QUARTERLY REPORT PURSUANT TO 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 |
(State or other jurisdiction |
(I.R.S. Employer | |
of incorporation or organization) |
Identification No.) |
Title of Each Class |
Trading Symbol(s) |
Name of each Exchange on Which Registered | ||
|
“ “ |
|
Large accelerated filer | ☐ | ☒ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
1 | ||||
1 | ||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
6 | ||||
15 | ||||
23 | ||||
24 | ||||
25 | ||||
25 | ||||
25 | ||||
25 | ||||
25 | ||||
25 | ||||
25 | ||||
25 | ||||
27 |
March 31, 2023 |
December 31, 2022 |
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Assets |
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Real estate properties |
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Land |
$ | $ | ||||||
Building and improvement |
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Tenant improvement |
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Furniture, fixtures and equipment |
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Accumulated depreciation |
( |
) | ( |
) | ||||
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Cash and cash equivalents |
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Restricted cash |
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Rents receivable, net |
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Deferred leasing costs, net |
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Acquired lease intangible assets, net |
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Other assets |
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Total Assets |
$ | $ | ||||||
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Liabilities and Equity |
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Liabilities: |
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Debt |
$ | $ | ||||||
Accounts payable and accrued liabilities |
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Deferred rent |
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Tenant rent deposits |
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Acquired lease intangible liabilities, net |
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Other liabilities |
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Total Liabilities |
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Commitments and Contingencies (Note 9) |
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Equity: |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive income |
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Total Stockholders’ Equity |
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Non-controlling interests in properties |
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Total Equity |
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Total Liabilities and Equity |
$ | $ | ||||||
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Three Months Ended March 31, |
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2023 |
2022 |
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Rental and other revenues |
$ | $ | ||||||
Operating expenses: |
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Property operating expenses |
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General and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Operating income |
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Interest expense: |
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Contractual interest expense |
( |
) | ( |
) | ||||
Amortization of deferred financing costs and debt fair value |
( |
) | ( |
) | ||||
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( |
) | ( |
) | |||||
Net gain on sale of real estate property |
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Net income |
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Less: |
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Net income attributable to non-controlling interests in properties |
( |
) | ( |
) | ||||
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Net income attributable to the Company |
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Preferred stock distributions |
( |
) | ( |
) | ||||
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Net (loss)/income attributable to common stockholders |
$ | ( |
) | $ | ||||
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Net (loss)/income per common share: |
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Basic |
$ | ( |
) | $ | ||||
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Diluted |
$ | ( |
) | $ | ||||
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Weighted average common shares outstanding: |
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Basic |
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Diluted |
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Dividend distributions declared per common share |
$ | $ | ||||||
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|
Three Months Ended March 31, |
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2023 |
2022 |
|||||||
Net income |
$ | $ | ||||||
Other comprehensive (loss)/income: |
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Unrealized cash flow hedge (loss)/gain |
( |
) | ||||||
Amounts reclassified to interest expense |
( |
) | ||||||
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|
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Other comprehensive (loss)/income |
( |
) | ||||||
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|
|||||
Comprehensive (loss)/income |
( |
) | ||||||
Less: |
||||||||
Comprehensive income attributable to non-controlling interests in properties |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Comprehensive (loss)/income attributable to the Company |
$ | ( |
) | $ | ||||
|
|
|
|
Number of shares of preferred stock |
Preferred stock |
Number of shares of common stock |
Common stock |
Additional paid-in capital |
Retained earnings |
Accumulated other comprehensive income |
Total stockholders’ equity |
Non-controlling interests in properties |
Total equity |
|||||||||||||||||||||||||||||||
Balance—December 31, 2022 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||||||||||
Restricted stock award grants and vesting |
— |
— |
( |
) |
( |
) |
— |
( |
) |
— |
( |
) | ||||||||||||||||||||||||||||
Common stock dividend distribution declared |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||
Preferred stock dividend distribution declared |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||
Contributions |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||
Distributions |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance—March 31, 2023 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
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|
Number of shares of preferred stock |
Preferred stock |
Number of shares of common stock |
Common stock |
Additional paid-in capital |
Retained earnings |
Accumulated other comprehensive (loss)/income |
Total stockholders’ equity |
Non-controlling interests in properties |
Total equity |
|||||||||||||||||||||||||||||||
Balance—December 31, 2021 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
$ |
||||||||||||||||||||||||||||||
Restricted stock award grants and vesting |
— |
— |
— |
— |
( |
) |
— |
— |
||||||||||||||||||||||||||||||||
Common stock dividend distribution declared |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||
Preferred stock dividend distribution declared |
— |
— |
— |
— |
— |
( |
) |
— |
( |
) |
— |
( |
) | |||||||||||||||||||||||||||
Contributions |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||
Distributions |
— |
— |
— |
— |
— |
— |
— |
— |
( |
) |
( |
) | ||||||||||||||||||||||||||||
Net income |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
— |
— |
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|
|||||||||||||||||||||
