Investments in Real Estate (Tables)

12 Months Ended

Dec. 31, 2016

Investments, All Other Investments [Abstract]

Summary of Acquired Wholly Owned Property Acquisitions

The following table sets forth the wholly-owned industrial properties we acquired during the year ended December 31, 2016:



Property	Submarket	Date of Acquisition	Rentable Square Feet	Number of Buildings	Contractual Purchase Price (in thousands)
8525 Camino Santa Fe⁽¹⁾	San Diego - Central	3/15/2016	59,399	1	$	8,450
28454 Livingston Avenue⁽¹⁾	Los Angeles - San Fernando Valley	3/29/2016	134,287	1	16,000
REIT Portfolio⁽²⁾	Various⁽²⁾	4/15/2016	1,530,814	9	191,000
10750-10826 Lower Azusa Road⁽³⁾	Los Angeles - San Gabriel Valley	5/3/2016	79,050	4	7,660
525 Park Avenue⁽⁴⁾	Los Angeles - San Fernando Valley	6/30/2016	63,403	1	7,550
3233 Mission Oaks Boulevard⁽⁵⁾	Ventura	7/6/2016	457,693	1	25,700
1600 E. Orangethorpe Avenue⁽⁴⁾	Orange County - North	8/24/2016	345,756	6	40,137
14742-14750 Nelson Avenue⁽⁴⁾	Los Angeles - San Gabriel Valley	9/8/2016	145,531	2	15,000
3927 Oceanic Drive⁽⁴⁾	San Diego - North County	10/21/2016	54,740	1	7,200
301-445 Figueroa Street⁽⁴⁾	Los Angeles - South Bay	11/4/2016	133,925	1	13,000
12320 4th Street⁽⁶⁾	Inland Empire - West	12/7/2016	284,676	2	24,435
9190 Activity Road⁽⁴⁾	San Diego - Central	12/16/2016	83,520	1	15,550
			3,372,794	30	$	371,682


(1)	This acquisition was funded with available cash on hand and borrowings under our unsecured revolving credit facility.

(2)

The REIT Portfolio Acquisition was funded with available cash on hand, proceeds from a $100.0 million term loan borrowing and proceeds from an equity offering of 10.35 million shares of our common stock. See Notes 5 and 13 for additional information. The REIT Portfolio consists of nine properties located in four of our core submarkets, including Orange County, Los Angeles - San Gabriel Valley, Inland Empire West and Central San Diego.


(3)	This acquisition was partially funded through a tax-deferred like-kind exchange under Section 1031 of the Internal Revenue Code (“1031 Exchange”) using $2.5 million of net cash proceeds from the sale of our property located at 6010 North Paramount Boulevard and available cash on hand.


(4)	This acquisition was funded with available cash on hand.


(5)	We acquired this property from our unconsolidated joint venture (see Note 11). Prior to the acquisition, our ownership interest in the property was 15.0%. This acquisition was partially funded through a 1031 Exchange using $18.0 million of net cash proceeds from the sale of our properties located at 1840 Dana Street and 12910 East Mulberry Drive and available cash on hand.


(6)	This acquisition was partially funded through a 1031 Exchange using $18.1 million of net cash proceeds from the sale of our properties located at 22343-22349 La Palma Avenue and 157th Street and available cash on hand.

The following table sets forth the wholly-owned industrial properties we acquired during the year ended December 31, 2015:



Property	Submarket	Date of Acquisition	Rentable Square Feet	Number of Buildings	Contractual Purchase Price (in thousands)
8902-8940 Activity Road⁽¹⁾	San Diego - Central	1/21/2015	112,501	5	$	18,450
12907 Imperial Highway⁽²⁾	Los Angeles - Mid-counties	1/21/2015	101,080	1	12,180
1210 North Red Gum Street⁽³⁾	Orange County - North	3/9/2015	64,570	1	7,650
9401 De Soto Avenue⁽³⁾	Los Angeles - San Fernando Valley	3/18/2015	150,263	1	14,075
9615 Norwalk Boulevard⁽³⁾	Los Angeles - Mid-counties	4/30/2015	38,362	2	9,642
16221 Arthur Street⁽³⁾	Los Angeles - Mid-counties	5/1/2015	61,372	1	5,774
2588 & 2605 Industry Way⁽¹⁾	Los Angeles - South Bay	5/12/2015	164,662	2	22,000
425 South Hacienda Boulevard⁽¹⁾	Los Angeles - San Gabriel Valley	5/15/2015	51,823	1	7,000
6700 Alameda Street⁽⁴⁾	Los Angeles - Central LA	6/29/2015	78,280	1	14,500
12720-12860 Danielson Court⁽¹⁾	San Diego - Central	7/10/2015	112,062	6	16,900
10950 Norwalk Boulevard⁽³⁾	Los Angeles - Mid-counties	7/29/2015	18,995	1	4,973
610-760 Hueneme Road⁽³⁾	Ventura	8/11/2015	86,904	2	9,607
10709-10719 Norwalk Boulevard⁽³⁾	Los Angeles - Mid-counties	9/1/2015	58,056	2	7,242
6020 Sheila Street⁽⁴⁾	Los Angeles - Central LA	9/18/2015	70,877	1	12,220
9805 6th Street⁽⁴⁾	Inland Empire West	9/30/2015	81,377	1	6,894
16321-16327 Arrow Highway⁽¹⁾	Los Angeles - San Gabriel Valley	10/14/2015	64,296	3	8,120
2535 Midway Drive⁽¹⁾	San Diego - Central	10/22/2015	373,744	2	19,295
601-605 Milliken Avenue⁽¹⁾	Inland Empire West	12/8/2015	128,322	3	13,000
1065 Walnut Street⁽⁵⁾	Los Angeles - South Bay	12/11/2015	172,420	1	16,700
12247 Lakeland Road⁽¹⁾	Los Angeles - Mid-counties	12/16/2015	24,875	1	4,257
17311 Nichols Lane⁽⁴⁾	Orange County - West	12/30/2015	114,912	1	17,100
Total 2015 Wholly-Owned Property Acquisitions			2,129,753	39	$	247,579


(1)	This acquisition was funded with borrowings under our unsecured revolving credit facility.


