ý | ANNUAL 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 |
Maryland | 46-4654479 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Title of Each Class | Name of Each Exchange on Which Registered |
None | None |
Securities registered pursuant to Section 12(g) of the Act: |
Class T Shares of Common Stock, $0.001 par value |
Class S Shares of Common Stock, $0.001 par value |
Class D Shares of Common Stock, $0.001 par value |
Class I Shares of Common Stock, $0.001 par value |
Class A Shares of Common Stock, $0.001 par value |
Class AA Shares of Common Stock, $0.001 par value |
Class AAA Shares of Common Stock, $0.001 par value |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |||
Non-accelerated filer | x (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | x |
Class T | Class S | Class D | Class I | Class A | Class AA | Class AAA | ||||||||
Outstanding shares | 227,686 | 280 | 19,319 | 807,373 | 25,785,133 | 49,874,287 | 977,245 |
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• | invest in income-producing real property in a manner that allows us to qualify as a REIT for federal income tax purposes; |
• | provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to commercial real estate with lower volatility than public real estate companies. |
• | subject to long-term leases with defined rental rate increases or with short-term leases with high-probability renewal and potential for increasing rent. |
• | the credit quality of the lease payment is determinable and equivalent to the senior unsecured credit rating of the tenant; |
• | the essential nature of the asset to the tenant's business provides greater default protection relative to the tenant's balance sheet debt; |
• | the percentage recovery in the event of a tenant default is empirically greater than an unsecured lender; and |
• | long-term leases provide a consistent and predictable income stream across market cycles while short-term leases offer income appreciation upon renewal and reset. |
• | a cohesive management team experienced in all aspects of real estate investment with a track record of acquiring primarily single tenant business essential assets; |
• | stable cash flow backed by a portfolio of primarily single tenant business essential real estate assets; |
• | minimal exposure to operating and maintenance expense increases as we attempt to structure or acquire leases where the tenant assumes responsibility for these costs; |
• | contractual lease rate increases enabling potential distribution growth and a potential hedge against inflation; |
• | insulation from short-term economic cycles resulting from the long-term nature of underlying asset leases; |
• | enhanced stability resulting from diversified credit characteristics of corporate credits; and |
• | portfolio stability promoted through geographic and product type investment diversification. |
• | lease terms, including length of lease term, scope of landlord responsibilities, presence and frequency of contractual rental increases, renewal option provisions, exclusive and permitted use provisions, co-tenancy requirements and termination options; |
• | demographics of the area, neighborhood growth patterns, economic conditions, and local market conditions; |
• | a majority of our directors, including a majority of our independent directors, not otherwise interested in the transaction, approve the transaction as being fair and reasonable to us; and |
• | the investment by us and such affiliate are on substantially the same terms and conditions otherwise dictated by the market. |
• | changes in the respective businesses, operations, assets, liabilities or prospects of us and GCEAR; |
• | changes in general market and economic conditions and other factors generally affecting the relative values of our and GCEAR’s assets; |
• | federal, state and local legislation, governmental regulation and legal developments in the businesses in which we and GCEAR operate; or |
• | other factors beyond the control of us and GCEAR, including those described or referred to elsewhere in this “Risk Factors” section. |
• | require us to dedicate a large portion of our cash flow to pay principal and interest on our borrowings, which will reduce the availability of cash flow to fund working capital, capital expenditures, and other business activities; |
• | increase our vulnerability to general adverse economic and industry conditions; |
• | subject us to maintaining various debt, operating income, net worth, cash flow, and other financial covenant ratios; |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | restrict our operating policies and ability to make strategic acquisitions, dispositions, or exploiting business opportunities; |
• | place us at a competitive disadvantage compared to our competitors that have less borrowings; |
• | limit our ability to borrow more funds (even when necessary to maintain adequate liquidity), dispose of assets, or make distributions to stockholders; or |
• | increase our costs of capital. |
• | any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation's outstanding voting stock; or |
• | an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding stock of the corporation. |
• | amendment of our charter, except that our Board may amend our charter without stockholder approval to increase or decrease the aggregate number of our shares, to increase or decrease the number of our shares of any class or series that we have the authority to issue, to change our name, to change the name or other designation or the par value of any class or series of our shares and the aggregate par value of our shares, or to effect certain reverse stock splits, provided however, that any such amendment does not adversely affect the rights, preferences and privileges of the stockholders; |
• | any merger, consolidation, conversion, statutory share exchange or sale or other disposition of substantially all of our assets. |
Year of Lease Expiration | Net Rent (1) (unaudited) | Number of Lessees | Approx. Square Feet | Percentage of Net Rent | |||||||||
2019 - 2021 | $ | 8,956 | 3 | 746,900 | 11.4 | % | |||||||
2022 | 1,204 | 1 | 312,000 | 1.5 | |||||||||
2023 | 6,913 | 2 | 658,600 | 8.8 | |||||||||
2024 | 9,034 | 4 | 571,500 | 11.5 | |||||||||
2025 | 7,557 | 5 | 728,800 | 9.6 | |||||||||
2026 | 9,909 | 3 | 1,331,700 | 12.6 | |||||||||
2027 and beyond | 34,820 | 9 | 2,991,100 | 44.6 | |||||||||
Total | $ | 78,393 | 27 | 7,340,600 | 100.0 | % |
(1) | Net rent is based on (a) the contractual base rental payments assuming the lease requires the tenant to reimburse us for certain operating expenses or the property is self-managed by the tenant and the tenant is responsible for all, or substantially all, of the operating expenses; or (b) contractual rent payments less certain operating expenses that are our responsibility for the 12-month period subsequent to December 31, 2018 and includes assumptions that may not be indicative of the actual future performance of a property, including the assumption that the tenant will perform its obligations under its lease agreement during the next 12 months. |
• | changes in general economic or local conditions; |
• | changes in supply of or demand for similar or competing properties in an area; |
• | changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive; |
• | changes in tax, real estate, environmental and zoning laws; |
• | changes in property tax assessments and insurance costs; |
• | increases in interest rates and tight money supply; and |
• | loss of entitlements. |
• | increased insurance premiums, resulting in part from the increased risk of terrorism, may reduce funds available for distribution, or, to the extent we are able to pass such increased insurance premiums on to our tenants, may increase tenant defaults. |
• | the risk that a co-owner may at any time have economic or business interests or goals that are or become inconsistent with our business interests or goals; |
• | the risk that a co-owner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives; |
• | the risk that disputes with co-owners may result in litigation, which may cause us to incur substantial costs and/or prevent our management from focusing on our business objectives; |
• | the possibility that an individual co-owner might become insolvent or bankrupt, or otherwise default under the applicable mortgage loan financing documents, which may constitute an event of default under all of the applicable mortgage loan financing documents or allow the bankruptcy court to reject the tenants-in-common agreement or management agreement entered into by the co-owner owning interests in the property; |
• | the possibility that a co-owner might not have adequate liquid assets to make cash advances that may be required in order to fund operations, maintenance and other expenses related to the property, which could result in the loss of current or prospective tenants and may otherwise adversely affect the operation and maintenance of the property, and could cause a default under the mortgage loan financing documents applicable to the property and may result in late charges, penalties and interest, and may lead to the exercise of foreclosure and other remedies by the lender; |
• | the risk that a co-owner could breach agreements related to the property, which may cause a default under, or result in personal liability for, the applicable mortgage loan financing documents, violate applicable securities laws and otherwise adversely affect the property and the co-ownership arrangement; or |
• | the risk that a default by any co-owner would constitute a default under the applicable mortgage loan financing documents that could result in a foreclosure and the loss of all or a substantial portion of the investment made by the co-owner. |
• | part of the income and gain recognized by certain qualified employee pension trusts with respect to our common stock may be treated as UBTI if shares of our common stock are predominately held by qualified employee pension trusts, and we are required to rely on a special look-through rule for purposes of meeting one of the REIT share ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as UBTI; |
• | part of the income and gain recognized by a tax exempt investor with respect to our common stock would constitute UBTI if the investor incurs debt in order to acquire the common stock; and |
• | part or all of the income or gain recognized with respect to our common stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) or (c)(20) of the Code may be treated as UBTI. |
• | their investment is made in accordance with the documents and instruments governing their plan or IRA, including their plan's investment policy; |
State | Net Rent (unaudited) | Number of Properties | Percentage of Net Rent | |||||||
Ohio | $ | 10,054 | 4 | 12.8 | % | |||||
Illinois | 8,862 | 2 | 11.3 | |||||||
California | 8,778 | 3 | 11.2 | |||||||
Alabama | 8,519 | 1 | 10.9 | |||||||
New Jersey | 8,278 | 2 | 10.6 | |||||||
Arizona | 7,527 | 2 | 9.6 | |||||||
Nevada | 6,943 | 2 | 8.9 | |||||||
Texas | 4,176 | 1 | 5.3 | |||||||
Oregon | 3,312 | 1 | 4.2 | |||||||
North Carolina | 2,750 | 2 | 3.5 | |||||||
All Others (1) | 9,194 | 7 | 11.7 | |||||||
Total | $ | 78,393 | 27 | 100.0 | % |
(1) | All others account for approximately 3.0% or less of total annualized net rent on an individual basis. |
Industry (1) | Net Rent (unaudited) | Number of Lessees | Percentage of Net Rent | |||||||
Consumer Services | $ | 13,031 | 4 | 16.6 | % | |||||
Utilities | 10,462 | 2 | 13.3 | |||||||
Capital Goods | 10,437 | 6 | 13.3 | |||||||
Technology Hardware & Equipment | 9,821 | 3 | 12.5 | |||||||
Diversified Financials | 5,863 | 1 | 7.5 | |||||||
Retailing | 5,753 | 1 | 7.3 | |||||||
Banks | 5,644 | 2 | 7.2 | |||||||
Energy | 4,176 | 1 | 5.3 | |||||||
Consumer Durables and Apparel | 3,312 | 1 | 4.2 | |||||||
Transportation | 3,203 | 2 | 4.1 | |||||||
Pharmaceuticals, Biotechnology & Life Sciences | 2,881 | 1 | 3.7 | |||||||
All Others (2) | 3,810 | 3 | 5.0 | |||||||
Total | $ | 78,393 | 27 | 100.0 | % |
(1) | Industry classification based on the Global Industry Classification Standards. |
(2) | All others represent 3.5% or less of total net rent on an individual basis. |
Tenant | Net Rent (unaudited) | Percentage of Net Rent | |||||
Southern Company Services, Inc. | $ | 8,519 | 10.9 | % | |||
American Express Travel Related Services Company, Inc. | 5,863 | 7.5 | |||||
Amazon.com.dedc, LLC | 5,753 | 7.3 | |||||
Bank of America, N.A. | 5,644 | 7.2 | |||||
Wyndham Worldwide Operations | 5,397 | 6.9 | |||||
IGT | 4,774 | 6.1 | |||||
3M Company | 4,544 | 5.8 | |||||
Zebra Technologies Corporation | 4,318 | 5.5 | |||||
Wood Group Mustang, Inc. | 4,176 | 5.3 | |||||
Nike | 3,312 | 4.2 | |||||
Other (1) | 26,093 | 33.3 | |||||
Total | $ | 78,393 | 100.0 | % |
(1) | All others account for 4.0% or less of total net rent on an individual basis. |
Year of Lease Expiration | Net Rent (unaudited) | Number of Lessees | Approx. Square Feet | Percentage of Net Rent | |||||||||
2019 - 2021 | $ | 8,956 | 3 | 746,900 | 11.4 | % | |||||||
2022 | 1,204 | 1 | 312,000 | 1.5 | |||||||||
2023 | 6,913 | 2 | 658,600 | 8.8 | |||||||||
2024 | 9,034 | 4 | 571,500 | 11.5 | |||||||||
2025 | 7,557 | 5 | 728,800 | 9.6 | |||||||||
2026 | 9,909 | 3 | 1,331,700 | 12.6 | |||||||||
2027 and beyond | 34,820 | 9 | 2,991,100 | 44.6 | |||||||||
Total | $ | 78,393 | 27 | 7,340,600 | 100.0 | % |
As of December 31, 2018 | As of September 30, 2018 | |||||||
Gross Real Estate Asset Value | $ | 1,229,797 | $ | 1,225,400 | ||||
Other Assets, net | 7,131 | 11,567 | ||||||
Mortgage Debt | (490,055 | ) | (490,055 | ) | ||||
NAV | $ | 746,873 | $ | 746,912 | ||||
Total Shares Outstanding | 77,669,752 | 77,620,432 | ||||||
NAV per share | $ | 9.62 | $ | 9.62 |
Range | Weighted Average | |||||
Overall Capitalization Rate (direct capitalization approach) | 5.25% | 6.25% | 5.36% | |||
Terminal Capitalization Rate (discounted cash flow approach) | 5.25% | 9.25% | 6.40% | |||
Cash Flow Discount Rate (discounted cash flow approach) | 6.00% | 11.50% | 7.14% |
Share Classes | ||||||||||||||||||||||||||||
Class T | Class S | Class D | Class I | IPO | OP Units | Total | ||||||||||||||||||||||
NAV as of September 30, 2018 | $ | 2,186,326 | $ | 2,672 | $ | 184,665 | $ | 7,750,410 | $ | 735,402,166 | $ | 1,385,707 | $ | 746,911,946 | ||||||||||||||
Fund Level Changes to NAV | ||||||||||||||||||||||||||||
Realized/unrealized losses on net assets | 33,223 | 40 | 2,809 | 117,672 | 11,169,582 | 20,947 | 11,344,273 | |||||||||||||||||||||
Dividend Accrual | (25,907 | ) | (32 | ) | (2,546 | ) | (111,538 | ) | (10,648,972 | ) | (19,932 | ) | (10,808,927 | ) | ||||||||||||||
Class specific changes to NAV | ||||||||||||||||||||||||||||
Stockholder Servicing fees/distribution fees | (5,508 | ) | (6 | ) | (117 | ) | — | (1,042,990 | ) | (1,971 | ) | (1,050,592 | ) | |||||||||||||||
NAV as of December 31, 2018 before share/unit sale/redemption activity | $ | 2,188,134 | $ | 2,674 | $ | 184,811 | $ | 7,756,544 | $ | 734,879,786 | $ | 1,384,751 | $ | 746,396,700 | ||||||||||||||
Unit sale/redemption activity- Dollars | ||||||||||||||||||||||||||||
Amount sold | 14,621 | 31 | 1,591 | 42,394 | 5,283,483 | — | 5,342,120 | |||||||||||||||||||||
Amount redeemed | — | — | — | — | (4,865,417 | ) | — | (4,865,417 | ) | |||||||||||||||||||
NAV as of December 31, 2018 | $ | 2,202,755 | $ | 2,705 | $ | 186,402 | $ | 7,798,938 | $ | 735,297,852 | $ | 1,384,751 | $ | 746,873,403 | ||||||||||||||
Shares/ units outstanding as of September 30, 2018 | 225,801 | 276 | 19,103 | 801,630 | 76,429,842 | 143,779 | 77,620,431 | |||||||||||||||||||||
Shares/units sold | 1,510 | 3 | 165 | 4,384 | 549,223 | — | 555,285 | |||||||||||||||||||||
Shares/units redeemed | — | — | — | — | (505,964 | ) | — | (505,964 | ) | |||||||||||||||||||
Shares/units outstanding as of December 31, 2018 | 227,311 | 279 | 19,268 | 806,014 | 76,473,101 | 143,779 | 77,669,752 | |||||||||||||||||||||
NAV per share/unit as of September 30, 2018 | $ | 9.68 | $ | 9.68 | $ | 9.67 | $ | 9.67 | $ | 9.62 | ||||||||||||||||||
Change in NAV per share/unit | 0.01 | 0.01 | — | 0.01 | — | |||||||||||||||||||||||
NAV per share/unit as of December 31, 2018 | $ | 9.69 | $ | 9.69 | $ | 9.67 | $ | 9.68 | $ | 9.62 |
For the Month Ended | Total Number of Shares Redeemed | Weighted Average Price Paid per Share | Total Number of Shares Redeemed as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||
October 31, 2018 | — | $ | — | — | (1) | |||||||
November 30, 2018 | — | $ | — | — | (1) | |||||||
December 31, 2018 | 505,977 | $ | 9.62 | 505,977 | (1) |
(1) | A description of the maximum number of shares that may be purchased under our SRP is included in the narrative preceding this table. |
Year Ended December 31, | For the Period from February 11, 2014 (Date of Initial Capitalization) through December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
Operating Data | ||||||||||||||||||||
Total revenue | $ | 106,394 | $ | 107,381 | $ | 62,812 | $ | 25,149 | $ | — | ||||||||||
Income before other income and (expenses) | $ | 16,876 | $ | 26,107 | $ | 4,264 | $ | (11,653 | ) | $ | (439 | ) | ||||||||
Net (loss) income | $ | (3,287 | ) | $ | 11,119 | $ | (6,107 | ) | $ | (16,504 | ) | $ | (495 | ) | ||||||
Net (loss) income attributable to common stockholders | $ | (3,281 | ) | $ | 11,116 | $ | (6,104 | ) | $ | (17,247 | ) | $ | (437 | ) | ||||||
Net (loss) income attributable to common stockholders per share, basic and diluted (1) | $ | (0.04 | ) | $ | 0.15 | $ | (0.12 | ) | $ | (1.19 | ) | $ | (0.86 | ) | ||||||
Distributions declared per common share | $ | 0.55 | $ | 0.55 | $ | 0.55 | $ | 0.55 | $ | 0.26 | ||||||||||
Balance Sheet Data | ||||||||||||||||||||
Total assets | $ | 1,137,335 | $ | 1,179,948 | $ | 1,184,475 | $ | 536,720 | $ | 10,588 | ||||||||||
Total liabilities | $ | 583,470 | $ | 584,999 | $ | 613,090 | $ | 307,213 | $ | 1,057 | ||||||||||
Redeemable common stock | $ | 37,357 | $ | 32,405 | $ | 16,930 | $ | 4,566 | $ | 51 | ||||||||||
Total stockholders’ equity | $ | 515,326 | $ | 562,468 | $ | 554,371 | $ | 224,844 | $ | 9,341 | ||||||||||
Total equity | $ | 516,508 | $ | 562,544 | $ | 554,455 | $ | 224,941 | $ | 9,480 | ||||||||||
Other Data | ||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 40,955 | $ | 39,712 | $ | 16,444 | $ | (2,935 | ) | $ | 54 | |||||||||
Net cash used in investing activities | $ | (2,305 | ) | $ | (87,207 | ) | $ | (533,806 | ) | $ | (486,148 | ) | $ | (2,000 | ) | |||||
Net cash (used in) provided by financing activities | $ | (43,173 | ) | $ | 29,984 | $ | 563,313 | $ | 500,522 | $ | 7,917 |
(1) | Amounts were retroactively adjusted to reflect stock dividends. (See Note 2, Basis of Presentation and Summary of Significant Accounting Policies, for additional detail). |
Year Ended December 31, | Increase/(Decrease) | Percentage Change | ||||||||||||
2018 | 2017 | |||||||||||||
Rental income | $ | 84,561 | $ | 87,407 | $ | (2,846 | ) | (3 | )% | |||||
Property expense recoveries | 17,828 | 16,969 | 859 | 5 | % | |||||||||
Property operating expenses | 7,232 | 6,592 | 640 | 10 | % | |||||||||
Property management fees to affiliates | 1,764 | 1,748 | 16 | 1 | % | |||||||||
Property tax expense | 9,529 | 9,591 | (62 | ) | (1 | )% | ||||||||
Depreciation and amortization | 42,578 | 42,425 | 153 | — | % |
Year Ended December 31, | Increase/(Decrease) | Percentage Change | ||||||||||||
2017 | 2016 | |||||||||||||
Rental income | $ | 38,879 | $ | 38,903 | $ | (24 | ) | — | % | |||||
Property management fees to affiliates | 778 | 779 | (1 | ) | — | % | ||||||||
Property expense recoveries | 9,220 | 8,633 | 587 | 7 | % | |||||||||
Property operating expenses | 3,520 | 3,384 | 136 | 4 | % | |||||||||
Property tax expense | 5,734 | 5,420 | 314 | 6 | % | |||||||||
Depreciation and amortization | 21,496 | 21,547 | (51 | ) | — | % |
Year Ended December 31, | Increase/(Decrease) | Percentage Change | ||||||||||||
2018 | 2017 | |||||||||||||
Rental income | $ | 87,789 | $ | 89,797 | $ | (2,008 | ) | (2 | )% | |||||
Property expense recoveries | 18,605 | 17,584 | 1,021 | 6 | % | |||||||||
Property operating expense | 7,382 | 6,724 | 658 | 10 | % | |||||||||
Property tax expense | 10,120 | 10,049 | 71 | 1 | % | |||||||||
Property management fees to affiliates | 1,832 | 1,799 | 33 | 2 | % | |||||||||
Asset management fees to affiliates | — | 8,027 | (8,027 | ) | (100 | )% | ||||||||
Advisory fees to affiliates | 9,316 | 2,550 | 6,766 | 265 | % | |||||||||
Performance distributions to affiliates | 7,783 | 2,394 | 5,389 | 225 | % | |||||||||
Acquisition fees and expenses to non-affiliates | 1,938 | — | 1,938 | 100 | % | |||||||||
General and administrative expenses | 3,471 | 3,445 | 26 | 1 | % | |||||||||
Corporate operating expenses to affiliates | 3,011 | 2,336 | 675 | 29 | % | |||||||||
Depreciation and amortization | 44,665 | 43,950 | 715 | 2 | % | |||||||||
Interest expense | 20,375 | 15,519 | 4,856 | 31 | % |
Year Ended December 31, | Increase/(Decrease) | Percentage Change | ||||||||||||
2017 | 2016 | |||||||||||||
Rental income | $ | 89,797 | $ | 51,403 | $ | 38,394 | 75 | % | ||||||
Property expense recoveries | 17,584 | 11,409 | 6,175 | 54 | % | |||||||||
Property operating expense | 6,724 | 4,428 | 2,296 | 52 | % | |||||||||
Property tax expense | 10,049 | 7,046 | 3,003 | 43 | % | |||||||||
Property management fees to affiliates | 1,799 | 1,052 | 747 | 71 | % | |||||||||
Asset management fees to affiliates | 8,027 | 6,413 | 1,614 | 25 | % | |||||||||
Advisory fees to affiliates | 2,550 | — | 2,550 | 100 | % | |||||||||
Performance distribution allocation to affiliates | 2,394 | — | 2,394 | 100 | % | |||||||||
Acquisition fees and expenses to non-affiliates | — | 1,113 | (1,113 | ) | (100 | )% | ||||||||
Acquisition fees and expenses to affiliates | — | 6,176 | (6,176 | ) | (100 | )% | ||||||||
General and administrative expenses | 3,445 | 2,804 | 641 | 23 | % | |||||||||
Corporate operating expenses to affiliates | 2,336 | 1,622 | 714 | 44 | % | |||||||||
Depreciation and amortization | 43,950 | 27,894 | 16,056 | 58 | % | |||||||||
Interest expense | 15,519 | 10,384 | 5,135 | 49 | % |
• | Revenues in excess of cash received, net. Most of our leases provide for periodic minimum rent payment increases throughout the term of the lease. In accordance with GAAP, these contractual periodic minimum rent payment increases during the term of a lease are recorded to rental revenue on a straight-line basis in order to reconcile the difference between accrual and cash basis accounting. As straight-line rent is a GAAP non-cash adjustment and is included in historical earnings, FFO is adjusted for the effect of straight-line rent to arrive at AFFO as a means of determining operating results of our portfolio. In addition, when applicable, in conjunction with certain acquisitions, we may enter into a master escrow or lease agreement with a seller, whereby the seller is obligated to pay us rent pertaining to certain spaces impacted by existing rental abatements. In accordance with GAAP, these proceeds are recorded as an adjustment to the allocation of real estate assets at the time of acquisition, and, accordingly, are not included in revenues, net income, or FFO. This application results in income recognition that can differ significantly from current contract terms. By adjusting for this item, we believe AFFO is reflective of the realized economic impact of our leases (including master agreements) that is useful in assessing the sustainability of our operating performance. |
• | Amortization of in-place lease valuation. Acquired in-place leases are valued as above-market or below-market as of the date of acquisition based on the present value of the difference between (a) the contractual amounts to be paid pursuant to the in-place leases and (b) management's estimate of fair market lease rates for the corresponding in-place leases over a period equal to the remaining non-cancelable term of the lease for above-market leases. The above-market and below-market lease values are capitalized as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases. As amortization of in-place lease valuation is a non-cash adjustment and is included in historical earnings, FFO is adjusted for the effect of the amortization to arrive at AFFO as a means of determining operating results of our portfolio. |
• | Acquisition-related costs. We were organized primarily with the purpose of acquiring or investing in income-producing real property in order to generate operational income and cash flow that will allow us to provide regular cash distributions to our stockholders. In the process, we incur non-reimbursable affiliated and non-affiliated acquisition-related costs, which in accordance with GAAP are capitalized and included as part of the relative fair value when the property acquisition meets the definition of an asset acquisition or are expensed as incurred and are included in the determination of income (loss) from operations and net income (loss), for property acquisitions accounted for as a business combination. By excluding acquisition-related costs, AFFO may not provide an accurate indicator of our operating performance during periods in which acquisitions are made. However, it can provide an indication of our on-going ability to generate cash flow from operations and continue as a going concern after we cease to acquire properties on a frequent and regular basis, which can be compared to the AFFO of other non-listed REITs that have completed their acquisition activity and have similar operating characteristics to ours. Management believes that excluding these costs from AFFO provides investors with supplemental performance information that is consistent with the performance models and analyses used by management. |
• | Gain or loss from the extinguishment of debt. We use debt as a partial source of capital to acquire properties in our portfolio. As a term of obtaining this debt, we will pay financing costs to the respective lender. Financing costs are presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts and amortized into interest expense on a straight-line basis over the term of the debt. We consider the amortization expense to be a component of operations if the debt was used to acquire properties. From time to time, we may cancel certain debt obligations and replace these canceled debt obligations with new debt at more favorable terms to us. In doing so, we are required to write off the remaining capitalized financing costs associated with the canceled debt, which we consider to be a cost, or loss, on extinguishing such debt. Management believes that this loss is |
• | Unrealized gains (losses) on derivative instruments. These adjustments include unrealized gains (losses) from mark-to-market adjustments on interest rate swaps and losses due to hedge ineffectiveness. The change in the fair value of interest rate swaps not designated as a hedge and the change in the fair value of the ineffective portion of interest rate swaps are non-cash adjustments recognized directly in earnings and are included in interest expense. We have excluded these adjustments in our calculation of AFFO to more appropriately reflect the economic impact of our interest rate swap agreements. |
• | Performance distribution allocation. Our Advisor holds a special limited partnership interest in our Operating Partnership that entitles it to receive a special distribution from our Operating Partnership equal to 12.5% of the total return, subject to a 5.5% hurdle amount and a high water mark, with a catch-up. At the election of the advisor, the performance distribution allocation may be paid in cash or Class I units in our Operating Partnership. We believe that the distribution, to the extent it is paid in cash, is appropriately included as a component of corporate operating expenses to affiliates and therefore included in FFO and AFFO. If, however, the special distribution is paid in Class I units, management believes the distribution would be excluded from AFFO to more appropriately reflect the on-going portfolio performance and our ability to sustain the current distribution level. |
• | Dead deal costs. As part of investing in income-producing real property, we incur non-reimbursable affiliated and non-affiliated acquisition-related costs for transactions that fail to close, which in accordance with GAAP, are expensed and are included in the determination of income (loss) from operations and net income (loss). Similar to acquisition-related costs (see above), management believes that excluding these costs from AFFO provides investors with supplemental performance information that is consistent with the performance models and analyses used by management. |
Year Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Net (loss) income | $ | (3,287 | ) | $ | 11,119 | $ | (6,107 | ) | ||||
