Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 06, 2019 | |
Class of Stock [Line Items] | ||
Entity Registrant Name | Griffin Capital Essential Asset REIT, Inc. | |
Entity Central Index Key | 0001600626 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Common Class T | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 362,241 | |
Common Class S | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 291 | |
Common Class D | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 25,754 | |
Common Class I | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,129,901 | |
Common Class A | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 24,477,117 | |
Common Class AA | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 47,716,361 | |
Common Class AAA | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 914,942 | |
Common Class E | ||
Class of Stock [Line Items] | ||
Entity Common Stock, Shares Outstanding | 162,173,233 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | |
ASSETS | |||
Cash and cash equivalents | $ 50,262 | $ 48,478 | |
Restricted cash | 31,913 | 15,807 | |
Real estate: | |||
Land | 473,709 | 350,470 | |
Building and improvements | 3,092,799 | 2,165,016 | |
Tenant origination and absorption cost | 752,012 | 530,181 | |
Construction in progress | 14,785 | 27,697 | |
Total real estate | 4,333,305 | 3,073,364 | |
Less: accumulated depreciation and amortization | (638,464) | (538,412) | |
Total real estate, net | 3,694,841 | 2,534,952 | |
Real estate assets and other assets held for sale, net | 29,804 | 0 | |
Investments in unconsolidated entities | 20,795 | 30,565 | |
Intangible assets, net | 14,199 | 17,099 | |
Deferred rent receivable | 63,565 | 55,163 | |
Deferred leasing costs, net | 50,114 | 29,958 | |
Goodwill | 229,948 | 229,948 | |
Due from affiliates | 1,523 | 19,685 | |
Right of use asset | 41,705 | 0 | |
Other assets | 34,127 | 31,120 | |
Total assets | 4,262,796 | 3,012,775 | |
LIABILITIES AND EQUITY | |||
Debt, net | 1,930,141 | 1,353,531 | |
Restricted reserves | 16,508 | 8,201 | |
Interest rate swap liability | 29,981 | 6,962 | |
Redemptions payable | 100,361 | 0 | |
Distributions payable | 15,585 | 12,248 | |
Due to affiliates | 14,867 | 42,406 | |
Intangible liabilities, net | 33,554 | 23,115 | |
Lease liability | 44,867 | 0 | |
Accrued expenses and other liabilities | 91,370 | 80,616 | |
Liabilities of real estate assets held for sale | 184 | 0 | |
Total liabilities | 2,277,418 | 1,527,079 | |
Commitments and contingencies | |||
Noncontrolling interests subject to redemption; 558,662 and 531,161 units as of September 30, 2019 and December 31, 2018, respectively | 4,887 | 4,887 | |
Stockholders’ equity: | |||
Common stock, $0.001 par value; 700,000,000 shares authorized; 235,382,622 and 174,278,341 shares outstanding in the aggregate as of September 30, 2019 and December 31, 2018, respectively (1) | [1] | 236 | 174 |
Additional paid-in capital | 2,137,112 | 1,556,770 | |
Cumulative distributions | (676,890) | (570,977) | |
Accumulated earnings | 157,005 | 128,525 | |
Accumulated other comprehensive loss | (27,008) | (2,409) | |
Total stockholders’ equity | 1,590,455 | 1,112,083 | |
Noncontrolling interests | 249,175 | 232,203 | |
Total equity | 1,839,630 | 1,344,286 | |
Total liabilities and equity | 4,262,796 | 3,012,775 | |
Perpetual convertible preferred shares | |||
LIABILITIES AND EQUITY | |||
Perpetual convertible preferred stock and common stock subject to redemption | 125,000 | 125,000 | |
Common stock subject to redemption | |||
LIABILITIES AND EQUITY | |||
Perpetual convertible preferred stock and common stock subject to redemption | $ 15,861 | $ 11,523 | |
[1] | See Note 10, Equity, for the number of shares outstanding of each class of common stock as of September 30, 2019. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Noncontrolling interest, units eligible towards redemption (in shares) | 558,662 | 531,161 |
Common Stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common Stock, shares authorized (in shares) | 700,000,000 | 700,000,000 |
Common Stock, shares outstanding (in shares) | 235,382,622 | 174,278,341 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Rental income | $ 97,435 | $ 85,041 | $ 277,276 | $ 251,431 |
Expenses: | ||||
Property operating expense | 14,717 | 13,055 | 39,091 | 36,060 |
Property tax expense | 10,050 | 11,301 | 27,722 | 33,460 |
Asset management fees to affiliates | 0 | 6,015 | 0 | 17,670 |
Property management fees to affiliates | 0 | 2,503 | 0 | 7,049 |
Property management fees to non-affiliates | 822 | 0 | 2,620 | 0 |
General and administrative expenses | 7,519 | 2,111 | 17,708 | 5,042 |
Corporate operating expenses to affiliates | 729 | 948 | 1,453 | 2,630 |
Depreciation and amortization | 41,440 | 30,096 | 112,311 | 89,258 |
Total expenses | 75,277 | 66,029 | 200,905 | 191,169 |
Income before other income and (expenses) | 22,158 | 19,012 | 76,371 | 60,262 |
Other income (expenses): | ||||
Interest expense | (19,560) | (14,161) | (53,642) | (41,251) |
Management fee revenue from affiliates | 0 | 0 | 6,368 | 0 |
Other (loss) income, net | (1,850) | 57 | (370) | 217 |
Gain (loss) from investment in unconsolidated entities | 3,027 | (579) | 1,919 | (1,617) |
Gain from disposition of assets | 8,441 | 0 | 8,441 | 1,158 |
Net income | 12,216 | 4,329 | 39,087 | 18,769 |
Distributions to redeemable preferred shareholders | (2,047) | (1,228) | (6,141) | (1,228) |
Net income attributable to noncontrolling interests | (1,149) | (157) | (4,226) | (671) |
Net income attributable to controlling interest | 9,020 | 2,944 | 28,720 | 16,870 |
Distributions to redeemable noncontrolling interests attributable to common stockholders | (81) | (90) | (240) | (266) |
Net income attributable to common stockholders | $ 8,939 | $ 2,854 | $ 28,480 | $ 16,604 |
Net income attributable to common stockholders per share, basic and diluted (in usd per share) | $ 0.04 | $ 0.02 | $ 0.13 | $ 0.10 |
Weighted average number of common shares outstanding, basic and diluted (in shares) | 245,579,526 | 167,037,629 | 216,344,938 | 169,430,447 |
Distributions declared per common share (in usd per share) | $ 0.13 | $ 0.17 | $ 0.46 | $ 0.51 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 12,216 | $ 4,329 | $ 39,087 | $ 18,769 |
Other comprehensive income (loss): | ||||
Equity in other comprehensive (loss) income of unconsolidated joint venture | (73) | (12) | (251) | 224 |
Change in fair value of swap agreements | (7,318) | 3,297 | (28,080) | 7,276 |
Total comprehensive income | 4,825 | 7,614 | 10,756 | 26,269 |
Distributions to redeemable preferred shareholders | (2,047) | (1,228) | (6,141) | (1,228) |
Distributions to redeemable noncontrolling interests attributable to common stockholders | (81) | (90) | (240) | (266) |
Comprehensive income attributable to noncontrolling interests | (314) | (232) | (494) | (895) |
Comprehensive income attributable to common stockholders | $ 2,383 | $ 6,064 | $ 3,881 | $ 23,880 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Additional Paid-In Capital | Cumulative Distributions | Accumulated Income (Deficit) | Accumulated Other Comprehensive (Loss) Income | Non- controlling Interests |
Beginning Balance at Dec. 31, 2017 | $ 1,251,811 | $ 1,220,706 | $ 179 | $ 1,561,686 | $ (454,526) | $ 110,907 | $ 2,460 | $ 31,105 |
Beginning Balance (in shares) at Dec. 31, 2017 | 179,121,568 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation | 20 | 20 | 20 | |||||
Distributions to common stockholders | (17,875) | (17,875) | (17,875) | |||||
Issuance of shares for distribution reinvestment plan | $ 1 | 11,433 | (11,434) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 1,193,568 | |||||||
Repurchase of common stock | (11) | (11) | (11) | |||||
Repurchase of common stock (in shares) | (1,116) | |||||||
Reduction of common stock subject to redemption | (11,423) | (11,423) | (11,423) | |||||
Distributions to noncontrolling interests | (1,077) | (1,077) | ||||||
Distributions to noncontrolling interests subject to redemption | (3) | (3) | ||||||
Net income | 6,553 | 6,319 | 6,319 | 234 | ||||
Other comprehensive income (loss) | 3,466 | 3,344 | 3,344 | 122 | ||||
Ending Balance at Mar. 31, 2018 | 1,231,461 | 1,201,080 | $ 180 | 1,561,705 | (483,835) | 117,226 | 5,804 | 30,381 |
Ending Balance(in shares) at Mar. 31, 2018 | 180,314,020 | |||||||
Beginning Balance at Dec. 31, 2017 | 1,251,811 | 1,220,706 | $ 179 | 1,561,686 | (454,526) | 110,907 | 2,460 | 31,105 |
Beginning Balance (in shares) at Dec. 31, 2017 | 179,121,568 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares for distribution reinvestment plan | 33,667 | |||||||
Ending Balance at Sep. 30, 2018 | 1,181,232 | 1,152,509 | $ 174 | 1,557,001 | (541,913) | 127,511 | 9,736 | 28,723 |
Ending Balance(in shares) at Sep. 30, 2018 | 174,245,340 | |||||||
Beginning Balance at Dec. 31, 2017 | 1,251,811 | 1,220,706 | $ 179 | 1,561,686 | (454,526) | 110,907 | 2,460 | 31,105 |
Beginning Balance (in shares) at Dec. 31, 2017 | 179,121,568 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of limited partnership units | 205,000 | |||||||
Distributions of units to noncontrolling interest | 0 | |||||||
Distributions to noncontrolling interests | (4,368) | |||||||
Distributions to noncontrolling interests subject to redemption | (13) | |||||||
Net income | 789 | |||||||
Other comprehensive income (loss) | (310) | |||||||
Ending Balance at Dec. 31, 2018 | $ 1,344,286 | 1,112,083 | $ 174 | 1,556,770 | (570,977) | 128,525 | (2,409) | 232,203 |
Ending Balance(in shares) at Dec. 31, 2018 | 174,278,341 | 174,278,341 | ||||||
Beginning Balance at Mar. 31, 2018 | $ 1,231,461 | 1,201,080 | $ 180 | 1,561,705 | (483,835) | 117,226 | 5,804 | 30,381 |
Beginning Balance (in shares) at Mar. 31, 2018 | 180,314,020 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation | 16 | 16 | 16 | |||||
Deferred equity compensation (in shares) | 8,035 | |||||||
Distributions to common stockholders | (17,831) | (17,831) | (17,831) | |||||
Issuance of shares for distribution reinvestment plan | $ 1 | 11,218 | (11,219) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 1,171,214 | |||||||
Repurchase of common stock | (64,264) | (64,264) | $ (7) | (64,257) | ||||
Repurchase of common stock (in shares) | (7,022,985) | |||||||
Reduction of common stock subject to redemption | 53,045 | 53,045 | 53,045 | |||||
Redemptions in excess of distribution reinvestment plan | (17,001) | (17,001) | (17,001) | |||||
Distributions to noncontrolling interests | (1,089) | (1,089) | ||||||
Distributions to noncontrolling interests subject to redemption | (4) | (4) | ||||||
Net income | 7,711 | 7,431 | 7,431 | 280 | ||||
Other comprehensive income (loss) | 749 | 722 | 722 | 27 | ||||
Ending Balance at Jun. 30, 2018 | 1,192,793 | 1,163,198 | $ 174 | 1,544,726 | (512,885) | 124,657 | 6,526 | 29,595 |
Ending Balance(in shares) at Jun. 30, 2018 | 174,470,284 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation | 1 | 1 | 1 | |||||
Distributions to common stockholders | (18,014) | (18,014) | (18,014) | |||||
Issuance of shares for distribution reinvestment plan | (1) | (1) | $ 1 | 11,012 | (11,014) | |||
Issuance of shares for distribution reinvestment plan (in shares) | 1,149,687 | |||||||
Repurchase of common stock | (12,637) | (12,637) | $ (1) | (12,636) | ||||
Repurchase of common stock (in shares) | (1,374,631) | |||||||
Reduction of common stock subject to redemption | 1,624 | 1,624 | 1,624 | |||||
Redemptions in excess of distribution reinvestment plan | 17,001 | 17,001 | 17,001 | |||||
Distributions to noncontrolling interests | (1,101) | (1,101) | ||||||
Distributions to noncontrolling interests subject to redemption | (3) | (3) | ||||||
Offering costs on preferred shares | (4,727) | (4,727) | (4,727) | |||||
Net income | 3,011 | 2,854 | 2,854 | 157 | ||||
Other comprehensive income (loss) | 3,285 | 3,210 | 3,210 | 75 | ||||
Ending Balance at Sep. 30, 2018 | 1,181,232 | 1,152,509 | $ 174 | 1,557,001 | (541,913) | 127,511 | 9,736 | 28,723 |
Ending Balance(in shares) at Sep. 30, 2018 | 174,245,340 | |||||||
Beginning Balance at Dec. 31, 2018 | $ 1,344,286 | 1,112,083 | $ 174 | 1,556,770 | (570,977) | 128,525 | (2,409) | 232,203 |
Beginning Balance (in shares) at Dec. 31, 2018 | 174,278,341 | 174,278,341 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation | $ 75 | 75 | 75 | |||||
Deferred equity compensation (in shares) | 7,336 | |||||||
Distributions to common stockholders | (21,803) | (21,803) | (21,803) | |||||
Issuance of shares for distribution reinvestment plan | $ 1 | 6,672 | (6,673) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 695,872 | |||||||
Reduction of common stock subject to redemption | (6,673) | (6,673) | (6,673) | |||||
Distributions to noncontrolling interests | (4,585) | (4,585) | ||||||
Distributions to noncontrolling interests subject to redemption | (13) | (13) | ||||||
Offering costs on preferred shares | (9) | (9) | (9) | |||||
Net income | 6,530 | 5,333 | 5,333 | 1,197 | ||||
Other comprehensive income (loss) | (8,137) | (6,729) | (6,729) | (1,408) | ||||
Ending Balance at Mar. 31, 2019 | 1,309,671 | 1,082,277 | $ 175 | 1,556,835 | (599,453) | 133,858 | (9,138) | 227,394 |
Ending Balance(in shares) at Mar. 31, 2019 | 174,981,549 | |||||||
Beginning Balance at Dec. 31, 2018 | $ 1,344,286 | 1,112,083 | $ 174 | 1,556,770 | (570,977) | 128,525 | (2,409) | 232,203 |
Beginning Balance (in shares) at Dec. 31, 2018 | 174,278,341 | 174,278,341 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of shares for distribution reinvestment plan | $ 28,378 | |||||||
Issuance of limited partnership units | 30,039 | |||||||
Distributions of units to noncontrolling interest | 1,069 | |||||||
Distributions to noncontrolling interests | (14,596) | |||||||
Distributions to noncontrolling interests subject to redemption | (34) | |||||||
Net income | 4,226 | |||||||
Other comprehensive income (loss) | (3,732) | |||||||
Ending Balance at Sep. 30, 2019 | $ 1,839,630 | 1,590,455 | $ 236 | 2,137,112 | (676,890) | 157,005 | (27,008) | 249,175 |
Ending Balance(in shares) at Sep. 30, 2019 | 235,382,622 | 235,382,622 | ||||||
Beginning Balance at Mar. 31, 2019 | $ 1,309,671 | 1,082,277 | $ 175 | 1,556,835 | (599,453) | 133,858 | (9,138) | 227,394 |
Beginning Balance (in shares) at Mar. 31, 2019 | 174,981,549 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Deferred equity compensation | 648 | 648 | 648 | |||||
Deferred equity compensation (in shares) | 349 | |||||||
Distributions to common stockholders | (26,296) | (26,296) | (26,296) | |||||
Issuance of shares for distribution reinvestment plan | $ 1 | 8,805 | (8,806) | |||||
Issuance of shares for distribution reinvestment plan (in shares) | 921,864 | |||||||
Repurchase of common stock | (98,928) | (98,928) | $ (10) | (98,918) | ||||
Repurchase of common stock (in shares) | (10,348,142) | |||||||
Reduction of common stock subject to redemption | (19,175) | (19,175) | (19,175) | |||||
Issuance of stock dividends | (2,067) | (2,067) | (2,067) | |||||
Issuance of limited partnership units | 25,000 | 25,000 | ||||||
Distributions of units to noncontrolling interest | 269 | 269 | ||||||
Mergers | 751,277 | 746,238 | $ 78 | 746,160 | 5,039 | |||
Mergers (in shares) | 78,054,934 | |||||||
Distributions to noncontrolling interests | (4,903) | (4,903) | ||||||
Distributions to noncontrolling interests subject to redemption | (11) | (11) | ||||||
Offering costs on preferred shares | (181) | (181) | (181) | |||||
Net income | 16,088 | 14,208 | 14,208 | 1,880 | ||||
Other comprehensive income (loss) | (12,803) | (11,314) | (11,314) | (1,489) | ||||
Ending Balance at Jun. 30, 2019 | 1,938,589 | 1,685,410 | $ 244 | 2,194,174 | (636,622) | 148,066 | (20,452) | 253,179 |
Ending Balance(in shares) at Jun. 30, 2019 | 243,610,554 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Mergers | $ 751,278 | |||||||
Ending Balance(in shares) at Apr. 30, 2019 | 78,054,934 | |||||||
Beginning Balance (in shares) at Jun. 30, 2019 | 243,610,554 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Gross proceeds from issuance of common stock | $ 2,576 | 2,576 | 2,576 | |||||
Gross proceeds from issuance of common stock (in shares) | 264,624 | |||||||
Deferred equity compensation | 950 | 950 | 950 | |||||
Distributions to common stockholders | (21,204) | (21,204) | (21,204) | |||||
Issuance of shares for distribution reinvestment plan | 242 | 242 | $ 1 | 13,140 | (12,899) | |||
Issuance of shares for distribution reinvestment plan (in shares) | 1,377,885 | |||||||
Repurchase of common stock | (100,361) | (100,361) | $ (10) | (100,351) | ||||
Repurchase of common stock (in shares) | (10,524,436) | |||||||
Reduction of common stock subject to redemption | 21,510 | 21,510 | 21,510 | |||||
Issuance of stock dividends | 55 | 55 | $ 1 | 6,219 | (6,165) | |||
Issuance of stock dividends ( in shares) | 653,995 | |||||||
Distributions of units to noncontrolling interest | 800 | |||||||
Distributions to noncontrolling interests | (5,108) | (5,108) | ||||||
Distributions to noncontrolling interests subject to redemption | (10) | (10) | ||||||
Offering costs on preferred shares | (1,106) | (1,106) | (1,106) | |||||
Net income | 10,088 | 8,939 | 8,939 | 1,149 | ||||
Other comprehensive income (loss) | (7,391) | (6,556) | (6,556) | (835) | ||||
Ending Balance at Sep. 30, 2019 | $ 1,839,630 | $ 1,590,455 | $ 236 | $ 2,137,112 | $ (676,890) | $ 157,005 | $ (27,008) | $ 249,175 |
Ending Balance(in shares) at Sep. 30, 2019 | 235,382,622 | 235,382,622 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating Activities: | ||
Net income | $ 39,087 | $ 18,769 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of building and building improvements | 57,473 | 44,390 |
Amortization of leasing costs and intangibles, including ground leasehold interests and leasing costs | 54,838 | 44,868 |
Amortization of (below) above market leases | (2,639) | (135) |
Amortization of deferred financing costs and debt premium | 4,926 | 2,293 |
Amortization of swap interest | 94 | 94 |
Deferred rent | (9,655) | (10,210) |
Deferred rent, ground lease | 1,129 | |
Termination fee revenue - receivable from tenant, net | (7,501) | (6,304) |
Gain from sale of depreciable operating property | (8,441) | (1,158) |
Unrealized loss on interest rate swap | 0 | 2 |
(Gain) loss from investment in unconsolidated entities | (1,919) | 1,617 |
(Gain) loss from investment | 457 | 0 |
Stock-based compensation | 1,673 | 37 |
Performance distribution allocation (non-cash) | (2,604) | |
Change in operating assets and liabilities: | ||
Deferred leasing costs and other assets | (5,380) | 1,118 |
Restricted reserves | (79) | (30) |
Accrued expenses and other liabilities | (8,943) | 7,441 |
Due to affiliates, net | 6,907 | 478 |
Net cash provided by operating activities | 119,423 | 103,270 |
Investing Activities: | ||
Cash acquired in connection with the Mergers, net of acquisition costs | 25,321 | 0 |
Acquisition of properties, net | (37,781) | (182,250) |
Proceeds from disposition of properties | 46,784 | 1,383 |
Real estate acquisition deposits | 0 | (3,350) |
Reserves for tenant improvements | 2,030 | 3 |
Payments for construction in progress | (29,447) | (17,934) |
Investment in unconsolidated joint venture | 0 | (3,266) |
Distributions of capital from investment in unconsolidated entities | 13,189 | 5,627 |
Purchase of investments | (8,353) | 0 |
Net cash provided by (used in) investing activities | 11,743 | (199,787) |
Financing Activities: | ||
Proceeds from borrowings - Term Loan | 627,000 | 0 |
Proceeds from borrowings - Revolver Loan | 215,854 | 0 |
Proceeds from borrowings - Revolver Loan - EA-1 | 0 | 96,100 |
Principal payoff of secured indebtedness - Mortgage Debt | 0 | (18,954) |
Principal payoff of secured indebtedness - Revolver Loan | (44,439) | 0 |
Principal payoff of secured indebtedness - Unsecured Credit Facility - EA-1 | (715,000) | (106,253) |
Principal amortization payments on secured indebtedness | (4,903) | (4,896) |
Deferred financing costs | (5,737) | (24) |
Offering costs | (1,707) | 0 |
Repurchase of common stock | (98,928) | (76,912) |
Issuance of common stock, net of discounts and underwriting costs | 2,789 | 0 |
Issuance of perpetual convertible preferred shares | 0 | 125,000 |
Payment of offering costs - preferred shares | 0 | (4,727) |
Distributions to noncontrolling interests | (12,506) | (3,556) |
Distributions to preferred units subject to redemption | (6,141) | 0 |
Distributions to common stockholders | (69,558) | (53,817) |
Net cash used in financing activities | (113,276) | (48,039) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 17,890 | (144,556) |
Cash, cash equivalents and restricted cash at the beginning of the period | 64,285 | 214,867 |
Cash, cash equivalents and restricted cash at the end of the period | 82,175 | 70,311 |
Supplemental Disclosures of Significant Non-Cash Transactions: | ||
Cash paid for interest | 45,759 | 3,721 |
Increase (decrease) in fair value swap agreement | (28,080) | 7,182 |
Increase (decrease) in distributions payable to common stockholders | 3,306 | (97) |
Increase (decrease) in distributions payable to noncontrolling interests | 1,294 | (13) |
Common stock issued pursuant to the distribution reinvestment plan | 28,378 | 33,667 |
Common stock redemptions funded subsequent to period-end | 0 | 39,107 |
Issuance of limited partnership units | 25,000 | 0 |
Increase in redemptions payable | 100,362 | 0 |
Issuance of stock dividends | 6,165 | 0 |
Net assets acquired in Merger in exchange for common shares | 751,278 | 0 |
Implied EA-1 common stock and operating partnership units issued in exchange for net assets acquired in Merger | 751,278 | $ 0 |
Operating lease right-of-use assets obtained in exchange for lease liabilities upon adoption of ASC 842 on January 1, 2019 | $ 16,919 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Griffin Capital Essential Asset REIT, Inc., formerly known as Griffin Capital Essential Asset REIT II, Inc. (“GCEAR”), is a real estate investment trust (“REIT”) organized primarily with the purpose of acquiring single tenant net lease properties essential to the business operations of the tenant, and has used a substantial amount of the net investment proceeds from its offerings to invest in such properties. GCEAR’s year-end date is December 31. On December 14, 2018, GCEAR, Griffin Capital Essential Asset Operating Partnership II, L.P. (the “GCEAR II Operating Partnership”), GCEAR’s wholly-owned subsidiary Globe Merger Sub, LLC (“Merger Sub”), the entity formerly known as Griffin Capital Essential Asset REIT, Inc. (“EA-1”), and Griffin Capital Essential Asset Operating Partnership, L.P. (the “EA-1 Operating Partnership”) entered into an Agreement and Plan of Merger (the “Merger Agreement”). On April 30, 2019, pursuant to the Merger Agreement, (i) EA-1 merged with and into Merger Sub, with Merger Sub surviving as GCEAR’s direct, wholly-owned subsidiary (the “Company Merger”) and (ii) the GCEAR II Operating Partnership merged with and into the EA-1 Operating Partnership (the “Partnership Merger” and, together with the Company Merger, the “Mergers”), with the EA-1 Operating Partnership (and now known as the “Current Operating Partnership”) surviving the Partnership Merger. In addition, on April 30, 2019, following the Mergers, Merger Sub merged into GCEAR. In connection with the Mergers, each issued and outstanding share of EA-1’s common stock (or fraction thereof) was converted into 1.04807 shares of GCEAR’s newly created Class E common stock, $0.001 par value per share, and each issued and outstanding share of EA-1’s Series A cumulative perpetual convertible preferred stock was converted into one share of GCEAR’s newly created Series A cumulative perpetual convertible preferred stock (the “Series A Preferred Shares”). Also on April 30, 2019, each EA-1 Operating Partnership unit outstanding converted into 1.04807 Class E units in the Current Operating Partnership and each unit outstanding in the GCEAR II Operating Partnership converted into one unit of like class in the Current Operating Partnership (the “OP Units”). On April 30, 2019 , GCEAR issued approximately 174,981,547 Class E shares and 5,000,000 shares of Series A Preferred Shares. Immediately following the consummation of the Mergers, GCEAR had 252,863,421 shares of common stock outstanding, and 5,000,000 shares of Series A Preferred Shares outstanding and the Current Operating Partnership had 284,533,435 OP Units outstanding. In connection with the Mergers, GCEAR was the legal acquirer and EA-1 was the accounting acquirer for financial reporting purposes, as discussed in Note 4, Real Estate . Thus, the financial information set forth herein subsequent to the Mergers reflects results of the combined entity, and the financial information set forth herein prior to the Mergers reflects EA-1’s results. For this reason, period to period comparisons may not be meaningful. Unless the context requires otherwise, all references to the “Company,” “we,” “our,” and “us” herein mean EA-1 and one or more of EA-1’s subsidiaries for periods prior to the Mergers, and GCEAR and one or more of GCEAR’s subsidiaries for periods following the Mergers. Certain historical information of GCEAR is included for background purposes. Prior to the Mergers, on December 14, 2018, EA-1 and the EA-1 Operating Partnership entered into a series of transactions, agreements, and amendments to EA-1’s existing agreements and arrangements (such agreements and amendments hereinafter collectively referred to as the “Self Administration Transaction”), with EA-1’s former sponsor, Griffin Capital Company, LLC (“GCC”), and Griffin Capital, LLC (“GC LLC”), pursuant to which GCC and GC LLC contributed to the EA-1 Operating Partnership all of the membership interests of Griffin Capital Real Estate Company, LLC (“GRECO”) and certain assets related to the business of GRECO, in exchange for 20,438,684 units of limited partnership in the EA-1 Operating Partnership and additional limited partnership units as earn-out consideration. As a result of the Self Administration Transaction, EA-1 became self-managed and acquired the advisory, asset management and property management business of GRECO. As part of the Self Administration Transaction, EA-1 entered into a series of agreements and amendments to existing agreements which were assumed by GCEAR pursuant to the Mergers. On December 12, 2018, in connection with the Mergers, the board of directors (the “Board”) of the Company approved the temporary suspension of the distribution reinvestment plan (“DRP”) and share redemption program (“SRP”) (the board of directors of EA-1 also approved the temporary suspension of its distribution reinvestment plan and share redemption program on such date). During the quarter ended September 30, 2018, the Company reached the 5% annual limitation of the SRP for 2018 and, therefore, redemptions submitted for the fourth quarter of 2018 were not processed. The DRP was officially suspended as of December 30, 2018, and the SRP was officially suspended as of January 19, 2019. All December 2018 distributions were paid in cash only. On February 15, 2019, the Board determined it was in the best interests of the Company to reinstate the DRP effective with the February distributions paid on or around March 1, 2019. On June 12, 2019, the Board approved, effective as of July 13, 2019, (i) the reinstatement of the SRP; and (ii) the inclusion of the Company’s Class E shares in the SRP, such that holders of the Company’s Class E shares may utilize the SRP and redeem their shares under the SRP subject to certain limitations and conditions as described in the SRP. Stockholders of EA-1 who were enrolled in EA-1’s distribution reinvestment plan were automatically enrolled in the Company’s DRP, unless such stockholder requested to not be enrolled in the Company’s DRP. On September 20, 2017, GCEAR commenced a follow-on offering of up to $2.2 billion of shares (the “Follow-On Offering”), consisting of up to $2.0 billion of shares in GCEAR’s primary offering and $0.2 billion of shares pursuant to its DRP. Pursuant to the Follow-On Offering, GCEAR offered to the public four new classes of shares of common stock: Class T shares, Class S shares, Class D shares, and Class I shares with net asset value (“NAV”) based pricing. The share classes have different selling commissions, dealer manager fees, and ongoing distribution fees. On August 16, 2018, the board of directors of GCEAR approved the temporary suspension of the primary portion of the Follow-On Offering, effective August 17, 2018. On June 12, 2019, the Board approved the reinstatement of the primary portion of the Follow-On Offering, effective June 18, 2019. Since inception, the Company had issued 6,378,213 shares of common stock for aggregate gross proceeds of approximately $62.0 million in its offerings. The Current Operating Partnership owns, directly or indirectly, all of the properties that the Company has acquired. As of September 30, 2019 , the Company owned approximately 88.6% of the limited partnership units of the Current Operating Partnership. As a result of the contribution of five properties to the Company and the Self Administration Transaction, the former sponsor and certain of its affiliates, including certain officers of the Company, owned approximately 9.9% of the limited partnership units of the Current Operating Partnership, including approximately 2.4 million units owned by the Company’s Executive Chairman and Chairman of the Board, Kevin A. Shields, as of September 30, 2019 . The remaining approximately 1.5% limited partnership units are owned by unaffiliated third parties. No limited partnership units of the Current Operating Partnership have been redeemed during the nine months ended September 30, 2019 and the year ended December 31, 2018 . The Current Operating Partnership may conduct certain activities through one or more of the Company’s taxable REIT subsidiaries, which are wholly-owned subsidiaries of the Current Operating Partnership. Since inception, the Company had issued 279,457,165 shares of common stock. The Company has received aggregate gross offering proceeds of approximately $2.7 billion from the sale of shares in its various private offerings, public offerings, and DRP offerings. The Company also issued approximately 43,772,611 shares of its common stock upon the consummation of the merger of Signature Office REIT, Inc. in June 2015. There were 235,382,622 shares of common stock outstanding as of September 30, 2019 , including shares issued pursuant to the DRP, less shares redeemed pursuant to the SRP. As of September 30, 2019 and December 31, 2018 , the Company had issued approximately $281.2 million and $252.8 million in shares pursuant to the DRP, respectively. As of September 30, 2019 , $15.9 million subject to the Company's quarterly cap on aggregate redemptions are classified on the consolidated balance sheet as common stock subject to redemption. