x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Spirit Realty Capital, Inc. | Maryland | 20-1676382 | ||
Spirit Realty, L.P. | Delaware | 20-1127940 | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||
2727 North Harwood Street, Suite 300, Dallas, Texas 75201 | (972) 476-1900 | |||
(Address of principal executive offices; zip code) | (Registrant’s telephone number, including area code) |
Spirit Realty Capital, Inc. Yes x No o | Spirit Realty, L.P. Yes o No x |
Spirit Realty Capital, Inc. Yes x No o | Spirit Realty, L.P. Yes x No o |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o |
Smaller reporting company o | Emerging growth company o |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer x |
Smaller reporting company o | Emerging growth company o |
Spirit Realty Capital, Inc. o | Spirit Realty, L.P. o |
Spirit Realty Capital, Inc. Yes o No x | Spirit Realty, L.P. Yes o No x |
• | enhancing investors’ understanding of our Company and Operating Partnership by enabling investors to view the business as a whole, reflective of how management views and operates the business; |
• | eliminating duplicative disclosure and providing a streamlined presentation as a substantial portion of the disclosures apply to both our Company and Operating Partnership; and |
• | creating time and cost efficiencies by preparing one combined report in lieu of two separate reports. |
Glossary | |
Item 1. Financial Statements (Unaudited) | |
Definitions: | |
1031 Exchange | Tax-deferred like-kind exchange of properties held for business or investment purposes, pursuant to Section 1031 of the Code |
2019 Notes | $402.5 million convertible notes of the Corporation due in 2019 |
2021 Notes | $345.0 million convertible notes of the Corporation due in 2021 |
AFFO | Adjusted Funds From Operations |
Amended Incentive Award Plan | Amended and Restated Spirit Realty Capital, Inc. and Spirit Realty, L.P. 2012 Incentive Award Plan |
AOCL | Accumulated Other Comprehensive Loss |
ASC | Accounting Standards Codification |
ASU | Accounting Standards Update |
ATM Program | At the Market equity distribution program, pursuant to which the Corporation may offer and sell registered shares of common stock from time to time |
CMBS | Commercial Mortgage Backed Securities |
Code | Internal Revenue Code of 1986, as amended |
Cole II | Cole Credit Property Trust II, Inc. |
Cole II Merger | Acquisition on July 17, 2013 of Cole II by the Company, in which the Company merged with and into the Cole II legal entity |
Collateral Pools | Pools of collateral assets that are pledged to the indenture trustee for the benefit of the noteholders and secure obligations of issuers under the Spirit Master Funding Program |
Company | The Corporation and its consolidated subsidiaries |
Contractual Rent | Monthly contractual cash rent and earned income from direct financing leases, excluding percentage rents, from our properties owned fee-simple or ground leased, recognized during the final month of the reporting period, adjusted to exclude amounts received from properties sold during that period and adjusted to include a full month of contractual rent for properties acquired during that period. |
Convertible Notes | The 2019 Notes and 2021 Notes, together |
Corporation | Spirit Realty Capital, Inc., a Maryland corporation |
CPI | Consumer Price Index |
Credit Agreement | Revolving credit facility agreement between the Operating Partnership and certain lenders dated March 31, 2015, as amended or otherwise modified from time to time |
EBITDA | Earnings Before Interest, Taxes, Depreciation and Amortization |
Exchange Act | Securities Exchange Act of 1934, as amended |
FASB | Financial Accounting Standards Board |
FFO | Funds From Operations |
Fitch | Fitch Ratings, Inc. |
GAAP | Generally Accepted Accounting Principles in the United States |
LIBOR | London Interbank Offered Rate |
Master Trust 2013 | The net-lease mortgage securitization trust established in December 2013 under the Spirit Master Funding Program |
Master Trust 2014 | The net-lease mortgage securitization trust established in 2005 and amended and restated in 2014 under the Spirit Master Funding Program |
Master Trust Notes | Master Trust 2013 and Master Trust 2014 notes, together |
Master Trust Release | Proceeds from the sale of assets securing the Master Trust Notes held in restricted accounts until a qualifying substitution is made or until used for principal reduction |
Moody's | Moody's Investor Services |
NAREIT | National Association of Real Estate Investment Trusts |
OP Holdings | Spirit General OP Holdings, LLC |
Operating Partnership | Spirit Realty, L.P., a Delaware limited partnership |
Definitions: | |
REIT | Real Estate Investment Trust |
Revolving Credit Facility | $800.0 million unsecured credit facility pursuant to the Credit Agreement |
S&P | Standard & Poor's Rating Services |
SEC | Securities and Exchange Commission |
Securities Act | Securities Act of 1933, as amended |
Senior Unsecured Notes | $300 million aggregate principal amount of senior notes issued in August 2016 |
Series A Cumulative Redeemable Preferred Stock | 6,900,000 shares of 6.000% Cumulative Redeemable Preferred Stock issued October 3, 2017, with a liquidation preference of $25.00 per share. |
Shopko | Specialty Retail Shops Holding Corp. and certain of its affiliates |
Spirit Master Funding Program | The Company's asset-backed securitization program that comprises Master Trust 2013 and Master Trust 2014 |
Term Loan | $420.0 million senior unsecured term facility pursuant to the Term Loan Agreement |
Term Loan Agreement | Term loan agreement between the Operating Partnership and certain lenders dated November 3, 2015, as amended or otherwise modified from time to time |
TSR | Total Shareholder Return |
U.S. | United States |
September 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Investments: | |||||||
Real estate investments: | |||||||
Land and improvements | $ | 2,600,873 | $ | 2,704,010 | |||
Buildings and improvements | 4,702,828 | 4,775,221 | |||||
Total real estate investments | 7,303,701 | 7,479,231 | |||||
Less: accumulated depreciation | (1,018,544 | ) | (940,005 | ) | |||
6,285,157 | 6,539,226 | ||||||
Loans receivable, net | 76,821 | 66,578 | |||||
Intangible lease assets, net | 429,857 | 470,276 | |||||
Real estate assets under direct financing leases, net | 24,883 | 36,005 | |||||
Real estate assets held for sale, net | 133,382 | 160,570 | |||||
Net investments | 6,950,100 | 7,272,655 | |||||
Cash and cash equivalents | 11,947 | 10,059 | |||||
Deferred costs and other assets, net | 218,400 | 140,917 | |||||
Goodwill | 254,340 | 254,340 | |||||
Total assets | $ | 7,434,787 | $ | 7,677,971 | |||
Liabilities and stockholders’ equity | |||||||
Liabilities: | |||||||
Revolving Credit Facility | $ | 386,000 | $ | 86,000 | |||
Term Loan, net | 419,091 | 418,471 | |||||
Senior Unsecured Notes, net | 295,242 | 295,112 | |||||
Mortgages and notes payable, net | 2,050,302 | 2,162,403 | |||||
Convertible Notes, net | 712,510 | 702,642 | |||||
Total debt, net | 3,863,145 | 3,664,628 | |||||
Intangible lease liabilities, net | 162,619 | 182,320 | |||||
Accounts payable, accrued expenses and other liabilities | 149,858 | 148,915 | |||||
Total liabilities | 4,175,622 | 3,995,863 | |||||
Commitments and contingencies (see Note 7) | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par value, 750,000,000 shares authorized: 455,900,032 and 483,624,120 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 4,559 | 4,836 | |||||
Capital in excess of par value | 5,190,849 | 5,177,086 | |||||
Accumulated deficit | (1,936,243 | ) | (1,499,814 | ) | |||
Accumulated other comprehensive income | — | — | |||||
Total stockholders’ equity | 3,259,165 | 3,682,108 | |||||
Total liabilities and stockholders’ equity | $ | 7,434,787 | $ | 7,677,971 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Rentals | $ | 159,799 | $ | 161,765 | $ | 479,506 | $ | 484,090 | |||||||
Interest income on loans receivable | 1,003 | 1,042 | 2,769 | 4,326 | |||||||||||
Earned income from direct financing leases | 483 | 660 | 1,613 | 2,082 | |||||||||||
Tenant reimbursement income | 4,691 | 3,469 | 13,136 | 10,493 | |||||||||||
Other income | 3,574 | 5,572 | 6,583 | 11,600 | |||||||||||
Total revenues | 169,550 | 172,508 | 503,607 | 512,591 | |||||||||||
Expenses: | |||||||||||||||
General and administrative | 13,712 | 15,112 | 49,992 | 40,611 | |||||||||||
Restructuring charges | — | 3,264 | — | 5,726 | |||||||||||
Transaction costs | 2,660 | — | 3,145 | — | |||||||||||
Property costs | 8,080 | 6,916 | 26,763 | 20,854 | |||||||||||
Real estate acquisition costs | 196 | 1,056 | 773 | 2,092 | |||||||||||
Interest | 48,680 | 47,653 | 142,129 | 149,842 | |||||||||||
Depreciation and amortization | 63,673 | 65,300 | 192,887 | 194,227 | |||||||||||
Impairments | 37,737 | 15,407 | 88,109 | 41,396 | |||||||||||
Total expenses | 174,738 | 154,708 | 503,798 | 454,748 | |||||||||||
(Loss) income before other income/(expense) and income tax benefit (expense) | (5,188 | ) | 17,800 | (191 | ) | 57,843 | |||||||||
Other income (expense): | |||||||||||||||
Gain (loss) on debt extinguishment | 1,792 | (8,349 | ) | 1,770 | 326 | ||||||||||
Total other income (expense) | 1,792 | (8,349 | ) | 1,770 | 326 | ||||||||||
(Loss) income before income tax benefit (expense) | (3,396 | ) | 9,451 | 1,579 | 58,169 | ||||||||||
Income tax benefit (expense) | 11 | (12 | ) | (419 | ) | (932 | ) | ||||||||
(Loss) income before gain on disposition of assets | (3,385 | ) | 9,439 | 1,160 | 57,237 | ||||||||||
Gain on disposition of assets | 8,707 | 17,960 | 40,197 | 39,221 | |||||||||||
Net income attributable to common stockholders | $ | 5,322 | $ | 27,399 | $ | 41,357 | $ | 96,458 | |||||||
Net income per share attributable to common stockholders—basic | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | 0.21 | |||||||
Net income per share attributable to common stockholders—diluted | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | 0.21 | |||||||
Weighted average shares of common stock outstanding: | |||||||||||||||
Basic | 456,671,617 | 479,554,362 | 472,698,692 | 457,263,526 | |||||||||||
Diluted | 456,671,617 | 480,598,610 | 472,698,692 | 457,301,623 | |||||||||||
Dividends declared per common share issued | $ | 0.1800 | $ | 0.1750 | $ | 0.5400 | $ | 0.5250 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income attributable to common stockholders | $ | 5,322 | $ | 27,399 | $ | 41,357 | $ | 96,458 | |||||||
Other comprehensive income: | |||||||||||||||
Change in net unrealized losses on cash flow hedges | — | 28 | — | (1,145 | ) | ||||||||||
Net cash flow hedge losses reclassified to operations | — | — | — | 2,165 | |||||||||||
Total comprehensive income | $ | 5,322 | $ | 27,427 | $ | 41,357 | $ | 97,478 |
Common Stock | ||||||||||||||||||
Shares | Par Value | Capital in Excess of Par Value | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||
Balances, December 31, 2016 | 483,624,120 | $ | 4,836 | $ | 5,177,086 | $ | (1,499,814 | ) | $ | 3,682,108 | ||||||||
Net income | — | — | — | 41,357 | 41,357 | |||||||||||||
Dividends declared on common stock | — | — | — | (251,606 | ) | (251,606 | ) | |||||||||||
Tax withholdings related to net stock settlements | (430,429 | ) | (4 | ) | — | (3,454 | ) | (3,458 | ) | |||||||||
Repurchase of common shares | (28,819,865 | ) | (288 | ) | (222,002 | ) | (222,290 | ) | ||||||||||
Stock-based compensation, net | 1,526,206 | 15 | 13,763 | (724 | ) | 13,054 | ||||||||||||
Balances, September 30, 2017 | 455,900,032 | $ | 4,559 | $ | 5,190,849 | $ | (1,936,243 | ) | $ | 3,259,165 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Operating activities | |||||||
Net income attributable to common stockholders | $ | 41,357 | $ | 96,458 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 192,887 | 194,227 | |||||
Impairments | 88,109 | 41,396 | |||||
Amortization of deferred financing costs | 7,274 | 6,706 | |||||
Payment to terminate interest rate swaps | — | (1,724 | ) | ||||
Derivative net settlements, amortization and terminations | — | 1,809 | |||||
Amortization of debt discounts | 9,663 | 3,354 | |||||
Stock-based compensation expense | 13,778 | 7,190 | |||||
Gain on debt extinguishment | (1,770 | ) | (326 | ) | |||
Debt extinguishment costs | — | (25,344 | ) | ||||
Gains on dispositions of real estate and other assets, net | (40,197 | ) | (39,221 | ) | |||
Non-cash revenue | (20,642 | ) | (16,155 | ) | |||
Other | 4,902 | (1,514 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Deferred costs and other assets, net | (8,728 | ) | (8,911 | ) | |||
Accounts payable, accrued expenses and other liabilities | 5,726 | 1,346 | |||||
Net cash provided by operating activities | 292,359 | 259,291 | |||||
Investing activities | |||||||
Acquisitions of real estate | (278,470 | ) | (424,468 | ) | |||
Capitalized real estate expenditures | (34,939 | ) | (8,307 | ) | |||
Investments in corporate leasehold improvements | — | (2,839 | ) | ||||
Investments in loans receivable | (4,995 | ) | — | ||||
Collections of principal on loans receivable and real estate assets under direct financing leases | 7,817 | 6,331 | |||||
Proceeds from dispositions of real estate and other assets | 342,032 | 245,921 | |||||
Transfers of net sales proceeds from restricted accounts pursuant to 1031 Exchanges | — | 58,194 | |||||
Transfers of net sales proceeds to Master Trust Release | (64,941 | ) | (3,953 | ) | |||
Net cash used in investing activities | (33,496 | ) | (129,121 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Financing activities | |||||||
Borrowings under Revolving Credit Facility | 781,200 | 828,000 | |||||
Repayments under Revolving Credit Facility | (481,200 | ) | (723,000 | ) | |||
Repayments under mortgages and notes payable | (76,403 | ) | (790,224 | ) | |||
Borrowings under Term Loan | — | 746,000 | |||||
Repayments under Term Loan | — | (701,000 | ) | ||||
Borrowings under Senior Unsecured Notes | — | 298,134 | |||||
Deferred financing costs | (192 | ) | (4,017 | ) | |||
Proceeds from issuance of common stock, net of offering costs | — | 446,613 | |||||
Repurchase of shares of common stock | (225,748 | ) | (739 | ) | |||
Dividends paid | (257,112 | ) | (238,926 | ) | |||
Transfers (from) to reserve/escrow deposits with lenders | 2,480 | 383 | |||||
Net cash used in financing activities | (256,975 | ) | (138,776 | ) | |||
Net increase (decrease) in cash and cash equivalents | 1,888 | (8,606 | ) | ||||
Cash and cash equivalents, beginning of period | 10,059 | 21,790 | |||||
Cash and cash equivalents, end of period | $ | 11,947 | $ | 13,184 | |||
Cash paid for interest | $ | 121,166 | $ | 130,762 | |||
Cash paid for income taxes | $ | 872 | $ | 763 |
September 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Investments: | |||||||
Real estate investments: | |||||||
Land and improvements | $ | 2,600,873 | $ | 2,704,010 | |||
Buildings and improvements | 4,702,828 | 4,775,221 | |||||
Total real estate investments | 7,303,701 | 7,479,231 | |||||
Less: accumulated depreciation | (1,018,544 | ) | (940,005 | ) | |||
6,285,157 | 6,539,226 | ||||||
Loans receivable, net | 76,821 | 66,578 | |||||
Intangible lease assets, net | 429,857 | 470,276 | |||||
Real estate assets under direct financing leases, net | 24,883 | 36,005 | |||||
Real estate assets held for sale, net | 133,382 | 160,570 | |||||
Net investments | 6,950,100 | 7,272,655 | |||||
Cash and cash equivalents | 11,947 | 10,059 | |||||
Deferred costs and other assets, net | 218,400 | 140,917 | |||||
Goodwill | 254,340 | 254,340 | |||||
Total assets | $ | 7,434,787 | $ | 7,677,971 | |||
Liabilities and partners' capital | |||||||
Liabilities: | |||||||
Revolving Credit Facility | $ | 386,000 | $ | 86,000 | |||
Term Loan, net | 419,091 | 418,471 | |||||
Senior Unsecured Notes, net | 295,242 | 295,112 | |||||
Mortgages and notes payable, net | 2,050,302 | 2,162,403 | |||||
Notes payable to Spirit Realty Capital, Inc., net | 712,510 | 702,642 | |||||
Total debt, net | 3,863,145 | 3,664,628 | |||||
Intangible lease liabilities, net | 162,619 | 182,320 | |||||
Accounts payable, accrued expenses and other liabilities | 149,858 | 148,915 | |||||
Total liabilities | 4,175,622 | 3,995,863 | |||||
Commitments and contingencies (see Note 7) | |||||||
Partners' capital: | |||||||
Partnership units | |||||||
General partner's capital: 3,988,218 units issued and outstanding as of both September 30, 2017 and December 31, 2016 | 24,835 | 26,586 | |||||
Limited partners' capital: 451,911,814 and 479,635,902 units issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 3,234,330 | 3,655,522 | |||||
Total partners' capital | 3,259,165 | 3,682,108 | |||||
Total liabilities and partners' capital | 7,434,787 | 7,677,971 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues: | |||||||||||||||
Rentals | $ | 159,799 | $ | 161,765 | $ | 479,506 | $ | 484,090 | |||||||
Interest income on loans receivable | 1,003 | 1,042 | 2,769 | 4,326 | |||||||||||
Earned income from direct financing leases | 483 | 660 | 1,613 | 2,082 | |||||||||||
Tenant reimbursement income | 4,691 | 3,469 | 13,136 | 10,493 | |||||||||||
Other income | 3,574 | 5,572 | 6,583 | 11,600 | |||||||||||
Total revenues | 169,550 | 172,508 | 503,607 | 512,591 | |||||||||||
Expenses: | |||||||||||||||
General and administrative | 13,712 | 15,112 | 49,992 | 40,611 | |||||||||||
Restructuring charges | — | 3,264 | — | 5,726 | |||||||||||
Transaction costs | 2,660 | — | 3,145 | — | |||||||||||
Property costs | 8,080 | 6,916 | 26,763 | 20,854 | |||||||||||
Real estate acquisition costs | 196 | 1,056 | 773 | 2,092 | |||||||||||
Interest | 48,680 | 47,653 | 142,129 | 149,842 | |||||||||||
Depreciation and amortization | 63,673 | 65,300 | 192,887 | 194,227 | |||||||||||
Impairments | 37,737 | 15,407 | 88,109 | 41,396 | |||||||||||
Total expenses | 174,738 | 154,708 | 503,798 | 454,748 | |||||||||||
(Loss) income before other income/(expense) and income tax benefit (expense) | (5,188 | ) | 17,800 | (191 | ) | 57,843 | |||||||||
Other income (expense): | |||||||||||||||
Gain (loss) on debt extinguishment | 1,792 | (8,349 | ) | 1,770 | 326 | ||||||||||
Total other income (expense) | 1,792 | (8,349 | ) | 1,770 | 326 | ||||||||||
(Loss) income before income tax benefit (expense) | (3,396 | ) | 9,451 | 1,579 | 58,169 | ||||||||||
Income tax benefit (expense) | 11 | (12 | ) | (419 | ) | (932 | ) | ||||||||
(Loss) income before gain on disposition of assets | (3,385 | ) | 9,439 | 1,160 | 57,237 | ||||||||||
Gain on disposition of assets | 8,707 | 17,960 | 40,197 | 39,221 | |||||||||||
Net income | $ | 5,322 | $ | 27,399 | $ | 41,357 | $ | 96,458 | |||||||
Net income attributable to the general partner | $ | 44 | $ | 232 | 344 | 817 | |||||||||
Net income attributable to the limited partners | $ | 5,278 | $ | 27,167 | $ | 41,013 | $ | 95,641 | |||||||
