | 58,029 | 51,795 |
Operating lease right-of-use asset (Note 9) | 56,229 | 50,211 |
Prepaid expenses and other assets | 45,422 | 37,370 |
Due from related parties | 366 | 351 |
Deferred tax assets | 4,472 | 4,441 |
Goodwill and other intangible assets, net | 22,492 | 21,920 |
Deferred financing costs, net | 8,652 | 10,938 |
Total Assets | 3,824,471 | 3,701,605 |
LIABILITIES AND EQUITY | ||
Mortgage notes payable, net (Note 4) | 1,417,712 | 1,272,154 |
Revolving credit facility (Note 5) | 264,009 | 199,071 |
Term loan, net (Note 5) | 417,072 | 397,893 |
Acquired intangible lease liabilities, net | 29,402 | 30,529 |
Derivative liabilities, at fair value (Note 7) | 18,546 | 7,507 |
Due to related parties | 24 | 342 |
Accounts payable and accrued expenses | 28,776 | 22,903 |
Operating lease liability (Note 9) | 24,458 | 23,985 |
Prepaid rent | 22,413 | 17,236 |
Deferred tax liability | 15,146 | 14,975 |
Taxes payable | 0 | 1,046 |
Dividends payable | 5,014 | 4,006 |
Total Liabilities | 2,242,572 | 1,991,647 |
Commitments and contingencies (Note 9) | 0 | 0 |
Stockholders’ Equity (Note 8): | ||
Common Stock, $0.01 par value, 250,000,000 shares authorized, 89,614,601 and 89,458,752 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 2,227 | 2,225 |
Additional paid-in capital | 2,413,117 | 2,408,353 |
Accumulated other comprehensive (loss) income | (5,630) | 20,195 |
Accumulated deficit | (847,322) | (733,245) |
Total Stockholders’ Equity | 1,562,497 | 1,697,631 |
Non-controlling interest | 19,402 | 12,327 |
Total Equity | 1,581,899 | 1,709,958 |
Total Liabilities and Equity | 3,824,471 | 3,701,605 |
Series A Preferred Stock | ||
Stockholders’ Equity (Note 8): | ||
Cumulative redeemable preferred stock | 68 | 68 |
Series B Preferred Stock | ||
Stockholders’ Equity (Note 8): | ||
Cumulative redeemable preferred stock | $ 37 | $ 35 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Preferred stock, authorized (in shares) | 30,000,000 | |
Preferred stock, outstanding (in shares) | 6,799,467 | 6,799,467 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, issued (in shares) | 89,614,601 | 89,458,752 |
Common stock, outstanding (in shares) | 89,614,601 | 89,458,752 |
Series A Preferred Stock | ||
Preferred stock, dividend rate | 7.25% | 7.25% |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, authorized (in shares) | 9,959,650 | 9,959,650 |
Preferred stock, issued (in shares) | 6,799,467 | 6,799,467 |
Preferred stock, outstanding (in shares) | 6,799,467 | 6,799,467 |
Series B Preferred Stock | ||
Preferred stock, dividend rate | 6.875% | 6.875% |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, authorized (in shares) | 11,450,000 | 11,450,000 |
Preferred stock, issued (in shares) | 3,635,128 | 3,450,000 |
Preferred stock, outstanding (in shares) | 3,635,128 | 3,450,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue from tenants | $ 82,711 | $ 77,942 | $ 243,062 | $ 229,529 |
Expenses (income): | ||||
Property operating | 7,525 | 8,205 | 22,737 | 22,613 |
Operating fees to related parties | 8,939 | 8,220 | 26,607 | 24,425 |
Impairment charges | 0 | 6,375 | 0 | 6,375 |
Acquisition, transaction and other costs (Note 9) | 75 | 192 | 388 | 1,301 |
General and administrative | 2,641 | 3,250 | 9,014 | 8,774 |
Equity-based compensation | 2,479 | 2,501 | 7,480 | 7,039 |
Depreciation and amortization | 35,049 | 31,620 | 102,566 | 94,007 |
Total expenses | 56,708 | 60,363 | 168,792 | 164,534 |
Operating income before gain (loss) on dispositions of real estate investments | 26,003 | 17,579 | 74,270 | 64,995 |
Gain (loss) on dispositions of real estate investments | 0 | 6,977 | (153) | 14,792 |
Operating income | 26,003 | 24,556 | 74,117 | 79,787 |
Other income (expense): | ||||
Interest expense | (18,677) | (16,154) | (52,646) | (47,005) |
Loss on extinguishment of debt | 0 | (563) | (309) | (1,328) |
(Loss) gain on derivative instruments | (2,464) | 3,044 | 362 | 4,674 |
Unrealized income on undesignated foreign currency advances and other hedge ineffectiveness | 0 | 0 | 0 | 76 |
Other income (loss) | 142 | (2) | 261 | 21 |
Total other expense, net | (20,999) | (13,675) | (52,332) | (43,562) |
Net income before income tax | 5,004 | 10,881 | 21,785 | 36,225 |
Income tax expense | (862) | (940) | (2,512) | (2,680) |
Net income | 4,142 | 9,941 | 19,273 | 33,545 |
Preferred stock dividends | (4,644) | (3,081) | (13,771) | (8,273) |
Net (loss) income attributable to common stockholders | $ (502) | $ 6,860 | $ 5,502 | $ 25,272 |
Weighted average shares outstanding - Basic (in shares) | 89,482,577 | 85,254,638 | 89,470,525 | 83,539,304 |
Weighted average shares outstanding - Diluted (in shares) | 89,482,577 | 86,202,582 | 89,470,525 | 84,487,248 |
Net income (loss) per share attributable to common stockholders - Basic and Diluted (in dollars per share) | $ (0.01) | $ 0.08 | $ 0.06 | $ 0.30 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 4,142 | $ 9,941 | $ 19,273 | $ 33,545 |
Other comprehensive income (loss) | ||||
Cumulative translation adjustment | (245) | (7,605) | (15,322) | (9,216) |
Designated derivatives, fair value adjustments | 36 | (3,031) | (10,503) | (11,880) |
Other comprehensive income (loss) | (209) | (10,636) | (25,825) | (21,096) |
Comprehensive income (loss) | 3,933 | (695) | (6,552) | 12,449 |
Preferred stock dividends | (4,644) | (3,081) | (13,771) | (8,273) |
Comprehensive (loss) income attributable to common stockholders | $ (711) | $ (3,776) | $ (20,323) | $ 4,176 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Preferred Stock | Series A Preferred Stock | Series B Preferred Stock | Common Stock | Preferred Stock | Preferred StockSeries A Preferred Stock | Preferred StockSeries B Preferred Stock | Common Stock | Common StockCommon Stock | Additional Paid-in Capital | Additional Paid-in CapitalPreferred Stock | Additional Paid-in CapitalSeries A Preferred Stock | Additional Paid-in CapitalCommon Stock | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Accumulated DeficitSeries A Preferred Stock | Accumulated DeficitSeries B Preferred Stock | Accumulated DeficitCommon Stock | Total Stockholders’ Equity | Total Stockholders’ EquityPreferred Stock | Total Stockholders’ EquitySeries A Preferred Stock | Total Stockholders’ EquitySeries B Preferred Stock | Total Stockholders’ EquityCommon Stock | Non-controlling interest | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, AdjustmentAccumulated Other Comprehensive (Loss) Income | Cumulative Effect, Period of Adoption, AdjustmentAccumulated Deficit | Cumulative Effect, Period of Adoption, AdjustmentTotal Stockholders’ Equity |
Beginning Balance (in shares) at Dec. 31, 2018 | 5,416,890 | 76,080,625 | |||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2018 | $ 1,428,746 | $ 54 | $ 2,091 | $ 2,031,981 | $ 6,810 | $ (615,448) | $ 1,425,488 | $ 3,258 | |||||||||||||||||||||
Beginning Balance (ASU 2017-12) at Dec. 31, 2018 | $ (332) | $ 332 | |||||||||||||||||||||||||||
Beginning Balance (ASC 842) at Dec. 31, 2018 | $ (1,200) | $ (1,200) | $ (1,200) | ||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||
Issuance of stock, net (in shares) | 1,265,558 | 13,377,715 | |||||||||||||||||||||||||||
Issuance of stock, net | $ 31,652 | $ 258,604 | $ 13 | $ 134 | $ 31,639 | $ 258,470 | $ 31,652 | $ 258,604 | |||||||||||||||||||||
Dividends declared, common stock | (103,265) | (103,265) | (103,265) | ||||||||||||||||||||||||||
Dividends declared, preferred stock | (8,273) | $ (8,273) | (8,273) | ||||||||||||||||||||||||||
Equity-based compensation | 7,039 | 329 | 329 | 6,710 | |||||||||||||||||||||||||
Distributions to non-controlling interest holders | (405) | (405) | (405) | ||||||||||||||||||||||||||
Net Income | 33,545 | 33,545 | 33,545 | ||||||||||||||||||||||||||
Cumulative translation adjustment | (9,216) | (9,216) | (9,216) | ||||||||||||||||||||||||||
Designated derivatives, fair value adjustments | (11,880) | (11,880) | (11,880) | ||||||||||||||||||||||||||
Ending Balance (in shares) at Sep. 30, 2019 | 6,682,448 | 89,458,340 | |||||||||||||||||||||||||||
Ending Balance at Sep. 30, 2019 | 1,625,347 | $ 67 | $ 2,225 | 2,322,419 | (14,618) | (694,714) | 1,615,379 | 9,968 | |||||||||||||||||||||
Beginning Balance (in shares) at Jun. 30, 2019 | 5,957,848 | 83,861,900 | |||||||||||||||||||||||||||
Beginning Balance at Jun. 30, 2019 | 1,545,627 | $ 59 | $ 2,169 | 2,196,183 | (3,982) | (656,411) | 1,538,018 | 7,609 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||
Issuance of stock, net (in shares) | 724,600 | 5,596,440 | |||||||||||||||||||||||||||
Issuance of stock, net | 18,140 | 108,018 | $ 8 | $ 56 | $ 18,132 | 107,962 | 18,140 | 108,018 | |||||||||||||||||||||
Dividends declared, common stock | (45,028) | $ (45,028) | (45,028) | ||||||||||||||||||||||||||
Dividends declared, preferred stock | (3,081) | (3,081) | (3,081) | ||||||||||||||||||||||||||
Equity-based compensation | 2,501 | 142 | 142 | 2,359 | |||||||||||||||||||||||||
Distributions to non-controlling interest holders | (135) | (135) | (135) | ||||||||||||||||||||||||||
Net Income | 9,941 | 9,941 | 9,941 | ||||||||||||||||||||||||||
Cumulative translation adjustment | (7,605) | (7,605) | (7,605) | ||||||||||||||||||||||||||
Designated derivatives, fair value adjustments | (3,031) | (3,031) | (3,031) | ||||||||||||||||||||||||||
Ending Balance (in shares) at Sep. 30, 2019 | 6,682,448 | 89,458,340 | |||||||||||||||||||||||||||
Ending Balance at Sep. 30, 2019 | 1,625,347 | $ 67 | $ 2,225 | 2,322,419 | (14,618) | (694,714) | 1,615,379 | 9,968 | |||||||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2019 | 6,799,467 | 3,450,000 | 89,458,752 | ||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2019 | 1,709,958 | $ 68 | $ 35 | $ 2,225 | 2,408,353 | 20,195 | (733,245) | 1,697,631 | 12,327 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||
Stock issuance costs | (58) | (58) | (58) | ||||||||||||||||||||||||||
Issuance of stock, net (in shares) | 185,128 | ||||||||||||||||||||||||||||
Issuance of stock, net | $ 4,421 | $ 2 | $ 4,419 | $ 4,421 | |||||||||||||||||||||||||
Dividends declared, common stock | (119,242) | (119,242) | (119,242) | ||||||||||||||||||||||||||
Dividends declared, preferred stock | (9,244) | $ (4,527) | (9,244) | $ (4,527) | (9,244) | $ (4,527) | |||||||||||||||||||||||
Equity-based compensation (in shares) | 155,849 | ||||||||||||||||||||||||||||
Equity-based compensation | 7,480 | $ 2 | 403 | 405 | 7,075 | ||||||||||||||||||||||||
Distributions to non-controlling interest holders | (337) | (337) | (337) | ||||||||||||||||||||||||||
Net Income | 19,273 | 19,273 | 19,273 | ||||||||||||||||||||||||||
Cumulative translation adjustment | (15,322) | (15,322) | (15,322) | ||||||||||||||||||||||||||
Designated derivatives, fair value adjustments | (10,503) | (10,503) | (10,503) | ||||||||||||||||||||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 6,799,467 | 3,635,128 | 89,614,601 | ||||||||||||||||||||||||||
Ending Balance at Sep. 30, 2020 | 1,581,899 | $ 68 | $ 37 | $ 2,227 | 2,413,117 | (5,630) | (847,322) | 1,562,497 | 19,402 | ||||||||||||||||||||
Beginning Balance (in shares) at Jun. 30, 2020 | 6,799,467 | 3,450,000 | 89,482,576 | ||||||||||||||||||||||||||
Beginning Balance at Jun. 30, 2020 | 1,611,555 | $ 68 | $ 35 | $ 2,225 | 2,408,527 | (5,421) | (810,923) | 1,594,511 | 17,044 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||
Stock issuance costs | (51) | $ (51) | (51) | ||||||||||||||||||||||||||
Issuance of stock, net (in shares) | 185,128 | ||||||||||||||||||||||||||||
Issuance of stock, net | $ 4,524 | $ 2 | $ 4,522 | $ 4,524 | |||||||||||||||||||||||||
Dividends declared, common stock | $ (35,794) | $ (35,794) | $ (35,794) | ||||||||||||||||||||||||||
Dividends declared, preferred stock | $ (3,081) | $ (1,563) | $ (3,081) | $ (1,563) | $ (3,081) | $ (1,563) | |||||||||||||||||||||||
Equity-based compensation (in shares) | 132,025 | ||||||||||||||||||||||||||||
Equity-based compensation | 2,479 | $ 2 | 119 | 121 | 2,358 | ||||||||||||||||||||||||
Distributions to non-controlling interest holders | (103) | (103) | (103) | ||||||||||||||||||||||||||
Net Income | 4,142 | 4,142 | 4,142 | ||||||||||||||||||||||||||
Cumulative translation adjustment | (245) | (245) | (245) | ||||||||||||||||||||||||||
Designated derivatives, fair value adjustments | 36 | 36 | 36 | ||||||||||||||||||||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 6,799,467 | 3,635,128 | 89,614,601 | ||||||||||||||||||||||||||
Ending Balance at Sep. 30, 2020 | $ 1,581,899 | $ 68 | $ 37 | $ 2,227 | $ 2,413,117 | $ (5,630) | $ (847,322) | $ 1,562,497 | $ 19,402 |
CONSOLDATED STATEMENTS OF CHANG
CONSOLDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Common stock, dividends (in dollars per share) | $ 0.40 | $ 0.53 | $ 1.33 | $ 1.59 |
Series A Preferred Stock | ||||
Preferred stock, dividends (in dollars per share) | 0.45 | $ 0.45 | 1.35 | $ 1.35 |
Issuance of stock, net | $ 18,140 | $ 31,652 | ||
Series A Preferred Stock | Additional Paid-in Capital | ||||
Issuance of stock, net | 18,132 | 31,639 | ||
Series A Preferred Stock | Total Stockholders’ Equity | ||||
Issuance of stock, net | $ 18,140 | $ 31,652 | ||
Series B Preferred Stock | ||||
Preferred stock, dividends (in dollars per share) | $ 0.43 | $ 1.29 | ||
Preferred Stock | ||||
Issuance of stock, net | $ 4,524 | $ 4,421 | ||
Preferred Stock | Additional Paid-in Capital | ||||
Issuance of stock, net | 4,522 | 4,419 | ||
Preferred Stock | Total Stockholders’ Equity | ||||
Issuance of stock, net | $ 4,524 | $ 4,421 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 19,273 | $ 33,545 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 59,387 | 48,167 |
Amortization of intangibles | 43,179 | 45,840 |
Amortization of deferred financing costs | 5,732 | 4,825 |
Amortization of mortgage discounts and premiums, net | 13 | 232 |
Amortization of below-market lease liabilities | (2,509) | (2,900) |
Amortization of above-market lease assets | 2,512 | 3,286 |
Amortization of operating lease right-of-use assets | 631 | 636 |
Amortization of lease incentive | 226 | 0 |
Bad debt expense | 0 | 0 |
Unbilled straight-line rent | (6,434) | (5,063) |
Equity-based compensation | 7,480 | 7,039 |
Unrealized loss (gain) on foreign currency transactions, derivatives, and other | 2,304 | (1,673) |
Unrealized loss on undesignated foreign currency advances and other hedge ineffectiveness | 0 | 76 |
Payments for settlement of derivatives | 0 | (1,773) |
Loss on extinguishment of debt | 0 | 1,328 |
Loss (gain) on disposition of real estate investments | 153 | (14,792) |
Lease incentive payment | (4,676) | 0 |
Impairment charges | 0 | 6,375 |
Changes in operating assets and liabilities, net: | ||
Prepaid expenses and other assets | (1,232) | (16,232) |
Deferred tax assets | (31) | 39 |
Accounts payable and accrued expenses | 6,018 | (12,373) |
Prepaid rent | 5,177 | 4,116 |
Deferred tax liability | 171 | (624) |
Taxes payable | (1,046) | (2,225) |
Net cash provided by operating activities | 136,328 | 97,849 |
Cash flows from investing activities: | ||
Investment in real estate and real estate related assets | (170,810) | (309,003) |
Deposits for future real estate acquisitions | (4,012) | (1,051) |
Capital expenditures | (3,576) | (13,686) |
Proceeds from dispositions of real estate investments | 0 | 141,538 |
Net cash used in investing activities | (178,398) | (182,202) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facilities | 227,000 | 240,264 |
Repayments on revolving credit facilities | (161,343) | (499,649) |
Proceeds from mortgage notes payable | 163,607 | 579,369 |
Payments on mortgage notes payable | (27,003) | (307,813) |
Loss on extinguishment of debt | (309) | (426) |
Common Stock issuance (costs) proceeds, net | 258,604 | |
Payments of financing costs | (4,530) | (19,000) |
Dividends paid on Common Stock | (119,215) | (103,141) |
Distributions to non-controlling interest holders | (337) | (405) |
Net cash provided by financing activities | 69,449 | 296,073 |
Net change in cash, cash equivalents and restricted cash | 27,379 | 211,720 |
Effect of exchange rate changes on cash | (858) | (5,501) |
Cash, cash equivalents and restricted cash, beginning of period | 274,287 | 103,693 |
Cash, cash equivalents and restricted cash, end of period | 300,808 | 309,912 |
Cash, cash equivalents and restricted cash, end of period | 300,808 | 309,912 |
Common Stock | ||
Cash flows from financing activities: | ||
Stock issuance (costs), net | (58) | |
Series A Preferred Stock | ||
Cash flows from financing activities: | ||
Stock issuance (costs), net | (75) | |
Preferred stock issuance (costs) proceeds, net | 31,652 | |
Dividends paid on Preferred Stock | (9,243) | (7,646) |
Series B Preferred Stock | ||
Cash flows from financing activities: | ||
Preferred stock issuance (costs) proceeds, net | 4,496 | 124,264 |
Dividends paid on Preferred Stock | $ (3,541) | $ 0 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Global Net Lease, Inc. (the “Company”), incorporated on July 13, 2011, is a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) for United States (“U.S.”) federal income tax purposes beginning with the taxable year ended December 31, 2013. The Company’s common stock, $0.01 par value per share (“Common Stock”) is listed on the New York Stock Exchange (“NYSE”) under the symbol “GNL.” In addition, the Company’s 7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”) and its 6.875% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series B Preferred Stock”) are both listed on the NYSE under the symbols “GNL PR A” and “GNL PR B,” respectively. The Company invests in commercial properties, with an emphasis on sale-leaseback transactions and mission-critical single tenant net-leased commercial properties. Substantially all of the Company’s business is conducted through the Global Net Lease Operating Partnership, L.P. (the “OP”), a Delaware limited partnership. The Company has retained Global Net Lease Advisors, LLC (the “Advisor”) to manage the Company’s affairs on a day-to-day basis. The Company’s properties are managed and leased to third parties by Global Net Lease Properties, LLC (the “Property Manager”). The Advisor and the Property Manager are under common control with AR Global Investments, LLC (the successor business to AR Capital LLC, “AR Global”), and these related parties receive compensation and fees for various services provided to the Company. As of September 30, 2020, the Company owned 299 properties consisting of 34.7 million rentable square feet, which were 99.6% leased, with a weighted-average remaining lease term of 8.7 years. Based on the percentage of annualized rental income on a straight-line basis as of September 30, 2020, 63% of the Company’s properties are located in the U.S. and Canada and 37% in Europe. The Company may also originate or acquire first mortgage loans, mezzanine loans, preferred equity or securitized loans (secured by real estate). As of September 30, 2020, the Company did not own any first mortgage loans, mezzanine loans, preferred equity or securitized loans. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results for the entire year or any subsequent interim period. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019, which are included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 28, 2020. Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the nine months ended September 30, 2020, other than those relating to new accounting pronouncements (see “Recently Issued Accounting Pronouncements” section below). Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, real estate taxes, income taxes, derivative financial instruments, hedging activities, equity-based compensation expenses related to a multi-year outperformance agreement entered into with the Advisor in 2018 (the “2018 OPP”) and fair value measurements, as applicable. Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. As of September 30, 2020, these leases had an average remaining lease term of 8.7 years. Because many of the Company’s leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable for, and include in revenue from tenants, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. For new leases after acquisition, the commencement date is considered to be the date the lease is executed. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. In addition to base rent, the Company’s lease agreements generally require tenants to pay or reimburse the Company for all property operating expenses, which primarily reflect insurance costs and real estate taxes incurred by the Company and subsequently reimbursed by the tenant. However, some limited property operating expenses that are not the responsibility of the tenant are absorbed by the Company. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under lease accounting rules, the Company is required to assess, based on credit risk only, if it is probable that it will collect virtually all of the lease payments at the lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. Partial reserves, or the ability to assume partial recovery are no longer permitted. If the Company determines that it is probable it will collect virtually all of the lease payments (rent and common area maintenance), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it is not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and the straight line rent receivable would be written off where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in revenue from tenants on the accompanying consolidated statements of operations in the period the related costs are incurred, as applicable. Accounting for Leases Lessor Accounting As a lessor of real estate, the Company has elected, by class of underlying assets, to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance. Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed as incurred. Update on the Impacts of the COVID-19 Pandemic The financial stability and overall health of the Company’s tenants is critical to its business. The negative effects that the global COVID-19 pandemic has had on the economy has impacted the ability of some of the Company’s tenants to pay their monthly rent. The Company has taken a proactive approach to seek mutually agreeable solutions with its tenants where necessary and, in some cases in the second quarter of 2020, the Company executed rent deferral agreements on leases with several tenants. For accounting purposes, in accordance with ASC 842, normally a company would be required to assess the modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease (i.e. operating, direct financing or sales-type). However, in light of the COVID-19 pandemic due to which many leases are being modified, the FASB and SEC have provided relief that will allow companies to make a policy election as to whether they treat COVID-19 related lease amendments as a provision included in the pre-concession arrangement, and therefore, not a lease modification, or to treat a lease amendment as a modification. In order to qualify for the relief, the modifications must be COVID-19 related and cash flows must be substantially the same or less than those prior to the concession, but not substantially greater. The Company has elected to use this relief where applicable. In those circumstances, the Company has accounted for these arrangements as if no changes to the lease contract were made. For those leases that do not qualify for the relief, the Company performs a lease modification analysis and if required, uses lease modification accounting. Lessee Accounting For lessees, the accounting standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. For additional information and disclosures related to the Company’s operating leases, see Note 9 — Commitments and Contingencies. Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. Goodwill The Company evaluates goodwill for impairment at least annually or upon the occurrence of a triggering event. A triggering event is an event or circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performed a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. The Company determined that the potential impact of the COVID-19 pandemic represented a triggering event, and, as such, performed an updated goodwill assessment. Based on the Company’s assessment, it determined that the goodwill was not impaired as of March 31, 2020. There were no material changes as of September 30, 2020. Derivative Instruments The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. In addition, all foreign currency denominated borrowings under the Company’s Credit Facility (as defined in Note 5 - Credit Facilities ) are designated as net investment hedges. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in the Company’s functional currency, the U.S. Dollar (“USD”). The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives 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. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in foreign operations. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment (or for derivatives that do not qualify as hedges), any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statements of operations. If a derivative is designated and qualifies for cash flow hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a change in derivative fair value is immediately recorded in earnings. Equity-Based Compensation The Company has a stock-based incentive plan under which its directors, officers and other employees of the Advisor,or its affiliates who are involved in providing services to the Company are eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share based payments. The cost of services received in exchange for a stock award is measured at the grant date fair value of the award and the expense for such awards is included in equity-based compensation on consolidated statements of operations and is recognized over the vesting period or when the requirements for exercise of the award have been met (see Note 12 — Equity-Based Compensation for additional information). Multi-Year Outperformance Agreements Concurrent with the listing of Common Stock on the NYSE on June 2, 2015 and modifications to the Fourth Amended and Restated Advisory Agreement (the “Advisory Agreement”) by and among the Company, the OP and the Advisor, the Company entered into a multi-year outperformance agreement with the Advisor in June 2015 (the “2015 OPP”). Following the end of the performance period under the 2015 OPP on June 2, 2018, the Company entered into the 2018 OPP with the Advisor (see Note 12 — Equity-Based Compensation). Under the 2018 OPP, effective June 2, 2018, the Company records equity-based compensation evenly over the requisite service period of approximately 2.8 years from the grant date. Under accounting guidance adopted by the Company on January 1, 2019, total equity-based compensation expense calculated as of the adoption of the new guidance is fixed as of that date and reflected as a charge to earnings over the remaining service period. Further, in the event of a modification, any incremental increase in the value of the instrument measured on the date of the modification both before and after the modification, will result in an incremental amount to be reflected prospectively as a charge to earnings over the remaining service period. The expense for these non-employee awards is included in the equity-based compensation line item of the consolidated statements of operations. For additional information on the original terms, a February 2019 modification of the 2018 OPP, and accounting for these awards, see Note 12 — Equity-based compensation . Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with the taxable year ended December 31, 2013. Commencing with such taxable year, the Company was organized to operate in such a manner as to qualify for taxation as a REIT under the Code and believes it has so qualified. The Company intends to continue to operate in such a manner to continue to qualify for taxation as a REIT, but no assurance can be given that it will operate in a manner so as to remain qualified as a REIT. As a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes annually all of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. The Company conducts business in various states and municipalities within the U.S., Canada, Puerto Rico, the United Kingdom and Western Europe and, as a result, the Company or one of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and certain foreign jurisdictions. As a result, the Company may be subject to certain federal, state, local and foreign taxes on its income and assets, including alternative minimum taxes, taxes on any undistributed income and state, local or foreign income, franchise, property and transfer taxes. Any of these taxes decrease the Company’s earnings and available cash. In addition, the Company’s international assets and operations, including those owned through direct or indirect subsidiaries that are disregarded entities for U.S. federal income tax purposes, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted. Significant judgment is required in determining the Company’s tax provision and in evaluating its tax positions. The Company establishes tax reserves based on a benefit recognition model, which the Company believes could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. The Company derecognizes the tax position when the likelihood of the tax position being sustained is no longer more likely than not. The Company recognizes deferred income taxes in certain of its subsidiaries taxable in the U.S. or in foreign jurisdictions. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. The Company provides a valuation allowance against its deferred income tax assets when it believes that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit). The Company derives most of its REIT taxable income from its real estate operations in the U.S. and has historically distributed all of its REIT taxable income to its shareholders. As such, the Company’s real estate operations are generally not subject to U.S. federal tax, and accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial statements for these operations. These operations may be subject to certain state, local, and foreign taxes, as applicable. The Company’s deferred tax assets and liabilities are primarily the result of temporary differences related to the following: • Basis differences between tax and GAAP for certain international real estate investments. For income tax purposes, in certain acquisitions, the Company assumes the seller’s basis, or the carry-over basis, in the acquired assets. The carry-over basis is typically lower than the purchase price, or the GAAP basis, resulting in a deferred tax liability with an offsetting increase to goodwill or the acquired tangible or intangible assets; • Timing differences generated by differences in the GAAP basis and the tax basis of assets such as those related to capitalized acquisition costs and depreciation expense; and • Tax net operating losses in certain subsidiaries, including those domiciled in foreign jurisdictions that may be realized in future periods if the respective subsidiary generates sufficient taxable income. The Company recognizes current income tax expense for state and local income taxes and taxes incurred in its foreign jurisdictions. The Company’s current income tax expense fluctuates from period to period based primarily on the timing of its taxable income. Recently Issued Accounting Pronouncements Adopted as of January 1, 2020: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. The revised guidance became effective for the Company effective January 1, 2020 and it did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amended guidance is effective for the Company beginning on January 1, 2020 and it did not have a material impact on the Company’s financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 contains practical expedients for reference rate reform-related activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future London Interbank Offered Rate (“LIBOR”) indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815) . The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity. The standard also amends and makes targeted improvements to the related earnings per share guidance. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The standard allows for either modified or full retrospective transition methods. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. |
Real Estate Investments, Net
Real Estate Investments, Net | 9 Months Ended |
Sep. 30, 2020 | |
Real Estate [Abstract] | |
Real Estate Investments, Net | Real Estate Investments, Net Property Acquisitions The following table presents the allocation of the assets acquired and liabilities assumed during the nine months ended September 30, 2020 and 2019, and, in the case of assets located outside of the United States, based on the applicable exchange rate at the time of purchase. All acquisitions in both periods were considered asset acquisitions for accounting purposes. Nine Months Ended September 30, (Dollar amounts in thousands) 2020 2019 Real estate investments, at cost: Land $ 28,622 $ 22,441 Buildings, fixtures and improvements 121,311 243,545 Total tangible assets 149,933 265,986 Acquired intangible lease assets: In-place leases 16,842 44,256 Above-market lease assets 53 406 Below-market lease liabilities (1,040) (1,645) Total intangible assets 15,855 43,017 ROU asset 5,022 — Cash paid for acquired real estate investments $ 170,810 $ 309,003 Number of properties purchased 21 20 Acquired Intangible Lease Assets The Company allocates a portion of the fair value of real estate acquired to identified intangible assets and liabilities, consisting of the value of origination costs (tenant improvements, leasing commissions, and legal and marketing costs), the value of above-market and below-market leases, and the value of tenant relationships, if applicable, based in each case on their relative fair values. The Company periodically assesses whether there are any indicators that the value of the intangible assets may be impaired by performing a net present value analysis of future cash flows, discounted for the inherent risk associated with each investment. For the three and nine months ended September 30, 2020 and 2019, the Company did not record any impairment charges for the intangible assets associated with the Company’s real estate investments. Dispositions During the three and nine months ended September 30, 2020, the Company did not sell any properties. During the three months ended September 30, 2019, the Company sold 33 properties located in the United States (32 Family Dollar retail stores and one industrial property) for a total contract sale price of $53.0 million resulting in an aggregate gain of $7.0 million, which is reflected in gains on dispositions of real estate investments in the accompanying consolidated statements of operations for the three months ended September 30, 2019. During the nine months ended September 30, 2019, the Company sold 97 properties located in the United States (94 Family Dollar retail stores and three industrial properties) and one property located in the United Kingdom for a total contract sales price of $145.8 million, resulting in an aggregate gain of $14.8 million, which is reflected in gains on dispositions of real estate investments in the accompanying consolidated statements of operations for the nine months ended September 30, 2019. Assets Held for Sale As of September 30, 2020 and December 31, 2019, the Company did not have any assets that were classified as held for sale. Significant Tenants There were no tenants whose annualized rental income on a straight-line basis represented 10.0% or greater of consolidated annualized rental income on a straight-line basis for all properties as of September 30, 2020 and December 31, 2019. The termination, delinquency or non-renewal of leases by any major tenant may have a material adverse effect on revenues. Geographic Concentration The following table lists the countries and states where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10.0% of consolidated annualized rental income on a straight-line basis as of September 30, 2020 and December 31, 2019. Country / U.S. State September 30, December 31, United States 62.1% 63.0% Michigan 14.0% 14.6% United Kingdom 17.4% 18.2% |
Mortgage Notes Payable, Net
Mortgage Notes Payable, Net | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable, Net | Mortgage Notes Payable, Net Mortgage notes payable, net as of September 30, 2020 and December 31, 2019 consisted of the following: Encumbered Properties Outstanding Loan Amount (1) Effective Interest Rate Interest Rate Country Portfolio September 30, December 31, Maturity (In thousands) (In thousands) Finland: Finland Properties 5 $ 86,762 $ 82,996 1.7% (2) Fixed/Variable Feb. 2024 France: Worldline — — 5,608 — (3) — — DCNS — — 10,655 — (3) — — ID Logistics II — — 11,776 — (3) — — French Properties 7 82,072 — 2.5% (4) Fixed/Variable May 2025 Germany: Germany Properties 5 60,382 57,761 1.8% (5) Fixed/Variable Jun. 2023 Luxembourg/ The Netherlands: Benelux Properties 3 140,696 134,587 1.4% Fixed Jun. 2024 Total EUR denominated 20 369,912 303,383 United Kingdom: United Kingdom Properties 42 287,304 294,315 3.1% (6) Fixed/Variable Aug. 2023 Total GBP denominated 42 287,304 294,315 United States: Penske Logistics 1 70,000 70,000 4.7% (7) Fixed Nov. 2028 Multi-Tenant Mortgage Loan I 12 187,000 187,000 4.4% (7) Fixed Nov. 2027 Multi-Tenant Mortgage Loan II 8 32,750 32,750 4.4% (7) Fixed Feb. 2028 Multi-Tenant Mortgage Loan III 7 98,500 98,500 4.9% (7) Fixed Dec. 2028 Multi-Tenant Mortgage Loan IV 16 97,500 97,500 4.6% (7) Fixed May 2029 Multi-Tenant Mortgage Loan V 12 204,000 204,000 3.7% (7) Fixed Oct. 2029 Whirlpool Loan 6 88,000 — 3.5% (8) Fixed Jul. 2027 Total USD denominated 62 777,750 689,750 Gross mortgage notes payable 124 1,434,966 1,287,448 3.4% Mortgage discount — (26) Deferred financing costs, net of accumulated amortization (9) (17,254) (15,268) Mortgage notes payable, net 124 $ 1,417,712 $ 1,272,154 3.4% ______________ (1) Amounts borrowed in local currency and translated at the spot rate in effect at the applicable reporting date. (2) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 1.4% plus 3-month Euribor rate in effect as of September 30, 2020. (3) These loans were refinanced in May 2020 as part of the French Refinancing (see below for further details). As a result, the Company terminated an interest rate swap agreement for two of these properties (see Note 7 — Derivatives and Hedging Activities ). (4) 90% fixed as a result of a “pay-fixed” interest rate swap agreement and 10% variable. Variable portion is approximately 2.3% plus 3-month Euribor. Euribor rate in effect as of September 30, 2020. (5) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 1.55% plus 3 month Euribor. Euribor rate in effect as of September 30, 2020. (6) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 2.0% plus 3-month GBP LIBOR. LIBOR rate in effect as of September 30, 2020. This loan requires principal repayments beginning in 2020 based on amounts specified under the loan. (7) The borrower’s (wholly owned subsidiaries of the Company) financial statements are included within the Company’s consolidated financial statements, however, the borrowers’ assets and credit are only available to pay the debts of the borrowers and their liabilities constitute obligations of the borrowers. (8) Fixed as a result of “pay-fixed” interest rate swap agreements. (9) Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or paid down before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. The following table presents future scheduled aggregate principal payments on the Company’s gross mortgage notes payable over the next five calendar years and thereafter as of September 30, 2020: (In thousands) Future Principal Payments (1) 2020 (remainder) $ 2,609 2021 12,772 2022 19,779 2023 319,537 2024 227,458 2025 82,072 Thereafter 770,739 Total $ 1,434,966 ________________________ (1) Assumes exchange rates of £1.00 to $1.29 for GBP and €1.00 to $1.17 for EUR as of September 30, 2020 for illustrative purposes, as applicable. The Company’s mortgage notes payable agreements require compliance with certain property-level financial covenants including debt service coverage ratios. As of September 30, 2020, the Company was in compliance with all other financial covenants under its mortgage notes payable agreements. During the three months ended September 30, 2020, the borrower entities under the mortgage loan secured by all the Company’s properties located in the United Kingdom did not maintain the required loan-to-value ratios with respect to the mortgaged properties, and, as a result, a cash trap event under the loan occurred which was immediately cured when the Company executed, as required by the terms of the loan, an unsecured corporate guaranty of the borrower entities’ obligations under the loan. The guaranty remains in effect and contains a covenant that requires the Company to maintain unrestricted cash and cash equivalents (or amounts available for future borrowings under credit facility, such as the Credit Facility) in an amount sufficient to meet its actual and contingent liabilities under the guaranty. As of September 30, 2020, the Company was in compliance with the covenants under the Credit Facility and mortgage notes payable agreements. The total gross carrying value of unencumbered assets as of September 30, 2020 was $1.4 billion , of which approximately $1.3 billion was included in the unencumbered asset pool comprising the borrowing base under the Revolving Credit Facility (as defined in Note 5 — Credit Facilities ) and therefore is not available to serve as collateral for future borrowings. Whirlpool Loan On July 10, 2020, the Company, through certain wholly owned subsidiaries, borrowed $88.0 million from a syndicate of regional banks led by BOK Financial. The loans are secured by six industrial properties triple-net leased to Whirlpool Corporation and located in Tennessee and Ohio that were simultaneously removed from the borrowing base under the Revolving Credit Facility. At closing, approximately $84.0 million was used to repay amounts outstanding under the Revolving Credit Facility, with the remaining proceeds of approximately $2.2 million, after costs and fees related to the loan, available for general corporate purposes. The loan bears interest at a floating interest rate of one-month LIBOR plus 2.9%, with the interest rate fixed at 3.45% by swap agreement. The loan is interest-only with the principal due at maturity on July 10, 2027. The Company may prepay the loan in whole or in part at any time, and mandatory prepayments are required to be made in connection with any release of a property from the loan. French Refinancing On May 14, 2020, the Company, through certain of its subsidiaries, entered into a loan agreement with HSBC France (“HSBC”) and borrowed €70.0 million ($75.6 million based on the exchange rate on that date) secured by the seven properties the Company owns in France. The maturity date of this loan is May 14, 2025 and it bears interest at a rate of 3-month EURIBOR (with a floor of 0.0%) plus an initial margin of 2.3% per year, with the interest rate for €63.0 million ($68.0 million based on the exchange rate on that date) fixed by an interest rate swap agreement. The amount fixed by swap agreement represents 90% of the principal amount of the loan and is fixed at 2.5% per year. The loan is interest-only with the principal due at maturity. At the closing of the loan, €25.0 million ($27.0 million based on the exchange rate on that date) was used to repay all outstanding indebtedness on four of the properties. Of the remaining proceeds, approximately €20.0 million ($21.6 million based on the exchange rate on that date) was used to repay amounts outstanding under the Revolving Credit Facility and the remaining balance is available for general corporate purposes. |
Credit Facilities
Credit Facilities | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Credit Facilities | Credit Facilities The table below details the outstanding balances as of September 30, 2020 and December 31, 2019 under the credit agreement with KeyBank National Association (“KeyBank”), as agent, and the other lender parties thereto, which provides for a $835.0 million senior unsecured multi-currency revolving credit facility (the “Revolving Credit Facility”) and a €359.6 million ($421.6 million based on the prevailing exchange rate as of September 30, 2020) senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Credit Facility, the “Credit Facility”). The Credit Facility was originally entered into on July 24, 2017 and it has been amended from time to time. On August 1, 2019, the Company, through the OP, entered into an amendment and restatement of the credit agreement related to the Credit Facility to, among other things, increase the aggregate total commitments, lower the interest rate and revise certain covenants, and the terms of the Credit Facility described below generally reflect this amendment and restatement. September 30, 2020 December 31, 2019 (In thousands) TOTAL USD (1) USD GBP EUR TOTAL USD (2) USD GBP EUR Revolving Credit Facility $ 264,009 $ 183,211 £ 40,000 € 25,000 $ 199,071 $ 62,211 £ 40,000 € 75,000 Term Loan 421,560 — — 359,551 403,258 — — 359,551 Deferred financing costs (4,488) — — — (5,365) — — — Term Loan, Net 417,072 — — 359,551 397,893 — — 359,551 Total Credit Facility $ 681,081 $ 183,211 £ 40,000 € 384,551 $ 596,964 $ 62,211 £ 40,000 € 434,551 (1) Assumes exchange rates of £1.00 to $1.29 for GBP and €1.00 to $1.17 for EUR as of September 30, 2020 for illustrative purposes, as applicable. (2) Assumes exchange rates of £1.00 to $1.32 for GBP and €1.00 to $1.12 for EUR as of December 31, 2019 for illustrative purposes, as applicable. Credit Facility - Terms The aggregate total commitments under the Credit Facility are $1.235 billion, based on the USD equivalent on August 1, 2019, the date of the most recent amendment to the Credit Facility. Upon the Company’s request, subject in all respects to the consent of the lenders in their sole discretion, these aggregate total commitments under the Credit Facility may be increased up to an aggregate additional amount of approximately $515.0 million, allocated to either or both portions of the Credit Facility, with total commitments under the Credit Facility not to exceed $1.75 billion, increased from the previous maximum of $950.0 million. The Credit Facility consists of two components, a Revolving Credit Facility and a Term Loan, both of which are interest-only. The Revolving Credit Facility matures on August 1, 2023, subject to two six-month extensions at the Company’s option, and the Term Loan matures on August 1, 2024. Borrowings under the Credit Facility bear interest at a variable rate per annum based on an applicable margin that varies based on the ratio of consolidated total indebtedness and the consolidated total asset value of the Company and its subsidiaries plus either (i) LIBOR, as applicable to the currency being borrowed, or (ii) a “base rate” equal to the greatest of (a) KeyBank’s “prime rate,” (b) 0.5% above the Federal Funds Effective Rate, or (c) 1.0% above one-month LIBOR. The applicable interest rate margin is based on a range from 0.45% to 1.05% per annum with respect to base rate borrowings under the Revolving Credit Facility, 1.45% to 2.05% per annum with respect to LIBOR borrowings under the Revolving Credit Facility, 0.40% to 1.00% per annum with respect to base rate borrowings under the Term Loan and 1.40% to 2.00% per annum with respect to LIBOR borrowings under the Term Loan. As of September 30, 2020, the Credit Facility had a weighted-average effective interest rate of 2.5% after giving effect to interest rate swaps in place. LIBOR will likely only be available in substantially its current form until the end of 2021. The Credit Facility also contains terms governing the establishment of a replacement index to serve as an alternative to LIBOR, if necessary. To transition from LIBOR under the Credit Facility, the Company anticipates that it will either utilize the Base Rate or negotiate a replacement reference rate for LIBOR with the lenders. The Credit Facility requires the Company through the OP to pay an unused fee per annum of 0.25% of the unused balance of the Revolving Credit Facility if the unused balance exceeds or is equal to 50% of the total commitment or a fee per annum of 0.15% of the unused balance of the Revolving Credit Facility if the unused balance is less than 50% of the total commitment. From and after the time the Company obtains an investment grade credit rating, the unused fee will be replaced with a facility fee based on the total commitment under the Revolving Credit Facility multiplied by 0.30%, decreasing as the Company’s credit rating increases. The availability of borrowings under the Revolving Credit Facility is based on the value of a pool of eligible unencumbered real estate assets owned by the Company and compliance with various ratios related to those assets. As of September 30, 2020, approximately $92.0 million was available for future borrowings under the Revolving Credit Facility. Any future borrowings may, at the option of the Company, be denominated in USD, EUR, Canadian Dollars, GBP or Swiss Francs. Amounts borrowed may not, however, be converted to, or repaid in, another currency once borrowed. The Term Loan is denominated in EUR. The Company, through the OP, may reduce the amount committed under the Revolving Credit Facility and repay outstanding borrowings under the Credit Facility, in whole or in part, at any time without premium or penalty, other than customary “breakage” costs payable on LIBOR borrowings. In the event of a default, lenders have the right to terminate their obligations under the Credit Facility agreement and to accelerate the payment on any unpaid principal amount of all outstanding loans. The Credit Facility also imposes certain affirmative and negative covenants on the OP, the Company and certain of its subsidiaries including restrictive covenants with respect to, among other things, liens, indebtedness, investments, distributions (see additional information below), mergers and asset sales, as well as financial covenants requiring the OP to maintain, among other things, ratios related to leverage, secured leverage, fixed charge coverage and unencumbered debt services, as well as a minimum consolidated tangible net worth. Under the terms of the Credit Facility, the Company may not pay distributions, including cash dividends payable with respect to Common Stock, Series A Preferred Stock, Series B Preferred Stock or any other class or series of stock the Company may issue in the future, or redeem or otherwise repurchase shares of Common Stock, Series A Preferred Stock, Series B Preferred Stock, or any other class or series of stock the Company may issue in the future that exceed 100% of the Company’s Adjusted FFO, as defined in the Credit Facility (which is different from AFFO disclosed in this Quarterly Report on Form 10-Q) for any period of four consecutive fiscal quarters, except in limited circumstances, including that for one fiscal quarter in each calendar year, the Company may pay cash dividends and other distributions, and make redemptions and other repurchases in an aggregate amount equal to no more than 105% of its Adjusted FFO. From and after the time the Company obtains and continues to maintain an investment grade rating, the limitation on distributions discussed above will not be applicable. The Company used the exception to pay dividends that were between 100% of Adjusted FFO to 105% of Adjusted FFO during the quarter ended on June 30, 2020. The Company’s ability to comply with the restrictions on the payment of distributions in the Credit Facility depends on its ability to generate sufficient cash flows from its existing properties and through acquisitions or otherwise such that its cash flows in the applicable periods exceed the level of Adjusted FFO required by these restrictions. Among other things, there can be no assurance the Company will complete acquisitions and other investments on a timely basis or on acceptable terms and conditions, if at all. If the Company is not able to increase the amount of cash it has available to pay dividends, including through additional cash flows the Company expects to generate from completing acquisitions, the Company may have to reduce dividend payments or identify other financing sources to fund the payment of dividends at their current levels. Alternatively, the Company could elect to pay a portion of its dividends in shares if approved by the Company’s board of directors. The Company and certain of its subsidiaries have guaranteed the OP’s obligations under the Credit Facility pursuant to a guarantee and a related contribution agreement which governs contribution rights of the guarantors in the event any amounts become payable under the guaranty. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability and those inputs are significant. Level 3 — Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2020 and December 31, 2019, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. Financial Instruments Measured at Fair Value on a Recurring Basis The following table presents information about the Company’s assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Total September 30, 2020 Foreign currency forwards, net (GBP & EUR) $ — $ 424 $ — $ 424 Interest rate swaps, net (USD,GBP & EUR) $ — $ (17,072) $ — $ (17,072) December 31, 2019 Foreign currency forwards, net (GBP & EUR) $ — $ 2,726 $ — $ 2,726 Interest rate swaps, net (USD,GBP & EUR) $ — $ (6,082) $ — $ (6,082) A review of the fair value hierarchy classification is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain assets. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended September 30, 2020. Financial Instruments not Measured at Fair Value The carrying value of short-term financial instruments such as cash and cash equivalents, restricted cash, due to/from related pa rties, prepaid expenses and other assets, accounts payable, accrued expenses and dividends payable approximates their fair value due to their short-term nature. As of September 30, 2020 the fair value of advances to the Company under the Credit Facility was $266.3 million, which is approximately equivalent to the carrying value of $264.0 million as of September 30, 2020. As of December 31, 2019 the $199.1 million carrying value of advances under the Credit Facility approximated their fair value. The fair value of the Company’s mortgage notes payable as of September 30, 2020 and December 31, 2019 were $1.5 billion and $1.3 billion, respectively. The fair value of gross mortgage notes payable is based on estimates of market interest rates. This approach relies on unobservable inputs and therefore is classified as Level 3 in the fair value hierarchy. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency, the USD. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate and currency risk management. The use of derivative financial instruments carries certain risks, including the risk that any counterparty to a contractual arrangement may not be able to perform under the agreement. To mitigate this risk, the Company only enters into a derivative financial instrument with a counterparty with a high credit rating with a major financial institution which the Company and its affiliates may also have other financial relationships with. The Company does not anticipate that any such counterparty will fail to meet its obligations. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2020 and December 31, 2019: (In thousands) Balance Sheet Location September 30, December 31, Derivatives designated as hedging instruments: Interest rate “pay-fixed” swaps (USD) Derivative liabilities, at fair value $ (5,495) $ (939) Interest rate “pay-fixed” swaps (GBP) Derivative assets, at fair value — 366 Interest rate “pay-fixed” swaps (GBP) Derivative liabilities, at fair value (9,173) (4,524) Interest rate “pay-fixed” swaps (EUR) Derivative assets, at fair value — 228 Interest rate “pay-fixed” swaps (EUR) Derivative liabilities, at fair value (2,404) (1,139) Total $ (17,072) $ (6,008) Derivatives not designated as hedging instruments: Foreign currency forwards (GBP-USD) Derivative assets, at fair value $ 1,018 $ 1,205 Foreign currency forwards (GBP-USD) Derivative liabilities, at fair value (1,020) (831) Foreign currency forwards (EUR-USD) Derivative assets, at fair value 880 2,352 Foreign currency forwards (EUR-USD) Derivative liabilities, at fair value (454) — Interest rate swaps (EUR) Derivative liabilities, at fair value — (74) Total $ 424 $ 2,652 Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. All of the changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and are subsequently reclassified into earnings in the period that the hedged forecasted transaction impacts earnings. During the three and nine months ended September 30, 2020, such derivatives were used to hedge the variable cash flows associated with variable-rate debt. Additionally, during the three and nine months ended September 30, 2019, the Company accelerated the reclassification of amounts in other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur. During the three and nine months ended September 30, 2019, the accelerated amounts were losses of $0.1 million and losses of $0.1 million, respectively. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months ending September 30, 2021, the Company estimates that an additional $7.1 million will be reclassified from other comprehensive income as an increase to interest expense. As of September 30, 2020 and December 31, 2019, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: September 30, 2020 December 31, 2019 Derivatives Number of Notional Amount Number of Notional Amount (In thousands) (In thousands) Interest rate “pay-fixed” swaps (GBP) 49 $ 284,033 49 $ 290,965 Interest rate “pay-fixed” swaps (EUR) 22 613,141 16 521,471 Interest rate “pay-fixed” swaps (USD) 9 238,000 3 150,000 Total 80 $ 1,135,174 68 $ 962,436 In connection with a multi-property loan which refinanced all of the Company’s mortgage notes payable secured by the Company’s properties located in France during the second quarter of 2020 (see Note 4 — Mortgage Notes Payable, Net ), the Company terminated two interest rate swaps with an aggregate notional amount of €14.5 million for a payment of approximately $0.1 million. Amounts recorded to AOCI and interest expense following these terminations was not significant. In connection with a multi-property loan which refinanced all of the Company’s mortgage notes payable secured by the Company’s properties located in Finland during the first quarter of 2019, the Company terminated five interest rate swaps with an aggregate notional amount of €57.4 million for a payment of approximately $0.8 million. Following these terminations, $0.7 million was recorded in AOCI and is being recorded as an adjustment to interest expense over the term of the original EUR hedges and respective borrowings. Of the amount recorded in AOCI following these terminations, $0.1 million and $0.3 million was recorded as an increase to interest expense for the three and nine months ended September 30, 2020, respectively, and an immaterial amount remained in AOCI as of September 30, 2020. In connection with a multi-property loan which refinanced all of the Company’s mortgage notes payable denominated in GBP during the third quarter of 2018, the Company terminated 15 interest rate swaps with an aggregate notional amount of £208.8 million and one floor with a notional amount of £28.1 million. Following these terminations, the amount relating to GBP borrowings still outstanding of approximately $1.2 million was recorded in AOCI and is being recorded as an adjustment to interest expense over the term of the original GBP hedges and respective borrowings. Of the amount recorded in AOCI following these terminations, approximately $18,000 and $0.2 million was recorded as an increase to interest expense for the three and nine months ended September 30, 2020. As of September 30, 2020, there is no balance remaining in AOCI related to these terminations. The table below details the location in the consolidated financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2020 and 2019. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2020 2019 2020 2019 Amount of loss recognized in AOCI from derivatives $ (1,207) $ (4,139) $ (14,290) $ (13,250) Amount of loss reclassified from AOCI into income as interest expense $ (1,729) $ (660) $ (3,843) $ (1,640) Total interest expense recorded in the consolidated statements of operations $ 18,677 $ 16,154 $ 52,646 $ 47,005 Net Investment Hedges The Company is exposed to fluctuations in foreign currency exchange rates on property investments in foreign countries which pay rental income, incur property related expenses and hold debt instruments in currencies other than its functional currency, the USD. For derivatives designated as net investment hedges, all of the changes in the fair value of the derivatives, including the ineffective portion of the change in fair value of the derivatives, if any, are reported in AOCI (outside of earnings) as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated. As of September 30, 2020 and December 31, 2019 the Company did not have foreign currency derivatives that were designated as net investment hedges used to hedge its net investments in foreign operations and during the nine months ended September 30, 2020 and the year ended December 31, 2019, the Company did not use foreign currency derivatives that were designated as net investment hedges. Foreign Denominated Debt Designated as Net Investment Hedges Effective May 17, 2015, all foreign currency denominated borrowings under the Credit Facility were designated as net investment hedges. As such, the effective portion of changes in value due to currency fluctuations are reported in AOCI (outside of earnings) as part of the cumulative translation adjustment. The undesignated portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated, or if the Company should no longer possess a controlling interest. The Company records adjustments to earnings for currency impacts related to undesignated excess positions, if any. There were no undesignated excess positions at any time during the three and nine months ended September 30, 2020 and 2019. Non-designated Derivatives The Company is exposed to fluctuations in the exchange rates of its functional currency, the USD, against the GBP and the EUR. The Company has used and may continue to use foreign currency derivatives, including options, currency forward and cross currency swap agreements, to manage its exposure to fluctuations in GBP-USD and EUR-USD exchange rates. While these derivatives are economically hedging the fluctuations in foreign currencies, they do not meet the strict hedge accounting requirements to be classified as hedging instruments. Changes in the fair value of derivatives not designated as hedges under qualifying hedging relationships are recorded directly in net income (loss). The Company recorded a loss o f $2.5 million and a gain of $0.4 million for the three and nine months ended September 30, 2020, respectively. The Company recorded gains of $3.1 million and $4.8 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020 and December 31, 2019, the Company had the following outstanding derivatives that were not designated as hedges under qualifying hedging relationships. September 30, 2020 December 31, 2019 Derivatives Number of Notional Amount Number of Notional Amount (In thousands) (In thousands) Foreign currency forwards (GBP-USD) 38 $ 29,605 38 $ 38,898 Foreign currency forwards (EUR-USD) 33 21,104 32 27,478 Interest rate swaps (EUR) — — 1 10,655 Total 71 $ 50,709 71 $ 77,031 Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2020 and December 31, 2019. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying consolidated balance sheets. Gross Amounts Not Offset on the Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset on the Balance Sheet Net Amounts of (Liabilities) Assets presented on the Balance Sheet Financial Instruments Cash Collateral Received (Posted) Net Amount September 30, 2020 $ 1,898 $ (18,546) $ — $ (16,648) $ — $ — $ (16,648) December 31, 2019 $ 4,151 $ (7,507) $ — $ (3,356) $ — $ — $ (3,356) In addition to the above derivative arrangements, the Company also uses non-derivative financial instruments to hedge its exposure to foreign currency exchange rate fluctuations as part of its risk management program, including foreign denominated debt issued and outstanding with third parties to protect the value of its net investments in foreign subsidiaries against exchange rate fluctuations. The Company has drawn, and expects to continue to draw, foreign currency advances under the Credit Facility to fund certain investments in the respective local currency which creates a natural hedge against the original equity invested in the real estate investments, removing the need for the final cross currency swaps. Credit-risk-related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of September 30, 2020, the fair value of derivatives in a net liability pos ition including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $19.3 million. As of September 30, 2020, the Company had not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock As of September 30, 2020 and December 31, 2019, the Company had 89,614,601 and 89,458,752, respectively, shares of Common Stock issued and outstanding including restricted shares of Common Stock (“Restricted Shares”) and excluding unvested restricted stock units in respect of shares of Common Stock (“RSUs”) and long-term incentive plan units of limited partner interest in the OP (“LTIP Units”). LTIP Units may be convertible into shares of Common Stock in the future. ATM Program — Common Stock The Company has an “at the market” equity offering program (the “Common Stock ATM Program”) pursuant to which the Company may sell shares of Common Stock, from time to time through its sales agents. During the three months ended March 31, 2019, the Company sold 7,759,322 shares of Common Stock through the Common Stock ATM Program for gross proceeds of $152.8 million, before commissions paid of $1.5 million and additional issuance costs of $0.8 million. Following these sales, the Company had raised all $175.0 million contemplated by its existing equity distribution agreement related to the Common Stock ATM Program. In February 2019, the Company terminated its existing equity distribution agreement and entered into a new equity distribution agreement with substantially the same sales agents on substantially the same terms. During the three months ended September 30, 2019, the Company sold 5,596,452 shares of Common Stock under the new equity distribution agreement for gross proceeds of $109.9 million, before commissions paid of $1.6 million and additional issuance costs of $0.2 million. In total, during the nine months ended September 30, 2019, the Company sold 13,555,774 shares of Common Stock for gross proceeds of $262.6 million, before commissions paid of $3.1 million and additional issuance costs of $1.0 million. The Company did not sell any shares of Common Stock through the Common Stock ATM Program during the three or nine months ended September 30, 2020. Preferred Stock The Company is authorized to issue up to 30,000,000 shares of Preferred Stock. • The Company has classified and designated 9,959,650 shares of its authorized Preferred Stock as authorized shares of its 7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”), as of September 30, 2020 and December 31, 2019. The Company had 6,799,467 shares of Series A Preferred Stock issued and outstanding, as of September 30, 2020 and December 31, 2019. • The Company has classified and designated 11,450,000 shares of its authorized Preferred Stock as authorized shares of its 6.875% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series B Preferred Stock”), as of September 30, 2020 and December 31, 2019. The Company had 3,635,128 and 3,450,000 shares of Series B Preferred Stock issued and outstanding, as of September 30, 2020 and December 31, 2019, respectively. • The Company has classified and designated 100,000 shares of its authorized Preferred Stock as authorized shares of its Series C preferred stock, $0.01 par value (“Series C Preferred Stock”), as of September 30, 2020. No shares of Series C Preferred Stock were authorized as of December 31, 2019 and no shares of Series C Preferred Stock were issued and outstanding as of September 30, 2020 and December 31, 2019. ATM Programs — Series A Preferred Stock and Series B Preferred Stock In March 2018, the Company established an “at the market” equity offering program for its Series A Preferred Stock (the “Series A Preferred Stock ATM Program”) pursuant to which the Company was permitted to raise aggregate sales proceeds of $200.0 million through sales of shares of Series A Preferred Stock from time to time through its sales agents. During the three months ended September 30, 2019, the Company sold 724,600 shares of Series A Preferred Stock through the Series A Preferred Stock ATM Program for gross proceeds of $18.5 million, before commissions paid of approximately $0.3 million and additional issuance costs of approximately $0.1 million. During the nine months ended September 30, 2019, the Company sold 1,265,558 shares of Series A Preferred Stock through the Series A Preferred Stock ATM Program for gross proceeds of $32.3 million, before commissions paid of approximately $0.5 million and additional issuance costs of $0.2 million. In November 2019, the Company terminated the Series A Preferred Stock ATM Program. In December 2019, the Company established an “at the market” equity offering program for its Series B Preferred Stock (the “Series B Preferred Stock ATM Program”) pursuant to which the Company may raise aggregate sales proceeds of $200 million through sales of shares of Series B Preferred Stock from time to time through its sales agents. During the three and nine months ended September 30, 2020, the Company sold 185,128 shares of Series B Preferred Stock through the Series B Preferred Stock ATM Program for gross proceeds of $4.6 million, before commissions paid of approximately $70,000 and additional issuance costs of $0.1 million. Dividends Common Stock Dividends Historically, and through March 31, 2020, the Company paid dividends at an annualized rate of $2.13 per share or $0.5325 per share on a quarterly basis. In March 2020, the Company’s board of directors approved a change in the dividend to an annual rate of $1.60 per share or $0.40 per share on a quarterly basis, which became effective in the second quarter of 2020 with the Company’s April 1, 2020 dividend declaration. Dividends authorized by the Company’s board of directors are paid on a quarterly basis in arrears on the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to common stockholders of record on the record date for such payment. The Company’s board of directors may alter the amounts of dividends paid or suspend dividend payments at any time prior to declaration and therefore dividend payments are not assured. For purposes of the presentation of information herein, the Company may refer to distributions by the OP on ordinary units of limited partner interest in the OP (“OP Units”) and LTIP Units as dividends. In addition, see Note 5 — Credit Facilities f or additional information on the restrictions on the payment of dividends and other distributions imposed by the Credit Facility. Series A Preferred Stock Dividends Dividends on Series A Preferred Stock accrue in an amount equal to $0.453125 per share per quarter to Series A Preferred Stock holders, which is equivalent to 7.25% of the $25.00 liquidation preference per share of Series A Preferred Stock per annum. Dividends on the Series A Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record at the close of business on the record date set by the Company’s board of directors. Series B Preferred Stock Dividends Dividends on Series B Preferred Stock accrue in an amount equal to $0.429688 per share per quarter to Series B Preferred Stock holders, which is equivalent to 6.875% of the $25.00 liquidation preference per share of Series B Preferred Stock per annum. Dividends on the Series B Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record at the close of business on the record date set by the Company’s board of directors. Stockholder Rights Plan In April 2020, the Company announced that its board of directors approved a short-term stockholder rights plan (the “Plan”) to protect the long-term interests of the Company. The Company adopted the Plan due to the substantial volatility in the trading of the Common Stock that has resulted from the ongoing COVID-19 pandemic. The adoption of the Plan is intended to allow the Company to realize the long-term value of the Company’s assets by protecting the Company from the actions of third parties that the Company’s board determines are not in the best interest of the Company. By adopting the Plan, the Company believes that it has best positioned itself to navigate through this period of volatility brought on by COVID-19. The Plan is designed to reduce the likelihood that any person or group (including a group of persons that are acting in concert with each other) would gain control of the Company through open market accumulation of stock by imposing significant penalties upon |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lessee Arrangements — Ground Leases The Company leases land under ground leases for 10 of its properties with lease durations ranging from 15 to 97 years as of September 30, 2020, which includes two ground leases acquired during the third quarter of 2020. As of September 30, 2020, the Company’s balance sheet includes ROU assets and liabilities of $56.2 million and $24.5 million, respectively. In determining operating ROU assets and lease liabilities for the Company’s existing operating leases upon the adoption of the new lease guidance as well as for new operating leases in the current period, if any, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Since the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment. The Company’s ground operating leases have a weighted-average remaining lease term of approximately 32.3 years and a weighted-average discount rate of 4.33% as of September 30, 2020. For the three and nine months ended September 30, 2020, the Company paid cash of approximatel y $0.4 million and $1.1 million for amounts included in the measurement of lease liabilities and recorded expense of $0.3 million and $1.0 million, respectively, on a straight-line basis in accordance with the standard. The lease expense is recorded in property operating expenses in the consolidated statements of operations and comprehensive loss. The Company did not enter into any additional ground leases during the quarter ended September 30, 2020. The Company incurred rent expense on ground leases of $0.3 million and $1.0 million during the three and nine months ended September 30, 2019, respectively. The following table reflects the base cash rental payments due from the Company as of September 30, 2020: (In thousands) Future Base Rent Payments (1) 2020 (remainder) $ 361 2021 1,445 2022 1,445 2023 1,445 2024 1,450 Thereafter 41,905 Total minimum lease payments (2) 48,051 Less: Effects of discounting (23,593) Total present value of lease payments $ 24,458 ________ (1) Assumes exchange rates of £1.00 to $1.29 for GBP and €1.00 to $1.17 for EUR as of September 30, 2020 for illustrative purposes, as applicable. (2) Ground lease rental payments due for the Company’s ING Amsterdam lease are not included in the table above as the Company’s ground for this property is prepaid through 2050. Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company. On January 25, 2018, Moor Park Capital Partners LLP filed a complaint against (i) the Company and the OP; (ii) the Property Manager, Global Net Lease Special Limited Partner, LLC, an affiliate of AR Global that directly owns the Advisor and the Property Manager, and the Advisor; and (iii) AR Capital Global Holdings, LLC, and AR Global, in the Supreme Court of the State of New York, County of New York. On March 4, 2019, the parties entered into a settlement agreement pursuant to which the lawsuit was dismissed. The Company recorded a reserve of $7.4 million related to the then anticipated settlement payment during the fourth quarter of 2018 and subsequently paid the settlement amount during the first quarter of 2019. During the nine months ended September 30, 2019, the Company incurred approximately $1.0 million in additional legal expenses related to this litigation. These costs are included in acquisition, transaction and other costs in the consolidated statement of operations. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of September 30, 2020, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of September 30, 2020 and December 31, 2019, AR Global and certain affiliates owned, in the aggregate, 35,900 shares of outstanding Common Stock. The Advisor, which is an affiliate of AR Global, and its affiliates may incur costs and fees on behalf of the Company. As of September 30, 2020 and December 31, 2019, the Company had $0.4 million and $0.4 million, respectively, of receivables from former affiliates of the Advisor and $24,000 and $0.3 million of payables to their affiliates, respectively. As of September 30, 2020, AR Global indirectly owned 95% of the membership interests in the Advisor and Scott J. Bowman, the Company’s former chief executive officer and president, directly owned the other 5% of the membership interests in the Advisor. James L. Nelson, the Company’s chief executive officer and president, holds a non-controlling profit interest in the Advisor and Property Manager. The Company is the sole general partner of the OP. There were no OP Units held by anyone other than the Company outstanding as of September 30, 2020 and December 31, 2019. The Company paid $0.1 million and $0.3 million in distributions to the Advisor as the sole holder of LTIP Units during the three and nine months ended September 30, 2020, respectively, and the Company paid $0.1 million and $0.4 million in distributions related to LTIP units during the three and nine months ended September 30, 2019, respectively, which are included in accumulated deficit in the audited consolidated statements of equity. As of September 30, 2020 and December 31, 2019, the Company had no unpaid distributions on the LTIP Units. During the third quarter of 2020, the Company granted Restricted Shares to employees of the Advisor or its affiliates who are involved in providing services to the Company, including the Company’s Chief Executive Officer and Chief Financial Officer. For additional information, see No t e 12 — Equity-Based Compensation . Fees Paid in Connection with the Operations of the Company On June 2, 2015, concurrent with its listing on the New York Stock Exchange, the Company entered into the Advisory Agreement. The Advisory Agreement was most recently amended on May 6, 2020 (the “Amendment”) to temporarily lower the effective thresholds of Core AFFO Per Share (1) that the Company must satisfy for the Advisor to be paid Incentive Compensation (as defined in the Advisory Agreement) in light of the unprecedented market disruption resulting from the COVID-19 pandemic. Under the Advisory Agreement, the Company pays the Advisor the following fees in cash: (i) a base fee of $18.0 million per annum payable in cash monthly in advance (“Minimum Base Management Fee”); and (ii) a variable fee, equal to 1.25% per annum of the cumulative net proceeds realized by the Company from the issuance of any common equity, including any common equity issued in exchange for or conversion of preferred stock or exchangeable notes, as well as, from any other issuances of common, preferred, or other forms of common, preferred, or other forms of equity of the Company, including units of any operating partnership (“Variable Base Management Fee”). Additionally, the Company pays the Advisor the Incentive Compensation each quarter which is payable 50% in cash and 50% in shares of Common Stock (subject to certain lock up restrictions), except for the period beginning April 1, 2020 and ending December 31, 2020, when it is payable in cash only. The Incentive Compensation is generally calculated on an annual basis for the 12-month period from July 1 to June 30 of each year, in quarterly installments. The Incentive Compensation is subject to a final adjustment after the performance period ends, such that the difference, if any, between the amount of the Incentive Compensation actually paid to the Advisor in the preceding year under the quarterly installments and the actual amount payable for the year is either repaid by or paid to the Advisor as applicable. Shares of Common Stock that are issued as a portion of any quarterly installment payment are retained and, for purposes of any repayment required to be made by the Advisor, have the value they had at the time of issuance and are adjusted in respect of any dividend or other distribution received with respect to those shares to allow recoupment of the same. Under the Advisory Agreement, prior to the Amendment, the Incentive Fee Lower Hurdle (as defined in the Advisory Agreement) was (a) $2.15 for the 12 months ended June 30, 2019, and (b) $2.25 for the 12 months ending June 30, 2020. Following the Amendment, the Incentive Fee Lower Hurdle is equal to (i) $1.6875 per share in the aggregate and $0.5625 per share per quarter for the period beginning July 1, 2019 and ending March 31, 2020; (ii) $1.35 per share in the aggregate and $0.45 per share per quarter for the period beginning April 1, 2020 and ending December 31, 2020; (iii) $1.125 per share in the aggregate and $0.5625 per share per quarter for the period beginning January 1, 2021 and ending June 30, 2021; and (iv) $2.25 per share in the aggregate and $0.5625 per share per quarter for the annual period beginning July 1, 2021. In addition, prior to the Amendment, the Incentive Fee Upper Hurdle (as defined in the Advisory Agreement) was (a) $2.79 for the 12 months ended June 30, 2019, and (b) $2.92 for the 12 months ending June 30, 2020. Following the Amendment, the Incentive Fee Upper Hurdle is equal to (i) $2.19 per share in the aggregate and $0.73 per share per quarter for the period beginning July 1, 2019 and ending March 31, 2020; (ii) $1.75 per share in the aggregate and $0.583 per share per quarter for the period beginning April 1, 2020 and ending December 31, 2020; (iii) $1.46 per share in the aggregate and $0.73 per share per quarter for the period beginning January 1, 2021 and ending June 30, 2021; and (iv) $2.92 per share in the aggregate and $0.73 per share per quarter for the annual period beginning July 1, 2021. During the three and nine months ended September 30, 2020, $24,000 of Incentive Compensation was earned which was payable in cash only. During the three and nine months ended September 30, 2019, no Incentive Compensation was earned. The Amendment also extended from July 1, 2020 to July 1, 2021 the first date that the annual thresholds are subject to annual increases by a majority of the Company’s independent directors (in their good faith reasonable judgment, after consultation with the Advisor). The percentage at which independent directors may so increase the thresholds remains a percentage equal to between 0% and 3%. In addition, commencing August 2023 and every five years thereafter, the Advisor has a right to request that the Company’s independent directors reduce the then current Incentive Fee Lower Hurdle and Incentive Fee Upper Hurdle and make a determination whether any reduction in the annual thresholds is warranted. The annual aggregate amount of the Minimum Base Management Fee and Variable Base Management Fee (collectively, the “Base Management Fee”) that may be paid under the Advisory Agreement are subject to varying caps based on assets under management (“AUM”) (2) , as defined in the Advisory Agreement. The amount of the Base Management Fee to be paid under the Advisory Agreement is capped at the AUM for the preceding year multiplied by (a) 0.75% if equal to or less than $3.0 billion; (b) 0.75% less (i) a fraction, (x) the numerator of which is the AUM for such specified period less $3.0 billion and (y) the denominator of which is $11.7 billion multiplied by 0.35% if AUM is greater than $3.0 billion but less than $14.6 billion; or (c) 0.4% if equal to or greater than $14.7 billion. _______________________________ (1) For purposes of the Advisory Agreement, Core AFFO Per Share means for the applicable period (i) net income adjusted for the following items (to the extent they are included in net income): (a) real estate related depreciation and amortization; (b) net income from unconsolidated partnerships and joint ventures; (c) one-time costs that the Advisor deems to be non-recurring; (d) non-cash equity compensation (other than any Restricted Share Payments (as defined in the Advisory Agreement)); (e) other non-cash income and expense items; (f) certain non-cash interest expenses related to securities that are convertible to Common Stock; (g) gain (or loss) from the sale of investments; (h) impairment loss on real estate; (i) acquisition and transaction related costs (known as acquisition, transaction and other costs on the face of the Company’s income statement); (j) straight-line rent; (k) amortization of above and below market leases assets and liabilities; (l) amortization of deferred financing costs; (m) accretion of discounts and amortization of premiums on debt investments; (n) marked-to-market adjustments included in net income; (o) unrealized gain (loss) resulting from consolidation from, or deconsolidation to, equity accounting, (p) consolidated and unconsolidated partnerships and joint ventures and (q) Incentive Compensation, (ii) divided by the weighted-average outstanding shares of Common Stock on a fully-diluted basis for such period. (2) For purposes of the Advisory Agreement, AUM means, for a specified period, an amount equal to (A) (i) the aggregate costs of the Company’s investments (including acquisition fees and expenses) at the beginning of such period (before reserves for depreciation of bad debts, or similar non-cash reserves) plus (ii) the aggregate cost of the Company’s investment at the end of such period (before reserves from depreciation or bad debts, or similar non-cash reserves) divided by (B) two (2). In addition, the per annum aggregate amount of the Base Management Fee and the Incentive Compensation to be paid under the Advisory Agreement is capped at (a) 1.25% of the AUM for the previous year if AUM is less than or equal to $5.0 billion; (b) 0.95% if the AUM is equal to or exceeds $15.0 billion; or (c) a percentage equal to: (A) 1.25% less (B) (i) a fraction, (x) the numerator of which is the AUM for such specified period less $5.0 billion and (y) the denominator of which is $10.0 billion multiplied by (ii) 0.30% if AUM is greater than $5.0 billion but less than $15.0 billion. The Variable Base Management Fee is also subject to reduction if there is a sale or sales of one or more Investments in a single or series of related transactions exceeding $200.0 million and a special dividend(s) related thereto is paid to stockholders. The Company has also agreed under the Advisory Agreement to reimburse, indemnify and hold harmless each of the Advisor and its affiliates, and the directors, officers, employees, partners, members, stockholders, other equity holders, agents and representatives of the Advisor and its affiliates (each, a “Advisor Indemnified Party”), of and from any and all expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees) in respect of or arising from any acts or omissions of the Advisor Indemnified Party performed in good faith under the Advisory Agreement and not constituting bad faith, willful misconduct, gross negligence, or reckless disregard of duties on the part of the Advisor Indemnified Party. In addition, the Company has agreed to advance funds to an Advisor Indemnified Party for reasonable legal fees and other reasonable costs and expenses incurred as a result of any claim, suit, action or proceeding for which indemnification is being sought, subject to repayment if the Advisor Indemnified Party is later found pursuant to a final and non-appealable order or judgment to not be entitled to indemnification. Property Management Fees The Property Manager provides property management and leasing services for properties owned by the Company, for which the Company pays fees to the Property Manager equal to: (i) with respect to stand-alone, single-tenant net leased properties which are not part of a shopping center, 2.0% of gross revenues from the properties managed and (ii) with respect to all other types of properties, 4.0% of gross revenues from the properties managed. For services related to overseeing property management and leasing services provided by any person or entity that is not an affiliate of the Property Manager, the Company pays the Property Manager an oversight fee equal to 1.0% of gross revenues of the property managed. This oversight fee is no longer applicable to 39 of the Company’s properties which became subject to separate property management agreements with the Property Manager in connection with a multi-property mortgage loan in October 2017, a multi-property mortgage loan in April 2019, and a multi-property mortgage loan in September 2019 (the “ Loan Property PMLAs”) on otherwise nearly identical terms to the primary property and management leasing agreement (the “Primary PMLA”), which remains applicable to all other properties. In February 2019, the Company entered into an amendment to the Primary PMLA, following which it continues to have a one-year term that is automatically extended for an unlimited number of successive one-year terms unless terminated by either party upon notice. Under the Primary PMLA prior to this amendment, either the Company or the Property Manager could terminate upon 60 days’ written notice prior to the end of the applicable term. Following this amendment, either the Company or the Property Manager may terminate the Primary PMLA at any time upon at least 12 months’ prior written notice. The extended termination notice period does not apply to the Loan Property PMLAs, pursuant to which either the Company or the Property Manager can terminate upon 60 days’ written notice prior to end of the applicable term. Professional Fees and Other Reimbursements The Company reimburses the Advisor’s costs of providing administrative services, subject to the limitation that the Company will not reimburse the Advisor for any amount by which the Company’s operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income, unless the excess amount is otherwise approved by the Company’s board of directors. Additionally, the Company reimburses the Advisor for expenses of the Advisor and its affiliates incurred on behalf of the Company, except for those expenses that are specifically the responsibility of the Advisor under the Advisory Agreement, such as the Advisor’s overhead expenses, rent and travel expenses, professional services fees incurred with respect to the Advisor for the operation of its business, insurance expenses (other than with respect to the Company’s directors and officers) and information technology expenses. The following table reflects related party fees incurred, forgiven and contractually due as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Payable as of (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven September 30, 2020 December 31, 2019 One-time fees and reimbursements: Fees on gain from sale of investments $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Ongoing fees (1) : Asset management fees (2) 7,383 — 6,758 — 22,136 — 20,123 — — — Property management fees 1,532 — 1,462 — 4,447 — 4,302 — — — Incentive compensation 24 — — — 24 — — — 24 — Total related party operational fees and reimbursements $ 8,939 $ — $ 8,220 $ — $ 26,607 $ — $ 24,425 $ — $ 24 $ — ______________ (1) The Company incurred general and administrative costs and other expense reimbursements of approximately $0.7 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, which are recorded within general and administrative expenses in the consolidated statements of operations and are not reflected in the table above. (2) The Advisor, in accordance with the Advisory Agreement, received asset management fees in cash each quarter equal to one quarter of the annual Minimum Base Management Fee of $18.0 million and the Variable Base Management Fee for the respective three months ended. The Variable Base Management Fee was $2.9 million and $2.3 million for the three months ended September 30, 2020 and 2019, respectively, and $8.6 million and $6.6 million for the nine months ended September 30, 2020 and 2019, respectively. Fees Paid in Connection with the Liquidation of the Company’s Real Estate Assets In connection with any sale or similar transaction involving any investment, subject to the terms of the Advisory Agreement, the Company will pay to the Advisor a fee in connection with net gain recognized by the Company in connection with the sale or transaction (the “Gain Fee”) unless the proceeds of the sale or transaction are reinvested in one or more investments within 180 days thereafter. The Gain Fee is calculated at the end of each month and paid, to the extent due, with the next installment of the Base Management Fee. The Gain Fee is calculated by aggregating all of the gains and losses from the preceding month. There was no Gain Fee for the nine months ended September 30, 2020 or 2019. |
Economic Dependency
Economic Dependency | 9 Months Ended |
Sep. 30, 2020 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor, to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, the sale of shares of Common Stock available for issue, transfer agency services, as well as other administrative responsibilities for the Company including accounting services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that these companies are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Stock Option Plan The Company has a stock option plan (the “Plan”) which authorizes the grant of nonqualified Common Stock options to the Company’s directors, officers, advisors, consultants and other personnel of the Company, the Advisor and the Property Manager and their affiliates, subject to the absolute discretion of the board of directors and the applicable limitations of the Plan. The exercise price for any stock options granted under the Plan will be equal to the closing price of a share of Common Stock on the last trading day preceding the date of grant. A total of 0.5 million shares have been authorized and reserved for issuance under the Plan. As of September 30, 2020 and December 31, 2019, no stock options were issued under the Plan. Restricted Share Plan The Company’s employee and director incentive restricted share plan (“RSP”) provides the Company with the ability to grant awards of Restricted Shares and RSUs to the Company’s directors, officers and employees, employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The Company pays independent director compensation as follows: (i) the annual retainer payable to all independent directors is $100,000 per year, (ii) the annual retainer for the non-executive chair is $105,000, (iii) the annual retainer for independent directors serving on the audit committee, compensation committee or nominating and corporate governance committee is $30,000. All annual retainers are payable 50% in the form of cash and 50% in the form of RSUs which vest over a three-year period. In addition, the directors have the option to elect to receive the cash component in the form of RSUs which would vest over a three-year period. Under the RSP, the number of shares of Common Stock available for awards is equal to 10.0% of the Company’s outstanding shares of Common Stock on a fully diluted basis at any time. If any awards granted under the RSP are forfeited for any reason, the number of forfeited shares is again available for purposes of granting awards under the RSP. RSUs RSUs are awarded under terms that provide for vesting on a straight-line basis over a specified period of time for each award. RSUs represent a contingent right to receive shares of Common Stock at a future settlement date, subject to satisfaction of applicable vesting conditions or other restrictions, as set forth in the RSP and an award agreement evidencing the grant of RSUs. RSUs may not, in general, be sold or otherwise transferred until restrictions are removed and the rights to the shares of Common Stock have vested. Holders of RSUs do not have or receive any voting rights with respect to the RSUs or any shares underlying any award of RSUs, but such holders are generally credited with dividend or other distribution equivalents which are subject to the same vesting conditions or other restrictions as the underlying RSUs and only paid at the time such RSUs are settled in shares of Common Stock. RSU award agreements generally provide for accelerated vesting of all unvested RSUs in connection with a termination without cause from the Company’s board of directors or a change of control and accelerated vesting of the portion of the unvested RSUs scheduled to vest in the year of the recipient’s voluntary resignation from or failure to be re-elected to the Company’s board of directors. The following table reflects the amount of RSUs outstanding as of September 30, 2020 and 2019: Number of RSUs Weighted-Average Issue Price Unvested, December 31, 2019 40,541 $ 20.47 Vested (23,824) 21.71 Granted 28,232 13.37 Unvested, September 30, 2020 44,949 15.35 Number of RSUs Weighted-Average Issue Price Unvested, December 31, 2018 46,352 $ 22.04 Vested (21,955) 22.56 Granted 16,563 18.89 Unvested, September 30, 2019 40,960 20.49 The fair value of the equity awards in the form of Restricted Shares granted prior to the listing of the Common Stock on the NYSE on June 2, 2015 was based on the per share price in the Company’s initial public offering of Common Stock completed prior to the listing, and the fair value of the RSUs granted on or after the listing is based on the market price of Common Stock as of the grant date. The fair value of the equity awards is expensed over the vesting period. Restricted Shares Restricted Shares are shares of Common Stock awarded under terms that provide for vesting over a specified period of time. Holders of Restricted Shares receive nonforfeitable cash dividends prior to the time that the restrictions on the Restricted Shares have lapsed. Any dividends to holders of Restricted Shares payable in shares of Common Stock are subject to the same restrictions as the underlying Restricted Shares. Restricted Shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. During the three months ended September 30, 2020, the Company granted 132,025 Restricted Shares to employees of the Advisor or its affiliates who are involved in providing services to the Company, and including its Chief Executive Officer and Chief Financial Officer. The Restricted Shares were issued in October 2020 at the time the related award agreements were executed and were granted at a price of $17.41 per share. The awards were made pursuant to authority delegated by the compensation committee to Edward M. Weil, Jr., a member of the Company’s board of directors. Following the grant of these awards there remained an additional 217,975 Restricted Shares that may be awarded in the future pursuant to the delegation of authority to Mr. Weil. No awards may be made pursuant to this delegation of authority to anyone who is also a partner, member or equity owner of the parent of the Advisor. The Restricted Shares granted to employees of the Advisor or its affiliates vest in 25% increments on each of the first four anniversaries of the grant date. Except in connection with a change in control (as defined in the award agreement) of the Company, any unvested Restricted Shares will be forfeited if the holder’s employment with the Advisor terminates for any reason. Upon