Balance—March 31, 2022 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
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Three Months Ended March 31, |
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2023 |
2022 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Amortization of deferred financing costs and debt fair value |
||||||||
Amortization of above and below market leases |
||||||||
Straight-line rent/expense |
( |
) | ( |
) | ||||
Non-cash stock compensation |
||||||||
Net gain on sale of real estate property |
( |
) | ||||||
Changes in non-cash working capital: |
||||||||
Rents receivable, net |
( |
) | ||||||
Other assets |
( |
) | ||||||
Accounts payable and accrued liabilities |
( |
) | ||||||
Deferred rent |
( |
) | ( |
) | ||||
Tenant rent deposits |
||||||||
|
|
|
|
|||||
Net Cash Provided By Operating Activities |
||||||||
|
|
|
|
|||||
Cash Flows to Investing Activities: |
||||||||
Additions to real estate properties |
( |
) | ( |
) | ||||
Net proceeds from sale of real estate |
||||||||
Deferred leasing costs |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net Cash Used In Investing Activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash Flows from/(to) Financing Activities: |
||||||||
Debt issuance and extinguishment costs |
( |
) | ||||||
Proceeds from borrowings |
||||||||
Repayment of borrowings |
( |
) | ( |
) | ||||
Dividend distributions paid to stockholders |
( |
) | ( |
) | ||||
Distributions to non-controlling interests in properties |
( |
) | ( |
) | ||||
Shares withheld for payment of taxes on restricted stock unit vesting |
( |
) | ||||||
Contributions from non-controlling interests in properties |
||||||||
|
|
|
|
|||||
Net Cash Provided By/(Used In) Financing Activities |
( |
) | ||||||
|
|
|
|
|||||
Net Increase in Cash, Cash Equivalents and Restricted Cash |
||||||||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period |
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|
|
|
|
|||||
Cash, Cash Equivalents and Restricted Cash, End of Period |
$ | $ | ||||||
|
|
|
|
|||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash: |
||||||||
Cash and Cash Equivalents, End of Period |
||||||||
Restricted Cash, End of Period |
||||||||
|
|
|
|
|||||
Cash, Cash Equivalents and Restricted Cash, End of Period |
$ | $ | ||||||
|
|
|
|
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Supplemental Disclosures of Cash Flow Information: |
||||||||
Cash paid for interest |
$ | $ | ||||||
Purchase of additions in real estate properties included in accounts payable |
$ | $ | ||||||
Purchase of deferred leasing costs included in accounts payable |
$ | $ |
Lease Intangible Assets |
Lease Intangible Liabilities |
|||||||||||||||||||||||||||
March 31, 2023 |
Above Market Leases |
In Place Leases |
Leasing Commissions |
Total |
Below Market Leases |
Below Market Ground Lease |
Total |
|||||||||||||||||||||
Cost |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||
Accumulated amortization |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
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|||||||||||||||
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Lease Intangible Assets |
Lease Intangible Liabilities |
|||||||||||||||||||||||||||
December 31, 2022 |
Above Market Leases |
In Place Leases |
Leasing Commissions |
Total |
Below Market Leases |
Below Market Ground Lease |
Total |
|||||||||||||||||||||
Cost |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||
Accumulated amortization |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
|
|
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|
|
|
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|
|||||||||||||||
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||
|
|
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2023 |
$ | |||
2024 |
||||
2025 |
||||
2026 |
||||
2027 |
||||
Thereafter |
||||
|
|
|||
$ | ||||
|
|
Property |
March 31, 2023 |
December 31, 2022 |
Interest Rate as of March 31, 2023 (1) |
Maturity |
||||||||||||
Unsecured Credit Facility (3)(5) |
$ | $ | SOFR + |
% (2) |
||||||||||||
Term Loan (4) |
SOFR + |
% (2) |
||||||||||||||
Term Loan (5) |
SOFR + |
% (2) |
||||||||||||||
Mission City |
% | |||||||||||||||
Canyon Park (6) |
% | |||||||||||||||
Circle Point |
% | |||||||||||||||
190 Office Center (7) |
% | |||||||||||||||
SanTan |
% | |||||||||||||||
Intellicenter |
% | |||||||||||||||
The Quad |
% | |||||||||||||||
2525 McKinnon |
% | |||||||||||||||
FRP Collection |
% | |||||||||||||||
Greenwood Blvd |
% | |||||||||||||||
Cascade Station (8) |
% | |||||||||||||||
5090 N. 40 th St |
% | |||||||||||||||
AmberGlen |
% | |||||||||||||||
Central Fairwinds |
% | |||||||||||||||
FRP Ingenuity Drive (9) |
% | |||||||||||||||
Carillon Point |
% | |||||||||||||||
|
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|
|
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Total Principal |
||||||||||||||||
Deferred financing costs, net |
( |
) | ( |
) | ||||||||||||
Unamortized fair value adjustments |
||||||||||||||||
|
|
|
|
|||||||||||||
Total |
$ | $ | ||||||||||||||
|
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|
|
(1) | All interest rates are fixed interest rates with the exception of the Unsecured Credit Facility and the term loans, as explained in footnotes 3, 4 and 5 below. |
(2) | As of March 31, 2023, the daily-simple SOFR rate was |
(3) | Borrowings under the Unsecured Credit Facility bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 12 months at the Company’s option upon meeting certain conditions. The Unsecured Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than |
(4) | Borrowings under the $ |
(5) | On January 5, 2023, the Company entered into a second amendment to its amended and restated credit agreement, dated November 16, 2021 (as amended, the “Amended and Restated Credit Agreement”) for the Unsecured Credit Facility and entered into a three-year |
(6) |
The mortgage loan anticipated repayment date (“ARD”) is March 1, 2027. The final scheduled maturity date can be extended up to 5 years beyond the ARD. If the loan is not paid off at ARD, the loan’s interest rate shall be adjusted to the greater of (i) the initial interest rate plus |
(7) |
In the fourth quarter of 2022, a ‘cash-sweep period’ began for the 190 Office Center loan due to the non-renewal of the minimum square footage of a major tenant in the building. Under a ‘cash-sweep period’ , property cash flows are directed into lender-controlled restricted cash accounts to fund property operations until certain thresholds are met. As of March 31, 2023 and December 31, 2022, total restricted cash for the property was $ |
(8) | In the first quarter of 2023, a ‘cash-sweep period’ began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2023, total restricted cash for the property was $ |
(9) | As of September 30, 2022, the Debt Service Coverage Ratio (“DSCR”) covenant for FRP Ingenuity Drive was not met, which triggered a ‘cash-sweep period’ that began in the fourth quarter of 2022. As of March 31, 2023, the DSCR was still not met. As of March 31, 2023 and December 31, 2022, total restricted cash for the property was $ million and $ |
2023 |
$ | |||
2024 |
||||
2025 |
||||
2026 |
||||
2027 |
||||
Thereafter |
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|
|
|||
$ | ||||
|
|
Notional Value |
Effective Date |
Maturity Date |
Fair Value Assets/(Liabilities) |
|||||||||||||||||
March 31, 2023 |
December 31, 2022 |
|||||||||||||||||||
Interest Rate Swap |
$ | September 2019 | September 2024 | $ | $ | |||||||||||||||
Interest Rate Swap |
January 2023 | January 2026 | ( |
) | ||||||||||||||||
Interest Rate Swap |
March 2023 | November 2025 | ( |
) | ||||||||||||||||
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$ | $ | $ | ||||||||||||||||||
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|
Three Months Ended March 31, |
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2023 |
