Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Armada Hoffler Properties, Inc. | |
Entity Central Index Key | 1,569,187 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 48,891,867 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Real estate investments: | ||
Income producing property | $ 934,929 | $ 910,686 |
Held for development | 1,474 | 680 |
Construction in progress | 157,795 | 83,071 |
Gross real estate investments | 1,094,198 | 994,437 |
Accumulated depreciation | (177,966) | (164,521) |
Net real estate investments | 916,232 | 829,916 |
Cash and cash equivalents | 12,279 | 19,959 |
Restricted cash | 3,139 | 2,957 |
Accounts receivable, net | 16,444 | 15,691 |
Notes receivable | 93,478 | 83,058 |
Construction receivables, including retentions | 19,868 | 23,933 |
Construction contract costs and estimated earnings in excess of billings | 1,287 | 245 |
Equity method investments | 14,538 | 11,411 |
Other assets | 55,106 | 55,953 |
Total Assets | 1,132,371 | 1,043,123 |
LIABILITIES AND EQUITY | ||
Indebtedness, net | 580,446 | 517,272 |
Accounts payable and accrued liabilities | 11,525 | 15,180 |
Construction payables, including retentions | 40,719 | 47,445 |
Billings in excess of construction contract costs and estimated earnings | 1,711 | 3,591 |
Other liabilities | 41,000 | 39,352 |
Total Liabilities | 675,401 | 622,840 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding as of June 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.01 par value, 500,000,000 shares authorized, 48,768,363 and 44,937,763 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 488 | 449 |
Additional paid-in capital | 338,577 | 287,407 |
Distributions in excess of earnings | (70,648) | (61,166) |
Total stockholders’ equity | 268,417 | 226,690 |
Noncontrolling interests | 188,553 | 193,593 |
Total Equity | 456,970 | 420,283 |
Total Liabilities and Equity | $ 1,132,371 | $ 1,043,123 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 48,768,363 | 44,937,763 |
Common stock, shares outstanding (in shares) | 48,768,363 | 44,937,763 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | ||||
Rental revenues | $ 28,598 | $ 26,755 | $ 57,297 | $ 53,987 |
Total revenues | 49,252 | 83,426 | 101,001 | 174,177 |
Expenses | ||||
Rental expenses | 6,522 | 6,171 | 12,946 | 12,239 |
Real estate taxes | 2,735 | 2,595 | 5,548 | 5,104 |
Depreciation and amortization | 9,179 | 9,304 | 18,457 | 18,779 |
General and administrative expenses | 2,764 | 2,678 | 5,725 | 5,664 |
Acquisition, development and other pursuit costs | 9 | 369 | 93 | 416 |
Impairment charges | 98 | 27 | 98 | 31 |
Total expenses | 41,394 | 75,159 | 85,368 | 157,444 |
Operating income | 7,858 | 8,267 | 15,633 | 16,733 |
Interest income | 2,375 | 1,658 | 4,607 | 3,056 |
Interest expense | (4,497) | (4,494) | (8,870) | (9,029) |
Gain on real estate dispositions | 0 | 0 | 0 | 3,395 |
Change in fair value of interest rate derivatives | (11) | (81) | 958 | 213 |
Other income | 54 | 43 | 168 | 80 |
Income before taxes | 5,779 | 5,393 | 12,496 | 14,448 |
Income tax benefit (provision) | 166 | (450) | 432 | (752) |
Net income | 5,945 | 4,943 | 12,928 | 13,696 |
Net income attributable to noncontrolling interests | (1,626) | (1,472) | (3,569) | (4,289) |
Net income attributable to stockholders | $ 4,319 | $ 3,471 | $ 9,359 | $ 9,407 |
Net income attributable to stockholders per share (basic and diluted) (in dollars per share) | $ 0.09 | $ 0.08 | $ 0.21 | $ 0.24 |
Weighted-average common shares outstanding (basic and diluted) (in shares) | 45,928 | 42,091 | 45,532 | 39,869 |
Dividends and distributions declared per common share and unit (in dollars per share) | $ 0.2 | $ 0.19 | $ 0.4 | $ 0.38 |
General contracting and real estate services | ||||
General contracting and real estate services revenues | $ 20,654 | $ 56,671 | $ 43,704 | $ 120,190 |
General contracting and real estate services expenses | $ 20,087 | $ 54,015 | $ 42,501 | $ 115,211 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Equity - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock | Additional paid-in capital | Distributions in excess of earnings | Total stockholders' equity | Noncontrolling interests |
Beginning balance (in shares) at Dec. 31, 2017 | 44,937,763 | 44,937,763 | ||||
Beginning balance at Dec. 31, 2017 | $ 420,283 | $ 449 | $ 287,407 | $ (61,166) | $ 226,690 | $ 193,593 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 12,928 | 9,359 | 9,359 | 3,569 | ||
Net proceeds from sales of common stock (in shares) | 3,542,178 | |||||
Net proceeds from sales of common stock | 48,981 | $ 35 | 48,946 | 48,981 | ||
Restricted stock awards, net of tax withholding (in shares) | 126,050 | |||||
Restricted stock awards, net of tax withholding | 904 | $ 2 | 902 | 904 | ||
Restricted stock award forfeitures (in shares) | (628) | |||||
Restricted stock award forfeitures | (4) | (4) | (4) | |||
Issuance of operating partnership units for acquisitions | 2,196 | (5) | (5) | 2,201 | ||
Redemption of operating partnership units (in shares) | 163,000 | |||||
Redemption of operating partnership units | (2,531) | $ 2 | 1,331 | 1,333 | (3,864) | |
Dividends and distributions declared | $ (25,787) | (18,841) | (18,841) | (6,946) | ||
Ending balance, shares (in shares) at Jun. 30, 2018 | 48,768,363 | 48,768,363 | ||||
Ending balance at Jun. 30, 2018 | $ 456,970 | $ 488 | $ 338,577 | $ (70,648) | $ 268,417 | $ 188,553 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
OPERATING ACTIVITIES | ||
Net income | $ 12,928 | $ 13,696 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of buildings and tenant improvements | 13,540 | 12,930 |
Amortization of leasing costs and in-place lease intangibles | 4,917 | 5,849 |
Accrued straight-line rental revenue | (1,029) | (640) |
Amortization of leasing incentives and above or below-market rents | (141) | (90) |
Accrued straight-line ground rent expense | 136 | 273 |
Bad debt expense | 112 | 166 |
Noncash stock compensation | 820 | 832 |
Impairment charges | 98 | 31 |
Noncash interest expense | 557 | 560 |
Gain on real estate dispositions | 0 | (3,395) |
Change in the fair value of interest rate derivatives | (958) | (213) |
Changes in operating assets and liabilities: | ||
Property assets | (2,505) | (1,009) |
Property liabilities | (1,973) | (2,489) |
Construction assets | 4,443 | (6,495) |
Construction liabilities | (15,081) | 21 |
Interest receivable | (4,604) | (3,053) |
Net cash provided by operating activities | 11,260 | 16,974 |
INVESTING ACTIVITIES | ||
Development of real estate investments | (57,741) | (14,997) |
Tenant and building improvements | (5,599) | (4,338) |
Acquisitions of real estate investments, net of cash received | (32,967) | (6,767) |
Dispositions of real estate investments | 4,271 | 4,441 |
Notes receivable issuances | (5,816) | (10,783) |
Leasing costs | (2,060) | (807) |
Leasing incentives | (79) | (2) |
Contributions to equity method investments | (3,127) | (715) |
Net cash used for investing activities | (103,118) | (33,968) |
FINANCING ACTIVITIES | ||
Proceeds from sales of common stock | 49,730 | 96,044 |
Offering costs | (749) | (4,663) |
Common shares tendered for tax withholding | (343) | (289) |
Debt issuances, credit facility and construction loan borrowings | 147,248 | 73,906 |
Debt and credit facility repayments, including principal amortization | (84,277) | (130,674) |
Debt issuance costs | (381) | (471) |
Redemption of operating partnership units | (2,531) | (229) |
Dividends and distributions | (24,337) | (20,097) |
Net cash provided by financing activities | 84,360 | 13,527 |
Net decrease in cash and cash equivalents | (7,498) | (3,467) |
Cash, cash equivalents, and restricted cash, beginning of period | 22,916 | 25,193 |
Cash, cash equivalents, and restricted cash, end of period | 15,418 | 21,726 |
Supplemental Disclosures (noncash transactions): | ||
Increase in dividends payable | 1,450 | 1,973 |
Increase in accounts payable and accrued liabilities for capital expenditures | 6,692 | 4,608 |
Issuance of operating partnership units for acquisitions | 1,702 | 982 |
Operating Partnership units redeemed for common shares | 1,804 | 0 |
Redeemable noncontrolling interest from development | 0 | 2,000 |
Deferred payment for land acquisition | $ 0 | $ 600 |
Business of Organization
Business of Organization | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business of Organization | Business of Organization Armada Hoffler Properties, Inc. (the “Company”) is a full service real estate company with extensive experience developing, building, owning and managing high-quality, institutional-grade office, retail and multifamily properties in attractive markets primarily throughout the Mid-Atlantic and Southeastern United States. The Company is the sole general partner of Armada Hoffler, L.P. (the “Operating Partnership”), and as of June 30, 2018 owned 73.8% of the economic interest in the Operating Partnership, of which 0.1% is held as general partnership units. The operations of the Company are carried on primarily through the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership. As of June 30, 2018 , the Company's property portfolio consisted of 49 operating properties and 8 development properties. Refer to Note 4 for information related to the Company's recent acquisitions and dispositions of operating properties. Refer to Note 5 for information related to the Company’s investment in Durham City Center II, LLC, which is an unconsolidated subsidiary that the Company accounts for using the equity method of accounting. Subsequent to June 30, 2018 On July 2, 2018, the Company entered into a ground lease for a land parcel at Wills Wharf, located at the Harbor Point area in Baltimore, Maryland. The Company plans to develop a mixed-use building on the site. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the financial position and results of operations of the Company and its consolidated subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair presentation of the financial condition and results of operations for the interim periods presented. The accompanying condensed consolidated financial statements were prepared in accordance with the requirements for interim financial information. Accordingly, these interim financial statements have not been audited and exclude certain disclosures required for annual financial statements. Also, the operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed. Such estimates are based on management’s historical experience and best judgment after considering past, current and expected events and economic conditions. Actual results could differ significantly from management’s estimates. Reclassifications During the second quarter of 2018, the Company identified certain immaterial classification errors on the Company's Consolidated Statements of Cash Flows and has determined that, in this Quarterly Report on Form 10-Q and future periodic reports, the Company will correct these classification errors. One classification error will be corrected by including within the changes in operating assets and liabilities in the operating activities section a new line item for "Interest receivable." A corresponding adjustment will be recorded to reduce the amount of "Notes receivable issuances" within investing activities on the statement of cash flows. These reclassifications totaled $7.1 million , $3.2 million , and $0.1 million during the years ended December 31, 2017, 2016, and 2015, respectively, $2.2 million and $1.4 million for the three months ended March 31, 2018 and 2017, respectively, and $3.1 million for the six months ended June 30, 2017. These reclassifications will decrease "Net cash provided by operating activities" and "Net cash used for investing activities" by an equal and offsetting amount. These reclassifications will not have any impact on the Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statement of Equity, or any other operating measure for the periods affected. These amounts were previously presented as "Notes receivable issuances," a component of net cash used for investing activities on the Consolidated Statements of Cash Flows, resulting in overstatements in cash provided by operating activities and overstatements of cash used in investing activities. These amounts represent interest earned on mezzanine loans that were funded by the interest reserve accounts provided for in the mezzanine loan agreements. These amounts are now classified as changes in interest receivable, a non-cash adjustment to calculate net cash provided by operating activities. The second classification error will be corrected by including within financing activities on the Consolidated Statements of Cash Flows a new line item for “Common shares tendered for tax withholding.” A corresponding adjustment will be recorded to the "Changes in operating assets and liabilities: Property liabilities" within operating activities on the Consolidated Statements of Cash Flows. This reclassification totaled $0.3 million , $0.2 million , and $0.3 million during the years ended December 31, 2017, 2016, and 2015, respectively, $0.3 million and $0.3 million for the three months ended March 31, 2018 and 2017, respectively, and $0.3 million for the six months ended June 30, 2017. These reclassifications will increase “Net cash provided by operating activities” and decrease “Net cash provided by financing activities” by an equal and offsetting amount. Significant Accounting Policies General Contracting and Real Estate Services Revenues On January 1, 2018, the Company adopted the new accounting standard codified in Accounting Standards Codification 606 - Revenue from Contracts with Customers (see also "Recent Accounting Pronouncements" below). The Company recognizes general contracting revenues as a customer obtains control of promised goods or services in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. For each construction contract, the Company identifies the performance obligations, which typically include the delivery of a single building constructed according to the specifications of the contract. The Company estimates the total transaction price, which generally includes a fixed contract price and may also include variable components such as early completion bonuses, liquidated damages, or cost savings to be shared with the customer. Variable components of the contract price are included in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur. The Company recognizes the estimated transaction price as revenue as it satisfies its performance obligations, and the Company estimates its progress in satisfying performance obligations for each contract using the percentage-of-completion method, based on the proportion of incurred costs to total estimated construction costs at completion. Construction contract costs include all direct material, direct labor, subcontract costs, and overhead costs directly related to contract performance. