FORM 10-Q |
ý | QUARTERLY REPORT PURSUANT TO THE SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 52-0782497 | |
(State of Organization) | (IRS Employer Identification No.) | |
1626 East Jefferson Street, Rockville, Maryland | 20852 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large Accelerated Filer | ý | Accelerated filer | ¨ |
Non-Accelerated Filer | o (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Emerging growth company | ¨ | ||
If an emerging growth company, indicate by checkmark if the registrant has elected not use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
PART I. FINANCIAL INFORMATION | |||
Item 1. | Financial Statements | ||
Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016 | |||
Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2017 and 2016 | |||
Consolidated Statement of Shareholders' Equity (unaudited) for the nine months ended September 30, 2017 | |||
Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2017 and 2016 | |||
Notes to Consolidated Financial Statements (unaudited) | |||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | ||
Item 4. | Controls and Procedures | ||
PART II. OTHER INFORMATION | |||
Item 1. | Legal Proceedings | ||
Item 1A. | Risk Factors | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 3. | Defaults Upon Senior Securities | ||
Item 4. | Mine Safety Disclosures | ||
Item 5. | Other Information | ||
Item 6. | Exhibits | ||
SIGNATURES |
September 30, | December 31, | ||||||
2017 | 2016 | ||||||
(In thousands, except share and per share data) | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
Real estate, at cost | |||||||
Operating (including $1,666,691 and $1,226,918 of consolidated variable interest entities, respectively) | $ | 6,758,728 | $ | 6,125,957 | |||
Construction-in-progress | 769,882 | 599,260 | |||||
Asset held for sale | — | 33,856 | |||||
7,528,610 | 6,759,073 | ||||||
Less accumulated depreciation and amortization (including $236,391 and $209,239 of consolidated variable interest entities, respectively) | (1,828,845 | ) | (1,729,234 | ) | |||
Net real estate | 5,699,765 | 5,029,839 | |||||
Cash and cash equivalents | 22,850 | 23,368 | |||||
Accounts and notes receivable, net | 200,878 | 116,749 | |||||
Mortgage notes receivable, net | 30,429 | 29,904 | |||||
Investment in real estate partnerships | 23,925 | 14,864 | |||||
Prepaid expenses and other assets | 243,290 | 208,555 | |||||
TOTAL ASSETS | $ | 6,221,137 | $ | 5,423,279 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Liabilities | |||||||
Mortgages payable (including $461,873 and $439,120 of consolidated variable interest entities, respectively) | $ | 493,240 | $ | 471,117 | |||
Capital lease obligations | 71,565 | 71,590 | |||||
Notes payable | 320,718 | 279,151 | |||||
Senior notes and debentures | 2,377,939 | 1,976,594 | |||||
Accounts payable and accrued expenses | 206,441 | 201,756 | |||||
Dividends payable | 73,466 | 71,440 | |||||
Security deposits payable | 16,698 | 16,285 | |||||
Other liabilities and deferred credits | 175,464 | 115,817 | |||||
Total liabilities | 3,735,531 | 3,203,750 | |||||
Commitments and contingencies (Note 6) | |||||||
Redeemable noncontrolling interests | 151,815 | 143,694 | |||||
Shareholders’ equity | |||||||
Preferred shares, authorized 15,000,000 shares, $.01 par: | |||||||
5.0% Series C Cumulative Redeemable Preferred Shares, (stated at liquidation preference $25,000 per share), 6,000 and 0 shares issued and outstanding, respectively | 150,000 | — | |||||
5.417% Series 1 Cumulative Convertible Preferred Shares, (stated at liquidation preference $25 per share), 399,896 shares issued and outstanding | 9,997 | 9,997 | |||||
Common shares of beneficial interest, $.01 par, 100,000,000 shares authorized, 72,542,909 and 71,995,897 shares issued and outstanding, respectively | 728 | 722 | |||||
Additional paid-in capital | 2,773,890 | 2,718,325 | |||||
Accumulated dividends in excess of net income | (724,919 | ) | (749,734 | ) | |||
Accumulated other comprehensive loss | (742 | ) | (2,577 | ) | |||
Total shareholders’ equity of the Trust | 2,208,954 | 1,976,733 | |||||
Noncontrolling interests | 124,837 | 99,102 | |||||
Total shareholders’ equity | 2,333,791 | 2,075,835 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 6,221,137 | $ | 5,423,279 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
REVENUE | |||||||||||||||
Rental income | $ | 212,048 | $ | 197,469 | $ | 620,741 | $ | 585,712 | |||||||
Other property income | 5,171 | 2,759 | 10,429 | 8,559 | |||||||||||
Mortgage interest income | 734 | 929 | 2,221 | 3,211 | |||||||||||
Total revenue | 217,953 | 201,157 | 633,391 | 597,482 | |||||||||||
EXPENSES | |||||||||||||||
Rental expenses | 41,250 | 38,588 | 119,487 | 118,385 | |||||||||||
Real estate taxes | 27,492 | 24,973 | 79,104 | 71,164 | |||||||||||
General and administrative | 9,103 | 8,232 | 26,013 | 25,278 | |||||||||||
Depreciation and amortization | 55,611 | 48,903 | 159,656 | 145,137 | |||||||||||
Total operating expenses | 133,456 | 120,696 | 384,260 | 359,964 | |||||||||||
OPERATING INCOME | 84,497 | 80,461 | 249,131 | 237,518 | |||||||||||
Other interest income | 79 | 105 | 253 | 285 | |||||||||||
Interest expense | (26,287 | ) | (24,313 | ) | (73,952 | ) | (71,143 | ) | |||||||
(Loss) income from real estate partnerships | (182 | ) | — | (296 | ) | 41 | |||||||||
INCOME FROM CONTINUING OPERATIONS | 58,107 | 56,253 | 175,136 | 166,701 | |||||||||||
Gain on sale of real estate and change in control of interests, net | 50,775 | 4,945 | 69,949 | 32,458 | |||||||||||
NET INCOME | 108,882 | 61,198 | 245,085 | 199,159 | |||||||||||
Net income attributable to noncontrolling interests | (2,105 | ) | (2,221 | ) | (5,827 | ) | (7,286 | ) | |||||||
NET INCOME ATTRIBUTABLE TO THE TRUST | 106,777 | 58,977 | 239,258 | 191,873 | |||||||||||
Dividends on preferred shares | (177 | ) | (136 | ) | (448 | ) | (406 | ) | |||||||
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ | 106,600 | $ | 58,841 | $ | 238,810 | $ | 191,467 | |||||||
EARNINGS PER COMMON SHARE, BASIC: | |||||||||||||||
Net income available for common shareholders | $ | 1.47 | $ | 0.82 | $ | 3.31 | $ | 2.70 | |||||||
Weighted average number of common shares | 72,091 | 71,319 | 71,983 | 70,626 | |||||||||||
EARNINGS PER COMMON SHARE, DILUTED: | |||||||||||||||
Net income available for common shareholders | $ | 1.47 | $ | 0.82 | $ | 3.30 | $ | 2.70 | |||||||
Weighted average number of common shares | 72,206 | 71,489 | 72,110 | 70,804 | |||||||||||
COMPREHENSIVE INCOME | $ | 109,240 | $ | 63,097 | $ | 246,920 | $ | 197,875 | |||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST | $ | 107,135 | $ | 60,876 | $ | 241,093 | $ | 190,589 |
Shareholders’ Equity of the Trust | |||||||||||||||||||||||||||||||||
Preferred Shares | Common Shares | Additional Paid-in Capital | Accumulated Dividends in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total Shareholders' Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
(In thousands, except share data) | |||||||||||||||||||||||||||||||||
BALANCE AT DECEMBER 31, 2016 | 399,896 | $ | 9,997 | 71,995,897 | $ | 722 | $ | 2,718,325 | $ | (749,734 | ) | $ | (2,577 | ) | $ | 99,102 | $ | 2,075,835 | |||||||||||||||
January 1, 2017 adoption of new accounting standard - See Note 2 | — | — | — | — | 83 | (83 | ) | — | — | — | |||||||||||||||||||||||
Net income, excluding $2,774 attributable to redeemable noncontrolling interests | — | — | — | — | — | 239,258 | — | 3,053 | 242,311 | ||||||||||||||||||||||||
Other comprehensive income - change in fair value of interest rate swaps | — | — | — | — | — | — | 1,835 | — | 1,835 | ||||||||||||||||||||||||
Dividends declared to common shareholders | — | — | — | — | — | (213,954 | ) | — | — | (213,954 | ) | ||||||||||||||||||||||
Dividends declared to preferred shareholders | — | — | — | — | — | (406 | ) | — | — | (406 | ) | ||||||||||||||||||||||
Distributions declared to noncontrolling interests | — | — | — | — | — | — | — | (4,435 | ) | (4,435 | ) | ||||||||||||||||||||||
Common shares issued, net | — | — | 325,451 | 4 | 42,690 | — | — | — | 42,694 | ||||||||||||||||||||||||
Preferred shares issued, net | 6,000 | 150,000 | — | — | (5,027 | ) | — | — | — | 144,973 | |||||||||||||||||||||||
Exercise of stock options | — | — | 112,334 | 1 | 8,213 | — | — | — | 8,214 | ||||||||||||||||||||||||
Shares issued under dividend reinvestment plan | — | — | 13,521 | — | 1,809 | — | — | — | 1,809 | ||||||||||||||||||||||||
Share-based compensation expense, net of forfeitures | — | — | 105,291 | 1 | 9,401 | — | — | — | 9,402 | ||||||||||||||||||||||||
Shares withheld for employee taxes | — | — | (29,615 | ) | — | (4,216 | ) | — | — | — | (4,216 | ) | |||||||||||||||||||||
Conversion and redemption of OP units | — | — | 20,030 | — | 2,569 | — | — | (2,569 | ) | — | |||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | — | 35,264 | 35,264 | ||||||||||||||||||||||||
Purchase of noncontrolling interest | — | — | — | — | 43 | — | — | (5,578 | ) | (5,535 | ) | ||||||||||||||||||||||
BALANCE AT SEPTEMBER 30, 2017 | 405,896 | $ | 159,997 | 72,542,909 | $ | 728 | $ | 2,773,890 | $ | (724,919 | ) | $ | (742 | ) | $ | 124,837 | $ | 2,333,791 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 245,085 | $ | 199,159 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 159,656 | 145,137 | |||||
Gain on sale of real estate and change in control of interests, net | (69,949 | ) | (32,458 | ) | |||
Loss (income) from real estate partnerships | 296 | (41 | ) | ||||
Other, net | (4,821 | ) | 556 | ||||
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | |||||||