2022 |
|||||||
|
$ | $ | ||||||
|
||||||||
|
|
|
|
|||||
$ |
$ |
|||||||
|
|
|
|
2023 |
$ | |||
2024 |
||||
2025 |
||||
2026 |
||||
2027 |
||||
Thereafter |
||||
|
|
|||
$ | ||||
|
|
March 31, 2023 |
December 31, 2022 |
|||||||
-of-use |
$ | $ | ||||||
liability – leases |
$ | $ | ||||||
-of-use |
$ | $ | ||||||
liability – leases |
$ | $ |
Operating Leases |
Financing Leases |
|||||||
2023 |
$ | $ | ||||||
2024 |
||||||||
2025 |
||||||||
2026 |
||||||||
2027 |
||||||||
Thereafter |
||||||||
Total future minimum lease payments |
||||||||
Discount |
( |
) | ( |
) | ||||
Total |
$ | $ | ||||||
Number of RSUs |
Number of Performance RSUs |
|||||||
Outstanding at December 31, 2022 |
||||||||
Granted |
||||||||
Issuance of dividend equivalents |
||||||||
Vested |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Outstanding at March 31, 2023 |
Number of RSUs |
Number of Performance RSUs |
|||||||
Outstanding at December 31, 2021 |
||||||||
Granted |
||||||||
Issuance of dividend equivalents |
||||||||
|
|
|
|
|||||
Outstanding at March 31, 2022 |
Units Granted |
Fair Value (in thousands) |
Weighted Average Grant Fair Value Per Share |
||||||||||||||
RSUs |
Performance RSUs |
|||||||||||||||
2023 |
$ | $ | ||||||||||||||
2022 |
RSUs |
Performance RSUs |
Total |
||||||||||
2023 |
$ | $ | $ | |||||||||
2022 |
• | adverse economic or real estate developments in the office sector or the markets in which we operate; |
• | increased interest rates, any resulting increase in financing or operating costs, the impact of inflation and a stall in economic growth or an economic recession; |
• | changes in local, regional, national and international economic conditions, including as a result of the coronavirus disease (“COVID-19”) pandemic; |
• | the extent to which “work from home” and hybrid work policies continue as a result of the COVID-19 pandemic; |
• | our inability to compete effectively; |
• | our inability to collect rent from tenants or renew tenants’ leases on attractive terms if at all; |
• | demand for and market acceptance of our properties for rental purposes, including as a result of near-term market fluctuations or long-term trends that result in an overall decrease in the demand for office space; |
• | decreased rental rates or increased vacancy rates, including as a result of the ongoing COVID-19 pandemic; |
• | our failure to obtain necessary financing or access the capital markets on favorable terms or at all; |
• | changes in the availability of acquisition opportunities; |
• | availability of qualified personnel; |
• | our inability to successfully complete real estate acquisitions or dispositions on the terms and timing we expect, or at all; |
• | our failure to successfully operate acquired properties and operations; |
• | changes in our business, financing or investment strategy or the markets in which we operate; |
• | our failure to generate sufficient cash flows to service our outstanding indebtedness; |
• | environmental uncertainties and risks related to adverse weather conditions and natural disasters; |
• | our failure to maintain our qualification as a REIT for U.S. federal income tax purposes; |
• | government approvals, actions and initiatives, including the need for compliance with environmental requirements; |
• | outcome of claims and litigation involving or affecting us; |
• | financial market fluctuations; |
• | changes in real estate, taxation and zoning laws and other legislation and government activity and changes to real property tax rates and the taxation of REITs in general; and |
• | other factors described in our news releases and filings with the SEC, including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2022 under the sections captioned “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” and in our subsequent reports filed with the SEC. |
• | business leaders may generally become more reticent to make large capital allocation decisions, such as entry into a new lease, given the uncertain economic environment; |
• | our cost of capital has increased due to higher interest rates and credit spreads, and private market debt financing is significantly more challenging to arrange; and |
• | retaining and attracting new tenants has become increasingly challenging due to potential business layoffs, downsizing and industry slowdowns. |
Metropolitan Area |
Property |
Economic Interest |
NRA (000s Square Feet) |
In Place Occupancy |
Annualized Base Rent per Square Foot |
Annualized Gross Rent per Square Foot (1) |
Annualized Base Rent (2) ($000s) |
|||||||||||||||||||
Phoenix, AZ |
Block 23 | 100.0 | % | 307 | 94.5 | % | $ | 30.02 | $ | 32.30 | $ | 8,706 | ||||||||||||||
Pima Center | 100.0 | % | 272 | 45.8 | % | $ | 29.06 | $ | 29.06 | $ | 3,618 | |||||||||||||||
SanTan | 100.0 | % | 267 | 45.4 | % | $ | 31.98 | $ | 31.98 | $ | 3,871 | |||||||||||||||
5090 N. 40 th St |
100.0 | % | 176 | 68.1 | % | $ | 34.03 | $ | 34.03 | $ | 4,068 | |||||||||||||||
Camelback Square | 100.0 | % | 172 | 84.4 | % | $ | 34.41 | $ | 34.41 | $ | 5,005 | |||||||||||||||
The Quad | 100.0 | % | 163 | 100.0 | % | $ | 32.40 | $ | 32.72 | $ | 5,282 | |||||||||||||||
Papago Tech | 100.0 | % | 163 | 88.7 | % | $ | 24.40 | $ | 24.40 | $ | 3,522 | |||||||||||||||
Tampa, FL (17.5%) |
Park Tower | 94.8 | % | 478 | 89.0 | % | $ | 27.62 | $ | 27.62 | $ | 11,758 | ||||||||||||||
City Center | 95.0 | % | 244 | 85.5 | % | $ | 28.27 | $ | 28.27 | $ | 5,895 | |||||||||||||||
Intellicenter | 100.0 | % | 204 | 100.0 | % | $ | 25.64 | $ | 25.64 | $ | 5,219 | |||||||||||||||
Carillon Point | 100.0 | % | 124 | 100.0 | % | $ | 30.25 | $ | 30.25 | $ | 3,757 | |||||||||||||||
Denver, CO |
Denver Tech | 100.0 | % | 381 | 85.6 | % | $ | 24.29 | $ | 28.74 | $ | 7,731 | ||||||||||||||
Circle Point | 100.0 | % | 272 | 89.3 | % | $ | 19.84 | $ | 34.71 | $ | 4,816 | |||||||||||||||
Superior Pointe | 100.0 | % | 152 | 81.7 | % | $ | 18.47 | $ | 31.47 | $ | 2,299 | |||||||||||||||
Orlando, FL (12.0%) |
Florida Research Park | 96.6 | % | 397 | 88.0 | % | $ | 26.03 | $ | 27.77 | $ | 8,989 | ||||||||||||||
Central Fairwinds | 97.0 | % | 168 | 89.0 | % | $ | 27.87 | $ | 27.87 | $ | 4,172 | |||||||||||||||
Greenwood Blvd | 100.0 | % | 155 | 100.0 | % | $ | 24.75 | $ | 24.75 | $ | 3,837 | |||||||||||||||
Dallas, TX (9.8%) |
190 Office Center | 100.0 | % | 303 | 77.5 | % | $ | 26.57 | $ | 26.57 | $ | 6,241 | ||||||||||||||
The Terraces | 100.0 | % | 173 | 99.0 | % | $ | 38.68 | $ | 58.68 | $ | 6,609 | |||||||||||||||
2525 McKinnon | 100.0 | % | 111 | 97.8 | % | $ | 30.27 | $ | 51.27 | $ | 3,298 | |||||||||||||||
Raleigh, NC |
Bloc 83 | 100.0 | % | 495 | 83.5 | % | $ | 37.41 | $ | 37.63 | $ | 15,459 | ||||||||||||||
Portland, OR (5.5%) |
AmberGlen | 76.0 | % | 203 | 98.4 | % | $ | 23.78 | $ | 27.05 | $ | 4,741 | ||||||||||||||
Cascade Station | 100.0 | % | 128 | 100.0 | % | $ | 29.22 | $ | 31.14 | $ | 3,743 | |||||||||||||||
San Diego, CA (4.7%) |
Mission City | 100.0 | % | 281 | 75.3 | % | $ | 39.21 | $ | 39.21 | $ | 8,301 | ||||||||||||||
Seattle, WA (3.5%) |
Canyon Park | 100.0 | % | 207 | 100.0 | % | $ | 23.86 | $ | 29.86 | $ | 4,934 | ||||||||||||||
Total / Weighted Average – March 31, 2023 (3) |
5,996 |
84.9 |
% |
$ |
28.71 |
$ |
31.84 |
$ |
145,871 |
|||||||||||||||||
(1) | Annualized gross rent per square foot includes adjustment for estimated expense reimbursements of triple net leases. |
(2) | Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended March 31, 2023 by (ii) 12. |
(3) | Averages weighted based on the property’s NRA, adjusted for occupancy. |
Payments Due by Period |
||||||||||||||||||||
Contractual Obligations |
Total |
2023 |
2024-2025 |
2026-2027 |
More than 5 years |
|||||||||||||||
Principal payments on mortgage loans |
$ | 712,113 | $ | 46,084 | $ | 396,190 | $ | 205,719 | $ | 64,120 | ||||||||||
Interest payments (1) |
96,359 | 23,857 | 54,540 | 15,880 | 2,082 | |||||||||||||||