Net income per partnership unit - basic | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | 0.21 | |||||||
Net income per partnership unit - diluted | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | 0.21 | |||||||
Weighted average partnership units outstanding: | |||||||||||||||
Basic | 456,671,617 | 479,554,362 | 472,698,692 | 457,263,526 | |||||||||||
Diluted | 456,671,617 | 480,598,610 | 472,698,692 | 457,301,623 | |||||||||||
Distributions declared per partnership unit issued | $ | 0.1800 | $ | 0.1750 | $ | 0.5400 | $ | 0.5250 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income | $ | 5,322 | $ | 27,399 | $ | 41,357 | $ | 96,458 | |||||||
Other comprehensive income: | |||||||||||||||
Change in net unrealized losses on cash flow hedges | — | 28 | — | (1,145 | ) | ||||||||||
Net cash flow hedge losses reclassified to operations | — | — | — | 2,165 | |||||||||||
Total comprehensive income | $ | 5,322 | $ | 27,427 | $ | 41,357 | $ | 97,478 |
General Partner's Capital (1) | Limited Partners' Capital (2) | Total Partnership Capital | ||||||||||||||||
Units | Amount | Units | Amount | |||||||||||||||
Balances, December 31, 2016 | 3,988,218 | $ | 26,586 | 479,635,902 | $ | 3,655,522 | $ | 3,682,108 | ||||||||||
Net income | — | 344 | — | 41,013 | 41,357 | |||||||||||||
Partnership distributions declared | — | (2,095 | ) | — | (249,511 | ) | (251,606 | ) | ||||||||||
Tax withholdings related to net partnership unit settlements | — | — | (430,429 | ) | (3,458 | ) | (3,458 | ) | ||||||||||
Repurchase of partnership units | — | — | (28,819,865 | ) | (222,290 | ) | (222,290 | ) | ||||||||||
Stock-based compensation | — | — | 1,526,206 | 13,054 | 13,054 | |||||||||||||
Balances, September 30, 2017 | 3,988,218 | $ | 24,835 | 451,911,814 | $ | 3,234,330 | $ | 3,259,165 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Operating activities | |||||||
Net income attributable to partners | $ | 41,357 | $ | 96,458 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 192,887 | 194,227 | |||||
Impairments | 88,109 | 41,396 | |||||
Amortization of deferred financing costs | 7,274 | 6,706 | |||||
Payment to terminate interest rate swaps | — | (1,724 | ) | ||||
Derivative net settlements, amortization and terminations | — | 1,809 | |||||
Amortization of debt discounts | 9,663 | 3,354 | |||||
Stock-based compensation expense | 13,778 | 7,190 | |||||
Gain on debt extinguishment | (1,770 | ) | (326 | ) | |||
Debt extinguishment costs | — | (25,344 | ) | ||||
Gains on dispositions of real estate and other assets, net | (40,197 | ) | (39,221 | ) | |||
Non-cash revenue | (20,642 | ) | (16,155 | ) | |||
Other | 4,902 | (1,514 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Deferred costs and other assets, net | (8,728 | ) | (8,911 | ) | |||
Accounts payable, accrued expenses and other liabilities | 5,726 | 1,346 | |||||
Net cash provided by operating activities | 292,359 | 259,291 | |||||
Investing activities | |||||||
Acquisitions of real estate | (278,470 | ) | (424,468 | ) | |||
Capitalized real estate expenditures | (34,939 | ) | (8,307 | ) | |||
Investments in corporate leasehold improvements | — | (2,839 | ) | ||||
Investments in loans receivable | (4,995 | ) | — | ||||
Collections of principal on loans receivable and real estate assets under direct financing leases | 7,817 | 6,331 | |||||
Proceeds from dispositions of real estate and other assets | 342,032 | 245,921 | |||||
Transfers of net sales proceeds from restricted accounts pursuant to 1031 Exchanges | — | 58,194 | |||||
Transfers of net sales proceeds to Master Trust Release | (64,941 | ) | (3,953 | ) | |||
Net cash used in investing activities | (33,496 | ) | (129,121 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Financing activities | |||||||
Borrowings under Revolving Credit Facility | 781,200 | 828,000 | |||||
Repayments under Revolving Credit Facility | (481,200 | ) | (723,000 | ) | |||
Repayments under mortgages and notes payable | (76,403 | ) | (790,224 | ) | |||
Borrowings under Term Loan | — | 746,000 | |||||
Repayments under Term Loan | — | (701,000 | ) | ||||
Borrowings under Senior Unsecured Notes | — | 298,134 | |||||
Deferred financing costs | (192 | ) | (4,017 | ) | |||
Proceeds from issuance of partnership units, net of offering costs | — | 446,613 | |||||
Repurchase of partnership units | (225,748 | ) | (739 | ) | |||
Dividends paid | (257,112 | ) | (238,926 | ) | |||
Transfers (from) to reserve/escrow deposits with lenders | 2,480 | 383 | |||||
Net cash used in financing activities | (256,975 | ) | (138,776 | ) | |||
Net increase (decrease) in cash and cash equivalents | 1,888 | (8,606 | ) | ||||
Cash and cash equivalents, beginning of period | 10,059 | 21,790 | |||||
Cash and cash equivalents, end of period | $ | 11,947 | $ | 13,184 | |||
Cash paid for interest | $ | 121,166 | $ | 130,762 | |||
Cash paid for income taxes | $ | 872 | $ | 763 |
September 30, 2017 | December 31, 2016 | ||||||
Collateral deposits (1) | $ | 1,229 | $ | 1,374 | |||
Tenant improvements, repairs, and leasing commissions (2) | 7,988 | 9,739 | |||||
Master Trust Release (3) | 79,353 | 14,412 | |||||
Loan impounds (4) | 330 | 670 | |||||
Other (5) | 7,444 | 644 | |||||
$ | 96,344 | $ | 26,839 |
Number of Properties | Dollar Amount of Investments | |||||||||||||||||||
Owned | Financed | Total | Owned | Financed | Total | |||||||||||||||
(In Thousands) | ||||||||||||||||||||
Gross balance, December 31, 2016 | 2,541 | 74 | 2,615 | $ | 8,181,076 | $ | 66,578 | $ | 8,247,654 | |||||||||||
Acquisitions/improvements (1) | 43 | 15 | 58 | 314,141 | 19,190 | 333,331 | ||||||||||||||
Dispositions of real estate (2) | (161 | ) | — | (161 | ) | (392,504 | ) | — | (392,504 | ) | ||||||||||
Principal payments and payoffs | — | (1 | ) | (1 | ) | — | (7,817 | ) | (7,817 | ) | ||||||||||
Impairments | — | — | — | (88,109 | ) | — | (88,109 | ) | ||||||||||||
Write-off of gross lease intangibles | — | — | — | (64,766 | ) | — | (64,766 | ) | ||||||||||||
Loan premium amortization and other | — | — | — | (4,847 | ) | (1,130 | ) | (5,977 | ) | |||||||||||
Gross balance, September 30, 2017 | 2,423 | 88 | 2,511 | 7,944,991 | 76,821 | 8,021,812 | ||||||||||||||
Accumulated depreciation and amortization | (1,234,978 | ) | — | (1,234,978 | ) | |||||||||||||||
Other | 647 | — | 647 | |||||||||||||||||
Net balance, September 30, 2017 | $ | 6,710,660 | $ | 76,821 | $ | 6,787,481 |
September 30, 2017 | |||
Remainder of 2017 | $ | 151,042 | |
2018 | 597,808 | ||
2019 | 583,233 | ||
2020 | 566,864 | ||
2021 | 538,273 | ||
Thereafter | 4,084,670 | ||
Total future minimum rentals | $ | 6,521,890 |
September 30, 2017 | December 31, 2016 | ||||||
Mortgage loans - principal | $ | 62,833 | $ | 55,410 | |||
Mortgage loans - premium, net of amortization | 5,568 | 7,194 | |||||
Mortgages loans, net | 68,401 | 62,604 | |||||
Other note receivables - principal | 8,420 | 4,474 | |||||
Allowance for loan losses | — | (500 | ) | ||||
Other note receivables, net | 8,420 | 3,974 | |||||
Total loans receivable, net | $ | 76,821 | $ | 66,578 |
September 30, 2017 | December 31, 2016 | ||||||
In-place leases | $ | 599,905 | $ | 624,723 | |||
Above-market leases | 91,274 | 88,873 | |||||
Less: accumulated amortization | (261,322 | ) | (243,320 | ) | |||
Intangible lease assets, net | $ | 429,857 | $ | 470,276 | |||
Below-market leases | $ | 222,078 | $ | 236,008 | |||
Less: accumulated amortization | (59,459 | ) | (53,688 | ) | |||
Intangible lease liabilities, net | $ | 162,619 | $ | 182,320 |
September 30, 2017 | December 31, 2016 | ||||||
Minimum lease payments receivable | $ | 7,809 | $ | 9,456 | |||
Estimated residual value of leased assets | 24,552 | 35,640 | |||||
Unearned income | (7,478 | ) | (9,091 | ) | |||
Real estate assets under direct financing leases, net | $ | 24,883 | $ | 36,005 |
Number of Properties | Carrying Value | |||||
Balance, December 31, 2016 | 44 | $ | 160,570 | |||
Transfers from real estate investments held and used | 80 | 212,726 | ||||
Sales | (78 | ) | (157,156 | ) | ||
Transfers to real estate investments held and used | (8 | ) | (63,597 | ) | ||
Impairments | (19,161 | ) | ||||
Balance, September 30, 2017 | 38 | $ | 133,382 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Real estate and intangible asset impairment | $ | 32,676 | $ | 13,894 | $ | 82,553 | $ | 35,236 | |||||||
Write-off of lease intangibles, net | 5,061 | 1,491 | 5,556 | 6,463 | |||||||||||
Loans receivable recovery | — | — | — | (324 | ) | ||||||||||
Total impairments from real estate investment net assets | 37,737 | 15,385 | 88,109 | 41,375 | |||||||||||
Other impairment | — | 22 | — | 21 | |||||||||||
Total impairment loss | $ | 37,737 | $ | 15,407 | $ | 88,109 | $ | 41,396 |
Weighted Average Effective Interest Rates (1) | Weighted Average Stated Rates (2) | Weighted Average Maturity (3) | September 30, 2017 | December 31, 2016 | |||||||||||
(in Years) | (In Thousands) | ||||||||||||||
Revolving Credit Facility | 3.43 | % | 2.49 | % | 1.5 | $ | 386,000 | $ | 86,000 | ||||||
Term Loan | 2.83 | % | 2.59 | % | 1.1 | 420,000 | 420,000 | ||||||||
Senior Unsecured Notes | 4.59 | % | 4.45 | % | 9.0 | 300,000 | 300,000 | ||||||||
Master Trust Notes | 5.58 | % | 5.03 | % | 5.5 | 1,657,402 | 1,672,706 | ||||||||
CMBS fixed-rate | 5.85 | % | 5.89 | % | 3.9 | 426,583 | 528,427 | ||||||||
Convertible Notes | 5.32 | % | 3.28 | % | 2.5 | 747,500 | 747,500 | ||||||||
Total debt | 4.97 | % | 4.24 | % | 4.2 | 3,937,485 | 3,754,633 | ||||||||
Debt discount, net | (43,327 | ) | (52,894 | ) | |||||||||||
Deferred financing costs, net (4) | (31,013 | ) | (37,111 | ) | |||||||||||
Total debt, net | $ | 3,863,145 | $ | 3,664,628 |
Stated Rates (1) | Maturity | September 30, 2017 | December 31, 2016 | ||||||||||
(in Years) | (in Thousands) | ||||||||||||
Series 2014-1 Class A1 | 5.1 | % | 2.7 | $ | 45,141 | $ | 53,919 | ||||||
Series 2014-1 Class A2 | 5.4 | % | 2.8 | 253,300 | 253,300 | ||||||||
Series 2014-2 | 5.8 | % | 3.5 | 223,604 | 226,283 | ||||||||
Series 2014-3 | 5.7 | % | 4.5 | 311,459 | 311,820 | ||||||||
Series 2014-4 Class A1 | 3.5 | % | 2.3 | 150,000 | 150,000 | ||||||||
Series 2014-4 Class A2 | 4.6 | % | 12.3 | 360,000 | 360,000 | ||||||||
Total Master Trust 2014 notes | 5.1 | % | 5.8 | 1,343,504 | 1,355,322 | ||||||||
Series 2013-1 Class A | 3.9 | % | 1.2 | 125,000 | 125,000 | ||||||||
Series 2013-2 Class A | 5.3 | % | 6.2 | 188,898 | 192,384 | ||||||||
Total Master Trust 2013 notes | 4.7 | % | 4.2 | 313,898 | 317,384 | ||||||||
Total Master Trust notes | 1,657,402 | 1,672,706 | |||||||||||
Debt discount, net | (15,613 | ) | (18,787 | ) | |||||||||
Deferred financing costs, net | (14,050 | ) | (16,376 | ) | |||||||||
Total Master Trust Notes, net | $ | 1,627,739 | $ | 1,637,543 |
Scheduled Principal | Balloon Payment | Total | |||||||||
Remainder of 2017 (1) | $ | 7,538 | $ | 122,634 | $ | 130,172 | |||||
2018 (2) | 41,954 | 569,800 | 611,754 | ||||||||
2019 (3) | 44,325 | 798,500 | 842,825 | ||||||||
2020 | 39,096 | 413,206 | 452,302 | ||||||||
2021 | 30,658 | 554,753 | 585,411 | ||||||||
Thereafter | 219,000 | 1,096,021 | 1,315,021 | ||||||||
Total | $ | 382,571 | $ | 3,554,914 | $ | 3,937,485 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Interest expense – Revolving Credit Facility (1) | $ | 3,075 | $ | 1,155 | $ | 5,632 | $ | 2,507 | |||||||
Interest expense – Term Loan | 2,768 | 1,307 | 7,525 | 3,376 | |||||||||||
Interest expense – Senior Unsecured Notes | 3,337 | 1,595 | 10,013 | 1,595 | |||||||||||
Interest expense – mortgages and notes payable | 27,563 | 33,291 | 83,640 | 113,837 | |||||||||||
Interest expense – Convertible Notes (2) | 6,127 | 6,127 | 18,382 | 18,382 | |||||||||||
Non-cash interest expense: | |||||||||||||||
Amortization of deferred financing costs | 2,451 | 2,303 | 7,274 | 6,706 | |||||||||||
Amortization of net losses related to interest rate swaps | — | 28 | — | 85 | |||||||||||
Amortization of debt discount, net | 3,359 | 1,847 | 9,663 | 3,354 | |||||||||||
Total interest expense | $ | 48,680 | $ | 47,653 | $ | 142,129 | $ | 149,842 |
Amount of Loss Recognized in AOCL on Derivative (Effective Portion) | ||||||||
Derivatives in Cash Flow Hedging Relationships | Three Months Ended | Nine Months Ended | ||||||
September 30, 2016 | ||||||||
Interest rate swaps | $ | 28 | $ | (1,145 | ) | |||
Amount of Loss Reclassified from AOCL into Operations (Effective Portion) | ||||||||
Location of Loss Reclassified from AOCL into Operations | Three Months Ended | Nine Months Ended | ||||||
September 30, 2016 | ||||||||
Interest expense | $ | — | $ | (459 | ) | |||
Amount of Loss Recognized in Operations on Derivative (Ineffective Portion) | ||||||||
Location of Loss Recognized in Operations on Derivatives | Three Months Ended | Nine Months Ended | ||||||
September 30, 2016 | ||||||||
General and administrative expense | $ | — | $ | (1,706 | ) | |||
Derivatives Not Designated as Hedging Instruments | ||||||||
Location of Loss Recognized in Operations on Derivatives | Three Months Ended | Nine Months Ended | ||||||
September 30, 2016 | ||||||||
General and administrative expense | $ | — | $ | (18 | ) |
Declaration Date | Dividend Per Share | Record Date | Total Amount | Payment Date | ||||||||
(in thousands) | ||||||||||||
March 15, 2017 | $ | 0.1800 | March 31, 2017 | $ | 87,122 | April 14, 2017 | ||||||
June 15, 2017 | $ | 0.1800 | June 30, 2017 | $ | 82,422 | July 14, 2017 | ||||||
September 15, 2017 | $ | 0.1800 | September 29, 2017 | $ | 82,062 | October 13, 2017 |
• | On November 25, 2015, Haggen and Spirit restructured the master lease in an initial settlement agreement with approved claims of $21.0 million. |
• | On April 1, 2016, Spirit entered into a second settlement agreement with both Haggen and Albertsons, LLC for $3.4 million and $3.0 million, respectively. |
• | As a result of the settlements, the leases for seven locations were rejected and the leases for thirteen locations were assumed by the Debtors and assigned to the following tenants: five locations to Albertsons, LLC, five locations to Smart & Final, LLC, two locations to Gelson’s Markets and one location to Safeway, Inc. |
• | As of September 30, 2017, the Company had sold seven of the properties for total proceeds of $58.3 million, including five of the original seven rejected locations, resulting in 11 locations with leases in-place under substantially the same terms and rent (inclusive of the $3.0 million settlement related to rent reduction for an amended lease with Albertsons, LLC) and two locations that remain vacant. |
• | To date, the Company has collected $5.5 million of the total claims and there is no guaranty that the remaining claims will be paid or otherwise satisfied in full. |
Fair Value Hierarchy Level | ||||||||||||
Description | Level 1 | Level 2 | Level 3 | |||||||||
September 30, 2017 | ||||||||||||
Retail | $ | — | $ | — | $ | 17,000 | ||||||
Industrial | — | — | 6,954 | |||||||||
Office | — | — | 6,020 | |||||||||
Long-lived assets held and used | — | — | 29,974 | |||||||||
Long-lived assets held for sale | — | — | 47,748 | |||||||||
December 31, 2016 | ||||||||||||
Retail | $ | — | $ | — | $ | 37,934 | ||||||
Industrial | — | — | 3,741 | |||||||||
Office | — | — | 8,538 | |||||||||
Long-lived assets held and used | — | — | 50,213 | |||||||||
Lease intangible assets | — | — | 6,384 | |||||||||
Other assets | — | — | 27 | |||||||||
Long-lived assets held for sale | — | — | 61,400 | |||||||||
September 30, 2017 | December 31, 2016 | |||||||||||||||||
Description | Range | Weighted Average | Square Footage | Range | Weighted Average | Square Footage | ||||||||||||
Long-lived assets held and used by asset type | ||||||||||||||||||
Retail | $13.66 - 285.98 | $ | 53.99 | 355,428 | $17.17 - $502.23 | $ | 58.78 | 290,770 | ||||||||||
Industrial | — | — | — | $26.43 | $ | 26.43 | 104,864 | |||||||||||
Office | $24.82 - 244.86 | $ | 40.14 | 161,346 | $35.00 | $ | 35.00 | 135,675 |
September 30, 2017 | December 31, 2016 | |||||||||||||||||
Description | Range | Weighted Average | Square Footage | Range | Weighted Average | Square Footage | ||||||||||||
Long-lived assets held and used by asset type | ||||||||||||||||||
Retail | — | $ | — | — | $15.40 - $170.02 | $ | 40.80 | 516,916 | ||||||||||
Industrial | $5.73 | $ | 5.73 | 370,824 | $9.09 | $ | 9.09 | 149,627 | ||||||||||
Office | — | $ | — | — | $56.81 | $ | 56.81 | 34,992 |
September 30, 2017 | December 31, 2016 | ||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||
Loans receivable, net | $ | 76,821 | $ | 80,396 | $ | 66,578 | $ | 71,895 | |||||||
Revolving Credit Facility | 386,000 | 385,993 | 86,000 | 87,718 | |||||||||||
Term Loan, net (1) | 419,091 | 420,024 | 418,471 | 428,441 | |||||||||||
Senior Unsecured Notes, net (1) | 295,242 | 300,039 | 295,112 | 283,473 | |||||||||||
Mortgages and notes payable, net (1) | 2,050,302 | 2,068,788 | 2,162,403 | 2,282,142 | |||||||||||
Convertible Notes, net (1) | 712,510 | 758,085 | 702,642 | 784,175 |
Nine Months Ended September 30, | |||||
2017 | 2016 | ||||
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | |||||
Reduction of debt in exchange for collateral assets | — | 47,780 | |||
Reduction and assumption of debt through sale of certain real estate properties | 39,141 | — | |||
Reclass of residual value on expired deferred financing lease to operating asset | 11,088 | — | |||
Net real estate and other collateral assets sold or surrendered to lender | 35,008 | 22,728 | |||
Mortgage notes receivable transferred for real estate properties acquired | — | 26,609 | |||
Accrued interest capitalized to principal (1) | 2,430 | 3,584 | |||
Accrued performance share dividend rights | 699 | 340 | |||
Distributions declared and unpaid | 82,062 | 84,730 | |||
Accrued deferred financing costs | 1,373 | 4,043 | |||
Real estate properties acquired under 1031 exchange | — | 83,560 | |||
Real estate properties sold under 1031 exchange | — | 43,828 | |||
Financing provided in connection with disposition of assets | 15,015 | — |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Basic and diluted income: | |||||||||||||||
Net income | 5,322 | 27,399 | 41,357 | 96,458 | |||||||||||
Less: income attributable to unvested restricted stock | (265 | ) | (192 | ) | (682 | ) | (430 | ) | |||||||
Net income attributable to common stockholders used in basic and diluted income per share | $ | 5,057 | $ | 27,207 | $ | 40,675 | $ | 96,028 | |||||||
Basic weighted average shares of common stock outstanding: | |||||||||||||||
Weighted average shares of common stock outstanding | 458,035,972 | 480,326,857 | 473,919,177 | 457,992,378 | |||||||||||
Less: unvested weighted average shares of restricted stock | (1,364,355 | ) | (772,495 | ) | (1,220,485 | ) | (728,852 | ) | |||||||
Weighted average shares of common stock outstanding used in basic income per share | 456,671,617 | 479,554,362 | 472,698,692 | 457,263,526 | |||||||||||
