(Mark One) | |
ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2017 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Maryland (State or other jurisdiction of incorporation or organization) | 30-0971238 (I.R.S. Employer Identification Number) | |
1114 Avenue of the Americas, 39th Floor | ||
New York, NY (Address of principal executive offices) | 10036 (Zip code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer ý (Do not check if a smaller reporting company) | Smaller reporting company o | Emerging growth company ý |
Page | ||
As of | |||||||
September 30, 2017 (unaudited) | December 31, 2016 | ||||||
ASSETS | The Company | Predecessor | |||||
Real estate | |||||||
Real estate, at cost | $ | 413,145 | $ | 165,699 | |||
Less: accumulated depreciation | (2,752 | ) | (61,221 | ) | |||
Total real estate, net | 410,393 | 104,478 | |||||
Real estate-related intangible assets, net | 140,069 | 32,680 | |||||
Total real estate, net and real estate-related intangible assets, net | 550,462 | 137,158 | |||||
Cash and cash equivalents | 91,327 | — | |||||
Restricted cash | 2,976 | — | |||||
Ground and other lease income receivable, net | — | 3,482 | |||||
Deferred ground and other lease income receivable, net | 2,422 | 8,423 | |||||
Deferred expenses and other assets, net | 3,337 | 6,604 | |||||
Total assets | $ | 650,524 | $ | 155,667 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Accounts payable, accrued expenses and other liabilities | $ | 6,783 | $ | 1,576 | |||
Real estate-related intangible liabilities, net | 58,114 | — | |||||
Debt obligations, net | 227,396 | — | |||||
Total liabilities | 292,293 | 1,576 | |||||
Commitments and contingencies (refer to Note 7) | — | — | |||||
Equity: | |||||||
Safety, Income & Growth Inc. Predecessor Equity | — | 154,091 | |||||
Safety, Income & Growth Inc. shareholders' equity: | |||||||
Common stock, $0.01 par value, 400,000 shares authorized, 18,190 and 0 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 182 | — | |||||
Additional paid-in capital | 363,465 | — | |||||
Retained earnings (deficit) | (5,173 | ) | — | ||||
Accumulated other comprehensive income (loss) | (243 | ) | — | ||||
Total equity | 358,231 | 154,091 | |||||
Total liabilities and equity | $ | 650,524 | $ | 155,667 |
For the Three Months Ended September 30, | For the Period from April 14, 2017 to September 30, 2017 | For the Period from January 1, 2017 to April 13, 2017 | For the Nine Months Ended September 30, 2016 | ||||||||||||||||
2017 | 2016 | ||||||||||||||||||
Revenues: | The Company | Predecessor | The Company | Predecessor | |||||||||||||||
Ground and other lease income | $ | 6,172 | $ | 4,749 | $ | 10,374 | $ | 5,916 | $ | 14,005 | |||||||||
Other income | 84 | 23 | 86 | 108 | 32 | ||||||||||||||
Total revenues | 6,256 | 4,772 | 10,460 | 6,024 | 14,037 | ||||||||||||||
Costs and expenses: | |||||||||||||||||||
Interest expense | 2,445 | 2,090 | 4,313 | 2,432 | 6,072 | ||||||||||||||
Real estate expense(2) | 472 | 241 | 897 | 210 | 604 | ||||||||||||||
Depreciation and amortization | 2,266 | 786 | 4,139 | 901 | 2,356 | ||||||||||||||
General and administrative | 1,672 | 706 | 2,821 | 1,143 | 2,089 | ||||||||||||||
Other expense | 122 | — | 615 | — | — | ||||||||||||||
Total costs and expenses | 6,977 | 3,823 | 12,785 | 4,686 | 11,121 | ||||||||||||||
Income (loss) from operations | (721 | ) | 949 | (2,325 | ) | 1,338 | 2,916 | ||||||||||||
Income from sales of real estate | — | — | — | 508 | — | ||||||||||||||
Net income (loss) | $ | (721 | ) | $ | 949 | $ | (2,325 | ) | $ | 1,846 | $ | 2,916 | |||||||
Per common share data: | |||||||||||||||||||
Net income (loss) | |||||||||||||||||||
Basic and diluted | $ | (0.04 | ) | N/A | $ | (0.18 | ) | N/A | N/A | ||||||||||
Weighted average number of common shares: | |||||||||||||||||||
Basic and diluted | 18,190 | N/A | 12,731 | N/A | N/A | ||||||||||||||
Dividends declared per share(3) | $ | 0.15 | N/A | $ | 0.1566 | N/A | N/A |
(1) | The combined statements of operations prior to April 14, 2017 represent the activity of Safety, Income & Growth Inc. Predecessor. |
(2) | For the three and nine months ended September 30, 2017, real estate expense includes reimbursable property taxes at one of the Company's properties of $0.1 million and $0.4 million, respectively. For the three and nine months ended September 30, 2017, real estate expense includes non-cash rent expense related to the amortization of a below market lease asset at one of the Company's hotel properties of $0.2 million and $0.5 million, respectively. |
(3) | Dividends declared per share for the period from April 14, 2017 to September 30, 2017 represents the dividends declared per share for the period beginning with the Company's initial public offering on June 27, 2017 to September 30, 2017. |
For the Three Months Ended September 30, | For the Period from April 14, 2017 to September 30, 2017 | For the Period from January 1, 2017 to April 13, 2017 | For the Nine Months Ended September 30, 2016 | ||||||||||||||||
2017 | 2016 | ||||||||||||||||||
The Company | Predecessor | The Company | Predecessor | ||||||||||||||||
Net income (loss) | $ | (721 | ) | $ | 949 | $ | (2,325 | ) | $ | 1,846 | $ | 2,916 | |||||||
Other comprehensive income: | |||||||||||||||||||
Unrealized (loss) gain on derivatives | (117 | ) | — | (243 | ) | 415 | — | ||||||||||||
Other comprehensive income (loss) | (117 | ) | — | (243 | ) | 415 | — | ||||||||||||
Comprehensive income (loss) | $ | (838 | ) | $ | 949 | $ | (2,568 | ) | $ | 2,261 | $ | 2,916 |
(1) | The combined statements of comprehensive income prior to April 14, 2017 represent the activity of Safety, Income & Growth Inc. Predecessor. |
Safety, Income & Growth Inc. Predecessor Equity | Common Stock at Par | Additional Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Equity | |||||||||||||||||||
Predecessor | ||||||||||||||||||||||||
Balance as of December 31, 2015 | $ | 144,029 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Net income | 2,916 | — | — | — | — | — | ||||||||||||||||||
Net transactions with iStar Inc. | 666 | — | — | — | — | — | ||||||||||||||||||
Balance as of September 30, 2016 | $ | 147,611 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Balance as of December 31, 2016 | $ | 154,091 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Net income | 1,846 | — | — | — | — | — | ||||||||||||||||||
Unrealized gain on cash flow hedge | 415 | — | — | — | — | — | ||||||||||||||||||
Net transactions with iStar Inc. | (220,813 | ) | — | — | — | — | — | |||||||||||||||||
Balance as of April 13, 2017 | (64,461 | ) | — | — | — | — | — | |||||||||||||||||
The Company | ||||||||||||||||||||||||
Net income (loss) | $ | — | $ | — | $ | — | $ | (2,325 | ) | $ | — | $ | (2,325 | ) | ||||||||||
Proceeds from issuance of common stock to initial investors | — | 57 | 112,943 | — | — | 113,000 | ||||||||||||||||||
Proceeds from issuance of common stock in initial public offering | — | 125 | 249,875 | — | — | 250,000 | ||||||||||||||||||
Contributions from iStar | — | — | 20,113 | — | — | 20,113 | ||||||||||||||||||
Offering costs | — | — | (20,232 | ) | — | — | (20,232 | ) | ||||||||||||||||
Issuance of common stock to directors | — | — | 766 | — | — | 766 | ||||||||||||||||||
Dividends declared | — | — | — | (2,848 | ) | — | (2,848 | ) | ||||||||||||||||
Change in accumulated other comprehensive income (loss) | — | — | — | — | (243 | ) | (243 | ) | ||||||||||||||||
Balance as of September 30, 2017 | $ | — | $ | 182 | $ | 363,465 | $ | (5,173 | ) | $ | (243 | ) | $ | 358,231 |
For the Period from April 14, 2017 to September 30, 2017 | For the Period from January 1, 2017 to April 13, 2017 | For the Nine Months Ended September 30, 2016 | |||||||||
The Company | Predecessor | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | (2,325 | ) | $ | 1,846 | $ | 2,916 | ||||
Adjustments to reconcile net income (loss) to cash flows from operating activities: | |||||||||||
Depreciation and amortization | 4,139 | 901 | 2,356 | ||||||||
Non-cash expense for stock-based compensation | 766 | — | — | ||||||||
Deferred ground and other lease income | (2,422 | ) | (1,271 | ) | (3,261 | ) | |||||
Income from sales of real estate | — | (508 | ) | — | |||||||
Amortization of real estate-related intangibles, net | 754 | 118 | 310 | ||||||||
Amortization of premium and deferred financing costs on debt obligations, net | 226 | — | — | ||||||||
Other operating activities | 1,447 | 24 | — | ||||||||
Changes in assets and liabilities: | |||||||||||
Changes in ground and other lease income receivable, net | 1,394 | 2,088 | 2,208 | ||||||||
Changes in deferred expenses and other assets, net | 96 | (576 | ) | (136 | ) | ||||||
Changes in accounts payable, accrued expenses and other liabilities | 390 | (13 | ) | 496 | |||||||
Cash flows provided by operating activities | 4,465 | 2,609 | 4,889 | ||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions of real estate | (270,734 | ) | — | (3,915 | ) | ||||||
Proceeds from sales of real estate | — | 508 | — | ||||||||
Changes in restricted cash held in connection with investing activities | (2,976 | ) | — | — | |||||||
Other investing activities | 415 | (1,042 | ) | (1,662 | ) | ||||||
Cash flows used in investing activities | (273,295 | ) | (534 | ) | (5,577 | ) | |||||
Cash flows from financing activities: | |||||||||||
Net transactions with iStar Inc. | — | (220,813 | ) | 666 | |||||||
Contribution from iStar Inc. | 14,350 | — | — | ||||||||
Proceeds from issuance of common stock | 363,000 | — | — | ||||||||
Proceeds from debt obligations | — | 227,000 | — | ||||||||
Payments for deferred financing costs | (2,821 | ) | (7,217 | ) | — | ||||||
Payment of offering costs | (14,372 | ) | (779 | ) | — | ||||||
Cash flows provided by (used in) financing activities | 360,157 | (1,809 | ) | 666 | |||||||
Changes in cash and cash equivalents | 91,327 | 266 | (22 | ) | |||||||
Cash and cash equivalents at beginning of period | — | — | 22 | ||||||||
Cash and cash equivalents at end of period | $ | 91,327 | $ | 266 | $ | — | |||||
Supplemental disclosure of non-cash investing and financing activity: | |||||||||||
Assumption of debt obligations | $ | 227,415 | $ | — | $ | — | |||||
Contribution from iStar Inc. | 5,763 | — | — | ||||||||
Dividends declared to common shareholders | 2,848 | — | — | ||||||||
Accrued offering costs | 1,567 | — | — | ||||||||
Accrued finance costs | 42 | 21 | — |
Derivative Type | Maturity | Notional Amount | Fair Value(2) | Balance Sheet Location | ||||||||
Interest rate swap(3) | October 2020 | $ | 45,000 | $ | 48 | Deferred expenses and other assets, net | ||||||
Interest rate swap | October 2020 | 10,000 | 55 | Deferred expenses and other assets, net | ||||||||
Interest rate swap | October 2030 | 10,000 | 114 | Deferred expenses and other assets, net | ||||||||
Interest rate swap | October 2030 | 95,000 | 460 | Accounts payable, accrued expenses and other liabilities |
(1) | For the three months ended September 30, 2017 and the period from April 14, 2017 to September 30, 2017, the Company recognized $(0.1) million and $(0.2) million, respectively, in accumulated other comprehensive income (loss). |
(2) | The fair value of the Company's derivatives are based upon widely accepted valuation techniques utilized by a third-party specialist using observable inputs such as interest rates and contractual cash flow and are classified as Level 2. Over the next 12 months, the Company expects that $0.2 million related to cash flow hedges will be reclassified from "Accumulated other comprehensive income (loss)" into interest expense. |
(3) | On October 1, 2017, the notional balance of this interest rate swap was increased to $95.0 million. |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Land and land improvements, at cost | $ | 220,749 | $ | 41,160 | |||
Buildings and improvements, at cost | 192,396 | 124,539 | |||||
Less: accumulated depreciation | (2,752 | ) | (61,221 | ) | |||
Total real estate, net | $ | 410,393 | $ | 104,478 | |||
Real estate-related intangible assets, net | 140,069 | 32,680 | |||||
Total real estate, net and real estate-related intangible assets, net | $ | 550,462 | $ | 137,158 |
(1) | On April 14, 2017, the Company, through a merger and other formation transactions, acquired the Initial Portfolio from iStar and accounted for the acquisition as a business combination pursuant to ASC 805. As a result, the Company recorded the assets acquired and liabilities assumed at their acquisition date fair values. In February 2017, the Company sold a parking facility from its Hilton Western Portfolio for $0.5 million that had been previously impaired and had a carrying value of zero. |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Above-market lease assets, net(2) | $ | 77,528 | $ | — | |||
In-place lease assets, net(3) | 36,510 | — | |||||
Below-market lease asset, net(4) | 26,031 | — | |||||
Lease incentives, net(5) | — | 32,545 | |||||
Other intangible assets, net | — | 135 | |||||
Real estate-related intangible assets, net | $ | 140,069 | $ | 32,680 |
(1) | On April 14, 2017, the Company, through a merger and other formation transactions, acquired the Initial Portfolio from iStar and accounted for the acquisition as a business combination pursuant to ASC 805. As a result, the Company recorded the assets acquired and liabilities assumed at their acquisition date fair values. |
(2) | Above-market lease assets are recognized during business combinations when the present value of market rate rental cash flows over the term of a lease is less than the present value of the contractual in-place rental cash flows. Accumulated amortization on above-market lease assets was $0.6 million as of September 30, 2017. The amortization of above-market lease assets decreased "Ground and other lease income" in the Company's combined and consolidated statements of operations by $0.6 million for the period from April 14, 2017 to September 30, 2017. Above-market lease assets are amortized over the term of the leases. |
(3) | In-place lease assets are recognized during business combinations and are estimated based on the value associated with the costs avoided in originating leases comparable to the acquired in-place leases as well as the value associated with lost rental revenue during the assumed lease-up period. Accumulated amortization on in-place lease assets was $1.4 million as of September 30, 2017. The amortization expense for in-place leases was $1.4 million for the period from April 14, 2017 to September 30, 2017. This amount is included in "Depreciation and amortization" in the Company's combined and consolidated statements of operations. In-place lease assets are amortized over the term of the leases. |
(4) | Below-market lease asset, net resulted from the acquisition of the Initial Portfolio and relates to a property that is majority-owned by a third party and is ground leased to the Company. The Company is obligated to pay the third-party owner of the property $0.4 million, subject to adjustment for changes in the CPI, per year through 2044; however, the Company's tenant pays this expense directly under the terms of a master lease. Accumulated amortization on the below-market lease asset was $0.5 million as of September 30, 2017. The amortization expense for the Company's below-market lease asset was $0.5 million for the period from April 14, 2017 to September 30, 2017. This amount is included in "Real estate expense" in the Company's combined and consolidated statements of operations. The below-market lease asset is amortized over the term of the lease. |
(5) | Accumulated amortization on lease incentives was $2.1 million as of December 31, 2016. The amortization of lease incentives decreased "Ground and other lease income" in the Company's combined and consolidated statements of operations by $0.1 million for the period from January 1, 2017 to April 13, 2017, respectively, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2016, respectively. Lease incentive assets are amortized over the term of the leases. |
Year | Amount | |||
2017 (remaining three months) | $ | 1,344 | ||
2018 | 5,376 | |||
2019 | 5,376 | |||
2020 | 5,376 | |||
2021 | 5,376 |
(1) | As of September 30, 2017, the weighted average amortization period for the Company's real estate-related intangible assets was approximately 60 years. |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Below-market lease liabilities(2) | $ | 58,114 | $ | — | |||
Real estate-related intangible liabilities, net | $ | 58,114 | $ | — |
(1) | On April 14, 2017, the Company, through a merger and other formation transactions, acquired the Initial Portfolio from iStar and accounted for the acquisition as a business combination pursuant to ASC 805. As a result, the Company recorded the assets acquired and liabilities assumed at their acquisition date fair values. |
(2) | Below-market lease liabilities are recognized during business combinations when the present value of market rate rental cash flows over the term of a lease exceeds the present value of the contractual in-place rental cash flows. Accumulated amortization on below-market lease liabilities was $0.3 million as of September 30, 2017. The amortization of below-market lease liabilities increased "Ground and other lease income" in the Company's combined and consolidated statements of operations by $0.3 million for the period from April 14, 2017 to September 30, 2017. |
Initial Portfolio | 6200 Hollywood Blvd. | 6201 Hollywood Blvd. | Total | |||||||||||||
Assets | ||||||||||||||||
Land and land improvements, at cost | $ | 73,472 | $ | 68,140 | $ | 72,836 | $ | 214,448 | ||||||||
Buildings and improvements, at cost | 192,396 | — | — | 192,396 | ||||||||||||
Real estate | 265,868 | 68,140 | 72,836 | 406,844 | ||||||||||||
Real estate-related intangible assets(1) | 124,017 | 5,500 | 3,258 | 132,775 | ||||||||||||
Other assets | 1,174 | — | — | 1,174 | ||||||||||||
Total assets | $ | 391,059 | $ | 73,640 | $ | 76,094 | $ | 540,793 | ||||||||
Liabilities | ||||||||||||||||
Real estate-related intangible liabilities(2) | $ | 50,644 | $ | — | $ | 7,734 | $ | 58,378 | ||||||||
Debt obligations | 227,415 | — | — | 227,415 | ||||||||||||
Total liabilities | 278,059 | — | 7,734 | 285,793 | ||||||||||||
Purchase Price(3) | $ | 113,000 | $ | 73,640 | $ | 68,360 | $ | 255,000 |
(1) | Intangible assets primarily includes above market and in-place lease assets related to the acquisition of real estate assets. The amortization of above market lease assets is recorded as a reduction to "Ground and other lease income" in the Company's combined and consolidated statements of operations and are amortized over the term of the leases. The amortization expense for in-place leases is recorded in "Depreciation and amortization" in the Company's combined and consolidated statements of operations. In addition, intangible assets from the acquisition of the Initial Portfolio includes a below market lease asset on a property that is majority-owned by a third party that is ground leased to the Company. The Company is obligated to pay the third-party owner of the property $0.4 million, subject to adjustment for changes in the CPI, per year through 2044; however, the Company's tenant pays this expense directly under the terms of a master lease. The amortization of the below market lease asset is recorded to "Real estate expense" in the Company's combined and consolidated statements of operations. |