Increase in accounts receivable, net | (1,565 | ) | (3,604 | ) | |||
Increase in prepaid expenses and other assets | (5,819 | ) | (25,769 | ) | |||
Increase in accounts payable and accrued expenses | 13,617 | 11,164 | |||||
Increase (decrease) in security deposits and other liabilities | 3,138 | (736 | ) | ||||
Net cash provided by operating activities | 339,638 | 293,408 | |||||
INVESTING ACTIVITIES | |||||||
Acquisition of real estate | (436,652 | ) | (135,151 | ) | |||
Capital expenditures - development and redevelopment | (335,666 | ) | (263,606 | ) | |||
Capital expenditures - other | (52,875 | ) | (40,326 | ) | |||
Proceeds from sale of real estate and real estate partnership interests | 127,538 | — | |||||
Investment in real estate partnerships | (502 | ) | (3,494 | ) | |||
Distribution from real estate partnership in excess of earnings | 1,672 | 3,910 | |||||
Leasing costs | (11,295 | ) | (11,471 | ) | |||
(Issuance) repayment of mortgage and other notes receivable, net | (500 | ) | 11,721 | ||||
Net cash used in investing activities | (708,280 | ) | (438,417 | ) | |||
FINANCING ACTIVITIES | |||||||
Net borrowings (repayment) under revolving credit facility, net of costs | 41,500 | (53,500 | ) | ||||
Issuance of senior notes, net of costs | 399,454 | 241,787 | |||||
Repayment of mortgages and capital leases | (54,844 | ) | (38,849 | ) | |||
Issuance of common shares, net of costs | 51,189 | 300,040 | |||||
Issuance of preferred shares, net of costs | 145,456 | — | |||||
Dividends paid to common and preferred shareholders | (210,845 | ) | (197,750 | ) | |||
Shares withheld for employee taxes | (4,216 | ) | (4,436 | ) | |||
Contributions from noncontrolling interests | 13,312 | 302 | |||||
Distributions to and redemptions of noncontrolling interests | (12,882 | ) | (22,350 | ) | |||
Net cash provided by financing activities | 368,124 | 225,244 | |||||
(Decrease) increase in cash and cash equivalents | (518 | ) | 80,235 | ||||
Cash and cash equivalents at beginning of year | 23,368 | 21,046 | |||||
Cash and cash equivalents at end of period | $ | 22,850 | $ | 101,281 |
Nine Months Ended | |||||||
September 30, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
SUPPLEMENTAL DISCLOSURES: | |||||||
Total interest costs incurred | $ | 92,520 | $ | 83,803 | |||
Interest capitalized | (18,568 | ) | (12,660 | ) | |||
Interest expense | $ | 73,952 | $ | 71,143 | |||
Cash paid for interest, net of amounts capitalized | $ | 70,486 | $ | 66,921 | |||
Cash paid for income taxes | $ | 342 | $ | 300 | |||
NON-CASH INVESTING AND FINANCING TRANSACTIONS: | |||||||
Mortgage loans refinanced | $ | 166,823 | $ | — | |||
Mortgage loans assumed with acquisition | $ | 79,401 | $ | 34,385 | |||
DownREIT operating partnership units issued with acquisition of noncontrolling interest | $ | 5,918 | $ | — | |||
DownREIT operating partnership units redeemed for common shares | $ | 2,569 | $ | 18,679 | |||
Shares issued under dividend reinvestment plan | $ | 1,528 | $ | 1,523 |
Property | City/State | GLA | |||
(in square feet) | |||||
Azalea | South Gate, CA | 222,000 | |||
Bell Gardens | Bell Gardens, CA | 330,000 | |||
La Alameda | Walnut Park, CA | 245,000 | |||
Olivo at Mission Hills (1) | Mission Hills, CA | 155,000 | |||
Plaza Del Sol | South El Monte, CA | 48,000 | |||
Plaza Pacoima | Pacoima, CA | 204,000 | |||
Sylmar Towne Center | Sylmar, CA | 148,000 | |||
1,352,000 | |||||
(1) Property is currently being redeveloped. GLA reflects approximate square footage once the property is open and operating. |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
(in millions) (unaudited) | ||||||||||||||||
Total revenue | $ | 220.2 | $ | 207.3 | $ | 649.0 | $ | 616.0 | ||||||||
Net income available for common shareholders | 106.2 | 57.5 | 235.9 | 187.5 |
Principal | Stated Interest Rate | Maturity Date | |||||||
(in millions) | |||||||||
Sylmar Towne Center | $ | 17.5 | 5.39 | % | June 6, 2021 | ||||
Plaza Del Sol | 8.6 | 5.23 | % | December 1, 2021 | |||||
Azalea | 40.0 | 3.73 | % | November 1, 2025 | |||||
Bell Gardens | 13.3 | 4.06 | % | August 1, 2026 |
September 30, 2017 | December 31, 2016 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Mortgages and notes payable | $ | 813,958 | $ | 826,012 | $ | 750,268 | $ | 760,260 | |||||||
Senior notes and debentures | $ | 2,377,939 | $ | 2,452,494 | $ | 1,976,594 | $ | 2,015,973 |
September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||
Interest rate swaps | $ | — | $ | 742 | $ | — | $ | 742 | $ | — | $ | 2,577 | $ | — | $ | 2,577 |
Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Declared | Paid | Declared | Paid | ||||||||||||
Common shares | $ | 2.960 | $ | 2.940 | $ | 2.860 | $ | 2.820 | |||||||
5.417% Series 1 Cumulative Convertible Preferred shares | $ | 1.016 | $ | 1.016 | $ | 1.016 | $ | 1.016 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In thousands) | |||||||||||||||
Minimum rents | |||||||||||||||
Retail and commercial | $ | 147,971 | $ | 137,009 | $ | 434,390 | $ | 409,027 | |||||||
Residential | 13,837 | 12,886 | 40,781 | 36,476 | |||||||||||
Cost reimbursement | 43,602 | 40,565 | 124,997 | 119,004 | |||||||||||
Percentage rents | 2,304 | 2,315 | 7,524 | 7,866 | |||||||||||
Other | 4,334 | 4,694 | 13,049 | 13,339 | |||||||||||
Total rental income | $ | 212,048 | $ | 197,469 | $ | 620,741 | $ | 585,712 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In millions) | |||||||||||||||
Straight-line rents | $ | 3.9 | $ | 1.5 | $ | 11.3 | $ | 6.2 | |||||||
Amortization of above market leases | $ | (1.6 | ) | $ | (1.7 | ) | $ | (4.4 | ) | $ | (5.3 | ) | |||
Amortization of below market leases | $ | 2.5 | $ | 2.2 | $ | 7.7 | $ | 6.5 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In thousands) | |||||||||||||||
Grants of common shares and options | $ | 2,945 | $ | 2,766 | $ | 9,402 | $ | 8,818 | |||||||
Capitalized share-based compensation | (405 | ) | (375 | ) | (1,103 | ) | (1,002 | ) | |||||||
Share-based compensation expense | $ | 2,540 | $ | 2,391 | $ | 8,299 | $ | 7,816 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
NUMERATOR | |||||||||||||||
Income from continuing operations | $ | 58,107 | $ | 56,253 | $ | 175,136 | $ | 166,701 | |||||||
Less: Preferred share dividends | (177 | ) | (136 | ) | (448 | ) | (406 | ) | |||||||
Less: Income from continuing operations attributable to noncontrolling interests | (2,105 | ) | (1,982 | ) | (5,537 | ) | (5,961 | ) | |||||||
Less: Earnings allocated to unvested shares | (317 | ) | (170 | ) | (785 | ) | (534 | ) | |||||||
Income from continuing operations available for common shareholders | 55,508 | 53,965 | 168,366 | 159,800 | |||||||||||
Gain on sale of real estate and change in control of interests, net | 50,775 | 4,706 | 69,659 | 31,133 | |||||||||||
Net income available for common shareholders, basic and diluted | $ | 106,283 | $ | 58,671 | $ | 238,025 | $ | 190,933 | |||||||
DENOMINATOR | |||||||||||||||
Weighted average common shares outstanding—basic | 72,091 | 71,319 | 71,983 | 70,626 | |||||||||||
Stock options | 115 | 170 | 127 | 178 | |||||||||||
Weighted average common shares outstanding—diluted | 72,206 | 71,489 | 72,110 | 70,804 | |||||||||||
EARNINGS PER COMMON SHARE, BASIC: | |||||||||||||||
Net income available for common shareholders | $ | 1.47 | $ | 0.82 | $ | 3.31 | $ | 2.70 | |||||||
EARNINGS PER COMMON SHARE, DILUTED: | |||||||||||||||
Net income available for common shareholders | $ | 1.47 | $ | 0.82 | $ | 3.30 | $ | 2.70 | |||||||
Income from continuing operations attributable to the Trust | $ | 56,002 | $ | 54,271 | $ | 169,599 | $ | 160,740 |
Property | City/State | GLA | |||
(in square feet) | |||||
Azalea | South Gate, CA | 222,000 | |||
Bell Gardens | Bell Gardens, CA | 330,000 | |||
La Alameda | Walnut Park, CA | 245,000 | |||
Olivo at Mission Hills (1) | Mission Hills, CA | 155,000 | |||
Plaza Del Sol | South El Monte, CA | 48,000 | |||
Plaza Pacoima | Pacoima, CA | 204,000 | |||
Sylmar Towne Center | Sylmar, CA | 148,000 | |||
1,352,000 | |||||
(1) Property is currently being redeveloped. GLA reflects approximate square footage once the property is open and operating. |
Principal | Stated Interest Rate | Maturity Date | |||||||
(in millions) | |||||||||
Sylmar Towne Center | $ | 17.5 | 5.39 | % | June 6, 2021 | ||||
Plaza Del Sol | 8.6 | 5.23 | % | December 1, 2021 | |||||
Azalea | 40.0 | 3.73 | % | November 1, 2025 | |||||
Bell Gardens | 13.3 | 4.06 | % | August 1, 2026 |
• | growth in our same-center portfolio, |
• | growth in our portfolio from property development and redevelopments, and |
• | expansion of our portfolio through property acquisitions. |
Change | ||||||||||||||
2017 | 2016 | Dollars | % | |||||||||||
(Dollar amounts in thousands) | ||||||||||||||
Rental income | $ | 212,048 | $ | 197,469 | $ | 14,579 | 7.4 | % | ||||||
Other property income | 5,171 | 2,759 | 2,412 | 87.4 | % | |||||||||
Mortgage interest income | 734 | 929 | (195 | ) | (21.0 | )% | ||||||||
Total property revenue | 217,953 | 201,157 | 16,796 | 8.3 | % | |||||||||
Rental expenses | 41,250 | 38,588 | 2,662 | 6.9 | % | |||||||||
Real estate taxes | 27,492 | 24,973 | 2,519 | 10.1 | % | |||||||||
Total property expenses | 68,742 | 63,561 | 5,181 | 8.2 | % | |||||||||
Property operating income (1) | 149,211 | 137,596 | 11,615 | 8.4 | % | |||||||||
General and administrative expense | (9,103 | ) | (8,232 | ) | (871 | ) | 10.6 | % | ||||||
Depreciation and amortization | (55,611 | ) | (48,903 | ) | (6,708 | ) | 13.7 | % | ||||||
Operating Income | 84,497 | 80,461 | 4,036 | 5.0 | % | |||||||||
Other interest income | 79 | 105 | (26 | ) | (24.8 | )% | ||||||||
Interest expense | (26,287 | ) | (24,313 | ) | (1,974 | ) | 8.1 | % | ||||||
