Real Estate Properties (Tables)

12 Months Ended

Dec. 31, 2017

Real Estate [Abstract]

Schedule of allocation of purchase price

Total Purchase Price:
	Cash consideration	$	1,175,140
	Acquisition related costs	9,575
	Total cash consideration	1,184,715
	Preferred units of limited partnership issued (1)	20,221
	Acquired net working capital	(1,596		)
	Assumed mortgage notes	167,548
	Non-cash portion of purchase price	186,173
	Gross purchase price	$	1,370,888
Purchase Price Allocation:
	Land	$	360,909
	Buildings and improvements	681,340
	Acquired real estate leases (2)	283,498
	Investment in unconsolidated joint ventures	51,305
	Cash	11,191
	Restricted cash	1,018
	Rents receivable	2,672
	Other assets	3,640
	Total assets	1,426,694
	Mortgage notes payable (3)	(167,936		)
	Assumed real estate lease obligations (2)	(5,776		)
	Accounts payable and accrued expenses	(10,640		)
	Rents collected in advance	(1,436		)
	Security deposits	(4,849		)
	Net assets acquired	1,204,936
	Assumed working capital	(1,596		)
	Assumed principal balance of debt	167,548
	Gross purchase price	$	1,370,888

(1) Pursuant to the terms of the FPO Transaction, each unit of limited partnership interest in FPO's operating partnership that was not liquidated on the closing date was exchanged on a one-for-one basis for 5.5% Series A Cumulative Preferred Units of the surviving subsidiary. As of December 31, 2017, there are 1,814 of 5.5% Series A Cumulative Preferred Units outstanding. Beginning on October of each year and ending January 15 of the following year, with the first such period beginning October 1, 2019, holders have the right to redeem their 5.5% Series A Cumulative Preferred Units for cash equal to $11.15 per unit. Beginning on April 1 of each year and ending June 30 of that year, with the first such period beginning April 1, 2018, we have the right to redeem all or any portion of the outstanding 5.5% Series A Cumulative Preferred Units for cash at $11.15 per unit. As of December 31, 2017, the carrying value of these Series A Cumulative Preferred Units was $20,496 and is recorded as temporary equity on our consolidated balance sheet at December 31, 2017.

(2) As of the date acquired, the weighted average amortization periods for capitalized above market lease values, lease origination value and capitalized below market lease values were 3.2 years, 3.1 years and 3.8 years, respectively.

(3) Includes fair value adjustments totaling $388 on $167,936 principal amount of mortgage notes we assumed in connection with the FPO Transaction.

Our allocation of the purchase price of these acquisitions based on the estimated fair value of the acquired assets and assumed liabilities is presented in the table below.

			Number
			of						Buildings		Other				Acquired
Acquisition			Properties/	Square	Purchase				and		Assumed		Acquired		Lease
Date	Location	Type	Buildings	Feet	Price (1)		Land		Improvements		Assets		Leases		Obligations
Jan-16	Sacramento, CA (2)	Office	1/1	337,811	$	79,508	$	4,688	$	61,995	$	2,167	$	11,245	$	(587	)
Jul-16	Atlanta, GA (3)	Land	—	—	1,670		1,670		—		—		—		—
Dec-16	Rancho Cordova, CA (2)	Office	1/1	82,896	13,943		1,466		8,797		—		3,680		—
Dec-16	Chantilly, VA (2)	Office	1/3	409,478	104,183		6,966		74,214		—		23,003		—
			3/5	830,185	$	199,304	$	14,790	$	145,006	$	2,167	$	37,928	$	(587	)

(1) Excludes acquisition costs.

(2) Accounted for as a business combination. 

(3) On July 6, 2016, we acquired a land parcel adjacent to on our existing properties for $1,623. We accounted for this transaction as an asset acquisition and capitalized acquisition related costs of $47.

Our allocation of the purchase price of this acquisition is based on the relative estimated fair value of the acquired assets and assumed liabilities is presented in the table below.  