Adjustments: | ||||||||||||
Depreciation of building and improvements | 20,466 | 20,194 | 11,630 | |||||||||
Amortization of leasing costs and intangibles | 24,199 | 23,756 | 16,264 | |||||||||
FFO | $ | 41,378 | $ | 55,069 | $ | 21,787 | ||||||
Distributions to noncontrolling interests | (70 | ) | (11 | ) | (11 | ) | ||||||
FFO, net of noncontrolling interest distributions | $ | 41,308 | $ | 55,058 | $ | 21,776 | ||||||
Reconciliation of FFO to AFFO | ||||||||||||
FFO, net of noncontrolling interest distributions | $ | 41,308 | $ | 55,058 | $ | 21,776 | ||||||
Adjustments: | ||||||||||||
Acquisition fees and expenses to non-affiliates | 1,938 | — | 1,113 | |||||||||
Acquisition fees and expenses to affiliates | — | — | 6,176 | |||||||||
Revenues in excess of cash received, net | (5,882 | ) | (10,528 | ) | (3,699 | ) | ||||||
Amortization of below market rent, net | (4,695 | ) | (4,573 | ) | (3,592 | ) | ||||||
Unrealized loss (gain) on derivatives | 77 | 83 | (155 | ) | ||||||||
Loss on extinguishment of debt - write-off of deferred financing costs | — | — | 377 | |||||||||
Performance distribution adjustment | 3,904 | 1,197 | — | |||||||||
Dead deal costs | 316 | — | — | |||||||||
AFFO | $ | 36,966 | $ | 41,237 | $ | 21,996 |
Class | ||||||||||||||||||||||||||||||||
T | S | D | I | A | AA | AAA | Total | |||||||||||||||||||||||||
Gross proceeds from primary portion of offerings | $ | 2,245 | $ | 3 | $ | 182 | $ | 7,538 | $ | 240,780 | $ | 474,858 | $ | 8,381 | $ | 733,987 | ||||||||||||||||
Gross proceeds from DRP | $ | 26 | $ | — | $ | 3 | $ | 187 | $ | 26,535 | $ | 34,656 | $ | 545 | $ | 61,952 | ||||||||||||||||
Shares issued in primary portion of offerings | 224,647 | 264 | 18,921 | 786,573 | 24,199,764 | 47,562,870 | 901,225 | 73,694,264 | ||||||||||||||||||||||||
DRP shares issued | 2,664 | 15 | 347 | 19,441 | 2,794,547 | 3,650,017 | 57,433 | 6,524,464 | ||||||||||||||||||||||||
Stock distribution shares issued | — | — | — | — | 263,642 | 300,166 | 4,677 | 568,485 | ||||||||||||||||||||||||
Restricted stock units issued | — | — | — | — | — | — | 36,000 | 36,000 | ||||||||||||||||||||||||
Total shares issued prior to redemptions | 227,311 | 279 | 19,268 | 806,014 | 27,257,953 | 51,513,053 | 999,335 | 80,823,213 |
Fair value (1) | Current Effective Notional Amount (2) | |||||||||||||||||||||
Derivative Instrument | Effective Date | Maturity Date | Interest Strike Rate | December 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | |||||||||||||||
Interest Rate Swap | 4/1/2016 | 12/12/2018 | 0.74% | $ | — | $ | 967 | $ | — | $ | 100,000 | |||||||||||
Interest Rate Swap | 11/1/2017 | 4/30/2018 | 1.50% | — | 65 | — | 100,000 | |||||||||||||||
Total | $ | — | $ | 1,032 | $ | — | $ | 200,000 |
(1) | We record all derivative instruments on a gross basis on the consolidated balance sheets, and accordingly, there are no offsetting amounts that net assets against liabilities. As of December 31, 2018, all our derivatives have matured. |
(2) | Represents the notional amount of our swaps that was effective as of the balance sheet date of December 31, 2018 and December 31, 2017. |
Payments Due During the Years Ending December 31, | |||||||||||||||||||
Total | 2019 | 2020-2021 | 2022-2023 | Thereafter | |||||||||||||||
Outstanding debt obligations (1) (2) | $ | 490,055 | $ | — | $ | 2,178 | $ | 4,637 | $ | 483,240 | |||||||||
Interest on outstanding debt obligations (3) | 159,295 | 20,483 | 41,068 | 39,592 | 58,152 | ||||||||||||||
Total | $ | 649,350 | $ | 20,483 | $ | 43,246 | $ | 44,229 | $ | 541,392 |
(1) | Amount relates to principal payments for the outstanding balance on the Unsecured Credit Facility, BofA/KeyBank Loan and AIG Loan at December 31, 2018. |
(2) | Deferred financing costs are excluded from total contractual obligations above. |
(3) | Projected interest payments are based on the outstanding principal amounts under the Unsecured Credit Facility, BofA/KeyBank Loan and AIG Loan at December 31, 2018. Projected interest payments are based on the interest rate in effect at December 31, 2018. |
• | $44.2 million decrease in cash used to acquire properties as a result of no acquisitions for the year ended December 31, 2018 versus two acquisitions in 2017; and |
• | $40.6 million decrease in restricted reserves primarily as a result of payments of tenant improvement disbursements in the prior period. |
• | $24.3 million decrease in cash provided from borrowings from the Revolving Credit Facility due to the acquisition of the MISO property in May 2017 and a tenant improvement disbursement for the Southern Company property in December 2017; |
• | $357.7 million increase in cash used for principal repayments of the Revolving Credit Facility in the current year provided by the proceeds of the BofA/KeyBank Loan and Term Loan borrowings in the current year; |
• | $28.0 million decrease in cash provided by the issuance of common stock, net of discounts and offering costs due to the closing of the primary portion of our IPO during the first quarter of 2017; |
• | $6.6 million increase in cash used in deferred financing costs related to the BofA/KeyBank Loan in the current year; and |
• | $19.5 million increase in cash used for payments of distributions and repurchases of common stock due to an increase in number of shareholders; offset by |
• | $250.0 million increase in proceeds from borrowings on the BofA/KeyBank Loan. $249.8 million of the proceeds provided by the loan was used to pay down a portion of our Revolving Credit Facility; and |
• | $113.0 million increase in proceeds from borrowings on the Term Loan. $107.9 million of the proceeds provided by the Term Loan was used to pay down a portion of our Revolving Credit Facility. |
• | the amount of time required for us to invest the funds received in our public offerings; |
• | our operating and interest expenses; |
• | the amount of distributions or dividends received by us from our indirect real estate investments, if applicable; |
• | our ability to keep our properties occupied; |
• | our ability to maintain or increase rental rates; |
• | tenant improvements, capital expenditures and reserves for such expenditures; |
• | the issuance of additional shares; and |
• | financings and refinancings. |
Year Ended December 31, 2018 | Year Ended December 31, 2017 | ||||||||||||
Distributions paid in cash — noncontrolling interests | $ | 65 | $ | 11 | |||||||||
Distributions paid in cash — common stockholders | 20,753 | 19,232 | |||||||||||
Distributions of DRP | 19,998 | 22,208 | |||||||||||
Total distributions | $ | 40,816 | (1) | $ | 41,451 | ||||||||
Source of distributions (2) | |||||||||||||
Paid from cash flows provided by operations | $ | 20,818 | 51 | % | $ | 19,243 | 46 | % | |||||
Offering proceeds from issuance of common stock | — | 0 | % | — | 0 | % | |||||||
Offering proceeds from issuance of common stock pursuant to the DRP | 19,998 | 49 | % | 22,208 | 54 | % | |||||||
Total sources | $ | 40,816 | (3) | 100 | % | $ | 41,451 | 100 | % | ||||
Net cash provided by operating activities | $ | 40,955 | $ | 39,712 |
(1) | Distributions are paid on a monthly basis in arrears. Distributions for all record dates of a given month are paid on or about the first business day of the following month. Total distributions declared but not paid as of December 31, 2018 were approximately $3.6 million for common stockholders and noncontrolling interests. |
(2) | Percentages were calculated by dividing the respective source amount by the total sources of distributions. |
(3) | Allocation of total sources are calculated on a quarterly basis. |
Name | Age | Position(s) | Period with Company |
Kevin A. Shields | 60 | Chairman of the Board of Directors and Chief Executive Officer | 11/2013 - present |
Michael J. Escalante | 58 | Director and President | 11/2013 - present |
Javier F. Bitar | 57 | Chief Financial Officer and Treasurer | 6/2016 - present |
David C. Rupert | 62 | Executive Vice President | 11/2013 - present |
Mary P. Higgins | 59 | Vice President and General Counsel | 11/2013 - present |
Howard S. Hirsch | 53 | Vice President and Secretary | 6/2014 - present |
Don G. Pescara | 55 | Vice President - Acquisitions | 11/2013 - present |
Julie A. Treinen | 59 | Vice President - Asset Management | 11/2013 - present |
Samuel Tang | 58 | Independent Director | 2/2015 - present |
J. Grayson Sanders | 78 | Independent Director | 3/2016 - present |
Kathleen S. Briscoe | 59 | Independent Director | 3/2016 - present |
• | Kevin A. Shields, Chief Executive Officer; |
• | Javier F. Bitar, Chief Financial Officer; |
• | Michael J. Escalante, President; |
• | David C. Rupert, Executive Vice President; and |
• | Howard S. Hirsch, Vice President and Secretary. |
Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All other Compensation | Total | |||||||||||||||||||||
Kevin A. Shields | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Michael J. Escalante | — | — | — | — | — | — | — | |||||||||||||||||||||
Samuel Tang | 62,500 | — | — | — | — | — | 62,500 | |||||||||||||||||||||
J. Grayson Sanders | 60,000 | — | — | — | — | — | 60,000 | |||||||||||||||||||||
Kathleen S. Briscoe | 61,500 | — | — | — | — | — | 61,500 | |||||||||||||||||||||
Total | $ | 184,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 184,000 |
Common Stock Beneficially Owned(2) | |||||
Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership | Percent of Class | |||
Kevin A. Shields, Chairman of the Board of Directors and Chief Executive Officer | 280 | Class T | (3) | * | |
280 | Class S | (3) | * | ||
283 | Class D | (3) | * | ||
283,016 | Class I | (3) | * | ||
287,323 | Class A | (3) | * | ||
Michael J. Escalante, Director and President | — | ||||
Javier F. Bitar, Chief Financial Officer and Treasurer | — | ||||
David C. Rupert, Executive Vice President | — | ||||
Howard S. Hirsch, Vice President and Secretary | — | ||||
Samuel Tang, independent director | 12,021 | Class AAA | (4) | * | |
J. Grayson Sanders, independent director | 12,021 | Class AAA | (4) | * | |
Kathleen S. Briscoe, independent director | 12,021 | Class AAA | (4) | * | |
All directors and current executive officers as a group (11 persons) | 607,245 | (3) | * |
(1) | The address of each beneficial owner listed is Griffin Capital Plaza, 1520 E. Grand Avenue, El Segundo, California 90245. |
(2) | Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities and shares issuable pursuant to options, warrants and similar rights held by the respective person or group that may be exercised within 60 days following |
(3) | Consists of shares owned by Griffin Capital Vertical Partners, L.P., which is indirectly owned by Mr. Shields. |
(4) | Each independent director was awarded 5,000 shares of restricted stock on January 18, 2017, which are fully vested and 7,000 shares of restricted stock on June 14, 2017, which are fully vested. Our 2018 Annual Meeting was not held until March 13, 2019, at which time the 2018 grants of restricted stock were awarded. |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining for Future Issuance Under Equity Compensation Plans (1) | |||||
Equity Compensation Plans Approved by Security Holders | — | — | 7,752,597 | |||||
Equity Compensation Plans Not Approved by Security Holders | — | — | — | |||||
Total | — | — | 7,752,597 |
(1) | The total number of shares of our common stock (or common stock equivalents) reserved for issuance under the Plan is equal to 10% of our outstanding shares of stock at any time, but not to exceed 10,000,000 shares in the aggregate. As of December 31, 2018, we had 77,525,973 outstanding shares of common stock, including shares issued pursuant to the DRP and our stock distributions. |
• | find, evaluate, present and recommend to us investment opportunities consistent with our investment policies and objectives; |
• | serve as our investment and financial advisor and provide research and economic and statistical data in connection with our assets and our investment policies; |
• | perform due diligence and prepare and obtain reports regarding prospective investments; |
• | provide supporting documentation and recommendations necessary for the our Board to evaluate proposed investments; |
• | acquire properties and make investments on our behalf in compliance with our investment objectives and policies; |
• | structure and negotiate the terms and conditions of our real estate acquisitions, sales or joint ventures; |
• | monitor applicable markets, obtain reports and evaluate the performance and value of our investments; |
• | implement and coordinate the processes with respect to the calculation of NAV and obtain appraisals performed by independent third-party appraisal firms concerning the value of properties; |
• | supervise our independent valuation firm and monitor its valuation process to ensure that it complies with our valuation procedures; |
• | review and analyze each property’s operating and capital budget; |
• | arrange, structure and negotiate financing and refinancing of properties; |
• | perform all operational functions for the maintenance and administration of our assets, including the servicing of mortgages; |
• | consult with our officers and Board and assist the Board in formulating and implementing our financial policies, operational planning services and portfolio management functions; |
• | prepare and review on our behalf, with the participation of one designated principal executive officer and principal financial officer, all reports and returns required by the SEC, IRS and other state or federal governmental agencies; |
• | provide the daily management and perform and supervise the various administrative functions reasonably necessary for our management and operations; and |
• | investigate, select, and, on our behalf, engage and conduct business with such third parties as our Advisor deems necessary to the proper performance of its obligations under the Advisory Agreement. |
2018 | 2017 | ||||||
Audit Fees | $ | 421,605 | $ | 446,679 | |||
Audit-Related Fees | 93,180 | — | |||||
Tax Fees | 118,785 | 113,744 | |||||
All Other Fees | 1,250 | 1,250 | |||||
Total | $ | 634,820 | $ | 561,673 |
Exhibit No. | Description |
101* | The following Griffin Capital Essential Asset REIT II, Inc. financial information for the period ended December 31, 2018 formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive (Loss) Income (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements. |
* | Filed herewith. |
** | Furnished herewith. |
+ | Management contract, compensatory plan or arrangement filed in response to Item 15(a)(3) of Instructions to Form 10-K. |
GRIFFIN CAPITAL ESSENTIAL ASSET REIT II, INC. | |||
By: | /s/ Kevin A. Shields | ||
Kevin A. Shields | |||
Chief Executive Officer and Chairman |
Signature | Title | Date | ||
/s/ Kevin A. Shields | Chief Executive Officer and Chairman (Principal Executive Officer) | March 14, 2019 | ||
Kevin A. Shields | ||||
/s/ Javier F. Bitar | Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | March 14, 2019 | ||
Javier F. Bitar | ||||
/s/ Michael J. Escalante | Director and President | March 14, 2019 | ||
Michael J. Escalante | ||||
/s/ J. Grayson Sanders | Independent Director | March 14, 2019 | ||
J. Grayson Sanders | ||||
/s/ Kathleen S. Briscoe | Independent Director | March 14, 2019 | ||
Kathleen S. Briscoe | ||||
/s/ Samuel Tang | Independent Director | March 14, 2019 | ||
Samuel Tang |
Consolidated Financial Statements | |
Financial Statement Schedule | |
December 31, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 28,623 | $ | 33,164 | |||
Restricted cash | 12,904 | 12,886 | |||||
Real estate: | |||||||
Land | 122,482 | 122,482 | |||||
Building | 819,224 | 815,721 | |||||
Tenant origination and absorption cost | 240,364 | 240,364 | |||||
Construction in progress | 144 | 299 | |||||
Total real estate | 1,182,214 | 1,178,866 | |||||
Less: accumulated depreciation and amortization | (128,570 | ) | (83,905 | ) | |||
Total real estate, net | 1,053,644 | 1,094,961 | |||||
Intangible assets, net | 2,923 | 3,294 | |||||
Due from affiliates | 1,202 | 686 | |||||
Deferred rent | 31,189 | 22,733 | |||||
Other assets, net | 6,850 | 12,224 | |||||
Total assets | $ | 1,137,335 | $ | 1,179,948 | |||
LIABILITIES AND EQUITY | |||||||
Total debt | $ | 481,955 | $ | 481,848 | |||
Restricted reserves | 11,565 | 13,368 | |||||
Accrued expenses and other liabilities | 21,023 | 19,903 | |||||
Distributions payable | 3,650 | 1,689 | |||||
Due to affiliates | 19,048 | 16,896 | |||||
Below market leases, net | 46,229 | 51,295 | |||||
Total liabilities | 583,470 | 584,999 | |||||
Commitments and contingencies (Note 11) | |||||||
Common stock subject to redemption | 37,357 | 32,405 | |||||
Stockholders' equity: | |||||||
Common Stock, $0.001 par value - Authorized:800,000,000; 77,525,973 and 77,175,283 shares outstanding in the aggregate, as of December 31, 2018 and December 31, 2017, respectively (1) | 76 | 76 | |||||
Additional paid-in capital | 656,500 | 656,705 | |||||
Cumulative distributions | (125,297 | ) | (82,590 | ) | |||
Accumulated deficit | (15,953 | ) | (12,672 | ) | |||
Accumulated other comprehensive income | — | 949 | |||||
Total stockholders' equity | 515,326 | 562,468 | |||||
Noncontrolling interests | 1,182 | 76 | |||||
Total equity | 516,508 | 562,544 | |||||
Total liabilities and equity | $ | 1,137,335 | $ | 1,179,948 |
(1) | See Note 8, Equity, for the number of shares outstanding of each class of common stock as of December 31, 2018 and December 31, 2017. |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Revenue: | |||||||||||
Rental income | $ | 87,789 | $ | 89,797 | $ | 51,403 | |||||
Property expense recovery | 18,605 | 17,584 | 11,409 | ||||||||
Total revenue | 106,394 | 107,381 | 62,812 | ||||||||
Expenses: | |||||||||||
Property operating | 7,382 | 6,724 | 4,428 | ||||||||
Property tax | 10,120 | 10,049 | 7,046 | ||||||||
Property management fees to affiliates | 1,832 | 1,799 | 1,052 | ||||||||
Asset management fees to affiliates | — | 8,027 | 6,413 | ||||||||
Advisory fees to affiliates | 9,316 | 2,550 | — | ||||||||
Performance distribution allocation to affiliates | 7,783 | 2,394 | — | ||||||||
Acquisition fees and expenses to affiliates | — | — | 6,176 | ||||||||
Acquisition fees and expenses to non-affiliates | 1,938 | — | 1,113 | ||||||||
General and administrative | 3,471 | 3,445 | 2,804 | ||||||||
Corporate operating expenses to affiliates | 3,011 | 2,336 | 1,622 | ||||||||
Depreciation and amortization | 44,665 | 43,950 | 27,894 | ||||||||
Total expenses | 89,518 | 81,274 | 58,548 | ||||||||
Income before other income and (expenses) | 16,876 | 26,107 | 4,264 | ||||||||
Other income (expenses): | |||||||||||
Interest expense | (20,375 | ) | (15,519 | ) | (10,384 | ) | |||||
Other income, net | 212 | 531 | 13 | ||||||||
Net (loss) income | (3,287 | ) | 11,119 | (6,107 | ) | ||||||
Net loss (income) attributable to noncontrolling interests | 6 | (3 | ) | 3 | |||||||
Net (loss) income attributable to common stockholders | $ | (3,281 | ) | $ | 11,116 | $ | (6,104 | ) | |||
Net (loss) income attributable to common stockholders per share, basic and diluted | $ | (0.04 | ) | $ | 0.15 | $ | (0.12 | ) | |||
Weighted average number of common shares outstanding, basic and diluted | 77,657,627 | 75,799,415 | 50,712,589 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Net (loss) income | $ | (3,287 | ) | $ | 11,119 | $ | (6,107 | ) | |||
Other comprehensive (loss) income: | |||||||||||
Change in fair value of swap agreement | (952 | ) | 108 | 841 | |||||||
Total comprehensive (loss) income | (4,239 | ) | 11,227 | (5,266 | ) | ||||||
Comprehensive loss (income) attributable to noncontrolling interests | 9 | (3 | ) | 3 | |||||||
Comprehensive (loss) income attributable to common stockholders | $ | (4,230 | ) | $ | 11,224 | $ | (5,263 | ) |
Common Stock | Additional Paid-In Capital | Cumulative Distributions | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||
Balance December 31, 2015 | 28,556,170 | $ | 29 | $ | 250,757 | $ | (8,258 | ) | $ | (17,684 | ) | $ | — | $ | 224,844 | $ | 98 | $ | 224,942 | |||||||||||||||
Gross proceeds from issuance of common stock | 40,700,406 | 40 | 406,423 | — | — | — | 406,463 | — | 406,463 | |||||||||||||||||||||||||
Discount on issuance of common stock | — | — | (696 | ) | — | — | — | (696 | ) | — | (696 | ) | ||||||||||||||||||||||
Offering costs including dealer manager fees to affiliates | — | — | (43,340 | ) | — | — | — | (43,340 | ) | — | (43,340 | ) | ||||||||||||||||||||||
Distributions to common stockholders | — | — | — | (12,479 | ) | — | — | (12,479 | ) | — | (12,479 | ) | ||||||||||||||||||||||
Issuance of shares for distribution reinvestment plan | 1,599,355 | 2 | 15,157 | (15,159 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Repurchase of common stock | (167,442 | ) | — | (1,627 | ) | — | — | — | (1,627 | ) | — | (1,627 | ) | |||||||||||||||||||||
Additions to common stock subject to redemption | — | — | (13,531 | ) | — | — | — | (13,531 | ) | — | (13,531 | ) | ||||||||||||||||||||||
Issuance of stock dividends | 251,158 | — | 2,510 | (2,510 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | — | — | — | (11 | ) | (11 | ) | |||||||||||||||||||||||
Net loss | — | — | — | (6,104 | ) | — | (6,104 | ) | (3 | ) | (6,107 | ) | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 841 | 841 | — | 841 | |||||||||||||||||||||||||
Balance December 31, 2016 | 70,939,647 | $ | 71 | $ | 615,653 | $ | (38,406 | ) | $ | (23,788 | ) | $ | 841 | $ | 554,371 | $ | 84 | $ | 554,455 | |||||||||||||||
Gross proceeds from issuance of common stock | 4,205,673 | 4 | 41,822 | — | — | — | 41,826 | — | 41,826 | |||||||||||||||||||||||||
Discount on issuance of common stock | — | — | (16 | ) | — | — | — | (16 | ) | — | (16 | ) | ||||||||||||||||||||||
Stock-based compensation | 25,500 | — | 292 | — | — | — | 292 | — | 292 | |||||||||||||||||||||||||
Offering costs including dealer manager fees and stockholder servicing fees to affiliates | — | — | (3,593 | ) | — | — | — | (3,593 | ) | — | (3,593 | ) | ||||||||||||||||||||||
Distributions to common stockholders | — | — | — | (19,427 | ) | — | — | (19,427 | ) | — | (19,427 | ) | ||||||||||||||||||||||
Issuance of shares for distribution reinvestment plan | 2,358,188 | 2 | 22,206 | (22,208 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Repurchase of common stock | (623,499 | ) | (1 | ) | (5,741 | ) | — | — | — | (5,742 | ) | — | (5,742 | ) | ||||||||||||||||||||
Additions to common stock subject to redemption | — | — | (16,467 | ) | — | — | — | (16,467 | ) | — | (16,467 | ) | ||||||||||||||||||||||
Issuance of stock dividends | 269,774 | — | 2,549 | (2,549 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | — | — | — | (11 | ) | (11 | ) | |||||||||||||||||||||||
Net income | — | — | — | — | 11,116 | — | 11,116 | 3 | 11,119 | |||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 108 | 108 | — | 108 | |||||||||||||||||||||||||
Balance December 31, 2017 | 77,175,283 | $ | 76 | $ | 656,705 | $ | (82,590 | ) | $ | (12,672 | ) | $ | 949 | $ | 562,468 | $ | 76 | $ | 562,544 |
Gross proceeds from issuance of common stock | 762,537 | 1 | 7,429 | — | — | — | 7,430 | — | 7,430 | |||||||||||||||||||||||||
Changes in redeemable common stock | — | — | (6,538 | ) | — | — | — | (6,538 | ) | — | (6,538 | ) | ||||||||||||||||||||||
Discount on issuance of common stock | — | — | (1 | ) | — | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||||||||
Stock-based compensation | 10,500 | — | 44 | — | — | — | 44 | — | 44 | |||||||||||||||||||||||||
Offering costs including dealer manager fees and stockholder servicing fees to affiliates | — | — | (1,140 | ) | — | — | — | (1,140 | ) | — | (1,140 | ) | ||||||||||||||||||||||
Distributions to common stockholders | — | — | — | (22,709 | ) | — | — | (22,709 | ) | — | (22,709 | ) | ||||||||||||||||||||||
Issuance of shares for distribution reinvestment plan | 2,083,950 | 2 | 19,996 | (19,998 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Repurchase of common stock | (2,506,299 | ) | (3 | ) | (23,763 | ) | — | — | — | (23,766 | ) | — | (23,766 | ) | ||||||||||||||||||||
Additions to common stock subject to redemption | — | — | 3,768 | — | — | — | 3,768 | — | 3,768 | |||||||||||||||||||||||||
Issuance of stock dividends | 2 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Issuance of limited partnership units | — | — | — | — | — | — | — | 1,185 | 1,185 | |||||||||||||||||||||||||
Distributions to noncontrolling interest | — | — | — | — | — | — | — | (70 | ) | (70 | ) | |||||||||||||||||||||||
Net (loss) | — | — | — | — | (3,281 | ) | — | (3,281 | ) | (6 | ) | (3,287 | ) | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (949 | ) | (949 | ) | (3 | ) | (952 | ) | |||||||||||||||||||||
Balance December 31, 2018 | 77,525,973 | $ | 76 | $ | 656,500 | $ | (125,297 | ) | $ | (15,953 | ) | $ | — | $ | 515,326 | $ | 1,182 | $ | 516,508 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Net (loss) income | $ | (3,287 | ) | $ | 11,119 | $ | (6,107 | ) | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation of building and improvements | 20,466 | 20,194 | 11,630 | ||||||||
Amortization of tenant origination and absorption costs | 24,199 | 23,756 | 16,264 | ||||||||
Amortization of above and below market leases | (4,695 | ) | (4,573 | ) | (3,592 | ) | |||||
Amortization of deferred financing costs | 1,384 | 1,106 | 1,196 | ||||||||
Deferred rent | (8,456 | ) | (17,308 | ) | (3,924 | ) | |||||
Stock based compensation | 44 | 292 | — | ||||||||
Unrealized loss (gain) on interest rate swap | 77 | 83 | (155 | ) | |||||||
Performance distribution allocation (non-cash) | 3,904 | — | — | ||||||||
Change in operating assets and liabilities: | |||||||||||
Other assets, net | 1,397 | 4,590 | (1,040 | ) | |||||||
Accrued expenses and other liabilities, net | 3,376 | (2,615 | ) | 3,094 | |||||||
Due to affiliates, net | 2,546 | 3,068 | (922 | ) | |||||||
Net cash provided by operating activities | 40,955 | 39,712 | 16,444 | ||||||||
Investing Activities: | |||||||||||
Acquisition of properties, net | — | (44,234 | ) | (538,845 | ) | ||||||
Restricted reserves | (1,803 | ) | (42,430 | ) | (3,541 | ) | |||||
Improvements to real estate | — | (21 | ) | (40 | ) | ||||||
Payments for construction in progress | (502 | ) | (772 | ) | (80 | ) | |||||
Real estate acquisition deposits | — | 250 | 8,700 | ||||||||
Net cash used in investing activities | (2,305 | ) | (87,207 | ) | (533,806 | ) | |||||
Financing Activities: | |||||||||||
Proceeds from borrowings - Revolving Credit Facility | — | 24,300 | 249,900 | ||||||||
Proceeds from borrowings - BofA/KeyBank Loan | 250,000 | — | — | ||||||||
Proceeds from borrowings - Term Loan | 113,000 | — | — | ||||||||
Principal payoff of indebtedness - Revolving Credit Facility | (357,673 | ) | — | (55,000 | ) | ||||||
Deferred financing costs | (6,603 | ) | (30 | ) | (1,578 | ) | |||||
Issuance of common stock | 7,465 | 30,699 | 383,170 | ||||||||
Offering costs | (4,778 | ) | — | — | |||||||
Repurchase of common stock | (23,766 | ) | (5,742 | ) | (1,627 | ) | |||||
Distributions paid to common stockholders | (20,753 | ) | (19,232 | ) | (11,541 | ) | |||||
Distributions paid to noncontrolling interests | (65 | ) | (11 | ) | (11 | ) | |||||
Net cash (used in) provided by financing activities | (43,173 | ) | 29,984 | 563,313 | |||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (4,523 | ) | (17,511 | ) | 45,951 | ||||||
Cash, cash equivalents and restricted cash at the beginning of the period | 46,050 | 63,561 | 17,610 | ||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 41,527 | $ | 46,050 | $ | 63,561 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest | $ | 19,200 | $ | 13,116 | $ | 9,228 | |||||
Supplemental disclosures of non-cash investing and financing transactions: | |||||||||||
(Decrease) Increase in fair value swap agreement | $ | (952 | ) | $ | 108 | $ | 841 | ||||
Increase in Stock Servicing Fee Payable | $ | 174 | $ | 660 | $ | 17,449 | |||||
Increase in distributions payable to common stockholders | $ | 1,955 | $ | 195 | $ | 938 | |||||
Common stock issued pursuant to the distribution reinvestment plan | $ | 19,998 | $ | 22,208 | $ | 15,158 |
Buildings | 40 years | |
Building Improvements | 5-20 years | |
Land Improvements | 15-25 years | |
Tenant Improvements | Shorter of estimated useful life or remaining contractual lease term | |
Tenant Origination and Absorption Cost | Remaining contractual lease term | |
In-place Lease Valuation | Remaining contractual lease term with consideration as to below-market extension options for below-market leases |
As of December 31, 2018 | |||
2019 | $ | 78,887 | |
2020 | 80,492 | ||
2021 | 72,677 | ||
2022 | 73,538 | ||
2023 | 71,308 | ||
Thereafter | 457,495 | ||
Total | $ | 834,397 |
December 31, | |||||||