Tenant-related commitments |
14,723 | 14,723 | — | — | — | |||||||||||||||
Lease obligations |
36,847 | 464 | 1,555 | 1,327 | 33,501 | |||||||||||||||
Total |
$ | 860,042 | $ | 85,128 | $ | 452,285 | $ | 222,926 | $ | 99,703 | ||||||||||
(1) | Contracted interest on the floating rate borrowings under our Unsecured Credit Facility was calculated based on the balance and interest rate at March 31, 2023. Contracted interest on our term loans and part of the Unsecured Credit Facility were calculated based on the interest rate swap rates fixing the SOFR component of the borrowing rates. |
31.2 | Certification by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. † | |
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. † | |
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. † | |
101.INS | INLINE XBRL INSTANCE DOCUMENT† | |
101.SCH | INLINE XBRL SCHEMA DOCUMENT† | |
101.CAL | INLINE XBRL CALCULATION LINKBASE DOCUMENT† | |
101.LAB | INLINE XBRL LABELS LINKBASE DOCUMENT† | |
101.PRE | INLINE XBRL PRESENTATION LINKBASE DOCUMENT† | |
101.DEF | INLINE XBRL DEFINITION LINKBASE DOCUMENT† | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) † | |
† | Filed herewith. |
Date: May 5, 2023 | ||||||
By: | /s/ James Farrar | |||||
James Farrar | ||||||
Chief Executive Officer and Director (Principal Executive Officer) | ||||||
Date: May 5, 2023 | ||||||
By: | /s/ Anthony Maretic | |||||
Anthony Maretic | ||||||
Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit 31.1
Certification
I, James Farrar, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2023 of City Office REIT, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants 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 registrants internal control over financial reporting. |
May 5, 2023 | /s/ James Farrar | |||||
Date | James Farrar Chief Executive Officer and Director (Principal Executive Officer) |
Exhibit 31.2
Certification
I, Anthony Maretic, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2023 of City Office REIT, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(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 registrants 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 registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants 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 registrants internal control over financial reporting. |
May 5, 2023 | /s/ Anthony Maretic | |||||
Date | Anthony Maretic Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report on Form 10-Q for the period ended March 31, 2023 of City Office REIT, Inc. (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), I, James Farrar, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
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. |
May 5, 2023 | /s/ James Farrar | |||||
Date | James Farrar Chief Executive Officer and Director (Principal Executive Officer) |
This written report is being furnished to the Securities and Exchange Commission as an exhibit to the Report. A signed original of this written statement required by Section 906 has been provided to City Office REIT, Inc. and will be retained by City Office REIT, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report on Form 10-Q for the period ended March 31, 2023 of City Office REIT, Inc. (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Anthony Maretic, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
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. |
May 5, 2023 | /s/ Anthony Maretic | |||||
Date | Anthony Maretic Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
This written report is being furnished to the Securities and Exchange Commission as an exhibit to the Report. A signed original of this written statement required by Section 906 has been provided to City Office REIT, Inc. and will be retained by City Office REIT, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
|
Statement of Financial Position [Abstract] | ||
Preferred stock, Dividend rate percentage | 6.625% | 6.625% |
Preferred stock, par value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,600,000 | 5,600,000 |
Preferred stock, shares issued | 4,480,000 | 4,480,000 |
Preferred stock, shares outstanding | 4,480,000 | 4,480,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 39,938,451 | 39,718,767 |
Common stock, shares outstanding | 39,938,451 | 39,718,767 |
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 873 | $ 24,691 |
Other comprehensive (loss)/income: | ||
Unrealized cash flow hedge (loss)/gain | (1,465) | 1,614 |
Amounts reclassified to interest expense | (477) | 140 |
Other comprehensive (loss)/income | (1,942) | 1,754 |
Comprehensive (loss)/income | (1,069) | 26,445 |
Comprehensive income attributable to non-controlling interests in properties | (169) | (171) |
Comprehensive (loss)/income attributable to the Company | $ (1,238) | $ 26,274 |
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands |
Total |
Preferred Stock [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained earnings [Member] |
Accumulated Other Comprehensive Income [Member] |
Total stockholders' equity [Member] |
Non-controlling Interests in Properties [Member] |
---|---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2021 | $ 870,595 | $ 112,000 | $ 435 | $ 482,061 | $ 275,502 | $ (382) | $ 869,616 | $ 979 |
Beginning balance, shares at Dec. 31, 2021 | 4,480,000 | 43,554,000 | ||||||
Restricted stock award grants and vesting, values | 904 | 972 | (68) | 904 | ||||
Common stock dividend distribution declared | (8,711) | (8,711) | (8,711) | |||||
Preferred stock dividend distribution declared | (1,855) | (1,855) | (1,855) | |||||
Contributions | 3 | 3 | ||||||
Distributions | (254) | (254) | ||||||
Net income | 24,691 | 24,520 | 24,520 | 171 | ||||
Other comprehensive income (loss) | 1,754 | 1,754 | 1,754 | |||||
Ending balance at Mar. 31, 2022 | 887,127 | $ 112,000 | $ 435 | 483,033 | 289,388 | 1,372 | 886,228 | 899 |
Ending balance, shares at Mar. 31, 2022 | 4,480,000 | 43,554,000 | ||||||
Beginning balance at Dec. 31, 2022 | 803,174 | $ 112,000 | $ 397 | 436,161 | 251,542 | 2,731 | 802,831 | 343 |
Beginning balance, shares at Dec. 31, 2022 | 4,480,000 | 39,718,000 | ||||||
Restricted stock award grants and vesting, values | (618) | $ 2 | (535) | (85) | (618) | |||
Restricted stock award grants and vesting, shares | 220,000 | |||||||
Common stock dividend distribution declared | (7,988) | (7,988) | (7,988) | |||||
Preferred stock dividend distribution declared | (1,855) | (1,855) | (1,855) | |||||
Contributions | 110 | 110 | ||||||
Distributions | (235) | (235) | ||||||
Net income | 873 | 704 | 704 | 169 | ||||
Other comprehensive income (loss) | (1,942) | (1,942) | (1,942) | |||||
Ending balance at Mar. 31, 2023 | $ 791,519 | $ 112,000 | $ 399 | $ 435,626 | $ 242,318 | $ 789 | $ 791,132 | $ 387 |
Ending balance, shares at Mar. 31, 2023 | 4,480,000 | 39,938,000 |
Organization and Description of Business |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business City Office REIT, Inc. (the “Company”) was organized in the state of Maryland on November 26, 2013. On April 21, 2014, the Company completed its initial public offering (“IPO”) of shares of the Company’s common stock. The Company contributed the net proceeds of the IPO to City Office REIT Operating Partnership, L.P., a Maryland limited partnership (the “Operating Partnership”), in exchange for common units of limited partnership interest in the Operating Partnership (“common units”). The Company’s interest in the Operating Partnership entitles the Company to share in distributions from, and allocations of profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership of common units. As the sole general partner of the Operating Partnership, the Company has the exclusive power under the Operating Partnership’s partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners. The Company has elected to be taxed and will continue to operate in a manner that will allow it to continue to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to qualification as a REIT, the Company will be permitted to deduct dividend distributions paid to its stockholders, eliminating the U.S. federal taxation of income represented by such distributions at the Company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and, for years prior to 2018, any applicable alternative minimum tax.