(2)	This acquisition was funded as follows: (i) $5.4 million from the assumption of secured debt, (ii) $2.1 million from a deposit paid during the fourth quarter of 2014 and (iii) borrowings under our unsecured revolving credit facility. The assumed debt was recorded at fair value on the acquisition date, resulting in a premium of approximately $0.5 million.


(3)	This acquisition was funded with available cash on hand.


(4)	This acquisition was funded in part with available cash on hand and in part with borrowings under our unsecured revolving credit facility.


(5)	This acquisition was funded as follows: (i) $10.9 million from the assumption of secured debt and (ii) borrowings under our unsecured revolving credit facility. The assumed debt was recorded at fair value on the acquisition date, resulting in a premium of approximately $0.3 million.

Acquisition of Other Interests

e following table summarizes the fair value of amounts recognized for each major class of asset and liability for the acquisitions noted in the table above, as of the date of acquisition (in thousands):



	2016						2015
	REIT Portfolio Acquisition		Other Acquisitions		Total Acquisitions		Total Acquisitions
Assets:
Land⁽¹⁾	$	101,530	$	102,296	$	203,826	$	124,660
Buildings and improvements⁽²⁾	74,586		72,588		147,174		106,496
Tenant improvements	2,875		2,461		5,336		4,792
Acquired lease intangible assets⁽³⁾	12,103		9,180		21,283		16,236
Other acquired assets⁽⁴⁾	222		305		527		128
Total assets acquired	191,316		186,830		378,146		252,312
Liabilities:
Acquired lease intangible liabilities⁽⁵⁾	934		6,583		7,517		1,713
Notes payable	—		—		—		17,097
Deferred rent liability	—		—		—		977
Other assumed liabilities⁽⁴⁾	1,519		1,364		2,883		1,926
Total liabilities assumed	2,453		7,947		10,400		21,713
Net assets acquired	188,863		178,883		367,746		230,599

(1)

The allocation to land in 2016 includes $0.2 million of capitalized acquisition costs related to the purchase of 14742-14750 Nelson Avenue and 3927 Oceanic Drive, which were accounted for as an asset acquisition. The allocation to land in 2015 includes an aggregate $0.4 million of capitalized acquisition costs related to the purchases of 9401 De Soto Avenue, 16221 Arthur Street, 425 Hacienda Boulevard, 6020 Sheila Street, and 2535 Midway Drive, which were accounted for as asset acquisitions.


(2)	The allocation to buildings and improvements in 2015 includes an aggregate $0.3 million of capitalized acquisition costs related to the purchases of 16221 Arthur Street, 425 Hacienda Boulevard, 6020 Sheila Street, and 2535 Midway Drive, which were accounted for as asset acquisitions.

(3)

For the REIT Portfolio, acquired lease intangible assets consist of $11.1 million of in-place lease intangibles with a weighted average amortization period of 5.0 years and $1.0 million of above-market lease intangibles with a weighted average amortization period of 7.6 years. For the other 2016 acquisitions, acquired lease intangible assets consist of $8.9 million of in-place lease intangibles with a weighted average amortization period of 5.5 years and $0.3 million of above-market lease intangibles with a weighted average amortization period of 2.4 years. For 2015 acquisitions, acquired lease intangible assets consists of $12.1 million of in-place lease intangibles with a weighted average amortization period of 5.5 years and $4.1 million of above-market tenant lease intangibles with a weighted average amortization period of 11.9 years.


(4)	Includes other working capital assets acquired (prepaid expenses, other receivables and other assets) and liabilities assumed (tenant security deposits and other payables), respectively, at the time of acquisition.


(5)	Represents below-market lease intangibles with a weighted average amortization period of 4.8 years, 10.3 years and 5.9 years for the REIT Portfolio, other 2016 acquisitions and total 2015 acquisitions, respectively.

Proforma Financial Information

The following table sets forth the results of operations for the year ended December 31, 2016, for the properties acquired during the year ended December 31, 2016, included in the consolidated statements of operations from the date of acquisition (in thousands):



	Year Ended December 31, 2016
Revenues	$	15,496
Net Income	$	4,503

The following table sets forth unaudited pro-forma financial information (in thousands) as if the closing of our acquisitions during the year ended December 31, 2016, had occurred on January 1, 2015. These unaudited pro-forma results have been prepared for comparative purposes only and include certain adjustments, such as (i) increased rental revenues for the amortization of the net amount of above- and -below-market rents acquired in the acquisitions, (ii) increased depreciation and amortization expenses as a result of tangible and intangible assets acquired in the acquisitions, (iii) increased interest expense for borrowings associated with these acquisitions, (iv) the elimination of acquisition costs that are directly related to these acquisitions and (v) the elimination of equity in income/loss from unconsolidated real estate entities related to our acquisition of the property located at 3233 Mission Oaks Boulevard from our unconsolidated joint venture. These unaudited pro-forma results do not purport to be indicative of what operating results would have been had the acquisitions actually occurred on January 1, 2015, and may not be indicative of future operating results.



	Year Ended December 31,
	2016		2015
Revenues	$	137,744	$	116,585
Net income	$	26,427	$	(76	)
Net income attributable to common stockholders per share - basic	$	0.42	$	—
Net income attributable to common stockholders per share - diluted	$	0.42	$	—