XML 22 R25.htm IDEA: XBRL DOCUMENT v3.2.0.727
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2015
Accounting Policies [Abstract]  
Principles of Consolidation and Basis of Presentation
Principles of Consolidation and Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of the Company, the Operating Partnership, all majority-owned subsidiaries and controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
Use of Estimates
The preparation of the financial statements in conformity with GAAP necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk and Significant Leases
Concentration of Credit Risk and Significant Leases
As of June 30, 2015, the Company had cash on deposit, including restricted cash, in several financial institutions which had deposits in excess of current federally insured levels totaling $43.6 million; however, the Company has not experienced any losses in such accounts. The Company limits its cash investments to financial institutions with high credit standings; therefore, the Company believes it is not exposed to any significant credit risk on its cash deposits. To date, the Company has experienced no loss or lack of access to cash in its accounts. Concentration of credit risk with respect to accounts receivable from tenants is limited.
As of June 30, 2015, the Company owned real estate investments in 44 MSAs, (including two real estate investments owned through consolidated partnerships), four of which accounted for 10.0% or more of rental revenue. Real estate investments located in the Dallas-Ft. Worth-Arlington, Texas MSA, the Chicago-Naperville-Elgin, Illinois-Indiana-Wisconsin MSA, the Atlanta-Sandy Springs-Roswell, Georgia MSA and the Houston-The Woodlands-Sugar Land, Texas MSA accounted for an aggregate of 13.9%, 12.1%, 10.2% and 10.7%, respectively, of rental revenue for the six months ended June 30, 2015.
As of June 30, 2015, the Company had two tenants that accounted for 10.0% or more of rental revenue. The leases with AT&T Services, Inc. and the lease with Bay Area Regional Medical Center, LLC accounted for 13.4% and 10.5%, respectively, of rental revenue for the six months ended June 30, 2015.
Share Repurchase Program
Share Repurchase Program
The Company’s share repurchase program allows for repurchases of shares of the Company’s common stock when certain criteria are met. The share repurchase program provides that all redemptions during any calendar year, including those redeemable upon death or a qualifying disability of a stockholder, are limited to those that can be funded with proceeds raised from the DRIP Offering.
Repurchases of shares of the Company’s common stock are at the sole discretion of the Company’s board of directors. In addition, the Company’s board of directors, at its sole discretion, may amend, suspend, reduce, terminate or otherwise change the share repurchase program upon 30 days' prior notice to the Company’s stockholders for any reason it deems appropriate. During the six months ended June 30, 2015, the Company received valid redemption requests related to approximately 332,000 shares of common stock, all of which were redeemed in full for an aggregate purchase price of approximately $3,191,000 (an average of $9.61 per share). During the six months ended June 30, 2014, the Company received valid redemption requests related to approximately 120,000 shares of common stock, all of which were redeemed in full for an aggregate purchase price of approximately $1,151,000 (an average of $9.59 per share).
Earnings Per Share
Earnings Per Share
Basic earnings per share attributable for all periods presented are computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Shares of non-vested restricted common stock give rise to potentially dilutive shares of common stock. Diluted earnings per share are computed based on the weighted average number of shares outstanding and all potentially dilutive securities. For the three months ended June 30, 2015 and 2014, diluted earnings per share reflect the effect of approximately 14,000 and 24,000, respectively, and for the six months ended June 30, 2015 and 2014, diluted earnings per share reflect the effect of approximately 16,000 and 25,000, respectively, of non-vested shares of restricted common stock that were outstanding as of such period.
Preferred Equity Investment
Preferred Equity Investment
The Company accounts for its Preferred Equity Investment as an asset under the cost method of accounting, as the Company exercises no influence over the investee. The Company recognizes dividends as other income in the condensed consolidated statements of comprehensive income.
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements
On May 28, 2014, the Financial Accounting Standards Board, or the FASB, issued Accounting Standards Update, or ASU, 2014-9, Revenue from Contracts with Customers, or ASU 2014-9. The objective of ASU 2014-9 is to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods and 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. ASU 2014-9 defines a five-step process to achieve this core principle, which may require more judgment and estimates within the revenue recognition process than are required under existing GAAP. In July 2015, the FASB provided for a one-year deferral of the effective date for ASU 2014-09 which is now effective for fiscal years beginning after December 15, 2017, and interim periods within those years; however, early adoption is permitted as of the original effective date, which was annual reporting periods beginning after December 15, 2016, and the interim periods within that year. The Company is in the process of evaluating the impact ASU 2014-9 will have on the Company’s condensed consolidated financial statements.
On February 18, 2015, the FASB issued ASU 2015-2, Consolidation (Topic 810): Amendments to the Consolidation Analysis, or ASU 2015-2, that changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendment affects the following areas: limited partnerships and similar legal entities, evaluating fees paid to a decision maker or a service provider as a variable interest, the effect of fee arrangements on the primary beneficiary determination and certain investment funds. Under the amendment, all reporting entities are within the scope of Subtopic 810-10, ConsolidationOverall, unless a scope exception applies. The presumption that a general partner controls a limited partnership has been eliminated. In addition, fees paid to decision makers that meet certain conditions no longer cause decision makers to consolidate variable interest entities in certain instances. The amendment is effective for public business entities for periods beginning after December 15, 2015. Early adoption of ASU 2015-2 is permitted. The Company is in the process of evaluating the impact ASU 2015-2 will have on the Company’s condensed consolidated financial statements.
On April 7, 2015, the FASB issued ASU 2015-3, InterestImputation of Interest, or ASU 2015-3, that intends to simplify the presentation of debt issuance costs. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The amendment is effective for public business entities for periods beginning after December 15, 2015. The Company is in the process of evaluating the impact ASU 2015-3 will have on the Company’s condensed consolidated financial statements.
Reclassifications
Reclassifications
Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company’s condensed consolidated financial position or results of operations.