Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 02, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | STORE CAPITAL Corp | |
Entity Central Index Key | 1,538,990 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 190,015,680 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Real estate investments: | |||
Land and improvements | $ 1,788,412 | $ 1,536,178 | |
Buildings and improvements | 3,763,510 | 3,226,791 | |
Intangible lease assets | 88,671 | 92,337 | |
Total real estate investments | 5,640,593 | 4,855,306 | |
Less accumulated depreciation and amortization | (393,037) | (298,984) | |
Real estate investments, net | 5,247,556 | 4,556,322 | |
Loans and direct financing receivables | 273,265 | 269,210 | |
Net investments | 5,520,821 | [1] | 4,825,532 |
Cash and cash equivalents | 34,986 | 54,200 | |
Other assets, net | 58,910 | 61,936 | |
Total assets | 5,614,717 | 4,941,668 | |
Liabilities: | |||
Credit facility | 82,000 | 48,000 | |
Unsecured notes and term loan payable, net | 570,376 | 470,190 | |
Non-recourse debt obligations of consolidated special purpose entities, net | 1,741,343 | 1,833,481 | |
Dividends payable | 58,904 | 46,209 | |
Accrued expenses, deferred revenue and other liabilities | 68,888 | 60,533 | |
Total liabilities | 2,521,511 | 2,458,413 | |
Stockholders’ equity: | |||
Common stock, $0.01 par value per share, 375,000,000 shares authorized, 190,013,411 and 159,341,955 shares issued and outstanding, respectively | 1,900 | 1,593 | |
Capital in excess of par value | 3,284,353 | 2,631,845 | |
Distributions in excess of retained earnings | (194,671) | (151,592) | |
Accumulated other comprehensive income | 1,624 | 1,409 | |
Total stockholders’ equity | 3,093,206 | 2,483,255 | |
Total liabilities and stockholders’ equity | $ 5,614,717 | $ 4,941,668 | |
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Condensed Consolidated Balance Sheets | ||
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common shares, authorized shares | 375,000,000 | 375,000,000 |
Common shares, issued shares | 190,013,411 | 159,341,955 |
Common shares, outstanding shares | 190,013,411 | 159,341,955 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Revenues: | |||||
Rental revenues | $ 104,039 | $ 91,759 | $ 314,093 | $ 259,666 | |
Interest income on loans and direct financing receivables | 5,502 | 5,023 | 16,729 | 14,101 | |
Other income | 1,003 | 216 | 1,901 | 435 | |
Total revenues | 110,544 | 96,998 | 332,723 | 274,202 | |
Expenses: | |||||
Interest | 31,379 | 27,121 | 91,938 | 76,427 | |
Transaction costs | 155 | 490 | |||
Property costs | 1,335 | 807 | 3,272 | 2,519 | |
General and administrative | 10,255 | 8,104 | 29,787 | 25,240 | |
Selling stockholder costs | 800 | ||||
Depreciation and amortization | 37,589 | 31,112 | 110,200 | 86,626 | |
Provision for impairment of real estate | 7,670 | 11,940 | [1] | ||
Total expenses | 88,228 | 67,299 | 247,137 | 192,102 | |
Income from operations before income taxes | 22,316 | 29,699 | 85,586 | 82,100 | |
Income tax expense | 81 | 89 | 334 | 248 | |
Income before gain on dispositions of real estate | 22,235 | 29,610 | 85,252 | 81,852 | |
Gain on dispositions of real estate, net of tax | 6,345 | 6,733 | 35,778 | 9,533 | |
Net income | $ 28,580 | $ 36,343 | $ 121,030 | $ 91,385 | |
Net income per share of common stock—basic and diluted: | |||||
Net income per share of common stock—basic and diluted | $ 0.15 | $ 0.24 | $ 0.69 | $ 0.62 | |
Weighted average common shares outstanding: | |||||
Weighted average shares outstanding used in basic income per share (in shares) | 189,656,095 | 153,143,726 | 174,481,758 | 146,491,617 | |
Weighted average shares outstanding used in diluted income per share (in shares) | 190,043,107 | 153,462,048 | 174,481,758 | 146,747,194 | |
Dividends declared per common share | |||||
Dividends declared per common share (in dollars per share) | $ 0.31 | $ 0.29 | $ 0.89 | $ 0.83 | |
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Net income | $ 28,580 | $ 36,343 | $ 121,030 | $ 91,385 |
Other comprehensive income (loss): | ||||
Unrealized gains (losses) on cash flow hedges | 34 | 245 | (328) | (2,101) |
Cash flow hedge losses reclassified to interest expense | 116 | 277 | 543 | 568 |
Total other comprehensive income (loss) | 150 | 522 | 215 | (1,533) |
Total comprehensive income | $ 28,730 | $ 36,865 | $ 121,245 | $ 89,852 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | ||
Operating activities | |||
Net income | $ 121,030 | $ 91,385 | |
Adjustments to net income: | |||
Depreciation and amortization | 110,200 | 86,626 | |
Amortization of deferred financing costs and other noncash interest expense | 8,127 | 5,319 | |
Amortization of equity-based compensation | 5,880 | 5,219 | |
Provision for impairment of real estate | [1] | 11,940 | |
Gain on dispositions of real estate, net of tax | 35,778 | 9,533 | |
Noncash revenue and other | 3,318 | (620) | |
Changes in operating assets and liabilities: | |||
Other assets | (3,884) | (3,031) | |
Accrued expenses, deferred revenue and other liabilities | 8,572 | 7,594 | |
Net cash provided by operating activities | 229,405 | 182,959 | |
Investing activities | |||
Acquisition of and additions to real estate | (978,944) | (849,286) | |
Investment in loans and direct financing receivables | (28,844) | (30,660) | |
Collections of principal on loans and direct financing receivables | 23,099 | 1,590 | |
Proceeds from dispositions of real estate | 202,412 | 44,231 | |
Net cash used in investing activities | (782,277) | (834,125) | |
Financing activities | |||
Borrowings under credit facility | 401,000 | 445,000 | |
Repayments under credit facility | (367,000) | (400,000) | |
Borrowings under unsecured notes and term loans payable | 100,000 | 300,000 | |
Borrowings under non-recourse debt obligations of consolidated special purpose entities | 134,961 | 65,000 | |
Repayments under non-recourse debt obligations of consolidated special purpose entities | (231,578) | (22,831) | |
Financing costs paid | (2,748) | (4,243) | |
Proceeds from the issuance of common stock | 658,110 | 389,564 | |
Stock issuance costs paid | (10,325) | (13,684) | |
Shares repurchased under stock compensation plans | (1,346) | (1,719) | |
Dividends paid | (151,014) | (117,448) | |
Net cash provided by financing activities | 530,060 | 639,639 | |
Net decrease in cash, cash equivalents and restricted cash | (22,812) | (11,527) | |
Cash, cash equivalents and restricted cash, beginning of period | 73,166 | 83,438 | |
Cash, cash equivalents and restricted cash, end of period | 50,354 | 71,911 | |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Total cash, cash equivalents and restricted cash | 73,166 | 83,438 | |
Supplemental disclosure of noncash investing and financing activities: | |||
Accrued tenant improvement advances included in real estate investments | 22,323 | 16,375 | |
Seller financing provided to purchasers of real estate sold | 17,479 | ||
Acquisition of collateral property securing a mortgage note receivable | 2,000 | ||
Accrued financing costs | 33 | ||
Accrued stock issuance costs | 53 | 366 | |
Supplemental disclosure of cash flow information: | |||
Cash paid during the period for interest, net of amounts capitalized | 79,360 | 64,937 | |
Cash paid during the period for income and franchise taxes | $ 1,488 | $ 1,029 | |
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Organization
Organization | 9 Months Ended |
Sep. 30, 2017 | |
Organization | |
Organization | 1. Organization STORE Capital Corporation (STORE Capital or the Company) was incorporated under the laws of Maryland on May 17, 2011 to acquire single‑tenant operational real estate to be leased on a long‑term, net basis to companies that operate across a wide variety of industries within the service, retail and manufacturing sectors of the United States economy. From time to time, it also provides mortgage financing to its customers. On November 21, 2014, the Company completed the initial public offering (IPO) of its common stock. The shares began trading on the New York Stock Exchange on November 18, 2014 under the ticker symbol “STOR”. The Company was originally formed as a wholly owned subsidiary of STORE Holding Company, LLC (STORE Holding), a Delaware limited liability company; the voting interests of STORE Holding were entirely owned by entities managed by a global investment management firm. Subsequent to the Company’s IPO, STORE Holding sold all of its shares through public offerings and, as of April 1, 2016, no longer owned any shares of the Company’s common stock. STORE Capital has made an election to qualify, and believes it is operating in a manner to continue to qualify, as a real estate investment trust (REIT) for federal income tax purposes beginning with its initial taxable year ended December 31, 2011. As a REIT, it will generally not be subject to federal income taxes to the extent that it distributes all of its taxable income to its stockholders and meets other specific requirements. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments: | |
Investments | 3. Investments At September 30, 2017, STORE Capital had investments in 1,826 property locations representing 1,777 owned properties (of which 38 are accounted for as direct financing receivables), 19 ground lease interests and 30 properties which secure mortgage loans. The gross investment portfolio totaled $5.91 billion at September 30, 2017 and consisted of the gross acquisition cost of the real estate investments totaling $5.64 billion and loans and direct financing receivables with an aggregate carrying amount of $273.3 million. As of September 30, 2017, approximately half of these investments are assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non‑recourse obligations of these special purpose entities (Note 4). During the nine months ended September 30, 2017, the Company had the following gross real estate and loan activity (dollars in thousands): Number of Dollar Investment Amount of Locations Investments (a) Gross investments, December 31, 2016 1,660 $ 5,124,516 Acquisition of and additions to real estate (b)(c)(d) 204 979,869 Investment in loans and direct financing receivables 3 28,844 Sales of real estate (40) (182,198) Principal collections on loans and direct financing receivables (d) (1) (25,099) Provision for impairment of real estate — (11,940) Other — (134) Gross investments, September 30, 2017 5,913,858 Less accumulated depreciation and amortization (393,037) Net investments, September 30, 2017 1,826 $ 5,520,821 (a) The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. (b) Includes $0.8 million of interest capitalized to properties under construction. (c) Excludes $23.4 million of tenant improvement advances disbursed in 2017 which were accrued as of December 31, 2016. (d) One loan receivable was repaid in full through a $2.0 million non-cash transaction in which the Company acquired the underlying mortgaged property and leased it back to the borrower. Significant Credit and Revenue Concentration STORE Capital’s real estate investments are leased or financed to approximately 380 customers geographically dispersed throughout 48 states. Only one state, Texas (12%), accounted for 10% or more of the total dollar amount of STORE Capital’s investment portfolio at September 30, 2017. None of the Company’s customers represented more than 10% of the Company’s real estate investment portfolio at September 30, 2017, with the largest customer representing approximately 3% of the total investment portfolio. On an annualized basis, the largest customer also represented approximately 3% of the Company’s total annualized investment portfolio revenues as of September 30, 2017. The Company’s customers operate their businesses across approximately 480 concepts and the largest of these concepts represented approximately 3% of the Company’s total annualized investment portfolio revenues as of September 30, 2017. The following table shows information regarding the diversification of the Company’s total investment portfolio among the different industries in which its tenants and borrowers operate as of September 30, 2017 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments (a) Investments Restaurants 727 $ 1,176,632 20 % Early childhood education centers 170 379,084 7 Furniture stores 46 371,453 6 Movie theaters 39 355,393 6 Health clubs 67 343,455 6 Family entertainment centers 25 231,893 4 Farm and ranch supply stores 22 198,854 3 All manufacturing industries 156 769,090 13 All other service industries 475 1,487,016 25 All other retail industries 99 600,988 10 1,826 $ 5,913,858 100 % (a) The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. Intangible Lease Assets The following details intangible lease assets and related accumulated amortization (in thousands): September 30, December 31, 2017 2016 In-place lease assets $ 57,816 $ 61,634 Ground lease interest assets 21,363 20,430 Above-market lease assets 9,492 10,273 Total intangible lease assets 88,671 92,337 Accumulated amortization (23,220) (19,515) Net intangible lease assets $ 65,451 $ 72,822 Aggregate lease intangible amortization included in expense was $1.5 million and $1.6 million during the three months ended September 30, 2017 and 2016, respectively, and was $4.8 million during both the nine-month periods ended September 30, 2017 and 2016. The amount amortized as a decrease to rental revenue for capitalized above‑market lease intangibles was $0.3 million during both the three months ended September 30, 2017 and 2016 and was $0.9 million during both the nine months ended September 30, 2017 and 2016. Based on the balance of the intangible assets at September 30, 2017, the aggregate amortization expense is expected to be $1.5 million for the remainder of 2017, $5.8 million in 2018, $5.6 million in 2019, $5.1 million in 2020, $4.7 million in 2021 and $4.5 million in 2022; the amount expected to be amortized as a decrease to rental revenue is expected to be $0.3 million for the remainder of 2017, $1.1 million in each of the years 2018 through 2020, $0.6 million in 2021 and $0.4 million in 2022. The weighted average remaining amortization period is approximately nine years for the in‑place lease intangibles, approximately 46 years for the amortizing ground lease interests and approximately seven years for the above‑market lease intangibles. Real Estate Investments The Company’s investment properties are leased to tenants under long‑term operating leases that typically include one or more renewal options. The weighted average remaining noncancelable lease term at September 30, 2017 was approximately 14 years. Substantially all of the leases are triple net, which provide that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance; therefore, STORE Capital is generally not responsible for repairs or other capital expenditures related to the properties while the triple-net leases are in effect. At September 30, 2017, the Company owned 19 properties that were vacant and not subject to a lease. Scheduled future minimum rentals to be received under the remaining noncancelable term of the operating leases in place as of September 30, 2017, are as follows (in thousands): Remainder of 2017 $ 113,052 2018 452,475 2019 451,699 2020 450,079 2021 449,344 2022 449,466 Thereafter 4,209,774 Total future minimum rentals $ 6,575,889 Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum lease payments do not include any contingent rentals such as lease escalations based on future changes in CPI. Loans and Direct Financing Receivables At September 30, 2017, the Company held 29 loans receivable with an aggregate carrying amount of $148.8 million. Eighteen of the loans are mortgage loans secured by land and/or buildings and improvements on the mortgaged property. Six of the mortgage loans are shorter-term loans (maturing prior to 2023) that require either monthly interest-only payments with a balloon payment at maturity or monthly interest-only payments for an established period and then monthly principal and interest payments with a balloon payment at maturity. The remaining mortgage loans receivable generally require the borrowers to make monthly principal and interest payments based on a 40-year amortization period with balloon payments, if any, at maturity or earlier upon the occurrence of certain other events. The interest rates on ten of the mortgage loans are subject to increases over the term of the loans. The other loans are primarily loans secured by a tenant’s equipment or other assets and generally require the borrower to make monthly interest‑only payments with a balloon payment at maturity. The Company’s loans and direct financing receivables are summarized below (dollars in thousands): Amount Outstanding Interest Maturity September 30, December 31, Type Rate (a) Date 2017 2016 Six mortgage loans receivable (b) 8.60 % 2017 - 2022 $ 29,171 $ 22,599 Five mortgage loans receivable 8.57 % 2032 - 2038 42,863 43,002 Seven mortgage loans receivable (c) 8.70 % 2053 - 2056 64,608 70,173 Total mortgage loans receivable 136,642 135,774 Eleven equipment and other loans receivable 9.29 % 2017 - 2025 10,912 9,233 Total principal amount outstanding—loans receivable 147,554 145,007 Unamortized loan origination costs 1,256 1,205 Direct financing receivables 124,455 122,998 Total loans and direct financing receivables $ 273,265 $ 269,210 (a) Represents the weighted average interest rate as of the balance sheet date. (b) One loan outstanding at December 31, 2016 was repaid in full during the nine months ended September 30, 2017 through a $2.0 million non-cash transaction in which the Company acquired the underlying mortgaged property and leased it back to the borrower. (c) Four of these mortgage loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment. Two loans outstanding at December 31, 2016 were either repaid in full or sold during the nine months ended September 30, 2017 and the Company collected $0.1 million in prepayment penalty fees. The long‑term mortgage loans receivable generally allow for prepayments in whole, but not in part, without penalty or with penalties ranging from 1% to 20%, depending on the timing of the prepayment, except as noted in the table above. All other loans receivable allow for prepayments in whole or in part without penalty. Absent prepayments, scheduled maturities are expected to be as follows (in thousands): Scheduled Principal Balloon Total Payments Payments Payments Remainder of 2017 $ 238 $ 18,056 $ 18,294 2018 1,534 850 2,384 2019 2,188 4,374 6,562 2020 2,355 — 2,355 2021 1,301 1,484 2,785 2022 841 8,408 9,249 Thereafter 69,709 36,216 105,925 Total principal payments $ 78,166 $ 69,388 $ 147,554 As of September 30, 2017 and December 31, 2016, the Company had $124.5 million and $123.0 million, respectively, of investments accounted for as direct financing leases; the components of the investments accounted for as direct financing receivables were as follows (in thousands): September 30, December 31, 2017 2016 Minimum lease payments receivable $ 296,280 $ 300,832 Estimated residual value of leased assets 14,815 14,500 Unearned income (186,640) (192,334) Net investment $ 124,455 $ 122,998 As of September 30, 2017, the future minimum lease payments to be received under the direct financing lease receivables are expected to be $3.0 million for the remainder of 2017 and average approximately $12.2 million for each of the next five years. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt | |
Debt | 4. Debt Credit Facility As of September 30, 2017, the Company had a $500 million unsecured revolving credit facility with a group of lenders. The facility, which was put in place in September 2014 and amended in September 2015, is used to partially fund real estate acquisitions pending the issuance of long-term, fixed-rate debt and includes an accordion feature that allows the size of the facility to be increased up to $800 million. The amended facility matures in September 2019 and includes a one-year extension option subject to certain conditions and the payment of a 0.15% extension fee. The facility is recourse to the Company and includes a guaranty from STORE Capital Acquisitions, LLC (SCA), one of the Company’s direct wholly owned subsidiaries. Through June 30, 2017, borrowings under this facility required monthly payments of interest at a rate selected by the Company of either (1) LIBOR plus a credit spread ranging from 1.35% to 2.15%, or (2) the Base Rate, as defined in the credit agreement, plus a credit spread ranging from 0.35% to 1.15%. The Company was also required to pay a non-use fee of 0.15% or 0.25% on the unused portion of the facility, depending upon the amount of borrowings outstanding. Borrowing availability under the facility is limited to 50% of the value of the Company’s eligible unencumbered assets at any point in time. At September 30, 2017, the Company had $82 million of borrowings outstanding and a pool of unencumbered assets aggregating approximately $3.0 billion, substantially all of which are eligible unencumbered assets as defined in the credit agreement. The Company is subject to various financial and nonfinancial covenants under the revolving credit facility including a maximum total leverage ratio of 65%, a minimum EBITDA to fixed charges ratio of 1.5 to 1, minimum consolidated net worth of $1.0 billion plus 75% of any additional equity raised after September 2015, a maximum dividend payout ratio limited to 95% of Funds from Operations and a maximum unsecured debt leverage ratio of 50%, all as defined in the credit agreement. As of September 30, 2017, the Company was in compliance with these covenants. At September 30, 2017 and December 31, 2016, unamortized financing costs related to the Company’s credit facility totaled $2.0 million and $2.7 million, respectively, and are included in other assets, net, on the condensed consolidated balance sheets. Unsecured Notes and Term Loans Payable, net The Company has entered into Note Purchase Agreements (NPAs) with institutional purchasers that provided for the private placement of three series of senior unsecured notes aggregating $375 million (the Notes). Interest on the Notes is payable semi-annually in arrears in May and November of each year. On each interest payment date, the interest rate on each series of Notes may be increased by 1.0% should the Company’s Applicable Credit Rating (as defined in the NPAs) fail to be an investment-grade credit rating; the increased interest rate would remain in effect until the next interest payment date on which the Company obtains an Applicable Credit Rating that is an investment grade credit rating. The Company may prepay at any time all, or any part, of any series of Notes, in an amount not less than 5% of the aggregate principal amount of the series then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid plus a Make-Whole Amount (as defined in the NPA). The Notes are senior unsecured obligations of the Company and are guaranteed by SCA. The NPAs contain a number of financial covenants that are similar to the Company’s unsecured credit facility as summarized above, including the maximum total leverage ratio, the minimum EBITDA to fixed charges ratio and the minimum consolidated net worth amount, as well as a maximum secured debt leverage ratio, a maximum unsecured debt leverage ratio and a minimum interest coverage ratio on unsecured debt. Subject to the terms of the NPAs and the Notes, upon certain events of default, including, but not limited to, (i) a payment default under the Notes, and (ii) a default in the payment of certain other indebtedness by the Company or its subsidiaries, all amounts outstanding under the Notes will become due and payable at the option of the purchasers. As of September 30, 2017, the Company was in compliance with its covenants under the NPAs. In April 2016, the Company entered into a $100 million floating-rate, unsecured five-year term loan; the interest rate on the loan resets monthly at one-month LIBOR plus a credit spread ranging from 1.35% to 2.15%. In March 2017, the Company entered into a second $100 million floating-rate, unsecured term note. This second loan is a two-year loan which has three one-year extension options and the interest rate on the loan resets monthly at one-month LIBOR plus a credit spread ranging from 1.30% to 2.15%. Subsequent to June 30, 2017, the Company made the election to base the credit spread on the Company’s credit rating as defined in the loan agreements; as a result, the interest rate on both term loans now resets monthly at one-month LIBOR plus a credit spread ranging from 0.90% to 1.75%; the credit spread currently applicable to the Company is 1.10%. The term loans were arranged with lenders who also participate in the Company’s unsecured revolving credit facility. The financial covenants of the term loans match the covenants of the unsecured credit facility. The term loans are senior unsecured obligations of the Company, are guaranteed by SCA and may be prepaid at any time without penalty. The Company’s senior unsecured notes and term loans payable are summarized below (dollars in thousands): Outstanding Balance Maturity Interest September 30, December 31, Date Rate 2017 2016 Notes Payable: Series A issued November 2015 Nov. 2022 4.95 % $ 75,000 $ 75,000 Series B issued November 2015 Nov. 2024 5.24 % 100,000 100,000 Series C issued April 2016 Apr. 2026 4.73 % 200,000 200,000 Total notes payable 375,000 375,000 Term Loans: Term Loan issued March 2017 Mar. 2019 2.57 % (a) 100,000 — Term Loan issued April 2016 Apr. 2021 2.44 % (a) 100,000 100,000 Total term loans 200,000 100,000 Unamortized deferred financing costs (4,624) (4,810) Total unsecured notes and term loans payable, net $ 570,376 $ 470,190 (a) Loan is a variable‑rate loan which resets monthly at one-month LIBOR + the applicable credit spread which was 1.10% at September 30, 2017. The Company has entered into interest rate swap agreements that effectively convert the floating rate to the fixed rate noted above as of September 30, 2017. Non‑recourse Debt Obligations of Consolidated Special Purpose Entities, net During 2012, the Company implemented the STORE Master Funding debt program pursuant to which certain of its consolidated special purpose entities issue multiple series of non‑recourse net‑lease mortgage notes from time to time that are collateralized by the assets and related leases (collateral) owned by these entities. One of the principal features of the program is that, as additional series of notes are issued, new collateral is contributed to the collateral pool thereby increasing the size and diversity of the collateral pool for the benefit of all noteholders, including those who invested in prior series. Another feature of the program is the ability to substitute collateral from time to time subject to meeting certain prescribed conditions and criteria. The notes are generally segregated into Class A amortizing notes and Class B non‑amortizing notes. The Company has retained each of the Class B notes which aggregate $128.0 million at September 30, 2017. The Class A notes require monthly principal and interest payments with a balloon payment due at maturity and these notes may be prepaid at any time, subject to a yield maintenance prepayment premium if prepaid more than 24 months prior to maturity. In August 2017, the Company prepaid the STORE Master Funding Series 2012-1, Class A notes (issued in August 2012 and scheduled to mature in August 2019), which bore an interest rate of 5.77% and had an outstanding balance of $198.6 million at the time of prepayment and recognized $2.0 million of accelerated amortization of deferred financing costs associated with this debt. As of September 30, 2017, the aggregate collateral pool securing the net‑lease mortgage notes was comprised primarily of single-tenant commercial real estate properties with an aggregate investment amount of approximately $2.6 billion. A number of additional consolidated special purpose entity subsidiaries of the Company have financed their real estate properties with traditional first mortgage debt. The notes generally require monthly principal and interest payments with balloon payments due at maturity. In general, these mortgage notes payable can be prepaid in whole or in part upon payment of a yield maintenance premium. The mortgage notes payable are collateralized by real estate properties owned by these consolidated special purpose entity subsidiaries with an aggregate investment amount of approximately $392.0 million at September 30, 2017. The mortgage notes payable, which are obligations of the consolidated special purpose entities described in Note 2, contain various covenants customarily found in mortgage notes, including a limitation on the issuing entity’s ability to incur additional indebtedness on the underlying real estate. Although this mortgage debt generally is non‑recourse, there are customary limited exceptions to recourse for matters such as fraud, misrepresentation, gross negligence or willful misconduct, misapplication of payments, bankruptcy and environmental liabilities. Certain of the mortgage notes payable also require the posting of cash reserves with the lender or trustee if specified coverage ratios are not maintained by the Company or one of its tenants. The Company did not make the September 1, 2017 through November 1, 2017 scheduled payments of interest and principal due on a $12.9 million note scheduled to mature in August 2022 (see table below) because the two properties that secure this note were not generating sufficient cash flow to cover the debt service. The Company is currently in discussions with the lender regarding a resolution of this matter, although no assurances can be made as to the outcome of these discussions. As of the date of this report, the lender has not declared an event of default. Should the lender declare an event of default, the note would bear interest at a default rate equal to 9.95% per annum. The Company’s non-recourse debt obligations of consolidated special purpose entity subsidiaries are summarized below (dollars in thousands): Outstanding Balance Maturity Interest September 30, December 31, Date Rate 2017 2016 Non-recourse net-lease mortgage notes: $214,500 Series 2012-1, Class A $ — $ 200,749 $150,000 Series 2013-1, Class A-1 Mar. 2020 4.16 % 138,663 140,724 $107,000 Series 2013-2, Class A-1 Jul. 2020 4.37 % 99,869 101,265 $77,000 Series 2013-3, Class A-1 Nov. 2020 4.24 % 72,320 73,307 $120,000 Series 2014-1, Class A-1 Apr. 2021 4.21 % 118,000 118,450 $95,000 Series 2015-1, Class A-1 Apr. 2022 3.75 % 93,852 94,208 $102,000 Series 2013-1, Class A-2 Mar. 2023 4.65 % 94,291 95,693 $97,000 Series 2013-2, Class A-2 Jul. 2023 5.33 % 90,536 91,801 $100,000 Series 2013-3, Class A-2 Nov. 2023 5.21 % 93,922 95,204 $140,000 Series 2014-1, Class A-2 Apr. 2024 5.00 % 137,667 138,192 $270,000 Series 2015-1, Class A-2 Apr. 2025 4.17 % 266,737 267,750 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 3.96 % 196,777 199,423 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 4.32 % 134,021 — Total non-recourse net-lease mortgage notes 1,536,655 1,616,766 Non-recourse mortgage notes payable: $2,956 note issued June 2013 — 2,663 $7,088 note issued April 2007 — 6,457 $4,400 note issued August 2007 — 3,586 $8,000 note issued January 2012; assumed in December 2013 Jan. 2018 4.778 % 6,740 6,960 $20,530 note issued December 2011; amended February 2012 Jan. 2019 5.275 % (a) 17,970 18,359 $6,500 note issued December 2012 Dec. 2019 4.806 % 5,777 5,900 $16,100 note issued February 2014 Mar. 2021 4.83 % 14,879 15,159 $13,000 note issued May 2012 May 2022 5.195 % 11,500 11,737 $14,950 note issued July 2012 Aug. 2022 4.95 % 12,874 13,135 $26,000 note issued August 2012 Sept. 2022 5.05 % 23,150 23,625 $6,400 note issued November 2012 Dec. 2022 4.707 % 5,707 5,827 $11,895 note issued March 2013 Apr. 2023 4.7315 % 10,712 10,931 $17,500 note issued August 2013 Sept. 2023 5.46 % 16,092 16,380 $10,075 note issued March 2014 Apr. 2024 5.10 % 9,573 9,691 $21,125 note issued July 2015 Aug. 2025 4.36 % 21,099 21,125 $65,000 note issued June 2016 Jul. 2026 4.75 % 63,886 64,614 $7,750 note issued February 2013 Mar. 2038 4.81 % (b) 6,972 7,114 $6,944 notes issued March 2013 Apr. 2038 4.50 % (c) 6,194 6,330 Total non-recourse mortgage notes payable 233,125 249,593 Unamortized net (discount) premium (399) (336) Unamortized deferred financing costs (28,038) (32,542) Total non-recourse debt obligations of consolidated special purpose entities, net $ 1,741,343 $ 1,833,481 (a) Note is a variable‑rate note which resets monthly at one-month LIBOR + 3.50%. The Company has entered into two interest rate swap agreements that effectively convert the floating rate on an $11.8 million portion and a $6.2 million portion of this mortgage note payable to fixed rates of 5.299% and 5.230%, respectively. (b) Interest rate is effective until March 2023 and will reset to greater of (1) initial rate plus 400 basis points or (2) Treasury rate plus 400 basis points. (c) Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate. Credit Risk Related Contingent Features The Company has an agreement with a derivative counterparty which provides that if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company has agreements with other derivative counterparties which provide that the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. As of September 30, 2017, the termination value of the Company’s interest rate swaps that were in a liability position was approximately $0.1 million, which includes accrued interest but excludes any adjustment for nonperformance risk. Long-term Debt Maturity Schedule As of September 30, 2017, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are expected to be as follows (in thousands): Scheduled Principal Balloon Payments Payments Total Remainder of 2017 $ 6,537 $ — $ 6,537 2018 26,432 6,664 33,096 2019 26,953 122,686 149,639 2020 23,860 293,632 317,492 2021 21,016 229,366 250,382 2022 20,506 211,493 231,999 Thereafter 56,436 1,299,199 1,355,635 $ 181,740 $ 2,163,040 $ 2,344,780 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders’ Equity | |