Net income per share attributable to common stockholders—basic | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | 0.21 | |||||||
Diluted weighted average shares of common stock outstanding: (1) | |||||||||||||||
Unvested performance shares | — | 67,506 | — | 33,938 | |||||||||||
Stock options | — | 4,688 | — | 4,159 | |||||||||||
Convertible debt | — | 972,054 | — | — | |||||||||||
Weighted average shares of common stock outstanding used in diluted income per share | 456,671,617 | 480,598,610 | 472,698,692 | 457,301,623 | |||||||||||
Net income per share attributable to common stockholders—diluted | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | 0.21 | |||||||
Potentially dilutive shares of common stock | |||||||||||||||
Unvested shares of restricted stock | — | 181,667 | 32,150 | 121,230 | |||||||||||
Total | — | 181,667 | 32,150 | 121,230 |
• | industry and economic conditions; |
• | volatility and uncertainty in the financial markets, including potential fluctuations in the CPI; |
• | our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate, integrate and manage diversifying acquisitions or investments; |
• | the financial performance of our traditional retail tenants and the demand for traditional retail space, particularly with respect to challenges being experienced by general merchandise retailers; |
• | our ability to diversify our tenant base and reduce the concentration of our significant tenant; |
• | the nature and extent of future competition; |
• | increases in our costs of borrowing as a result of changes in interest rates and other factors; |
• | our ability to access debt and equity capital markets; |
• | our ability to pay down, refinance, restructure and/or extend our indebtedness as it becomes due; |
• | our ability and willingness to renew our leases upon expiration and to reposition our properties on the same or better terms upon expiration in the event such properties are not renewed by tenants or we exercise our rights to replace existing tenants upon default; |
• | the impact of any financial, accounting, legal or regulatory issues or litigation that may affect us or our major tenants; |
• | our ability to manage our expanded operations; |
• | our ability and willingness to maintain our qualification as a REIT; |
• | uncertainties as to the completion and timing of our proposed spin-off, and the impact of the spin-off on our business; and |
• | other risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments and potential damages from natural disasters. |
• | Generated net income of $0.01 per share and AFFO of $0.23 per share. |
• | Invested $73.4 million in four properties, including revenue producing capital expenditures. |
• | Disposed of 56 properties for $124.1 million, including 42 vacant properties for $46.8 million and three revenue producing Shopko properties for $18.5 million. |
• | Approved a new stock repurchase program under which we may repurchase up to $250 million of our outstanding common stock. |
• | Commenced an underwritten public offering of 6.000% Series A Cumulative Redeemable Preferred Stock, which closed on October 3, 2017, for aggregate net proceeds of $166.6 million. |
• | Generated net income of $0.09 per diluted share and AFFO of $0.64 per share, including $4.2 million in cash severance charges. |
• | Acquired 39 properties for $314.2 million and disposed of 161 properties for $406.4 million, including 96 vacant properties for $138.4 million and 11 properties leased to Shopko for $65.0 million. |
• | Extinguished $101.0 million of high coupon secured debt that had a 5.84% weighted average rate. |
• | collect rent due, |
• | renew expiring leases or re-lease space upon expiration or other termination, |
• | lease currently vacant properties and |
• | maintain or increase rental rates. |
Three Months Ended September 30, | ||||||||||||||
(In Thousands) | 2017 | 2016 | Change | % Change | ||||||||||
Revenues: | ||||||||||||||
Rentals | $ | 159,799 | $ | 161,765 | $ | (1,966 | ) | (1.2 | )% | |||||
Interest income on loans receivable | 1,003 | 1,042 | (39 | ) | (3.7 | )% | ||||||||
Earned income from direct financing leases | 483 | 660 | (177 | ) | (26.8 | )% | ||||||||
Tenant reimbursement income | 4,691 | 3,469 | 1,222 | 35.2 | % | |||||||||
Other income | 3,574 | 5,572 | (1,998 | ) | (35.9 | )% | ||||||||
Total revenues | 169,550 | 172,508 | (2,958 | ) | (1.7 | )% | ||||||||
Expenses: | ||||||||||||||
General and administrative | 13,712 | 15,112 | (1,400 | ) | (9.3 | )% | ||||||||
Restructuring charges | — | 3,264 | (3,264 | ) | (100.0 | )% | ||||||||
Transaction costs | 2,660 | — | 2,660 | 100.0 | % | |||||||||
Property costs | 8,080 | 6,916 | 1,164 | 16.8 | % | |||||||||
Real estate acquisition costs | 196 | 1,056 | (860 | ) | (81.4 | )% | ||||||||
Interest | 48,680 | 47,653 | 1,027 | 2.2 | % | |||||||||
Depreciation and amortization | 63,673 | 65,300 | (1,627 | ) | (2.5 | )% | ||||||||
Impairments | 37,737 | 15,407 | 22,330 | NM | ||||||||||
Total expenses | 174,738 | 154,708 | 20,030 | 12.9 | % | |||||||||
(Loss) income from continuing operations before other income (expense) and income tax benefit (expense) | (5,188 | ) | 17,800 | (22,988 | ) | NM | ||||||||
Other income (expense): | ||||||||||||||
Gain (loss) on debt extinguishment | 1,792 | (8,349 | ) | 10,141 | NM | |||||||||
Total other income (expense) | 1,792 | (8,349 | ) | 10,141 | NM | |||||||||
(Loss) income from continuing operations before income tax benefit (expense) | (3,396 | ) | 9,451 | (12,847 | ) | NM | ||||||||
Income tax benefit (expense) | 11 | (12 | ) | 23 | NM | |||||||||
(Loss) Income from continuing operations | $ | (3,385 | ) | $ | 9,439 | $ | (12,824 | ) | NM | |||||
Gain on disposition of assets | $ | 8,707 | $ | 17,960 | $ | (9,253 | ) | (51.5 | )% |
Three Months Ended September 30, | |||||||
(In Thousands) | 2017 | 2016 | |||||
Interest expense – Revolving Credit Facility (1) | $ | 3,075 | $ | 1,155 | |||
Interest expense – Term Loan | 2,768 | 1,307 | |||||
Interest expense – Senior Unsecured Notes | 3,337 | 1,595 | |||||
Interest expense – mortgages and notes payable | 27,563 | 33,291 | |||||
Interest expense – Convertible Notes | 6,127 | 6,127 | |||||
Non-cash interest expense: | |||||||
Amortization of deferred financing costs | 2,451 | 2,303 | |||||
Amortization of net losses related to interest rate swaps | — | 28 | |||||
Amortization of debt discount, net | 3,359 | 1,847 | |||||
Total interest expense | $ | 48,680 | $ | 47,653 |
Three Months Ended September 30, | |||||||
(In Thousands) | 2017 | 2016 | |||||
Depreciation of real estate assets | $ | 52,698 | $ | 53,592 | |||
Other depreciation | 143 | 145 | |||||
Amortization of lease intangibles | 10,832 | 11,563 | |||||
Total depreciation and amortization | $ | 63,673 | $ | 65,300 |
Nine Months Ended September 30, | ||||||||||||||
(In Thousands) | 2017 | 2016 | Change | % Change | ||||||||||
Revenues: | ||||||||||||||
Rentals | $ | 479,506 | $ | 484,090 | $ | (4,584 | ) | (0.9 | )% | |||||
Interest income on loans receivable | 2,769 | 4,326 | (1,557 | ) | (36.0 | )% | ||||||||
Earned income from direct financing leases | 1,613 | 2,082 | (469 | ) | (22.5 | )% | ||||||||
Tenant reimbursement income | 13,136 | 10,493 | 2,643 | 25.2 | % | |||||||||
Other income | 6,583 | 11,600 | (5,017 | ) | (43.3 | )% | ||||||||
Total revenues | 503,607 | 512,591 | (8,984 | ) | (1.8 | )% | ||||||||
Expenses: | ||||||||||||||
General and administrative | 49,992 | 40,611 | 9,381 | 23.1 | % | |||||||||
Restructuring charges | — | 5,726 | (5,726 | ) | (100.0 | )% | ||||||||
Transaction costs | 3,145 | — | 3,145 | 100.0 | % | |||||||||
Property costs | 26,763 | 20,854 | 5,909 | 28.3 | % | |||||||||
Real estate acquisition costs | 773 | 2,092 | (1,319 | ) | (63.0 | )% | ||||||||
Interest | 142,129 | 149,842 | (7,713 | ) | (5.1 | )% | ||||||||
Depreciation and amortization | 192,887 | 194,227 | (1,340 | ) | (0.7 | )% | ||||||||
Impairments | 88,109 | 41,396 | 46,713 | NM | ||||||||||
Total expenses | 503,798 | 454,748 | 49,050 | 10.8 | % | |||||||||
(Loss) income from continuing operations before other income and income tax expense | (191 | ) | 57,843 | (58,034 | ) | NM | ||||||||
Other income: | ||||||||||||||
Gain on debt extinguishment | 1,770 | 326 | 1,444 | NM | ||||||||||
Total other income | 1,770 | 326 | 1,444 | NM | ||||||||||
Income from continuing operations before income tax expense | 1,579 | 58,169 | (56,590 | ) | (97.3 | )% | ||||||||
Income tax expense | (419 | ) | (932 | ) | 513 | (55.0 | )% | |||||||
Income from continuing operations | $ | 1,160 | $ | 57,237 | $ | (56,077 | ) | (98.0 | )% | |||||
Gain on disposition of assets | $ | 40,197 | $ | 39,221 | $ | 976 | 2.5 | % |
Nine Months Ended September 30, | |||||||
(In Thousands) | 2017 | 2016 | |||||
Interest expense – Revolving Credit Facility (1) | $ | 5,632 | $ | 2,507 | |||
Interest expense – Term Loan | 7,525 | 3,376 | |||||
Interest expense – Senior Unsecured Notes | 10,013 | 1,595 | |||||
Interest expense – mortgages and notes payable | 83,640 | 113,837 | |||||
Interest expense – Convertible Notes | 18,382 | 18,382 | |||||
Non-cash interest expense: | |||||||
Amortization of deferred financing costs | 7,274 | 6,706 | |||||
Amortization of net losses related to interest rate swaps | — | 85 | |||||
Amortization of debt discount, net | 9,663 | 3,354 | |||||
Total interest expense | $ | 142,129 | $ | 149,842 |
Nine Months Ended September 30, | |||||||
(In Thousands) | 2017 | 2016 | |||||
Depreciation of real estate assets | $ | 159,510 | $ | 158,804 | |||
Other depreciation | 420 | 335 | |||||
Amortization of lease intangibles | 32,957 | 35,088 | |||||
Total depreciation and amortization | $ | 192,887 | $ | 194,227 |
2,423 | 99.1% | 49 | 421 | 30 |
Properties | Occupancy | States | Tenants | Industries |
Tenant | Number of Properties | Total Square Feet (in thousands) | Percent of Contractual Rent | ||||||
Shopko (Specialty Retail Shops Holding Corp.) | 101 | 6,812 | 7.8 | % | |||||
AMC Entertainment, Inc. / Carmike Cinemas | 18 | 917 | 2.6 | ||||||
Walgreen Company | 42 | 622 | 2.4 | ||||||
Church's Chicken (Cajun Global, LLC) | 186 | 264 | 2.2 | ||||||
Academy Sports + Outdoors (Academy, LTD ) | 6 | 1,805 | 1.9 | ||||||
Circle K (Alimentation Couche-Tard, Inc.) | 82 | 248 | 1.9 | ||||||
Albertsons (AB Acquisition, LLC) | 23 | 1,030 | 1.7 | ||||||
The Home Depot, Inc. | 7 | 821 | 1.7 | ||||||
CVS Caremark Corporation | 36 | 405 | 1.5 | ||||||
Carmax, Inc. | 8 | 356 | 1.5 | ||||||
Other | 1,893 | 34,119 | 74.8 | ||||||
Vacant | 21 | 1,763 | — | ||||||
Total | 2,423 | 49,162 | 100.0 | % |
Asset Type | Number of Properties | Total Square Feet (in thousands) | ||||
Retail | 2,235 | 36,913 | ||||
Industrial | 70 | 9,730 | ||||
Office | 118 | 2,519 | ||||
Total | 2,423 | 49,162 |
Industry | Number of Owned Properties | Total Square Feet (in thousands) | Percent of Contractual Rent | ||||||
General Merchandise | 139 | 8,191 | 9.4 | % | |||||
Restaurants - Casual Dining | 306 | 1,830 | 8.6 | ||||||
Restaurants - Quick Service | 586 | 1,364 | 8.1 | ||||||
Movie Theaters | 62 | 3,115 | 7.4 | ||||||
Convenience Stores | 318 | 1,026 | 7.0 | ||||||
Grocery | 64 | 3,094 | 5.2 | ||||||
Drug Stores / Pharmacies | 102 | 1,437 | 4.9 | ||||||
Medical / Other Office | 120 | 1,268 | 4.8 | ||||||
Health and Fitness | 44 | 1,775 | 4.1 | ||||||
Sporting Goods | 18 | 2,547 | 3.4 | ||||||
Specialty Retail | 42 | 2,175 | 3.3 | ||||||
Entertainment | 26 | 1,199 | 3.1 | ||||||
Home Improvement | 15 | 1,681 | 2.7 | ||||||
Education | 55 | 821 | 2.7 | ||||||
Automotive Services | 128 | 748 | 2.5 | ||||||
Home Furnishings | 26 | 1,638 | 2.4 | ||||||
Building Materials | 61 | 2,169 | 2.3 | ||||||
Automotive Dealers | 23 | 665 | 2.3 | ||||||
Apparel | 13 | 1,996 | 2.2 | ||||||
Distribution | 12 | 1,239 | 2.1 | ||||||
Car Washes | 41 | 231 | 1.9 | ||||||
Other | 6 | 978 | 1.6 | ||||||
Manufacturing | 17 | 2,289 | 1.4 | ||||||
Automotive Parts | 61 | 523 | 1.2 | ||||||
Dollar Stores | 77 | 788 | 1.2 | ||||||
Wholesale Clubs | 5 | 512 | 1.1 | ||||||
Pet Supplies & Service | 6 | 1,016 | 1.0 | ||||||
Financial Services | 4 | 342 | 0.8 | ||||||
Office Supplies | 18 | 488 | 0.8 | ||||||
Consumer Electronics | 7 | 254 | 0.5 | ||||||
Vacant | 21 | 1,763 | — | ||||||
Total | 2,423 | 49,162 | 100.0 | % |
Location | Number of Properties | Total Square Feet (in thousands) | Percent of Contractual Rent | Location (continued) | Number of Properties | Total Square Feet (in thousands) | Percent of Contractual Rent | ||||||||||||
Texas | 305 | 5,933 | 11.9 | % | Arkansas | 53 | 608 | 1.3 | |||||||||||
Georgia | 182 | 2,080 | 6.0 | Washington | 14 | 578 | 1.2 | ||||||||||||
Florida | 155 | 1,579 | 5.7 | Massachusetts | 3 | 887 | 1.2 | ||||||||||||
Illinois | 112 | 2,890 | 5.7 | Iowa | 32 | 565 | 1.1 | ||||||||||||
Ohio | 124 | 2,448 | 5.2 | New Jersey | 14 | 883 | 1.1 | ||||||||||||
California | 37 | 1,421 | 4.3 | Oregon | 10 | 444 | 1.0 | ||||||||||||
Michigan | 137 | 2,105 | 3.9 | Idaho | 16 | 679 | 1.0 | ||||||||||||
Wisconsin | 45 | 3,054 | 3.9 | Mississippi | 41 | 360 | 0.9 | ||||||||||||
Minnesota | 50 | 2,169 | 3.5 | New Hampshire | 16 | 640 | 0.8 | ||||||||||||
Arizona | 60 | 940 | 3.0 | Maryland | 19 | 242 | 0.7 | ||||||||||||
Tennessee | 104 | 1,428 | 3.0 | Louisiana | 24 | 208 | 0.7 | ||||||||||||
Missouri | 91 | 1,369 | 2.9 | South Dakota | 8 | 390 | 0.7 | ||||||||||||
Indiana | 77 | 1,175 | 2.8 | Montana | 6 | 406 | 0.6 | ||||||||||||
South Carolina | 45 | 951 | 2.5 | Connecticut | 5 | 686 | 0.6 | ||||||||||||
North Carolina | 69 | 1,250 | 2.4 | West Virginia | 18 | 297 | 0.6 | ||||||||||||
Alabama | 106 | 726 | 2.2 | Utah | 7 | 618 | 0.5 | ||||||||||||
Pennsylvania | 55 | 1,174 | 2.0 | Nebraska | 12 | 363 | 0.4 | ||||||||||||
Virginia | 60 | 1,358 | 2.0 | North Dakota | 5 | 236 | 0.4 | ||||||||||||
Colorado | 29 | 993 | 1.9 | Maine | 25 | 68 | 0.4 | ||||||||||||
New York | 39 | 923 | 1.7 | Rhode Island | 4 | 117 | 0.3 | ||||||||||||
New Mexico | 38 | 548 | 1.7 | Wyoming | 8 | 180 | 0.2 | ||||||||||||
Kansas | 37 | 810 | 1.6 | Alaska | 5 | 63 | 0.1 | ||||||||||||
Oklahoma | 66 | 613 | 1.5 | U.S. V.I. | 1 | 38 | 0.1 | ||||||||||||
Kentucky | 47 | 564 | 1.5 | Delaware | 1 | 5 | — | ||||||||||||
Nevada | 5 | 1,099 | 1.3 | Vermont | 1 | 1 | — |
Leases Expiring In: | Number of Properties | Contractual Rent Annualized (in thousands) (1) | Total Square Feet (in thousands) | Percent of Contractual Rent | |||||||||
Remainder of 2017 | 29 | $ | 8,230 | 1,013 | 1.4 | % | |||||||
2018 | 72 | 22,295 | 1,824 | 3.7 | |||||||||
2019 | 103 | 19,193 | 1,758 | 3.2 | |||||||||
2020 | 73 | 18,966 | 1,508 | 3.1 | |||||||||
2021 | 186 | 44,525 | 3,861 | 7.3 | |||||||||
2022 | 116 | 32,015 | 2,849 | 5.3 | |||||||||
2023 | 107 | 31,318 | 3,330 | 5.1 | |||||||||
2024 | 57 | 22,306 | 1,369 | 3.7 | |||||||||
2025 | 77 | 35,704 | 2,078 | 5.9 | |||||||||
2026 | 192 | 43,940 | 3,945 | 7.2 | |||||||||
2027 and thereafter | 1,390 | 330,082 | 23,864 | 54.1 | |||||||||
Vacant | 21 | — | 1,763 | — | |||||||||
Total owned properties | 2,423 | $ | 608,574 | 49,162 | 100.0 | % |
Stated Rates (1) | Maturity | September 30, 2017 | December 31, 2016 | ||||||||||
(in Years) | (in Thousands) | ||||||||||||
Series 2014-1 Class A1 | 5.1 | % | 2.7 | $ | 45,141 | $ | 53,919 | ||||||
Series 2014-1 Class A2 | 5.4 | % | 2.8 | 253,300 | 253,300 | ||||||||
Series 2014-2 | 5.8 | % | 3.5 | 223,604 | 226,283 | ||||||||
Series 2014-3 | 5.7 | % | 4.5 | 311,459 | 311,820 | ||||||||
Series 2014-4 Class A1 | 3.5 | % | 2.3 | 150,000 | 150,000 | ||||||||
Series 2014-4 Class A2 | 4.6 | % | 12.3 | 360,000 | 360,000 | ||||||||
Total Master Trust 2014 notes | 5.1 | % | 5.8 | 1,343,504 | 1,355,322 | ||||||||
Series 2013-1 Class A | 3.9 | % | 1.2 | 125,000 | 125,000 | ||||||||
Series 2013-2 Class A | 5.3 | % | 6.2 | 188,898 | 192,384 | ||||||||
Total Master Trust 2013 notes | 4.7 | % | 4.2 | 313,898 | 317,384 | ||||||||
Total Master Trust notes | 1,657,402 | 1,672,706 | |||||||||||
Debt discount, net | (15,613 | ) | (18,787 | ) | |||||||||
Deferred financing costs, net | (14,050 | ) | (16,376 | ) | |||||||||
Total Master Trust Notes, net | $ | 1,627,739 | $ | 1,637,543 |
Year of Maturity | Number of Loans | Number of Properties | Stated Interest Rate Range | Weighted Average Stated Rate | Scheduled Principal | Balloon | Total | ||||||||||||||||
Remainder of 2017 | 1 | 1 | 6.52% | 6.50 | % | $ | 51 | $ | 39,830 | $ | 39,881 | ||||||||||||
2018 | 2 | 7 | 3.90% - 4.60% | 4.21 | % | — | 44,550 | 44,550 | |||||||||||||||
2019 | 1 | 5 | 4.61% | 4.61 | % | — | 10,000 | 10,000 | |||||||||||||||
2020 | — | — | — | — | — | — | — | ||||||||||||||||
2021 | — | — | — | — | — | — | — | ||||||||||||||||
Thereafter | 6 | 100 | 4.67% - 6.00% | 5.33 | % | 28,853 | 240,380 | 269,233 | |||||||||||||||
Total | 10 | 113 | 5.32 | % | $ | 28,904 | $ | 334,760 | $ | 363,664 |
Industry | Properties | Net Book Value | Monthly Base Rent | Pre-Default Outstanding Principal | Capitalized interest (1) | Total Debt Outstanding | Restricted Cash (2) | Stated Rate | Default Rate | Accrued Interest (1) | ||||||||||||||||||||||||||
Manufacturing | 2 | $ | 4,895 | $ | — | $ | 5,460 | $ | 10,942 | $ | 16,402 | $ | — | 5.85 | % | 9.85 | % | $ | 135 | |||||||||||||||||
Sporting Goods | 1 | 3,098 | — | 6,321 | 251 | 6,572 | 57 | 5.62 | 10.62 | 58 | ||||||||||||||||||||||||||
Consumer Electronics | 1 | 3,057 | — | 8,592 | 367 | 8,959 | 286 | 5.87 | 9.87 | 74 | ||||||||||||||||||||||||||
Multi-Tenant Retail | 1 | 12,773 | — | 17,250 | 148 | 17,398 | 265 | 5.53 | 7.53 | 73 | ||||||||||||||||||||||||||
Sporting Goods | 2 | 3,480 | — | 9,625 | 78 | 9,703 | 455 | 4.39 | 9.39 | 76 | ||||||||||||||||||||||||||
Sporting Goods | 1 | 2,019 | — | 3,853 | 32 | 3,885 | 169 | 4.65 | 9.65 | 31 | ||||||||||||||||||||||||||
Total | 8 | $ | 29,322 | $ | — | $ | 51,101 | $ | 11,818 | $ | 62,919 | $ | 1,232 | 5.44 | % | 8.3 | % | $ | 447 |
Total | Remainder of 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | ||||||||||||||||||||||
Revolving Credit Facility (1) | $ | 386,000 | $ | — | $ | — | $ | 386,000 | $ | — | $ | — | $ | — | ||||||||||||||
Term Loan (2) | 420,000 | — | 420,000 | — | — | — | — | |||||||||||||||||||||
Senior Unsecured Notes | 300,000 | — | — | — | — | — | 300,000 | |||||||||||||||||||||
Master Trust Notes | 1,657,402 | 6,589 | 163,262 | 40,420 | 448,202 | 236,046 | 762,883 | |||||||||||||||||||||
CMBS - fixed-rate (3) | 426,583 | 123,583 | 28,492 | 13,905 | 4,100 | 4,365 | 252,138 | |||||||||||||||||||||
Convertible Notes | 747,500 | — | — | 402,500 | — | 345,000 | — | |||||||||||||||||||||
$ | 3,937,485 | $ | 130,172 | $ | 611,754 | $ | 842,825 | $ | 452,302 | $ | 585,411 | $ | 1,315,021 |
Nine Months Ended September 30, | |||||||||||
2017 | 2016 | Change | |||||||||
(in Thousands) | |||||||||||
Net cash provided by operating activities | $ | 292,359 | $ | 259,291 | $ | 33,068 | |||||
