Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 31, 2019 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-35908 | |
Entity Registrant Name | ARMADA HOFFLER PROPERTIES, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-1214914 | |
Entity Address, Address Line One | 222 Central Park Avenue | |
Entity Address, Address Line Two | Suite 2100 | |
Entity Address, City or Town | Virginia Beach | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23462 | |
City Area Code | 757 | |
Local Phone Number | 366-4000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 52,982,147 | |
Amendment Flag | false | |
Entity Central Index Key | 0001569187 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Common stock | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | AHH | |
Security Exchange Name | NYSE | |
Redeemable convertible preferred stock | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share | |
Trading Symbol | AHHPrA | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Real estate investments: | ||
Income producing property | $ 1,407,224 | $ 1,037,917 |
Held for development | 2,752 | 2,994 |
Construction in progress | 156,695 | 135,675 |
Gross real estate investments | 1,566,671 | 1,176,586 |
Accumulated depreciation | (205,650) | (188,775) |
Net real estate investments | 1,361,021 | 987,811 |
Real estate investments held for sale | 0 | 929 |
Cash and cash equivalents | 23,109 | 21,254 |
Restricted cash | 2,852 | 2,797 |
Accounts receivable, net | 20,713 | 19,016 |
Notes receivable | 144,743 | 138,683 |
Construction receivables, including retentions | 13,696 | 16,154 |
Construction contract costs and estimated earnings in excess of billings | 461 | 1,358 |
Equity method investments | 0 | 22,203 |
Operating lease right-of-use assets | 33,268 | |
Finance lease right-of-use assets | 24,415 | |
Other assets | 105,749 | 55,177 |
Total Assets | 1,730,027 | 1,265,382 |
LIABILITIES AND EQUITY | ||
Indebtedness, net | 949,345 | 694,239 |
Accounts payable and accrued liabilities | 15,983 | 15,217 |
Construction payables, including retentions | 37,798 | 50,796 |
Billings in excess of construction contract costs and estimated earnings | 1,789 | 3,037 |
Operating lease liabilities | 41,300 | |
Finance lease liabilities | 17,862 | |
Other liabilities | 59,508 | 46,203 |
Total Liabilities | 1,123,585 | 809,492 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 100,000,000 shares authorized; 6.75% Series A Cumulative Redeemable Preferred Stock, 2,530,000 issued and outstanding as of June 30, 2019 and zero shares issued and outstanding as of December 31, 2018 | 63,250 | 0 |
Common stock, $0.01 par value, 500,000,000 shares authorized; 52,794,357 and 50,013,731 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 528 | 500 |
Additional paid-in capital | 394,269 | 357,353 |
Distributions in excess of earnings | (95,490) | (82,699) |
Accumulated other comprehensive loss | (4,502) | (1,283) |
Total stockholders’ equity | 358,055 | 273,871 |
Noncontrolling interests in investment entities | 4,550 | 0 |
Noncontrolling interests in Operating Partnership | 243,837 | 182,019 |
Total Equity | 606,442 | 455,890 |
Total Liabilities and Equity | $ 1,730,027 | $ 1,265,382 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
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) | 2,530,000 | 0 |
Preferred stock, shares outstanding (in shares) | 2,530,000 | 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) | 52,794,357 | 50,013,731 |
Common stock, shares outstanding (in shares) | 52,794,357 | 50,013,731 |
Redeemable convertible preferred stock | ||
Preferred Stock dividend rate percentage | 6.75% |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Rental revenues | $ 36,378 | $ 28,598 | $ 67,287 | $ 57,297 |
Total revenues | 57,822 | 49,252 | 105,767 | 101,001 |
Expenses | ||||
Rental expenses | 8,027 | 6,522 | 14,752 | 12,946 |
Real estate taxes | 3,451 | 2,735 | 6,579 | 5,548 |
Depreciation and amortization | 13,478 | 9,179 | 23,382 | 18,457 |
General and administrative expenses | 2,951 | 2,764 | 6,352 | 5,725 |
Acquisition, development and other pursuit costs | 57 | 9 | 457 | 93 |
Impairment charges | 0 | 98 | 0 | 98 |
Total expenses | 48,087 | 41,394 | 87,931 | 85,368 |
Operating income | 9,735 | 7,858 | 17,836 | 15,633 |
Interest income | 5,593 | 2,375 | 10,912 | 4,607 |
Interest expense | (7,603) | (4,497) | (13,489) | (8,870) |
Equity in income of unconsolidated real estate entities | 0 | 0 | 273 | 0 |
Change in fair value of interest rate derivatives | (1,933) | (11) | (3,396) | 958 |
Other income | 4 | 54 | 64 | 168 |
Income before taxes | 5,796 | 5,779 | 12,200 | 12,496 |
Income tax benefit | 30 | 166 | 140 | 432 |
Net income | 5,826 | 5,945 | 12,340 | 12,928 |
Net income attributable to noncontrolling interests: | ||||
Investment entities | 320 | 0 | 320 | 0 |
Operating Partnership | (1,580) | (1,626) | (3,210) | (3,569) |
Net income attributable to Armada Hoffler Properties, Inc. | 4,566 | 4,319 | 9,450 | 9,359 |
Preferred stock dividends | (154) | 0 | (154) | 0 |
Net income attributable to common stockholders | $ 4,412 | $ 4,319 | $ 9,296 | $ 9,359 |
Net income attributable to stockholders per share (basic and diluted) (in dollars per share) | $ 0.08 | $ 0.09 | $ 0.18 | $ 0.21 |
Weighted-average common shares outstanding (basic and diluted) (in shares) | 52,451 | 45,928 | 51,692 | 45,532 |
Comprehensive income: | ||||
Net income | $ 5,826 | $ 5,945 | $ 12,340 | $ 12,928 |
Unrealized cash flow hedge losses | (3,459) | 0 | (4,462) | 0 |
Realized cash flow hedge losses reclassified to net income | 35 | 0 | 107 | 0 |
Comprehensive income | 2,402 | 5,945 | 7,985 | 12,928 |
Comprehensive income attributable to Armada Hoffler Properties, Inc. | 2,045 | 4,319 | 6,231 | 9,359 |
General contracting and real estate services | ||||
Revenues | ||||
General contracting and real estate services revenues | 21,444 | 20,654 | 38,480 | 43,704 |
Expenses | ||||
General contracting and real estate services expenses | 20,123 | 20,087 | 36,409 | 42,501 |
Noncontrolling interests in investment entities | ||||
Expenses | ||||
Net income | (320) | |||
Comprehensive income: | ||||
Net income | (320) | |||
Comprehensive income attributable to noncontrolling interests: | 320 | 0 | 320 | 0 |
Noncontrolling interests in Operating Partnership | ||||
Expenses | ||||
Net income | 1,580 | 1,626 | ||
Comprehensive income: | ||||
Net income | 1,580 | 1,626 | ||
Unrealized cash flow hedge losses | (912) | |||
Realized cash flow hedge losses reclassified to net income | 9 | |||
Comprehensive income attributable to noncontrolling interests: | $ (677) | $ (1,626) | $ (2,074) | $ (3,569) |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Equity - USD ($) $ in Thousands | Total | Preferred stock | Common stock | Additional paid-in capital | Distributions in excess of earnings | Accumulated other comprehensive loss | Total stockholders' equity | Noncontrolling interests in investment entities | Noncontrolling interests in Operating Partnership | Redeemable convertible preferred stock | Redeemable convertible preferred stockPreferred stock | Redeemable convertible preferred stockAdditional paid-in capital | Redeemable convertible preferred stockTotal stockholders' equity | Operating PartnershipAdditional paid-in capital | Operating PartnershipTotal stockholders' equity |
Beginning balance at Dec. 31, 2017 | $ 420,283 | $ 0 | $ 449 | $ 287,407 | $ (61,166) | $ 0 | $ 226,690 | $ 0 | $ 193,593 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 6,983 | 5,040 | 5,040 | 0 | 1,943 | ||||||||||
Restricted stock awards, net of tax withholding | 500 | 1 | 499 | 500 | |||||||||||
Restricted stock award forfeitures | (4) | (4) | (4) | ||||||||||||
Issuance of operating partnership units for acquisitions | 1,696 | 1,696 | |||||||||||||
Redemption of operating partnership units | (5) | 2 | 1,797 | 1,799 | (1,804) | ||||||||||
Dividends and distributions declared | (12,552) | (9,064) | (9,064) | (3,488) | |||||||||||
Ending balance at Mar. 31, 2018 | 416,901 | 0 | 452 | 289,699 | (65,190) | 0 | 224,961 | 0 | 191,940 | ||||||
Beginning balance at Dec. 31, 2017 | 420,283 | 0 | 449 | 287,407 | (61,166) | 0 | 226,690 | 0 | 193,593 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 12,928 | ||||||||||||||
Unrealized cash flow hedge losses | 0 | ||||||||||||||
Realized cash flow hedge losses reclassified to net income | 0 | ||||||||||||||
Ending balance at Jun. 30, 2018 | 456,970 | 0 | 488 | 338,577 | (70,648) | 0 | 268,417 | 0 | 188,553 | ||||||
Beginning balance at Mar. 31, 2018 | 416,901 | 0 | 452 | 289,699 | (65,190) | 0 | 224,961 | 0 | 191,940 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 5,945 | 4,319 | 4,319 | 1,626 | |||||||||||
Unrealized cash flow hedge losses | 0 | ||||||||||||||
Realized cash flow hedge losses reclassified to net income | 0 | ||||||||||||||
Net proceeds from issuance of common stock | 48,981 | 35 | 48,946 | 48,981 | |||||||||||
Restricted stock awards, net of tax withholding | 404 | 1 | 403 | 404 | |||||||||||
Issuance of operating partnership units for acquisitions | 500 | (5) | (5) | 505 | |||||||||||
Redemption of operating partnership units | (2,526) | (466) | (466) | (2,060) | |||||||||||
Dividends and distributions declared | (13,235) | (9,777) | (9,777) | (3,458) | |||||||||||
Ending balance at Jun. 30, 2018 | 456,970 | 0 | 488 | 338,577 | (70,648) | 0 | 268,417 | 0 | 188,553 | ||||||
Beginning balance at Dec. 31, 2018 | 455,890 | 0 | 500 | 357,353 | (82,699) | (1,283) | 273,871 | 0 | 182,019 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 6,514 | 4,884 | 4,884 | 1,630 | |||||||||||
Unrealized cash flow hedge losses | (1,003) | (752) | (752) | (251) | |||||||||||
Realized cash flow hedge losses reclassified to net income | 72 | 54 | 54 | 18 | |||||||||||
Net proceeds from issuance of common stock | 30,206 | 21 | 30,185 | 30,206 | |||||||||||
Restricted stock awards, net of tax withholding | 755 | 1 | 754 | 755 | |||||||||||
Restricted stock award forfeitures | (4) | (4) | (4) | ||||||||||||
Redemption of operating partnership units | 0 | 1 | 1,259 | 1,260 | (1,260) | ||||||||||
Dividends and distributions declared | (14,577) | (11,009) | (11,009) | (3,568) | |||||||||||
Ending balance at Mar. 31, 2019 | 477,686 | 0 | 523 | 389,547 | (88,949) | (1,981) | 299,140 | 0 | 178,546 | ||||||
Beginning balance at Dec. 31, 2018 | 455,890 | 0 | 500 | 357,353 | (82,699) | (1,283) | 273,871 | 0 | 182,019 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 12,340 | ||||||||||||||
Unrealized cash flow hedge losses | (4,462) | ||||||||||||||
Realized cash flow hedge losses reclassified to net income | 107 | ||||||||||||||
Noncontrolling Interest, Increase from Business Combination | 4,870 | ||||||||||||||
Issuance of operating partnership units for acquisitions | 68,075 | 69,061 | $ (986) | $ (986) | |||||||||||
Ending balance at Jun. 30, 2019 | 606,442 | 63,250 | 528 | 394,269 | (95,490) | (4,502) | 358,055 | 4,550 | 243,837 | ||||||
Beginning balance at Mar. 31, 2019 | 477,686 | 0 | 523 | 389,547 | (88,949) | (1,981) | 299,140 | 0 | 178,546 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 5,826 | 4,566 | 4,566 | (320) | 1,580 | ||||||||||
Unrealized cash flow hedge losses | (3,459) | (2,547) | (2,547) | (912) | |||||||||||
Realized cash flow hedge losses reclassified to net income | 35 | 26 | 26 | 9 | |||||||||||
Net proceeds from issuance of common stock | 7,498 | 4 | 7,494 | 7,498 | $ 61,001 | $ 63,250 | $ (2,249) | $ 61,001 | |||||||
Restricted stock awards, net of tax withholding | 464 | 1 | 463 | 464 | |||||||||||
Noncontrolling Interest, Increase from Business Combination | 4,870 | 4,870 | |||||||||||||
Dividends and distributions declared | (15,554) | (11,107) | (11,107) | (4,447) | |||||||||||
Ending balance at Jun. 30, 2019 | $ 606,442 | $ 63,250 | $ 528 | $ 394,269 | $ (95,490) | $ (4,502) | $ 358,055 | $ 4,550 | $ 243,837 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Equity (Parenthetical) - $ / shares | May 07, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Statement of Stockholders' Equity [Abstract] | |||||
Dividends and distributions declared per common share and unit (in dollars per share) | $ 0.21 | $ 0.20 | $ 0.21 | $ 0.21 | $ 0.20 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | ||
OPERATING ACTIVITIES | |||
Net income | $ 12,340 | $ 12,928 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of buildings and tenant improvements | 16,875 | 13,540 | |
Amortization of leasing costs and in-place lease intangibles | 6,507 | 4,917 | |
Accrued straight-line rental revenue | (2,208) | (1,029) | |
Amortization of leasing incentives and above or below-market rents | (97) | (141) | |
Accrued straight-line ground rent expense | 56 | 136 | |
Adjustment for uncollectable accounts | 9 | 112 | |
Noncash stock compensation | 1,017 | 820 | |
Impairment charges | 0 | 98 | |
Noncash interest expense | 701 | 557 | |
Adjustment for Annapolis Junction loan discount amortization | [1] | (2,356) | 0 |
Change in fair value of interest rate derivatives | 3,396 | (958) | |
Equity in income of unconsolidated real estate entities | (273) | 0 | |
Changes in operating assets and liabilities: | |||
Property assets | 2,387 | (2,505) | |
Property liabilities | (2,841) | (1,973) | |
Construction assets | 4,142 | 4,443 | |
Construction liabilities | (4,004) | (15,081) | |
Interest receivable | (7,539) | (4,604) | |
Net cash provided by operating activities | 28,112 | 11,260 | |
INVESTING ACTIVITIES | |||
Development of real estate investments | (75,679) | (57,741) | |
Tenant and building improvements | (12,519) | (5,599) | |
Acquisitions of real estate investments, net of cash received | (133,345) | (32,967) | |
Dispositions of real estate investments, net of selling costs | 1,014 | 4,271 | |
Notes receivable issuances | (25,355) | (5,816) | |
Notes receivable paydowns | 1,692 | 0 | |
Leasing costs | (1,883) | (2,060) | |
Leasing incentives | 0 | (79) | |
Contributions to equity method investments | (535) | (3,127) | |
Net cash used for investing activities | (246,610) | (103,118) | |
FINANCING ACTIVITIES | |||
Proceeds from issuance of cumulative redeemable perpetual preferred stock, net | 61,001 | 0 | |
Proceeds from issuance of common stock, net | 37,704 | 48,981 | |
Common shares tendered for tax withholding | (344) | (343) | |
Debt issuances, credit facility and construction loan borrowings | 291,392 | 147,248 | |
Debt and credit facility repayments, including principal amortization | (138,175) | (84,277) | |
Debt issuance costs | (3,167) | (381) | |
Redemption of operating partnership units | 0 | (2,531) | |
Dividends on common stock and distributions on Operating Partnership units | (28,003) | (24,337) | |
Net cash provided by financing activities | 220,408 | 84,360 | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 1,910 | (7,498) | |
Cash, cash equivalents, and restricted cash, beginning of period | 24,051 | 22,916 | |
Cash, cash equivalents, and restricted cash, end of period | [2] | 25,961 | 15,418 |
Supplemental Disclosures (noncash transactions): | |||
Increase in dividends and distributions payable | 2,128 | 1,450 | |
(Decrease) increase in accrued capital improvements and development costs | (9,861) | 6,692 | |
Issuance of operating partnership units for acquisitions | 69,061 | 1,702 | |
Operating Partnership units redeemed for common shares | 1,260 | 1,804 | |
Debt assumed at fair value in conjunction with real estate purchases | 101,390 | 0 | |
Note receivable extinguished in conjunction with real estate purchase | 31,252 | 0 | |
Equity method investment redeemed for real estate acquisition | 23,011 | $ 0 | |
Noncontrolling interest in acquired real estate entity | 4,870 | ||
Recognition of operating lease ROU assets | [3] | 33,525 | |
Recognition of operating lease liabilities | [3] | 41,191 | |
Recognition of finance lease ROU assets | 24,500 | ||
Recognition of finance lease liabilities | $ 17,871 | ||
[1] | Borrower paid $5.0 million in exchange for the Company's purchase option. This is being accounted for as a loan modification fee; interest income is being recognized as additional interest income on the note receivable over the one-year remaining term. See Note 7 for additional discussion. | ||
[2] | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Statements of Cash Flows (in thousands): June 30, 2019 June 30, 2018 Cash and cash equivalents $ 23,109 $ 12,279 Restricted cash (a) 2,852 3,139 Cash, cash equivalents, and restricted cash $ 25,961 $ 15,418 (a) Restricted cash represents amounts held by lenders for real estate taxes, insurance, and reserves for capital improvements. | ||