Stockholders’ Equity | 5. Stockholders’ Equity In June 2017, the Company completed a private placement of 18,621,674 shares of its common stock to a non-affiliated investor and received aggregate proceeds of $377.1 million. The issuance and sale of the shares were made pursuant to a stock purchase agreement and there were no underwriter discounts or commissions associated with the sale. During the first quarter of 2017, the Company completed a follow-on stock offering in which the Company issued and sold 9,947,500 shares of its common stock. The Company received $220.8 million in proceeds, net of both underwriters’ discount and offering expenses, in connection with this offering. In September 2016, the Company established an “at the market” equity distribution program, or ATM program, pursuant to which, from time to time, it offers and sells registered shares of its common stock up to a maximum amount of $400 million through a group of banks acting as its sales agents. During the first quarter of 2017, the Company issued and sold 2,047,546 shares of common stock under the program at a weighted average share price of $25.02, raising $51.2 million in gross proceeds, or $50.3 million in net proceeds after the payment of sales agents’ commissions of $0.8 million and offering expenses. Since the program began in 2016, the Company has issued and sold an aggregate of 8,132,647 shares of common stock under the program at a weighted average share price of $26.25 and raised approximately $213.5 million in aggregate gross proceeds, or approximately $209.4 million in aggregate net proceeds after the payment of sales agents’ commissions of $3.2 million and offering expenses. The Company declared dividends payable to common stockholders totaling $163.7 million and $124.6 million during the nine months ended September 30, 2017 and 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies In the normal course of business, the Company enters into various types of commitments to purchase real estate properties. These commitments are generally subject to the Company’s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase the properties. As of September 30, 2017, the Company had commitments to its customers to fund improvements to owned or mortgaged real estate properties totaling approximately $108.7 million, of which $101.0 million is expected to be funded in the next twelve months. These additional investments will generally result in increases to the rental revenue or interest income due under the related contracts. The Company has employment agreements with each of its executive officers that provide for minimum annual base salaries, and annual cash and equity incentive compensation based on the satisfactory achievement of reasonable performance criteria and objectives to be adopted by the Company’s Board of Directors each year. In the event an executive officer’s employment terminates under certain circumstances, the Company would be liable for cash severance, continuation of healthcare benefits and, in some instances, accelerated vesting of equity awards that he or she has been awarded as part of the Company’s incentive compensation program. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 7. Fair Value of Financial Instruments The Company’s derivatives are required to be measured at fair value in the Company’s consolidated financial statements on a recurring basis. Derivatives are measured under a market approach, using prices obtained from a nationally recognized pricing service and pricing models with market observable inputs such as interest rates and equity index levels. These measurements are classified as Level 2 within the fair value hierarchy. At September 30, 2017 and December 31, 2016, the fair value of the Company’s derivative instruments was an asset of $1.7 million and $1.6 million, respectively, included in other assets, net, on the condensed consolidated balance sheets, and a liability of $57,000 and $180,000, respectively, included in accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets. In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value. The fair values of financial instruments are estimates based upon market conditions and perceived risks at September 30, 2017 and December 31, 2016. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash, accounts receivable, accounts payable and tenant deposits. Generally these assets and liabilities are short‑term in duration and are recorded at fair value on the consolidated balance sheets. The Company believes the carrying value of the borrowings on its credit facility approximate fair value based on their nature, terms and variable interest rate. Additionally, the Company believes the carrying values of its fixed‑rate loans receivable approximate fair values based on market quotes for comparable instruments or discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. The estimated fair values of the Company’s aggregate long-term debt obligations have been derived based on market observable inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 2 within the fair value hierarchy. At September 30, 2017, these debt obligations had a carrying value of $2,311.7 million and an estimated fair value of $2,415.1 million. At December 31, 2016, these debt obligations had an aggregate carrying value of $2,303.7 million and an estimated fair value of $2,353.6 million. |
Summary of Significant Accounti
Summary of Significant Accounting Principles (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Principles | |
Basis of Accounting and Principles of Consolidation | Basis of Accounting and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements and, accordingly, these statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the fiscal year ended December 31, 2016. These condensed consolidated statements include the accounts of STORE Capital and its subsidiaries, which are wholly owned and controlled by the Company through its voting interest. One of the Company’s wholly owned subsidiaries, STORE Capital Advisors, LLC, provides all of the general and administrative services for the day‑to‑day operations of the consolidated group, including property acquisition and lease origination, real estate portfolio management and marketing, accounting and treasury services. The remaining subsidiaries were formed to acquire and hold real estate investments or to facilitate non‑recourse secured borrowing activities. Generally, the initial operations of the real estate subsidiaries are funded by an interest‑bearing intercompany loan from STORE Capital, and such intercompany loan is repaid when the subsidiary issues long‑term debt secured by its properties. All intercompany account balances and transactions have been eliminated in consolidation. Certain of the Company’s wholly owned consolidated subsidiaries were formed as special purpose entities. Each special purpose entity is a separate legal entity and is the sole owner of its assets and liabilities. The assets of the special purpose entities are not available to pay or otherwise satisfy obligations to the creditors of any owner or affiliate of the special purpose entity. At September 30, 2017 and December 31, 2016, these special purpose entities held assets totaling $5.0 billion and $4.3 billion, respectively, and had third-party liabilities totaling $1.8 billion and $1.9 billion, respectively. These assets and liabilities are included in the accompanying condensed consolidated balance sheets. |
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, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period balances to conform to the current period presentation. During the quarter ended December 31, 2016, the Company elected to early adopt Accounting Standards Update (ASU) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , described below in Recent Accounting Pronouncements . Under this new guidance, transfers to or from restricted cash which have previously been shown in the operating, investing or financing sections of the statement of cash flows are now required to be shown as part of the total change in cash, cash equivalents and restricted cash in the statement of cash flows. As a result of the adoption of ASU 2016-18, amounts previously shown as part of the change in other assets in the operating section and as transfers from or to restricted deposits in the investing section of the statement of cash flows for the nine months ended September 30, 2016 have been retrospectively adjusted as follows: As Previously As Adjusted Effect of Reported per ASU 2016-18 Change Nine Months Ended September 30, 2016 Operating Activities Change in operating assets: Other assets $ (3,222) $ (3,031) $ 191 Net cash provided by operating activities 182,768 182,959 191 Investing Activities Transfers to restricted deposits (25,353) — 25,353 Net cash used in investing activities (859,478) (834,125) 25,353 Net decrease in cash, cash equivalents and restricted cash (37,071) (11,527) 25,544 Cash, cash equivalents and restricted cash, beginning of period 67,115 83,438 16,323 Cash, cash equivalents and restricted cash, end of period 30,044 71,911 41,867 |
Segment Reporting | Segment Reporting The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting , established standards for the manner in which enterprises report information about operating segments. The Company views its operations as one reportable segment. |
Accounting for Real Estate Investments | Accounting for Real Estate Investments STORE Capital records the acquisition of real estate properties at cost, including acquisition and closing costs. The Company allocates the cost of real estate properties to the tangible and intangible assets and liabilities acquired based on their estimated relative fair values. Intangible assets and liabilities acquired may include the value of existing in-place leases, above-market or below-market lease value of in-place leases and ground lease intangibles, as applicable. Management uses multiple sources to estimate fair value, including independent appraisals and information obtained about each property as a result of its pre‑acquisition due diligence and its marketing and leasing activities. Historically, the Company has expensed transaction costs associated with real estate acquisitions accounted for as business combinations in the period incurred. As discussed in Recent Accounting Pronouncements below, the Company adopted ASU 2017-01, Business C ombinations (Topic 805): Clarifying the Definition of a Business, in January 2017 and, as a result, expects that fewer, if any, of its real estate acquisitions will be accounted for as business combinations and, consequently, that minimal, if any, transaction costs will be expensed subsequent to adoption. In‑place lease intangibles are valued based on management’s estimates of lost rent and carrying costs during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases. In estimating lost rent and carrying costs, management considers market rents, real estate taxes, insurance, costs to execute similar leases including leasing commissions and other related costs. The value assigned to in‑place leases is amortized on a straight‑line basis as a component of depreciation and amortization expense typically over the remaining term of the related leases. The fair value of any above‑market and below‑market leases is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the in‑place lease and management’s estimate of current market lease rates for the property, measured over a period equal to the remaining term of the lease. Capitalized above‑market lease intangibles are amortized over the remaining term of the respective leases as a decrease to rental revenue. Below‑market lease intangibles are amortized as an increase in rental revenue over the remaining term of the respective leases plus the fixed‑rate renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations. The Company’s real estate portfolio is depreciated using the straight‑line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is generally 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated closing costs. Any properties classified as held for sale are not depreciated. |
Impairment | Impairment STORE Capital reviews its real estate investments and related lease intangibles periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through operations. Management considers factors such as expected future undiscounted cash flows, estimated residual value, market trends (such as the effects of leasing demand and competition) and other factors, including bona fide purchase offers received from third parties, in making this assessment. These factors are classified as Level 3 inputs within the fair value hierarchy, discussed in Fair Value Measurements below. An asset is considered impaired if the carrying value of the asset exceeds its estimated undiscounted cash flows and the impairment is calculated as the amount by which the carrying value of the asset exceeds its estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results. During the nine months ended September 30, 2017, the Company recognized an aggregate provision for impairment of real estate of $11.9 million, representing $7.6 million recognized in the third quarter related to two properties which became vacant during the quarter and $4.3 million recognized in the first quarter associated with a property sold in the second quarter. The estimated fair value of the impaired real estate assets at September 30, 2017 was $12.7 million; there were no impaired assets as of December 31, 2016. |
Revenue Recognition | Revenue Recognition STORE Capital leases real estate to its tenants under long‑term net leases that are predominantly classified as operating leases. Direct costs associated with lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. Substantially all of the leases are triple net, which provide that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. In certain circumstances, the Company may collect property taxes from its customers and remit those taxes to governmental authorities; such property taxes are presented on a net basis in the condensed consolidated statements of income. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight‑line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, accrued rental revenue, calculated as the aggregate difference between the rental revenue recognized on a straight‑line basis and scheduled rents, represents unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the lease. The Company provides an estimated reserve for uncollectible straight‑line rental revenue based on management’s assessment of the risks inherent in those lease contracts, giving consideration to industry default rates for long‑term receivables. There was $19.5 million and $15.0 million of accrued straight‑line rental revenue, net of allowances of $2.9 million and $4.6 million, at September 30, 2017 and December 31, 2016, respectively, which were included in other assets, net, on the condensed consolidated balance sheets. Leases that have contingent rent escalators indexed to future increases in the Consumer Price Index (CPI) may adjust over a one‑year period or over multiple‑year periods. Generally, these escalators increase rent at the lesser of (a) 1 to 1.25 times the increase in the CPI over a specified period or (b) a fixed percentage. Because of the volatility and uncertainty with respect to future changes in the CPI, the Company’s inability to determine the extent to which any specific future change in the CPI is probable at each rent adjustment date during the entire term of these leases and the Company’s view that the multiplier does not represent a significant leverage factor, increases in rental revenue from leases with this type of escalator are recognized only after the changes in the rental rates have actually occurred. For leases that have contingent rentals that are based on a percentage of the tenant’s gross sales, the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Less than 1.5% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales. The Company suspends revenue recognition when the collectibility of amounts due pursuant to a lease is no longer reasonably assured or if the tenant’s monthly lease payments become more than 60 days past due, whichever is earlier. The Company reviews its accounts receivable for collectibility on a regular basis, taking into consideration changes in factors such as 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 where the property is located. In the event that the collectibility of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write‑off of the specific receivable will be made. |
Loans Receivable | Loans Receivable STORE Capital holds its loans receivable for long‑term investment. Loans receivable are carried at amortized cost, including related unamortized discounts or premiums, if any. Revenue Recognition The Company recognizes interest income on loans receivable using the effective‑interest method applied on a loan‑by‑loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective-interest method. A loan receivable is placed on nonaccrual status when the loan has become more than 60 days past due, or earlier if management determines that full recovery of the contractually specified payments of principal and interest is doubtful. While on nonaccrual status, interest income is recognized only when received. As of September 30, 2017, there was one mortgage loan receivable with an outstanding principal balance of $6.3 million on nonaccrual status. There were no loans on nonaccrual status at December 31, 2016. Impairment and Provision for Loan Losses The Company periodically evaluates the collectibility of its loans receivable, including accrued interest, by analyzing the underlying property‑level economics and trends, collateral value and quality and other relevant factors in determining the adequacy of its allowance for loan losses. A loan is determined to be impaired when, in management’s judgment based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Specific allowances for loan losses are provided for impaired loans on an individual loan basis in the amount by which the carrying value exceeds the estimated fair value of the underlying collateral less disposition costs. There was no allowance for loan losses at September 30, 2017 or December 31, 2016. |
Direct Financing Receivables | Direct Financing Receivables Certain of the Company’s real estate investment transactions are accounted for as direct financing leases. The Company records the direct financing receivables at their net investment, determined as the aggregate minimum lease payments and the estimated residual value of the leased property less unearned income. The unearned income is recognized over the life of the related contracts so as to produce a constant rate of return on the net investment in the asset. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money‑market funds of a major financial institution, consisting predominantly of U.S. Government obligations. |
Restricted Cash | Restricted Cash Restricted cash primarily consists of reserve account deposits held by lenders, including deposits required to be used for future investment in real estate assets, and escrow deposits. The Company had $15.4 million and $19.0 million of restricted cash and deposits in escrow at September 30, 2017 and December 31, 2016, respectively, which were included in other assets, net, on the condensed consolidated balance sheets. |
Deferred Costs | Deferred Costs Financing costs related to the issuance of the Company’s long-term debt are deferred and amortized as an increase to interest expense over the term of the related debt instrument using the effective-interest method and are reported as a reduction of the related debt balance on the condensed consolidated balance sheets. Deferred financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company may enter into derivatives contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives 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. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of September 30, 2017, the Company had one interest rate floor and five interest rate swap agreements in place. Two of the swaps, with current notional amounts of $11.8 million and $6.2 million, were designated as cash flow hedges associated with the Company’s secured, variable‑rate mortgage note payable due in 2019 (Note 4). One of the interest rate swaps has a notional amount of $100 million and was designated as a cash flow hedge of the Company’s $100 million variable-rate bank term loan due in 2019 (Note 4). The remaining two interest rate swaps and related interest rate floor transaction have an aggregate notional amount of $100 million and were designated as a cash flow hedge of the Company’s $100 million variable-rate bank term loan due in 2021 (Note 4). |