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies There have been no significant changes to the Company’s accounting policies since the Company filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2018 . For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC. The accompanying unaudited consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . The consolidated financial statements of the Company include all accounts of the Company, the Current Operating Partnership, and its subsidiaries. Intercompany transactions are not shown on the consolidated statements. However, each property-owning entity is a wholly-owned subsidiary which is a special purpose entity ("SPE"), whose assets and credit are not available to satisfy the debts or obligations of any other entity, except to the extent required with respect to any co-borrower or guarantor under the same credit facility. Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Per Share Data The Company reports earnings per share for the period as (1) basic earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, and (2) diluted earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, including common stock equivalents. As of September 30, 2019 and December 31, 2018 , there were no material common stock equivalents that would have a dilutive effect on earnings (loss) per share for common stockholders. During the quarter ended September 30, 2019 , the Company retroactively adjusted the number of common shares outstanding in accordance with ASC 260-10, Earnings per Share ("ASC 260-10"). ASC 260-10 requires the computations of basic and diluted earnings per share to be adjusted retroactively for all periods presented to reflect the change in capital structure if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split. If changes in common stock resulting from stock dividends, stock splits, or reverse stock splits occur after the close of the period but before the consolidated financial statements are issued or are available to be issued, the per share computations for those and any prior period consolidated financial statements presented shall be based on the new number of shares. Segment Information ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity’s reportable segments. The Company internally evaluates all of the properties and interests therein as one reportable segment. Goodwill Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of business acquired. The Company's goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company takes a qualitative approach to consider whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting unit in step one of the impairment test. The Company performs its annual assessment on October 1st. Recently Issued Accounting Pronouncements On February 25, 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 was subsequently amended by the following updates: (i) ASU 2018-10, Leases: Codification Improvements to Topic 842, (ii) ASU 2018-11, Leases: Targeted Improvements, (iii) ASU 2018-20, Leases: Narrow Scope Improvements for Lessors and (iv) ASU 2019-01, Leases: Codification Improvements (collectively referred to as “ASC 842”). ASC 842 supersedes prior lease accounting guidance contained in ASC 840, Leases (“ASC 840”). On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and elected to apply the provisions as of the date of adoption on a prospective basis. In making this election, the Company has continued to apply ASC 840 to comparative periods, including providing disclosures required by ASC 840 for these periods, and the Company recognized the effects of applying ASC 842 as a cumulative-effect adjustment to retained earnings as of January 1, 2019, as described below under “Lessor”. Upon adoption of ASC 842, the Company elected the “package of practical expedients,” which allowed the Company to not reassess (a) whether expired or existing contracts as of January 1, 2019 are or contain leases, (b) the lease classification for any expired or existing leases as of January 1, 2019, and (c) the treatment of initial direct costs relating to any existing leases as of January 1, 2019. The package of practical expedients was made as a single election and was consistently applied to all leases that commenced before January 1, 2019. Lessor ASC 842 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. As the Company elected the package of practical expedients, the Company's existing leases as of January 1, 2019 continue to be accounted for as operating leases. Upon adoption of ASC 842, the Company elected the practical expedient permitting lessors to elect by class of underlying asset to not separate nonlease components (for example, maintenance services, including common area maintenance) from associated lease components (the “non-separation practical expedient”) if both of the following criteria are met: (1) the timing and pattern of transfer of the lease and non-lease component(s) are the same and (2) the lease component would be classified as an operating lease if it were accounted for separately. If both criteria are met, the combined component is accounted for in accordance with ASC 842 if the lease component is the predominant component of the combined component; otherwise, the combined component is accounted for in accordance with the revenue recognition standard. The Company assessed the criteria above with respect to the Company's operating leases and determined that they qualify for the non-separation practical expedient. As a result, the Company has accounted for and presented all rental income earned pursuant to operating leases, including property expense recovery, as a single line item, “Rental income,” in the consolidated statement of operations for the three and nine months ended September 30, 2019 . Prior to the adoption of ASC 842, the Company presented rental income, property expense recovery and other income related to leases separately in the Company's consolidated statements of operations. For comparability, the Company adjusted the comparative consolidated statement of operations for the three and nine months ended September 30, 2018 to conform to the 2019 financial statement presentation. Under ASC 842, lessors are required to record revenues and expenses on a gross basis for lessor costs (which include real estate taxes) when these costs are reimbursed by a lessee. Conversely, lessors are required to record revenues and expenses on a net basis for lessor costs when they are paid by a lessee directly to a third party on behalf of the lessor. Prior to the adoption of ASC 842, the Company recorded revenues and expenses on a gross basis for real estate taxes whether they were reimbursed to the Company by a tenant or paid directly by a tenant to the taxing authorities on the Company's behalf. Effective January 1, 2019, the Company is recording these costs in accordance with ASC 842. Lessee ASC 842 requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset (“ROU asset”), which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASC 842 also requires lessees to classify leases as either finance or operating leases based on whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification is used to evaluate whether the lease expense should be recognized based on an effective interest method or on a straight-line basis over the term of the lease. On January 1, 2019, the Company was the lessee on two ground leases, which were classified as operating leases under ASC 840. As the Company elected the packages of practical expedients, the Company is not required to reassess the classification of these existing leases and, as such, these leases continue to be accounted for as operating leases. In the event the Company modifies existing leases or enters into new leases in the future, such leases may be classified as finance leases. On January 1, 2019, the Company recognized ROU assets and lease liabilities for these leases on the Company's consolidated balance sheets, and on a go-forward basis, lease expense will be recognized on a straight-line basis over the remaining term of the lease. On January 1, 2019, the Company recorded a ROU asset of $25.5 million and a corresponding liability of approximately $27.6 million relating to the Company's existing ground lease arrangements. These operating leases were recognized based on the present value of the future minimum lease payments over the lease term. As these leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available in determining the present value of future payments. The discount rate used to determine the present value of these operating leases’ future payments was 5.36% . There was no impact to beginning equity as a result of the adoption related to the lessee accounting as the difference between the asset and liability is attributed to derecognition of pre-existing straight-line rent balances. On March 1, 2019. the Company entered into an office lease located in Chicago, Illinois. The Company recorded a ROU asset of $0.6 million and a corresponding liability to the Company's lease agreements (see Note 14 , Operating Leases, for details). The discount rate used to determine the present value of these operating leases’ future payments was 3.94% . On September 20, 2019, the Company acquired the McKesson II property (defined in Note 4 , Real Estate ) and assumed a ground lease from the seller. The Company recorded a ROU asset of $16.3 million and a corresponding liability to the Company's existing ground lease agreements (see Note 14 , Operating Leases, for details). The discount rate used to determine the present value of these operating leases’ future payments was 4.36% . Upon adoption of ASC 842, the Company also elected the practical expedient to not separate non-lease components, such as common area maintenance, from associated lease components for the Company's ground and office space leases. Reclassification of the Prior Year Presentation of Rental Income and Property Expense Recovery As described below, rental income, termination income and property expense recovery related to the Company's operating leases for which the Company is the lessor qualified for the single component practical expedient and was classified as rental income in the Company's consolidated statements of operations. Prior to the adoption of the new lease accounting standard, the Company classified rental income, termination income and property expense recovery separately in the Company's consolidated statements of operations, in accordance with the guidance in effect prior to January 1, 2019. Upon adoption of the new lease accounting standard, the Company's comparative statements of operations from the prior period have been reclassified to conform to the new single component presentation of rental income, termination income and property expense recovery, classified within "Rental Income" in the Company's consolidated statements of operations. The table below provides a reconciliation of the prior period presentation of the statement of operations line items that were reclassified in the Company's consolidated statement of operations to conform to the current period presentation, pursuant to the adoption of the new lease accounting standard and election of the single component practical expedient (in thousands): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Presentation prior to January 1, 2019 Lease income $ 66,028 $ 187,601 Lease termination income 84 9,090 Property expense recovery 18,929 54,740 Rental income $ 85,041 $ 251,431 |
Self Administration Transaction
Self Administration Transaction | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Self Administration Transaction | Self Administration Transaction Overview Fair Value of Consideration Transferred The Company accounted for the Self Administration Transaction as a business combination under the acquisition method of accounting. Under the terms of the Self Administration Transaction, the following consideration was given in exchange for 100% of the membership interests in GRECO: Amount Fair value of EA-1 Operating Partnership units issued $ 205,000 Fair value of earn-outs 29,380 Accrued liabilities: Executive deferred compensation plan 7,795 Other liabilities 11,890 Total consideration 254,065 Less: accounts receivable from affiliates and other assets (19,878 ) Net consideration $ 234,187 As part of the Self Administration Transaction, the Company issued 20.4 million limited partnership units with an estimated fair value per unit of $10.03 . The terms of the Self Administration Transaction included two earn-outs structured with an estimated fair value obligation of approximately $29.4 million . Assets Acquired and Liabilities Assumed The Self Administration Transaction was accounted for using the acquisition method of accounting under ASC 805, Business Combinations ("ASC 805"), which requires, among other things, the assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. During the nine months ended September 30, 2019 , the Company finalized the purchase price allocation for the Self Administration Transaction. The following table summarizes the finalized purchase price allocation: Amount Assets: Accounts receivable from affiliates and other assets $ 19,878 Management contract intangibles 4,239 Goodwill 229,948 Total assets acquired 254,065 Liabilities: Earn-outs (due to affiliates) 29,380 Executive deferred compensation plan 7,795 Other liabilities 11,890 Total liabilities assumed 49,065 Net assets acquired $ 205,000 The intangible assets acquired primarily consist of property management and advisory contracts that the Company, as advisor and property manager through certain subsidiaries, had with GCEAR. The value of the contracts was determined based on a discounted cash flow valuation of the projected revenues of the acquired contracts. The contracts are subject to an estimated useful life of approximately three months. As of September 30, 2019 , the management and advisory contracts were fully amortized. Goodwill In connection with the Self Administration Transaction, the Company recorded goodwill of $229.9 million as a result of the consideration exceeding the fair value of the net assets acquired. Goodwill represents the estimated future benefits arising from other assets acquired that could not be individually identified and separately recognized. The goodwill recorded represents the Company's acquired workforce and its ability to generate additional opportunities for revenue and raise additional funds. Pro Forma Financial Information The following condensed pro forma operating information is presented as if the Self Administration Transaction occurred in 2018 and had been included in operations as of January 1, 2018. The pro forma operating information excludes certain nonrecurring adjustments, such as acquisition fees and expenses incurred, to reflect the pro forma impact the acquisition would have on earnings on a continuous basis: Nine Months Ended September 30, 2018 Revenue $ 251,431 Net income $ 47,304 Net income attributable to noncontrolling interests $ 7,171 Net income attributable to common stockholders (1) $ 38,639 Net income attributable to common stockholders per share, basic and diluted $ 0.23 (1) Amount is net of net income attributable to noncontrolling interests, distributions to redeemable noncontrolling interests attributable to common stockholders and distributions to preferred shareholders. |
Real Estate
Real Estate | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Real Estate | Real Estate As of September 30, 2019 , the Company’s real estate portfolio consisted of 101 properties in 25 states consisting substantially of office, warehouse, and manufacturing facilities and one land parcel held for future development with a combined acquisition value of approximately $4.2 billion , including the allocation of the purchase price to above- and below-market lease valuation. Depreciation expense for buildings and improvements for the nine months ended September 30, 2019 was $57.5 million . Amortization expense for intangibles, including, but not limited to, tenant origination and absorption costs for the nine months ended September 30, 2019 was $54.8 million . 2019 Acquisitions The purchase price and other acquisition items for the properties acquired during the nine months ended September 30, 2019 are shown below (in thousands except square footage): Property Location Tenant/Major Lessee Acquisition Date Purchase Price Approx. Square Feet Acquisition Fees and Expenses (1) Year of Lease Expiration McKesson II Scottsdale, AZ McKesson Corporation 9/20/2019 $37,674 124,900 $1,059 2029 (1) The former advisor is entitled to receive acquisition fees equal to 2.5% . In addition, the Company incurred third-party costs associated with the acquisition. Mergers The Mergers were accounted for as an asset acquisition under ASC 805, with EA-1 treated as the accounting acquirer and the Mergers accounted for as a reverse acquisition. The total purchase price was allocated to the individual assets acquired and liabilities assumed based upon their relative fair values. Intangible assets were recognized at their relative fair values in accordance with ASC 350, Intangibles. Based on an evaluation of the relevant factors and the guidance in ASC 805 requiring significant management judgment, the entity considered the acquirer for accounting purposes is not the legal acquirer. In order to make this consideration, various factors have been analyzed including which entity issued its equity interests, relative voting rights, existence of minority interests (if any), control of the board of directors, management composition, existence of a premium as it applies to the exchange ratio, relative size, transaction initiation, operational structure, relative composition of employees, surviving brand and name, and other factors. The strongest factor identified was the relative size of EA-1 and GCEAR. Based on financial measures, EA-1 was a significantly larger entity than GCEAR and its stockholders hold the majority of the voting shares of the Company. The assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of the Company as of the effective time of the Mergers were recorded at their respective relative fair values and added to those of EA-1. Transaction costs incurred by EA-1 were capitalized in the period in which the costs were incurred and services were received. The total purchase price was allocated to the individual assets acquired and liabilities assumed based upon their relative fair values. Intangible assets were recognized at their relative fair values in accordance with ASC 805. Upon the effective time of the Mergers on April 30, 2019, each of EA-1's 167.0 million issued and outstanding shares of common stock were converted into the right to receive 1.04807 newly issued shares of the Class E Common Stock of the Company. GCEAR's 78.1 million issued and outstanding shares of common stock remained outstanding as of April 30, 2019. As the Mergers were accounted for as a reverse acquisition, the total consideration transferred was computed by dividing the Company's outstanding shares as of April 30, 2019 by the exchange ratio of 1.04807 and multiplied by EA-1’s estimated value per share of $10.02 (including transaction costs) as of April 30, 2019. Consideration transferred is calculated as such (in thousands except share and per share data): As of April 30, 2019 GCEAR's common shares outstanding 78,054,934 Exchange ratio 1.04807 Implied EA-1 common stock issued in consideration 74,474,924 GCEAR's operating partnership units outstanding 527,045 Exchange ratio 1.04807 Implied EA-1 operating partnership units issued in consideration 502,872 EA-1's net asset value per share $ 10.02 Total consideration $ 751,278 The following table summarizes the final purchase price allocation based on a valuation report prepared by the Company's third-party valuation specialist that was subject to management's review and approval: As of April 30, 2019 Assets: Cash assumed $ 35,659 Land 135,875 Building and improvements 913,739 Tenant origination and absorption cost 214,428 Intangibles 3,627 Construction in progress 263 Other assets 5,964 Total assets 1,309,555 Liabilities: Debt (net of $1.1 million premium) 498,906 Below market leases 12,476 Due to Affiliates 8,804 Distribution payable 1,854 Restricted reserves 11,050 Accounts payable and other liabilities 14,849 Total liabilities 547,939 Fair value of net assets acquired 761,616 Less: EA-1's Merger expenses 10,338 Fair value of net assets acquired, less EA-1's Merger expenses $ 751,278 Merger-Related Expenses In connection with the Mergers, the Company incurred various transaction and administrative costs. These costs included advisory fees, legal, tax, accounting, valuation fees, and other costs. These costs were capitalized as a component of the cost of the assets acquired. The costs that were obligations of GCEAR and expensed prior to the Mergers are not included in the Company's consolidated statements of operations. The following is a breakdown of the Company's costs incurred during the nine months ended September 30, 2019 related to the Mergers: Amount Advisory and valuation fees $ 8,592 Legal, accounting and tax fees 1,384 Other fees 362 Total Merger-related fees $ 10,338 Real Estate - Valuation and Purchase Price Allocation The Company allocates the purchase price to the relative fair value of the tangible assets of a property by valuing the property as if it were vacant. This “as-if vacant” value is estimated using an income, or discounted cash flow, approach that relies upon Level 3 inputs, which are unobservable inputs based on the Company's review of the assumptions a market participant would use. These Level 3 inputs include discount rates, capitalization rates, market rents and comparable sales data for similar properties. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. In calculating the “as-if vacant” value for acquisitions completed during the nine months ended September 30, 2019 , the Company used a discount rate of 5.75% to 11.75% . In determining the fair value of intangible lease assets or liabilities, the Company also considers Level 3 inputs. Acquired above and below-market leases are valued based on the present value of the difference between prevailing market rates and the in-place rates measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases, if applicable. The estimated fair value of acquired in-place at-market tenant leases are the costs that would have been incurred to lease the property to the occupancy level of the property at the date of acquisition. Such estimates include the value associated with leasing commissions, legal and other costs, as well as the estimated period necessary to lease such property that would be incurred to lease the property to its occupancy level at the time of its acquisition. Acquisition costs associated with asset acquisitions are capitalized in the period they are incurred. The following summarizes the purchase price allocations of the properties acquired during the nine months ended September 30, 2019 : Acquisition Land Building Improvements Tenant origination and absorption costs In-place lease valuation - above market In-place lease valuation - (below) market Land Leasehold Value (Above Market) Total (1) 2019 Revenue (2) Mergers $ 135,875 $ 850,811 $ 62,928 $ 214,428 $ 3,627 $ (12,476 ) $ — $ 1,255,193 $ 44,124 McKesson II (3) $ — $ 25,446 $ 4,681 $ 11,513 $ 239 $ — $ (3,072 ) $ 38,807 $ 107 (1) The allocations noted above are based on a determination of the relative fair value of the total consideration provided and represent the amount paid including capitalized acquisition costs. (2) The operating results of the properties acquired have been included in the Company's consolidated statement of operations since the acquisition date. (3) The Company recorded a ROU asset of $16.3 million and a corresponding liability to the Company's existing ground lease agreements as part of the acquisition (see Note 14 , Operating Leases , for details). Intangibles The Company allocated a portion of the acquired and contributed real estate asset value to in-place lease valuation, tenant origination and absorption cost, and other intangibles, net of the write-off of intangibles, as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 In-place lease valuation (above market) $ 45,398 $ 42,736 In-place lease valuation (above market) - accumulated amortization (33,296 ) (31,995 ) In-place lease valuation (above market), net 12,102 10,741 Ground leasehold interest (below market) 2,254 2,255 Ground leasehold interest (below market) - accumulated amortization (157 ) (137 ) Ground leasehold interest (below market), net 2,097 2,118 Intangibles - other — 4,240 Intangible assets, net $ 14,199 $ 17,099 In-place lease valuation (below market) $ (67,622 ) $ (55,147 ) Land leasehold interest (above market) (3,072 ) — In-place lease valuation (below market) - accumulated amortization 37,140 32,032 Intangible liabilities, net $ (33,554 ) $ (23,115 ) Tenant origination and absorption cost $ 752,012 $ 530,181 Tenant origination and absorption cost - accumulated amortization (343,018 ) (296,201 ) Tenant origination and absorption cost, net $ 408,994 $ 233,980 The following table sets forth the estimated annual amortization (income) expense for in-place lease valuation, net, tenant origination and absorption costs, ground leasehold improvements, and other leasing costs as of September 30, 2019 for the next five years: Year In-place lease valuation, net Tenant origination and absorption costs Ground leasehold interest Other leasing costs Remaining 2019 $ (901 ) $ 17,415 $ (3 ) $ 998 2020 $ (1,777 ) $ 65,548 $ (10 ) $ 4,852 2021 $ (1,864 ) $ 57,564 $ (10 ) $ 5,624 2022 $ (2,359 ) $ 53,980 $ (10 ) $ 5,630 2023 $ (2,379 ) $ 49,383 $ (10 ) $ 5,530 Tenant and Portfolio Risk The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies) that are rated by nationally recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or required to be provided pursuant to the lease; (3) monitoring news reports and press releases regarding the tenants and their underlying business and industry; and (4) monitoring the timeliness of rent collections. Restricted Cash In conjunction with the acquisition of certain assets, as required by certain lease provisions or certain lenders in conjunction with an acquisition or debt financing, or credits received by the seller of certain assets, the Company assumed or funded reserves for specific property improvements and deferred maintenance, re-leasing costs, and taxes and insurance, which are included on the consolidated balance sheets as restricted cash. Additionally, an ongoing replacement reserve is funded by certain tenants pursuant to each tenant’s respective lease as follows: Balance as of September 30, 2019 December 31, 2018 Cash reserves $ 24,604 $ 12,945 Restricted lockbox 7,309 2,862 Total $ 31,913 $ 15,807 Assets Held for Sale As of September 30, 2019, the 10 Commerce Parkway property located in West Jefferson, Ohio, met the criteria for classification as held for sale. Therefore, the Company classified the property as held for sale, net, on the consolidated balance sheets at the carrying amount as of September 30, 2019. The 10 Commerce Parkway property is included in continuing operations in the consolidated statements of operations, as the property did not meet the prerequisite requirements to be classified as a discontinued operation (see Note 17 , Subsequent Events, for details). The following summary presents the major components of assets and liabilities related to the real estate held for sale as of September 30, 2019 : Balance as of September 30, 2019 Land $ 1,407 Building and improvements 26,224 Tenant origination and absorption cost 2,937 Total real estate 30,568 Less: accumulated depreciation and amortization (802 ) Total real estate, net 29,766 Intangible assets, net 37 Other assets 1 Total assets $ 29,804 Accrued expenses and other liabilities $ 184 Total liabilities $ 184 Sale of Properties Lynnwood Land On July 30, 2019, the Company sold the Lynnwood IV land parcel located in Lynnwood, WA for total proceeds of $1.8 million , less closing costs and other closing credits. The carrying value of the land parcel was approximately $1.3 million . Upon the sale, the Company recognized a gain of approximately $0.3 million . 