Net cash used in investing activities | (33,496 | ) | (129,121 | ) | 95,625 | ||||||
Net cash used in financing activities | (256,975 | ) | (138,776 | ) | (118,199 | ) | |||||
Net increase (decrease) in cash and cash equivalents | $ | 1,888 | $ | (8,606 | ) | $ | 10,494 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income attributable to common stockholders (1) (2) | $ | 5,322 | $ | 27,399 | $ | 41,357 | $ | 96,458 | |||||||
Add/(less): | |||||||||||||||
Portfolio depreciation and amortization | 63,530 | 65,155 | 192,465 | 193,892 | |||||||||||
Portfolio impairments | 37,737 | 15,384 | 88,109 | 41,693 | |||||||||||
Realized gains on sales of real estate | (8,707 | ) | (17,960 | ) | (40,197 | ) | (39,221 | ) | |||||||
Total adjustments to net income | 92,560 | 62,579 | 240,377 | 196,364 | |||||||||||
FFO | $ | 97,882 | $ | 89,978 | $ | 281,734 | $ | 292,822 | |||||||
Add/(less): | |||||||||||||||
(Gain) loss on debt extinguishment | (1,792 | ) | 8,349 | (1,770 | ) | (326 | ) | ||||||||
Restructuring charges | — | 3,264 | — | 5,726 | |||||||||||
Other costs included in general and administrative associated with headquarters relocation | — | 1,501 | — | 3,442 | |||||||||||
Transaction costs | 2,660 | — | 3,145 | — | |||||||||||
Real estate acquisition costs | 196 | 1,056 | 773 | 2,092 | |||||||||||
Non-cash interest expense | 5,810 | 4,178 | 16,937 | 10,144 | |||||||||||
Accrued interest and fees on defaulted loans | 1,344 | 853 | 2,917 | 3,951 | |||||||||||
Swap termination costs (included in general and administrative) | — | — | — | 1,724 | |||||||||||
Straight-line rent, net of related bad debt expense (4) | (3,217 | ) | (3,246 | ) | (13,427 | ) | (14,097 | ) | |||||||
Other amortization and non-cash charges | (743 | ) | (954 | ) | (2,447 | ) | (2,058 | ) | |||||||
Non-cash compensation expense (1) | 2,339 | 3,399 | 13,778 | 7,189 | |||||||||||
Total adjustments to FFO | 6,597 | 18,400 | 19,906 | 17,787 | |||||||||||
AFFO | $ | 104,479 | $ | 108,378 | $ | 301,640 | $ | 310,609 | |||||||
Dividends declared to common stockholders | $ | 82,062 | $ | 84,606 | $ | 251,606 | $ | 246,151 | |||||||
Net income per share of common stock | |||||||||||||||
Basic (3) | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | 0.21 | |||||||
Diluted (3) | $ | 0.01 | $ | 0.06 | $ | 0.09 | $ | 0.21 | |||||||
FFO per share of common stock | |||||||||||||||
Diluted (3) | $ | 0.21 | $ | 0.19 | $ | 0.59 | $ | 0.64 | |||||||
AFFO per share of common stock | |||||||||||||||
Diluted (3) | $ | 0.23 | $ | 0.22 | $ | 0.64 | $ | 0.68 | |||||||
Weighted average shares of common stock outstanding: | |||||||||||||||
Basic | 456,671,617 | 479,554,362 | 472,698,692 | 457,263,526 | |||||||||||
Diluted | 456,671,617 | 480,598,610 | 472,698,692 | 457,301,623 |
September 30, | |||||||
2017 | 2016 | ||||||
(Unaudited) | |||||||
Revolving Credit Facility | $ | 386,000 | $ | 105,000 | |||
Term Loan, net | 419,091 | 368,400 | |||||
Unsecured Senior Notes, net | 295,242 | 295,215 | |||||
Mortgages and notes payable, net | 2,050,302 | 2,241,783 | |||||
Convertible Notes, net | 712,510 | 699,465 | |||||
3,863,145 | 3,709,863 | ||||||
Add/(less): | |||||||
Unamortized debt discount, net | 43,327 | 54,975 | |||||
Unamortized deferred financing costs | 31,013 | 38,812 | |||||
Cash and cash equivalents | (11,947 | ) | (13,184 | ) | |||
Restricted cash balances held for the benefit of lenders | (96,344 | ) | (39,038 | ) | |||
Total adjustments | (33,951 | ) | 41,565 | ||||
Adjusted Debt | $ | 3,829,194 | $ | 3,751,428 | |||
Three Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(Unaudited) | |||||||
Net income attributable to common stockholders | $ | 5,322 | $ | 27,399 | |||
Add/(less): | |||||||
Interest | 48,680 | 47,653 | |||||
Depreciation and amortization | 63,673 | 65,300 | |||||
Income tax expense | (11 | ) | 12 | ||||
Total adjustments | 112,342 | 112,965 | |||||
EBITDA | $ | 117,664 | $ | 140,364 | |||
Add/(less): | |||||||
Restructuring charges | — | 3,264 | |||||
Other costs in general and administrative associated with headquarters relocation | — | 1,501 | |||||
Transaction costs | 2,660 | — | |||||
Real estate acquisition costs | 196 | 1,056 | |||||
Impairments on real estate assets | 37,737 | 15,384 | |||||
Swap termination costs (included in general and administrative) | — | — | |||||
Realized gain on sales of real estate | (8,707 | ) | (17,960 | ) | |||
Loss on debt extinguishment | (1,792 | ) | 8,349 | ||||
Total adjustments to EBITDA | 30,094 | 11,594 | |||||
Adjusted EBITDA | $ | 147,758 | $ | 151,958 | |||
Annualized Adjusted EBITDA (1) | $ | 591,032 | $ | 607,832 | |||
Adjusted Debt / Annualized Adjusted EBITDA | 6.5 | x | 6.2 | x | |||
(1) Adjusted EBITDA of the current quarter multiplied by four. |
Carrying Value | Estimated Fair Value | ||||||
Revolving Credit Facility | $ | 386,000 | $ | 385,993 | |||
Term Loan, net (1) | 419,091 | 420,024 | |||||
Senior Unsecured Notes, net (1) | 295,242 | 300,039 | |||||
Mortgages and notes payable, net (1) | 2,050,302 | 2,068,788 | |||||
Convertible Notes, net (1) | 712,510 | 758,085 |
• | The retail industry in which Shopko operates is highly competitive, which could impair its operations and liquidity, limit its growth opportunities and reduce profitability. Shopko competes with other discount retail merchants as well as mass merchants, catalog merchants, internet retailers and other general merchandise, apparel and household merchandise retailers. It faces strong competition from large national discount retailers, such as Walmart, Kmart and Target, and mid-tier merchants such as Kohl’s and J.C. Penney. |
• | Shopko stores are geographically concentrated in the Midwest, Pacific Northwest, North Central and Western Mountain states. As a result, adverse economic conditions in these regions may materially and adversely affect its results of operations and retail sales. |
• | The seasonality in retail operations may cause fluctuations in Shopko’s quarterly performance and results of operations and could adversely affect its cash flows. |
• | Shopko stores are dependent on the efficient functioning of its distribution networks. Problems that cause delays or interruptions in the distribution networks could materially and adversely affect its results of operations. |
• | Shopko stores depend on attracting and retaining quality employees. Many employees are entry-level or part-time with historically high rates of turnover. |
Exhibit No. | Description |
2.1 | |
2.2 | |
3.1 | |
3.2 | |
3.3 | |
3.4 | |
3.5 | |
4.1 | |
4.2 | |
4.3 | |
4.4 | |
4.5 | |
4.6 | |
4.7 | |
4.8 | |
Exhibit No. | Description |
4.9 | |
4.10 | |
4.11 | |
4.12 | |
4.13 | |
4.14 | |
4.15 | |
4.16 | |
4.17 | |
10.1 | |
10.2 | |
10.3 | |
10.4 | |
10.5 | |
10.6 | |
10.7 | |
Exhibit No. | Description |
10.8 | |
10.9 | |
10.10 | |
10.11 | |
10.12 | |
10.13 | |
10.14 | |
10.15 | |
10.16 | |
10.17 | |
10.18 | |
10.19 | |
10.21 | |
10.23 | |
10.25 | |
Exhibit No. | Description |
10.26 | |
10.27 | |
10.28 | |
10.29 | |
10.30 | |
10.31 | |
10.32 | |
10.33 | |
10.34 | |
10.35 | |
10.36 | |
10.37 | |
10.38 | |
10.39 | |
31.1* | |
Exhibit No. | Description |
31.2* | |
31.3* | |
31.4* | |
32.1* | |
32.2* | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | XBRL Taxonomy Extension Label Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
* | Filed herewith. |
SPIRIT REALTY CAPITAL, INC. (Registrant) | ||
By: | /s/ Prakash J. Parag | |
Name: | Prakash J. Parag | |
Title: | Chief Accounting Officer and Senior Vice President (Principal Accounting Officer) |
SPIRIT REALTY, L.P. (Registrant) | ||
By: | Spirit General OP Holdings, LLC, as general partner of Spirit Realty, L.P. | |
/s/ Prakash J. Parag | ||
Prakash J. Parag | ||
Chief Accounting Officer and Senior Vice President (Principal Accounting Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Spirit Realty Capital, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 2, 2017 | /s/ JACKSON HSIEH | |
Jackson Hsieh | |||
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Spirit Realty Capital, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 2, 2017 | /s/ PHILLIP D. JOSEPH, JR. | |
Phillip D. Joseph, Jr. | |||
Executive Vice President, | |||
Chief Financial Officer and Treasurer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Spirit Realty, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
4. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 2, 2017 | /s/ JACKSON HSIEH | |
Name: | Jackson Hsieh | ||
Title: | Chief Executive Officer and Manager of Spirit General OP Holdings, LLC, as general partner of Spirit Realty, L.P. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Spirit Realty, L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 2, 2017 | /s/ PHILLIP D. JOSEPH, JR. | |
Phillip D. Joseph, Jr. | |||
Executive Vice President, Chief Financial Officer and Treasurer of Spirit General OP Holdings, LLC, as general partner of Spirit Realty, L.P. |
(i) | the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 2, 2017 | /s/ JACKSON HSIEH | |
Jackson Hsieh | |||
Chief Executive Officer | |||
/s/ PHILLIP D. JOSEPH, JR. | |||
Phillip D. Joseph, Jr. | |||
Executive Vice President, | |||
Chief Financial Officer and Treasurer |
(i) | the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 2, 2017 | /s/ JACKSON HSIEH | |
Jackson Hsieh | |||
Chief Executive Officer and Manager of Spirit General OP Holdings, LLC, as general partner of Spirit Realty, L.P. | |||
/s/ PHILLIP D. JOSEPH, JR. | |||
Phillip D. Joseph, Jr. | |||
Executive Vice President, Chief Financial Officer and Treasurer of Spirit General OP Holdings, LLC, as general partner of Spirit Realty, L.P. |
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Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 31, 2017 |
|
Document Information [Line Items] | ||
Entity Registrant Name | SPIRIT REALTY CAPITAL, INC. | |
Trading Symbol | SRC | |
Entity Central Index Key | 0001308606 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 455,897,075 | |
Spirit Realty, L.P. | ||
Document Information [Line Items] | ||
Entity Registrant Name | SPIRIT REALTY, L.P. | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Common stock, par value per share (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 455,900,032 | 483,624,120 |
Common stock, shares outstanding | 455,900,032 | 483,624,120 |
Spirit Realty, L.P. | ||
General partners' capital, shares issued | 3,988,218 | 3,988,218 |
General partners' capital, shares outstanding | 3,988,218 | 3,988,218 |
Limited partners' capital, shares issued | 451,911,814 | 479,635,902 |
Limited partners' capital, shares outstanding | 451,911,814 | 479,635,902 |
Consolidated Statements of Operations - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Revenues: | ||||
Rentals | $ 159,799,000 | $ 161,765,000 | $ 479,506,000 | $ 484,090,000 |
Interest income on loans receivable | 1,003,000 | 1,042,000 | 2,769,000 | 4,326,000 |
Earned income from direct financing leases | 483,000 | 660,000 | 1,613,000 | 2,082,000 |
Tenant reimbursement income | 4,691,000 | 3,469,000 | 13,136,000 | 10,493,000 |
Other income | 3,574,000 | 5,572,000 | 6,583,000 | 11,600,000 |
Total revenues | 169,550,000 | 172,508,000 | 503,607,000 | 512,591,000 |
Expenses: | ||||
General and administrative | 13,712,000 | 15,112,000 | 49,992,000 | 40,611,000 |
Restructuring charges | 0 | 3,264,000 | 0 | 5,726,000 |
Transaction costs | 2,660,000 | 0 | 3,145,000 | 0 |
Property costs | 8,080,000 | 6,916,000 | 26,763,000 | 20,854,000 |
Real estate acquisition costs | 196,000 | 1,056,000 | 773,000 | 2,092,000 |
Interest | 48,680,000 | 47,653,000 | 142,129,000 | 149,842,000 |
Depreciation and amortization | 63,673,000 | 65,300,000 | 192,887,000 | 194,227,000 |
Impairments | 37,737,000 | 15,407,000 | 88,109,000 | 41,396,000 |
Total expenses | 174,738,000 | 154,708,000 | 503,798,000 | 454,748,000 |
(Loss) income before other income/(expense) and income tax benefit (expense) | (5,188,000) | 17,800,000 | (191,000) | 57,843,000 |
Other income (expense): | ||||
Gain (loss) on debt extinguishment | 1,792,000 | (8,349,000) | 1,770,000 | 326,000 |
Total other income (expense) | 1,792,000 | (8,349,000) | 1,770,000 | 326,000 |
(Loss) income before income tax benefit (expense) | (3,396,000) | 9,451,000 | 1,579,000 | 58,169,000 |
Income tax benefit (expense) | 11,000 | (12,000) | (419,000) | (932,000) |
(Loss) income before gain on disposition of assets | (3,385,000) | 9,439,000 | 1,160,000 | 57,237,000 |
Gain on disposition of assets | 8,707,000 | 17,960,000 | 40,197,000 | 39,221,000 |
Net income attributable to common stockholders | $ 5,322,000 | $ 27,399,000 | $ 41,357,000 | $ 96,458,000 |
Net income per share attributable to common stockholders—basic (in USD per share) | $ 0.01 | $ 0.06 | $ 0.09 | $ 0.21 |
Net income per share attributable to common stockholders—diluted (in USD per share) | $ 0.01 | $ 0.06 | $ 0.09 | $ 0.21 |
Weighted average shares of common stock outstanding: | ||||
Basic (in shares) | 456,671,617 | 479,554,362 | 472,698,692 | 457,263,526 |
Diluted (in shares) | 456,671,617 | 480,598,610 | 472,698,692 | 457,301,623 |
Weighted average partnership units outstanding: | ||||
Dividends declared per common share/partnership issued (in USD per share) | $ 0.18000 | $ 0.17500 | $ 0.54000 | $ 0.52500 |
Spirit Realty, L.P. | ||||
Revenues: | ||||
Rentals | $ 159,799,000 | $ 161,765,000 | $ 479,506,000 | $ 484,090,000 |
Interest income on loans receivable | 1,003,000 | 1,042,000 | 2,769,000 | 4,326,000 |
Earned income from direct financing leases | 483,000 | 660,000 | 1,613,000 | 2,082,000 |
Tenant reimbursement income | 4,691,000 | 3,469,000 | 13,136,000 | 10,493,000 |
Other income | 3,574,000 | 5,572,000 | 6,583,000 | 11,600,000 |
Total revenues | 169,550,000 | 172,508,000 | 503,607,000 | 512,591,000 |
Expenses: | ||||
General and administrative | 13,712,000 | 15,112,000 | 49,992,000 | 40,611,000 |
Restructuring charges | 0 | 3,264,000 | 0 | 5,726,000 |
Transaction costs | 2,660,000 | 0 | 3,145,000 | 0 |
Property costs | 8,080,000 | 6,916,000 | 26,763,000 | 20,854,000 |
Real estate acquisition costs | 196,000 | 1,056,000 | 773,000 | 2,092,000 |
Interest | 48,680,000 | 47,653,000 | 142,129,000 | 149,842,000 |
Depreciation and amortization | 63,673,000 | 65,300,000 | 192,887,000 | 194,227,000 |
Impairments | 37,737,000 | 15,407,000 | 88,109,000 | 41,396,000 |
Total expenses | 174,738,000 | 154,708,000 | 503,798,000 | 454,748,000 |
(Loss) income before other income/(expense) and income tax benefit (expense) | (5,188,000) | 17,800,000 | (191,000) | 57,843,000 |
Other income (expense): | ||||
Gain (loss) on debt extinguishment | 1,792,000 | (8,349,000) | 1,770,000 | 326,000 |
Total other income (expense) | 1,792,000 | (8,349,000) | 1,770,000 | 326,000 |
(Loss) income before income tax benefit (expense) | (3,396,000) | 9,451,000 | 1,579,000 | 58,169,000 |
Income tax benefit (expense) | 11,000 | (12,000) | (419,000) | (932,000) |
(Loss) income before gain on disposition of assets | (3,385,000) | 9,439,000 | 1,160,000 | 57,237,000 |
Gain on disposition of assets | 8,707,000 | 17,960,000 | 40,197,000 | 39,221,000 |
Net income attributable to common stockholders | 5,322,000 | 27,399,000 | 41,357,000 | 96,458,000 |
Net income attributable to the general partner | 44,000 | 232,000 | 344,000 | 817,000 |
Net income attributable to the limited partners | $ 5,278,000 | $ 27,167,000 | $ 41,013,000 | $ 95,641,000 |
Net income per partnership unit - basic (in USD per share) | $ 0.01 | $ 0.06 | $ 0.09 | $ 0.21 |
Net income per partnership unit - diluted (in USD per share) | $ 0.01 | $ 0.06 | $ 0.09 | $ 0.21 |
Weighted average partnership units outstanding: | ||||
Basic (in shares) | 456,671,617 | 479,554,362 | 472,698,692 | 457,263,526 |
Diluted (in shares) | 456,671,617 | 480,598,610 | 472,698,692 | 457,301,623 |
Dividends declared per common share/partnership issued (in USD per share) | $ 0.18 | $ 0.175 | $ 0.54 | $ 0.525 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Net income | $ 5,322 | $ 27,399 | $ 41,357 | $ 96,458 |
Other comprehensive income: | ||||
Change in net unrealized losses on cash flow hedges | 0 | 28 | 0 | (1,145) |
Net cash flow hedge losses reclassified to operations | 0 | 0 | 0 | 2,165 |
Total comprehensive income | 5,322 | 27,427 | 41,357 | 97,478 |
Spirit Realty, L.P. | ||||
Net income | 5,322 | 27,399 | 41,357 | 96,458 |
Other comprehensive income: | ||||
Change in net unrealized losses on cash flow hedges | 0 | 28 | 0 | (1,145) |
Net cash flow hedge losses reclassified to operations | 0 | 0 | 0 | 2,165 |
Total comprehensive income | $ 5,322 | $ 27,427 | $ 41,357 | $ 97,478 |
Consolidated Statements of Partners' Capital Consolidated Statements of Partners' Capital - USD ($) $ in Thousands |
Total |
Spirit Realty, L.P. |
Spirit Realty, L.P.
General Partner's Capital
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[1] |
Spirit Realty, L.P.
Limited Partners' Capital
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Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Beginning balance, value | $ 3,682,108 | $ 26,586 | $ 3,655,522 | [2] | |||||||
Beginning balance (in shares) at Dec. 31, 2016 | 3,988,218 | 479,635,902 | [2] | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Beginning balance, value | 3,259,165 | $ 24,835 | $ 3,234,330 | [2] | |||||||
Net income | $ 41,357 | 41,357 | 344 | 41,013 | [2] | ||||||
Partnership distributions declared | (251,606) | $ (2,095) | $ (249,511) | [2] | |||||||
Tax withholdings related to net partnership unit settlements (in shares) | (400,000) | (430,429) | [2] | ||||||||
Tax withholdings related to net partnership unit settlements | $ (3,458) | (3,458) | $ (3,458) | [2] | |||||||
Repurchase of partnership units (in shares) | [2] | (28,819,865) | |||||||||
Repurchase of partnership units | (222,290) | $ (222,290) | [2] | ||||||||
Stock-based compensation (in shares) | [2] | 1,526,206 | |||||||||
Stock-based compensation | 13,054 | $ 13,054 | [2] | ||||||||
Ending balance (in shares) at Sep. 30, 2017 | 3,988,218 | 451,911,814 | [2] | ||||||||
Ending balance, value at Sep. 30, 2017 | 3,259,165 | $ 24,835 | $ 3,234,330 | [2] | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||
Beginning balance, value | $ 3,259,165 | $ 24,835 | $ 3,234,330 | [2] | |||||||
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Organization |