a change in control of the Company, 50% of the unvested Restricted Shares will immediately vest and the remaining unvested Restricted Shares will be forfeited. Compensation Expense — RSP Compensation expense for awards granted pursuant to the RSP was $0.1 million and $0.4 million for the three and nine months ended September 30, 2020, respectively. Compensation expense for awards issued pursuant to the RSP was $0.1 million and $0.3 million for the three and nine months ended September 30, 2019, respectively. Compensation expense is recorded as equity-based compensation in the accompanying consolidated statements of operations. As of September 30, 2020, the Company had $0.5 million unrecognized compensation cost related to RSUs granted under the RSP, which is expected to be recognized over a weighted-average period of 2.0 years. As of September 30, 2020, the Company had $2.3 million unrecognized compensation cost related to Restricted Share awards granted under the RSP, which is expected to be recognized over a period of 4.0 years. Multi-Year Outperformance Agreement On July 16, 2018, the Company’s compensation committee approved the 2018 OPP, which was subsequently entered into by the Company and the OP with the Advisor on July 19, 2018. The 2018 OPP was entered into in connection with the conclusion of the performance period under the 2015 OPP on June 2, 2018. Because no performance goals under the 2015 OPP were achieved during the performance period, no LTIP Units issued under the 2015 OPP were earned and all LTIP Units issued under the 2015 OPP were automatically forfeited without the payment of any consideration by the Company or the OP effective as of June 2, 2018. Under accounting rules adopted by the Company on January 1, 2019, the total fair value of the LTIP Units of $18.8 million is fixed as of that date and will not be remeasured in subsequent periods unless the 2018 OPP is amended (see Note 2 — Summary of Significant Accounting Policies for a description of accounting rules related to non-employee equity awards). The fair value of LTIP Units is being recorded evenly over the requisite service period of approximately 2.8 years from the grant date. In February 2019, the Company entered into an amendment to the 2018 OPP with the Advisor to reflect a change in the peer group resulting from the merger of two members of the peer group. Under the accounting rules, the Company was required to calculate any excess of the new value of LTIP Units awarded pursuant to the 2018 OPP in accordance with the provisions of the amendment ($29.9 million) over the fair value immediately prior to the amendment ($23.3 million). This excess of approximately $6.6 million is being expensed over the period from February 21, 2019, the date the Company’s compensation committee approved the amendment, through June 2, 2021, the end of the service period. During the three and nine months ended September 30, 2020, the Company recorded compensation expense related to the 2018 OPP of $2.4 million and $7.1 million, respectively. During the three and nine months ended September 30, 2019, the Company recorded compensation expense of $2.4 million and $6.7 million, respectively, related to the 2018 OPP. LTIP Units/Distributions/Redemption The rights of the Advisor as the holder of the LTIP Units are governed by the terms of the LTIP Units contained in the agreement of limited partnership of the OP. The agreement of limited partnership of the OP was amended in July 2018 in connection with the execution of the 2018 OPP to reflect the issuance of LTIP Units thereunder and to make certain clarifying and ministerial revisions, but these amendments did not alter the terms of the LTIP Units established in connection with the Company’s entry into the 2015 OPP in June 2015. The Advisor, as the holder of the LTIP Units is entitled to distributions on the LTIP Units equal to 10% of the distributions made per OP Unit (other than distributions of sale proceeds) until the LTIP Units are earned. The Company paid $0.3 million and $0.4 million in distributions related to LTIP Units during the nine months ended September 30, 2020 and 2019, respectively, which is included in accumulated deficit in the consolidated statements of changes in equity. These distributions are not subject to forfeiture, even if the LTIP Units are ultimately forfeited. If any LTIP Units are earned, the Advisor will be entitled to a priority catch-up distribution on each earned LTIP Unit equal to the aggregate distributions paid on OP Units during the applicable performance period, less the aggregate distributions paid on the LTIP Unit during the performance period. As of the valuation date on the final day of the applicable performance period, the earned LTIP Units will become entitled to receive the same distributions paid on the OP Units. Further, at the time the Advisor’s capital account with respect to an LTIP Unit that is earned and vested is economically equivalent to the average capital account balance of an OP Unit, the Advisor, as the holder of the LTIP Unit, in its sole discretion, will in accordance with the limited partnership agreement of the OP, be entitled to convert the LTIP Unit into an OP Unit, which may, in turn, be redeemed on a one-for-one basis for, at the Company’s election, a share of Common Stock or the cash equivalent thereof. 2018 OPP Based on a maximum award value of $50.0 million and $19.57 (the “Initial Share Price”), the closing price of Common Stock on June 1, 2018, the trading day prior to the effective date of the 2018 OPP, the Advisor was issued a total of 2,554,930 LTIP Units pursuant to the 2018 OPP. These LTIP Units represent the maximum number of LTIP Units that could be earned by the Advisor based on the Company’s total shareholder return (“TSR”), including both share price appreciation and Common Stock dividends, against the Initial Share Price over a performance period, commencing on June 2, 2018 and ending on the earliest of (i) June 2, 2021, (ii) the effective date of any Change of Control (as defined in the 2018 OPP) and (iii) the effective date of any termination of the Advisor’s service as advisor of the Company (the “Performance Period”). Half of the LTIP Units (the “Absolute TSR LTIP Units”) are eligible to be earned as of the last day of the Performance Period (the “Valuation Date”) if the Company achieves an absolute TSR with respect to threshold, target and maximum performance goals for the Performance Period as follows: Performance Level (% of Absolute TSR LTIP Units Earned) Absolute TSR Number of Absolute TSR LTIP Units Earned Below Threshold — % Less than 24 % — Threshold 25 % 24 % 319,366 Target 50 % 30 % 638,733 Maximum 100 % 36 % or higher 1,277,465 If the Company’s absolute TSR is more than 24% but less than 30%, or more than 30% but less than 36%, the percentage of the Absolute TSR LTIP Units earned will be determined using linear interpolation as between those tiers, respectively. Half of the LTIP Units (the “Relative TSR LTIP Units”) are eligible to be earned as of the Valuation Date if the amount, expressed in terms of basis points, whether positive or negative, by which the Company’s absolute TSR for the Performance Period exceeds the average TSR of a peer group for the Performance Period consisting of Lexington Realty Trust, W.P. Carey Inc. and Office Properties Income Trust as follows: Performance Level (% of Relative TSR LTIP Units Earned) Relative TSR Excess Number of Absolute TSR LTIP Units Earned Below Threshold — % Less than -600 basis points — Threshold 25 % -600 basis points 319,366 Target 50 % — basis points 638,733 Maximum 100 % +600 basis points 1,277,465 If the relative TSR excess is more than -600 basis points but less than 0 basis points, or more than 0 basis points but less than +600 bps, the percentage of the Relative TSR LTIP Units earned will be determined using linear interpolation as between those tiers, respectively. If the Valuation Date is the effective date of a Change of Control or a termination of the Advisor for any reason (i.e., with or without cause), then calculations relating to the number of LTIP Units earned pursuant to the 2018 OPP will be based on actual performance the last trading day prior to the effective date of the Change of Control or termination (as applicable), with the hurdles for calculating absolute TSR pro-rated to reflect that the Performance Period lasted less than three years but without pro-rating the number of Absolute TSR LTIP Units or Relative TSR LTIP Units the Advisor would be eligible to earn to reflect the shortened period. The award of LTIP Units under the 2018 OPP is administered by the compensation committee of the Company’s board of directors, provided that any of the compensation committee’s powers can be exercised instead by the board if the board so elects. Following the Valuation Date, the compensation committee is responsible for determining the number of Absolute TSR LTIP Units and Relative TSR LTIP Units earned, as calculated by an independent consultant engaged by the compensation committee and as approved by the compensation committee in its reasonable and good faith discretion. The compensation committee also must approve the transfer of any Absolute TSR LTIP Units and Relative TSR LTIP Units (or OP Units into which they may be converted in accordance with the terms of the agreement of limited partnership of the OP). LTIP Units earned as of the Valuation Date will also become vested as of the Valuation Date. Any LTIP Units that are not earned and vested after the Compensation Committee makes the required determination will automatically and without notice be forfeited without the payment of any consideration by the Company or the OP, effective as of the Valuation Date. Other Equity-Based Compensation The Company may issue Common Stock in lieu of cash to pay fees earned by the Company’s directors at each director’s election. There are no restrictions on the shares issued since these payments in lieu of cash relate to fees earned for services performed. There were no such shares of Common Stock issued in lieu of cash during the nine months ended September 30, 2020 and 2019. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following is a summary of the basic and diluted net income per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except share and per share data) 2020 2019 2020 2019 Net income (loss) attributable to common stockholders $ (502) $ 6,860 $ 5,502 $ 25,272 Adjustments to net income (loss) attributable to common stockholders for common share equivalents (102) (176) (366) (510) Adjusted net income (loss) attributable to common stockholders $ (604) $ 6,684 $ 5,136 $ 24,762 Weighted average common shares outstanding — Basic 89,482,577 85,254,638 89,470,525 83,539,304 Weighted average common shares outstanding — Diluted 89,482,577 86,202,582 89,470,525 84,487,248 Net income (loss) per share attributable to common stockholders — Basic and Diluted $ (0.01) $ 0.08 $ 0.06 $ 0.30 Under current authoritative guidance for determining earnings per share, all unvested share-based payment awards that contain non-forfeitable rights to distributions are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The Company’s unvested Restricted Shares, unvested RSUs and unearned LTIP Units contain rights to receive distributions considered to be non-forfeitable, except in certain limited circumstances, and therefore the Company applies the two-class method of computing earnings per share. The calculation of earnings per share above excludes the distributions to the unvested Restricted Shares, unvested RSUs and unearned LTIP Units from the numerator. Diluted net income per share assumes the conversion of all Common Stock share equivalents into an equivalent number of shares of Common Stock, unless the effect is anti-dilutive. The Company considers unvested Restricted Shares, unvested RSUs and unvested LTIP Units to be common share equivalents. The following table shows common share equivalents on a weighted average basis that were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Unvested RSUs 44,949 40,944 44,949 40,944 Unvested Restricted Shares (1) 21,526 — 7,228 — LTIP Units (2) 2,554,930 1,647,230 2,554,930 1,647,230 Total common share equivalents excluded from EPS calculation 2,621,405 1,688,174 2,607,107 1,688,174 (1) There were 132,025 Restricted Shares issued and outstanding as of September 30, 2020. See Note 12 — Equity-Based Compensation for additional information on the Restricted Shares, including their issuance during September 30, 2020. (2) There were 2,554,930 LTIP Units issued and outstanding under the 2018 OPP as of September 30, 2020 and 2019. See Note 12 — Equity-Based Compensation for additional information on the 2018 OPP. Conditionally issuable shares relating to the 2018 OPP award (see Note 12 — Equity-Based Compensation ) would be included in the computation of fully diluted EPS (if dilutive) based on shares that would be issued as if the balance sheet date were the end of the measurement period. No LTIP Unit share equivalents were included in the computation for the three and nine months ended September 30, 2020 and 2019. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have not been any events that have occurred that would require adjustments to, or disclosures in the consolidated financial statements, except for as disclosed below. On November 5, 2020, the Company acquired four properties, all located in the United States, for an aggregate total base purchase price of approximately $153.0 million, excluding acquisition related costs. The acquisition was funded with cash on hand. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. All intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results for the entire year or any subsequent interim period. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, real estate taxes, income taxes, derivative financial instruments, hedging activities, equity-based compensation expenses related to a multi-year outperformance agreement entered into with the Advisor in 2018 (the “2018 OPP”) and fair value measurements, as applicable. |
Revenue Recognition | Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. As of September 30, 2020, these leases had an average remaining lease term of 8.7 years. Because many of the Company’s leases provide for rental increases at specified intervals, straight-line basis accounting requires the Company to record a receivable for, and include in revenue from tenants, unbilled rent receivables that the Company will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. For new leases after acquisition, the commencement date is considered to be the date the lease is executed. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. In addition to base rent, the Company’s lease agreements generally require tenants to pay or reimburse the Company for all property operating expenses, which primarily reflect insurance costs and real estate taxes incurred by the Company and subsequently reimbursed by the tenant. However, some limited property operating expenses that are not the responsibility of the tenant are absorbed by the Company. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. |
Lessor Accounting | Lessor Accounting As a lessor of real estate, the Company has elected, by class of underlying assets, to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance. Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed as incurred. Update on the Impacts of the COVID-19 Pandemic The financial stability and overall health of the Company’s tenants is critical to its business. The negative effects that the global COVID-19 pandemic has had on the economy has impacted the ability of some of the Company’s tenants to pay their monthly rent. The Company has taken a proactive approach to seek mutually agreeable solutions with its tenants where necessary and, in some cases in the second quarter of 2020, the Company executed rent deferral agreements on leases with several tenants. For accounting purposes, in accordance with ASC 842, normally a company would be required to assess the modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease (i.e. operating, direct financing or sales-type). |
Lessee Accounting | Lessee Accounting For lessees, the accounting standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. For additional information and disclosures related to the Company’s operating leases, see Note 9 — Commitments and Contingencies. |
Impairment of Long Lived Assets | Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. |
Goodwill | GoodwillThe Company evaluates goodwill for impairment at least annually or upon the occurrence of a triggering event. A triggering event is an event or circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performed a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. The Company determined that the potential impact of the COVID-19 pandemic represented a triggering event, and, as such, performed an updated goodwill assessment. Based on the Company’s assessment, it determined that the goodwill was not impaired as of March 31, 2020. There were no material changes as of September 30, 2020. |
Derivative Instruments | Derivative Instruments The Company may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. In addition, all foreign currency denominated borrowings under the Company’s Credit Facility (as defined in Note 5 - Credit Facilities ) are designated as net investment hedges. Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in the Company’s functional currency, the U.S. Dollar (“USD”). The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives 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. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in foreign operations. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment (or for derivatives that do not qualify as hedges), any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statements of operations. If a derivative is designated and qualifies for cash flow hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a change in derivative fair value is immediately recorded in earnings. |
Equity-Based Compensation | Equity-Based Compensation The Company has a stock-based incentive plan under which its directors, officers and other employees of the Advisor,or its affiliates who are involved in providing services to the Company are eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share based payments. The cost of services received in exchange for a stock award is measured at the grant date fair value of the award and the expense for such awards is included in equity-based compensation on consolidated statements of operations and is recognized over the vesting period or when the requirements for exercise of the award have been met (see Note 12 — Equity-Based Compensation for additional information). Multi-Year Outperformance Agreements Concurrent with the listing of Common Stock on the NYSE on June 2, 2015 and modifications to the Fourth Amended and Restated Advisory Agreement (the “Advisory Agreement”) by and among the Company, the OP and the Advisor, the Company entered into a multi-year outperformance agreement with the Advisor in June 2015 (the “2015 OPP”). Following the end of the performance period under the 2015 OPP on June 2, 2018, the Company entered into the 2018 OPP with the Advisor (see Note 12 — Equity-Based Compensation). Under the 2018 OPP, effective June 2, 2018, the Company records equity-based compensation evenly over the requisite service period of approximately 2.8 years from the grant date. Under accounting guidance adopted by the Company on January 1, 2019, total equity-based compensation expense calculated as of the adoption of the new guidance is fixed as of that date and reflected as a charge to earnings over the remaining service period. Further, in the event of a modification, any incremental increase in the value of the instrument measured on the date of the modification both before and after the modification, will result in an incremental amount to be reflected prospectively as a charge to earnings over the remaining service period. The expense for these non-employee awards is included in the equity-based compensation line item of the consolidated statements of operations. For additional information on the original terms, a February 2019 modification of the 2018 OPP, and accounting for these awards, see Note 12 — Equity-based compensation |
Income Taxes | Income Taxes The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with the taxable year ended December 31, 2013. Commencing with such taxable year, the Company was organized to operate in such a manner as to qualify for taxation as a REIT under the Code and believes it has so qualified. The Company intends to continue to operate in such a manner to continue to qualify for taxation as a REIT, but no assurance can be given that it will operate in a manner so as to remain qualified as a REIT. As a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes annually all of its REIT taxable income. REITs are subject to a number of other organizational and operational requirements. The Company conducts business in various states and municipalities within the U.S., Canada, Puerto Rico, the United Kingdom and Western Europe and, as a result, the Company or one of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and certain foreign jurisdictions. As a result, the Company may be subject to certain federal, state, local and foreign taxes on its income and assets, including alternative minimum taxes, taxes on any undistributed income and state, local or foreign income, franchise, property and transfer taxes. Any of these taxes decrease the Company’s earnings and available cash. In addition, the Company’s international assets and operations, including those owned through direct or indirect subsidiaries that are disregarded entities for U.S. federal income tax purposes, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted. Significant judgment is required in determining the Company’s tax provision and in evaluating its tax positions. The Company establishes tax reserves based on a benefit recognition model, which the Company believes could result in a greater amount of benefit (and a lower amount of reserve) being initially recognized in certain circumstances. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. The Company derecognizes the tax position when the likelihood of the tax position being sustained is no longer more likely than not. The Company recognizes deferred income taxes in certain of its subsidiaries taxable in the U.S. or in foreign jurisdictions. Deferred income taxes are generally the result of temporary differences (items that are treated differently for tax purposes than for GAAP purposes). In addition, deferred tax assets arise from unutilized tax net operating losses, generated in prior years. The Company provides a valuation allowance against its deferred income tax assets when it believes that it is more likely than not that all or some portion of the deferred income tax asset may not be realized. Whenever a change in circumstances causes a change in the estimated realizability of the related deferred income tax asset, the resulting increase or decrease in the valuation allowance is included in deferred income tax expense (benefit). The Company derives most of its REIT taxable income from its real estate operations in the U.S. and has historically distributed all of its REIT taxable income to its shareholders. As such, the Company’s real estate operations are generally not subject to U.S. federal tax, and accordingly, no provision has been made for U.S. federal income taxes in the consolidated financial statements for these operations. These operations may be subject to certain state, local, and foreign taxes, as applicable. The Company’s deferred tax assets and liabilities are primarily the result of temporary differences related to the following: • Basis differences between tax and GAAP for certain international real estate investments. For income tax purposes, in certain acquisitions, the Company assumes the seller’s basis, or the carry-over basis, in the acquired assets. The carry-over basis is typically lower than the purchase price, or the GAAP basis, resulting in a deferred tax liability with an offsetting increase to goodwill or the acquired tangible or intangible assets; • Timing differences generated by differences in the GAAP basis and the tax basis of assets such as those related to capitalized acquisition costs and depreciation expense; and • Tax net operating losses in certain subsidiaries, including those domiciled in foreign jurisdictions that may be realized in future periods if the respective subsidiary generates sufficient taxable income. The Company recognizes current income tax expense for state and local income taxes and taxes incurred in its foreign jurisdictions. The Company’s current income tax expense fluctuates from period to period based primarily on the timing of its taxable income. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted as of January 1, 2020: In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the update requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. The amendments become effective for reporting periods beginning after December 15, 2019. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. The revised guidance became effective for the Company effective January 1, 2020 and it did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amended guidance is effective for the Company beginning on January 1, 2020 and it did not have a material impact on the Company’s financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 contains practical expedients for reference rate reform-related activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future London Interbank Offered Rate (“LIBOR”) indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815) . The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity. The standard also amends and makes targeted improvements to the related earnings per share guidance. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The standard allows for either modified or full retrospective transition methods. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. This alternative approach also reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The guidance defines three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability and those inputs are significant. Level 3 — Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2020 and December 31, 2019, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. |