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements, are all significant judgments that may result in revisions to costs and income and are recognized in the period in which they are determined. Provisions for estimated losses on uncompleted contracts are recognized immediately in the period in which such losses are determined. The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. The Company recognizes real estate services revenues from property development and management services as it satisfies its performance obligations under these service arrangements. The Company assesses whether multiple contracts with a single counterparty should be combined into a single contract for revenue recognition purposes based on factors such as the timing of the negotiation and execution of the contracts and whether the economic substance of the contracts was contemplated separately or in tandem. See the Company's Annual Report on Form 10-K for the year ended December 31, 2017 for a description of other accounting principles upon which basis the accompanying consolidated financial statements were prepared. Recent Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued a new standard that provides a single, comprehensive model for recognizing revenue from contracts with customers. While the new standard does not supersede the guidance on accounting for leases, it changes the way the Company recognizes revenue from construction and development contracts with third party customers. The Company adopted this standard on January 1, 2018 using the modified retrospective method, applying this standard to all contracts not yet completed as of that date. In applying the standard to the Company’s future construction contracts, certain pre-contract costs incurred by the Company are now deferred and amortized over the period during which construction obligations are fulfilled. Previously, these costs were immediately recorded as general contracting expenses upon commencement of construction, with the corresponding general contracting revenue also recorded. Applying the standard to the Company’s uncompleted contracts as of January 1, 2018 did not result in material differences to these contracts in aggregate, and no cumulative adjustment to distributions in excess of earnings was recorded as of January 1, 2018. On February 25, 2016, the FASB issued a new lease standard that requires lessees to recognize most leases in their balance sheets as lease liabilities with corresponding right-of-use assets. The new standard also makes targeted changes to lessor accounting. The new standard will be effective for the Company on January 1, 2019 and requires a modified retrospective transition approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented, with an option to use certain transition relief. Management is currently evaluating the potential impact of the new standard on the Company’s consolidated financial statements. The Company is the lessee on certain ground leases and equipment leases, which represents a majority of the Company's current operating lease payments, and expects to record right-of-use assets and lease liabilities for these leases under the new standard. In 2016, the FASB issued new guidance that addresses eight classification issues related to the statement of cash flows and requires the presentation of total changes in cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. The Company adopted this new guidance on December 31, 2017, applying it retrospectively to each period presented. The new guidance requires that the statement of cash flows show changes in restricted cash in addition to changes in cash and cash equivalents. No additional changes were required to be made to the Company's consolidated statements of cash flows as a result of the new guidance. The following table sets forth the items from the Company's consolidated balance sheets that are included in cash, cash equivalents, and restricted cash in the consolidated statements of cash flows (in thousands): Balance as of June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 Cash and cash equivalents $ 12,279 $ 19,959 $ 18,587 $ 21,942 Restricted cash 3,139 2,957 3,139 3,251 Cash, cash equivalents, and restricted cash $ 15,418 $ 22,916 $ 21,726 $ 25,193 The following table summarizes the changes made to net cash provided by operating activities, net cash used for investing activities, and net cash provided by financing activities in the consolidated statement of cash flows for the six months ended June 30, 2017 on a retrospective basis (in thousands) as a result of the new guidance as well as the reclassification adjustments described in the "Reclassifications" section above: Six months ended June 30, 2017 Operating activities as originally presented $ 19,886 Adjustment relating to restricted cash (148 ) Adjustment for shares tendered for tax withholding 289 Adjustment relating to interest income presentation (3,053 ) Operating activities after adjustments $ 16,974 Investing activities as originally presented $ (37,057 ) Adjustment relating to restricted cash 36 Adjustment relating to interest income presentation 3,053 Investing activities after adjustments $ (33,968 ) Financing activities as originally presented $ 13,816 Adjustment for shares tendered for tax withholding (289 ) Financing activities after adjustments $ 13,527 On February 22, 2017, the FASB issued new guidance that clarifies the scope and application of guidance on sales or transfers of nonfinancial assets and in substance nonfinancial assets to customers, including partial sales. The new guidance applies to all nonfinancial assets, including real estate, and defines an in substance nonfinancial asset. The Company adopted the new guidance on January 1, 2018, and it did not have a material impact on the Company’s consolidated financial statements. On August 28, 2017, the FASB issued new guidance that simplifies some of the requirements relating to accounting for derivatives and hedging. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness for a highly effective hedge and also simplifies certain documentation and assessment requirements relating to the determination of hedge effectiveness. The new guidance will be effective for the Company on January 1, 2019, with early adoption permitted. As of June 30, 2018 , the Company does not currently have any derivatives designated as hedging instruments for accounting purposes but may designate new derivative contracts as hedging instruments in the future. The application of this guidance to future hedging relationships could reduce or eliminate the gains and losses that would otherwise be recorded for these derivative instruments. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segments | Segments Net operating income (segment revenues minus segment expenses) is the measure used by the Company’s chief operating decision-maker to assess segment performance. Net operating income is not a measure of operating income or cash flows from operating activities as measured by GAAP and is not indicative of cash available to fund cash needs. As a result, net operating income should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate net operating income in the same manner. The Company considers net operating income to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of the Company’s real estate and construction businesses. Net operating income of the Company’s reportable segments for the three and six months ended June 30, 2018 and 2017 was as follows (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 (Unaudited) Office real estate Rental revenues $ 5,288 $ 4,759 $ 10,388 $ 9,665 Rental expenses 1,430 1,366 2,876 2,692 Real estate taxes 502 450 1,004 900 Segment net operating income 3,356 2,943 6,508 6,073 Retail real estate Rental revenues 16,608 15,578 33,319 31,209 Rental expenses 2,563 2,479 5,220 4,999 Real estate taxes 1,656 1,520 3,339 2,969 Segment net operating income 12,389 11,579 24,760 23,241 Multifamily residential real estate Rental revenues 6,702 6,418 13,590 13,113 Rental expenses 2,529 2,326 4,850 4,548 Real estate taxes 577 625 1,205 1,235 Segment net operating income 3,596 3,467 7,535 7,330 General contracting and real estate services Segment revenues 20,654 56,671 43,704 120,190 Segment expenses 20,087 54,015 42,501 115,211 Segment gross profit 567 2,656 1,203 4,979 Net operating income $ 19,908 $ 20,645 $ 40,006 $ 41,623 General contracting and real estate services revenues for the three months ended June 30, 2018 and 2017 exclude revenue related to intercompany construction contracts of $34.2 million and $11.6 million , respectively. General contracting and real estate services revenues for the six months ended June 30, 2018 and 2017 exclude revenue related to intercompany construction contracts of $60.1 million and $17.5 million , respectively. General contracting and real estate services expenses for the three months ended June 30, 2018 and 2017 exclude expenses related to intercompany construction contracts of $33.9 million and $11.6 million , respectively. General contracting and real estate services expenses for the six months ended June 30, 2018 and 2017 exclude expenses related to intercompany construction contracts of $59.5 million and $17.3 million , respectively. General contracting and real estate services expenses for the three months ended June 30, 2018 and 2017 include noncash stock compensation expense of less than $0.1 million and $0.1 million , respectively. General contracting and real estate services expenses for the six months ended June 30, 2018 and 2017 include noncash stock compensation expense of $0.2 million and $0.4 million , respectively. The following table reconciles net operating income to net income, the most directly comparable GAAP measure, for the three and six months ended June 30, 2018 and 2017 (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 (Unaudited) Net operating income $ 19,908 $ 20,645 $ 40,006 $ 41,623 Depreciation and amortization (9,179 ) (9,304 ) (18,457 ) (18,779 ) General and administrative expenses (2,764 ) (2,678 ) (5,725 ) (5,664 ) Acquisition, development and other pursuit costs (9 ) (369 ) (93 ) (416 ) Impairment charges (98 ) (27 ) (98 ) (31 ) Interest income 2,375 1,658 4,607 3,056 Interest expense (4,497 ) (4,494 ) (8,870 ) (9,029 ) Gain on real estate dispositions — — — 3,395 Change in fair value of interest rate derivatives (11 ) (81 ) 958 213 Other income 54 43 168 80 Income tax (provision) benefit 166 (450 ) 432 (752 ) Net income $ 5,945 $ 4,943 $ 12,928 $ 13,696 General and administrative expenses for the three months ended June 30, 2018 and 2017 include noncash stock compensation expense of $0.2 million and $0.2 million , respectively. General and administrative expenses for the six months ended June 30, 2018 and 2017 include noncash stock compensation expense of $0.7 million and $0.6 million , respectively. |
Real Estate Investment
Real Estate Investment | 6 Months Ended |
Jun. 30, 2018 | |
Real Estate [Abstract] | |
Real Estate Investment | Real Estate Investment Property Acquisitions On January 9, 2018, the Company acquired Indian Lakes Crossing, a Harris Teeter-anchored shopping center in Virginia Beach, Virginia, for a contract price of $14.7 million plus capitalized acquisition costs of $0.2 million . On January 29, 2018, the Company acquired Parkway Centre, a newly developed Publix-anchored shopping center in Moultrie, Georgia for total consideration of $11.3 million (comprised of $9.6 million in cash and $1.7 million in the form of Class A units of limited partnership interest in the Operating Partnership ("Class A Units")) plus capitalized acquisition costs of $0.3 million . The following table summarizes the purchase price allocation (including acquisition costs) based on relative fair value of the assets acquired and liabilities assumed for the two operating properties purchased during the six months ended June 30, 2018 (in thousands): Indian Lakes Crossing Parkway Centre Land $ 10,926 $ 1,372 Site improvements 531 696 Building and improvements 1,913 7,168 In-place leases 1,648 2,346 Above-market leases 11 — Below-market leases (175 ) (10 ) Net assets acquired $ 14,854 $ 11,572 On November 30, 2017, the Company entered into a lease agreement with Bottling Group, LLC for a new distribution facility that the Company will develop and construct for expected delivery in the fourth quarter of 2018. On January 29, 2018, the Company acquired undeveloped land in Chesterfield, Virginia, a portion of which will serve as the site for this facility, for a contract price of $2.4 million plus capitalized acquisition costs of $0.1 million . On January 18, 2018, the Company entered into an operating agreement with a partner to develop a Lowes Foods-anchored shopping center in Mount Pleasant, South Carolina. The Company has a 70% ownership interest in the partnership. The partnership, Market at Mill Creek Partners, LLC acquired undeveloped land on February 16, 2018 for a contract price of $2.9 million plus capitalized acquisition costs of $0.1 million . The Company is responsible for funding the equity requirements of this development. As of June 30, 2018 , the Company's investment in the project totaled $9.4 million . Management has concluded that this entity is a variable interest entity ("VIE") as it lacks sufficient equity to fund its operations without additional financial support. The Company is the developer of the shopping center and has the power to direct the activities of the project that most significantly impact its performance and is the party most closely associated with the project. Therefore, the Company is the project's primary beneficiary and consolidates the project in its consolidated financial statements. On April 2, 2018, the Company acquired undeveloped land in Newport News, Virginia for less than $0.1 million . This land parcel is being used in the development of the Brooks Crossing office tower. Property Disposition On May 24, 2018, the Company completed the sale of the Wawa outparcel at Indian Lakes Crossing for a contract price of $4.4 million . There was no gain or loss on the disposition. |
