Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
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, 2018 | |
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 | 212,839,096 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Real estate investments: | ||
Land and improvements | $ 2,148,884 | $ 1,898,342 |
Buildings and improvements | 4,619,316 | 3,958,003 |
Intangible lease assets | 85,148 | 87,402 |
Total real estate investments | 6,853,348 | 5,943,747 |
Less accumulated depreciation and amortization | (541,759) | (426,931) |
Real estate investments, net | 6,311,589 | 5,516,816 |
Real estate investments held for sale, net | 16,741 | |
Loans and direct financing receivables | 351,990 | 271,453 |
Net investments | 6,663,579 | 5,805,010 |
Cash and cash equivalents | 25,598 | 42,937 |
Other assets, net | 62,569 | 51,830 |
Total assets | 6,751,746 | 5,899,777 |
Liabilities: | ||
Credit facility | 359,000 | 290,000 |
Unsecured notes and term loans payable, net | 916,372 | 570,595 |
Non-recourse debt obligations of consolidated special purpose entities, net | 1,681,060 | 1,736,306 |
Dividends payable | 69,912 | 60,068 |
Accrued expenses, deferred revenue and other liabilities | 106,700 | 71,866 |
Total liabilities | 3,133,044 | 2,728,835 |
Stockholders’ equity: | ||
Common stock, $0.01 par value per share, 375,000,000 shares authorized, 211,855,230 and 193,766,854 shares issued and outstanding, respectively | 2,119 | 1,938 |
Capital in excess of par value | 3,858,416 | 3,381,090 |
Distributions in excess of retained earnings | (250,174) | (214,845) |
Accumulated other comprehensive income | 8,341 | 2,759 |
Total stockholders’ equity | 3,618,702 | 3,170,942 |
Total liabilities and stockholders’ equity | $ 6,751,746 | $ 5,899,777 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 211,855,230 | 193,766,854 |
Common shares, outstanding shares | 211,855,230 | 193,766,854 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Rental revenues | $ 129,778 | $ 104,039 | $ 374,091 | $ 314,093 |
Interest income on loans and direct financing receivables | 6,867 | 5,502 | 18,667 | 16,729 |
Other income | 360 | 1,003 | 1,294 | 1,901 |
Total revenues | 137,005 | 110,544 | 394,052 | 332,723 |
Expenses: | ||||
Interest | 31,833 | 31,379 | 93,097 | 91,938 |
Property costs | 755 | 1,335 | 2,837 | 3,272 |
General and administrative | 11,509 | 10,255 | 33,212 | 29,787 |
Depreciation and amortization | 45,781 | 37,589 | 132,307 | 110,200 |
Provisions for impairment | 7,670 | 2,608 | 11,940 | |
Total expenses | 89,878 | 88,228 | 264,061 | 247,137 |
Income from operations before income taxes | 47,127 | 22,316 | 129,991 | 85,586 |
Income tax expense | 130 | 81 | 337 | 334 |
Income before gain on dispositions of real estate | 46,997 | 22,235 | 129,654 | 85,252 |
Gain on dispositions of real estate, net of tax | 1,228 | 6,345 | 30,732 | 35,778 |
Net income | $ 48,225 | $ 28,580 | $ 160,386 | $ 121,030 |
Net income per share of common stock—basic and diluted: | ||||
Net income per share of common stock—basic and diluted | $ 0.23 | $ 0.15 | $ 0.80 | $ 0.69 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 207,165,838 | 189,656,095 | 200,501,376 | 174,481,758 |
Diluted (in shares) | 207,932,531 | 190,043,107 | 201,039,328 | 174,481,758 |
Dividends declared per common share. | ||||
Dividends declared per common share | $ 0.33 | $ 0.31 | $ 0.95 | $ 0.89 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 48,225 | $ 28,580 | $ 160,386 | $ 121,030 |
Other comprehensive income: | ||||
Deferred gain on cash flow hedges | 4,288 | |||
Unrealized gains (losses) on cash flow hedges | 296 | 34 | 2,250 | (328) |
Cash flow hedge (gains) losses reclassified to interest expense | (474) | 116 | (956) | 543 |
Total other comprehensive (loss) income | (178) | 150 | 5,582 | 215 |
Total comprehensive income | $ 48,047 | $ 28,730 | $ 165,968 | $ 121,245 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net income | $ 160,386 | $ 121,030 |
Adjustments to net income: | ||
Depreciation and amortization | 132,307 | 110,200 |
Amortization of deferred financing costs and other noncash interest expense | 5,971 | 8,127 |
Amortization of equity-based compensation | 5,949 | 5,880 |
Provisions for impairment | 2,608 | 11,940 |
Gain on dispositions of real estate, net of tax | (30,732) | (35,778) |
Gain on extinguishment of debt | (814) | |
Noncash revenue and other | 949 | 3,318 |
Payments received in settlement of cash flow hedges | 4,288 | |
Changes in operating assets and liabilities: | ||
Other assets | (3,100) | (3,884) |
Accrued expenses, deferred revenue and other liabilities | 5,261 | 8,572 |
Net cash provided by operating activities | 283,073 | 229,405 |
Investing activities | ||
Acquisition of and additions to real estate | (1,053,730) | (978,944) |
Investment in loans and direct financing receivables | (87,109) | (28,844) |
Collections of principal on loans and direct financing receivables | 3,457 | 23,099 |
Proceeds from dispositions of real estate | 167,533 | 202,412 |
Net cash used in investing activities | (969,849) | (782,277) |
Financing activities | ||
Borrowings under credit facility | 709,000 | 401,000 |
Repayments under credit facility | (640,000) | (367,000) |
Borrowings under unsecured notes and term loans payable | 348,303 | 100,000 |
Borrowings under non-recourse debt obligations of consolidated special purpose entities | 134,961 | |
Repayments under non-recourse debt obligations of consolidated special purpose entities | (25,974) | (231,578) |
Financing costs paid | (5,908) | (2,748) |
Proceeds from the issuance of common stock | 481,424 | 658,110 |
Stock issuance costs paid | (7,795) | (10,325) |
Shares repurchased under stock compensation plans | (2,835) | (1,346) |
Dividends paid | (185,660) | (151,014) |
Net cash provided by financing activities | 670,555 | 530,060 |
Net decrease in cash, cash equivalents and restricted cash | (16,221) | (22,812) |
Cash, cash equivalents and restricted cash, beginning of period | 49,178 | 73,166 |
Cash, cash equivalents and restricted cash, end of period | 32,957 | 50,354 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Total cash, cash equivalents and restricted cash | 49,178 | 73,166 |
Supplemental disclosure of noncash investing and financing activities: | ||
Accrued tenant improvements included in real estate investments | 39,188 | 22,323 |
Net real estate assets surrendered to lender | 12,573 | |
Acquisition of collateral property securing a mortgage note receivable | 2,000 | |
Non-recourse debt obligation assumed by purchaser of real estate | 20,845 | |
Non-recourse debt forgiven by lender in exchange for collateral assets | 12,874 | |
Accrued financing and stock issuance costs | 1,363 | 86 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest, net of amounts capitalized | 82,339 | 79,360 |
Cash paid during the period for income and franchise taxes | $ 1,785 | $ 1,488 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2018 | |
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 of its common stock. The shares began trading on the New York Stock Exchange on November 18, 2014 under the ticker symbol “STOR”. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Principles | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Principles | |
Summary of Significant Accounting Principles | 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, 2017. 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, 2018 and December 31, 2017, these special purpose entities held assets totaling $5.9 billion and $5.2 billion, respectively, and had third-party liabilities totaling $1.8 billion. 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. 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. 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. The estimated fair value of the impaired real estate assets at December 31, 2017 was $12.6 million. There were no impaired real estate assets as of September 30, 2018. 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. The Company periodically commits to fund the construction of new properties for its customers; rental revenue collected during the construction period is deferred and amortized over the remaining lease term when the construction project is complete. Substantially all of the leases are triple-net, which means that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. For a few lease contracts, the Company collects property taxes from its customers and remits 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 $24.5 million and $20.9 million of accrued straight‑line rental revenue, net of allowances of $4.1 million and $2.9 million, at September 30, 2018 and December 31, 2017, 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, 2018, there was one loan receivable with an outstanding principal balance of $3.0 million on nonaccrual status. There were two loans receivable with an aggregate outstanding principal balance of $5.4 million on nonaccrual status at December 31, 2017. 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. At September 30, 2018 and December 31, 2017, there was $2.5 million and $1.5 million, respectively, of allowances for loan losses, which were included in loans and direct financing receivables on the condensed consolidated balance sheets, related to one outstanding loan receivable. During the nine months ended September 30, 2018, the Company recognized $2.6 million of provisions for loan losses which is included in provisions for impairment on the condensed consolidated statement of income; $1.6 million of this amount was recognized during the first quarter of 2018 as part of a write-off of one loan receivable, net of collateral assets acquired and $1.0 million was recognized in the second quarter of 2018. 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 $7.4 million and $6.2 million of restricted cash and deposits in escrow at September 30, 2018 and December 31, 2017, 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 derivative 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 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, 2018, the Company had one interest rate floor and five interest rate swap agreements in place. Two of the swaps, with current notional amounts of $11.5 million and $5.9 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). In January 2018, the Company entered into a treasury lock agreement which was designated as a cash flow hedge associated with the expected public offering of the senior unsecured notes issued by the Company in March 2018 (Note 4). The agreement was settled in accordance with its terms in March 2018 and the Company received a $4.3 million payment from the counterparty which was recognized as a deferred gain in accumulated other comprehensive income. Fair Value Measurement The Company estimates the 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 based on the closing price per share of the common stock on the date of grant and recognizes that amount in general and administrative expense ratably over the vesting period at the greater of the amount amortized on a straight‑line basis or the amount vested. During the nine months ended September 30, 2018, the Company granted RSAs representing 135,496 shares of restricted common stock to its directors and key employees. During the same period, RSAs representing 192,011 shares of restricted stock vested and RSAs representing 16,235 shares were forfeited. In connection with the vesting of the RSAs, the Company repurchased 54,833 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, 2018, the Company had 331,001 shares of restricted common stock outstanding. The Company’s RSUs granted in 2015 through 2017 contain both a market condition and a service condition and RSUs granted in 2018 contain both a market condition and a performance condition as well as a service condition. The Company values the RSUs with a market condition using a Monte Carlo simulation model and values the RSUs with a performance condition based on the fair value of the awards expected to be earned and recognizes those amounts in general and administrative expense on a tranche by tranche basis ratably over the vesting periods. During the nine months ended September 30, 2018, the Company awarded 540,975 RSUs to its executive officers and 79,745 RSUs were forfeited. In connection with the vesting of 174,112 RSUs on December 31, 2017, the Company repurchased 59,115 shares during the nine months ended September 30, 2018 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 plan. As of September 30, 2018, there were 1,380,271 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 2013 and tax returns filed for 2014 through 2017 are subject to examination by these jurisdictions. As of September 30, 2018 and December 31, 2017, 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, 2018 or December 31, 2017. 