9 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization | Organization Company Organization and Operations Spirit Realty Capital, Inc. (the "Corporation" or, with its consolidated subsidiaries, the "Company") operates as a self-administered and self-managed REIT that seeks to generate and deliver sustainable and attractive returns for stockholders by investing primarily in and managing a portfolio of single-tenant, operationally essential real estate throughout the U.S. that is generally leased on a long-term, triple-net basis to tenants operating within predominantly retail, but also office and industrial property types. Single tenant, operationally essential real estate generally refers to free-standing, commercial real estate facilities where tenants conduct activities that are essential to the generation of their sales and profits.The Company began operations through a predecessor legal entity in 2003. The Company’s operations are generally carried out through Spirit Realty, L.P. (the "Operating Partnership") and its subsidiaries. Spirit General OP Holdings, LLC ("OP Holdings"), one of the Corporation's wholly-owned subsidiaries, is the sole general partner and owns approximately 1.0% of the Operating Partnership. The Corporation and a wholly-owned subsidiary ("Spirit Notes Partner, LLC") are the only limited partners and together own the remaining 99.0% of the Operating Partnership. On August 3, 2017, the Company announced a proposed spin-off of almost all of the properties leased to Shopko, the assets that collateralize Master Trust 2014 and potentially additional assets into an independent, publicly traded REIT. Transaction costs associated with the spin off for the three and nine months ended September 30, 2017 totaled $2.7 million and $3.1 million, respectively, and are included within transaction costs on the accompanying consolidated statements of operations. |
Summary of Significant Accounting Policies |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Accounting and Principles of Consolidation The accompanying consolidated financial statements of the Company and the Operating Partnership have been prepared pursuant to the rules and regulations of the SEC. In the opinion of management, the consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of the information required to be set forth therein. The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the year ended December 31, 2016. The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. The consolidated financial statements of the Operating Partnership include the accounts of the Operating Partnership and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. All expenses incurred by the Company have been allocated to the Operating Partnership in accordance with the Operating Partnership's first amended and restated agreement of limited partnership, which management determined to be a reasonable method of allocation. Therefore, expenses incurred would not be materially different if the Operating Partnership had operated as an unaffiliated entity. The Company has formed numerous special purpose entities to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted under their governing documents. At September 30, 2017 and December 31, 2016, net assets totaling $2.73 billion and $2.95 billion, respectively, were held, and net liabilities totaling $2.15 billion and $2.26 billion, respectively, were owed by these special purpose entities and are included in the accompanying consolidated balance sheets. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates. Segment Reporting The Company views its operations as one segment, which consists of net leasing operations. The Company has no other reportable segments. Allowance for Doubtful Accounts The Company reviews its rent and other tenant receivables for collectability on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area in which the tenant operates. In the event that the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made. The Company provided for reserves for uncollectible amounts totaling $8.3 million and $6.4 million at September 30, 2017 and December 31, 2016, respectively, against accounts receivable balances of $22.4 million and $25.3 million, respectively. Receivables are recorded within deferred costs and other assets, net in the accompanying consolidated balance sheets. Receivables are written off against the reserves for uncollectible amounts when all possible means of collection have been exhausted. For deferred rental revenues related to the straight-line method of reporting rental revenue, the collectability review includes management’s estimates of amounts that will not be realized and an assessment of the risks inherent in the portfolio, giving consideration to historical experience and industry default rates for long-term receivables. The Company established a reserve for losses of $2.4 million at September 30, 2017 and $7.7 million at December 31, 2016, against deferred rental revenue receivables of $77.3 million and $71.1 million, respectively. Deferred rental revenue receivables are recorded within deferred costs and other assets, net in the accompanying consolidated balance sheets. Restricted Cash and Escrow Deposits Restricted cash and deposits in escrow, classified within deferred costs and other assets, net in the accompanying consolidated balance sheets consisted of the following (in thousands):
(1) Funds held in reserve by lenders which can be applied at their discretion to the repayment of debt (any funds remaining on deposit after the debt is paid in full are released to the borrower). Balance changes are reflected in financing activities within the Statement of Cash Flows. (2) Deposits held as additional collateral support by lenders to fund tenant improvements, repairs and leasing commissions incurred to secure a new tenant. Balance changes are reflected in financing activities within the Statement of Cash Flows. (3) Proceeds from the sale of assets pledged as collateral under the Spirit Master Funding Program, which are held on deposit until a qualifying substitution is made or the funds are applied as prepayment of principal. Balance changes are reflected in investing activities within the Statement of Cash Flows. (4) Funds held in lender controlled accounts generally used to meet future debt service or certain property operating expenses. Balance changes are reflected in financing activities within the Statement of Cash Flows. (5) Primarily funds held in lender controlled accounts released after scheduled debt service requirements are met. Balance changes are reflected in operating activities within the Statement of Cash Flows. Goodwill Goodwill arises from business combinations and represents the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. Income Taxes The Company has elected to be taxed as a REIT under the Code. As a REIT, the Company generally will not be subject to federal income tax provided it continues to satisfy certain tests concerning the Company’s sources of income, the nature of its assets, the amounts distributed to its stockholders and the ownership of Company stock. Management believes the Company has qualified and will continue to qualify as a REIT and therefore, no provision has been made for federal income taxes in the accompanying consolidated financial statements. Even if the Company qualifies for taxation as a REIT, it may be subject to state and local income and franchise taxes and to federal income tax and excise tax on its undistributed income. Franchise taxes are included in general and administrative expenses on the accompanying consolidated statements of operations. Taxable income from non-REIT activities managed through the Company’s taxable REIT subsidiaries are subject to federal, state and local taxes, which are not material. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or the SEC that are adopted by the Company as of the specified effective date. These new accounting pronouncements entail technical corrections to existing guidance or affect guidance related to specialized industries or entities. There are no updates to our prior disclosures regarding adoption of pronouncements that are not yet effective. Additionally, we have evaluated new accounting pronouncements issued subsequent to our most recent Annual Report on Form 10-K and have concluded that they are either not applicable or will not have a material impact on the Company's financial position or results of operations. Changes in Accounting Principle In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies many aspects of accounting for share-based payment transactions under ASC Topic 718, Compensation - Stock Compensation, including income tax consequences, classification of awards as either equity or liability, forfeiture rate calculations and classification on the statement of cash flows. The Company adopted this new guidance effective January 1, 2017 and made an accounting policy election to recognize stock-based compensation forfeitures as they occur, whereas previously stock-based compensation forfeitures were estimated and recognized based on historical forfeiture rates. This change in accounting principle has been applied prospectively and the change in accounting principle had no material impact on the financial statements of the Company. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which narrows the definition of a business. The Company early adopted the guidance effective January 1, 2017 and application is on a prospective basis. Under the new guidance, the acquisition of a property with an in-place lease generally is no longer accounted for as an acquisition of a business, but instead as an asset acquisition, meaning the transaction costs of such an acquisition are now capitalized instead of expensed. Further, dispositions of properties generally no longer qualify as a disposition of a business and therefore do not generate allocated goodwill when determining gain or loss on sale. |
Investments |
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Investments | Investments Real Estate Investments As of September 30, 2017, the Company's gross investment in real estate properties and loans totaled approximately $8.0 billion, representing investments in 2,511 properties, including 88 properties or other related assets securing mortgage loans. The gross investment is comprised of land, buildings, lease intangible assets and lease intangible liabilities, as adjusted for any impairment, and the carrying amount of loans receivable, real estate assets held under direct financing leases and real estate assets held for sale. The portfolio is geographically dispersed throughout 49 states with only one state, Texas, with a real estate investment of 12.2%, accounting for more than 10% of the total dollar amount of the Company’s real estate investment portfolio. During the nine months ended September 30, 2017, the Company had the following real estate and loan activity, net of accumulated depreciation and amortization:
(1) Includes investments of $33.8 million in revenue producing capitalized expenditures, as well as $1.2 million of non-revenue producing capitalized expenditures as of September 30, 2017. (2) The total accumulated depreciation and amortization associated with dispositions of real estate was $42.0 million as of September 30, 2017. Scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases (including realized rent increases occurring after October 1, 2017) at September 30, 2017 (in thousands):
Because lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum lease payments due during the initial lease term only. In addition, the future minimum rentals do not include any contingent rentals based on a percentage of the lessees' gross sales or lease escalations based on future changes in the CPI or other stipulated reference rate. Loans Receivable The following table details loans receivable, net of premium and allowance for loan losses (in thousands):
The mortgage loans are secured by single-tenant commercial properties and generally have fixed interest rates over the term of the loans. There are four other notes receivable included within loans receivable, of which two notes totaling $6.5 million are secured by tenant assets and stock and the remaining two notes are unsecured. Lease Intangibles, Net The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):
The amounts amortized as a net increase to rental revenue for capitalized above- and below-market leases were $4.9 million and $4.7 million for the nine months ended September 30, 2017 and 2016, respectively and $1.5 million and $1.8 million for the three months ended September 30, 2017 and 2016, respectively. The value of in-place leases amortized and included in depreciation and amortization expense was $33.0 million and $35.1 million for the nine months ended September 30, 2017 and 2016, respectively, and $10.8 million and $11.6 million for the three months ended September 30, 2017 and 2016, respectively. Real Estate Assets Under Direct Financing Leases The components of real estate investments held under direct financing leases were as follows (in thousands):
Real Estate Assets Held for Sale The following table shows the activity in real estate assets held for sale for the nine months ended September 30, 2017 (dollars in thousands):
Impairments The following table summarizes total impairment losses recognized on the accompanying consolidated statements of operations (in thousands):
Impairments for the nine months ended September 30, 2017 were comprised of $22.6 million on properties classified as held for sale and $65.5 million on properties classified as held and used. Impairments for the nine months ended September 30, 2016 were comprised of $15.3 million on properties classified as held for sale and $26.1 million on properties classified as held and used. |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The debt of the Company and the Operating Partnership are the same, except for the presentation of the Convertible Notes. The Convertible Notes were issued by the Company. Subsequently, an intercompany note between the Company and the Operating Partnership was executed with terms identical to those of the Convertible Notes. Therefore, in the consolidated balance sheet of the Operating Partnership, the amounts related to the Convertible Notes are reflected as notes payable to Spirit Realty Capital, Inc., net. The Company's debt is summarized below:
(1) The effective interest rates include amortization of debt discount/premium, amortization of deferred financing costs and credit facility fees, where applicable, calculated for the three months ended September 30, 2017 and based on the average principal balance outstanding during the period. (2) Represents the weighted average stated interest rate based on the outstanding principal balance as of September 30, 2017. (3) Represents the weighted average maturity based on the outstanding principal balance as of September 30, 2017. (4) The Company records deferred financing costs for its Revolving Credit Facility in deferred costs and other assets, net on its consolidated balance sheets. Revolving Credit Facility On March 31, 2015, the Company entered into the Credit Agreement, among the Operating Partnership as borrower and the Company as guarantor, that established a new $600.0 million unsecured credit facility. The Revolving Credit Facility matures on March 31, 2019 (extendable at the Operating Partnership's option to March 31, 2020, subject to satisfaction of certain requirements) and includes an accordion feature to increase the committed facility size up to $1.0 billion, subject to satisfying certain requirements and obtaining additional lender commitments. On April 27, 2016, the Company expanded the borrowing capacity under the Revolving Credit Facility from $600.0 million to $800.0 million by partially exercising the accordion feature under the terms of the Credit Agreement. The Revolving Credit Facility also includes a $50.0 million sub-limit for swing-line loans and up to $60.0 million available for issuances of letters of credit. Swing-line loans and letters of credit reduce availability under the Revolving Credit Facility on a dollar-for-dollar basis. On November 3, 2015, the Company entered into a first amendment to the Credit Agreement. The amendment conforms certain of the terms and covenants to those in the Term Loan Agreement, including limiting the requirement of subsidiary guarantees to material subsidiaries (as defined in the Credit Agreement) meeting certain conditions. At September 30, 2017, there were no subsidiaries meeting this requirement. Borrowings bear interest at either a specified base rate or LIBOR plus an applicable margin, at the Operating Partnership's option. The Revolving Credit Facility bears interest at a rate equal to LIBOR plus 0.875% to 1.55% per annum or a specified base rate plus 0.00% to 0.55% and requires a facility fee in an amount equal to the aggregate revolving credit commitments (whether or not utilized) multiplied by a rate equal to 0.125% to 0.30% per annum, in each case depending on the Corporation's credit rating. As of September 30, 2017, the Revolving Credit Facility bore interest at LIBOR plus 1.25% based on the Company's credit rating and incurred a facility fee of 0.25% per annum. The Operating Partnership may voluntarily prepay the Revolving Credit Facility, in whole or in part, at any time, without premium or penalty, but subject to applicable LIBOR breakage fees, if any. Payment of the Revolving Credit Facility is unconditionally guaranteed by the Corporation and material subsidiaries that meet certain conditions (as defined in the Credit Agreement). The Revolving Credit Facility is full recourse to the Operating Partnership and the aforementioned guarantors. As a result of entering into the Revolving Credit Facility and expanding the borrowing capacity, the Company incurred costs of $4.8 million. These deferred financing costs are being amortized to interest expense over the remaining initial term of the Revolving Credit Facility. The unamortized deferred financing costs relating to the Revolving Credit Facility were $2.0 million and $2.9 million as of September 30, 2017 and December 31, 2016, respectively, and recorded in deferred costs and other assets, net on the accompanying consolidated balance sheets. As of September 30, 2017, $386.0 million was outstanding, no letters of credit were issued and $414.0 million of borrowing capacity was available under the Revolving Credit Facility. The Operating Partnership's ability to borrow under the Revolving Credit Facility is subject to ongoing compliance with a number of customary financial covenants and other customary affirmative and negative covenants. As of September 30, 2017, the Corporation and the Operating Partnership were in compliance with these financial covenants. Term Loan On November 3, 2015, the Company entered into a Term Loan Agreement among the Operating Partnership, as borrower, the Company as guarantor and the lenders that are parties thereto. The Term Loan Agreement provides for a $325.0 million senior unsecured term facility that has an initial maturity date of November 2, 2018, which may be extended at the Company's option pursuant to two one-year extension options, subject to the