7601 Technology Way On September 5, 2019, the Company sold the 7601 Technology Way property located in Denver, Colorado for total proceeds of $48.8 million , less closing costs and other closing credits. The carrying value of the property on the closing date was approximately $37.6 million . Upon the sale of the property, the Company recognized a gain of approximately $8.1 million . |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities Heritage Commons X, LTD In June 2018, the Company, through a special purpose entity, wholly owned by the Current Operating Partnership, formed a joint venture (the "Heritage Common X") for the construction and ownership of a four-story, Class "A" office building with a net rentable area of approximately 200,000 square feet located in Fort Worth, Texas (the "Heritage Commons Property"). The Heritage Commons Property was completed in April 2019 and is 100% leased to Mercedes-Benz Financial Services USA. On July 17, 2019, the Heritage Common X Ltd. sold the Heritage Trace Parkway property located in Fort Worth, TX. The net cash to the Company from the sale was approximately $8.2 million after repayment of approximately $41.4 million of debt, along with closing costs, credits, and distributions to its joint venture partners in accordance with the provisions of the governing documents. Upon the sale, the Company recognized a equity in earnings of approximately $3.6 million . At the time of the sale, the Company had an ownership interest of approximately 45% in the joint venture. The remaining balance as of September 30, 2019 represents approximately $0.4 million of escrow holdback deposit. Digital Realty Trust, Inc. In September 2014, the Company, through an SPE, wholly owned by the Current Operating Partnership, acquired an 80% interest in a joint venture with an affiliate of Digital Realty Trust, Inc. for $68.4 million , which was funded with equity proceeds raised in the Company's public offerings. The gross acquisition value of the property was $187.5 million , plus closing costs, which was partially financed with debt of $102.0 million . The joint venture was created for purposes of directly or indirectly acquiring, owning, financing, operating and maintaining a data center facility located in Ashburn, Virginia (the "Property"). The Property is approximately 132,300 square feet and consists of certain data processing and communications equipment that is fully leased to a social media company and a financial services company with an average remaining lease term of approximately three years . The joint venture currently uses an interest rate swap to manage its interest rate risk associated with its variable rate debt. The interest rate swap is designated as an interest rate hedge of its exposure to the volatility associated with interest rates. As a result of the hedge designation and in satisfying the requirement for cash flow hedge accounting, the joint venture records changes in the fair value in accumulated other comprehensive income. In conjunction with the investment in the joint venture discussed above, the Company recognized its 80% share, or approximately $0.3 million of other comprehensive loss for the nine months ended September 30, 2019 . The interests discussed above are deemed to be variable interests in variable interest entities ("VIE") and, based on an evaluation of the variable interests against the criteria for consolidation, the Company determined that it is not the primary beneficiary of the investments, as the Company does not have power to direct the activities of the entities that most significantly affect their performance. As such, the interest in the VIEs are recorded using the equity method of accounting in the accompanying consolidated financial statements. Under the equity method, the investments in the unconsolidated entities are stated at cost and adjusted for the Company’s share of net earnings or losses and reduced by distributions. Equity in earnings of real estate ventures is generally recognized based on the allocation of cash distributions upon liquidation of the investment at book value in accordance with the operating agreements. The Company's maximum exposure to losses associated with its unconsolidated investments is primarily limited to its carrying value in the investments. As of September 30, 2019 , the balance of the investments are shown below: Digital Realty Joint Venture Heritage Common X Total Balance as of December 31, 2018 $ 27,291 $ 3,274 $ 30,565 Net income (1,690 ) 3,609 (1) 1,919 Distributions (5,000 ) (6,438 ) (1) (11,438 ) Other comprehensive loss (251 ) — (251 ) Balance as of September 30, 2019 $ 20,350 $ 445 $ 20,795 (1) Includes approximately $0.6 million in disposition and other fees owed to the Company's former advisor. In addition, approximately $1.1 million of third party fees and taxes were incurred as part of the outside basis of the investment. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of September 30, 2019 and December 31, 2018 , the Company’s debt consisted of the following: September 30, 2019 December 31, 2018 Contractual Interest Rate (1) Loan Maturity Effective Interest Rate (2) HealthSpring Mortgage Loan $ 20,849 $ 21,219 4.18% April 2023 4.61% Midland Mortgage Loan 100,760 102,262 3.94% April 2023 4.11% Emporia Partners Mortgage Loan 2,219 2,554 5.88% September 2023 5.98% Samsonite 21,392 22,085 6.08% September 2023 5.15% Highway 94 loan 15,835 16,497 3.75% August 2024 4.71% AIG Loan II 126,970 — 4.15% November 2025 4.93% BOA Loan 375,000 375,000 3.77% October 2027 3.92% BOA/KeyBank Loan 250,000 — 4.32% May 2028 4.16% AIG Loan 106,220 107,562 4.96% February 2029 5.08% Total Mortgage Debt 1,019,245 647,179 Revolving Credit Facility 171,500 — LIBO Rate +1.30% (4) June 2023 (4) 3.54% 2023 Term Loan 200,000 — LIBO Rate +1.25% June 2023 3.46% 2024 Term Loan 400,000 — LIBO Rate +1.25% April 2024 3.45% 2026 Term Loan 150,000 — LIBO Rate +1.65% April 2026 3.82% Term Loan — 715,000 (3) — — — Total Debt 1,940,745 1,362,179 Unamortized Deferred Financing Costs and Discounts, net (10,604 ) (8,648 ) Total Debt, net $ 1,930,141 $ 1,353,531 (1) Including the effect of one interest rate swap agreement with a total notional amount of $425.0 million , the weighted average interest rate as of September 30, 2019 was 3.81% for both the Company’s fixed-rate and variable-rate debt combined and 3.89% for the Company’s fixed-rate debt only. (2) Reflects the effective interest rate as of September 30, 2019 and includes the effect of amortization of discounts/premiums and deferred financing costs. (3) Represents the Company's Term Loan (defined below), which was fully repaid on May 1, 2019. See discussion below. (4) The LIBO rate as of September 30, 2019 was 2.05% .The Revolving Credit Facility has an initial term of approximately three years, maturing on June 28, 2022 , and may be extended for a one -year period if certain conditions are met and upon payment of an extension fee. See discussion below. Unsecured Credit Facility On July 20, 2015, EA-1, through the Current Operating Partnership, entered into an amended and restated credit agreement, as amended by that certain first amendment to amended and restated credit agreement dated as of February 12, 2016, with a syndicate of lenders, co-led by KeyBank National Association ("KeyBank"). Pursuant to the unsecured credit agreement, EA-1 was provided with a $1.14 billion senior unsecured credit facility (the "Unsecured Credit Facility"), consisting of a $500.0 million senior unsecured revolver (the "Revolver Loan") and a $640.0 million senior unsecured term loan (the "Term Loan"). The Revolver Loan had an initial term of four years , maturing on July 20, 2019, and with an extension for a one -year period if certain conditions were met and upon payment of an extension fee. The Term Loan had a term of five years , maturing on July 20, 2020. On May 1, 2019, the Company paid off the remaining balances of the Term and Revolver Loans. Second Amended and Restated Credit Agreement On April 30, 2019, the Company, through the Current Operating Partnership (the “KeyBank Borrower”), entered into that certain second amended and restated credit agreement (the "Second Amended and Restated Credit Agreement") related to a revolving credit facility and three term loans described below (the "Term Loans" and collectively with the revolving credit facility, the "KeyBank Loans") with a syndicate of lenders, under which KeyBank serves as administrative agent. Pursuant to the Second Amended and Restated Credit Agreement, the Company was provided with a revolving credit facility (the "Revolving Credit Facility") in an initial commitment amount of $750.0 million (the "Revolving Commitment"), a five -year term loan (the "2023 Term Loan") in an initial commitment amount of $200.0 million (the "2023 Term Commitment"), a five -year term loan (the "2024 Term Loan") in an initial commitment amount of $400.0 million (the "2024 Term Commitment"), and a seven -year term loan (the "2026 Term Loan") in an initial commitment amount of $150.0 million (the "2026 Term Commitment"), which commitments may be increased under certain circumstances up to a maximum total commitment of $2.0 billion . Any increase in the total commitment will be allocated to the Revolving Credit Facility and/or the Term Loans in such amounts as the KeyBank Borrower and KeyBank may determine. The KeyBank Loans are evidenced by promissory notes that are substantially similar related to each lender and the amount committed by such lender. Increases in the commitment amount must be made in amounts of not less than $25.0 million , and increases of $25.0 million in increments in excess thereof, provided that such increases do not exceed the maximum total commitment amount of $2.0 billion . The KeyBank Borrower may also reduce the amount of the Revolving Commitment in increments of $50.0 million , provided that at no time will the Revolving Credit Facility be less than $150.0 million , and such a reduction will preclude the KeyBank Borrower's ability to later increase the commitment amount. The Revolving Credit Facility may be prepaid and terminated, in whole or in part, at any time without fees or penalty. The Revolving Credit Facility also provides for same day swingline advances to be provided by KeyBank, Bank of America, N.A., and Wells Fargo Bank, N.A., on a pro rata basis, up to $125.0 million in the aggregate. Such swingline advances will reduce dollar for dollar the availability under the Revolving Credit Facility, and must be repaid within 10 business days. The Revolving Credit Facility has an initial term of approximately three years , maturing on June 28, 2022. The Revolving Credit Facility may be extended for a one -year period if certain conditions are met and the KeyBank Borrower pays an extension fee. Payments under the Revolving Credit Facility are interest only and are due on the first day of each quarter. Amounts borrowed under the Revolving Credit Facility may be repaid and reborrowed, subject to the terms of the Second Amended and Restated Credit Agreement. The 2023 Term Loan has an initial term of approximately four years , maturing on June 28, 2023. Payments under the 2023 Term Loan are interest only and are due on the first day of each quarter. Amounts borrowed under the 2023 Term Loan may not be repaid and reborrowed. The 2024 Term Loan has an initial term of five years , maturing on April 30, 2024. Payments under the 2024 Term Loan are interest only and are due on the first day of each quarter. Amounts borrowed under the 2024 Term Loan may not be repaid and reborrowed. The 2026 Term Loan has an initial term of seven years , maturing on April 30, 2026. Payments under the 2026 Term Loan are interest only and are due on the first day of each quarter. Amounts borrowed under the 2026 Term Loan may not be repaid and reborrowed. The KeyBank Loans have an interest rate calculated based on LIBOR plus the applicable LIBOR margin, as provided in the Second Amended and Restated Credit Agreement, or the Base Rate plus the applicable base rate margin, as provided in the agreement. The applicable LIBOR margin and base rate margin are dependent on the consolidated leverage ratio of the KeyBank Borrower, the Company, and the Company's subsidiaries, as disclosed in the periodic compliance certificate provided to our administrative agent each quarter. If the KeyBank Borrower obtains an investment grade rating of its senior unsecured long term debt from Standard & Poor's Rating Services, Moody's Investors Service, Inc., or Fitch, Inc., the applicable LIBOR margin and base rate margin will be dependent on such rating. The Second Amended and Restated Credit Agreement relating to the Revolving Credit Facility provides that the KeyBank Borrower must maintain a pool of unencumbered real properties (each a "Pool Property" and collectively the "Pool Properties") that meet certain requirements contained in the Second Amended and Restated Credit Agreement. The agreement sets forth certain covenants relating to the Pool Properties, including, without limitation, the following: • there must be no less than 15 Pool Properties at any time; • no greater than 15% of the aggregate pool value may be contributed by a single Pool Property or tenant; • no greater than 15% of the aggregate pool value may be contributed by Pool Properties subject to ground leases; • no greater than 20% of the aggregate pool value may be contributed by Pool Properties which are under development or assets under renovation; • the minimum aggregate leasing percentage of all Pool Properties must be no less than 90% ; and • other limitations as determined by KeyBank upon further due diligence of the Pool Properties. Borrowing availability under the Second Amended and Restated Credit Agreement is limited to the lesser of (i) an unsecured leverage ratio of no greater than 60% , or (ii) an unsecured interest coverage ratio of no less than 2.00 :1.00. In connection with the KeyBank Loans, the KeyBank Borrower paid closing costs, including arrangement fees, commitment fees and legal fees, of approximately $5.7 million . The KeyBank Borrower will pay KeyBank an administrative agent fee of $25,000 per year. In addition, an unused fee will be payable quarterly which is calculated based on the amount of the unused revolving loan commitments and is equal to 15 basis points if 50% or more of the loan commitments are used or 20 basis points if less than 50% of the loan commitments are used. At the time that the applicable LIBOR margin and base rate margin are determined in accordance with the Borrower's investment grade rating as provided above, the KeyBank Borrower will pay a quarterly facility fee at a rate that is dependent on such rating and is based upon the total commitments. Guarantors of the KeyBank Loans include us, each special purpose entity that owns a Pool Property, and each of the KeyBank Borrower's other subsidiaries which owns a direct or indirect equity interest in a special purpose entity that owns a Pool Property. In addition to customary representations, warranties, covenants, and indemnities, the KeyBank Loans require the KeyBank Borrower to comply with the following at all times, which will be tested on a quarterly basis: • a maximum consolidated leverage ratio of 60% , or, the ratio may increase to 65% for up to four consecutive quarters after a material acquisition; • a minimum consolidated tangible net worth of 75% of the Company's consolidated tangible net worth at closing of the Revolving Credit Facility, or approximately $2.0 billion , plus 75% of net future equity issuances (including units of the operating partnership interests in the KeyBank Borrower), minus 75% of the amount of any payments used to redeem the Company's stock or the KeyBank Borrower's stock or the Company's operating partnership units, minus any amounts paid for the redemption or retirement of or any accrued return on the preferred equity issued under the preferred equity investment made in EA-1's August 2018 by SHBNPP Global Professional Investment Type Private Real Estate Trust No. 13 (H); • upon consummation, if ever, of an initial public offering, a minimum consolidated tangible net worth of 75% of the Company's consolidated tangible net worth plus 75% of net future equity issuances (including units of operating partnership interests in the KeyBank Borrower) should we publicly list on the New York Stock Exchange; • a minimum consolidated fixed charge coverage ratio of not less than 1.50 :1.00; • a maximum total secured debt ratio of not greater than 40% , which ratio will increase by five percentage points for four quarters after closing of a material acquisition that is financed with secured debt; • a minimum unsecured interest coverage ratio of 2.00 :1.00; • a maximum total secured recourse debt ratio, excluding recourse obligations associated with interest rate hedges, of 10% of our total asset value; • aggregate maximum unhedged variable rate debt of not greater than 30% of the Company's total asset value; and • a maximum payout ratio of not greater than 95% commencing for the quarter ended September 30, 2019. Furthermore, the activities of the KeyBank Borrower, the Company, and the Company's subsidiaries must be focused principally on the acquisition, operation, and maintenance of income-producing office and industrial real estate properties. The Second Amended and Restated Credit Agreement contains certain restrictions with respect to the investment activities of the KeyBank Borrower, including, without limitation, the following: (i) unimproved land may not exceed 5% of total asset value; (ii) developments that are pre-leased assets under development may not exceed 20% of total asset value; (iii) investments in unconsolidated affiliates may not exceed 10% of total asset value; (iv) investments in mortgage notes receivable may not exceed 15% of total asset value; and (v) leased assets under renovation may not exceed 10% of total asset value. These investment limitations cannot exceed 25% in the aggregate, based on total asset value, as defined in the Second Amended and Restated Credit Agreement. Bank of America and KeyBank Loan On April 30, 2019, upon consummation of the Mergers, the Company assumed GCEAR's obligations as carve-out guarantor under a non-recourse carve-out guaranty agreement, which was originally executed in connection with a loan agreement dated April 27, 2018 (the "Loan Agreement”), originally created by four SPEs that own the respective four properties noted below and were owned by the GCEAR II Operating Partnership with Bank of America, N.A. and KeyBank in which GCEAR borrowed $250.0 million (the "BofA/KeyBank Loan"). The BofA/KeyBank Loan is secured by cross-collateralized and cross-defaulted first mortgage liens on the properties with the following tenants: 3M Company, Amazon.com.dedc LLC, Southern Company Services, Inc. and IGT (each, a "Secured Property"). The BofA/KeyBank Loan has a term of 10 years , maturing on May 1, 2028. The BofA/KeyBank Loan bears interest at an annual rate of 4.32% . Commencing on June 1, 2020, the BofA/KeyBank Loan may be prepaid but only if such prepayment is made in full (with certain exceptions), subject to certain conditions set forth in the Loan Agreement, including 30 days' prior notice to the Lender and payment of a prepayment premium in addition to all unpaid principal and accrued interest to the date of such prepayment. Commencing on November 1, 2027, the BofA/KeyBank Loan may be prepaid in whole or in part, subject to satisfaction of certain conditions, including 30 days' prior notice to the Lender, without payment of any prepayment premium. As of September 30, 2019 , there was approximately $250.0 million outstanding pursuant to the BofA/KeyBank Loan. AIG Loan II On April 30, 2019, upon consummation of the Mergers, the Company assumed GCEAR's obligation, which was originally executed in connection with a loan dated October 22, 2015, between six SPEs that were wholly owned by the GCEAR II Operating Partnership as the borrowers and The Variable Annuity Life Insurance Company, American General Life Insurance Company, and the United States Life Insurance Company (collectively, the "Lenders"), pursuant to which the Lenders provided such SPEs with a loan in the aggregate amount of approximately $127.0 million (the "AIG Loan II"). The AIG Loan II has a term of 10 years , maturing on November 1, 2025. The AIG Loan II bears interest at a rate of 4.15% . The AIG Loan II requires monthly payments of interest only for the first five years and fixed monthly payments of principal and interest thereafter. The AIG Loan II is secured by cross-collateralized and cross-defaulted first lien deeds of trust and second lien deeds of trust on certain properties. Each of the individual promissory notes comprising the AIG Loan II may be prepaid but only if such prepayment is made in full, subject to 30 days' prior notice to the holder and payment of a prepayment premium in addition to all unpaid principal and accrued interest to the date of such prepayment. As of September 30, 2019 , there was approximately $127.0 million outstanding pursuant to the AIG Loan. Term Loan On July 20, 2015, the Company, through the EA-1 Operating Partnership, entered into an amended and restated credit agreement, as amended by that certain first amendment to amended and restated credit agreement dated as of February 12, 2016 with a syndicate of lenders, co-led by KeyBank National Association ("KeyBank"). Pursuant to the unsecured credit agreement, the Company was provided with a $1.14 billion senior unsecured credit facility, consisting of a $500.0 million senior unsecured revolver and a $640.0 million senior unsecured term loan (the "Term Loan"). On March 29, 2016, the Company exercised its right to increase the total commitments, pursuant to the unsecured credit agreement. As a result, the total commitments on the Term Loan increased from $640.0 million to $715.0 million . On April 30, 2019, the Company paid off the outstanding balance of $715.0 million on the Term Loan with funds from the Revolving Credit Facility. Debt Covenant Compliance Pursuant to the terms of the Company's mortgage loans and the KeyBank Loans, the Current Operating Partnership, in consolidation with the Company, is subject to certain loan compliance covenants. The Company was in compliance with all of its debt covenants as of September 30, 2019 . |
Interest Rate Contracts