[3] | Net of $0.4 million disposal related to the Company's preexisting lease at the Thames Street Wharf property acquired on June 26, 2019. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - Footnotes (Parenthetical) $ in Thousands | Jun. 26, 2019USD ($) |
The Residences at Annapolis Junction | |
Disposal of lease assets | $ 400 |
Business of Organization
Business of Organization | 6 Months Ended |
Jun. 30, 2019 | |
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 a real estate investment trust ("REIT"), the sole general partner of Armada Hoffler, L.P. (the "Operating Partnership") and, as of June 30, 2019 , owned 71.4% 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, 2019 , the Company's property portfolio consisted of 54 operating properties and 8 properties either under development or not yet stabilized. Refer to Note 5 for information related to the Company's recent acquisitions and dispositions of operating properties. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The condensed consolidated financial statements include the financial position and results of operations of the Company and its consolidated subsidiaries, including the Operating Partnership, its wholly-owned subsidiaries, and any interests in variable interest entities ("VIEs") where the Company has been determined to be the primary beneficiary. 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, 2018 . 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. Recent Accounting Pronouncements Leases On February 25, 2016, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") that requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets (ASU 2016-02— Leases (Topic 842)). The new standard also makes targeted changes to lessor accounting. The Company adopted the new standard on January 1, 2019, using the modified retrospective approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented as permitted in Accounting Standards Codification ("ASC") Topic 842. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to not reassess whether any expired or existing contracts are or contain leases, not reassess the lease classification for any expired or existing leases, and not reassess initial direct costs for existing leases. As of January 1, 2019, Company did not have any leases classified as finance leases. The Company also elected a practical expedient that allowed it to not separate non-lease components from lease components and instead to account for each lease and non-lease component as a single lease component. The adoption of the new standard as of January 1, 2019 did not impact the Company's consolidated results of operations and had no impact on cash flows. As a lessee, the Company had six ground leases on five properties as of January 1, 2019 with initial terms that range from 20 to 65 years and options to extend up to an additional 70 years in certain cases. The exercise of lease renewal options is at the Company's sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term. The Company recognizes lease expense for operating leases on a straight-line basis over the lease term. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants. The long-term ground leases represent a majority of the Company's current operating lease payments. The Company recorded right-of-use assets totaling $32.2 million and lease liabilities totaling $41.4 million upon adopting this standard on January 1, 2019. The Company utilized a weighted average discount rate of 5.4% to measure its lease liabilities upon adoption. As a lessor, the Company leases its properties under operating leases and recognizes base rents on a straight-line basis over the lease term. The Company also recognizes revenue from tenant recoveries, through which tenants reimburse the Company on an accrual basis for certain expenses such as utilities, janitorial services, repairs and maintenance, security and alarms, parking lot and ground maintenance, administrative services, management fees, insurance, and real estate taxes. Rental revenues are reduced by the amount of any leasing incentives amortized on a straight-line basis over the term of the applicable lease. In addition, the Company recognizes contingent rental revenue (e.g., percentage rents based on tenant sales thresholds) when the sales thresholds are met. Many tenant leases include one or more options to renew, with renewal terms that can extend the lease term from one to 15 years or more. The exercise of lease renewal options is at the tenant's sole discretion. The Company includes a renewal period in the lease term only if it appears at lease inception that the renewal is reasonably assured. The new standard includes new considerations regarding the recognition of rental revenue when collection is not probable. The Company changed its presentation and measurement of charges for uncollectable lease revenue associated with its office, retail, and residential leasing activity, reflecting those amounts as a component of rental income on the accompanying Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2019 . However, in accordance with its prospective adoption of the standard, the Company did not adjust the prior year period presentation of charges for uncollectable lease revenue associated with its office, retail, and residential leasing activity as a component of operating expenses, excluding property taxes, on the accompanying Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2018 . Instead, the Company recorded a combined adjustment of $0.2 million to the opening balances for distributions in excess of earnings and noncontrolling interest relating to receivables where collection of substantially all operating lease payments was not probable as of January 1, 2019. Lease-related receivables, which include contractual amounts accrued and unpaid from tenants and accrued straight-line rents receivable, are reduced for credit losses. Such amounts are recognized as a reduction to real estate rental revenues. The Company evaluates the collectability of lease receivables using several factors, including a lessee’s creditworthiness. The Company recognizes a credit loss on lease-related receivables when, in the opinion of management, collection of substantially all lease payments is not probable. When collectability is determined not probable, any lease income subsequent to recognizing the credit loss is limited to the lesser of the lease income reflected on a straight-line basis or cash collected. Credit losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance will replace the "incurred loss" approach under existing guidance with an "expected loss" model for instruments measured at amortized cost, such as our notes receivable. The guidance is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While the Company is currently evaluating the impact ASU 2016-13 will have on the consolidated financial statements, the Company expects that the adoption could result in earlier recognition of a provision for loan losses on its notes receivable. Other Accounting Policies See the Company's Annual Report on Form 10-K for the year ended December 31, 2018 for a description of other accounting principles upon which basis the accompanying consolidated financial statements were prepared. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 and 2018 was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (Unaudited) Office real estate Rental revenues $ 7,382 $ 5,288 $ 12,938 $ 10,388 Rental expenses 1,853 1,430 3,339 2,876 Real estate taxes 653 502 1,179 1,004 Segment net operating income 4,876 3,356 8,420 6,508 Retail real estate Rental revenues 19,235 16,608 36,492 33,319 Rental expenses 2,893 2,563 5,493 5,220 Real estate taxes 1,893 1,656 3,704 3,339 Segment net operating income 14,449 12,389 27,295 24,760 Multifamily residential real estate Rental revenues 9,761 6,702 17,857 13,590 Rental expenses 3,281 2,529 5,920 4,850 Real estate taxes 905 577 1,696 1,205 Segment net operating income 5,575 3,596 10,241 7,535 General contracting and real estate services Segment revenues 21,444 20,654 38,480 43,704 Segment expenses 20,123 20,087 36,409 42,501 Segment gross profit 1,321 567 2,071 1,203 Net operating income $ 26,221 $ 19,908 $ 48,027 $ 40,006 Rental expenses represent costs directly associated with the operation and management of the Company’s real estate properties. Rental expenses include asset management expenses, property management fees, repairs and maintenance, insurance, and utilities. General contracting and real estate services revenues for the three months ended June 30, 2019 and 2018 exclude revenue related to intercompany construction contracts of $30.0 million and $34.2 million , respectively. General contracting and real estate services revenues for the six months ended June 30, 2019 and 2018 exclude revenue related to intercompany construction contracts of $60.2 million and $60.1 million , respectively. General contracting and real estate services expenses for the three months ended June 30, 2019 and 2018 exclude expenses related to intercompany construction contracts of $29.7 million and $33.9 million , respectively. General contracting and real estate services expenses for the six months ended June 30, 2019 and 2018 exclude expenses related to intercompany construction contracts of $59.6 million and $59.5 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, 2019 and 2018 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (Unaudited) Net operating income $ 26,221 $ 19,908 $ 48,027 $ 40,006 Depreciation and amortization (13,478 ) (9,179 ) (23,382 ) (18,457 ) General and administrative expenses (2,951 ) (2,764 ) (6,352 ) (5,725 ) Acquisition, development, and other pursuit costs (57 ) (9 ) (457 ) (93 ) Impairment charges — (98 ) — (98 ) Interest income 5,593 2,375 10,912 4,607 Interest expense (7,603 ) (4,497 ) (13,489 ) (8,870 ) Equity in income of unconsolidated real estate entities — — 273 — Change in fair value of interest rate derivatives (1,933 ) (11 ) (3,396 ) 958 Other income 4 54 64 168 Income tax benefit 30 166 140 432 Net income $ 5,826 $ 5,945 $ 12,340 $ 12,928 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases Lessee Disclosures The components of lease cost for the three and six months ended June 30, 2019 were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Operating lease cost $ 707 1,395 Finance lease cost: Amortization of right-of-use assets $ 77 77 Interest on lease liabilities $ 112 112 The table below presents supplemental cash flow information related to leases during the three and six months ended June 30, 2019 (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 524 $ 1,024 Operating cash flows from finance leases 111 111 Financing cash flows from finance leases — — Additional information related to leases as of June 30, 2019 were as follows (in thousands): June 30, 2019 (Unaudited) Weighted Average Remaining Lease Term (years) Operating leases 45.9 Finance leases 41.7 Weighted Average Discount Rate Operating leases 5.4 % Finance leases 5.2 % Maturities of lease liabilities as of June 30, 2019 were as follows (in thousands): Year Ending December 31, Operating Leases Finance Leases 2019 (excluding six months ended June 30, 2019) $ 954 $ 422 2020 2,080 864 2021 2,137 864 2022 2,361 868 2023 2,400 873 Thereafter 105,961 43,902 Total lease liabilities 115,893 47,793 Less imputed interest (74,593 ) (29,931 ) Present value of lease liabilities $ 41,300 $ 17,862 Lessor Disclosures Rental revenue for the three and six months ended June 30, 2019 comprised the following (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Base rent and tenant charges $ 35,066 $ 64,990 Accrued straight-line rental adjustment 1,187 2,148 Lease incentive amortization (184 ) (367 ) Above/below market lease amortization 309 516 Total rental revenue $ 36,378 $ 67,287 The Company's commercial tenant leases provide for minimum rental payments during each of the next five years and thereafter as follows (in thousands): Year Ending December 31, Operating Leases 2019 (excluding six months ended June 30, 2019) $ 48,504 2020 91,957 2021 84,332 2022 77,113 2023 67,302 Thereafter 314,422 Total $ 683,630 |
Leases | Leases Lessee Disclosures The components of lease cost for the three and six months ended June 30, 2019 were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Operating lease cost $ 707 1,395 Finance lease cost: Amortization of right-of-use assets $ 77 77 Interest on lease liabilities $ 112 112 The table below presents supplemental cash flow information related to leases during the three and six months ended June 30, 2019 (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 524 $ 1,024 Operating cash flows from finance leases 111 111 Financing cash flows from finance leases — — Additional information related to leases as of June 30, 2019 were as follows (in thousands): June 30, 2019 (Unaudited) Weighted Average Remaining Lease Term (years) Operating leases 45.9 Finance leases 41.7 Weighted Average Discount Rate Operating leases 5.4 % Finance leases 5.2 % Maturities of lease liabilities as of June 30, 2019 were as follows (in thousands): Year Ending December 31, Operating Leases Finance Leases 2019 (excluding six months ended June 30, 2019) $ 954 $ 422 2020 2,080 864 2021 2,137 864 2022 2,361 868 2023 2,400 873 Thereafter 105,961 43,902 Total lease liabilities 115,893 47,793 Less imputed interest (74,593 ) (29,931 ) Present value of lease liabilities $ 41,300 $ 17,862 Lessor Disclosures Rental revenue for the three and six months ended June 30, 2019 comprised the following (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Base rent and tenant charges $ 35,066 $ 64,990 Accrued straight-line rental adjustment 1,187 2,148 Lease incentive amortization (184 ) (367 ) Above/below market lease amortization 309 516 Total rental revenue $ 36,378 $ 67,287 The Company's commercial tenant leases provide for minimum rental payments during each of the next five years and thereafter as follows (in thousands): Year Ending December 31, Operating Leases 2019 (excluding six months ended June 30, 2019) $ 48,504 2020 91,957 2021 84,332 2022 77,113 2023 67,302 Thereafter 314,422 Total $ 683,630 |
Leases | Leases Lessee Disclosures The components of lease cost for the three and six months ended June 30, 2019 were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Operating lease cost $ 707 1,395 Finance lease cost: Amortization of right-of-use assets $ 77 77 Interest on lease liabilities $ 112 112 The table below presents supplemental cash flow information related to leases during the three and six months ended June 30, 2019 (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 524 $ 1,024 Operating cash flows from finance leases 111 111 Financing cash flows from finance leases — — Additional information related to leases as of June 30, 2019 were as follows (in thousands): June 30, 2019 (Unaudited) Weighted Average Remaining Lease Term (years) Operating leases 45.9 Finance leases 41.7 Weighted Average Discount Rate Operating leases 5.4 % Finance leases 5.2 % Maturities of lease liabilities as of June 30, 2019 were as follows (in thousands): Year Ending December 31, Operating Leases Finance Leases 2019 (excluding six months ended June 30, 2019) $ 954 $ 422 2020 2,080 864 2021 2,137 864 2022 2,361 868 2023 2,400 873 Thereafter 105,961 43,902 Total lease liabilities 115,893 47,793 Less imputed interest (74,593 ) (29,931 ) Present value of lease liabilities $ 41,300 $ 17,862 Lessor Disclosures Rental revenue for the three and six months ended June 30, 2019 comprised the following (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Base rent and tenant charges $ 35,066 $ 64,990 Accrued straight-line rental adjustment 1,187 2,148 Lease incentive amortization (184 ) (367 ) Above/below market lease amortization 309 516 Total rental revenue $ 36,378 $ 67,287 The Company's commercial tenant leases provide for minimum rental payments during each of the next five years and thereafter as follows (in thousands): Year Ending December 31, Operating Leases 2019 (excluding six months ended June 30, 2019) $ 48,504 2020 91,957 2021 84,332 2022 77,113 2023 67,302 Thereafter 314,422 Total $ 683,630 |
Real Estate Investment
Real Estate Investment | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate [Abstract] | |