2018 | 2017 | ||||||
In-place lease valuation (above market) | $ | 4,046 | $ | 4,046 | |||
In-place lease valuation (above market), accumulated amortization | (1,123 | ) | (752 | ) | |||
Intangible assets, net | $ | 2,923 | $ | 3,294 | |||
In-place lease valuation (below market) | $ | (62,070 | ) | $ | (62,070 | ) | |
In-place lease valuation (below market) - accumulated amortization | 15,841 | 10,775 | |||||
In-place lease valuation (below market), net | $ | (46,229 | ) | $ | (51,295 | ) | |
Tenant origination and absorption cost | $ | 240,364 | $ | 240,364 | |||
Tenant origination and absorption cost - accumulated amortization | (71,364 | ) | (47,165 | ) | |||
Tenant origination and absorption cost, net | $ | 169,000 | $ | 193,199 |
Amortization (income) expense for the year ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
In-place lease valuation | $ | (4,695 | ) | $ | (4,573 | ) | $ | (3,592 | ) | ||
Tenant origination and absorption cost | $ | 24,199 | $ | 23,756 | $ | 16,264 |
Year | In-Place Lease Valuation | Tenant Origination and Absorption Costs | ||||||
2019 | $ | (4,695 | ) | $ | 24,198 | |||
2020 | $ | (4,695 | ) | $ | 24,198 | |||
2021 | $ | (3,799 | ) | $ | 19,715 | |||
2022 | $ | (3,774 | ) | $ | 19,256 | |||
2023 | $ | (2,901 | ) | $ | 16,502 |
December 31, | Contractual Interest Rate (1) | Payment Type | Loan Maturity | Effective Interest Rate (2) | |||||||||||
2018 | 2017 | ||||||||||||||
BofA/KeyBank Loan | $ | 250,000 | $ | — | 4.32% | Interest Only | May 2028 | 4.42% | |||||||
AIG Loan | 126,970 | 126,970 | 4.15% | Interest Only (3) | November 2025 | 4.22% | |||||||||
Total Mortgage Debt | 376,970 | 126,970 | |||||||||||||
Term Loan | 113,000 | — | LIBOR + 1.25%(4) | Interest Only | June 2023 | 3.67% | |||||||||
Revolving Credit Facility | 85 | 357,758 | LIBOR + 1.30%(4)(5) | Interest Only | June 2023(6) | 3.89% | |||||||||
Total Debt | 490,055 | 484,728 | |||||||||||||
Unamortized deferred financing costs | (8,100 | ) | (2,880 | ) | |||||||||||
Total Debt, net | $ | 481,955 | $ | 481,848 |
(1) | The weighted average interest rate as of December 31, 2018 was approximately 4.15% for the Company's fixed-rate and variable-rate debt combined. |
(2) | Includes the effect of amortization of deferred financing costs. |
(3) | The AIG Loan (as defined below) requires monthly payments of interest only, at a fixed rate, for the first five years and fixed monthly payments of principal and interest thereafter. |
(4) | The London Interbank Offered Rate ("LIBOR") as of December 31, 2018 was 2.35%. |
(5) | As discussed below, the Company entered into an amended and restated credit agreement in June 2018. The contractual interest rate on the original |
(6) | The Revolving Credit Facility (as defined below) has an initial term of four years, maturing on June 28, 2022, and may be extended for a one-year period if certain conditions are met and upon payment of an extension fee. See discussion below. |
December 31, 2018 | |||
2019 | $ | — | |
2020 | — | ||
2021 | 2,178 | ||
2022 | 2,270 | ||
2023 | 2,367 | ||
Thereafter | 483,240 | ||
Total principal | 490,055 | ||
Unamortized deferred loan costs | (8,100 | ) | |
Total | $ | 481,955 |
Fair Value (1) | Current Effective Notional Amount (2) | |||||||||||||||||||||
Derivative Instrument | Effective Date | Maturity Date/Termination | Interest Strike Rate | December 31, | December 31, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Interest Rate Swap | 4/1/2016 | 12/12/2018 | 0.74% | $ | — | $ | 967 | $ | — | $ | 100,000 | |||||||||||
Interest Rate Swap | 11/1/2017 | 4/30/2018 | 1.50% | — | 65 | — | 100,000 | |||||||||||||||
Total | $ | — | $ | 1,032 | $ | — | $ | 200,000 |
(1) | The Company records all derivative instruments on a gross basis on the consolidated balance sheets, and accordingly, there are no offsetting amounts that net assets against liabilities. As of December 31, 2018, all of the Company's derivatives have matured. |
(2) | Represents the notional amount of swap that was effective as of the balance sheet date of December 31, 2018 and December 31, 2017. |
Year Ended December 31, | ||||||||
2018 | 2017 | |||||||
Interest Rate Swaps in Cash Flow Hedging Relationship: | ||||||||
Amount of gain (loss) recognized in AOCI on derivatives | $ | 281 | $ | 428 | ||||
Amount of (gain) reclassified from AOCI into earnings under “Interest expense” | $ | (1,233 | ) | $ | (319 | ) | ||
Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded | $ | 20,375 | $ | 15,519 |
Total Fair Value | Quoted Prices in Active Markets for Identical Assets and Liabilities | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||
Interest Rate Swaps at: | ||||||||||||
December 31, 2018 | $ | — | $ | — | $ | — | $ | — | ||||
December 31, 2017 | $ | 1,032 | $ | — | $ | 1,032 | $ | — |
December 31, 2018 | December 31, 2017 | ||||||||||||||
Fair Value | Carrying Value (1) | Fair Value | Carrying Value (1) | ||||||||||||
AIG Loan | $ | 120,599 | $ | 126,970 | $ | 122,928 | $ | 126,970 |
(1) | The carrying value of the AIG Loan does not include deferred financing costs as of December 31, 2018 and 2017 . See Note 4, Debt, for details. |
Year Ended December 31, | ||||||||
2018 | 2017 | |||||||
Redemptions payable | $ | 4,866 | $ | 2,181 | ||||
Prepaid rent | 4,709 | 4,304 | ||||||
Other liabilities | 3,788 | 3,132 | ||||||
Accrued property taxes | 2,955 | 3,490 | ||||||
Interest expense payable | 2,805 | 3,013 | ||||||
Leasing commission payable | 1,900 | 3,783 | ||||||
Total | $ | 21,023 | $ | 19,903 |
Class | ||||||||||||||||||||||||||||||||
T | S | D | I | A | AA | AAA | Total | |||||||||||||||||||||||||
Gross proceeds from primary portion of offerings | $ | 2,245 | $ | 3 | $ | 182 | $ | 7,538 | $ | 240,780 | $ | 474,858 | $ | 8,381 | $ | 733,987 | ||||||||||||||||
Gross proceeds from DRP | $ | 26 | $ | — | $ | 3 | $ | 187 | $ | 26,535 | $ | 34,656 | $ | 545 | $ | 61,952 | ||||||||||||||||
Shares issued in primary portion of offerings | 224,647 | 264 | 18,921 | 786,573 | 24,199,764 | 47,562,870 | 901,225 | 73,694,264 | ||||||||||||||||||||||||
DRP shares issued | 2,664 | 15 | 347 | 19,441 | 2,794,547 | 3,650,017 | 57,433 | 6,524,464 | ||||||||||||||||||||||||
Stock distribution shares issued | — | — | — | — | 263,642 | 300,166 | 4,677 | 568,485 | ||||||||||||||||||||||||
Restricted stock issued | — | — | — | — | — | — | 36,000 | 36,000 | ||||||||||||||||||||||||
Total redemptions | — | — | — | — | (1,528,918 | ) | (1,744,366 | ) | (23,956 | ) | (3,297,240 | ) | ||||||||||||||||||||
Total shares outstanding as of December 31, 2018 | 227,311 | 279 | 19,268 | 806,014 | 25,729,035 | 49,768,687 | 975,379 | 77,525,973 | ||||||||||||||||||||||||
Total shares outstanding as of December 31, 2017 | 4,148 | 268 | 268 | 267,476 | 25,995,943 | 49,942,471 | 964,709 | 77,175,283 |
December 31, 2018 | |||
Cumulative offering costs | $ | 2,975 | |
Cumulative organizational costs | $ | 535 | |
Organizational and offering costs advanced by the Advisor | $ | 2,125 | |
Organizational and offering costs paid by the Company | 1,385 | ||
Adjustment to organizational and offering costs pursuant to the limitation: | |||
Costs in excess of limit | (2,015 | ) | |
Organizational and offering costs incurred | $ | 1,495 |
Year Ended December 31, | ||||||||
Period | 2018 | 2017 | ||||||
Shares of common stock redeemed | 1,306,834 | 623,499 | ||||||
Weighted average price per share | $ | 9.36 | $ | 9.21 |
Year Ended December 31, | ||||||
Period | 2018 | 2017 | ||||
Shares of common stock redeemed | 1,199,464 | — | ||||
Weighted average price per share | 9.62 | — |
Year Ended December 31, | ||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||
Ordinary income | $ | 0.06 | 10.78 | % | $ | 0.04 | 7.90 | % | $ | 0.31 | 57.10 | % | ||||||
Return of capital | 0.49 | 89.22 | % | 0.51 | 92.10 | % | 0.24 | 42.90 | % | |||||||||
Total distributions paid | $ | 0.55 | 100.00 | % | $ | 0.55 | 100.00 | % | $ | 0.55 | 100.00 | % |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Beginning balance | $ | 76 | $ | 84 | $ | 98 | |||||
Issuance of limited partnership units | 1,185 | — | — | ||||||||
Distributions to noncontrolling interests | (70 | ) | (11 | ) | (11 | ) | |||||
Net (loss) income allocation | (6 | ) | 3 | (3 | ) | ||||||
Other comprehensive loss | (3 | ) | — | — | |||||||
Ending balance | $ | 1,182 | $ | 76 | $ | 84 |
Incurred as of December 31, | Payable as of December 31, | ||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | |||||||||||||||
Expensed | |||||||||||||||||||
Acquisition fees and expenses | $ | — | $ | — | $ | 6,324 | $ | — | $ | — | |||||||||
Corporate operating expenses | 3,011 | 2,336 | 1,622 | 63 | 658 | ||||||||||||||
Other operating expenses (1) | 215 | — | — | 215 | — | ||||||||||||||
Asset management fees (2) | — | 8,027 | 6,413 | — | — | ||||||||||||||
Property management fees | 1,832 | 1,799 | 1,052 | 157 | 158 | ||||||||||||||
Performance distributions | 7,783 | 2,394 | — | 7,807 | 2,394 | ||||||||||||||
Advisory Fees | 9,316 | 2,550 | — | 781 | 762 | ||||||||||||||
Capitalized/Offering | |||||||||||||||||||
Acquisition fees and expenses (3) | — | 1,099 | 7,606 | — | — | ||||||||||||||
Organization and offering expense | 1,120 | 192 | — | 1,312 | (7) | 192 | |||||||||||||
Other costs advanced by the Advisor | 1,233 | 662 | 304 | 367 | 285 | ||||||||||||||
Selling commissions (4) | 66 | 1,128 | 11,397 | — | — | ||||||||||||||
Dealer manager fees | 11 | 393 | 3,949 | — | — | ||||||||||||||
Stockholder servicing fee (5) | 175 | 660 | 17,449 | 8,302 | 12,377 | ||||||||||||||
Distribution fee | 10 | — | — | — | — | ||||||||||||||
Advisor Advances: (6) | |||||||||||||||||||
Organization and offering expenses | 45 | 179 | 2,634 | 44 | 8 | ||||||||||||||
Dealer manager fees | — | 853 | 8,069 | — | 62 | ||||||||||||||
Total | $ | 24,817 | $ | 22,272 | $ | 66,819 | $ | 19,048 | $ | 16,896 |
(1) | Other operating expenses include costs incurred by the Company's former sponsor, GCC, related to acquisition transactions that failed to close. |
(2) | As part of the Follow-On Offering, the Company's new management compensation structure no longer includes asset management fees. |
(3) | Effective September 20, 2017, the Advisor is not entitled to acquisition fees, disposition fees or financing fees. |
(4) | On September 18, 2017, the Company and the Dealer Manager entered into a dealer manager agreement for the Follow-On Offering. See the "Dealer Manager Agreement" section below for details regarding selling commissions and dealer manager fees. |
(5) | The Dealer Manager continues to receive a stockholder servicing fee with respect to Class AA shares as detailed in the Company's IPO prospectus. The stockholder servicing fee is paid quarterly and accrues daily in an amount equal to 1/365th of 1% of the NAV per share of the Class AA shares, up to an aggregate of 4% of the gross proceeds of Class AA shares sold. The Company will cease paying the stockholder servicing fee with respect to the Class AA shares at the earlier of: (i) the date at which the aggregate underwriting compensation from all sources equals 10% of the gross proceeds from the sale of shares in the Company's IPO (excluding proceeds from sales pursuant to the related DRP); (ii) the fourth anniversary of the last day of the fiscal quarter in which the Company's IPO terminated; (iii) the date that such Class AA share is redeemed or is no longer outstanding; and (iv) the occurrence of a merger, listing on a national securities exchange, or an extraordinary transaction. |
(6) | Pursuant to the original advisory agreement, commencing November 2, 2015, the Company remained obligated to reimburse the Advisor for organizational and offering costs incurred after such date. Terms of the organizational and offering costs are included in the Company's 2016 Annual Report on Form 10-K filed on March 15, 2017. |
(7) | Excludes amounts in excess of the 15% organization and offering costs limitation. See Note 8, Equity, for additional details. |
• | the investment objectives of each program; |
• | the amount of funds available to each program; |
• | the financial impact of the acquisition on each program, including each program’s earnings and distribution ratios; |
• | various strategic considerations that may impact the value of the investment to each program; |
• | the effect of the acquisition on concentration/diversification of each program’s investments; and |
• | the income tax effects of the investment to each program. |
2018 | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Total revenue | $ | 26,789 | $ | 26,297 | $ | 26,713 | $ | 26,595 | ||||||||
Net income (loss) | $ | 804 | $ | (478 | ) | $ | (757 | ) | $ | (2,856 | ) | |||||
Net income (loss) attributable to common stockholders | $ | 803 | $ | (477 | ) | $ | (756 | ) | $ | (2,851 | ) | |||||
Net income (loss) per share (1) | $ | 0.01 | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | |||||
2017 | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Total revenue | $ | 25,972 | $ | 26,546 | $ | 27,349 | $ | 27,514 | ||||||||
Net income | $ | 3,124 | $ | 3,365 | $ | 3,099 | $ | 1,531 | ||||||||
Net income attributable to common stockholders | $ | 3,123 | $ | 3,364 | $ | 3,098 | $ | 1,531 | ||||||||
Net income per share (1) | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.03 |
(1) | Amounts were retroactively adjusted to reflect stock dividends. (See Note 2, Basis of Presentation and Summary of Significant Accounting Policies, for additional detail). |
Initial Cost to Company | Cost Capitalized Subsequent to Acquisition | Gross Carrying Amount at December 31, 2018 | Life on which depreciation in latest income statement is computed | |||||||||||||||||||||||||||||||||||||||
Property | Property Type | ST | Encumbrances | Land | Building and Improvements(1) | Building and Improvements | Land | Building and Improvements(1) | Total | Accumulated Depreciation and Amortization | Date of Construction | Date of Acquisition | ||||||||||||||||||||||||||||||
Owens Corning | Industrial | NC | $ | 3,300 | $ | 575 | $ | 5,167 | $ | — | $ | 575 | $ | 5,167 | $ | 5,742 | $ | 657 | N/A | 3/9/2015 | 5-40 years | |||||||||||||||||||||
Westgate II | Office | TX | 34,200 | 3,732 | 55,101 | — | 3,732 | 55,101 | 58,833 | 8,842 | N/A | 4/1/2015 | 5-40 years | |||||||||||||||||||||||||||||
Administrative Office of Pennsylvania Courts | Office | PA | 6,070 | 1,207 | 8,936 | — | 1,207 | 8,936 | 10,143 | 1,362 | N/A | 4/22/2015 | 5-40 years | |||||||||||||||||||||||||||||
American Express Center | Data Center/Office | AZ | 54,900 | 5,750 | 113,670 | — | 5,750 | 113,670 | 119,420 | 24,395 | N/A | 5/11/2015 | 5-40 years | |||||||||||||||||||||||||||||
MGM Corporate Center | Office | NV | 18,180 | 4,260 | 28,705 | 536 | 4,260 | 29,241 | 33,501 | 4,729 | N/A | 5/27/2015 | 5-40 years | |||||||||||||||||||||||||||||
American Showa | Industrial | OH | 10,320 | 1,453 | 15,747 | — | 1,453 | 15,747 | 17,200 | 2,042 | N/A | 5/28/2015 | 5-40 years | |||||||||||||||||||||||||||||
Huntington Ingalls | Industrial | VA | — | 5,415 | 29,836 | 18 | 5,415 | 29,854 | 35,269 | 3,881 | N/A | 6/26/2015 | 5-40 years | |||||||||||||||||||||||||||||
Wyndham | Office | NJ | — | 5,696 | 76,532 | — | 5,696 | 76,532 | 82,228 | 9,219 | N/A | 6/26/2015 | 5-40 years | |||||||||||||||||||||||||||||
Exel | Distribution Center | OH | — | 1,988 | 13,958 | — | 1,988 | 13,958 | 15,946 | 2,043 | N/A | 6/30/2015 | 5-40 years | |||||||||||||||||||||||||||||
Rapiscan Systems | Office | MA | — | 2,350 | 9,482 | — | 2,350 | 9,482 | 11,832 | 1,584 | N/A | 7/1/2015 | 5-40 years | |||||||||||||||||||||||||||||
FedEx Freight | Industrial | OH | — | 2,774 | 25,913 | — | 2,774 | 25,913 | 28,687 | 3,283 | N/A | 7/22/2015 | 5-40 years | |||||||||||||||||||||||||||||
Aetna | Office | AZ | — | 1,853 | 20,481 | — | 1,853 | 20,481 | 22,334 | 1,755 | N/A | 7/29/2015 | 5-40 years | |||||||||||||||||||||||||||||
Bank of America I | Office | CA | — | 5,491 | 23,514 | 216 | 5,491 | 23,730 | 29,221 | 5,294 | N/A | 8/14/2015 | 5-40 years | |||||||||||||||||||||||||||||
Bank of America II | Office | CA | — | 9,206 | 20,204 | 14 | 9,206 | 20,218 | 29,424 | 5,214 | N/A | 8/14/2015 | 5-40 years | |||||||||||||||||||||||||||||
Atlas Copco | Office | MI | — | 1,480 | 16,490 | — | 1,480 | 16,490 | 17,970 | 2,347 | N/A | 10/1/2015 | 5-40 years | |||||||||||||||||||||||||||||
Toshiba TEC | Office | NC | — | 4,130 | 36,821 | — | 4,130 | 36,821 | 40,951 | 4,072 | N/A | 1/21/2016 | 5-40 years | |||||||||||||||||||||||||||||
NETGEAR | Office | CA | — | 20,726 | 25,887 | 43 | 20,726 | 25,930 | 46,656 | 3,470 | N/A | 5/17/2016 | 5-40 years | |||||||||||||||||||||||||||||
Nike | Office | OR | — | 5,988 | 42,397 | 81 | 5,988 | 42,478 | 48,466 | 7,583 | N/A | 6/16/2016 | 5-40 years | |||||||||||||||||||||||||||||
Zebra Technologies | Office | IL | — | 5,238 | 56,526 | — | 5,238 | 56,526 | 61,764 | 6,759 | N/A | 8/1/2016 | 5-40 years | |||||||||||||||||||||||||||||
WABCO | Industrial | SC | — | 1,302 | 12,598 | — | 1,302 | 12,598 | 13,900 | 1,208 | N/A | 9/14/2016 | 5-40 years | |||||||||||||||||||||||||||||
IGT | Office | NV | 45,300 | 6,325 | 64,441 | 40 | 6,325 | 64,481 | 70,806 | 4,837 | N/A | 9/27/2016 | 5-40 years | |||||||||||||||||||||||||||||
3M | Industrial | IL | 43,600 | 5,320 | 62,247 | — | 5,320 | 62,247 | 67,567 | 4,561 | N/A | 10/25/2016 | 5-40 years | |||||||||||||||||||||||||||||
Amazon | Industrial | OH | 61,500 | 5,331 | 85,770 | — | 5,331 | 85,770 | 91,101 | 5,493 | N/A | 11/18/2016 | 5-40 years | |||||||||||||||||||||||||||||
Zoetis | Office | NJ | — | 3,375 | 42,265 | — | 3,375 | 42,265 | 45,640 | 3,425 | N/A | 12/16/2016 | 5-40 years | |||||||||||||||||||||||||||||
Southern Company | Office | AL | 99,600 | 6,605 | 125,602 | 48 | 6,605 | 125,650 | 132,255 | 6,902 | N/A | 12/22/2016 | 5-40 years | |||||||||||||||||||||||||||||
Allstate | Office | CO | — | 1,808 | 14,090 | 342 | 1,808 | 14,432 | 16,240 | 1,428 | N/A | 1/31/2017 | 5-40 years | |||||||||||||||||||||||||||||
MISO | Office | IN | — | 3,104 | 26,014 | — | 3,104 | 26,014 | 29,118 | 2,185 | N/A | 5/15/2017 | 5-40 years | |||||||||||||||||||||||||||||
Total (2) | $ | 376,970 | $ | 122,482 | $ | 1,058,394 | $ | 1,338 | $ | 122,482 | $ | 1,059,732 | $ | 1,182,214 | $ | 128,570 |
(1) | Building and improvements include tenant origination and absorption costs. |
(2) | As of December 31, 2018, the aggregate cost of real estate the Company and consolidated subsidiaries own for federal income tax purposes was approximately $1.1 billion (unaudited). |
Activity for the year ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Real estate facilities | |||||||||||
Balance at beginning of year | $ | 1,178,866 | $ | 1,133,055 | $ | 516,965 | |||||
Acquisitions | 2,923 | 45,016 | 615,972 | ||||||||
Improvements | 580 | 576 | 38 | ||||||||
Construction-in-progress, net | (155 | ) | 219 | 80 | |||||||
Balance at end of year | $ | 1,182,214 | $ | 1,178,866 | $ | 1,133,055 | |||||
Accumulated depreciation | |||||||||||
Balance at beginning of year | $ | 83,905 | $ | 39,955 | $ | 12,061 | |||||
Depreciation and amortization expense | 44,665 | 43,950 | 27,894 | ||||||||
Balance at end of year | $ | 128,570 | $ | 83,905 | $ | 39,955 | |||||
Real estate facilities, net | $ | 1,053,644 | $ | 1,094,961 | $ | 1,093,100 |
1. | I have reviewed this Annual Report on Form 10-K of Griffin Capital Essential Asset REIT II, 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 registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | March 14, 2019 | By: | /s/ Kevin A. Shields |
Kevin A. Shields | |||
Chief Executive Officer and Chairman | |||
(Principal Executive Officer) |
1. | I have reviewed this Annual Report on Form 10-K of Griffin Capital Essential Asset REIT II, 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 registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: | March 14, 2019 | By: | /s/ Javier F. Bitar |
Javier F. Bitar | |||
Chief Financial Officer and Treasurer | |||
(Principal Financial and Accounting Officer) |
(i) | the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | March 14, 2019 | By: | /s/ Kevin A. Shields |
Kevin A. Shields | |||
Chief Executive Officer and Chairman | |||
(Principal Executive Officer) |
(i) | the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: | March 14, 2019 | By: | /s/ Javier F. Bitar |
Javier F. Bitar | |||
Chief Financial Officer and Treasurer | |||
(Principal Financial and Accounting Officer) |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, number of shares authorized (in shares) | 800,000,000 | 700,000,000 |
Common stock, number of shares outstanding (in shares) | 77,525,973 | 77,175,283 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Statement [Abstract] | |||
Rental income | $ 87,789 | $ 89,797 | $ 51,403 |
Property expense recovery | 18,605 | 17,584 | 11,409 |
Total revenue | 106,394 | 107,381 | 62,812 |
Property operating | 7,382 | 6,724 | 4,428 |
Property tax | 10,120 | 10,049 | 7,046 |
Property management fees to affiliates | 1,832 | 1,799 | 1,052 |
Asset management fees to affiliates | 0 | 8,027 | 6,413 |
Advisory fees to affiliates | 9,316 | 2,550 | 0 |
Performance distribution allocation to affiliates | 7,783 | 2,394 | 0 |
Acquisition fees and expenses to affiliates | 0 | 0 | 6,176 |
Acquisition fees and expenses to non-affiliates | 1,938 | 0 | 1,113 |
General and administrative | 3,471 | 3,445 | 2,804 |
Corporate operating expenses to affiliates | 3,011 | 2,336 | 1,622 |
Depreciation and amortization | 44,665 | 43,950 | 27,894 |
Total expenses | 89,518 | 81,274 | 58,548 |
Income before other income and (expenses) | 16,876 | 26,107 | 4,264 |
Interest expense | (20,375) | (15,519) | (10,384) |
Other income, net | 212 | 531 | 13 |
Net (loss) income | (3,287) | 11,119 | (6,107) |
Net loss (income) attributable to noncontrolling interests | 6 | (3) | 3 |
Net (loss) income attributable to common stockholders | $ (3,281) | $ 11,116 | $ (6,104) |
Net income (loss) attributable to common stockholders per share, basic and diluted (in usd per share) | $ (0.04) | $ 0.15 | $ (0.12) |
Weighted average number of common shares outstanding, basic and diluted (in shares) | 77,657,627 | 75,799,415 | 50,712,589 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (3,287) | $ 11,119 | $ (6,107) |
Change in fair value of swap agreement | (952) | 108 | 841 |
Total comprehensive (loss) income | (4,239) | 11,227 | (5,266) |
Comprehensive loss (income) attributable to noncontrolling interests | 9 | (3) | 3 |
Comprehensive (loss) income attributable to common stockholders | $ (4,230) | $ 11,224 | $ (5,263) |
Consolidated Statements of Equity - USD ($) $ in Thousands |
Total |
Total Stockholders’ Equity |
Common Stock |
Additional Paid-In Capital |
Cumulative Distributions |
Accumulated Deficit |
Accumulated Other Comprehensive Income |
Non- controlling Interests |
---|---|---|---|---|---|---|---|---|
Beginning balance (shares) at Dec. 31, 2015 | 28,556,170 | |||||||
Beginning balance at Dec. 31, 2015 | $ 224,942 | $ 224,844 | $ 29 | $ 250,757 | $ (8,258) | $ (17,684) | $ 0 | $ 98 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Gross proceeds from issuance of common stock (shares) | 40,700,406 | |||||||
Gross proceeds from issuance of common stock | 406,463 | 406,463 | $ 40 | 406,423 | ||||
Discount on issuance of common stock | (696) | (696) | (696) | |||||
Offering costs including dealer manager fees and stockholder servicing fees to affiliates | (43,340) | (43,340) | (43,340) | |||||
Distributions to common stockholders | (12,479) | (12,479) | (12,479) | |||||
Issuance of shares for distribution reinvestment plan (shares) | 1,599,355 | |||||||
Issuance of shares for distribution reinvestment plan | 15,158 | $ 2 | 15,157 | (15,159) | ||||
Repurchase of common stock (shares) | (167,442) | |||||||
Repurchase of common stock | (1,627) | (1,627) | (1,627) | |||||
Additions to common stock subject to redemption | (13,531) | (13,531) | (13,531) | |||||
Issuance of stock dividends (in shares) | 251,158 | |||||||
Issuance of stock dividends | 0 | 0 | 2,510 | (2,510) | 0 | 0 | ||
Issuance of limited partnership units | 0 | |||||||
Distributions to noncontrolling interest | (11) | (11) | ||||||
Net income (loss) | (6,107) | (6,104) | (6,104) | (3) | ||||
Other comprehensive income (loss) | 841 | 841 | 841 | 0 | ||||
Ending balance (shares) at Dec. 31, 2016 | 70,939,647 | |||||||
Ending balance at Dec. 31, 2016 | 554,455 | 554,371 | $ 71 | 615,653 | (38,406) | (23,788) | 841 | 84 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Gross proceeds from issuance of common stock (shares) | 4,205,673 | |||||||
Gross proceeds from issuance of common stock | 41,826 | 41,826 | $ 4 | 41,822 | ||||
Discount on issuance of common stock | (16) | (16) | (16) | |||||
Stock-based compensation (shares) | 25,500 | |||||||
Stock-based compensation | 292 | 292 | 292 | |||||
Offering costs including dealer manager fees and stockholder servicing fees to affiliates | (3,593) | (3,593) | (3,593) | |||||
Distributions to common stockholders | (19,427) | (19,427) | (19,427) | |||||
Issuance of shares for distribution reinvestment plan (shares) | 2,358,188 | |||||||
Issuance of shares for distribution reinvestment plan | 22,208 | $ 2 | 22,206 | (22,208) | ||||
Repurchase of common stock (shares) | (623,499) | |||||||
Repurchase of common stock | (5,742) | (5,742) | $ (1) | (5,741) | ||||
Additions to common stock subject to redemption | (16,467) | (16,467) | (16,467) | |||||
Issuance of stock dividends (in shares) | 269,774 | |||||||
Issuance of stock dividends | 0 | 0 | 2,549 | (2,549) | 0 | 0 | ||
Issuance of limited partnership units | 0 | |||||||
Distributions to noncontrolling interest | (11) | (11) | ||||||
Net income (loss) | 11,119 | 11,116 | 11,116 | 3 | ||||
Other comprehensive income (loss) | $ 108 | 108 | 108 | 0 | ||||
Ending balance (shares) at Dec. 31, 2017 | 77,175,283 | 77,175,283 | ||||||
Ending balance at Dec. 31, 2017 | $ 562,544 | 562,468 | $ 76 | 656,705 | (82,590) | (12,672) | 949 | 76 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Gross proceeds from issuance of common stock (shares) | 762,537 | |||||||
Gross proceeds from issuance of common stock | 7,430 | 7,430 | $ 1 | 7,429 | ||||
Changes in redeemable common stock | (6,538) | (6,538) | (6,538) | |||||
Discount on issuance of common stock | (1) | (1) | (1) | |||||
Stock-based compensation (shares) | 10,500 | |||||||
Stock-based compensation | 44 | 44 | 44 | |||||
Offering costs including dealer manager fees and stockholder servicing fees to affiliates | (1,140) | (1,140) | (1,140) | |||||
Distributions to common stockholders | (22,709) | (22,709) | (22,709) | |||||
Issuance of shares for distribution reinvestment plan (shares) | 2,083,950 | |||||||
Issuance of shares for distribution reinvestment plan | 19,998 | $ 2 | 19,996 | (19,998) | ||||
Repurchase of common stock (shares) | (2,506,299) | |||||||
Repurchase of common stock | (23,766) | (23,766) | $ (3) | (23,763) | ||||
Additions to common stock subject to redemption | 3,768 | 3,768 | 3,768 | |||||
Issuance of stock dividends (in shares) | 2 | |||||||
Issuance of stock dividends | 0 | 0 | ||||||
Issuance of limited partnership units | 1,185 | 1,185 | ||||||
Distributions to noncontrolling interest | (70) | (70) | ||||||
Net income (loss) | (3,287) | (3,281) | (3,281) | (6) | ||||
Other comprehensive income (loss) | $ (952) | (949) | (949) | (3) | ||||
Ending balance (shares) at Dec. 31, 2018 | 77,525,973 | 77,525,973 | ||||||
Ending balance at Dec. 31, 2018 | $ 516,508 | $ 515,326 | $ 76 | $ 656,500 | $ (125,297) | $ (15,953) | $ 0 | $ 1,182 |
Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Operating Activities: | |||
Net (loss) income | $ (3,287) | $ 11,119 | $ (6,107) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation of building and improvements | 20,466 | 20,194 | 11,630 |
Amortization of tenant origination and absorption costs | 24,199 | 23,756 | 16,264 |
Amortization of above and below market leases | (4,695) | (4,573) | (3,592) |
Amortization of deferred financing costs | 1,384 | 1,106 | 1,196 |
Deferred rent | (8,456) | (17,308) | (3,924) |
Stock based compensation | 44 | 292 | 0 |
Unrealized loss (gain) on interest rate swap | 77 | 83 | (155) |
Performance distribution allocation (non-cash) | 3,904 | 0 | 0 |
Change in operating assets and liabilities: | |||
Other assets, net | 1,397 | 4,590 | (1,040) |
Accrued expenses and other liabilities, net | 3,376 | (2,615) | 3,094 |
Due to affiliates, net | 2,546 | 3,068 | (922) |
Net cash provided by operating activities | 40,955 | 39,712 | 16,444 |
Investing Activities: | |||
Acquisition of properties, net | 0 | (44,234) | (538,845) |
Restricted reserves | (1,803) | (42,430) | (3,541) |
Improvements to real estate | 0 | (21) | (40) |
Payments for construction in progress | (502) | (772) | (80) |
Real estate acquisition deposits | 0 | 250 | 8,700 |