Interest Rate Contracts | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Contracts | Interest Rate Contracts Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by expected cash payments principally related to borrowings and interest rates. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not use derivatives for trading or speculative purposes. Derivative Instruments On August 31, 2018, the Company executed four interest rate swap agreements to hedge future variable cash flows associated with London Interbank Offered Rate ("LIBOR"). The forward-starting interest rate swaps with a total notional amount of $425.0 million become effective on July 1, 2020 and have a term of five years . The Company has entered into interest rate swap agreements to hedge the variable cash flows associated with certain existing or forecasted LIBOR based variable-rate debt, including the Company's KeyBank Loans. The change in the fair value of derivatives designated and qualifying as cash flow hedges is initially recorded in accumulated other comprehensive income ("AOCI") and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. The following table sets forth a summary of the interest rate swaps at September 30, 2019 and December 31, 2018 : Fair Value (1) Current Notional Amounts (2) Derivative Instrument Effective Date Maturity Date Interest Strike Rate September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Assets/(Liabilities): Interest Rate Swap 7/9/2015 7/1/2020 1.69% $ 90 $ 5,245 $ 425,000 $ 425,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% (8,768 ) (1,987 ) 125,000 125,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% (7,034 ) (1,628 ) 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.83% (7,048 ) (1,636 ) 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.84% (7,131 ) (1,711 ) 100,000 100,000 Total $ (29,891 ) $ (1,717 ) $ 850,000 $ 850,000 (1) The Company records all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly, there are no offsetting amounts that net assets against liabilities. As of September 30, 2019 , derivatives in an asset or liability position are included in the line item "Other assets" or "Interest rate swap liability," respectively, in the consolidated balance sheets at fair value. (2) Represents the notional amount of swaps as of the balance sheet date of September 30, 2019 and December 31, 2018 . The following table sets forth the impact of the interest rate swaps on the consolidated statements of operations for the periods presented: Nine Months Ended September 30, 2019 2018 Interest Rate Swap in Cash Flow Hedging Relationship: Amount of (loss) gain recognized in AOCI on derivatives $ (25,849 ) $ (8,458 ) Amount of (gain) reclassified from AOCI into earnings under “Interest expense” $ (2,231 ) $ 1,182 Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded $ 53,642 $ 41,251 During the 12 months subsequent to September 30, 2019 , the Company estimates that an additional $1.4 million of income will be recognized from AOCI into earnings. Certain agreements with the derivative counterparties contain a provision where if the Company defaults on any of the Company's indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender within a specified time period, then the Company could also be declared in default on its derivative obligations. As of September 30, 2019 and December 31, 2018 , the fair value of interest rate swaps in a net liability position, which excludes any adjustment for nonperformance risk related to these agreements, was approximately $31.0 million and $1.7 million , respectively. As of September 30, 2019 and December 31, 2018 , the Company had not posted any collateral related to these agreements. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Prepaid rent $ 14,847 $ 15,204 Deferred compensation 8,637 — Accrued CIP 4,855 4,662 Real estate taxes payable 19,509 23,258 Interest payable 12,266 9,310 Property operating expense payable 7,054 9,159 Other liabilities 24,202 19,023 Total $ 91,370 $ 80,616 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company is required to disclose fair value information about all financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate fair value. The Company measures and discloses the estimated fair value of financial assets and liabilities utilizing a fair value hierarchy that distinguishes between data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels, as follows: (i) quoted prices in active markets for identical assets or liabilities, (ii) "significant other observable inputs," and (iii) "significant unobservable inputs." "Significant other observable inputs" can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability, such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. "Significant unobservable inputs" are typically based on an entity’s own assumptions, since there is little, if any, related market activity. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers between the levels in the fair value hierarchy during the nine months ended September 30, 2019 and the year ended December 31, 2018 . The following tables set forth the assets and liabilities that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2019 and December 31, 2018 : Assets/(Liabilities) Total Fair Value Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2019 Interest Rate Swap Asset $ 90 $ — $ 90 $ — Interest Rate Swap Liability $ (29,981 ) $ — $ (29,981 ) $ — Earn-out Liability (due to affiliates) $ (4,380 ) $ — $ — $ (4,380 ) Corporate Owned Life Insurance Asset $ 2,022 $ — $ 2,022 $ — Mutual Funds Asset $ 6,483 $ 6,483 $ — $ — Deferred Compensation Liability $ (8,568 ) $ — $ (8,568 ) $ — December 31, 2018 Interest Rate Swap Asset $ 5,245 $ — $ 5,245 $ — Interest Rate Swap Liability $ (6,962 ) $ — $ (6,962 ) $ — Earn-out Liability (due to affiliates) $ (29,380 ) $ — $ — $ (29,380 ) Earn-outs As part of the Self Administration Transaction, the Current Operating Partnership paid GC LLC in operating units earn-out consideration of $25.0 million upon completion of the Mergers. In addition, the Current Operating Partnership will pay GCC in cash earn-out consideration ("Cash Earn-Out") equal to (i) 37.25% of the amounts received by the Company's advisor as advisory fees pursuant to the Company's advisory agreement with respect to the incremental common equity invested in the Company's follow-on public offering from April 30, 2019 through the termination of the Company's follow-on public offering, plus (ii) 37.25% of the amounts that would have been received by the Company's advisor as performance distributions pursuant to the operating partnership agreement of the Company, with respect to assets acquired by the Company from April 30, 2019 through the termination of the follow-on public offering. The Cash Earn-Out consideration will accrue on an ongoing basis and be paid quarterly; provided that such cash earn-out consideration will in no event exceed an amount equal to 2.5% of the aggregate dollar amount of common equity invested in the Company pursuant to its follow-on public offering from April 30, 2019 through the termination of such follow-on public offering. The Company estimates the fair value of the Cash Earn-Out liability using a discounted cash flow. The estimate requires the Company to make various assumptions about future equity raised, capitalization rates and annual net operating income growth. The liability is considered a Level 3 input in the fair value hierarchy. As of September 30, 2019 , the fair value of the liability was estimated to be $4.4 million . As of September 30, 2019 , no payments on the estimated liability have occurred. Financial Instruments Disclosed at Fair Value Financial instruments as of September 30, 2019 and December 31, 2018 consisted of cash and cash equivalents, restricted cash, accounts receivable, accrued expenses and other liabilities, and mortgage payable and other borrowings, as defined in Note 6, Debt . With the exception of the mortgage loans in the table below, the amounts of the financial instruments presented in the consolidated financial statements substantially approximate their fair value as of September 30, 2019 and December 31, 2018 . The fair value of the six mortgage loans in the table below is estimated by discounting each loan’s principal balance over the remaining term of the mortgage using current borrowing rates available to the Company for debt instruments with similar terms and maturities. The Company determined that the mortgage debt valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt. September 30, 2019 December 31, 2018 Fair Value Carrying Value (1) Fair Value Carrying Value (1) Samsonite $ 22,662 $ 21,392 $ 22,440 $ 22,085 Highway 94 loan $ 15,356 $ 15,835 $ 15,601 $ 16,497 AIG Loan II $ 122,791 $ 126,970 $ — $ — BOA Loan $ 374,336 $ 375,000 $ 361,917 $ 375,000 BOA/KeyBank Loan $ 268,318 $ 250,000 $ — $ — AIG Loan $ 104,131 $ 106,220 $ 108,032 $ 107,562 (1) The carrying values do not include the debt premium/(discount) or deferred financing costs as of September 30, 2019 and December 31, 2018 . See Note 6 , Debt , for details. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Equity | Equity Share Classes Class T shares, Class S shares, Class D shares, Class I shares, Class A shares, Class AA shares, Class AAA and Class E shares vote together as a single class, and each share is entitled to one vote on each matter submitted to a vote at a meeting of the Company's stockholders; provided that with respect to any matter that would only have a material adverse effect on the rights of a particular class of common stock, only the holders of such affected class are entitled to vote . As of September 30, 2019 , there were 323,816 shares of Class T common stock, 287 shares of Class S common stock, 24,414 shares of Class D common stock, 986,564 shares of Class I common stock, 24,324,950 shares of Class A common stock, 47,419,337 of Class AA common stock, 946,134 shares of Class AAA common stock, and 161,357,120 of Class E common stock outstanding. Common Equity As of September 30, 2019 , the Company had received aggregate gross offering proceeds of approximately $2.7 billion from the sale of shares in the private offering, the public offerings, and the DRP offerings, as discussed in Note 1, Organization . The Company also issued approximately 43,772,611 shares of its common stock upon the consummation of the merger of Signature Office REIT, Inc. in June 2015 and 174,981,547 Class E shares (in exchange for all outstanding shares of EA-1's common stock at the time of the Mergers) in April 2019 upon the consummation of the Mergers. As of September 30, 2019 , there were 235,382,622 shares outstanding, including shares issued pursuant to the DRP, less shares redeemed pursuant to the SRP and the self-tender offer, which occurred in May 2019. Extension of the Follow-On Offering On August 8, 2019, the Company's Board extended the termination date of the Company's Follow-On Offering from September 20, 2019 to September 20, 2020, which is three years after the effective date of the Company's Follow-On Offering. The Company's Board reserved the right to further extend the Follow-On Offering, in certain circumstances, or terminate the Company's Follow-On Offering at any time prior to September 20, 2020 . Distribution Reinvestment Plan (DRP) The Company has adopted the DRP, which allows stockholders to have dividends and other distributions otherwise distributable to them invested in additional shares of common stock. No sales commissions or dealer manager fees will be paid on shares sold through the DRP, but the DRP shares will be charged the applicable distribution fee payable with respect to all shares of the applicable class. The purchase price per share under the DRP is equal to the NAV per share applicable to the class of shares purchased, calculated as of the distribution date. The Company may amend or terminate the DRP for any reason at any time upon 10 days' prior written notice to stockholders, which may be provided through the Company's filings with the SEC. As of September 30, 2019 and December 31, 2018 , the Company had issued approximately $281.2 million and $252.8 million in shares pursuant to the DRP, respectively. As of September 30, 2019 , $15.9 million were subject to the Company's quarterly cap on aggregate redemptions are classified on the consolidated balance sheet as common stock subject to redemption. Share Redemption Program The Company has adopted the SRP that enables stockholders to sell their stock to the Company in limited circumstances. The SRP was previously suspended as of January 19, 2019, due to the Company's then-pending Mergers with EA-1 and the EA-1 Operating Partnership. On June 12, 2019, the Board reinstated the SRP effective as of July 13, 2019. All classes of shares of the Company's common stock are eligible for redemption under the SRP. On August 8, 2019, the Company's Board amended and restated its SRP, effective as of September 12, 2019, in order to (i) clarify that only those stockholders who purchased their shares from us or received their shares from the Company (directly or indirectly) through one or more non-cash transactions (including transfers to trusts, family members, etc.) may participate in the SRP; (ii) allocate capacity within each class of common stock such that the Company may redeem up to 5% of the aggregate NAV of each class of common stock; (iii) treat all unsatisfied redemption requests (or portion thereof) as a request for redemption the following quarter unless otherwise withdrawn; and (iv) make certain other clarifying changes. Under the SRP, the Company will redeem shares as of the last business day of each quarter. The redemption price will be equal to the NAV per share for the applicable class generally on the 13th day of the month prior to quarter end. Redemption requests must be received by 4:00 p.m. (Eastern time) on the second to last business day of the applicable quarter. Redemption requests exceeding the quarterly cap will be filled on a pro rata basis. With respect to any pro rata treatment, redemption requests following the death or qualifying disability of a stockholder will be considered first, as a group, followed by requests where pro rata redemption would result in a stockholder owning less than the minimum balance of $2,500 of shares of the Company's common stock, which will be redeemed in full to the extent there are available funds, with any remaining available funds allocated pro rata among all other redemption requests. All unsatisfied redemption requests must be resubmitted after the start of the next quarter, or upon the recommencement of the SRP, as applicable. There are several restrictions under the SRP. Stockholders generally have to hold their shares for one year before submitting their shares for redemption under the program; however, the Company will waive the one-year holding period in the event of the death or qualifying disability of a stockholder. Shares issued pursuant to the DRP are not subject to the one-year holding period. In addition, the SRP generally imposes a quarterly cap on aggregate redemptions of the Company's shares equal to a value of up to 5% of the aggregate NAV of the outstanding shares as of the last business day of the previous quarter, subject to the further limitations as indicated in the August 8, 2019 amendments discussed above. See Note 17 , Subsequent Events , for details. As the value on the aggregate redemptions of the Company's shares is outside the Company's control, the 5% quarterly cap is considered to be temporary equity and is presented as the common stock subject to redemption on the accompanying consolidated balance sheets. As of September 30, 2019 , the quarterly cap was approximately $116.2 million . During the three months ended September 30, 2019 , the Company received redemption requests under the SRP for Class A, Class AA, Class AAA, Class I, and Class E shares of common stock, as summarized in the following table: Class T S D E I A AA AAA Total Redemption Requests - Shares — — — 11,362,476 10,406 837,000 1,231,604 20,363 13,461,849 Redemption Requests - Amount $ — $ — $ — $ 108,398 $ 100 $ 7,968 $ 11,725 $ 194 $ 128,385 During the three months ended September 30, 2019 , redemption requests for Class E shares exceeded the quarterly 5% per share class limitation by 2,872,488 shares or approximately $27.4 million . The Class E shares not redeemed during the quarter, or 25% of the shares submitted, will be treated as redemption requests for the quarter ending December 31, 2019. The following table summarizes share redemption (excluding the self-tender offer) activity during the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Shares of common stock redeemed 10,589,361 1,311,582 10,589,361 8,013,521 Weighted average price per share $ 9.54 $ 9.63 $ 9.54 $ 9.60 Employment Agreements With Executive Officers In connection with the Mergers and Michael J. Escalante's appointment as Chief Executive Officer of the Company, the Company assumed, from EA-1, an employment agreement dated December 14, 2018, for Mr. Escalante to serve as the Company's Chief Executive Officer and President (the “Escalante Employment Agreement”). The Escalante Employment Agreement has an initial term of five years and will automatically renew for additional one year periods thereafter, unless either the Company or Mr. Escalante provide advance written notice of its or his intent not to renew or unless sooner terminated in accordance with the terms thereof. The Company also assumed employment agreements entered into by EA-1 with each of Javier F. Bitar, Howard S. Hirsch, Louis K. Sohn and Scott Tausk. Each of such employment agreements (collectively, the “Other Employee Employment Agreements”) was entered into on December 14, 2018 and is substantially similar to the material terms of the Escalante Employment Agreement. The terms of the Escalante Employment Agreement and the Other Employee Employment Agreements are included in the Company's Form 8-K filed on May 1, 2019. Issuance of Restricted Stock Units to Executive Officers Pursuant to the terms of the Escalante Employment Agreement and the Other Employee Employment Agreements, on May 1, 2019, the Company entered into Time-Based Restricted Stock Unit Agreements with each of Messrs. Escalante, Bitar, Hirsch, Sohn and Tausk for the issuance of each of their respective initial equity awards (collectively, the "Restricted Stock Unit Award Agreements"), pursuant to which the Company issued restricted stock units to such executive officers under the Employee and Director Long-Term Incentive Plan in the following amounts (the "RSUs"): 732,218 RSUs to Mr. Escalante; 104,603 RSUs to Mr. Bitar; 67,992 RSUs to Mr. Hirsch; 52,301 RSUs to Mr. Sohn; and 52,301 RSUs to Mr. Tausk. Each RSU represents a contingent right to receive one share of the Company’s Class E Common Stock when settled in accordance with the terms of the respective Restricted Stock Unit Award Agreement and will vest in equal, 25% installments on each of December 31, 2019, 2020, 2021 and 2022, provided that such executive officer remains continuously employed by the Company on each such date, subject to certain accelerated vesting provisions as provided in the Restricted Stock Unit Award Agreements. The shares of Class E Common Stock underlying the RSUs will not be delivered upon vesting, but instead will be deferred for delivery on May 1, 2023, or, if sooner, upon the executive officer's termination of employment. Deferred Compensation Plan The Company maintains a voluntary, contributory, nonqualified deferred compensation plan which, for each year, permits key employees to defer a percentage of their compensation. The retirement benefit to be provided under the plan is a function of the participant's deferred compensation and earnings thereupon. The plan is designed to primarily fund the retirement benefit liability through maintenance of certain investments, including participant cash deferrals. The liability to the deferred compensation plan participants as of September 30, 2019 was $8.6 million and is included in "Accrued expenses and other liabilities" in the consolidated balance sheet. The Company has certain investments, including corporate-owned life insurance policies ("COLI"), which had a market value that offset the participant liabilities. |
Noncontrolling Interests
Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interests represent limited partnership interests in the Current Operating Partnership in which the Company is the general partner. General partnership units and limited partnership units of the Current Operating Partnership were issued as part of the initial capitalization of the EA-1 Operating Partnership and GCEAR II Operating Partnership, in conjunction with members of management's contribution of certain assets, other contributions, and in connection with the Self-Administration Transaction as discussed in Note 1, Organization . As of September 30, 2019 , noncontrolling interests were approximately 11.71% of total shares and 12.15% of weighted average shares outstanding (both measures assuming limited partnership units were converted to common stock). The Company has evaluated the terms of the limited partnership interests in the Current Operating Partnership, and as a result, has classified limited partnership interests issued in the initial capitalization, in conjunction with the contributed assets and in connection with the Self-Administration Transaction, as noncontrolling interests, which are presented as a component of permanent equity, except as discussed below. The Company evaluates individual noncontrolling interests for the ability to recognize the noncontrolling interest as permanent equity on the consolidated balance sheets at the time such interests are issued and on a continual basis. Any noncontrolling interest that fails to qualify as permanent equity has been reclassified as temporary equity and adjusted to the greater of (a) the carrying amount or (b) its redemption value as of the end of the period in which the determination is made. The Current Operating Partnership issued 31.6 million limited partnership units, including stock distributions, to affiliated parties and unaffiliated third parties in exchange for certain properties and in connection with the Self Administration Transaction. The limited partnership units issued to affiliates as part of the Self Administration Transaction have a mandatory hold period until December 2020 and have no voting rights until the units are converted to common shares. In addition, 0.2 million limited partnership units were issued to unaffiliated third parties unrelated to property contributions. To the extent the contributors should elect to redeem all or a portion of their Current Operating Partnership units, pursuant to the terms of the respective contribution agreement, such redemption shall be at a per unit value equivalent to the price at which the contributor acquired its limited partnership units in the respective transaction. The limited partners of the Current Operating Partnership, other than those related to the Will Partners REIT, LLC ("Will Partners" property) contribution, will have the right to cause the general partner of the Current Operating Partnership, the Company, to redeem their limited partnership units for cash equal to the value of an equivalent number of shares, or, at the Company’s option, purchase their limited partnership units by issuing one share of the Company’s common stock for the original redemption value of each limited partnership unit redeemed. The Company has the control and ability to settle such requests in shares. These rights may not be exercised under certain circumstances which could cause the Company to lose its REIT election. There were no unit redemptions during the nine months ended September 30, 2019 and year ended December 31, 2018 . The following summarizes the activity for noncontrolling interests recorded as equity for the nine months ended September 30, 2019 and year ended December 31, 2018 : Nine Months Ended September 30, 2019 Year Ended December 31, 2018 Beginning balance $ 232,203 $ 31,105 Contributions/issuance of noncontrolling interests 30,039 (1) 205,000 (1) Distributions of units to noncontrolling interest 1,069 — Distributions to noncontrolling interests (14,596 ) (4,368 ) Allocated distributions to noncontrolling interests subject to redemption (34 ) (13 ) Net Income 4,226 789 Other comprehensive income (loss) (3,732 ) (310 ) Ending balance $ 249,175 $ 232,203 (1) The issuance of noncontrolling units was the result of the Self Administration Transaction and Mergers. See Note 3 , S elf Administration Transaction , and Note 4 , Real Estate , respectively. Noncontrolling interests subject to redemption Operating partnership units issued pursuant to the Will Partners property contribution are not included in permanent equity on the consolidated balance sheets. The partners holding these units can cause the general partner to redeem the units for the cash value, as defined in the operating partnership agreement. As the general partner does not control these redemptions, these units are presented on the consolidated balance sheets as noncontrolling interest subject to redemption at their redeemable value. The net income (loss) and distributions attributed to these limited partners is allocated proportionately between common stockholders and other noncontrolling interests that are not considered redeemable. |
Perpetual Convertible Preferred
Perpetual Convertible Preferred Shares | 9 Months Ended |
Sep. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Perpetual Convertible Preferred Shares | Perpetual Convertible Preferred Shares On August 8, 2018, EA-1 entered into a purchase agreement (the "Purchase Agreement") with SHBNPP Global Professional Investment Type Private Real Estate Trust No. 13(H) (acting through Kookmin Bank as trustee) (the "Purchaser") and Shinhan BNP Paribas Asset Management Corporation, as an asset manager of the Purchaser, pursuant to which the Purchaser agreed to purchase an aggregate of 10,000,000 shares of EA-1 Series A Cumulative Perpetual Convertible Preferred Stock at a price of $25.00 per share (the "EA-1 Series A Preferred Shares") in two tranches, each comprising 5,000,000 EA-1 Series A Preferred Shares. On August 8, 2018 (the "First Issuance Date"), EA-1 issued 5,000,000 Series A Preferred Shares to the Purchaser for a total purchase price of $125 million (the "First Issuance"). EA-1 paid transaction fees totaling 3.5% of the First Issuance purchase price and incurred approximately $0.4 million in transaction-related expenses to unaffiliated third parties. EA-1's former external advisor incurred transaction-related expenses of approximately $0.2 million , which was reimbursed by EA-1. Upon consummation of the Mergers, the Company issued 5,000,000 Series A Preferred Shares to the Purchaser. Pursuant to the Purchase Agreement, the Purchaser has agreed to purchase an additional 5,000,000 Series A Preferred Shares (the "Second Issuance") at a later date (the "Second Issuance Date") for an additional purchase price of $125 million subject to approval by the Purchaser’s internal investment committee and the satisfaction of the conditions in the Purchase Agreement, including, but not limited to, the execution of an Ownership Limit Exemption Agreement. Pursuant to the Purchase Agreement, the Purchaser is generally restricted from transferring the Series A Preferred Shares or the economic interest in the Series A Preferred Shares for a period of five years from the closing date. The Company's Series A Preferred Shares are not registered under the Securities Act and are not listed on a national securities exchange. The articles supplementary set forth the key terms of the Company's Series A Preferred Shares as follows: Distributions Subject to the terms of the applicable articles supplementary, the holders of the Series A Preferred Shares are entitled to receive distributions quarterly in arrears at a rate equal to one-fourth (1/4) of the applicable varying rate, as follows: i. an initial annual distribution rate of 6.55% , or if the Company's Board decides to proceed with the Second Issuance, 6.55% from and after the Second Issuance Date until the five year anniversary of the First Issuance Date, or if the Second Issuance occurs, the five year anniversary of the Second Issuance Date (the “Reset Date”), subject to paragraphs (iii) and (iv) below; ii. 6.75% from and after the Reset Date, subject to paragraphs (iii) and (iv) below; iii. if a listing (“Listing”) of the Company's shares of common stock or the Series A Preferred Shares on a national securities exchange registered under Section 6(a) of the Exchange Act, does not occur by August 1, 2020 (the “First Triggering Event”), 7.55% from and after August 2, 2020 and 7.75% from and after the Reset Date, subject to certain conditions as set forth in the articles supplementary; or iv. if a Listing does not occur by August 1, 2021, 8.05% from and after August 2, 2021 until the Reset Date, and 8.25% from and after the Reset Date. Liquidation Preference Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of the Series A Preferred Shares will be entitled to be paid out of the Company's assets legally available for distribution to the stockholders, after payment of or provision for the Company's debts and other liabilities, liquidating distributions, in cash or property at its fair market value as determined by the Company's Board, in the amount, for each outstanding Series A Preferred Share equal to $25.00 per Series A Preferred Share (the "Liquidation Preference"), plus an amount equal to any accumulated and unpaid distributions to the date of payment, before any distribution or payment is made to holders of shares of common stock or any other class or series of equity securities ranking junior to the Series A Preferred Shares but subject to the preferential rights of holders of any class or series of equity securities ranking senior to the Series A Preferred Shares. After payment of the full amount of the Liquidation Preference to which they are entitled, plus an amount equal to any accumulated and unpaid distributions to the date of payment, the holders of Series A Preferred Shares will have no right or claim to any of the Company's remaining assets. Company Redemption Rights The Series A Preferred Shares may be redeemed by the Company, in whole or in part, at the Company's option, upon the earlier to occur of: (i) five years from the First Issuance Date or (ii) the First Triggering Event, at a per share redemption price in cash equal to $25.00 per Series A Preferred Share (the "Redemption Price"), plus any accumulated and unpaid distributions on the Series A Preferred Shares up to the redemption date, plus, a redemption fee of 1.5% of the Redemption Price in the case of a redemption that occurs on or after the date of the First Triggering Event, but before the date that is five years from the First Issuance Date. Holder Redemption Rights In the event the Company fails to effect a Listing by August 1, 2023, the holder of any Series A Preferred Shares has the option to request a redemption of such shares on or on any date following August 1, 2023, at the Redemption Price, plus any accumulated and unpaid distributions up to the redemption date (the "Redemption Right"); provided, however, that no holder of the Series A Preferred Shares shall have a Redemption Right if a Listing occurs prior to or on August 1, 2023. Conversion Rights Subject to the Company's redemption rights and certain conditions set forth in the articles supplementary, a holder of the Series A Preferred Shares, at his or her option, will have the right to convert such holder's Series A Preferred Shares into shares of the Company's common stock any time after the earlier of (i) five years from the First Issuance Date, or if the Second Issuance occurs, five years from the Second Issuance Date or (ii) a Change of Control (as defined in the articles supplementary) at a per share conversion rate equal to the Liquidation Preference divided by the then Common Stock Fair Market Value (as defined in the articles supplementary). |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Summarized below are the related party costs incurred by the Company for the nine months ended September 30, 2019 and 2018 , respectively, and any related amounts payable and receivable as of September 30, 2019 and December 31, 2018 : Incurred for