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 net income per common share (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 48,225 $ 28,580 $ 160,386 $ 121,030 Less: earnings attributable to unvested restricted shares (109) (105) (289) (320) Net income used in basic and diluted income per share $ 48,116 $ 28,475 $ 160,097 $ 120,710 Denominator: Weighted average common shares outstanding 207,498,560 190,015,850 200,849,404 174,856,940 Less: Weighted average number of shares of unvested restricted stock (332,722) (359,755) (348,028) (375,182) Weighted average shares outstanding used in basic income per share 207,165,838 189,656,095 200,501,376 174,481,758 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 766,693 387,012 537,952 — Weighted average shares outstanding used in diluted income per share 207,932,531 190,043,107 201,039,328 174,481,758 (a) For the three months ended September 30, 2018 and 2017, excludes 110,592 shares and 110,001 shares, respectively, and for the nine months ended September 30, 2018 and 2017, excludes 99,495 shares and 106,265 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, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606)(ASU 2014-09), which established 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 streams. This new revenue guidance also included 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 gains or losses in connection with future real estate sales. The Company adopted the standard on January 1, 2018 using the modified retrospective method for transition and did not recognize a cumulative effect adjustment. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842)(ASU 2016-02) 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 nine months ended September 30, 2018, the Company capitalized $1.4 million of initial direct costs which are included in other assets, net, 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 and insurance costs associated with the properties the Company leases to them. Under the current lease accounting guidance, these payments are excluded from rental revenue. Under the new lease accounting standard, it was unclear whether the lessor would be required to recognize the payments made by its tenants directly to third parties as rental revenue with an offset to property expense (a gross presentation). At its October 31, 2018 meeting, the FASB tentatively decided to require that lessors exclude from lease payments and rental revenue all costs paid by a lessee directly to a third party. The FASB is expected to amend ASU 2016-02 in December 2018 to reflect this decision, which will allow the Company, as a triple-net lessor, to continue to exclude these payments from revenue and expense (a net presentation). The new lease accounting standard will also require additional disclosures within the notes accompanying the consolidated financial statements. This standard will be effective for the Company on January 1, 2019. The Company developed a four-phase approach to the implementation of the new lease accounting standard and completed the first two phases in 2017, which included the initial inventory and evaluation of its lease contracts, as a lessee, and the identification of changes needed to the Company’s processes and systems impacted by the new standard. During 2018, the Company has continued to complete the remaining phases of its implementation plan, including updates and enhancements to the Company’s internal control framework, accounting systems and related documentation surrounding its lease accounting processes and the preparation of any additional disclosures that will be required. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes how entities measure credit losses for most financial assets. This guidance requires an entity to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. This new standard will be effective for the Company on January 1, 2020, with early adoption permitted beginning on January 1, 2019. The Company continues to evaluate the impact this new standard will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which is intended to reduce diversity in practice in how certain specified transactions, such as particular debt and insurance claim related cash flows, are cl |
Investments
Investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments: | |
Investments | 3. Investments At September 30, 2018, STORE Capital had investments in 2,206 property locations representing 2,150 owned properties (of which 61 are accounted for as direct financing receivables), 20 ground lease interests and 36 properties which secure mortgage loans. The gross investment portfolio totaled $7.2 billion at September 30, 2018 and consisted of the gross acquisition cost of the real estate investments totaling $6.9 billion and loans and direct financing receivables with an aggregate carrying amount of $352.0 million. As of September 30, 2018, approximately 42% 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). The gross dollar amount of the Company’s 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. During the nine months ended September 30, 2018, the Company had the following gross real estate and loan activity (dollars in thousands): Number of Dollar Investment Amount of Locations Investments Gross investments, December 31, 2017 1,921 $ 6,233,910 Acquisition of and additions to real estate (a) 314 1,079,040 Investment in loans and direct financing receivables 29 87,109 Sales of real estate (55) (173,883) Principal collections on loans and direct financing receivables (1) (3,457) Provisions for impairment — (2,608) Other (b) (2) (14,773) Gross investments, September 30, 2018 7,205,338 Less accumulated depreciation and amortization (541,759) Net investments, September 30, 2018 2,206 $ 6,663,579 (a) Excludes $14.2 million of tenant improvement advances disbursed in 2018 which were accrued as of December 31, 2017 and includes $2.0 million of interest capitalized to properties under construction. (b) Includes $14.3 million representing the gross carrying amount of two real estate properties surrendered to the lender in exchange for the release of the related indebtedness (Note 4). Significant Credit and Revenue Concentration STORE Capital’s real estate investments are leased or financed to more than 400 customers geographically dispersed throughout 49 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, 2018. None of the Company’s customers represented more than 10% of the Company’s real estate investment portfolio at September 30, 2018, with the largest customer representing 3.2% of the total investment portfolio. On an annualized basis, the largest customer represented 3.1% of the Company’s total annualized investment portfolio revenues as of September 30, 2018. The Company’s customers operate their businesses across approximately 575 concepts and the largest of these concepts represented less than 2.5% of the Company’s total annualized investment portfolio revenues as of September 30, 2018. 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, 2018 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments Investments Restaurants 819 $ 1,295,374 18 % Furniture stores 55 432,487 6 Early childhood education centers 183 412,167 6 Health clubs 77 400,071 5 Movie theaters 39 354,896 5 Farm and ranch supply stores 39 336,825 5 Metal fabrication 68 321,242 5 All other service industries 688 2,185,072 30 All other retail industries 104 647,205 9 All other manufacturing industries 134 819,999 11 $ 7,205,338 % Intangible Lease Assets The following details intangible lease assets and related accumulated amortization (in thousands): September 30, December 31, 2018 2017 In-place leases $ 54,293 $ 56,547 Ground lease interests 21,363 21,363 Above-market leases 9,492 9,492 Total intangible lease assets 85,148 87,402 Accumulated amortization (27,618) (24,184) Net intangible lease assets $ 57,530 $ 63,218 Aggregate lease intangible amortization included in expense was $1.4 million and $1.5 million during the three months ended September 30, 2018 and 2017, respectively, and was $4.4 million and $4.8 million during the nine months ended September 30, 2018 and 2017, respectively. 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, 2018 and 2017 and was $0.8 million and $0.9 million during the nine months ended September 30, 2018 and 2017, respectively. Based on the balance of the intangible assets at September 30, 2018, the aggregate amortization expense is expected to be $1.3 million for the remainder of 2018, $5.3 million in 2019, $4.8 million in 2020, $4.5 million in 2021, $4.3 million in 2022 and $3.8 million in 2023; the amount expected to be amortized as a decrease to rental revenue is expected to be $0.3 million for the remainder of 2018, $1.1 million in each of the years 2019 and 2020, $0.6 million in 2021 and $0.4 million in each of the years 2022 and 2023. The weighted average remaining amortization period is approximately nine years for the in‑place lease intangibles, approximately 45 years for the amortizing ground lease interests and approximately six 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, 2018 was approximately 14 years. Substantially all of the leases are triple net, which means that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance; therefore, the Company 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, 2018, six of the Company’s properties 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, 2018, are as follows (in thousands): Remainder of 2018 $ 137,556 2019 550,965 2020 548,626 2021 547,767 2022 548,025 2023 544,998 Thereafter 5,022,703 Total future minimum rentals $ 7,900,640 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, 2018, the Company held 37 loans receivable with an aggregate carrying amount of $167.0 million. Twenty-two of the loans are mortgage loans secured by land and/or buildings and improvements on the mortgaged property. Ten of the mortgage loans are shorter-term loans (maturing prior to 2023) that generally require 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 11 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): Interest Maturity September 30, December 31, Type Rate (a) Date 2018 2017 Ten mortgage loans receivable 8.29 % 2018 - 2022 $ 50,126 $ 29,079 Five mortgage loans receivable 8.61 % 2032 - 2038 41,658 42,827 Seven mortgage loans receivable (b) 8.72 % 2053 - 2058 64,336 58,752 Total mortgage loans receivable 156,120 130,658 Fifteen equipment and other loans receivable 8.77 % 2018 - 2025 12,119 11,944 Total principal amount outstanding—loans receivable 168,239 142,602 Unamortized loan origination costs 1,269 1,245 Allowance for loan losses (2,538) (1,500) Direct financing receivables 185,020 129,106 Total loans and direct financing receivables $ 351,990 $ 271,453 (a) Represents the weighted average interest rate as of the balance sheet date. (b) 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. 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 2018 $ 1,350 $ 12,647 $ 13,997 2019 2,455 9,581 12,036 2020 1,847 18,713 20,560 2021 1,075 6,207 7,282 2022 843 8,474 9,317 2023 743 1,203 1,946 Thereafter 68,884 34,217 103,101 Total principal payments $ 77,197 $ 91,042 $ 168,239 As of September 30, 2018 and December 31, 2017, the Company had $185.0 million and $129.1 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, 2018 2017 Minimum lease payments receivable $ 428,666 $ 305,438 Estimated residual value of leased assets 24,053 15,521 Unearned income (267,699) (191,853) Net investment $ 185,020 $ 129,106 As of September 30, 2018, the future minimum lease payments to be received under the direct financing lease receivables are expected to be $4.4 million for the remainder of 2018 and average approximately $18.0 million for each of the next five years. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt | |
Debt | 4. Debt Credit Facility The Company has an unsecured revolving credit facility with a group of lenders that is used to partially fund real estate acquisitions pending the issuance of long-term, fixed-rate debt. In February 2018, the Company expanded its credit facility from $500 million to $600 million and increased the accordion feature from $300 million to $800 million, which now allows the size of the facility to be increased up to $1.4 billion. The amended facility matures in February 2022 and includes two six-month extension options, subject to certain conditions and the payment of a 0.075% extension fee. At September 30, 2018, the Company had $359.0 million of borrowings outstanding on the facility. Borrowings under the amended facility require monthly payments of interest at a rate selected by the Company of either (1) LIBOR plus a credit spread ranging from 0.825% to 1.55%, or (2) the Base Rate, as defined in the credit agreement, plus a credit spread ranging from 0.00% to 0.55%. The credit spread used is based on the Company’s credit rating as defined in the credit agreement. The Company is required to pay a facility fee on the total commitment amount ranging from 0.125% to 0.30%. Under the terms of the amended facility, the Company is subject to various restrictive financial and nonfinancial covenants which, among other things, require the Company to maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios and a minimum level of tangible net worth. Certain of these ratios are based on the Company’s pool of unencumbered assets, which aggregated approximately $4.2 billion at September 30, 2018. The facility is recourse to the Company and, as of September 30, 2018, the Company was in compliance with the covenants under the facility. At September 30, 2018 and December 31, 2017, unamortized financing costs related to the Company’s credit facility totaled $3.4 million and $1.7 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 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 NPAs). The Notes are senior unsecured obligations of the Company. The NPAs contain a number of financial covenants that are similar to the Company’s unsecured credit facility as summarized above. 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, 2018, the Company was in compliance with its covenants under the NPAs. In March 2018, the Company completed a public offering of $350 million in aggregate principal amount of senior unsecured notes (Public Notes). The Public Notes have a coupon rate of 4.50% and interest is payable semi-annually in arrears in March and September of each year beginning in September 2018. The notes were issued at 99.515% of their principal amount. The supplemental indenture governing the Public Notes contains various restrictive covenants, including limitations on the Company’s ability to incur additional secured and unsecured indebtedness. As of September 30, 2018, the Company was in compliance with these covenants. The Public Notes can be redeemed, in whole or in part, at par within three months of their maturity date or at a redemption price equal to the sum of (i) the principal amount of the notes being redeemed plus accrued and unpaid interest and (ii) the make-whole premium, as defined in the supplemental indenture governing these notes. In April 2016, the Company entered into a $100 million floating-rate, unsecured five-year term loan and, in March 2017, the Company entered into a second $100 million floating-rate, unsecured term loan. This second loan is a two-year loan which has three one-year extension options. The interest rate on these loans resets monthly at one-month LIBOR plus a credit rating-based credit spread ranging from 0.90% to 1.75%; the credit spread currently applicable to the Company is 1.10%. The Company has entered into interest rate swap agreements that effectively convert the variable interest rates on the term loans to fixed rates. The term loans were arranged with lenders who also participate in the Company’s unsecured revolving credit facility and, in connection with the Company’s amendment of its credit facility in February 2018 as described above, the terms of these term loans were incorporated into the amended 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 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): Maturity Interest September 30, December 31, Date Rate 2018 2017 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 Public Notes issued March 2018 Mar. 2028 4.50 % 350,000 — Total notes payable 725,000 375,000 Term Loans: Term Loan issued March 2017 Mar. 2019 2.57 % (a) 100,000 100,000 Term Loan issued April 2016 Apr. 2021 2.44 % (a) 100,000 100,000 Total term loans 200,000 200,000 Unamortized original issue discount (1,605) — Unamortized deferred financing costs (7,023) (4,405) Total unsecured notes and term loans payable, net $ 916,372 $ 570,595 (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, 2018. 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, 2018. 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, 2018. 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. As of September 30, 2018, 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 $2.7 billion. On October 22, 2018, certain of the Company’s consolidated special purpose entities issued an additional series, Series 2018-1, of net-lease mortgage notes as summarized below (excludes $34 million of Class B notes which were retained by the Company). Class Rating (a) Amount Coupon Rate Maturity Date Class A-1 AAA $ 150.0 3.96 % Oct. 2024 Class A-2 AAA 228.0 4.29 % Oct. 2027 Class A-3 A+ 50.0 4.40 % Oct. 2024 Class A-4 A+ 164.0 4.74 % Oct. 2027 Total $ 592.0 (a) By Standard & Poor’s Ratings Services. In conjunction with the issuance of the Series 2018-1 notes, the Company prepaid, without penalty, the Series 2013-1, Class A-1 notes and the Series 2013-2, Class A-1 notes; these notes had an aggregate outstanding principal balance of $233.3 million at the time of prepayment and, as summarized in the table below, were issued in 2013, scheduled to mature in 2020 and bore interest rates of 4.16% and 4.37%, respectively. As a result of this prepayment and the size of the collateral pool at the time of the issuance of the Series 2018-1 notes, no additional collateral was contributed to the collateral pool. 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 $334.8 million at September 30, 2018. 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. Beginning on September 1, 2017, the Company did not make the scheduled debt service payments due on a $12.9 million note payable (see table below) because the two properties that secured this note were vacant and not generating cash flow to cover the debt service. During the first quarter of 2018, the Company completed discussions with the special servicer regarding this note and reached an agreement to surrender the collateral properties in exchange for the release of the indebtedness, including any accrued interest, encumbering them. As a result, during the first quarter of 2018, the Company recognized a $0.8 million gain on the extinguishment of this debt, which is included in interest expense on the condensed consolidated statement of income. The Company’s non-recourse debt obligations of consolidated special purpose entity subsidiaries are summarized below (dollars in thousands): Maturity Interest September 30, December 31, Date Rate 2018 2017 Non-recourse net-lease mortgage notes: $150,000 Series 2013-1, Class A-1 Mar. 2020 4.16 % $ 135,798 $ 137,960 $107,000 Series 2013-2, Class A-1 Jul. 2020 4.37 % 97,926 99,393 $77,000 Series 2013-3, Class A-1 Nov. 2020 4.24 % 70,944 71,982 $120,000 Series 2014-1, Class A-1 Apr. 2021 4.21 % 117,400 117,850 $95,000 Series 2015-1, Class A-1 Apr. 2022 3.75 % 93,377 93,733 $102,000 Series 2013-1, Class A-2 Mar. 2023 4.65 % 92,343 93,812 $97,000 Series 2013-2, Class A-2 Jul. 2023 5.33 % 88,774 90,104 $100,000 Series 2013-3, Class A-2 Nov. 2023 5.21 % 92,135 93,483 $140,000 Series 2014-1, Class A-2 Apr. 2024 5.00 % 136,967 137,492 $270,000 Series 2015-1, Class A-2 Apr. 2025 4.17 % 265,388 266,400 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 3.96 % 193,123 195,877 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 4.32 % 131,604 133,426 Total non-recourse net-lease mortgage notes 1,515,779 1,531,512 Non-recourse mortgage notes payable: $8,000 note issued January 2012; assumed in December 2013 — 6,664 $14,950 note issued July 2012 — 12,874 $21,125 note issued July 2015 — 21,015 $20,530 note issued December 2011; amended February 2012 Jan. 2019 5.275 % (a) 17,430 17,840 $6,500 note issued December 2012 Dec. 2019 4.806 % 5,605 5,734 $16,100 note issued February 2014 Mar. 2021 4.83 % 14,489 14,783 $13,000 note issued May 2012 May 2022 5.195 % 11,168 11,418 $26,000 note issued August 2012 Sept. 2022 5.05 % 22,487 22,987 $6,400 note issued November 2012 Dec. 2022 4.707 % 5,539 5,665 $11,895 note issued March 2013 Apr. 2023 4.7315 % 10,407 10,637 $17,500 note issued August 2013 Sept. 2023 5.46 % 15,688 15,993 $10,075 note issued March 2014 Apr. 2024 5.10 % 9,407 9,532 $65,000 note issued June 2016 Jul. 2026 4.75 % 62,872 63,635 $7,750 note issued February 2013 Mar. 2038 4.81 % (b) 6,774 6,924 $6,944 notes issued March 2013 Apr. 2038 4.50 % (c) 6,022 6,148 Total non-recourse mortgage notes payable 187,888 231,849 Unamortized net discount (334) (383) Unamortized deferred financing costs (22,273) (26,672) Total non-recourse debt obligations of consolidated special purpose entities, net $ 1,681,060 $ 1,736,306 (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 $11.5 million portion and a $5.9 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 agreements with derivative counterparties, which provide generally that the Company could be declared in default on its derivative obligations if the Company defaults on the underlying indebtedness following acceleration of the indebtedness by the lender. As of September 30, 2018, the Company had no interest rate swaps that were in a liability position. Long-term Debt Maturity Schedule As of September 30, 2018, 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 (a) Payments (a) Total Remainder of 2018 $ 6,522 $ — $ 6,522 2019 26,161 122,686 148,847 2020 23,035 293,632 316,667 2021 20,146 229,366 249,512 2022 19,806 200,829 220,635 2023 15,471 265,357 280,828 Thereafter 39,826 $ 150,967 $ $ (a) As noted earlier, subsequent to September 30, 2018, the Company prepaid, without penalty, $233.3 million of debt scheduled to mature in 2020; amounts prepaid were $828,000 scheduled in 2018, $5.1 million scheduled for 2019 and $227.4 million scheduled for 2020, which includes balloon payments aggregating $225.8 million. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders’ Equity | |
Stockholders’ Equity | 5. Stockholders’ Equity In September 2016, the Company established its first “at the market” equity distribution program, or ATM program, pursuant to which, from time to time, it may offer and sell registered shares of its common stock through a group of banks acting as its sales agents. Under the program established in September 2016, the Company could offer and sell up to a maximum amount of $400 million of common stock (the “2016 ATM Program”). In February 2018, the Company established a new $500 million ATM program (the “2018 ATM Program”) and terminated the 2016 ATM Program. The following tables outline the common stock issuances under these programs (in millions except share and per share information): Three Months Ended September 30, 2018 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $500 million 2018 ATM Program 6,651,049 $ 28.60 $ 190.3 $ (2.9) $ (0.2) $ 187.2 Total 6,651,049 $ 28.60 $ 190.3 $ (2.9) $ (0.2) $ 187.2 Nine Months Ended September 30, 2018 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $500 million 2018 ATM Program 17,553,005 $ 26.90 $ 472.2 $ (7.1) $ (0.6) $ 464.5 $400 million 2016 ATM Program 355,946 $ 25.92 9.2 (0.1) - 9.1 Total 17,908,951 $ 26.88 $ 481.4 $ (7.2) $ (0.6) $ 473.6 Inception of Program Through September 30, 2018 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $500 million 2018 ATM Program 17,553,005 $ 26.90 $ 472.2 $ (7.1) $ (0.6) $ 464.5 $400 million 2016 ATM Program 12,195,601 $ 26.15 318.9 (4.8) (0.9) 313.2 Total 29,748,606 $ 26.59 $ 791.1 $ (11.9) $ (1.5) $ 777.7 The Company declared dividends payable to common stockholders totaling $194.9 million and $163.7 million during the nine months ended September 30, 2018 and 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. Management believes that the final outcome of such matters will not have a material adverse effect on the Company’s financial position or results of operations. 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, 2018, the Company had commitments to its customers to fund improvements to owned or mortgaged real estate properties totaling approximately $86.4 million, of which $83.3 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, 2018 | |