(2) | Intangible liabilities includes below market lease liabilities related to the acquisition of real estate assets. The amortization of below market lease liabilities is recorded as an increase to "Ground and other lease income" in the Company's combined and consolidated statements of operations. |
(3) | The Company paid $340.0 million in total consideration to iStar for the Initial Portfolio, including the proceeds from the 2017 Secured Financing. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Pro forma revenues | $ | 6,256 | $ | 6,161 | $ | 18,916 | $ | 18,228 | |||||||
Pro forma net income (loss) (1) | (721 | ) | 615 | 387 | 1,607 |
(1) | The combined statements of operations prior to April 14, 2017 represented the activity of the Predecessor and EPS was not applicable. The acquisition of the Initial Portfolio is included in EPS for the period from April 14, 2017 to September 30, 2017. The acquisitions of 6200 Hollywood Boulevard and 6201 Hollywood Boulevard would have increased EPS by $0.08 if the acquisitions had occurred on April 14, 2017. |
Year | Leases with CPI Based Escalations | Leases with Fixed Escalations | Leases with Revenue Participation (1) | Total | ||||||||||||
2017 (remaining three months) | $ | 1,248 | $ | 1,283 | $ | 2,508 | $ | 5,039 | ||||||||
2018 | 4,993 | 5,172 | 10,032 | 20,197 | ||||||||||||
2019 | 4,993 | 5,245 | 10,032 | 20,270 | ||||||||||||
2020 | 4,993 | 5,323 | 10,032 | 20,348 | ||||||||||||
2021 | 4,993 | 5,409 | 10,032 | 20,434 |
(1) | Represents contractual base rent only and does not include percentage rent that is not fixed and determinable. |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Deferred finance costs, net(2) | $ | 2,617 | $ | — | |||
Other assets(3) | 681 | 5,841 | |||||
Leasing costs, net(4) | 39 | 763 | |||||
Deferred expenses and other assets, net | $ | 3,337 | $ | 6,604 |
(1) | On April 14, 2017, the Company, through a merger and other formation transactions, acquired the Initial Portfolio from iStar and accounted for the acquisition as a business combination pursuant to ASC 805. As a result, the Company recorded the assets acquired and liabilities assumed at their acquisition date fair values. |
(2) | Accumulated amortization of deferred finance costs was $0.2 million as of September 30, 2017. |
(3) | As of December 31, 2016, other assets included a $4.1 million receivable related to the funding provided to a certain investment in a Ground Lease the Company entered into during the year ended December 31, 2016. In addition, as of December 31, 2016 other assets includes $1.7 million in deferred offering costs. |
(4) | Accumulated amortization of leasing costs was $28 thousand as of December 31, 2016. |
As of | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Dividends declared and payable | $ | 2,848 | $ | — | |||
Accounts payable(2) | 1,567 | 779 | |||||
Other liabilities(3) | 1,350 | 89 | |||||
Interest payable | 574 | — | |||||
Accrued expenses(4) | 444 | 708 | |||||
Accounts payable, accrued expenses and other liabilities | $ | 6,783 | $ | 1,576 |
(1) | On April 14, 2017, the Company, through a merger and other formation transactions, acquired the Initial Portfolio from iStar and accounted for the acquisition as a business combination pursuant to ASC 805. As a result, the Company recorded the assets acquired and liabilities assumed at their acquisition date fair values. |
(2) | As of September 30, 2017 and December 31, 2016, accounts payable includes accrued offering costs. |
(3) | As of September 30, 2017, other liabilities includes $0.6 million due to the Manager for costs it paid on the Company's behalf, unearned rent and derivative liabilities. |
(4) | As of September 30, 2017, accrued expenses primarily includes accrued legal expenses, accrued audit expenses and recoverable real estate taxes paid by the Company and reimbursed by the tenant. As of December 31, 2016, accrued expenses primarily includes recoverable real estate taxes paid by the Company and reimbursed by the tenant. |
As of | Stated Interest Rate | Scheduled Maturity Date | ||||||||||
September 30, 2017 | December 31, 2016 | |||||||||||
Secured credit financing: | ||||||||||||
2017 Secured Financing | $ | 227,000 | $ | — | 3.795 | % | April 2027 | |||||
Total secured credit financing | 227,000 | — | ||||||||||
Total debt obligations | 227,000 | — | ||||||||||
Debt premium, net(1) | 396 | — | ||||||||||
Total debt obligations, net | $ | 227,396 | $ | — |
(1) | On April 14, 2017, the Company, through a merger and other formation transactions, acquired the Initial Portfolio from iStar and accounted for the acquisition as a business combination pursuant to ASC 805. As a result, the Company recorded the assets acquired and liabilities assumed at their acquisition date fair values. |
Event | Date | Owner | # of shares | Price paid Per Share | |||||||
Initial capitalization | April 14, 2017 | Third parties | 2,875,000 | $ | 20.00 | ||||||
Initial capitalization | April 14, 2017 | iStar | 2,775,000 | 20.00 | |||||||
Initial public offering | June 27, 2017 | Third parties | 10,250,000 | 20.00 | |||||||
Concurrent iStar placement | June 27, 2017 | iStar | 2,250,000 | 20.00 | |||||||
Issuance of shares to directors | June 27, 2017 | Directors | 40,000 | — | |||||||
Shares outstanding at June 27, 2017 | 18,190,000 |
Three Months Ended September 30, 2017 | For the Period from April 14, 2017 to September 30, 2017 | ||||||
Income (loss) from operations | $ | (721 | ) | $ | (2,325 | ) | |
Income (loss) from operations attributable and allocable to common shareholders for basic and diluted earnings per common share | $ | (721 | ) | $ | (2,325 | ) |
(1) | The combined statements of operations prior to April 14, 2017 represented the activity of the Predecessor and EPS was not applicable. |
Three Months Ended September 30, 2017 | For the Period from April 14, 2017 to September 30, 2017 | ||||||
Earnings allocable to common shares: | |||||||
Numerator for basic and diluted earnings per share: | |||||||
Income (loss) from operations attributable to Safety, Income & Growth Inc. and allocable to common shareholders | $ | (721 | ) | $ | (2,325 | ) | |
Net income (loss) | $ | (721 | ) | $ | (2,325 | ) | |
Denominator for basic and diluted earnings per share: | |||||||
Weighted average common shares outstanding for basic and diluted earnings per common share | 18,190 | 12,731 | |||||
Basic and diluted earnings per common share: | |||||||
Net income (loss) attributable to Safety, Income & Growth Inc. and allocable to common shareholders | $ | (0.04 | ) | $ | (0.18 | ) |
Manager | SFTY Manager, LLC, a wholly-owned subsidiary of iStar Inc. |
Management Fee | Annual fee of 1.0% of total shareholder's equity (up to $2.5 billion) Annual fee of 0.75% of total shareholder's equity (> $2.5 billion) |
Management Fee Consideration | Payment will be made exclusively in the Company's common stock (valued at the greater of (i) the volume weighted average market price during the quarter for which the fee is being paid or (ii) the initial public offering price) |
Lock-up | Restriction from selling common stock received for management fees for 2 years from the date of such issuance (restriction will terminate in the event of and effective with the termination of the management agreement) |
Management Fee Waiver | No management fee paid to the Manager during the first year (through June 30, 2018) |
Incentive Fee | None |
Term | 1 year |
Renewal Provision | Annual renewal to be approved by majority of independent directors |
Termination Fee | None |
Lease Terms | Rent(1) | |||||||||||||||||||||
Property Name | Location | Lease Expiration / As Extended | Fixed Escalations or Revenue Participation | In-Place Base Rent(2) | % Rent(3) | Total In-Place Cash Rent | GAAP Rent | |||||||||||||||
Doubletree Seattle Airport(4) | Seattle, WA | 2025 / 2035 | % Rent | $ | 4.5 | $ | 1.0 | $ | 5.5 | $ | 5.5 | |||||||||||
One Ally Center | Detroit, MI | 2114 / 2174 | 1.5% / p.a. CPI Lookback(5) | 2.6 | N/A | 2.6 | 5.3 | |||||||||||||||
Hilton Salt Lake(4) | Salt Lake City, UT | 2025 / 2035 | % Rent | 2.7 | 0.6 | 3.3 | 3.3 | |||||||||||||||
Hollywood Blvd - South | Los Angeles, CA | 2104 / 2104 | % of CPI / 4 yrs(6) | 2.6 | N/A | 2.6 | 2.6 | |||||||||||||||
3333 LifeHope | Atlanta, GA | 2116 / 2176 | 2.0% / p.a. | 0.9 | N/A | 0.9 | 2.6 | |||||||||||||||
Hollywood Blvd - North | Los Angeles, CA | 2104 / 2104 | % of CPI / 4 yrs(7) | 2.4 | N/A | 2.4 | 2.5 | |||||||||||||||
Doubletree Mission Valley(4) | San Diego, CA | 2025 / 2035 | % Rent | 1.1 | 0.7 | 1.8 | 1.8 | |||||||||||||||
Doubletree Durango(4) | Durango, CO | 2025 / 2035 | % Rent | 0.9 | 0.3 | 1.2 | 1.2 | |||||||||||||||
Doubletree Sonoma(4) | San Francisco, CA | 2025 / 2035 | % Rent | 0.7 | 0.4 | 1.1 | 1.1 | |||||||||||||||
Northside Forsyth Medical Center | Atlanta, GA | 2115 / 2175 | 1.5% / p.a. CPI Lookback(8) | 0.5 | N/A | 0.5 | 1.1 | |||||||||||||||
Dallas Market Center - Sheraton Suites | Dallas, TX | 2114 / 2114 | 2.0% / p.a.(9) | 0.4 | N/A | 0.4 | 1.0 | |||||||||||||||
The Buckler Apartments | Milwaukee, WI | 2112 / 2112 | 15% / 10yrs | 0.3 | N/A | 0.3 | 1.0 | |||||||||||||||
NASA/JPSS Headquarters | Washington, DC | 2075 / 2105 | 3.0% / 5yrs | 0.4 | N/A | 0.4 | 0.4 | |||||||||||||||
Lock Up Self Storage Facility | Minneapolis, MN | 2037 / 2037 | 3.5% / 2 yrs | 0.1 | N/A | 0.1 | 0.1 | |||||||||||||||
Dallas Market Center - Marriott Courtyard | Dallas, TX | 2026 / 2066 | % Rent | 0.1 | 0.2 | 0.3 | — | |||||||||||||||
Total | $ | 20.2 | $ | 3.2 | $ | 23.4 | $ | 29.5 |
(1) | Rent payments do not include any payments made by our tenants to us in respect of reimbursement expenses. |
(2) | Annualized cash base rental income in place as of September 30, 2017. |
(3) | Total percentage cash rental income during the 12 months ended September 30, 2017. |
(4) | Property is part of the Hilton Western Portfolio and is subject to a master lease. In November 2016, the master lease governing the Hilton Western Portfolio was amended to change the look back period for which annual percentage rent is computed from the trailing twelve months ended September 30 to the trailing twelve months ended December 31. In March 2017, we recorded $0.5 million of income representing a one-time stub payment of percentage rent for the three months ended December 31, 2016, to account for the change in the look back period. The aggregate $3.0 million percentage rent shown above for the hotels comprising the Hilton Western Portfolio excludes the one-time $0.5 million stub period payment. |
(5) | During each 10th lease year, annual fixed rent is adjusted to the greater of (i) 1.5% over the prior year’s rent, or (ii) the product of the rent applicable in the initial year of the 10 year period multiplied by a CPI factor, subject to a cap on the increase of 20% of the rent applicable in that initial year. |
(6) | Base rent is subject to increase every 4 years based on a percentage of growth in the CPI for the greater Los Angeles area, California in that time span. Rent increase capped at 12.0% from one rent period to the next. Next potential base increase is May 2018. Notwithstanding the foregoing, in 2058 and 2078, the annual base rent will be reset based on a calculation derived from the then fair market value of the land, but not less than the annual base rent that was in effect before the reset. |
(7) | Base rent is subject to increase every 4 years based on a percentage of growth in the CPI for the greater Los Angeles area, California in that time span. Rent increase capped at 12.0% from one rent period to the next. Next potential base increase is February 2019. Notwithstanding the foregoing, in 2059 and 2079, the annual base rent will be reset based on a calculation derived from the then fair market value of the land, but not less than the annual base rent that was in effect before the reset. |
(8) | During each 10th lease year, annual fixed rent is adjusted to the greater of (i) 1.5% over the prior year’s rent, or (ii) the product of the rent applicable in the initial year of the 10 year period multiplied by a CPI factor, subject to a cap on the increase of 20% of the prior year’s rent. |
(9) | For the 51st through 99th years of the lease, the base rent is the greater of (i) the annual rent calculated based on 2.0% annual rent escalation throughout the term of the lease, and (ii) the fair market rental value of the property. |
Property Name | Property Type | Units/Keys | Square Feet | Underlying Property NOI(1) | Ground Rent Coverage(1) | |||||||||
Doubletree Seattle Airport(2) | Hospitality | 850 | 579,432 | $ | 14.8 | 3.3x | ||||||||
One Ally Center | Office | N/A | 957,355 | N/A | (3) | >5.0x | (3) | |||||||
Hilton Salt Lake(2) | Hospitality | 499 | 425,000 | 10.0 | 3.7x | |||||||||
Hollywood Blvd - South | Multi-Family | 507 | (4) | 143,151 | >14.0 | (5) | >5.4x | |||||||
3333 LifeHope | Office | N/A | 117,355 | 3.1 | (6) | 3.6x | ||||||||
Hollywood Blvd - North | Multi-Family | 535 | (4) | 183,802 | >14.5 | (7) | >6.0x | |||||||
Doubletree Mission Valley(2) | Hospitality | 300 | 236,745 | 6.7 | 6.0x | |||||||||
Doubletree Durango(2) | Hospitality | 159 | 132,384 | 2.9 | 3.3x | |||||||||
Doubletree Sonoma(2) | Hospitality | 245 | 213,000 | 3.6 | 4.9x | |||||||||
Northside Forsyth Medical Center | Office | N/A | 92,573 | (8) | 1.5 | 3.0x | ||||||||
Dallas Market Center - Sheraton Suites | Hospitality | 251 | 178,331 | 2.1 | (9) | 5.9x | ||||||||
The Buckler Apartments(2) | Multi-Family | 207 | 206,712 | 2.3 | 9.2x | |||||||||
NASA/JPSS Headquarters | Office | N/A | 120,000 | 2.1 | (10) | 4.9x | ||||||||
Lock Up Self Storage Facility | Industrial | 812 | 104,000 | 0.8 | (9) | 6.5x | ||||||||
Dallas Market Center - Marriott Courtyard | Hospitality | 184 | 158,805 | 2.3 | (9) | 18.5x | ||||||||
Weighted Average | 4.6x |
(1) | Underlying Property NOI is defined as the net operating income of the commercial real estate being operated at the property without giving effect to any rent paid or payable under our GL. Net operating income is calculated as property-level revenues less property-level operating expenses as reported to us by the tenant. We rely on net operating income as reported to us by our tenants without any independent investigation or verification by us. Underlying Property NOI is shown for the 12 months ended September 30, 2017 unless otherwise noted. Ground Rent Coverage is defined as the ratio of the Underlying Property NOI to the base rental payment due to us under the Ground Lease. |
(2) | We own the buildings and site improvements at these properties. |
(3) | Underlying Property NOI information provided by our Ground Lease tenant is confidential. Our estimate is based on available market information. |
(4) | Reflects the estimated number of apartments at 6201 Hollywood and to be constructed at 6200 Hollywood. |
(5) | The property is currently under renovation. We currently expect renovation to be completed in April 2018. Represents our underwritten stabilized net operating income at the property upon stabilization. Our estimates are based on available market information, including leasing activity at comparable properties in the market. |
(6) | The property is currently being renovated and converted into a class-A medical office building. We currently expect construction to be completed in 2018. Represents our underwritten stabilized net operating income at the property (which is 100% pre-leased) upon stabilization. |
(7) | Construction was completed in 2016 and the property is currently in the lease up phase. A full year of property results is not yet available. Underlying Property NOI represents our underwritten stabilized net operating income at the property upon stabilization. Our estimates are based on leasing activity at the property and available market information, including leasing activity at comparable properties in the market. |
(8) | Represents square footage of initial building. The site can accommodate an additional 115,100 square feet. |
(9) | Based on available information, represents Underlying Property NOI for the 12 months ended June 30, 2017. |
(10) | Does not reflect $0.2 million of legal expenses incurred by our Ground Lease tenant from January 1, 2017 to September 30, 2017. |
For the Three Months Ended September 30, | ||||||||||||||
2017 | 2016 | $ Change | % Change | |||||||||||
(in thousands) | ||||||||||||||
The Company | Predecessor | |||||||||||||
Ground and other lease income | $ | 6,172 | $ | 4,749 | $ | 1,423 | 30 | % | ||||||
Other income | 84 | 23 | 61 | >100% | ||||||||||
Total revenue | 6,256 | 4,772 | 1,484 | 31 | % | |||||||||
Interest expense | 2,445 | 2,090 | 355 | 17 | % | |||||||||
Real estate expense(2) | 472 | 241 | 231 | 96 | % | |||||||||
Depreciation and amortization | 2,266 | 786 | 1,480 | >100% | ||||||||||
General and administrative | 1,672 | 706 | 966 | >100% | ||||||||||
Other expense | 122 | — | 122 | 100 | % | |||||||||
Total costs and expenses | 6,977 | 3,823 | 3,154 | 83 | % | |||||||||
Net income (loss) | $ | (721 | ) | $ | 949 | $ | (1,670 | ) | >(100%) |
(1) | Operations prior to April 14, 2017 represent the activity of Safety, Income & Growth Inc. Predecessor. In addition, as a result of our acquisition of the Initial Portfolio from iStar, the periods subsequent to April 14, 2017 are presented on a new basis of accounting pursuant to Accounting Standards Codification ("ASC") 805. |
(2) | Real estate expense includes reimbursable property taxes at one of our properties. |
Three Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Non-cash expenses | ||||||||
Allocation from iStar | $ | — | $ | 706 | ||||
Management fees | 915 | — | ||||||
Expense reimbursements to the Manager | 304 | — | ||||||
Subtotal - non-cash expenses | 1,219 | 706 | ||||||
Cash expenses | ||||||||
Public company costs | 453 | — | ||||||
Subtotal - cash expenses | 453 | — | ||||||
Total general and administrative expenses | $ | 1,672 | $ | 706 |
For the Period from April 14, 2017 to September 30, 2017 | For the Period from January 1, 2017 to April 13, 2017 | For the Nine Months Ended September 30, 2016 | $ Change | % Change | ||||||||||||||
(in thousands) | ||||||||||||||||||
The Company | Predecessor | |||||||||||||||||
Ground and other lease income | $ | 10,374 | $ | 5,916 | $ | 14,005 | $ | 2,285 | 16 | % | ||||||||
Other income | 86 | 108 | 32 | 162 | >100% | |||||||||||||
Total revenue | 10,460 | 6,024 | 14,037 | 2,447 | 17 | % | ||||||||||||
Interest expense | 4,313 | 2,432 | 6,072 | 673 | 11 | % | ||||||||||||
Real estate expense(2) | 897 | 210 | 604 | 503 | 83 | % | ||||||||||||
Depreciation and amortization | 4,139 | 901 | 2,356 | 2,684 | >100% | |||||||||||||
General and administrative | 2,821 | 1,143 | 2,089 | 1,875 | 90 | % | ||||||||||||
Other expense | 615 | — | — | 615 | 100 | % | ||||||||||||
Total costs and expenses | 12,785 | 4,686 | 11,121 | 6,350 | 57 | % | ||||||||||||
Income from sales of real estate | — | 508 | — | 508 | (100 | )% | ||||||||||||
Net income (loss) | $ | (2,325 | ) | $ | 1,846 | $ | 2,916 | $ | (3,395 | ) | >(100%) |
(1) | Operations prior to April 14, 2017 represent the activity of Safety, Income & Growth Inc. Predecessor. In addition, as a result of our acquisition of the Initial Portfolio from iStar, the periods subsequent to April 14, 2017 are presented on a new basis of accounting pursuant to ASC 805. |