Number

of

Buildings

Other

Acquisition

Properties/

Square

Purchase

and

Assumed

Date

Location

Type

Buildings

Feet

Price

Land

Improvements

Assets

Jan-17

Manassas, VA

Office

1/1

69,374

$

12,657

$

1,562

$

8,253

$

2,842

Schedule of Joint Ventures

As of December 31, 2017, our investment in unconsolidated joint ventures consisted of the following:

Joint Venture	GOV Ownership	GOV Carrying Value of Investment at December 31, 2017		Property Type	Number of Buildings	Location	Square Feet
Prosperity Metro Plaza	51%	$	27,888	Office	2	Fairfax, VA	328,456
1750 H Street, NW	50%	22,314		Office	1	Washington, DC	115,411
Total		$	50,202		3		443,867

The following table provides a summary of the mortgage debt of our unconsolidated joint ventures:

Joint Venture	Interest Rate (1)	Maturity Date	Principal Balance at December 31, 2017
Prosperity Metro Plaza	4.09%	12/1/2029	$	50,000
1750 H Street, NW	3.69%	8/1/2024	32,000
Weighted Average/Total	3.93%		$	82,000

(1) Includes the effect of mark to market purchase accounting.

Schedule of Pro Forma Information

The following table presents our pro forma results of operations for the years ended December 31, 2017 and 2016 as if the FPO Transaction and related financing activities had occurred on January 1, 2016. The historical FPO results of operations included in this pro forma financial information have been adjusted to remove the results of operations of properties and joint venture interests FPO sold from January 1, 2016 to October 2, 2017, the closing date of the FPO Transaction. The effect of these adjustments was to decrease pro forma rental income $804 and $17,810 for the years ended December 31, 2017 and 2016, respectively, and to decrease net income (loss) $47,019 and $5,403 for the years ended December 31, 2017 and 2016, respectively.

This pro forma financial information is not necessarily indicative of what our actual financial position or results of operations would have been for the periods presented or for any future period. Differences could result from numerous factors, including future changes in our portfolio of investments, capital structure, property level operating expenses and revenues, including rents expected to be received on our existing leases or leases we may enter during and after 2018, changes in interest rates and other reasons. Actual future results are likely to be different from amounts presented in this pro forma financial information and such differences could be significant.

	Year Ended December 31,
	2017			2016
Rental income	$	437,101		$	412,245
Net income (loss)	(25,898		)	11,630
Net income (loss) per share	$	(0.26	)	$	0.12

Summarized balance sheet and income statement information for properties classified as discontinued operations

Summarized balance sheet and income statement information for this property is as follows:

Balance Sheets

	As of December 31,
	2016
Real estate properties, net	$	12,260
Other assets	281
Assets of discontinued operations	$	12,541
Other liabilities	$	45
Liabilities of discontinued operations	$	45

Statements of Operations

	Year Ended December 31,
	2017			2016			2015
Rental income	$	17		$	68		$	114
Real estate taxes	(88		)	(97		)	(92		)
Utility expenses	(97		)	(146		)	(161		)
Other operating expenses	(202		)	(300		)	(272		)
General and administrative	(76		)	(114		)	(114		)
Increase in carrying value of property included in discontinued operations	619			—			—
Income (loss) from discontinued operations	$	173		$	(589	)	$	(525	)

Schedule of future minimum lease payments related properties (excluding real estate tax and other expense reimbursements)

Our future minimum lease payments related to our consolidated properties and estimated real estate tax and other expense reimbursements scheduled to be received during the current terms of the existing leases as of December 31, 2017 are as follows:

2018	$	367,883
2019	330,792
2020	258,847
2021	220,758
2022	180,558
Thereafter	564,621
	$	1,923,459

Schedule of minimum rental payments

Future minimum rental payments due under the lease, net of subleased revenue, as of December 31, 2017 are summarized as follows:

2018	$	1,543
2019	1,584
2020	1,627
2021	139
	$	4,893