Earnings Per Share | Earnings Per Share The following is a summary of the basic and diluted net income per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except share and per share data) 2020 2019 2020 2019 Net income (loss) attributable to common stockholders $ (502) $ 6,860 $ 5,502 $ 25,272 Adjustments to net income (loss) attributable to common stockholders for common share equivalents (102) (176) (366) (510) Adjusted net income (loss) attributable to common stockholders $ (604) $ 6,684 $ 5,136 $ 24,762 Weighted average common shares outstanding — Basic 89,482,577 85,254,638 89,470,525 83,539,304 Weighted average common shares outstanding — Diluted 89,482,577 86,202,582 89,470,525 84,487,248 Net income (loss) per share attributable to common stockholders — Basic and Diluted $ (0.01) $ 0.08 $ 0.06 $ 0.30 Under current authoritative guidance for determining earnings per share, all unvested share-based payment awards that contain non-forfeitable rights to distributions are considered to be participating securities and therefore are included in the computation of earnings per share under the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each class of common shares and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The Company’s unvested Restricted Shares, unvested RSUs and unearned LTIP Units contain rights to receive distributions considered to be non-forfeitable, except in certain limited circumstances, and therefore the Company applies the two-class method of computing earnings per share. The calculation of earnings per share above excludes the distributions to the unvested Restricted Shares, unvested RSUs and unearned LTIP Units from the numerator. Diluted net income per share assumes the conversion of all Common Stock share equivalents into an equivalent number of shares of Common Stock, unless the effect is anti-dilutive. The Company considers unvested Restricted Shares, unvested RSUs and unvested LTIP Units to be common share equivalents. The following table shows common share equivalents on a weighted average basis that were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Unvested RSUs 44,949 40,944 44,949 40,944 Unvested Restricted Shares (1) 21,526 — 7,228 — LTIP Units (2) 2,554,930 1,647,230 2,554,930 1,647,230 Total common share equivalents excluded from EPS calculation 2,621,405 1,688,174 2,607,107 1,688,174 (1) There were 132,025 Restricted Shares issued and outstanding as of September 30, 2020. See Note 12 — Equity-Based Compensation for additional information on the Restricted Shares, including their issuance during September 30, 2020. (2) There were 2,554,930 LTIP Units issued and outstanding under the 2018 OPP as of September 30, 2020 and 2019. See Note 12 — Equity-Based Compensation for additional information on the 2018 OPP. Conditionally issuable shares relating to the 2018 OPP award (see Note 12 — Equity-Based Compensation ) would be included in the computation of fully diluted EPS (if dilutive) based on shares that would be issued as if the balance sheet date were the end of the measurement period. No LTIP Unit share equivalents were included in the computation for the three and nine months ended September 30, 2020 and 2019. |
Real Estate Investments, Net (T
Real Estate Investments, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Real Estate [Abstract] | |
Allocation of Assets Acquired and Liabilities Assumed | The following table presents the allocation of the assets acquired and liabilities assumed during the nine months ended September 30, 2020 and 2019, and, in the case of assets located outside of the United States, based on the applicable exchange rate at the time of purchase. All acquisitions in both periods were considered asset acquisitions for accounting purposes. Nine Months Ended September 30, (Dollar amounts in thousands) 2020 2019 Real estate investments, at cost: Land $ 28,622 $ 22,441 Buildings, fixtures and improvements 121,311 243,545 Total tangible assets 149,933 265,986 Acquired intangible lease assets: In-place leases 16,842 44,256 Above-market lease assets 53 406 Below-market lease liabilities (1,040) (1,645) Total intangible assets 15,855 43,017 ROU asset 5,022 — Cash paid for acquired real estate investments $ 170,810 $ 309,003 Number of properties purchased 21 20 |
Properties With Significant Annualized Straight-line Rental Income, by Geographical Areas | The following table lists the countries and states where the Company has concentrations of properties where annualized rental income on a straight-line basis represented greater than 10.0% of consolidated annualized rental income on a straight-line basis as of September 30, 2020 and December 31, 2019. Country / U.S. State September 30, December 31, United States 62.1% 63.0% Michigan 14.0% 14.6% United Kingdom 17.4% 18.2% |
Mortgage Notes Payable, Net (Ta
Mortgage Notes Payable, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Mortgage Notes Payable | Mortgage notes payable, net as of September 30, 2020 and December 31, 2019 consisted of the following: Encumbered Properties Outstanding Loan Amount (1) Effective Interest Rate Interest Rate Country Portfolio September 30, December 31, Maturity (In thousands) (In thousands) Finland: Finland Properties 5 $ 86,762 $ 82,996 1.7% (2) Fixed/Variable Feb. 2024 France: Worldline — — 5,608 — (3) — — DCNS — — 10,655 — (3) — — ID Logistics II — — 11,776 — (3) — — French Properties 7 82,072 — 2.5% (4) Fixed/Variable May 2025 Germany: Germany Properties 5 60,382 57,761 1.8% (5) Fixed/Variable Jun. 2023 Luxembourg/ The Netherlands: Benelux Properties 3 140,696 134,587 1.4% Fixed Jun. 2024 Total EUR denominated 20 369,912 303,383 United Kingdom: United Kingdom Properties 42 287,304 294,315 3.1% (6) Fixed/Variable Aug. 2023 Total GBP denominated 42 287,304 294,315 United States: Penske Logistics 1 70,000 70,000 4.7% (7) Fixed Nov. 2028 Multi-Tenant Mortgage Loan I 12 187,000 187,000 4.4% (7) Fixed Nov. 2027 Multi-Tenant Mortgage Loan II 8 32,750 32,750 4.4% (7) Fixed Feb. 2028 Multi-Tenant Mortgage Loan III 7 98,500 98,500 4.9% (7) Fixed Dec. 2028 Multi-Tenant Mortgage Loan IV 16 97,500 97,500 4.6% (7) Fixed May 2029 Multi-Tenant Mortgage Loan V 12 204,000 204,000 3.7% (7) Fixed Oct. 2029 Whirlpool Loan 6 88,000 — 3.5% (8) Fixed Jul. 2027 Total USD denominated 62 777,750 689,750 Gross mortgage notes payable 124 1,434,966 1,287,448 3.4% Mortgage discount — (26) Deferred financing costs, net of accumulated amortization (9) (17,254) (15,268) Mortgage notes payable, net 124 $ 1,417,712 $ 1,272,154 3.4% ______________ (1) Amounts borrowed in local currency and translated at the spot rate in effect at the applicable reporting date. (2) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 1.4% plus 3-month Euribor rate in effect as of September 30, 2020. (3) These loans were refinanced in May 2020 as part of the French Refinancing (see below for further details). As a result, the Company terminated an interest rate swap agreement for two of these properties (see Note 7 — Derivatives and Hedging Activities ). (4) 90% fixed as a result of a “pay-fixed” interest rate swap agreement and 10% variable. Variable portion is approximately 2.3% plus 3-month Euribor. Euribor rate in effect as of September 30, 2020. (5) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 1.55% plus 3 month Euribor. Euribor rate in effect as of September 30, 2020. (6) 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. Variable portion is approximately 2.0% plus 3-month GBP LIBOR. LIBOR rate in effect as of September 30, 2020. This loan requires principal repayments beginning in 2020 based on amounts specified under the loan. (7) The borrower’s (wholly owned subsidiaries of the Company) financial statements are included within the Company’s consolidated financial statements, however, the borrowers’ assets and credit are only available to pay the debts of the borrowers and their liabilities constitute obligations of the borrowers. (8) Fixed as a result of “pay-fixed” interest rate swap agreements. (9) Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or paid down before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. |
Future Principal Payments on Mortgage Notes Payable | The following table presents future scheduled aggregate principal payments on the Company’s gross mortgage notes payable over the next five calendar years and thereafter as of September 30, 2020: (In thousands) Future Principal Payments (1) 2020 (remainder) $ 2,609 2021 12,772 2022 19,779 2023 319,537 2024 227,458 2025 82,072 Thereafter 770,739 Total $ 1,434,966 ________________________ (1) Assumes exchange rates of £1.00 to $1.29 for GBP and €1.00 to $1.17 for EUR as of September 30, 2020 for illustrative purposes, as applicable. |
Credit Facilities (Tables)
Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Outstanding Balance Under Credit Agreement | The table below details the outstanding balances as of September 30, 2020 and December 31, 2019 under the credit agreement with KeyBank National Association (“KeyBank”), as agent, and the other lender parties thereto, which provides for a $835.0 million senior unsecured multi-currency revolving credit facility (the “Revolving Credit Facility”) and a €359.6 million ($421.6 million based on the prevailing exchange rate as of September 30, 2020) senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Credit Facility, the “Credit Facility”). The Credit Facility was originally entered into on July 24, 2017 and it has been amended from time to time. On August 1, 2019, the Company, through the OP, entered into an amendment and restatement of the credit agreement related to the Credit Facility to, among other things, increase the aggregate total commitments, lower the interest rate and revise certain covenants, and the terms of the Credit Facility described below generally reflect this amendment and restatement. September 30, 2020 December 31, 2019 (In thousands) TOTAL USD (1) USD GBP EUR TOTAL USD (2) USD GBP EUR Revolving Credit Facility $ 264,009 $ 183,211 £ 40,000 € 25,000 $ 199,071 $ 62,211 £ 40,000 € 75,000 Term Loan 421,560 — — 359,551 403,258 — — 359,551 Deferred financing costs (4,488) — — — (5,365) — — — Term Loan, Net 417,072 — — 359,551 397,893 — — 359,551 Total Credit Facility $ 681,081 $ 183,211 £ 40,000 € 384,551 $ 596,964 $ 62,211 £ 40,000 € 434,551 (1) Assumes exchange rates of £1.00 to $1.29 for GBP and €1.00 to $1.17 for EUR as of September 30, 2020 for illustrative purposes, as applicable. (2) Assumes exchange rates of £1.00 to $1.32 for GBP and €1.00 to $1.12 for EUR as of December 31, 2019 for illustrative purposes, as applicable. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table presents information about the Company’s assets and liabilities (including derivatives that are presented net) measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those instruments fall. (In thousands) Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Total September 30, 2020 Foreign currency forwards, net (GBP & EUR) $ — $ 424 $ — $ 424 Interest rate swaps, net (USD,GBP & EUR) $ — $ (17,072) $ — $ (17,072) December 31, 2019 Foreign currency forwards, net (GBP & EUR) $ — $ 2,726 $ — $ 2,726 Interest rate swaps, net (USD,GBP & EUR) $ — $ (6,082) $ — $ (6,082) |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2020 and December 31, 2019: (In thousands) Balance Sheet Location September 30, December 31, Derivatives designated as hedging instruments: Interest rate “pay-fixed” swaps (USD) Derivative liabilities, at fair value $ (5,495) $ (939) Interest rate “pay-fixed” swaps (GBP) Derivative assets, at fair value — 366 Interest rate “pay-fixed” swaps (GBP) Derivative liabilities, at fair value (9,173) (4,524) Interest rate “pay-fixed” swaps (EUR) Derivative assets, at fair value — 228 Interest rate “pay-fixed” swaps (EUR) Derivative liabilities, at fair value (2,404) (1,139) Total $ (17,072) $ (6,008) Derivatives not designated as hedging instruments: Foreign currency forwards (GBP-USD) Derivative assets, at fair value $ 1,018 $ 1,205 Foreign currency forwards (GBP-USD) Derivative liabilities, at fair value (1,020) (831) Foreign currency forwards (EUR-USD) Derivative assets, at fair value 880 2,352 Foreign currency forwards (EUR-USD) Derivative liabilities, at fair value (454) — Interest rate swaps (EUR) Derivative liabilities, at fair value — (74) Total $ 424 $ 2,652 |
Schedule of Interest Rate Derivatives | As of September 30, 2020 and December 31, 2019, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: September 30, 2020 December 31, 2019 Derivatives Number of Notional Amount Number of Notional Amount (In thousands) (In thousands) Interest rate “pay-fixed” swaps (GBP) 49 $ 284,033 49 $ 290,965 Interest rate “pay-fixed” swaps (EUR) 22 613,141 16 521,471 Interest rate “pay-fixed” swaps (USD) 9 238,000 3 150,000 Total 80 $ 1,135,174 68 $ 962,436 |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The table below details the location in the consolidated financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2020 and 2019. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2020 2019 2020 2019 Amount of loss recognized in AOCI from derivatives $ (1,207) $ (4,139) $ (14,290) $ (13,250) Amount of loss reclassified from AOCI into income as interest expense $ (1,729) $ (660) $ (3,843) $ (1,640) Total interest expense recorded in the consolidated statements of operations $ 18,677 $ 16,154 $ 52,646 $ 47,005 |
Disclosure of Credit Derivatives | As of September 30, 2020 and December 31, 2019, the Company had the following outstanding derivatives that were not designated as hedges under qualifying hedging relationships. September 30, 2020 December 31, 2019 Derivatives Number of Notional Amount Number of Notional Amount (In thousands) (In thousands) Foreign currency forwards (GBP-USD) 38 $ 29,605 38 $ 38,898 Foreign currency forwards (EUR-USD) 33 21,104 32 27,478 Interest rate swaps (EUR) — — 1 10,655 Total 71 $ 50,709 71 $ 77,031 |
Offsetting Assets | The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2020 and December 31, 2019. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying consolidated balance sheets. Gross Amounts Not Offset on the Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset on the Balance Sheet Net Amounts of (Liabilities) Assets presented on the Balance Sheet Financial Instruments Cash Collateral Received (Posted) Net Amount September 30, 2020 $ 1,898 $ (18,546) $ — $ (16,648) $ — $ — $ (16,648) December 31, 2019 $ 4,151 $ (7,507) $ — $ (3,356) $ — $ — $ (3,356) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Base Cash Rental Payments - Topic 842 | The following table reflects the base cash rental payments due from the Company as of September 30, 2020: (In thousands) Future Base Rent Payments (1) 2020 (remainder) $ 361 2021 1,445 2022 1,445 2023 1,445 2024 1,450 Thereafter 41,905 Total minimum lease payments (2) 48,051 Less: Effects of discounting (23,593) Total present value of lease payments $ 24,458 ________ (1) Assumes exchange rates of £1.00 to $1.29 for GBP and €1.00 to $1.17 for EUR as of September 30, 2020 for illustrative purposes, as applicable. (2) Ground lease rental payments due for the Company’s ING Amsterdam lease are not included in the table above as the Company’s ground for this property is prepaid through 2050. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Amount Contractually Due and Forgiven in Connection with Operation Related Services | The following table reflects related party fees incurred, forgiven and contractually due as of and for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Payable as of (In thousands) Incurred Forgiven Incurred Forgiven Incurred Forgiven Incurred Forgiven September 30, 2020 December 31, 2019 One-time fees and reimbursements: Fees on gain from sale of investments $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Ongoing fees (1) : Asset management fees (2) 7,383 — 6,758 — 22,136 — 20,123 — — — Property management fees 1,532 — 1,462 — 4,447 — 4,302 — — — Incentive compensation 24 — — — 24 — — — 24 — Total related party operational fees and reimbursements $ 8,939 $ — $ 8,220 $ — $ 26,607 $ — $ 24,425 $ — $ 24 $ — ______________ (1) The Company incurred general and administrative costs and other expense reimbursements of approximately $0.7 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, which are recorded within general and administrative expenses in the consolidated statements of operations and are not reflected in the table above. (2) The Advisor, in accordance with the Advisory Agreement, received asset management fees in cash each quarter equal to one quarter of the annual Minimum Base Management Fee of $18.0 million and the Variable Base Management Fee for the respective three months ended. The Variable Base Management Fee was $2.9 million and $2.3 million for the three months ended September 30, 2020 and 2019, respectively, and $8.6 million and $6.6 million for the nine months ended September 30, 2020 and 2019, respectively. |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of Share-based Compensation Arrangements by Share-based Payment Award | The following table reflects the amount of RSUs outstanding as of September 30, 2020 and 2019: Number of RSUs Weighted-Average Issue Price Unvested, December 31, 2019 40,541 $ 20.47 Vested (23,824) 21.71 Granted 28,232 13.37 Unvested, September 30, 2020 44,949 15.35 Number of RSUs Weighted-Average Issue Price Unvested, December 31, 2018 46,352 $ 22.04 Vested (21,955) 22.56 Granted 16,563 18.89 Unvested, September 30, 2019 40,960 20.49 |
Schedule of Share Based Compensation Total Return | Half of the LTIP Units (the “Absolute TSR LTIP Units”) are eligible to be earned as of the last day of the Performance Period (the “Valuation Date”) if the Company achieves an absolute TSR with respect to threshold, target and maximum performance goals for the Performance Period as follows: Performance Level (% of Absolute TSR LTIP Units Earned) Absolute TSR Number of Absolute TSR LTIP Units Earned Below Threshold — % Less than 24 % — Threshold 25 % 24 % 319,366 Target 50 % 30 % 638,733 Maximum 100 % 36 % or higher 1,277,465 Half of the LTIP Units (the “Relative TSR LTIP Units”) are eligible to be earned as of the Valuation Date if the amount, expressed in terms of basis points, whether positive or negative, by which the Company’s absolute TSR for the Performance Period exceeds the average TSR of a peer group for the Performance Period consisting of Lexington Realty Trust, W.P. Carey Inc. and Office Properties Income Trust as follows: Performance Level (% of Relative TSR LTIP Units Earned) Relative TSR Excess Number of Absolute TSR LTIP Units Earned Below Threshold — % Less than -600 basis points — Threshold 25 % -600 basis points 319,366 Target 50 % — basis points 638,733 Maximum 100 % +600 basis points 1,277,465 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a summary of the basic and diluted net income per share computation for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, (In thousands, except share and per share data) 2020 2019 2020 2019 Net income (loss) attributable to common stockholders $ (502) $ 6,860 $ 5,502 $ 25,272 Adjustments to net income (loss) attributable to common stockholders for common share equivalents (102) (176) (366) (510) Adjusted net income (loss) attributable to common stockholders $ (604) $ 6,684 $ 5,136 $ 24,762 Weighted average common shares outstanding — Basic 89,482,577 85,254,638 89,470,525 83,539,304 Weighted average common shares outstanding — Diluted 89,482,577 86,202,582 89,470,525 84,487,248 Net income (loss) per share attributable to common stockholders — Basic and Diluted $ (0.01) $ 0.08 $ 0.06 $ 0.30 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table shows common share equivalents on a weighted average basis that were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Unvested RSUs 44,949 40,944 44,949 40,944 Unvested Restricted Shares (1) 21,526 — 7,228 — LTIP Units (2) 2,554,930 1,647,230 2,554,930 1,647,230 Total common share equivalents excluded from EPS calculation 2,621,405 1,688,174 2,607,107 1,688,174 (1) There were 132,025 Restricted Shares issued and outstanding as of September 30, 2020. See Note 12 — Equity-Based Compensation for additional information on the Restricted Shares, including their issuance during September 30, 2020. (2) There were 2,554,930 LTIP Units issued and outstanding under the 2018 OPP as of September 30, 2020 and 2019. See Note 12 — Equity-Based Compensation for additional information on the 2018 OPP. |
Organization (Details)
Organization (Details) ft² in Millions | 9 Months Ended | |
Sep. 30, 2020ft²property$ / shares | Dec. 31, 2019$ / shares | |
Operations [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Number of properties (property) | property | 299 | |
Rentable square feet (sqft) | ft² | 34.7 | |
Occupancy rate | 99.60% | |
Weighted average remaining lease term | 8 years 8 months 12 days | |
United States | ||
Operations [Line Items] | ||
Entity-wide revenue percentage | 63.00% | |
Europe | ||
Operations [Line Items] | ||
Percentage of portfolio investments | 37.00% | |
7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value | ||
Operations [Line Items] | ||
Stated interest rate | 7.25% | |
Preferred stock, par value (in dollars per share) | $ 0.01 | |
6.875% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | ||
Operations [Line Items] | ||
Stated interest rate | 6.875% | |
Preferred stock, par value (in dollars per share) | $ 0.01 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average remaining lease term | 8 years 8 months 12 days |
Goodwill impairment | $ 0 |
2018 OPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Requisite service period | 2 years 9 months 18 days |
Real Estate Investments, Net -
Real Estate Investments, Net - Schedule of Property Acquisitions (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)property | Sep. 30, 2019USD ($)property | |
Real estate investments, at cost: | ||
Land | $ 28,622 | $ 22,441 |
Buildings, fixtures and improvements | 121,311 | 243,545 |
Total tangible assets | 149,933 | 265,986 |
Acquired intangible lease assets: | ||
Total intangible assets | 15,855 | 43,017 |
ROU asset | 5,022 | 0 |
Cash paid for acquired real estate investments | $ 170,810 | $ 309,003 |
Number of properties purchased (property) | property | 21 | 20 |
In-place leases | ||
Acquired intangible lease assets: | ||
Acquired intangible lease assets | $ 16,842 | $ 44,256 |
Above market lease assets | ||
Acquired intangible lease assets: | ||
Acquired intangible lease assets | 53 | 406 |
Below market lease liabilities | ||
Acquired intangible lease assets: | ||
Below-market lease liabilities | $ (1,040) | $ (1,645) |
Real Estate Investments, Net _2
Real Estate Investments, Net - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)property | Sep. 30, 2019USD ($)property | Sep. 30, 2020USD ($)property | Sep. 30, 2019USD ($)property | Dec. 31, 2019property | |
Real Estate [Line Items] | |||||
Gain (loss) on dispositions of real estate investments | $ | $ 0 | $ 6,977 | $ (153) | $ 14,792 | |
Number of real estate properties held for sale | 0 | 0 | |||
United States | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | 33 | 97 | |||
United States | Family Dollar | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | 32 | 94 | |||
United States | Industrial Property | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | 1 | 3 | |||
UNITED KINGDOM | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | 1 | ||||
Properties Sold | |||||
Real Estate [Line Items] | |||||
Number of real estate properties sold | 0 | 0 | |||
Proceeds from dispositions of real estate investments, gross | $ | $ 53,000 | $ 145,800 | |||