the Nine Months Payable as of Ended September 30, September 30, December 31, 2019 2018 2019 2018 Expensed Operating expenses $ — $ 2,630 $ — $ 74 Asset management fees — 17,628 — — Property management fees — 6,992 — 875 Disposition fees 641 — 641 — Costs advanced by the Advisor 2,571 396 1,271 341 Consulting fee - shared services 1,874 — 377 — Capitalized Acquisition fees (1) 942 5,331 942 — Leasing commissions 596 — — — Assumed through Self- Administration Transaction/Mergers Earn-out — — 4,380 29,380 Other Fees 20 — — 11,734 Stockholder Servicing Fee 693 — 5,938 — Other Distributions 10,089 — 1,318 2 Total, net of real estate assets held for sale $ 17,426 $ 32,977 $ 14,867 $ 42,406 Asset management fees related to real estate held for sale — 42 — — Property management fees related to real estate held for sale — 57 — — Total $ 17,426 $ 33,076 $ 14,867 $ 42,406 (1) Acquisition fees related to the acquisition of McKesson II during the quarter ended September 30, 2019 were capitalized as the acquisition did not meet the business combination criteria. Incurred for the Nine Months Receivable as of Ended September 30, September 30, December 31, 2019 2018 2019 2018 Assets Assumed through the Self-Administration Transaction Cash to be received from an affiliate related to deferred compensation and other payroll costs $ 658 $ — $ — $ 7,951 Other fees — — 1,202 11,734 Due from GCC Payroll/Expense Allocation 321 — 321 — Due from Affiliates Payroll/Expense Allocation 1,217 — — — O&O Costs (including payroll allocated to O&O) 157 — — — Other Fees (1) 6,375 — — — Total $ 8,728 $ — $ 1,523 $ 19,685 (1) Includes Payroll/Expense allocation, Offering Costs, Advisory Fee, Performance Distribution, LP Distributions & Employee Reimbursements. Fifth Amended and Restated Limited Partnership Agreement of the Current Operating Partnership On April 30, 2019, in connection with the Partnership Merger, the Company entered into a Fifth Amended and Restated Limited Partnership Agreement of the Current Operating Partnership (the "Operating Partnership Agreement"), which amended and superseded the Fourth Amended and Restated Limited Partnership Agreement. The Operating Partnership Agreement reflects, among other things, the change of the general partner of the GCEAR Operating Partnership to the Company, the exchange of classes of units of limited partnership interest pursuant to the Partnership Merger, the authorization of additional classes of units of limited partnership interest of the Current Operating Partnership that were outstanding prior to the Mergers and were issued in connection with the Mergers, and other updates to reflect the effects of the Mergers. The terms of the Operating Partnership Agreement are included in the Company's Form 8-K filed on May 1, 2019. Advisory and Property Management Fees Prior to the execution of the Merger Agreement, the Company's Advisor and Property Manager provided services to the Company, including asset acquisition and disposition decisions, asset management, operating and leasing of properties, property management, and other general and administrative responsibilities. Subsequent to the Mergers, advisory or property management fees paid by the Company are intercompany transactions and are eliminated in consolidation. Dealer Manager Agreement GCEAR entered into a dealer manager agreement and associated form of participating dealer agreement (the "Dealer Manager Agreement") with the Dealer Manager. The terms of the Dealer Manager Agreement are substantially similar to the terms of the dealer manager agreement from GCEAR's IPO, except as it relates to the share classes offered and the fees to be received by the Dealer Manager (terms of the Dealer Manager Agreement are included in GCEAR's 2018 Annual Report on Form 10-K filed on March 14, 2019). Distribution Fees Subject to Financial Industry Regulatory Authority, Inc.'s limitations on underwriting compensation, under the Dealer Manager Agreement the Company will pay the Dealer Manager a distribution fee for ongoing services rendered to stockholders by participating broker-dealers or broker-dealers servicing investors’ accounts, referred to as servicing broker-dealers. The fee accrues daily and is paid monthly in arrears and is calculated based on the average daily NAV for the applicable month (the “Average NAV”) (terms of the distribution fees are included in GCEAR's 2018 Annual Report on Form 10-K filed on March 14, 2019 ). Conflicts of Interest Affiliated Dealer Manager Since Griffin Capital Securities, LLC, the Company's dealer manager, is an affiliate of the Company's former sponsor, the Company does not have the benefit of an independent due diligence review and investigation of the type normally performed by an unaffiliated, independent underwriter in connection with the offering of securities. The Company's dealer manager is also serving as the dealer manager for Griffin-American Healthcare REIT III, Inc. ("GAHR III"), Griffin-American Healthcare REIT IV, Inc. ("GAHR IV") and Phillips Edison Grocery Center REIT III ("PECO III"), each of which are publicly-registered, non-traded REITs, as wholesale marketing agent for Griffin Institutional Access Real Estate Fund (“GIA Real Estate Fund”) and Griffin Institutional Access Credit Fund ("GIA Credit Fund") both of which are non-diversified, closed-end management investment companies that are operated as interval funds under the 1940 Act, and as dealer manager for various private offerings, which will result in competing demands for the Company's dealer manager's time and efforts relating to the distribution of the Company's shares and shares/interests of GAHR III, GAHR IV, PECO III, GIA Real Estate Fund, GIA Credit Fund, and the private offerings. Administrative Services Agreement In connection with the Mergers, the Company assumed, as the successor of EA-1 and the EA-1 Operating Partnership, an Administrative Services Agreement (the "Administrative Services Agreement"), pursuant to which GCC and GC LLC continue to provide office space and certain operational and administrative services at cost to the Company's Current Operating Partnership, Griffin Capital Essential Asset TRS, Inc., and GRECO, which may include, without limitation, the shared information technology, human resources, legal, due diligence, marketing, customer service, events, operations, accounting and administrative support services set forth in the Administrative Services Agreement. The Company pays GCC a monthly amount based on the actual costs anticipated to be incurred by GCC for the provision of such office space and services until the Company elects to provide such space and/or services for itself or through another provider, which amount is initially $187,167 per month, based on an approved budget. Such costs are reconciled quarterly and a full review of the costs will be performed at least annually. In addition, the Company will directly pay or reimburse GCC for the actual cost of any reasonable third-party expenses incurred in connection with the provision of such services. Certain Conflict Resolution Procedures Every transaction that the Company enters into with the Company's dealer manager or its affiliates is subject to an inherent conflict of interest. The Board may encounter conflicts of interest in enforcing the Company's rights against any affiliate in the event of a default by or disagreement with an affiliate or in invoking powers, rights or options pursuant to any agreement between the Company and the Company's dealer manager or any of its affiliates. In order to reduce or eliminate certain potential conflicts of interest, the Company addresses any conflicts of interest in two distinct ways: First, the Company's Nominating and Corporate Governance Committee considers and acts on any conflicts-related matter required by the Company's charter or otherwise permitted by the Maryland General Corporation Law ("MGCL") where the exercise of independent judgment by any of the Company's directors (who is not an independent director) could reasonably be compromised, including approval of any transaction involving the Company's dealer manager and its affiliates. Second, the Company's charter contains, or the Company is otherwise subject to, a number of restrictions relating to (1) transactions the Company enters into with the Company's dealer manager and its affiliates, (2) certain future offerings, and (3) allocation of investment opportunities among affiliated entities. These restrictions include, among others, the following: • The Company will not purchase or lease properties in which the Company's dealer manager, any of the Company's directors or any of their respective affiliates has an interest without a determination by a majority of the directors, including a majority of the independent directors, not otherwise interested in such transaction, that such transaction is fair and reasonable to the Company and at a price to the Company no greater than the cost of the property to the seller or lessor unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event will the Company acquire any such property at an amount in excess of its appraised value. The Company will not sell or lease properties to the Company's dealer manager, any of the Company's directors or any of their respective affiliates unless a majority of the directors, including a majority of the independent directors, not otherwise interested in the transaction, determines that the transaction is fair and reasonable to the Company. Notwithstanding the foregoing, the Company has agreed that the Company will not acquire properties in which the Company's former sponsor, or its affiliates, owns an economic interest. • The Company will not make any loans to the Company's dealer manager, any of the Company's directors or any of their respective affiliates, except that the Company may make or invest in mortgage loans involving the Company's dealer manager, the Company's directors or their respective affiliates, provided that an appraisal of the underlying property is obtained from an independent appraiser and the transaction is approved as fair and reasonable to the Company and on terms no less favorable to the Company than those available from third parties. In addition, the Company's dealer manager, any of the Company's directors and any of their respective affiliates will not make loans to the Company or to joint ventures in which the Company is a joint venture partner unless approved by a majority of the directors, including a majority of the independent directors, not otherwise interested in the transaction, as fair, competitive and commercially reasonable, and no less favorable to the Company than comparable loans between unaffiliated parties. The Company will not accept goods or services from the Company's dealer manager or its affiliates or enter into any other transaction with the Company's dealer manager or its affiliates unless a majority of the Company's directors, including a majority of the independent directors, not otherwise interested in the transaction, approve such transaction as fair and reasonable to the Company and on terms and conditions not less favorable to the Company than those available from unaffiliated third parties. |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Operating Leases | Operating Leases Lessor The Company leases commercial and industrial space to tenants primarily under non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum lease payments are recognized in rental income on a straight-line basis over the term of the related lease and estimated reimbursements from tenants for real estate taxes, insurance, common area maintenance and other recoverable operating expenses are recognized in rental income in the period that the expenses are incurred. The Company recognized $80.3 million and $212.8 million of lease income related to operating lease payments for the three and nine months ended September 30, 2019 , respectively. The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2019 . The Company's current leases have expirations ranging from 2019 to 2044. As of September 30, 2019 Remaining 2019 $ 74,253 2020 290,724 2021 294,220 2022 293,720 2023 285,232 Thereafter 1,338,973 Total $ 2,577,122 The future minimum base rents in the table above excludes tenant reimbursements of operating expenses, amortization of adjustments for deferred rent receivables and the amortization of above/below-market lease intangibles. Lessee As of September 30, 2019 , the Company leased three parcels of land located in Arizona under long-term ground leases with expiration dates of September 2102, December 2095, and September 2102 with no options to renew. The Company leases office space as part of conducting day-to-day business in Chicago. The Company's office space lease has a remaining lease term of approximately six years and no option to renew. On January 1, 2019, the Company recognized ROU assets and lease liabilities for these leases on the Company's consolidated balance sheets, and on a go-forward basis, lease expense will be recognized on a straight-line basis over the remaining term of the lease. On January 1, 2019, the Company recorded a ROU asset of $25.5 million and a corresponding liability $27.6 million relating to the Company's existing ground lease arrangements. On March 1, 2019. the Company entered into an office lease located in Chicago, Illinois. The Company recorded a ROU asset of $0.6 million and a corresponding liability to the Company's lease agreements (see Note 14 , Operating Leases, for details). The discount rate used to determine the present value of these operating leases’ future payments was 3.94% . On September 20, 2019, the Company acquired the McKesson II property, and assumed a ground lease from the seller. The Company recorded a ROU asset of $16.3 million and a corresponding liability to the Company's existing ground lease agreement. The Company incurred operating lease costs of approximately $0.7 million , and $1.9 million for the three and nine months ended September 30, 2019 , respectively, which are included in "Property Operating Expense" in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $0.3 million and $0.8 million for the three and nine months ended September 30, 2019 , respectively. Maturities of lease liabilities as of September 30, 2019 were as follows: September 30, 2019 Remaining 2019 $ 408 2020 1,633 2021 1,636 2022 1,644 2023 1,735 Thereafter 288,541 Total undiscounted lease payments 295,597 Less imputed interest (250,730 ) Total lease liabilities $ 44,867 As the Company elected to apply the provisions of ASC 842 on a prospective basis, the following comparative period disclosure is being presented in accordance with ASC 840. The future minimum commitments under the Company's ground leases as of December 31, 2018 were as follows: December 31, 2018 2019 $ 1,032 2020 1,032 2021 1,032 2022 1,072 2023 1,422 Thereafter 199,024 Total $ 204,614 |
Operating Leases | Operating Leases Lessor The Company leases commercial and industrial space to tenants primarily under non-cancelable operating leases that generally contain provisions for minimum base rents plus reimbursement for certain operating expenses. Total minimum lease payments are recognized in rental income on a straight-line basis over the term of the related lease and estimated reimbursements from tenants for real estate taxes, insurance, common area maintenance and other recoverable operating expenses are recognized in rental income in the period that the expenses are incurred. The Company recognized $80.3 million and $212.8 million of lease income related to operating lease payments for the three and nine months ended September 30, 2019 , respectively. The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2019 . The Company's current leases have expirations ranging from 2019 to 2044. As of September 30, 2019 Remaining 2019 $ 74,253 2020 290,724 2021 294,220 2022 293,720 2023 285,232 Thereafter 1,338,973 Total $ 2,577,122 The future minimum base rents in the table above excludes tenant reimbursements of operating expenses, amortization of adjustments for deferred rent receivables and the amortization of above/below-market lease intangibles. Lessee As of September 30, 2019 , the Company leased three parcels of land located in Arizona under long-term ground leases with expiration dates of September 2102, December 2095, and September 2102 with no options to renew. The Company leases office space as part of conducting day-to-day business in Chicago. The Company's office space lease has a remaining lease term of approximately six years and no option to renew. On January 1, 2019, the Company recognized ROU assets and lease liabilities for these leases on the Company's consolidated balance sheets, and on a go-forward basis, lease expense will be recognized on a straight-line basis over the remaining term of the lease. On January 1, 2019, the Company recorded a ROU asset of $25.5 million and a corresponding liability $27.6 million relating to the Company's existing ground lease arrangements. On March 1, 2019. the Company entered into an office lease located in Chicago, Illinois. The Company recorded a ROU asset of $0.6 million and a corresponding liability to the Company's lease agreements (see Note 14 , Operating Leases, for details). The discount rate used to determine the present value of these operating leases’ future payments was 3.94% . On September 20, 2019, the Company acquired the McKesson II property, and assumed a ground lease from the seller. The Company recorded a ROU asset of $16.3 million and a corresponding liability to the Company's existing ground lease agreement. The Company incurred operating lease costs of approximately $0.7 million , and $1.9 million for the three and nine months ended September 30, 2019 , respectively, which are included in "Property Operating Expense" in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $0.3 million and $0.8 million for the three and nine months ended September 30, 2019 , respectively. Maturities of lease liabilities as of September 30, 2019 were as follows: September 30, 2019 Remaining 2019 $ 408 2020 1,633 2021 1,636 2022 1,644 2023 1,735 Thereafter 288,541 Total undiscounted lease payments 295,597 Less imputed interest (250,730 ) Total lease liabilities $ 44,867 As the Company elected to apply the provisions of ASC 842 on a prospective basis, the following comparative period disclosure is being presented in accordance with ASC 840. The future minimum commitments under the Company's ground leases as of December 31, 2018 were as follows: December 31, 2018 2019 $ 1,032 2020 1,032 2021 1,032 2022 1,072 2023 1,422 Thereafter 199,024 Total $ 204,614 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Litigation From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. |
Declaration of Distributions
Declaration of Distributions | 9 Months Ended |
Sep. 30, 2019 | |
Declaration of Distributions [Abstract] | |
Declaration of Distributions | Declaration of Distributions On June 12, 2019, the Board declared cash distributions in the amount of $0.001506849 per day, subject to adjustments for class-specific expenses, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock and stock distributions in the amount of $0.000273973 worth of shares per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock for stockholders of such classes as of the close of each business day of the period commencing on July 1, 2019 and ending on September 30, 2019 . Such distributions payable to each stockholder of record during a month will be paid on such date of the following month as the Company’s Chief Executive Officer may determine. On August 1, 2019, the Company paid cash distributions in the amount of $0.001506849 per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock and stock distributions in the amount of $0.000273973 worth of shares per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock for stockholders of such classes as of the close of each business day of the period from July 1, 2019 to July 31, 2019. On September 3, 2019, the Company paid cash distributions in the amount of $0.001506849 per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock and stock distributions in the amount of $0.000273973 worth of shares per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock for stockholders of such classes as of the close of each business day of the period from August 1, 2019 to August 31, 2019. On October 1, 2019, the Company paid cash distributions in the amount of $0.001506849 per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock and stock distributions in the amount of $0.000273973 worth of shares per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock for stockholders of such classes as of the close of each business day of the period from September 1, 2019 to September 30, 2019. On September 23, 2019, the Board declared cash distributions in the amount of $0.001506849 per day, subject to adjustments for class-specific expenses, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock and stock distributions in the amount of $0.000273973 worth of shares per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock for stockholders of such classes as of the close of each business day of the period commencing on October 1, 2019 and ending on December 31, 2019 . Such distributions payable to each stockholder of record during a month will be paid on such date of the following month as the Company’s Chief Executive Officer may determine. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Offering Status As of November 6, 2019, the Company has issued 1,480,865 shares of the Company's common stock, pursuant to the primary portion of the Follow-On Offering for approximately $14.3 million (includes historical amounts sold by GCEAR prior to the Mergers). As of November 6 2019, the Company had issued 29,859,562 shares of the Company’s common stock pursuant to the DRP offerings for approximately $289.6 million . Cash and Stock Distributions On November 2, 2019, the Company paid cash distributions in the amount of $0.001506849 per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock and stock distributions in the amount of $ 0.000273973 worth of shares per day, per Class E share, Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share of common stock for stockholders of such classes as of the close of each business day of the period from October 1, 2019 to October 31, 2019. Share Redemption Program During the quarter ended September 30, 2019, the Company received redemption requests under the SRP for Class A, Class AA, Class AAA, Class I, and Class E shares of common stock. The following table summarizes shares redeemed on October 2, 2019: Class T S D E I A AA AAA Total Redeemed - Shares — — — 8,489,988 10,406 837,000 1,231,604 20,363 10,589,361 Redeemed - Amount $ — $ — $ — $ 80,993 $ 100 $ 7,968 $ 11,725 $ 194 $ 100,980 On November 7, 2019, Board amended and restated the SRP, effective as of December 12, 2019, in order to (i) provide for redemption sought upon a stockholder’s determination of incompetence or incapacitation; (ii) clarify the circumstances under which a determination of incompetence or incapacitation will entitle a stockholder to such redemption; and (iii) make certain other clarifying changes. Sale of Properties On October 14, 2019, the Company sold the FedEx Freight property located in West Jefferson, Ohio for total proceeds of $30.3 million , less closing costs and other closing credits. The property sold for an approximate amount equal to the carrying value. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting and Presentation | The accompanying unaudited consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . |
Consolidation | The consolidated financial statements of the Company include all accounts of the Company, the Current Operating Partnership, and its subsidiaries. Intercompany transactions are not shown on the consolidated statements. However, each property-owning entity is a wholly-owned subsidiary which is a special purpose entity ("SPE"), whose assets and credit are not available to satisfy the debts or obligations of any other entity, except to the extent required with respect to any co-borrower or guarantor under the same credit facility. |
Use of Estimates | Use of Estimates The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
Per Share Data | Per Share Data The Company reports earnings per share for the period as (1) basic earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, and (2) diluted earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, including common stock equivalents. |
Segment Information | Segment Information ASC 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity’s reportable segments. The Company internally evaluates all of the properties and interests therein as one reportable segment. |