satisfaction of certain conditions and payment of an extension fee. In addition, an accordion feature allows the facility to be increased up to $600.0 million, subject to obtaining additional lender commitments. During the fourth quarter of 2015 and 2016, the Company exercised the accordion feature under the Credit Agreement and increased the term facility borrowing capacity from $325.0 million to $370.0 million and $420.0 million, respectively. The Term Loan Agreement provides that borrowings bear interest at either LIBOR plus 1.35% to 1.80% per annum or a specified base rate plus 0.35% to 0.80% per annum, at the Operating Partnership's option. The borrowings bear interest at either LIBOR plus 0.90% to 1.75% per annum or a specified base rate plus 0.00% to 0.75% per annum, in each case depending on the Corporation’s credit ratings. As of September 30, 2017, the Term Loan bore interest at LIBOR plus 1.35% based on the Company's credit rating. The Operating Partnership may voluntarily prepay the Term Loan, in whole or in part, at any time, without premium or penalty, but subject to applicable LIBOR breakage fees. Borrowings may be repaid without premium or penalty, and may be re-borrowed within 30 days up to the then available loan commitment and subject to occurrence limitations within any twelve-month period. Payment of the Term Loan is unconditionally guaranteed by the Corporation and, under certain circumstances, by one or more material subsidiaries (as defined in the Term Loan Agreement) of the Corporation. The obligations of the Corporation and any guarantor under the Term Loan are full recourse to the Corporation and each guarantor. As a result of entering into the Term Loan, the Company incurred origination costs of $2.4 million. These deferred financing costs are being amortized to interest expense over the remaining initial term of the Term Loan. As of September 30, 2017 and December 31, 2016, the unamortized deferred financing costs relating to the Term Loan were $0.9 million and $1.5 million, respectively, and recorded net against the principal balance of the Term Loan on the accompanying consolidated balance sheets. As of September 30, 2017, the Term Loan was fully drawn. The Operating Partnership's ability to borrow under the Term Loan is subject to ongoing compliance with a number of customary financial covenants and other customary affirmative and negative covenants. The Corporation has unconditionally guaranteed all obligations of the Operating Partnership under the Term Loan Agreement. As of September 30, 2017, the Corporation and the Operating Partnership were in compliance with these financial covenants. Senior Unsecured Notes On August 18, 2016, the Operating Partnership completed a private placement of $300.0 million aggregate principal amount of senior notes, which are guaranteed by the Corporation. The Senior Unsecured Notes were issued at 99.378% of their principal amount, resulting in net proceeds of $296.2 million, after deducting transaction fees and expenses. The Senior Unsecured Notes accrue interest at a rate of 4.45% per year, payable on March 15 and September 15 of each year, until the maturity date of September 15, 2026. The Company filed a registration statement with the SEC to exchange the private Senior Unsecured Notes for registered Senior Unsecured Notes with substantially identical terms, which became effective April 14, 2017. All $300.0 million aggregate principal amount of private Senior Unsecured Notes were tendered in the exchange for registered Senior Unsecured Notes. The Senior Unsecured Notes are redeemable in whole at any time or in part from time to time, at the Operating Partnership’s option, at a redemption price equal to the sum of: an amount equal to 100% of the principal amount of the Senior Unsecured Notes to be redeemed plus accrued and unpaid interest and liquidated damages, if any, up to, but not including, the redemption date; and a make-whole premium calculated in accordance with the indenture. Notwithstanding the foregoing, if any of the Senior Unsecured Notes are redeemed on or after June 15, 2026 (three months prior to the maturity date of the Senior Unsecured Notes), the redemption price will not include a make-whole premium. In connection with the offering, the Operating Partnership incurred $3.4 million in deferred financing costs. This amount is being amortized to interest expense over the life of the Senior Unsecured Notes. As of both September 30, 2017 and December 31, 2016, the unamortized deferred financing costs relating to the Senior Unsecured Notes were $3.1 million, and recorded net against the Senior Unsecured Notes principal balance on the accompanying consolidated balance sheets. In connection with the issuance of the Senior Unsecured Notes, the Corporation and Operating Partnership are subject to ongoing compliance with a number of customary financial covenants and other customary affirmative and negative covenants. As of September 30, 2017, the Corporation and the Operating Partnership were in compliance with these financial covenants. Master Trust Notes The Company has access to an asset-backed securitization platform, the Spirit Master Funding Program, to raise capital through the issuance of non-recourse net-lease mortgage notes collateralized by commercial real estate, net-leases and mortgage loans. The Spirit Master Funding Program consists of two separate securitization trusts, Master Trust 2013 and Master Trust 2014, each of which have one or multiple bankruptcy-remote, special purpose entities as issuers or co-issuers of the notes. Each issuer is an indirect wholly-owned special purpose entity of the Corporation. The Master Trust Notes are summarized below:
(1) Represents the individual series stated interest rate as of September 30, 2017 and the weighted average stated rate of the total Master Trust Notes, based on the collective series outstanding principal balances as of September 30, 2017. As of September 30, 2017, the Master Trust 2014 notes were secured by 815 owned and financed properties issued by five indirect wholly-owned subsidiaries of the Corporation. The notes issued under Master Trust 2014 are cross-collateralized by the assets of all issuers within this trust. As of September 30, 2017, the Master Trust 2013 notes were secured by 295 owned and financed properties issued by a single indirect wholly-owned subsidiary of the Corporation. CMBS As of September 30, 2017, indirect wholly-owned special purpose entity subsidiaries of the Corporation were borrowers under 10 fixed-rate non-recourse loans, excluding six loans in default, which have been securitized into CMBS and are secured by the borrowers' respective leased properties and related assets. The stated interest rates of the loans as of September 30, 2017, excluding the defaulted loans, ranged from 3.90% to 6.52% with a weighted average stated interest rate of 5.32%. As of September 30, 2017, these fixed-rate loans were secured by 113 properties. As of September 30, 2017 and December 31, 2016, the unamortized deferred financing costs associated with these fixed-rate loans were $4.2 million and $4.7 million, respectively, and recorded net against the principal balance of the mortgages and notes payable on the accompanying consolidated balance sheets. The deferred financing costs are being amortized to interest expense over the term of the respective loans. As of September 30, 2017, certain borrowers were in default under the loan agreements relating to six separate CMBS fixed-rate loans, where eight properties securing the respective loans were no longer generating sufficient revenue to pay the scheduled debt service. The default interest rate on these loans was between 7.53% and 10.62%. Each defaulted borrower is a bankruptcy remote special purpose entity and the sole owner of the collateral securing the loan obligations. As of September 30, 2017, the aggregate principal balance under the defaulted loans was $62.9 million, which includes $11.8 million of interest capitalized to the principal balance. Convertible Notes In May 2014, the Corporation issued $402.5 million aggregate principal amount of 2.875% convertible notes due in 2019 and $345.0 million aggregate principal amount of 3.75% convertible notes due in 2021. Interest on the Convertible Notes is payable semiannually in arrears on May 15 and November 15 of each year. The 2019 Notes will mature on May 15, 2019 and the 2021 Notes will mature on May 15, 2021. The Convertible Notes are convertible only during certain periods and, subject to certain circumstances, into cash, shares of the Corporation's common stock, or a combination thereof. The initial conversion rate applicable to each series is 76.3636 per $1,000 principal note (equivalent to an initial conversion price of $13.10 per share of common stock, representing a 22.5% premium above the public offering price of the common stock offered concurrently at the time the Convertible Notes were issued). The conversion rate is subject to adjustment for certain anti-dilution events, including special distributions and regular quarterly cash dividends exceeding $0.16625 per share. As of September 30, 2017, the conversion rate was 77.1889 per $1,000 principal note. Earlier conversion may be triggered if shares of the Corporation's common stock trades higher than the established thresholds, if the Convertible Notes trade below established thresholds, or certain corporate events occur. In connection with the issuance of the Convertible Notes, the Company recorded a discount of $56.7 million, which represents the estimated value of the embedded conversion feature for each of the Convertible Notes. The discount is being amortized to interest expense using the effective interest method over the term of each of the 2019 Notes and 2021 Notes. As of September 30, 2017 and December 31, 2016, the unamortized discount was $26.2 million and $33.5 million, respectively. The discount is shown net against the aggregate outstanding principal balance of the Convertible Notes on the accompanying consolidated balance sheets. The equity component of the conversion feature is recorded in capital in excess of par value in the accompanying consolidated balance sheets, net of financing transaction costs. In connection with the offering, the Company also incurred $19.6 million in deferred financing costs. This amount has been allocated on a pro-rata basis to each of the Convertible Notes and is being amortized to interest expense over the term of each note. As of September 30, 2017 and December 31, 2016, the unamortized deferred financing costs relating to the Convertible Notes were $8.8 million and $11.4 million, respectively, and recorded net against the Convertible Notes principal balance on the accompanying consolidated balance sheets. Debt Extinguishment During the nine months ended September 30, 2017, the Company extinguished a total of $101.0 million aggregate principal amount of senior mortgage indebtedness with a weighted average contractual interest rate of 5.84%. As a result of these transactions, the Company recognized a net gain on debt extinguishment of approximately $1.8 million. Payment of any premium is included in debt extinguishment costs within operating activities in the consolidated statement of cash flows. During the nine months ended September 30, 2016, the Company extinguished a total of $817.3 million aggregate principal amount of senior mortgage indebtedness with a weighted average contractual interest rate of 6.02%. As a result of these transactions, the Company recognized a net gain on debt extinguishment of approximately $0.3 million. Debt Maturities As of September 30, 2017, scheduled debt maturities of the Company’s Revolving Credit Facility, Term Loan, Senior Unsecured Notes, Master Trust Notes, CMBS and Convertible Notes, including balloon payments, are as follows (in thousands):
(1) The balloon payment balance in 2017 includes $62.9 million, including $11.8 million of capitalized interest, for the acceleration of principal payable following an event of default under six non-recourse CMBS loans with a stated maturity in 2017. (2) 2018 includes $420 million unsecured Term Loan that is extendible at borrower's option pursuant to two one-year extension options. (3) 2019 includes the Revolving Credit Facility which is extendible for one year at the borrower's option. Interest Expense The following table is a summary of the components of interest expense related to the Company's borrowings (in thousands):
(1) Includes facility fees of approximately $0.5 million for both of the three month periods ended September 30, 2017 and 2016, and approximately $1.6 million and $1.5 million for the nine month periods ended September 30, 2017 and 2016, respectively. (2) Included in interest expense on the Operating Partnership's consolidated statements of operations are amounts paid to the Corporation by the Operating Partnership related to the notes payable to Spirit Realty Capital, Inc. |
Derivative and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative and Hedging Activities | Derivative and Hedging Activities The Company uses interest rate derivative contracts to manage its exposure to changes in interest rates on its variable rate debt. These derivatives are considered cash flow hedges and are recorded on a gross basis at fair value. Assessments of hedge effectiveness are performed quarterly using regression analysis and the measurement of hedge ineffectiveness is based on the hypothetical derivative method. The effective portion of changes in fair value are recorded in AOCL and subsequently reclassified to earnings when the hedged transactions affect earnings. The ineffective portion is recorded immediately in earnings in general and administrative expenses. The Company does not enter into derivatives contracts for speculative or trading purposes. The Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company evaluates counterparty credit risk through monitoring the creditworthiness of counterparties, which includes review of debt ratings and financial performance. To mitigate its credit risk, the Company enters into agreements with counterparties it considers credit-worthy, such as large financial institutions with favorable credit ratings. The Company has terminated all existing derivative contracts as of June 30, 2016 and has not entered into any new derivative contracts as of September 30, 2017. The following tables provide information about the amounts recorded in AOCL, as well as the loss recorded in operations, when reclassified out of AOCL or recognized in earnings immediately, for the nine months ended September 30, 2016 (in thousands):
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Stockholders' Equity and Partners' Capital |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity and Partners' Capital | Stockholders’ Equity and Partners' Capital Issuance of Common Stock During the nine months ended September 30, 2017, portions of awards of restricted common stock and performance share awards granted to certain of the Company's officers and other employees vested. The vesting of these awards, granted pursuant to the Amended Incentive Award Plan, resulted in federal and state income tax liabilities for the recipients. As permitted by the terms of the Amended Incentive Award Plan and the award grants, certain executive officers and employees elected to surrender 0.4 million shares of common stock valued at $3.5 million, solely to pay the associated statutory tax withholdings during the nine months ended September 30, 2017. ATM Program In November 2016, the Company's Board of Directors approved a new ATM Program and the Company terminated its existing program. As of September 30, 2017, no shares of the Company's common stock had been sold under the new ATM Program and $500.0 million in gross proceeds capacity remained available. Stock Repurchase Programs In August 2017, the Company's Board of Directors approved a new stock repurchase program, which authorizes the Company to repurchase up to $250.0 million of its common stock. These purchases can be made in the open market or through private transactions from time to time over the 18 month time period following authorization, depending on prevailing market conditions and applicable legal and regulatory requirements. Purchase activity will be dependent on various factors, including the Company's capital position, operating results, funds generated by asset sales, dividends that may be required by those sales, and investment options that may be available, including acquiring new properties or retiring debt. The stock repurchase program does not obligate the Company to repurchase any specific number of shares and may be suspended at any time at the Company's discretion. As of September 30, 2017, 2,482,570 shares of the Company's common stock have been repurchased in open market transactions under the stock repurchase program, at a weighted average price of $8.75 per share, leaving $228.3 million in available capacity. Fees associated with the repurchase, of $49,700, are included in retained earnings. In February 2016, the Company's Board of Directors approved a stock repurchase program, which authorized the Company to repurchase up to $200.0 million of its common stock over the 18 month time period following authorization. A total of 26,337,295 shares of the Company's outstanding common stock were repurchased in open market transactions under the stock repurchase program, at a weighted average price of $7.59 per share, equivalent to the full $200.0 million authorized. Fees associated with the share repurchase of $0.5 million are included in retained earnings. Dividends Declared For the nine months ended September 30, 2017, the Corporation's Board of Directors declared the following dividends:
The dividend declared on September 15, 2017 was paid on October 13, 2017 and is included in accounts payable, accrued expenses and other liabilities as of September 30, 2017. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The Company is periodically subject to claims or litigation in the ordinary course of business, including claims generated from business conducted by tenants on real estate owned by the Company. In these instances, the Company is typically indemnified by the tenant against any losses that might be suffered, and the Company and/or the tenant are typically insured against such claims. On September 8, 2015, Haggen Holdings, LLC and a number of its affiliates, including Haggen Operations Holdings, LLC (collectively, the "Debtors"), filed petitions for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. At the time of the filing, Haggen Operations Holdings, LLC ("Haggen") leased 20 properties on a triple net basis from a subsidiary of the Company under a master lease.