Net cash used in investing activities | (2,305) | (87,207) | (533,806) |
Financing Activities: | |||
Proceeds from borrowings - Revolving Credit Facility | 0 | 24,300 | 249,900 |
Proceeds from borrowings - BofA/KeyBank Loan | 250,000 | 0 | 0 |
Proceeds from borrowings - Term Loan | 113,000 | 0 | 0 |
Principal payoff of indebtedness - Revolving Credit Facility | (357,673) | 0 | (55,000) |
Deferred financing costs | (6,603) | (30) | (1,578) |
Issuance of common stock | 7,465 | 30,699 | 383,170 |
Offering costs | (4,778) | 0 | 0 |
Repurchase of common stock | (23,766) | (5,742) | (1,627) |
Distributions paid to common stockholders | (20,753) | (19,232) | (11,541) |
Distributions paid to noncontrolling interests | (65) | (11) | (11) |
Net cash (used in) provided by financing activities | (43,173) | 29,984 | 563,313 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (4,523) | (17,511) | 45,951 |
Cash, cash equivalents and restricted cash at the beginning of the period | 46,050 | 63,561 | 17,610 |
Cash, cash equivalents and restricted cash at the end of the period | 41,527 | 46,050 | 63,561 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 19,200 | 13,116 | 9,228 |
Supplemental disclosures of non-cash investing and financing transactions: | |||
(Decrease) Increase in fair value swap agreement | (952) | 108 | 841 |
Increase in Stock Servicing Fee Payable | 174 | 660 | 17,449 |
Increase in distributions payable to common stockholders | 1,955 | 195 | 938 |
Common stock issued pursuant to the distribution reinvestment plan | $ 19,998 | $ 22,208 | $ 15,158 |
Organization |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Griffin Capital Essential Asset REIT II, Inc., a Maryland corporation (the “Company”), was formed on November 20, 2013 under the Maryland General Corporation Law ("MGCL") and qualified as a real estate investment trust (“REIT”) commencing with the year ended December 31, 2015. The Company was organized primarily with the purpose of acquiring single tenant net lease properties that are considered essential to the occupying tenant, and has used a substantial amount of the net proceeds from its initial public offering ("IPO") to invest in such properties. The Company’s year end is December 31. Prior to the execution of the Merger Agreement (as defined below), on December 14, 2018, Griffin Capital Essential Asset REIT, Inc. ("GCEAR"), a non-traded REIT sponsored by our former sponsor, entered into a series of transactions and became self-managed (the “Self Administration Transaction”) and succeeded to the advisory, asset management and property management arrangements formerly in place for the Company. Accordingly, the sponsor of the Company has changed from Griffin Capital Company, LLC ("GCC") to Griffin Capital Real Estate Company, LLC (the "Sponsor" or "GRECO") until the Company Merger (defined below) is consummated. Griffin Capital Essential Asset Advisor II, LLC, a Delaware limited liability company (the “Advisor”), was formed on November 19, 2013. GRECO, is the sole member of the Advisor. GRECO is owned by Griffin Capital Essential Asset Operating Partnership, L.P. (the "GCEAR Operating Partnership") and Griffin Capital Essential Asset TRS, Inc., a Delaware corporation. The Advisor is responsible for managing the Company’s affairs on a day-to-day basis and identifying and making acquisitions and investments on behalf of the Company under the terms of the Advisory Agreement (as defined below). The Company's officers are also officers of the Advisor and certain of the officers are also officers of the Sponsor. Griffin Capital Securities, LLC (the “Dealer Manager”) is a Delaware limited liability company and is a wholly-owned subsidiary of Griffin Capital, LLC (“GC”), a Delaware limited liability company. The Company’s former sponsor, GCC, is the sole member of GC. The Dealer Manager is responsible for marketing the Company’s shares offered pursuant to the Company's public offerings. The Company’s property manager is Griffin Capital Essential Asset Property Management II, LLC, a Delaware limited liability company (the “Property Manager”), which was formed on November 19, 2013 to manage the Company’s properties, or provide oversight of other property managers engaged by the Company or an affiliate of the Company. The Property Manager derives substantially all of its income from the property management services it performs for the Company. Griffin Capital Essential Asset Operating Partnership II, L.P., (the "Operating Partnership") owns, and will own, directly or indirectly, all of the properties acquired by the Company. The Operating Partnership will conduct certain activities through the Company’s taxable REIT subsidiary, Griffin Capital Essential Asset TRS II, Inc., a Delaware corporation (the “TRS”), formed on November 22, 2013, which is a wholly-owned subsidiary of the Operating Partnership. The TRS had no activity as of December 31, 2018. On September 20, 2017, the Company commenced a follow-on offering of up to $2.2 billion of shares (the "Follow-On Offering"), consisting of up to $2.0 billion of shares in the Company's primary offering and $0.2 billion of shares pursuant to the distribution reinvestment plan ("DRP"). Pursuant to the Follow-On Offering, the Company offered to the public four new classes of shares of common stock: Class T shares, Class S shares, Class D shares and Class I shares (the “New Shares”) with net asset value (“NAV”) based pricing. The share classes have different selling commissions, dealer manager fees and ongoing distribution fees. In connection with the Follow-On Offering, the Company reclassified all Class T and Class I shares sold in its IPO as "Class AA" and "Class AAA" shares, respectively. On September 20, 2017, the Company entered into an amended and restated advisory agreement (the "Advisory Agreement") with the Advisor and the Operating Partnership, which replaced the Original Advisory Agreement and modified various provisions including the fees and expense reimbursements payable to the Advisor. See Note 10, Related Party Transactions, for additional details. In connection with the Follow-On Offering, the Company's board of directors (the "Board") adopted an amended and restated DRP effective as of September 30, 2017 to include all of its shares, including the New Shares, under the DRP. In connection with the Follow-On Offering, the Company’s Board adopted a share redemption program for the New Shares (and IPO shares that have been held for four years or longer) (the “SRP”). On June 4, 2018, the Company’s Board amended and restated the SRP to allow stockholders of the Company’s IPO shares to utilize the SRP, effective as of July 5, 2018. Prior to that time, the Company had a separate share redemption program for its IPO shares. See Note 8, Equity, for additional details. Under the SRP, stockholders are allowed to redeem their shares after a one-year holding period at a redemption price equal to the NAV per share for the applicable class generally on the 13th of the month prior to quarter end. On August 16, 2018, the Company’s Board approved the temporary suspension of the primary portion of the Follow-On Offering, effective August 17, 2018. On December 12, 2018, the Company also temporarily suspended the DRP offering and the SRP. Beginning in January 2019, all distributions by the Company were paid in cash. The SRP was officially suspended as of January 19, 2019. On December 14, 2018, the Company, the Operating Partnership, Globe Merger Sub, LLC, a wholly owned subsidiary of the Company (“Merger Sub”), GCEAR, and the GCEAR Operating Partnership, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Subject to the terms and conditions of the Merger Agreement, (i) GCEAR will merge with and into Merger Sub, with Merger Sub surviving as a direct, wholly owned subsidiary of the Company (the “Company Merger”) and (ii) the Operating Partnership will merge with and into the GCEAR Operating Partnership (the “Partnership Merger” and, together with the Company Merger, the “Mergers”), with the GCEAR Operating Partnership surviving the Partnership Merger. At such time, (x) in accordance with the applicable provisions of the Maryland General Corporation Law, the separate existence of GCEAR shall cease and (y) in accordance with the Delaware Revised Uniform Limited Partnership Act, the separate existence of the Operating Partnership shall cease. See Note 11, Commitments and Contingencies, for additional details. |
Basis of Presentation and Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States (“GAAP”) as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the Securities and Exchange Commission ("SEC"). The consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the years ended December 31, 2018 and 2017. The consolidated financial statements of the Company include all accounts of the Company, the Operating Partnership, and its subsidiaries. Intercompany transactions are not shown on the consolidated statements. However, each property owning entity is a wholly owned subsidiary which is a special purpose entity ("SPE"), whose assets and credit are not available to satisfy the debts or obligations of any other entity, except to the extent required with respect to any co-borrower or guarantor under the same credit facility. Revenue Recognition Leases associated with the acquisition and contribution of certain real estate assets have net minimum rent payment increases during the term of the lease and are recorded to rental revenue on a straight-line basis, commencing as of the contribution or acquisition date. See Note 3, Real Estate, for more details. If a lease provides for contingent rental income, the Company will defer the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Tenant reimbursement revenue, which is comprised of additional amounts collected from tenants for the recovery of certain operating expenses, including repair and maintenance, property taxes and insurance, and capital expenditures, to the extent allowed pursuant to the lease (collectively, "Recoverable Expenses"), is recognized as revenue when the additional rent is due. Recoverable Expenses to be reimbursed by a tenant are determined based on the Company's estimate of the property's operating expenses for the year, pro rated based on leased square footage of the property, and are collected in equal installments as additional rent from the tenant, pursuant to the terms of the lease. At least quarterly, the Company reconciles the amount of additional rent paid by the tenant during the quarter to the actual amount of the Recoverable Expenses incurred by the Company for the same period. The difference, if any, is either charged or credited to the tenant pursuant to the provisions of the lease. In certain instances, the lease may restrict the amount the Company can recover from the tenant such as a cap on certain or all property operating expenses. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Principles of Consolidation The Company's financial statements, and the financial statements of the Company's Operating Partnership, including its wholly-owned subsidiaries, are consolidated in the accompanying consolidated financial statements. The portion of these entities not wholly-owned by the Company is presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents The Company considers all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents may include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value. There were no cash equivalents, nor were there restrictions on the use of the Company’s cash balance as of December 31, 2018 and 2017. The Company maintains its cash accounts with major financial institutions. The cash balances consist of business checking accounts. These accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 at each institution. The Company has not experienced any losses with respect to cash balances in excess of government provided insurance. Management believes there was no significant concentration of credit risk with respect to these cash balances as of December 31, 2018. Restricted Cash In conjunction with acquisitions of certain assets, as required by certain lease provisions or certain lenders in conjunction with an acquisition or debt financing, or credits received by the seller of certain assets, the Company assumed or funded reserves for specific property improvements and deferred maintenance, re-leasing costs, and taxes and insurance, which are included on the consolidated balance sheets as restricted cash. As of December 31, 2018, the Company had approximately $12.9 million in restricted cash, which includes tenant improvement funds. Real Estate Purchase Price Allocation The Company applies the provisions in ASC 805-10, Business Combinations ("ASC 805-10"), to account for the acquisition of real estate, or real estate related assets, in which a lease, or other contract, is in place representing an active revenue stream, as an asset acquisition (in rare cases, a business combination). In accordance with the provisions of ASC 805-10 (on an asset acquisition), the Company recognizes the assets acquired, the liabilities assumed and any noncontrolling interest in the acquired entity at their relative fair values. The accounting provisions have also established that transaction costs associated with an asset acquisition are capitalized. Acquired in-place leases are valued as above-market or below-market as of the date of acquisition. The valuation is measured based on the present value (using an interest rate, which reflects the risks associated with the leases acquired) of the difference between (a) the contractual amounts to be paid pursuant to the in-place leases and (b) management’s estimate of fair market lease rates for the corresponding in-place leases over a period equal to the remaining non-cancelable term of the lease for above-market leases, taking into consideration below-market extension options for below-market leases. In addition, renewal options are considered and will be included in the valuation of in-place leases if (1) it is likely that the tenant will exercise the option, and (2) the renewal rent is considered to be sufficiently below a fair market rental rate at the time of renewal. The above-market and below-market lease values are capitalized as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases. The aggregate relative fair value of in-place leases includes direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals, which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs associated with obtaining a new tenant include commissions, tenant improvements, and other direct costs and are estimated using methods similar to those used in independent appraisals and management’s consideration of current market costs to execute a similar lease. These direct costs are considered intangible lease assets and are included with real estate assets on the consolidated balance sheets. The intangible lease assets are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid, including real estate taxes, insurance, and other operating expenses, pursuant to the in-place leases over a market lease-up period for a similar lease. Customer relationships are valued based on management’s evaluation of certain characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics management will consider in allocating these values include the nature and extent of the Company’s existing business relationships with tenants, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. These intangibles will be included in intangible lease assets on the consolidated balance sheets and are amortized to expense over the remaining term of the respective leases. The determination of the relative fair values of the assets and liabilities acquired requires the use of significant assumptions about current market rental rates, rental growth rates, discount rates and other variables. Depreciation and Amortization The purchase price of real estate acquired and the costs related to development, construction, and property improvements are capitalized. Repairs and maintenance costs include all costs that do not extend the useful life of the real estate asset and are expensed as incurred. The Company considers the period of future benefit of an asset to determine the appropriate useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows:
If a lease is terminated or amended prior to its scheduled expiration, the Company will accelerate the remaining useful life of the unamortized lease-related costs. Impairment of Real Estate and Related Intangible Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of real estate and related intangible assets may not be recoverable, including credit ratings of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by nationally recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring news reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections. When indicators of potential impairment are present that indicate that the carrying amounts of real estate and related intangible assets may not be recoverable, management assesses whether the carrying value of the assets will be recovered through the future undiscounted operating cash flows expected from the use of the assets and the eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the asset, the Company will record an impairment charge to the extent the carrying value exceeds the net present value of the estimated future cash flows of the asset. Projections of expected future undiscounted cash flows require management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property and the number of years the property is held for investment. For the year ended December 31, 2018, the Company did not record any impairment charges related to its real estate assets or intangible assets. Derivative Instruments and Hedging Activities ASC Topic 815: Derivatives and Hedging ("ASC 815") provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments; (b) how the entity accounts for derivative instruments and related hedged items; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, ASC 815 requires qualitative disclosures regarding the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company recorded all derivatives on the consolidated balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, and whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. See Note 5, Interest Rate Contracts. Income Taxes The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code") for the year ended December 31, 2015. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to currently distribute at least 90% of the REIT’s ordinary taxable income to stockholders. As a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. If the Company fails to qualify as a REIT in any taxable year, after the Company initially qualifies to be taxed as a REIT, the Company will then be subject to federal income taxes on the taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially adversely affect net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and will operate in such a manner as to qualify for treatment as a REIT and intends to operate in the foreseeable future in such a manner that it will remain qualified as a REIT for federal income tax purposes. The Company could engage in certain business activities that could have an adverse effect on its REIT qualification. The Company has elected to isolate these business activities in the books and records of the TRS. In general, the TRS may perform additional services for the Company’s tenants and generally may engage in any real estate or non-real estate related business. The TRS will be subject to corporate federal and state income tax. As of December 31, 2018, the TRS has not commenced operations. Per Share Data The Company reports earnings per share for the period as (1) basic earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, and (2) diluted earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, including common stock equivalents. As of December 31, 2018 and December 31, 2017, there were no material common stock equivalents that would have a dilutive effect on earnings (loss) per share for common stockholders. The Company retroactively adjusted the number of common shares outstanding in accordance with ASC 260-10, Earnings per Share ("ASC 260-10"). ASC 260-10 requires retroactively adjusting the computations of basic and diluted earnings per share for all periods presented to reflect the change in capital structure, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split. If changes in common stock resulting from stock dividends, stock splits, or reverse stock splits occur after the close of the period but before the consolidated financial statements are issued or are available to be issued, the per-share computations for those and any prior-period consolidated financial statements presented shall be based on the new number of shares. Segment Information ASC Topic 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity’s reportable segments. The Company internally evaluates all of the properties and interests therein as one reportable segment. Unaudited Data Any references to the number of buildings, square footage, number of leases, occupancy, and any amounts derived from these values in the notes to the consolidated financial statements are unaudited and outside the scope of the Company's independent registered public accounting firm's audit of its consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU No. 2016-02"). ASU No. 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 will direct how the Company accounts for payments from the elements of leases that are generally fixed and determinable at the inception of the lease (“Fixed Lease Payments”) while ASU No. 2014-09 (defined below) will direct how the Company accounts for the non-lease components of lease contracts, primarily expense reimbursements (“Non-Lease Payments”) and the accounting for the disposition of real estate facilities. ASU No. 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU No. 2016-02 as of its issuance is permitted. ASU No. 2016-02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Based on the required adoption date of January 1, 2019, the modified retrospective method for ASU No. 2016-02 requires application of the standard to all leases that exist at, or commence after, January 1, 2017 (beginning of the earliest comparative period presented in the 2019 financial statements), with a cumulative adjustment to the opening balance of accumulated earnings (deficit) on January 1, 2017, for the effect of applying the standard at the date of initial application, and restatement of the amounts presented prior to January 1, 2019. The FASB has also issued an amendment to the standard that would provide an entity an optional transition method to initially account for the impact of the adoption of the standard with a cumulative adjustment to accumulated earnings (deficit) on January 1, 2019 (the effective date of ASU No. 2016-02), rather than January 1, 2017, which would eliminate the need to restate amounts presented prior to January 1, 2019. Under ASU No. 2016-02, an entity may elect a practical expedient package, which states that: (1) an entity need not reassess whether any expired or existing contracts are leases or contain leases; (2) an entity need not reassess the lease classification for any expired or existing leases; and (3) an entity need not reassess initial direct costs for any existing leases. These three practical expedients are available as a single election that must be elected as a package and must be consistently applied to all existing leases at the date of adoption. The FASB has also tentatively noted in May 2017 board meeting minutes that lessors that adopt this package of practical expedients are not expected to reassess expired or existing leases at the date of initial application, which is January 1, 2017 under ASU No. 2016-02, or January 1, 2019, if the Company elects the optional transition method. The FASB noted that the transition provisions generally enable entities to “run off” their existing leases for the remainder of the lease term, which would effectively eliminate the need to calculate adjustment to the opening balance of accumulated earnings (deficit). In July 2018, the FASB approved an amendment to the ASU to allow lessors to elect, as a practical expedient, not to allocate the total consideration to lease and non-lease components based on their relative standalone selling prices. The single-lease component practical expedient allows lessors to elect a combined single-lease component presentation if (1) the timing and pattern of transfer of the lease component and the non-lease component(s) associated with it are the same, and (2) the lease component would be classified as an operating lease if it were accounted for separately. Non-lease components that do not meet the criteria of this practical expedient and combined components in which the non-lease component is the predominant component will be accounted for under the new revenue recognition ASU. The Company does not expect that ASU No. 2016-02 will impact the Company's accounting for Fixed Lease Payments because the Company's accounting policy is currently consistent with the provisions of the standard. The Company plans to elect the practical expedient mentioned above, which will treat payments for expense reimbursements that qualify as Non-Lease Payments and meet the criteria above as a single lease component. Under ASU No. 2016-02, reimbursements relating to property taxes and insurances are Fixed Lease Payments as the payments relates to the right to use the leased assets, while reimbursements relating to maintenance activities and common area expense are Non-Lease Payments and would be accounted under ASU No. 2016-02, assuming the Non-Lease Payments meet the criteria above. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 replaces substantially all industry-specific revenue recognition requirements and converges areas under this topic with International Financial Reporting Standards. ASU No. 2014-09 implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. ASU No. 2014-09 also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. Other major provisions in ASU No. 2014-09 include capitalizing and amortizing certain contract costs, ensuring the time value of money is considered in the applicable transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. ASU No. 2014-09 was originally effective for reporting periods beginning after December 31, 2016 (for public entities). On April 1, 2015, the FASB voted to defer the effective date of ASU No. 2014-09 by one year to annual reporting periods beginning after December 15, 2017. On July 9, 2015, the FASB affirmed its proposal to defer the effective date to annual reporting periods beginning after December 15, 2017, although entities may elect to adopt the standard as of the original effective date. The Company adopted the guidance using the modified retrospective approach for the fiscal year beginning January 1, 2018. The impact was minimal upon adoption of the new accounting guidance on its consolidated financial statements relating to the recognition of gains and losses on the sale of real estate assets as the Company’s current accounting for such transactions is consistent with the new guidance’s core principle. Rental income from leasing arrangements is a substantial portion of the Company’s revenue, is specifically excluded from ASU No. 2014-09 and will be governed by the applicable lease codification ASU No. 2016-02. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments clarify how an entity should identify the unit of accounting (i.e., the specified good or service) for the principal versus agent evaluation, and how it should apply the control principle to certain types of arrangements, such as service transactions, by explaining what a principal controls before the specified good or service is transferred to the customer. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements of ASU No. 2014-09 described above. The Company adopted the guidance using the modified retrospective approach for the fiscal year beginning January 1, 2018. The impact was minimal upon adoption of the new accounting guidance on its consolidated financial statements relating to the recognition of reporting revenue gross versus net on its consolidated financial statements as the Company’s current accounting for such transactions is consistent with the new guidance’s core principle. |
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Real Estate | Future Minimum Contractual Rent Payments The future minimum contractual rent payments pursuant to the current lease terms are shown in the table below. The Company's current leases have expirations ranging from 2020 to 2044.