Fair Value Measurement | Fair Value Measurement The Company estimates fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: · Level 1—Quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access. · Level 2—Significant inputs that are observable, either directly or indirectly. These types of inputs would include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets in inactive markets and market‑corroborated inputs. Level 3—Inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. These types of inputs include the Company’s own assumptions. |
Share-based Compensation | Share‑based Compensation Directors and key employees of the Company have been granted long‑term incentive awards, including restricted stock awards (RSAs) and restricted stock unit awards (RSUs) which provide such directors and employees with equity interests as an incentive to remain in the Company’s service and to align their interests with those of the Company’s stockholders. The Company estimates the fair value of RSAs at the date of grant and recognizes that amount in general and administrative expense on the condensed consolidated statements of income ratably over the vesting period at the greater of the amount amortized on a straight‑line basis or the amount vested. The fair value of the RSAs is based on the per-share price of the common stock on the date of the grant. Prior to the Company’s IPO, the fair value was based on the per‑share price of the common stock issued in the Company’s private equity offerings. During the nine months ended September 30, 2017, the Company granted RSAs representing 120,140 shares of restricted common stock to its directors and key employees. During the same period, RSAs representing 213,233 shares of previously issued restricted stock vested and RSAs representing 9,307 shares of previously issued restricted stock were forfeited. In connection with the vesting of the RSAs, the Company repurchased 56,097 shares as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plans. As of September 30, 2017, the Company had 357,316 shares of restricted common stock outstanding. The Company values the RSUs (which contain both a market condition and a service condition) using a Monte Carlo simulation model on the date of grant and recognizes that amount in general and administrative expense on the condensed consolidated statements of income on a tranche by tranche basis ratably over the vesting periods. During the nine months ended September 30, 2017, the Company awarded 373,719 RSUs to its executive officers. At September 30, 2017, there were 1,093,153 RSUs outstanding. |
Income Taxes | Income Taxes As a REIT, the Company generally will not be subject to federal income tax. It is still subject, however, to state and local income taxes and to federal income and excise tax on its undistributed income. STORE Investment Corporation is the Company’s wholly owned taxable REIT subsidiary (TRS) created to engage in non‑qualifying REIT activities. The TRS is subject to federal, state and local income taxes. Management of the Company determines whether any tax positions taken or expected to be taken meet the “more‑likely‑than‑not” threshold of being sustained by the applicable federal, state or local tax authority. Certain state tax returns filed for 2012 and tax returns filed for 2013 through 2016 are subject to examination by these jurisdictions. As of September 30, 2017 and December 31, 2016, management concluded that there is no tax liability relating to uncertain income tax positions. The Company’s policy is to recognize interest related to any underpayment of income taxes as interest expense and to recognize any penalties as general and administrative expenses. There was no accrual for interest or penalties at September 30, 2017 or December 31, 2016. |
Net Income Per Common Share | Net Income Per Common Share Net income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share . The guidance requires the classification of the Company’s unvested restricted common shares, which contain rights to receive non‑forfeitable dividends, as participating securities requiring the two‑class method of computing net income per common share. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net income $ 28,580 $ 36,343 $ 121,030 $ 91,385 Less: earnings attributable to unvested restricted shares (105) (133) (320) (380) Net income used in basic and diluted income per share $ 28,475 $ 36,210 $ 120,710 $ 91,005 Denominator: Weighted average common shares outstanding 190,015,850 153,602,720 174,856,940 146,967,323 Less: Weighted average number of shares of unvested restricted stock (359,755) (458,994) (375,182) (475,706) Weighted average shares outstanding used in basic income per share 189,656,095 153,143,726 174,481,758 146,491,617 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 387,012 318,322 — 255,577 Weighted average shares outstanding used in diluted income per share 190,043,107 153,462,048 174,481,758 146,747,194 For the three months ended September 30, 2017 and 2016, excludes 110,001 shares and 216,141 shares, respectively, and for the nine months ended September 30, 2017 and 2016, excludes 106,265 shares and 196,446 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive. |
Recent Accounting Pronouncements | 2. Summary of Significant Accounting Principles Basis of Accounting and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the rules and regulations of the U.S. Securities and Exchange Commission (SEC). In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements and, accordingly, these statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the fiscal year ended December 31, 2016. These condensed consolidated statements include the accounts of STORE Capital and its subsidiaries, which are wholly owned and controlled by the Company through its voting interest. One of the Company’s wholly owned subsidiaries, STORE Capital Advisors, LLC, provides all of the general and administrative services for the day‑to‑day operations of the consolidated group, including property acquisition and lease origination, real estate portfolio management and marketing, accounting and treasury services. The remaining subsidiaries were formed to acquire and hold real estate investments or to facilitate non‑recourse secured borrowing activities. Generally, the initial operations of the real estate subsidiaries are funded by an interest‑bearing intercompany loan from STORE Capital, and such intercompany loan is repaid when the subsidiary issues long‑term debt secured by its properties. All intercompany account balances and transactions have been eliminated in consolidation. Certain of the Company’s wholly owned consolidated subsidiaries were formed as special purpose entities. Each special purpose entity is a separate legal entity and is the sole owner of its assets and liabilities. The assets of the special purpose entities are not available to pay or otherwise satisfy obligations to the creditors of any owner or affiliate of the special purpose entity. At September 30, 2017 and December 31, 2016, these special purpose entities held assets totaling $5.0 billion and $4.3 billion, respectively, and had third-party liabilities totaling $1.8 billion and $1.9 billion, respectively. These assets and liabilities are included in the accompanying condensed consolidated balance sheets. 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, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to prior period balances to conform to the current period presentation. During the quarter ended December 31, 2016, the Company elected to early adopt Accounting Standards Update (ASU) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , described below in Recent Accounting Pronouncements . Under this new guidance, transfers to or from restricted cash which have previously been shown in the operating, investing or financing sections of the statement of cash flows are now required to be shown as part of the total change in cash, cash equivalents and restricted cash in the statement of cash flows. As a result of the adoption of ASU 2016-18, amounts previously shown as part of the change in other assets in the operating section and as transfers from or to restricted deposits in the investing section of the statement of cash flows for the nine months ended September 30, 2016 have been retrospectively adjusted as follows: As Previously As Adjusted Effect of Reported per ASU 2016-18 Change Nine Months Ended September 30, 2016 Operating Activities Change in operating assets: Other assets $ (3,222) $ (3,031) $ 191 Net cash provided by operating activities 182,768 182,959 191 Investing Activities Transfers to restricted deposits (25,353) — 25,353 Net cash used in investing activities (859,478) (834,125) 25,353 Net decrease in cash, cash equivalents and restricted cash (37,071) (11,527) 25,544 Cash, cash equivalents and restricted cash, beginning of period 67,115 83,438 16,323 Cash, cash equivalents and restricted cash, end of period 30,044 71,911 41,867 Segment Reporting The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting , established standards for the manner in which enterprises report information about operating segments. The Company views its operations as one reportable segment. Accounting for Real Estate Investments STORE Capital records the acquisition of real estate properties at cost, including acquisition and closing costs. The Company allocates the cost of real estate properties to the tangible and intangible assets and liabilities acquired based on their estimated relative fair values. Intangible assets and liabilities acquired may include the value of existing in-place leases, above-market or below-market lease value of in-place leases and ground lease intangibles, as applicable. Management uses multiple sources to estimate fair value, including independent appraisals and information obtained about each property as a result of its pre‑acquisition due diligence and its marketing and leasing activities. Historically, the Company has expensed transaction costs associated with real estate acquisitions accounted for as business combinations in the period incurred. As discussed in Recent Accounting Pronouncements below, the Company adopted ASU 2017-01, Business C ombinations (Topic 805): Clarifying the Definition of a Business, in January 2017 and, as a result, expects that fewer, if any, of its real estate acquisitions will be accounted for as business combinations and, consequently, that minimal, if any, transaction costs will be expensed subsequent to adoption. In‑place lease intangibles are valued based on management’s estimates of lost rent and carrying costs during the time it would take to locate a tenant if the property were vacant, considering current market conditions and costs to execute similar leases. In estimating lost rent and carrying costs, management considers market rents, real estate taxes, insurance, costs to execute similar leases including leasing commissions and other related costs. The value assigned to in‑place leases is amortized on a straight‑line basis as a component of depreciation and amortization expense typically over the remaining term of the related leases. The fair value of any above‑market and below‑market leases is estimated based on the present value of the difference between the contractual amounts to be paid pursuant to the in‑place lease and management’s estimate of current market lease rates for the property, measured over a period equal to the remaining term of the lease. Capitalized above‑market lease intangibles are amortized over the remaining term of the respective leases as a decrease to rental revenue. Below‑market lease intangibles are amortized as an increase in rental revenue over the remaining term of the respective leases plus the fixed‑rate renewal periods on those leases, if any. Should a lease terminate early, the unamortized portion of any related lease intangible is immediately recognized in operations. The Company’s real estate portfolio is depreciated using the straight‑line method over the estimated remaining useful life of the properties, which generally ranges from 30 to 40 years for buildings and is generally 15 years for land improvements. Properties classified as held for sale are recorded at the lower of their carrying value or their fair value, less anticipated closing costs. Any properties classified as held for sale are not depreciated. Impairment STORE Capital reviews its real estate investments and related lease intangibles periodically for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through operations. Management considers factors such as expected future undiscounted cash flows, estimated residual value, market trends (such as the effects of leasing demand and competition) and other factors, including bona fide purchase offers received from third parties, in making this assessment. These factors are classified as Level 3 inputs within the fair value hierarchy, discussed in Fair Value Measurements below. An asset is considered impaired if the carrying value of the asset exceeds its estimated undiscounted cash flows and the impairment is calculated as the amount by which the carrying value of the asset exceeds its estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results. During the nine months ended September 30, 2017, the Company recognized an aggregate provision for impairment of real estate of $11.9 million, representing $7.6 million recognized in the third quarter related to two properties which became vacant during the quarter and $4.3 million recognized in the first quarter associated with a property sold in the second quarter. The estimated fair value of the impaired real estate assets at September 30, 2017 was $12.7 million; there were no impaired assets as of December 31, 2016. Revenue Recognition STORE Capital leases real estate to its tenants under long‑term net leases that are predominantly classified as operating leases. Direct costs associated with lease origination, offset by any lease origination fees received, are deferred and amortized over the related lease term as an adjustment to rental revenue. Substantially all of the leases are triple net, which provide that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. In certain circumstances, the Company may collect property taxes from its customers and remit those taxes to governmental authorities; such property taxes are presented on a net basis in the condensed consolidated statements of income. The Company’s leases generally provide for rent escalations throughout the lease terms. For leases that provide for specific contractual escalations, rental revenue is recognized on a straight‑line basis so as to produce a constant periodic rent over the term of the lease. Accordingly, accrued rental revenue, calculated as the aggregate difference between the rental revenue recognized on a straight‑line basis and scheduled rents, represents unbilled rent receivables that the Company will receive only if the tenants make all rent payments required through the expiration of the lease. The Company provides an estimated reserve for uncollectible straight‑line rental revenue based on management’s assessment of the risks inherent in those lease contracts, giving consideration to industry default rates for long‑term receivables. There was $19.5 million and $15.0 million of accrued straight‑line rental revenue, net of allowances of $2.9 million and $4.6 million, at September 30, 2017 and December 31, 2016, respectively, which were included in other assets, net, on the condensed consolidated balance sheets. Leases that have contingent rent escalators indexed to future increases in the Consumer Price Index (CPI) may adjust over a one‑year period or over multiple‑year periods. Generally, these escalators increase rent at the lesser of (a) 1 to 1.25 times the increase in the CPI over a specified period or (b) a fixed percentage. Because of the volatility and uncertainty with respect to future changes in the CPI, the Company’s inability to determine the extent to which any specific future change in the CPI is probable at each rent adjustment date during the entire term of these leases and the Company’s view that the multiplier does not represent a significant leverage factor, increases in rental revenue from leases with this type of escalator are recognized only after the changes in the rental rates have actually occurred. For leases that have contingent rentals that are based on a percentage of the tenant’s gross sales, the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. Less than 1.5% of the Company’s investment portfolio is subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales. The Company suspends revenue recognition when the collectibility of amounts due pursuant to a lease is no longer reasonably assured or if the tenant’s monthly lease payments become more than 60 days past due, whichever is earlier. The Company reviews its accounts receivable for collectibility on a regular basis, taking into consideration changes in factors such as 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 where the property is located. In the event that the collectibility of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write‑off of the specific receivable will be made. Loans Receivable STORE Capital holds its loans receivable for long‑term investment. Loans receivable are carried at amortized cost, including related unamortized discounts or premiums, if any. Revenue Recognition The Company recognizes interest income on loans receivable using the effective‑interest method applied on a loan‑by‑loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest income over the term of the related loan receivable using the effective-interest method. A loan receivable is placed on nonaccrual status when the loan has become more than 60 days past due, or earlier if management determines that full recovery of the contractually specified payments of principal and interest is doubtful. While on nonaccrual status, interest income is recognized only when received. As of September 30, 2017, there was one mortgage loan receivable with an outstanding principal balance of $6.3 million on nonaccrual status. There were no loans on nonaccrual status at December 31, 2016. Impairment and Provision for Loan Losses The Company periodically evaluates the collectibility of its loans receivable, including accrued interest, by analyzing the underlying property‑level economics and trends, collateral value and quality and other relevant factors in determining the adequacy of its allowance for loan losses. A loan is determined to be impaired when, in management’s judgment based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Specific allowances for loan losses are provided for impaired loans on an individual loan basis in the amount by which the carrying value exceeds the estimated fair value of the underlying collateral less disposition costs. There was no allowance for loan losses at September 30, 2017 or December 31, 2016. Direct Financing Receivables Certain of the Company’s real estate investment transactions are accounted for as direct financing leases. The Company records the direct financing receivables at their net investment, determined as the aggregate minimum lease payments and the estimated residual value of the leased property less unearned income. The unearned income is recognized over the life of the related contracts so as to produce a constant rate of return on the net investment in the asset. Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. The Company invests cash primarily in money‑market funds of a major financial institution, consisting predominantly of U.S. Government obligations. Restricted Cash Restricted cash primarily consists of reserve account deposits held by lenders, including deposits required to be used for future investment in real estate assets, and escrow deposits. The Company had $15.4 million and $19.0 million of restricted cash and deposits in escrow at September 30, 2017 and December 31, 2016, respectively, which were included in other assets, net, on the condensed consolidated balance sheets. Deferred Costs Financing costs related to the issuance of the Company’s long-term debt are deferred and amortized as an increase to interest expense over the term of the related debt instrument using the effective-interest method and are reported as a reduction of the related debt balance on the condensed consolidated balance sheets. Deferred financing costs related to the establishment of the Company's credit facility are deferred and amortized to interest expense over the term of the credit facility and are included in other assets, net, on the condensed consolidated balance sheets. Derivative Instruments and Hedging Activities The Company may enter into derivatives contracts as part of its overall financing strategy to manage the Company’s exposure to changes in interest rates associated with current and/or future debt issuances. The Company does not use derivatives for trading or speculative purposes. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company enters into derivative financial instruments only with counterparties with high credit ratings and with major financial institutions with which the Company may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. The Company records its derivatives on the balance sheet at fair value. All derivatives subject to a master netting arrangement in accordance with the associated master International Swap and Derivatives Association agreement have been presented on a net basis by counterparty portfolio for purposes of balance sheet presentation and related disclosures. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives 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. Hedge accounting generally provides for the matching of the earnings effect of the hedged forecasted transactions in a cash flow hedge. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedges are reclassified to operations as an adjustment to interest expense as interest payments are made on the hedged debt transaction. As of September 30, 2017, the Company had one interest rate floor and five interest rate swap agreements in place. Two of the swaps, with current notional amounts of $11.8 million and $6.2 million, were designated as cash flow hedges associated with the Company’s secured, variable‑rate mortgage note payable due in 2019 (Note 4). One of the interest rate swaps has a notional amount of $100 million and was designated as a cash flow hedge of the Company’s $100 million variable-rate bank term loan due in 2019 (Note 4). The remaining two interest rate swaps and related interest rate floor transaction have an aggregate notional amount of $100 million and were designated as a cash flow hedge of the Company’s $100 million variable-rate bank term loan due in 2021 (Note 4). Fair Value Measurement The Company estimates fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: · Level 1—Quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access. · Level 2—Significant inputs that are observable, either directly or indirectly. These types of inputs would include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets in inactive markets and market‑corroborated inputs. · Level 3—Inputs that are unobservable and significant to the overall fair value measurement of the assets or liabilities. These types of inputs include the Company’s own assumptions. Share‑based Compensation Directors and key employees of the Company have been granted long‑term incentive awards, including restricted stock awards (RSAs) and restricted stock unit awards (RSUs) which provide such directors and employees with equity interests as an incentive to remain in the Company’s service and to align their interests with those of the Company’s stockholders. The Company estimates the fair value of RSAs at the date of grant and recognizes that amount in general and administrative expense on the condensed consolidated statements of income ratably over the vesting period at the greater of the amount amortized on a straight‑line basis or the amount vested. The fair value of the RSAs is based on the per-share price of the common stock on the date of the grant. Prior to the Company’s IPO, the fair value was based on the per‑share price of the common stock issued in the Company’s private equity offerings. During the nine months ended September 30, 2017, the Company granted RSAs representing 120,140 shares of restricted common stock to its directors and key employees. During the same period, RSAs representing 213,233 shares of previously issued restricted stock vested and RSAs representing 9,307 shares of previously issued restricted stock were forfeited. In connection with the vesting of the RSAs, the Company repurchased 56,097 shares as a result of participant elections to surrender common shares to the Company to satisfy statutory tax withholding obligations under the Company’s equity-based compensation plans. As of September 30, 2017, the Company had 357,316 shares of restricted common stock outstanding. The Company values the RSUs (which contain both a market condition and a service condition) using a Monte Carlo simulation model on the date of grant and recognizes that amount in general and administrative expense on the condensed consolidated statements of income on a tranche by tranche basis ratably over the vesting periods. During the nine months ended September 30, 2017, the Company awarded 373,719 RSUs to its executive officers. At September 30, 2017, there were 1,093,153 RSUs outstanding. Income Taxes As a REIT, the Company generally will not be subject to federal income tax. It is still subject, however, to state and local income taxes and to federal income and excise tax on its undistributed income. STORE Investment Corporation is the Company’s wholly owned taxable REIT subsidiary (TRS) created to engage in non‑qualifying REIT activities. The TRS is subject to federal, state and local income taxes. Management of the Company determines whether any tax positions taken or expected to be taken meet the “more‑likely‑than‑not” threshold of being sustained by the applicable federal, state or local tax authority. Certain state tax returns filed for 2012 and tax returns filed for 2013 through 2016 are subject to examination by these jurisdictions. As of September 30, 2017 and December 31, 2016, management concluded that there is no tax liability relating to uncertain income tax positions. The Company’s policy is to recognize interest related to any underpayment of income taxes as interest expense and to recognize any penalties as general and administrative expenses. There was no accrual for interest or penalties at September 30, 2017 or December 31, 2016. Net Income Per Common Share Net income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings Per Share . The guidance requires the classification of the Company’s unvested restricted common shares, which contain rights to receive non‑forfeitable dividends, as participating securities requiring the two‑class method of computing net income per common share. The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net income $ 28,580 $ 36,343 $ 121,030 $ 91,385 Less: earnings attributable to unvested restricted shares (105) (133) (320) (380) Net income used in basic and diluted income per share $ 28,475 $ 36,210 $ 120,710 $ 91,005 Denominator: Weighted average common shares outstanding 190,015,850 153,602,720 174,856,940 146,967,323 Less: Weighted average number of shares of unvested restricted stock (359,755) (458,994) (375,182) (475,706) Weighted average shares outstanding used in basic income per share 189,656,095 153,143,726 174,481,758 146,491,617 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 387,012 318,322 — 255,577 Weighted average shares outstanding used in diluted income per share 190,043,107 153,462,048 174,481,758 146,747,194 (a) For the three months ended September 30, 2017 and 2016, excludes 110,001 shares and 216,141 shares, respectively, and for the nine months ended September 30, 2017 and 2016, excludes 106,265 shares and 196,446 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or the SEC. The Company adopts the new pronouncements as of the specified effective date. When permitted, the Company may elect to early adopt the new pronouncements. Unless otherwise discussed, these new accounting pronouncements include technical corrections to existing guidance or introduce new guidance related to specialized industries or entities and, therefore, have minimal, if any, impact on the Company’s financial position, results of operations or cash flows upon adoption. In May 2014, with subsequent updates in 2015 and 2016, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which establishes a principles-based approach for accounting for revenue from contracts with customers. The standard does not apply to revenue recognition for lease contracts or to the interest income recognized from loans receivable, which together represent over 99% of the Company’s revenue. ASU 2014-09 is effective for the Company on January 1, 2018 with early adoption permitted and allows for full retrospective or modified retrospective methods of adoption. In accordance with the Company’s implementation plan for adoption, it has evaluated its revenue streams and identified the very few that fall within the scope of this new accounting standard including any impact to the accounting for sales of real estate assets. The Company expects to complete its in-depth review of the revenue contracts and related performance obligations in the fourth quarter of 2017 and finalize the revision of its internal accounting procedures and controls around the revenue recognition process. The Company currently expects to adopt the standard on January 1, 2018 using the modified retrospective method for transition under the standard, in which case the cumulative effect of applying the standard, if any, would be recognized at the date of initial application; the Company currently does not anticipate a material cumulative effect adjustment. This new revenue guidance includes changes to the accounting for sales of real estate properties; however, based on the Company’s analysis, the new standard is not expected to have a material impact on the Company’s recognition of real estate sales and resulting recognition of a gain or loss. The Company will consider whether any additional disclosures required upon the adoption of this standard are applicable to the Company’s financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) to amend the accounting for leases. The new standard requires lessees to classify leases as either finance or operating leases based on certain criteria and record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The standard also eliminates current real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. Both lessees and lessors are permitted to make an election to apply a package of practical expedients available for implementation under the standard. The accounting applied by a lessor is largely unchanged under ASU 2016-02; however, the standard requires that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in negotiating a lease. Under existing standards, certain of these costs are capitalizable and, therefore, this new standard may result in these costs being expensed as incurred after adoption; during the first nine months of 2017, the Company capitalized $1.5 million of initial direct costs which are included in other assets on the condensed consolidated balance sheet. Although primarily a lessor, the Company is also a lessee under several ground lease arrangements and under its corporate office lease. The Company has completed its initial inventory and evaluation of these leases and expects that it will be required to recognize a right-of-use asset and a lease liability for the present value of the minimum lease payments. The Company is in the process of preparing and reviewing the initial estimates of the amount of its right-of-use assets and lease liabilities; based on the Company’s current list of contracts under which it is a lessee, the Company estimates that its right-of-use assets to be recognized upon adoption will be less than 1% of total assets. Approximately 98% of the Company’s lease contracts (under which the Company is the lessor) are “triple-net” leases, which means that its tenants are responsible for making the payments to third parties for operating expenses such as, property taxes, insurance and common area maintenance (“CAM”) costs associated with the properties the Company leases to them. Under the current lease accounting guidance, these payments made by its tenants to third parties are excluded from lease payments and rental revenue. Upon adoption of the new lease accounting standard in 2019, these lease executory cost payments will be accounted for as activities or costs that are not components of the lease contract. As a result, the Company may be required to show these payments made by its tenants on a gross basis (for example, both as property tax expense and as corresponding revenue from the tenant who makes the payment directly to the third party) in its consolidated statements of income. Although there is not expected to be any impact to net inc |
Summary of Significant Accoun14
Summary of Significant Accounting Principles (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Principles | |
Schedule of Adoption of ASU 2016-18 | As Previously As Adjusted Effect of Reported per ASU 2016-18 Change Nine Months Ended September 30, 2016 Operating Activities Change in operating assets: Other assets $ (3,222) $ (3,031) $ 191 Net cash provided by operating activities 182,768 182,959 191 Investing Activities Transfers to restricted deposits (25,353) — 25,353 Net cash used in investing activities (859,478) (834,125) 25,353 Net decrease in cash, cash equivalents and restricted cash (37,071) (11,527) 25,544 Cash, cash equivalents and restricted cash, beginning of period 67,115 83,438 16,323 Cash, cash equivalents and restricted cash, end of period 30,044 71,911 41,867 |
Reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share | The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net income $ 28,580 $ 36,343 $ 121,030 $ 91,385 Less: earnings attributable to unvested restricted shares (105) (133) (320) (380) Net income used in basic and diluted income per share $ 28,475 $ 36,210 $ 120,710 $ 91,005 Denominator: Weighted average common shares outstanding 190,015,850 153,602,720 174,856,940 146,967,323 Less: Weighted average number of shares of unvested restricted stock (359,755) (458,994) (375,182) (475,706) Weighted average shares outstanding used in basic income per share 189,656,095 153,143,726 174,481,758 146,491,617 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 387,012 318,322 — 255,577 Weighted average shares outstanding used in diluted income per share 190,043,107 153,462,048 174,481,758 146,747,194 (a) For the three months ended September 30, 2017 and 2016, excludes 110,001 shares and 216,141 shares, respectively, and for the nine months ended September 30, 2017 and 2016, excludes 106,265 shares and 196,446 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments: | |
Schedule of gross real estate and loan activity | During the nine months ended September 30, 2017, the Company had the following gross real estate and loan activity (dollars in thousands): Number of Dollar Investment Amount of Locations Investments (a) Gross investments, December 31, 2016 1,660 $ 5,124,516 Acquisition of and additions to real estate (b)(c)(d) 204 979,869 Investment in loans and direct financing receivables 3 28,844 Sales of real estate (40) (182,198) Principal collections on loans and direct financing receivables (d) (1) (25,099) Provision for impairment of real estate — (11,940) Other — (134) Gross investments, September 30, 2017 5,913,858 Less accumulated depreciation and amortization (393,037) Net investments, September 30, 2017 1,826 $ 5,520,821 (a) The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. (b) Includes $0.8 million of interest capitalized to properties under construction. (c) Excludes $23.4 million of tenant improvement advances disbursed in 2017 which were accrued as of December 31, 2016. (d) One loan receivable was repaid in full through a $2.0 million non-cash transaction in which the Company acquired the underlying mortgaged property and leased it back to the borrower. |