Goodwill | Goodwill Goodwill represents the excess of consideration paid over the fair value of underlying identifiable net assets of business acquired. The Company's goodwill has an indeterminate life and is not amortized, but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company takes a qualitative approach to consider whether an impairment of goodwill exists prior to quantitatively determining the fair value of the reporting unit in step one of the impairment test. The Company performs its annual assessment on October 1st. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements On February 25, 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 was subsequently amended by the following updates: (i) ASU 2018-10, Leases: Codification Improvements to Topic 842, (ii) ASU 2018-11, Leases: Targeted Improvements, (iii) ASU 2018-20, Leases: Narrow Scope Improvements for Lessors and (iv) ASU 2019-01, Leases: Codification Improvements (collectively referred to as “ASC 842”). ASC 842 supersedes prior lease accounting guidance contained in ASC 840, Leases (“ASC 840”). On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and elected to apply the provisions as of the date of adoption on a prospective basis. In making this election, the Company has continued to apply ASC 840 to comparative periods, including providing disclosures required by ASC 840 for these periods, and the Company recognized the effects of applying ASC 842 as a cumulative-effect adjustment to retained earnings as of January 1, 2019, as described below under “Lessor”. Upon adoption of ASC 842, the Company elected the “package of practical expedients,” which allowed the Company to not reassess (a) whether expired or existing contracts as of January 1, 2019 are or contain leases, (b) the lease classification for any expired or existing leases as of January 1, 2019, and (c) the treatment of initial direct costs relating to any existing leases as of January 1, 2019. The package of practical expedients was made as a single election and was consistently applied to all leases that commenced before January 1, 2019. Lessor ASC 842 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. As the Company elected the package of practical expedients, the Company's existing leases as of January 1, 2019 continue to be accounted for as operating leases. Upon adoption of ASC 842, the Company elected the practical expedient permitting lessors to elect by class of underlying asset to not separate nonlease components (for example, maintenance services, including common area maintenance) from associated lease components (the “non-separation practical expedient”) if both of the following criteria are met: (1) the timing and pattern of transfer of the lease and non-lease component(s) are the same and (2) the lease component would be classified as an operating lease if it were accounted for separately. If both criteria are met, the combined component is accounted for in accordance with ASC 842 if the lease component is the predominant component of the combined component; otherwise, the combined component is accounted for in accordance with the revenue recognition standard. The Company assessed the criteria above with respect to the Company's operating leases and determined that they qualify for the non-separation practical expedient. As a result, the Company has accounted for and presented all rental income earned pursuant to operating leases, including property expense recovery, as a single line item, “Rental income,” in the consolidated statement of operations for the three and nine months ended September 30, 2019 . Prior to the adoption of ASC 842, the Company presented rental income, property expense recovery and other income related to leases separately in the Company's consolidated statements of operations. For comparability, the Company adjusted the comparative consolidated statement of operations for the three and nine months ended September 30, 2018 to conform to the 2019 financial statement presentation. Under ASC 842, lessors are required to record revenues and expenses on a gross basis for lessor costs (which include real estate taxes) when these costs are reimbursed by a lessee. Conversely, lessors are required to record revenues and expenses on a net basis for lessor costs when they are paid by a lessee directly to a third party on behalf of the lessor. Prior to the adoption of ASC 842, the Company recorded revenues and expenses on a gross basis for real estate taxes whether they were reimbursed to the Company by a tenant or paid directly by a tenant to the taxing authorities on the Company's behalf. Effective January 1, 2019, the Company is recording these costs in accordance with ASC 842. Lessee ASC 842 requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset (“ROU asset”), which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASC 842 also requires lessees to classify leases as either finance or operating leases based on whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification is used to evaluate whether the lease expense should be recognized based on an effective interest method or on a straight-line basis over the term of the lease. On January 1, 2019, the Company was the lessee on two ground leases, which were classified as operating leases under ASC 840. As the Company elected the packages of practical expedients, the Company is not required to reassess the classification of these existing leases and, as such, these leases continue to be accounted for as operating leases. In the event the Company modifies existing leases or enters into new leases in the future, such leases may be classified as finance leases. On January 1, 2019, the Company recognized ROU assets and lease liabilities for these leases on the Company's consolidated balance sheets, and on a go-forward basis, lease expense will be recognized on a straight-line basis over the remaining term of the lease. On January 1, 2019, the Company recorded a ROU asset of $25.5 million and a corresponding liability of approximately $27.6 million relating to the Company's existing ground lease arrangements. These operating leases were recognized based on the present value of the future minimum lease payments over the lease term. As these leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available in determining the present value of future payments. The discount rate used to determine the present value of these operating leases’ future payments was 5.36% . There was no impact to beginning equity as a result of the adoption related to the lessee accounting as the difference between the asset and liability is attributed to derecognition of pre-existing straight-line rent balances. On March 1, 2019. the Company entered into an office lease located in Chicago, Illinois. The Company recorded a ROU asset of $0.6 million and a corresponding liability to the Company's lease agreements (see Note 14 , Operating Leases, for details). The discount rate used to determine the present value of these operating leases’ future payments was 3.94% . On September 20, 2019, the Company acquired the McKesson II property (defined in Note 4 , Real Estate ) and assumed a ground lease from the seller. The Company recorded a ROU asset of $16.3 million and a corresponding liability to the Company's existing ground lease agreements (see Note 14 , Operating Leases, for details). The discount rate used to determine the present value of these operating leases’ future payments was 4.36% . Upon adoption of ASC 842, the Company also elected the practical expedient to not separate non-lease components, such as common area maintenance, from associated lease components for the Company's ground and office space leases. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Reclassification of Prior Year Presentation of Rental Income and Property Expense Recovery | The table below provides a reconciliation of the prior period presentation of the statement of operations line items that were reclassified in the Company's consolidated statement of operations to conform to the current period presentation, pursuant to the adoption of the new lease accounting standard and election of the single component practical expedient (in thousands): Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Presentation prior to January 1, 2019 Lease income $ 66,028 $ 187,601 Lease termination income 84 9,090 Property expense recovery 18,929 54,740 Rental income $ 85,041 $ 251,431 |
Self Administration Transacti_2
Self Administration Transaction (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Consideration Given to Acquire Interest | Under the terms of the Self Administration Transaction, the following consideration was given in exchange for 100% of the membership interests in GRECO: Amount Fair value of EA-1 Operating Partnership units issued $ 205,000 Fair value of earn-outs 29,380 Accrued liabilities: Executive deferred compensation plan 7,795 Other liabilities 11,890 Total consideration 254,065 Less: accounts receivable from affiliates and other assets (19,878 ) Net consideration $ 234,187 |
Schedule of Purchase Price Allocation | During the nine months ended September 30, 2019 , the Company finalized the purchase price allocation for the Self Administration Transaction. The following table summarizes the finalized purchase price allocation: Amount Assets: Accounts receivable from affiliates and other assets $ 19,878 Management contract intangibles 4,239 Goodwill 229,948 Total assets acquired 254,065 Liabilities: Earn-outs (due to affiliates) 29,380 Executive deferred compensation plan 7,795 Other liabilities 11,890 Total liabilities assumed 49,065 Net assets acquired $ 205,000 |
Business Acquisition, Pro Forma Information | The following condensed pro forma operating information is presented as if the Self Administration Transaction occurred in 2018 and had been included in operations as of January 1, 2018. The pro forma operating information excludes certain nonrecurring adjustments, such as acquisition fees and expenses incurred, to reflect the pro forma impact the acquisition would have on earnings on a continuous basis: Nine Months Ended September 30, 2018 Revenue $ 251,431 Net income $ 47,304 Net income attributable to noncontrolling interests $ 7,171 Net income attributable to common stockholders (1) $ 38,639 Net income attributable to common stockholders per share, basic and diluted $ 0.23 (1) Amount is net of net income attributable to noncontrolling interests, distributions to redeemable noncontrolling interests attributable to common stockholders and distributions to preferred shareholders. |
Real Estate (Tables)
Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Schedule of Property Acquisition | The purchase price and other acquisition items for the properties acquired during the nine months ended September 30, 2019 are shown below (in thousands except square footage): Property Location Tenant/Major Lessee Acquisition Date Purchase Price Approx. Square Feet Acquisition Fees and Expenses (1) Year of Lease Expiration McKesson II Scottsdale, AZ McKesson Corporation 9/20/2019 $37,674 124,900 $1,059 2029 (1) The former advisor is entitled to receive acquisition fees equal to 2.5% . In addition, the Company incurred third-party costs associated with the acquisition. |
Schedule of Consideration Transferred | As the Mergers were accounted for as a reverse acquisition, the total consideration transferred was computed by dividing the Company's outstanding shares as of April 30, 2019 by the exchange ratio of 1.04807 and multiplied by EA-1’s estimated value per share of $10.02 (including transaction costs) as of April 30, 2019. Consideration transferred is calculated as such (in thousands except share and per share data): As of April 30, 2019 GCEAR's common shares outstanding 78,054,934 Exchange ratio 1.04807 Implied EA-1 common stock issued in consideration 74,474,924 GCEAR's operating partnership units outstanding 527,045 Exchange ratio 1.04807 Implied EA-1 operating partnership units issued in consideration 502,872 EA-1's net asset value per share $ 10.02 Total consideration $ 751,278 |
Schedule of Asset Acquisition | The following summarizes the purchase price allocations of the properties acquired during the nine months ended September 30, 2019 : Acquisition Land Building Improvements Tenant origination and absorption costs In-place lease valuation - above market In-place lease valuation - (below) market Land Leasehold Value (Above Market) Total (1) 2019 Revenue (2) Mergers $ 135,875 $ 850,811 $ 62,928 $ 214,428 $ 3,627 $ (12,476 ) $ — $ 1,255,193 $ 44,124 McKesson II (3) $ — $ 25,446 $ 4,681 $ 11,513 $ 239 $ — $ (3,072 ) $ 38,807 $ 107 (1) The allocations noted above are based on a determination of the relative fair value of the total consideration provided and represent the amount paid including capitalized acquisition costs. (2) The operating results of the properties acquired have been included in the Company's consolidated statement of operations since the acquisition date. (3) The Company recorded a ROU asset of $16.3 million and a corresponding liability to the Company's existing ground lease agreements as part of the acquisition (see Note 14 , Operating Leases , for details). The following table summarizes the final purchase price allocation based on a valuation report prepared by the Company's third-party valuation specialist that was subject to management's review and approval: As of April 30, 2019 Assets: Cash assumed $ 35,659 Land 135,875 Building and improvements 913,739 Tenant origination and absorption cost 214,428 Intangibles 3,627 Construction in progress 263 Other assets 5,964 Total assets 1,309,555 Liabilities: Debt (net of $1.1 million premium) 498,906 Below market leases 12,476 Due to Affiliates 8,804 Distribution payable 1,854 Restricted reserves 11,050 Accounts payable and other liabilities 14,849 Total liabilities 547,939 Fair value of net assets acquired 761,616 Less: EA-1's Merger expenses 10,338 Fair value of net assets acquired, less EA-1's Merger expenses $ 751,278 |
Schedule of Merger Related Costs Incurred | The following is a breakdown of the Company's costs incurred during the nine months ended September 30, 2019 related to the Mergers: Amount Advisory and valuation fees $ 8,592 Legal, accounting and tax fees 1,384 Other fees 362 Total Merger-related fees $ 10,338 |
Schedule of in-place lease valuation and tenant origination and absorption cost | The Company allocated a portion of the acquired and contributed real estate asset value to in-place lease valuation, tenant origination and absorption cost, and other intangibles, net of the write-off of intangibles, as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 In-place lease valuation (above market) $ 45,398 $ 42,736 In-place lease valuation (above market) - accumulated amortization (33,296 ) (31,995 ) In-place lease valuation (above market), net 12,102 10,741 Ground leasehold interest (below market) 2,254 2,255 Ground leasehold interest (below market) - accumulated amortization (157 ) (137 ) Ground leasehold interest (below market), net 2,097 2,118 Intangibles - other — 4,240 Intangible assets, net $ 14,199 $ 17,099 In-place lease valuation (below market) $ (67,622 ) $ (55,147 ) Land leasehold interest (above market) (3,072 ) — In-place lease valuation (below market) - accumulated amortization 37,140 32,032 Intangible liabilities, net $ (33,554 ) $ (23,115 ) Tenant origination and absorption cost $ 752,012 $ 530,181 Tenant origination and absorption cost - accumulated amortization (343,018 ) (296,201 ) Tenant origination and absorption cost, net $ 408,994 $ 233,980 |
Schedule of estimated annual amortization (income) expense | The following table sets forth the estimated annual amortization (income) expense for in-place lease valuation, net, tenant origination and absorption costs, ground leasehold improvements, and other leasing costs as of September 30, 2019 for the next five years: Year In-place lease valuation, net Tenant origination and absorption costs Ground leasehold interest Other leasing costs Remaining 2019 $ (901 ) $ 17,415 $ (3 ) $ 998 2020 $ (1,777 ) $ 65,548 $ (10 ) $ 4,852 2021 $ (1,864 ) $ 57,564 $ (10 ) $ 5,624 2022 $ (2,359 ) $ 53,980 $ (10 ) $ 5,630 2023 $ (2,379 ) $ 49,383 $ (10 ) $ 5,530 |
Restrictions on cash and cash equivalents | Additionally, an ongoing replacement reserve is funded by certain tenants pursuant to each tenant’s respective lease as follows: Balance as of September 30, 2019 December 31, 2018 Cash reserves $ 24,604 $ 12,945 Restricted lockbox 7,309 2,862 Total $ 31,913 $ 15,807 |
Disclosure of Long Lived Assets Held-for-sale [Table Text Block] | The following summary presents the major components of assets and liabilities related to the real estate held for sale as of September 30, 2019 : Balance as of September 30, 2019 Land $ 1,407 Building and improvements 26,224 Tenant origination and absorption cost 2,937 Total real estate 30,568 Less: accumulated depreciation and amortization (802 ) Total real estate, net 29,766 Intangible assets, net 37 Other assets 1 Total assets $ 29,804 Accrued expenses and other liabilities $ 184 Total liabilities $ 184 |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments | As of September 30, 2019 , the balance of the investments are shown below: Digital Realty Joint Venture Heritage Common X Total Balance as of December 31, 2018 $ 27,291 $ 3,274 $ 30,565 Net income (1,690 ) 3,609 (1) 1,919 Distributions (5,000 ) (6,438 ) (1) (11,438 ) Other comprehensive loss (251 ) — (251 ) Balance as of September 30, 2019 $ 20,350 $ 445 $ 20,795 (1) Includes approximately $0.6 million in disposition and other fees owed to the Company's former advisor. In addition, approximately $1.1 million of third party fees and taxes were incurred as part of the outside basis of the investment. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of debt | As of September 30, 2019 and December 31, 2018 , the Company’s debt consisted of the following: September 30, 2019 December 31, 2018 Contractual Interest Rate (1) Loan Maturity Effective Interest Rate (2) HealthSpring Mortgage Loan $ 20,849 $ 21,219 4.18% April 2023 4.61% Midland Mortgage Loan 100,760 102,262 3.94% April 2023 4.11% Emporia Partners Mortgage Loan 2,219 2,554 5.88% September 2023 5.98% Samsonite 21,392 22,085 6.08% September 2023 5.15% Highway 94 loan 15,835 16,497 3.75% August 2024 4.71% AIG Loan II 126,970 — 4.15% November 2025 4.93% BOA Loan 375,000 375,000 3.77% October 2027 3.92% BOA/KeyBank Loan 250,000 — 4.32% May 2028 4.16% AIG Loan 106,220 107,562 4.96% February 2029 5.08% Total Mortgage Debt 1,019,245 647,179 Revolving Credit Facility 171,500 — LIBO Rate +1.30% (4) June 2023 (4) 3.54% 2023 Term Loan 200,000 — LIBO Rate +1.25% June 2023 3.46% 2024 Term Loan 400,000 — LIBO Rate +1.25% April 2024 3.45% 2026 Term Loan 150,000 — LIBO Rate +1.65% April 2026 3.82% Term Loan — 715,000 (3) — — — Total Debt 1,940,745 1,362,179 Unamortized Deferred Financing Costs and Discounts, net (10,604 ) (8,648 ) Total Debt, net $ 1,930,141 $ 1,353,531 (1) Including the effect of one interest rate swap agreement with a total notional amount of $425.0 million , the weighted average interest rate as of September 30, 2019 was 3.81% for both the Company’s fixed-rate and variable-rate debt combined and 3.89% for the Company’s fixed-rate debt only. (2) Reflects the effective interest rate as of September 30, 2019 and includes the effect of amortization of discounts/premiums and deferred financing costs. (3) Represents the Company's Term Loan (defined below), which was fully repaid on May 1, 2019. See discussion below. (4) The LIBO rate as of September 30, 2019 was 2.05% .The Revolving Credit Facility has an initial term of approximately three years, maturing on June 28, 2022 , and may be extended for a one -year period if certain conditions are met and upon payment of an extension fee. See discussion below. |
Interest Rate Contracts (Tables
Interest Rate Contracts (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of interest rate swaps | The following table sets forth a summary of the interest rate swaps at September 30, 2019 and December 31, 2018 : Fair Value (1) Current Notional Amounts (2) Derivative Instrument Effective Date Maturity Date Interest Strike Rate September 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018 Assets/(Liabilities): Interest Rate Swap 7/9/2015 7/1/2020 1.69% $ 90 $ 5,245 $ 425,000 $ 425,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% (8,768 ) (1,987 ) 125,000 125,000 Interest Rate Swap 7/1/2020 7/1/2025 2.82% (7,034 ) (1,628 ) 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.83% (7,048 ) (1,636 ) 100,000 100,000 Interest Rate Swap 7/1/2020 7/1/2025 2.84% (7,131 ) (1,711 ) 100,000 100,000 Total $ (29,891 ) $ (1,717 ) $ 850,000 $ 850,000 (1) The Company records all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly, there are no offsetting amounts that net assets against liabilities. As of September 30, 2019 , derivatives in an asset or liability position are included in the line item "Other assets" or "Interest rate swap liability," respectively, in the consolidated balance sheets at fair value. (2) Represents the notional amount of swaps as of the balance sheet date of September 30, 2019 and December 31, 2018 . |
Impact of interest rate swap on consolidated statements of operation | The following table sets forth the impact of the interest rate swaps on the consolidated statements of operations for the periods presented: Nine Months Ended September 30, 2019 2018 Interest Rate Swap in Cash Flow Hedging Relationship: Amount of (loss) gain recognized in AOCI on derivatives $ (25,849 ) $ (8,458 ) Amount of (gain) reclassified from AOCI into earnings under “Interest expense” $ (2,231 ) $ 1,182 Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded $ 53,642 $ 41,251 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other liabilities | Accrued expenses and other liabilities consisted of the following as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Prepaid rent $ 14,847 $ 15,204 Deferred compensation 8,637 — Accrued CIP 4,855 4,662 Real estate taxes payable 19,509 23,258 Interest payable 12,266 9,310 Property operating expense payable 7,054 9,159 Other liabilities 24,202 19,023 Total $ 91,370 $ 80,616 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measure at fair value on a recurring basis | The following tables set forth the assets and liabilities that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2019 and December 31, 2018 : Assets/(Liabilities) Total Fair Value Quoted Prices in Active Markets for Identical Assets and Liabilities Significant Other Observable Inputs Significant Unobservable Inputs September 30, 2019 Interest Rate Swap Asset $ 90 $ — $ 90 $ — Interest Rate Swap Liability $ (29,981 ) $ — $ (29,981 ) $ — Earn-out Liability (due to affiliates) $ (4,380 ) $ — $ — $ (4,380 ) Corporate Owned Life Insurance Asset $ 2,022 $ — $ 2,022 $ — Mutual Funds Asset $ 6,483 $ 6,483 $ — $ — Deferred Compensation Liability $ (8,568 ) $ — $ (8,568 ) $ — December 31, 2018 Interest Rate Swap Asset $ 5,245 $ — $ 5,245 $ — Interest Rate Swap Liability $ (6,962 ) $ — $ (6,962 ) $ — Earn-out Liability (due to affiliates) $ (29,380 ) $ — $ — $ (29,380 ) |
Schedule of carrying values and estimated fair values of financial instruments | The fair value of the six mortgage loans in the table below is estimated by discounting each loan’s principal balance over the remaining term of the mortgage using current borrowing rates available to the Company for debt instruments with similar terms and maturities. The Company determined that the mortgage debt valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt. September 30, 2019 December 31, 2018 Fair Value Carrying Value (1) Fair Value Carrying Value (1) Samsonite $ 22,662 $ 21,392 $ 22,440 $ 22,085 Highway 94 loan $ 15,356 $ 15,835 $ 15,601 $ 16,497 AIG Loan II $ 122,791 $ 126,970 $ — $ — BOA Loan $ 374,336 $ 375,000 $ 361,917 $ 375,000 BOA/KeyBank Loan $ 268,318 $ 250,000 $ — $ — AIG Loan $ 104,131 $ 106,220 $ 108,032 $ 107,562 (1) The carrying values do not include the debt premium/(discount) or deferred financing costs as of September 30, 2019 and December 31, 2018 . See Note 6 , Debt , for details. |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Schedule of share redemption activity | The following table summarizes share redemption (excluding the self-tender offer) activity during the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Shares of common stock redeemed 10,589,361 1,311,582 10,589,361 8,013,521 Weighted average price per share $ 9.54 $ 9.63 $ 9.54 $ 9.60 During the three months ended September 30, 2019 , the Company received redemption requests under the SRP for Class A, Class AA, Class AAA, Class I, and Class E shares of common stock, as summarized in the following table: Class T S D E I A AA AAA Total Redemption Requests - Shares — — — 11,362,476 10,406 837,000 1,231,604 20,363 13,461,849 Redemption Requests - Amount $ — $ — $ — $ 108,398 $ 100 $ 7,968 $ 11,725 $ 194 $ 128,385 The following table summarizes shares redeemed on October 2, 2019: Class T S D E I A AA AAA Total Redeemed - Shares — — — 8,489,988 10,406 837,000 1,231,604 20,363 10,589,361 Redeemed - Amount $ — $ — $ — $ 80,993 $ 100 $ 7,968 $ 11,725 $ 194 $ 100,980 |
Noncontrolling Interests (Table
Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule of activity for noncontrolling interests | The following summarizes the activity for noncontrolling interests recorded as equity for the nine months ended September 30, 2019 and year ended December 31, 2018 : Nine Months Ended September 30, 2019 Year Ended December 31, 2018 Beginning balance $ 232,203 $ 31,105 Contributions/issuance of noncontrolling interests 30,039 (1) 205,000 (1) Distributions of units to noncontrolling interest 1,069 — Distributions to noncontrolling interests (14,596 ) (4,368 ) Allocated distributions to noncontrolling interests subject to redemption (34 ) (13 ) Net Income 4,226 789 Other comprehensive income (loss) (3,732 ) (310 ) Ending balance $ 249,175 $ 232,203 (1) The issuance of noncontrolling units was the result of the Self Administration Transaction and Mergers. See Note 3 , S elf Administration Transaction , and Note 4 , Real Estate , respectively. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Summarized below are the related party costs incurred by the Company for the nine months ended September 30, 2019 and 2018 , respectively, and any related amounts payable and receivable as of September 30, 2019 and December 31, 2018 : Incurred for the Nine Months Payable as of Ended September 30, September 30, December 31, 2019 2018 2019 2018 Expensed Operating expenses $ — $ 2,630 $ — $ 74 Asset management fees — 17,628 — — Property management fees — 6,992 — 875 Disposition fees 641 — 641 — Costs advanced by the Advisor 2,571 396 1,271 341 Consulting fee - shared services 1,874 — 377 — Capitalized Acquisition fees (1) 942 5,331 942 — Leasing commissions 596 — — — Assumed through Self- Administration Transaction/Mergers Earn-out — — 4,380 29,380 Other Fees 20 — — 11,734 Stockholder Servicing Fee 693 — 5,938 — Other Distributions 10,089 — 1,318 2 Total, net of real estate assets held for sale $ 17,426 $ 32,977 $ 14,867 $ 42,406 Asset management fees related to real estate held for sale — 42 — — Property management fees related to real estate held for sale — 57 — — Total $ 17,426 $ 33,076 $ 14,867 $ 42,406 (1) Acquisition fees related to the acquisition of McKesson II during the quarter ended September 30, 2019 were capitalized as the acquisition did not meet the business combination criteria. Incurred for the Nine Months Receivable as of Ended September 30, September 30, December 31, 2019 2018 2019 2018 Assets Assumed through the Self-Administration Transaction Cash to be received from an affiliate related to deferred compensation and other payroll costs $ 658 $ — $ — $ 7,951 Other fees — — 1,202 11,734 Due from GCC Payroll/Expense Allocation 321 — 321 — Due from Affiliates Payroll/Expense Allocation 1,217 — — — O&O Costs (including payroll allocated to O&O) 157 — — — Other Fees (1) 6,375 — — — Total $ 8,728 $ — $ 1,523 $ 19,685 (1) Includes Payroll/Expense allocation, Offering Costs, Advisory Fee, Performance Distribution, LP Distributions & Employee Reimbursements. |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Future Minimum Base Rents to be Received | The following table sets forth the undiscounted cash flows for future minimum base rents to be received under operating leases as of September 30, 2019 . The Company's current leases have expirations ranging from 2019 to 2044. As of September 30, 2019 Remaining 2019 $ 74,253 2020 290,724 2021 294,220 2022 293,720 2023 285,232 Thereafter 1,338,973 Total $ 2,577,122 |
Schedule of Remaining Required Payments Under Ground Leases | Maturities of lease liabilities as of September 30, 2019 were as follows: September 30, 2019 Remaining 2019 $ 408 2020 1,633 2021 1,636 2022 1,644 2023 1,735 Thereafter 288,541 Total undiscounted lease payments 295,597 Less imputed interest (250,730 ) Total lease liabilities $ 44,867 |
Schedule of Future Minimum Rental Payments for Operating Leases | The future minimum commitments under the Company's ground leases as of December 31, 2018 were as follows: December 31, 2018 2019 $ 1,032 2020 1,032 2021 1,032 2022 1,072 2023 1,422 Thereafter 199,024 Total $ 204,614 |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Schedule of share redemption activity | The following table summarizes share redemption (excluding the self-tender offer) activity during the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Shares of common stock redeemed 10,589,361 1,311,582 10,589,361 8,013,521 Weighted average price per share $ 9.54 $ 9.63 $ 9.54 $ 9.60 During the three months ended September 30, 2019 , the Company received redemption requests under the SRP for Class A, Class AA, Class AAA, Class I, and Class E shares of common stock, as summarized in the following table: Class T S D E I A AA AAA Total Redemption Requests - Shares — — — 11,362,476 10,406 837,000 1,231,604 20,363 13,461,849 Redemption Requests - Amount $ — $ — $ — $ 108,398 $ 100 $ 7,968 $ 11,725 $ 194 $ 128,385 The following table summarizes shares redeemed on October 2, 2019: Class T S D E I A AA AAA Total Redeemed - Shares — — — 8,489,988 10,406 837,000 1,231,604 20,363 10,589,361 Redeemed - Amount $ — $ — $ — $ 80,993 $ 100 $ 7,968 $ 11,725 $ 194 $ 100,980 |
Organization - Narrative (Detai
Organization - Narrative (Details) $ / shares in Units, $ in Thousands | Apr. 30, 2019$ / sharesshares | Dec. 14, 2018shares | Sep. 20, 2017USD ($) | Sep. 30, 2018 | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | May 01, 2019shares | Jun. 30, 2015shares | |
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Exchange ratio | 1.04807 | |||||||||
Common Stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Exchange ratio | 1.04807 | |||||||||
Number of shares outstanding (in shares) | 78,054,934 | 235,382,622 | 174,278,341 | 235,382,622 | 252,863,421 | |||||
GCEAR's operating partnership units outstanding as of April 30, 2019 (in shares) | 527,045 | |||||||||
Limited partnership, Company's ownership interest (percent) | 88.60% | |||||||||
Limited partnership units redeemed (shares) | 0 | 0 | ||||||||
Implied EA-1 common stock issued in consideration | 78,100,000 | |||||||||
Proceeds from sale of shares | $ | $ 2,700,000 | |||||||||
Shares issued | $ | [1] | $ 236 | $ 174 | $ 236 | ||||||
Sponsor and Affiliates | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Limited liability partnership percentage of interest held (percent) | 9.90% | 9.90% | ||||||||
Third parties | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Limited liability partnership percentage of interest held (percent) | 1.50% | 1.50% | ||||||||
Board Chairman | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Partnership units owned (shares) | 2,400,000 | 2,400,000 | ||||||||
Share Redemption Program | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Maximum redemption percentage of weighted average shares outstanding | 5.00% | |||||||||
Common Class E | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Exchange ratio | 1.04807 | |||||||||