Loss from real estate partnerships | (182 | ) | — | (182 | ) | (100.0 | )% | |||||||
Total other, net | (26,390 | ) | (24,208 | ) | (2,182 | ) | 9.0 | % | ||||||
Income from continuing operations | 58,107 | 56,253 | 1,854 | 3.3 | % | |||||||||
Gain on sale of real estate, net | 50,775 | 4,945 | 45,830 | 926.8 | % | |||||||||
Net income | 108,882 | 61,198 | 47,684 | 77.9 | % | |||||||||
Net income attributable to noncontrolling interests | (2,105 | ) | (2,221 | ) | 116 | (5.2 | )% | |||||||
Net income attributable to the Trust | $ | 106,777 | $ | 58,977 | $ | 47,800 | 81.0 | % |
(1) | Property operating income is a non-GAAP measure that consists of rental income, other property income and mortgage interest income, less rental expenses and real estate taxes. This measure is used internally to evaluate the performance of property operations and we consider it to be a significant measure. Property operating income should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. |
• | an increase of $7.4 million from acquisitions, primarily related to the six shopping centers acquired in Los Angeles County, California, Riverpoint Center, and Hastings Ranch Plaza, |
• | an increase of $3.7 million at redevelopment properties due to the opening of our new office building at Santana Row in late 2016, the lease-up of two of our retail redevelopments, partially offset by lower occupancy at two of our retail properties in Florida in the beginning stages of redevelopment, |
• | an increase of $2.8 million at same-center properties due primarily to higher rental rates of approximately $2.3 million, and |
• | an increase of $0.9 million from Assembly Row and Pike & Rose due primarily to the lease-up of residential units at Pike & Rose and the opening of the second phase of retail at both properties during 2017, partially offset by lower income from ground lease parcels which were sold in 2017. |
• | an increase of $1.5 million from acquisitions, primarily related to six shopping centers acquired in Los Angeles County, California, Hastings Ranch Plaza, and Riverpoint Center, |
• | an increase of $0.8 million from Assembly Row and Pike & Rose primarily related to Phase II of both properties, and |
• | an increase of $0.5 million from redevelopment and same-center properties primarily due to higher bad debt expense. |
• | an increase of $1.5 million from acquisitions, primarily related to our acquisition of six shopping centers in Los Angeles County, California, Riverpoint Center, and Hastings Ranch Plaza, and |
• | an increase of $1.2 million at redevelopment and same-center properties due primarily to higher assessments and our new office building at Santana Row. |
• | an increase of $6.0 million due to higher borrowings primarily attributable to the $300 million 3.25% senior notes and the reopening of $100 million on the 4.50% senior notes, both issued in June 2017 and higher weighted average borrowings on our revolving credit facility, |
• | an increase of $2.2 million in capitalized interest, and |
• | a decrease of $1.8 million due to a lower overall weighted average borrowing rate. |
• | $45.2 million gain related to the sale of our 150 Post Street property in August 2017, |
• | $4.9 million gain related to the sale of our North Lake Commons property in September 2017, and |
• | $0.6 million net percentage-of-completion gain, related to condominiums under binding contract at our Assembly Row property. |
Change | ||||||||||||||
2017 | 2016 | Dollars | % | |||||||||||
(Dollar amounts in thousands) | ||||||||||||||
Rental income | $ | 620,741 | $ | 585,712 | $ | 35,029 | 6.0 | % | ||||||
Other property income | 10,429 | 8,559 | 1,870 | 21.8 | % | |||||||||
Mortgage interest income | 2,221 | 3,211 | (990 | ) | (30.8 | )% | ||||||||
Total property revenue | 633,391 | 597,482 | 35,909 | 6.0 | % | |||||||||
Rental expenses | 119,487 | 118,385 | 1,102 | 0.9 | % | |||||||||
Real estate taxes | 79,104 | 71,164 | 7,940 | 11.2 | % | |||||||||
Total property expenses | 198,591 | 189,549 | 9,042 | 4.8 | % | |||||||||
Property operating income (1) | 434,800 | 407,933 | 26,867 | 6.6 | % | |||||||||
General and administrative expense | (26,013 | ) | (25,278 | ) | (735 | ) | 2.9 | % | ||||||
Depreciation and amortization | (159,656 | ) | (145,137 | ) | (14,519 | ) | 10.0 | % | ||||||
Operating Income | 249,131 | 237,518 | 11,613 | 4.9 | % | |||||||||
Other interest income | 253 | 285 | (32 | ) | (11.2 | )% | ||||||||
Interest expense | (73,952 | ) | (71,143 | ) | (2,809 | ) | 3.9 | % | ||||||
(Loss) income from real estate partnerships | (296 | ) | 41 | (337 | ) | (822.0 | )% | |||||||
Total other, net | (73,995 | ) | (70,817 | ) | (3,178 | ) | 4.5 | % | ||||||
Income from continuing operations | 175,136 | 166,701 | 8,435 | 5.1 | % | |||||||||
Gain on sale of real estate and change in control of interests, net | 69,949 | 32,458 | 37,491 | 115.5 | % | |||||||||
Net income | 245,085 | 199,159 | 45,926 | 23.1 | % | |||||||||
Net income attributable to noncontrolling interests | (5,827 | ) | (7,286 | ) | 1,459 | (20.0 | )% | |||||||
Net income attributable to the Trust | $ | 239,258 | $ | 191,873 | $ | 47,385 | 24.7 | % |
(1) | Property operating income is a non-GAAP measure that consists of rental income, other property income and mortgage interest income, less rental expenses and real estate taxes. This measure is used internally to evaluate the performance of property operations and we consider it to be a significant measure. Property operating income should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. |
• | an increase of $13.1 million at redevelopment properties due to the opening of our new office building at Santana Row in late 2016, the lease-up of three of our retail redevelopments, and the lease-up of the new residential building at Congressional Plaza throughout 2016, partially offset by lower occupancy at two of our retail properties in Florida in the beginning stages of redevelopment, |
• | an increase of $11.2 million from acquisitions, primarily related to the six shopping centers acquired in Los Angeles County, California, Riverpoint Center, and Hastings Ranch Plaza. |
• | an increase of $4.1 million at same-center properties due primarily to higher rental rates of approximately $4.5 million and higher recoveries of $0.7 million primarily the net result of higher real estate tax assessments partially offset by lower snow removal expense, partially offset by lower average occupancy of approximately $0.9 million, |
• | an increase of $4.0 million from Assembly Row and Pike & Rose due primarily to the lease-up of residential units and the opening of the second phase of retail at Pike & Rose during third quarter 2017, and |
• | an increase of $2.4 million from the acquisition of six previously unconsolidated Clarion joint venture properties in January 2016. |
• | an increase of $2.4 million from acquisitions, primarily related to our acquisition of six shopping centers in Los Angeles County, California, Hastings Ranch Plaza, and Riverpoint Center, and |
• | an increase of $0.4 million from Assembly Row and Pike & Rose, |
• | a decrease of $1.6 million at same-center and redevelopment properties primarily due to lower snow removal costs. |
• | an increase of $3.4 million at same-center properties due primarily to higher assessments, |
• | an increase of $2.3 million from acquisitions, primarily related to Riverpoint Center, six shopping centers in Los Angeles County, California, and Hastings Ranch Plaza, |
• | an increase of $1.5 million from redevelopment properties, primarily related to our new office building at Santana Row, and |
• | an increase of $0.5 million from Assembly Row and Pike & Rose. |
• | an increase of $10.8 million due to higher borrowings primarily attributable to the $300 million 3.25% senior notes and the reopening of $100 million on the 4.5% senior notes, both issued in June 2017, the 3.625% senior notes issued in July 2016, and higher weighted average borrowings on our revolving credit facility, |
• | an increase of $5.9 million in capitalized interest, and |
• | a decrease of $2.1 million due to a lower overall weighted average borrowing rate. |
• | $45.2 million gain related to the sale of our 150 Post Street property in August 2017, |
• | $15.4 million gain related to the sale of three ground lease parcels at our Assembly Row property in Somerville, Massachusetts, |
• | $4.9 million gain related to the sale of our North Lake Commons property in September 2017, and |
• | $3.9 million net percentage-of-completion gain, related to condominiums under binding contract at our Assembly Row property. |
• | $25.7 million gain related to our obtaining control of six properties when we acquired Clarion’s 70% interest in the partnership that owned those properties. The properties were previously accounted for under the equity method of accounting. We consolidated these assets effective January 13, 2016, and consequently recognized a gain on obtaining the controlling interest, |
• | $4.9 million gain related to the reversal of the unused portion of the warranty reserve for condominium units at Santana Row, as the statutorily mandated latent construction defect period ended in third quarter 2016, and |
• | $1.8 million gain related to the sale of a building in Coconut Grove, Florida. Our share of the gain, net of noncontrolling interests, was $0.7 million. |
• | restrictions in our debt instruments or preferred shares may limit us from incurring debt or issuing equity at all, or on acceptable terms under then-prevailing market conditions; and |