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, 2018 and December 31, 2017, the fair value of the Company’s derivative instruments was an asset of $4.3 million and $2.8 million, respectively, included in other assets, net, 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, 2018 and December 31, 2017. 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, 2018, these debt obligations had a carrying value of $2,597.4 million and an estimated fair value of $2,618.8 million. At December 31, 2017, these debt obligations had an aggregate carrying value of $2,306.9 million and an estimated fair value of $2,407.0 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2017. 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, 2018 and December 31, 2017, these special purpose entities held assets totaling $5.9 billion and $5.2 billion, respectively, and had third-party liabilities totaling $1.8 billion. 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. |
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. 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. The estimated fair value of the impaired real estate assets at December 31, 2017 was $12.6 million. There were no impaired real estate assets as of September 30, 2018. |
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. The Company periodically commits to fund the construction of new properties for its customers; rental revenue collected during the construction period is deferred and amortized over the remaining lease term when the construction project is complete. Substantially all of the leases are triple-net, which means that the lessees are responsible for the payment of all property operating expenses, including property taxes, maintenance and insurance. For a few lease contracts, the Company collects property taxes from its customers and remits 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 $24.5 million and $20.9 million of accrued straight‑line rental revenue, net of allowances of $4.1 million and $2.9 million, at September 30, 2018 and December 31, 2017, 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, 2018, there was one loan receivable with an outstanding principal balance of $3.0 million on nonaccrual status. There were two loans receivable with an aggregate outstanding principal balance of $5.4 million on nonaccrual status at December 31, 2017. 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. At September 30, 2018 and December 31, 2017, there was $2.5 million and $1.5 million, respectively, of allowances for loan losses, which were included in loans and direct financing receivables on the condensed consolidated balance sheets, related to one outstanding loan receivable. During the nine months ended September 30, 2018, the Company recognized $2.6 million of provisions for loan losses which is included in provisions for impairment on the condensed consolidated statement of income; $1.6 million of this amount was recognized during the first quarter of 2018 as part of a write-off of one loan receivable, net of collateral assets acquired and $1.0 million was recognized in the second quarter of 2018. |
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 $7.4 million and $6.2 million of restricted cash and deposits in escrow at September 30, 2018 and December 31, 2017, 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 derivative 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 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, 2018, the Company had one interest rate floor and five interest rate swap agreements in place. Two of the swaps, with current notional amounts of $11.5 million and $5.9 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). In January 2018, the Company entered into a treasury lock agreement which was designated as a cash flow hedge associated with the expected public offering of the senior unsecured notes issued by the Company in March 2018 (Note 4). The agreement was settled in accordance with its terms in March 2018 and the Company received a $4.3 million payment from the counterparty which was recognized as a deferred gain in accumulated other comprehensive income. |
Fair Value Measurement | Fair Value Measurement The Company estimates the 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 based on the closing price per share of the common stock on the date of grant and recognizes that amount in general and administrative expense ratably over the vesting period at the greater of the amount amortized on a straight‑line basis or the amount vested. During the nine months ended September 30, 2018, the Company granted RSAs representing 135,496 shares of restricted common stock to its directors and key employees. During the same period, RSAs representing 192,011 shares of restricted stock vested and RSAs representing 16,235 shares were forfeited. In connection with the vesting of the RSAs, the Company repurchased 54,833 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, 2018, the Company had 331,001 shares of restricted common stock outstanding. The Company’s RSUs granted in 2015 through 2017 contain both a market condition and a service condition and RSUs granted in 2018 contain both a market condition and a performance condition as well as a service condition. The Company values the RSUs with a market condition using a Monte Carlo simulation model and values the RSUs with a performance condition based on the fair value of the awards expected to be earned and recognizes those amounts in general and administrative expense on a tranche by tranche basis ratably over the vesting periods. During the nine months ended September 30, 2018, the Company awarded 540,975 RSUs to its executive officers and 79,745 RSUs were forfeited. In connection with the vesting of 174,112 RSUs on December 31, 2017, the Company repurchased 59,115 shares during the nine months ended September 30, 2018 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 plan. As of September 30, 2018, there were 1,380,271 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 2013 and tax returns filed for 2014 through 2017 are subject to examination by these jurisdictions. As of September 30, 2018 and December 31, 2017, 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, 2018 or December 31, 2017. |
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 net income per common share (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 48,225 $ 28,580 $ 160,386 $ 121,030 Less: earnings attributable to unvested restricted shares (109) (105) (289) (320) Net income used in basic and diluted income per share $ 48,116 $ 28,475 $ 160,097 $ 120,710 Denominator: Weighted average common shares outstanding 207,498,560 190,015,850 200,849,404 174,856,940 Less: Weighted average number of shares of unvested restricted stock (332,722) (359,755) (348,028) (375,182) Weighted average shares outstanding used in basic income per share 207,165,838 189,656,095 200,501,376 174,481,758 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 766,693 387,012 537,952 — Weighted average shares outstanding used in diluted income per share 207,932,531 190,043,107 201,039,328 174,481,758 (a) For the three months ended September 30, 2018 and 2017, excludes 110,592 shares and 110,001 shares, respectively, and for the nine months ended September 30, 2018 and 2017, excludes 99,495 shares and 106,265 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive. |
Recent Accounting Pronouncements | 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, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606)(ASU 2014-09), which established 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 streams. This new revenue guidance also included 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 gains or losses in connection with future real estate sales. The Company adopted the standard on January 1, 2018 using the modified retrospective method for transition and did not recognize a cumulative effect adjustment. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842)(ASU 2016-02) 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 nine months ended September 30, 2018, the Company capitalized $1.4 million of initial direct costs which are included in other assets, net, 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 and insurance costs associated with the properties the Company leases to them. Under the current lease accounting guidance, these payments are excluded from rental revenue. Under the new lease accounting standard, it was unclear whether the lessor would be required to recognize the payments made by its tenants directly to third parties as rental revenue with an offset to property expense (a gross presentation). At its October 31, 2018 meeting, the FASB tentatively decided to require that lessors exclude from lease payments and rental revenue all costs paid by a lessee directly to a third party. The FASB is expected to amend ASU 2016-02 in December 2018 to reflect this decision, which will allow the Company, as a triple-net lessor, to continue to exclude these payments from revenue and expense (a net presentation). The new lease accounting standard will also require additional disclosures within the notes accompanying the consolidated financial statements. This standard will be effective for the Company on January 1, 2019. The Company developed a four-phase approach to the implementation of the new lease accounting standard and completed the first two phases in 2017, which included the initial inventory and evaluation of its lease contracts, as a lessee, and the identification of changes needed to the Company’s processes and systems impacted by the new standard. During 2018, the Company has continued to complete the remaining phases of its implementation plan, including updates and enhancements to the Company’s internal control framework, accounting systems and related documentation surrounding its lease accounting processes and the preparation of any additional disclosures that will be required. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes how entities measure credit losses for most financial assets. This guidance requires an entity to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. This new standard will be effective for the Company on January 1, 2020, with early adoption permitted beginning on January 1, 2019. The Company continues to evaluate the impact this new standard will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which is intended to reduce diversity in practice in how certain specified transactions, such as particular debt and insurance claim related cash flows, are classified in the statement of cash flows. This new standard was effective for the Company on January 1, 2018 and the adoption by the Company did not have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications and is expected to reduce diversity in practice. The standard was effective for the Company on January 1, 2018 and the adoption by the Company did not have a material impact on its consolidated financial statements. In September 2018, the FASB issued ASU 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. This new guidance, which can be adopted either prospectively or retrospectively, will be effective for the Company on January 1, 2020, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material impact on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Summary of Significant Accounting Principles | |