Common Stock, par value (in usd per share) | $ / shares | $ 0.001 | |||||||||
Exchange ratio | 1.04807 | |||||||||
Partnership units issued (shares) | 1 | |||||||||
Number of shares issued (in shares) | 174,981,547 | |||||||||
Number of shares outstanding (in shares) | 161,357,120 | 161,357,120 | ||||||||
Series A Cumulative Perpetual Convertible Preferred Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued upon conversion (shares) | 1 | |||||||||
Series A Preferred Stock | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Number of shares issued (in shares) | 5,000,000 | |||||||||
Number of shares outstanding (in shares) | 5,000,000 | |||||||||
Private Offering | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Proceeds from issuance of private placement | $ | $ 2,000,000 | |||||||||
Implied EA-1 common stock issued in consideration | 279,457,165 | 279,457,165 | ||||||||
Distribution Reinvestment Plan | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Proceeds from issuance of private placement | $ | 200,000 | |||||||||
Shares issued | $ | $ 281,200 | $ 252,800 | $ 281,200 | |||||||
Follow-on Offering | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Proceeds from issuance of private placement | $ | $ 2,200,000 | $ 62,000 | ||||||||
Implied EA-1 common stock issued in consideration | 6,378,213 | 6,378,213 | ||||||||
Signature Office REIT Merger | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Implied EA-1 common stock issued in consideration | 43,772,611.05983 | |||||||||
OP Units | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
GCEAR's operating partnership units outstanding as of April 30, 2019 (in shares) | 284,533,435 | |||||||||
GRECO | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Units of limited partnership exchanged as earn-out consideration (in shares) | 20,438,684 | |||||||||
[1] | See Note 10, Equity, for the number of shares outstanding of each class of common stock as of September 30, 2019. |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2019USD ($)segment | Sep. 20, 2019USD ($) | Mar. 01, 2019USD ($) | Jan. 01, 2019USD ($)lease | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |||||
Number of reportable segments | segment | 1 | ||||
Lessee, Lease, Description [Line Items] | |||||
Number of ground leases | lease | 2 | ||||
Right of use asset | $ 41,705 | $ 0 | |||
Lease liability | $ 44,867 | $ 0 | |||
Discount rate (percent) | 5.36% | ||||
ASU 2016-02 | |||||
Lessee, Lease, Description [Line Items] | |||||
Right of use asset | $ 25,500 | ||||
Lease liability | $ 27,600 | ||||
Chicago Illinois Office | |||||
Lessee, Lease, Description [Line Items] | |||||
Right of use asset | $ 600 | ||||
Lease liability | $ 600 | ||||
Discount rate (percent) | 3.94% | ||||
McKesson II (3) | |||||
Lessee, Lease, Description [Line Items] | |||||
Right of use asset | $ 16,300 | ||||
Lease liability | $ 16,300 | ||||
Discount rate (percent) | 4.36% |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Reclassification of Prior Year Presentation of Rental Income and Property Expense Recovery (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Rental income | $ 97,435 | $ 85,041 | $ 277,276 | $ 251,431 |
Presentation prior to January 1, 2019 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease income | 66,028 | 187,601 | ||
Lease termination income | 84 | 9,090 | ||
Property expense recovery | 18,929 | 54,740 | ||
Rental income | $ 85,041 | $ 251,431 |
Self Administration Transacti_3
Self Administration Transaction - Schedule of Consideration Given to Acquire Interest (Details) - GRECO $ in Thousands | Dec. 14, 2018USD ($) |
Business Acquisition [Line Items] | |
Fair value of EA-1 Operating Partnership units issued | $ 205,000 |
Fair value of earn-outs | 29,380 |
Total consideration | 254,065 |
Less: accounts receivable from affiliates and other assets | (19,878) |
Net consideration | 234,187 |
Executive deferred compensation plan | |
Business Acquisition [Line Items] | |
Accrued liabilities | 7,795 |
Other liabilities | |
Business Acquisition [Line Items] | |
Accrued liabilities | $ 11,890 |
Self Administration Transacti_4
Self Administration Transaction - Narrative (Details) $ / shares in Units, $ in Thousands, shares in Millions | Dec. 14, 2018USD ($)contingency$ / sharesshares | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||
Goodwill | $ 229,948 | $ 229,948 | |
GRECO | |||
Business Acquisition [Line Items] | |||
Ownership interest acquired (percent) | 100.00% | ||
OP units issued (shares) | shares | 20.4 | ||
Fair value per unit of OP units issued (in usd per share) | $ / shares | $ 10.03 | ||
Number of earn-outs | contingency | 2 | ||
Fair value of earn-outs | $ 29,380 | ||
Goodwill | $ 229,948 |
Self Administration Transacti_5
Self Administration Transaction - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 14, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 229,948 | $ 229,948 | |
GRECO | |||
Business Acquisition [Line Items] | |||
Accounts receivable from affiliates and other assets | $ 19,878 | ||
Management contract intangibles | 4,239 | ||
Goodwill | 229,948 | ||
Total assets acquired | 254,065 | ||
Earn-outs (due to affiliates) | 29,380 | ||
Executive deferred compensation plan | 7,795 | ||
Other liabilities | 11,890 | ||
Total liabilities assumed | 49,065 | ||
Net assets acquired | $ 205,000 |
Self Administration Transacti_6
Self Administration Transaction - Proforma Operating Information (Details) - GRECO $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Revenue | $ 251,431 |
Net income | 47,304 |
Net income attributable to noncontrolling interests | 7,171 |
Net income attributable to common stockholders | $ 38,639 |
Net income to common stockholders per share, basic and diluted (in usd per share) | $ / shares | $ 0.23 |
Real Estate - Narrative (Detail
Real Estate - Narrative (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2019USD ($)propertyparcelstateshares | Sep. 30, 2018USD ($) | May 01, 2019shares | Apr. 30, 2019$ / sharesshares | Apr. 29, 2019shares | Dec. 31, 2018shares | |
Real Estate [Line Items] | ||||||
Number of properties | property | 101 | |||||
Number of states | state | 25 | |||||
Number of land parcels held for future development | parcel | 1 | |||||
Purchase price | $ | $ 4,200,000 | |||||
Depreciation | $ | 57,473 | $ 44,390 | ||||
Amortization expense | $ | $ 54,838 | $ 44,868 | ||||
Number of shares issued (shares) | 78,100,000 | |||||
Number of shares outstanding (in shares) | 235,382,622 | 252,863,421 | 78,054,934 | 174,278,341 | ||
Exchange ratio | 1.04807 | |||||
Discount rate | Minimum | ||||||
Real Estate [Line Items] | ||||||
Discount rate (percent) | 0.0575 | |||||
Discount rate | Maximum | ||||||
Real Estate [Line Items] | ||||||
Discount rate (percent) | 0.1175 | |||||
Common Class E | ||||||
Real Estate [Line Items] | ||||||
Number of shares outstanding (in shares) | 161,357,120 | |||||
Exchange ratio | 1.04807 | |||||
EA-1 | ||||||
Real Estate [Line Items] | ||||||
Number of shares issued (shares) | 74,474,924.3848216236 | 167,000,000 | ||||
Number of shares outstanding (in shares) | 167,000,000 | |||||
EA-1's net asset value per share (in usd per share) | $ / shares | $ 10.02 |
Real Estate - Summary of Proper
Real Estate - Summary of Property Acquired (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)ft² | |
Purchase Price | $ 4,200,000 |
McKesson II | |
Purchase Price | $ 37,674 |
Approximate Square Feet | ft² | 124,900 |
Acquisition Fees and Expenses | $ 1,059 |
Acquisition fees entitled (percent) | 2.50% |
Real Estate - Consideration Tra
Real Estate - Consideration Transferred (Details) $ / shares in Units, $ in Thousands | Apr. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Sep. 30, 2019shares | May 01, 2019shares | Apr. 29, 2019shares | Dec. 31, 2018shares |
Real Estate [Line Items] | ||||||
Common Stock, shares outstanding (in shares) | 78,054,934 | 235,382,622 | 252,863,421 | 174,278,341 | ||
Exchange ratio | 1.04807 | |||||
Implied EA-1 common stock issued in consideration | 78,100,000 | |||||
GCEAR's operating partnership units outstanding as of April 30, 2019 (in shares) | 527,045 | |||||
Exchange ratio | 1.04807 | |||||
Implied EA-1 operating partnership units issued in consideration | 200,000 | |||||
Net assets acquired in Merger in exchange for common shares | $ | $ 751,278 | $ 751,277 | ||||
EA-1 | ||||||
Real Estate [Line Items] | ||||||
Common Stock, shares outstanding (in shares) | 167,000,000 | |||||
Implied EA-1 common stock issued in consideration | 74,474,924.3848216236 | 167,000,000 | ||||
Implied EA-1 operating partnership units issued in consideration | 502,871.9455761543 | |||||
EA-1's net asset value per share as of April 30, 2019 (in usd per share) | $ / shares | $ 10.02 |
Real Estate - Summary of Purcha
Real Estate - Summary of Purchase Price Allocation (Details) - The Mergers - USD ($) $ in Thousands | Apr. 30, 2019 | Sep. 30, 2019 |
Schedule of Asset Acquisition [Line Items] | ||
Cash assumed | $ 35,659 | |
Land | 135,875 | |
Building and improvements | 913,739 | |
Tenant origination and absorption cost | 214,428 | |
Intangibles | 3,627 | |
Construction in progress | 263 | |
Other assets | 5,964 | |
Total assets | 1,309,555 | |
Debt (net of $1.1 million premium) | 498,906 | |
Below market leases | 12,476 | |
Due to Affiliates | 8,804 | |
Distribution payable | 1,854 | |
Restricted reserves | 11,050 | |
Accounts payable and other liabilities | 14,849 | |
Total liabilities | 547,939 | |
Fair value of net assets acquired | 761,616 | |
Less: EA-1's Merger expenses | 10,338 | $ 10,338 |
Fair value of net assets acquired, less EA-1's Merger expenses | 751,278 | |
Debt premium | $ 1,100 |
Real Estate - Summary of Costs
Real Estate - Summary of Costs Incurred (Details) - The Mergers - USD ($) $ in Thousands | Apr. 30, 2019 | Sep. 30, 2019 |
Schedule of Asset Acquisition [Line Items] | ||
Advisory and valuation fees | $ 8,592 | |
Legal, accounting and tax fees | 1,384 | |
Other fees | 362 | |
Total Merger-related fees | $ 10,338 | $ 10,338 |
Real Estate - Summary of Purc_2
Real Estate - Summary of Purchase Price Allocation of Properties Acquired (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | |
Real Estate [Line Items] | |||
Land | $ 473,709 | $ 473,709 | $ 350,470 |
In-place lease valuation (above market) | 45,398 | 45,398 | 42,736 |
In-place lease valuation (below market) | (67,622) | (67,622) | $ (55,147) |
2019 Revenue | 80,300 | 212,800 | |
Mergers | |||
Real Estate [Line Items] | |||
Land | 135,875 | 135,875 | |
Building | 850,811 | 850,811 | |
Improvements | 62,928 | 62,928 | |
Tenant origination and absorption costs | 214,428 | 214,428 | |
In-place lease valuation (above market) | 3,627 | 3,627 | |
In-place lease valuation (below market) | (12,476) | (12,476) | |
Land Leasehold Value Above Market | 0 | 0 | |
Total | 1,255,193 | 1,255,193 | |
2019 Revenue | 44,124 | ||
McKesson II (3) | |||
Real Estate [Line Items] | |||
Land | 0 | 0 | |
Building | 25,446 | 25,446 | |
Improvements | 4,681 | 4,681 | |
Tenant origination and absorption costs | 11,513 | 11,513 | |
In-place lease valuation (above market) | 239 | 239 | |
In-place lease valuation (below market) | 0 | 0 | |
Land Leasehold Value Above Market | (3,072) | (3,072) | |
Total | $ 38,807 | 38,807 | |
2019 Revenue | $ 107 |
Real Estate - Intangibles (Deta
Real Estate - Intangibles (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of in-place lease valuation | ||
In-place lease valuation (above market) | $ 45,398 | $ 42,736 |
In-place lease valuation (above market) - accumulated amortization | (33,296) | (31,995) |
In-place lease valuation (above market), net | 12,102 | 10,741 |
Ground leasehold interest (below market) | 2,254 | 2,255 |
Ground leasehold interest (below market) - accumulated amortization | (157) | (137) |
Ground leasehold interest (below market), net | 2,097 | 2,118 |
Intangibles - other | 0 | 4,240 |
Intangible assets, net | 14,199 | 17,099 |
In-place lease valuation (below market) | (67,622) | (55,147) |
Land leasehold interest (above market) | (3,072) | 0 |
In-place lease valuation (below market) - accumulated amortization | 37,140 | 32,032 |
Intangible liabilities, net | (33,554) | (23,115) |
Tenant origination and absorption cost | 752,012 | 530,181 |
Tenant origination and absorption cost - accumulated amortization | (343,018) | (296,201) |
Tenant origination and absorption cost, net | $ 408,994 | $ 233,980 |
Real Estate - Leasing Costs For
Real Estate - Leasing Costs For Next Five Years (Details) $ in Thousands | Sep. 30, 2019USD ($) |
In-place lease valuation, net | |
Remaining 2019 | $ (901) |
2020 | (1,777) |
2021 | (1,864) |
2022 | (2,359) |
2023 | (2,379) |
Tenant origination and absorption costs | |
Remaining 2019 | 17,415 |
2020 | 65,548 |
2021 | 57,564 |
2022 | 53,980 |
2023 | 49,383 |
Ground leasehold interest | |
Remaining 2019 | (3) |
2020 | (10) |
2021 | (10) |
2022 | (10) |
2023 | (10) |
Other leasing costs | |
Remaining 2019 | 998 |
2020 | 4,852 |
2021 | 5,624 |
2022 | 5,630 |
2023 | $ 5,530 |
Real Estate - Restricted Cash (
Real Estate - Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Real Estate [Line Items] | ||
Restricted cash | $ 31,913 | $ 15,807 |
Real Estate Asset Acquisitions and Contributions | ||
Real Estate [Line Items] | ||
Restricted cash | 31,913 | 15,807 |
Real Estate Asset Acquisitions and Contributions | Cash reserves | ||
Real Estate [Line Items] | ||
Restricted cash | 24,604 | 12,945 |
Real Estate Asset Acquisitions and Contributions | Restricted lockbox | ||
Real Estate [Line Items] | ||
Restricted cash | $ 7,309 | $ 2,862 |
Real Estate - Summary of Assets
Real Estate - Summary of Assets and Liabilities Related to Real Estate Held for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Real Estate [Line Items] | ||
Total assets | $ 29,804 | $ 0 |
Total liabilities | 184 | $ 0 |
10 Commerce Parkway | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Real Estate [Line Items] | ||
Land | 1,407 | |
Building and improvements | 26,224 | |
Tenant origination and absorption cost | 2,937 | |
Total real estate | 30,568 | |
Less: accumulated depreciation and amortization | (802) | |
Total real estate, net | 29,766 | |
Intangible assets, net | 37 | |
Other assets | 1 | |
Total assets | 29,804 | |
Accrued expenses and other liabilities | 184 | |
Total liabilities | $ 184 |
Real Estate - Sale of Propertie
Real Estate - Sale of Properties (Details) - USD ($) $ in Thousands | Sep. 05, 2019 | Jul. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Real Estate [Line Items] | |||||
Proceeds from disposition of properties | $ 46,784 | $ 1,383 | |||
Real Estate Investment Property, Net | 3,694,841 | $ 2,534,952 | |||
Gain (Loss) on Sale of Properties | $ 8,441 | $ 1,158 | |||
Lynnwood IV | |||||
Real Estate [Line Items] | |||||
Proceeds from sale of land | $ 1,800 | ||||
Real Estate Investment Property, Net | 1,300 | ||||
Gain (Loss) on Sale of Properties | $ 300 | ||||
7601 technology Way | |||||
Real Estate [Line Items] | |||||
Proceeds from disposition of properties | $ 48,800 | ||||
Real Estate Investment Property, Net | 37,600 | ||||
Gain (Loss) on Sale of Properties | $ 8,100 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities - Narrative (Details) $ in Thousands | Jul. 17, 2019USD ($) | Sep. 30, 2014USD ($)ft² | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2018ft² |
Schedule of Equity Method Investments [Line Items] | ||||||||
Equity method investments | $ 20,795 | $ 20,795 | $ 30,565 | |||||
Equity in other comprehensive (loss) income of unconsolidated joint venture | (73) | $ (12) | (251) | $ 224 | ||||
Heritage Common X | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Area of real estate property (in sqft) | ft² | 200,000 | |||||||
Net cash proceeds from sale of investment | $ 8,200 | |||||||
Payment for debt, debt closing costs, credits and distributions | 41,400 | |||||||
Equity method investments | $ 445 | $ 445 | 3,274 | |||||
Equity method investment, realized gain on disposal | $ 3,600 | |||||||
Equity method investment, ownership (percent) | 45.00% | 45.00% | ||||||
Escrow holdback deposit | $ 400 | $ 400 | ||||||
Equity in other comprehensive (loss) income of unconsolidated joint venture | 0 | |||||||
Digital Realty Joint Venture | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Area of real estate property (in sqft) | ft² | 132,300 | |||||||
Equity method investments | $ 20,350 | $ 20,350 | $ 27,291 | |||||
Equity method investment, ownership (percent) | 80.00% | 80.00% | 80.00% | |||||
Payments to acquire interest in equity method investment | $ 68,400 | |||||||
Equity method investment, property | 187,500 | |||||||
Equity method investment, liabilities | $ 102,000 | |||||||
Operating leases, term of contract | 3 years | |||||||
Equity in other comprehensive (loss) income of unconsolidated joint venture | $ 300 | |||||||
Mercedes-Benz Financial Services USA | Heritage Common X | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Portion of building leased out (percent) | 100.00% | 100.00% |
Investments in Unconsolidated_4
Investments in Unconsolidated Entities - Balance of Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Investments [Roll Forward] | ||||
Balance as of December 31, 2018 | $ 30,565 | |||
Net income | $ 3,027 | $ (579) | 1,919 | $ (1,617) |
Distributions | (11,438) | |||
Other comprehensive loss | (73) | $ (12) | (251) | $ 224 |
Balance as of September 30, 2019 | 20,795 | 20,795 | ||
Digital Realty Joint Venture | ||||
Investments [Roll Forward] | ||||
Balance as of December 31, 2018 | 27,291 | |||
Net income | (1,690) | |||
Distributions | (5,000) | |||
Other comprehensive loss | 300 | |||
Balance as of September 30, 2019 | 20,350 | 20,350 | ||
Heritage Common X | ||||
Investments [Roll Forward] | ||||
Balance as of December 31, 2018 | 3,274 | |||
Net income | 3,609 | |||
Distributions | (6,438) | |||
Other comprehensive loss | 0 | |||
Balance as of September 30, 2019 | $ 445 | 445 | ||
Disposition and other advisory fees owed | 600 | |||
Third party fees and taxes incurred | $ 1,100 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Apr. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Total principal | $ 1,940,745 | $ 1,362,179 | |
Unamortized Deferred Financing Costs and Discounts, net | (10,604) | (8,648) | |
Debt, net | 1,930,141 | 1,353,531 | |
Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Derivative notional amount | $ 425,000 | ||
LIBOR | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 2.05% | ||
Fixed and variable rate debt | Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 3.81% | ||
Fixed rate debt | Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 3.89% | ||
Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 1,019,245 | 647,179 | |
HealthSpring Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 20,849 | 21,219 | |
Contractual stated interest rate (percent) | 4.18% | ||
Effective interest rate (percent) | 4.61% | ||
Midland Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 100,760 | 102,262 | |
Contractual stated interest rate (percent) | 3.94% | ||
Effective interest rate (percent) | 4.11% | ||
Emporia Partners Mortgage Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 2,219 | 2,554 | |
Contractual stated interest rate (percent) | 5.88% | ||
Effective interest rate (percent) | 5.98% | ||
Samsonite | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 21,392 | 22,085 | |
Contractual stated interest rate (percent) | 6.08% | ||
Effective interest rate (percent) | 5.15% | ||
Highway 94 loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 15,835 | 16,497 | |
Contractual stated interest rate (percent) | 3.75% | ||
Effective interest rate (percent) | 4.71% | ||
AIG Loan II | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 126,970 | 0 | |
Debt, net | $ 127,000 | ||
Contractual stated interest rate (percent) | 4.15% | ||
Effective interest rate (percent) | 4.93% | ||
Initial debt instrument term | 10 years | ||
BOA Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 375,000 | 375,000 | |
Contractual stated interest rate (percent) | 3.77% | ||
Effective interest rate (percent) | 3.92% | ||
BOA/KeyBank Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 250,000 | 0 | |
Debt, net | $ 250,000 | ||
Contractual stated interest rate (percent) | 4.32% | ||
Effective interest rate (percent) | 4.16% | ||
Initial debt instrument term | 10 years | ||
AIG Loan | Mortgages | |||
Debt Instrument [Line Items] | |||
Total principal | $ 106,220 | 107,562 | |
Contractual stated interest rate (percent) | 4.96% | ||
Effective interest rate (percent) | 5.08% | ||
Revolving Credit Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total principal | $ 171,500 | 0 | |
Effective interest rate (percent) | 3.54% | ||
Initial debt instrument term | 3 years | ||
Debt instrument extended term | 1 year | ||
Revolving Credit Facility | Revolving Credit Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Spread over variable rate (percent) | 1.30% | ||
2023 Term Loan | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 3.46% | ||
2023 Term Loan | LIBOR | |||
Debt Instrument [Line Items] | |||
Spread over variable rate (percent) | 1.25% | ||
2023 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 200,000 | 0 | |
Initial debt instrument term | 4 years | ||
2024 Term Loan | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 3.45% | ||
2024 Term Loan | LIBOR | |||
Debt Instrument [Line Items] | |||
Spread over variable rate (percent) | 1.25% | ||
2024 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 400,000 | 0 | |
Initial debt instrument term | 5 years | ||
2026 Term Loan | |||
Debt Instrument [Line Items] | |||
Effective interest rate (percent) | 3.82% | ||
2026 Term Loan | LIBOR | |||
Debt Instrument [Line Items] | |||
Spread over variable rate (percent) | 1.65% | ||
2026 Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 150,000 | 0 | |
Initial debt instrument term | 7 years | ||
Term Loan | Term Loans | |||
Debt Instrument [Line Items] | |||
Total principal | $ 0 | $ 715,000 |
Interest Rate Contracts - Narra
Interest Rate Contracts - Narrative (Details) $ in Thousands | Aug. 31, 2018USD ($)contract | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Derivative [Line Items] | |||
Income expected to be recognized in earnings in next 12 months | $ 1,400 | ||
Interest Rate Swap Effective Date July 1, 2020, $425,000 Notional Amount | |||
Derivative [Line Items] | |||
Number of interest rate swap agreements executed | contract | 4 | ||
Derivative notional amount | $ 425,000 | ||
Derivative contract term | 5 years | ||
Interest Rate Swap | |||
Derivative [Line Items] | |||
Derivative notional amount | 850,000 | $ 850,000 | |
Fair value of interest rate swap in a net liability position | $ 31,000 | $ 1,700 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Apr. 30, 2019USD ($)loan | Jul. 20, 2015USD ($) | Sep. 30, 2019USD ($)propertyquarter | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Mar. 29, 2016USD ($) |
Debt Instrument [Line Items] | ||||||
Closing costs paid | $ 5,737,000 | $ 24,000 | ||||
Outstanding debt | $ 1,930,141,000 | $ 1,353,531,000 | ||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 1,140,000,000 | |||||
Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Maximum increment to borrowing capacity available under accordion feature | $ 2,000,000,000 | |||||
Minimum increments allowed under accordion feature | 25,000,000 | |||||
Maximum borrowing capacity available under accordion feature | $ 25,000,000 | |||||
Term Loans | the Term Loans | ||||||
Debt Instrument [Line Items] | ||||||
Number of term loans | loan | 3 | |||||
Term Loans | 2023 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 200,000,000 | |||||
Initial debt instrument term | 4 years | |||||
Debt instrument term, including extension | 5 years | |||||
Term Loans | 2024 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 400,000,000 | |||||
Initial debt instrument term | 5 years | |||||
Term Loans | 2026 Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 150,000,000 | |||||
Initial debt instrument term | 7 years | |||||
Term Loans | Keybank Loans | ||||||
Debt Instrument [Line Items] | ||||||
Closing costs paid | $ 5,700,000 | |||||
Annual administrative agent fee | 25,000 | |||||
Compliance requirement - maximum consolidated leverage ratio (percent) | 60.00% | |||||
Compliance requirement - maximum consolidated leverage ratio after material acquisition (percent) | 65.00% | |||||
Compliance requirement - consecutive quarters after material acquisition subject to higher consolidated leverage ratio | quarter | 4 | |||||
Compliance requirement - minimum consolidated tangible net worth (percent) | 75.00% | |||||
Compliance requirement - minimum consolidated tangible net worth | $ 2,000,000,000 | |||||
Compliance requirement - additional net future equity issuances (percent) | 75.00% | |||||
Compliance requirement - reduction for amount of payments used to redeem stock (percent) | 75.00% | |||||
Compliance requirement - minimum consolidated fixed charge coverage ratio | 1.50 | |||||
Compliance requirement - maximum total secured debt ratio (percent) | 40.00% | |||||
Compliance requirement - increase in maximum total secured coverage ratio after material acquisition (percent) | 5.00% | |||||
Compliance requirement - number of quarters subject to higher maximum total secured coverage ratio after material acquisition | quarter | 4 | |||||
Compliance requirement - minimum unsecured interest coverage ratio | 2 | |||||
Compliance requirement - maximum total secured recourse debt ratio (percent) | 10.00% | |||||
Compliance requirement - maximum aggregate maximum unhedged variable rate debt (percent) | 30.00% | |||||
Compliance requirement - maximum payout ratio (percent) | 95.00% | |||||
Restrictions - maximum unimproved land as percentage of total asset value (percent) | 5.00% | |||||
Restrictions - pre-leased developments under development as a percentage of total asset value, maximum (percent) | 20.00% | |||||
Restrictions - investments in unconsolidated affiliates as percentage of total asset value, maximum (percent) | 10.00% | |||||
Restrictions - investments in mortgage notes receivable as percentage of total asset value, maximum (percent) | 15.00% | |||||
Restrictions - leased assets under renovation as percentage of total asset value, maximum (percent) | 10.00% | |||||
Restrictions - Aggregate investment limitations as a percentage of total asset value, maximum (percent) | 25.00% | |||||
Term Loans | Keybank Loans | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Unused commitment fee (percent) | 0.15% | |||||
Term Loans | Keybank Loans | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Unused commitment fee (percent) | 0.20% | |||||
Mortgages | BOA/KeyBank Loan | ||||||
Debt Instrument [Line Items] | ||||||
Initial debt instrument term | 10 years | |||||
Proceeds from borrowings | 250,000,000 | |||||
Contractual stated interest rate (percent) | 4.32% | |||||
Outstanding debt | $ 250,000,000 | |||||
Mortgages | AIG Loan II | ||||||
Debt Instrument [Line Items] | ||||||
Initial debt instrument term | 10 years | |||||
Proceeds from borrowings | 127,000,000 | |||||
Contractual stated interest rate (percent) | 4.15% | |||||
Outstanding debt | $ 127,000,000 | |||||
Interest-only period | 5 years | |||||
Unsecured Debt | Unsecured Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 640,000,000 | |||||
Initial debt instrument term | 5 years | |||||
Unsecured Debt | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 640,000,000 | $ 715,000,000 | ||||
Debt repaid | 715,000,000 | |||||
Line of Credit | Unsecured Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | 1,140,000,000 | |||||
Revolving Credit Facility | Unsecured Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 500,000,000 | |||||
Initial debt instrument term | 4 years | |||||
Debt instrument extended term | 1 year | |||||
Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 750,000,000 | |||||
Initial debt instrument term | 3 years | |||||
Debt instrument extended term | 1 year | |||||
Permitted incremental reduction in revolving commitment | $ 50,000,000 | |||||
Minimum borrowing capacity permitted | 150,000,000 | |||||
Covenant - minimum pool properties | property | 15 | |||||
Covenant -maximum pool value contributed by single pool property of tenant (percent) | 15.00% | |||||
Covenant - maximum aggregate pool value to be contributed by pool properties subject to ground leases (percent) | 15.00% | |||||
Covenant - maximum aggregate pool value to be contributed by pool properties under development (percent) | 20.00% | |||||