Schedule of investment portfolio diversification by industry | The following table shows information regarding the diversification of the Company’s total investment portfolio among the different industries in which its tenants and borrowers operate as of September 30, 2017 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments (a) Investments Restaurants 727 $ 1,176,632 20 % Early childhood education centers 170 379,084 7 Furniture stores 46 371,453 6 Movie theaters 39 355,393 6 Health clubs 67 343,455 6 Family entertainment centers 25 231,893 4 Farm and ranch supply stores 22 198,854 3 All manufacturing industries 156 769,090 13 All other service industries 475 1,487,016 25 All other retail industries 99 600,988 10 1,826 $ 5,913,858 100 % (a) The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Schedule detailing intangible lease assets and related accumulated amortization | The following details intangible lease assets and related accumulated amortization (in thousands): September 30, December 31, 2017 2016 In-place lease assets $ 57,816 $ 61,634 Ground lease interest assets 21,363 20,430 Above-market lease assets 9,492 10,273 Total intangible lease assets 88,671 92,337 Accumulated amortization (23,220) (19,515) Net intangible lease assets $ 65,451 $ 72,822 |
Schedule of future minimum rentals to be received under operating leases | Scheduled future minimum rentals to be received under the remaining noncancelable term of the operating leases in place as of September 30, 2017, are as follows (in thousands): Remainder of 2017 $ 113,052 2018 452,475 2019 451,699 2020 450,079 2021 449,344 2022 449,466 Thereafter 4,209,774 Total future minimum rentals $ 6,575,889 |
Schedule summarizing loans and direct financing receivables | The Company’s loans and direct financing receivables are summarized below (dollars in thousands): Amount Outstanding Interest Maturity September 30, December 31, Type Rate (a) Date 2017 2016 Six mortgage loans receivable (b) 8.60 % 2017 - 2022 $ 29,171 $ 22,599 Five mortgage loans receivable 8.57 % 2032 - 2038 42,863 43,002 Seven mortgage loans receivable (c) 8.70 % 2053 - 2056 64,608 70,173 Total mortgage loans receivable 136,642 135,774 Eleven equipment and other loans receivable 9.29 % 2017 - 2025 10,912 9,233 Total principal amount outstanding—loans receivable 147,554 145,007 Unamortized loan origination costs 1,256 1,205 Direct financing receivables 124,455 122,998 Total loans and direct financing receivables $ 273,265 $ 269,210 (a) Represents the weighted average interest rate as of the balance sheet date. (b) One loan outstanding at December 31, 2016 was repaid in full during the nine months ended September 30, 2017 through a $2.0 million non-cash transaction in which the Company acquired the underlying mortgaged property and leased it back to the borrower. (c) Four of these mortgage loans allow for prepayment in whole, but not in part, with penalties ranging from 20% to 70% depending on the timing of the prepayment. Two loans outstanding at December 31, 2016 were either repaid in full or sold during the nine months ended September 30, 2017 and the Company collected $0.1 million in prepayment penalty fees. |
Schedule of maturities of loans receivable | Absent prepayments, scheduled maturities are expected to be as follows (in thousands): Scheduled Principal Balloon Total Payments Payments Payments Remainder of 2017 $ 238 $ 18,056 $ 18,294 2018 1,534 850 2,384 2019 2,188 4,374 6,562 2020 2,355 — 2,355 2021 1,301 1,484 2,785 2022 841 8,408 9,249 Thereafter 69,709 36,216 105,925 Total principal payments $ 78,166 $ 69,388 $ 147,554 |
Schedule of the components of the investments accounted for as direct financing receivables | As of September 30, 2017 and December 31, 2016, the Company had $124.5 million and $123.0 million, respectively, of investments accounted for as direct financing leases; the components of the investments accounted for as direct financing receivables were as follows (in thousands): September 30, December 31, 2017 2016 Minimum lease payments receivable $ 296,280 $ 300,832 Estimated residual value of leased assets 14,815 14,500 Unearned income (186,640) (192,334) Net investment $ 124,455 $ 122,998 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of maturities of long-term debt | As of September 30, 2017, the scheduled maturities, including balloon payments, on the Company’s aggregate long-term debt obligations are expected to be as follows (in thousands): Scheduled Principal Balloon Payments Payments Total Remainder of 2017 $ 6,537 $ — $ 6,537 2018 26,432 6,664 33,096 2019 26,953 122,686 149,639 2020 23,860 293,632 317,492 2021 21,016 229,366 250,382 2022 20,506 211,493 231,999 Thereafter 56,436 1,299,199 1,355,635 $ 181,740 $ 2,163,040 $ 2,344,780 |
senior unsecured notes and term loans payable | |
Schedule of debt | The Company’s senior unsecured notes and term loans payable are summarized below (dollars in thousands): Outstanding Balance Maturity Interest September 30, December 31, Date Rate 2017 2016 Notes Payable: Series A issued November 2015 Nov. 2022 4.95 % $ 75,000 $ 75,000 Series B issued November 2015 Nov. 2024 5.24 % 100,000 100,000 Series C issued April 2016 Apr. 2026 4.73 % 200,000 200,000 Total notes payable 375,000 375,000 Term Loans: Term Loan issued March 2017 Mar. 2019 2.57 % (a) 100,000 — Term Loan issued April 2016 Apr. 2021 2.44 % (a) 100,000 100,000 Total term loans 200,000 100,000 Unamortized deferred financing costs (4,624) (4,810) Total unsecured notes and term loans payable, net $ 570,376 $ 470,190 (a) Loan is a variable‑rate loan which resets monthly at one-month LIBOR + the applicable credit spread which was 1.10% at September 30, 2017. The Company has entered into interest rate swap agreements that effectively convert the floating rate to the fixed rate noted above as of September 30, 2017. |
Non-recourse debt obligations | |
Schedule of debt | The Company’s non-recourse debt obligations of consolidated special purpose entity subsidiaries are summarized below (dollars in thousands): Outstanding Balance Maturity Interest September 30, December 31, Date Rate 2017 2016 Non-recourse net-lease mortgage notes: $214,500 Series 2012-1, Class A $ — $ 200,749 $150,000 Series 2013-1, Class A-1 Mar. 2020 4.16 % 138,663 140,724 $107,000 Series 2013-2, Class A-1 Jul. 2020 4.37 % 99,869 101,265 $77,000 Series 2013-3, Class A-1 Nov. 2020 4.24 % 72,320 73,307 $120,000 Series 2014-1, Class A-1 Apr. 2021 4.21 % 118,000 118,450 $95,000 Series 2015-1, Class A-1 Apr. 2022 3.75 % 93,852 94,208 $102,000 Series 2013-1, Class A-2 Mar. 2023 4.65 % 94,291 95,693 $97,000 Series 2013-2, Class A-2 Jul. 2023 5.33 % 90,536 91,801 $100,000 Series 2013-3, Class A-2 Nov. 2023 5.21 % 93,922 95,204 $140,000 Series 2014-1, Class A-2 Apr. 2024 5.00 % 137,667 138,192 $270,000 Series 2015-1, Class A-2 Apr. 2025 4.17 % 266,737 267,750 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 3.96 % 196,777 199,423 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 4.32 % 134,021 — Total non-recourse net-lease mortgage notes 1,536,655 1,616,766 Non-recourse mortgage notes payable: $2,956 note issued June 2013 — 2,663 $7,088 note issued April 2007 — 6,457 $4,400 note issued August 2007 — 3,586 $8,000 note issued January 2012; assumed in December 2013 Jan. 2018 4.778 % 6,740 6,960 $20,530 note issued December 2011; amended February 2012 Jan. 2019 5.275 % (a) 17,970 18,359 $6,500 note issued December 2012 Dec. 2019 4.806 % 5,777 5,900 $16,100 note issued February 2014 Mar. 2021 4.83 % 14,879 15,159 $13,000 note issued May 2012 May 2022 5.195 % 11,500 11,737 $14,950 note issued July 2012 Aug. 2022 4.95 % 12,874 13,135 $26,000 note issued August 2012 Sept. 2022 5.05 % 23,150 23,625 $6,400 note issued November 2012 Dec. 2022 4.707 % 5,707 5,827 $11,895 note issued March 2013 Apr. 2023 4.7315 % 10,712 10,931 $17,500 note issued August 2013 Sept. 2023 5.46 % 16,092 16,380 $10,075 note issued March 2014 Apr. 2024 5.10 % 9,573 9,691 $21,125 note issued July 2015 Aug. 2025 4.36 % 21,099 21,125 $65,000 note issued June 2016 Jul. 2026 4.75 % 63,886 64,614 $7,750 note issued February 2013 Mar. 2038 4.81 % (b) 6,972 7,114 $6,944 notes issued March 2013 Apr. 2038 4.50 % (c) 6,194 6,330 Total non-recourse mortgage notes payable 233,125 249,593 Unamortized net (discount) premium (399) (336) Unamortized deferred financing costs (28,038) (32,542) Total non-recourse debt obligations of consolidated special purpose entities, net $ 1,741,343 $ 1,833,481 (a) Note is a variable‑rate note which resets monthly at one-month LIBOR + 3.50%. The Company has entered into two interest rate swap agreements that effectively convert the floating rate on an $11.8 million portion and a $6.2 million portion of this mortgage note payable to fixed rates of 5.299% and 5.230%, respectively. (b) Interest rate is effective until March 2023 and will reset to greater of (1) initial rate plus 400 basis points or (2) Treasury rate plus 400 basis points. (c) Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate. |
Summary of Significant Accoun17
Summary of Significant Accounting Principles (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017USD ($)segmentpropertyitem | Mar. 31, 2017USD ($) | Sep. 30, 2017USD ($)segmentpropertyitem | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | ||
Basis of Accounting and Principles of Consolidation | ||||||
Assets owned | $ 5,614,717 | $ 5,614,717 | $ 4,941,668 | |||
Liabilities owed | 2,521,511 | $ 2,521,511 | 2,458,413 | |||
Segment Reporting | ||||||
Number of Reportable Segments | segment | 1 | |||||
Impairments | ||||||
Provision for impairment of real estate | $ 7,670 | $ 4,300 | $ 11,940 | [1] | ||
Number of properties which became vacant | property | 2 | 2 | ||||
Estimate fair value of impaired real estate assets | $ 12,700 | |||||
Asset impaired | 0 | |||||
Revenue recognition | ||||||
Accrued straight-line rental revenue, net of allowance | $ 19,500 | 19,500 | 15,000 | |||
Accrued straight-line rental revenue, allowance | $ 2,900 | $ 2,900 | 4,600 | |||
Leases indexed to increases in the CPI, minimum adjustment period | 1 year | |||||
Leases indexed to increases in the CPI, minimum multiplier increasing rent (in multipliers) | 1 | |||||
Leases indexed to increases in the CPI, maximum multiplier increasing rent (in multipliers) | 1.25 | |||||
Loans receivable | ||||||
Number of loans on non-accrual status | item | 1 | 1 | ||||
Allowance for loan losses | $ 0 | 0 | ||||
Non accrual status loan receivables | $ 6,300 | 6,300 | 0 | |||
Restricted Cash and Escrow Deposits | ||||||
Restricted cash included in other assets | 15,368 | 15,368 | 19,000 | $ 41,867 | ||
Derivative Instruments and Hedging Activities | ||||||
Outstanding balance | $ 2,344,780 | $ 2,344,780 | ||||
Maximum | ||||||
Revenue recognition | ||||||
Portion of investment portfolio subject to contingent rent based upon tenant sales (as a percent) | 1.50% | 1.50% | ||||
Rent receivables | ||||||
Revenue recognition | ||||||
Maximum past due period for tenant lease payments causing suspension of revenue recognition. | 60 days | |||||
Loans receivable | ||||||
Loans receivable | ||||||
Maximum past due period for loans payments causing nonaccrual status. | 60 days | |||||
Buildings | Maximum | ||||||
Accounting for Real Estate Investments | ||||||
Property, Plant and Equipment, Useful Life | 40 years | |||||
Buildings | Minimum | ||||||
Accounting for Real Estate Investments | ||||||
Property, Plant and Equipment, Useful Life | 30 years | |||||
Land improvements | ||||||
Accounting for Real Estate Investments | ||||||
Property, Plant and Equipment, Useful Life | 15 years | |||||
Consolidated special purpose entities | ||||||
Basis of Accounting and Principles of Consolidation | ||||||
Assets owned | $ 5,000,000 | $ 5,000,000 | 4,300,000 | |||
Liabilities owed | $ 1,800,000 | $ 1,800,000 | 1,900,000 | |||
Interest rate swaps | ||||||
Derivative Instruments and Hedging Activities | ||||||
Number of agreements | segment | 5 | 5 | ||||
Interest rate swap contract two | ||||||
Derivative Instruments and Hedging Activities | ||||||
Number of agreements | segment | 2 | 2 | ||||
Interest rate floor | ||||||
Derivative Instruments and Hedging Activities | ||||||
Number of agreements | segment | 1 | 1 | ||||
Senior Unsecured Notes | ||||||
Derivative Instruments and Hedging Activities | ||||||
Outstanding balance | $ 200,000 | $ 200,000 | 100,000 | |||
Senior Unsecured Notes | Term Loan issued April 2016 | ||||||
Derivative Instruments and Hedging Activities | ||||||
Outstanding balance | 100,000 | 100,000 | $ 100,000 | |||
Designated as hedging instrument | Interest rate swap contract one | ||||||
Derivative Instruments and Hedging Activities | ||||||
Current notional amounts | 11,800 | 11,800 | ||||
Designated as hedging instrument | Interest rate swap contract two | ||||||
Derivative Instruments and Hedging Activities | ||||||
Current notional amounts | 6,200 | 6,200 | ||||
Designated as hedging instrument | Interest rate swap contract three | ||||||
Derivative Instruments and Hedging Activities | ||||||
Current notional amounts | 100,000 | 100,000 | ||||
Outstanding balance | 100,000 | 100,000 | ||||
Designated as hedging instrument | Interest rate swap contract four | ||||||
Derivative Instruments and Hedging Activities | ||||||
Current notional amounts | 100,000 | 100,000 | ||||
Outstanding balance | $ 100,000 | $ 100,000 | ||||
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Summary of Significant Accoun18
Summary of Significant Accounting Principles - Share Based Compensation and Other (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Examination, Penalties and Interest Accrued | ||||
Uncertain income tax positions | $ 0 | $ 0 | ||
Accrual for interest or penalties | 0 | 0 | ||
Numerator: | ||||
Net income | 28,580,000 | $ 36,343,000 | 121,030,000 | $ 91,385,000 |
Less: earnings attributable to unvested restricted shares | (105,000) | (133,000) | (320,000) | (380,000) |
Net income used in basic and diluted income per share | $ 28,475,000 | $ 36,210,000 | $ 120,710,000 | $ 91,005,000 |
Denominator: | ||||
Weighted average common shares outstanding | 190,015,850 | 153,602,720 | 174,856,940 | 146,967,323 |
Less: Weighted average number of shares of unvested restricted stock (in shares) | (359,755) | (458,994) | (375,182) | (475,706) |
Weighted average shares outstanding used in basic income per share (in shares) | 189,656,095 | 153,143,726 | 174,481,758 | 146,491,617 |
Effects of dilutive securities: | ||||
Add: Treasury stock method impact of potentially dilutive securities (in shares) | 387,012 | 318,322 | 255,577 | |
Weighted average shares outstanding used in diluted income per share (in shares) | 190,043,107 | 153,462,048 | 174,481,758 | 146,747,194 |
Antidilutive unvested restricted shares (in shares) | 110,001 | 216,141 | 106,265 | 196,446 |
Restricted Stock | ||||
Share‑based Compensation | ||||
Granted in period (in shares) | 120,140 | |||
Vested in period (in shares) | 213,233 | |||
Shares repurchased in connection with tax withholding obligations (in shares) | 56,097 | |||
Forfeited in period (in shares) | (9,307) | |||
Outstanding (in shares) | 357,316 | 357,316 | ||
Restricted Stock Units | Executive Officer | Vesting Based On Service And Market Conditions | ||||
Share‑based Compensation | ||||
Granted in period (in shares) | 373,719 | |||
Outstanding (in shares) | 1,093,153 | 1,093,153 |
Summary of Significant Accoun19
Summary of Significant Accounting Principles - Cash (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Other assets | $ 3,884 | $ 3,031 |
Net cash provided by operating activities | 229,405 | 182,959 |
Investing activities | ||
Net cash used in investing activities | (782,277) | (834,125) |
Net decrease in cash, cash equivalents and restricted cash | (22,812) | (11,527) |
Cash, cash equivalents and restricted cash, beginning of period | 73,166 | 83,438 |
Cash, cash equivalents and restricted cash, end of period | $ 50,354 | 71,911 |
As previously reported | ||
Operating activities | ||
Other assets | (3,222) | |
Net cash provided by operating activities | 182,768 | |
Investing activities | ||
Transfers to restricted deposits | (25,353) | |
Net cash used in investing activities | (859,478) | |
Net decrease in cash, cash equivalents and restricted cash | (37,071) | |
Cash, cash equivalents and restricted cash, beginning of period | 67,115 | |
Cash, cash equivalents and restricted cash, end of period | 30,044 | |
As Adjusted per ASU 2016-18 | Accounting Standards Update 2016-18 [Member] | ||
Operating activities | ||
Other assets | (3,031) | |
Net cash provided by operating activities | 182,959 | |
Investing activities | ||
Net cash used in investing activities | (834,125) | |
Net decrease in cash, cash equivalents and restricted cash | (11,527) | |
Cash, cash equivalents and restricted cash, beginning of period | 83,438 | |
Cash, cash equivalents and restricted cash, end of period | 71,911 | |
Effect of Change | ||
Operating activities | ||
Other assets | 191 | |
Net cash provided by operating activities | 191 | |
Investing activities | ||
Transfers to restricted deposits | 25,353 | |
Net cash used in investing activities | 25,353 | |
Net decrease in cash, cash equivalents and restricted cash | 25,544 | |
Cash, cash equivalents and restricted cash, beginning of period | 16,323 | |
Cash, cash equivalents and restricted cash, end of period | $ 41,867 |
Summary of Significant Accoun20
Summary of Significant Accounting Principles - New Accounting Pronouncements (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Maximum percentage of right of use assets to be recognized upon adoption of ASU | 1.00% |
Percent of triple net leases | 98.00% |
Other Assets [Member] | |
Initial direct lease costs capitalized | $ 1.5 |
Minimum | |
Percentage of total revenues from leases and interest income (as a percent) | 99.00% |
Investments - Locations (Detail
Investments - Locations (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2017USD ($)property | Mar. 31, 2017USD ($)property | Sep. 30, 2017USD ($)property | Sep. 30, 2017USD ($)property | Dec. 31, 2016USD ($)property | ||||
Investments: | ||||||||
Number of property locations of investments (in locations) | property | 1,826 | 1,660 | 1,660 | 1,826 | 1,660 | |||
Number of owned properties (in properties) | property | 1,777 | |||||||