Real Estate Investment | Real Estate Investment Property Acquisitions On February 6, 2019, the Company acquired an additional outparcel phase of Wendover Village in Greensboro, North Carolina for a contract price of $2.7 million plus capitalized acquisition costs of $0.1 million . This phase is leased by a single tenant. On March 14, 2019, the Company acquired the office and retail portions of the One City Center project in exchange for a redemption of its 37% equity ownership in the joint venture with Austin Lawrence Partners, which totaled $23.0 million as of the acquisition date, and a cash payment of $23.2 million . The Company also incurred capitalized acquisition costs of $0.1 million . On April 24, 2019, the Company exercised its option to purchase 79% of the interests in the partnership that owns 1405 Point in exchange for extinguishing the Company's $31.3 million note receivable on the project, making a cash payment of $0.3 million , and assuming a loan payable of $64.9 million , which was recorded at its fair value of $65.8 million . The Company also incurred capitalized acquisition costs of $0.1 million . On May 23, 2019, the Company acquired Red Mill Commons and Marketplace at Hilltop from Venture Realty Group for consideration comprised of 4.1 million Class A Units (as defined in Note 11), the assumption of $35.7 million of mortgage debt principal, and $4.5 million in cash. The negotiated price was $105.0 million , which contemplated the price of the Company's common stock of $15.55 per share when the purchase and sale agreement was executed. The aggregate acquisition cost was $109.3 million , which consisted of 4.1 million Class A Units valued at $68.1 million (using the price of the Company's common stock of $16.50 on the date of the acquisition), mortgage debt valued at $35.6 million , cash consideration of $4.5 million , and capitalized acquisition costs of $1.1 million . In connection with the acquisition, the Company and the Operating Partnership entered into a tax protection agreement with the contributors pursuant to which the Company and the Operating Partnership agreed, subject to certain exceptions, to indemnify the contributors for up to 10 years against certain tax liabilities incurred by them, if such liabilities result from a transaction involving a direct or indirect taxable disposition of either or both of these properties or if the Operating Partnership fails to maintain and allocate to the contributors for taxation purposes minimum levels of Operating Partnership liabilities. On June 26, 2019, the Company acquired Thames Street Wharf, a class A office building located in the Harbor Point development of Baltimore, Maryland, for $101.0 million in cash and $0.3 million of capitalized acquisition costs. The following table summarizes the purchase price allocation (including acquisition costs) based on relative fair value of the assets acquired and intangible liabilities assumed for the six operating properties purchased during the six months ended June 30, 2019 (in thousands): Wendover Village additional outparcel One City Center 1405 Point Red Mill Commons Marketplace at Hilltop Thames Street Wharf Land $ 1,633 $ 2,678 $ — (a) $ 44,252 $ 2,023 (b) $ 15,861 Site improvements 50 163 298 2,558 691 150 Building and improvements 888 28,039 92,866 27,790 19,195 64,539 Furniture and fixtures — — 2,302 — — — In-place leases 101 15,140 3,371 9,973 4,565 24,385 Above-market leases 111 — — 1,463 599 — Below-market leases — — — (6,221 ) (1,136 ) (3,636 ) Finance lease liabilities — — (8,671 ) — (9,200 ) — Finance lease right-of-use assets — — 11,730 — 12,770 — Net assets acquired $ 2,783 $ 46,020 $ 101,896 $ 79,815 $ 29,507 $ 101,299 ________________________________________ (a) Land is subject to a ground lease. (b) Portion of land is subject to a ground lease. Property Disposition On April 1, 2019, the Company sold Waynesboro Commons for a sale price of $1.1 million . There was no gain or loss recognized on the disposition. Subsequent to June 30, 2019 On July 17, 2019, the Company executed an agreement to sell Lightfoot Marketplace for $30.3 million and classified the property as held for sale at that time. |
Equity Method Investment
Equity Method Investment | 6 Months Ended |
Jun. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment One City Center On February 25, 2016, the Company acquired a 37% interest in One City Center, a joint venture with Austin Lawrence Partners, for purposes of developing a 22 -story mixed use tower in Durham, North Carolina. During the six months ended June 30, 2019 , the Company invested an additional $0.5 million in One City Center. For the period from January 1, 2019 to March 13, 2019, One City Center had operating income of $0.3 million allocated to the Company. For the three and six months ended June 30, 2018 , One City Center had no operating activity, and therefore the Company received no allocated income. On March 14, 2019, the Company acquired the office and retail portions of the One City Center project in exchange for its 37% equity ownership in the joint venture and a cash payment of $23.2 million |
Notes Receivable
Notes Receivable | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Notes Receivable | Notes Receivable The Company had the following notes receivable outstanding as of June 30, 2019 and December 31, 2018 ($ in thousands): Outstanding loan amount Maximum loan commitment Interest rate Interest compounding Development Project June 30, December 31, 2018 1405 Point $ — $ 30,238 $ 31,032 8.0 % Monthly The Residences at Annapolis Junction 37,602 36,361 48,105 10.0 % Monthly North Decatur Square (a) 19,852 18,521 29,673 15.0 % Annually Delray Plaza 12,098 7,032 15,000 15.0 % Annually Nexton Square 14,168 14,855 17,000 15.0 % Monthly Interlock Commercial 38,062 18,269 95,000 15.0 % None Solis Apartments at Interlock 17,226 13,821 41,100 13.0 % Annually Total mezzanine 139,008 139,097 $ 276,910 Other notes receivable 1,314 1,275 Notes receivable guarantee premium 6,554 2,800 Notes receivable discount, net (b) (2,133 ) (4,489 ) Total notes receivable $ 144,743 $ 138,683 _______________________________________ (a) This loan was paid in full on July 22, 2019. (b) Represents the remaining unamortized portion of the $5.0 million loan modification fee for The Residences at Annapolis Junction paid by the borrower in November 2018. 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, 2019 and 2018 as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, Development Project 2019 2018 2019 2018 1405 Point $ 173 $ 483 $ 783 $ 936 The Residences at Annapolis Junction 2,173 (a) 1,124 4,196 (a) 2,209 North Decatur Square 693 531 1,331 992 Delray Plaza 414 225 724 448 Nexton Square 524 — 1,033 — Interlock Commercial 1,086 — 1,830 — Solis Apartments at Interlock 508 — 972 — Total mezzanine 5,571 2,363 10,869 4,585 Other interest income 22 12 43 22 Total interest income $ 5,593 $ 2,375 $ 10,912 $ 4,607 ________________________________________ (a) Includes amortization of the $5.0 million loan modification fee paid by the borrower in November 2018. As of June 30, 2019 and December 31, 2018 , there was no allowance for loan losses. During the three and six months ended June 30, 2019 and 2018 , there was no provision for loan losses recorded for any of the Company's notes receivable. The Company's management performs a quarterly analysis of the loan portfolio to determine if an impairment has occurred based on the progress of development activities including leasing activities, projected development costs, and current and projected mezzanine and senior construction loan balances. Delray Plaza On January 8, 2019, the Delray Plaza loan was modified to increase the maximum amount of the loan to $15.0 million and increase the payment guarantee amount to $5.2 million . Nexton Square On February 8, 2019, the developer of Nexton Square closed on a senior construction loan with a maximum borrowing capacity of $25.2 million . The developer used proceeds from its original draw in part to repay $2.1 million of the mezzanine loan. Upon the closing of this senior construction loan, the Company entered into a payment guarantee for $12.6 million of the senior loan. 1405 Point On April 24, 2019, the Company exercised its option to purchase 79% of the interests in the partnership that owns 1405 Point in exchange for extinguishing its note receivable on the project and a cash payment of $0.3 million . The project is subject to a loan payable of $64.9 million . The Company has also guaranteed payment on a portion of the loan payable. See Note 15 for additional information. Interlock Commercial On April 19, 2019, the borrower executed its senior construction loan, and the Company's payment guarantee of up to $30.7 million became effective. See Note 15 for additional information. Annapolis Junction The Annapolis Junction loan was originated inclusive of options for the Company to purchase up to 88% of the related development project from the developer, Annapolis Junction Apartments Owner, LLC (“AJAO”). On November 16, 2018, AJAO refinanced the senior construction loan with a one year senior loan of $83.0 million . This senior loan may be extended for one additional year if certain minimum debt yields and minimum debt service coverage ratios are met by AJAO. Concurrent with the refinancing of the senior construction loan, the Company agreed to modify the mezzanine loan receivable with AJAO as follows: • The Company agreed to guarantee $8.3 million of the new senior loan; • The Company agreed to extend the maturity of the mezzanine loan, which will mature concurrently with the new senior loan; • The Company terminated its rights under the purchase options; • AJAO paid a fee of $5.0 million ; and • AJAO paid down $11.1 million of the outstanding mezzanine loan balance, which was comprised of a $9.9 million payment of accrued interest and a $1.2 million payment of principal. The fee of $5.0 million paid by AJAO is being accounted for as a loan discount that is being recognized as interest income over the remaining term of the loan using the effective interest method. Subsequent to June 30, 2019 On July 22, 2019, the borrower paid off the North Decatur Square note receivable in full. The Company received the outstanding principal and interest in the amount of $20.0 million . |
Construction Contracts
Construction Contracts | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 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, 2019 and 2018 (in thousands): Six Months Ended Six Months Ended Construction contract costs and estimated earnings in excess of billings Billings in excess of construction contract costs and estimated earnings Construction contract costs and estimated earnings in excess of billings Billings in excess of construction contract costs and estimated earnings Beginning balance $ 1,358 $ 3,037 $ 245 $ 3,591 Revenue recognized that was included in the balance at the beginning of the period — (3,037 ) — (3,591 ) Increases due to new billings, excluding amounts recognized as revenue during the period — 2,541 — 1,898 Transferred to receivables (1,890 ) — (245 ) — Construction contract costs and estimated earnings not billed during the period 461 — 1,287 — Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion 532 (752 ) — (187 ) Ending balance $ 461 $ 1,789 $ 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 $0.7 million and $1.4 million were deferred as of June 30, 2019 and December 31, 2018 , respectively. Amortization of pre-contract costs for the six months ended June 30, 2019 and 2018 was $0.3 million and zero, 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, 2019 and December 31, 2018 , construction receivables included retentions of $3.2 million and $8.5 million , respectively. The Company expects to collect substantially all construction receivables as of June 30, 2019 during the next twelve months. As of June 30, 2019 and December 31, 2018 , construction payables included retentions of $14.7 million and $21.6 million , respectively. The Company expects to pay substantially all construction payables as of June 30, 2019 during the next twelve months. The Company’s net position on uncompleted construction contracts comprised the following as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 December 31, 2018 Costs incurred on uncompleted construction contracts $ 630,425 $ 594,006 Estimated earnings 22,383 20,375 Billings (654,136 ) (616,060 ) Net position $ (1,328 ) $ (1,679 ) Construction contract costs and estimated earnings in excess of billings $ 461 $ 1,358 Billings in excess of construction contract costs and estimated earnings (1,789 ) (3,037 ) Net position $ (1,328 ) $ (1,679 ) The Company’s balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) as of June 30, 2019 and 2018 were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Beginning backlog $ 160,871 $ 30,733 $ 165,863 $ 49,167 New contracts/change orders 39,177 27,807 51,196 32,376 Work performed (21,416 ) (20,619 ) (38,427 ) (43,622 ) Ending backlog $ 178,632 $ 37,921 $ 178,632 $ 37,921 The Company expects to complete a majority of the uncompleted contracts as of June 30, 2019 during the next 12 to 18 months. |
Indebtedness
Indebtedness | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness Credit Facility The Company has a senior credit facility that was modified on January 31, 2019 using the accordion feature to increase the maximum total commitments to $355.0 million , comprised of a $150.0 million senior unsecured revolving credit facility (the "revolving credit facility") and a $205.0 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 further 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 . 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, 2019 and December 31, 2018 , the outstanding balance on the revolving credit facility was $122.0 million and $126.0 million , respectively, and the outstanding balance on the term loan facility was $205.0 million and $180.0 million , respectively. As of June 30, 2019 , the effective interest rates on the revolving credit facility and the term loan facility were 3.95% and 3.90% , 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. Other 2019 Financing Activity On January 31, 2019, the Company paid off North Point Center Note 1. On March 11, 2019, the Company received $7.4 million of additional funding on the loan secured by Lightfoot Marketplace. On March 14, 2019, the Company obtained a loan secured by One City Center in the amount of $25.6 million in conjunction with the acquisition of this property. This loan may be increased to $27.6 million subject to certain conditions. The loan bears interest at a rate of LIBOR plus a spread of 1.85% and will mature on April 1, 2024. On April 24, 2019, the Company exercised its option to purchase 79% of the partnership that owns 1405 Point in exchange for extinguishing its note receivable on the project and a cash payment of $0.3 million . The project was acquired subject to a loan payable of $64.9 million , which was recorded at its fair value of $65.8 million . The loan matures on May 1, 2020 and bears interest at a rate of LIBOR plus a spread of 2.75% ; this spread will decrease to 2.50% upon stabilization (as defined in the loan agreement). On May 23, 2019, the Company assumed notes payable in connection with the acquisition of Red Mill Commons and Marketplace at Hilltop with outstanding principal balances of $24.9 million and $10.8 million , respectively. The following table summarizes the note balance at assumption, fair value at assumption, maturity date, and interest rate for each loan ($ in thousands): Loan name Note balance at assumption Fair value of loan at assumption Loan maturity date Loan interest rate Redmill North $ 4,451 $ 4,520 12/31/2028 4.73 % Redmill South 6,310 6,090 5/1/2025 3.57 % Redmill Central 2,640 2,690 6/17/2024 4.80 % Redmill West 11,548 11,540 6/1/2022 4.23 % Marketplace at Hilltop 10,740 10,790 10/1/2022 4.42 % $ 35,689 $ 35,630 On June 26, 2019, the Company obtained a loan secured by Thames Street Wharf in the amount of $70.0 million in conjunction with the acquisition of this property. The loan bears interest at a rate of LIBOR plus a spread of 1.30% and will mature on June 26, 2022. On June 26, 2019, the Company entered into a $76.0 million syndicated construction loan facility for the Wills Wharf development project in Baltimore, Maryland. The facility bears interest at a rate of LIBOR plus a spread of 2.25% during construction activities and will mature on June 26, 2023. The facility will have an unused commitment fee of 25 basis points until the Company has borrowed at least $19.0 million under the facility. During the six months ended June 30, 2019 , the Company borrowed $50.3 million under its existing construction loans to fund new development and construction. Subsequent to June 30, 2019 In July 2019, the Company borrowed $5.4 million on its construction loans to fund development activities. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company may enter into interest rate derivative contracts to manage exposure to interest rate risks. The Company does not use derivative financial instruments for trading or speculative purposes. Derivative financial instruments are recognized at fair value and presented within other assets and other liabilities in the condensed consolidated balance sheets. Gains and losses resulting from changes in the fair value of derivatives that are neither designated nor qualify as hedging instruments are recognized within the change in fair value of interest rate derivatives in the condensed consolidated statements of comprehensive income. For derivatives that qualify as cash flow hedges, the gain or loss is reported as a component of other comprehensive income (loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. As of June 30, 2019 , the Company had the following LIBOR interest rate caps ($ in thousands), which are not designated as cash flow hedges for accounting purposes: Origination Date Expiration Date Notional Amount Strike Rate Premium Paid 6/23/2017 7/1/2019 $ 50,000 1.50 % $ 154 9/18/2017 10/1/2019 50,000 1.50 % 199 11/28/2017 12/1/2019 50,000 1.50 % 359 3/7/2018 4/1/2020 50,000 2.25 % 310 7/16/2018 8/1/2020 50,000 2.50 % 319 12/11/2018 1/1/2021 50,000 2.75 % 210 5/15/2019 6/1/2022 100,000 2.50 % 288 Total $ 400,000 $ 1,839 As of June 30, 2019 , the Company held the following floating-to-fixed interest rate swaps ($ in thousands): Related Debt Notional Amount Index Swap Fixed Rate Debt effective rate Effective Date Expiration Date Senior unsecured term loan $ 50,000 1-month LIBOR 2.00 % 3.50 % 3/1/2016 2/20/2020 Senior unsecured term loan 50,000 1-month LIBOR 2.78 % 4.28 % 5/1/2018 5/1/2023 John Hopkins Village 52,256 (a) 1-month LIBOR 2.94 % 4.19 % 8/7/2018 8/7/2025 Lightfoot Marketplace 10,500 (a) 1-month LIBOR 3.02 % 4.77 % 10/12/2018 10/12/2023 249 Central Park Retail, South Retail, and Fountain Plaza Retail 34,570 (a) 1-month LIBOR 2.25 % 3.85 % 4/1/2019 8/10/2023 Senior unsecured term loan 50,000 (a) 1-month LIBOR 2.26 % 3.76 % 4/1/2019 10/22/2022 Total $ 247,326 ________________________________________ (a) Designated as a cash flow hedge. For those interest rate swaps designated as cash flow hedges, during the three months ended June 30, 2019 , unrealized losses of $3.5 million were recorded to other comprehensive loss, and less than $0.1 million of realized losses were reclassified out of accumulated other comprehensive loss to interest expense due to payments made to the swap counterparty during the three months ended June 30, 2019 . For the interest rate swaps designated as cash flow hedges, during the six months ended June 30, 2019 , unrealized losses of $4.5 million were recorded to other comprehensive loss, and $0.1 million of realized losses were reclassified out of accumulated other comprehensive loss to interest expense due to payments made to the swap counterparty. During the next 12 months, the Company anticipates reclassifying approximately $1.1 million of net hedging losses from accumulated other comprehensive loss into earnings to offset the variability of the hedged items during this period. The Company’s derivatives were comprised of the following as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 December 31, 2018 (Unaudited) Notional Amount Fair Value Notional Amount Fair Value Asset Liability Asset Liability Derivatives not designated as accounting hedges Interest rate swaps $ 100,000 $ — $ (2,186 ) $ 100,000 $ 303 $ (749 ) Interest rate caps 400,000 422 — 350,000 1,790 — Total derivatives not designated as accounting hedges 500,000 422 (2,186 ) 450,000 2,093 (749 ) Derivatives designated as accounting hedges Interest rate swaps 147,326 — (6,080 ) 63,208 — (1,725 ) Total derivatives $ 647,326 $ 422 $ (8,266 ) $ 513,208 $ 2,093 $ (2,474 ) The changes in the fair value of the Company’s derivatives during the three and six months ended June 30, 2019 and 2018 were comprised of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Interest rate swaps $ (4,549 ) $ 5 $ (6,201 ) $ 353 Interest rate caps (843 ) (16 ) (1,657 ) 605 Total change in fair value of interest rate derivatives $ (5,392 ) $ (11 ) $ (7,858 ) $ 958 Comprehensive income statement presentation: Change in fair value of interest rate derivatives $ (1,933 ) $ (11 ) $ (3,396 ) $ 958 Unrealized cash flow hedge gains losses (3,459 ) — $ (4,462 ) $ — Total change in fair value of interest rate derivatives $ (5,392 ) $ (11 ) $ (7,858 ) $ 958 |
Equity
Equity | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 , the Company sold an aggregate of 2,522,186 shares of common stock at a weighted average price of $15.16 per share under the ATM Program, receiving net proceeds, after offering costs and commissions, of $37.8 million . On June 18, 2019, the Company issued 2,530,000 shares of its 6.75% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share ("Series A Preferred Stock"), with a liquidation preference of $25.00 per share, which included 330,000 shares issued upon the underwriters’ full exercise of their option to purchase additional shares. Net proceeds from the offering, after the underwriting discount but before offering expenses payable by the Company, were approximately $61.3 million . The Company used the net proceeds to fund a portion of the purchase price of Thames Street Wharf, a 263,426 square foot office building located in the Harbor Point neighborhood of Baltimore, Maryland. The balance of the net proceeds was used to repay a portion of the outstanding borrowings under the Company’s unsecured revolving credit facility and for general corporate purposes. In connection with the issuance of the Series A Preferred Stock, on June 18, 2019, the Operating Partnership issued to the Company 2,530,000 6.75% Series A Cumulative Redeemable Perpetual Preferred Units (the "Series A Preferred Units"), which have economic terms that are identical to the Company’s Series A Preferred Stock. The Series A Preferred Units were issued in exchange for the Company’s contribution of the net proceeds from the offering of the Series A Preferred Stock to the Operating Partnership. Dividends on the Series A Preferred Stock will be payable quarterly in arrears on or about the 15th day of each January, April, July and October. The first dividend on the Series A Preferred Stock will be paid on October 15, 2019 and will include $0.0609 per share that was accumulated and unpaid as of June 30, 2019. The Series A Preferred Stock does not have a stated maturity date and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the Series A Preferred Stock will rank senior to the Company's common stock with respect to the payment of distributions and other amounts. Except in instances relating to preservation of the Company's qualification as a REIT or pursuant to the Company’s special optional redemption right, the Series A Preferred Stock is not redeemable prior to June 18, 2024. On and after June 18, 2024, the Company may, at its option, redeem the Series A Preferred Stock, in whole, at any time, or in part, from time to time, for cash at a redemption price of $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but excluding, the redemption date. Upon the occurrence of a change of control (as defined in the articles supplementary designating the terms of the Series A Preferred Stock), the Company has a special optional redemption right that enables it to redeem the Series A Preferred Stock, in whole or in part and within 120 days after the first date on which a change of control has occurred resulting in neither the Company nor the surviving entity having a class of common stock listed on the NYSE, NYSE American, or NASDAQ or the acquisition of beneficial ownership of its stock entitling a person to exercise more than 50% of the total voting power of all our stock entitled to vote generally in election of directors. The special optional redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether or not declared) to, but excluding, the date of redemption. Upon the occurrence of a change of control, holders will have the right (unless the Company has elected to exercise its special optional redemption right to redeem their Series A Preferred Stock) to convert some or all of such holder’s Series A Preferred Stock into a number of shares of the Company's common stock equal to the lesser of: • the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid distributions to, but not including, the change of control conversion date (unless the change of control conversion date is after a record date for a Series A Preferred Stock distribution payment and prior to the corresponding Series A Preferred Stock distribution payment date, in which case no additional amount for such accrued and unpaid distribution will be included in this sum) by (ii) the Common Stock Price (as defined in the articles supplementary designating the terms of the Series A Preferred Stock); and • 2.97796 (i.e., the Share Cap), subject to certain adjustments; subject, in each case, to certain adjustments and provisions for the receipt of alternative consideration of equivalent value as described in the articles supplementary designating the terms of the Series A Preferred Stock. Noncontrolling Interests As of June 30, 2019 and December 31, 2018 , the Company held a 71.4% and 74.5% common interest, respectively, in the Operating Partnership. As of June 30, 2019 , the Company also held a preferred interest in the Operating Partnership in the form of preferred units with a liquidation preference of $63.3 million . 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 71.4% 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 Operating Partnership represent units of limited partnership interest in the Operating Partnership not held by the Company. As of June 30, 2019 , there were 21,177,692 Class A units of limited partnership interest in the Operating Partnership ("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. Additionally, the Operating Partnership owns a majority interest in certain non-wholly-owned operating and development properties. The noncontrolling interest for investment entities included $4.6 million related to the minority partner's interest in 1405 Point as of June 30, 2019 . The noncontrolling interest for all other consolidated real estate entities was zero as of June 30, 2019 and December 31, 2018 . On January 2, 2019, due to the holders of Class A Units tendering an aggregate of 118,471 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 May 23, 2019, the Operating Partnership issued 4,125,759 Class A Units valued at $68.1 million in connection with the acquisition of Red Mill Commons and Marketplace at Hilltop. On May 30, 2019, the Operating Partnership issued 60,000 Class A Units valued at $1.0 million in exchange for the remaining 35% ownership interest in Brooks Crossing Office, which was previously owned by Tidewater Partners. Common Stock Dividends and Class A Unit Distributions On January 3, 2019, the Company paid cash dividends of $10.0 million to common stockholders, and the Operating Partnership paid cash distributions of $3.4 million to holders of Class A Units. On April 4, 2019, the Company paid cash dividends of $11.0 million to common stockholders, and the Operating Partnership paid cash distributions of $3.6 million to holders of Class A Units. On May 7, 2019, the Board of Directors declared a cash dividend and distribution of $0.21 per share and unit payable on July 3, 2019 to stockholders and unitholders of record on June 26, 2019. Subsequent to June 30, 2019 On July 1, 2019, due to the holders of Class A Units tendering an aggregate of 125,118 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 3, 2019, the Company paid cash dividends of $11.1 million to common stockholders, and the Operating Partnership paid cash distributions of $4.4 million to holders of Class A Units. In July 2019, the Company sold an aggregate of 62,823 shares of common stock at a weighted average price of $16.84 per share under the ATM Program, receiving net proceeds, after offering costs and commissions, of $1.0 million |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company’s Amended and Restated 2013 Equity Incentive Plan (the "Equity Plan") permits the grant of restricted stock awards, stock options, stock appreciation rights, performance units, and other equity-based awards up to an aggregate of 1,700,000 shares of common stock. As of June 30, 2019 , there were 895,257 shares available for issuance under the Equity Plan. During the six months ended June 30, 2019 , the Company granted an aggregate of 152,292 shares of restricted stock to employees and non-employee directors with a weighted average grant date fair value of $15.39 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. Unvested restricted stock awards are entitled to receive dividends from their grant date. During the six months ended June 30, 2019 , 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 six months ended June 30, 2019 , 10,755 shares were issued with a grant date fair value of $15.42 per share due to the partial vesting of performance units awarded to certain employees in 2016. During the three months ended June 30, 2019 and 2018 , the Company recognized $0.5 million and $0.4 million , respectively, of stock-based compensation cost. During the six months ended June 30, 2019 and 2018 , the Company recognized $1.5 million and $1.2 million , respectively, of stock-based compensation cost. As of June 30, 2019 , there were 144,426 nonvested restricted shares outstanding; the total unrecognized compensation expense related to nonvested restricted shares was $1.5 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, 2019 | |
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. Financial assets and liabilities whose fair values are not measured at fair value but for which the fair value is disclosed include the Company's notes receivable and indebtedness. The fair value is estimated by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity, credit characteristics, and other terms of the arrangements, which are Level 3 inputs under the fair value hierarchy. In certain cases, the inputs used to estimate the 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. Considerable judgment is used to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. The carrying amounts and fair values of the Company’s financial instruments as of June 30, 2019 and December 31, 2018 were as follows (in thousands): June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value (Unaudited) Indebtedness $ 949,345 $ 952,641 $ 694,239 $ 688,437 Notes receivable 144,743 144,743 138,683 138,683 Interest rate swap liabilities 8,266 8,266 2,474 2,474 Interest rate swap and cap assets 422 422 2,093 2,093 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
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 was $0.3 million , and gross profit from such contracts was $0.1 million . Revenue from construction contracts with related party entities for the six months ended June 30, 2018 was $1.5 million , and gross profit from such contracts was $0.3 million . There was no such revenue or gross profit for the three and six months ended June 30, 2019 . Real estate services fees from affiliated entities of the Company were not significant for the three and six months ended June 30, 2019 or 2018 . 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, 2019 and 2018 . 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 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