As of September 30, 2017, there were no outstanding claims against the Company that are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. As of September 30, 2017, the Company had commitments totaling $54.1 million, of which $11.3 million relates to future acquisitions with the majority of the remainder to fund revenue generating improvements on properties the Company currently owns. Commitments related to acquisitions contain standard cancellation clauses contingent on the results of due diligence. Of the total commitments of $54.1 million, $33.0 million is expected to be funded during fiscal year 2017. In addition, the Company is contingently liable for $5.7 million of debt owed by one of its tenants and is indemnified by that tenant for any payments the Company may be required to make on such debt. The Company estimates future costs for known environmental remediation requirements when it is probable that the Company has incurred a liability and the related costs can be reasonably estimated. The Company considers various factors when estimating its environmental liabilities, and adjustments are made when additional information becomes available that affects the estimated costs to study or remediate any environmental issues. When only a wide range of estimated amounts can be reasonably established and no other amount within the range is better than another, the low end of the range is recorded in the consolidated financial statements. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements The Company did not have any assets or liabilities that are required to be measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016. Nonrecurring Fair Value Measurements Fair value measurement of an asset on a nonrecurring basis occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset is no longer recoverable. The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis (in thousands):
Real estate assets and their related intangible assets are evaluated for impairment based on certain indicators including, but not limited to: the asset being held for sale, vacant, non-operating or the lease on the asset expiring in twelve months or less. The fair values of impaired real estate and intangible assets were determined by using the following information, depending on availability, in order of preference: signed purchase and sale agreements or letters of intent; recently quoted bid or ask prices, or market prices for comparable properties; estimates of cash flow, which consider, among other things, contractual and forecasted rental revenues, leasing assumptions, and expenses based upon market conditions; and expectations for the use of the real estate. Based on these inputs, the Company determined that its valuation of the impaired real estate and intangible assets falls within Level 3 of the fair value hierarchy. During the nine months ended September 30, 2017 and for the year ended December 31, 2016, we determined that 16 and 33 long-lived assets held and used, respectively, were impaired. The Company estimated the fair value of these properties using weighted average sales price per square foot of comparable properties for 15 of the 16 impaired properties during the nine months ended September 30, 2017 and for 16 of the 33 impaired properties during the year ended December 31, 2016. The following table provides information about the weighted average sales price per square foot of comparable properties used to estimate fair value (price per square foot in dollars):
The Company estimated the fair value on 1 of the 16 impaired properties using the weighted average listing price of comparable properties or broker opinion of value per square foot during the nine months ended September 30, 2017 and on 17 of the 33 impaired properties during the year ended December 31, 2016. The following table provides information about the weighted average listing price and broker opinion of value per square foot of comparable properties used to estimate fair value (price per square foot in dollars):
Estimated Fair Value of Financial Instruments Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash and escrow deposits, and accounts receivable and payable. Generally, these assets and liabilities are short-term in duration and are recorded at cost, which approximates fair value, on the accompanying consolidated balance sheets. In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair values. The fair values of financial instruments are estimates based upon market conditions and perceived risks at September 30, 2017 and December 31, 2016. These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities. The estimated fair values of the following financial instruments have been derived based on market quotes for comparable instruments or discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 2 of the fair value hierarchy. The following table discloses fair value information for these financial instruments (in thousands):
(1) The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums. |
Significant Credit and Revenue Concentration |
9 Months Ended |
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Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Significant Credit and Revenue Concentration | Significant Credit and Revenue Concentration As of September 30, 2017 and December 31, 2016, the Company’s real estate investments are operated by 421 and 450 tenants, respectively, that operate within retail, office and industrial property types across various industries throughout the U.S. Shopko operates in the general merchandise industry and is the Company’s largest tenant as a percentage of rental revenue. Total rental revenues from properties leased to Shopko for the three months ended September 30, 2017 and 2016, contributed 7.5% and 8.3% of the rental revenue shown in the accompanying consolidated statements of operations. No other tenant contributed 4% or more of the rental revenue during any of the periods presented. As of September 30, 2017 and December 31, 2016, the Company's net investment in Shopko properties represents approximately 5.1% and 5.8%, respectively, of the Company’s total assets and the Company's real estate investment in Shopko represents approximately 7.0% and 7.7%, respectively, of the Company's total real estate investment portfolio. |
Supplemental Cash Flow Information |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table presents the supplemental cash flow disclosures (in thousands):
(1) Accrued and overdue interest on certain CMBS notes that have been intentionally placed in default. |
Incentive Award Plan |
9 Months Ended |
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Sep. 30, 2017 | |
Retirement Benefits [Abstract] | |
Incentive Award Plan | Incentive Award Plan Restricted Shares of Common Stock During the nine months ended September 30, 2017, the Company granted 1.1 million restricted shares under the Amended Incentive Award Plan to certain executive officers and employees. The Company recorded $9.9 million in deferred compensation associated with these grants, which will be recognized in expense over the service period of the awards. As of September 30, 2017, there were approximately 1.5 million unvested restricted shares outstanding. Performance Share Awards During the nine months ended September 30, 2017, the Board of Directors or committee thereof approved target grants of 0.9 million performance shares to executive officers of the Company. The performance period of these grants runs through December 31, 2019. Potential shares of the Corporation's common stock that each participant is eligible to receive is based on the initial target number of shares granted multiplied by a percentage range between 0% and 250%. Grant date fair value was calculated using the Monte Carlo simulation model, which incorporated stock price correlation, projected dividend yields and other variables over the time horizons matching the performance periods. Stock-based compensation expense associated with unvested performance share awards is recognized on a straight-line basis over the minimum required service period, which is generally three years. Based on the grant date fair value and as of September 30, 2017, the Corporation expects to recognize $8.7 million in compensation expense on a straight-line basis over the requisite service period. Approximately $0.7 million and $0.5 million in dividend rights have been accrued for non-vested performance share awards outstanding as of September 30, 2017 and December 31, 2016, respectively. For outstanding non-vested awards at September 30, 2017, no shares would have been released based on the Corporation's TSR relative to the specified peer groups through that date. Stock-based Compensation Expense For the three months ended September 30, 2017 and 2016, the Company recognized $2.3 million and $3.4 million, respectively, in stock-based compensation expense, which is included in general and administrative expenses in the accompanying consolidated statements of operations. For the nine months ended September 30, 2017 and 2016, the Company recognized $13.8 million and $7.2 million, respectively, in stock-based compensation expense. Stock-based compensation expense for the nine months ended September 30, 2017 included $6.9 million related to the acceleration of Restricted Stock and Performance Share Awards upon the departure of the Chief Executive Officer. As of September 30, 2017, the remaining unamortized stock-based compensation expense, including amounts relating to the performance share awards, totaled $20.6 million, including $11.9 million related to restricted stock awards and $8.7 million related to performance share awards, which is recognized as the greater of the amount amortized on a straight-line basis over the service period of each applicable award or the amount vested over the vesting periods. |
Income Per Share and Partnership Unit |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Per Share and Partnership Unit | Income Per Share and Partnership Unit Income per share has been computed using the two-class method which is computed by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares of common stock outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both shares of common stock and participating securities based on the weighted average shares outstanding during the period. Classification of the Company's unvested restricted stock, which contain rights to receive non-forfeitable dividends, are deemed participating securities under the two-class method. Under the two-class method, earnings attributable to unvested restricted shares are deducted from income from continuing operations in the computation of net income attributable to common stockholders. The table below is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per share computed using the two-class method (dollars in thousands):
(1) Assumes the most dilutive issuance of potentially issuable shares between the two-class and treasury stock method unless the result would be anti-dilutive. The Corporation intends to satisfy its exchange obligation for the principal amount of the Convertible Notes to the note holders entirely in cash, therefore, the "if-converted" method does not apply and the treasury stock method is being used. For the three and nine months ended September 30, 2017, the Corporation's average stock price was below the conversion price, resulting in zero potentially dilutive shares related to the conversion spread for both periods. |
Costs Associated With Restructuring Activities |
9 Months Ended |
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Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Costs Associated With Restructuring Activities | Costs Associated With Restructuring Activities On November 16, 2015, the Company’s Board of Directors approved the strategic decision to relocate its headquarters from Scottsdale, Arizona to Dallas, Texas. The Company began occupying temporary office space in the new headquarters building in the spring of 2016, and finalized the move with the opening of the new office space in late September 2016. As a result of moving its corporate headquarters, the Company incurred various restructuring charges, including employee separation and relocation costs. Restructuring charges for the nine months ended September 30, 2016 totaled $5.7 million, and are included within restructuring charges on the accompanying consolidated statements of operations. As of and for the nine months ended September 30, 2017, the Company no longer had any accrued restructuring charges and incurred no additional restructuring charges. |
Subsequent Event |
9 Months Ended |
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Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 3, 2017, the Company closed on an offering of 6,900,000 shares of 6.000% Series A Cumulative Redeemable Preferred Stock with a liquidation preference of $25.00 per share, for aggregate net proceeds of 166.5 million, after deducting the underwriting discount and the Company's estimated expenses. |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying consolidated financial statements of the Company and the Operating Partnership have been prepared pursuant to the rules and regulations of the SEC. In the opinion of management, the consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of the information required to be set forth therein. The results for interim periods are not necessarily indicative of the results for the entire year. Certain information and note disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted from these statements pursuant to SEC rules and regulations and, accordingly, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements as filed with the SEC in its Annual Report on Form 10-K for the year ended December 31, 2016. |
Consolidation | The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. The consolidated financial statements of the Operating Partnership include the accounts of the Operating Partnership and its wholly-owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. All expenses incurred by the Company have been allocated to the Operating Partnership in accordance with the Operating Partnership's first amended and restated agreement of limited partnership, which management determined to be a reasonable method of allocation. Therefore, expenses incurred would not be materially different if the Operating Partnership had operated as an unaffiliated entity. |
Special Purpose Entities | The Company has formed numerous special purpose entities to acquire and hold real estate encumbered by indebtedness (see Note 4). Each special purpose entity is a separate legal entity and is the sole owner of its assets and responsible for its liabilities. The assets of these special purpose entities are not available to pay, or otherwise satisfy obligations to, the creditors of any affiliate or owner of another entity unless the special purpose entities have expressly agreed and are permitted under their governing documents. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes its estimates are reasonable, actual results could differ from those estimates. |
Segment Reporting | The Company views its operations as one segment, which consists of net leasing operations. The Company has no other reportable segments. |
Allowance for Doubtful Accounts | The Company reviews its rent and other tenant receivables for collectability on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates, and economic conditions in the area in which the tenant operates. In the event that the collectability of a receivable with respect to any tenant is in doubt, a provision for uncollectible amounts will be established or a direct write-off of the specific receivable will be made. The Company provided for reserves for uncollectible amounts totaling $8.3 million and $6.4 million at September 30, 2017 and December 31, 2016, respectively, against accounts receivable balances of $22.4 million and $25.3 million, respectively. Receivables are recorded within deferred costs and other assets, net in the accompanying consolidated balance sheets. Receivables are written off against the reserves for uncollectible amounts when all possible means of collection have been exhausted. For deferred rental revenues related to the straight-line method of reporting rental revenue, the collectability review includes management’s estimates of amounts that will not be realized and an assessment of the risks inherent in the portfolio, giving consideration to historical experience and industry default rates for long-term receivables. The Company established a reserve for losses of $2.4 million at September 30, 2017 and $7.7 million at December 31, 2016, against deferred rental revenue receivables of $77.3 million and $71.1 million, respectively. Deferred rental revenue receivables are recorded within deferred costs and other assets, net in the accompanying consolidated balance sheets. |
Goodwill | Goodwill arises from business combinations and represents the excess of the cost of an acquired entity over the net fair value amounts that were assigned to the identifiable assets acquired and the liabilities assumed. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. |
Income Taxes | The Company has elected to be taxed as a REIT under the Code. As a REIT, the Company generally will not be subject to federal income tax provided it continues to satisfy certain tests concerning the Company’s sources of income, the nature of its assets, the amounts distributed to its stockholders and the ownership of Company stock. Management believes the Company has qualified and will continue to qualify as a REIT and therefore, no provision has been made for federal income taxes in the accompanying consolidated financial statements. Even if the Company qualifies for taxation as a REIT, it may be subject to state and local income and franchise taxes and to federal income tax and excise tax on its undistributed income. Franchise taxes are included in general and administrative expenses on the accompanying consolidated statements of operations. Taxable income from non-REIT activities managed through the Company’s taxable REIT subsidiaries are subject to federal, state and local taxes, which are not material. |
New Accounting Pronouncements and Changes in Accounting Principle | New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or the SEC that are adopted by the Company as of the specified effective date. These new accounting pronouncements entail technical corrections to existing guidance or affect guidance related to specialized industries or entities. There are no updates to our prior disclosures regarding adoption of pronouncements that are not yet effective. Additionally, we have evaluated new accounting pronouncements issued subsequent to our most recent Annual Report on Form 10-K and have concluded that they are either not applicable or will not have a material impact on the Company's financial position or results of operations. Changes in Accounting Principle In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies many aspects of accounting for share-based payment transactions under ASC Topic 718, Compensation - Stock Compensation, including income tax consequences, classification of awards as either equity or liability, forfeiture rate calculations and classification on the statement of cash flows. The Company adopted this new guidance effective January 1, 2017 and made an accounting policy election to recognize stock-based compensation forfeitures as they occur, whereas previously stock-based compensation forfeitures were estimated and recognized based on historical forfeiture rates. This change in accounting principle has been applied prospectively and the change in accounting principle had no material impact on the financial statements of the Company. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which narrows the definition of a business. The Company early adopted the guidance effective January 1, 2017 and application is on a prospective basis. Under the new guidance, the acquisition of a property with an in-place lease generally is no longer accounted for as an acquisition of a business, but instead as an asset acquisition, meaning the transaction costs of such an acquisition are now capitalized instead of expensed. Further, dispositions of properties generally no longer qualify as a disposition of a business and therefore do not generate allocated goodwill when determining gain or loss on sale. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Cash and Escrow Deposits | Restricted cash and deposits in escrow, classified within deferred costs and other assets, net in the accompanying consolidated balance sheets consisted of the following (in thousands):