Equity Method Investment
Equity Method Investment | 6 Months Ended |
Jun. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment City Center On February 25, 2016, the Company acquired a 37% interest in Durham City Center II, LLC (“City Center”) for purposes of developing a 22 -story mixed use tower in Durham, North Carolina. During the six months ended June 30, 2018 , the Company invested an additional $3.2 million in City Center. As of June 30, 2018 and December 31, 2017 , the Company had invested $13.8 million and $10.9 million , respectively, in City Center, and the carrying value of the Company's investment was $14.5 million and $11.4 million , respectively. The Company has agreed to guarantee 37% of the construction loan for City Center; however, the loan is collateralized by 100% of the assets of City Center. As of June 30, 2018 and December 31, 2017 , $38.9 million and $29.2 million , respectively, had been drawn against the construction loan, of which $13.2 million and $11.2 million , respectively, was attributable to the Company's portion of the loan. For the three and six months ended June 30, 2018 and 2017 , City Center did not have any operating activity, and therefore the Company did not receive any distributions or allocated income. Based on the terms of City Center’s operating agreement, the Company has concluded that City Center is a VIE and that the Company holds a variable interest. The Company does not have the power to direct the activities of the project that most significantly impact its performance. Accordingly, the Company is not the project’s primary beneficiary and, therefore, does not consolidate City Center in its consolidated financial statements. |
Notes Receivable
Notes Receivable | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Notes Receivable | Notes Receivable The Company had the following mezzanine loans outstanding as of June 30, 2018 and December 31, 2017 (in thousands): Outstanding loan amount Maximum loan commitment Interest rate Development Project June 30, 2018 December 31, 2017 1405 Point $ 25,633 $ 22,444 $ 28,232 8.0 % The Residences at Annapolis Junction 45,230 43,021 48,105 10.0 % North Decatur Square 15,134 11,790 25,712 15.0 % Delray Plaza 6,551 5,379 13,123 15.0 % Total $ 92,548 $ 82,634 $ 115,172 Interest on the mezzanine loans is accrued and funded utilizing the interest reserves for each loan, which are components of the respective maximum loan commitments, and such accrued interest is added to the loan receivable balances. The Company recognized interest income for the three and six months ended June 30, 2018 and 2017 as follows: Three Months Ended Six Months Ended Development Project 2018 2017 2018 2017 1405 Point $ 483 $ 429 $ 936 $ 845 The Residences at Annapolis Junction 1,124 1,016 2,209 1,997 North Decatur Square 531 211 992 211 Delray Plaza 225 — 448 — Total $ 2,363 $ 1,656 $ 4,585 $ 3,053 1405 Point 1405 Point (also known as Point Street Apartments) opened during the first quarter of 2018. The developer of 1405 Point secured a senior construction loan of up to $67.0 million to fund the development and construction of 1405 Point on November 10, 2016. The Company has agreed to guarantee $25.0 million of the senior construction loan in exchange for the option to purchase up to an 88% controlling interest in 1405 Point upon completion of the project. The Company currently has a $2.1 million letter of credit for the guarantee of the senior construction loan. The Residences at Annapolis Junction The developer of The Residences at Annapolis Junction secured a senior construction loan of up to $60.0 million to fund the development and construction of Annapolis Junction's residential component on September 30, 2016. The Company has agreed to guarantee up to $25.0 million of the senior construction loan in exchange for the option to purchase up to an 88% controlling interest in Annapolis Junction. In July 2018, the Company entered into an agreement regarding the sale of its at-cost purchase option to the developer of The Residences at Annapolis Junction. |
Construction Contracts
Construction Contracts | 6 Months Ended |
Jun. 30, 2018 | |
Contractors [Abstract] | |
Construction Contracts | Construction Contracts Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project. The Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of billings as of June 30, 2018 during the next twelve months. Billings in excess of construction contract costs and estimated earnings represent billings or collections on contracts made in advance of revenue recognized. The following table summarizes the changes to the balances in the Company’s construction contract costs and estimated earnings in excess of billings account and the billings in excess of construction contract costs and estimated earnings account for the six months ended June 30, 2018 (in thousands): Construction contract costs and estimated earnings in excess of billings Billings in excess of construction contract costs and estimated earnings Balance as of January 1, 2018 $ 245 $ 3,591 Revenue recognized that was included in the balance at the beginning of the period — (3,591 ) Increases due to new billings, excluding amounts recognized as revenue during the period — 1,898 Transferred to receivables (245 ) — Construction contract costs and estimated earnings not billed during the period 1,287 — Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion — (187 ) Balance as of June 30, 2018 $ 1,287 $ 1,711 The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. Pre-contract costs of $0.5 million and $0.6 million were deferred as of June 30, 2018 and December 31, 2017 , respectively. Construction receivables and payables include retentions, amounts that are generally withheld until the completion of the contract or the satisfaction of certain restrictive conditions such as fulfillment guarantees. As of June 30, 2018 and December 31, 2017 , construction receivables included retentions of $8.9 million and $9.9 million , respectively. The Company expects to collect substantially all construction receivables as of June 30, 2018 during the next twelve months. As of June 30, 2018 and December 31, 2017 , construction payables included retentions of $17.4 million and $17.4 million , respectively. The Company expects to pay substantially all construction payables as of June 30, 2018 during the next twelve months. The Company’s net position on uncompleted construction contracts comprised the following as of June 30, 2018 and December 31, 2017 (in thousands): June 30, December 31, Costs incurred on uncompleted construction contracts $ 562,879 $ 520,368 Estimated earnings 19,222 18,070 Billings (582,525 ) (541,784 ) Net position $ (424 ) $ (3,346 ) June 30, December 31, Construction contract costs and estimated earnings in excess of billings $ 1,287 $ 245 Billings in excess of construction contract costs and estimated earnings (1,711 ) (3,591 ) Net position $ (424 ) $ (3,346 ) The Company’s balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) as of June 30, 2018 and December 31, 2017 were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Beginning backlog $ 30,733 $ 157,722 $ 49,167 $ 217,718 New contracts/change orders 27,807 15,519 32,376 18,960 Work performed (20,619 ) (56,584 ) (43,622 ) (120,021 ) Ending backlog $ 37,921 $ 116,657 $ 37,921 $ 116,657 The Company expects to complete a majority of the uncompleted contracts as of June 30, 2018 during the next 12 to 18 months. |
Indebtedness
Indebtedness | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Credit Facility On October 26, 2017, the Operating Partnership entered into an amended and restated credit agreement (the “credit agreement”), which provides for a $300.0 million senior credit facility comprised of a $150.0 million senior unsecured revolving credit facility (the "revolving credit facility") and a $150.0 million senior unsecured term loan facility (the "term loan facility" and, together with the revolving credit facility, the "credit facility"), with a syndicate of banks. The credit facility includes an accordion feature that allows the total commitments to be increased to $450.0 million , subject to certain conditions, including obtaining commitments from any one or more lenders. The revolving credit facility has a scheduled maturity date of October 26, 2021 , with two six -month extension options, subject to certain conditions, including payment of a 0.075% extension fee at each extension. The term loan facility has a scheduled maturity date of October 26, 2022 . On March 28, 2018, the Operating Partnership increased the maximum commitments under the credit facility to $330.0 million using the accordion feature, with an increase of the term loan facility to $180.0 million . The revolving credit facility bears interest at LIBOR (the London Inter-Bank Offered Rate) plus a margin ranging from 1.40% to 2.00% and the term loan facility bears interest at LIBOR plus a margin ranging from 1.35% to 1.95% , in each case depending on the Company's total leverage. The Company is also obligated to pay an unused commitment fee of 15 or 25 basis points on the unused portions of the commitments under the revolving credit facility, depending on the amount of borrowings under the credit facility. As of June 30, 2018 and December 31, 2017 , the outstanding balance on the revolving credit facility was $83.0 million and $66.0 million , respectively, and the outstanding balance on the term loan facility was $180.0 million and $150.0 million , respectively. As of June 30, 2018 , the effective interest rates on the revolving credit facility and the term loan facility were 3.84% and 3.79% , respectively. The Company may, at any time, voluntarily prepay any loan under the credit facility in whole or in part without premium or penalty. The Operating Partnership is the borrower under the credit facility, and its obligations under the credit facility are guaranteed by the Company and certain of its subsidiaries that are not otherwise prohibited from providing such guaranty. The credit agreement contains customary representations and warranties and financial and other affirmative and negative covenants. The Company's ability to borrow under the credit facility is subject to ongoing compliance with a number of financial covenants, affirmative covenants and other restrictions. The credit agreement includes customary events of default, in certain cases subject to customary cure periods. The occurrence of an event of default, if not cured within the applicable cure period, would permit the lenders to, among other things, declare the unpaid principal, accrued and unpaid interest and all other amounts payable under the credit facility to be immediately due and payable. The Company is currently in compliance with all covenants under the credit agreement. Subsequent to June 30, 2018 In July 2018, the Company increased its borrowings under the revolving credit facility by $20.0 million . Other Financing Activity On January 22, 2018, the Company extended and modified the Sandbridge Commons note. The note bears interest at a rate of LIBOR plus a spread of 1.75% and will mature on January 17, 2023. On March 27, 2018, the Company paid off Columbus Village Note 1 and Columbus Village Note 2 in full for an aggregate amount of $8.3 million . On May 31, 2018, the Company modified the Southgate Square note. The principal amount of the note was increased to $22 million , and the note now bears interest at a rate of LIBOR plus a spread of 1.60% . This note will still mature on April 29, 2021. On June 1, 2018, the Company entered into a $16.3 million construction loan for the River City industrial development project in Chesterfield, Virginia. The loan bears interest at a rate of LIBOR plus a spread of 1.50% and will mature on May 31, 2019. On June 14, 2018, the Company extended and modified the note secured by 249 Central Park Retail, Fountain Plaza Retail, and South Retail. The principal amount of the note was increased to $35.0 million . The note bears interest at a rate of LIBOR plus a spread of 1.60% and will mature on August 10, 2023. On June 29, 2018, the Company entered into a $15.6 million construction loan for the Brooks Crossing office tower development project. The loan bears interest at a rate of LIBOR plus a spread of 1.60% and will mature on July 1, 2025. During the six months ended June 30, 2018 , the Company borrowed $24.4 million under its existing construction loans to fund new development and construction. Subsequent to June 30, 2018 On July 12, 2018, the Company entered into a $16.2 million construction loan for the Market at Mill Creek development project in Mt. Pleasant, South Carolina. The loan bears interest at a rate of LIBOR plus a spread of 1.55% and will mature on July 12, 2025. On July 27, 2018, the Company extended and modified the Johns Hopkins Village note. The principal amount of the note was increased to $53.0 million . The note bears interest at a rate of LIBOR plus a spread of 1.25% and will mature on August 7, 2025. The Company simultaneously entered into an interest rate swap agreement that effectively fixes the interest rate at 4.19% for the term of the loan. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company may enter into interest rate derivative contracts to manage exposure to interest rate risks. The Company does not use derivative financial instruments for trading or speculative purposes. Derivative financial instruments are recognized at fair value and presented within other assets and liabilities in the condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of derivatives that are neither designated nor qualify as hedging instruments are recognized within the change in fair value of interest rate derivatives in the condensed consolidated statements of income. For derivatives that qualify as cash flow hedges, the effective portion of the gain or loss is reported as a component of other comprehensive loss and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. On March 7, 2018, the Operating Partnership entered into a LIBOR interest rate cap agreement on a notional amount of $50.0 million at a strike rate of 2.25% for a premium of $0.3 million . The interest rate cap expires on April 1, 2020. On April 23, 2018, the Operating Partnership entered into a floating-to-fixed interest rate swap attributable to one-month LIBOR indexed interest payments with a notional amount of $50.0 million . The interest rate swap has a fixed rate of 2.783% , an effective date of May 1, 2018, and a maturity date of May 1, 2023. The Company’s derivatives were comprised of the following as of June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 December 31, 2017 (Unaudited) Notional Amount Fair Value Notional Amount Fair Value Asset Liability Asset Liability Interest rate swaps $ 100,000 $ 431 $ (136 ) $ 56,079 $ 10 $ (69 ) Interest rate caps 250,000 2,429 — 345,000 1,515 — Total $ 350,000 $ 2,860 $ (136 ) $ 401,079 $ 1,525 $ (69 ) The changes in the fair value of the Company’s derivatives during the three and six months ended June 30, 2018 and 2017 were comprised of the following (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Interest rate swaps $ 5 $ 7 $ 353 $ 268 Interest rate caps (16 ) (88 ) 605 (55 ) Total change in fair value of interest rate derivatives $ (11 ) $ (81 ) $ 958 $ 213 The Company has not designated any of its derivatives as hedging instruments under GAAP as of June 30, 2018 . Subsequent to June 30, 2018 On July 16, 2018, the Operating Partnership entered into a LIBOR interest rate cap agreement on a notional amount of $50.0 million at a strike rate of 2.50% for a premium of $0.3 million . The interest rate cap expires on August 1, 2020. On July 27, 2018, the Company entered into an interest rate swap agreement that effectively fixes the interest rate of the new Johns Hopkins Village note payable at 4.19% . |
Equity
Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Equity | Equity Stockholders’ Equity On February 26, 2018, the Company commenced an at-the-market continuous equity offering program (the “ATM Program”) through which the Company may, from time to time, issue and sell shares of its common stock having an aggregate offering price of up to $125.0 million . During the six months ended June 30, 2018 , the Company sold an aggregate of 3,542,178 shares of common stock at a weighted average price of $14.07 per share under the ATM Program, receiving net proceeds, after offering costs and commissions, of $49.1 million . As of June 30, 2018 and December 31, 2017 , the Company’s authorized capital was 500 million shares of common stock and 100 million shares of preferred stock. The Company had 48,768,363 and 44,937,763 shares of common stock issued and outstanding as of June 30, 2018 and December 31, 2017 , respectively. No shares of preferred stock were issued and outstanding as of June 30, 2018 or December 31, 2017 . Noncontrolling Interests As of June 30, 2018 and December 31, 2017 , the Company held a 73.8% and 72.0% interest, respectively, in the Operating Partnership. The Company is the primary beneficiary of the Operating Partnership as it has the power to direct the activities of the Operating Partnership and the rights to absorb 73.8% of the net income of the Operating Partnership. As the primary beneficiary, the Company consolidates the financial position and results of operations of the Operating Partnership. Noncontrolling interests in the Company represent units of limited partnership interest in the Operating Partnership not held by the Company. As of June 30, 2018 , there were 17,290,403 Class A Units not held by the Company. The Company's financial position and results of operations are the same as those of the Operating Partnership. The noncontrolling interest for the consolidated entities under development or construction (see Note 1) was zero as of June 30, 2018 and December 31, 2017 . On January 2, 2018, due to the holders of Class A Units tendering an aggregate of 163,000 Class A Units for redemption by the Operating Partnership, the Company elected to satisfy the redemption request through the issuance of an equal number of shares of common stock. As partial consideration for the acquisition of Columbus Village, the Operating Partnership issued 1,000,000 class B units of limited partnership interest in the Operating Partnership ("Class B Units") on July 10, 2015 and issued 275,000 class C units of limited partnership interest in the Operating Partnership ("Class C Units") on January 10, 2017. The Class B Units were automatically converted to Class A Units on July 10, 2017. The Class C Units were automatically converted into Class A Units on January 10, 2018. As partial consideration for the acquisition of Parkway Centre, the Operating Partnership issued 117,228 Class A Units on January 29, 2018. On April 2, 2018, due to the holders of Class A Units tendering an aggregate of 187,142 Class A Units for redemption by the Operating Partnership, the Company elected to satisfy the redemption request with an aggregate cash payment of $2.5 million . On April 17, 2018, the Operating Partnership issued 36,684 Class A Units to the former noncontrolling interest holder of John Hopkins Village due to the satisfaction of a contingent event that was part of the redemption of its redeemable noncontrolling interest in Johns Hopkins Village in December 2017. Common Stock Dividends and Class A Unit Distributions On January 4, 2018, the Company paid cash dividends of $8.5 million to common stockholders and the Operating Partnership paid cash distributions of $3.3 million to holders of Class A Units. On April 5, 2018, the Company paid cash dividends of $9.0 million to common stockholders and the Operating Partnership paid cash distributions of $3.5 million to holders of Class A Units. On May 3, 2018, the Board of Directors declared a cash dividend and distribution of $0.20 per share and Class A Unit payable on July 5, 2018 to stockholders and unitholders of record on June 27, 2018. Subsequent to June 30, 2018 On July 2, 2018, due to the holders of Class A Units tendering an aggregate of 123,504 Class A Units for redemption by the Operating Partnership, the Company elected to satisfy the redemption requests through the issuance of an equal number of shares of common stock. On July 5, 2018, the Company paid cash dividends of $9.7 million to common stockholders and the Operating Partnership paid cash distributions of $3.5 million to holders of Class A Units. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation On June 14, 2017, the Company's stockholders approved the Company's Amended and Restated 2013 Equity Incentive Plan (the "Amended Plan"), which, among other things, increased the number of shares of the Company's common stock reserved for issuance under the Amended Plan by 1,000,000 shares, from 700,000 shares to 1,700,000 shares. As of June 30, 2018 , there were 1,029,659 shares available for issuance under the Amended Plan. During the six months ended June 30, 2018 , the Company granted an aggregate of 151,844 shares of restricted stock to employees and non-employee directors with a weighted average grant date fair value of $13.53 per share. Employee restricted stock awards generally vest over a period of two years : one-third immediately on the grant date and the remaining two-thirds in equal amounts on the first two anniversaries following the grant date, subject to continued service to the Company. Non-employee director restricted stock awards vest either immediately upon grant or over a period of one year , subject to continued service to the Company. During the six months ended June 30, 2018 , the Company issued performance-based awards in the form of restricted stock units to certain employees. The performance period for these awards is three years , with a required two -year service period immediately following the expiration of the performance period in order to fully vest. The compensation expense and the effect on the Company’s weighted average diluted shares calculation were immaterial. During the three months ended June 30, 2018 and 2017 , the Company recognized $0.4 million and $0.3 million , respectively, of stock-based compensation expense. During the six months ended June 30, 2018 and 2017 , the Company recognized $1.2 million and $1.1 million , respectively, of stock-based compensation expense. As of June 30, 2018 , there were 138,971 nonvested restricted shares outstanding; the total unrecognized compensation expense related to nonvested restricted shares was $1.3 million , which the Company expects to recognize over the next 21 months . |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows: Level 1—quoted prices in active markets for identical assets or liabilities Level 2—observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3—unobservable inputs Except as disclosed below, the carrying amounts of the Company’s financial instruments approximate their fair values. Financial assets and liabilities whose fair values are measured on a recurring basis using Level 2 inputs consist of interest rate swaps and caps. The Company measures the fair values of these assets and liabilities based on prices provided by independent market participants that are based on observable inputs using market-based valuation techniques. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The carrying amounts and fair values of the Company’s financial instruments, all of which are based on Level 2 inputs, as of June 30, 2018 and December 31, 2017 , were as follows (in thousands): June 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value (Unaudited) Indebtedness $ 580,446 $ 576,270 $ 517,272 $ 518,417 Interest rate swap liabilities 136 136 69 69 Interest rate swap and cap assets 2,860 2,860 1,525 1,525 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company provides general contracting and real estate services to certain related party entities that are included in these condensed consolidated financial statements. Revenue from construction contracts with these entities for the three months ended June 30, 2018 and 2017 was $0.3 million and $0.8 million , respectively, and gross profit from such contracts for the three months ended June 30, 2018 and 2017 was $0.1 million and $0.1 million , respectively. Revenue from construction contracts with related party entities of the Company for the six months ended June 30, 2018 and 2017 was $1.5 million and $7.3 million , respectively, and gross profit from such contracts for the six months ended June 30, 2018 and 2017 was $0.3 million and $0.4 million , respectively. Real estate services fees from affiliated entities of the Company were not significant for the three and six months ended June 30, 2018 or 2017 . In addition, affiliated entities also reimburse the Company for monthly maintenance and facilities management services provided to the properties. Cost reimbursements earned by the Company from affiliated entities were not significant for the three and six months ended June 30, 2018 and 2017 . The Operating Partnership entered into tax protection agreements that indemnify certain directors and executive officers of the Company from their tax liabilities resulting from the potential future sale of certain of the Company’s properties within seven (or, in a limited number of cases, ten ) years of the completion of the Company’s initial public offering and formation transactions completed on May 13, 2013. In addition, the tax protection agreements provide that the Operating Partnership will offer certain of the original contributors, including certain of the Company’s directors and executive officers, the opportunity to guarantee debt, or, alternatively, to enter into a deficit restoration obligation, for ten years from the closing of the Company’s initial public offering in a manner intended to provide an allocation of Operating Partnership liabilities to the partner for U.S. federal income tax purposes. Pursuant to these tax protection agreements, certain of the Company’s executive officers have guaranteed approximately $0.3 million of the Operating Partnership’s outstanding debt as of June 30, 2018 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is from time to time involved in various disputes, lawsuits, warranty claims, environmental and other matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters. The Company currently is a party to various legal proceedings. Management accrues a liability for litigation if an unfavorable outcome is determined to be probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is determined to be probable and a range of loss can be reasonably estimated, management accrues the best estimate within the range; however, if no amount within the range is a better estimate than any other, the minimum amount within the range is accrued. Legal fees related to litigation are expensed as incurred. Management does not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on the Company’s financial position or results of operations; however, litigation is subject to inherent uncertainties. Under the Company’s leases, tenants are typically obligated to indemnify the Company from and against all liabilities, costs and expenses imposed upon or asserted against it as owner of the properties due to certain matters relating to the operation of the properties by the tenant. Commitments The Company has a bonding line of credit for its general contracting construction business and is contingently liable under performance and payment bonds, bonds for cancellation of mechanics liens and defect bonds. Such bonds collectively totaled $43.5 million and $44.9 million as of June 30, 2018 and December 31, 2017 , respectively. The Operating Partnership has entered into standby letters of credit using the available capacity under the credit facility. Letters of credit generally are available for draw down in the event the Company does not perform. As of both June 30, 2018 and December 31, 2017 , the Operating Partnership had total outstanding letters of credit of $2.1 million . The amounts outstanding at June 30, 2018 and December 31, 2017 were comprised of a $2.1 million letter of credit related to the guarantee on the 1405 Point senior construction loan. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The condensed consolidated financial statements include the financial position and results of operations of the Company and its consolidated subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, which are necessary for the fair presentation of the financial condition and results of operations for the interim periods presented. The accompanying condensed consolidated financial statements were prepared in accordance with the requirements for interim financial information. Accordingly, these interim financial statements have not been audited and exclude certain disclosures required for annual financial statements. Also, the operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These interim financial statements should be read in conjunction with the audited consolidated financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . |
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 amounts reported and disclosed. Such estimates are based on management’s historical experience and best judgment after considering past, current and expected events and economic conditions. Actual results could differ significantly from management’s estimates. |
General Contracting and Real Estate Services Revenues | General Contracting and Real Estate Services Revenues On January 1, 2018, the Company adopted the new accounting standard codified in Accounting Standards Codification 606 - Revenue from Contracts with Customers (see also "Recent Accounting Pronouncements" below). The Company recognizes general contracting revenues as a customer obtains control of promised goods or services in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. For each construction contract, the Company identifies the performance obligations, which typically include the delivery of a single building constructed according to the specifications of the contract. The Company estimates the total transaction price, which generally includes a fixed contract price and may also include variable components such as early completion bonuses, liquidated damages, or cost savings to be shared with the customer. Variable components of the contract price are included in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur. The Company recognizes the estimated transaction price as revenue as it satisfies its performance obligations, and the Company estimates its progress in satisfying performance obligations for each contract using the percentage-of-completion method, based on the proportion of incurred costs to total estimated construction costs at completion. Construction contract costs include all direct material, direct labor, subcontract costs, and overhead costs directly related to contract performance. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements, are all significant judgments that may result in revisions to costs and income and are recognized in the period in which they are determined. Provisions for estimated losses on uncompleted contracts are recognized immediately in the period in which such losses are determined. The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. The Company recognizes real estate services revenues from property development and management services as it satisfies its performance obligations under these service arrangements. The Company assesses whether multiple contracts with a single counterparty should be combined into a single contract for revenue recognition purposes based on factors such as the timing of the negotiation and execution of the contracts and whether the economic substance of the contracts was contemplated separately or in tandem. The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. Construction Contracts Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project. The Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of billings as of June 30, 2018 during the next twelve months. Billings in excess of construction contract costs and estimated earnings represent billings or collections on contracts made in advance of revenue recognized. |
Recent Accounting Pronouncements | On February 22, 2017, the FASB issued new guidance that clarifies the scope and application of guidance on sales or transfers of nonfinancial assets and in substance nonfinancial assets to customers, including partial sales. The new guidance applies to all nonfinancial assets, including real estate, and defines an in substance nonfinancial asset. The Company adopted the new guidance on January 1, 2018, and it did not have a material impact on the Company’s consolidated financial statements. On August 28, 2017, the FASB issued new guidance that simplifies some of the requirements relating to accounting for derivatives and hedging. The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness for a highly effective hedge and also simplifies certain documentation and assessment requirements relating to the determination of hedge effectiveness. The new guidance will be effective for the Company on January 1, 2019, with early adoption permitted. As of June 30, 2018 , the Company does not currently have any derivatives designated as hedging instruments for accounting purposes but may designate new derivative contracts as hedging instruments in the future. The application of this guidance to future hedging relationships could reduce or eliminate the gains and losses that would otherwise be recorded for these derivative instruments. Recent Accounting Pronouncements On May 28, 2014, the Financial Accounting Standards Board ("FASB") issued a new standard that provides a single, comprehensive model for recognizing revenue from contracts with customers. While the new standard does not supersede the guidance on accounting for leases, it changes the way the Company recognizes revenue from construction and development contracts with third party customers. The Company adopted this standard on January 1, 2018 using the modified retrospective method, applying this standard to all contracts not yet completed as of that date. In applying the standard to the Company’s future construction contracts, certain pre-contract costs incurred by the Company are now deferred and amortized over the period during which construction obligations are fulfilled. Previously, these costs were immediately recorded as general contracting expenses upon commencement of construction, with the corresponding general contracting revenue also recorded. Applying the standard to the Company’s uncompleted contracts as of January 1, 2018 did not result in material differences to these contracts in aggregate, and no cumulative adjustment to distributions in excess of earnings was recorded as of January 1, 2018. On February 25, 2016, the FASB issued a new lease standard that requires lessees to recognize most leases in their balance sheets as lease liabilities with corresponding right-of-use assets. The new standard also makes targeted changes to lessor accounting. The new standard will be effective for the Company on January 1, 2019 and requires a modified retrospective transition approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented, with an option to use certain transition relief. Management is currently evaluating the potential impact of the new standard on the Company’s consolidated financial statements. The Company is the lessee on certain ground leases and equipment leases, which represents a majority of the Company's current operating lease payments, and expects to record right-of-use assets and lease liabilities for these leases under the new standard. In 2016, the FASB issued new guidance that addresses eight classification issues related to the statement of cash flows and requires the presentation of total changes in cash, cash equivalents, restricted cash, and restricted cash equivalents in the statement of cash flows. The Company adopted this new guidance on December 31, 2017, applying it retrospectively to each period presented. The new guidance requires that the statement of cash flows show changes in restricted cash in addition to changes in cash and cash equivalents. No additional changes were required to be made to the Company's consolidated statements of cash flows as a result of the new guidance. |
Segments | Segments Net operating income (segment revenues minus segment expenses) is the measure used by the Company’s chief operating decision-maker to assess segment performance. Net operating income is not a measure of operating income or cash flows from operating activities as measured by GAAP and is not indicative of cash available to fund cash needs. As a result, net operating income should not be considered an alternative to cash flows as a measure of liquidity. Not all companies calculate net operating income in the same manner. The Company considers net operating income to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of the Company’s real estate and construction businesses. |
Derivative Financial Instruments | Derivative Financial Instruments The Company may enter into interest rate derivative contracts to manage exposure to interest rate risks. The Company does not use derivative financial instruments for trading or speculative purposes. Derivative financial instruments are recognized at fair value and presented within other assets and liabilities in the condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of derivatives that are neither designated nor qualify as hedging instruments are recognized within the change in fair value of interest rate derivatives in the condensed consolidated statements of income. For derivatives that qualify as cash flow hedges, the effective portion of the gain or loss is reported as a component of other comprehensive loss and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows: Level 1—quoted prices in active markets for identical assets or liabilities Level 2—observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3—unobservable inputs Except as disclosed below, the carrying amounts of the Company’s financial instruments approximate their fair values. Financial assets and liabilities whose fair values are measured on a recurring basis using Level 2 inputs consist of interest rate swaps and caps. The Company measures the fair values of these assets and liabilities based on prices provided by independent market participants that are based on observable inputs using market-based valuation techniques. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. |
Legal Proceedings | Legal Proceedings The Company is from time to time involved in various disputes, lawsuits, warranty claims, environmental and other matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters. The Company currently is a party to various legal proceedings. Management accrues a liability for litigation if an unfavorable outcome is determined to be probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is determined to be probable and a range of loss can be reasonably estimated, management accrues the best estimate within the range; however, if no amount within the range is a better estimate than any other, the minimum amount within the range is accrued. Legal fees related to litigation are expensed as incurred. Management does not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on the Company’s financial position or results of operations; however, litigation is subject to inherent uncertainties. Under the Company’s leases, tenants are typically obligated to indemnify the Company from and against all liabilities, costs and expenses imposed upon or asserted against it as owner of the properties due to certain matters relating to the operation of the properties by the tenant. |
Business of Organization (Table