Reconciliation of the numerator and denominator used in the computation of basic and diluted income per common share | Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income $ 48,225 $ 28,580 $ 160,386 $ 121,030 Less: earnings attributable to unvested restricted shares (109) (105) (289) (320) Net income used in basic and diluted income per share $ 48,116 $ 28,475 $ 160,097 $ 120,710 Denominator: Weighted average common shares outstanding 207,498,560 190,015,850 200,849,404 174,856,940 Less: Weighted average number of shares of unvested restricted stock (332,722) (359,755) (348,028) (375,182) Weighted average shares outstanding used in basic income per share 207,165,838 189,656,095 200,501,376 174,481,758 Effects of dilutive securities: Add: Treasury stock method impact of potentially dilutive securities (a) 766,693 387,012 537,952 — Weighted average shares outstanding used in diluted income per share 207,932,531 190,043,107 201,039,328 174,481,758 (a) For the three months ended September 30, 2018 and 2017, excludes 110,592 shares and 110,001 shares, respectively, and for the nine months ended September 30, 2018 and 2017, excludes 99,495 shares and 106,265 shares, respectively, related to unvested restricted shares as the effect would have been antidilutive. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments: | |
Schedule of gross real estate and loan activity | The gross dollar amount of the Company’s 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. During the nine months ended September 30, 2018, the Company had the following gross real estate and loan activity (dollars in thousands): Number of Dollar Investment Amount of Locations Investments Gross investments, December 31, 2017 1,921 $ 6,233,910 Acquisition of and additions to real estate (a) 314 1,079,040 Investment in loans and direct financing receivables 29 87,109 Sales of real estate (55) (173,883) Principal collections on loans and direct financing receivables (1) (3,457) Provisions for impairment — (2,608) Other (b) (2) (14,773) Gross investments, September 30, 2018 7,205,338 Less accumulated depreciation and amortization (541,759) Net investments, September 30, 2018 2,206 $ 6,663,579 (a) Excludes $14.2 million of tenant improvement advances disbursed in 2018 which were accrued as of December 31, 2017 and includes $2.0 million of interest capitalized to properties under construction. (b) Includes $14.3 million representing the gross carrying amount of two real estate properties surrendered to the lender in exchange for the release of the related indebtedness (Note 4). |
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, 2018 (dollars in thousands): Percentage of Number of Dollar Total Dollar Investment Amount of Amount of Locations Investments Investments Restaurants 819 $ 1,295,374 18 % Furniture stores 55 432,487 6 Early childhood education centers 183 412,167 6 Health clubs 77 400,071 5 Movie theaters 39 354,896 5 Farm and ranch supply stores 39 336,825 5 Metal fabrication 68 321,242 5 All other service industries 688 2,185,072 30 All other retail industries 104 647,205 9 All other manufacturing industries 134 819,999 11 $ 7,205,338 % |
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, 2018 2017 In-place leases $ 54,293 $ 56,547 Ground lease interests 21,363 21,363 Above-market leases 9,492 9,492 Total intangible lease assets 85,148 87,402 Accumulated amortization (27,618) (24,184) Net intangible lease assets $ 57,530 $ 63,218 |
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, 2018, are as follows (in thousands): Remainder of 2018 $ 137,556 2019 550,965 2020 548,626 2021 547,767 2022 548,025 2023 544,998 Thereafter 5,022,703 Total future minimum rentals $ 7,900,640 |
Schedule summarizing loans and direct financing receivables | The Company’s loans and direct financing receivables are summarized below (dollars in thousands): Interest Maturity September 30, December 31, Type Rate (a) Date 2018 2017 Ten mortgage loans receivable 8.29 % 2018 - 2022 $ 50,126 $ 29,079 Five mortgage loans receivable 8.61 % 2032 - 2038 41,658 42,827 Seven mortgage loans receivable (b) 8.72 % 2053 - 2058 64,336 58,752 Total mortgage loans receivable 156,120 130,658 Fifteen equipment and other loans receivable 8.77 % 2018 - 2025 12,119 11,944 Total principal amount outstanding—loans receivable 168,239 142,602 Unamortized loan origination costs 1,269 1,245 Allowance for loan losses (2,538) (1,500) Direct financing receivables 185,020 129,106 Total loans and direct financing receivables $ 351,990 $ 271,453 (a) Represents the weighted average interest rate as of the balance sheet date. (b) 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. |
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 2018 $ 1,350 $ 12,647 $ 13,997 2019 2,455 9,581 12,036 2020 1,847 18,713 20,560 2021 1,075 6,207 7,282 2022 843 8,474 9,317 2023 743 1,203 1,946 Thereafter 68,884 34,217 103,101 Total principal payments $ 77,197 $ 91,042 $ 168,239 |
Schedule of the components of the investments accounted for as direct financing receivables | As of September 30, 2018 and December 31, 2017, the Company had $185.0 million and $129.1 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, 2018 2017 Minimum lease payments receivable $ 428,666 $ 305,438 Estimated residual value of leased assets 24,053 15,521 Unearned income (267,699) (191,853) Net investment $ 185,020 $ 129,106 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of maturities of long-term debt | As of September 30, 2018, 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 (a) Payments (a) Total Remainder of 2018 $ 6,522 $ — $ 6,522 2019 26,161 122,686 148,847 2020 23,035 293,632 316,667 2021 20,146 229,366 249,512 2022 19,806 200,829 220,635 2023 15,471 265,357 280,828 Thereafter 39,826 $ 150,967 $ $ As noted earlier, subsequent to September 30, 2018, the Company prepaid, without penalty, $233.3 million of debt scheduled to mature in 2020; amounts prepaid were $828,000 scheduled in 2018, $5.1 million scheduled for 2019 and $227.4 million scheduled for 2020, which includes balloon payments aggregating $225.8 million. |
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): Maturity Interest September 30, December 31, Date Rate 2018 2017 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 Public Notes issued March 2018 Mar. 2028 4.50 % 350,000 — Total notes payable 725,000 375,000 Term Loans: Term Loan issued March 2017 Mar. 2019 2.57 % (a) 100,000 100,000 Term Loan issued April 2016 Apr. 2021 2.44 % (a) 100,000 100,000 Total term loans 200,000 200,000 Unamortized original issue discount (1,605) — Unamortized deferred financing costs (7,023) (4,405) Total unsecured notes and term loans payable, net $ 916,372 $ 570,595 (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, 2018. 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, 2018. |
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): Maturity Interest September 30, December 31, Date Rate 2018 2017 Non-recourse net-lease mortgage notes: $150,000 Series 2013-1, Class A-1 Mar. 2020 4.16 % $ 135,798 $ 137,960 $107,000 Series 2013-2, Class A-1 Jul. 2020 4.37 % 97,926 99,393 $77,000 Series 2013-3, Class A-1 Nov. 2020 4.24 % 70,944 71,982 $120,000 Series 2014-1, Class A-1 Apr. 2021 4.21 % 117,400 117,850 $95,000 Series 2015-1, Class A-1 Apr. 2022 3.75 % 93,377 93,733 $102,000 Series 2013-1, Class A-2 Mar. 2023 4.65 % 92,343 93,812 $97,000 Series 2013-2, Class A-2 Jul. 2023 5.33 % 88,774 90,104 $100,000 Series 2013-3, Class A-2 Nov. 2023 5.21 % 92,135 93,483 $140,000 Series 2014-1, Class A-2 Apr. 2024 5.00 % 136,967 137,492 $270,000 Series 2015-1, Class A-2 Apr. 2025 4.17 % 265,388 266,400 $200,000 Series 2016-1, Class A-1 (2016) Oct. 2026 3.96 % 193,123 195,877 $135,000 Series 2016-1, Class A-2 (2017) Apr. 2027 4.32 % 131,604 133,426 Total non-recourse net-lease mortgage notes 1,515,779 1,531,512 Non-recourse mortgage notes payable: $8,000 note issued January 2012; assumed in December 2013 — 6,664 $14,950 note issued July 2012 — 12,874 $21,125 note issued July 2015 — 21,015 $20,530 note issued December 2011; amended February 2012 Jan. 2019 5.275 % (a) 17,430 17,840 $6,500 note issued December 2012 Dec. 2019 4.806 % 5,605 5,734 $16,100 note issued February 2014 Mar. 2021 4.83 % 14,489 14,783 $13,000 note issued May 2012 May 2022 5.195 % 11,168 11,418 $26,000 note issued August 2012 Sept. 2022 5.05 % 22,487 22,987 $6,400 note issued November 2012 Dec. 2022 4.707 % 5,539 5,665 $11,895 note issued March 2013 Apr. 2023 4.7315 % 10,407 10,637 $17,500 note issued August 2013 Sept. 2023 5.46 % 15,688 15,993 $10,075 note issued March 2014 Apr. 2024 5.10 % 9,407 9,532 $65,000 note issued June 2016 Jul. 2026 4.75 % 62,872 63,635 $7,750 note issued February 2013 Mar. 2038 4.81 % (b) 6,774 6,924 $6,944 notes issued March 2013 Apr. 2038 4.50 % (c) 6,022 6,148 Total non-recourse mortgage notes payable 187,888 231,849 Unamortized net discount (334) (383) Unamortized deferred financing costs (22,273) (26,672) Total non-recourse debt obligations of consolidated special purpose entities, net $ 1,681,060 $ 1,736,306 (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 $11.5 million portion and a $5.9 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. |
Series 2018-1 | |
Schedule of debt | Class Rating (a) Amount Coupon Rate Maturity Date Class A-1 AAA $ 150.0 3.96 % Oct. 2024 Class A-2 AAA 228.0 4.29 % Oct. 2027 Class A-3 A+ 50.0 4.40 % Oct. 2024 Class A-4 A+ 164.0 4.74 % Oct. 2027 Total $ 592.0 (a) By Standard & Poor’s Ratings Services. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders’ Equity | |
Schedule of Stockholders Equity [Table Text Block] | The following tables outline the common stock issuances under these programs (in millions except share and per share information): Three Months Ended September 30, 2018 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $500 million 2018 ATM Program 6,651,049 $ 28.60 $ 190.3 $ (2.9) $ (0.2) $ 187.2 Total 6,651,049 $ 28.60 $ 190.3 $ (2.9) $ (0.2) $ 187.2 Nine Months Ended September 30, 2018 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $500 million 2018 ATM Program 17,553,005 $ 26.90 $ 472.2 $ (7.1) $ (0.6) $ 464.5 $400 million 2016 ATM Program 355,946 $ 25.92 9.2 (0.1) - 9.1 Total 17,908,951 $ 26.88 $ 481.4 $ (7.2) $ (0.6) $ 473.6 Inception of Program Through September 30, 2018 ATM Program Shares Sold Weighted Average Price per Share Gross Proceeds Sales Agents' Commissions Other Offering Expenses Net Proceeds $500 million 2018 ATM Program 17,553,005 $ 26.90 $ 472.2 $ (7.1) $ (0.6) $ 464.5 $400 million 2016 ATM Program 12,195,601 $ 26.15 318.9 (4.8) (0.9) 313.2 Total 29,748,606 $ 26.59 $ 791.1 $ (11.9) $ (1.5) $ 777.7 |
Summary of Significant Accoun_4
Summary of Significant Accounting Principles (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($)loan | Sep. 30, 2018USD ($)segmentloanitem | Dec. 31, 2017USD ($)loanitem | Sep. 30, 2017USD ($) | |
Basis of Accounting and Principles of Consolidation | |||||
Assets owned | $ 6,751,746 | $ 5,899,777 | |||
Liabilities owed | $ 3,133,044 | 2,728,835 | |||
Segment Reporting | |||||
Number of Reportable Segments | segment | 1 | ||||
Impairments | |||||
Provisions for impairment | $ 2,608 | ||||
Estimate fair value of impaired real estate assets | 12,600 | ||||
Real estate impaired | 0 | ||||
Revenue Recognition | |||||
Accrued straight-line rental revenue, net of allowance | 24,500 | 20,900 | |||
Accrued straight-line rental revenue, allowance | $ 4,100 | $ 2,900 | |||
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 | 2 | |||
Allowance for loan losses | $ 1,000 | $ 1,600 | $ 2,600 | ||
Allowance for loan losses | $ 2,538 | $ 1,500 | |||
Number of loans on impairment | loan | 1 | 1 | |||
Number of loans written off | loan | 1 | ||||
Non accrual status loan receivables | $ 3,000 | $ 5,400 | |||
Restricted Cash and Escrow Deposits | |||||
Restricted cash included in other assets | 7,359 | 6,200 | $ 15,368 | ||
Derivative Instruments and Hedging Activities | |||||
Outstanding balance | $ 2,628,667 | ||||
Maximum | |||||
Revenue Recognition | |||||
Portion of investment portfolio subject to contingent rent based upon tenant sales (as a percent) | 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 | ||||
Allowance for loan losses | $ 2,500 | 1,500 | |||