|
Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Preparation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with Securities and Exchange Commission (“SEC”) rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (the “FASB”) established Topic 848, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, by issuing Accounting Standards Update (“ASU”) No. 2020-04 (“ASU 2020-04”). ASU 2020-04 provides companies with optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. For contracts affected by reference rate reform, if certain criteria are met, companies can elect to not remeasure contracts at the modification date or reassess a previous accounting conclusion. Companies can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met. Further, in January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). ASU 2021-01 clarified the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848.2020-04 and ASU 2021-01 can be applied as of the beginning of the interim period that includes March 12, 2020, however, the guidance will only be available for optional use through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”). ASU 2022-06 amends the date the guidance will be available to December 31, 2024. The new standard applies prospectively to contract modifications and hedging relationships and may be elected over time as reference rate reform activities occur. During the first quarter of 2023, the Company transitioned its LIBOR-based contracts to SOFR and elected to apply the practical expedients to modifications of qualifying debt contracts and hedging relationships as continuations of the existing contracts, rather than as new contracts. Application of the hedge accounting expedients preserves the presentation of derivatives consistent with past presentation and does not result in dedesignation of hedging relationships. Applying the expedients did not have a material impact on the consolidated financial statements. As of March 31, 2023, the Company has no remaining LIBOR-based contracts. |
Real Estate Investments |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Real Estate [Abstract] | |
Real Estate Investments | 3. Real Estate Investments Sale of Real Estate Property During the first quarter of 2022, the sole tenant at the Lake Vista Pointe property exercised its lease option to purchase the building and the Company signed a purchase and sale agreement with the tenant. At the time the tenant exercised the option, the Company reassessed the classification of the lease, in accordance with ASC 842 – Leases, and determined that the lease should be reclassified from an operating lease to a sales-type lease. This reclassification resulted in a gain on sale of $ million net of disposal-related costs. On June 15, 2022, the Company sold the Lake Vista Pointe property in Dallas, Texas for a gross sales price of $ million. |
Lease Intangibles |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Intangibles | 4. Lease Intangibles Lease intangibles and the value of assumed lease obligations as of March 31, 2023 and December 31, 2022 were comprised of the following (in thousands):
The estimated aggregate amortization expense for lease intangibles for the next five years and in the aggregate are as follows (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | 5. Debt On January 5, 2023, the Company transitioned the borrowing rate of its unsecured credit facility (the “Unsecured Credit Facility”) and $ 50 million term loan from LIBOR to daily-simple SOFR. The Company applied the practical expedients available under the reference rate reform guidance and accounted for the modifications as continuations of the existing contracts. The following table summarizes the indebtedness as of March 31, 2023 and December 31, 2022 (dollars in thousands):
The scheduled principal repayments of debt as of March 31, 2023 are as follows (in thousands):
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | 6. Fair Value of Financial Instruments Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows: Level 1 Inputs – quoted prices in active markets for identical assets or liabilities Level 2 Inputs – observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 Inputs – unobservable inputs In January 2023, the Company amended the $ million interest rate swap to transition from LIBOR to daily-simple SOFR. The Company applied the practical expedients available for hedging relationships under the reference rate reform guidance, which preserves the presentation of the derivative consistent with past presentation and does not result in dedesignation of the hedging relationship. Pursuant to the amended interest rate swap, the Company will pay a fixed rate of approximately % of the notional amount annually, payable monthly, and receive floating rate daily-simple SOFR payments. In January 2023, the Company entered into an interest rate swap for a notional amount of $25 million. Pursuant to the interest rate swap, the Company will pay a fixed rate of approximately 3.90% of the notional amount annually, payable monthly, and receive floating rate daily-simple SOFR payments. In February 2023, the Company entered into an interest rate swap for a notional amount of $140 million. Pursuant to the interest rate swap, the Company will pay a fixed rate of approximately 4.19% of the notional amount annually, payable quarterly, and receive floating rate daily-simple SOFR payments. The fair value of the interest rate swaps have been classified as Level 2 fair value measurements. The interest rate swaps have been designated and qualify as cash flow hedges and have been recognized on the condensed consolidated balance sheets at fair value, presented within other assets and other liabilities. Gains and losses resulting from changes in the fair value of derivatives that have been designated and qualify as cash flow hedges are reported as a component of other comprehensive income/(loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. The following table summarizes the Company’s derivative financial instruments as of March 31, 2023 and December 31, 2022 (in thousands):
For the three months ended March 31, 2023, approximately $0.5 million of realized gains were reclassified to interest expense due to payments received from the swap counterparty. For the three months ended March 31, 2022, approximately $0.1 million of realized losses were reclassified to interest expense due to payments made to the swap counterparty. Cash, Cash Equivalents, Restricted Cash, Rents Receivable, Accounts Payable and Accr ued Lia bilities The Company estimates that the fair value approximates carrying value due to the relatively short-term nature of these instruments. Fair Value of Financial Instruments Not Carried at Fair Value With the exception of fixed rate mortgage loans payable, the carrying amounts of the Company’s financial instruments approximate their fair value. The Company determines the fair value of its fixed rate mortgage loan payable based on a discounted cash flow analysis using a discount rate that approximates the current borrowing rates for instruments of similar maturities. Based on this, the Company has determined that the fair value of these instruments was $425.6 million and $420.7 million (compared to a carrying value of $441.4 million and $443.3 million) as of March 31, 2023, and December 31, 2022, respectively. Accordingly, the fair value of mortgage loans payable have been classified as Level 3 fair value measurements.