(2) | Real estate expense includes reimbursable property taxes at one of our properties. |
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Non-cash expenses | ||||||||
Allocation from iStar | $ | 1,053 | $ | 2,089 | ||||
Stock-based compensation | 766 | — | ||||||
Management fees | 1,069 | — | ||||||
Expense reimbursements to the Manager | 324 | — | ||||||
Subtotal - non-cash expenses | 3,212 | 2,089 | ||||||
Cash expenses | ||||||||
Public company costs | 752 | — | ||||||
Subtotal - cash expenses | 752 | — | ||||||
Total general and administrative expenses | $ | 3,964 | $ | 2,089 |
For the Three Months Ended September 30, | For the Period from April 14, 2017 to September 30, 2017 | For the Period from January 1, 2017 to April 13, 2017 | For the Nine Months Ended September 30, 2016 | ||||||||||||||||
2017 | 2016 | ||||||||||||||||||
(in thousands) | |||||||||||||||||||
Funds from Operations | The Company | Predecessor | The Company | Predecessor | |||||||||||||||
Net income (loss) | $ | (721 | ) | $ | 949 | $ | (2,325 | ) | $ | 1,846 | $ | 2,916 | |||||||
Add: Depreciation and amortization | 2,266 | 786 | 4,139 | 901 | 2,356 | ||||||||||||||
Less: Income from sales of real estate | — | — | — | (508 | ) | — | |||||||||||||
FFO | $ | 1,545 | $ | 1,735 | $ | 1,814 | $ | 2,239 | $ | 5,272 | |||||||||
Adjusted Funds from Operations | |||||||||||||||||||
FFO | $ | 1,545 | $ | 1,735 | $ | 1,814 | $ | 2,239 | $ | 5,272 | |||||||||
Straight-line rental income | (1,378 | ) | (1,113 | ) | (2,422 | ) | (1,271 | ) | (3,261 | ) | |||||||||
Amortization of real estate-related intangibles, net | 408 | 104 | 754 | 118 | 310 | ||||||||||||||
Stock-based compensation | — | 51 | 766 | 246 | 250 | ||||||||||||||
Acquisition costs | — | — | 381 | — | — | ||||||||||||||
Non-cash management fees and expense reimbursements | 1,219 | — | 1,393 | — | — | ||||||||||||||
Non-cash interest expense | 225 | 271 | 226 | 20 | 742 | ||||||||||||||
AFFO(2) | $ | 2,019 | $ | 1,048 | $ | 2,912 | $ | 1,352 | $ | 3,313 |
(1) | Operations prior to April 14, 2017 represent the activity of Safety, Income & Growth Inc. Predecessor. |
(2) | For the three months ended September 30, 2017, AFFO does not include any percentage rent from the Hilton Western Portfolio, which is recorded annually in the first quarter of each year. For the year ended December 31, 2016, we recorded $3.0 million in percentage rent from the Hilton Western Portfolio. |
For the Three Months Ended September 30, | For the Period from April 14, 2017 to September 30, 2017 | For the Period from January 1, 2017 to April 13, 2017 | For the Nine Months Ended September 30, 2016 | ||||||||||||||||
2017 | 2016 | ||||||||||||||||||
(in thousands) | |||||||||||||||||||
EBITDA | The Company | Predecessor | The Company | Predecessor | |||||||||||||||
Net income (loss) | $ | (721 | ) | $ | 949 | $ | (2,325 | ) | $ | 1,846 | $ | 2,916 | |||||||
Add: Interest expense | 2,445 | 2,090 | 4,313 | 2,432 | 6,072 | ||||||||||||||
Add: Depreciation and amortization | 2,266 | 786 | 4,139 | 901 | 2,356 | ||||||||||||||
EBITDA | $ | 3,990 | $ | 3,825 | $ | 6,127 | $ | 5,179 | $ | 11,344 |
(1) | Operations prior to April 14, 2017 represent the activity of Safety, Income & Growth Inc. Predecessor. |
Amounts Due By Period | |||||||||||||||||||||||
Total | Less Than 1 Year | 1 - 3 Years | 3 - 5 Years | 5 - 10 Years | After 10 Years | ||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Long-Term Debt Obligations: | |||||||||||||||||||||||
2017 Secured Financing | $ | 227,000 | $ | — | $ | — | $ | — | $ | 227,000 | $ | — | |||||||||||
Total principal maturities | 227,000 | — | — | — | 227,000 | — | |||||||||||||||||
Interest Payable | 83,730 | 8,734 | 17,493 | 17,469 | 40,034 | — | |||||||||||||||||
Total(1) | $ | 310,730 | $ | 8,734 | $ | 17,493 | $ | 17,469 | $ | 267,034 | $ | — |
(1) | We are also obligated to pay the third-party owner of a property that is ground leased to us $0.4 million, subject to adjustment for changes in the CPI, per year through 2044; however, our tenant pays this expense directly under the terms of a master lease through 2035. |
Exhibit Number | Document Description |
3.1+ | Articles of Amendment |
31.0 | |
32.0 | |
101* | The following financial information from the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2017 is formatted in XBRL ("eXtensible Business Reporting Language"): (i) the Combined and Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016, (ii) the Combined and Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2017 and 2016, (iii) the Combined and Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three and nine months ended September 30, 2017 and 2016, (iv) the Combined and Consolidated Statements of Changes in Equity (unaudited) for the nine months ended September 30, 2017 and 2016, (v) the Combined and Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2017 and 2016 and (vi) the Notes to the Combined Financial Statements (unaudited). |
+ | Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 23, 2017. |
* | In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934 and otherwise is not subject to liability under these sections. |
Safety, Income & Growth Inc. Registrant | ||
Date: | October 26, 2017 | /s/ JAY SUGARMAN |
Jay Sugarman Chairman of the Board of Directors and Chief Executive Officer (principal executive officer) | ||
Safety, Income & Growth Inc. Registrant | ||
Date: | October 26, 2017 | /s/ GEOFFREY G. JERVIS |
Geoffrey G. Jervis Chief Operating Officer and Chief Financial Officer (principal financial and accounting officer) |
Date: | October 26, 2017 | By: | /s/ JAY SUGARMAN | |||
Name: | Jay Sugarman | |||||
Title: | Chief Executive Officer |
Date: | October 26, 2017 | By: | /s/ GEOFFREY G. JERVIS | |||
Name: | Geoffrey G. Jervis | |||||
Title: | Chief Financial Officer (principal financial and accounting officer) |
Date: | October 26, 2017 | By: | /s/ JAY SUGARMAN | |||
Name: | Jay Sugarman | |||||
Title: | Chief Executive Officer |
Date: | October 26, 2017 | By: | /s/ GEOFFREY G. JERVIS | |||
Name: | Geoffrey G. Jervis | |||||
Title: | Chief Financial Officer (principal financial and accounting officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 25, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Safety, Income & Growth, Inc. | |
Entity Central Index Key | 0001688852 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 18,190,000 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 |
Combined and Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Common Stock, shares outstanding (in shares) | 18,190,000 | |
The Company | ||
Common Stock, par value (in dollars per share) | $ 0.01 | |
Common Stock, shares authorized (in shares) | 400,000,000 | |
Common Stock, shares issued (in shares) | 18,190,000 | |
Common Stock, shares outstanding (in shares) | 18,190,000 | |
Predecessor | ||
Common Stock, par value (in dollars per share) | $ 0.01 | |
Common Stock, shares authorized (in shares) | 400,000,000 | |
Common Stock, shares issued (in shares) | 0 | |
Common Stock, shares outstanding (in shares) | 0 |
Combined and Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Apr. 13, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|||||||||||||||||
Weighted average number of common shares: | ||||||||||||||||||||||
Dividends declared, per share (usd per share) | $ 0.1566 | |||||||||||||||||||||
Reimbursable property taxes | $ 100 | $ 400 | ||||||||||||||||||||
Non-cash rent expense related to the amortization of a below market Lease | 200 | $ 500 | ||||||||||||||||||||
The Company | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Ground and other lease income | [1] | 6,172 | $ 10,374 | |||||||||||||||||||
Other income | [1] | 84 | 86 | |||||||||||||||||||
Total revenues | 6,256 | 10,460 | ||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Interest expense | [1] | 2,445 | 4,313 | |||||||||||||||||||
Real estate expense | [1],[2] | 472 | 897 | |||||||||||||||||||
Depreciation and amortization | [1] | 2,266 | 4,139 | [3] | ||||||||||||||||||
General and administrative | [1] | 1,672 | 2,821 | |||||||||||||||||||
Other expense | [1] | 122 | 615 | |||||||||||||||||||
Total costs and expenses | [1] | 6,977 | 12,785 | |||||||||||||||||||
Income (loss) from operations | [1] | (721) | (2,325) | |||||||||||||||||||
Income from sales of real estate | [1] | 0 | 0 | |||||||||||||||||||
Net income (loss) | [1],[4] | $ (721) | $ (2,325) | [3],[5] | ||||||||||||||||||
Net income (loss) | ||||||||||||||||||||||
Basic and diluted (in dollars per share) | [1] | $ (0.04) | $ (0.18) | |||||||||||||||||||
Weighted average number of common shares: | ||||||||||||||||||||||
Basic and diluted (in shares) | [1] | 18,190 | 12,731 | |||||||||||||||||||
Dividends declared, per share (usd per share) | [6] | $ 0.15 | $ 0.1566 | |||||||||||||||||||
Non-cash rent expense related to the amortization of a below market Lease | [3] | $ 754 | ||||||||||||||||||||
Predecessor | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Ground and other lease income | [1] | $ 5,916 | $ 4,749 | $ 14,005 | ||||||||||||||||||
Other income | [1] | 108 | 23 | 32 | ||||||||||||||||||
Total revenues | [1] | 6,024 | 4,772 | 14,037 | ||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||
Interest expense | [1] | 2,432 | 2,090 | 6,072 | ||||||||||||||||||
Real estate expense | [1],[2] | 210 | 241 | 604 | ||||||||||||||||||
Depreciation and amortization | [1] | 901 | [3] | 786 | 2,356 | [3] | ||||||||||||||||
General and administrative | [1] | 1,143 | 706 | 2,089 | ||||||||||||||||||
Other expense | [1] | 0 | 0 | 0 | ||||||||||||||||||
Total costs and expenses | [1] | 4,686 | 3,823 | 11,121 | ||||||||||||||||||
Income (loss) from operations | [1] | 1,338 | 949 | 2,916 | ||||||||||||||||||
Income from sales of real estate | [1] | 508 | 0 | 0 | ||||||||||||||||||
Net income (loss) | [1],[4] | 1,846 | [3],[5] | $ 949 | 2,916 | [3],[5] | ||||||||||||||||
Weighted average number of common shares: | ||||||||||||||||||||||
Non-cash rent expense related to the amortization of a below market Lease | [3] | $ 118 | $ 310 | |||||||||||||||||||
|
Combined and Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Apr. 13, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|||||||||||||
Other comprehensive income: | |||||||||||||||||
Unrealized (loss) gain on derivatives | $ (100) | $ (200) | |||||||||||||||
The Company | |||||||||||||||||
Net income (loss) | [1],[2] | (721) | (2,325) | [3],[4] | |||||||||||||
Other comprehensive income: | |||||||||||||||||
Unrealized (loss) gain on derivatives | [1] | (117) | (243) | ||||||||||||||
Other comprehensive income (loss) | [1] | (117) | (243) | [4] | |||||||||||||
Comprehensive income (loss) | [1] | $ (838) | $ (2,568) | ||||||||||||||
Predecessor | |||||||||||||||||
Net income (loss) | [1],[2] | $ 1,846 | [3],[4] | $ 949 | $ 2,916 | [3],[4] | |||||||||||
Other comprehensive income: | |||||||||||||||||
Unrealized (loss) gain on derivatives | [1] | 415 | 0 | 0 | |||||||||||||
Other comprehensive income (loss) | [1] | 415 | 0 | 0 | |||||||||||||
Comprehensive income (loss) | [1] | $ 2,261 | $ 949 | $ 2,916 | |||||||||||||
|
Combined and Consolidated Statements of Changes in Equity - USD ($) $ in Thousands |
Total |
Initial Capitalization |
IPO and Private Placement |
Common Stock at Par |
Common Stock at Par
Initial Capitalization
|
Common Stock at Par
IPO and Private Placement
|
Additional Paid-In Capital |
Additional Paid-In Capital
Initial Capitalization
|
Additional Paid-In Capital
IPO and Private Placement
|
Retained Earnings (Deficit) |
Accumulated Other Comprehensive Income (Loss) |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Stockholders' equity, beginning balance (Predecessor) at Dec. 31, 2015 | [1] | $ 144,029 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||
Net income (loss) | Predecessor | [1],[2],[3],[4] | 2,916 | ||||||||||||||||||||
Net transactions with iStar Inc. | Predecessor | [1] | 666 | ||||||||||||||||||||
Change in accumulated other comprehensive income (loss) | Predecessor | [3] | 0 | ||||||||||||||||||||
Dividends | Predecessor | [2] | 0 | ||||||||||||||||||||
Stockholders' equity, ending balance (Predecessor) at Sep. 30, 2016 | [1] | 147,611 | ||||||||||||||||||||
Stockholders' equity, beginning balance (Predecessor) at Dec. 31, 2016 | [1] | 154,091 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||
Net income (loss) | Predecessor | [1],[2],[3],[4] | 1,846 | ||||||||||||||||||||
Net transactions with iStar Inc. | Predecessor | [1] | (220,813) | ||||||||||||||||||||
Change in accumulated other comprehensive income (loss) | Predecessor | 415 | [3] | $ 415 | [1] | ||||||||||||||||||
Dividends | Predecessor | [2] | 0 | ||||||||||||||||||||
Stockholders' equity, ending balance (Predecessor) at Apr. 13, 2017 | [1] | (64,461) | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||
Net income (loss) | The Company | [1] | (2,325) | [2],[3],[4] | $ (2,325) | ||||||||||||||||||
Net income (loss) | $ (2,325) | |||||||||||||||||||||
Change in accumulated other comprehensive income (loss) | The Company | [1] | (243) | [3] | (243) | ||||||||||||||||||
Proceeds from issuance of common stock | The Company | [1] | $ 113,000 | $ 250,000 | $ 57 | $ 125 | $ 112,943 | $ 249,875 | |||||||||||||||
Contributions from iStar | The Company | [1] | 20,113 | $ 20,113 | |||||||||||||||||||
Offering costs | The Company | [1] | (20,232) | (20,232) | |||||||||||||||||||
Issuance of common stock to directors | The Company | [1] | 766 | 766 | |||||||||||||||||||
Dividends | The Company | [1] | (2,848) | [2] | (2,848) | ||||||||||||||||||
Stockholders' equity, ending balance (The Company) at Sep. 30, 2017 | [1] | $ 358,231 | $ 182 | $ 363,465 | $ (5,173) | $ (243) | ||||||||||||||||
|
Combined and Consolidated Statements of Cash Flows - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 13, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
||||||||||
Cash flows from investing activities: | ||||||||||||
Changes in restricted cash held in connection with investing activities | [1] | $ 0 | $ 0 | |||||||||
The Company | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | [1],[2],[3],[4] | $ (2,325) | ||||||||||
Adjustments to reconcile net income (loss) to cash flows from operating activities: | ||||||||||||
Depreciation and amortization | [1],[4] | 4,139 | ||||||||||
Non-cash expense for stock-based compensation | [1] | 766 | ||||||||||
Deferred ground and other lease income | [1] | (2,422) | ||||||||||
Income from sales of real estate | [1] | 0 | ||||||||||
Amortization of real estate-related intangibles, net | [1] | 754 | ||||||||||
Amortization of premium and deferred financing costs on debt obligations, net | [1] | 226 | ||||||||||
Other operating activities | [1] | 1,447 | ||||||||||
Changes in assets and liabilities: | ||||||||||||
Changes in ground and other lease income receivable, net | [1] | 1,394 | ||||||||||
Changes in deferred expenses and other assets, net | [1] | 96 | ||||||||||
Changes in accounts payable, accrued expenses and other liabilities | [1] | 390 | ||||||||||
Cash flows provided by operating activities | [1] | 4,465 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Acquisitions of real estate | [1] | (270,734) | ||||||||||
Proceeds from sales of real estate | [1] | 0 | ||||||||||
Changes in restricted cash held in connection with investing activities | [1] | (2,976) | ||||||||||
Other investing activities | [1] | 415 | ||||||||||
Cash flows used in investing activities | [1] | (273,295) | ||||||||||
Cash flows from financing activities: | ||||||||||||
Net transactions with iStar Inc. | [1] | 0 | ||||||||||
Contribution from iStar Inc. | [1] | 14,350 | ||||||||||
Proceeds from issuance of common stock | [1] | 363,000 | ||||||||||
Proceeds from debt obligations | [1] | 0 | ||||||||||
Payments for deferred financing costs | [1] | (2,821) | ||||||||||
Payment of offering costs | [1] | (14,372) | ||||||||||
Cash flows provided by (used in) financing activities | [1] | 360,157 | ||||||||||
Changes in cash and cash equivalents | [1] | 91,327 | ||||||||||
Cash and cash equivalents at end of period | [1] | 91,327 | ||||||||||
Supplemental disclosure of non-cash investing and financing activity: | ||||||||||||
Assumption of debt obligations | [1] | 227,415 | ||||||||||
Contribution from iStar Inc. | [1] | 5,763 | ||||||||||
Dividends declared to common shareholders | [1],[2] | 2,848 | ||||||||||
Accrued offering costs | [1] | 1,567 | ||||||||||
Accrued Funding Obligations | [1] | 42 | ||||||||||
Predecessor | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | [1],[2],[3],[4] | 1,846 | 2,916 | |||||||||
Adjustments to reconcile net income (loss) to cash flows from operating activities: | ||||||||||||
Depreciation and amortization | [1],[4] | 901 | 2,356 | |||||||||
Non-cash expense for stock-based compensation | [1] | 0 | 0 | |||||||||
Deferred ground and other lease income | [1] | (1,271) | (3,261) | |||||||||
Income from sales of real estate | [1] | (508) | 0 | |||||||||
Amortization of real estate-related intangibles, net | [1] | 118 | 310 | |||||||||
Amortization of premium and deferred financing costs on debt obligations, net | [1] | 0 | 0 | |||||||||
Other operating activities | [1] | 24 | 0 | |||||||||
Changes in assets and liabilities: | ||||||||||||
Changes in ground and other lease income receivable, net | [1] | 2,088 | 2,208 | |||||||||
Changes in deferred expenses and other assets, net | [1] | (576) | (136) | |||||||||
Changes in accounts payable, accrued expenses and other liabilities | [1] | (13) | 496 | |||||||||
Cash flows provided by operating activities | [1] | 2,609 | 4,889 | |||||||||
Cash flows from investing activities: | ||||||||||||
Acquisitions of real estate | [1] | 0 | (3,915) | |||||||||
Proceeds from sales of real estate | [1] | 508 | 0 | |||||||||
Other investing activities | [1] | (1,042) | (1,662) | |||||||||
Cash flows used in investing activities | [1] | (534) | (5,577) | |||||||||
Cash flows from financing activities: | ||||||||||||
Net transactions with iStar Inc. | [1] | (220,813) | 666 | |||||||||
Contribution from iStar Inc. | [1] | 0 | 0 | |||||||||
Proceeds from issuance of common stock | [1] | 0 | 0 | |||||||||
Proceeds from debt obligations | [1] | 227,000 | 0 | |||||||||
Payments for deferred financing costs | [1] | (7,217) | 0 | |||||||||
Payment of offering costs | [1] | (779) | 0 | |||||||||
Cash flows provided by (used in) financing activities | [1] | (1,809) | 666 | |||||||||
Changes in cash and cash equivalents | [1] | 266 | (22) | |||||||||
Cash and cash equivalents at beginning of period | [1] | 0 | $ 266 | 22 | ||||||||
Cash and cash equivalents at end of period | [1] | 266 | 0 | |||||||||
Supplemental disclosure of non-cash investing and financing activity: | ||||||||||||
Assumption of debt obligations | [1] | 0 | 0 | |||||||||
Contribution from iStar Inc. | [1] | 0 | 0 | |||||||||
Dividends declared to common shareholders | [1] | 0 | 0 | |||||||||
Accrued offering costs | [1] | 0 | 0 | |||||||||
Accrued Funding Obligations | [1] | $ 21 | $ 0 | |||||||||
|