Business of Organization (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of properties under development or construction | As of June 30, 2018 , the Company's property portfolio consisted of 49 operating properties and 8 development properties. Refer to Note 4 for information related to the Company's recent acquisitions and dispositions of operating properties. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of restricted cash | The following table sets forth the items from the Company's consolidated balance sheets that are included in cash, cash equivalents, and restricted cash in the consolidated statements of cash flows (in thousands): Balance as of June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 Cash and cash equivalents $ 12,279 $ 19,959 $ 18,587 $ 21,942 Restricted cash 3,139 2,957 3,139 3,251 Cash, cash equivalents, and restricted cash $ 15,418 $ 22,916 $ 21,726 $ 25,193 |
Summary of changes due to new accounting principle | The following table summarizes the changes made to net cash provided by operating activities, net cash used for investing activities, and net cash provided by financing activities in the consolidated statement of cash flows for the six months ended June 30, 2017 on a retrospective basis (in thousands) as a result of the new guidance as well as the reclassification adjustments described in the "Reclassifications" section above: Six months ended June 30, 2017 Operating activities as originally presented $ 19,886 Adjustment relating to restricted cash (148 ) Adjustment for shares tendered for tax withholding 289 Adjustment relating to interest income presentation (3,053 ) Operating activities after adjustments $ 16,974 Investing activities as originally presented $ (37,057 ) Adjustment relating to restricted cash 36 Adjustment relating to interest income presentation 3,053 Investing activities after adjustments $ (33,968 ) Financing activities as originally presented $ 13,816 Adjustment for shares tendered for tax withholding (289 ) Financing activities after adjustments $ 13,527 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Net operating income of reportable segments | Net operating income of the Company’s reportable segments for the three and six months ended June 30, 2018 and 2017 was as follows (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 (Unaudited) Office real estate Rental revenues $ 5,288 $ 4,759 $ 10,388 $ 9,665 Rental expenses 1,430 1,366 2,876 2,692 Real estate taxes 502 450 1,004 900 Segment net operating income 3,356 2,943 6,508 6,073 Retail real estate Rental revenues 16,608 15,578 33,319 31,209 Rental expenses 2,563 2,479 5,220 4,999 Real estate taxes 1,656 1,520 3,339 2,969 Segment net operating income 12,389 11,579 24,760 23,241 Multifamily residential real estate Rental revenues 6,702 6,418 13,590 13,113 Rental expenses 2,529 2,326 4,850 4,548 Real estate taxes 577 625 1,205 1,235 Segment net operating income 3,596 3,467 7,535 7,330 General contracting and real estate services Segment revenues 20,654 56,671 43,704 120,190 Segment expenses 20,087 54,015 42,501 115,211 Segment gross profit 567 2,656 1,203 4,979 Net operating income $ 19,908 $ 20,645 $ 40,006 $ 41,623 |
Reconciliation of net operating income to net income | The following table reconciles net operating income to net income, the most directly comparable GAAP measure, for the three and six months ended June 30, 2018 and 2017 (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 (Unaudited) Net operating income $ 19,908 $ 20,645 $ 40,006 $ 41,623 Depreciation and amortization (9,179 ) (9,304 ) (18,457 ) (18,779 ) General and administrative expenses (2,764 ) (2,678 ) (5,725 ) (5,664 ) Acquisition, development and other pursuit costs (9 ) (369 ) (93 ) (416 ) Impairment charges (98 ) (27 ) (98 ) (31 ) Interest income 2,375 1,658 4,607 3,056 Interest expense (4,497 ) (4,494 ) (8,870 ) (9,029 ) Gain on real estate dispositions — — — 3,395 Change in fair value of interest rate derivatives (11 ) (81 ) 958 213 Other income 54 43 168 80 Income tax (provision) benefit 166 (450 ) 432 (752 ) Net income $ 5,945 $ 4,943 $ 12,928 $ 13,696 |
Real Estate Investment (Tables)
Real Estate Investment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Real Estate [Abstract] | |
Summary of the purchase price allocation | The following table summarizes the purchase price allocation (including acquisition costs) based on relative fair value of the assets acquired and liabilities assumed for the two operating properties purchased during the six months ended June 30, 2018 (in thousands): Indian Lakes Crossing Parkway Centre Land $ 10,926 $ 1,372 Site improvements 531 696 Building and improvements 1,913 7,168 In-place leases 1,648 2,346 Above-market leases 11 — Below-market leases (175 ) (10 ) Net assets acquired $ 14,854 $ 11,572 |
Notes Receivable Notes Receivab
Notes Receivable Notes Receivable (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Summary of Mezzanine Loans | The Company had the following mezzanine loans outstanding as of June 30, 2018 and December 31, 2017 (in thousands): Outstanding loan amount Maximum loan commitment Interest rate Development Project June 30, 2018 December 31, 2017 1405 Point $ 25,633 $ 22,444 $ 28,232 8.0 % The Residences at Annapolis Junction 45,230 43,021 48,105 10.0 % North Decatur Square 15,134 11,790 25,712 15.0 % Delray Plaza 6,551 5,379 13,123 15.0 % Total $ 92,548 $ 82,634 $ 115,172 |
Summary of Interest Income | The Company recognized interest income for the three and six months ended June 30, 2018 and 2017 as follows: Three Months Ended Six Months Ended Development Project 2018 2017 2018 2017 1405 Point $ 483 $ 429 $ 936 $ 845 The Residences at Annapolis Junction 1,124 1,016 2,209 1,997 North Decatur Square 531 211 992 211 Delray Plaza 225 — 448 — Total $ 2,363 $ 1,656 $ 4,585 $ 3,053 |
Construction Contracts (Tables)
Construction Contracts (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Contractors [Abstract] | |
Summary of balances and changes of construction contracts | The Company’s balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) as of June 30, 2018 and December 31, 2017 were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Beginning backlog $ 30,733 $ 157,722 $ 49,167 $ 217,718 New contracts/change orders 27,807 15,519 32,376 18,960 Work performed (20,619 ) (56,584 ) (43,622 ) (120,021 ) Ending backlog $ 37,921 $ 116,657 $ 37,921 $ 116,657 The following table summarizes the changes to the balances in the Company’s construction contract costs and estimated earnings in excess of billings account and the billings in excess of construction contract costs and estimated earnings account for the six months ended June 30, 2018 (in thousands): Construction contract costs and estimated earnings in excess of billings Billings in excess of construction contract costs and estimated earnings Balance as of January 1, 2018 $ 245 $ 3,591 Revenue recognized that was included in the balance at the beginning of the period — (3,591 ) Increases due to new billings, excluding amounts recognized as revenue during the period — 1,898 Transferred to receivables (245 ) — Construction contract costs and estimated earnings not billed during the period 1,287 — Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion — (187 ) Balance as of June 30, 2018 $ 1,287 $ 1,711 |
Net position of uncompleted construction contracts | The Company’s net position on uncompleted construction contracts comprised the following as of June 30, 2018 and December 31, 2017 (in thousands): June 30, December 31, Costs incurred on uncompleted construction contracts $ 562,879 $ 520,368 Estimated earnings 19,222 18,070 Billings (582,525 ) (541,784 ) Net position $ (424 ) $ (3,346 ) June 30, December 31, Construction contract costs and estimated earnings in excess of billings $ 1,287 $ 245 Billings in excess of construction contract costs and estimated earnings (1,711 ) (3,591 ) Net position $ (424 ) $ (3,346 ) |
Derivative Financial Instrume28
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivatives | The Company’s derivatives were comprised of the following as of June 30, 2018 and December 31, 2017 (in thousands): June 30, 2018 December 31, 2017 (Unaudited) Notional Amount Fair Value Notional Amount Fair Value Asset Liability Asset Liability Interest rate swaps $ 100,000 $ 431 $ (136 ) $ 56,079 $ 10 $ (69 ) Interest rate caps 250,000 2,429 — 345,000 1,515 — Total $ 350,000 $ 2,860 $ (136 ) $ 401,079 $ 1,525 $ (69 ) |
Schedule of changes in fair value of derivatives | The changes in the fair value of the Company’s derivatives during the three and six months ended June 30, 2018 and 2017 were comprised of the following (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Interest rate swaps $ 5 $ 7 $ 353 $ 268 Interest rate caps (16 ) (88 ) 605 (55 ) Total change in fair value of interest rate derivatives $ (11 ) $ (81 ) $ 958 $ 213 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Carrying amounts and fair values of financial instruments measured based on level two inputs | The carrying amounts and fair values of the Company’s financial instruments, all of which are based on Level 2 inputs, as of June 30, 2018 and December 31, 2017 , were as follows (in thousands): June 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value (Unaudited) Indebtedness $ 580,446 $ 576,270 $ 517,272 $ 518,417 Interest rate swap liabilities 136 136 69 69 Interest rate swap and cap assets 2,860 2,860 1,525 1,525 |
Business of Organization - Addi
Business of Organization - Additional Information (Details) - property | Jun. 30, 2018 | Dec. 31, 2017 |
Business And Organization [Line Items] | ||
Percentage of Operating Partnership held | 73.80% | 72.00% |
General Partner | ||
Business And Organization [Line Items] | ||
Percentage of Operating Partnership held | 0.10% | |
Operating Property | ||
Business And Organization [Line Items] | ||
Number of real estate properties | 49 | |
Development Property | ||
Business And Organization [Line Items] | ||
Number of real estate properties | 8 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Interest receivable | $ 4,604 | $ 3,053 | |||||
Notes receivable issuances | 5,816 | 10,783 | |||||
Common shares tendered for tax withholding | 343 | 289 | |||||
Property liabilities | $ (1,973) | (2,489) | |||||
Restatement Adjustment | Reclassification Of Earned Interest Income | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Interest receivable | $ 2,200 | $ 1,400 | 3,100 | $ 7,100 | $ 3,200 | $ 100 | |
Notes receivable issuances | (2,200) | (1,400) | (3,100) | (7,100) | (3,200) | (100) | |
Restatement Adjustment | Reclassification For Shares Tendered For Tax Withholding | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Common shares tendered for tax withholding | 300 | 300 | 300 | 300 | 200 | 300 | |
Property liabilities | $ (300) | $ (300) | $ (300) | $ (300) | $ (200) | $ (300) |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Schedule of Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 12,279 | $ 19,959 | $ 18,587 | $ 21,942 |
Restricted cash | 3,139 | 2,957 | 3,139 | 3,251 |
Cash, cash equivalents, and restricted cash | $ 15,418 | $ 22,916 | $ 21,726 | $ 25,193 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Prior Period Adjustment (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by operating activities | $ 11,260 | $ 16,974 |
Net cash used for investing activities | (103,118) | (33,968) |
Net cash provided by (used in) financing activities | $ 84,360 | 13,527 |
Activities as originally presented | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by (used in) financing activities | 13,816 | |
Adjustment for shares tendered for tax withholding | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by operating activities | 289 | |
Net cash provided by (used in) financing activities | (289) | |
Accounting Standards Update 2016-15 | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by operating activities | 16,974 | |
Net cash used for investing activities | (33,968) | |
Accounting Standards Update 2016-15 | Activities as originally presented | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by operating activities | 19,886 | |
Net cash used for investing activities | (37,057) | |
Accounting Standards Update 2016-15 | Adjustment Relating To Restricted Cash [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by operating activities | (148) | |
Net cash used for investing activities | 36 | |
Accounting Standards Update 2016-15 | Adjustment relating to interest income presentation | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by operating activities | (3,053) | |
Net cash used for investing activities | $ 3,053 |
Segments - Net Income of Report
Segments - Net Income of Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information | ||||
Rental revenues | $ 28,598 | $ 26,755 | $ 57,297 | $ 53,987 |
Rental expenses | 6,522 | 6,171 | 12,946 | 12,239 |
Real estate taxes | 2,735 | 2,595 | 5,548 | 5,104 |
Operating Segments | ||||
Segment Reporting Information | ||||
Gross profit | 19,908 | 20,645 | 40,006 | 41,623 |
Operating Segments | Office real estate | ||||
Segment Reporting Information | ||||
Rental revenues | 5,288 | 4,759 | 10,388 | 9,665 |
Rental expenses | 1,430 | 1,366 | 2,876 | 2,692 |
Real estate taxes | 502 | 450 | 1,004 | 900 |
Gross profit | 3,356 | 2,943 | 6,508 | 6,073 |
Operating Segments | Retail real estate | ||||
Segment Reporting Information | ||||
Rental revenues | 16,608 | 15,578 | 33,319 | 31,209 |
Rental expenses | 2,563 | 2,479 | 5,220 | 4,999 |
Real estate taxes | 1,656 | 1,520 | 3,339 | 2,969 |
Gross profit | 12,389 | 11,579 | 24,760 | 23,241 |
Operating Segments | Multifamily residential real estate | ||||
Segment Reporting Information | ||||
Rental revenues | 6,702 | 6,418 | 13,590 | 13,113 |
Rental expenses | 2,529 | 2,326 | 4,850 | 4,548 |
Real estate taxes | 577 | 625 | 1,205 | 1,235 |
Gross profit | 3,596 | 3,467 | 7,535 | 7,330 |
Operating Segments | General contracting and real estate services | ||||
Segment Reporting Information | ||||
Gross profit | 567 | 2,656 | 1,203 | 4,979 |
General contracting and real estate services | ||||
Segment Reporting Information | ||||
Segment revenues | 20,654 | 56,671 | 43,704 | 120,190 |
Segment expenses | 20,087 | 54,015 | 42,501 | 115,211 |