Gain (loss) on dispositions of real estate investments | $ | $ 7,000 | $ 14,800 |
Real Estate Investments, Net _3
Real Estate Investments, Net - Revenue from External Customers and Long-Lived Assets, by Geographical Areas (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue percentage | 62.10% | 63.00% |
Michigan | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue percentage | 14.00% | 14.60% |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Entity-wide revenue percentage | 17.40% | 18.20% |
Mortgage Notes Payable, Net - S
Mortgage Notes Payable, Net - Schedule of Long-term Debt Instruments (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)property | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||
Mortgage notes payable, net | $ 1,417,712 | $ 1,272,154 |
Mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 124 | |
Outstanding Loan Amount | $ 1,434,966 | 1,287,448 |
Effective Interest Rate | 3.40% | |
Mortgage discount | $ 0 | (26) |
Deferred financing costs, net of accumulated amortization | (17,254) | (15,268) |
Mortgage notes payable, net | $ 1,417,712 | 1,272,154 |
Mortgage notes payable | EUR | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 20 | |
Outstanding Loan Amount | $ 369,912 | 303,383 |
Mortgage notes payable | EUR | Finland Properties | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 5 | |
Outstanding Loan Amount | $ 86,762 | 82,996 |
Effective Interest Rate | 1.70% | |
Percentage fixed interest rate | 80.00% | |
Percentage variable interest rate | 20.00% | |
Mortgage notes payable | EUR | Finland Properties | Euribor Rate | ||
Debt Instrument [Line Items] | ||
Interest rate spread | 1.40% | |
Mortgage notes payable | EUR | Worldline | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 0 | |
Outstanding Loan Amount | $ 0 | 5,608 |
Effective Interest Rate | 0.00% | |
Mortgage notes payable | EUR | DCNS | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 0 | |
Outstanding Loan Amount | $ 0 | 10,655 |
Effective Interest Rate | 0.00% | |
Mortgage notes payable | EUR | ID Logistics II | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 0 | |
Outstanding Loan Amount | $ 0 | 11,776 |
Effective Interest Rate | 0.00% | |
Mortgage notes payable | EUR | French Properties | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 7 | |
Outstanding Loan Amount | $ 82,072 | 0 |
Effective Interest Rate | 2.50% | |
Percentage fixed interest rate | 90.00% | |
Percentage variable interest rate | 10.00% | |
Mortgage notes payable | EUR | French Properties | Euribor Rate | ||
Debt Instrument [Line Items] | ||
Interest rate spread | 2.30% | |
Mortgage notes payable | EUR | Germany Properties | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 5 | |
Outstanding Loan Amount | $ 60,382 | 57,761 |
Effective Interest Rate | 1.80% | |
Percentage fixed interest rate | 80.00% | |
Percentage variable interest rate | 20.00% | |
Mortgage notes payable | EUR | Germany Properties | Euribor Rate | ||
Debt Instrument [Line Items] | ||
Interest rate spread | 1.55% | |
Mortgage notes payable | EUR | Benelux Properties | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 3 | |
Outstanding Loan Amount | $ 140,696 | 134,587 |
Effective Interest Rate | 1.40% | |
Mortgage notes payable | GBP | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 42 | |
Outstanding Loan Amount | $ 287,304 | 294,315 |
Mortgage notes payable | GBP | United Kingdom Properties | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 42 | |
Outstanding Loan Amount | $ 287,304 | 294,315 |
Effective Interest Rate | 3.10% | |
Percentage fixed interest rate | 80.00% | |
Percentage variable interest rate | 20.00% | |
Mortgage notes payable | GBP | United Kingdom Properties | LIBOR | ||
Debt Instrument [Line Items] | ||
Interest rate spread | 2.00% | |
Mortgage notes payable | USD | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 62 | |
Outstanding Loan Amount | $ 777,750 | 689,750 |
Mortgage notes payable | USD | Penske Logistics | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 1 | |
Outstanding Loan Amount | $ 70,000 | 70,000 |
Effective Interest Rate | 4.70% | |
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan I | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 12 | |
Outstanding Loan Amount | $ 187,000 | 187,000 |
Effective Interest Rate | 4.40% | |
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan II | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 8 | |
Outstanding Loan Amount | $ 32,750 | 32,750 |
Effective Interest Rate | 4.40% | |
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan III | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 7 | |
Outstanding Loan Amount | $ 98,500 | 98,500 |
Effective Interest Rate | 4.90% | |
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan IV | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 16 | |
Outstanding Loan Amount | $ 97,500 | 97,500 |
Effective Interest Rate | 4.60% | |
Mortgage notes payable | USD | Multi-Tenant Mortgage Loan V | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 12 | |
Outstanding Loan Amount | $ 204,000 | 204,000 |
Effective Interest Rate | 3.70% | |
Mortgage notes payable | USD | Whirlpool Loan | ||
Debt Instrument [Line Items] | ||
Encumbered properties (property) | property | 6 | |
Outstanding Loan Amount | $ 88,000 | $ 0 |
Effective Interest Rate | 3.50% |
Mortgage Notes Payable, Net -_2
Mortgage Notes Payable, Net - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Sep. 30, 2020USD ($) | Sep. 30, 2020$ / £ | Sep. 30, 2020$ / € | Dec. 31, 2019USD ($) | Dec. 31, 2019$ / £ | Dec. 31, 2019$ / € |
Debt Instrument [Line Items] | ||||||
Foreign currency exchange rate (gbp, eur per usd) | 1.29 | 1.17 | 1.32 | 1.12 | ||
Mortgage notes payable | ||||||
Debt Instrument [Line Items] | ||||||
2020 (remainder) | $ 2,609 | |||||
2021 | 12,772 | |||||
2022 | 19,779 | |||||
2023 | 319,537 | |||||
2024 | 227,458 | |||||
2025 | 82,072 | |||||
Thereafter | 770,739 | |||||
Term Loan | $ 1,434,966 | $ 1,287,448 |
Mortgage Notes Payable, Net - N
Mortgage Notes Payable, Net - Narrative (Details) $ in Billions | Sep. 30, 2020USD ($) |
Debt Instrument [Line Items] | |
Carrying value of encumbered assets | $ 1.4 |
Line of Credit | |
Debt Instrument [Line Items] | |
Carrying value of encumbered assets | $ 1.3 |
Mortgage Notes Payable, Net - W
Mortgage Notes Payable, Net - Whirlpool Loan (Details) - Whirlpool Loan - BOK Financial - Mortgage notes payable $ in Millions | Jul. 10, 2020USD ($)property |
Debt Instrument [Line Items] | |
Proceeds from loans borrowed | $ 88 |
Collateral, number of leased offices and industrial properties | property | 6 |
Remaining proceeds after costs and fees related to the loan | $ 2.2 |
Percentage fixed interest rate | 3.45% |
LIBOR | |
Debt Instrument [Line Items] | |
Interest rate spread | 2.90% |
Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Repayments of debt | $ 84 |
Mortgage Notes Payable, Net - F
Mortgage Notes Payable, Net - French Refinancing (Details) - May 14, 2020 - French Properties - HSBC € in Millions, $ in Millions | USD ($)property | EUR (€)property | EUR (€) |
Debt Instrument [Line Items] | |||
Collateral, number of leased offices and industrial properties | 7 | 7 | |
Collateral, number of leased offices and industrial properties, previously encumbered | 4 | 4 | |
Mortgage notes payable | |||
Debt Instrument [Line Items] | |||
Proceeds from loans borrowed | $ 75.6 | € 70 | |
Interest rate spread | 2.50% | 2.50% | |
Debt bearing fixed interest rate | $ 68 | € 63 | |
Percentage fixed interest rate | 90.00% | 90.00% | |
Repayments of debt | $ 27 | € 25 | |
Mortgage notes payable | Base Rate | |||
Debt Instrument [Line Items] | |||
Interest rate spread | 0.00% | 0.00% | |
Mortgage notes payable | Euribor Rate | |||
Debt Instrument [Line Items] | |||
Interest rate spread | 2.30% | 2.30% | |
Revolving Credit Facility | Mortgage notes payable | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 21.6 | € 20 |
Credit Facilities - Narrative (
Credit Facilities - Narrative (Details) | Aug. 01, 2019USD ($)extension | Jul. 24, 2017 | Jun. 30, 2020 | Sep. 30, 2020USD ($) | Sep. 30, 2020EUR (€) | Jul. 31, 2019USD ($) |
Line of Credit Facility [Line Items] | ||||||
Maximum distribution as percentage of FFO | 100.00% | 100.00% | ||||
Maximum distribution as percentage of AFFO | 105.00% | |||||
Maximum distribution as percentage of FFO, under exception | 105.00% | |||||
Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Weighted-average effective interest rate | 2.50% | 2.50% | ||||
Credit Facility | Federal Funds | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on base rate determination | 0.50% | |||||
Credit Facility | LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on base rate determination | 1.00% | |||||
Credit Facility | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Available for future borrowings | $ 92,000,000 | |||||
Credit Facility | KeyBank National Association | Unsecured debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Increase in aggregate commitments | $ 515,000,000 | |||||
Total line of credit commitment | $ 1,750,000,000 | $ 950,000,000 | ||||
Credit Facility | KeyBank National Association | Unsecured debt | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 835,000,000 | |||||
Number of extensions | extension | 2 | |||||
Extension term | 6 months | |||||
Facility fee multiplier | 0.0030 | |||||
Credit Facility | KeyBank National Association | Unsecured debt | Revolving Credit Facility | Above Threshold | ||||||
Line of Credit Facility [Line Items] | ||||||
Unused capacity commitment fee | 0.25% | |||||
Commitment fee percentage | 50.00% | |||||
Credit Facility | KeyBank National Association | Unsecured debt | Revolving Credit Facility | Below Threshold | ||||||
Line of Credit Facility [Line Items] | ||||||
Unused capacity commitment fee | 0.15% | |||||
Commitment fee percentage | 50.00% | |||||
Credit Facility | KeyBank National Association | Unsecured debt | Term Loan Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 421,600,000 | € 359,600,000 | ||||
Credit Facility Amendment | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 1,235,000,000 | |||||
Credit Facility Amendment | Revolving Credit Facility | LIBOR | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate spread | 1.45% | |||||
Credit Facility Amendment | Revolving Credit Facility | LIBOR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate spread | 2.05% | |||||
Credit Facility Amendment | Revolving Credit Facility | Base Rate | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate spread | 0.45% | |||||
Credit Facility Amendment | Revolving Credit Facility | Base Rate | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate spread | 1.05% | |||||
Credit Facility Amendment | Term Loan | LIBOR | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate spread | 1.40% | |||||
Credit Facility Amendment | Term Loan | LIBOR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate spread | 2.00% | |||||
Credit Facility Amendment | Term Loan | Base Rate | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate spread | 0.40% | |||||
Credit Facility Amendment | Term Loan | Base Rate | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate spread | 1.00% |
Credit Facilities - Outstanding
Credit Facilities - Outstanding Balance Under Credit Agreement (Details) € in Thousands, £ in Thousands, $ in Thousands | Sep. 30, 2020USD ($) | Sep. 30, 2020$ / £ | Sep. 30, 2020$ / € | Sep. 30, 2020GBP (£) | Sep. 30, 2020EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2019$ / £ | Dec. 31, 2019$ / € | Dec. 31, 2019GBP (£) | Dec. 31, 2019EUR (€) |
Line of Credit Facility [Line Items] | ||||||||||
Revolving credit facility (Note 5) | $ 264,009 | $ 199,071 | ||||||||
Term Loan, Net | 417,072 | 397,893 | ||||||||
Foreign currency exchange rate (GBP, EUR, CAD per USD) | 1.29 | 1.17 | 1.32 | 1.12 | ||||||
KeyBank National Association | Credit Facility | Unsecured debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total Credit Facility | 681,081 | 596,964 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | USD | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total Credit Facility | 183,211 | 62,211 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | GBP | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total Credit Facility | £ | £ 40,000 | £ 40,000 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | EUR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total Credit Facility | € | € 384,551 | € 434,551 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Revolving Credit Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving credit facility (Note 5) | 264,009 | 199,071 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Revolving Credit Facility | USD | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving credit facility (Note 5) | 183,211 | 62,211 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Revolving Credit Facility | GBP | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving credit facility (Note 5) | £ | 40,000 | 40,000 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Revolving Credit Facility | EUR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving credit facility (Note 5) | € | 25,000 | 75,000 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Term Facility | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term Loan | 421,560 | 403,258 | ||||||||
Deferred financing costs | (4,488) | (5,365) | ||||||||
Term Loan, Net | 417,072 | 397,893 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Term Facility | USD | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term Loan | 0 | 0 | ||||||||
Deferred financing costs | 0 | 0 | ||||||||
Term Loan, Net | $ 0 | $ 0 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Term Facility | GBP | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term Loan | £ | 0 | 0 | ||||||||
Deferred financing costs | £ | 0 | 0 | ||||||||
Term Loan, Net | £ | £ 0 | £ 0 | ||||||||
KeyBank National Association | Credit Facility | Unsecured debt | Term Facility | EUR | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term Loan | € | 359,551 | 359,551 | ||||||||
Deferred financing costs | € | 0 | 0 | ||||||||
Term Loan, Net | € | € 359,551 | € 359,551 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair Value, Financial Instruments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | $ (16,648) | $ (3,356) |
Fair Value, Measurements, Recurring | Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | 424 | 2,726 |
Fair Value, Measurements, Recurring | Interest rate swaps, net (USD,GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | (17,072) | (6,082) |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets Level 1 | Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets Level 1 | Interest rate swaps, net (USD,GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | 424 | 2,726 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs Level 2 | Interest rate swaps, net (USD,GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | (17,072) | (6,082) |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | Foreign currency forwards, net (GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs Level 3 | Interest rate swaps, net (USD,GBP & EUR) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets (liabilities), net | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Fair Value, by Balance Sheet Grouping (Details) - Significant Unobservable Inputs Level 3 - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Revolving Credit Facility | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | $ 266.3 | |
Revolving Credit Facility | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | 264 | $ 199.1 |
Mortgage notes payable | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt, fair value | $ 1,500 | $ 1,300 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities - Schedule of Derivatives in Statement of Financial Position, Fair Value (Details) - Swap - Significant Other Observable Inputs Level 2 - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | $ (17,072) | $ (6,008) |
Designated as Hedging Instrument | Interest rate swaps, net | USD | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (5,495) | (939) |
Designated as Hedging Instrument | Interest rate swaps, net | GBP | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (9,173) | (4,524) |
Designated as Hedging Instrument | Interest rate swaps, net | GBP | Derivatives assets, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | 0 | 366 |
Designated as Hedging Instrument | Interest rate swaps, net | EUR | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (2,404) | (1,139) |
Designated as Hedging Instrument | Interest rate swaps, net | EUR | Derivatives assets, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | 0 | 228 |
Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | 424 | 2,652 |
Not Designated as Hedging Instrument | Interest rate swaps, net | EUR | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | 0 | (74) |
Not Designated as Hedging Instrument | Foreign currency forwards | GBP | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (1,020) | (831) |
Not Designated as Hedging Instrument | Foreign currency forwards | GBP | Derivatives assets, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | 1,018 | 1,205 |
Not Designated as Hedging Instrument | Foreign currency forwards | EUR | Derivatives liabilities, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | (454) | 0 |
Not Designated as Hedging Instrument | Foreign currency forwards | EUR | Derivatives assets, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivatives, at fair value | $ 880 | $ 2,352 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities - Narrative (Details) $ in Thousands, € in Millions, £ in Millions | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($)derivative | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($)derivative | Sep. 30, 2018USD ($)derivative | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2020EUR (€) | Dec. 31, 2019USD ($) | Mar. 31, 2019EUR (€) | Sep. 30, 2018GBP (£) | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Losses for accelerated reclassification of amounts in other comprehensive income to earnings | $ 100 | $ 100 | |||||||||
Loss to be reclassified from other comprehensive income | $ 7,100 | ||||||||||
Accumulated other comprehensive (loss) income | $ (5,630) | (5,630) | $ 20,195 | ||||||||
Gains (losses) on derivative instruments | (2,464) | 3,044 | 362 | 4,674 | |||||||
Fair value of derivatives in net liability position | 19,300 | 19,300 | |||||||||
Multi-Property Loan, France | Interest rate swaps, net | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Derivative asset, notional amount | € | € 14.5 | ||||||||||
Payment to settle derivatives | $ 100 | ||||||||||
Multi-Property Loan, Finland | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of loss recognized in accumulated other comprehensive income (loss) from derivatives (effective portion) | $ (700) | ||||||||||
Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) | (100) | (300) | |||||||||
Multi-Property Loan, Finland | Interest rate swaps, net | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Number interest rates swaps terminated | derivative | 2 | 5 | |||||||||
Derivative asset, notional amount | € | € 57.4 | ||||||||||
Payment to settle derivatives | $ 800 | ||||||||||
Multi-Property GBP Loan | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of loss reclassified from accumulated other comprehensive income (loss) into income as interest expense (effective portion) | (18) | (200) | |||||||||
Accumulated other comprehensive (loss) income | 0 | $ (1,200) | 0 | ||||||||
Multi-Property GBP Loan | Interest rate swaps, net | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Number interest rates swaps terminated | derivative | 15 | ||||||||||
Derivative asset, notional amount | £ | £ 208.8 | ||||||||||
Multi-Property GBP Loan | Interest Rate Floor | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Number interest rates swaps terminated | derivative | 1 | ||||||||||
Derivative asset, notional amount | £ | £ 28.1 | ||||||||||
Not Designated as Hedging Instrument | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Gains (losses) on derivative instruments | $ (2,500) | $ 3,100 | $ 400 | $ 4,800 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities - Schedule of Interest Rate Derivatives (Details) - Designated as Hedging Instrument - Cash Flow Hedging - Swap $ in Thousands | Sep. 30, 2020USD ($)derivative | Dec. 31, 2019USD ($)derivative |
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 80 | 68 |
Notional Amount | $ | $ 1,135,174 | $ 962,436 |
GBP | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 49 | 49 |
Notional Amount | $ | $ 284,033 | $ 290,965 |
EUR | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 22 | 16 |
Notional Amount | $ | $ 613,141 | $ 521,471 |
USD | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 9 | 3 |
Notional Amount | $ | $ 238,000 | $ 150,000 |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities - Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total interest expense recorded in the consolidated statements of operations | $ 18,677 | $ 16,154 | $ 52,646 | $ 47,005 |
Interest rate swaps, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of loss recognized in AOCI from derivatives | (1,207) | (4,139) | (14,290) | (13,250) |
Interest rate swaps, net | Interest Expense | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of loss reclassified from AOCI into income as interest expense | $ (1,729) | $ (660) | $ (3,843) | $ (1,640) |
Derivatives and Hedging Activ_7
Derivatives and Hedging Activities - Foreign Cross Currency Derivatives (Details) - Not Designated as Hedging Instrument - Swap $ in Thousands | Sep. 30, 2020USD ($)derivative | Dec. 31, 2019USD ($)derivative |
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 71 | 71 |
Notional Amount | $ | $ 50,709 | $ 77,031 |
Forward Contracts | GBP | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 38 | 38 |
Notional Amount | $ | $ 29,605 | $ 38,898 |
Forward Contracts | EUR | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 33 | 32 |
Notional Amount | $ | $ 21,104 | $ 27,478 |
Interest rate swaps, net | EUR | ||
Derivative [Line Items] | ||
Number of Instruments (derivative) | derivative | 0 | 1 |
Notional Amount | $ | $ 0 | $ 10,655 |
Derivatives and Hedging Activ_8
Derivatives and Hedging Activities - Offsetting Derivatives (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 1,898 | $ 4,151 |
Gross Amounts of Recognized (Liabilities) | (18,546) | (7,507) |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amounts of (Liabilities) Assets presented on the Balance Sheet | (16,648) | (3,356) |
Gross Amounts Not Offset on the Balance Sheet, Financial Instruments | 0 | |
Gross Amounts Not Offset on the Balance Sheet, Financial Instruments | 0 | |
Gross Amounts Not Offset on the Balance Sheet, Cash Collateral Received (Posted) | 0 | 0 |
Net Amount | $ (16,648) | $ (3,356) |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Apr. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Apr. 20, 2020 | Mar. 31, 2018 | |
Conversion of Stock [Line Items] | |||||||||||
Common stock, outstanding (in shares) | 89,614,601 | 89,614,601 | 89,458,752 | ||||||||
Common stock, issued (in shares) | 89,614,601 | 89,458,752 | 89,614,601 | 89,458,752 | 89,458,752 | ||||||
Preferred stock, authorized (in shares) | 30,000,000 | 30,000,000 | |||||||||
Preferred stock, outstanding (in shares) | 6,799,467 | 6,799,467 | 6,799,467 | ||||||||
Common stock dividend rate (in dollars per share) | $ 1.60 | $ 2.13 | |||||||||
Common stock, monthly dividend rate (in dollars per share) | $ 0.40 | $ 0.5325 | |||||||||
Agent | At-the-Market Program | |||||||||||
Conversion of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 0 | 5,596,452 | 7,759,322 | 0 | 13,555,774 | ||||||
Gross proceeds from sale of stock | $ 109,900,000 | $ 152,800,000 | $ 262,600,000 | ||||||||
Commissions paid | 1,600,000 | 1,500,000 | 3,100,000 | ||||||||
Payments of stock offering costs | $ 200,000 | 800,000 | $ 1,000,000 | ||||||||
Aggregate common stock offering price | $ 175,000,000 | ||||||||||
Series A Preferred Stock | |||||||||||
Conversion of Stock [Line Items] | |||||||||||
Payments of stock offering costs | $ 75,000 | ||||||||||
Preferred stock, authorized (in shares) | 9,959,650 | 9,959,650 | 9,959,650 | ||||||||
Preferred stock, dividend rate | 7.25% | 7.25% | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, issued (in shares) | 6,799,467 | 6,799,467 | 6,799,467 | ||||||||
Preferred stock, outstanding (in shares) | 6,799,467 | 6,799,467 | 6,799,467 | ||||||||
Dividend payout (in dollars per share) | $ 0.453125 | ||||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | ||||||||
Series A Preferred Stock | Agent | At-the-Market Program | |||||||||||
Conversion of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 724,600 | 1,265,558 | |||||||||
Gross proceeds from sale of stock | $ 18,500,000 | $ 32,300,000 | |||||||||
Commissions paid | 300,000 | 500,000 | |||||||||
Payments of stock offering costs | $ 100,000 | $ 200,000 | |||||||||