Number of properties owned as direct financing receivables | property | 38 | |||||||
Number of ground lease interests (in properties) | property | 19 | |||||||
Number of properties which secure certain mortgage loans (in properties) | property | 30 | |||||||
Gross acquisition cost of real estate investments | $ 5,640,000 | |||||||
Number of Investment Locations | ||||||||
Gross investments | property | 1,660 | 1,660 | ||||||
Acquisition of and additions to real estate | property | 204 | |||||||
Investment in loans and direct financing receivables | property | 3 | |||||||
Sales of real estate | property | (40) | |||||||
Principal collections on loans and direct financing receivables | property | (1) | |||||||
Gross investments | property | 1,826 | 1,826 | ||||||
Dollar Amount of Investments | ||||||||
Gross investments | [1] | $ 5,124,516 | $ 5,124,516 | |||||
Acquisition of and additions to real estate | [1] | 979,869 | ||||||
Investment in loans and direct financing receivables | [1] | 28,844 | ||||||
Sales of real estate | [1] | (182,198) | ||||||
Principal collections on loans and direct financing receivables | [1] | 25,099 | ||||||
Provision for impairment of real estate | $ (7,670) | $ (4,300) | (11,940) | [1] | ||||
Other | [1] | (134) | ||||||
Gross investments | [1] | $ 5,913,858 | 5,913,858 | |||||
Less accumulated depreciation and amortization | [1] | (393,037) | ||||||
Net investments | $ 5,520,821 | [1] | $ 4,825,532 | |||||
Interest capitalized | 800 | |||||||
Tenant improvement advances disbursed | 23,400 | |||||||
Acquisition of underlying mortgaged property | $ 2,000 | |||||||
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Investments - Portfolio Diversi
Investments - Portfolio Diversification (Details) $ in Thousands | Sep. 30, 2017USD ($)property | Dec. 31, 2016USD ($)property | |
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 1,826 | 1,660 | |
Dollar Amount of Investments | $ | [1] | $ 5,913,858 | $ 5,124,516 |
Percentage of Total Dollar Amount of Investments | 100.00% | ||
Restaurants | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 727 | ||
Dollar Amount of Investments | $ | $ 1,176,632 | ||
Percentage of Total Dollar Amount of Investments | 20.00% | ||
Manufacturing | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 156 | ||
Dollar Amount of Investments | $ | $ 769,090 | ||
Percentage of Total Dollar Amount of Investments | 13.00% | ||
Furniture stores | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 46 | ||
Dollar Amount of Investments | $ | $ 371,453 | ||
Percentage of Total Dollar Amount of Investments | 6.00% | ||
Early childhood education centers | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 170 | ||
Dollar Amount of Investments | $ | $ 379,084 | ||
Percentage of Total Dollar Amount of Investments | 7.00% | ||
Movie theaters | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 39 | ||
Dollar Amount of Investments | $ | $ 355,393 | ||
Percentage of Total Dollar Amount of Investments | 6.00% | ||
Health clubs | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 67 | ||
Dollar Amount of Investments | $ | $ 343,455 | ||
Percentage of Total Dollar Amount of Investments | 6.00% | ||
Family entertainment centers | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 25 | ||
Dollar Amount of Investments | $ | $ 231,893 | ||
Percentage of Total Dollar Amount of Investments | 4.00% | ||
Farm and ranch supply stores | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 22 | ||
Dollar Amount of Investments | $ | $ 198,854 | ||
Percentage of Total Dollar Amount of Investments | 3.00% | ||
All other service industries | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 475 | ||
Dollar Amount of Investments | $ | $ 1,487,016 | ||
Percentage of Total Dollar Amount of Investments | 25.00% | ||
All other retail industries | |||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | |||
Number of Investment Locations | property | 99 | ||
Dollar Amount of Investments | $ | $ 600,988 | ||
Percentage of Total Dollar Amount of Investments | 10.00% | ||
[1] | The dollar amount of investments includes the investment in land, buildings, improvements and lease intangibles related to real estate investments as well as the carrying amount of the loans and direct financing receivables. |
Investments - Significant Credi
Investments - Significant Credit and Revenue Concentration (Details) | 9 Months Ended |
Sep. 30, 2017stateitem | |
Real estate investment portfolio | Geographic concentration | |
Significant Credit and Revenue Concentration | |
Number of customers | 380 |
Number of states over which real estate investments are dispersed (in states) | state | 48 |
Concentration Percentage for threshold | 10.00% |
Real estate investment portfolio | Geographic concentration | Texas | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 12.00% |
Number of states accounting for 10% or more | state | 1 |
Real estate investment portfolio | Customer concentration | |
Significant Credit and Revenue Concentration | |
Concentration Percentage for threshold | 10.00% |
Number of customers representing more than 10% | 0 |
Real estate investment portfolio | Customer concentration | Largest customer, investment portfolio | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 3.00% |
Real estate investment portfolio | Concept concentration | Minimum | |
Significant Credit and Revenue Concentration | |
Number of concepts (in categories) | 480 |
Investment portfolio revenues | Customer concentration | Largest customer, investment portfolio revenues | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 3.00% |
Investment portfolio revenues | Concept concentration | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 3.00% |
Investments - Intangible Lease
Investments - Intangible Lease Assets and Real Estate Investments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)propertyitem | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Intangible Lease Assets | |||||
Intangible lease assets | $ 88,671 | $ 88,671 | $ 92,337 | ||
Accumulated amortization | (23,220) | (23,220) | (19,515) | ||
Net intangible lease assets | 65,451 | 65,451 | 72,822 | ||
Amortization in the next five years | |||||
Remainder of 2017 | 1,500 | 1,500 | |||
2,018 | 5,800 | 5,800 | |||
2,019 | 5,600 | 5,600 | |||
2,020 | 5,100 | 5,100 | |||
2,021 | 4,700 | 4,700 | |||
2,022 | 4,500 | $ 4,500 | |||
Accounting for Real Estate Investments | |||||
Typical number of renewal options | item | 1 | ||||
Remaining noncancelable lease term | 14 years | ||||
Number of real estate properties vacant not subject to lease | property | 19 | ||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Remainder of 2017 | 113,052 | $ 113,052 | |||
2,018 | 452,475 | 452,475 | |||
2,019 | 451,699 | 451,699 | |||
2,020 | 450,079 | 450,079 | |||
2,021 | 449,344 | 449,344 | |||
2,022 | 449,466 | 449,466 | |||
Thereafter | 4,209,774 | 4,209,774 | |||
Total future minimum rentals | 6,575,889 | 6,575,889 | |||
Decrease to rental revenue | |||||
Amortization in the next five years | |||||
Remainder of 2017 | 300 | 300 | |||
2,018 | 1,100 | 1,100 | |||
2,019 | 1,100 | 1,100 | |||
2,020 | 1,100 | 1,100 | |||
2,021 | 600 | 600 | |||
2,022 | 400 | 400 | |||
Amortization expense | |||||
Intangible Lease Assets | |||||
Amount amortized | 1,500 | $ 1,600 | 4,800 | $ 4,800 | |
In -place lease assets | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 57,816 | $ 57,816 | 61,634 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 9 years | ||||
Ground lease interest assets | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 21,363 | $ 21,363 | 20,430 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 46 years | ||||
Above-market lease assets | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 9,492 | $ 9,492 | $ 10,273 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 7 years | ||||
Above-market lease assets | Decrease to rental revenue | |||||
Intangible Lease Assets | |||||
Amount amortized | $ 300 | $ 300 | $ 900 | $ 900 |
Investments - Loans and Direct
Investments - Loans and Direct Financing Receivables (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)propertyloan | Dec. 31, 2016USD ($)loan | |
Loans and direct financing receivables | ||
Number of loans receivable | loan | 29 | |
Number of properties which secure certain mortgage loans (in properties) | property | 30 | |
Gross carrying amount of loans receivable | $ 148,800 | |
Number of mortgage loans | loan | 18 | |
Number of short-term mortgage loans | loan | 6 | |
Amortization period of long-term mortgage loans | 40 years | |
Mortgage loans receivable | $ 136,642 | $ 135,774 |
Number of mortgage loans subject to interest rate increases | loan | 10 | |
Total principal outstanding - loans receivable | $ 147,554 | 145,007 |
Unamortized loan origination costs | 1,256 | 1,205 |
Direct financing receivables | 124,455 | 122,998 |
Total loans and direct financing receivables | 273,265 | $ 269,210 |
Non Cash acquisition of collateral property securing a mortgage note receivable | $ 2,000 | |
Minimum | ||
Loans and direct financing receivables | ||
Long-term mortgage loans receivable prepayment penalty rate (as a percent) | 1.00% | |
Maximum | ||
Loans and direct financing receivables | ||
Long-term mortgage loans receivable prepayment penalty rate (as a percent) | 20.00% | |
Mortgage loan receivable 0.086 interest rate maturity range 2017 to 2022 | ||
Loans and direct financing receivables | ||
Number of mortgage loans | loan | 6 | 6 |
Stated Interest Rate (as a percent) | 8.60% | 8.60% |
Mortgage loans receivable | $ 29,171 | $ 22,599 |
Number of mortgage loans repaid | loan | 1 | |
Mortgage loan receivable 0.0857 interest rate maturity range 2032 to 2038 | ||
Loans and direct financing receivables | ||
Number of mortgage loans | loan | 5 | 5 |
Stated Interest Rate (as a percent) | 8.57% | 8.57% |
Mortgage loans receivable | $ 42,863 | $ 43,002 |
Mortgage loan receivable 0.0870 interest rate maturity range 2053 to 2056 | ||
Loans and direct financing receivables | ||
Number of mortgage loans | loan | 7 | 7 |
Stated Interest Rate (as a percent) | 8.70% | 8.70% |
Mortgage loans receivable | $ 64,608 | $ 70,173 |
Number of mortgage loans allowing for prepayment in whole | loan | 4 | |
Number of mortgage loans repaid | loan | 2 | |
Prepayment penalty fees | $ 100 | |
Mortgage loan receivable 0.0870 interest rate maturity range 2053 to 2056 | Minimum | ||
Loans and direct financing receivables | ||
Prepayment penalties (as a percent) | 20.00% | |
Mortgage loan receivable 0.0870 interest rate maturity range 2053 to 2056 | Maximum | ||
Loans and direct financing receivables | ||
Prepayment penalties (as a percent) | 70.00% | |
Equipment and other loans receivable 0.0929 interest rate maturity range 2017 to 2025 | ||
Loans and direct financing receivables | ||
Number of loans secured by tenant's equipment or other assets | loan | 11 | |
Stated Interest Rate (as a percent) | 9.29% | 9.29% |
Equipment and other loans receivable | $ 10,912 | $ 9,233 |
Investments - Loans Receivable
Investments - Loans Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Scheduled loan receivable maturities | ||
Remainder of 2017 | $ 18,294 | |
2,018 | 2,384 | |
2,019 | 6,562 | |
2,020 | 2,355 | |
2,021 | 2,785 | |
2,022 | 9,249 | |
Thereafter | 105,925 | |
Total principal outstanding - loans receivable | 147,554 | $ 145,007 |
Components of investments accounted for as direct financing receivables | ||
Minimum lease payments receivable | 296,280 | 300,832 |
Estimated residual value of leased assets | 14,815 | 14,500 |
Unearned income | (186,640) | (192,334) |
Net investment | 124,455 | $ 122,998 |
Future minimum lease payments to be received | ||
Remainder of 2017 | 3,000 | |
2,018 | 12,200 | |
2,019 | 12,200 | |
2,020 | 12,200 | |
2,021 | 12,200 | |
2,022 | 12,200 | |
Scheduled principal | ||
Scheduled loan receivable maturities | ||
Remainder of 2017 | 238 | |
2,018 | 1,534 | |
2,019 | 2,188 | |
2,020 | 2,355 | |
2,021 | 1,301 | |
2,022 | 841 | |
Thereafter | 69,709 | |
Total principal outstanding - loans receivable | 78,166 | |
Balloon payments | ||
Scheduled loan receivable maturities | ||
Remainder of 2017 | 18,056 | |
2,018 | 850 | |
2,019 | 4,374 | |
2,021 | 1,484 | |
2,022 | 8,408 | |
Thereafter | 36,216 | |
Total principal outstanding - loans receivable | $ 69,388 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) $ in Thousands | Jul. 01, 2017 | Sep. 30, 2015USD ($) | Mar. 31, 2017USD ($)item | Apr. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2017USD ($)segmentloan | Dec. 31, 2016USD ($) |
Credit facilities | |||||||
Borrowings outstanding (in dollars) | $ 82,000 | $ 48,000 | |||||
Maximum unsecured debt leverage ratio (as a percent) | 50.00% | 50.00% | |||||
Unamortized financing costs related to all debt | 4,624 | 4,810 | |||||
Revolving credit facility | |||||||
Credit facilities | |||||||
Unamortized financing costs related to all debt | $ 2,000 | $ 2,700 | |||||
Term Loan Payable | |||||||
Credit facilities | |||||||
Initial term | 2 years | 5 years | |||||
Number of extension options | item | 3 | ||||||
Extension option term | 1 year | ||||||
Unsecured Term Notes Payable | |||||||
Principal amount | $ 100,000 | $ 100,000 | |||||
Term Loan Payable | One-Month LIBOR | |||||||
Credit facilities | |||||||
Debt Instrument interest rate description | one-month LIBOR | one-month LIBOR | |||||
Credit spread (as a percent) | 1.10% | ||||||
Term Loan Payable | One-Month LIBOR | Minimum | |||||||
Credit facilities | |||||||
Credit spread (as a percent) | 0.90% | 1.30% | 1.35% | ||||
Term Loan Payable | One-Month LIBOR | Maximum | |||||||
Credit facilities | |||||||
Credit spread (as a percent) | 1.75% | 2.15% | 2.15% | ||||
Senior Unsecured Notes | |||||||
Unsecured Term Notes Payable | |||||||
Contingent periodic interest rate increase for failure to maintain investment grade credit rating | 1.00% | ||||||
Prepayment applied to principal plus make-whole amount (as a percent) | 100.00% | ||||||
Principal amount | $ 375,000 | ||||||
Number of loans | loan | 3 | ||||||
Senior Unsecured Notes | Minimum | |||||||
Unsecured Term Notes Payable | |||||||
Prepayment threshold (as a percent) | 5.00% | ||||||
Interest rate swaps | |||||||
Credit facilities | |||||||
Number of agreements | segment | 5 | ||||||
New unsecured credit facility | Revolving credit facility | |||||||
Credit facilities | |||||||
Borrowing availability, limitation as a percentage of the value of the Company's eligible unencumbered assets (as a percent) | 50.00% | ||||||
Borrowings outstanding (in dollars) | $ 82,000 | ||||||
Eligible unencumbered assets (in dollars) | 3,000,000 | ||||||
Amended unsecured revolving credit facility | |||||||
Credit facilities | |||||||
Minimum EBITDA to fixed charges ratio covenant (as a percent) | 1.5 | ||||||
Amended unsecured revolving credit facility | Revolving credit facility | |||||||
Credit facilities | |||||||
Unsecured loan facility | $ 500,000 | ||||||
Size of the facility with the accordion feature (in dollars) | $ 800,000 | $ 800,000 | |||||
Maturity date | Sep. 30, 2019 | ||||||
Extension option term | 1 year | ||||||
Extension fee (as a percent) | 0.15% | ||||||
Maximum leverage covenant (as a percent) | 65.00% | 65.00% | |||||
Minimum consolidated net worth, base (in dollars) | $ 1,000,000 | $ 1,000,000 | |||||
Minimum consolidated net worth, percentage of any additional equity raised (as a percent) | 75 | 75 | |||||
Maximum dividend payout ratio (as a percent) | 95 | ||||||
Amended unsecured revolving credit facility | Revolving credit facility | Minimum | |||||||
Credit facilities | |||||||
Non-use fee (as a percent) | 0.15% | ||||||
Facility fee (as a percent) | 0.125% | ||||||
Amended unsecured revolving credit facility | Revolving credit facility | Maximum | |||||||
Credit facilities | |||||||
Non-use fee (as a percent) | 0.25% | ||||||
Facility fee (as a percent) | 0.30% | ||||||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | |||||||
Credit facilities | |||||||
Debt Instrument interest rate description | LIBOR | LIBOR | |||||
Credit spread (as a percent) | 1.00% | ||||||
Facility fee (as a percent) | 0.20% | ||||||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Minimum | |||||||
Credit facilities | |||||||
Credit spread (as a percent) | 0.85% | 1.35% | |||||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Maximum | |||||||
Credit facilities | |||||||
Credit spread (as a percent) | 1.55% | 2.15% | |||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | |||||||
Credit facilities | |||||||
Debt Instrument interest rate description | Base Rate | Base Rate | |||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Minimum | |||||||
Credit facilities | |||||||
Credit spread (as a percent) | 0.00% | 0.35% | |||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Maximum | |||||||
Credit facilities | |||||||
Credit spread (as a percent) | 0.55% | 1.15% | |||||
Series A issued November 2015 | Term Loan Payable | |||||||
Unsecured Term Notes Payable | |||||||
Stated interest rate (as a percent) | 4.95% | ||||||
Series B issued November 2015 | Term Loan Payable | |||||||
Unsecured Term Notes Payable | |||||||
Stated interest rate (as a percent) | 5.24% | ||||||
Term Loan Issued March 2017 | Senior Unsecured Notes | |||||||
Unsecured Term Notes Payable | |||||||
Stated interest rate (as a percent) | 2.57% |
Debt - Carrying Amount (Details
Debt - Carrying Amount (Details) $ in Thousands | Jul. 01, 2017 | Mar. 31, 2017USD ($) | Apr. 30, 2016USD ($) | Sep. 30, 2017USD ($)agreementsegmentitem | Dec. 31, 2016USD ($) | Aug. 31, 2012USD ($) | |
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Maximum number of months | 24 months | ||||||
Outstanding balance | $ 2,344,780 | ||||||
Unamortized net (discount) premium | (399) | $ (336) | |||||
Unamortized deferred financing costs | (4,624) | (4,810) | |||||
Total unsecured notes and term loan payable, net | 570,376 | 470,190 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Remainder of 2017 | 6,537 | ||||||
2,018 | 33,096 | ||||||
2,019 | 149,639 | ||||||
2,020 | 317,492 | ||||||
2,021 | 250,382 | ||||||
2,021 | 231,999 | ||||||
Thereafter | 1,355,635 | ||||||
Long-term Debt | 2,344,780 | ||||||
Scheduled principal | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | 181,740 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Remainder of 2017 | 6,537 | ||||||