Organization and Business |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization Business—Safety, Income & Growth Inc. (the "Company") operates its business through one segment by acquiring, managing and capitalizing ground leases. Ground leases are long-term contracts between the landlord (the Company) and a tenant or leaseholder ("Ground Leases"). The Company believes that it is the first publicly-traded company formed primarily to acquire, own, manage, finance and capitalize Ground Leases. Ground Leases generally represent ownership of the land underlying commercial real estate projects that is net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon. Ground Leases are typically ‘‘triple net’’ leases, meaning that the tenant is responsible for development costs, capital expenditures and all property operating expenses, such as maintenance, real estate taxes and insurance. Ground Leases are typically long-term (base terms ranging from 30 to 99 years, often with tenant renewal options) and have contractual base rent increases (either at a specified percentage or consumer price index ("CPI") based, or both) and sometimes include percentage rent participations. The Company intends to target investments in long-term Ground Leases in which: (i) the initial value of its Ground Lease represents 30% to 45% of the combined value of the land and buildings and improvements thereon as if there was no Ground Lease on the land ("Combined Property Value"); (ii) the ratio of underlying property net operating income to the Ground Lease payment due the Company ("Ground Rent Coverage") is between 2.0x to 5.0x; and (iii) the Ground Lease contains contractual rent escalation clauses or percentage rent that participates in gross revenues generated by the commercial real estate on the land. A Ground Lease lessor (the Company) typically has the right to regain possession of its land and take ownership of the buildings and improvements thereon upon a tenant default. The Company believes that the Ground Lease structure provides an opportunity for future investment value accretion through the reversion to the Company, as the Ground Lease owner, of the buildings and improvements on the land at the expiration or earlier termination of the lease, for no additional consideration from the Company. The Company is managed by SFTY Manager, LLC (the "Manager"), a wholly-owned subsidiary of iStar Inc. ("iStar"), the Company's largest shareholder, pursuant to a management agreement (refer to Note 11). The Company has no employees, relying on its Manager to provide all services. The Company intends to draw on the extensive investment origination and sourcing platform of its Manager to actively promote the benefits of the Ground Lease structure to prospective Ground Lease tenants. Organization—Safety, Income & Growth Inc. (prior to April 14, 2017, "Original Safety") is a Maryland corporation that was formed as a wholly-owned subsidiary of iStar on October 24, 2016. iStar contributed a pre-existing portfolio of Ground Leases to Original Safety and sought third party capital to grow its Ground Lease business. A second entity, SIGI Acquisition, Inc. ("SIGI"), was capitalized on April 14, 2017 by iStar and two institutional investors. On April 14, 2017, Original Safety merged with and into SIGI with SIGI surviving the merger and being renamed Safety, Income & Growth Inc. References herein to the Company refer to Original Safety before such merger and to the surviving company of such merger thereafter. Through these and other formation transactions, the Company (i) acquired iStar's entire Ground Lease portfolio consisting of 12 properties (the "Initial Portfolio"), all of which were wholly-owned by the Company as of September 30, 2017 and December 31, 2016, (ii) completed the $227 million 2017 Secured Financing (refer to Note 6) on March 30, 2017, (iii) issued 2,875,000 shares of the Company's common stock to two institutional investors for $20.00 per share, or $57.5 million (representing a 51% ownership interest in the Company at such time), and 2,775,000 shares of the Company's common stock to iStar for $20.00 per share, or $55.5 million (representing a 49% ownership interest in the Company at such time), and (iv) paid $340.0 million in total consideration to iStar for the Initial Portfolio. On June 27, 2017, the Company completed its initial public offering raising $205.0 million in gross proceeds and concurrently completing a $45.0 million private placement with iStar, its largest shareholder. The initial public offering price was $20.00 per share. iStar incurred a total of $18.9 million of organization and offering costs, of which it has paid $18.7 million, in connection with these transactions, including commissions payable to the underwriters and other offering expenses. iStar received no compensation for its payment of the organization and offering costs. The payment of such costs were treated as capital contributions from iStar with an offsetting cost of capital in the Company's consolidated statements of changes in equity. The Company intends to elect to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes, commencing with the tax year ending December 31, 2017. The Company was structured as an Umbrella Partnership REIT ("UPREIT"). As such, all of the Company's properties are owned by a subsidiary partnership, Safety Income and Growth Operating Partnership LP (the "Operating Partnership"), which is currently wholly-owned by the Company. The UPREIT structure may afford the Company with certain benefits as it seeks to acquire properties from third parties who may want to defer taxes by contributing their Ground Leases to the Company. Basis of Presentation and Principles of Combination and Consolidation Basis of Presentation—For periods prior to April 14, 2017, the accompanying combined financial statements do not represent the financial position and results of operations of one legal entity, but rather a combination of entities under common control (the "Predecessor") that have been ‘‘carved out’’ from iStar’s consolidated financial statements. For periods prior to April 14, 2017, these combined financial statements reflect the revenues and expenses of the Predecessor and include certain material assets and liabilities of iStar that are specifically identifiable and generated through, or associated with, an in-place lease, which have been reflected at iStar’s historical basis. For periods subsequent to April 14, 2017, the accompanying consolidated financial statements represent the consolidated financial statements of the Company. In addition, as a result of the Company's acquisition of the Initial Portfolio from iStar, the consolidated financial statements subsequent to April 14, 2017 are presented on a new basis of accounting pursuant to Accounting Standards Codification ("ASC") 805 (refer to Note 4). The preparation of these combined and consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (‘‘GAAP’’) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These combined financial statements for the periods prior to April 14, 2017 include an allocation of general and administrative expenses and interest expense to the Predecessor from iStar. General and administrative expenses include certain iStar corporate functions, including executive oversight, treasury, finance, human resources, tax compliance and planning, internal audit, financial reporting, information technology and investor relations. General and administrative expenses, including stock based compensation, represent a pro rata allocation of costs from iStar’s net lease and corporate business segments based on our average net assets as a percentage of iStar’s average net assets. Interest expense was allocated to the Predecessor by calculating its average net assets as a percentage of the average net assets in iStar’s net lease business segment and multiplying that percentage by the interest expense allocated to iStar’s net lease business segment (only for the number of days in the period in which the Predecessor did not have debt obligations outstanding—refer to Note 6). The Company believes the allocation methodology for the general and administrative expenses and interest expense is reasonable. Accordingly, the general and administrative expense allocation presented in our combined statements of operations for historical periods does not necessarily reflect what our general and administrative expenses will be as a standalone public company for future reporting periods. In the opinion of management, the accompanying combined financial statements contain all adjustments consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. For the periods prior to April 14, 2017, most of the entities included in the Predecessor financial statements did not have bank accounts for the periods presented, and most cash transactions for the Predecessor were transacted through bank accounts owned by iStar. For the periods prior to April 14, 2017, the combined statements of cash flows for the periods presented were prepared as if operating, investing and financing transactions for the Predecessor had been transacted through its own bank accounts. Certain prior period amounts have been reclassified in the Company's consolidated financial statements and the related notes to conform to the current period presentation. Principles of Combination and Consolidation—For the periods prior to April 14, 2017, the combined financial statements include on a carve-out basis the historical balance sheets and statements of operations and cash flows attributed to the Predecessor. For the periods subsequent to April 14, 2017, the consolidated financial statements include the accounts and operations of the Company and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Basis of Presentation and Principles of Combination and Consolidation |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Combination and Consolidation | Organization Business—Safety, Income & Growth Inc. (the "Company") operates its business through one segment by acquiring, managing and capitalizing ground leases. Ground leases are long-term contracts between the landlord (the Company) and a tenant or leaseholder ("Ground Leases"). The Company believes that it is the first publicly-traded company formed primarily to acquire, own, manage, finance and capitalize Ground Leases. Ground Leases generally represent ownership of the land underlying commercial real estate projects that is net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon. Ground Leases are typically ‘‘triple net’’ leases, meaning that the tenant is responsible for development costs, capital expenditures and all property operating expenses, such as maintenance, real estate taxes and insurance. Ground Leases are typically long-term (base terms ranging from 30 to 99 years, often with tenant renewal options) and have contractual base rent increases (either at a specified percentage or consumer price index ("CPI") based, or both) and sometimes include percentage rent participations. The Company intends to target investments in long-term Ground Leases in which: (i) the initial value of its Ground Lease represents 30% to 45% of the combined value of the land and buildings and improvements thereon as if there was no Ground Lease on the land ("Combined Property Value"); (ii) the ratio of underlying property net operating income to the Ground Lease payment due the Company ("Ground Rent Coverage") is between 2.0x to 5.0x; and (iii) the Ground Lease contains contractual rent escalation clauses or percentage rent that participates in gross revenues generated by the commercial real estate on the land. A Ground Lease lessor (the Company) typically has the right to regain possession of its land and take ownership of the buildings and improvements thereon upon a tenant default. The Company believes that the Ground Lease structure provides an opportunity for future investment value accretion through the reversion to the Company, as the Ground Lease owner, of the buildings and improvements on the land at the expiration or earlier termination of the lease, for no additional consideration from the Company. The Company is managed by SFTY Manager, LLC (the "Manager"), a wholly-owned subsidiary of iStar Inc. ("iStar"), the Company's largest shareholder, pursuant to a management agreement (refer to Note 11). The Company has no employees, relying on its Manager to provide all services. The Company intends to draw on the extensive investment origination and sourcing platform of its Manager to actively promote the benefits of the Ground Lease structure to prospective Ground Lease tenants. Organization—Safety, Income & Growth Inc. (prior to April 14, 2017, "Original Safety") is a Maryland corporation that was formed as a wholly-owned subsidiary of iStar on October 24, 2016. iStar contributed a pre-existing portfolio of Ground Leases to Original Safety and sought third party capital to grow its Ground Lease business. A second entity, SIGI Acquisition, Inc. ("SIGI"), was capitalized on April 14, 2017 by iStar and two institutional investors. On April 14, 2017, Original Safety merged with and into SIGI with SIGI surviving the merger and being renamed Safety, Income & Growth Inc. References herein to the Company refer to Original Safety before such merger and to the surviving company of such merger thereafter. Through these and other formation transactions, the Company (i) acquired iStar's entire Ground Lease portfolio consisting of 12 properties (the "Initial Portfolio"), all of which were wholly-owned by the Company as of September 30, 2017 and December 31, 2016, (ii) completed the $227 million 2017 Secured Financing (refer to Note 6) on March 30, 2017, (iii) issued 2,875,000 shares of the Company's common stock to two institutional investors for $20.00 per share, or $57.5 million (representing a 51% ownership interest in the Company at such time), and 2,775,000 shares of the Company's common stock to iStar for $20.00 per share, or $55.5 million (representing a 49% ownership interest in the Company at such time), and (iv) paid $340.0 million in total consideration to iStar for the Initial Portfolio. On June 27, 2017, the Company completed its initial public offering raising $205.0 million in gross proceeds and concurrently completing a $45.0 million private placement with iStar, its largest shareholder. The initial public offering price was $20.00 per share. iStar incurred a total of $18.9 million of organization and offering costs, of which it has paid $18.7 million, in connection with these transactions, including commissions payable to the underwriters and other offering expenses. iStar received no compensation for its payment of the organization and offering costs. The payment of such costs were treated as capital contributions from iStar with an offsetting cost of capital in the Company's consolidated statements of changes in equity. The Company intends to elect to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes, commencing with the tax year ending December 31, 2017. The Company was structured as an Umbrella Partnership REIT ("UPREIT"). As such, all of the Company's properties are owned by a subsidiary partnership, Safety Income and Growth Operating Partnership LP (the "Operating Partnership"), which is currently wholly-owned by the Company. The UPREIT structure may afford the Company with certain benefits as it seeks to acquire properties from third parties who may want to defer taxes by contributing their Ground Leases to the Company. Basis of Presentation and Principles of Combination and Consolidation Basis of Presentation—For periods prior to April 14, 2017, the accompanying combined financial statements do not represent the financial position and results of operations of one legal entity, but rather a combination of entities under common control (the "Predecessor") that have been ‘‘carved out’’ from iStar’s consolidated financial statements. For periods prior to April 14, 2017, these combined financial statements reflect the revenues and expenses of the Predecessor and include certain material assets and liabilities of iStar that are specifically identifiable and generated through, or associated with, an in-place lease, which have been reflected at iStar’s historical basis. For periods subsequent to April 14, 2017, the accompanying consolidated financial statements represent the consolidated financial statements of the Company. In addition, as a result of the Company's acquisition of the Initial Portfolio from iStar, the consolidated financial statements subsequent to April 14, 2017 are presented on a new basis of accounting pursuant to Accounting Standards Codification ("ASC") 805 (refer to Note 4). The preparation of these combined and consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (‘‘GAAP’’) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These combined financial statements for the periods prior to April 14, 2017 include an allocation of general and administrative expenses and interest expense to the Predecessor from iStar. General and administrative expenses include certain iStar corporate functions, including executive oversight, treasury, finance, human resources, tax compliance and planning, internal audit, financial reporting, information technology and investor relations. General and administrative expenses, including stock based compensation, represent a pro rata allocation of costs from iStar’s net lease and corporate business segments based on our average net assets as a percentage of iStar’s average net assets. Interest expense was allocated to the Predecessor by calculating its average net assets as a percentage of the average net assets in iStar’s net lease business segment and multiplying that percentage by the interest expense allocated to iStar’s net lease business segment (only for the number of days in the period in which the Predecessor did not have debt obligations outstanding—refer to Note 6). The Company believes the allocation methodology for the general and administrative expenses and interest expense is reasonable. Accordingly, the general and administrative expense allocation presented in our combined statements of operations for historical periods does not necessarily reflect what our general and administrative expenses will be as a standalone public company for future reporting periods. In the opinion of management, the accompanying combined financial statements contain all adjustments consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. For the periods prior to April 14, 2017, most of the entities included in the Predecessor financial statements did not have bank accounts for the periods presented, and most cash transactions for the Predecessor were transacted through bank accounts owned by iStar. For the periods prior to April 14, 2017, the combined statements of cash flows for the periods presented were prepared as if operating, investing and financing transactions for the Predecessor had been transacted through its own bank accounts. Certain prior period amounts have been reclassified in the Company's consolidated financial statements and the related notes to conform to the current period presentation. Principles of Combination and Consolidation—For the periods prior to April 14, 2017, the combined financial statements include on a carve-out basis the historical balance sheets and statements of operations and cash flows attributed to the Predecessor. For the periods subsequent to April 14, 2017, the consolidated financial statements include the accounts and operations of the Company and its consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Summary of Significant Accounting Policies |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Cash and cash equivalents—Cash and cash equivalents include cash held in banks or invested in money market funds, if applicable, with original maturity terms of less than 90 days. Restricted Cash—Restricted cash represents amounts required to be maintained under certain of the Company's derivative transactions. Ground and other lease income—Ground and other lease income includes rent earned from leasing land and buildings owned by the Company to its tenants. Ground and other lease income is recognized on the straight-line method of accounting, generally from the later of the date the lessee takes possession of the space and it is ready for its intended use or the date of acquisition of the asset subject to existing leases. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between ground and other lease income recognized under this method and contractual lease payment terms is recorded as deferred ground and other lease income receivable and is included in ‘‘Deferred ground and other lease income receivable, net’’ on the Company's consolidated and combined balance sheets. The Company is also entitled to percentage rent pursuant to some of its leases and records percentage rent as ground and other lease income when earned. Ground and other lease income also includes the amortization of finite lived intangible assets and liabilities, which are amortized over the period during which the assets or liabilities are expected to contribute directly or indirectly to the future cash flows of the business acquired. Earnings per share—The Company has one class of common stock. Earnings per share ("EPS") is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding (refer to Note 9 for a summary of shares outstanding). Deferred financing fees—Deferred financing fees associated with the 2017 Revolver (refer to Note 6) are recorded in ‘‘Deferred expenses and other assets, net’’ on the Company’s combined and consolidated balance sheets. The amortization of deferred financing fees is included in ‘‘Interest expense’’ in the Company’s combined and consolidated statements of operations. Dispositions—Gains on the sale of real estate assets are recognized in "Income from sales of real estate" in accordance with ASC 360-20, Real Estate Sales. Gains on sales of real estate are recognized for full profit recognition upon closing of the sale transactions, when the profit is determinable, the earnings process is virtually complete, the parties are bound by the terms of the contract, all consideration has been exchanged, any permanent financing for which the seller is responsible has been arranged and all conditions for closing have been performed. The Company primarily uses specific identification and the relative sales value method to allocate costs. Stock-based compensation—The Company adopted an equity incentive plan to provide equity incentive opportunities to members of the Manager’s management team and employees who perform services for the Company, the Company's independent directors, advisers, consultants and other personnel. The Company's equity incentive plan provides for grants of stock options, shares of restricted common stock, phantom shares, dividend equivalent rights and other equity-based awards, including long-term incentive plan units. The Company accounts for stock-based compensation awards using the fair value method, which requires an estimate of fair value of the award at the time of grant. On June 27, 2017, the Company's directors who are not officers or employees of the Manager or iStar were granted a total of 40,000 shares in the Company's common stock with an aggregate grant date fair value of $0.8 million. The shares granted to the directors vested immediately and the Company recognized $0.8 million in stock-based compensation, which is classified within "General and administrative" in the Company's consolidated statements of operations. Derivative instruments and hedging activity—The Company's use of derivative financial instruments is associated with debt issuances and primarily limited to the utilization of interest rate swaps, interest rate caps or other instruments to manage interest rate risk exposure. The Company does not enter into derivatives for trading purposes. The Company recognizes derivatives as either assets or liabilities on the Company's combined and consolidated balance sheets at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge of the exposure to changes in the fair value of a recognized asset or liability, a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. For the Company's four derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivatives is reported in accumulated other comprehensive income (loss). The ineffective portion of the change in fair value of the derivatives is recognized directly in the Company's consolidated statements of operations. The table below presents the Company's cash flow hedges that are designated in hedging relationships as well as their classification on the consolidated balance sheet as of September 30, 2017 ($ in thousands)(1):
In February 2017, the Company entered into and settled a rate lock swap in connection with the 2017 Secured Financing (refer to Note 6). As a result of the settlement, the Company recorded a $0.4 million unrealized gain in other comprehensive income, which was recorded in "Safety, Income & Growth Inc. Predecessor equity" on the Company’s combined and consolidated balance sheets. In connection with the Company's acquisition of the Initial Portfolio, the 2017 Secured Financing was recorded at fair value and the resulting premium will be recorded as a reduction to interest expense over the term of the 2017 Secured Financing. Fair Values—The Company is required to disclose fair value information with regard to its financial instruments, whether or not recognized in the combined and consolidated balance sheets, for which it is practical to estimate fair value. The Financial Accounting Standards Board ("FASB") guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Company determines the estimated fair values of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the Company and the Company’s own assumptions about market participant assumptions. The Company determined the carrying values of its financial instruments including cash and cash equivalents; restricted cash; ground and other lease income receivable; deferred ground and other lease income receivable, net; deferred expenses and other assets, net; and accounts payable, accrued expenses, and other liabilities approximated their fair values. For the Company's debt obligations not traded in secondary markets, the Company determines fair value primarily by using market rates currently available for debt obligations with similar terms and remaining maturities. The Company determined that the significant inputs used to value its debt obligations, net fall within Level 3 of the fair value hierarchy. The Company determined the fair value of its debt obligations, net approximated its carrying value as of September 30, 2017. In connection with the Company's acquisition of the Initial Portfolio and its acquisition of two separate Ground Leases on June 28, 2017 (refer to Note 4), the Company was required to account for the acquisitions as business combinations pursuant to ASC 805. The Company utilized a third-party specialist to assist the Company in recognizing and measuring the identifiable assets acquired, the liabilities assumed, and estimating the remaining useful life of the identifiable assets acquired in accordance with ASC 350. As of September 30, 2017, the remainder of the Company’s significant accounting policies, which are detailed in the Company’s Prospectus, dated June 21, 2017 (the "Prospectus"), have not changed materially. The Company is an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") and is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other publicly-traded companies that are not "emerging growth companies," including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. The Company has elected to utilize the exemption for auditor attestation requirements. In addition, the JOBS Act provides that an "emerging growth company" can take advantage of the extended transition period provided in the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, the Company has chosen to "opt out" of this extended transition period, and as a result, it will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies that are not emerging growth companies. The Company's decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. The Company will remain an "emerging growth company" until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.07 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of the Company's initial public offering, (iii) the date on which the Company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt or (iv) the date on which the Company is deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended. New Accounting Pronouncements—In August 2017, the FASB issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12") to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU 2017-12 expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. ASU 2017-12 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets ("ASU 2017-05") to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. The amendments in ASU 2017-05 simplify GAAP by eliminating several accounting differences between transactions involving assets and transactions involving businesses. The amendments in ASU 2017-05 require an entity to initially measure a retained noncontrolling interest in a nonfinancial asset at fair value consistent with how a retained noncontrolling interest in a business is measured. Also, if an entity transfers ownership interests in a consolidated subsidiary that is within the scope of ASC 610-20 and continues to have a controlling financial interest in that subsidiary, ASU 2017-05 requires the entity to account for the transaction as an equity transaction, which is consistent with how changes in ownership interests in a consolidated subsidiary that is a business are recorded when a parent retains a controlling financial interest in the business. ASU 2017-05 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted beginning January 1, 2017. Management is evaluating the impact of the guidance on the Company's consolidated financial statements and expects to adopt the retrospective approach, which would require the Company to recast revenue and expenses for all prior periods presented in the year of adoption of the new standard. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business ("ASU 2017-01") to provide a more robust framework to use in determining when a set of assets and activities is a business. The amendments provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The Company's real estate acquisitions have historically been accounted for as a business combination or an asset acquisition. Under ASU 2017-01, certain transactions previously accounted for as business combinations under the existing guidance would be accounted for as asset acquisitions under the new guidance. As a result, the Company expects more transaction costs to be capitalized under real estate acquisitions and less transaction costs to be expensed under business combinations. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Management is evaluating the impact of the guidance on the Company's consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash ("ASU 2016-18") which requires that restricted cash be included with cash and cash equivalents when reconciling beginning and ending cash and cash equivalents on the statement of cash flows. In addition, ASU 2016-18 requires disclosure of what is included in restricted cash. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15") which was issued to reduce diversity in practice in how certain cash receipts and cash payments, including debt prepayment or debt extinguishment costs, distributions from equity method investees, and other separately identifiable cash flows, are presented and classified in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (‘‘ASU 2016-13’’) which was issued to provide financial statement users with more decision useful information about the expected credit losses on financial instruments held by a reporting entity. This amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Management does not believe the guidance will have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (‘‘ASU 2016-02’’), which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. For operating leases, a lessee will be required to: (i) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its statement of financial position; (ii) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight line basis and (iii) classify all cash payments within operating activities in its statement of cash flows. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. However, in certain instances a long-term lease of land could be classified as a sales-type lease, resulting in the lessor derecognizing the underlying asset from its books and recording a profit or loss on the sale and a net investment in the lease. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Management is evaluating the impact of the guidance on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (‘'ASU 2014-09’') which supersedes existing industry-specific guidance, including ASC 360-20, Real Estate Sales. The new standard is principles-based and requires more estimates and judgment than current guidance. Certain contracts with customers, including lease contracts and financial instruments and other contractual rights, are not within the scope of the new guidance. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers—Deferral of the Effective Date, to defer the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption was permitted beginning January 1, 2017. Management is evaluating the impact of the guidance on the Company’s consolidated financial statements and expects to adopt the full retrospective approach, which would require the Company to recast revenue and expenses for all prior periods presented in the year of adoption of the new standard. Management does not believe the guidance will have a material impact on the Company’s consolidated financial statements. |
Real Estate and Real Estate-Related Intangibles |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate and Real Estate-Related Intangibles | Real Estate and Real Estate-Related Intangibles The Company's real estate assets consist of the following ($ in thousands)(1):
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Real estate-related intangible assets, net consist of the following items ($ in thousands)(1):
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The estimated expense from the amortization of real estate-related intangible assets for each of the five succeeding fiscal years is as follows ($ in thousands) (1):
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Real estate-related intangible liabilities, net consist of the following items ($ in thousands)(1):
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Acquisitions—On April 14, 2017, the Company, through a merger and other formation transactions, acquired the Initial Portfolio from iStar and accounted for the acquisition as a business combination pursuant to ASC 805. On June 28, 2017, the Company separately acquired two additional Ground Leases (described below) from third party sellers for an aggregate purchase price of approximately $142.0 million and accounted for the acquisitions as business combinations pursuant to ASC 805. The Company acquired the Ground Lease at 6200 Hollywood Boulevard, a 143,151 square foot land parcel subject to a long term Ground Lease located in Los Angeles, CA in the Hollywood neighborhood adjacent to the Hollywood/Vine metro station. The site is currently under construction; once completed, it will be improved with approximately 507 apartments, 56,100 square feet of retail space, 1,237 underground parking spaces, and signage facing Hollywood Boulevard. The Ground Lease has 87 years remaining on its term. The Company also acquired the Ground Lease at 6201 Hollywood Boulevard, a 183,802 square foot land parcel subject to a long term Ground Lease located in Los Angeles, CA in the Hollywood neighborhood adjacent to the Hollywood/Vine metro station. The land is improved with approximately 535 apartments, 71,200 square feet of retail space, 1,300 underground parking spaces, and signage facing Hollywood Boulevard. The Ground Lease has 87 years remaining on its term. The Company's preliminary purchase price allocations for the acquisitions accounted for as business combinations are presented in the table below ($ in thousands):
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The following unaudited table summarizes the Company's pro forma revenues and net income (loss) for the three and nine months ended September 30, 2017 and 2016, as if the acquisition of these properties was completed on January 1, 2016 ($ in thousands):
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From the date of acquisition through September 30, 2017, $10.4 million in total revenues and $5.4 million in net income associated with the properties were included in the Company’s consolidated statements of operations. The pro forma revenues and net income are presented for informational purposes only and may not be indicative of what the actual results of operations of the Company would have been assuming the transaction occurred on January 1, 2016, nor do they purport to represent the Company’s results of operations for future periods. On August 31, 2017, the Company closed on a Ground Lease at 3333 LifeHope in Atlanta, GA for a purchase price of $16.0 million and accounted for the acquisition as an asset acquisition recording $6.3 million in "Real estate, net" and $9.7 million in "Real estate-related intangible assets, net" on the Company's consolidated balance sheet. The property is being converted into a class-A medical office building. The building is 100% pre-leased to 23 subtenants with a weighted average lease term of 17.6 years. The Ground Lease has a term of 99 years and initial rent of $0.9 million, subject to annual increases of 2%. In addition, the ground lessee will construct a 185-space parking deck adjacent to the building scheduled to be completed in 2018, which will be engineered to accommodate future development of the site. The Company has a right of first refusal to provide funding for up to 30% of the construction cost of an additional 160,000 square feet of development on terms consistent with the Ground Lease. iStar, the Company's largest shareholder, committed to provide a $24.0 million construction loan to the ground lessee with an initial term of one year for the renovation of the property, of which $5.1 million was funded as of September 30, 2017. In accordance with the Company's policy with respect to transactions in which iStar, the Company's largest shareholder, is also a participant, the Company's purchase of this Ground Lease was approved by the Company’s independent directors. Future Minimum Ground and Other Lease Payments—Future minimum Ground and Other Lease payments to be collected under non-cancelable leases, excluding percentage rent and other lease payments that are not fixed and determinable, in effect as of September 30, 2017, are as follows by year ($ in thousands):