• | we may be unable to service additional or replacement debt due to increases in interest rates or a decline in our operating performance. |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
(In thousands) | |||||||
Cash provided by operating activities | $ | 339,638 | $ | 293,408 | |||
Cash used in investing activities | (708,280 | ) | (438,417 | ) | |||
Cash provided by financing activities | 368,124 | 225,244 | |||||
(Decrease) increase in cash and cash equivalents | (518 | ) | 80,235 | ||||
Cash and cash equivalents, beginning of year | 23,368 | 21,046 | |||||
Cash and cash equivalents, end of period | $ | 22,850 | $ | 101,281 |
• | a $301.5 million increase in acquisitions of real estate, primarily due to the August 2017 acquisition of six shopping centers in Los Angeles County, California, |
• | an $84.4 million increase in capital expenditures as we continue to invest in Pike & Rose, Assembly Row, Santana Row, and other current redevelopments, and |
• | a $12.2 million decrease in repayments of mortgage notes receivable due to the payoff of an $11.7 million note receivable in September 2016, |
• | $127.5 million in proceeds primarily from the sale of our property at 150 Post Street, three land parcels at Assembly Row, and North Lake Commons in 2017. |
• | $399.5 million net proceeds from the June 2017 issuance of $300.0 million of 3.25% senior unsecured notes that mature on July 15, 2027 and $100.0 million of 4.50% notes that mature on December 1, 2044, compared to $241.8 million in net proceeds from the issuance of 3.625% senior notes in July 2016, |
• | $145.5 million in net proceeds from the September 29, 2017 issuance of 6,000 Series C Preferred Shares, |
• | $41.5 million of borrowings on our revolving credit facility in 2017 as compared to $53.5 million of repayments in 2016, |
• | a $13.0 million increase in contributions from noncontrolling interests primarily due to contributions to fund the $50.0 million partial repayment of the Plaza El Segundo mortgage loan, and |
• | a $9.5 million decrease in distributions to and redemptions of noncontrolling interests primarily due to the 2016 acquisition of the 10% noncontrolling interest of a partnership which owns a project in Southern California, |
• | a $248.9 million decrease in net proceeds from the issuance of common shares primarily due to our March 2016 issuance of 1.0 million common shares at $149.43 per share in an underwritten public offering, and 1.0 million common shares under our ATM equity program at a weighted average price of $155.48 during the nine months ended September 30, 2016, compared to 0.3 million common shares at a weighted average share price of $133.09 in 2017, |
• | a $16.0 million increase in repayment of mortgages and capital leases primarily due to the $50.0 million pay down of the Plaza El Segundo mortgage loan on June 5, 2017, as compared to the payoff of $34.4 million of mortgage loans on April 1, 2016, and |
• | a $13.1 million increase in dividends paid to shareholders due to an increase in the dividend rate and an increased number of shares outstanding. |
Description of Debt | Original Debt Issued | Principal Balance as of September 30, 2017 | Stated Interest Rate as of September 30, 2017 | Maturity Date | |||||||
(Dollar amounts in thousands) | |||||||||||
Mortgages payable | |||||||||||
Secured fixed rate | |||||||||||
The Grove at Shrewsbury (West) | Acquired | $ | 10,608 | 6.38 | % | March 1, 2018 | |||||
Rollingwood Apartments | 24,050 | 20,939 | 5.54 | % | May 1, 2019 | ||||||
The Shops at Sunset Place | Acquired | 67,124 | 5.62 | % | September 1, 2020 | ||||||
29th Place | Acquired | 4,395 | 5.91 | % | January 31, 2021 | ||||||
Sylmar Towne Center | Acquired | 17,448 | 5.39 | % | June 6, 2021 | ||||||
Plaza Del Sol | Acquired | 8,621 | 5.23 | % | December 1, 2021 | ||||||
The AVENUE at White Marsh | 52,705 | 52,705 | 3.35 | % | January 1, 2022 | ||||||
Montrose Crossing | 80,000 | 71,478 | 4.20 | % | January 10, 2022 | ||||||
Azalea | Acquired | 40,000 | 3.73 | % | November 1, 2025 | ||||||
Bell Gardens | Acquired | 13,245 | 4.06 | % | August 1, 2026 | ||||||
Plaza El Segundo | 125,000 | 125,000 | 3.83 | % | June 5, 2027 | ||||||
The Grove at Shrewsbury (East) | 43,600 | 43,600 | 3.77 | % | September 1, 2027 | ||||||
Brook 35 | 11,500 | 11,500 | 4.65 | % | July 1, 2029 | ||||||
Chelsea | Acquired | 6,346 | 5.36 | % | January 15, 2031 | ||||||
Subtotal | 493,009 | ||||||||||
Net unamortized premium and debt issuance costs | 231 | ||||||||||
Total mortgages payable | 493,240 | ||||||||||
Notes payable | |||||||||||
Unsecured fixed rate | |||||||||||
Term loan (1) | 275,000 | 275,000 | LIBOR + 0.90% | November 21, 2018 | |||||||
Various | 7,239 | 4,908 | 11.31% | Various through 2028 | |||||||
Unsecured variable rate | |||||||||||
Revolving credit facility (2) | 800,000 | 41,500 | LIBOR + 0.825% | April 20, 2020 | |||||||
Subtotal | 321,408 | ||||||||||
Net unamortized debt issuance costs | (690 | ) | |||||||||
Total notes payable | 320,718 | ||||||||||
Senior notes and debentures | |||||||||||
Unsecured fixed rate | |||||||||||
5.90% notes | 150,000 | 150,000 | 5.90 | % | April 1, 2020 | ||||||
2.55% notes | 250,000 | 250,000 | 2.55 | % | January 15, 2021 | ||||||
3.00% notes | 250,000 | 250,000 | 3.00 | % | August 1, 2022 | ||||||
2.75% notes | 275,000 | 275,000 | 2.75 | % | June 1, 2023 | ||||||
3.95% notes | 300,000 | 300,000 | 3.95 | % | January 15, 2024 | ||||||
7.48% debentures | 50,000 | 29,200 | 7.48 | % | August 15, 2026 | ||||||
3.25% notes | 300,000 | 300,000 | 3.25 | % | July 15, 2027 | ||||||
6.82% medium term notes | 40,000 | 40,000 | 6.82 | % | August 1, 2027 | ||||||
4.50% notes | 550,000 | 550,000 | 4.50 | % | December 1, 2044 | ||||||
3.625% notes | 250,000 | 250,000 | 3.625 | % | August 1, 2046 | ||||||
Subtotal | 2,394,200 | ||||||||||
Net unamortized discount and debt issuance costs | (16,261 | ) | |||||||||
Total senior notes and debentures | 2,377,939 | ||||||||||
Capital lease obligations | |||||||||||
Various | 71,565 | Various | Various through 2106 | ||||||||
Total debt and capital lease obligations | $ | 3,263,462 |
1) | We entered into two interest rate swap agreements that fix the LIBOR portion of the interest rate on the term loan at 1.72%. The spread on the term loan is 90 basis points resulting in a fixed rate of 2.62%. |
2) | The maximum amount drawn under our revolving credit facility during the nine months ended September 30, 2017 was $344.0 million, and the weighted average interest rate on borrowings under our revolving credit facility, before amortization of debt fees, was 1.9%. |
Unsecured | Secured | Capital Lease | Total | |||||||||||||
(In thousands) | ||||||||||||||||
2017 | $ | 123 | $ | 1,425 | $ | 13 | $ | 1,561 | ||||||||
2018 | 275,513 | (1) | 16,251 | 37 | 291,801 | |||||||||||
2019 | 567 | 25,820 | 42 | 26,429 | ||||||||||||
2020 | 192,129 | (2) | 65,539 | 46 | 257,714 | |||||||||||
2021 | 250,700 | 30,541 | 51 | 281,292 | ||||||||||||
Thereafter | 1,996,576 | 353,433 | 71,376 | 2,421,385 | ||||||||||||
$ | 2,715,608 | $ | 493,009 | $ | 71,565 | $ | 3,280,182 | (3) |
1) | Our $275.0 million unsecured term loan matures on November 21, 2018, subject to a one-year extension at our option. |
2) | Our $800.0 million revolving credit facility matures on April 20, 2020, subject to two six-month extensions at our option. As of September 30, 2017, there was $41.5 million outstanding under this credit facility. |
3) | The total debt maturities differs from the total reported on the consolidated balance sheet due to the unamortized net premium/(discount) and debt issuance costs on mortgage loans, notes payable, and senior notes as of September 30, 2017. |
• | does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income); |
• | should not be considered an alternative to net income as an indication of our performance; and |
• | is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net income | $ | 108,882 | $ | 61,198 | $ | 245,085 | $ | 199,159 | |||||||
Net income attributable to noncontrolling interests | (2,105 | ) | (2,221 | ) | (5,827 | ) | (7,286 | ) | |||||||
Gain on sale of real estate and change in control of interests, net | (50,775 | ) | (4,706 | ) | (69,659 | ) | (31,133 | ) | |||||||
Depreciation and amortization of real estate assets | 48,796 | 42,779 | 139,112 | 126,806 | |||||||||||
Amortization of initial direct costs of leases | 4,780 | 4,260 | 14,530 | 12,729 | |||||||||||
Funds from operations | 109,578 | 101,310 | 323,241 | 300,275 | |||||||||||
Dividends on preferred shares (1) | (41 | ) | (136 | ) | (41 | ) | (406 | ) | |||||||
Income attributable to operating partnership units | 788 | 750 | 2,355 | 2,397 | |||||||||||
Income attributable to unvested shares | (357 | ) | (263 | ) | (1,064 | ) | (826 | ) | |||||||
Funds from operations available for common shareholders | $ | 109,968 | $ | 101,661 | $ | 324,491 | 301,440 | ||||||||
Weighted average number of common shares, diluted (1)(2) | 73,089 | 72,254 | 73,001 | 71,642 | |||||||||||
Funds from operations available for common shareholders, per diluted share | $ | 1.50 | $ | 1.41 | $ | 4.45 | $ | 4.21 |
(1) | For the three and nine months ended September 30, 2017, dividends on our Series 1 preferred stock are not deducted in the calculation of FFO available to common shareholders, as the related shares are dilutive and included in "weighted average common shares, diluted." |
(2) | The weighted average common shares used to compute FFO per diluted common share includes operating partnership units that were excluded from the computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted common share but is anti-dilutive for the computation of diluted EPS for the periods presented. |