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 | $ 5,900,000 | 5,200,000 | |||
Liabilities owed | $ 1,800,000 | 1,800,000 | |||
Interest rate swaps | |||||
Derivative Instruments and Hedging Activities | |||||
Number of agreements | segment | 5 | ||||
Interest rate swap contract two | |||||
Derivative Instruments and Hedging Activities | |||||
Number of agreements | segment | 2 | ||||
Interest rate floor | |||||
Derivative Instruments and Hedging Activities | |||||
Number of agreements | segment | 1 | ||||
Senior Unsecured Notes | |||||
Derivative Instruments and Hedging Activities | |||||
Outstanding balance | $ 725,000 | $ 375,000 | |||
Designated as hedging instrument | Interest rate swap contract one | |||||
Derivative Instruments and Hedging Activities | |||||
Current notional amounts | 11,500 | ||||
Designated as hedging instrument | Interest rate swap contract two | |||||
Derivative Instruments and Hedging Activities | |||||
Current notional amounts | 5,900 | ||||
Designated as hedging instrument | Interest rate swap contract three | |||||
Derivative Instruments and Hedging Activities | |||||
Current notional amounts | 100,000 | ||||
Outstanding balance | 100,000 | ||||
Designated as hedging instrument | Interest rate swap contract four | |||||
Derivative Instruments and Hedging Activities | |||||
Current notional amounts | 100,000 | ||||
Outstanding balance | $ 100,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Principles - Share Based Compensation and Other (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Income Tax Examination, Penalties and Interest Accrued | |||||
Uncertain income tax positions | $ 0 | $ 0 | $ 0 | ||
Accrual for interest or penalties | 0 | 0 | $ 0 | ||
Numerator: | |||||
Net income | 48,225,000 | $ 28,580,000 | 160,386,000 | $ 121,030,000 | |
Less: earnings attributable to unvested restricted shares | (109,000) | (105,000) | (289,000) | (320,000) | |
Net income used in basic and diluted income per share | $ 48,116,000 | $ 28,475,000 | $ 160,097,000 | $ 120,710,000 | |
Denominator: | |||||
Weighted average common shares outstanding | 207,498,560 | 190,015,850 | 200,849,404 | 174,856,940 | |
Less: Weighted average number of shares of unvested restricted stock (in shares) | (332,722) | (359,755) | (348,028) | (375,182) | |
Weighted average shares outstanding used in basic income per share (in shares) | 207,165,838 | 189,656,095 | 200,501,376 | 174,481,758 | |
Effects of dilutive securities: | |||||
Add: Treasury stock method impact of potentially dilutive securities (in shares) | 766,693 | 387,012 | 537,952 | ||
Weighted average shares outstanding used in diluted income per share (in shares) | 207,932,531 | 190,043,107 | 201,039,328 | 174,481,758 | |
Antidilutive unvested restricted shares (in shares) | 110,592 | 110,001 | 99,495 | 106,265 | |
Restricted Stock | |||||
Share‑based Compensation | |||||
Granted in period (in shares) | 135,496 | ||||
Vested in period (in shares) | 192,011 | ||||
Shares repurchased in connection with tax withholding obligations (in shares) | 54,833 | ||||
Forfeited in period (in shares) | (16,235) | ||||
Outstanding (in shares) | 331,001 | 331,001 | |||
Restricted Stock Units | |||||
Share‑based Compensation | |||||
Vested in period (in shares) | 174,112 | ||||
Shares repurchased in connection with tax withholding obligations (in shares) | 59,115 | ||||
Forfeited in period (in shares) | (79,745) | ||||
Restricted Stock Units | Executive Officer | Vesting Based On Service And Market Conditions | |||||
Share‑based Compensation | |||||
Granted in period (in shares) | 540,975 | ||||
Outstanding (in shares) | 1,380,271 | 1,380,271 |
Summary of Significant Accoun_6
Summary of Significant Accounting Principles - Cash (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Other assets | $ 3,100 | $ 3,884 |
Net cash provided by operating activities | 283,073 | 229,405 |
Investing activities | ||
Net cash used in investing activities | (969,849) | (782,277) |
Cash, cash equivalents and restricted cash, beginning of period | 49,178 | 73,166 |
Cash, cash equivalents and restricted cash, end of period | $ 32,957 | $ 50,354 |
Summary of Significant Accoun_7
Summary of Significant Accounting Principles - New Accounting Pronouncements (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended |
May 31, 2014 | Sep. 30, 2018 | |
Maximum percentage of right of use assets to be recognized upon adoption of ASU | 1.00% | |
Percent of triple net leases (as a percent) | 98.00% | |
Other Assets | ||
Initial direct lease costs capitalized | $ 1.4 | |
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 ($) | Sep. 30, 2018USD ($)propertyitem | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)property | Dec. 31, 2017USD ($)property | |
Investments: | |||||
Number of property locations of investments (in locations) | property | 1,921 | 2,206 | 1,921 | ||
Number of owned properties (in properties) | property | 2,150 | ||||
Number of properties owned as direct financing receivables | property | 61 | ||||
Number of ground lease interests (in properties) | property | 20 | ||||
Number of properties which secure certain mortgage loans (in properties) | property | 36 | ||||
Gross acquisition cost of real estate investments | $ 6,900,000 | ||||
Investments assets of consolidated special purpose entity subsidiaries and are pledged as collateral under the non-recourse obligations of these special purpose entities | 42.00% | ||||
Number of Investment Locations | |||||
Gross investments | property | 1,921 | ||||
Acquisition of and additions to real estate | property | 314 | ||||
Investment in loans and direct financing receivables | property | 29 | ||||
Sales of real estate | property | (55) | ||||
Principal collections on loans and direct financing receivables | property | (1) | ||||
Other | property | (2) | ||||
Gross investments | property | 2,206 | ||||
Dollar Amount of Investments | |||||
Gross investments | $ 6,233,910 | ||||
Acquisition of and additions to real estate | 1,079,040 | ||||
Investment in loans and direct financing receivables | 87,109 | ||||
Sales of real estate | (173,883) | ||||
Principal collections on loans and direct financing receivables | 3,457 | ||||
Provisions for impairment of real estate and loan losses | $ 7,670 | 2,608 | $ 11,940 | ||
Other | (14,773) | ||||
Gross investments | 7,205,338 | ||||
Less accumulated depreciation and amortization | (541,759) | ||||
Net investments | 6,663,579 | $ 5,805,010 | |||
Interest capitalized | 2,000 | ||||
Tenant improvement advances disbursed | 14,200 | ||||
The gross carrying amount of real estate properties surrendered | $ 14,300 | ||||
Number of real estate properties surrendered to lender | item | 2 | ||||
Assets held | 6,311,589 | 5,516,816 | |||
Less accumulated depreciation and amortization | $ 541,759 | $ 426,931 |
Investments - Portfolio Diversi
Investments - Portfolio Diversification (Details) $ in Thousands | Sep. 30, 2018USD ($)property | Dec. 31, 2017USD ($)property |
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 2,206 | 1,921 |
Dollar Amount of Investments | $ | $ 7,205,338 | $ 6,233,910 |
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 | 819 | |
Dollar Amount of Investments | $ | $ 1,295,374 | |
Percentage of Total Dollar Amount of Investments | 18.00% | |
Furniture stores | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 55 | |
Dollar Amount of Investments | $ | $ 432,487 | |
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 | 183 | |
Dollar Amount of Investments | $ | $ 412,167 | |
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 | 77 | |
Dollar Amount of Investments | $ | $ 400,071 | |
Percentage of Total Dollar Amount of Investments | 5.00% | |
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 | $ | $ 354,896 | |
Percentage of Total Dollar Amount of Investments | 5.00% | |
Farm and ranch supply stores | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 39 | |
Dollar Amount of Investments | $ | $ 336,825 | |
Percentage of Total Dollar Amount of Investments | 5.00% | |
Metal fabrication | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 68 | |
Dollar Amount of Investments | $ | $ 321,242 | |
Percentage of Total Dollar Amount of Investments | 5.00% | |
All other service industries | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 688 | |
Dollar Amount of Investments | $ | $ 2,185,072 | |
Percentage of Total Dollar Amount of Investments | 30.00% | |
All other retail industries | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 104 | |
Dollar Amount of Investments | $ | $ 647,205 | |
Percentage of Total Dollar Amount of Investments | 9.00% | |
All other manufacturing industries | ||
Information regarding the diversification of Company's investment portfolio among different industries [Line items] | ||
Number of Investment Locations | property | 134 | |
Dollar Amount of Investments | $ | $ 819,999 | |
Percentage of Total Dollar Amount of Investments | 11.00% |
Investments - Significant Credi
Investments - Significant Credit and Revenue Concentration (Details) | 9 Months Ended |
Sep. 30, 2018stateitem | |
Real estate investment portfolio | Geographic concentration | |
Significant Credit and Revenue Concentration | |
Number of customers | 400 |
Number of states over which real estate investments are dispersed (in states) | state | 49 |
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 | 3.20% |
Real estate investment portfolio | Concept concentration | Minimum | |
Significant Credit and Revenue Concentration | |
Number of concepts (in categories) | 575 |
Investment portfolio revenues | Customer concentration | Largest customer, investment portfolio revenues | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 3.10% |
Investment portfolio revenues | Concept concentration | |
Significant Credit and Revenue Concentration | |
Concentration Percentage | 2.50% |
Investments - Intangible Lease
Investments - Intangible Lease Assets and Real Estate Investments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)propertyitem | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Intangible Lease Assets | |||||
Intangible lease assets | $ 85,148 | $ 85,148 | $ 87,402 | ||
Accumulated amortization | (27,618) | (27,618) | (24,184) | ||
Net intangible lease assets | 57,530 | 57,530 | 63,218 | ||
Amortization in the next five years | |||||
Remainder of 2018 | 1,300 | 1,300 | |||
2,019 | 5,300 | 5,300 | |||
2,020 | 4,800 | 4,800 | |||
2,021 | 4,500 | 4,500 | |||
2,022 | 4,300 | 4,300 | |||
2,023 | 3,800 | $ 3,800 | |||
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 | 6 | ||||
Future minimum rentals to be received under the remaining noncancelable term of the operating leases | |||||
Remainder of 2018 | 137,556 | $ 137,556 | |||
2,019 | 550,965 | 550,965 | |||
2,020 | 548,626 | 548,626 | |||
2,021 | 547,767 | 547,767 | |||
2,022 | 548,025 | 548,025 | |||
2,023 | 544,998 | 544,998 | |||
Thereafter | 5,022,703 | 5,022,703 | |||
Total future minimum rentals | 7,900,640 | 7,900,640 | |||
Decrease to rental revenue | |||||
Amortization in the next five years | |||||
Remainder of 2018 | 300 | 300 | |||
2,019 | 1,100 | 1,100 | |||
2,020 | 1,100 | 1,100 | |||
2,021 | 600 | 600 | |||
2,022 | 400 | 400 | |||
2,023 | 400 | 400 | |||
Amortization expense | |||||
Intangible Lease Assets | |||||
Amount amortized | 1,400 | $ 1,500 | 4,400 | $ 4,800 | |
In -place leases | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 54,293 | $ 54,293 | 56,547 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 9 years | ||||
Ground lease interests | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 21,363 | $ 21,363 | 21,363 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 45 years | ||||
Above-market leases | |||||
Intangible Lease Assets | |||||
Intangible lease assets | 9,492 | $ 9,492 | $ 9,492 | ||
Amortization in the next five years | |||||
Weighted average remaining amortization period | 6 years | ||||
Above-market leases | Decrease to rental revenue | |||||
Intangible Lease Assets | |||||
Amount amortized | $ 300 | $ 300 | $ 800 | $ 900 |
Investments - Loans and Direct
Investments - Loans and Direct Financing Receivables (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($)propertyloan | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)loan | |
Loans and direct financing receivables | |||