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, none of which management expects will have a material adverse effect on the Company’s financial position, results of operations, or liquidity. 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. Guarantees In connection with the Company's mezzanine lending activities, the Company has made guarantees to pay portions of certain senior loans of third parties associated with the development projects. The following table summarizes the guarantees made by the Company as of June 30, 2019 (in thousands): Development project Payment guarantee amount The Residences at Annapolis Junction $ 8,300 Delray Plaza 5,180 Nexton Square 12,600 Interlock Commercial 30,654 Total $ 56,734 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 $29.0 million and $34.8 million as of June 30, 2019 and December 31, 2018 , respectively. The Company has entered into standby letters of credit using the available capacity under the credit facility. The letters of credit relate to the guarantee of future performance on certain of the Company’s construction contracts. Letters of credit generally are available for draw down in the event the Company does not perform. As of June 30, 2019 and December 31, 2018 , the Operating Partnership had total outstanding letters of credit of $0.3 million and $2.1 million |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The condensed consolidated financial statements include the financial position and results of operations of the Company and its consolidated subsidiaries, including the Operating Partnership, its wholly-owned subsidiaries, and any interests in variable interest entities ("VIEs") where the Company has been determined to be the primary beneficiary. 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, 2018 . |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases On February 25, 2016, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") that requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets (ASU 2016-02— Leases (Topic 842)). The new standard also makes targeted changes to lessor accounting. The Company adopted the new standard on January 1, 2019, using the modified retrospective approach for all leases existing at, or entered into after, the beginning of the earliest comparative period presented as permitted in Accounting Standards Codification ("ASC") Topic 842. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to not reassess whether any expired or existing contracts are or contain leases, not reassess the lease classification for any expired or existing leases, and not reassess initial direct costs for existing leases. As of January 1, 2019, Company did not have any leases classified as finance leases. The Company also elected a practical expedient that allowed it to not separate non-lease components from lease components and instead to account for each lease and non-lease component as a single lease component. The adoption of the new standard as of January 1, 2019 did not impact the Company's consolidated results of operations and had no impact on cash flows. As a lessee, the Company had six ground leases on five properties as of January 1, 2019 with initial terms that range from 20 to 65 years and options to extend up to an additional 70 years in certain cases. The exercise of lease renewal options is at the Company's sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term. The Company recognizes lease expense for operating leases on a straight-line basis over the lease term. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants. The long-term ground leases represent a majority of the Company's current operating lease payments. The Company recorded right-of-use assets totaling $32.2 million and lease liabilities totaling $41.4 million upon adopting this standard on January 1, 2019. The Company utilized a weighted average discount rate of 5.4% to measure its lease liabilities upon adoption. As a lessor, the Company leases its properties under operating leases and recognizes base rents on a straight-line basis over the lease term. The Company also recognizes revenue from tenant recoveries, through which tenants reimburse the Company on an accrual basis for certain expenses such as utilities, janitorial services, repairs and maintenance, security and alarms, parking lot and ground maintenance, administrative services, management fees, insurance, and real estate taxes. Rental revenues are reduced by the amount of any leasing incentives amortized on a straight-line basis over the term of the applicable lease. In addition, the Company recognizes contingent rental revenue (e.g., percentage rents based on tenant sales thresholds) when the sales thresholds are met. Many tenant leases include one or more options to renew, with renewal terms that can extend the lease term from one to 15 years or more. The exercise of lease renewal options is at the tenant's sole discretion. The Company includes a renewal period in the lease term only if it appears at lease inception that the renewal is reasonably assured. The new standard includes new considerations regarding the recognition of rental revenue when collection is not probable. The Company changed its presentation and measurement of charges for uncollectable lease revenue associated with its office, retail, and residential leasing activity, reflecting those amounts as a component of rental income on the accompanying Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2019 . However, in accordance with its prospective adoption of the standard, the Company did not adjust the prior year period presentation of charges for uncollectable lease revenue associated with its office, retail, and residential leasing activity as a component of operating expenses, excluding property taxes, on the accompanying Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2018 . Instead, the Company recorded a combined adjustment of $0.2 million to the opening balances for distributions in excess of earnings and noncontrolling interest relating to receivables where collection of substantially all operating lease payments was not probable as of January 1, 2019. Lease-related receivables, which include contractual amounts accrued and unpaid from tenants and accrued straight-line rents receivable, are reduced for credit losses. Such amounts are recognized as a reduction to real estate rental revenues. The Company evaluates the collectability of lease receivables using several factors, including a lessee’s creditworthiness. The Company recognizes a credit loss on lease-related receivables when, in the opinion of management, collection of substantially all lease payments is not probable. When collectability is determined not probable, any lease income subsequent to recognizing the credit loss is limited to the lesser of the lease income reflected on a straight-line basis or cash collected. Credit losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance will replace the "incurred loss" approach under existing guidance with an "expected loss" model for instruments measured at amortized cost, such as our notes receivable. The guidance is effective for fiscal years beginning after December 15, 2019 and is to be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. While the Company is currently evaluating the impact ASU 2016-13 will have on the consolidated financial statements, the Company expects that the adoption could result in earlier recognition of a provision for loan losses on its notes receivable. |
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. |
Construction Contracts | 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, 2019 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. |
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 other 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 comprehensive income. For derivatives that qualify as cash flow hedges, the gain or loss is reported as a component of other comprehensive income (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. Financial assets and liabilities whose fair values are not measured at fair value but for which the fair value is disclosed include the Company's notes receivable and indebtedness. The fair value is estimated by discounting the future cash flows of each instrument at estimated market rates consistent with the maturity, credit characteristics, and other terms of the arrangements, which are Level 3 inputs under the fair value hierarchy. In certain cases, the inputs used to estimate the 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. Considerable judgment is used to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. |
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, none of which management expects will have a material adverse effect on the Company’s financial position, results of operations, or liquidity. 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. |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 and 2018 was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (Unaudited) Office real estate Rental revenues $ 7,382 $ 5,288 $ 12,938 $ 10,388 Rental expenses 1,853 1,430 3,339 2,876 Real estate taxes 653 502 1,179 1,004 Segment net operating income 4,876 3,356 8,420 6,508 Retail real estate Rental revenues 19,235 16,608 36,492 33,319 Rental expenses 2,893 2,563 5,493 5,220 Real estate taxes 1,893 1,656 3,704 3,339 Segment net operating income 14,449 12,389 27,295 24,760 Multifamily residential real estate Rental revenues 9,761 6,702 17,857 13,590 Rental expenses 3,281 2,529 5,920 4,850 Real estate taxes 905 577 1,696 1,205 Segment net operating income 5,575 3,596 10,241 7,535 General contracting and real estate services Segment revenues 21,444 20,654 38,480 43,704 Segment expenses 20,123 20,087 36,409 42,501 Segment gross profit 1,321 567 2,071 1,203 Net operating income $ 26,221 $ 19,908 $ 48,027 $ 40,006 |
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, 2019 and 2018 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 (Unaudited) Net operating income $ 26,221 $ 19,908 $ 48,027 $ 40,006 Depreciation and amortization (13,478 ) (9,179 ) (23,382 ) (18,457 ) General and administrative expenses (2,951 ) (2,764 ) (6,352 ) (5,725 ) Acquisition, development, and other pursuit costs (57 ) (9 ) (457 ) (93 ) Impairment charges — (98 ) — (98 ) Interest income 5,593 2,375 10,912 4,607 Interest expense (7,603 ) (4,497 ) (13,489 ) (8,870 ) Equity in income of unconsolidated real estate entities — — 273 — Change in fair value of interest rate derivatives (1,933 ) (11 ) (3,396 ) 958 Other income 4 54 64 168 Income tax benefit 30 166 140 432 Net income $ 5,826 $ 5,945 $ 12,340 $ 12,928 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of operating lease costs | The components of lease cost for the three and six months ended June 30, 2019 were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Operating lease cost $ 707 1,395 Finance lease cost: Amortization of right-of-use assets $ 77 77 Interest on lease liabilities $ 112 112 The table below presents supplemental cash flow information related to leases during the three and six months ended June 30, 2019 (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 524 $ 1,024 Operating cash flows from finance leases 111 111 Financing cash flows from finance leases — — Additional information related to leases as of June 30, 2019 were as follows (in thousands): June 30, 2019 (Unaudited) Weighted Average Remaining Lease Term (years) Operating leases 45.9 Finance leases 41.7 Weighted Average Discount Rate Operating leases 5.4 % Finance leases 5.2 % |
Schedule of maturities of lease liabilities | Maturities of lease liabilities as of June 30, 2019 were as follows (in thousands): Year Ending December 31, Operating Leases Finance Leases 2019 (excluding six months ended June 30, 2019) $ 954 $ 422 2020 2,080 864 2021 2,137 864 2022 2,361 868 2023 2,400 873 Thereafter 105,961 43,902 Total lease liabilities 115,893 47,793 Less imputed interest (74,593 ) (29,931 ) Present value of lease liabilities $ 41,300 $ 17,862 |
Schedule of rental revenue | Rental revenue for the three and six months ended June 30, 2019 comprised the following (in thousands): Three Months Ended June 30, 2019 Six Months Ended (Unaudited) Base rent and tenant charges $ 35,066 $ 64,990 Accrued straight-line rental adjustment 1,187 2,148 Lease incentive amortization (184 ) (367 ) Above/below market lease amortization 309 516 Total rental revenue $ 36,378 $ 67,287 |
Schedule of minimum rental payments | The Company's commercial tenant leases provide for minimum rental payments during each of the next five years and thereafter as follows (in thousands): Year Ending December 31, Operating Leases 2019 (excluding six months ended June 30, 2019) $ 48,504 2020 91,957 2021 84,332 2022 77,113 2023 67,302 Thereafter 314,422 Total $ 683,630 |
Real Estate Investment (Tables)
Real Estate Investment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 intangible liabilities assumed for the six operating properties purchased during the six months ended June 30, 2019 (in thousands): Wendover Village additional outparcel One City Center 1405 Point Red Mill Commons Marketplace at Hilltop Thames Street Wharf Land $ 1,633 $ 2,678 $ — (a) $ 44,252 $ 2,023 (b) $ 15,861 Site improvements 50 163 298 2,558 691 150 Building and improvements 888 28,039 92,866 27,790 19,195 64,539 Furniture and fixtures — — 2,302 — — — In-place leases 101 15,140 3,371 9,973 4,565 24,385 Above-market leases 111 — — 1,463 599 — Below-market leases — — — (6,221 ) (1,136 ) (3,636 ) Finance lease liabilities — — (8,671 ) — (9,200 ) — Finance lease right-of-use assets — — 11,730 — 12,770 — Net assets acquired $ 2,783 $ 46,020 $ 101,896 $ 79,815 $ 29,507 $ 101,299 ________________________________________ (a) Land is subject to a ground lease. (b) Portion of land is subject to a ground lease. |
Notes Receivable (Tables)
Notes Receivable (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Summary of Mezzanine Loans | The Company had the following notes receivable outstanding as of June 30, 2019 and December 31, 2018 ($ in thousands): Outstanding loan amount Maximum loan commitment Interest rate Interest compounding Development Project June 30, December 31, 2018 1405 Point $ — $ 30,238 $ 31,032 8.0 % Monthly The Residences at Annapolis Junction 37,602 36,361 48,105 10.0 % Monthly North Decatur Square (a) 19,852 18,521 29,673 15.0 % Annually Delray Plaza 12,098 7,032 15,000 15.0 % Annually Nexton Square 14,168 14,855 17,000 15.0 % Monthly Interlock Commercial 38,062 18,269 95,000 15.0 % None Solis Apartments at Interlock 17,226 13,821 41,100 13.0 % Annually Total mezzanine 139,008 139,097 $ 276,910 Other notes receivable 1,314 1,275 Notes receivable guarantee premium 6,554 2,800 Notes receivable discount, net (b) (2,133 ) (4,489 ) Total notes receivable $ 144,743 $ 138,683 _______________________________________ (a) This loan was paid in full on July 22, 2019. (b) Represents the remaining unamortized portion of the $5.0 million loan modification fee for The Residences at Annapolis Junction paid by the borrower in November 2018. |
Summary of Interest Income | The Company recognized interest income for the three and six months ended June 30, 2019 and 2018 as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, Development Project 2019 2018 2019 2018 1405 Point $ 173 $ 483 $ 783 $ 936 The Residences at Annapolis Junction 2,173 (a) 1,124 4,196 (a) 2,209 North Decatur Square 693 531 1,331 992 Delray Plaza 414 225 724 448 Nexton Square 524 — 1,033 — Interlock Commercial 1,086 — 1,830 — Solis Apartments at Interlock 508 — 972 — Total mezzanine 5,571 2,363 10,869 4,585 Other interest income 22 12 43 22 Total interest income $ 5,593 $ 2,375 $ 10,912 $ 4,607 ________________________________________ (a) Includes amortization of the $5.0 million loan modification fee paid by the borrower in November 2018. |
Construction Contracts (Tables)
Construction Contracts (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 and 2018 were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Beginning backlog $ 160,871 $ 30,733 $ 165,863 $ 49,167 New contracts/change orders 39,177 27,807 51,196 32,376 Work performed (21,416 ) (20,619 ) (38,427 ) (43,622 ) Ending backlog $ 178,632 $ 37,921 $ 178,632 $ 37,921 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, 2019 and 2018 (in thousands): Six Months Ended Six Months Ended Construction contract costs and estimated earnings in excess of billings Billings in excess of construction contract costs and estimated earnings Construction contract costs and estimated earnings in excess of billings Billings in excess of construction contract costs and estimated earnings Beginning balance $ 1,358 $ 3,037 $ 245 $ 3,591 Revenue recognized that was included in the balance at the beginning of the period — (3,037 ) — (3,591 ) Increases due to new billings, excluding amounts recognized as revenue during the period — 2,541 — 1,898 Transferred to receivables (1,890 ) — (245 ) — Construction contract costs and estimated earnings not billed during the period 461 — 1,287 — Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion 532 (752 ) — (187 ) Ending balance $ 461 $ 1,789 $ 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, 2019 and December 31, 2018 (in thousands): June 30, 2019 December 31, 2018 Costs incurred on uncompleted construction contracts $ 630,425 $ 594,006 Estimated earnings 22,383 20,375 Billings (654,136 ) (616,060 ) Net position $ (1,328 ) $ (1,679 ) Construction contract costs and estimated earnings in excess of billings $ 461 $ 1,358 Billings in excess of construction contract costs and estimated earnings (1,789 ) (3,037 ) Net position $ (1,328 ) $ (1,679 ) |
Indebtedness (Tables)