• | risks that our tenants will not pay rent, may vacate early or may file for bankruptcy or that we may be unable to renew leases or re-let space at favorable rents as leases expire; |
• | risks that we may not be able to proceed with or obtain necessary approvals for any redevelopment or renovation project, and that completion of anticipated or ongoing property redevelopment or renovation projects that we do pursue may cost more, take more time to complete or fail to perform as expected; |
• | risk that we are investing a significant amount in ground-up development projects that may be dependent on third parties to deliver critical aspects of certain projects, requires spending a substantial |
• | risks normally associated with the real estate industry, including risks that: |
• | occupancy levels at our properties and the amount of rent that we receive from our properties may be lower than expected, |
• | new acquisitions may fail to perform as expected, |
• | competition for acquisitions could result in increased prices for acquisitions, |
• | that costs associated with the periodic maintenance and repair or renovation of space, insurance and other operations may increase, |
• | environmental issues may develop at our properties and result in unanticipated costs, and |
• | because real estate is illiquid, we may not be able to sell properties when appropriate; |
• | risks that our growth will be limited if we cannot obtain additional capital; |
• | risks associated with general economic conditions, including local economic conditions in our geographic markets; |
• | risks of financing, such as our ability to consummate additional financings or obtain replacement financing on terms which are acceptable to us, our ability to meet existing financial covenants and the limitations imposed on our operations by those covenants, and the possibility of increases in interest rates that would result in increased interest expense; and |
• | risks related to our status as a real estate investment trust, commonly referred to as a REIT, for federal income tax purposes, such as the existence of complex tax regulations relating to our status as a REIT, the effect of future changes in REIT requirements as a result of new legislation, and the adverse consequences of the failure to qualify as a REIT. |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
FEDERAL REALTY INVESTMENT TRUST | ||
November 1, 2017 | /s/ Donald C. Wood | |
Donald C. Wood, | ||
President, Chief Executive Officer and Trustee | ||
(Principal Financial and Executive Officer) | ||
FEDERAL REALTY INVESTMENT TRUST | ||
November 1, 2017 | /s/ Daniel Guglielmone | |
Daniel Guglielmone, | ||
Executive Vice President | ||
Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) | ||
EXHIBIT INDEX | ||
Exhibit No. | Description | |
Rule 13a-14(a) Certification of Chief Executive Officer (filed herewith) | ||
Rule 13a-14(a) Certification of Principal Financial Officer (filed herewith) | ||
Section 1350 Certification of Chief Executive Officer (filed herewith) | ||
Section 1350 Certification of Principal Financial Officer (filed herewith) | ||
The following materials from Federal Realty Investment Trust’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (Extensible Business Reporting Language): (1) the Consolidated Balance Sheets, (2) the Consolidated Statements of Comprehensive Income, (3) the Consolidated Statement of Shareholders’ Equity, (4) the Consolidated Statements of Cash Flows, and (5) Notes to Consolidated Financial Statements that have been detail tagged. |
1) | I have reviewed this quarterly report on Form 10-Q of Federal Realty Investment Trust; |
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 trustees (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. |
November 1, 2017 | /s/ Donald C. Wood | |
Donald C. Wood, | ||
President, Chief Executive Officer and Trustee | ||
(Principal Financial and Executive Officer) |
1) | I have reviewed this quarterly report on Form 10-Q of Federal Realty Investment Trust; |
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 trustees (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. |
November 1, 2017 | /s/ Daniel Guglielmone | |
Daniel Guglielmone | ||
Executive Vice President - Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
November 1, 2017 | /s/ Donald C. Wood | |
Donald C. Wood, | ||
President, Chief Executive Officer and Trustee | ||
(Principal Financial and Executive Officer) |
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
November 1, 2017 | /s/ Daniel Guglielmone | |
Daniel Guglielmone | ||
Executive Vice President - Chief Financial Officer and Treasurer | ||
(Principal Financial and Accounting Officer) |
Document and Entity Information Document - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 27, 2017 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | FEDERAL REALTY INVESTMENT TRUST | |
Entity Central Index Key | 0000034903 | |
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 | 72,546,870 |
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands |
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Sep. 30, 2016 |
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REVENUE | ||||
Rental income | $ 212,048 | $ 197,469 | $ 620,741 | $ 585,712 |
Other property income | 5,171 | 2,759 | 10,429 | 8,559 |
Mortgage interest income | 734 | 929 | 2,221 | 3,211 |
Total revenue | 217,953 | 201,157 | 633,391 | 597,482 |
EXPENSES | ||||
Rental expenses | 41,250 | 38,588 | 119,487 | 118,385 |
Real estate taxes | 27,492 | 24,973 | 79,104 | 71,164 |
General and administrative | 9,103 | 8,232 | 26,013 | 25,278 |
Depreciation and amortization | 55,611 | 48,903 | 159,656 | 145,137 |
Total operating expenses | 133,456 | 120,696 | 384,260 | 359,964 |
OPERATING INCOME | 84,497 | 80,461 | 249,131 | 237,518 |
Other interest income | 79 | 105 | 253 | 285 |
Interest expense | (26,287) | (24,313) | (73,952) | (71,143) |
(Loss) income from real estate partnerships | (182) | 0 | (296) | 41 |
INCOME FROM CONTINUING OPERATIONS | 58,107 | 56,253 | 175,136 | 166,701 |
Gain on sale of real estate and change in control of interests, net | 50,775 | 4,945 | 69,949 | 32,458 |
NET INCOME | 108,882 | 61,198 | 245,085 | 199,159 |
Net income attributable to noncontrolling interests | (2,105) | (2,221) | (5,827) | (7,286) |
NET INCOME ATTRIBUTABLE TO THE TRUST | 106,777 | 58,977 | 239,258 | 191,873 |
Dividends on preferred shares | (177) | (136) | (448) | (406) |
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | $ 106,600 | $ 58,841 | $ 238,810 | $ 191,467 |
EARNINGS PER COMMON SHARE, BASIC: | ||||
Net income available for common shareholders | $ 1.47 | $ 0.82 | $ 3.31 | $ 2.70 |
Weighted average number of common shares | 72,091 | 71,319 | 71,983 | 70,626 |
EARNINGS PER COMMON SHARE, DILUTED: | ||||
Net income available for common shareholders | $ 1.47 | $ 0.82 | $ 3.30 | $ 2.70 |
Weighted average number of common shares | 72,206 | 71,489 | 72,110 | 70,804 |
COMPREHENSIVE INCOME | $ 109,240 | $ 63,097 | $ 246,920 | $ 197,875 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE TRUST | $ 107,135 | $ 60,876 | $ 241,093 | $ 190,589 |
Consolidated Statement Of Shareholders' Equity (Parentheticals) $ in Thousands |
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USD ($)
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Statement of Stockholders' Equity [Abstract] | |
Net income attributable to redeemable noncontrolling interests | $ 2,774 |
Business And Organization |
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Nature Of Operations [Abstract] | |
BUSINESS AND ORGANIZATION | BUSINESS AND ORGANIZATION Federal Realty Investment Trust (the “Trust”) is an equity real estate investment trust (“REIT”) specializing in the ownership, management, and redevelopment of retail and mixed-use properties. Our properties are located primarily in densely populated and affluent communities in strategically selected metropolitan markets in the Mid-Atlantic and Northeast regions of the United States, California, and South Florida. As of September 30, 2017, we owned or had a majority interest in community and neighborhood shopping centers and mixed-use properties which are operated as 104 predominantly retail real estate projects. We operate in a manner intended to enable us to qualify as a REIT for federal income tax purposes. A REIT that distributes at least 90% of its taxable income to its shareholders each year and meets certain other conditions is not taxed on that portion of its taxable income which is distributed to its shareholders. Therefore, federal income taxes on our taxable income have been and are generally expected to be immaterial. We are obligated to pay state taxes, generally consisting of franchise or gross receipts taxes in certain states. Such state taxes also have not been material. |