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Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities | Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities Deferred expenses and other assets, net, consist of the following items ($ in thousands)(1):
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Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands)(1):
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Debt Obligations, net |
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Debt Obligations, net | Debt Obligations, net The Company's debt obligations consist of the following ($ in thousands)(1):
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2017 Secured Financing—In March 2017, the Company entered into a $227.0 million non-recourse secured financing transaction (the "2017 Secured Financing") that bears interest at a fixed rate of 3.795% and matures in April 2027. The 2017 Secured Financing was collateralized by the Initial Portfolio including seven Ground Leases and one master lease (covering the accounts of five properties). In connection with and prior to the closing of the 2017 Secured Financing, the Company entered into a $200 million notional rate lock swap, reducing the effective rate of the 2017 Secured Financing from 3.795% to 3.773%. 2017 Revolver—In June 2017, the Company entered into a recourse senior secured revolving credit facility with a group of lenders in the maximum aggregate initial original principal amount of up to $300.0 million (the "2017 Revolver"). The 2017 Revolver has a term of three years with two 12-month extension options exercisable by the Company, subject to certain conditions, and bears interest at an annual rate of applicable LIBOR plus 1.35%. An undrawn credit facility commitment fee ranges from 0.15% to 0.25%, based on utilization each quarter. This fee is waived for the first six months after the closing date of June 27, 2017. The 2017 Revolver will allow the Company to leverage Ground Leases up to 67%. The 2017 Revolver provides an accordion feature to increase, subject to certain conditions, the maximum availability up to $500.0 million. The Company incurred $2.9 million of lender and third-party fees, all of which were capitalized in "Deferred expenses and other assets, net" on the Company's consolidated balance sheets. As of September 30, 2017, the Company did not have any amounts outstanding on the 2017 Revolver. Debt Covenants—The Company is subject to financial covenants under the 2017 Revolver, including maintaining: a limitation on total consolidated leverage of not more than 70%, or 75% for no more than 180 days, of the Company's total consolidated assets; a consolidated fixed charge coverage ratio of at least 1.45x; a consolidated tangible net worth of at least 75% of the Company's tangible net worth at the date of the 2017 Revolver plus 75% of future issuances of net equity; a consolidated secured leverage ratio of not more than 70%, or 75% for no more than 180 days, of the Company's total consolidated assets; and a secured recourse debt ratio of not more than 5.0% of the Company's total consolidated assets. Additionally, the 2017 Revolver restricts the Company's ability to pay distributions to its stockholders. For the remainder of 2017, the Company will be permitted to make distributions based on an annualized distribution rate of 3.0% of the initial public offering price per share of its common stock. Beginning in 2018, the Company will be permitted to make annual distributions up to an amount equal to 110% of the Company's adjusted funds from operations, as calculated in accordance with the 2017 Revolver. In addition, the Company may make distributions to the extent necessary to maintain the Company's qualification as a REIT. As of September 30, 2017, the Company was in compliance with all of its financial covenants. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings—The Company evaluates developments in legal proceedings that could require a liability to be accrued and/or disclosed. Based on its current knowledge, and after consultation with legal counsel, the Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material adverse effect on the Company’s combined and consolidated financial statements. |
Risk Management |
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Risks and Uncertainties [Abstract] | |
Risk Management | Risk Management In the normal course of its ongoing business operations, the Company encounters credit risk. Credit risk is the risk of default on the Company’s leases that result from a tenant’s inability or unwillingness to make contractually required payments. Risk concentrations—Concentrations of credit risks arise when the Company has multiple leases with a particular tenant or credit party, or a number of the Company’s tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features, such that their ability to meet contractual obligations, including those to the Company, could be similarly affected by changes in economic conditions. The Company underwrites the credit of prospective tenants and often requires them to provide some form of credit support such as corporate guarantees. Although the Company’s real estate assets are geographically diverse and the tenants operate in a variety of industries and property types, to the extent the Company has a significant concentration of ground and other lease income from any tenant, the inability of that tenant to make its payment could have a material adverse effect on the Company. During the nine months ended September 30, 2017, the Company’s two largest tenants accounted for approximately $7.9 million and $4.0 million, or 48% and 24%, respectively, of the Company’s revenues. Five hotels leased by the Company under a master lease guaranteed by Park Intermediate Holdings LLC represented 33% of the Company’s total assets at September 30, 2017. Park Intermediate Holdings LLC is a subsidiary of Park Hotels & Resorts Inc., which is a public reporting company. According to Park Hotels & Resorts Inc.’s public Securities and Exchange Commission filings, Park Hotels & Resorts Inc. conducts substantially all of its business and holds substantially all of its assets through Park Intermediate Holdings LLC. For detailed financial information regarding Park Hotels & Resorts Inc., please refer to its financial statements, which are publicly available on the website of the Securities and Exchange Commission at http://www.sec.gov. |
Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Common Stock—On April 14, 2017, two institutional investors acquired 2,875,000 shares of the Company's common stock for $57.5 million and iStar acquired 2,775,000 shares of the Company's common stock for $55.5 million. On June 27, 2017, the Company sold 10,250,000 shares of its common stock in its initial public offering for proceeds of $205.0 million. Concurrently with the initial public offering, the Company sold $45.0 million in shares, or 2,250,000 shares, of its common stock to iStar in a private placement and issued a total of 40,000 shares to its directors who are not employees of the Manager or iStar in consideration for their services as directors. The following table presents a summary of the Company's ownership as of the initial public offering on June 27, 2017:
Subsequent to the initial public offering, iStar purchased 1.3 million shares of the Company's common stock for $24.5 million, at an average cost of $19.20 per share, pursuant to a 10b5-1 plan (the “10b5-1 Plan") in accordance with Rules 10b5-1 and 10b-18 under the Securities and Exchange Act of 1934, as amended, under which it could buy in the open market up to $24.5 million in the aggregate of the Company’s common stock. As of September 30, 2017, iStar had utilized all of the availability authorized in the 10b5-1 Plan and owned 34.6% of the Company's common stock. In addition, subsequent to the initial public offering, trusts established by Jay Sugarman, the Company's Chairman and Chief Executive Officer, and Geoffrey Jervis, the Company's Chief Operating Officer and Chief Financial Officer, purchased 26 thousand shares in the aggregate of the Company's common stock for an aggregate $0.5 million, at an average cost of $19.20 per share, pursuant to a 10b5-1 plan (the “10b5-1 Plan") in accordance with Rules 10b5-1 and 10b-18 under the Securities and Exchange Act of 1934, as amended, under which they could buy in the open market up to $0.5 million in the aggregate of the Company’s common stock. As of September 30, 2017, the trusts established by Jay Sugarman, the Company's Chairman and Chief Executive Officer, and Geoffrey Jervis, the Company's Chief Operating Officer and Chief Financial Officer, had utilized all of the availability authorized in the 10b5-1 Plan. Safety, Income & Growth Inc. Predecessor Equity—For the periods prior to April 14, 2017, Safety, Income & Growth Inc. Predecessor Equity represents net contributions from and distributions to iStar. Most of the entities included in the Predecessor’s financial statements did not have bank accounts for the periods presented and most cash transactions for the Predecessor were transacted through bank accounts owned by iStar and are included in Safety, Income & Growth Inc. Predecessor Equity. Dividends—The Company intends to elect to qualify as a REIT beginning with its taxable year ending December 31, 2017. To qualify as a REIT, the Company must annually distribute, at a minimum, an amount equal to 90% of its taxable income, excluding net capital gains, and must distribute 100% of its taxable income (including net capital gains) to eliminate corporate federal income taxes payable by the REIT. Because taxable income differs from cash flow from operations due to non-cash revenues and expenses (such as depreciation and other items), in certain circumstances, the Company may generate operating cash flow in excess of its dividends, or alternatively, may need to make dividend payments in excess of operating cash flows. During the nine months ended September 30, 2017, the Company declared a cash dividend on its common stock of $2.8 million, or $0.1566 per share, which was paid in October 2017. |
Earnings Per Share |
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Earnings Per Share | Earnings Per Share EPS is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of shares outstanding for the period. The following table presents a reconciliation of income (loss) from operations used in the basic and diluted EPS calculations ($ in thousands, except for per share data)(1):
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Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||
Related Party Transactions | Related Party Transactions The Company is externally managed by an affiliate of iStar, the Company's largest shareholder. Although the Manager was recently formed, iStar has been an active real estate investor for over 20 years and has executed transactions with an aggregate value in excess of $35.0 billion. iStar has an extensive network for sourcing investments, which includes relationships with brokers, corporate tenants and developers that it has established over its long operating history. As of June 30, 2017, iStar had total assets of approximately $4.9 billion and 192 employees in its New York City headquarters and its seven regional offices across the United States. Management Agreement The Company has designed what it believes to be a management agreement with unique features that create alignment and incentives. A summary of the terms of the management agreement is below:
For the period from April 14, 2017 to September 30, 2017, the Company recorded $1.1 million in management fees to the Manager. These management fees are recorded in "General and administrative expenses" in the Company's consolidated statements of operations. The management fees were not actually paid to the Manager because no management fees are payable during the first year of the agreement. The fees were accounted for as a non-cash capital contribution from iStar despite iStar not receiving any compensation for its services. Expense Reimbursements The Company pays, or reimburses the Manager for, all of the Company's operating expenses, except those specifically required to be borne by the Manager under the management agreement. In addition, because the Manager’s personnel perform certain legal, accounting, due diligence tasks and other services that third-party professionals or consultants otherwise would perform, the Manager is reimbursed, solely in shares of the Company's common stock, for the documented cost of performing such tasks. For the period from the initial public offering on June 27, 2017 to September 30, 2017, the Company was allocated $0.3 million in expenses from the Manager. These expenses are recorded in "General and administrative expenses" in the Company's consolidated statements of operations. In accordance with the provisions of the management agreement, the expenses were waived by the Manager and, accordingly, were accounted for as a non-cash capital contribution from iStar despite iStar not receiving any reimbursement for these allocated expenses. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Basis of presentation | For periods prior to April 14, 2017, the accompanying combined financial statements do not represent the financial position and results of operations of one legal entity, but rather a combination of entities under common control (the "Predecessor") that have been ‘‘carved out’’ from iStar’s consolidated financial statements. For periods prior to April 14, 2017, these combined financial statements reflect the revenues and expenses of the Predecessor and include certain material assets and liabilities of iStar that are specifically identifiable and generated through, or associated with, an in-place lease, which have been reflected at iStar’s historical basis. For periods subsequent to April 14, 2017, the accompanying consolidated financial statements represent the consolidated financial statements of the Company. In addition, as a result of the Company's acquisition of the Initial Portfolio from iStar, the consolidated financial statements subsequent to April 14, 2017 are presented on a new basis of accounting pursuant to Accounting Standards Codification ("ASC") 805 (refer to Note 4). |
Use of estimates | The preparation of these combined and consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (‘‘GAAP’’) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These combined financial statements for the periods prior to April 14, 2017 include an allocation of general and administrative expenses and interest expense to the Predecessor from iStar. General and administrative expenses include certain iStar corporate functions, including executive oversight, treasury, finance, human resources, tax compliance and planning, internal audit, financial reporting, information technology and investor relations. General and administrative expenses, including stock based compensation, represent a pro rata allocation of costs from iStar’s net lease and corporate business segments based on our average net assets as a percentage of iStar’s average net assets. Interest expense was allocated to the Predecessor by calculating its average net assets as a percentage of the average net assets in iStar’s net lease business segment and multiplying that percentage by the interest expense allocated to iStar’s net lease business segment (only for the number of days in the period in which the Predecessor did not have debt obligations outstanding—refer to Note 6). The Company believes the allocation methodology for the general and administrative expenses and interest expense is reasonable. Accordingly, the general and administrative expense allocation presented in our combined statements of operations for historical periods does not necessarily reflect what our general and administrative expenses will be as a standalone public company for future reporting periods. In the opinion of management, the accompanying combined financial statements contain all adjustments consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. |
Principles of combination and consolidation | For the periods prior to April 14, 2017, the combined financial statements include on a carve-out basis the historical balance sheets and statements of operations and cash flows attributed to the Predecessor. For the periods subsequent to April 14, 2017, the consolidated financial statements include the accounts and operations of the Company and its consolidated subsidiaries. |
Cash and cash equivalents | Cash and cash equivalents—Cash and cash equivalents include cash held in banks or invested in money market funds, if applicable, with original maturity terms of less than 90 days. Restricted Cash—Restricted cash represents amounts required to be maintained under certain of the Company's derivative transactions. |
Ground lease income | income—Ground and other lease income includes rent earned from leasing land and buildings owned by the Company to its tenants. Ground and other lease income is recognized on the straight-line method of accounting, generally from the later of the date the lessee takes possession of the space and it is ready for its intended use or the date of acquisition of the asset subject to existing leases. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The periodic difference between ground and other lease income recognized under this method and contractual lease payment terms is recorded as deferred ground and other lease income receivable and is included in ‘‘Deferred ground and other lease income receivable, net’’ on the Company's consolidated and combined balance sheets. The Company is also entitled to percentage rent pursuant to some of its leases and records percentage rent as ground and other lease income when earned. Ground and other lease income also includes the amortization of finite lived intangible assets and liabilities, which are amortized over the period during which the assets or liabilities are expected to contribute directly or indirectly to the future cash flows of the business acquired. |
Earnings per share | Earnings per share—The Company has one class of common stock. Earnings per share ("EPS") is calculated by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding (refer to Note 9 for a summary of shares outstanding). |
Deferred financing fees | Deferred financing fees—Deferred financing fees associated with the 2017 Revolver (refer to Note 6) are recorded in ‘‘Deferred expenses and other assets, net’’ on the Company’s combined and consolidated balance sheets. The amortization of deferred financing fees is included in ‘‘Interest expense’’ in the Company’s combined and consolidated statements of operations. |