General contracting and real estate services | Operating Segments | General contracting and real estate services | ||||
Segment Reporting Information | ||||
Segment revenues | 20,654 | 56,671 | 43,704 | 120,190 |
Segment expenses | $ 20,087 | $ 54,015 | $ 42,501 | $ 115,211 |
Segments - Additional Informati
Segments - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting Information | ||||
Non-cash stock compensation | $ 820 | $ 832 | ||
General and Administrative Expense | ||||
Segment Reporting Information | ||||
Non-cash stock compensation | $ 200 | $ 200 | 700 | 600 |
General contracting and real estate services | ||||
Segment Reporting Information | ||||
Non-cash stock compensation | 100 | 100 | 200 | 400 |
General contracting and real estate services | ||||
Segment Reporting Information | ||||
General contracting and real estate services revenues | 20,654 | 56,671 | 43,704 | 120,190 |
General contracting and real estate services expenses | 20,087 | 54,015 | 42,501 | 115,211 |
General contracting and real estate services | General contracting and real estate services | Intercompany Eliminations | ||||
Segment Reporting Information | ||||
General contracting and real estate services revenues | 34,200 | 11,600 | 60,100 | 17,500 |
General contracting and real estate services expenses | $ 33,900 | $ 11,600 | $ 59,500 | $ 17,300 |
Segments - Reconciliation of Ne
Segments - Reconciliation of Net Operating Income to Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Depreciation and amortization | $ (9,179) | $ (9,304) | $ (18,457) | $ (18,779) |
General and administrative expenses | (2,764) | (2,678) | (5,725) | (5,664) |
Acquisition, development and other pursuit costs | (9) | (369) | (93) | (416) |
Impairment charges | (98) | (27) | (98) | (31) |
Interest income | 2,375 | 1,658 | 4,607 | 3,056 |
Interest expense | (4,497) | (4,494) | (8,870) | (9,029) |
Gain on real estate dispositions | 0 | 3,395 | ||
Change in fair value of interest rate derivatives | (11) | (81) | 958 | 213 |
Other income | 54 | 43 | 168 | 80 |
Income tax (provision) benefit | 166 | (450) | 432 | (752) |
Net income | 5,945 | 4,943 | 12,928 | 13,696 |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Gross profit | 19,908 | 20,645 | 40,006 | 41,623 |
Segment Reconciling Items | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Depreciation and amortization | (9,179) | (9,304) | (18,457) | (18,779) |
General and administrative expenses | (2,764) | (2,678) | (5,725) | (5,664) |
Acquisition, development and other pursuit costs | (9) | (369) | (93) | (416) |
Impairment charges | (98) | (27) | (98) | (31) |
Interest income | 2,375 | 1,658 | 4,607 | 3,056 |
Interest expense | (4,497) | (4,494) | (8,870) | (9,029) |
Gain on real estate dispositions | 0 | 0 | 0 | 3,395 |
Change in fair value of interest rate derivatives | (11) | (81) | 958 | 213 |
Other income | 54 | 43 | 168 | 80 |
Income tax (provision) benefit | $ 166 | $ (450) | $ 432 | $ (752) |
Real Estate Investment - Acquis
Real Estate Investment - Acquisitions (Details) $ in Millions | Apr. 02, 2018USD ($) | Feb. 16, 2018USD ($) | Jan. 29, 2018USD ($) | Jan. 09, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2018property | Jan. 18, 2018 |
Chesterfield, Virginia | |||||||
Real Estate Properties [Line Items] | |||||||
Capitalized acquisition costs | $ 0.1 | ||||||
Payments to acquire land | 2.4 | ||||||
Indian Lakes Crossing | |||||||
Real Estate Properties [Line Items] | |||||||
Consideration transferred | $ 14.7 | ||||||
Capitalized acquisition costs | $ 0.2 | ||||||
Parkway Centre | |||||||
Real Estate Properties [Line Items] | |||||||
Consideration transferred | 11.3 | ||||||
Capitalized acquisition costs | 0.3 | ||||||
Acquisition, cash consideration | 9.6 | ||||||
Acquisition, equity consideration | $ 1.7 | ||||||
Indian Lakes Crossing And Parkway Centre | |||||||
Real Estate Properties [Line Items] | |||||||
Number of operating properties acquired | property | 2 | ||||||
Market At Mill Creek Partners, LLC | |||||||
Real Estate Properties [Line Items] | |||||||
Capitalized acquisition costs | $ 0.1 | ||||||
Payments to acquire land | $ 2.9 | ||||||
Ownership interest in partnership | 70.00% | ||||||
Investment in project | $ 9.4 | ||||||
Brooks Crossing | |||||||
Real Estate Properties [Line Items] | |||||||
Payments to acquire land | $ 0.1 |
Real Estate Investment - Summar
Real Estate Investment - Summary of the Purchase Price Allocation (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Indian Lakes Crossing | |
Business Acquisition [Line Items] | |
Below-market leases | $ (175) |
Net assets acquired | 14,854 |
Indian Lakes Crossing | In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 1,648 |
Indian Lakes Crossing | Above-market leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 11 |
Indian Lakes Crossing | Land | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 10,926 |
Indian Lakes Crossing | Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 531 |
Indian Lakes Crossing | Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 1,913 |
Parkway Centre | |
Business Acquisition [Line Items] | |
Below-market leases | (10) |
Net assets acquired | 11,572 |
Parkway Centre | In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 2,346 |
Parkway Centre | Above-market leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 0 |
Parkway Centre | Land | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 1,372 |
Parkway Centre | Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 696 |
Parkway Centre | Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | $ 7,168 |
Real Estate Investment Real Est
Real Estate Investment Real Estate Investment - Property Disposition (Details) - USD ($) | May 24, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
Real Estate Properties [Line Items] | |||
Contract price | $ 4,271,000 | $ 4,441,000 | |
Indian Lakes Crossing | Wawa Outparcel | Disposal Group, Not Discontinued Operations | |||
Real Estate Properties [Line Items] | |||
Contract price | $ 4,400,000 | ||
Gain (loss) on disposal | $ 0 |
Equity Method Investment (Detai
Equity Method Investment (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Feb. 25, 2016story | |
Schedule of Equity Method Investments [Line Items] | ||||||
Investment in equity method investment during period | $ 3,127,000 | $ 715,000 | ||||
Equity method investments | $ 14,538,000 | 14,538,000 | $ 11,411,000 | |||
Construction loan outstanding | 580,446,000 | 580,446,000 | 517,272,000 | |||
22-Story Mixed Use Tower | City Center | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Interests in equity method investments | 37.00% | |||||
Number stories in the mixed use tower (story) | story | 22 | |||||
Investment in equity method investment during period | 3,200,000 | |||||
Investment in equity method investments | 13,800,000 | 13,800,000 | 10,900,000 | |||
Equity method investments | 14,500,000 | 14,500,000 | 11,400,000 | |||
Guarantee of construction loan | 37.00% | |||||
Assets being used as collateral for the construction loan | 100.00% | |||||
Construction loan outstanding | 13,200,000 | 13,200,000 | 11,200,000 | |||
Dividends from equity investment | 0 | $ 0 | 0 | 0 | ||
Income from equity method investment | 0 | $ 0 | 0 | $ 0 | ||
City Center | 22-Story Mixed Use Tower | City Center | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Construction loan outstanding | $ 38,900,000 | $ 38,900,000 | $ 29,200,000 |
Notes Receivable Notes Receiv41
Notes Receivable Notes Receivable (Summary of Mezzanine Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Notes receivable | $ 93,478 | $ 93,478 | $ 83,058 | ||
Interest income | 2,375 | $ 1,658 | 4,607 | $ 3,056 | |
Mezzanine Loan | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Notes receivable | 92,548 | 92,548 | 82,634 | ||
Maximum loan commitment | 115,172 | 115,172 | |||
Interest income | 2,363 | 1,656 | 4,585 | 3,053 | |
Mezzanine Loan | 1405 Point | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Notes receivable | 25,633 | 25,633 | 22,444 | ||
Maximum loan commitment | $ 28,232 | $ 28,232 | |||
Interest rate | 8.00% | 8.00% | |||
Interest income | $ 483 | 429 | $ 936 | 845 | |
Mezzanine Loan | The Residences at Annapolis Junction | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Notes receivable | 45,230 | 45,230 | 43,021 | ||
Maximum loan commitment | $ 48,105 | $ 48,105 | |||
Interest rate | 10.00% | 10.00% | |||
Interest income | $ 1,124 | 1,016 | $ 2,209 | 1,997 | |
Mezzanine Loan | North Decatur Square | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Notes receivable | 15,134 | 15,134 | 11,790 | ||
Maximum loan commitment | $ 25,712 | $ 25,712 | |||
Interest rate | 15.00% | 15.00% | |||
Interest income | $ 531 | 211 | $ 992 | 211 | |
Mezzanine Loan | Delray Plaza | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Notes receivable | 6,551 | 6,551 | $ 5,379 | ||
Maximum loan commitment | $ 13,123 | $ 13,123 | |||
Interest rate | 15.00% | 15.00% | |||
Interest income | $ 225 | $ 0 | $ 448 | $ 0 |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) | Jun. 30, 2018 | Nov. 10, 2016 | Sep. 30, 2016 |
Mezzanine Loan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Maximum loan commitment | $ 115,172,000 | ||
1405 Point | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Purchase option | 88.00% | ||
1405 Point | Mezzanine Loan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Maximum loan commitment | 28,232,000 | ||
1405 Point | Financial Guarantee | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Guarantor obligations, maximum exposure (up to) | $ 25,000,000 | ||
1405 Point | Financial Guarantee | Letter of Credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Credit facility, amount outstanding | 2,100,000 | ||
The Residences at Annapolis Junction | Mezzanine Loan | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Maximum loan commitment | $ 48,105,000 | ||
The Residences at Annapolis Junction | Financial Guarantee | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Guarantor obligations, maximum exposure (up to) | $ 25,000,000 | ||
The Residences at Annapolis Junction | AJAO | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Purchase option | 88.00% | ||
Construction Loans | 1405 Point | Beatty Development Group | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Maximum borrowing capacity | $ 67,000,000 | ||
Construction Loans | The Residences at Annapolis Junction | AJAO | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Maximum borrowing capacity | $ 60,000,000 |
Construction Contracts (Details
Construction Contracts (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Contractors [Abstract] | ||
Deferred pre-contract costs | $ 500 | $ 600 |
Construction receivables retentions | 8,900 | 9,900 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Retention payable | 1,711 | 3,591 |
Construction | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Retention payable | $ 17,400 | $ 17,400 |
Construction Contracts - Summar
Construction Contracts - Summary of Costs in Excess of Billings and Billings in Excess of Costs (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Change In Contract With Customer, Asset [Roll Forward] | |
Balance as of January 1, 2018 | $ 245 |
Transferred to receivables | (245) |
Construction contract costs and estimated earnings not billed during the period | 1,287 |
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion | 0 |
Balance as of June 30, 2018 | 1,287 |
Change In Contract With Customer, Liability [Roll Forward] | |
Balance as of January 1, 2018 | 3,591 |
Revenue recognized that was included in the balance at the beginning of the period | (3,591) |
Increases due to new billings, excluding amounts recognized as revenue during the period | 1,898 |
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion | (187) |
Balance as of June 30, 2018 | $ 1,711 |
Construction Contracts - Summ45
Construction Contracts - Summary of Net Position (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Contractors [Abstract] | ||
Costs incurred on uncompleted construction contracts | $ 562,879 | $ 520,368 |
Estimated earnings | 19,222 | 18,070 |
Billings | (582,525) | (541,784) |
Net position | (424) | (3,346) |
Construction contract costs and estimated earnings in excess of billings | 1,287 | 245 |
Billings in excess of construction contract costs and estimated earnings | $ (1,711) | $ (3,591) |
Construction Contracts - Summ46
Construction Contracts - Summary of Backlog (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Remaining Performance Obligation [Roll Forward] | ||||
Beginning backlog | $ 30,733 | $ 157,722 | $ 49,167 | $ 217,718 |
New contracts/change orders | 27,807 | 15,519 | 32,376 | 18,960 |
Work performed | (20,619) | (56,584) | (43,622) | (120,021) |
Ending backlog | $ 37,921 | $ 116,657 | $ 37,921 | $ 116,657 |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Expected completion of contracts | 12 months | 12 months | ||
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Expected completion of contracts | 18 months | 18 months |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Details) | Jul. 27, 2018USD ($) | Jul. 12, 2018USD ($) | Jun. 29, 2018USD ($) | Jun. 14, 2018USD ($) | Jun. 01, 2018USD ($) | May 31, 2018USD ($) | Mar. 27, 2018USD ($) | Jan. 22, 2018 | Oct. 26, 2017USD ($)extension | Jul. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Apr. 23, 2018 | Mar. 28, 2018USD ($) | Dec. 31, 2017USD ($) |
Revolving Credit Facility | ||||||||||||||
Indebtedness | ||||||||||||||
Interest rate on credit facility as of end of period | 3.84% | |||||||||||||
Revolving Credit Facility | Minimum | ||||||||||||||
Indebtedness | ||||||||||||||
Basis points on unused commitment fee | 0.15% | |||||||||||||
Revolving Credit Facility | Maximum | ||||||||||||||
Indebtedness | ||||||||||||||
Basis points on unused commitment fee | 0.25% | |||||||||||||