Summary Of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying consolidated balance sheet as of December 31, 2016, which has been derived from audited financial statements, and unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Trust’s latest Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation for the periods presented have been included. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the full year. Principles of Consolidation Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting. Certain 2016 amounts have been reclassified to conform to current period presentation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates. Revenue Recognition We are currently under construction on 221 condominium units at our Assembly Row and Pike & Rose properties. Gains or losses on the sale of these condominium units are recognized in accordance with the provisions of ASC Topic 360-20, “Property, Plant and Equipment – Real Estate Sales.” We account for contracted condominium sales under the percentage-of-completion method, based on an evaluation of the criteria specified in ASC Topic 360-20 including: the legal commitment of the purchaser in the real estate contract, whether the construction of the project is beyond a preliminary phase, whether sufficient units have been contracted to ensure the project will not revert to a rental project, the ability to reasonably estimate the aggregate project sale proceeds and aggregate project costs, and the determination that the buyer has made an adequate initial and continuing cash investment under the contract. When the percentage-of-completion criteria have not been met, no profit is recognized. The application of this criteria can be complex and requires us to make assumptions. Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." ASU 2014-09 as amended and interpreted by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20, supersedes nearly all existing revenue recognition guidance under GAAP and replaces it with a core revenue recognition principle, that an entity will recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and creates a five-step model for revenue recognition in accordance with this principle. While we are still completing the assessment of the impact of these standards to our consolidated financial statements, we believe the majority of our revenue falls outside of the scope of this guidance. However, the new guidance will affect the accounting method related to our gains on condominium sales. Currently, gains on contracted sales are recognized using the percentage-of-completion method, with the gain recognized once certain criteria have been met in advance of legal closing (see further discussion in Note 3 to the consolidated financial statements). Under the new guidance, condominium sale gains will be recognized as the condominium units are legally sold, which will typically be upon closing. We intend to implement the new revenue recognition guidance retrospectively with the cumulative effect recognized in retained earnings at the date of initial application. In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets." ASU 2017-05 clarifies that ASC 610-20 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and also clarifies that all businesses are derecognized using the deconsolidation guidance. Additionally, it defines an insubstance nonfinancial asset as a financial asset that is promised to a counterparty in a contract in which substantially all of the fair value of the assets promised in the contract is concentrated in nonfinancial assets, which excludes cash or cash equivalents and liabilities. The new guidance is expected to impact the gain recognized when a real estate asset is sold to a non-customer and a noncontrolling interest is retained. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest, however, the new guidance eliminates the use of carryover basis and generally requires a full gain to be recognized. ASU 2017-05 is effective for us in the first quarter of 2018, and we are currently assessing the impact of this standard to our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under the new guidance, an entity will not apply modification accounting if the awards' fair value, vesting conditions, and the classification of the award as equity or a liability are the same immediately before and after the change. ASU 2017-09 is effective for us in the first quarter of 2018, is applied prospectively to awards granted or modified after the adoption date, and is not expected to have a significant impact to our consolidated financial statements. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation." ASU 2016-09 simplifies the accounting for share-based payment transactions, including a policy election option with respect to accounting for forfeitures either as they occur or estimating forfeitures (as is currently required), as well as increasing the amount an employer can withhold to cover income taxes on equity awards. Additionally, ASU 2016-09 requires the cash paid to a taxing authority when shares are withheld to pay employee taxes to be classified as a "financing activity" rather than an "operating activity," as was done previously on the Statement of Cash Flows. We adopted this standard effective January 1, 2017, and as a result, we are now accounting for forfeitures as they occur, and have recorded the cumulative impact on the adoption date as a $0.1 million adjustment to additional paid in capital and retained earnings. The amount reclassified from "operating activities" to "financing activities" for shares withheld for employee taxes was $4.4 million. In January 2017, the FASB issued ASU 2017-01, "Clarifying the Definition of a Business." ASU 2017-01 changes the definition of a business to exclude acquisitions where substantially all of the fair value of the assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets. Given this change in definition, we believe most of our shopping center acquisitions will no longer be considered business combinations but rather asset acquisitions. While there are various differences between the accounting for an asset acquisition and a business combination, the largest impact will be that transaction costs are capitalized for asset acquisitions rather than expensed when they were considered business combinations. Based on acquisitions in the past several years, transaction costs for a single shopping center acquisition have typically ranged from $0.2 million to $2.4 million with significantly higher transaction costs expected for an acquisition of a larger portfolio. We adopted this standard effective January 1, 2017, and are applying the new guidance prospectively. Our acquisitions in the first nine months of 2017 (further discussed in Note 3 below) qualified as asset acquisitions and consequently, all transaction costs were capitalized. Consolidated Statements of Cash Flows—Supplemental Disclosures The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows:
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Real Estate |
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Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REAL ESTATE | REAL ESTATE On February 1, 2017, we acquired a leasehold interest in Hastings Ranch Plaza, a 274,000 square foot shopping center in Pasadena, California for $29.5 million. The land is subject to a long-term ground lease that expires on April 30, 2054. Approximately $21.5 million of assets acquired were allocated to lease intangibles and included within other assets. Approximately $15.2 million of net assets acquired were allocated to lease liabilities and included in other liabilities. On March 31, 2017, we acquired the fee interest in Riverpoint Center, a 211,000 square foot shopping center in the Lincoln Park neighborhood of Chicago, Illinois for $107.0 million. Approximately $1.0 million and $12.3 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. We leased three parcels of land at our Assembly Row property to two ground lessees. During 2016, both lessees exercised purchase options under the related ground leases. The sale transaction related to the purchase option on one of our ground leases was completed on April 4, 2017 for a sales price of $36.0 million. On June 28, 2017, the sale transactions related to the purchase options on our other two ground lease parcels were completed for a total sales price of $17.3 million. The net gain recognized in connection with these transactions was approximately $15.4 million. On May 19, 2017, we acquired the fee interest in a 71,000 square foot, mixed-use property located in Berkeley, California based on a gross value of $23.9 million. The acquisition was completed through a newly formed entity for which we own a 90% controlling interest. Approximately $0.8 million and $0.3 million of net assets acquired were allocated to other assets for "above market leases," and other liabilities for "below market leases," respectively. Additionally, approximately $2.4 million was allocated to noncontrolling interests. On August 2, 2017, we acquired an approximately 90% interest in a joint venture that owns six shopping centers in Los Angeles County, California based on a gross value of $357 million, including the assumption of $79.4 million of mortgage debt. Approximately $7.8 million of assets acquired were allocated to lease intangibles and included within other assets. Approximately $36.2 million of net assets acquired were allocated to lease liabilities and included in other liabilities. Additionally, approximately $30.6 million was allocated to noncontrolling interests. That joint venture also acquired a 24.5% interest in La Alameda, a shopping center in Walnut Park, California for $19.8 million. The property has $41.0 million of mortgage debt, of which the joint venture's share is approximately $10 million. Additional information on the properties is listed below:
The following unaudited pro forma financial data includes the incremental revenues, operating expenses (including approximately $2.8 million and $8.5 million of depreciation and amortization expense for the three and nine months ended September 30, 2017 and 2016, respectively), and interest expense/financing costs related to the properties acquired on August 2, 2017 as if they had occurred on January 1, 2016. The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of income would have been, nor does it represent the results of income for future periods.