Intangibles The Company allocated a portion of the acquired real estate asset value to in-place lease valuation and tenant origination and absorption cost. The in-place lease was measured against comparable leasing information and the present value of the difference between the contractual, in-place rent and the fair market rent was calculated using, as the discount rate, the capitalization rate utilized to compute the value of the real estate at acquisition. The intangible assets are amortized over the remaining lease terms of the respective properties, which on a weighted-average basis, was approximately 9.3 and 10.3 years as of December 31, 2018 and December 31, 2017, respectively.
The amortization of the intangible assets and other leasing costs for the respective periods is as follows:
The following table sets forth the estimated annual amortization (income) expense for in-place lease valuation, and tenant origination and absorption costs as of December 31, 2018 for the next five years:
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt As of December 31, 2018 and 2017, the Company's debt and related deferred financing costs consisted of the following:
revolving credit facility was LIBOR + 1.50% as of March 31, 2018.
Amended and Restated Credit Agreement On June 28, 2018, the Company, through the Operating Partnership, entered into an amended and restated credit agreement (the "Amended and Restated Credit Agreement") related to a revolving credit facility and a term loan (collectively, the "Unsecured Credit Facility") with a syndicate of lenders, under which KeyBank, National Association ("KeyBank") serves as administrative agent, and various notes related thereto. In addition, the Company entered into a guaranty agreement. Pursuant to the Amended and Restated Credit Agreement, the Company was provided with a revolving credit facility (the "Revolving Credit Facility") in an initial commitment amount of up to $550.0 million and a term loan (the "Term Loan") in an initial commitment amount of up to $200.0 million, which commitments may be increased under certain circumstances up to a maximum total commitment of $1.25 billion. Any increase in the total commitment will be allocated to the Revolving Credit Facility and/or the Term Loan in such amounts as the Operating Partnership and KeyBank may determine.The Revolving Credit Facility may be prepaid and terminated, in whole or in part, at any time without fees or penalty. The Revolving Credit Facility has an initial term of four years, maturing on June 28, 2022. The Revolving Credit Facility may be extended for a one-year period if certain conditions are met and the Operating Partnership pays an extension fee. Payments under the Revolving Credit Facility are interest only and are due on the first day of each quarter. Amounts borrowed under the Revolving Credit Facility may be repaid and reborrowed, subject to the terms of the Amended and Restated Credit Agreement. The Term Loan has an initial term of five years, maturing on June 28, 2023. Payments under the Term Loan are interest only and are due on the first day of each quarter. Amounts borrowed under the Term Loan may not be repaid and reborrowed. The Unsecured Credit Facility has an interest rate calculated based on LIBOR plus the applicable LIBOR margin, as provided in the Amended and Restated Credit Agreement, or the Base Rate plus the applicable base rate margin, as provided in the agreement. The applicable LIBOR margin and base rate margin are dependent on the consolidated leverage ratio of the Operating Partnership, the Company, and the Company's subsidiaries, as disclosed in the periodic compliance certificate provided to the administrative agent each quarter. If the Operating Partnership obtains an investment grade rating of its senior unsecured long term debt from Standard & Poor's Rating Services or Moody's Investors Service, Inc., the applicable LIBOR margin and base rate margin will be dependent on such rating. The Amended and Restated Credit Agreement relating to the Revolving Credit Facility provides that the Operating Partnership must maintain a pool of real properties (each a "Pool Property" and collectively the "Pool Properties") that meet certain requirements contained in the Amended and Restated Credit Agreement. The agreement sets forth certain covenants relating to the Pool Properties, including, without limitation, the following: • there must be no less than 15 Pool Properties; • no greater than 15% of the aggregate pool value may be contributed by a single Pool Property or tenant; • no greater than 15% of the aggregate pool value may be contributed by Pool Properties subject to ground leases; • no greater than 20% of the aggregate pool value may be contributed by Pool Properties which are under development; • the minimum aggregate leasing percentage of all Pool Properties must be no less than 90%; and • other limitations as determined by KeyBank upon further due diligence of the Pool Properties. Borrowing availability under the Amended and Restated Credit Agreement is limited to the lesser of (i) an asset pool leverage ratio of no greater than 60%, or (ii) an asset pool debt service coverage ratio of no less than 1.35:1.00. As of December 31, 2018, the remaining capacity pursuant to the Unsecured Credit Facility was $221.1 million. Bank of America and KeyBank Loan On April 27, 2018, the Company, through four SPEs that own the respective four properties noted below and are owned by the Company's Operating Partnership, entered into a loan agreement (the "Loan Agreement”) with Bank of America, N.A. and KeyBank (together with their successors and assigns, collectively, the "Lender") in which the Company borrowed $250.0 million (the "BofA/KeyBank Loan"). The Company utilized approximately $249.8 million of the proceeds provided by the BofA/KeyBank Loan to pay down a portion of the Company's Revolving Credit Facility. In connection with this pay down of the Company's Revolving Credit Facility, KeyBank released four of the special purpose entities owned by the Company's Operating Partnership from their obligations as guarantors under the Revolving Credit Facility. The BofA/KeyBank Loan is secured by cross-collateralized and cross-defaulted first mortgage liens on the properties with the following tenants: 3M Company, Amazon.com.dedc LLC, Southern Company Services, Inc. and IGT (each, a "Secured Property"). In connection with this transaction, the Company entered into a nonrecourse carve-out guaranty agreement. In addition to their first mortgage lien, the Lender also has a security interest in all other property relating to the ownership, use, maintenance or operation of the improvements on each Secured Property and all rents, profits and revenues from each Secured Property. The BofA/KeyBank Loan has a term of 10 years, maturing on May 1, 2028. The BofA/KeyBank Loan bears interest at an annual rate of 4.32%. Commencing on June 1, 2020, the BofA/KeyBank Loan may be prepaid but only if such prepayment is made in full (with certain exceptions), subject to certain conditions set forth in the Loan Agreement, including 30 days' prior notice to the Lender and payment of a prepayment premium in addition to all unpaid principal and accrued interest to the date of such prepayment. Commencing on November 1, 2027, the BofA/KeyBank Loan may be prepaid in whole or in part, subject to satisfaction of certain conditions, including 30 days' prior notice to the Lender, without payment of any prepayment premium. As of December 31, 2018, there was approximately $250.0 million outstanding pursuant to the BofA/KeyBank Loan. AIG Loan On October 22, 2015, six SPEs that are wholly-owned by the Operating Partnership entered into promissory notes with The Variable Annuity Life Insurance Company, American General Life Insurance Company, and the United States Life Insurance Company (collectively, the "Lenders"), pursuant to which the Lenders provided such SPEs with a loan in the aggregate amount of approximately $127.0 million (the "AIG Loan"). The AIG Loan has a term of 10 years, maturing on November 1, 2025. The AIG Loan bears interest at a rate of 4.15%. The AIG Loan requires monthly payments of interest only for the first five years and fixed monthly payments of principal and interest thereafter. The AIG Loan is secured by cross-collateralized and cross-defaulted first lien deeds of trust and second lien deeds of trust on certain properties. Commencing October 31, 2017, each of the individual promissory notes comprising the AIG Loan may be prepaid but only if such prepayment is made in full, subject to 30 days' prior notice to the holder and payment of a prepayment premium in addition to all unpaid principal and accrued interest to the date of such prepayment. As of December 31, 2018, there was approximately $127.0 million outstanding pursuant to the AIG Loan. Debt Covenant Compliance Pursuant to the terms of the Unsecured Credit Facility, BofA/KeyBank Loan and AIG Loan, the Company is subject to certain loan compliance covenants. The Company was in compliance with all applicable covenants as of December 31, 2018. The following summarizes the future principal repayments of all loans as of December 31, 2018 per the loan terms discussed above:
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Interest Rate Contracts |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Contracts | Interest Rate Contracts Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of debt funding and the use of derivative financial instruments. Specifically, the Company entered into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by expected cash payments principally related to borrowings and interest rates. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not use derivatives for trading or speculative purposes. Derivative Instruments The Company entered into an interest rate swap agreement to hedge the variable cash flows associated with the LIBOR-based variable-rate debt on the Company's Revolving Credit Facility. The interest rate swap was effective for the period from April 1, 2016 to December 12, 2018 with a notional amount of $100.0 million. Effective as of November 1, 2017, the GCEAR Operating Partnership novated one of its $100.0 million swaps to the Operating Partnership, as a result of the repayment of debt. The terms of the cash flow swap are listed in the table below. On April 30, 2018, the Company settled the $100.0 million cash flow hedge contract purchased from the GCEAR Operating Partnership, which resulted in the Company receiving a net settlement of approximately $0.1 million. The change in the fair value of derivatives designated and qualifying as cash flow hedges is initially recorded in accumulated other comprehensive income ("AOCI") and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. As of December 31, 2018, all of the Company's interest rate swap agreements have matured. The following table sets forth a summary of the interest rate swaps at December 31, 2018 and December 31, 2017:
The following table sets forth the impact of the interest rate swaps on the consolidated financial statements for the periods presented:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The Company is required to disclose fair value information about all financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practicable to estimate fair value. The Company measures and discloses the estimated fair value of financial assets and liabilities utilizing a fair value hierarchy that distinguishes between data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. This hierarchy consists of three broad levels, as follows: (i) quoted prices in active markets for identical assets or liabilities; (ii) "significant other observable inputs;" and (iii) "significant unobservable inputs." "Significant other observable inputs" can include quoted prices for similar assets or liabilities in active markets, as well as inputs that are observable for the asset or liability, such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. "Significant unobservable inputs" are typically based on an entity’s own assumptions, since there is little, if any, related market activity. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers between the levels in the fair value hierarchy during the year ended December 31, 2018. The following tables set forth the assets/(liabilities) that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2018 and 2017:
Financial instruments as of December 31, 2018 consisted of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, other accrued expenses, and borrowings. With the exception of the mortgage loan in the table below, the amounts of the financial instruments presented in the consolidated financial statements substantially approximate their fair value as of December 31, 2018. The fair value of the mortgage loan is estimated by discounting the loan’s principal balance over the remaining term of the mortgage using current borrowing rates available to the Company for debt instruments with similar terms and maturities. The Company determined that the mortgage loan valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt, and there were no transfers into and out of fair value measurement levels during the years ended December 31, 2018 and 2017.
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Accrued Expenses and Other Liabilities |
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Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following as of December 31, 2018 and 2017:
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Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Status of Offerings On January 20, 2017, the Company closed the primary portion of the IPO; however, the Company continued to offer shares pursuant to the DRP under the IPO registration statement through May 2017. On September 20, 2017, the Company commenced the Follow-On Offering of up to $2.2 billion of shares, consisting of up to $2.0 billion of shares in the Company's primary offering and $0.2 billion of shares pursuant to the DRP. The Company reclassified all Class T and Class I shares sold in the IPO as "Class AA" and "Class AAA" shares, respectively. The Company offered Class T shares, Class S shares, Class D shares and Class I shares in the primary portion of the Follow-On Offering and all seven of its share classes pursuant to the DRP. On August 16, 2018, the Company’s Board approved the temporary suspension of the primary portion of the Company's Follow-On Offering, effective August 17, 2018, to allow the special committee of the board to evaluate a potential strategic alternative. On December 12, 2018, in connection with the Merger Agreement, the Board of the Company approved the temporary suspension of the DRP and SRP. Redemptions submitted for the fourth quarter of 2018 were honored in accordance with the terms of the SRP, and the SRP was officially suspended as of January 19, 2019. The DRP officially was suspended as of December 30, 2018. Beginning in January 2019, all distributions by the Company were paid in cash. The DRP and SRP shall remain suspended until such time, if any, as the Board of the Company may approve the resumption of the DRP and SRP. Share Classes Class T shares, Class S shares, Class D shares, Class I shares, Class A shares, Class AA shares and Class AAA shares vote together as a single class, and each share is entitled to one vote on each matter submitted to a vote at a meeting of the Company's stockholders; provided that with respect to any matter that would only have a material adverse effect on the rights of a particular class of common stock, only the holders of such affected class are entitled to vote. The following table summarizes shares issued and gross proceeds received for each share class as of December 31, 2018 and outstanding shares as of December 31, 2018 and 2017:
Organizational and Offering Costs Pursuant to the Advisory Agreement, in no event will the Company be obligated to reimburse the Advisor for organizational and offering costs incurred in connection with the Follow-On Offering totaling in excess of 15.0% (including selling commissions, dealer manager fees, distribution fees and non-accountable due diligence expense allowance but excluding acquisition expenses or any fees, if ever applicable) of the gross proceeds raised in the Follow-On Offering (excluding gross proceeds from the DRP). If the organizational and offering costs exceed such limits discussed above, within 60 days after the end of the month in which the Follow-On Offering terminates or is completed, the Advisor is obligated to reimburse the Company for any excess amounts. As long as the Company is subject to the Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association (“NASAA REIT Guidelines”), such limitation discussed above will also apply to any future public offerings. As of December 31, 2018, organizational and offering costs relating to the Follow-On Offering were 35.2% (approximately $3.5 million) of gross offering proceeds ($10.0 million), including selling commissions, dealer manager fees and distribution fees. Therefore, if the Follow-On Offering had been terminated on December 31, 2018, the Company would owe the Advisor $1.5 million and the Advisor would be liable for organizational and offering costs incurred by the Company of approximately $2.0 million. Approximately $0.8 million of organizational and offering costs the Advisor is liable for as of December 31, 2018 is deducted from "Due to Affiliates" and the remaining $1.2 million is included in "Due from Affiliates" on the consolidated balance sheet. Organizational and offering costs incurred as of December 31, 2018, including those incurred by the Company and due to the Advisor, for the Follow-On Offering are as follows:
Distribution Reinvestment Plan (DRP) The Company has adopted the DRP, which allows stockholders to have dividends and other distributions otherwise distributable to them invested in additional shares of common stock of the same class. No selling commissions, dealer manager fees or stockholder servicing fees are paid on shares sold through the DRP, but the DRP shares will be charged the applicable distribution fee payable with respect to all shares of the applicable class. The purchase price per share under DRP is equal to the NAV per share applicable to the class of shares purchased, calculated as of the distribution date. The Company may amend or terminate the DRP for any reason at any time upon 10 days' prior written notice to stockholders, which may be provided through the Company's filings with the SEC. On December 12, 2018, in connection with the Merger Agreement, the Board of the Company approved the temporary suspension of the DRP. The DRP officially was suspended as of December 30, 2018, and shall remain suspended until such time, if any, as the Board of the Company may approve the resumption of the DRP. IPO Share Redemption Program The Company had a share redemption program for holders of Class A, Class AA, and Class AAA shares ("IPO Shares") who held their shares for less than four years, which enabled IPO stockholders to sell their shares back to the Company in limited circumstances ("IPO Share Redemption Program"). On June 4, 2018, the Board of the Company approved the termination of the IPO Share Redemption Program effective as of July 5, 2018. In addition, effective as of such date, the Board amended and restated the SRP in order to allow stockholders of the IPO Shares to utilize the SRP. Accordingly, beginning in July 2018, stockholders of IPO Shares are able to continue to redeem at 100% of the NAV of the applicable share class, subject to the other limitations and conditions of the amended and restated SRP, as noted below. During the years ended December 31, 2018 and 2017, the Company redeemed shares of its outstanding common stock under the IPO Share Redemption Program as follows:
During the year ended December 31, 2017, the Company redeemed 623,499 shares of common stock under the IPO Share Redemption Program for approximately $5.7 million at a weighted average price per share of $9.21. During the year ended December 31, 2018, the Company redeemed 1,306,834 shares of common stock under the IPO Share Redemption Program for approximately $12.2 million at a weighted average price per share of $9.36. Since inception, the Company has honored all redemption requests related to the IPO Share Redemption Program and has redeemed a total of 2,097,775 shares of common stock for approximately $19.6 million at a weighted average price per share of $9.34 under this program. The Company has funded all redemptions using proceeds from the sale of IPO Shares pursuant to the DRP. Share Redemption Program In connection with the Follow-On Offering, the Company’s Board adopted the SRP for the New Shares (and IPO Shares that have been held for four years or longer). As noted above, subsequently, on June 4, 2018, the Board amended and restated the SRP to allow stockholders of the IPO Shares to utilize the SRP, effective as of July 5, 2018. On December 12, 2018, in connection with the Merger Agreement, the Board of the Company approved the temporary suspension of the SRP. The SRP officially was suspended as of December 30, 2018, and shall remain suspended until such time, if any, as the Board of the Company may approve the resumption of the SRP. Under the SRP, the Company will redeem shares as of the last business day of each quarter. The redemption price will be equal to the NAV per share for the applicable class generally on the 13th of the month prior to quarter end. Redemption requests must be received by 4:00 p.m. (Eastern time) on the second to last business day of the applicable quarter. Redemption requests exceeding the quarterly cap will be filled on a pro rata basis. With respect to any pro rata treatment, redemption requests following the death or qualifying disability of a stockholder will be considered first, as a group, followed by requests where pro rata redemption would result in a stockholder owning less than the minimum balance of $2,500 of shares of the Company's common stock, which will be redeemed in full to the extent there are available funds, with any remaining available funds allocated pro rata among all other redemption requests. All unsatisfied redemption requests must be resubmitted after the start of the next quarter, or upon the recommencement of the SRP, as applicable. There are several restrictions under the SRP. Stockholders generally have to hold their shares for one year before submitting their shares for redemption under the program; however, the Company will waive the one-year holding period in the event of the death or qualifying disability of a stockholder. Shares issued pursuant to the DRP are not subject to the one-year holding period. In addition, the SRP generally imposes a quarterly cap on aggregate redemptions of the Company's shares equal to a value of up to 5% of the aggregate NAV of the outstanding shares as of the last business day of the previous quarter. As the value on the aggregate redemptions of the Company's shares is outside the Company's control, the 5% quarterly cap is considered to be temporary equity and is presented as common stock subject to redemption on the accompanying consolidated balance sheets. As of December 31, 2018, the quarterly cap was approximately $37.4 million and $4.9 million of common stock was reclassified from common stock to accrued expenses and other liabilities on the consolidated balance sheet as of December 31, 2018. During the years ended December 31, 2018 and 2017, the Company redeemed shares of its outstanding common stock under the SRP as follows:
Since inception, the Company has honored all redemption requests related to the SRP and has redeemed a total of 1,199,464 shares of common stock for approximately $11.5 million at a weighted average price per share of $9.62 under this program. The Company’s Board has the right to modify or suspend the SRP upon 30 days' notice at any time if it deems such action to be in the Company’s best interest. Any such modification or suspension will be communicated to stockholders through the Company’s filings with the SEC. On December 12, 2018, the Company’s Board temporarily suspended the SRP, effective as of January 19, 2019. Share-Based Compensation The Company’s Board adopted an Employee and Director Long-Term Incentive Plan (the “Plan”), which provides for the grant of awards to the Company's directors and full-time employees (should the Company ever have employees), directors and full-time employees of the Advisor and affiliate entities that provide services to the Company, and certain consultants that provide services to the Company, the Advisor, or affiliate entities. Awards granted under the Plan may consist of stock options, restricted stock, stock appreciation rights, distribution equivalent rights and other equity-based awards. The stock-based payment will be measured at fair value and recognized as compensation expense over the vesting period. The term of the Plan is ten years and the total number of shares of common stock reserved for issuance under the Plan will be equal to 10% of the outstanding shares of stock at any time, not to exceed 10,000,000 shares in the aggregate. As of December 31, 2018, approximately 7,752,597 shares were available for future issuance under the Plan. Distributions Earnings and profits, which determine the taxability of distributions to stockholders, may differ from income reported for financial reporting purposes due to the differences for federal income tax purposes in the treatment of loss on debt, revenue recognition and compensation expense and in the basis of depreciable assets and estimated useful lives used to compute depreciation expense. The following unaudited table summarizes the federal income tax treatment for all distributions per share for the years ended December 31, 2018, 2017 and 2016 reported for federal tax purposes and serves as a designation of capital gain distributions, if applicable, pursuant to Section 857(b)(3)(c) of the Code and Treasury Regulation § 1.857-6(e).