Revolving Credit Facility | LIBOR | Minimum | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.40% | |||||||||||||
Revolving Credit Facility | LIBOR | Maximum | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 2.00% | |||||||||||||
Term Loan Facility | ||||||||||||||
Indebtedness | ||||||||||||||
Interest rate on credit facility as of end of period | 3.79% | |||||||||||||
Term Loan Facility | LIBOR | Minimum | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.35% | |||||||||||||
Term Loan Facility | LIBOR | Maximum | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.95% | |||||||||||||
Construction Loans | ||||||||||||||
Indebtedness | ||||||||||||||
Borrowings under construction loans | $ 24,400,000 | |||||||||||||
Operating Partnership | New Credit Facility | ||||||||||||||
Indebtedness | ||||||||||||||
Aggregate capacity under the credit facility | $ 300,000,000 | $ 330,000,000 | ||||||||||||
Operating Partnership | New Credit Facility | Revolving Credit Facility | ||||||||||||||
Indebtedness | ||||||||||||||
Aggregate capacity under the credit facility | 150,000,000 | |||||||||||||
Accordion feature maximum borrowing capacity | $ 450,000,000 | |||||||||||||
Number of extension options | extension | 2 | |||||||||||||
Duration of extension option | 6 months | |||||||||||||
Extension fee percentage | 0.075% | |||||||||||||
Credit facility, amount outstanding | 83,000,000 | $ 66,000,000 | ||||||||||||
Operating Partnership | New Credit Facility | Term Loan Facility | ||||||||||||||
Indebtedness | ||||||||||||||
Aggregate capacity under the credit facility | $ 150,000,000 | $ 180,000,000 | ||||||||||||
Credit facility, amount outstanding | $ 180,000,000 | $ 150,000,000 | ||||||||||||
Sandbridge Commons | LIBOR | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.75% | |||||||||||||
Columbus Village | ||||||||||||||
Indebtedness | ||||||||||||||
Repayment of debt | $ 8,300,000 | |||||||||||||
Southgate Square | ||||||||||||||
Indebtedness | ||||||||||||||
Face amount | $ 22,000,000 | |||||||||||||
Southgate Square | LIBOR | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.60% | |||||||||||||
River City | LIBOR | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.50% | |||||||||||||
River City | Construction Loans | Line of credit | ||||||||||||||
Indebtedness | ||||||||||||||
Aggregate capacity under the credit facility | $ 16,300,000 | |||||||||||||
249 Central Park Retail | ||||||||||||||
Indebtedness | ||||||||||||||
Face amount | $ 35,000,000 | |||||||||||||
249 Central Park Retail | LIBOR | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.60% | |||||||||||||
Brooks Crossing | Construction Loans | Line of credit | ||||||||||||||
Indebtedness | ||||||||||||||
Aggregate capacity under the credit facility | $ 15,600,000 | |||||||||||||
Brooks Crossing | Construction Loans | Line of credit | LIBOR | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.60% | |||||||||||||
Subsequent Event | Operating Partnership | New Credit Facility | Revolving Credit Facility | ||||||||||||||
Indebtedness | ||||||||||||||
Increase in borrowing | $ 20,000,000 | |||||||||||||
Subsequent Event | Market at Mill Creek | Construction Loans | Line of credit | ||||||||||||||
Indebtedness | ||||||||||||||
Aggregate capacity under the credit facility | $ 16,200,000 | |||||||||||||
Subsequent Event | Market at Mill Creek | Construction Loans | Line of credit | LIBOR | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.55% | |||||||||||||
Subsequent Event | Johns Hopkins Village | ||||||||||||||
Indebtedness | ||||||||||||||
Face amount | $ 53,000,000 | |||||||||||||
Effective interest rate | 4.19% | |||||||||||||
Subsequent Event | Johns Hopkins Village | LIBOR | ||||||||||||||
Indebtedness | ||||||||||||||
Stated interest rate, basis spread on variable rate | 1.25% | |||||||||||||
Interest rate swaps | Operating Partnership | ||||||||||||||
Indebtedness | ||||||||||||||
Fixed interest rate | 2.783% |
Derivative Financial Instrume48
Derivative Financial Instruments - Additional Information (Details) - USD ($) | Jul. 27, 2018 | Jul. 16, 2018 | Jun. 30, 2018 | Apr. 23, 2018 | Mar. 07, 2018 | Dec. 31, 2017 |
Derivatives | ||||||
Interest rate agreement, notional amount | $ 350,000,000 | $ 401,079,000 | ||||
Interest Rate Caps | ||||||
Derivatives | ||||||
Interest rate agreement, notional amount | 250,000,000 | $ 50,000,000 | 345,000,000 | |||
Strike rate | 2.25% | |||||
Interest rate cap agreement, premium (less than) | $ 300,000 | |||||
Interest Rate Swaps | ||||||
Derivatives | ||||||
Interest rate agreement, notional amount | $ 100,000,000 | $ 56,079,000 | ||||
Operating Partnership | Interest Rate Swaps | ||||||
Derivatives | ||||||
Interest rate agreement, notional amount | $ 50,000,000 | |||||
Fixed interest rate | 2.783% | |||||
Subsequent Event | Interest Rate Caps | ||||||
Derivatives | ||||||
Interest rate agreement, notional amount | $ 50,000,000 | |||||
Strike rate | 2.50% | |||||
Interest rate cap agreement, premium (less than) | $ 300,000 | |||||
Johns Hopkins Village | Subsequent Event | ||||||
Derivatives | ||||||
Effective interest rate | 4.19% |
Derivative Financial Instrume49
Derivative Financial Instruments - Schedule of Derivatives (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 07, 2018 | Dec. 31, 2017 | |
Derivatives | ||||||
Notional Amount | $ 350,000,000 | $ 350,000,000 | $ 401,079,000 | |||
Asset, Fair Value | 2,860,000 | 2,860,000 | 1,525,000 | |||
Liability, Fair Value | (136,000) | (136,000) | (69,000) | |||
Total change in fair value of interest rate derivatives | (11,000) | $ (81,000) | 958,000 | $ 213,000 | ||
Interest rate swaps | ||||||
Derivatives | ||||||
Notional Amount | 100,000,000 | 100,000,000 | 56,079,000 | |||
Asset, Fair Value | 431,000 | 431,000 | 10,000 | |||
Liability, Fair Value | (136,000) | (136,000) | (69,000) | |||
Total change in fair value of interest rate derivatives | 5,000 | 7,000 | 353,000 | 268,000 | ||
Interest rate caps | ||||||
Derivatives | ||||||
Notional Amount | 250,000,000 | 250,000,000 | $ 50,000,000 | 345,000,000 | ||
Asset, Fair Value | 2,429,000 | 2,429,000 | 1,515,000 | |||
Liability, Fair Value | 0 | 0 | $ 0 | |||
Total change in fair value of interest rate derivatives | $ (16,000) | $ (88,000) | $ 605,000 | $ (55,000) |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | Jul. 05, 2018 | Jul. 02, 2018 | May 03, 2018 | Apr. 17, 2018 | Apr. 05, 2018 | Apr. 02, 2018 | Feb. 26, 2018 | Jan. 29, 2018 | Jan. 04, 2018 | Jan. 02, 2018 | Jan. 10, 2017 | Jul. 10, 2015 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Class of Stock | |||||||||||||||||
Authorized capital shares of common stock (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | ||||||||||||||
Authorized capital shares of preferred stock (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||||||||
Common stock, shares issued (in shares) | 48,768,363 | 48,768,363 | 44,937,763 | ||||||||||||||
Common stock, shares outstanding (in shares) | 48,768,363 | 48,768,363 | 44,937,763 | ||||||||||||||
Preferred stock issued (in shares) | 0 | 0 | 0 | ||||||||||||||
Preferred stock outstanding (in shares) | 0 | 0 | 0 | ||||||||||||||
Percentage of Operating Partnership held | 73.80% | 73.80% | 72.00% | ||||||||||||||
Aggregate cash dividends and distributions, paid | $ 24,337,000 | $ 20,097,000 | |||||||||||||||
Dividends and distributions declared per common share and unit (in dollars per share) | $ 0.20 | $ 0.2 | $ 0.19 | $ 0.4 | $ 0.38 | ||||||||||||
Parkway Centre | |||||||||||||||||
Class of Stock | |||||||||||||||||
Acquisition, common units/shares issued or to be issued (in shares) | 117,228 | ||||||||||||||||
Class A units | |||||||||||||||||
Class of Stock | |||||||||||||||||
Class A Units not held by Company (in shares) | 17,290,403 | 17,290,403 | |||||||||||||||
Units redeemed (in shares) | 187,142 | ||||||||||||||||
Payments for redemption of partnership units | $ 2,500,000 | ||||||||||||||||
Class A units | Operating Partnership | |||||||||||||||||
Class of Stock | |||||||||||||||||
Aggregate cash dividends and distributions, paid | $ 3,500,000 | $ 3,300,000 | |||||||||||||||
Class C units | Columbus Village | |||||||||||||||||
Class of Stock | |||||||||||||||||
Acquisition, common units/shares issued or to be issued (in shares) | 275,000 | ||||||||||||||||
Class B units | Columbus Village | |||||||||||||||||
Class of Stock | |||||||||||||||||
Acquisition, common units/shares issued or to be issued (in shares) | 1,000,000 | ||||||||||||||||
New ATM Program | |||||||||||||||||
Class of Stock | |||||||||||||||||
Consideration received on transaction | $ 49,100,000 | ||||||||||||||||
Common Stock | |||||||||||||||||
Class of Stock | |||||||||||||||||
Shares issued (in shares) | 163,000 | 3,542,178 | |||||||||||||||
Common stock, shares outstanding (in shares) | 48,768,363 | 48,768,363 | 44,937,763 | ||||||||||||||
Aggregate cash dividends and distributions, paid | $ 9,000,000 | $ 8,500,000 | |||||||||||||||
Units redeemed (in shares) | (163,000) | ||||||||||||||||
Common Stock | New ATM Program | |||||||||||||||||
Class of Stock | |||||||||||||||||
Maximum aggregate offering price of shares to be sold (up to) | $ 125,000,000 | ||||||||||||||||
Shares issued (in shares) | 3,542,178 | ||||||||||||||||
Weighted average price (in dollars per share) | $ 14.07 | $ 14.07 | |||||||||||||||
Subsequent Event | Class A units | |||||||||||||||||
Class of Stock | |||||||||||||||||
Units redeemed (in shares) | 123,504 | ||||||||||||||||
Subsequent Event | Class A units | Operating Partnership | |||||||||||||||||
Class of Stock | |||||||||||||||||
Aggregate cash dividends and distributions, paid | $ 3,500,000 | ||||||||||||||||
Subsequent Event | Common Stock | |||||||||||||||||
Class of Stock | |||||||||||||||||
Aggregate cash dividends and distributions, paid | $ 9,700,000 | ||||||||||||||||
Johns Hopkins Village | Noncontrolling interests | Class A units | |||||||||||||||||
Class of Stock | |||||||||||||||||
Shares issued (in shares) | 36,684 | ||||||||||||||||
Consolidated Entities Under Development Or Construction | Operating Partnership | |||||||||||||||||
Class of Stock | |||||||||||||||||
Ownership interest percentage in properties | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 14, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 13, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Stock-based compensation expense | $ 0.4 | $ 0.3 | $ 1.2 | $ 1.1 | ||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Restricted stock granted (in shares) | 151,844 | |||||
Restricted stock granted, grant date fair value (in dollars per share) | $ 13.53 | |||||
Employee restricted stock award, vesting period | 2 years | |||||
Non-employee restricted stock award vest grant over period | 1 year | |||||
Nonvested restricted shares outstanding (in shares) | 138,971 | 138,971 | ||||
Unrecognized compensation cost | $ 1.3 | $ 1.3 | ||||
Unrecognized compensation cost, recognition period | 21 months | |||||
Restricted Stock | Grant Date | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Restricted stock award, vesting percentage | 33.33% | |||||
Restricted Stock | First Anniversary | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Restricted stock award, vesting percentage | 33.33% | |||||
Restricted Stock | Second Anniversary | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Restricted stock award, vesting percentage | 33.33% | |||||
Amended and Restated 2013 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Number of additional shares authorized (in shares) | 1,000,000 | |||||
Number of shares reserved for issuance (in shares) | 1,700,000 | 700,000 | ||||
Shares available for issuance (in shares) | 1,029,659 | 1,029,659 | ||||
Long Term Incentive Plan | Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Performance period | 3 years | |||||
Service period | 2 years |
Fair Value of Financial Instr52
Fair Value of Financial Instruments - Carrying Amounts and Fair Values of Financial Instruments Measured based on Level Two Inputs (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Carrying Value | ||
Fair Value of Financial Instruments | ||
Indebtedness | $ 580,446 | $ 517,272 |
Interest rate liabilities | 136 | 69 |
Interest rate assets | 2,860 | 1,525 |
Fair Value | Level 2 | ||
Fair Value of Financial Instruments | ||
Indebtedness | 576,270 | 518,417 |
Interest rate liabilities | 136 | 69 |
Interest rate assets | $ 2,860 | $ 1,525 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | May 13, 2013 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Construction Contracts | |||||
Related Party Transactions | |||||
Revenue from contracts with affiliated entities | $ 0.3 | $ 0.8 | $ 1.5 | $ 7.3 | |
Gross profit from related parties | 0.1 | 0.1 | 0.3 | 0.4 | |
Real Estate Service Fees | |||||
Related Party Transactions | |||||
Revenue from contracts with affiliated entities | 0 | 0 | 0 | 0 | |
Cost Reimbursements | |||||
Related Party Transactions | |||||
Revenue from contracts with affiliated entities | $ 0 | $ 0 | 0 | $ 0 | |
Tax Protection Agreements | Operating Partnership | |||||
Related Party Transactions | |||||
Future sale period for properties | 7 years | ||||
Future sale period for properties in limited number of cases | 10 years | ||||
Period of opportunity to guarantee debt | 10 years | ||||
Tax Protection Agreements | Operating Partnership | Executive Officers | |||||
Related Party Transactions | |||||
Guarantee of debt | $ 0.3 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Commitments and Contingencies | ||
Line of credit, performance and payment bonds | $ 43.5 | $ 44.9 |
Financial Guarantee | Letter of Credit | 1405 Point | ||
Commitments and Contingencies | ||
Credit facility, amount outstanding | 2.1 | |
Credit facility, amount outstanding | 2.1 | 2.1 |
Operating Partnership | ||
Commitments and Contingencies | ||
Credit facility, amount outstanding | $ 2.1 | $ 2.1 |