On August 25, 2017, we sold our property located at 150 Post Street in San Francisco, California for a sales price of $69.3 million, resulting in a gain of $45.2 million. On September 25, 2017, we sold our North Lake Commons property in Lake Zurich, Illinois for a sales price of $15.6 million, resulting in a gain of $4.9 million. For the three and nine months ended September 30, 2017 we recognized a $0.6 million and $3.9 million gain, respectively, net of $0.3 million and $2.0 million of income taxes, respectively, related to the sale of condominiums at our Assembly Row property based on the percentage-of-completion method. In connection with recording the gain, we recognized a receivable of $59.1 million as of September 30, 2017. The closing of the Assembly Row condominium sales is expected to commence in 2018. As of September 30, 2017, no gain has been recognized for contracted condominium sales at Pike & Rose, as not all of the criteria necessary for profit recognition have been met. |
Debt |
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Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT On June 5, 2017 we refinanced the $175.0 million mortgage loan on Plaza El Segundo at a face amount of $125.0 million and repaid the remaining $50.0 million at par. The new mortgage loan bears interest at 3.83% and matures on June 5, 2027. On June 23, 2017, we issued $400.0 million aggregate principal amount of fixed rate senior unsecured notes in two separate series. We issued $300.0 million of 3.25% notes that mature on July 15, 2027, were offered at 99.083% of the principal amount, with a yield to maturity of 3.358%. Additionally, we issued $100.0 million of 4.50% notes due December 1, 2044. The 4.50% notes were offered at 105.760% of the principal amount, with a yield to maturity of 4.143%, and have the same terms and are of the same series as the senior notes first issued on November 14, 2014. Our net proceeds from the June note offering after net issuance premium, underwriting fees and other costs was approximately $399.5 million. In connection with the acquisition of six shopping centers in Los Angeles County, California on August 2, 2017 (as further discussed in Note 3), we assumed mortgage loans with a face amount of $79.4 million and a fair value of $80.1 million. The mortgage loans are secured by the individual properties with the following contractual terms:
On August 31, 2017, we refinanced the $41.8 million mortgage loan, at par, on The Grove at Shrewsbury (East) at a face amount of $43.6 million. The new mortgage loan bears interest at 3.77% and matures on September 1, 2027. During the three and nine months ended September 30, 2017, the maximum amount of borrowings outstanding under our $800.0 million revolving credit facility was $281.5 million and $344.0 million, respectively, and the weighted average interest rate, before amortization of debt fees, was 2.1% and 1.9%, respectively. During the three and nine months ended September 30, 2017, the weighted average borrowings outstanding were $172.7 million and $173.0 million, respectively. At September 30, 2017, there was $41.5 million outstanding balance. Our revolving credit facility, term loan and certain notes require us to comply with various financial covenants, including the maintenance of minimum shareholders’ equity and debt coverage ratios and a maximum ratio of debt to net worth. As of September 30, 2017, we were in compliance with all default related debt covenants. |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Except as disclosed below, the carrying amount of our financial instruments approximates their fair value. The fair value of our mortgages payable, notes payable and senior notes and debentures is sensitive to fluctuations in interest rates. Quoted market prices (Level 1) were used to estimate the fair value of our marketable senior notes and debentures and discounted cash flow analysis (Level 2) is generally used to estimate the fair value of our mortgages and notes payable. Considerable judgment is necessary to estimate the fair value of financial instruments. The estimates of fair value presented herein are not necessarily indicative of the amounts that could be realized upon disposition of the financial instruments. A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows:
As of September 30, 2017, we have two interest rate swap agreements with a notional amount of $275.0 million that are measured at fair value on a recurring basis. The interest rate swap agreements fix the variable portion of our $275.0 million term loan at 1.72% through November 1, 2018. We assess effectiveness of our cash flow hedges both at inception and on an ongoing basis. The effective portion of changes in fair value of the interest rate swaps associated with our cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into interest expense as interest is incurred on the related variable rate debt. Within the next 12 months, we expect to reclassify an estimated $0.7 million as an increase to interest expense. Our cash flow hedges become ineffective if critical terms of the hedging instrument and the debt instrument do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and LIBOR rate. In addition, we evaluate the default risk of the counterparty by monitoring the credit-worthiness of the counterparty. When ineffectiveness exists, the ineffective portion of changes in fair value of the interest rate swaps associated with our cash flow hedges is recognized in earnings in the period affected. Hedge ineffectiveness has not impacted earnings as of September 30, 2017, and we do not anticipate it will have a significant effect in the future. The fair values of the interest rate swap agreements are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and interest rate related observable inputs. The fair value of our swaps at September 30, 2017 was a liability of $0.7 million and is included in "accounts payable and accrued expenses" on our consolidated balance sheet. For the three and nine months ended September 30, 2017, the change in valuation on our interest rate swaps resulted in a $0.4 million and $1.8 million decrease in our derivative liability, respectively, (including $0.4 million and $1.5 million, respectively, reclassified from other comprehensive loss to interest expense). The change in valuation on our interest rate swaps is included in "accumulated other comprehensive loss." A summary of our financial liabilities that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We are sometimes involved in lawsuits, warranty claims, and environmental matters arising in the ordinary course of business. Management makes assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters. We are currently a party to various legal proceedings. We accrue a liability for litigation if an unfavorable outcome is probable and the amount of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range; however, if no amount within the range is a better estimate than any other amount, the minimum within the range is accrued. Legal fees related to litigation are expensed as incurred. We do not believe that the ultimate outcome of these matters, either individually or in the aggregate, could have a material adverse effect on our financial position or overall trends in results of operations; however, litigation is subject to inherent uncertainties. Also under our leases, tenants are typically obligated to indemnify us from and against all liabilities, costs and expenses imposed upon or asserted against us (1) as owner of the properties due to certain matters relating to the operation of the properties by the tenant, and (2) where appropriate, due to certain matters relating to the ownership of the properties prior to their acquisition by us. Under the terms of certain partnership agreements, the partners have the right to exchange their operating partnership units for cash or the same number of our common shares, at our option. A total of 787,962 downREIT operating partnership units are outstanding which have a total fair value of $97.9 million, based on our closing stock price on September 30, 2017. On January 12, 2017, we exercised our purchase option on non-controlling interests in San Antonio Center for $2.6 million of cash and 44,195 of downREIT operating partnership units. |
Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS’ EQUITY | SHAREHOLDERS’ EQUITY The following table provides a summary of dividends declared and paid per share:
We have an at the market (“ATM”) equity program in which we may from time to time offer and sell common shares having an aggregate offering price of up to $400.0 million. We intend to use the net proceeds to fund potential acquisition opportunities, fund our development and redevelopment pipeline, repay amounts outstanding under our revolving credit facility and/or for general corporate purposes. For the three months ended September 30, 2017, we issued 226,739 common shares at a weighted average price per share of $131.00 for net cash proceeds of $29.3 million and paid $0.3 million in commissions and $0.1 million in additional offering expenses related to the sales of these common shares. For the nine months ended September 30, 2017, we issued 325,397 common shares at a weighted average price per share of $133.09 for net cash proceeds of $42.7 million and paid $0.4 million in commissions and $0.1 million in additional offering expenses related to the sales of these common shares. As of September 30, 2017, we had the capacity to issue up to $327.6 million in common shares under our ATM equity program. On September 29, 2017, we issued 6,000,000 Depository Shares, each representing 1/1000th interest in a 5.0% Series C Cumulative Redeemable Preferred Share, par value $0.01 per share, ("Series C Preferred Shares") at the liquidation preference of $25.00 per depository share (or $25,000 per Series C Preferred share) in an underwritten public offering. The Series C Preferred Shares accrue dividends at a rate of 5.0% of the $25,000 liquidation preference per year and are redeemable at our option on or after September 29, 2022. Additionally, they are not convertible and holders of these shares generally have no voting rights, unless we fail to pay dividends for six or more quarters. The net proceeds after underwriting fees and other costs were approximately $145.0 million. |
Components Of Rental Income |
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Components Of Rental Income and Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPONENTS OF RENTAL INCOME | COMPONENTS OF RENTAL INCOME The principal components of rental income are as follows:
Minimum rents include the following:
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Share-Based Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION PLANS | SHARE-BASED COMPENSATION PLANS A summary of share-based compensation expense included in net income is as follows:
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE We have calculated earnings per share (“EPS”) under the two-class method. The two-class method is an earnings allocation methodology whereby EPS for each class of common stock and participating securities is calculated according to dividends declared and participation rights in undistributed earnings. For the three and nine months ended September 30, 2017 and 2016, we had 0.2 million weighted average unvested shares outstanding, which are considered participating securities. Therefore, we have allocated our earnings for basic and diluted EPS between common shares and unvested shares; the portion of earnings allocated to the unvested shares is reflected as “earnings allocated to unvested shares” in the reconciliation below. In the dilutive EPS calculation, dilutive stock options were calculated using the treasury stock method consistent with prior periods. There were 682 anti-dilutive stock options for the three and nine months ended September 30, 2017, and no anti-dilutive stock options for the thee and nine months ended September 30, 2016. The conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS.
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Summary of Significant Accounting Policies (Policy) |
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Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying consolidated balance sheet as of December 31, 2016, which has been derived from audited financial statements, and unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Trust’s latest Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation for the periods presented have been included. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the full year. |
Principles of Consolidation | Principles of Consolidation Our consolidated financial statements include the accounts of the Trust, its corporate subsidiaries, and all entities in which the Trust has a controlling interest or has been determined to be the primary beneficiary of a variable interest entity (“VIE”). The equity interests of other investors are reflected as noncontrolling interests or redeemable noncontrolling interests. All significant intercompany transactions and balances are eliminated in consolidation. We account for our interests in joint ventures, which we do not control, using the equity method of accounting. Certain 2016 amounts have been reclassified to conform to current period presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, referred to as “GAAP,” requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and revenues and expenses. These estimates are prepared using management’s best judgment, after considering past, current and expected events and economic conditions. Actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition We are currently under construction on 221 condominium units at our Assembly Row and Pike & Rose properties. Gains or losses on the sale of these condominium units are recognized in accordance with the provisions of ASC Topic 360-20, “Property, Plant and Equipment – Real Estate Sales.” We account for contracted condominium sales under the percentage-of-completion method, based on an evaluation of the criteria specified in ASC Topic 360-20 including: the legal commitment of the purchaser in the real estate contract, whether the construction of the project is beyond a preliminary phase, whether sufficient units have been contracted to ensure the project will not revert to a rental project, the ability to reasonably estimate the aggregate project sale proceeds and aggregate project costs, and the determination that the buyer has made an adequate initial and continuing cash investment under the contract. When the percentage-of-completion criteria have not been met, no profit is recognized. The application of this criteria can be complex and requires us to make assumptions. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers." ASU 2014-09 as amended and interpreted by ASU 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-12, and ASU 2016-20, supersedes nearly all existing revenue recognition guidance under GAAP and replaces it with a core revenue recognition principle, that an entity will recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and creates a five-step model for revenue recognition in accordance with this principle. While we are still completing the assessment of the impact of these standards to our consolidated financial statements, we believe the majority of our revenue falls outside of the scope of this guidance. However, the new guidance will affect the accounting method related to our gains on condominium sales. Currently, gains on contracted sales are recognized using the percentage-of-completion method, with the gain recognized once certain criteria have been met in advance of legal closing (see further discussion in Note 3 to the consolidated financial statements). Under the new guidance, condominium sale gains will be recognized as the condominium units are legally sold, which will typically be upon closing. We intend to implement the new revenue recognition guidance retrospectively with the cumulative effect recognized in retained earnings at the date of initial application. In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets." ASU 2017-05 clarifies that ASC 610-20 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and also clarifies that all businesses are derecognized using the deconsolidation guidance. Additionally, it defines an insubstance nonfinancial asset as a financial asset that is promised to a counterparty in a contract in which substantially all of the fair value of the assets promised in the contract is concentrated in nonfinancial assets, which excludes cash or cash equivalents and liabilities. The new guidance is expected to impact the gain recognized when a real estate asset is sold to a non-customer and a noncontrolling interest is retained. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest, however, the new guidance eliminates the use of carryover basis and generally requires a full gain to be recognized. ASU 2017-05 is effective for us in the first quarter of 2018, and we are currently assessing the impact of this standard to our consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, "Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting." ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under the new guidance, an entity will not apply modification accounting if the awards' fair value, vesting conditions, and the classification of the award as equity or a liability are the same immediately before and after the change. ASU 2017-09 is effective for us in the first quarter of 2018, is applied prospectively to awards granted or modified after the adoption date, and is not expected to have a significant impact to our consolidated financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, "Compensation - Stock Compensation." ASU 2016-09 simplifies the accounting for share-based payment transactions, including a policy election option with respect to accounting for forfeitures either as they occur or estimating forfeitures (as is currently required), as well as increasing the amount an employer can withhold to cover income taxes on equity awards. Additionally, ASU 2016-09 requires the cash paid to a taxing authority when shares are withheld to pay employee taxes to be classified as a "financing activity" rather than an "operating activity," as was done previously on the Statement of Cash Flows. We adopted this standard effective January 1, 2017, and as a result, we are now accounting for forfeitures as they occur, and have recorded the cumulative impact on the adoption date as a $0.1 million adjustment to additional paid in capital and retained earnings. The amount reclassified from "operating activities" to "financing activities" for shares withheld for employee taxes was $4.4 million. In January 2017, the FASB issued ASU 2017-01, "Clarifying the Definition of a Business." ASU 2017-01 changes the definition of a business to exclude acquisitions where substantially all of the fair value of the assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets. Given this change in definition, we believe most of our shopping center acquisitions will no longer be considered business combinations but rather asset acquisitions. While there are various differences between the accounting for an asset acquisition and a business combination, the largest impact will be that transaction costs are capitalized for asset acquisitions rather than expensed when they were considered business combinations. Based on acquisitions in the past several years, transaction costs for a single shopping center acquisition have typically ranged from $0.2 million to $2.4 million with significantly higher transaction costs expected for an acquisition of a larger portfolio. We adopted this standard effective January 1, 2017, and are applying the new guidance prospectively. Our acquisitions in the first nine months of 2017 (further discussed in Note 3 below) qualified as asset acquisitions and consequently, all transaction costs were capitalized. |
Summary Of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental disclosures related to the Consolidated Statements Of Cash Flows | The following table provides supplemental disclosures related to the Consolidated Statements of Cash Flows:
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Real Estate (Tables) |
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Los Angeles County Shopping Center Acquisition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Square Footage of Properties Acquired | On August 2, 2017, we acquired an approximately 90% interest in a joint venture that owns six shopping centers in Los Angeles County, California based on a gross value of $357 million, including the assumption of $79.4 million of mortgage debt. Approximately $7.8 million of assets acquired were allocated to lease intangibles and included within other assets. Approximately $36.2 million of net assets acquired were allocated to lease liabilities and included in other liabilities. Additionally, approximately $30.6 million was allocated to noncontrolling interests. That joint venture also acquired a 24.5% interest in La Alameda, a shopping center in Walnut Park, California for $19.8 million. The property has $41.0 million of mortgage debt, of which the joint venture's share is approximately $10 million. Additional information on the properties is listed below:
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Pro Forma Information | The following unaudited pro forma financial data includes the incremental revenues, operating expenses (including approximately $2.8 million and $8.5 million of depreciation and amortization expense for the three and nine months ended September 30, 2017 and 2016, respectively), and interest expense/financing costs related to the properties acquired on August 2, 2017 as if they had occurred on January 1, 2016. The pro forma financial information is presented for informational purposes only and may not be indicative of what actual results of income would have been, nor does it represent the results of income for future periods.
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Mortgage Loans Assumed with Acquisition (Tables) |
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Mortgage Loans Assumed in Acquisition | The mortgage loans are secured by the individual properties with the following contractual terms:
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Fair Value Of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of carrying amount and fair value of financial instruments | A summary of the carrying amount and fair value of our mortgages payable, notes payable and senior notes and debentures is as follows:
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Summary of financial liabilities measured at fair value on a recurring basis | A summary of our financial liabilities that are measured at fair value on a recurring basis, by level within the fair value hierarchy is as follows:
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Shareholders' Equity (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of dividends declared and paid per share | The following table provides a summary of dividends declared and paid per share:
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Components Of Rental Income (Tables) |
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Components Of Rental Income and Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal components of rental income | The principal components of rental income are as follows:
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Minimum rents | Minimum rents include the following:
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Share-Based Compensation Plans (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of share-based compensation expense included in net income | A summary of share-based compensation expense included in net income is as follows:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | In the dilutive EPS calculation, dilutive stock options were calculated using the treasury stock method consistent with prior periods. There were 682 anti-dilutive stock options for the three and nine months ended September 30, 2017, and no anti-dilutive stock options for the thee and nine months ended September 30, 2016. The conversions of downREIT operating partnership units and 5.417% Series 1 Cumulative Convertible Preferred Shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average common shares used to compute diluted EPS.
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Business And Organization (Details) |
9 Months Ended |
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Sep. 30, 2017
project
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Nature Of Operations [Abstract] | |
Number of real estate properties | 104 |
Minimum percentage of taxable income distributed to shareholders | 90.00% |
Summary Of Significant Accounting Policies Revenue Recognition (Details) |
Sep. 30, 2017
condominiums
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Condominiums | Assembly Row and Pike & Rose | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Number of condominium units under construction | 221 |
Summary Of Significant Accounting Policies Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands |
9 Months Ended | 48 Months Ended | ||
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Jan. 01, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative impact to additional paid in capital and retained earnings | $ 100 | $ 0 | ||
Payments related to shares withheld for employee taxes | $ 4,216 | $ 4,436 | ||
Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Acquisition related costs in the past several years | $ 200 | |||
Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Acquisition related costs in the past several years | $ 2,400 |
Summary Of Significant Accounting Policies Consolidated Statement of Cash Flows - Supplemental Disclosures (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Accounting Policies [Abstract] | ||||
Total interest costs incurred | $ 92,520 | $ 83,803 | ||
Interest capitalized | (18,568) | (12,660) | ||
Interest expense | $ 26,287 | $ 24,313 | 73,952 | 71,143 |
Cash paid for interest, net of amounts capitalized | 70,486 | 66,921 | ||
Cash paid for income taxes | 342 | 300 | ||
Mortgage loans refinanced | 166,823 | 0 | ||
Mortgage loans assumed with acquisition | 79,401 | 34,385 | ||
DownREIT operating partnership units issued with acquisition of noncontrolling interest | 5,918 | 0 | ||
DownREIT operating partnership units redeemed for common shares | 2,569 | 18,679 | ||
Shares issued under dividend reinvestment plan | $ 1,528 | $ 1,523 |
Fair Value of Financial Instruments - Summary of Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
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Mortgages payable and notes payable | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value of long-term debt | $ 813,958 | $ 750,268 |
Mortgages payable and notes payable | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value of long-term debt | 826,012 | 760,260 |
Senior notes and debentures | Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value of long-term debt | 2,377,939 | 1,976,594 |
Senior notes and debentures | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Fair value of long-term debt | $ 2,452,494 | $ 2,015,973 |
Fair Value of Financial Instruments - Summary of Financial Liabilities Measured on a Recurring Basis (Details) - Interest Rate Swap - Fair Value, Measurements, Recurring - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value of interest rate swaps | $ 742 | $ 2,577 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value of interest rate swaps | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value of interest rate swaps | 742 | 2,577 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value of interest rate swaps | $ 0 | $ 0 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
Jan. 12, 2017 |
Sep. 30, 2017 |
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Commitments and Contingencies Disclosure [Abstract] | ||
downREIT operating partnership units, outstanding | 787,962 | |
downREIT operating partnership units outstanding, fair value | $ 97.9 | |
San Antonio Center | ||
Purchase option of non-controlling interest | ||
Payments to Acquire Outstanding Interest | $ 2.6 | |
Number of downREIT units issued in connection with purchase option | 44,195 |
Shareholders' Equity (Summary of Dividends) (Details) - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
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Dividends [Abstract] | ||
Dividends declared per common share | $ 2.96 | $ 2.860 |
Dividends paid per common share | 2.94 | 2.820 |
Dividends declared per preferred share | 1.016 | 1.016 |
Dividends paid per preferred share | $ 1.016 | $ 1.016 |
Components Of Rental Income (Schedule Of Principal Components Of Rental Income) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Cost reimbursement | $ 43,602 | $ 40,565 | $ 124,997 | $ 119,004 |
Percentage rents | 2,304 | 2,315 | 7,524 | 7,866 |
Other | 4,334 | 4,694 | 13,049 | 13,339 |
Total rental income | 212,048 | 197,469 | 620,741 | 585,712 |
Retail and Commercial | ||||
Minimum rents | 147,971 | 137,009 | 434,390 | 409,027 |
Residential | ||||
Minimum rents | $ 13,837 | $ 12,886 | $ 40,781 | $ 36,476 |
Components Of Rental Income (Schedule Of Minimum Rent) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Minimum Rent [Line Items] | ||||
Straight-line rents | $ 3.9 | $ 1.5 | $ 11.3 | $ 6.2 |
Amortization of above market leases | ||||
Minimum Rent [Line Items] | ||||
Amortization of above and below market leases | (1.6) | (1.7) | (4.4) | (5.3) |
Amortization of below market leases | ||||
Minimum Rent [Line Items] | ||||
Amortization of above and below market leases | $ 2.5 | $ 2.2 | $ 7.7 | $ 6.5 |
Share-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | ||||
Grants of common shares and options | $ 2,945 | $ 2,766 | $ 9,402 | $ 8,818 |
Capitalized share-based compensation | (405) | (375) | (1,103) | (1,002) |
Share-based compensation expense | $ 2,540 | $ 2,391 | $ 8,299 | $ 7,816 |
Earnings Per Share (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] | ||||
Weighted average unvested shares outstanding | 200,000 | 200,000 | 200,000 | 200,000 |
Anti-dilutive stock options | 682 | 0 | 682 | 0 |
Cumulative convertible preferred shares, dividend rate | 5.417% | 5.417% | 5.417% | 5.417% |
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