Aggregate preferred stock offering price | $ 200,000,000 | ||||||||||
Series B Preferred Stock | |||||||||||
Conversion of Stock [Line Items] | |||||||||||
Preferred stock, authorized (in shares) | 11,450,000 | 11,450,000 | 11,450,000 | ||||||||
Preferred stock, dividend rate | 6.875% | 6.875% | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, issued (in shares) | 3,635,128 | 3,635,128 | 3,450,000 | ||||||||
Preferred stock, outstanding (in shares) | 3,635,128 | 3,635,128 | 3,450,000 | ||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | $ 25 | ||||||||
Preferred stock, quarterly dividend (in dollars per share) | 0.429688 | ||||||||||
Series B Preferred Stock | Public Offering | |||||||||||
Conversion of Stock [Line Items] | |||||||||||
Preferred stock, liquidation preference (in dollars per share) | $ 25 | $ 25 | |||||||||
Series B Preferred Stock | Agent | At-the-Market Program | |||||||||||
Conversion of Stock [Line Items] | |||||||||||
Number of shares issued (in shares) | 185,128 | 185,128 | |||||||||
Gross proceeds from sale of stock | $ 4,600,000 | $ 4,600,000 | |||||||||
Commissions paid | 70,000 | 70,000 | |||||||||
Payments of stock offering costs | $ 100,000 | $ 100,000 | |||||||||
Aggregate preferred stock offering price | $ 200,000,000 | ||||||||||
Series C Preferred Stock | |||||||||||
Conversion of Stock [Line Items] | |||||||||||
Preferred stock, authorized (in shares) | 100,000 | 100,000 | 0 | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||||||
Preferred stock, issued (in shares) | 0 | 0 | 0 | ||||||||
Preferred stock, outstanding (in shares) | 0 | 0 | 0 | ||||||||
Percent of outstanding shares acquired | 4.90% | ||||||||||
Exercise price (in dollars per share) | $ 50 | ||||||||||
Preferred share purchase right basis per share | 0.001 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($)property | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)property | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | ||||||
Number of properties subject to ground leases | property | 10 | 10 | ||||
Number ground leases acquired | property | 2 | |||||
Operating lease right-of-use asset (Note 9) | $ 56,229 | $ 56,229 | $ 50,211 | |||
Operating lease liability (Note 9) | $ 24,458 | $ 24,458 | $ 23,985 | |||
Weighted average remaining lease term | 32 years 3 months 18 days | 32 years 3 months 18 days | ||||
Weighted average discount rate | 4.33% | 4.33% | ||||
Payments | $ 400 | $ 1,100 | ||||
Expense | $ 300 | $ 300 | $ 1,000 | $ 1,000 | ||
Legal settlement reserve | $ 7,400 | |||||
Asset management fees | Service Provider | Defendants vs. Service Providers | ||||||
Loss Contingencies [Line Items] | ||||||
Legal expenses | $ 1,000 | |||||
Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Term of contract | 15 years | 15 years | ||||
Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Term of contract | 97 years | 97 years |
Commitments and Contingencies_2
Commitments and Contingencies - Operating Leases Future Minimum Payments (Details) $ in Thousands | Sep. 30, 2020USD ($) | Sep. 30, 2020$ / £ | Sep. 30, 2020$ / € | Dec. 31, 2019USD ($) | Dec. 31, 2019$ / £ | Dec. 31, 2019$ / € |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||||
2020 (remainder) | $ 361 | |||||
2021 | 1,445 | |||||
2022 | 1,445 | |||||
2023 | 1,445 | |||||
2024 | 1,450 | |||||
Thereafter | 41,905 | |||||
Total minimum lease payments | 48,051 | |||||
Less: Effects of discounting | (23,593) | |||||
Total present value of lease payments | $ 24,458 | $ 23,985 | ||||
Foreign currency exchange rate (GBP, EUR, CAD per USD) | 1.29 | 1.17 | 1.32 | 1.12 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | May 06, 2020$ / shares | Aug. 14, 2018USD ($)$ / shares | Jun. 02, 2015USD ($) | Feb. 28, 2019 | Sep. 30, 2020USD ($)propertyshares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)propertyshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)shares |
Related Party Transaction [Line Items] | |||||||||
Due from related parties | $ 366,000 | $ 366,000 | $ 351,000 | ||||||
Due to related parties | 24,000 | 24,000 | 342,000 | ||||||
Dividends payable | $ 5,014,000 | $ 5,014,000 | 4,006,000 | ||||||
Number of real estate properties, no longer subject to oversight fee (property) | property | 39 | 39 | |||||||
PMLA term | 1 year | ||||||||
PMLA renewal term | 1 year | ||||||||
Period to reinvest proceeds to not be included in the Sale | 180 days | ||||||||
Advisor | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cap on annum aggregate amount, range two | $ 14,600,000,000 | ||||||||
Maximum percent of assets under management, range three | 0.40% | ||||||||
Maximum amount under management, range three | $ 14,700,000,000 | ||||||||
LTIP Units | |||||||||
Related Party Transaction [Line Items] | |||||||||
Distributions paid to partners | $ (100,000) | $ (100,000) | $ (300,000) | $ (400,000) | |||||
Dividends payable | $ 0 | $ 0 | 0 | ||||||
Global Net Lease Advisors, LLC | Advisor And Scott J. Bowman | Chief Executive Officer | |||||||||
Related Party Transaction [Line Items] | |||||||||
Direct membership interest | 5.00% | 5.00% | |||||||
Third party professional fees and offering costs | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due to related parties | $ 24,000 | $ 24,000 | $ 300,000 | ||||||
AR Global, LLC | Global Net Lease Advisors, LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Indirect membership interest | 95.00% | 95.00% | |||||||
Special Limited Partner | |||||||||
Related Party Transaction [Line Items] | |||||||||
Operating partnership units (in shares) | shares | 35,900 | 35,900 | 35,900 | ||||||
Advisor | |||||||||
Related Party Transaction [Line Items] | |||||||||
Maximum percent of assets under management, range one | 0.75% | ||||||||
Maximum amount under management, range one | $ 3,000,000,000 | ||||||||
Cap on annum aggregate amount, range two denominator | $ 11,700,000,000 | ||||||||
Minimum base management fee and incentive compensation payable, maximum percent of assets under management, range two | 0.35% | ||||||||
Advisor | Properties Sold | |||||||||
Related Party Transaction [Line Items] | |||||||||
Gain (loss) on sale of property | $ 0 | 0 | |||||||
Advisor | Amended Advisory Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Minimum monthly base management fee | $ 18,000,000 | ||||||||
Amended Advisory Agreement, variable fee payable | 1.25% | ||||||||
Amended Advisory Agreement, incentive compensation payable in cash | 50.00% | ||||||||
Amended Advisory Agreement, incentive compensation payable in shares | 50.00% | ||||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle one, period one (in dollars per share) | $ / shares | $ 2.15 | ||||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle one, period two (in dollars per share) | $ / shares | 2.25 | ||||||||
Incentive fee lower hurdle, aggregate, period one (in dollars per share) | $ / shares | $ 1.6875 | ||||||||
Incentive fee lower hurdle, quarterly, period one (in dollars per share) | $ / shares | 0.5625 | ||||||||
Incentive fee lower hurdle, aggregate, period two (in dollars per share) | $ / shares | 1.35 | ||||||||
Incentive fee lower hurdle, quarterly, period two (in dollars per share) | $ / shares | 0.45 | ||||||||
Incentive fee lower hurdle, aggregate, period three (in dollars per share) | $ / shares | 1.125 | ||||||||
Incentive fee lower hurdle, quarterly, period three (in dollars per share) | $ / shares | 0.5625 | ||||||||
Incentive fee lower hurdle, aggregate, period four (in dollars per share) | $ / shares | 2.25 | ||||||||
Incentive fee lower hurdle, quarterly, period four (in dollars per share) | $ / shares | 0.5625 | ||||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle two, period one (in dollars per share) | $ / shares | 2.79 | ||||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle two, period two (in dollars per share) | $ / shares | $ 2.92 | ||||||||
Incentive fee upper hurdle, aggregate, period one (in dollars per share) | $ / shares | 2.19 | ||||||||
Incentive fee upper hurdle, quarterly, period one (in dollars per share) | $ / shares | 0.73 | ||||||||
Incentive fee upper hurdle, aggregate, period two (in dollars per share) | $ / shares | 1.75 | ||||||||
Incentive fee upper hurdle, quarterly, period two (in dollars per share) | $ / shares | 0.583 | ||||||||
Incentive fee upper hurdle, aggregate, period three (in dollars per share) | $ / shares | 1.46 | ||||||||
Incentive fee upper hurdle, quarterly, period three (in dollars per share) | $ / shares | 0.73 | ||||||||
Incentive fee upper hurdle, aggregate, period four (in dollars per share) | $ / shares | 2.92 | ||||||||
Incentive fee upper hurdle, quarterly, period four (in dollars per share) | $ / shares | $ 0.73 | ||||||||
Minimum base management fee and incentive compensation payable, maximum percent of assets under management, range two | 0.30% | ||||||||
Minimum base management fee and incentive compensation payable, maximum percent of assets under management, range one | 1.25% | ||||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range three | $ 5,000,000,000 | ||||||||
Minimum base management fee and incentive compensation payable, maximum percent of assets under management, range two | 0.95% | ||||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range two | $ 15,000,000,000 | ||||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range three calculation base | 1.25% | ||||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range three calculation denominator | $ 10,000,000,000 | ||||||||
Amended Advisory Agreement, variable fee payable, maximum sale of investments to trigger possible reduction | 200,000,000 | ||||||||
Advisor | Amended Advisory Agreement | Minimum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle possible annual increase | 0.00% | ||||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range three | 5,000,000,000 | ||||||||
Advisor | Amended Advisory Agreement | Maximum | |||||||||
Related Party Transaction [Line Items] | |||||||||
Amended Advisory Agreement, incentive compensation core AFFO per share, incentive hurdle possible annual increase | 3.00% | ||||||||
Minimum base management fee and incentive compensation payable, cap on annum aggregate amount, maximum amount of assets under management, range three | $ 15,000,000,000 | ||||||||
Advisor | American Realty Capital Global Advisors, LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | $ 400,000 | $ 400,000 | $ 400,000 | ||||||
Advisor | American Realty Capital Global Advisors, LLC | Maximum | Average Invested Assets | Greater Of | |||||||||
Related Party Transaction [Line Items] | |||||||||
Operating expenses as a percentage of benchmark | 2.00% | 2.00% | |||||||
Advisor | American Realty Capital Global Advisors, LLC | Maximum | Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets | Greater Of | |||||||||
Related Party Transaction [Line Items] | |||||||||
Operating expenses as a percentage of benchmark | 25.00% | 25.00% | |||||||
Property Manager | American Realty Capital Global Properties, LLC | Maximum | Gross Revenue, Managed Properties | |||||||||
Related Party Transaction [Line Items] | |||||||||
Oversight fees as a percentage of benchmark | 1.00% | 1.00% | |||||||
Property Manager | American Realty Capital Global Properties, LLC | Maximum | Gross Revenue, Managed Properties | Stand Alone, Single Tenant, Net Leased | |||||||||
Related Party Transaction [Line Items] | |||||||||
Oversight fees as a percentage of benchmark | 2.00% | 2.00% | |||||||
Property Manager | American Realty Capital Global Properties, LLC | Maximum | Gross Revenue, Managed Properties | All Other Properties, Other than Stand Alone, Single Tenant, Net Leased | |||||||||
Related Party Transaction [Line Items] | |||||||||
Oversight fees as a percentage of benchmark | 4.00% | 4.00% | |||||||
Incurred | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party expenses | $ 8,939,000 | 8,220,000 | $ 26,607,000 | 24,425,000 | |||||
Recurring Fees | Incurred | Incentive compensation | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party expenses | $ 24,000 | $ 0 | $ 24,000 | $ 0 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Amount Contractually Due and Forgiven in Connection With Operation Related Services (Details) - USD ($) | Jun. 02, 2015 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Advisor | Amended Advisory Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Minimum monthly base management fee | $ 18,000,000 | |||||
Advisor | Variable Base Management Fee | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | $ 2,900,000 | $ 2,300,000 | $ 8,600,000 | $ 6,600,000 | ||
Incurred | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 8,939,000 | 8,220,000 | 26,607,000 | 24,425,000 | ||
Forgiven | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 0 | 0 | 0 | 0 | ||
Payable | ||||||
Related Party Transaction [Line Items] | ||||||
Related party payable | 24,000 | 24,000 | $ 0 | |||
Nonrecurring Fees | Fees on gain from sale of investments | Incurred | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 0 | 0 | 0 | 0 | ||
Nonrecurring Fees | Fees on gain from sale of investments | Forgiven | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 0 | 0 | 0 | 0 | ||
Nonrecurring Fees | Fees on gain from sale of investments | Payable | ||||||
Related Party Transaction [Line Items] | ||||||
Related party payable | 0 | 0 | 0 | |||
Recurring Fees | Asset management fees | Incurred | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 7,383,000 | 6,758,000 | 22,136,000 | 20,123,000 | ||
Recurring Fees | Asset management fees | Forgiven | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 0 | 0 | 0 | 0 | ||
Recurring Fees | Asset management fees | Payable | ||||||
Related Party Transaction [Line Items] | ||||||
Related party payable | 0 | 0 | 0 | |||
Recurring Fees | Property management fees | Incurred | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 1,532,000 | 1,462,000 | 4,447,000 | 4,302,000 | ||
Recurring Fees | Property management fees | Forgiven | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 0 | 0 | 0 | 0 | ||
Recurring Fees | Property management fees | Payable | ||||||
Related Party Transaction [Line Items] | ||||||
Related party payable | 0 | 0 | 0 | |||
Recurring Fees | Incentive compensation | Incurred | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 24,000 | 0 | 24,000 | 0 | ||
Recurring Fees | Incentive compensation | Forgiven | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | 0 | $ 0 | 0 | 0 | ||
Recurring Fees | Incentive compensation | Payable | ||||||
Related Party Transaction [Line Items] | ||||||
Related party payable | $ 24,000 | 24,000 | $ 0 | |||
General and Administrative Expense | Incurred | ||||||
Related Party Transaction [Line Items] | ||||||
Related party expenses | $ 700,000 | $ 800,000 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) | Jul. 19, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Jan. 01, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity-based compensation | $ 2,479,000 | $ 2,501,000 | $ 7,480,000 | $ 7,039,000 | |||||
Distributions paid | $ (337,000) | $ (405,000) | |||||||
Director | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares issued in lieu of cash (in shares) | 0 | 0 | |||||||
Incentive Restricted Share Plan | Independent Directors | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Annual retainer payable | 100,000 | $ 100,000 | |||||||
Incentive Restricted Share Plan | Non-Executive Chair | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Annual retainer payable | 105,000 | 105,000 | |||||||
Incentive Restricted Share Plan | Director | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Annual retainer payable | $ 30,000 | $ 30,000 | |||||||
Annual retainer payable, cash | 50.00% | 50.00% | |||||||
Annual retainer payable, restricted stock units | 50.00% | 50.00% | |||||||
Restricted Share Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation expense | $ 100,000 | 100,000 | $ 400,000 | $ 300,000 | |||||
Compensation expense | $ 500,000 | $ 500,000 | |||||||
Weighted average period of recognition | 2 years | ||||||||
2015 OPP | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Distribution percent entitled to by LTIP holders | 10.00% | 10.00% | |||||||
2018 Multi Year Outperformance Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period | 2 years 9 months 18 days | ||||||||
Maximum award value | $ 50,000,000 | ||||||||
Share price (in dollars per share) | $ 19.57 | ||||||||
2018 Multi Year Outperformance Plan | Tranche one | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Absolute TSR | 24.00% | ||||||||
Relative TSR excess | (0.0600) | ||||||||
2018 Multi Year Outperformance Plan | Tranche two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Absolute TSR | 24.00% | ||||||||
Relative TSR excess | (0.0600) | ||||||||
2018 Multi Year Outperformance Plan | Tranche three | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Absolute TSR | 30.00% | ||||||||
Relative TSR excess | 0 | ||||||||
2018 Multi Year Outperformance Plan | Minimum | Tier One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Absolute TSR | 24.00% | ||||||||
Relative TSR excess | (0.0600) | ||||||||
2018 Multi Year Outperformance Plan | Minimum | Tier Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Absolute TSR | 36.00% | ||||||||
Relative TSR excess | 0 | ||||||||
2018 Multi Year Outperformance Plan | Maximum | Tier One | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Absolute TSR | 30.00% | ||||||||
Relative TSR excess | 0 | ||||||||
2018 Multi Year Outperformance Plan | Maximum | Tier Two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Absolute TSR | 30.00% | ||||||||
Relative TSR excess | 0.0600 | ||||||||
Stock Options | Stock Option Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 500,000 | 500,000 | |||||||
Shares issued during the period (in shares) | 0 | 0 | |||||||
Unvested RSUs | Incentive Restricted Share Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage of maximum common stock available for issuance | 10.00% | ||||||||
Unvested RSUs | Incentive Restricted Share Plan | Director | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
RSUs award vesting period | 3 years | ||||||||
Unvested RSUs | Restricted Share Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Restricted shares granted (in shares) | 28,232 | 16,563 | |||||||
Restricted shares granted in (dollars per share) | $ 13.37 | $ 18.89 | |||||||
Restricted shares | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares issued during the period (in shares) | 132,025 | ||||||||
Restricted shares granted (in shares) | 132,025 | ||||||||
Restricted shares granted in (dollars per share) | $ 17.41 | ||||||||
Additional restricted shares to be awarded in the future | 217,975 | 217,975 | |||||||
Restricted shares | Tranche one | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting of granted Restricted Shares | 50.00% | ||||||||
Restricted shares | Advisor | Tranche one | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting of granted Restricted Shares | 25.00% | ||||||||
Restricted shares | Advisor | Tranche two | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting of granted Restricted Shares | 25.00% | ||||||||
Restricted shares | Advisor | Tranche three | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting of granted Restricted Shares | 25.00% | ||||||||
Restricted shares | Advisor | Tranche four | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting of granted Restricted Shares | 25.00% | ||||||||
Restricted shares | Restricted Share Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expense | $ 2,300,000 | $ 2,300,000 | |||||||
Weighted average period of recognition | 4 years | ||||||||
LTIP Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Distributions paid | $ (300,000) | $ (400,000) | |||||||
LTIP Units | 2018 Multi Year Outperformance Plan | Advisor | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares issued during the period (in shares) | 2,554,930 | ||||||||
Share-Based Payment Arrangement, Nonemployee | 2015 OPP | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Requisite service period | 2 years 9 months 18 days | ||||||||
Share-Based Payment Arrangement, Nonemployee | LTIP Units | 2015 OPP | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity fair value | $ 18,800,000 | ||||||||
Share-Based Payment Arrangement, Nonemployee | LTIP Units | 2018 Multi Year Outperformance Plan Amendment | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation expense | 2,400,000 | 6,700,000 | |||||||
Equity fair value | $ 29,900,000 | $ 23,300,000 | |||||||
Fair value in excess | 6,600,000 | $ 6,600,000 | |||||||
Non-controlling interest | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity-based compensation | 2,358,000 | $ 2,359,000 | 7,075,000 | $ 6,710,000 | |||||
Non-controlling interest | Share-Based Payment Arrangement, Nonemployee | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity-based compensation | $ 2,400,000 | $ 7,100,000 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Restricted Share Award Activity (Details) - Restricted Share Plan - Unvested RSUs - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Number of RSUs | ||
Unvested (in shares) | 40,541 | 46,352 |
Vested (in shares) | (23,824) | (21,955) |
Granted (in shares) | 28,232 | 16,563 |
Unvested (in shares) | 44,949 | 40,960 |
Weighted-Average Issue Price | ||
Unvested (in dollars per share) | $ 20.47 | $ 22.04 |
Vested (in dollars per share) | 21.71 | 22.56 |
Granted (in dollars per share) | 13.37 | 18.89 |
Unvested (in dollars per share) | $ 15.35 | $ 20.49 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Target and Maximum Performance Goals (Details) - 2018 Multi Year Outperformance Plan | Jul. 19, 2018shares |
Below Threshold | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Level (% of Absolute TSR LTIP Units Earned) | 0.00% |
Absolute TSR | 24.00% |
Number of Absolute TSR LTIP Units Earned (in shares) | 0 |
Performance Level (% of Relative TSR LTIP Units Earned) | 0.00% |
Relative TSR Excess | (0.0600) |
Number of Absolute TSR LTIP Units Earned (in shares) | 0 |
Threshold | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Level (% of Absolute TSR LTIP Units Earned) | 25.00% |
Absolute TSR | 24.00% |
Number of Absolute TSR LTIP Units Earned (in shares) | 319,366 |
Performance Level (% of Relative TSR LTIP Units Earned) | 25.00% |
Relative TSR Excess | (0.0600) |
Number of Absolute TSR LTIP Units Earned (in shares) | 319,366 |
Target | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Level (% of Absolute TSR LTIP Units Earned) | 50.00% |
Absolute TSR | 30.00% |
Number of Absolute TSR LTIP Units Earned (in shares) | 638,733 |
Performance Level (% of Relative TSR LTIP Units Earned) | 50.00% |
Relative TSR Excess | 0 |
Number of Absolute TSR LTIP Units Earned (in shares) | 638,733 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance Level (% of Absolute TSR LTIP Units Earned) | 100.00% |
Absolute TSR | 36.00% |
Number of Absolute TSR LTIP Units Earned (in shares) | 1,277,465 |
Performance Level (% of Relative TSR LTIP Units Earned) | 100.00% |
Relative TSR Excess | 0.0600 |
Number of Absolute TSR LTIP Units Earned (in shares) | 1,277,465 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to common stockholders | $ (502) | $ 6,860 | $ 5,502 | $ 25,272 |
Adjustments to net income (loss) attributable to common stockholders for common share equivalents | (102) | (176) | (366) | (510) |
Adjusted net income (loss) attributable to common stockholders | $ (604) | $ 6,684 | $ 5,136 | $ 24,762 |
Weighted average shares outstanding - Basic (in shares) | 89,482,577 | 85,254,638 | 89,470,525 | 83,539,304 |
Weighted average shares outstanding - Diluted (in shares) | 89,482,577 | 86,202,582 | 89,470,525 | 84,487,248 |
Net income (loss) per share attributable to common stockholders - Basic and Diluted (in dollars per share) | $ (0.01) | $ 0.08 | $ 0.06 | $ 0.30 |
Earnings Per Share - Schedule_2
Earnings Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common share equivalents excluded from EPS calculation (in shares) | 2,621,405 | 1,688,174 | 2,607,107 | 1,688,174 |
Restricted shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares issued during the period (in shares) | 132,025 | |||
Unvested RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common share equivalents excluded from EPS calculation (in shares) | 44,949 | 40,944 | 44,949 | 40,944 |
Restricted shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common share equivalents excluded from EPS calculation (in shares) | 21,526 | 0 | 7,228 | 0 |
LTIP Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common share equivalents excluded from EPS calculation (in shares) | 2,554,930 | 1,647,230 | 2,554,930 | 1,647,230 |
LTIP Units | 2018 Multi Year Outperformance Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares issued during the period (in shares) | 2,554,930 | 2,554,930 |
Subsequent Events - (Details)
Subsequent Events - (Details) - Subsequent Event $ in Millions | Nov. 05, 2020USD ($)property |
Subsequent Event [Line Items] | |
Number of properties acquired | property | 4 |
Asset purchase price | $ | $ 153 |