Indebtedness (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Assumed | The following table summarizes the note balance at assumption, fair value at assumption, maturity date, and interest rate for each loan ($ in thousands): Loan name Note balance at assumption Fair value of loan at assumption Loan maturity date Loan interest rate Redmill North $ 4,451 $ 4,520 12/31/2028 4.73 % Redmill South 6,310 6,090 5/1/2025 3.57 % Redmill Central 2,640 2,690 6/17/2024 4.80 % Redmill West 11,548 11,540 6/1/2022 4.23 % Marketplace at Hilltop 10,740 10,790 10/1/2022 4.42 % $ 35,689 $ 35,630 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of LIBOR interest rate caps | As of June 30, 2019 , the Company had the following LIBOR interest rate caps ($ in thousands), which are not designated as cash flow hedges for accounting purposes: Origination Date Expiration Date Notional Amount Strike Rate Premium Paid 6/23/2017 7/1/2019 $ 50,000 1.50 % $ 154 9/18/2017 10/1/2019 50,000 1.50 % 199 11/28/2017 12/1/2019 50,000 1.50 % 359 3/7/2018 4/1/2020 50,000 2.25 % 310 7/16/2018 8/1/2020 50,000 2.50 % 319 12/11/2018 1/1/2021 50,000 2.75 % 210 5/15/2019 6/1/2022 100,000 2.50 % 288 Total $ 400,000 $ 1,839 As of June 30, 2019 , the Company held the following floating-to-fixed interest rate swaps ($ in thousands): Related Debt Notional Amount Index Swap Fixed Rate Debt effective rate Effective Date Expiration Date Senior unsecured term loan $ 50,000 1-month LIBOR 2.00 % 3.50 % 3/1/2016 2/20/2020 Senior unsecured term loan 50,000 1-month LIBOR 2.78 % 4.28 % 5/1/2018 5/1/2023 John Hopkins Village 52,256 (a) 1-month LIBOR 2.94 % 4.19 % 8/7/2018 8/7/2025 Lightfoot Marketplace 10,500 (a) 1-month LIBOR 3.02 % 4.77 % 10/12/2018 10/12/2023 249 Central Park Retail, South Retail, and Fountain Plaza Retail 34,570 (a) 1-month LIBOR 2.25 % 3.85 % 4/1/2019 8/10/2023 Senior unsecured term loan 50,000 (a) 1-month LIBOR 2.26 % 3.76 % 4/1/2019 10/22/2022 Total $ 247,326 ________________________________________ (a) Designated as a cash flow hedge. |
Schedule of derivatives | The Company’s derivatives were comprised of the following as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 December 31, 2018 (Unaudited) Notional Amount Fair Value Notional Amount Fair Value Asset Liability Asset Liability Derivatives not designated as accounting hedges Interest rate swaps $ 100,000 $ — $ (2,186 ) $ 100,000 $ 303 $ (749 ) Interest rate caps 400,000 422 — 350,000 1,790 — Total derivatives not designated as accounting hedges 500,000 422 (2,186 ) 450,000 2,093 (749 ) Derivatives designated as accounting hedges Interest rate swaps 147,326 — (6,080 ) 63,208 — (1,725 ) Total derivatives $ 647,326 $ 422 $ (8,266 ) $ 513,208 $ 2,093 $ (2,474 ) |
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, 2019 and 2018 were comprised of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Interest rate swaps $ (4,549 ) $ 5 $ (6,201 ) $ 353 Interest rate caps (843 ) (16 ) (1,657 ) 605 Total change in fair value of interest rate derivatives $ (5,392 ) $ (11 ) $ (7,858 ) $ 958 Comprehensive income statement presentation: Change in fair value of interest rate derivatives $ (1,933 ) $ (11 ) $ (3,396 ) $ 958 Unrealized cash flow hedge gains losses (3,459 ) — $ (4,462 ) $ — Total change in fair value of interest rate derivatives $ (5,392 ) $ (11 ) $ (7,858 ) $ 958 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 as of June 30, 2019 and December 31, 2018 were as follows (in thousands): June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value (Unaudited) Indebtedness $ 949,345 $ 952,641 $ 694,239 $ 688,437 Notes receivable 144,743 144,743 138,683 138,683 Interest rate swap liabilities 8,266 8,266 2,474 2,474 Interest rate swap and cap assets 422 422 2,093 2,093 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of guarantees | The following table summarizes the guarantees made by the Company as of June 30, 2019 (in thousands): Development project Payment guarantee amount The Residences at Annapolis Junction $ 8,300 Delray Plaza 5,180 Nexton Square 12,600 Interlock Commercial 30,654 Total $ 56,734 |
Business of Organization - Addi
Business of Organization - Additional Information (Details) - property | Jun. 30, 2019 | Dec. 31, 2018 |
Business And Organization [Line Items] | ||
Percentage of Operating Partnership held | 71.40% | 74.50% |
Operating Property | ||
Business And Organization [Line Items] | ||
Number of real estate properties | 54 | |
Development Property | ||
Business And Organization [Line Items] | ||
Number of real estate properties | 8 | |
General Partner | ||
Business And Organization [Line Items] | ||
Percentage of Operating Partnership held | 0.10% |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Details) $ in Thousands | Jan. 01, 2019USD ($)propertylease | Jun. 30, 2019USD ($)extension | Jun. 30, 2018USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of ground leases | lease | 6 | ||
Number of properties subject to ground leases | property | 5 | ||
Maximum optional ground lease extension term | 70 years | ||
Operating lease right-of-use assets | $ 33,268 | ||
Operating lease liabilities | $ 41,300 | ||
Weighted average discount rate | 5.40% | ||
Number of options to extend, more than | extension | 1 | ||
Adjustment for uncollectable accounts | $ 9 | $ 112 | |
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Term of contract | 20 years | ||
Renewal term | 1 year | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Term of contract | 65 years | ||
Renewal term | 15 years | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 32,200 | ||
Operating lease liabilities | $ 41,400 | ||
Weighted average discount rate | 5.40% | ||
Adjustment for uncollectable accounts | $ 200 |
Segments - Net Income of Report
Segments - Net Income of Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information | ||||
Rental revenues | $ 36,378 | $ 28,598 | $ 67,287 | $ 57,297 |
Rental expenses | 8,027 | 6,522 | 14,752 | 12,946 |
Real estate taxes | 3,451 | 2,735 | 6,579 | 5,548 |
General contracting and real estate services | ||||
Segment Reporting Information | ||||
Segment revenues | 21,444 | 20,654 | 38,480 | 43,704 |
Segment expenses | 20,123 | 20,087 | 36,409 | 42,501 |
Operating Segments | ||||
Segment Reporting Information | ||||
Gross profit | 26,221 | 19,908 | 48,027 | 40,006 |
Operating Segments | Office real estate | ||||
Segment Reporting Information | ||||
Rental revenues | 7,382 | 5,288 | 12,938 | 10,388 |
Rental expenses | 1,853 | 1,430 | 3,339 | 2,876 |
Real estate taxes | 653 | 502 | 1,179 | 1,004 |
Gross profit | 4,876 | 3,356 | 8,420 | 6,508 |
Operating Segments | Retail real estate | ||||
Segment Reporting Information | ||||
Rental revenues | 19,235 | 16,608 | 36,492 | 33,319 |
Rental expenses | 2,893 | 2,563 | 5,493 | 5,220 |
Real estate taxes | 1,893 | 1,656 | 3,704 | 3,339 |
Gross profit | 14,449 | 12,389 | 27,295 | 24,760 |
Operating Segments | Multifamily residential real estate | ||||
Segment Reporting Information | ||||
Rental revenues | 9,761 | 6,702 | 17,857 | 13,590 |
Rental expenses | 3,281 | 2,529 | 5,920 | 4,850 |
Real estate taxes | 905 | 577 | 1,696 | 1,205 |
Gross profit | 5,575 | 3,596 | 10,241 | 7,535 |
Operating Segments | General contracting and real estate services | General contracting and real estate services | ||||
Segment Reporting Information | ||||
Segment revenues | 21,444 | 20,654 | 38,480 | 43,704 |
Segment expenses | 20,123 | 20,087 | 36,409 | 42,501 |
Gross profit | $ 1,321 | $ 567 | $ 2,071 | $ 1,203 |
Segments - Additional Informati
Segments - Additional Information (Details) - General contracting and real estate services - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information | ||||
General contracting and real estate services revenues | $ 21,444 | $ 20,654 | $ 38,480 | $ 43,704 |
General contracting and real estate services expenses | 20,123 | 20,087 | 36,409 | 42,501 |
General contracting and real estate services | Intercompany Eliminations | ||||
Segment Reporting Information | ||||
General contracting and real estate services revenues | 30,000 | 34,200 | 60,200 | 60,100 |
General contracting and real estate services expenses | $ 29,700 | $ 33,900 | $ 59,600 | $ 59,500 |
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, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||
Depreciation and amortization | $ (13,478) | $ (9,179) | $ (23,382) | $ (18,457) | ||
General and administrative expenses | (2,951) | (2,764) | (6,352) | (5,725) | ||
Acquisition, development, and other pursuit costs | (57) | (9) | (457) | (93) | ||
Impairment charges | 0 | (98) | 0 | (98) | ||
Interest income | 5,593 | 2,375 | 10,912 | 4,607 | ||
Interest expense | (7,603) | (4,497) | (13,489) | (8,870) | ||
Equity in income of unconsolidated real estate entities | 0 | 0 | 273 | 0 | ||
Change in fair value of interest rate derivatives | (1,933) | (11) | (3,396) | 958 | ||
Other income | 4 | 54 | 64 | 168 | ||
Income tax benefit | 30 | 166 | 140 | 432 | ||
Net income | 5,826 | $ 6,514 | 5,945 | $ 6,983 | 12,340 | 12,928 |
Operating Segments | ||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||
Gross profit | 26,221 | 19,908 | 48,027 | 40,006 | ||
Segment Reconciling Items | ||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||
Depreciation and amortization | (13,478) | (9,179) | (23,382) | (18,457) | ||
General and administrative expenses | (2,951) | (2,764) | (6,352) | (5,725) | ||
Acquisition, development, and other pursuit costs | (57) | (9) | (457) | (93) | ||
Impairment charges | 0 | (98) | 0 | (98) | ||
Interest expense | (7,603) | (4,497) | (13,489) | (8,870) | ||
Equity in income of unconsolidated real estate entities | 0 | 0 | 273 | 0 | ||
Change in fair value of interest rate derivatives | (1,933) | (11) | (3,396) | 958 | ||
Other income | 4 | 54 | 64 | 168 | ||
Income tax benefit | $ 30 | $ 166 | $ 140 | $ 432 |
Leases - Operating lease costs
Leases - Operating lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 707 | $ 1,395 |
Finance lease cost: | ||
Amortization of right-of-use assets | 77 | 77 |
Interest on lease liabilities | 112 | 112 |
Operating cash flows from operating leases | 524 | 1,024 |
Operating cash flows from finance leases | 111 | 111 |
Financing cash flows from finance leases | $ 0 | $ 0 |
Leases - Additional Information
Leases - Additional Information Related to Leases (Details) | Jun. 30, 2019 |
Weighted Average Remaining Lease Term (years) | |
Operating leases | 45 years 10 months 24 days |
Finance leases | 41 years 8 months 12 days |
Weighted Average Discount Rate | |
Operating leases | 5.40% |
Finance leases | 5.20% |
Leases - Lessee, Maturities of
Leases - Lessee, Maturities of Operating Leases (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
2019 (excluding six months ended June 30, 2019) | $ 954 |
2020 | 2,080 |
2021 | 2,137 |
2022 | 2,361 |
2023 | 2,400 |
Thereafter | 105,961 |
Total lease liabilities | 115,893 |
Less imputed interest | (74,593) |
Present value of lease liabilities | 41,300 |
Finance Leases | |
2019 (excluding six months ended June 30, 2019) | 422 |
2020 | 864 |
2021 | 864 |
2022 | 868 |
2023 | 873 |
Thereafter | 43,902 |
Total lease liabilities | 47,793 |
Less imputed interest | (29,931) |
Present value of lease liabilities | $ 17,862 |
Leases - Lessor, Rental Income
Leases - Lessor, Rental Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Base rent and tenant charges | $ 35,066 | $ 64,990 |
Accrued straight-line rental adjustment | 1,187 | 2,148 |
Lease incentive amortization | (184) | (367) |
Above/below market lease amortization | 309 | 516 |
Total rental revenue | $ 36,378 | $ 67,287 |
Leases - Lessor, Payments to be
Leases - Lessor, Payments to be Received (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (excluding six months ended June 30, 2019) | $ 48,504 |
2020 | 91,957 |
2021 | 84,332 |
2022 | 77,113 |
2023 | 67,302 |
Thereafter | 314,422 |
Total | $ 683,630 |
Real Estate Investment - Acquis
Real Estate Investment - Acquisitions (Details) $ / shares in Units, $ in Thousands, shares in Millions | Jun. 26, 2019USD ($) | May 23, 2019USD ($)$ / shares | May 22, 2019USD ($)$ / sharesshares | Apr. 24, 2019USD ($) | Mar. 14, 2019USD ($) | Feb. 06, 2019USD ($) | Jun. 30, 2019property |
1405 Point | |||||||
Real Estate Properties [Line Items] | |||||||
Capitalized acquisition costs | $ 100 | ||||||
Cash payment | $ 300 | ||||||
Option to purchase additional voting rights | 79.00% | ||||||
Extinguishment of note receivable | $ 31,300 | ||||||
Loans payable | 64,900 | ||||||
Loans payable, fair value | $ 65,800 | ||||||
Wendover Village | |||||||
Real Estate Properties [Line Items] | |||||||
Consideration transferred | $ 2,700 | ||||||
Capitalized acquisition costs | $ 100 | ||||||
One City Center | |||||||
Real Estate Properties [Line Items] | |||||||
Consideration transferred | $ 23,000 | ||||||
Capitalized acquisition costs | 100 | ||||||
Cash payment | $ 23,200 | ||||||
Wendover Village And Durham City Center | |||||||
Real Estate Properties [Line Items] | |||||||
Number of operating properties acquired | property | 6 | ||||||
Red Mill Commons And Marketplace At Hilltop | |||||||
Real Estate Properties [Line Items] | |||||||
Loans payable, fair value | $ 35,630 | ||||||
Mortgage debt assumed | 35,689 | ||||||
Thames Street Wharf | |||||||
Real Estate Properties [Line Items] | |||||||
Capitalized acquisition costs | $ 300 | ||||||
Cash payment | $ 101,000 | ||||||
City Center | Office And Retail Portions | |||||||
Real Estate Properties [Line Items] | |||||||
Interests in equity method investments | 37.00% | ||||||
Operating Partnership | Red Mill Commons And Marketplace At Hilltop | |||||||
Real Estate Properties [Line Items] | |||||||
Consideration transferred | 109,300 | $ 105,000 | |||||
Capitalized acquisition costs | 1,100 | ||||||
Cash payment | 4,500 | $ 4,500 | |||||
Number of shares issued (in shares) | shares | 4.1 | ||||||
Value of Class A Units | $ 68,100 | ||||||
Share price | $ / shares | $ 16.50 | $ 15.55 | |||||
Mortgage debt assumed | $ 35,600 | $ 35,700 | |||||
Future sale period for properties in limited number of cases | 10 years | ||||||
Secured Debt | One City Center | |||||||
Real Estate Properties [Line Items] | |||||||
Maximum borrowing capacity | $ 25,600 | ||||||
Accordion feature maximum borrowing capacity | $ 27,600 |
Real Estate Investment - Summar
Real Estate Investment - Summary of the Purchase Price Allocation (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Wendover Village additional outparcel | |
Business Acquisition [Line Items] | |
Below-market leases | $ 0 |
Finance lease liabilities | 0 |
Finance lease right-of-use assets | 0 |
Net assets acquired | 2,783 |
Wendover Village additional outparcel | In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 101 |
Wendover Village additional outparcel | Above-market leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 111 |
Wendover Village additional outparcel | Land | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 1,633 |
Wendover Village additional outparcel | Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 50 |
Wendover Village additional outparcel | Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 888 |
Wendover Village additional outparcel | Furniture and fixtures | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 0 |
One City Center | |
Business Acquisition [Line Items] | |
Below-market leases | 0 |
Finance lease liabilities | 0 |
Finance lease right-of-use assets | 0 |
Net assets acquired | 46,020 |
One City Center | In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 15,140 |
One City Center | Above-market leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 0 |
One City Center | Land | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 2,678 |
One City Center | Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 163 |
One City Center | Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 28,039 |
One City Center | Furniture and fixtures | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 0 |
1405 Point | |
Business Acquisition [Line Items] | |
Below-market leases | 0 |
Finance lease liabilities | (8,671) |
Finance lease right-of-use assets | 11,730 |
Net assets acquired | 101,896 |
1405 Point | In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 3,371 |
1405 Point | Above-market leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 0 |
1405 Point | Land | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 0 |
1405 Point | Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 298 |
1405 Point | Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 92,866 |
1405 Point | Furniture and fixtures | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 2,302 |
Red Mill Commons | |
Business Acquisition [Line Items] | |
Below-market leases | (6,221) |
Finance lease liabilities | 0 |
Finance lease right-of-use assets | 0 |
Net assets acquired | 79,815 |
Red Mill Commons | In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 9,973 |
Red Mill Commons | Above-market leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 1,463 |
Red Mill Commons | Land | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 44,252 |
Red Mill Commons | Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 2,558 |