Covenant - minimum aggregate leasing percentage (percent) | 90.00% | |||||
Covenant - maximum unsecured leverage ratio (percent) | 60.00% | |||||
Covenant - minimum unsecured interest coverage ratio | 2 | |||||
Revolving Credit Facility | Swingline | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 125,000,000 | |||||
Revolving Credit Facility | Unsecured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility borrowing capacity | $ 500,000,000 |
Interest Rate Contracts - Summa
Interest Rate Contracts - Summary of Interest Rate Swaps (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Interest Rate Swap Effective Date July 9, 2015 | ||
Derivative [Line Items] | ||
Interest Strike Rate (percent) | 1.69% | |
Fair value of interest rate swap in a net asset (liability) position | $ 90 | $ 5,245 |
Derivative notional amount | $ 425,000 | 425,000 |
Interest Rate Swap Effective Date July 1, 2020 | ||
Derivative [Line Items] | ||
Interest Strike Rate (percent) | 2.82% | |
Fair value of interest rate swap in a net asset (liability) position | $ (8,768) | (1,987) |
Derivative notional amount | $ 125,000 | 125,000 |
Interest Rate Swap Effective Date July 1, 2020 | ||
Derivative [Line Items] | ||
Interest Strike Rate (percent) | 2.82% | |
Fair value of interest rate swap in a net asset (liability) position | $ (7,034) | (1,628) |
Derivative notional amount | $ 100,000 | 100,000 |
Interest Rate Swap Effective Date July 1, 2020 | ||
Derivative [Line Items] | ||
Interest Strike Rate (percent) | 2.83% | |
Fair value of interest rate swap in a net asset (liability) position | $ (7,048) | (1,636) |
Derivative notional amount | $ 100,000 | 100,000 |
Interest Rate Swap Effective Date July 1, 2020 | ||
Derivative [Line Items] | ||
Interest Strike Rate (percent) | 2.84% | |
Fair value of interest rate swap in a net asset (liability) position | $ (7,131) | (1,711) |
Derivative notional amount | 100,000 | 100,000 |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Fair value of interest rate swap in a net asset (liability) position | (29,891) | (1,717) |
Derivative notional amount | $ 850,000 | $ 850,000 |
Interest Rate Contracts - Impac
Interest Rate Contracts - Impact of Interest Rate Swap on Consolidated Statements of Operation (Details) - Interest Rate Swap - Cash Flow Hedging - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (loss) gain recognized in AOCI on derivatives | $ (25,849) | $ (8,458) |
Amount of (gain) reclassified from AOCI into earnings under “Interest expense” | (2,231) | 1,182 |
Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded | $ 53,642 | $ 41,251 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Prepaid rent | $ 14,847 | $ 15,204 |
Deferred compensation | 8,637 | 0 |
Accrued CIP | 4,855 | 4,662 |
Real estate taxes payable | 19,509 | 23,258 |
Interest payable | 12,266 | 9,310 |
Property operating expense payable | 7,054 | 9,159 |
Other liabilities | 24,202 | 19,023 |
Total | $ 91,370 | $ 80,616 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Liability | $ (29,981) | $ (6,962) |
Recurring basis | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Earn-out Liability (due to affiliates) | (4,380) | (29,380) |
Corporate Owned Life Insurance Asset | 2,022 | |
Mutual Funds Asset | 6,483 | |
Deferred Compensation Liability | (8,568) | |
Recurring basis | Quoted Prices in Active Markets for Identical Assets and Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Earn-out Liability (due to affiliates) | 0 | 0 |
Corporate Owned Life Insurance Asset | 0 | |
Mutual Funds Asset | 6,483 | |
Deferred Compensation Liability | 0 | |
Recurring basis | Significant Other Observable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Earn-out Liability (due to affiliates) | 0 | 0 |
Corporate Owned Life Insurance Asset | 2,022 | |
Mutual Funds Asset | 0 | |
Deferred Compensation Liability | (8,568) | |
Recurring basis | Significant Unobservable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Earn-out Liability (due to affiliates) | (4,380) | (29,380) |
Corporate Owned Life Insurance Asset | 0 | |
Mutual Funds Asset | 0 | |
Deferred Compensation Liability | 0 | |
Recurring basis | Interest Rate Swap | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Asset | 90 | 5,245 |
Interest Rate Swap Liability | (29,981) | (6,962) |
Recurring basis | Interest Rate Swap | Quoted Prices in Active Markets for Identical Assets and Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Asset | 0 | 0 |
Interest Rate Swap Liability | 0 | 0 |
Recurring basis | Interest Rate Swap | Significant Other Observable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Asset | 90 | 5,245 |
Interest Rate Swap Liability | (29,981) | (6,962) |
Recurring basis | Interest Rate Swap | Significant Unobservable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest Rate Swap Asset | 0 | 0 |
Interest Rate Swap Liability | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Dec. 14, 2018USD ($) | Sep. 30, 2019USD ($)loan | Dec. 31, 2018USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Payment of earn-out consideration | $ 25,000,000 | ||
Percentage of performance distributions (percent) | 37.25% | ||
Common equity invested (percent) | 2.50% | ||
Number of mortgage loans (in loan) | loan | 6 | ||
Payment for Contingent Consideration Liability, Investing Activities | $ 0 | ||
Recurring basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of earn-outs | $ 4,380,000 | $ 29,380,000 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments at Fair Value (Details) - Mortgages - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value | Samsonite | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | $ 22,662 | $ 22,440 |
Fair Value | Highway 94 loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 15,356 | 15,601 |
Fair Value | AIG Loan II | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 122,791 | 0 |
Fair Value | BOA Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 374,336 | 361,917 |
Fair Value | BOA/KeyBank Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 268,318 | 0 |
Fair Value | AIG Loan | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 104,131 | 108,032 |
Carrying Value | Samsonite | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 21,392 | 22,085 |
Carrying Value | Highway 94 loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 15,835 | 16,497 |
Carrying Value | AIG Loan II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 126,970 | 0 |
Carrying Value | BOA Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 375,000 | 375,000 |
Carrying Value | BOA/KeyBank Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | 250,000 | 0 |
Carrying Value | AIG Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of mortgage loans | $ 106,220 | $ 107,562 |
Equity - Narrative (Details)
Equity - Narrative (Details) | Aug. 08, 2019 | May 01, 2019shares | Apr. 30, 2019shares | Dec. 14, 2018 | Sep. 30, 2019USD ($)voteshares | Sep. 30, 2019USD ($)voteshares | Sep. 30, 2019USD ($)voteshares | Dec. 31, 2018USD ($)shares | Jun. 30, 2015shares | |
Class of Stock [Line Items] | ||||||||||
Number of shares outstanding (in shares) | 252,863,421 | 78,054,934 | 235,382,622 | 235,382,622 | 235,382,622 | 174,278,341 | ||||
Proceeds from sale of shares | $ | $ 2,700,000,000 | |||||||||
Number of shares issued (shares) | 78,100,000 | |||||||||
Shares issued | $ | [1] | $ 236,000 | $ 236,000 | 236,000 | $ 174,000 | |||||
Deferred compensation liability | $ | (8,600,000) | (8,600,000) | (8,600,000) | |||||||
Share Redemption Program | ||||||||||
Class of Stock [Line Items] | ||||||||||
Minimum ownership balance (shares) | $ | 2,500 | $ 2,500 | 2,500 | |||||||
Minimum holding period for stock to be redeemed from stockholder by the Company | 1 year | |||||||||
Stock redemption quarterly cap | $ | $ 116,200,000 | $ 116,200,000 | $ 116,200,000 | |||||||
Signature Office REIT Merger | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued (shares) | 43,772,611.05983 | |||||||||
Follow-on Offering | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of shares issued (shares) | 6,378,213 | 6,378,213 | 6,378,213 | |||||||
Program termination period | 3 years | |||||||||
Distribution Reinvestment Plan | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares issued | $ | $ 281,200,000 | $ 281,200,000 | $ 281,200,000 | $ 252,800,000 | ||||||
Period for written notice | 10 days | |||||||||
DRP issued | $ | $ 15,900,000 | $ 15,900,000 | $ 15,900,000 | |||||||
Maximum | Share Redemption Program | ||||||||||
Class of Stock [Line Items] | ||||||||||
Aggregate redemption of Company's shares (percent) | 5.00% | |||||||||
RSUs | ||||||||||
Class of Stock [Line Items] | ||||||||||
Installment vesting of RSUs (percent) | 25.00% | |||||||||
Mr. Escalante | RSUs | ||||||||||
Class of Stock [Line Items] | ||||||||||
Restricted stock units issued to executives (shares) | 732,218 | |||||||||
Mr. Bitar | RSUs | ||||||||||
Class of Stock [Line Items] | ||||||||||
Restricted stock units issued to executives (shares) | 104,603 | |||||||||
Mr. Hirsch | RSUs | ||||||||||
Class of Stock [Line Items] | ||||||||||
Restricted stock units issued to executives (shares) | 67,992 | |||||||||
Mr. Sohn | RSUs | ||||||||||
Class of Stock [Line Items] | ||||||||||
Restricted stock units issued to executives (shares) | 52,301 | |||||||||
Mr. Tausk | RSUs | ||||||||||
Class of Stock [Line Items] | ||||||||||
Restricted stock units issued to executives (shares) | 52,301 | |||||||||
Chief Executive Officer | ||||||||||
Class of Stock [Line Items] | ||||||||||
Employment Agreement, initial term | 5 years | |||||||||
Employment Agreement, renewal term | 1 year | |||||||||
Common Class T | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||
Number of shares outstanding (in shares) | 323,816 | 323,816 | 323,816 | |||||||
Common Class S | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||
Number of shares outstanding (in shares) | 287 | 287 | 287 | |||||||
Common Class D | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||
Number of shares outstanding (in shares) | 24,414 | 24,414 | 24,414 | |||||||
Common Class I | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||
Number of shares outstanding (in shares) | 986,564 | 986,564 | 986,564 | |||||||
Common Class A | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||
Number of shares outstanding (in shares) | 24,324,950 | 24,324,950 | 24,324,950 | |||||||
Common Class AA | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||
Number of shares outstanding (in shares) | 47,419,337 | 47,419,337 | 47,419,337 | |||||||
Common Class AAA | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||
Number of shares outstanding (in shares) | 946,134 | 946,134 | 946,134 | |||||||
Common Class E | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of votes each share is entitled to | vote | 1 | 1 | 1 | |||||||
Number of shares outstanding (in shares) | 161,357,120 | 161,357,120 | 161,357,120 | |||||||
Number of shares issued (in shares) | 174,981,547 | |||||||||
Redemption requests in excess of quarterly cap (shares) | 2,872,488 | |||||||||
Redemption requests in excess of quarterly cap | $ | $ 27,400,000 | |||||||||
Shares not redeemed as percentage of shares submitted (percent) | 25.00% | |||||||||
Contingent right to common stock represented by each RSU (shares) | 1 | |||||||||
[1] | See Note 10, Equity, for the number of shares outstanding of each class of common stock as of September 30, 2019. |
Equity - Schedule of Shares Red
Equity - Schedule of Shares Redeemed (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2019USD ($)shares | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 13,461,849 |
Redemption Requests - Amount | $ | $ 128,385 |
Common Class T | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 0 |
Redemption Requests - Amount | $ | $ 0 |
Common Class S | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 0 |
Redemption Requests - Amount | $ | $ 0 |
Common Class D | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 0 |
Redemption Requests - Amount | $ | $ 0 |
Common Class E | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 11,362,476 |
Redemption Requests - Amount | $ | $ 108,398 |
Common Class I | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 10,406 |
Redemption Requests - Amount | $ | $ 100 |
Common Class A | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 837,000 |
Redemption Requests - Amount | $ | $ 7,968 |
Common Class AA | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 1,231,604 |
Redemption Requests - Amount | $ | $ 11,725 |
Common Class AAA | |
Class of Stock [Line Items] | |
Redemption Requests - Shares | shares | 20,363 |
Redemption Requests - Amount | $ | $ 194 |
Equity - Schedule of Share Rede
Equity - Schedule of Share Redemptions (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Class of Stock [Line Items] | ||||
Stock redeemed during period (in shares) | 13,461,849 | |||
Common Stock | Share Redemption Program | ||||
Class of Stock [Line Items] | ||||
Stock redeemed during period (in shares) | 10,589,361 | 1,311,582 | 10,589,361 | 8,013,521 |
Weighted average price per share (in dollars per share) | $ 9.54 | $ 9.63 | $ 9.54 | $ 9.60 |
Noncontrolling Interests - Narr
Noncontrolling Interests - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019shares | |
Noncontrolling Interest [Line Items] | |
Percentage of noncontrolling interests based on weighted average shares outstanding (percent) | 12.15% |
Limited partnership units issued (in shares) | 31,600,000 |
Implied EA-1 operating partnership units issued in consideration (in shares) | 200,000 |
Partnership unit exchange (in shares) | 1 |
Griffin Capital Essential Asset Operating Partnership, L.P. | |
Noncontrolling Interest [Line Items] | |
Percentage of noncontrolling interests based on total shares (percent) | 11.71% |
Noncontrolling Interests - Sche
Noncontrolling Interests - Schedule of Noncontrolling Interests Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Issuance of limited partnership units | $ 25,000 | |||||||
Distributions of units to noncontrolling interest | $ 800 | 269 | ||||||
Distributions to noncontrolling interests | (5,108) | (4,903) | $ (4,585) | $ (1,101) | $ (1,089) | $ (1,077) | ||
Allocated distributions to noncontrolling interests subject to redemption | (10) | (11) | (13) | (3) | (4) | (3) | ||
Net income | 10,088 | 16,088 | 6,530 | 3,011 | 7,711 | 6,553 | ||
Other comprehensive income (loss) | (7,391) | (12,803) | (8,137) | 3,285 | 749 | 3,466 | ||
Non- controlling Interests | ||||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Beginning balance | 232,203 | 31,105 | $ 232,203 | $ 31,105 | ||||
Issuance of limited partnership units | 25,000 | 30,039 | 205,000 | |||||
Distributions of units to noncontrolling interest | 269 | 1,069 | 0 | |||||
Distributions to noncontrolling interests | (5,108) | (4,903) | (4,585) | (1,101) | (1,089) | (1,077) | (14,596) | (4,368) |
Allocated distributions to noncontrolling interests subject to redemption | (10) | (11) | (13) | (3) | (4) | (3) | (34) | (13) |
Net income | 1,149 | 1,880 | 1,197 | 157 | 280 | 234 | 4,226 | 789 |
Other comprehensive income (loss) | (835) | $ (1,489) | $ (1,408) | $ 75 | $ 27 | $ 122 | (3,732) | (310) |
Ending balance | $ 249,175 | $ 249,175 | $ 232,203 |
Perpetual Convertible Preferr_2
Perpetual Convertible Preferred Shares - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 08, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Temporary Equity [Line Items] | |||
Transaction-related expenses incurred | $ 0 | $ 4,727 | |
Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Stock purchase price (usd per share) | $ 25 | ||
Restrictive period after closing date on transferring shares or economic interest | 5 years | ||
Quarterly distributions entitlement rate as percent of varying rate (percent) | 25.00% | ||
Liquidation preference (usd per share) | $ 25 | ||
Redemption fee (percent) | 1.50% | ||
Preferred Stock Issuance | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Aggregate number of shares to be purchased under transaction agreement (in shares) | 10,000,000 | ||
First Issuance | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Aggregate number of shares to be purchased under transaction agreement (in shares) | 5,000,000 | ||
Redemption rights, period from issuance | 5 years | ||
Conversion rights, period from issuance | 5 years | ||
Secondary Issuance | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Aggregate number of shares to be purchased under transaction agreement (in shares) | 5,000,000 | ||
Stock purchase price | $ 125,000 | ||
Additional shares to be purchased (shares) | 5,000,000 | ||
Conversion rights, period from issuance | 5 years | ||
Triggering event | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Redemption price per share (usd per share) | $ 25 | ||
EA-1 | First Issuance | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Aggregate number of shares to be purchased under transaction agreement (in shares) | 5,000,000 | ||
Stock purchase price | $ 125,000 | ||
Transaction fees paid (percent) | 3.50% | ||
Transaction-related expenses incurred | $ 400 | ||
EA-1 | Advisor | First Issuance | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Transaction-related expenses incurred | $ 200 | ||
Aug 8, 2018 | From and After First issuance Until Fifth Anniversary | First Issuance | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Initial annual distribution (percent) | 6.55% | ||
Anniversary period since issuance date | 5 years | ||
Aug 8, 2018 | From and After Second Issuance Date Until Fifth Anniversary | Secondary Issuance | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Initial annual distribution (percent) | 6.55% | ||
Anniversary period since issuance date | 5 years | ||
Aug 8, 2018 | From and After Reset Date | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Initial annual distribution (percent) | 6.75% | ||
Aug 2, 2020 | After First Triggering Event but Before Reset Date | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Initial annual distribution (percent) | 7.55% | ||
Aug 2, 2020 | After First Triggering Event and Also After Reset Date | Reset date | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Initial annual distribution (percent) | 7.75% | ||
Aug 2, 2021 | Reset date | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Initial annual distribution (percent) | 8.25% | ||
Aug 2, 2021 | Triggering event | Series A Cumulative Perpetual Convertible Preferred Stock | |||
Temporary Equity [Line Items] | |||
Initial annual distribution (percent) | 8.05% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Parties (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Incurred costs | $ 17,426 | $ 33,076 | |
Payable | 14,867 | $ 42,406 | |
Incurred fees | 8,728 | 0 | |
Receivable | 1,523 | 19,685 | |
Operating expenses | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 2,630 | |
Payable | 0 | 74 | |
Asset management fees | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 17,628 | |
Payable | 0 | 0 | |
Property management fees | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 6,992 | |
Payable | 0 | 875 | |
Disposition fees | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 641 | 0 | |
Payable | 641 | 0 | |
Costs advanced by the Advisor | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 2,571 | 396 | |
Payable | 1,271 | 341 | |
Consulting fee - shared services | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 1,874 | 0 | |
Payable | 377 | 0 | |
Acquisition fees | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 942 | 5,331 | |
Payable | 942 | 0 | |
Leasing commissions | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 596 | 0 | |
Payable | 0 | 0 | |
Earn-out | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 0 | |
Payable | 4,380 | 29,380 | |
Other Fees | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 20 | 0 | |
Payable | 0 | 11,734 | |
Incurred fees | 0 | 0 | |
Receivable | 1,202 | 11,734 | |
Stockholder Servicing Fee | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 693 | 0 | |
Payable | 5,938 | 0 | |
Distributions | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 10,089 | 0 | |
Payable | 1,318 | 2 | |
Total, net of real estate assets held for sale | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 17,426 | 32,977 | |
Payable | 14,867 | 42,406 | |
Asset management fees related to real estate held for sale | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 42 | |
Payable | 0 | 0 | |
Property management fees related to real estate held for sale | |||
Related Party Transaction [Line Items] | |||
Incurred costs | 0 | 57 | |
Payable | 0 | 0 | |
Cash to be received from an affiliate related to deferred compensation and other payroll costs | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 658 | 0 | |
Receivable | 0 | 7,951 | |
Griffin Capital Corporation | Payroll/Expense Allocation | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 321 | 0 | |
Receivable | 321 | 0 | |
Griffin Capital Essential Asset REIT II | Payroll/Expense Allocation | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 1,217 | 0 | |
Receivable | 0 | 0 | |
Griffin Capital Essential Asset REIT II | O&O Costs (including payroll allocated to O&O) | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 157 | 0 | |
Receivable | 0 | 0 | |
Griffin Capital Essential Asset REIT II | Other Fees | |||
Related Party Transaction [Line Items] | |||
Incurred fees | 6,375 | $ 0 | |
Receivable | $ 0 | $ 0 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Administrative Service Agreement | Griffin Capital Corporation | |
Related Party Transaction [Line Items] | |
Monthly service cost | $ 187,167 |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($)lease | Sep. 30, 2019USD ($)lease | Sep. 20, 2019USD ($) | Mar. 01, 2019USD ($) | Jan. 01, 2019USD ($)lease | Dec. 31, 2018USD ($) | |
Operating Leased Assets [Line Items] | ||||||
Number of parcels of land | lease | 2 | |||||
Rental income | $ 80,300 | $ 212,800 | ||||
Right of use asset | 41,705 | 41,705 | $ 0 | |||
Lease liability | 44,867 | 44,867 | $ 0 | |||
Discount rate (percent) | 5.36% | |||||
Operating lease costs | 700 | 1,900 | ||||
Cash paid for operating lease liabilities | $ 300 | $ 800 | ||||
McKesson II (3) | ||||||
Operating Leased Assets [Line Items] | ||||||
Right of use asset | $ 16,300 | |||||
Lease liability | $ 16,300 | |||||
Discount rate (percent) | 4.36% | |||||
Chicago Illinois Office | ||||||
Operating Leased Assets [Line Items] | ||||||
Operating Lease, Weighted Average Remaining Lease Term | 6 years | 6 years | ||||
Right of use asset | $ 600 | |||||
Lease liability | $ 600 | |||||
Discount rate (percent) | 3.94% | |||||
ASU 2016-02 | ||||||
Operating Leased Assets [Line Items] | ||||||
Right of use asset | $ 25,500 | |||||
Lease liability | $ 27,600 | |||||
Arizona | ||||||
Operating Leased Assets [Line Items] | ||||||
Number of parcels of land | lease | 3 | 3 |
Operating Leases - Future Minim
Operating Leases - Future Minimum Base Rents to be Received (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Remaining 2019 | $ 74,253 |
2020 | 290,724 |
2021 | 294,220 |
2022 | 293,720 |
2023 | 285,232 |
Thereafter | 1,338,973 |
Total | $ 2,577,122 |
Operating Leases - Remaining Re
Operating Leases - Remaining Required Payments Under Ground Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Remaining 2019 | $ 408 | |
2020 | 1,633 | |
2021 | 1,636 | |
2022 | 1,644 | |
2023 | 1,735 | |
Thereafter | 288,541 | |
Total undiscounted lease payments | 295,597 | |
Less imputed interest | (250,730) | |
Total lease liabilities | $ 44,867 | $ 0 |
Operating Leases - Future Min_2
Operating Leases - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 1,032 |
2020 | 1,032 |
2021 | 1,032 |
2022 | 1,072 |
2023 | 1,422 |
Thereafter | 199,024 |
Total | $ 204,614 |
Declaration of Distributions (D
Declaration of Distributions (Details) - $ / shares | Nov. 02, 2019 | Oct. 01, 2019 | Sep. 23, 2019 | Sep. 03, 2019 | Aug. 01, 2019 | Jun. 12, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Distribution Made to Limited Partner [Line Items] | ||||||||||
Dividends per share declared (in usd per share) | $ 0.001506849 | $ 0.13 | $ 0.17 | $ 0.46 | $ 0.51 | |||||
Stock distributions (in shares per day) | $ 0.000273973 | $ 0.000273973 | ||||||||
Dividends per share paid (in usd per share) | $ 0.001506849 | $ 0.001506849 | $ 0.001506849 | |||||||
Stock distributions paid, per day's worth (shares) | $ 0.000273973 | $ 0.000273973 | ||||||||
Subsequent Event | ||||||||||
Distribution Made to Limited Partner [Line Items] | ||||||||||
Dividends per share paid (in usd per share) | $ 0.001506849 | $ 0.001506849 | ||||||||
Stock distributions paid, per day's worth (shares) | $ 0.000273973 | $ 0.000273973 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 02, 2019 | Oct. 14, 2019 | Oct. 01, 2019 | Sep. 23, 2019 | Sep. 03, 2019 | Aug. 01, 2019 | Nov. 06, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Subsequent Event [Line Items] | |||||||||||
Common stock issued pursuant to the distribution reinvestment plan | $ 242 | $ (1) | $ 28,378 | $ 33,667 | |||||||
Dividends per share paid (in usd per share) | $ 0.001506849 | $ 0.001506849 | $ 0.001506849 | ||||||||
Stock distributions paid, per day's worth (shares) | $ 0.000273973 | $ 0.000273973 | |||||||||
Proceeds from disposition of properties | $ 46,784 | $ 1,383 | |||||||||
Subsequent Event | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Dividends per share paid (in usd per share) | $ 0.001506849 | $ 0.001506849 | |||||||||
Stock distributions paid, per day's worth (shares) | $ 0.000273973 | $ 0.000273973 | |||||||||
Subsequent Event | FedEx Freight | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Proceeds from disposition of properties | $ 30,300 | ||||||||||
Subsequent Event | Follow-on Offering | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares issued (in shares) | 1,480,865 | ||||||||||
Common stock issued pursuant to the distribution reinvestment plan | $ 14,300 | ||||||||||
Subsequent Event | Distribution Reinvestment Plan | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Number of shares issued (in shares) | 29,859,562 | ||||||||||
Common stock issued pursuant to the distribution reinvestment plan | $ 289,600 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Shares Redeemed (Details) - USD ($) $ in Thousands | Oct. 02, 2019 | Sep. 30, 2019 |
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 13,461,849 | |
Redeemed - Amount | $ 128,385 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 10,589,361 | |
Redeemed - Amount | $ 100,980 | |
Common Class T | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 0 | |
Redeemed - Amount | $ 0 | |
Common Class T | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 0 | |
Redeemed - Amount | $ 0 | |
Common Class S | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 0 | |
Redeemed - Amount | $ 0 | |
Common Class S | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 0 | |
Redeemed - Amount | $ 0 | |
Common Class D | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 0 | |
Redeemed - Amount | $ 0 | |
Common Class D | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 0 | |
Redeemed - Amount | $ 0 | |
Common Class E | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 11,362,476 | |
Redeemed - Amount | $ 108,398 | |
Common Class E | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 8,489,988 | |
Redeemed - Amount | $ 80,993 | |
Common Class I | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 10,406 | |
Redeemed - Amount | $ 100 | |
Common Class I | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 10,406 | |
Redeemed - Amount | $ 100 | |
Common Class A | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 837,000 | |
Redeemed - Amount | $ 7,968 | |
Common Class A | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 837,000 | |
Redeemed - Amount | $ 7,968 | |
Common Class AA | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 1,231,604 | |
Redeemed - Amount | $ 11,725 | |
Common Class AA | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 1,231,604 | |
Redeemed - Amount | $ 11,725 | |
Common Class AAA | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 20,363 | |
Redeemed - Amount | $ 194 | |
Common Class AAA | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock redeemed during period (in shares) | 20,363 | |
Redeemed - Amount | $ 194 |
Uncategorized Items - gcnl-2019
Label | Element | Value |
Accounting Standards Update 2016-02 [Member] | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | us-gaap_RightOfUseAssetObtainedInExchangeForOperatingLeaseLiability | $ 25,521,000 |