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Noncontrolling Interests |
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Noncontrolling Interest | Noncontrolling Interests Noncontrolling interests represent limited partnership interests in the Operating Partnership, of which the Company is the general partner. The Operating Partnership issued 20,000 Class A limited partnership units for $10.00 per unit on February 11, 2014 to the Advisor in exchange for the initial capitalization of the Operating Partnership. On February 16, 2018, as elected by the Advisor, the Company issued 123,779 Operating Partnership units for $9.57 per unit to the Advisor for the 50.0% of the 2017 performance distribution allocation that the Advisor elected to receive in Class I limited partnership units. The remaining balance was paid in cash. As of December 31, 2018, noncontrolling interests were approximately 0.19% of total shares outstanding and 0.16% of weighted average shares outstanding (both measures assuming limited partnership units were converted to common stock). The Company evaluates individual noncontrolling interests for the ability to recognize the noncontrolling interest as permanent equity on the consolidated balance sheets at the time such interests are issued and on a continual basis. Any noncontrolling interest that fails to qualify as permanent equity will be reclassified as temporary equity and adjusted to the greater of (a) the carrying amount or (b) its redemption value as of the end of the period in which the determination is made. The limited partners of the Operating Partnership will have the right to cause the Operating Partnership to redeem their limited partnership units for cash equal to the value of an equivalent number of shares, or, at the Company’s option, the Company may purchase such limited partners' limited partnership units by issuing one share of common stock for each limited partnership unit redeemed. These rights may not be exercised under certain circumstances which could cause the Company to lose its REIT election. Furthermore, limited partners may exercise their redemption rights only after their limited partnership units have been outstanding for one year. The limited partnership units are reported on the consolidated balance sheets as noncontrolling interests. The following summarizes the activity for noncontrolling interests for the years ended December 31, 2018, 2017 and 2016:
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Related Party Transactions |
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Related Party Transactions | Related Party Transactions Summarized below are the related-party costs incurred by the Company for the years ended December 31, 2018, 2017 and 2016, respectively, and amounts payable as of December 31, 2018 and 2017:
On September 20, 2017, an affiliated entity of the Company purchased 264 Class T shares, 264 Class S shares, 264 Class D shares, and 263,200 Class I shares in the Follow-On Offering for $2.5 million. As of December 31, 2018, the total outstanding shares owned by affiliates (including DRP) was 279 Class T shares, 279 Class S shares, 282 Class D shares, 281,789 Class I shares, and 286,192 Class A shares. Advisory Agreement In connection with the Follow-On Offering, on September 20, 2017, the Company entered into the Advisory Agreement with the Advisor and the Operating Partnership. The Advisory Agreement is substantially similar to the Original Advisory Agreement, except that the Company will not pay the Advisor any acquisition, financing or other similar fees from proceeds raised in the Follow-On Offering in connection with making investments and will instead pay the Advisor an advisory fee that will be payable in arrears on a monthly basis and accrues daily in an amount equal to 1/365th of 1.25% of the NAV for each class of common stock for each day. Performance Distribution So long as the Advisory Agreement has not been terminated (including by means of non-renewal), the Advisor will hold a special limited partnership interest in the Operating Partnership that entitles it to receive a distribution from the Operating Partnership equal to 12.5% of the total return, subject to a 5.5% hurdle amount and a high water mark, with a catch-up (terms of the performance distribution allocation are included in the Company's 2017 Annual Report on Form 10-K filed on March 9, 2018). Such distribution will be made annually and accrue daily. On February 16, 2018, the Company paid in cash approximately $1.2 million and issued approximately $1.2 million in Class I limited partnership units to the Advisor. The Advisor elected to receive 50% in cash and the remaining in Class I limited partnership units. Operating Expenses The Advisor and its affiliates are entitled to reimbursement for certain expenses incurred on behalf of the Company in connection with providing administrative services, including related personnel costs; provided, however, the Advisor must reimburse the Company for the amount, if any, by which total operating expenses (as defined), including advisory fees, paid during the previous 12 months then ended exceeded the greater of: (i) 2% of the Company’s average invested assets for that 12 months then ended; or (ii) 25% of the Company’s net income, before any additions to reserves for depreciation, bad debts or other expenses connected with the acquisition and disposition of real estate interests and before any gain from the sale of the Company’s assets, for that fiscal year, unless the Company’s Board has determined that such excess expenses were justified based on unusual and non-recurring factors. The Advisor may waive or defer all or a portion of these reimbursements or elect to receive Class I shares or Class I units of the Operating Partnership in lieu of these reimbursements at any time and from time to time, in its sole discretion. For the years ended December 31, 2018 and 2017, the Company’s total operating expenses did not exceed the 2%/25% guideline. The Company reimbursed the Advisor and its affiliates a portion of the compensation paid by the Advisor and its affiliates for the Company's principal financial officer, Javier F. Bitar, executive vice president, David C. Rupert, and vice president and secretary, Howard S. Hirsch of approximately $0.8 million and $0.7 million, which is partially included in offering costs with the remaining amount included in corporate operating expenses to affiliates for the years ended December 31, 2018 and 2017, respectively, for services provided to the Company, for which the Company does not pay the Advisor a fee. In addition, the Company incurred approximately $0.1 million and $0.2 million in reimbursable expenses to the Advisor for services provided to the Company by certain of its other executive officers for the years ended December 31, 2018 and 2017, respectively. The reimbursable expenses include components of salaries, bonuses, benefits and other overhead charges and are based on the percentage of time each executive officer spends on the Company's affairs. Dealer Manager Agreement The Company entered into a dealer manager agreement and associated form of participating dealer agreement (the "Dealer Manager Agreement") with the Dealer Manager. Pursuant to the Dealer Manager Agreement, the Company will pay to the Dealer Manager selling commissions of up to 3.0% of the total purchase price for each sale of Class T shares and selling commissions of up to 3.5% of the total purchase price for each sale of Class S shares. The Company will not pay to the Dealer Manager any selling commissions in respect of the purchase of any Class D shares, Class I shares or DRP shares. The Company also will pay to the Dealer Manager dealer manager fees of up to 0.5% of the total purchase price for each sale of Class T shares. The Company will not pay to the Dealer Manager any dealer manager fees in respect of the purchase of any Class S shares, Class D shares, Class I shares or DRP shares. Substantially all of the selling commissions and dealer manager fees may be reallowed by the Dealer Manager to the participating broker-dealers who sold the shares giving rise to such selling commissions and dealer manager fees. Distribution Fees Subject to Financial Industry Regulatory Authority, Inc.'s limitations on underwriting compensation, under the Dealer Manager Agreement the Company will pay the Dealer Manager a distribution fee for ongoing services rendered to stockholders by participating broker-dealers or broker-dealers servicing investors’ accounts, referred to as servicing broker-dealers. The fee accrues daily and is paid monthly in arrears and is calculated based on the average daily NAV for the applicable month (the “Average NAV”). The distribution fees for the different share classes are as follows: (i) with respect to the outstanding Class T shares equal to 1/365th of 1.0% of the Average NAV of the outstanding Class T shares for each day, consisting of an advisor distribution fee of 1/365th of 0.75% and a dealer distribution fee of 1/365th of 0.25% of the Average NAV of the Class T shares for each day; (ii) with respect to the outstanding Class S shares equal to 1/365th of 1.0% of the Average NAV of the outstanding Class S shares for each day; and (iii) with respect to the outstanding Class D shares equal to 1/365th of 0.25% of the Average NAV of the outstanding Class D shares for each day. The Company will not pay a distribution fee with respect to the outstanding Class I shares. The distribution fees will accrue daily and be paid monthly in arrears. The Dealer Manager will reallow the distribution fees to participating broker-dealers and servicing broker-dealers for ongoing services performed by such broker-dealers, and will retain any such distribution fees to the extent a broker-dealer is not eligible to receive them for failure to provide such services. The Dealer Manager will waive the distribution fees for any purchases by affiliates of the Company. The Company will cease paying the distribution fee with respect to any Class T share, Class S share or Class D share held in a stockholder's account at the end of the month in which the Dealer Manager in conjunction with the transfer agent determines that total selling commissions, dealer manager fees and distribution fees paid with respect to all shares from the Follow-On Offering held by such stockholder within such account would exceed, in the aggregate, 9.0% (or a lower limit as set forth in any applicable agreement between the Dealer Manager and a participating broker-dealer) of the gross proceeds from the sale of such shares (including the gross proceeds of any shares issued under the DRP with respect thereto). At the end of such month, such Class T share, Class S share or Class D share (and any shares issued under the DRP with respect thereto) will convert into a number of Class I shares (including any fractional shares) with an equivalent NAV as such share. In addition, the Company will cease paying the distribution fee on the Class T shares, Class S shares and Class D shares on the earlier to occur of the following: (i) a listing of the Company's shares; (ii) a merger or consolidation with or into another entity, or the sale or other disposition of all or substantially all of the Company's assets, including any liquidation of the Company; or (iii) the date following the completion of the primary portion of the Follow-On Offering on which, in the aggregate, underwriting compensation from all sources in connection with the Follow-On Offering, including selling commissions, dealer manager fees, the distribution fee and other underwriting compensation, is equal to 9.0% of the gross proceeds from the Company's primary offering. Property Management Agreement In the event that the Company contracts directly with non-affiliated third party property managers with respect to its individual properties, the Company pays the Property Manager an oversight fee equal to 1.0% of the gross revenues of the property managed, plus reimbursable costs as applicable. Reimbursable costs and expenses include wages and salaries and other expenses of employees engaged in operating, managing and maintaining the Company's properties, as well as certain allocations of office, administrative, and supply costs. The Property Manager may waive or defer all or a portion of these reimbursements or elect to receive Class I shares or Class I units of the Operating Partnership in lieu of these reimbursements at any time and from time to time, in its sole discretion. In the event that the Company contracts directly with the Property Manager with respect to a particular property, the Company pays the Property Manager aggregate property management fees of up to 3.0%, or greater if the lease so allows, of gross revenues received for management of the Company's properties, plus reimbursable costs as applicable. These property management fees may be paid or re-allowed to third party property managers if the Property Manager contracts with a third party. In no event will the Company pay both a property management fee to the Property Manager and an oversight fee to the Property Manager with respect to a particular property. In addition, the Company may pay the Property Manager or its designees a leasing fee in an amount equal to the fee customarily charged by others rendering similar services in the same geographic area. The Company may also pay the Property Manager or its designees a construction management fee for planning and coordinating the construction of any tenant directed improvements for which the Company is responsible to perform pursuant to lease concessions, including tenant-paid finish-out or improvements. The Property Manager shall also be entitled to a construction management fee of 5.0% of the cost of improvements. In the event that the Property Manager assists with the development or redevelopment of a property, the Company may pay a separate market-based fee for such services. Conflicts of Interest The Sponsor, Advisor, Property Manager and their officers and certain of their key personnel and their respective affiliates currently serve as key personnel, advisors and managers to GCEAR. Certain of the Company's officers are also officers to some or all of 12 other programs affiliated with the Company's former sponsor, including, Griffin-American Healthcare REIT III, Inc. ("GAHR III"), Phillips Edison Grocery Center REIT III, Inc. ("PECO III"), and Griffin-American Healthcare REIT IV, Inc. ("GAHR IV"), all of which are publicly-registered, non-traded real estate investment trusts, and Griffin Institutional Access Real Estate Fund ("GIA Real Estate Fund"), and Griffin Institutional Access Credit Fund ("GIA Credit Fund"), both of which are non-diversified, closed-end management investment companies that are operated as interval funds under the Investment Company Act of 1940, as amended (the "1940 Act"). Because these persons have competing demands on their time and resources, they may have conflicts of interest in allocating their time between the Company’s business and these other activities. Some of the material conflicts that the Advisor or its affiliates will face are: (1) competing demand for time of the Advisor’s executive officers and other key personnel from the Sponsor and other affiliated entities; (2) determining if certain investment opportunities should be recommended to the Company or GCEAR; and (3) influence of the fee structure under the Advisory Agreement and distribution structure of the operating partnership agreement that could result in actions not necessarily in the long-term best interest of the Company's stockholders. The Board has adopted the Sponsor’s acquisition allocation policy as to the allocation of acquisition opportunities among GCEAR and the Company, which is as follows: The Sponsor will allocate potential investment opportunities to the Company and GCEAR based on the following factors:
In the event all acquisition allocation factors have been exhausted and an investment opportunity remains equally suitable for the Company and GCEAR, the Sponsor will offer the investment opportunity to the REIT that has had the longest period of time elapse since it was offered an investment opportunity. Economic Dependency The Company will be dependent on the Advisor and the Dealer Manager for certain services that are essential to the Company, including the sale of the Company's shares of common stock available for issue, the identification, evaluation, negotiation, purchase and disposition of properties and other investments, management of the daily operations of the Company’s real estate portfolio, and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other resources. |
Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. Proposed Merger with GCEAR On December 14, 2018, the Company, the Operating Partnership, Merger Sub, GCEAR, and the GCEAR Operating Partnership, entered into the Merger Agreement. Subject to the terms and conditions of the Merger Agreement, (i) GCEAR will merge with and into Merger Sub, with Merger Sub surviving as a direct, wholly owned subsidiary of the Company (the “Company Merger”) and (ii) the Operating Partnership will merge with and into the GCEAR Operating Partnership (the “Partnership Merger” and, together with the Company Merger, the “Mergers”), with the GCEAR Operating Partnership surviving the Partnership Merger. At such time, (x) in accordance with the applicable provisions of the MGCL, the separate existence of GCEAR shall cease and (y) in accordance with the Delaware Revised Uniform Limited Partnership Act, the separate existence of the Operating Partnership shall cease. At the effective time of the Company Merger, each issued and outstanding share of GCEAR’s common stock (or fraction thereof), $0.001 par value per share (the “GCEAR Common Stock”), will be converted into the right to receive 1.04807 shares of the Company’s newly created Class E common stock, $0.001 par value per share (the “Class E Common Stock”), and each issued and outstanding share of GCEAR’s Series A cumulative perpetual convertible preferred stock will be converted into the right to receive one share of the Company’s newly created Series A cumulative perpetual convertible preferred stock. At the effective time of the Partnership Merger, each GCEAR Operating Partnership unit (“OP Units”) outstanding immediately prior to the effective time of the Partnership Merger will convert into the right to receive 1.04807 Class E OP Units in the surviving partnership and each Operating Partnership unit outstanding immediately prior to the effective time of the Partnership Merger will convert into the right to receive one OP Unit of like class in the surviving partnership. The special limited partnership interest of the Operating Partnership will be automatically redeemed, canceled and retired as described in the Merger Agreement. The Merger Agreement provides certain termination rights for the Company and GCEAR. In connection with the termination of the Merger Agreement, under certain specified circumstances, GCEAR may be required to pay the Company a termination fee of $52.2 million and the Company may be required to pay GCEAR a termination fee of $52.2 million. The Mergers will be accounted for by using the business combination accounting rules, which requires the application of a screen test to evaluate if substantially all the fair value of the acquired properties is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction is accounted for as an asset acquisition or business combination. In addition, the rules require the identification of the acquirer, the determination of the acquisition date, and the recognition and measurement, at fair value, of the identifiable assets acquired, liabilities assumed and any noncontrolling interest in the consolidated subsidiaries of the acquiree. After consideration of all applicable factors pursuant to the business combination accounting rules, the Mergers are expected to be treated as an asset acquisition under GAAP. As of December 31, 2018, the Company has incurred expenses (as the Company is the acquiree) of $1.9 million in costs related to the Mergers. |
Declaration of Distributions |
12 Months Ended |
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Dec. 31, 2018 | |
Declaration of Distributions [Abstract] | |
Declaration of Distributions | Declaration of Distributions The Company paid cash distributions in the amount of $0.00150684932 per day, before adjustments of class-specific expenses, per Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share and Class AAA share on the outstanding shares of common stock payable to stockholders of record at the close of business on each day during the period from October 1, 2018 through December 31, 2018. Such distributions payable to each stockholder of record were paid on such date after the end of each month during the period as determined by the Company's Chief Executive Officer. On December 12, 2018, the Company’s Board declared cash distributions in the amount of $0.00150684932 per day, subject to adjustments for class-specific expenses, per Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share, and Class AAA share on the outstanding shares of common stock payable to stockholders of record at the close of business on each day during the period January 1, 2019 through the earlier of March 31, 2019 or the date of consummation of the Company Merger. Such distributions payable to each stockholder of record will be paid on such date after the end of each month during the period as determined by the Company's Chief Executive Officer. |
Selected Quarterly Financial Data (unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (Unaudited) Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2018 and 2017:
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Subsequent Events |
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Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Status of the Offering As of March 11, 2019, the Company had issued 6,689,813 and 1,030,404 shares of the Company’s common stock pursuant to the DRP and Follow-On Offering, respectively, for approximately $63.5 million and $10.0 million, respectively. Declaration of Distributions On March 13, 2019, the Company’s Board declared cash distributions in the amount of $0.00150684932 per day, subject to adjustments for class-specific expenses, per Class T share, Class S share, Class D share, Class I share, Class A share, Class AA share, and Class AAA on the outstanding shares of common stock payable to stockholders of record at the close of business on each day during the period commencing on April 1, 2019 and ending on the earlier of (a) June 30, 2019 or (b) the date of the closing of the mergers. Such distributions payable to each stockholder of record will be paid on such date after the end of each month during the period as determined by the Company's Chief Executive Officer. DRP On February 15, 2019, the Company's board of directors determined it was in the best interests of the Company to reinstate the DRP effective with the February distribution paid on or around March 1, 2019. Issuance of Directors Stock On March 14, 2019, the Company issued 7,000 shares of restricted stock to each of the Company's independent directors upon each of their respective re-elections to the Company’s board of directors. Half of the restricted shares vested upon issuance, and the remaining half will vest upon the first anniversary of the grant date, subject to the independent director’s continued service as a director during such vesting period. |
Schedule III - Real Estate and Accumulated Depreciation |
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SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule III - Real Estate and Accumulated Depreciation |
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2018 | |||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Leases associated with the acquisition and contribution of certain real estate assets have net minimum rent payment increases during the term of the lease and are recorded to rental revenue on a straight-line basis, commencing as of the contribution or acquisition date. See Note 3, Real Estate, for more details. If a lease provides for contingent rental income, the Company will defer the recognition of contingent rental income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Tenant reimbursement revenue, which is comprised of additional amounts collected from tenants for the recovery of certain operating expenses, including repair and maintenance, property taxes and insurance, and capital expenditures, to the extent allowed pursuant to the lease (collectively, "Recoverable Expenses"), is recognized as revenue when the additional rent is due. Recoverable Expenses to be reimbursed by a tenant are determined based on the Company's estimate of the property's operating expenses for the year, pro rated based on leased square footage of the property, and are collected in equal installments as additional rent from the tenant, pursuant to the terms of the lease. At least quarterly, the Company reconciles the amount of additional rent paid by the tenant during the quarter to the actual amount of the Recoverable Expenses incurred by the Company for the same period. The difference, if any, is either charged or credited to the tenant pursuant to the provisions of the lease. In certain instances, the lease may restrict the amount the Company can recover from the tenant such as a cap on certain or all property operating expenses. |
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Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. |
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Principles of Consolidation | Principles of Consolidation The Company's financial statements, and the financial statements of the Company's Operating Partnership, including its wholly-owned subsidiaries, are consolidated in the accompanying consolidated financial statements. The portion of these entities not wholly-owned by the Company is presented as noncontrolling interests. All significant intercompany accounts and transactions have been eliminated in consolidation |
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents may include cash and short-term investments. Short-term investments are stated at cost, which approximates fair value. There were no cash equivalents, nor were there restrictions on the use of the Company’s cash balance as of December 31, 2018 and 2017. The Company maintains its cash accounts with major financial institutions. The cash balances consist of business checking accounts. These accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 at each institution. The Company has not experienced any losses with respect to cash balances in excess of government provided insurance. Management believes there was no significant concentration of credit risk with respect to these cash balances as of December 31, 2018. |
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Restricted Cash | Restricted Cash In conjunction with acquisitions of certain assets, as required by certain lease provisions or certain lenders in conjunction with an acquisition or debt financing, or credits received by the seller of certain assets, the Company assumed or funded reserves for specific property improvements and deferred maintenance, re-leasing costs, and taxes and insurance, which are included on the consolidated balance sheets as restricted cash. |
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Real Estate Purchase Price Allocation | Real Estate Purchase Price Allocation The Company applies the provisions in ASC 805-10, Business Combinations ("ASC 805-10"), to account for the acquisition of real estate, or real estate related assets, in which a lease, or other contract, is in place representing an active revenue stream, as an asset acquisition (in rare cases, a business combination). In accordance with the provisions of ASC 805-10 (on an asset acquisition), the Company recognizes the assets acquired, the liabilities assumed and any noncontrolling interest in the acquired entity at their relative fair values. The accounting provisions have also established that transaction costs associated with an asset acquisition are capitalized. Acquired in-place leases are valued as above-market or below-market as of the date of acquisition. The valuation is measured based on the present value (using an interest rate, which reflects the risks associated with the leases acquired) of the difference between (a) the contractual amounts to be paid pursuant to the in-place leases and (b) management’s estimate of fair market lease rates for the corresponding in-place leases over a period equal to the remaining non-cancelable term of the lease for above-market leases, taking into consideration below-market extension options for below-market leases. In addition, renewal options are considered and will be included in the valuation of in-place leases if (1) it is likely that the tenant will exercise the option, and (2) the renewal rent is considered to be sufficiently below a fair market rental rate at the time of renewal. The above-market and below-market lease values are capitalized as intangible lease assets or liabilities and amortized as an adjustment to rental income over the remaining terms of the respective leases. The aggregate relative fair value of in-place leases includes direct costs associated with obtaining a new tenant, opportunity costs associated with lost rentals, which are avoided by acquiring an in-place lease, and tenant relationships. Direct costs associated with obtaining a new tenant include commissions, tenant improvements, and other direct costs and are estimated using methods similar to those used in independent appraisals and management’s consideration of current market costs to execute a similar lease. These direct costs are considered intangible lease assets and are included with real estate assets on the consolidated balance sheets. The intangible lease assets are amortized to expense over the remaining terms of the respective leases. The value of opportunity costs is calculated using the contractual amounts to be paid, including real estate taxes, insurance, and other operating expenses, pursuant to the in-place leases over a market lease-up period for a similar lease. Customer relationships are valued based on management’s evaluation of certain characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics management will consider in allocating these values include the nature and extent of the Company’s existing business relationships with tenants, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. These intangibles will be included in intangible lease assets on the consolidated balance sheets and are amortized to expense over the remaining term of the respective leases. The determination of the relative fair values of the assets and liabilities acquired requires the use of significant assumptions about current market rental rates, rental growth rates, discount rates and other variables. |
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Depreciation and Amortization | Depreciation and Amortization The purchase price of real estate acquired and the costs related to development, construction, and property improvements are capitalized. Repairs and maintenance costs include all costs that do not extend the useful life of the real estate asset and are expensed as incurred. The Company considers the period of future benefit of an asset to determine the appropriate useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows:
If a lease is terminated or amended prior to its scheduled expiration, the Company will accelerate the remaining useful life of the unamortized lease-related costs. |
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Impairment of Real Estate and Related Intangible Assets | Impairment of Real Estate and Related Intangible Assets The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of real estate and related intangible assets may not be recoverable, including credit ratings of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by nationally recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring news reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections. When indicators of potential impairment are present that indicate that the carrying amounts of real estate and related intangible assets may not be recoverable, management assesses whether the carrying value of the assets will be recovered through the future undiscounted operating cash flows expected from the use of the assets and the eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the asset, the Company will record an impairment charge to the extent the carrying value exceeds the net present value of the estimated future cash flows of the asset. Projections of expected future undiscounted cash flows require management to estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, discount rates, the number of months it takes to re-lease the property and the number of years the property is held for investment. |
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Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities ASC Topic 815: Derivatives and Hedging ("ASC 815") provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments; (b) how the entity accounts for derivative instruments and related hedged items; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, ASC 815 requires qualitative disclosures regarding the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by ASC 815, the Company recorded all derivatives on the consolidated balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, and whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. See Note 5, Interest Rate Contracts. |
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Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code") for the year ended December 31, 2015. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to currently distribute at least 90% of the REIT’s ordinary taxable income to stockholders. As a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. If the Company fails to qualify as a REIT in any taxable year, after the Company initially qualifies to be taxed as a REIT, the Company will then be subject to federal income taxes on the taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially adversely affect net income and net cash available for distribution to stockholders. However, the Company believes that it is organized and will operate in such a manner as to qualify for treatment as a REIT and intends to operate in the foreseeable future in such a manner that it will remain qualified as a REIT for federal income tax purposes. The Company could engage in certain business activities that could have an adverse effect on its REIT qualification. The Company has elected to isolate these business activities in the books and records of the TRS. In general, the TRS may perform additional services for the Company’s tenants and generally may engage in any real estate or non-real estate related business. The TRS will be subject to corporate federal and state income tax. As of December 31, 2018, the TRS has not commenced operations. |
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Per Share Data | Per Share Data The Company reports earnings per share for the period as (1) basic earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period, and (2) diluted earnings per share computed by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding, including common stock equivalents. As of December 31, 2018 and December 31, 2017, there were no material common stock equivalents that would have a dilutive effect on earnings (loss) per share for common stockholders. The Company retroactively adjusted the number of common shares outstanding in accordance with ASC 260-10, Earnings per Share ("ASC 260-10"). ASC 260-10 requires retroactively adjusting the computations of basic and diluted earnings per share for all periods presented to reflect the change in capital structure, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split. If changes in common stock resulting from stock dividends, stock splits, or reverse stock splits occur after the close of the period but before the consolidated financial statements are issued or are available to be issued, the per-share computations for those and any prior-period consolidated financial statements presented shall be based on the new number of shares. |
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Segment Information | Segment Information ASC Topic 280, Segment Reporting, establishes standards for reporting financial and descriptive information about a public entity’s reportable segments. The Company internally evaluates all of the properties and interests therein as one reportable segment. |
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Unaudited Data | Unaudited Data Any references to the number of buildings, square footage, number of leases, occupancy, and any amounts derived from these values in the notes to the consolidated financial statements are unaudited and outside the scope of the Company's independent registered public accounting firm's audit of its consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board. |
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU No. 2016-02"). ASU No. 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU No. 2016-02 will direct how the Company accounts for payments from the elements of leases that are generally fixed and determinable at the inception of the lease (“Fixed Lease Payments”) while ASU No. 2014-09 (defined below) will direct how the Company accounts for the non-lease components of lease contracts, primarily expense reimbursements (“Non-Lease Payments”) and the accounting for the disposition of real estate facilities. ASU No. 2016-02 will be effective beginning in the first quarter of 2019. Early adoption of ASU No. 2016-02 as of its issuance is permitted. ASU No. 2016-02 requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. Based on the required adoption date of January 1, 2019, the modified retrospective method for ASU No. 2016-02 requires application of the standard to all leases that exist at, or commence after, January 1, 2017 (beginning of the earliest comparative period presented in the 2019 financial statements), with a cumulative adjustment to the opening balance of accumulated earnings (deficit) on January 1, 2017, for the effect of applying the standard at the date of initial application, and restatement of the amounts presented prior to January 1, 2019. The FASB has also issued an amendment to the standard that would provide an entity an optional transition method to initially account for the impact of the adoption of the standard with a cumulative adjustment to accumulated earnings (deficit) on January 1, 2019 (the effective date of ASU No. 2016-02), rather than January 1, 2017, which would eliminate the need to restate amounts presented prior to January 1, 2019. Under ASU No. 2016-02, an entity may elect a practical expedient package, which states that: (1) an entity need not reassess whether any expired or existing contracts are leases or contain leases; (2) an entity need not reassess the lease classification for any expired or existing leases; and (3) an entity need not reassess initial direct costs for any existing leases. These three practical expedients are available as a single election that must be elected as a package and must be consistently applied to all existing leases at the date of adoption. The FASB has also tentatively noted in May 2017 board meeting minutes that lessors that adopt this package of practical expedients are not expected to reassess expired or existing leases at the date of initial application, which is January 1, 2017 under ASU No. 2016-02, or January 1, 2019, if the Company elects the optional transition method. The FASB noted that the transition provisions generally enable entities to “run off” their existing leases for the remainder of the lease term, which would effectively eliminate the need to calculate adjustment to the opening balance of accumulated earnings (deficit). In July 2018, the FASB approved an amendment to the ASU to allow lessors to elect, as a practical expedient, not to allocate the total consideration to lease and non-lease components based on their relative standalone selling prices. The single-lease component practical expedient allows lessors to elect a combined single-lease component presentation if (1) the timing and pattern of transfer of the lease component and the non-lease component(s) associated with it are the same, and (2) the lease component would be classified as an operating lease if it were accounted for separately. Non-lease components that do not meet the criteria of this practical expedient and combined components in which the non-lease component is the predominant component will be accounted for under the new revenue recognition ASU. The Company does not expect that ASU No. 2016-02 will impact the Company's accounting for Fixed Lease Payments because the Company's accounting policy is currently consistent with the provisions of the standard. The Company plans to elect the practical expedient mentioned above, which will treat payments for expense reimbursements that qualify as Non-Lease Payments and meet the criteria above as a single lease component. Under ASU No. 2016-02, reimbursements relating to property taxes and insurances are Fixed Lease Payments as the payments relates to the right to use the leased assets, while reimbursements relating to maintenance activities and common area expense are Non-Lease Payments and would be accounted under ASU No. 2016-02, assuming the Non-Lease Payments meet the criteria above. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 replaces substantially all industry-specific revenue recognition requirements and converges areas under this topic with International Financial Reporting Standards. ASU No. 2014-09 implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. ASU No. 2014-09 also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. Other major provisions in ASU No. 2014-09 include capitalizing and amortizing certain contract costs, ensuring the time value of money is considered in the applicable transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. ASU No. 2014-09 was originally effective for reporting periods beginning after December 31, 2016 (for public entities). On April 1, 2015, the FASB voted to defer the effective date of ASU No. 2014-09 by one year to annual reporting periods beginning after December 15, 2017. On July 9, 2015, the FASB affirmed its proposal to defer the effective date to annual reporting periods beginning after December 15, 2017, although entities may elect to adopt the standard as of the original effective date. The Company adopted the guidance using the modified retrospective approach for the fiscal year beginning January 1, 2018. The impact was minimal upon adoption of the new accounting guidance on its consolidated financial statements relating to the recognition of gains and losses on the sale of real estate assets as the Company’s current accounting for such transactions is consistent with the new guidance’s core principle. Rental income from leasing arrangements is a substantial portion of the Company’s revenue, is specifically excluded from ASU No. 2014-09 and will be governed by the applicable lease codification ASU No. 2016-02. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The amendments clarify how an entity should identify the unit of accounting (i.e., the specified good or service) for the principal versus agent evaluation, and how it should apply the control principle to certain types of arrangements, such as service transactions, by explaining what a principal controls before the specified good or service is transferred to the customer. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements of ASU No. 2014-09 described above. The Company adopted the guidance using the modified retrospective approach for the fiscal year beginning January 1, 2018. The impact was minimal upon adoption of the new accounting guidance on its consolidated financial statements relating to the recognition of reporting revenue gross versus net on its consolidated financial statements as the Company’s current accounting for such transactions is consistent with the new guidance’s core principle. |
Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||
Property, Plant and Equipment | The Company anticipates the estimated useful lives of its assets by class to be generally as follows:
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Real Estate (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum net rent payments | The future minimum contractual rent payments pursuant to the current lease terms are shown in the table below. The Company's current leases have expirations ranging from 2020 to 2044.