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. Related Party Transactions Administrative Services Agreement For the three months ended March 31, 2023 and 2022, the Company earned $0.1 million and $0.1
million, respectively, in administrative services performed for Second City Real Estate II Corporation, Clarity Real Estate Ventures GP, Limited Partnership and their affiliates. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 8. Leases Lessor Accounting The Company is focused on acquiring, owning and operating high-quality office properties for lease to a stable and diverse tenant base. Our properties have both full-service gross and net leases which are generally classified as operating leases. Rental income related to such leases is recognized on a straight-line basis over the remaining lease term. The Company’s total revenue includes fixed base rental payments provided under the lease and variable payments, which principally consist of tenant expense reimbursements for certain property operating expenses as provided under the lease. The Company recognized fixed and variable lease payments for operating leases for the three months ended March 31, 2023 and 2022 as follows (in thousands):
Future minimum lease payments to be received by the Company as of March 31, 2023 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):
The Company’s leases may include various provisions such as scheduled rent increases, renewal options and termination options. The majority of the Company’s leases include defined rent increases rather than variable payments based on an index or unknown rate. Lessee Accounting As a lessee, the Company has ground and office leases which are classified as operating and financing leases. As of March 31, 2023, these leases had remaining terms of under one year to 65 years and a weighted average remaining lease term of 50 years. Right-of-use
Lease liabilities are measured at the commencement date based on the present value of future lease payments. One of the Company’s operating ground leases includes rental payment increases over the lease term based on increases in the Consumer Price Index (“CPI”). Changes in the CPI were not estimated as part of the measurement of the operating lease liability. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company used a weighted average discount rate of 6.2% in determining its lease liabilities. The discount rates were derived from the Company’s assessment of the credit quality of the Company and adjusted to reflect secured borrowing, estimated yield curves and long-term spread adjustments. Right-of-use Operating lease expense for the three months ended March 31, 2023 and March 31, 2022 were $0.2 million and $0.3 million, respectively. Financing lease expense for the three months ended March 31, 2023 and March 31, 2022 were $0.1 million and $0.1 million, respectively. Future minimum lease payments to be paid by the Company as a lessee for operating and financing leases as of March 31, 2023 for the next five years and thereafter are as follows (in thousands):
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies The Company is obligated under certain tenant leases to fund tenant improvements and the expansion of the underlying leased properties. Under various federal, state and local laws, ordinances and regulations relating to the protection of the environment, a current or previous owner or operator of real estate may be liable for the cost of removal or remediation of certain hazardous or toxic substances disposed, stored, generated, released, manufactured or discharged from, on, at, under, or in a property. As such, the Company may be potentially liable for costs associated with any potential environmental remediation at any of its formerly or currently owned properties. The Company believes that it is in compliance in all material respects with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. Management is not aware of any environmental liability that it believes would have a material adverse impact on the Company’s financial position or results of operations. Management is unaware of any instances in which the Company would incur significant environmental costs if any or all properties were sold, disposed of or abandoned. However, there can be no assurance that any such non-compliance, liability, claim or expenditure will not arise in the future. The Company is involved from time to time in lawsuits and other disputes which arise in the ordinary course of business. As of March 31, 2023, management believes that these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s financial position or results of operations.
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Stockholder's Equity |
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Stockholder's Equity | 10. Stockholders’ Equity Share Repurchase Plan On March 9, 2020, the Company’s Board of Directors (the “Board of Directors”) approved a share repurchase plan authorizing the Company to repurchase up to $ million of its outstanding shares of common stock. In July 2020, the Company completed the full March 2020 share repurchase plan. On August 5, 2020, the Board of Directors approved an additional share repurchase plan authorizing the Company to repurchase up to an additional aggregate amount of $ million of its outstanding shares of common stock. In September 2022, the Company completed the full August 2020 share repurchase plan. Under the share repurchase programs, the shares may be repurchased from time to time using a variety of methods, which may include open market transactions, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements. Repurchased shares of common stock will be classified as authorized and unissued shares. The Company recognizes the cost of shares of common stock it repurchases, including direct costs incurred, as a reduction in stockholders’ equity. Such reductions of stockholders equity due to the repurchases of shares of common stock will be applied first, to reduce common stock in the amount of the par value associated with the shares of common stock repurchased and second, to reduce additional paid-in capital by the amount that the purchase price for the shares of common stock repurchased exceed the par value. There were no shares repurchased during the three months ended March 31, 2023 and 2022. Common Stock and Common Unit Distributions On March 14, 2023, the Board of Directors approved and the Company declared a cash dividend distribution of $ Preferred Stock Distributions On March 14, 2023, the Board of Directors approved and the Company declared a cash dividend distribution of $ Equity Incentive Plan The Company has an equity incentive plan (“Equity Incentive Plan”) for executive officers, directors and certain 3,763,580non-executive employees, and with approval of the Board of Directors, for subsidiaries and their respective affiliates. The Equity Incentive Plan provides for grants of restricted common stock, restricted stock units, phantom shares, stock options, dividend equivalent rights and other equity-based awards (including the grant of Operating Partnership long-term incentive plan units), subject to the total number of shares available for issuance under the plan.shares of common stock. To the extent an award granted under the Equity Incentive Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards. On January 27, 2020, each of the Board of Directors and the Compensation Committee approved a new form of performance-based restricted unit award agreement that will be used to grant performance-based restricted stock unit awards (“Performance RSU Awards”) measurement period beginning January 1 of the year of grant (the “Measurement Period”) relative