2,018 | 26,432 | ||||||
2,019 | 26,953 | ||||||
2,020 | 23,860 | ||||||
2,021 | 21,016 | ||||||
2,021 | 20,506 | ||||||
Thereafter | 56,436 | ||||||
Long-term Debt | 181,740 | ||||||
Balloon payments | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | 2,163,040 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
2,018 | 6,664 | ||||||
2,019 | 122,686 | ||||||
2,020 | 293,632 | ||||||
2,021 | 229,366 | ||||||
2,021 | 211,493 | ||||||
Thereafter | 1,299,199 | ||||||
Long-term Debt | $ 2,163,040 | ||||||
Interest rate swaps | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Number of agreements | segment | 5 | ||||||
Series 2012-1, Class A Due August 2019 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Amortization of deferred financing costs | $ 2,000 | ||||||
Stated interest rate (as a percent) | 5.77% | ||||||
Outstanding balance | $ 198,600 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 198,600 | ||||||
Senior Unsecured Notes | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 375,000 | ||||||
Outstanding balance | 200,000 | 100,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 200,000 | 100,000 | |||||
Senior Unsecured Notes | Term Loan Issued March 2017 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 2.57% | ||||||
Outstanding balance | $ 100,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 100,000 | ||||||
Senior Unsecured Notes | Term Loan issued April 2016 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 2.44% | ||||||
Outstanding balance | $ 100,000 | 100,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 100,000 | 100,000 | |||||
Term Loan Payable | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 100,000 | $ 100,000 | |||||
Term of notes | 2 years | 5 years | |||||
Outstanding balance | 375,000 | 375,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 375,000 | 375,000 | |||||
Term Loan Payable | One-Month LIBOR | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | one-month LIBOR | |||||
Credit spread (as a percent) | 1.10% | ||||||
Term Loan Payable | Series A issued November 2015 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.95% | ||||||
Outstanding balance | $ 75,000 | 75,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 75,000 | 75,000 | |||||
Term Loan Payable | Series B issued November 2015 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 5.24% | ||||||
Outstanding balance | $ 100,000 | 100,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 100,000 | 100,000 | |||||
Term Loan Payable | Series C issued April 2016 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.73% | ||||||
Outstanding balance | $ 200,000 | 200,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 200,000 | 200,000 | |||||
Term Loan Payable | Term Loan issued April 2016 | One-Month LIBOR | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | ||||||
Credit spread (as a percent) | 1.10% | ||||||
Non-recourse net-lease mortgage notes: | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Retained non-amortizing notes | $ 128,000 | ||||||
Non‑recourse mortgage notes payable: | Interest rate swaps | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Termination value, liability position which includes accrued interest | $ 100 | ||||||
Non‑recourse mortgage notes payable: | $20,530 note issued December 2011 and amended February 2012 | Interest rate swaps | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Number of agreements | agreement | 2 | ||||||
Non‑recourse mortgage notes payable: | $12.6 million portion of note issued December 2011 and amended February 2012 | Interest rate swaps | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | $ 11,800 | ||||||
Fixed rate | 5.299% | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 11,800 | ||||||
Non‑recourse mortgage notes payable: | $6.6 million portion of note issued December 2011 and amended February 2012 | Interest rate swaps | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | $ 6,200 | ||||||
Fixed rate | 5.23% | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 6,200 | ||||||
Consolidated special purpose entities | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Aggregate investment amount | 2,600,000 | ||||||
Unamortized deferred financing costs | (28,038) | (32,542) | |||||
Total unsecured notes and term loan payable, net | 1,741,343 | 1,833,481 | |||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | 1,536,655 | 1,616,766 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 1,536,655 | 1,616,766 | |||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2012-1, Class A Due August 2019 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 214,500 | ||||||
Outstanding balance | 200,749 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 200,749 | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-1, Class A-1 Due March 2020 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 150,000 | ||||||
Outstanding balance | 138,663 | 140,724 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 138,663 | 140,724 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.16% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-2, Class A-1 Due July 2020 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 107,000 | ||||||
Outstanding balance | 99,869 | 101,265 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 99,869 | 101,265 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.37% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-3, Class A-1 Due November 2020 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 77,000 | ||||||
Outstanding balance | 72,320 | 73,307 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 72,320 | 73,307 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.24% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2014‑1, Class A‑1 Due April 2021 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 120,000 | ||||||
Outstanding balance | 118,000 | 118,450 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 118,000 | 118,450 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.21% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2015-1, Class A-1 Due April 2022 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 95,000 | ||||||
Outstanding balance | 93,852 | 94,208 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 93,852 | 94,208 | |||||
Mortgage Loans on Real Estate, Interest Rate | 3.75% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-1, Class A-2 Due March 2023 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 102,000 | ||||||
Outstanding balance | 94,291 | 95,693 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 94,291 | 95,693 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.65% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-2, Class A-2 Due July 2023 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 97,000 | ||||||
Outstanding balance | 90,536 | 91,801 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 90,536 | 91,801 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.33% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2013-3, Class A-2 Due November 2023 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 100,000 | ||||||
Outstanding balance | 93,922 | 95,204 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 93,922 | 95,204 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.21% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2014‑1, Class A‑2 Due April 2024 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 140,000 | ||||||
Outstanding balance | 137,667 | 138,192 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 137,667 | 138,192 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.00% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2015-1, Class A-2 Due April 2025 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 270,000 | ||||||
Outstanding balance | 266,737 | 267,750 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 266,737 | 267,750 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.17% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2016-1, Class A-1 (2016) due Oct 2026 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 200,000 | ||||||
Outstanding balance | 196,777 | 199,423 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 196,777 | 199,423 | |||||
Mortgage Loans on Real Estate, Interest Rate | 3.96% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | Series 2016-1, Class A-2 (2017) Due April 2027 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 135,000 | ||||||
Outstanding balance | 134,021 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 134,021 | ||||||
Mortgage Loans on Real Estate, Interest Rate | 4.32% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | $21,125 note issued July 2015 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | $ 21,099 | 21,125 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 21,099 | 21,125 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.36% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Aggregate investment amount | $ 392,000 | ||||||
Principal amount | 8,000 | ||||||
Outstanding balance | 233,125 | 249,593 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 233,125 | 249,593 | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $2,956 note issued June 2013 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 2,956 | ||||||
Outstanding balance | 2,663 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 2,663 | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $7,088 note issued April 2007 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 7,088 | ||||||
Outstanding balance | 6,457 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 6,457 | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $4,400 note issued August 2007 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 4,400 | ||||||
Outstanding balance | 3,586 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 3,586 | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $8,000 note issued January 2012; assumed on December 2013 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | 6,740 | 6,960 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 6,740 | 6,960 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.778% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $20,530 note issued December 2011 and amended February 2012 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 20,530 | ||||||
Outstanding balance | 17,970 | 18,359 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 17,970 | 18,359 | |||||
Mortgage Loans on Real Estate, Interest Rate | [1] | 5.275% | |||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $20,530 note issued December 2011 and amended February 2012 | One-Month LIBOR | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Debt Instrument, Description of Variable Rate Basis | one-month LIBOR | ||||||
Credit spread (as a percent) | 3.50% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $6,500 note issued December 2012 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 6,500 | ||||||
Outstanding balance | 5,777 | 5,900 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 5,777 | 5,900 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.806% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $16,100 note issued February 2014 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 16,100 | ||||||
Outstanding balance | 14,879 | 15,159 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 14,879 | 15,159 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.83% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $13,000 note issued May 2012 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 13,000 | ||||||
Outstanding balance | 11,500 | 11,737 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 11,500 | 11,737 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.195% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $14,950 note issued July 2012 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 14,950 | ||||||
Outstanding balance | $ 12,874 | 13,135 | |||||
Number of secured property not generating sufficient cashflow to cover debt | item | 2 | ||||||
Default Interest Rate | 9.95% | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 12,874 | 13,135 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.95% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $26,000 note issued August 2012 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 26,000 | ||||||
Outstanding balance | 23,150 | 23,625 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 23,150 | 23,625 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.05% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $6,400 note issued November 2012 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 6,400 | ||||||
Outstanding balance | 5,707 | 5,827 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 5,707 | 5,827 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.707% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $11,895 note issued March 2013 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 11,895 | ||||||
Outstanding balance | 10,712 | 10,931 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 10,712 | 10,931 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.7315% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $17,500 note issued August 2013 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 17,500 | ||||||
Outstanding balance | 16,092 | 16,380 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 16,092 | 16,380 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.46% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $10,075 note issued March 2014 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 10,075 | ||||||
Outstanding balance | 9,573 | 9,691 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 9,573 | 9,691 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.10% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $21,125 note issued July 2015 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 21,125 | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $65,000 note issued June 2016 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 65,000 | ||||||
Outstanding balance | 63,886 | 64,614 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 63,886 | 64,614 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.75% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $7,750 note issued February 2013 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 7,750 | ||||||
Outstanding balance | 6,972 | 7,114 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 6,972 | 7,114 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.81% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $7,750 note issued February 2013 | Initial rate | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Credit spread (as a percent) | 4.00% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $7,750 note issued February 2013 | Treasury rate | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Credit spread (as a percent) | 4.00% | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | $6,944 notes issued March 2013 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 6,944 | ||||||
Outstanding balance | 6,194 | 6,330 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 6,194 | $ 6,330 | |||||
Mortgage Loans on Real Estate, Interest Rate | [2] | 4.50% | |||||
[1] | Note is a variablerate note which resets monthly at one-month LIBOR + 3.50%. The Company has entered into two interest rate swap agreements that effectively convert the floating rate on an $11.8 million portion and a $6.2 million portion of this mortgage note payable to fixed rates of 5.299% and 5.230%, respectively. | ||||||
[2] | Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate.Credit Risk Related Contingent FeaturesThe Company has an agreement with a derivative counterparty which provides that if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company has agreements with other derivative counterparties which provide that the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. As of September 30, 2017, the termination value of the Company’s interest rate swaps that were in a liability position was approximately $0.1 million, which includes accrued interest but excludes any adjustment for nonperformance risk.Long-term Debt Maturity Schedule |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 13 Months Ended | ||
Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | |
Common stock. | ||||||
Shares issued and sold | 9,947,500 | |||||
Gross proceeds from issuance of shares | $ 658,110 | $ 389,564 | ||||
Net proceeds from issuance of common stock | $ 220,800 | |||||
Offering costs paid | 10,325 | 13,684 | ||||
Selling stockholder costs | 800 | |||||
Declared dividends payable to common stockholders (in dollars) | $ 163,700 | 124,600 | ||||
Common stock, par value per share | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock outstanding | 190,013,411 | 190,013,411 | 159,341,955 | |||
At the market | ||||||
Common stock. | ||||||
Maximum value of shares that can be offered and sold | $ 400,000 | |||||
Shares issued and sold | 2,047,546 | 8,132,647 | ||||
Weighted average share price | $ 25.02 | $ 26.25 | ||||
Gross proceeds from issuance of shares | $ 51,200 | $ 213,500 | ||||
Net proceeds from issuance of common stock | 50,300 | 209,400 | ||||
Offering costs paid | $ 800 | $ 3,200 | ||||
Private Placement | ||||||
Common stock. | ||||||
Shares issued and sold | 18,621,674 | |||||
Gross proceeds from issuance of shares | $ 377,100 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Commitments to fund improvements to real estate properties $ in Millions | Sep. 30, 2017USD ($) |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Real estate property improvement commitments | $ 108.7 |
Real estate property improvement commitments, in Next Twelve Months | $ 101 |
Fair Value of Financial Instr31
Fair Value of Financial Instruments (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives [Line items] | ||
Derivative asset | $ 1,700,000 | $ 1,600,000 |
Derivative liabilities | 57,000 | 180,000 |
Level 2 Fair Value | Carrying value | ||
Derivatives [Line items] | ||
Long-term debt obligations | 2,311,700,000 | 2,303,700,000 |
Level 2 Fair Value | Fair value | ||
Derivatives [Line items] | ||
Long-term debt obligations | $ 2,415,100,000 | $ 2,353,600,000 |