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Schedule of in-place lease valuation | The in-place lease was measured against comparable leasing information and the present value of the difference between the contractual, in-place rent and the fair market rent was calculated using, as the discount rate, the capitalization rate utilized to compute the value of the real estate at acquisition. The intangible assets are amortized over the remaining lease terms of the respective properties, which on a weighted-average basis, was approximately 9.3 and 10.3 years as of December 31, 2018 and December 31, 2017, respectively.
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Schedule of amortization expense | The amortization of the intangible assets and other leasing costs for the respective periods is as follows:
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Schedule of amortization (income) expense, future amortization | The following table sets forth the estimated annual amortization (income) expense for in-place lease valuation, and tenant origination and absorption costs as of December 31, 2018 for the next five years:
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Below market lease, future amortization | The following table sets forth the estimated annual amortization (income) expense for in-place lease valuation, and tenant origination and absorption costs as of December 31, 2018 for the next five years:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | As of December 31, 2018 and 2017, the Company's debt and related deferred financing costs consisted of the following:
revolving credit facility was LIBOR + 1.50% as of March 31, 2018.
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Schedule of Maturities of Long-term Debt | The following summarizes the future principal repayments of all loans as of December 31, 2018 per the loan terms discussed above:
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Interest Rate Contracts (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Interest Rate Swaps | The following table sets forth a summary of the interest rate swaps at December 31, 2018 and December 31, 2017:
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Impact of Interest Rate Swap Agreements on Consolidated Financial Statements | The following table sets forth the impact of the interest rate swaps on the consolidated financial statements for the periods presented:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value | The following tables set forth the assets/(liabilities) that the Company measures at fair value on a recurring basis by level within the fair value hierarchy as of December 31, 2018 and 2017:
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Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Financial instruments as of December 31, 2018 consisted of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, other accrued expenses, and borrowings. With the exception of the mortgage loan in the table below, the amounts of the financial instruments presented in the consolidated financial statements substantially approximate their fair value as of December 31, 2018. The fair value of the mortgage loan is estimated by discounting the loan’s principal balance over the remaining term of the mortgage using current borrowing rates available to the Company for debt instruments with similar terms and maturities. The Company determined that the mortgage loan valuation in its entirety is classified in Level 2 of the fair value hierarchy, as the fair value is based on current pricing for debt with similar terms as the in-place debt, and there were no transfers into and out of fair value measurement levels during the years ended December 31, 2018 and 2017.
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Accrued Expenses and Other Liabilities (Tables) |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following as of December 31, 2018 and 2017:
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Equity (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Shares Issued and Gross Proceeds for Each Share Class | The following table summarizes shares issued and gross proceeds received for each share class as of December 31, 2018 and outstanding shares as of December 31, 2018 and 2017:
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Organizational and Offering Costs Incurred | Organizational and offering costs incurred as of December 31, 2018, including those incurred by the Company and due to the Advisor, for the Follow-On Offering are as follows:
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Schedule of Stock Redemption Activity | During the years ended December 31, 2018 and 2017, the Company redeemed shares of its outstanding common stock under the IPO Share Redemption Program as follows:
During the years ended December 31, 2018 and 2017, the Company redeemed shares of its outstanding common stock under the SRP as follows:
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Schedule of Distributions Paid | The following unaudited table summarizes the federal income tax treatment for all distributions per share for the years ended December 31, 2018, 2017 and 2016 reported for federal tax purposes and serves as a designation of capital gain distributions, if applicable, pursuant to Section 857(b)(3)(c) of the Code and Treasury Regulation § 1.857-6(e).
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Noncontrolling Interests (Tables) |
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Redeemable Noncontrolling Interest | The following summarizes the activity for noncontrolling interests for the years ended December 31, 2018, 2017 and 2016:
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Related Party Transactions (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | Summarized below are the related-party costs incurred by the Company for the years ended December 31, 2018, 2017 and 2016, respectively, and amounts payable as of December 31, 2018 and 2017:
|
Selected Quarterly Financial Data (unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Presented below is a summary of the unaudited quarterly financial information for the years ended December 31, 2018 and 2017:
|
Organization - Narrative (Details) - USD ($) |
Jun. 04, 2018 |
Sep. 20, 2017 |
---|---|---|
Subsidiary, Sale of Stock [Line Items] | ||
Minimum holding period for qualified IPO shares under the SRP | 4 years | |
Minimum holding period for redemption of stock | 1 year | |
Follow-on Offering | ||
Subsidiary, Sale of Stock [Line Items] | ||
Offering amount in sales of shares | $ 2,200,000,000.0 | |
Primary Offering | ||
Subsidiary, Sale of Stock [Line Items] | ||
Offering amount in sales of shares | 2,000,000,000.0 | |
Distribution Reinvestment Plan | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock of the Company pursuant to the distribution reinvestment plan (shares) | $ 200,000,000.0 |
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018
USD ($)
segment
|
Dec. 31, 2017
USD ($)
|
|
Accounting Policies [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
Amount insured by FDIC | 250,000 | |
Restricted cash | 12,904,000 | $ 12,886,000 |
Asset impairment charge | $ 0 | |
Number of reportable segments | segment | 1 |
Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Estimated life of assets | 40 years |
Building Improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated life of assets | 5 years |
Building Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated life of assets | 20 years |
Land Improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated life of assets | 15 years |
Land Improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated life of assets | 25 years |
Real Estate - Narrative (Details) $ in Thousands, ft² in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
ft²
state
Property
building
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Real Estate [Line Items] | |||
Number of properties (property) | Property | 27 | ||
Number of buildings | building | 35 | ||
Number of states | state | 17 | ||
Combined acquisition value | $ 1,100,000 | ||
Area of real estate property (sq ft) | ft² | 7.3 | ||
Depreciation of building and improvements | $ 20,466 | $ 20,194 | $ 11,630 |
Amortization | $ 24,200 | ||
Weighted average amortization period | 9 years 3 months 18 days | 10 years 3 months 18 days |
Real Estate - Future Minimum Contractual Rent Payments (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Schedule of future minimum net rent payments | |
2019 | $ 78,887 |
2020 | 80,492 |
2021 | 72,677 |
2022 | 73,538 |
2023 | 71,308 |
Thereafter | 457,495 |
Total | $ 834,397 |
Real Estate - In-Place Lease Valuation and Tenant Origination and Absorption Costs (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
In-place lease valuation (above market) | $ 4,046 | $ 4,046 |
In-place lease valuation (above market), accumulated amortization | (1,123) | (752) |
Intangible assets, net | 2,923 | 3,294 |
Below Market Lease, Net [Abstract] | ||
In-place lease valuation (below market) | (62,070) | (62,070) |
In-place lease valuation (below market) - accumulated amortization | 15,841 | 10,775 |
In-place lease valuation (below market), net | (46,229) | (51,295) |
Tenant Origination and Absorption Cost | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Tenant origination and absorption cost | 240,364 | 240,364 |
Tenant origination and absorption cost - accumulated amortization | (71,364) | (47,165) |
Tenant origination and absorption cost, net | $ 169,000 | $ 193,199 |
Real Estate - Amortization of Intangible Assets and Other Leasing Costs (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Schedule of amortization expense | |||
In-place lease valuation | $ (4,695) | $ (4,573) | $ (3,592) |
Tenant origination and absorption cost | $ 24,199 | $ 23,756 | $ 16,264 |
Real Estate - Estimated Annual Amortization (Income) Expense for In-Place Lease (Details) $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
In-Place Lease Valuation | |
2019 | $ (4,695) |
2020 | (4,695) |
2021 | (3,799) |
2022 | (3,774) |
2023 | (2,901) |
Tenant Origination and Absorption Cost | |
Tenant Origination and Absorption Costs | |
2019 | 24,198 |
2020 | 24,198 |
2021 | 19,715 |
2022 | 19,256 |
2023 | $ 16,502 |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Oct. 22, 2015 |
|
Debt Instrument [Line Items] | ||||
Total debt, gross | $ 490,055 | $ 484,728 | ||
Unamortized deferred financing costs | (8,100) | (2,880) | ||
Total debt | 481,955 | 481,848 | ||
Mortgage debt | ||||
Debt Instrument [Line Items] | ||||
Total debt, gross | 376,970 | 126,970 | ||
Mortgage debt | BofA / Key Bank Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Total debt, gross | $ 250,000 | 0 | ||
Contractual interest rate (percent) | 4.32% | |||
Effective interest rate (percent) | 4.42% | |||
Mortgage debt | AIG Loan | ||||
Debt Instrument [Line Items] | ||||
Total debt, gross | $ 126,970 | 126,970 | ||
Contractual interest rate (percent) | 4.15% | |||
Effective interest rate (percent) | 4.22% | |||
Loan | AIG Loan | ||||
Debt Instrument [Line Items] | ||||
Total debt | $ 127,000 | |||
Contractual interest rate (percent) | 4.15% | |||
Loan | Term loan | ||||
Debt Instrument [Line Items] | ||||
Total debt, gross | $ 113,000 | 0 | ||
Effective interest rate (percent) | 3.67% | |||
Credit facility | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Total debt, gross | $ 85 | $ 357,758 | ||
Effective interest rate (percent) | 3.89% | |||
London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate (percent) | 2.35% | |||
London Interbank Offered Rate (LIBOR) | Loan | Term loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percent) | 1.25% | |||
London Interbank Offered Rate (LIBOR) | Credit facility | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percent) | 1.50% | 1.30% |
Debt - Narrative (Details) |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jun. 28, 2018
USD ($)
|
Apr. 27, 2018
USD ($)
property
entity
|
Mar. 31, 2018 |
Oct. 22, 2015
USD ($)
entity
|
Dec. 31, 2018
USD ($)
property
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Apr. 01, 2016
USD ($)
|
|
Debt Instrument [Line Items] | ||||||||
Weighted average interest rate (percent) | 4.15% | |||||||
Number of wholly owned SPE | entity | 4 | 6 | ||||||
Long-term debt | $ 481,955,000 | $ 481,848,000 | ||||||
Number of Properties Owned by Special Purpose Entity | property | 4 | |||||||
Repayments of Lines of Credit | 357,673,000 | 0 | $ 55,000,000 | |||||
Total debt, gross | $ 490,055,000 | 484,728,000 | ||||||
London Interbank Offered Rate (LIBOR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate (percent) | 2.35% | |||||||
Mortgage debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Total debt, gross | $ 376,970,000 | 126,970,000 | ||||||
Revolving Credit Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Revolving credit facility current borrowing capacity | $ 550,000,000 | |||||||
Revolving credit facility, maximum borrowing capacity | $ 1,250,000,000 | |||||||
Remaining borrowing capacity | $ 221,100,000 | |||||||
Minimum number of pool properties | property | 15 | |||||||
Maximum aggregate pool value contributed by single pool property | 15.00% | |||||||
Maximum aggregate pool value to be contributed by pool properties subject to ground leases | 15.00% | |||||||
Maximum aggregate pool value to be contributed by pool properties under development | 20.00% | |||||||
Minimum leasing percentage of all pool properties (percent) | 90.00% | |||||||
Asset pool leverage ratio | 60.00% | |||||||
Asset pool debt service coverage ratio | 135.00% | |||||||
Repayments of Lines of Credit | $ 249,800,000 | |||||||
Number of Wholly Owned Special Purpose Entities Released From Obligation | entity | 4 | |||||||
Revolving Credit Facility | Credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate (percent) | 3.89% | |||||||
Term of loan | 4 years | 4 years | ||||||
Debt Instrument, Extended Term | 1 year | 1 year | ||||||
Total debt, gross | $ 85,000 | 357,758,000 | ||||||
Revolving Credit Facility | Credit facility | London Interbank Offered Rate (LIBOR) | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (percent) | 1.50% | 1.30% | ||||||
BofA / Key Bank Loan [Member] | Mortgage debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Contractual interest rate (percent) | 4.32% | |||||||
Effective interest rate (percent) | 4.42% | |||||||
Total debt, gross | $ 250,000,000 | 0 | ||||||
BofA / Key Bank Loan [Member] | Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Contractual interest rate (percent) | 4.32% | |||||||
Term of loan | 10 years | |||||||
Debt Instrument, Face Amount | $ 250,000,000 | |||||||
Prior Notice Period for Termination of Plan | 30 days | |||||||
Total debt, gross | $ 250,000,000 | |||||||
Key Bank Term Loan [Member] | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Term of loan | 5 years | |||||||
Revolving credit facility current borrowing capacity | $ 200,000,000 | |||||||
AIG Loan | Mortgage debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Contractual interest rate (percent) | 4.15% | |||||||
Effective interest rate (percent) | 4.22% | |||||||
Period subject to fixed interest rate | 5 years | |||||||
Total debt, gross | $ 126,970,000 | $ 126,970,000 | ||||||
AIG Loan | Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Contractual interest rate (percent) | 4.15% | |||||||
Term of loan | 10 years | |||||||
Period subject to fixed interest rate | 5 years | |||||||
Long-term debt | $ 127,000,000 | |||||||
Interest Rate Swap | ||||||||
Debt Instrument [Line Items] | ||||||||
Notional amount | $ 100,000,000.0 |
Debt - Schedule of Debt Maturities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
2019 | $ 0 | |
2020 | 0 | |
2021 | 2,178 | |
2022 | 2,270 | |
2023 | 2,367 | |
Thereafter | 483,240 | |
Total principal | 490,055 | $ 484,728 |
Unamortized deferred loan costs | (8,100) | (2,880) |
Total debt | $ 481,955 | $ 481,848 |
Interest Rate Contracts - Narrative (Details) - USD ($) |
Apr. 30, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Nov. 01, 2017 |
Apr. 01, 2016 |
---|---|---|---|---|---|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Current effective notional amount | $ 0 | $ 200,000,000 | |||
Interest Rate Swap | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | $ 100,000,000.0 | ||||
Swap | Cash Flow Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | $ 100,000,000.0 | ||||
Proceeds from net settlement | $ 100,000 | ||||
Griffin Capital Essential Asset Operating Partnership, L.P. | Interest Rate Swap | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Current effective notional amount | $ 0 | $ 100,000,000 | $ 100,000,000 |
Interest Rate Contracts - Summary of Interest Rate Swap (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
Nov. 01, 2017 |
---|---|---|---|
Derivative [Line Items] | |||
Derivative asset fair value | $ 0 | $ 1,032,000 | |
Current effective notional amount | $ 0 | 200,000,000 | |
Sponsor | Interest Rate Swap | |||
Derivative [Line Items] | |||
Interest rate (percent) | 0.74% | ||
Derivative asset fair value | $ 0 | 967,000 | |
Current effective notional amount | $ 0 | 100,000,000 | |
Griffin Capital Essential Asset Operating Partnership, L.P. | Interest Rate Swap | |||
Derivative [Line Items] | |||
Interest rate (percent) | 1.50% | ||
Derivative asset fair value | $ 0 | 65,000 | |
Current effective notional amount | $ 0 | $ 100,000,000 | $ 100,000,000 |
Interest Rate Contracts - Effect of Interest Rate Swaps (Details) - Cash Flow Hedging - Interest Rate Swap - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Derivative [Line Items] | ||
Amount of gain (loss) recognized in AOCI on derivatives | $ 281 | $ 428 |
Amount of (gain) reclassified from AOCI into earnings under “Interest expense” | (1,233) | (319) |
Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded | $ 20,375 | $ 15,519 |
Fair Value Measurements - Assets (Liabilities) Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | $ 0 | $ 1,032 |
Recurring | Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 1,032 |
Recurring | Interest Rate Swap | Quoted Prices in Active Markets for Identical Assets and Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Recurring | Interest Rate Swap | Significant Other Observable Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 1,032 |
Recurring | Interest Rate Swap | Significant Unobservable Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | $ 0 | $ 0 |
Fair Value Measurements - Fair Value of Mortgage Loan (Details) - Loan - AIG Loan - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
AIG loan | $ 120,599 | $ 122,928 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
AIG loan | $ 126,970 | $ 126,970 |
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Payables and Accruals [Abstract] | ||
Redemptions payable | $ 4,866 | $ 2,181 |
Prepaid rent | 4,709 | 4,304 |
Other liabilities | 3,788 | 3,132 |
Accrued property taxes | 2,955 | 3,490 |
Interest expense payable | 2,805 | 3,013 |
Leasing commission payable | 1,900 | 3,783 |
Total | $ 21,023 | $ 19,903 |
Equity - Narrative (Details) |
12 Months Ended | 70 Months Ended | |||
---|---|---|---|---|---|
Jun. 04, 2018 |
Dec. 31, 2018
USD ($)
vote
$ / shares
shares
|
Dec. 31, 2017
USD ($)
vote
$ / shares
shares
|
Dec. 31, 2018
USD ($)
$ / shares
shares
|
Sep. 20, 2017
USD ($)
|
|
Class of Stock [Line Items] | |||||
Distributions Reinvestment Plan, Amendment or Termination, Written Notice Required | 10 days | ||||
Number of votes entitled per share | vote | 1 | ||||
Percent of organizational and offering costs limit (percent) | 15.00% | ||||
Days required for reimbursement of excess amounts | 60 days | ||||
Organizational costs as a percentage of gross offering proceeds | 35.20% | ||||
Minimum holding period for redemption of stock | 1 year | ||||
Shares of common stock redeemed (shares) | shares | 3,297,240 | ||||
Stock redeemed or called during period | $ 6,538,000 | ||||
Common stock subject to redemption | $ 37,357,000 | $ 32,405,000 | $ 37,357,000 | ||
Fair value assumptions, expected term | 10 years | ||||
Percentage of outstanding stock maximum | 10.00% | ||||
Number of shares authorized (shares) | shares | 10,000,000 | 10,000,000 | |||
Number of shares available for grant (shares) | shares | 7,752,597 | 7,752,597 | |||
Due to affiliates | $ 19,048,000 | $ 16,896,000 | $ 19,048,000 | ||
Distribution Reinvestment Plan | |||||
Class of Stock [Line Items] | |||||
Common stock of the Company pursuant to the distribution reinvestment plan (shares) | $ 200,000,000.0 | ||||
Value of shares tendered for redemption | $ 4,900,000 | 4,900,000 | |||
Follow-on Offering | |||||
Class of Stock [Line Items] | |||||
Offering amount in sales of shares | 2,200,000,000.0 | ||||
Primary Offering | |||||
Class of Stock [Line Items] | |||||
Offering amount in sales of shares | $ 2,000,000,000.0 | ||||
Class A | |||||
Class of Stock [Line Items] | |||||
Shares of common stock redeemed (shares) | shares | 1,528,918 | ||||
Class T | |||||
Class of Stock [Line Items] | |||||
Number of votes | vote | 1 | ||||
Shares of common stock redeemed (shares) | shares | 0 | ||||
Class I | |||||
Class of Stock [Line Items] | |||||
Shares of common stock redeemed (shares) | shares | 0 | ||||
Share Redemption Program | |||||
Class of Stock [Line Items] | |||||
Shares of common stock redeemed (shares) | shares | 1,306,834 | 623,499 | |||
Stock redeemed or called during period | $ 5,700,000 | ||||
Weighted average price per share (in usd per share) | $ / shares | $ 9.36 | $ 9.21 | |||
Minimum ownership balance | $ 2,500 | $ 2,500 | |||
Share Redemption Program | IPO | |||||
Class of Stock [Line Items] | |||||
Minimum holding period for redemption of stock | 4 years | ||||
Share Redemption Program | Common Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Shares of common stock redeemed (shares) | shares | 2,097,775 | ||||
Stock redeemed or called during period | $ 12,200,000 | $ 19,600,000 | |||
Stock Repurchased During Period, Average Cost per Share | $ / shares | $ 9.34 | ||||
New Share Redemption Program | |||||
Class of Stock [Line Items] | |||||
Minimum holding period for redemption of stock | 1 year | ||||
Redemption price, percentage of net asset value of shares | 100.00% | 100.00% | |||
Shares of common stock redeemed (shares) | shares | 1,199,463.98 | 0 | |||
Stock redeemed or called during period | $ 11,500,000 | ||||
Weighted average price per share (in usd per share) | $ / shares | $ 9.62 | $ 0.00 | |||
Share Redemption Program, Modification or Suspension, Written Notice Required | 30 days | ||||
Common stock subject to redemption | $ 37,400,000 | $ 37,400,000 | |||
Quarterly cap, percentage of net asset value of outstanding shares | 5.00% | ||||
New Share Redemption Program | IPO | |||||
Class of Stock [Line Items] | |||||
Minimum holding period for redemption of stock | 4 years | ||||
Organizational and Offering Costs Incurred | IPO | |||||
Class of Stock [Line Items] | |||||
Cumulative organizational costs | $ 3,500,000 | 3,500,000 | |||
Proceeds from Issuance or Sale of Equity | 10,000,000 | ||||
Organization and offering expense | |||||
Class of Stock [Line Items] | |||||
Cumulative organizational costs | 535,000 | 535,000 | |||
Due to affiliates | 1,312,000 | $ 192,000 | 1,312,000 | ||
Pro Forma | Organization and offering expense | |||||
Class of Stock [Line Items] | |||||
Due from related parties | 2,000,000 | 2,000,000 | |||
Due to affiliates | 1,500,000 | 1,500,000 | |||
Due to Affiliates | Organization and offering expense | |||||
Class of Stock [Line Items] | |||||
Due from related parties | 800,000 | 800,000 | |||
Other Assets | Organization and offering expense | |||||
Class of Stock [Line Items] | |||||
Due from related parties | $ 1,200,000 | $ 1,200,000 |
Equity - Schedule of Shares Issued and Gross Proceeds (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Class of Stock [Line Items] | ||
Total redemptions (shares) | (3,297,240) | |
Total shares outstanding (shares) | 77,525,973 | 77,175,283 |
Class T | ||
Class of Stock [Line Items] | ||
Total redemptions (shares) | 0 | |
Total shares outstanding (shares) | 227,311 | 4,148 |
Class S | ||
Class of Stock [Line Items] | ||
Total redemptions (shares) | 0 | |
Total shares outstanding (shares) | 279 | 268 |
Class D | ||
Class of Stock [Line Items] | ||
Total redemptions (shares) | 0 | |
Total shares outstanding (shares) | 19,268 | 268 |
Class I | ||
Class of Stock [Line Items] | ||
Total redemptions (shares) | 0 | |
Total shares outstanding (shares) | 806,014 | 267,476 |
Class A | ||
Class of Stock [Line Items] | ||
Total redemptions (shares) | (1,528,918) | |
Total shares outstanding (shares) | 25,729,035 | 25,995,943 |
Class AA | ||
Class of Stock [Line Items] | ||
Total redemptions (shares) | (1,744,366) | |
Total shares outstanding (shares) | 49,768,687 | 49,942,471 |
Class AAA | ||
Class of Stock [Line Items] | ||
Total redemptions (shares) | (23,956) | |
Total shares outstanding (shares) | 975,379 | 964,709 |
Primary Portion of Offering | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 733,987 | |
Total shares issued prior to redemptions (shares) | 73,694,264 | |
Primary Portion of Offering | Class T | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 2,245 | |
Total shares issued prior to redemptions (shares) | 224,647 | |
Primary Portion of Offering | Class S | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 3 | |
Total shares issued prior to redemptions (shares) | 264 | |
Primary Portion of Offering | Class D | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 182 | |
Total shares issued prior to redemptions (shares) | 18,921 | |
Primary Portion of Offering | Class I | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 7,538 | |
Total shares issued prior to redemptions (shares) | 786,573 | |
Primary Portion of Offering | Class A | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 240,780 | |
Total shares issued prior to redemptions (shares) | 24,199,764 | |
Primary Portion of Offering | Class AA | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 474,858 | |
Total shares issued prior to redemptions (shares) | 47,562,870 | |
Primary Portion of Offering | Class AAA | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 8,381 | |
Total shares issued prior to redemptions (shares) | 901,225 | |
Distribution Reinvestment Plan | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 61,952 | |
Total shares issued prior to redemptions (shares) | 6,524,464 | |
Distribution Reinvestment Plan | Class T | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 26 | |
Total shares issued prior to redemptions (shares) | 2,664 | |
Distribution Reinvestment Plan | Class S | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 0 | |
Total shares issued prior to redemptions (shares) | 15 | |
Distribution Reinvestment Plan | Class D | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 3 | |
Total shares issued prior to redemptions (shares) | 347 | |
Distribution Reinvestment Plan | Class I | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 187 | |
Total shares issued prior to redemptions (shares) | 19,441 | |
Distribution Reinvestment Plan | Class A | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 26,535 | |
Total shares issued prior to redemptions (shares) | 2,794,547 | |
Distribution Reinvestment Plan | Class AA | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 34,656 | |
Total shares issued prior to redemptions (shares) | 3,650,017 | |
Distribution Reinvestment Plan | Class AAA | ||
Class of Stock [Line Items] | ||
Gross proceeds | $ 545 | |
Total shares issued prior to redemptions (shares) | 57,433 | |
Share Distribution | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 568,485 | |
Share Distribution | Class T | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Share Distribution | Class S | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Share Distribution | Class D | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Share Distribution | Class I | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Share Distribution | Class A | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 263,642 | |
Share Distribution | Class AA | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 300,166 | |
Share Distribution | Class AAA | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 4,677 | |
Restricted Stock Issuance | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 36,000 | |
Restricted Stock Issuance | Class T | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Restricted Stock Issuance | Class S | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Restricted Stock Issuance | Class D | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Restricted Stock Issuance | Class I | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Restricted Stock Issuance | Class A | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Restricted Stock Issuance | Class AA | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 0 | |
Restricted Stock Issuance | Class AAA | ||
Class of Stock [Line Items] | ||
Total shares issued prior to redemptions (shares) | 36,000 |