to the TSR of a defined peer group list of other US Office REIT companies (the “Peer Group”) as of the first trading date in the year of grant. The payouts under the Performance RSU Awards are evaluated on a sliding scale as follows: TSR below the 30th percentile of the Peer Group would result in a 50% payout; TSR at the 50th percentile of the Peer Group would result in a 100% payout; and TSR at or above the 75th percentile of the Peer Group would result in a 150% payout. Payouts are mathematically interpolated between these stated percentile targets, subject to a 150% maximum. To the extent earned, the payouts of the Performance RSU Awards are intended to be settled in the form of shares of the Company’s common stock, pursuant to the Equity Incentive Plan. Upon satisfaction of the vesting conditions, dividend equivalents in an amount equal to all regular and special dividends declared with respect to the Company’s common stock during each annual measurement period during the Measurement Period are determined and paid on a cumulative, reinvested basis over the term of the applicable Performance RSU Award, at the time such award vests and based on the number of shares of the Company’s common stock that are earned. During the first quarter of 2023, the Performance RSU Awards granted in January 2020, with a January 1, 2020 through December 31, 2022 Measurement Period, were earned at 150% of the target number of shares granted based on achievement of a TSR that was at or above the 75th percentile of the 2020 Peer Group. The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2023:
The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2022:
During the three months ended March 31, 2023 and March 31, 2022, the Company granted the following restricted stock units (“RSUs”) and Performance RSU Awards to directors, executive officers and certain non-executive employees:
The RSU Awards will vest in three equal, annual installments on each of the first three anniversaries of the grant date. The Performance RSU Awards will vest on the last day of the three-year measurement period. During the three months ended March 31, 2023 and March 31, 2022, the Company recognized net compensation expense for the RSUs and Performance RSU Awards as follows (in thousands):
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Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Preparation and Summary of Significant Accounting Policies | Basis of Preparation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with Securities and Exchange Commission (“SEC”) rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2022. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (the “FASB”) established Topic 848, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, by issuing Accounting Standards Update (“ASU”) No. 2020-04 (“ASU 2020-04”). ASU 2020-04 provides companies with optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. For contracts affected by reference rate reform, if certain criteria are met, companies can elect to not remeasure contracts at the modification date or reassess a previous accounting conclusion. Companies can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met. Further, in January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). ASU 2021-01 clarified the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848.2020-04 and ASU 2021-01 can be applied as of the beginning of the interim period that includes March 12, 2020, however, the guidance will only be available for optional use through December 31, 2022. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”). ASU 2022-06 amends the date the guidance will be available to December 31, 2024. The new standard applies prospectively to contract modifications and hedging relationships and may be elected over time as reference rate reform activities occur. During the first quarter of 2023, the Company transitioned its LIBOR-based contracts to SOFR and elected to apply the practical expedients to modifications of qualifying debt contracts and hedging relationships as continuations of the existing contracts, rather than as new contracts. Application of the hedge accounting expedients preserves the presentation of derivatives consistent with past presentation and does not result in dedesignation of hedging relationships. Applying the expedients did not have a material impact on the consolidated financial statements. As of March 31, 2023, the Company has no remaining LIBOR-based contracts. |
Lease Intangibles (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Intangibles and Value of Assumed Lease Obligations | Lease intangibles and the value of assumed lease obligations as of March 31, 2023 and December 31, 2022 were comprised of the following (in thousands):
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Estimated Aggregate Amortization Expense for Lease Intangibles | The estimated aggregate amortization expense for lease intangibles for the next five years and in the aggregate are as follows (in thousands):
|
Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Indebtness | The following table summarizes the indebtedness as of March 31, 2023 and December 31, 2022 (dollars in thousands):
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Schedule of Principal Repayments of Mortgage Payable | The scheduled principal repayments of debt as of March 31, 2023 are as follows (in thousands):
|
Fair Value of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of company's derivative financial instruments | The following table summarizes the Company’s derivative financial instruments as of March 31, 2023 and December 31, 2022 (in thousands):
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Lease Income | The Company recognized fixed and variable lease payments for operating leases for the three months ended March 31, 2023 and 2022 as follows (in thousands):
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Schedule of future minimum rental payments for operating leases | Future minimum lease payments to be received by the Company as of March 31, 2023 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):
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Schedule of supplemental balance sheet information related to leases | Right-of-use
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Schedule future minimum lease payments to be paid | Future minimum lease payments to be paid by the Company as a lessee for operating and financing leases as of March 31, 2023 for the next five years and thereafter are as follows (in thousands):
|
Stockholder's Equity (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Banks [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Activity of Awards under Equity Incentive Plan | The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2023:
The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2022:
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Summary of Restricted Stock Units ("RSUs") and Performance RSU | During the three months ended March 31, 2023 and March 31, 2022, the Company granted the following restricted stock units (“RSUs”) and Performance RSU Awards to directors, executive officers and certain non-executive employees:
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Summary of Recognized Compensation Expense for RSUs and Performance RSU | During the three months ended March 31, 2023 and March 31, 2022, the Company recognized net compensation expense for the RSUs and Performance RSU Awards as follows (in thousands):
|
Organization and Description of Business - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company formation date | Nov. 26, 2013 |
Operation commencement date | Apr. 21, 2014 |