(1) Funds held in reserve by lenders which can be applied at their discretion to the repayment of debt (any funds remaining on deposit after the debt is paid in full are released to the borrower). Balance changes are reflected in financing activities within the Statement of Cash Flows. (2) Deposits held as additional collateral support by lenders to fund tenant improvements, repairs and leasing commissions incurred to secure a new tenant. Balance changes are reflected in financing activities within the Statement of Cash Flows. (3) Proceeds from the sale of assets pledged as collateral under the Spirit Master Funding Program, which are held on deposit until a qualifying substitution is made or the funds are applied as prepayment of principal. Balance changes are reflected in investing activities within the Statement of Cash Flows. (4) Funds held in lender controlled accounts generally used to meet future debt service or certain property operating expenses. Balance changes are reflected in financing activities within the Statement of Cash Flows. (5) Primarily funds held in lender controlled accounts released after scheduled debt service requirements are met. Balance changes are reflected in operating activities within the Statement of Cash Flows. |
Investments (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Real Estate and Loan Activity, Net of Accumulated Depreciation and Amortization | During the nine months ended September 30, 2017, the Company had the following real estate and loan activity, net of accumulated depreciation and amortization:
(1) Includes investments of $33.8 million in revenue producing capitalized expenditures, as well as $1.2 million of non-revenue producing capitalized expenditures as of September 30, 2017. (2) The total accumulated depreciation and amortization associated with dispositions of real estate was $42.0 million as of September 30, 2017. |
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Schedule of Minimum Future Contractual Rent to be Received | Scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases (including realized rent increases occurring after October 1, 2017) at September 30, 2017 (in thousands):
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Schedule of Loans Receivable, Net of Premium and Allowance for Loan Losses | The following table details loans receivable, net of premium and allowance for loan losses (in thousands):
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Schedule of Lease Intangible Assets and Liabilities, Net of Accumulated Amortization | The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands):
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Schedule of Components of Real Estate Investments Held Under Direct Financing Leases | The components of real estate investments held under direct financing leases were as follows (in thousands):
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Schedule of Activity in Real Estate Assets Held for Sale | The following table shows the activity in real estate assets held for sale for the nine months ended September 30, 2017 (dollars in thousands):
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Summary of Total Impairment Losses Recognized | The following table summarizes total impairment losses recognized on the accompanying consolidated statements of operations (in thousands):
The following table provides information about the weighted average sales price per square foot of comparable properties used to estimate fair value (price per square foot in dollars):
The following table provides information about the weighted average listing price and broker opinion of value per square foot of comparable properties used to estimate fair value (price per square foot in dollars):
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Debt (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Debt | The Company's debt is summarized below:
(1) The effective interest rates include amortization of debt discount/premium, amortization of deferred financing costs and credit facility fees, where applicable, calculated for the three months ended September 30, 2017 and based on the average principal balance outstanding during the period. (2) Represents the weighted average stated interest rate based on the outstanding principal balance as of September 30, 2017. (3) Represents the weighted average maturity based on the outstanding principal balance as of September 30, 2017. (4) The Company records deferred financing costs for its Revolving Credit Facility in deferred costs and other assets, net on its consolidated balance sheets. |
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Schedule of Debt Maturities | As of September 30, 2017, scheduled debt maturities of the Company’s Revolving Credit Facility, Term Loan, Senior Unsecured Notes, Master Trust Notes, CMBS and Convertible Notes, including balloon payments, are as follows (in thousands):
(1) The balloon payment balance in 2017 includes $62.9 million, including $11.8 million of capitalized interest, for the acceleration of principal payable following an event of default under six non-recourse CMBS loans with a stated maturity in 2017. (2) 2018 includes $420 million unsecured Term Loan that is extendible at borrower's option pursuant to two one-year extension options. (3) 2019 includes the Revolving Credit Facility which is extendible for one year at the borrower's option. |
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Summary of Components of Interest Expense Related to Borrowings | The following table is a summary of the components of interest expense related to the Company's borrowings (in thousands):
(1) Includes facility fees of approximately $0.5 million for both of the three month periods ended September 30, 2017 and 2016, and approximately $1.6 million and $1.5 million for the nine month periods ended September 30, 2017 and 2016, respectively. (2) Included in interest expense on the Operating Partnership's consolidated statements of operations are amounts paid to the Corporation by the Operating Partnership related to the notes payable to Spirit Realty Capital, Inc. |
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Master Trust Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary of Debt | The Master Trust Notes are summarized below:
(1) Represents the individual series stated interest rate as of September 30, 2017 and the weighted average stated rate of the total Master Trust Notes, based on the collective series outstanding principal balances as of September 30, 2017. |
Derivative and Hedging Activities (Tables) |
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Amounts Recorded in AOCL | The following tables provide information about the amounts recorded in AOCL, as well as the loss recorded in operations, when reclassified out of AOCL or recognized in earnings immediately, for the nine months ended September 30, 2016 (in thousands):
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Stockholders' Equity and Partners' Capital (Tables) |
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Dividends Declared | For the nine months ended September 30, 2017, the Corporation's Board of Directors declared the following dividends:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets at Fair Value on Nonrecurring Basis | The following table sets forth the Company’s assets that were accounted for at fair value on a nonrecurring basis (in thousands):
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Sales Price of Comparable Properties Used to Estimate Fair Value | The following table summarizes total impairment losses recognized on the accompanying consolidated statements of operations (in thousands):
The following table provides information about the weighted average sales price per square foot of comparable properties used to estimate fair value (price per square foot in dollars):
The following table provides information about the weighted average listing price and broker opinion of value per square foot of comparable properties used to estimate fair value (price per square foot in dollars):
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Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments | The following table discloses fair value information for these financial instruments (in thousands):
(1) The carrying value of the debt instruments are net of unamortized deferred financing costs and certain debt discounts/premiums. |
Supplemental Cash Flow Information (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Cash Flow Disclosures | The following table presents the supplemental cash flow disclosures (in thousands):
(1) Accrued and overdue interest on certain CMBS notes that have been intentionally placed in default. |
Income Per Share and Partnership Unit (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the Numerator and Denominator Used in the Computation of Basic and Diluted Income Per Share | The table below is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per share computed using the two-class method (dollars in thousands):
(1) Assumes the most dilutive issuance of potentially issuable shares between the two-class and treasury stock method unless the result would be anti-dilutive. |
Organization - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Transaction costs | $ 2,660 | $ 0 | $ 3,145 | $ 0 |
General Partner | ||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Ownership of operating partnership (as a percent) | 1.00% | |||
Limited Partner | ||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||
Ownership of operating partnership (as a percent) | 99.00% |
Summary of Significant Accounting Policies - Narrative (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2017
USD ($)
segment
|
Dec. 31, 2016
USD ($)
|
|
Summary Of Significant Accounting Policies [Line Items] | ||
Net assets | $ 7,434,787,000 | $ 7,677,971,000 |
Net liabilities | $ 4,175,622,000 | 3,995,863,000 |
Number of segments | segment | 1 | |
Reserves for uncollectible amounts | $ 8,300,000 | 6,400,000 |
Accounts receivable | 22,400,000 | 25,300,000 |
Reserve for losses | 2,400,000 | 7,700,000 |
Deferred rental revenue receivables | 77,300,000 | 71,100,000 |
Provision for income taxes | 0 | |
Special Purpose Entity | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Net assets | 2,730,000,000 | 2,950,000,000 |
Net liabilities | $ 2,150,000,000 | $ 2,260,000,000 |
Summary of Significant Accounting Policies - Schedule of Restricted Cash and Escrow Deposits (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and deposits in escrow | $ 96,344 | $ 26,839 |
Collateral deposits | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and deposits in escrow | 1,229 | 1,374 |
Tenant improvements, repairs, and leasing commissions | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and deposits in escrow | 7,988 | 9,739 |
Master Trust Release | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and deposits in escrow | 79,353 | 14,412 |
Loan impounds | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and deposits in escrow | 330 | 670 |
Other | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash and deposits in escrow | $ 7,444 | $ 644 |
Investments - Summary of Real Estate and Loan Activity, Net of Accumulated Depreciation and Amortization (Footnote) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Revenue producing capitalized expenditures | $ 33.8 |
Capitalized maintenance expenditures | 1.2 |
Accumulated depreciation and amortization associated with dispositions of real estate | $ 42.0 |
Investments - Schedule of Minimum Future Contractual Rent to be Received (Details) $ in Thousands |
Sep. 30, 2017
USD ($)
|
---|---|
Operating Leases, Future Contractual Rent Receivable | |
Remainder of 2017 | $ 151,042 |
2018 | 597,808 |
2019 | 583,233 |
2020 | 566,864 |
2021 | 538,273 |
Thereafter | 4,084,670 |
Total future minimum rentals | $ 6,521,890 |
Investments - Schedule of Loans Receivable, Net of Premium and Allowance for Loan Losses (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Loans and Leases Receivable Disclosure [Line Items] | ||
Total loans receivable, net | $ 76,821 | $ 66,578 |
Mortgage Loans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans and leases receivable, gross | 62,833 | 55,410 |
Mortgage loans - premium, net of amortization | 5,568 | 7,194 |
Total loans receivable, net | 68,401 | 62,604 |
Notes Receivable | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans and leases receivable, gross | 8,420 | 4,474 |
Allowance for loan losses | 0 | (500) |
Total loans receivable, net | $ 8,420 | $ 3,974 |
Investments - Schedule of Lease Intangible Assets and Liabilities, Net of Accumulated Amortization (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Capital Leased Assets [Line Items] | ||
Less: accumulated amortization | $ (261,322) | $ (243,320) |
Intangible lease assets, net | 429,857 | 470,276 |
Less: accumulated amortization | (59,459) | (53,688) |
Intangible lease liabilities, net | 162,619 | 182,320 |
In-place leases | ||
Capital Leased Assets [Line Items] | ||
Intangible lease assets, gross | 599,905 | 624,723 |
Above-market leases | ||
Capital Leased Assets [Line Items] | ||
Intangible lease assets, gross | 91,274 | 88,873 |
Below-market leases | ||
Capital Leased Assets [Line Items] | ||
Intangible lease liabilities, gross | $ 222,078 | $ 236,008 |
Investments - Schedule of Components of Real Estate Investments Held Under Direct Financing Leases (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | ||
Minimum lease payments receivable | $ 7,809 | $ 9,456 |
Estimated residual value of leased assets | 24,552 | 35,640 |
Unearned income | (7,478) | (9,091) |
Real estate assets under direct financing leases, net | $ 24,883 | $ 36,005 |
Investments - Schedule of Activity in Real Estate Assets Held for Sale (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
Property
| |
Number of Properties | |
Balance, December 31, 2016 (in properties) | Property | 44 |
Transfers from real estate investments held and used (in properties) | Property | 80 |
Sales (in properties) | Property | (78) |
Transfers to real estate investments held and used (in properties) | Property | (8) |
Balance, September 30, 2017 (in properties) | Property | 38 |
Carrying Value | |
Balance, December 31, 2016 | $ 160,570 |
Transfers from real estate investments held and used | 212,726 |
Sales | (157,156) |
Transfers to real estate investments held and used | (63,597) |
Impairments | (19,161) |
Balance, September 30, 2017 | $ 133,382 |
Investments - Summary of Total Impairment Losses Recognized (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | ||||
Real estate and intangible asset impairment | $ 32,676 | $ 13,894 | $ 82,553 | $ 35,236 |
Write-off of lease intangibles, net | 5,061 | 1,491 | 5,556 | 6,463 |
Loans receivable recovery | 0 | 0 | 0 | (324) |
Total impairments from real estate investment net assets | 37,737 | 15,385 | 88,109 | 41,375 |
Other impairment | 0 | 22 | 0 | 21 |
Total impairment loss | $ 37,737 | $ 15,407 | $ 88,109 | $ 41,396 |
Debt - Senior Unsecured Notes (Details) - USD ($) |
Aug. 18, 2016 |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Unamortized deferred financing costs | $ 31,013,000 | $ 37,111,000 | |
Unsecured Debt | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of debt | $ 300,000,000 | 420,000,000 | |
Principal amount issued (as a percent) | 99.378% | ||
Proceeds from issuance of debt | $ 296,200,000 | ||
Stated interest rate | 4.45% | ||
Deferred financing costs | $ 3,400,000 | 4,800,000 | |
Unamortized deferred financing costs | $ 3,100,000 | $ 3,100,000 | |
Period Prior to June 15, 2026 | Unsecured Debt | |||
Debt Instrument [Line Items] | |||
Redemption price, percent of principal amount | 100.00% |
Debt - Master Trust Notes - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2017
Property
Subsidiary
trust
| |
Debt Instrument [Line Items] | |
Number of securitization trusts within program | trust | 2 |
Master Trust 2014 notes | |
Debt Instrument [Line Items] | |
Number of properties securing borrowings | 815 |
Debt issued by, number of subsidiaries | Subsidiary | 5 |
Master Trust 2013 notes | |
Debt Instrument [Line Items] | |
Number of properties securing borrowings | 295 |
Debt - Debt Extinguishment - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Jun. 30, 2016 |
|
Debt Instrument [Line Items] | |||||
Gain (loss) on debt extinguishment | $ 1,792 | $ (8,349) | $ 1,770 | $ 326 | |
Master Trust Notes | |||||
Debt Instrument [Line Items] | |||||
Debt extinguishment costs | $ 101,000 | 817,300 | |||
Weighted average contractual interest rate | 5.84% | 5.84% | 6.02% | ||
Gain (loss) on debt extinguishment | $ 1,800 | $ 300 |
Debt - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Scheduled Debt Maturities | ||
Total debt, net | $ 3,863,145 | $ 3,664,628 |
Mortgages and Notes Payable | ||
Scheduled Debt Maturities | ||
Remainder of 2017 | 130,172 | |
2018 | 611,754 | |
2019 | 842,825 | |
2020 | 452,302 | |
2021 | 585,411 | |
Thereafter | 1,315,021 | |
Total debt, net | 3,937,485 | |
Mortgages and Notes Payable | Scheduled Principal | ||
Scheduled Debt Maturities | ||
Remainder of 2017 | 7,538 | |
2018 | 41,954 | |
2019 | 44,325 | |
2020 | 39,096 | |
2021 | 30,658 | |
Thereafter | 219,000 | |
Total debt, net | 382,571 | |
Mortgages and Notes Payable | Balloon Payment | ||
Scheduled Debt Maturities | ||
Remainder of 2017 | 122,634 | |
2018 | 569,800 | |
2019 | 798,500 | |
2020 | 413,206 | |
2021 | 554,753 | |
Thereafter | 1,096,021 | |
Total debt, net | $ 3,554,914 |
Debt - Schedule of Debt Maturities (Footnote) (Details) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2017
USD ($)
extension_option
Loan
|
Sep. 30, 2016
USD ($)
|
Aug. 18, 2016
USD ($)
|
|
Debt Instrument [Line Items] | |||
Capitalized interest | $ 2,430,000 | $ 3,584,000 | |
CMBS fixed-rate | CMBS Loans | |||
Debt Instrument [Line Items] | |||
Debt default amount | 62,900,000 | ||
Capitalized interest | 11,800,000 | ||
Unsecured Debt | |||
Debt Instrument [Line Items] | |||
Unsecured term loan | $ 420,000,000 | $ 300,000,000 | |
Number of one-year extension options | extension_option | 2 | ||
Extension option, term (in years) | 1 year | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Extension option, term (in years) | 1 year | ||
Discontinued Operations, Disposed of by Sale | CMBS Loans | |||
Debt Instrument [Line Items] | |||
Number of loans in default | Loan | 6 |
Stockholders' Equity and Partners' Capital - Narrative (Details) - USD ($) |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Aug. 31, 2017 |
Feb. 29, 2016 |
Sep. 30, 2017 |
|
Subsidiary, Sale of Stock [Line Items] | |||
Shares withheld for taxes | 400,000 | ||
Shares withheld for taxes, value | $ 3,500,000 | ||
Stock repurchase program, authorized amount | $ 250,000,000 | $ 200,000,000 | |
Stock repurchase program, period in force (in months) | 18 months | 18 months | |
Stock repurchased during period (in shares) | 26,337,295 | 2,482,570 | |
Stock repurchased, weighted average price (in dollars per share) | $ 7.59 | $ 8.75 | |
Stock repurchase program, remaining authorized repurchase amount | $ 228,300,000 | ||
Stock repurchased, fees acquired | $ 500,000 | $ 49,700 | |
ATM Program, November 2016 | |||
Subsidiary, Sale of Stock [Line Items] | |||
Issuance of common shares (in shares) | 0 | ||
Gross proceeds capacity remaining | $ 500,000,000 |
Stockholders' Equity and Partners' Capital - Summary of Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 15, 2017 |
Jun. 15, 2017 |
Mar. 15, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Equity [Abstract] | |||||||
Dividend per share (in USD per share) | $ 0.18000 | $ 0.18000 | $ 0.18000 | $ 0.18000 | $ 0.17500 | $ 0.54000 | $ 0.52500 |
Total dividends | $ 82,062 | $ 82,422 | $ 87,122 |
Fair Value Measurements - Narrative (Details) - Property |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired long-lived assets held and used, properties | 16 | 33 |
Impaired long-lived assets held and used, properties estimating fair values on comparable properties | 15 | 16 |
Weighted Average Listing Price or Broker Opinion of Value Per Square Foot | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired long-lived assets held and used, properties | 1 | 17 |
Significant Credit and Revenue Concentration - Narrative (Details) - tenant |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Revenue, Major Customer [Line Items] | |||||
Number of tenants | 421 | 421 | 450 | ||
Shopko | Revenues | Customer Concentration Risk | |||||
Revenue, Major Customer [Line Items] | |||||
Percentage of concentration risk (or more) | 7.50% | 8.30% | |||
Shopko | Total Assets | Customer Concentration Risk | |||||
Revenue, Major Customer [Line Items] | |||||
Percentage of concentration risk (or more) | 5.10% | 5.80% | |||
Shopko | Real Estate Investment Portfolio | Customer Concentration Risk | |||||
Revenue, Major Customer [Line Items] | |||||
Percentage of concentration risk (or more) | 7.00% | 7.70% | |||
No Tenant Other Than Shopko | Revenues | Customer Concentration Risk | |||||
Revenue, Major Customer [Line Items] | |||||
Percentage of concentration risk (or more) | 4.00% | 4.00% | 4.00% | 4.00% |
Income Per Share and Partnership Unit - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share [Abstract] | ||||
Potentially dilutive shares, convertible debt | 0 | 972,054 | 0 | 0 |
Costs Associated With Restructuring Activities - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Restructuring and Related Activities [Abstract] | ||||
Restructuring charges | $ 0 | $ 3,264,000 | $ 0 | $ 5,726,000 |
Subsequent Event (Details) - Subsequent Event - Series A Cumulative Redeemable Preferred Stock $ / shares in Units, $ in Millions |
Oct. 03, 2017
USD ($)
$ / shares
shares
|
---|---|
Subsequent Event [Line Items] | |
Shares issued in offering (in shares) | shares | 6,900,000 |
Dividend rate | 6.00% |
Liquidation preference (in usd per share) | $ / shares | $ 25 |
Aggregate net proceeds from offering | $ | $ 166.5 |
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