Number of loans receivable | loan | 37 | ||
Number of properties which secure certain mortgage loans (in properties) | property | 36 | ||
Gross carrying amount of loans receivable | $ 167,000 | ||
Number of mortgage loans | loan | 22 | ||
Number of short-term mortgage loans | loan | 10 | ||
Amortization period of long-term mortgage loans | 40 years | ||
Mortgage loans receivable | $ 156,120 | $ 130,658 | |
Number of mortgage loans subject to interest rate increases | loan | 11 | ||
Total principal outstanding - loans receivable | $ 168,239 | 142,602 | |
Unamortized loan origination costs | 1,269 | 1,245 | |
Allowance for loan losses | (2,538) | (1,500) | |
Direct financing receivables | 185,020 | 129,106 | |
Total loans and direct financing receivables | $ 351,990 | $ 271,453 | |
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% | ||
Loan receivable maturity range 2018 to 2022 | |||
Loans and direct financing receivables | |||
Number of mortgage loans | loan | 10 | 10 | |
Stated Interest Rate (as a percent) | 8.29% | 8.29% | |
Mortgage loans receivable | $ 50,126 | $ 29,079 | |
Loan receivable maturity range 2032 to 2038 | |||
Loans and direct financing receivables | |||
Number of mortgage loans | loan | 5 | 5 | |
Stated Interest Rate (as a percent) | 8.61% | 8.61% | |
Mortgage loans receivable | $ 41,658 | $ 42,827 | |
Loan receivable maturity range 2053 to 2058 | |||
Loans and direct financing receivables | |||
Number of mortgage loans | loan | 7 | 7 | |
Stated Interest Rate (as a percent) | 8.72% | 8.72% | |
Mortgage loans receivable | $ 64,336 | $ 58,752 | |
Number of mortgage loans allowing for prepayment in whole | loan | 4 | ||
Loan receivable maturity range 2053 to 2058 | Minimum | |||
Loans and direct financing receivables | |||
Prepayment penalties (as a percent) | 20.00% | ||
Loan receivable maturity range 2053 to 2058 | Maximum | |||
Loans and direct financing receivables | |||
Prepayment penalties (as a percent) | 70.00% | ||
Loan receivable maturity range 2018 to 2025 | |||
Loans and direct financing receivables | |||
Number of loans secured by tenant's equipment or other assets | loan | 15 | 15 | |
Stated Interest Rate (as a percent) | 8.77% | 8.77% | |
Equipment and other loans receivable | $ 12,119 | $ 11,944 |
Investments - Loans Receivable
Investments - Loans Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Scheduled loan receivable maturities | ||
Remainder of 2018 | $ 13,997 | |
2,019 | 12,036 | |
2,020 | 20,560 | |
2,021 | 7,282 | |
2,022 | 9,317 | |
2,023 | 1,946 | |
Thereafter | 103,101 | |
Total principal outstanding - loans receivable | 168,239 | $ 142,602 |
Components of investments accounted for as direct financing receivables | ||
Minimum lease payments receivable | 428,666 | 305,438 |
Estimated residual value of leased assets | 24,053 | 15,521 |
Unearned income | (267,699) | (191,853) |
Net investment | 185,020 | $ 129,106 |
Future minimum lease payments to be received | ||
Remainder of 2018 | 4,400 | |
2,019 | 18,000 | |
2,020 | 18,000 | |
2,021 | 18,000 | |
2,022 | 18,000 | |
2,023 | 18,000 | |
Scheduled principal | ||
Scheduled loan receivable maturities | ||
Remainder of 2018 | 1,350 | |
2,019 | 2,455 | |
2,020 | 1,847 | |
2,021 | 1,075 | |
2,022 | 843 | |
2,023 | 743 | |
Thereafter | 68,884 | |
Total principal outstanding - loans receivable | 77,197 | |
Balloon payments | ||
Scheduled loan receivable maturities | ||
Remainder of 2018 | 12,647 | |
2,019 | 9,581 | |
2,020 | 18,713 | |
2,021 | 6,207 | |
2,022 | 8,474 | |
2,023 | 1,203 | |
Thereafter | 34,217 | |
Total principal outstanding - loans receivable | $ 91,042 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) $ in Thousands | Feb. 09, 2018USD ($)Options | Feb. 08, 2018USD ($) | Feb. 28, 2018 | Mar. 31, 2017USD ($)item | Apr. 30, 2016USD ($) | Sep. 30, 2018USD ($)segmentloan | Sep. 30, 2018USD ($)segmentloan | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Credit facilities | |||||||||
Borrowings outstanding (in dollars) | $ 359,000 | $ 359,000 | $ 290,000 | ||||||
Unamortized financing costs related to all debt | 7,023 | 7,023 | 4,405 | ||||||
Unsecured Term Notes Payable | |||||||||
Principal amount | $ 350,000 | ||||||||
Revolving credit facility | |||||||||
Credit facilities | |||||||||
Unamortized financing costs related to all debt | 3,400 | $ 3,400 | $ 1,700 | ||||||
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 | ||||||||
Credit spread (as a percent) | 1.10% | ||||||||
Term Loan Payable | One-Month LIBOR | Minimum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 0.90% | ||||||||
Term Loan Payable | One-Month LIBOR | Maximum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 1.75% | ||||||||
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 | $ 375,000 | |||||||
Number of loans | loan | 3 | 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 | 5 | |||||||
New unsecured credit facility | Revolving credit facility | |||||||||
Credit facilities | |||||||||
Eligible unencumbered assets (in dollars) | $ 4,200,000 | $ 4,200,000 | |||||||
Amended unsecured revolving credit facility | Revolving credit facility | |||||||||
Credit facilities | |||||||||
Unsecured loan facility | $ 600,000 | $ 500,000 | |||||||
Size of the facility with the accordion feature (in dollars) | 1,400,000 | ||||||||
Accordion feature | $ 800,000 | $ 300,000 | |||||||
Number of extension options | Options | 2 | ||||||||
Maturity date | Feb. 1, 2022 | ||||||||
Extension option term | 6 months | ||||||||
Extension fee (as a percent) | 0.075% | ||||||||
Borrowings outstanding (in dollars) | $ 359,000 | $ 359,000 | |||||||
Amended unsecured revolving credit facility | Revolving credit facility | Minimum | |||||||||
Credit facilities | |||||||||
Facility fee (as a percent) | 0.125% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Maximum | |||||||||
Credit facilities | |||||||||
Facility fee (as a percent) | 0.30% | 0.30% | |||||||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | |||||||||
Credit facilities | |||||||||
Debt Instrument interest rate description | 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) | 0.825% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | LIBOR | Maximum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 1.55% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | |||||||||
Credit facilities | |||||||||
Debt Instrument interest rate description | Base Rate | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Minimum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 0.00% | ||||||||
Amended unsecured revolving credit facility | Revolving credit facility | Base rate | Maximum | |||||||||
Credit facilities | |||||||||
Credit spread (as a percent) | 0.55% | ||||||||
Series A issued November 2015 | Senior Unsecured Notes | |||||||||
Unsecured Term Notes Payable | |||||||||
Stated interest rate (as a percent) | 4.95% | 4.95% | |||||||
Series B issued November 2015 | Senior Unsecured Notes | |||||||||
Unsecured Term Notes Payable | |||||||||
Stated interest rate (as a percent) | 5.24% | 5.24% | |||||||
Term Loan Issued March 2017 | Term Loan Payable | |||||||||
Unsecured Term Notes Payable | |||||||||
Stated interest rate (as a percent) | 2.57% | 2.57% |
Debt - Carrying Amount (Details
Debt - Carrying Amount (Details) | Oct. 22, 2018USD ($) | Mar. 31, 2017USD ($) | Apr. 30, 2016USD ($) | Sep. 30, 2018USD ($)agreementsegmentitem | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Gain on extinguishment of debt | $ 814,000 | ||||||
Maximum number of months | 24 months | ||||||
Principal amount | $ 350,000,000 | ||||||
Percentage of face amount of debt issued | 99.515% | ||||||
Outstanding balance | $ 2,628,667,000 | ||||||
Unamortized net (discount) premium | (1,605,000) | ||||||
Unamortized deferred financing costs | (7,023,000) | $ (4,405,000) | |||||
Total unsecured notes and term loans payable, net | 916,372,000 | 570,595,000 | |||||
Interest rate swaps that were in a liability position | 0 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Remainder of 2017 | 6,522,000 | ||||||
2,019 | 148,847,000 | ||||||
2,020 | 316,667,000 | ||||||
2,021 | 249,512,000 | ||||||
2,022 | 220,635,000 | ||||||
2,021 | 280,828,000 | ||||||
Thereafter | 1,405,656,000 | ||||||
Long-term Debt | 2,628,667,000 | ||||||
Scheduled principal | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | 150,967,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Remainder of 2017 | 6,522,000 | ||||||
2,019 | 26,161,000 | ||||||
2,020 | 23,035,000 | ||||||
2,021 | 20,146,000 | ||||||
2,022 | 19,806,000 | ||||||
2,021 | 15,471,000 | ||||||
Thereafter | 39,826,000 | ||||||
Long-term Debt | 150,967,000 | ||||||
Balloon payments | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | 2,477,700,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
2,019 | 122,686,000 | ||||||
2,020 | 293,632,000 | ||||||
2,021 | 229,366,000 | ||||||
2,022 | 200,829,000 | ||||||
2,021 | 265,357,000 | ||||||
Thereafter | 1,365,830,000 | ||||||
Long-term Debt | $ 2,477,700,000 | ||||||
Interest rate swaps | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Number of agreements | segment | 5 | ||||||
Class B | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 34,000,000 | ||||||
Series 2013 1 Class 1 Due March 2020 And Series 2013 2 Class 1 Due July 2020 [Member] | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Prepayment of notes | 233,300,000 | ||||||
Series 2013 1 Class 1 Due March 2020 And Series 2013 2 Class 1 Due July 2020 [Member] | Balloon payments | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Prepayment of notes | 225,800,000 | ||||||
Series 2013 1 Class 1 Due March 2020 And Series 2013 2 Class 1 Due July 2020 [Member] | Debt Scheduled Payment Period One [Member] | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Prepayment of notes | 828,000 | ||||||
Series 2013 1 Class 1 Due March 2020 And Series 2013 2 Class 1 Due July 2020 [Member] | Debt Scheduled Payment Period Two [Member] | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Prepayment of notes | 5,100,000 | ||||||
Series 2013 1 Class 1 Due March 2020 And Series 2013 2 Class 1 Due July 2020 [Member] | Debt Scheduled Payment Period Three [Member] | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Prepayment of notes | 227,400,000 | ||||||
Senior Unsecured Notes | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 375,000,000 | ||||||
Outstanding balance | 725,000,000 | 375,000,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 725,000,000 | 375,000,000 | |||||
Senior Unsecured Notes | 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 | $ 75,000,000 | 75,000,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 75,000,000 | 75,000,000 | |||||
Senior Unsecured Notes | 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 | $ 100,000,000 | 100,000,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 100,000,000 | 100,000,000 | |||||
Senior Unsecured Notes | 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 | $ 200,000,000 | 200,000,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 200,000,000 | 200,000,000 | |||||
Senior Unsecured Notes | Notes Issued March 2018 99.515 Percent Of Par | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Stated interest rate (as a percent) | 4.50% | ||||||
Outstanding balance | $ 350,000,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 350,000,000 | ||||||
Term Loan Payable | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 100,000,000 | $ 100,000,000 | |||||
Term of notes | 2 years | 5 years | |||||
Outstanding balance | 200,000,000 | 200,000,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 200,000,000 | 200,000,000 | |||||
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 | ||||||
Credit spread (as a percent) | 1.10% | ||||||
Term Loan Payable | 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 | $ 100,000,000 | 100,000,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 100,000,000 | 100,000,000 | |||||
Term Loan Payable | 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 | $ 100,000,000 | 100,000,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 100,000,000 | 100,000,000 | |||||
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 | $ 128,000,000 | ||||||
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 | $ 11,500,000 | ||||||