Dispositions | Dispositions—Gains on the sale of real estate assets are recognized in "Income from sales of real estate" in accordance with ASC 360-20, Real Estate Sales. Gains on sales of real estate are recognized for full profit recognition upon closing of the sale transactions, when the profit is determinable, the earnings process is virtually complete, the parties are bound by the terms of the contract, all consideration has been exchanged, any permanent financing for which the seller is responsible has been arranged and all conditions for closing have been performed. The Company primarily uses specific identification and the relative sales value method to allocate costs. |
Stock-based compensation | Stock-based compensation—The Company adopted an equity incentive plan to provide equity incentive opportunities to members of the Manager’s management team and employees who perform services for the Company, the Company's independent directors, advisers, consultants and other personnel. The Company's equity incentive plan provides for grants of stock options, shares of restricted common stock, phantom shares, dividend equivalent rights and other equity-based awards, including long-term incentive plan units. The Company accounts for stock-based compensation awards using the fair value method, which requires an estimate of fair value of the award at the time of grant. On June 27, 2017, the Company's directors who are not officers or employees of the Manager or iStar were granted a total of 40,000 shares in the Company's common stock with an aggregate grant date fair value of $0.8 million. The shares granted to the directors vested immediately and the Company recognized $0.8 million in stock-based compensation, which is classified within "General and administrative" in the Company's consolidated statements of operations. |
Derivative instruments and hedging activity | Derivative instruments and hedging activity—The Company's use of derivative financial instruments is associated with debt issuances and primarily limited to the utilization of interest rate swaps, interest rate caps or other instruments to manage interest rate risk exposure. The Company does not enter into derivatives for trading purposes. The Company recognizes derivatives as either assets or liabilities on the Company's combined and consolidated balance sheets at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge of the exposure to changes in the fair value of a recognized asset or liability, a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. |
Fair values | Fair Values—The Company is required to disclose fair value information with regard to its financial instruments, whether or not recognized in the combined and consolidated balance sheets, for which it is practical to estimate fair value. The Financial Accounting Standards Board ("FASB") guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Company determines the estimated fair values of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the Company and the Company’s own assumptions about market participant assumptions. The Company determined the carrying values of its financial instruments including cash and cash equivalents; restricted cash; ground and other lease income receivable; deferred ground and other lease income receivable, net; deferred expenses and other assets, net; and accounts payable, accrued expenses, and other liabilities approximated their fair values. For the Company's debt obligations not traded in secondary markets, the Company determines fair value primarily by using market rates currently available for debt obligations with similar terms and remaining maturities. The Company determined that the significant inputs used to value its debt obligations, net fall within Level 3 of the fair value hierarchy. The Company determined the fair value of its debt obligations, net approximated its carrying value as of September 30, 2017. |
New accounting pronouncements | New Accounting Pronouncements—In August 2017, the FASB issued Accounting Standards Update ("ASU") 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12") to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. ASU 2017-12 expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. ASU 2017-12 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets ("ASU 2017-05") to clarify the scope of Subtopic 610-20, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, and to add guidance for partial sales of nonfinancial assets. The amendments in ASU 2017-05 simplify GAAP by eliminating several accounting differences between transactions involving assets and transactions involving businesses. The amendments in ASU 2017-05 require an entity to initially measure a retained noncontrolling interest in a nonfinancial asset at fair value consistent with how a retained noncontrolling interest in a business is measured. Also, if an entity transfers ownership interests in a consolidated subsidiary that is within the scope of ASC 610-20 and continues to have a controlling financial interest in that subsidiary, ASU 2017-05 requires the entity to account for the transaction as an equity transaction, which is consistent with how changes in ownership interests in a consolidated subsidiary that is a business are recorded when a parent retains a controlling financial interest in the business. ASU 2017-05 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted beginning January 1, 2017. Management is evaluating the impact of the guidance on the Company's consolidated financial statements and expects to adopt the retrospective approach, which would require the Company to recast revenue and expenses for all prior periods presented in the year of adoption of the new standard. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business ("ASU 2017-01") to provide a more robust framework to use in determining when a set of assets and activities is a business. The amendments provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The Company's real estate acquisitions have historically been accounted for as a business combination or an asset acquisition. Under ASU 2017-01, certain transactions previously accounted for as business combinations under the existing guidance would be accounted for as asset acquisitions under the new guidance. As a result, the Company expects more transaction costs to be capitalized under real estate acquisitions and less transaction costs to be expensed under business combinations. ASU 2017-01 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Management is evaluating the impact of the guidance on the Company's consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash ("ASU 2016-18") which requires that restricted cash be included with cash and cash equivalents when reconciling beginning and ending cash and cash equivalents on the statement of cash flows. In addition, ASU 2016-18 requires disclosure of what is included in restricted cash. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15") which was issued to reduce diversity in practice in how certain cash receipts and cash payments, including debt prepayment or debt extinguishment costs, distributions from equity method investees, and other separately identifiable cash flows, are presented and classified in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted. Management does not believe the guidance will have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (‘‘ASU 2016-13’’) which was issued to provide financial statement users with more decision useful information about the expected credit losses on financial instruments held by a reporting entity. This amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2018. Management does not believe the guidance will have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (‘‘ASU 2016-02’’), which requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases. For operating leases, a lessee will be required to: (i) recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its statement of financial position; (ii) recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight line basis and (iii) classify all cash payments within operating activities in its statement of cash flows. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. However, in certain instances a long-term lease of land could be classified as a sales-type lease, resulting in the lessor derecognizing the underlying asset from its books and recording a profit or loss on the sale and a net investment in the lease. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. Management is evaluating the impact of the guidance on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (‘'ASU 2014-09’') which supersedes existing industry-specific guidance, including ASC 360-20, Real Estate Sales. The new standard is principles-based and requires more estimates and judgment than current guidance. Certain contracts with customers, including lease contracts and financial instruments and other contractual rights, are not within the scope of the new guidance. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers—Deferral of the Effective Date, to defer the effective date of ASU 2014-09 by one year. ASU 2014-09 is now effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption was permitted beginning January 1, 2017. Management is evaluating the impact of the guidance on the Company’s consolidated financial statements and expects to adopt the full retrospective approach, which would require the Company to recast revenue and expenses for all prior periods presented in the year of adoption of the new standard. Management does not believe the guidance will have a material impact on the Company’s consolidated financial statements. |
Summary of Significant Accounting Policies (Tables) |
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Derivative Financial Instruments Designated in Hedging Relationships | The table below presents the Company's cash flow hedges that are designated in hedging relationships as well as their classification on the consolidated balance sheet as of September 30, 2017 ($ in thousands)(1):
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Real Estate and Real Estate-Related Intangibles (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Assets | The Company's real estate assets consist of the following ($ in thousands)(1):
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Schedule of Real Estate-Related Intangible Assets, Net | Real estate-related intangible assets, net consist of the following items ($ in thousands)(1):
_______________________________________________________________________________
|
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Schedule of Future Amortization Expense | The estimated expense from the amortization of real estate-related intangible assets for each of the five succeeding fiscal years is as follows ($ in thousands) (1):
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Real Estate - Related Intangibles, Liabilities | Real estate-related intangible liabilities, net consist of the following items ($ in thousands)(1):
_______________________________________________________________________________
|
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Purchase Price Allocations | The Company's preliminary purchase price allocations for the acquisitions accounted for as business combinations are presented in the table below ($ in thousands):
_______________________________________________________________________________
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Pro Forma Revenues and Net Income (Loss) | The following unaudited table summarizes the Company's pro forma revenues and net income (loss) for the three and nine months ended September 30, 2017 and 2016, as if the acquisition of these properties was completed on January 1, 2016 ($ in thousands):
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|
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Future Minimum Ground Net Lease Payments | Future minimum Ground and Other Lease payments to be collected under non-cancelable leases, excluding percentage rent and other lease payments that are not fixed and determinable, in effect as of September 30, 2017, are as follows by year ($ in thousands):
_______________________________________________________________________________
|
Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deferred expenses and other assets, net | Deferred expenses and other assets, net, consist of the following items ($ in thousands)(1):
_______________________________________________________________________________
|
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Schedule of accounts payable, accrued expenses and other liabilities | Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands)(1):
_______________________________________________________________________________
|
Debt Obligations, net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt obligations | The Company's debt obligations consist of the following ($ in thousands)(1):
_______________________________________________________________________________
|
Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | The following table presents a summary of the Company's ownership as of the initial public offering on June 27, 2017:
|
Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | The following table presents a reconciliation of income (loss) from operations used in the basic and diluted EPS calculations ($ in thousands, except for per share data)(1):
_______________________________________________________________________________
|
Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 | |||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||
Schedule of Related Party Transactions | The Company has designed what it believes to be a management agreement with unique features that create alignment and incentives. A summary of the terms of the management agreement is below:
|
Organization and Business (Details) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 28, 2017
USD ($)
|
Jun. 27, 2017
USD ($)
$ / shares
shares
|
Apr. 14, 2017
USD ($)
investor
$ / shares
shares
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2017
property
|
Dec. 31, 2016
property
|
|
Business Acquisition [Line Items] | ||||||
Number of institutional investors | investor | 2 | |||||
Total consideration | $ 142.0 | |||||
Initial Capitalization | ||||||
Business Acquisition [Line Items] | ||||||
Number of institutional investors | investor | 2 | |||||
IPO and Private Placement | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from initial public offering | $ 205.0 | |||||
Proceeds from private placement offering | $ 45.0 | |||||
Share price (in dollars per share) | $ / shares | $ 20 | |||||
iStar Inc. | IPO and Private Placement | ||||||
Business Acquisition [Line Items] | ||||||
Transaction costs | $ 18.9 | |||||
Payments of organization and offering costs | $ 18.7 | |||||
Initial Portfolio from iStar | ||||||
Business Acquisition [Line Items] | ||||||
Number of properties | property | 12 | 12,000 | ||||
Total consideration | $ 340.0 | |||||
Common Stock | Initial Capitalization | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued (in shares) | shares | 2,875,000 | |||||
Proceeds from issuance of common stock | $ 57.5 | |||||
Ownership percentage by Shareholders | 51.00% | |||||
Share price (in dollars per share) | $ / shares | $ 20.0 | |||||
Common Stock | IPO and Private Placement | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued (in shares) | shares | 10,250,000 | |||||
Proceeds from initial public offering | $ 205.0 | |||||
Common Stock | iStar Inc. | Initial Capitalization | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued (in shares) | shares | 2,775,000 | |||||
Proceeds from issuance of common stock | $ 55.5 | |||||
Ownership percentage by Shareholders | 49.00% | |||||
Share price (in dollars per share) | $ / shares | $ 20 | |||||
Common Stock | iStar Inc. | IPO and Private Placement | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued (in shares) | shares | 2,250,000 | |||||
Proceeds from private placement offering | $ 45.0 | |||||
Share price (in dollars per share) | $ / shares | $ 20 | |||||
Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Ground leases term | 30 years | |||||
Ground lease investment initial targeted value of of ground lease of combined value | 30.00% | |||||
Ground Lease, Ratio of Property Net Operating Income to Ground Lease Payment Due | 2.0 | |||||
Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Ground leases term | 99 years | |||||
Ground lease investment initial targeted value of of ground lease of combined value | 45.00% | |||||
Ground Lease, Ratio of Property Net Operating Income to Ground Lease Payment Due | 5.0 |
Summary of Significant Accounting Policies (Narrative) (Details) - Common Stock $ in Millions |
Jun. 27, 2017
USD ($)
shares
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock-based compensation, number of shares granted | shares | 40,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grant Date Fair Value | $ 0.8 |
Issuance of Stock and Warrants for Services or Claims | $ 0.8 |
Summary of Significant Accounting Policies (Derivative Instruments and Hedging Activities) (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|---|
Feb. 28, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
derivative
|
Sep. 30, 2017
USD ($)
derivative
|
Sep. 30, 2018
USD ($)
|
Oct. 01, 2017
USD ($)
|
|
Derivative [Line Items] | |||||
Unrealized (loss) gain on derivatives | $ 400 | $ (100) | $ (200) | ||
Interest Rate Swap | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Number of Interest Rate Derivatives Held | derivative | 4 | 4 | |||
Forecast | Reclassification out of Accumulated Other Comprehensive Income | Interest Rate Swap | Designated as Hedging Instrument | |||||
Derivative [Line Items] | |||||
Interest expense | $ 200 | ||||
October 2020 | Interest Rate Swap | Designated as Hedging Instrument | Deferred Expenses and Other Assets, Net | |||||
Derivative [Line Items] | |||||
Derivative asset, notional amount | $ 45,000 | $ 45,000 | |||
Derivative assets, fair value | 48 | 48 | |||
October 2020 | Interest Rate Swap | Designated as Hedging Instrument | Deferred Expenses and Other Assets, Net | |||||
Derivative [Line Items] | |||||
Derivative asset, notional amount | 10,000 | 10,000 | |||
Derivative assets, fair value | 55 | 55 | |||
October 2030 | Interest Rate Swap | Designated as Hedging Instrument | Deferred Expenses and Other Assets, Net | |||||
Derivative [Line Items] | |||||
Derivative asset, notional amount | 10,000 | 10,000 | |||
Derivative assets, fair value | 114 | 114 | |||
October 2030 | Interest Rate Swap | Designated as Hedging Instrument | Accounts Payable, Accrued Expenses, and Other Liabilities | |||||
Derivative [Line Items] | |||||
Derivative liability, notional amount | 95,000 | 95,000 | |||
Derivative liability, fair value | $ 460 | $ 460 | |||
Subsequent Event | October 2020 | Interest Rate Swap | Designated as Hedging Instrument | Deferred Expenses and Other Assets, Net | |||||
Derivative [Line Items] | |||||
Derivative asset, notional amount | $ 95,000 |
Real Estate and Real Estate-Related Intangibles (Real Estate Assets) (Details) - USD ($) |
1 Months Ended | ||
---|---|---|---|
Feb. 28, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
|
Real Estate [Abstract] | |||
Land and land improvements, at cost | $ 220,749,000 | $ 41,160,000 | |