Equity - Organization and Offering Costs (Details) - Organization and offering expense $ in Thousands |
Dec. 31, 2018
USD ($)
|
---|---|
Class of Stock [Line Items] | |
Cumulative offering costs | $ 2,975 |
Cumulative organizational costs | 535 |
Organizational and offering costs advanced by the Advisor | 2,125 |
Organizational and offering costs paid by the Company | 1,385 |
Costs in excess of limit | (2,015) |
Organizational and offering costs incurred | $ 1,495 |
Equity - Stock Redemption Activity (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Class of Stock [Line Items] | ||
Shares of common stock redeemed (shares) | 3,297,240 | |
New Share Redemption Program | ||
Class of Stock [Line Items] | ||
Shares of common stock redeemed (shares) | 1,199,463.98 | 0 |
Weighted average price per share (in usd per share) | $ 9.62 | $ 0.00 |
Equity - Income Tax Treatment of Distributions (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Equity [Abstract] | |||
Ordinary income (in usd per share) | $ 0.06 | $ 0.04 | $ 0.31 |
Ordinary income (percent) | 10.78% | 7.90% | 57.10% |
Return of capital (in usd per share) | $ 0.49 | $ 0.51 | $ 0.24 |
Return of capital (percent) | 89.22% | 92.10% | 42.90% |
Total distributions paid (in usd per share) | $ 0.55 | $ 0.55 | $ 0.55 |
Total distributions paid (percent) | 100.00% | 100.00% | 100.00% |
Noncontrolling Interests - Narrative (Details) - $ / shares |
12 Months Ended | |||
---|---|---|---|---|
Jun. 04, 2018 |
Feb. 16, 2018 |
Dec. 31, 2018 |
Feb. 11, 2014 |
|
Noncontrolling Interest [Line Items] | ||||
Minimum holding period for redemption of stock | 1 year | |||
Operating Partnership | Limited Partner | ||||
Noncontrolling Interest [Line Items] | ||||
Limited partnership units issued (in shares) | 20,000 | |||
Price per partnership unit (in USD per share) | $ 10 | |||
Partnership unit exchange (in shares) | 1 | |||
Minimum holding period for redemption of stock | 1 year | |||
Griffin Capital Essential Asset Advisor II, LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Limited partnership units issued (in shares) | 123,779 | |||
Price per partnership unit (in USD per share) | $ 9.57 | |||
Performance Distribution, Percentage of Allocation | 50.00% | |||
Shares Outstanding | Griffin Capital Essential Asset Operating Partnership, L.P. | Griffin Capital Essential Asset Advisor II, LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of ownership interests acquired in acquisitions in which noncontrolling interest is recognized - less than | 0.19% | |||
Weighted Average Shares Outstanding | Griffin Capital Essential Asset Operating Partnership, L.P. | Griffin Capital Essential Asset Advisor II, LLC | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of ownership interests acquired in acquisitions in which noncontrolling interest is recognized - less than | 0.16% |
Noncontrolling Interests - Schedule of Noncontrolling Interests (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Beginning balance | $ 76 | ||
Issuance of limited partnership units | 1,185 | ||
Distributions to noncontrolling interest | (70) | $ (11) | $ (11) |
Net (loss) income allocation | (3,287) | 11,119 | (6,107) |
Other comprehensive loss | (952) | 108 | 841 |
Ending balance | 1,182 | 76 | |
Non- controlling Interests | |||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Beginning balance | 76 | 84 | 98 |
Issuance of limited partnership units | 1,185 | 0 | 0 |
Distributions to noncontrolling interest | (70) | (11) | (11) |
Net (loss) income allocation | (6) | 3 | (3) |
Other comprehensive loss | (3) | 0 | 0 |
Ending balance | $ 1,182 | $ 76 | $ 84 |
Related Party Transactions - Schedule of Transactions (Details) $ in Thousands, ft² in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018
USD ($)
ft²
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Due to Related Parties [Roll Forward] | |||
Incurred | $ 24,817 | $ 22,272 | $ 66,819 |
Payable at end of period | $ 19,048 | 16,896 | |
Area of real estate property (sq ft) | ft² | 7.3 | ||
Total real estate | $ 1,182,214 | 1,178,866 | |
Underwriting compensation, percent of gross proceeds | 9.00% | ||
Class T | |||
Due to Related Parties [Roll Forward] | |||
Daily accrual rate of shares sold | 0.00274% | ||
Acquisition fees and expenses | |||
Due to Related Parties [Roll Forward] | |||
Incurred | $ 0 | 0 | 6,324 |
Payable at end of period | 0 | 0 | |
Corporate operating expenses | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 3,011 | 2,336 | 1,622 |
Payable at end of period | 63 | 658 | |
Other operating expenses | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 215 | 0 | 0 |
Payable at end of period | 215 | 0 | |
Asset management fees | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 0 | 8,027 | 6,413 |
Payable at end of period | 0 | 0 | |
Property management fees | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 1,832 | 1,799 | 1,052 |
Payable at end of period | 157 | 158 | |
Performance distributions | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 7,783 | 2,394 | 0 |
Payable at end of period | 7,807 | 2,394 | |
Advisory Fees | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 9,316 | 2,550 | 0 |
Payable at end of period | 781 | 762 | |
Acquisition fees and expenses | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 0 | 1,099 | 7,606 |
Payable at end of period | 0 | 0 | |
Organization and offering expense | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 1,120 | 192 | 0 |
Payable at end of period | 1,312 | 192 | |
Other costs advanced by the Advisor | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 1,233 | 662 | 304 |
Payable at end of period | 367 | 285 | |
Selling commissions | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 66 | 1,128 | 11,397 |
Payable at end of period | 0 | 0 | |
Dealer Manager fees | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 11 | 393 | 3,949 |
Payable at end of period | 0 | 0 | |
Stockholder servicing fee payable | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 175 | 660 | 17,449 |
Payable at end of period | 8,302 | 12,377 | |
Distribution fee | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 10 | 0 | 0 |
Payable at end of period | $ 0 | 0 | |
Underwriting compensation, percent of gross proceeds | 9.00% | ||
Distribution fee | Class T | |||
Due to Related Parties [Roll Forward] | |||
Daily accrual rate of shares sold | 0.00068% | ||
Organization and offering expenses | |||
Due to Related Parties [Roll Forward] | |||
Incurred | $ 45 | 179 | 2,634 |
Payable at end of period | 44 | 8 | |
Dealer manager fees | |||
Due to Related Parties [Roll Forward] | |||
Incurred | 0 | 853 | $ 8,069 |
Payable at end of period | $ 0 | $ 62 | |
Dealer Manager Agreement | |||
Due to Related Parties [Roll Forward] | |||
Underwriting compensation, percent of gross proceeds | 10.00% | ||
Dealer Manager Agreement | Class AA | |||
Due to Related Parties [Roll Forward] | |||
Organizational and offering costs advanced by and due to the Advisor | 4.00% | ||
Daily accrual rate of shares sold | 0.00274% | ||
Dealer Manager Agreement | Class T | |||
Due to Related Parties [Roll Forward] | |||
Daily accrual rate of shares sold | 0.00274% |
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 16, 2018 |
Sep. 20, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Related Party Transaction [Line Items] | |||||
Percent of organizational and offering costs limit (percent) | 15.00% | ||||
Average invested assets percentage | 2.00% | ||||
Incurred | $ 24,817 | $ 22,272 | $ 66,819 | ||
Underwriting compensation, percent of gross proceeds | 9.00% | ||||
Gross revenue percentage | 1.00% | ||||
Property management fees percentage | 3.00% | ||||
Construction management fee percentage | 5.00% | ||||
Reimbursement, Reimbursible Expenses | |||||
Related Party Transaction [Line Items] | |||||
Sales revenue goods percentage | 25.00% | ||||
Selling commissions | |||||
Related Party Transaction [Line Items] | |||||
Incurred | $ 66 | 1,128 | 11,397 | ||
Dealer Manager Agreement | |||||
Related Party Transaction [Line Items] | |||||
Underwriting compensation, percent of gross proceeds | 10.00% | ||||
Dealer Manager fees | |||||
Related Party Transaction [Line Items] | |||||
Incurred | $ 11 | 393 | 3,949 | ||
Related Party Transaction, Rate | 0.50% | ||||
Advisor and Property Manager Fees - Performance Distribution | |||||
Related Party Transaction [Line Items] | |||||
Percentage of total return | 12.50% | ||||
Hurdle rate, annualized rate of return on net asset value | 5.50% | ||||
Incurred | $ 7,783 | 2,394 | 0 | ||
Payment and issuance to advisor | $ 1,200 | ||||
Dealer Distribution Fee | |||||
Related Party Transaction [Line Items] | |||||
Incurred | $ 10 | 0 | $ 0 | ||
Underwriting compensation, percent of gross proceeds | 9.00% | ||||
Class AA | Dealer Manager Agreement | |||||
Related Party Transaction [Line Items] | |||||
Daily accrual rate of shares sold | 0.00274% | ||||
Class T | |||||
Related Party Transaction [Line Items] | |||||
Shares outstanding (shares) | 279 | ||||
Daily accrual rate of shares sold | 0.00274% | ||||
Class T | Selling commissions | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Rate | 3.00% | ||||
Class T | Dealer Manager Agreement | |||||
Related Party Transaction [Line Items] | |||||
Daily accrual rate of shares sold | 0.00274% | ||||
Class T | Advisory Agreement | |||||
Related Party Transaction [Line Items] | |||||
Daily accrual rate of shares sold | 0.00342% | ||||
Class T | Dealer Distribution Fee | |||||
Related Party Transaction [Line Items] | |||||
Daily accrual rate of shares sold | 0.00068% | ||||
Class T | Advisor Distribution Fee | |||||
Related Party Transaction [Line Items] | |||||
Daily accrual rate of shares sold | 0.00205% | ||||
Class S | |||||
Related Party Transaction [Line Items] | |||||
Shares outstanding (shares) | 279 | ||||
Daily accrual rate of shares sold | 0.00274% | ||||
Class S | Selling commissions | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Rate | 3.50% | ||||
Class D | |||||
Related Party Transaction [Line Items] | |||||
Shares outstanding (shares) | 282 | ||||
Daily accrual rate of shares sold | 0.00068% | ||||
Class I | |||||
Related Party Transaction [Line Items] | |||||
Shares outstanding (shares) | 281,789 | ||||
Class A | |||||
Related Party Transaction [Line Items] | |||||
Shares outstanding (shares) | 286,192 | ||||
Griffin Capital Essential Asset Advisor II, LLC | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from shares sold | $ 2,500 | ||||
Griffin Capital Essential Asset Advisor II, LLC | Class T | |||||
Related Party Transaction [Line Items] | |||||
Shares sold (shares) | 264 | ||||
Griffin Capital Essential Asset Advisor II, LLC | Class S | |||||
Related Party Transaction [Line Items] | |||||
Shares sold (shares) | 264 | ||||
Griffin Capital Essential Asset Advisor II, LLC | Class D | |||||
Related Party Transaction [Line Items] | |||||
Shares sold (shares) | 264 | ||||
Griffin Capital Essential Asset Advisor II, LLC | Class I | |||||
Related Party Transaction [Line Items] | |||||
Shares sold (shares) | 263,200 | ||||
Griffin Capital Essential Asset Advisor, LLC | Reimbursement, Services Provided That Are not Entitled to Advisor Fees | |||||
Related Party Transaction [Line Items] | |||||
Incurred | $ 800 | 700 | |||
Griffin Capital Essential Asset Advisor, LLC | Reimbursement, Reimbursible Expenses | |||||
Related Party Transaction [Line Items] | |||||
Incurred | $ 100 | $ 200 | |||
Limited Partnership Units [Member] | Advisor and Property Manager Fees - Performance Distribution | |||||
Related Party Transaction [Line Items] | |||||
Payment and issuance to advisor | $ 1,200 | ||||
Cash election portion to be received (percent) | 50.00% |
Commitments and Contingencies Commitments (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2019
USD ($)
$ / shares
shares
|
Dec. 31, 2018
USD ($)
$ / shares
|
Dec. 31, 2017
USD ($)
$ / shares
|
Dec. 31, 2016
USD ($)
|
|
Business Acquisition, Contingent Consideration [Line Items] | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Asset management fees to affiliates | $ 0 | $ 8,027 | $ 6,413 | |
Upon merger | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.001 | |||
Number of new shares to be received upon conversion | 1 | |||
Number of shares/units to be received upon conversion | shares | 1 | |||
Upon merger | Griffin Capital Essential Asset REIT, Inc. | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Common stock, par value (in USD per share) | $ / shares | $ 0.001 | |||
Number of new shares to be received upon conversion | 1.04807 | |||
Termination fee under Merger Agreement | Upon merger | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Termination fee | $ 52,200 | |||
Termination fee under Merger Agreement | Upon merger | Griffin Capital Essential Asset REIT, Inc. | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Termination fee | $ 52,200 | |||
Merger Agreement - Capitalized Costs | ||||
Business Acquisition, Contingent Consideration [Line Items] | ||||
Termination fee | $ 1,900 |
Declaration of Distributions (Details) - $ / shares |
3 Months Ended | |
---|---|---|
Dec. 12, 2018 |
Dec. 31, 2018 |
|
Declaration of Distributions [Abstract] | ||
Dividends paid (in USD per share) | $ 0.00150684932 | |
Dividends declared (usd per share) | $ 0.00150684932 |
Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 26,595 | $ 26,713 | $ 26,297 | $ 26,789 | $ 27,514 | $ 27,349 | $ 26,546 | $ 25,972 | $ 106,394 | $ 107,381 | $ 62,812 |
Net income (loss) | (2,856) | (757) | (478) | 804 | 1,531 | 3,099 | 3,365 | 3,124 | (3,287) | 11,119 | (6,107) |
Net income (loss) attributable to common stockholders | $ (2,851) | $ (756) | $ (477) | $ 803 | $ 1,531 | $ 3,098 | $ 3,364 | $ 3,123 | $ (3,281) | $ 11,116 | $ (6,104) |
Net income (loss) per share, basic and diluted (in usd per share) | $ (0.03) | $ (0.01) | $ (0.01) | $ 0.01 | $ 0.03 | $ 0.04 | $ 0.04 | $ 0.04 | $ (0.04) | $ 0.15 | $ (0.12) |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | 21 Months Ended | |||||
---|---|---|---|---|---|---|---|
Mar. 14, 2019 |
Mar. 13, 2019 |
Dec. 12, 2018 |
Feb. 16, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Mar. 11, 2019 |
|
Subsequent Event [Line Items] | |||||||
Shares of common stock redeemed (shares) | 3,297,240 | ||||||
Stock redeemed or called during period | $ 6,538 | ||||||
Dividends declared (usd per share) | $ 0.00150684932 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Dividends declared (usd per share) | $ 0.00150684932 | ||||||
Distribution Reinvestment Plan | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Issuance of shares for distribution reinvestment plan (shares) | 6,689,813 | ||||||
Proceeds from Issuance of Common Stock, Dividend Reinvestment Plan | $ 63,500 | ||||||
Follow-on Offering | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Issuance of shares for distribution reinvestment plan (shares) | 1,030,404 | ||||||
Proceeds from Issuance of Common Stock, Dividend Reinvestment Plan | $ 10,000 | ||||||
Share Redemption Program | |||||||
Subsequent Event [Line Items] | |||||||
Shares of common stock redeemed (shares) | 1,306,834 | 623,499 | |||||
Stock redeemed or called during period | $ 5,700 | ||||||
Weighted average price per share (in usd per share) | $ 9.36 | $ 9.21 | |||||
Performance distributions | |||||||
Subsequent Event [Line Items] | |||||||
Percentage of total return | 12.50% | ||||||
Payment and issuance to advisor | $ 1,200 | ||||||
Limited Partnership Units [Member] | Performance distributions | |||||||
Subsequent Event [Line Items] | |||||||
Payment and issuance to advisor | $ 1,200 | ||||||
Restricted Stock | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Restricted stock issued (shares) | 7,000 |
Schedule III - Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | $ 376,970 | |||
Initial Cost to Company | ||||
Land | 122,482 | |||
Building and Improvements | 1,058,394 | |||
Cost capitalized subsequent to acquisition | 1,338 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 122,482 | |||
Building and Improvements | 1,059,732 | |||
Total | 1,182,214 | $ 1,178,866 | $ 1,133,055 | $ 516,965 |
Accumulated Depreciation | 128,570 | $ 83,905 | $ 39,955 | $ 12,061 |
Owens Corning | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 3,300 | |||
Initial Cost to Company | ||||
Land | 575 | |||
Building and Improvements | 5,167 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 575 | |||
Building and Improvements | 5,167 | |||
Total | 5,742 | |||
Accumulated Depreciation | 657 | |||
Westgate II | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 34,200 | |||
Initial Cost to Company | ||||
Land | 3,732 | |||
Building and Improvements | 55,101 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 3,732 | |||
Building and Improvements | 55,101 | |||
Total | 58,833 | |||
Accumulated Depreciation | 8,842 | |||
Administrative Office of Pennsylvania Courts | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 6,070 | |||
Initial Cost to Company | ||||
Land | 1,207 | |||
Building and Improvements | 8,936 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 1,207 | |||
Building and Improvements | 8,936 | |||
Total | 10,143 | |||
Accumulated Depreciation | 1,362 | |||
American Express Center | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 54,900 | |||
Initial Cost to Company | ||||
Land | 5,750 | |||
Building and Improvements | 113,670 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 5,750 | |||
Building and Improvements | 113,670 | |||
Total | 119,420 | |||
Accumulated Depreciation | 24,395 | |||
MGM Corporate Center | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 18,180 | |||
Initial Cost to Company | ||||
Land | 4,260 | |||
Building and Improvements | 28,705 | |||
Cost capitalized subsequent to acquisition | 536 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 4,260 | |||
Building and Improvements | 29,241 | |||
Total | 33,501 | |||
Accumulated Depreciation | 4,729 | |||
American Showa | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 10,320 | |||
Initial Cost to Company | ||||
Land | 1,453 | |||
Building and Improvements | 15,747 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 1,453 | |||
Building and Improvements | 15,747 | |||
Total | 17,200 | |||
Accumulated Depreciation | 2,042 | |||
Huntington Ingalls | ||||
Initial Cost to Company | ||||
Land | 5,415 | |||
Building and Improvements | 29,836 | |||
Cost capitalized subsequent to acquisition | 18 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 5,415 | |||
Building and Improvements | 29,854 | |||
Total | 35,269 | |||
Accumulated Depreciation | 3,881 | |||
Wyndham | ||||
Initial Cost to Company | ||||
Land | 5,696 | |||
Building and Improvements | 76,532 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 5,696 | |||
Building and Improvements | 76,532 | |||
Total | 82,228 | |||
Accumulated Depreciation | 9,219 | |||
Exel | ||||
Initial Cost to Company | ||||
Land | 1,988 | |||
Building and Improvements | 13,958 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 1,988 | |||
Building and Improvements | 13,958 | |||
Total | 15,946 | |||
Accumulated Depreciation | 2,043 | |||
Rapiscan Systems | ||||
Initial Cost to Company | ||||
Land | 2,350 | |||
Building and Improvements | 9,482 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 2,350 | |||
Building and Improvements | 9,482 | |||
Total | 11,832 | |||
Accumulated Depreciation | 1,584 | |||
FedEx Freight | ||||
Initial Cost to Company | ||||
Land | 2,774 | |||
Building and Improvements | 25,913 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 2,774 | |||
Building and Improvements | 25,913 | |||
Total | 28,687 | |||
Accumulated Depreciation | 3,283 | |||
Aetna | ||||
Initial Cost to Company | ||||
Land | 1,853 | |||
Building and Improvements | 20,481 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 1,853 | |||
Building and Improvements | 20,481 | |||
Total | 22,334 | |||
Accumulated Depreciation | 1,755 | |||
Bank of America I | ||||
Initial Cost to Company | ||||
Land | 5,491 | |||
Building and Improvements | 23,514 | |||
Cost capitalized subsequent to acquisition | 216 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 5,491 | |||
Building and Improvements | 23,730 | |||
Total | 29,221 | |||
Accumulated Depreciation | 5,294 | |||
Bank of America II | ||||
Initial Cost to Company | ||||
Land | 9,206 | |||
Building and Improvements | 20,204 | |||
Cost capitalized subsequent to acquisition | 14 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 9,206 | |||
Building and Improvements | 20,218 | |||
Total | 29,424 | |||
Accumulated Depreciation | 5,214 | |||
Atlas Copco | ||||
Initial Cost to Company | ||||
Land | 1,480 | |||
Building and Improvements | 16,490 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 1,480 | |||
Building and Improvements | 16,490 | |||
Total | 17,970 | |||
Accumulated Depreciation | 2,347 | |||
Toshiba TEC | ||||
Initial Cost to Company | ||||
Land | 4,130 | |||
Building and Improvements | 36,821 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 4,130 | |||
Building and Improvements | 36,821 | |||
Total | 40,951 | |||
Accumulated Depreciation | 4,072 | |||
Netgear | ||||
Initial Cost to Company | ||||
Land | 20,726 | |||
Building and Improvements | 25,887 | |||
Cost capitalized subsequent to acquisition | 43 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 20,726 | |||
Building and Improvements | 25,930 | |||
Total | 46,656 | |||
Accumulated Depreciation | 3,470 | |||
Nike | ||||
Initial Cost to Company | ||||
Land | 5,988 | |||
Building and Improvements | 42,397 | |||
Cost capitalized subsequent to acquisition | 81 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 5,988 | |||
Building and Improvements | 42,478 | |||
Total | 48,466 | |||
Accumulated Depreciation | 7,583 | |||
Zebra Technologies | ||||
Initial Cost to Company | ||||
Land | 5,238 | |||
Building and Improvements | 56,526 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 5,238 | |||
Building and Improvements | 56,526 | |||
Total | 61,764 | |||
Accumulated Depreciation | 6,759 | |||
WABCO | ||||
Initial Cost to Company | ||||
Land | 1,302 | |||
Building and Improvements | 12,598 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 1,302 | |||
Building and Improvements | 12,598 | |||
Total | 13,900 | |||
Accumulated Depreciation | 1,208 | |||
IGT | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 45,300 | |||
Initial Cost to Company | ||||
Land | 6,325 | |||
Building and Improvements | 64,441 | |||
Cost capitalized subsequent to acquisition | 40 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 6,325 | |||
Building and Improvements | 64,481 | |||
Total | 70,806 | |||
Accumulated Depreciation | 4,837 | |||
3M | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 43,600 | |||
Initial Cost to Company | ||||
Land | 5,320 | |||
Building and Improvements | 62,247 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 5,320 | |||
Building and Improvements | 62,247 | |||
Total | 67,567 | |||
Accumulated Depreciation | 4,561 | |||
Amazon | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 61,500 | |||
Initial Cost to Company | ||||
Land | 5,331 | |||
Building and Improvements | 85,770 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 5,331 | |||
Building and Improvements | 85,770 | |||
Total | 91,101 | |||
Accumulated Depreciation | 5,493 | |||
Zoetis | ||||
Initial Cost to Company | ||||
Land | 3,375 | |||
Building and Improvements | 42,265 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 3,375 | |||
Building and Improvements | 42,265 | |||
Total | 45,640 | |||
Accumulated Depreciation | 3,425 | |||
Southern Company | ||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | ||||
Encumbrances | 99,600 | |||
Initial Cost to Company | ||||
Land | 6,605 | |||
Building and Improvements | 125,602 | |||
Cost capitalized subsequent to acquisition | 48 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 6,605 | |||
Building and Improvements | 125,650 | |||
Total | 132,255 | |||
Accumulated Depreciation | 6,902 | |||
Allstate | ||||
Initial Cost to Company | ||||
Land | 1,808 | |||
Building and Improvements | 14,090 | |||
Cost capitalized subsequent to acquisition | 342 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 1,808 | |||
Building and Improvements | 14,432 | |||
Total | 16,240 | |||
Accumulated Depreciation | 1,428 | |||
MISO | ||||
Initial Cost to Company | ||||
Land | 3,104 | |||
Building and Improvements | 26,014 | |||
Cost capitalized subsequent to acquisition | 0 | |||
Gross Carrying Amount at December 31, 2018 | ||||
Land | 3,104 | |||
Building and Improvements | 26,014 | |||
Total | 29,118 | |||
Accumulated Depreciation | $ 2,185 | |||
Minimum | Owens Corning | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Westgate II | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Administrative Office of Pennsylvania Courts | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | American Express Center | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | MGM Corporate Center | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | American Showa | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Huntington Ingalls | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Wyndham | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Exel | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Rapiscan Systems | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | FedEx Freight | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Aetna | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Bank of America I | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Bank of America II | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Atlas Copco | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Toshiba TEC | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Netgear | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Nike | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Zebra Technologies | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | WABCO | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | IGT | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | 3M | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Amazon | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Zoetis | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Southern Company | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | Allstate | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Minimum | MISO | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 5 years | |||
Maximum | Owens Corning | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Westgate II | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Administrative Office of Pennsylvania Courts | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | American Express Center | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | MGM Corporate Center | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | American Showa | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Huntington Ingalls | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Wyndham | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Exel | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Rapiscan Systems | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | FedEx Freight | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Aetna | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Bank of America I | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Bank of America II | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Atlas Copco | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Toshiba TEC | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Netgear | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Nike | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Zebra Technologies | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | WABCO | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | IGT | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | 3M | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Amazon | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Zoetis | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Southern Company | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | Allstate | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years | |||
Maximum | MISO | ||||
Gross Carrying Amount at December 31, 2018 | ||||
Life used for depreciation | 40 years |
Schedule III - Real Estate and Accumulated Depreciation - Rollforward of Accumulated Depreciation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate [Roll Forward] | |||
Balance at beginning of year | $ 1,178,866 | $ 1,133,055 | $ 516,965 |
Acquisitions | 2,923 | 45,016 | 615,972 |
Improvements | 580 | 576 | 38 |
Construction-in-progress, net | (155) | 219 | 80 |
Balance at end of year | 1,182,214 | 1,178,866 | 1,133,055 |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate, Accumulated Depreciation [Roll Forward] | |||
Balance at beginning of year | 83,905 | 39,955 | 12,061 |
Depreciation and amortization expense | 44,665 | 43,950 | 27,894 |
Balance at end of year | 128,570 | 83,905 | 39,955 |
Total real estate, net | $ 1,053,644 | $ 1,094,961 | $ 1,093,100 |
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