Red Mill Commons | Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 27,790 |
Red Mill Commons | Furniture and fixtures | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 0 |
Marketplace at Hilltop | |
Business Acquisition [Line Items] | |
Below-market leases | (1,136) |
Finance lease liabilities | (9,200) |
Finance lease right-of-use assets | 12,770 |
Net assets acquired | 29,507 |
Marketplace at Hilltop | In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 4,565 |
Marketplace at Hilltop | Above-market leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 599 |
Marketplace at Hilltop | Land | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 2,023 |
Marketplace at Hilltop | Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 691 |
Marketplace at Hilltop | Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 19,195 |
Marketplace at Hilltop | Furniture and fixtures | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 0 |
Thames Street Wharf | |
Business Acquisition [Line Items] | |
Below-market leases | (3,636) |
Finance lease liabilities | 0 |
Finance lease right-of-use assets | 0 |
Net assets acquired | 101,299 |
Thames Street Wharf | In-place leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 24,385 |
Thames Street Wharf | Above-market leases | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | 0 |
Thames Street Wharf | Land | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 15,861 |
Thames Street Wharf | Site improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 150 |
Thames Street Wharf | Building and improvements | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | 64,539 |
Thames Street Wharf | Furniture and fixtures | |
Business Acquisition [Line Items] | |
Property, plant, and equipment | $ 0 |
Real Estate Investment Real Est
Real Estate Investment Real Estate Investment - Property Disposition (Details) - USD ($) $ in Thousands | Apr. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jul. 17, 2019 |
Real Estate Properties [Line Items] | ||||
Contract price | $ 1,014 | $ 4,271 | ||
Waynesboro Commons | Waynesboro Commons | Held-for-sale | ||||
Real Estate Properties [Line Items] | ||||
Contract price | $ 1,100 | |||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 0 | |||
Subsequent Event | Lightfoot Marketplace | Lightfoot Marketplace | Held-for-sale | ||||
Real Estate Properties [Line Items] | ||||
Agreed upon selling price | $ 30,300 |
Equity Method Investment (Detai
Equity Method Investment (Details) | Mar. 14, 2019USD ($) | Mar. 13, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Feb. 25, 2016story |
Schedule of Equity Method Investments [Line Items] | |||||||
Investment in equity method investment during period | $ 535,000 | $ 3,127,000 | |||||
Equity in income of unconsolidated real estate entities | $ 0 | $ 0 | 273,000 | 0 | |||
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 | $ 500,000 | ||||||
Equity in income of unconsolidated real estate entities | $ 300,000 | 0 | 0 | ||||
Dividends from equity investment | $ 0 | $ 0 | |||||
Office And Retail Portions | City Center | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Interests in equity method investments | 37.00% | ||||||
One City Center | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Cash payment | $ 23,200,000 |
Notes Receivable (Summary of Me
Notes Receivable (Summary of Mezzanine Loans) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 08, 2019 | Dec. 31, 2018 | Nov. 16, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | $ 144,743 | $ 138,683 | ||
Financing receivable guarantee premium | 6,554 | 2,800 | ||
Financing receivable discount | (2,133) | (4,489) | ||
Total notes receivable | 144,743 | 138,683 | ||
Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | 139,008 | 139,097 | ||
Maximum loan commitment | 276,910 | |||
Mezzanine Loan | 1405 Point | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | 0 | 30,238 | ||
Maximum loan commitment | $ 31,032 | |||
Interest rate | 8.00% | |||
Mezzanine Loan | The Residences at Annapolis Junction | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | $ 37,602 | 36,361 | ||
Maximum loan commitment | $ 48,105 | |||
Interest rate | 10.00% | |||
Mezzanine Loan | North Decatur Square (a) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | $ 19,852 | 18,521 | ||
Maximum loan commitment | $ 29,673 | |||
Interest rate | 15.00% | |||
Mezzanine Loan | Delray Plaza | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | $ 12,098 | 7,032 | ||
Maximum loan commitment | $ 15,000 | $ 15,000 | ||
Interest rate | 15.00% | |||
Mezzanine Loan | Nexton Square | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | $ 14,168 | 14,855 | ||
Maximum loan commitment | $ 17,000 | |||
Interest rate | 15.00% | |||
Mezzanine Loan | Interlock Commercial | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | $ 38,062 | 18,269 | ||
Maximum loan commitment | $ 95,000 | |||
Interest rate | 15.00% | |||
Mezzanine Loan | Interlock Residential | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | $ 17,226 | 13,821 | ||
Maximum loan commitment | $ 41,100 | |||
Interest rate | 13.00% | |||
Other Notes Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes receivable | $ 1,314 | $ 1,275 | ||
Annapolis Junction | The Residences at Annapolis Junction | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan modification fee | $ 5,000 | $ 5,000 |
Notes Receivable (Schedule of I
Notes Receivable (Schedule of Interest on the Mezzanine Loans) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | $ 5,593 | $ 2,375 | $ 10,912 | $ 4,607 |
Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | 5,571 | 2,363 | 10,869 | 4,585 |
Other Notes Receivable | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | 22 | 12 | 43 | 22 |
1405 Point | Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | 173 | 483 | 783 | 936 |
The Residences at Annapolis Junction | Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | 2,173 | 1,124 | 4,196 | 2,209 |
North Decatur Square (a) | Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | 693 | 531 | 1,331 | 992 |
Delray Plaza | Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | 414 | 225 | 724 | 448 |
Nexton Square | Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | 524 | 0 | 1,033 | 0 |
Interlock Commercial | Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | 1,086 | 0 | 1,830 | 0 |
Interlock Residential | Mezzanine Loan | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Interest income | $ 508 | $ 0 | $ 972 | $ 0 |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) | Jul. 22, 2019 | Apr. 25, 2019 | Apr. 24, 2019 | Feb. 08, 2019 | Nov. 16, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Apr. 19, 2019 | Jan. 08, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Allowance for loan losses | $ 0 | $ 0 | $ 0 | |||||||||
Provision for loan losses | 0 | $ 0 | 0 | $ 0 | ||||||||
Repayments of debt | 138,175,000 | $ 84,277,000 | ||||||||||
Financial Guarantee | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Guarantor obligations, maximum exposure (up to) | 56,734,000 | 56,734,000 | ||||||||||
The Residences at Annapolis Junction | Financial Guarantee | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Guarantor obligations, maximum exposure (up to) | 8,300,000 | 8,300,000 | ||||||||||
The Residences at Annapolis Junction | Annapolis Junction | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Loan modification fee | $ 5,000,000 | 5,000,000 | 5,000,000 | |||||||||
Repayments of debt | 11,100,000 | |||||||||||
Repayment Of accrued interest | 9,900,000 | |||||||||||
Repayments of principal | 1,200,000 | |||||||||||
The Residences at Annapolis Junction | Bridge loan | Annapolis Junction | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Guarantor obligations, maximum exposure (up to) | 8,300,000 | |||||||||||
Debt, face value | $ 83,000,000 | |||||||||||
Duration of extension option | 1 year | |||||||||||
Delray Plaza | Financial Guarantee | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Guarantor obligations, maximum exposure (up to) | 5,180,000 | 5,180,000 | $ 5,200,000 | |||||||||
Nexton Square | Financial Guarantee | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Guarantor obligations, maximum exposure (up to) | 12,600,000 | 12,600,000 | ||||||||||
Nexton Square | Construction loans | Line of credit | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Maximum borrowing capacity | $ 25,200,000 | |||||||||||
Interlock Commercial | Financial Guarantee | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Guarantor obligations, maximum exposure (up to) | 30,654,000 | 30,654,000 | ||||||||||
Interlock Commercial | Construction loans | Financial Guarantee | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Guarantor obligations, maximum exposure (up to) | $ 30,700,000 | |||||||||||
Mezzanine Loan | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Maximum loan commitment | 276,910,000 | 276,910,000 | ||||||||||
Mezzanine Loan | The Residences at Annapolis Junction | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Maximum loan commitment | 48,105,000 | 48,105,000 | ||||||||||
Mezzanine Loan | Delray Plaza | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Maximum loan commitment | 15,000,000 | 15,000,000 | $ 15,000,000 | |||||||||
Mezzanine Loan | Nexton Square | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Maximum loan commitment | 17,000,000 | 17,000,000 | ||||||||||
Proceeds from collection of loans receivable | 2,100,000 | |||||||||||
Guaranty liabilities | $ 12,600,000 | |||||||||||
Mezzanine Loan | 1405 Point | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Maximum loan commitment | 31,032,000 | 31,032,000 | ||||||||||
Mezzanine Loan | Interlock Commercial | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Maximum loan commitment | 95,000,000 | 95,000,000 | ||||||||||
Mezzanine Loan | North Decatur Square (a) | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Maximum loan commitment | $ 29,673,000 | $ 29,673,000 | ||||||||||
Annapolis Junction | The Residences at Annapolis Junction | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Option to purchase additional voting rights | 88.00% | |||||||||||
1405 Point | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Option to purchase additional voting rights | 79.00% | |||||||||||
Cash payment | $ 300,000 | |||||||||||
Loans payable | $ 64,900,000 | |||||||||||
1405 Point | 1405 Point | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Option to purchase additional voting rights | 79.00% | |||||||||||
Cash payment | $ 300,000 | |||||||||||
Subsequent Event | Mezzanine Loan | North Decatur Square (a) | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Proceeds from collection of loans receivable | $ 20,000,000 |
Construction Contracts (Details
Construction Contracts (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Capitalized contract cost, amortization | $ 300 | $ 0 | ||
Construction receivables retentions | 3,200 | $ 8,500 | ||
Retention payable | 1,789 | $ 1,711 | 3,037 | $ 3,591 |
Construction | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Retention payable | 14,700 | 21,600 | ||
Portion Attributable To Pending Contracts | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Deferred pre-contract costs | $ 700 | $ 1,400 |
Construction Contracts - Summar
Construction Contracts - Summary of Costs in Excess of Billings and Billings in Excess of Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Construction contract costs and estimated earnings in excess of billings | ||
Beginning balance | $ 1,358 | $ 245 |
Transferred to receivables | (1,890) | (245) |
Construction contract costs and estimated earnings not billed during the period | 461 | 1,287 |
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion | 532 | 0 |
Ending balance | 461 | 1,287 |
Billings in excess of construction contract costs and estimated earnings | ||
Beginning balance | 3,037 | 3,591 |
Revenue recognized that was included in the balance at the beginning of the period | (3,037) | (3,591) |
Increases due to new billings, excluding amounts recognized as revenue during the period | 2,541 | 1,898 |
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion | (752) | (187) |
Ending balance | $ 1,789 | $ 1,711 |
Construction Contracts - Summ_2
Construction Contracts - Summary of Net Position (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Contractors [Abstract] | ||
Costs incurred on uncompleted construction contracts | $ 630,425 | $ 594,006 |
Estimated earnings | 22,383 | 20,375 |
Billings | (654,136) | (616,060) |
Net position | (1,328) | (1,679) |
Construction contract costs and estimated earnings in excess of billings | 461 | 1,358 |
Billings in excess of construction contract costs and estimated earnings | $ (1,789) | $ (3,037) |
Construction Contracts - Summ_3
Construction Contracts - Summary of Backlog (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue, Remaining Performance Obligation [Roll Forward] | ||||
Beginning backlog | $ 160,871 | $ 30,733 | $ 165,863 | $ 49,167 |
New contracts/change orders | 39,177 | 27,807 | 51,196 | 32,376 |
Work performed | (21,416) | (20,619) | (38,427) | (43,622) |
Ending backlog | $ 178,632 | $ 37,921 | $ 178,632 | $ 37,921 |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | ||||
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]: 2019-07-01 | ||||
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) | Jun. 26, 2019USD ($) | May 23, 2019USD ($) | Apr. 25, 2019USD ($) | Apr. 24, 2019USD ($) | Mar. 14, 2019USD ($) | Mar. 11, 2019USD ($) | Jan. 31, 2019USD ($)extension | Jul. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Revolving Credit Facility | ||||||||||
Indebtedness | ||||||||||
Interest rate on credit facility as of end of period | 3.95% | |||||||||
Term Loan Facility | ||||||||||
Indebtedness | ||||||||||
Interest rate on credit facility as of end of period | 3.90% | |||||||||
Minimum | Revolving Credit Facility | ||||||||||
Indebtedness | ||||||||||
Basis points on unused commitment fee | 0.15% | |||||||||
Minimum | Revolving Credit Facility | LIBOR | ||||||||||
Indebtedness | ||||||||||
Stated interest rate, basis spread on variable rate | 1.40% | |||||||||
Minimum | Term Loan Facility | LIBOR | ||||||||||
Indebtedness | ||||||||||
Stated interest rate, basis spread on variable rate | 1.35% | |||||||||
Maximum | Revolving Credit Facility | ||||||||||
Indebtedness | ||||||||||
Basis points on unused commitment fee | 0.25% | |||||||||
Maximum | Revolving Credit Facility | LIBOR | ||||||||||
Indebtedness | ||||||||||
Stated interest rate, basis spread on variable rate | 2.00% | |||||||||
Maximum | Term Loan Facility | LIBOR | ||||||||||
Indebtedness | ||||||||||
Stated interest rate, basis spread on variable rate | 1.95% | |||||||||
Construction loans | ||||||||||
Indebtedness | ||||||||||
Borrowings under construction loans | $ 50,300,000 | |||||||||
Construction loans | Subsequent Event | ||||||||||
Indebtedness | ||||||||||
Borrowings under construction loans | $ 5,400,000 | |||||||||
Operating Partnership | New Credit Facility | ||||||||||
Indebtedness | ||||||||||
Aggregate capacity under the credit facility | $ 355,000,000 | |||||||||
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 | 122,000,000 | $ 126,000,000 | ||||||||
Operating Partnership | New Credit Facility | Term Loan Facility | ||||||||||
Indebtedness | ||||||||||
Aggregate capacity under the credit facility | $ 205,000,000 | |||||||||
Credit facility, amount outstanding | $ 205,000,000 | $ 180,000,000 | ||||||||
Lightfoot Marketplace | Secured Debt | Line of credit | ||||||||||
Indebtedness | ||||||||||
Proceeds from lines of credit | $ 7,400,000 | |||||||||
One City Center | LIBOR | ||||||||||
Indebtedness | ||||||||||
Stated interest rate, basis spread on variable rate | 1.85% | |||||||||
One City Center | Secured Debt | ||||||||||
Indebtedness | ||||||||||
Aggregate capacity under the credit facility | $ 25,600,000 | |||||||||
Accordion feature maximum borrowing capacity | $ 27,600,000 | |||||||||
1405 Point | LIBOR | ||||||||||
Indebtedness | ||||||||||
Stated interest rate, basis spread on variable rate | 2.75% | 2.50% | ||||||||
Thames Street Wharf | LIBOR | ||||||||||
Indebtedness | ||||||||||
Stated interest rate, basis spread on variable rate | 1.30% | |||||||||
Thames Street Wharf | Revolving Credit Facility | LIBOR | ||||||||||
Indebtedness | ||||||||||
Stated interest rate, basis spread on variable rate | 2.25% | |||||||||
Thames Street Wharf | Secured Debt | ||||||||||
Indebtedness | ||||||||||
Aggregate capacity under the credit facility | $ 70,000,000 | |||||||||
Thames Street Wharf | Secured Debt | Revolving Credit Facility | ||||||||||
Indebtedness | ||||||||||
Aggregate capacity under the credit facility | 76,000,000 | |||||||||