Buildings and improvements, at cost | 192,396,000 | 124,539,000 | |
Less: accumulated depreciation | (2,752,000) | (61,221,000) | |
Real estate-related intangible assets, net | 410,393,000 | 104,478,000 | |
Real estate-related intangible assets, net | 140,069,000 | 32,680,000 | |
Total real estate, net and real estate-related intangible assets, net | $ 550,462,000 | $ 137,158,000 | |
Proceeds from sales of real estate | $ 500,000 | ||
Carrying value of Hilton Western parking facility | $ 0 |
Real Estate and Real Estate-Related Intangibles (Intangibles) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Real estate-related intangible assets, net | $ 140,069 | $ 140,069 | $ 32,680 | ||
Real estate-related intangible liabilities, net | 58,114 | 58,114 | 0 | ||
Ground lease income | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible liabilities, accumulated amortization | 300 | 300 | |||
Amortization of intangible liabilities | 300 | ||||
Above-market lease assets, net | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Real estate-related intangible assets, net | 77,528 | 77,528 | 0 | ||
Intangible assets, accumulated amortization | 600 | 600 | |||
Above-market lease assets, net | Ground lease income | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | (600) | ||||
In-place lease assets, net | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Real estate-related intangible assets, net | 36,510 | 36,510 | 0 | ||
Intangible assets, accumulated amortization | 1,400 | 1,400 | |||
In-place lease assets, net | Depreciation and amortization | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 1,400 | ||||
Below-market lease | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Real estate-related intangible assets, net | 26,031 | 26,031 | 0 | ||
Intangible assets, accumulated amortization | 500 | 500 | |||
Annual payments to third-party owner of the property | 400 | 400 | |||
Below-market lease | Real estate expense | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 500 | ||||
Lease incentives, net | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Real estate-related intangible assets, net | 0 | 0 | 32,545 | ||
Intangible assets, accumulated amortization | 2,100 | ||||
Lease incentives, net | Ground lease income | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 100 | 100 | $ 300 | ||
Other intangible assets, net | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Real estate-related intangible assets, net | $ 0 | $ 0 | $ 135 |
Real Estate and Real Estate-Related Intangibles (Intangible Asset Future Amortization Expense) (Details) $ in Thousands |
Sep. 30, 2017
USD ($)
|
---|---|
Real Estate [Abstract] | |
2017 (remaining three months) | $ 1,344 |
2018 | 5,376 |
2019 | 5,376 |
2020 | 5,376 |
2021 | $ 5,376 |
Real Estate and Real Estate-Related Intangibles (Acquisitions) (Details) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Aug. 31, 2017
USD ($)
ft²
parking_space
subtenants
|
Jun. 28, 2017
USD ($)
ft²
parking_space
apartment
business
|
Sep. 30, 2017
USD ($)
business
|
|
Business Acquisition [Line Items] | |||
Number of Ground Leases acquired | business | 2 | 2 | |
Total consideration | $ 142.0 | ||
6200 Hollywood Boulevard | |||
Business Acquisition [Line Items] | |||
Land subject to ground leases | ft² | 143,151 | ||
Number of units | apartment | 507 | ||
Net rentable retail space | ft² | 56,100 | ||
Number of underground parking spaces | parking_space | 1,237 | ||
Remaining lease term | 87 years | ||
6201 Hollywood Boulevard | |||
Business Acquisition [Line Items] | |||
Land subject to ground leases | ft² | 183,802 | ||
Number of units | apartment | 535 | ||
Net rentable retail space | ft² | 71,200 | ||
Number of underground parking spaces | parking_space | 1,300 | ||
Remaining lease term | 87 years | ||
3333 LifeHope in Alpharetta, Georgia | |||
Business Acquisition [Line Items] | |||
Total consideration | $ 16.0 | ||
Percent of building pre-leased | 100.00% | ||
Number of subtenants | subtenants | 23 | ||
Weighted average lease term | 17 years 7 months 6 days | ||
Ground leases term | 99 years | ||
Annual base rent, subject to annual percentage increases | $ 0.9 | ||
Annual percent rent increase | 2.00% | ||
Number of parking spaces to be constructed | parking_space | 185 | ||
Future construction funding, percent authorized | 30.00% | ||
Additional construction, number of square feet | ft² | 160,000 | ||
Additional construction funding commitment | $ 24.0 | ||
Additional construction, funding commitment, term | 1 year | ||
Additional construction, amount already funded | $ 5.1 | ||
Real Estate, Net | 3333 LifeHope in Alpharetta, Georgia | |||
Business Acquisition [Line Items] | |||
Total consideration | $ 6.3 | ||
Real Estate Related Intangible Assets, Net | 3333 LifeHope in Alpharetta, Georgia | |||
Business Acquisition [Line Items] | |||
Total consideration | $ 9.7 |
Real Estate and Real Estate-Related Intangibles (Purchase Price Allocations) (Details) - USD ($) $ in Thousands |
Jun. 28, 2017 |
Apr. 14, 2017 |
Sep. 30, 2017 |
---|---|---|---|
Assets | |||
Land and land improvements, at cost | $ 214,448 | ||
Buildings and improvements, at cost | 192,396 | ||
Real estate | 406,844 | ||
Real estate-related intangible assets | 132,775 | ||
Other assets | 1,174 | ||
Total assets | 540,793 | ||
Liabilities | |||
Real estate-related intangible liabilities | 58,378 | ||
Debt obligations | 227,415 | ||
Total liabilities | 285,793 | ||
Purchase Price | 255,000 | ||
Total consideration | $ 142,000 | ||
Initial Portfolio from iStar | |||
Assets | |||
Land and land improvements, at cost | 73,472 | ||
Buildings and improvements, at cost | 192,396 | ||
Real estate | 265,868 | ||
Real estate-related intangible assets | 124,017 | ||
Other assets | 1,174 | ||
Total assets | 391,059 | ||
Liabilities | |||
Real estate-related intangible liabilities | 50,644 | ||
Debt obligations | 227,415 | ||
Total liabilities | 278,059 | ||
Purchase Price | 113,000 | ||
Total consideration | $ 340,000 | ||
6200 Hollywood Boulevard | |||
Assets | |||
Land and land improvements, at cost | 68,140 | ||
Buildings and improvements, at cost | 0 | ||
Real estate | 68,140 | ||
Real estate-related intangible assets | 5,500 | ||
Other assets | 0 | ||
Total assets | 73,640 | ||
Liabilities | |||
Real estate-related intangible liabilities | 0 | ||
Debt obligations | 0 | ||
Total liabilities | 0 | ||
Purchase Price | 73,640 | ||
6201 Hollywood Boulevard | |||
Assets | |||
Land and land improvements, at cost | 72,836 | ||
Buildings and improvements, at cost | 0 | ||
Real estate | 72,836 | ||
Real estate-related intangible assets | 3,258 | ||
Other assets | 0 | ||
Total assets | 76,094 | ||
Liabilities | |||
Real estate-related intangible liabilities | 7,734 | ||
Debt obligations | 0 | ||
Total liabilities | 7,734 | ||
Purchase Price | 68,360 | ||
Below-market lease | |||
Liabilities | |||
Annual payments to third-party owner of the property | $ 400 |
Real Estate and Real Estate-Related Intangibles (Pro Forma Information) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Real Estate [Abstract] | |||||
Pro forma revenues | $ 6,256 | $ 6,161 | $ 18,916 | $ 18,228 | |
Pro forma net income (loss) | $ (721) | $ 615 | $ 387 | $ 1,607 | |
Pro forma earnings per share basic (in dollars per share) | $ 0.08 | ||||
Pro forma earnings per share diluted (in dollars per share) | $ 0.17 | ||||
Revenue since acquisition | $ 10,400 | ||||
Net income since acquisition | $ 5,400 |
Real Estate and Real Estate-Related Intangibles (Future Minimum Ground Net Lease Payments) (Details) $ in Thousands |
Sep. 30, 2017
USD ($)
|
---|---|
Future Minimum Ground Net Lease Payments to be Collected | |
2017 (remaining three months) | $ 5,039 |
2018 | 20,197 |
2019 | 20,270 |
2020 | 20,348 |
2021 | 20,434 |
Leases with CPI Based Escalations | |
Future Minimum Ground Net Lease Payments to be Collected | |
2017 (remaining three months) | 1,248 |
2018 | 4,993 |
2019 | 4,993 |
2020 | 4,993 |
2021 | 4,993 |
Leases with Fixed Escalations | |
Future Minimum Ground Net Lease Payments to be Collected | |
2017 (remaining three months) | 1,283 |
2018 | 5,172 |
2019 | 5,245 |
2020 | 5,323 |
2021 | 5,409 |
Leases with Revenue Participation | |
Future Minimum Ground Net Lease Payments to be Collected | |
2017 (remaining three months) | 2,508 |
2018 | 10,032 |
2019 | 10,032 |
2020 | 10,032 |
2021 | $ 10,032 |
Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities (Schedule of Other Assets) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated Amortization, Debt Issuance Costs, Current | $ 200 | |
Deferred finance costs, net | 2,617 | $ 0 |
Other assets | 681 | 5,841 |
Leasing costs, net | 39 | 763 |
Deferred expenses and other assets, net | $ 3,337 | 6,604 |
Receivable related to the funding provided by investment | 4,100 | |
Deferred offering costs | 1,700 | |
Accumulated amortization on leasing costs | $ 28 |
Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities (Schedule of Other Liabilities) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Dividends declared and payable | $ 2,848 | $ 0 |
Accounts Payable | 1,567 | 779 |
Other liabilities | 1,350 | 89 |
Interest payable | 574 | 0 |
Accrued expenses | 444 | 708 |
Accounts payable, accrued expenses and other liabilities | 6,783 | $ 1,576 |
Payable to the Manager for costs it paid on the Company's behalf | $ 600 |
Debt Obligations, net (Schedule of Debt) (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Total debt obligations | $ 227,000 | $ 0 | |
Debt premium, net | (396) | 0 | |
Total debt obligations, net | 227,396 | 0 | |
Secured Debt | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 227,000 | 0 | |
2017 Secured Financing | Secured Debt | |||
Debt Instrument [Line Items] | |||
Total debt obligations | $ 227,000 | $ 0 | |
Stated interest rates | 3.795% | 3.795% |
Debt Obligations, net (Narrative) (Details) |
1 Months Ended | 6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2017
USD ($)
extension
|
Mar. 31, 2017
USD ($)
lease
property
|
Jun. 30, 2017
USD ($)
extension
|
Sep. 30, 2017
USD ($)
|
Mar. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Line of Credit Facility [Line Items] | ||||||
Deferred finance costs, net | $ 2,617,000 | $ 0 | ||||
2017 Secured Financing | Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, face amount | $ 227,000,000.0 | $ 227,000,000 | ||||
Stated interest rates | 3.795% | 3.795% | ||||
Number of ground net leases collateralizing loan | lease | 7 | |||||
Number of master lease collateralizing loan | lease | 1 | |||||
Number of properties covered under master lease agreement | property | 5 | |||||
Effective interest rate | 3.795% | 3.773% | ||||
Interest Rate Swap | ||||||
Line of Credit Facility [Line Items] | ||||||
Notional amount | $ 200,000,000 | |||||
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum leverage ratio | 70.00% | |||||
Maximum leverage ratio for 180 day period | 75.00% | |||||
Debt instrument covenant multiple of minimum fixed charges on outstanding borrowings | 1.45 | |||||
Tangible net worth, percent of tangible net worth at date of issuance | 75.00% | |||||
Tangible net worth, percent of future issuances of net equity | 75.00% | |||||
Maximum secured leverage ratio | 70.00% | |||||
Maximum secured leverage ratio for 180 day period | 75.00% | |||||
Covenant description secured recourse debt ratio maximum | 5.00% | |||||
Annualized distribution rate of initial public offering price | 3.00% | |||||
Future annualized distribution rate of adjusted funds from operations | 110.00% | |||||
Revolving Credit Facility | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 300,000,000.0 | $ 300,000,000.0 | ||||
Debt term | 3 years | |||||
Number of extension options available | extension | 2 | 2 | ||||
Debt extension term | 12 months | |||||
Maximum leverage rate | 67.00% | 67.00% | ||||
Accordion feature, increase limit | $ 500,000,000.0 | $ 500,000,000.0 | ||||
Revolving Credit Facility | Line of Credit | Deferred Expenses and Other Assets, Net | ||||||
Line of Credit Facility [Line Items] | ||||||
Deferred finance costs, net | $ 2,900,000 | $ 2,900,000 | ||||
Revolving Credit Facility | Line of Credit | LIBOR | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis point spread on variable interest rate (as a percent) | 1.35% | |||||
Minimum | Revolving Credit Facility | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Unused capacity, commitment fee percentage | 0.15% | |||||
Maximum | Revolving Credit Facility | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Unused capacity, commitment fee percentage | 0.25% |
Risk Management (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
hotel
| |
Revenue | Customer Concentration Risk | Tenant 1 | |
Concentration Risk [Line Items] | |
Revenues | $ 7.9 |
Concentration risk percentage | 48.00% |
Revenue | Customer Concentration Risk | Tenant 2 | |
Concentration Risk [Line Items] | |
Revenues | $ 4.0 |
Concentration risk percentage | 24.00% |
Assets | Product Concentration Risk | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 33.00% |
Number of hotels leased | hotel | 5 |
Equity (Details) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 27, 2017
USD ($)
shares
|
Apr. 14, 2017
USD ($)
investor
shares
|
Sep. 30, 2017
USD ($)
$ / shares
shares
|
Sep. 30, 2017
USD ($)
$ / shares
|
|
Class of Stock [Line Items] | ||||
Number of institutional investors | investor | 2 | |||
Dividends declared | $ 2.8 | |||
Dividends declared, per share (usd per share) | $ / shares | $ 0.1566 | |||
Initial Capitalization | ||||
Class of Stock [Line Items] | ||||
Number of institutional investors | investor | 2 | |||
IPO | ||||
Class of Stock [Line Items] | ||||
Proceeds from initial public offering | $ 205.0 | |||
Proceeds from private placement offering | $ 45.0 | |||
Common Stock | Initial Capitalization | ||||
Class of Stock [Line Items] | ||||
Stock issued (in shares) | shares | 2,875,000 | |||
Proceeds from issuance of common stock | $ 57.5 | |||
Common Stock | IPO | ||||
Class of Stock [Line Items] | ||||
Stock issued (in shares) | shares | 10,250,000 | |||
Proceeds from initial public offering | $ 205.0 | |||
Common Stock | Director Compensation | ||||
Class of Stock [Line Items] | ||||
Stock issued (in shares) | shares | 40,000 | |||
Common Stock | iStar Inc. | Initial Capitalization | ||||
Class of Stock [Line Items] | ||||
Stock issued (in shares) | shares | 2,775,000 | |||
Proceeds from issuance of common stock | $ 55.5 | |||
Common Stock | iStar Inc. | IPO | ||||
Class of Stock [Line Items] | ||||
Stock issued (in shares) | shares | 2,250,000 | |||
Proceeds from private placement offering | $ 45.0 | |||
Amount of common stock iStar could purchase in accordance with 10b5-1 and 10b-18 | $ 24.5 | $ 24.5 | ||
Common Stock | iStar Inc. | Private Placement | ||||
Class of Stock [Line Items] | ||||
umber of shares issued in transaction | shares | 1,300,000 | |||
Consideration received on transaction | $ 24.5 | |||
Average cost per share (usd per share) | $ / shares | $ 19.20 | $ 19.20 | ||
Ownership percentage after transaction | 34.60% | |||
Common Stock | Jay Sugarman Trust and Geoffrey Jervis Trusts | IPO | ||||
Class of Stock [Line Items] | ||||
Amount of common stock iStar could purchase in accordance with 10b5-1 and 10b-18 | $ 0.5 | $ 0.5 | ||
Common Stock | Jay Sugarman Trust and Geoffrey Jervis Trusts | Private Placement | ||||
Class of Stock [Line Items] | ||||
umber of shares issued in transaction | shares | 0 | |||
Consideration received on transaction | $ 0.5 | |||
Average cost per share (usd per share) | $ / shares | $ 19.20 | $ 19.20 |
Equity (Schedule of Ownership) (Details) - $ / shares |
Sep. 30, 2017 |
Jun. 27, 2017 |
Apr. 14, 2017 |
---|---|---|---|
Class of Stock [Line Items] | |||
Stock issued (in shares) | 18,190,000 | ||
IPO | |||
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ 20 | ||
Director Compensation | |||
Class of Stock [Line Items] | |||
Stock issued (in shares) | 40,000 | ||
Third Parties | Initial Capitalization | |||
Class of Stock [Line Items] | |||
Stock issued (in shares) | 2,875,000 | ||
Third Parties | IPO | |||
Class of Stock [Line Items] | |||
Stock issued (in shares) | 10,250,000 | ||
iStar Inc. | Initial Capitalization | |||
Class of Stock [Line Items] | |||
Stock issued (in shares) | 2,775,000 | ||
iStar Inc. | IPO | |||
Class of Stock [Line Items] | |||
Stock issued (in shares) | 2,250,000 | ||
Common Stock | Initial Capitalization | |||
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ 20.0 | ||
Common Stock | Third Parties | Initial Capitalization | |||
Class of Stock [Line Items] | |||
Share price (in dollars per share) | 20 | ||
Common Stock | Third Parties | IPO | |||
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ 20 | ||
Common Stock | iStar Inc. | Initial Capitalization | |||
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ 20 | ||
Common Stock | iStar Inc. | IPO | |||
Class of Stock [Line Items] | |||
Share price (in dollars per share) | $ 20 |
Earnings Per Share (Schedule of Earnings Per Share) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Earnings Per Share [Abstract] | ||
Income (loss) from operations | $ (721) | $ (2,325) |
Earnings Per Share (Earnings Allocable to Common Shares) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Numerator for basic earnings per share: | ||
Income (loss) from operations attributable to Safety, Income & Growth Inc. and allocable to common shareholders | $ (2,325) | |
Common Stock | ||
Numerator for basic earnings per share: | ||
Net income (loss) | $ (721) | $ (2,325) |
Denominator for basic and diluted earnings per share: | ||
Weighted average common shares outstanding for basic and diluted earnings per common share (in shares) | 18,190 | 12,731 |
Basic and diluted earnings per common share: | ||
Net income (loss) attributable to Safety, Income and Growth, Inc. and allocable to common shareholders (in dollars per share) | $ (0.18) | |
Common Stock | ||
Numerator for basic earnings per share: | ||
Income (loss) from operations attributable to Safety, Income & Growth Inc. and allocable to common shareholders | $ (721) | |
Basic and diluted earnings per common share: | ||
Net income (loss) attributable to Safety, Income and Growth, Inc. and allocable to common shareholders (in dollars per share) | $ (0.04) |
Related Party Transactions (Narrative) (Details) |
3 Months Ended | 6 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
employee
office
|
|
Related Party Transaction [Line Items] | ||||
Management fee expense, percent of equity below threshold | 0.75% | |||
Management fee expense, percent of equity above threshold | 1.00% | |||
Management fee expense, Shareholders' equity threshold | $ 2,500,000,000.0 | $ 2,500,000,000.0 | $ 2,500,000,000.0 | |
Management contract, period | 1 year | |||
Management fee expense | $ 0 | |||
iStar Inc. | ||||
Related Party Transaction [Line Items] | ||||
Number of years as active real estate investor (over) | 20 years | |||
Real estate investments, aggregate transactions, value | 35,000,000,000 | 35,000,000,000 | $ 35,000,000,000 | |
Assets | $ 4,900,000,000 | |||
Entity number of employees | employee | 192 | |||
Number of regional offices | office | 7 | |||
iStar Inc. | General and Administrative Expense | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 300,000 | $ 1,100,000 |
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