Real Estate Investments - Additional Information (Detail) - Lake Vista Pointe [Member] - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jun. 15, 2022 |
Mar. 31, 2022 |
|
Real Estate [Line Items] | ||
Sales-type Lease, Selling Profit (Loss) | $ 21.7 | |
Proceeds from Sale of Real Estate | $ 43.8 |
Lease Intangibles - Estimated Aggregate Amortization Expense for Lease Intangibles (Detail) $ in Thousands |
Mar. 31, 2023
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 6,484 |
2024 | 6,660 |
2025 | 6,479 |
2026 | 6,490 |
2027 | 5,217 |
Thereafter | 12,581 |
Total | $ 43,911 |
Debt - Schedule of Principal Repayments of Mortgage Payable (Detail) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Disclosure [Abstract] | ||
2023 | $ 46,084 | |
2024 | 108,480 | |
2025 | 287,710 | |
2026 | 29,416 | |
2027 | 176,303 | |
Thereafter | 64,120 | |
Total | $ 712,113 | $ 693,796 |
Fair Value of Financial Instruments - Summary of Company's Derivative Financial Instruments (Detail) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Feb. 09, 2023 |
Jan. 06, 2023 |
Jan. 05, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|---|
Derivatives, Fair Value [Line Items] | |||||
Notional Value | $ 215,000 | ||||
Fair Value | 789 | $ 2,731 | |||
Interest Rate Swap [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional Value | $ 140,000 | $ 50,000 | $ 25,000 | ||
September 2024 [Member] | Interest Rate Swap [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional Value | 50,000 | ||||
Fair Value, Assets | 2,241 | 2,731 | |||
January 2026 [Member] | Interest Rate Swap [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional Value | 25,000 | ||||
Fair Value, Liability | (94) | 0 | |||
November 2025 [Member] | Interest Rate Swap [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional Value | 140,000 | ||||
Fair Value, Liability | $ (1,358) | $ 0 |
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 08, 2023 |
Feb. 09, 2023 |
Jan. 06, 2023 |
Jan. 05, 2023 |
Dec. 31, 2022 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Notional amount | $ 215,000 | ||||||
Interest rate swap gain (loss) reclassified to interest expense | 477 | $ (140) | |||||
Debt instrument carrying amount | 712,113 | $ 693,796 | |||||
Interest Rate Swap [Member] | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Notional amount | $ 140,000 | $ 50,000 | $ 25,000 | ||||
Fixed interest rate | 4.19% | 1.17% | 3.90% | ||||
Interest rate swap gain (loss) reclassified to interest expense | 500 | $ (100) | |||||
Fair Value, Inputs, Level 3 [Member] | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Mortgage loans payable, fair value | 425,600 | 420,700 | |||||
Debt instrument carrying amount | $ 441,400 | $ 443,300 |
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Administrative Services Agreement [Member] | SCRE II [Member] | Clarity Real Estate Ventures GP, Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Annual payment receivable for services | $ 0.1 | $ 0.1 |
Leases - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Operating Lease cost | $ 0.2 | $ 0.3 |
Operating Lease, Weighted Average Remaining Lease Term | 50 years | |
Operating Lease, Weighted Average Discount Rate, Percent | 6.20% | |
Finance Lease, Weighted Average Remaining Lease Term | 50 years | |
Finance Lease, Weighted Average Discount Rate, Percent | 6.20% | |
Financing Lease Cost | $ 0.1 | $ 0.1 |
Maximum [Member] | ||
Remaining lease terms | 65 years | |
Remaining lease terms, Financing leases | 65 years | |
Minimum [Member] | ||
Remaining lease terms | 1 year | |
Remaining lease terms, Financing leases | 1 year |
Leases - Schedule of Operating Leases (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Fixed payments | $ 38,914 | $ 38,320 |
Variable payments | 6,743 | 6,440 |
Operating Lease, Lease Income | $ 45,657 | $ 44,760 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Operating Income (Loss) | Operating Income (Loss) |
Leases - Schedule of Future Minimum Lease Payments under Non-cancellable Operating Leases (Detail) $ in Thousands |
Mar. 31, 2023
USD ($)
|
---|---|
Leases [Abstract] | |
2023 | $ 94,066 |
2024 | 118,908 |
2025 | 107,742 |
2026 | 98,598 |
2027 | 82,242 |
Thereafter | 223,165 |
Total future minimum lease payments to be received | $ 724,721 |
Leases - Schedule of Operating Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Right-of-use asset - operating leases | $ 12,825 | $ 12,935 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
Lease liability – operating leases | $ 8,738 | $ 8,802 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Other Liabilities | Other Liabilities |
Right-of-use asset – financing leases | $ 9,991 | $ 10,054 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets |
Lease liability – financing leases | $ 1,491 | $ 1,475 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities | Other Liabilities |
Leases - Schedule Future Minimum Lease Payments To Be Paid (Detail) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
2023 | $ 459 | |
2024 | 770 | |
2025 | 770 | |
2026 | 724 | |
2027 | 587 | |
Thereafter | 26,563 | |
Total future minimum lease payments | 29,873 | |
Discount | (21,135) | |
Total | 8,738 | $ 8,802 |
2023 | 5 | |
2024 | 7 | |
2025 | 8 | |
2026 | 8 | |
2027 | 8 | |
Thereafter | 6,938 | |
Total future minimum lease payments | 6,974 | |
Discount | (5,483) | |
Total | $ 1,491 | $ 1,475 |
Stockholder's Equity - Summary of Activity of Awards under Equity Incentive Plan (Detail) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Restricted Stock Units (RSUs) [Member] | ||
Schedule Of Share Based Compensation Restricted Stock Units Award Activity [Line Items] | ||
Beginning balance | 428,320 | 342,159 |
Granted | 198,022 | 237,986 |
Issuance of dividend equivalents | 9,485 | 3,902 |
Vested | (216,520) | |
Ending balance | 419,307 | 584,047 |
Performance Restricted Stock Unit [Member] | ||
Schedule Of Share Based Compensation Restricted Stock Units Award Activity [Line Items] | ||
Beginning balance | 307,500 | 217,500 |
Granted | 214,888 | 90,000 |
Issuance of dividend equivalents | 0 | 0 |
Vested | (97,500) | |
Ending balance | 424,888 | 307,500 |
Performance Restricted Stock Unit including 2020 Performance Restricted Stock Unit Awards [Member] | ||
Schedule Of Share Based Compensation Restricted Stock Units Award Activity [Line Items] | ||
Granted | 214,888 |
Stockholder's Equity - Summary of Restricted Stock Units ("RSUs") and Performance RSU (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Schedule Of Share Based Compensation Restricted Stock Units Award Activity Granted [Line Items] | ||
Fair Value | $ 3,729 | $ 5,753 |
Weighted Average Grant Fair Value Per Share | $ 9.03 | $ 17.54 |
Restricted Stock Units (RSUs) [Member] | ||
Schedule Of Share Based Compensation Restricted Stock Units Award Activity Granted [Line Items] | ||
Units Granted | 198,022 | 237,986 |
Performance Restricted Stock Unit [Member] | ||
Schedule Of Share Based Compensation Restricted Stock Units Award Activity Granted [Line Items] | ||
Units Granted | 214,888 | 90,000 |
Stockholder's Equity - Summary of Recognized Compensation Expense for RSUs and Performance RSU (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Schedule Of Recognized Net Compensation Expense [Line Items] | ||
Share-based Payment Arrangement, Amount Capitalized | $ 1,024 | $ 904 |
Restricted Stock Units (RSUs) [Member] | ||
Schedule Of Recognized Net Compensation Expense [Line Items] | ||
Share-based Payment Arrangement, Amount Capitalized | 643 | 599 |
Performance Restricted Stock Unit [Member] | ||
Schedule Of Recognized Net Compensation Expense [Line Items] | ||
Share-based Payment Arrangement, Amount Capitalized | $ 381 | $ 305 |
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