Commitment fee borrowing threshold | $ 19,000,000 | |||||||||
Basis points on unused commitment fee | 0.25% | |||||||||
First Purchase Option | 1405 Point | ||||||||||
Indebtedness | ||||||||||
Option to purchase additional voting rights | 79.00% | |||||||||
Cash payment | $ 300,000 | |||||||||
1405 Point | ||||||||||
Indebtedness | ||||||||||
Option to purchase additional voting rights | 79.00% | |||||||||
Cash payment | $ 300,000 | |||||||||
Loans payable | 64,900,000 | |||||||||
Loans payable, fair value | $ 65,800,000 | |||||||||
1405 Point | 1405 Point | ||||||||||
Indebtedness | ||||||||||
Option to purchase additional voting rights | 79.00% | |||||||||
Cash payment | $ 300,000 | |||||||||
Red Mill Commons | Operating Partnership | ||||||||||
Indebtedness | ||||||||||
Mortgage debt assumed | $ 24,900,000 | |||||||||
Marketplace at Hilltop | ||||||||||
Indebtedness | ||||||||||
Loans payable, fair value | 10,790,000 | |||||||||
Mortgage debt assumed | 10,740,000 | |||||||||
Marketplace at Hilltop | Operating Partnership | ||||||||||
Indebtedness | ||||||||||
Mortgage debt assumed | $ 10,800,000 |
Indebtedness -Schedule of Debt
Indebtedness -Schedule of Debt Assumed (Details) - USD ($) $ in Thousands | May 23, 2019 | May 22, 2019 |
Redmill North | ||
Indebtedness | ||
Note balance at assumption | $ 4,451 | |
Loans payable, fair value | $ 4,520 | |
Loan interest rate | 4.73% | |
Redmill South | ||
Indebtedness | ||
Note balance at assumption | $ 6,310 | |
Loans payable, fair value | $ 6,090 | |
Loan interest rate | 3.57% | |
Redmill Central | ||
Indebtedness | ||
Note balance at assumption | $ 2,640 | |
Loans payable, fair value | $ 2,690 | |
Loan interest rate | 4.80% | |
Redmill West | ||
Indebtedness | ||
Note balance at assumption | $ 11,548 | |
Loans payable, fair value | $ 11,540 | |
Loan interest rate | 4.23% | |
Marketplace at Hilltop | ||
Indebtedness | ||
Note balance at assumption | $ 10,740 | |
Loans payable, fair value | $ 10,790 | |
Loan interest rate | 4.42% | |
Red Mill Commons And Marketplace At Hilltop | ||
Indebtedness | ||
Note balance at assumption | $ 35,689 | |
Loans payable, fair value | 35,630 | |
Operating Partnership | Marketplace at Hilltop | ||
Indebtedness | ||
Note balance at assumption | 10,800 | |
Operating Partnership | Red Mill Commons And Marketplace At Hilltop | ||
Indebtedness | ||
Note balance at assumption | $ 35,600 | $ 35,700 |
Derivative Financial Instrume_3
Derivative Financial Instruments Derivative Financial Instruments - Schedule of LIBOR interest rate caps (Details) - USD ($) | Jun. 30, 2019 | May 15, 2019 | Dec. 31, 2018 | Dec. 11, 2018 | Jul. 16, 2018 | Mar. 07, 2018 | Nov. 28, 2017 | Sep. 18, 2017 | Jun. 23, 2017 |
Derivative [Line Items] | |||||||||
Notional Amount | $ 647,326,000 | $ 513,208,000 | |||||||
Interest Rate Caps | LIBOR | |||||||||
Derivative [Line Items] | |||||||||
Notional Amount | 400,000,000 | $ 100,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | |
Strike Rate | 2.50% | 2.75% | 2.50% | 2.25% | 1.50% | 1.50% | 1.50% | ||
Premium Paid | $ 1,839,000 | $ 288,000 | $ 210,000 | $ 319,000 | $ 310,000 | $ 359,000 | $ 199,000 | $ 154,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands | Mar. 11, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Derivative [Line Items] | |||||||
Notional Amount | $ 647,326 | $ 647,326 | $ 513,208 | ||||
Unrealized cash flow hedge losses | (3,459) | $ (1,003) | $ 0 | (4,462) | $ 0 | ||
Realized cash flow hedge losses reclassified to net income | 35 | $ 72 | $ 0 | 107 | $ 0 | ||
Gain (loss) reclassified during next 12 months | (1,100) | (1,100) | |||||
Interest Rate Swaps | |||||||
Derivative [Line Items] | |||||||
Notional Amount | 247,326 | 247,326 | |||||
Not designated as accounting hedges | |||||||
Derivative [Line Items] | |||||||
Notional Amount | 500,000 | 500,000 | 450,000 | ||||
Not designated as accounting hedges | Interest Rate Swaps | |||||||
Derivative [Line Items] | |||||||
Notional Amount | 100,000 | $ 100,000 | $ 100,000 | ||||
Line of credit | Secured Debt | Lightfoot Marketplace | |||||||
Derivative [Line Items] | |||||||
Proceeds from lines of credit | $ 7,400 | ||||||
Maximum | |||||||
Derivative [Line Items] | |||||||
Realized cash flow hedge losses reclassified to net income | $ 100 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Derivative [Line Items] | ||||||
Notional Amount | $ 647,326 | $ 647,326 | $ 513,208 | |||
Asset, Fair Value | 422 | 422 | 2,093 | |||
Liability, Fair Value | (8,266) | (8,266) | (2,474) | |||
Change in fair value of interest rate derivatives | (1,933) | $ (11) | (3,396) | $ 958 | ||
Unrealized cash flow hedge losses | (3,459) | $ (1,003) | 0 | (4,462) | 0 | |
Total change in fair value of interest rate derivatives | (5,392) | (11) | (7,858) | 958 | ||
Interest rate swaps | ||||||
Derivative [Line Items] | ||||||
Notional Amount | 247,326 | 247,326 | ||||
Total change in fair value of interest rate derivatives | (4,549) | 5 | (6,201) | 353 | ||
Interest rate caps | ||||||
Derivative [Line Items] | ||||||
Total change in fair value of interest rate derivatives | (843) | $ (16) | (1,657) | $ 605 | ||
Not designated as accounting hedges | ||||||
Derivative [Line Items] | ||||||
Notional Amount | 500,000 | 500,000 | 450,000 | |||
Asset, Fair Value | 422 | 422 | 2,093 | |||
Liability, Fair Value | (2,186) | (2,186) | (749) | |||
Not designated as accounting hedges | Interest rate swaps | ||||||
Derivative [Line Items] | ||||||
Notional Amount | 100,000 | 100,000 | 100,000 | |||
Asset, Fair Value | 0 | 0 | 303 | |||
Liability, Fair Value | (2,186) | (2,186) | (749) | |||
Not designated as accounting hedges | Interest rate caps | ||||||
Derivative [Line Items] | ||||||
Notional Amount | 400,000 | 400,000 | 350,000 | |||
Asset, Fair Value | 422 | 422 | 1,790 | |||
Liability, Fair Value | 0 | 0 | 0 | |||
Designated as accounting hedge | Interest rate swaps | ||||||
Derivative [Line Items] | ||||||
Notional Amount | 147,326 | 147,326 | 63,208 | |||
Asset, Fair Value | 0 | 0 | 0 | |||
Liability, Fair Value | $ (6,080) | $ (6,080) | $ (1,725) |
Derivative Financial Instrume_6
Derivative Financial Instruments - Floating-to-Fixed Interest Rate Swaps (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Notional Amount | $ 647,326 | $ 513,208 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | 247,326 | |
Not designated as accounting hedges | ||
Derivative [Line Items] | ||
Notional Amount | 500,000 | 450,000 |
Not designated as accounting hedges | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | 100,000 | 100,000 |
Not designated as accounting hedges | Senior Unsecured Term Loan 2.00% | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 50,000 | |
Fixed interest rate | 2.00% | |
Effective interest rate | 3.50% | |
Not designated as accounting hedges | Senior Unsecured Term Loan 1.50% | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 50,000 | |
Fixed interest rate | 2.78% | |
Effective interest rate | 4.28% | |
Designated as accounting hedge | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 147,326 | $ 63,208 |
Designated as accounting hedge | John Hopkins Village | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 52,256 | |
Fixed interest rate | 2.94% | |
Effective interest rate | 4.19% | |
Designated as accounting hedge | Lightfoot Marketplace | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 10,500 | |
Fixed interest rate | 3.02% | |
Effective interest rate | 4.77% | |
Designated as accounting hedge | 249 Central Park Retail, South Retail, and Fountain Plaza Retail | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 34,570 | |
Fixed interest rate | 2.25% | |
Effective interest rate | 3.85% | |
Designated as accounting hedge | Senior Unsecured Term Loan 2.26% | Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 50,000 | |
Fixed interest rate | 2.26% | |
Effective interest rate | 3.76% |
Equity - Additional Information
Equity - Additional Information (Details) | Jul. 03, 2019USD ($) | Jul. 01, 2019shares | Jun. 18, 2019USD ($)ft²$ / sharesshares | May 30, 2019USD ($)shares | May 23, 2019USD ($)shares | May 07, 2019$ / shares | Apr. 04, 2019USD ($) | Jan. 03, 2019USD ($) | Jan. 02, 2019shares | Feb. 26, 2018USD ($) | Jul. 31, 2019USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019$ / shares | Jun. 30, 2018$ / shares | Mar. 31, 2018$ / shares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($)$ / sharesshares |
Class of Stock | ||||||||||||||||||
Preferred stock issued (in shares) | shares | 2,530,000 | 2,530,000 | 0 | |||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||||||
Percentage of Operating Partnership held | 71.40% | 71.40% | 74.50% | |||||||||||||||
Aggregate cash dividends and distributions, paid | $ 28,003,000 | $ 24,337,000 | ||||||||||||||||
Dividends and distributions declared per common share and unit (in dollars per share) | $ / shares | $ 0.21 | $ 0.20 | $ 0.21 | $ 0.21 | $ 0.20 | |||||||||||||
Class A units | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Class A Units not held by Company (in shares) | shares | 21,177,692 | 21,177,692 | ||||||||||||||||
Class A units | Operating Partnership | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Number of shares issued (in shares) | shares | 60,000 | 4,125,759 | ||||||||||||||||
Business acquisition, equity interest issued or issuable, value assigned | $ 1,000,000 | $ 68,100,000 | ||||||||||||||||
Business acquisition, percentage of voting interests acquired | 35.00% | |||||||||||||||||
Aggregate cash dividends and distributions, paid | $ 3,600,000 | $ 3,400,000 | ||||||||||||||||
Common stock | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Shares issued (in shares) | shares | 118,471 | |||||||||||||||||
Aggregate cash dividends and distributions, paid | $ 11,000,000 | $ 10,000,000 | ||||||||||||||||
New ATM Program | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Consideration received on transaction | $ 37,800,000 | |||||||||||||||||
New ATM Program | Common stock | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Maximum aggregate offering price of shares to be sold (up to) | $ 125,000,000 | |||||||||||||||||
Shares issued (in shares) | shares | 2,522,186 | |||||||||||||||||
Weighted average price (in dollars per share) | $ / shares | $ 15.16 | $ 15.16 | ||||||||||||||||
Subsequent Event | Class A units | Operating Partnership | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Aggregate cash dividends and distributions, paid | $ 4,400,000 | |||||||||||||||||
Subsequent Event | Common stock | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Aggregate cash dividends and distributions, paid | $ 11,100,000 | |||||||||||||||||
Subsequent Event | New ATM Program | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Consideration received on transaction | $ 1,000,000 | |||||||||||||||||
Subsequent Event | New ATM Program | Common stock | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Shares issued (in shares) | shares | 62,823 | |||||||||||||||||
Weighted average price (in dollars per share) | $ / shares | $ 16.84 | |||||||||||||||||
Noncontrolling interests in investment entities | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Liquidation preference | $ 63,300,000 | $ 63,300,000 | ||||||||||||||||
Consolidated Entities Under Development Or Construction | Operating Partnership | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Ownership interest percentage in properties | $ 0 | $ 0 | $ 0 | |||||||||||||||
Redeemable convertible preferred stock | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Preferred stock issued (in shares) | shares | 2,530,000 | |||||||||||||||||
Preferred Stock dividend rate percentage | 6.75% | 6.75% | ||||||||||||||||
Preferred stock, dividends, not yet paid (in dollars per share) | $ / shares | $ 0.0609 | |||||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 25 | |||||||||||||||||
Proceeds from issuance of preferred stock | $ 61,300,000 | |||||||||||||||||
Preferred stock, redemption price (in usd per unit) | $ / shares | $ 25 | $ 25 | ||||||||||||||||
Redeemable convertible preferred stock | Over-Allotment Option | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Preferred stock issued (in shares) | shares | 330,000 | |||||||||||||||||
Series A Cumulative Redeemable Perpetual Preferred Units | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Preferred stock issued (in shares) | shares | 2,530,000 | |||||||||||||||||
Preferred Stock dividend rate percentage | 6.75% | |||||||||||||||||
Class A Units | Subsequent Event | Common stock | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Shares issued (in shares) | shares | 125,118 | |||||||||||||||||
Thames Street Wharf | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Area of Real Estate Property | ft² | 263,426 | |||||||||||||||||
1405 Point | Noncontrolling interests in investment entities | Operating Partnership | ||||||||||||||||||
Class of Stock | ||||||||||||||||||
Ownership interest percentage in properties | $ 4,600,000 | $ 4,600,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation expense | $ 0.5 | $ 0.4 | $ 1.5 | $ 1.2 |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Restricted stock granted (in shares) | 152,292 | |||
Restricted stock granted, grant date fair value (in dollars per share) | $ 15.39 | |||
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) | 144,426 | 144,426 | ||
Unrecognized compensation cost | $ 1.5 | $ 1.5 | ||
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% | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Restricted stock granted (in shares) | 10,755 | |||
Restricted stock granted, grant date fair value (in dollars per share) | $ 15.42 | |||
Amended and Restated 2013 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Number of shares reserved for issuance (in shares) | 1,700,000 | 1,700,000 | ||
Shares available for issuance (in shares) | 895,257 | 895,257 | ||
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 Instr_3
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, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Fair Value of Financial Instruments | ||
Indebtedness | $ 949,345 | $ 694,239 |
Notes receivable | 144,743 | 138,683 |
Interest rate swap liabilities | 8,266 | 2,474 |
Interest rate swap and cap assets | 422 | 2,093 |
Fair Value | ||
Fair Value of Financial Instruments | ||
Indebtedness | 952,641 | 688,437 |
Notes receivable | 144,743 | 138,683 |
Interest rate swap liabilities | 8,266 | 2,474 |
Interest rate swap and cap assets | $ 422 | $ 2,093 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | May 13, 2013 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Construction Contracts | |||||
Related Party Transactions | |||||
Revenue from contracts with affiliated entities | $ 0 | $ 300,000 | $ 0 | $ 1,500,000 | |
Gross profit from related parties | 0 | 100,000 | 0 | 300,000 | |
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 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Commitments and Contingencies | ||
Line of credit, performance and payment bonds | $ 29,000 | $ 34,800 |
Operating Partnership | ||
Commitments and Contingencies | ||
Credit facility, amount outstanding | 300 | $ 2,100 |
Financial Guarantee | ||
Commitments and Contingencies | ||
Guarantor obligations, maximum exposure (up to) | $ 56,734 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies - Guarantees (Details) - Financial Guarantee - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 08, 2019 |
Commitments and Contingencies | ||
Guarantor obligations, maximum exposure (up to) | $ 56,734 | |
The Residences at Annapolis Junction | ||
Commitments and Contingencies | ||
Guarantor obligations, maximum exposure (up to) | 8,300 | |
Delray Plaza | ||
Commitments and Contingencies | ||
Guarantor obligations, maximum exposure (up to) | 5,180 | $ 5,200 |
Nexton Square | ||
Commitments and Contingencies | ||
Guarantor obligations, maximum exposure (up to) | 12,600 | |
Interlock Commercial | ||
Commitments and Contingencies | ||
Guarantor obligations, maximum exposure (up to) | $ 30,654 |
Uncategorized Items - ahhq22019
Label | Element | Value | [1] |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (167,000) | |
Parent [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (125,000) | |
Accumulated Distributions in Excess of Net Income [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (125,000) | |
Noncontrolling Interests In Operating Partnership [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (42,000) | |
[1] | The Company recorded cumulative effect adjustments related to the new lease standard in the first quarter of 2019. See "Financial Statements — Note 2 — Significant Accounting Policies — Recent Accounting Pronouncements” for additional information. |