Fixed rate | 5.299% | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 11,500,000 | ||||||
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 | $ 5,900,000 | ||||||
Fixed rate | 5.23% | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 5,900,000 | ||||||
Consolidated special purpose entities | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Aggregate investment amount | 2,700,000,000 | ||||||
Unamortized net (discount) premium | (334,000) | (383,000) | |||||
Unamortized deferred financing costs | (22,273,000) | (26,672,000) | |||||
Total unsecured notes and term loans payable, net | 1,681,060,000 | 1,736,306,000 | |||||
Consolidated special purpose entities | Series 2018-1 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | 592,000,000 | ||||||
Consolidated special purpose entities | Class A-1 Maturity Date October 2024 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 150,000,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Mortgage Loans on Real Estate, Interest Rate | 3.96% | ||||||
Consolidated special purpose entities | Class A-2 Maturity Date October 2027 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 228,000,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Mortgage Loans on Real Estate, Interest Rate | 4.29% | ||||||
Consolidated special purpose entities | Class A-3 Maturity Date October 2024 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 50,000,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Mortgage Loans on Real Estate, Interest Rate | 4.40% | ||||||
Consolidated special purpose entities | Class A-4 Maturity Date October 2027 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 164,000,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Mortgage Loans on Real Estate, Interest Rate | 4.74% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | 1,515,779,000 | 1,531,512,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 1,515,779,000 | 1,531,512,000 | |||||
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 | 150,000,000 | ||||||
Outstanding balance | 135,798,000 | 137,960,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 135,798,000 | 137,960,000 | |||||
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 | $ 107,000,000 | ||||||
Outstanding balance | 97,926,000 | 99,393,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 97,926,000 | 99,393,000 | |||||
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 | $ 77,000,000 | ||||||
Outstanding balance | 70,944,000 | 71,982,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 70,944,000 | 71,982,000 | |||||
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 | $ 120,000,000 | ||||||
Outstanding balance | 117,400,000 | 117,850,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 117,400,000 | 117,850,000 | |||||
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 | $ 95,000,000 | ||||||
Outstanding balance | 93,377,000 | 93,733,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 93,377,000 | 93,733,000 | |||||
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 | $ 102,000,000 | ||||||
Outstanding balance | 92,343,000 | 93,812,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 92,343,000 | 93,812,000 | |||||
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 | $ 97,000,000 | ||||||
Outstanding balance | 88,774,000 | 90,104,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 88,774,000 | 90,104,000 | |||||
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 | $ 100,000,000 | ||||||
Outstanding balance | 92,135,000 | 93,483,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 92,135,000 | 93,483,000 | |||||
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 | $ 140,000,000 | ||||||
Outstanding balance | 136,967,000 | 137,492,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 136,967,000 | 137,492,000 | |||||
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 | $ 270,000,000 | ||||||
Outstanding balance | 265,388,000 | 266,400,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 265,388,000 | 266,400,000 | |||||
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 | $ 200,000,000 | ||||||
Outstanding balance | 193,123,000 | 195,877,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 193,123,000 | 195,877,000 | |||||
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 | $ 135,000,000 | ||||||
Outstanding balance | 131,604,000 | 133,426,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 131,604,000 | 133,426,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.32% | ||||||
Consolidated special purpose entities | Non-recourse net-lease mortgage notes: | $10,075 note issued March 2014 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Outstanding balance | 21,015,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 21,015,000 | ||||||
Consolidated special purpose entities | Non‑recourse mortgage notes payable: | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Aggregate investment amount | $ 334,800,000 | ||||||
Principal amount | 8,000,000 | ||||||
Outstanding balance | 187,888,000 | 231,849,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 187,888,000 | 231,849,000 | |||||
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 | 6,664,000 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 6,664,000 | ||||||
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 | $ 14,950,000 | ||||||
Outstanding balance | 12,874,000 | ||||||
Number of secured property not generating sufficient cashflow to cover debt | item | 2 | ||||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | 12,874,000 | ||||||
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 | $ 20,530,000 | ||||||
Outstanding balance | 17,430,000 | 17,840,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 17,430,000 | 17,840,000 | |||||
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 | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Principal amount | $ 6,500,000 | ||||||
Outstanding balance | 5,605,000 | 5,734,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 5,605,000 | 5,734,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.806% | ||||||
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 | $ 16,100,000 | ||||||
Outstanding balance | 14,489,000 | 14,783,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 14,489,000 | 14,783,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.83% | ||||||
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 | $ 13,000,000 | ||||||
Outstanding balance | 11,168,000 | 11,418,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 11,168,000 | 11,418,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.195% | ||||||
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 | $ 26,000,000 | ||||||
Outstanding balance | 22,487,000 | 22,987,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 22,487,000 | 22,987,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.05% | ||||||
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 | $ 6,400,000 | ||||||
Outstanding balance | 5,539,000 | 5,665,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 5,539,000 | 5,665,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.707% | ||||||
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 | $ 11,895,000 | ||||||
Outstanding balance | 10,407,000 | 10,637,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 10,407,000 | 10,637,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 4.7315% | ||||||
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 | $ 17,500,000 | ||||||
Outstanding balance | 15,688,000 | 15,993,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 15,688,000 | 15,993,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.46% | ||||||
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 | $ 10,075,000 | ||||||
Outstanding balance | 9,407,000 | 9,532,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 9,407,000 | 9,532,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | 5.10% | ||||||
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 | $ 21,125,000 | ||||||
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 | 65,000,000 | ||||||
Outstanding balance | 62,872,000 | 63,635,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 62,872,000 | 63,635,000 | |||||
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 | $ 7,750,000 | ||||||
Outstanding balance | 6,774,000 | 6,924,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 6,774,000 | 6,924,000 | |||||
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 | $ 6,944,000 | ||||||
Outstanding balance | 6,022,000 | 6,148,000 | |||||
Scheduled maturities, including balloon payments, on the non‑recourse debt obligations | |||||||
Long-term Debt | $ 6,022,000 | $ 6,148,000 | |||||
Mortgage Loans on Real Estate, Interest Rate | [2] | 4.50% | |||||
Minimum | Term Loan Payable | One-Month LIBOR | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Credit spread (as a percent) | 0.90% | ||||||
Maximum | Term Loan Payable | One-Month LIBOR | |||||||
Summary of non‑recourse debt obligations of consolidated special purpose entity subsidiaries | |||||||
Credit spread (as a percent) | 1.75% | ||||||
[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 $11.5 million portion and a $5.9 million portion of this mortgage note payable to fixed rates of 5.299% and 5.230%, respectively. | ||||||
[2] | Interest rate is effective until March 2023 and will reset to the lender’s then prevailing interest rate.Credit Risk Related Contingent FeaturesThe Company has agreements with derivative counterparties, which provide generally that the Company could be declared in default on its derivative obligations if the Company defaults on the underlying indebtedness following acceleration of the indebtedness by the lender. As of September 30, 2018, the Company had no interest rate swaps that were in a liability position.Long-term Debt Maturity Schedule |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 8 Months Ended | 9 Months Ended | 25 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Feb. 28, 2018 | Sep. 30, 2016 | |
Common stock. | |||||||
Gross proceeds from issuance of shares | $ 481,424 | $ 658,110 | |||||
Commission | 7,795 | 10,325 | |||||
Declared dividends payable to common stockholders (in dollars) | $ 194,900 | $ 163,700 | |||||
At the market | |||||||
Common stock. | |||||||
Shares issued and sold | 6,651,049 | 17,908,951 | 29,748,606 | ||||
Weighted average share price | $ 28.60 | $ 26.88 | $ 26.59 | ||||
Gross proceeds from issuance of shares | $ 190,300 | $ 481,400 | $ 791,100 | ||||
Sales agents' commissions | 2,900 | 7,200 | 11,900 | ||||
Other offering expenses | 200 | 600 | 1,500 | ||||
Net proceeds from issuance of common stock | $ 187,200 | $ 473,600 | $ 777,700 | ||||
2018 ATM Program | |||||||
Common stock. | |||||||
Maximum value of shares that can be offered and sold | $ 500,000 | ||||||
Shares issued and sold | 6,651,049 | 17,553,005 | 17,553,005 | ||||
Weighted average share price | $ 28.60 | $ 26.90 | $ 26.90 | ||||
Gross proceeds from issuance of shares | $ 190,300 | $ 472,200 | $ 472,200 | ||||
Sales agents' commissions | 2,900 | 7,100 | 7,100 | ||||
Other offering expenses | 200 | 600 | 600 | ||||
Net proceeds from issuance of common stock | $ 187,200 | $ 464,500 | $ 464,500 | ||||
2016 ATM Program | |||||||
Common stock. | |||||||
Maximum value of shares that can be offered and sold | $ 400,000 | ||||||
Shares issued and sold | 355,946 | 12,195,601 | |||||
Weighted average share price | $ 25.92 | $ 26.15 | |||||
Gross proceeds from issuance of shares | $ 9,200 | $ 318,900 | |||||
Sales agents' commissions | 100 | 4,800 | |||||
Other offering expenses | 900 | ||||||
Net proceeds from issuance of common stock | $ 9,100 | $ 313,200 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Commitments to fund improvements to real estate properties $ in Millions | Sep. 30, 2018USD ($) |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Real estate property improvement commitments | $ 86.4 |
Real estate property improvement commitments, in Next Twelve Months | $ 83.3 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Derivatives [Line items] | ||
Derivative asset | $ 4.3 | $ 2.8 |
Level 2 Fair Value | Carrying value | ||
Derivatives [Line items] | ||
Long-term debt obligations | 2,597.4 | 2,306.9 |
Level 2 Fair Value | Fair value | ||
Derivatives [Line items] | ||
Long-term debt obligations | $ 2,618.8 | $ 2,407 |