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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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42-1579325
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer Identification No.)
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2021 Spring Road, Suite 200, Oak Brook, Illinois
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60523
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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March 31,
2015 |
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December 31,
2014 |
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Assets
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Investment properties:
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Land
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$
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1,297,067
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$
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1,195,369
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Building and other improvements
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4,652,456
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4,442,446
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Developments in progress
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42,983
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42,561
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5,992,506
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5,680,376
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Less accumulated depreciation
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(1,411,423
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)
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(1,365,471
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)
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Net investment properties
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4,581,083
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4,314,905
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Cash and cash equivalents
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64,895
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112,292
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Accounts and notes receivable (net of allowances of $7,660 and $7,497, respectively)
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77,937
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86,013
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Acquired lease intangible assets, net
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151,437
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125,490
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Assets associated with investment properties held for sale
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5,041
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33,640
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Other assets, net
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112,817
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131,520
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Total assets
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$
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4,993,210
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$
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4,803,860
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Liabilities and Equity
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Liabilities:
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Mortgages payable, net
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$
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1,560,956
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$
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1,634,465
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Unsecured notes payable, net
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498,822
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250,000
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Unsecured term loan
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450,000
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450,000
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Unsecured revolving line of credit
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35,000
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—
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Accounts payable and accrued expenses
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54,563
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61,129
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Distributions payable
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39,284
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39,187
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Acquired lease intangible liabilities, net
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117,502
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100,641
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Liabilities associated with investment properties held for sale
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320
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8,203
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Other liabilities
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75,575
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70,860
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Total liabilities
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2,832,022
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2,614,485
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Commitments and contingencies (Note 14)
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Equity:
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Preferred stock, $0.001 par value, 10,000 shares authorized, 7.00% Series A cumulative
redeemable preferred stock, 5,400 shares issued and outstanding as of March 31, 2015
and December 31, 2014; liquidation preference $135,000
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5
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5
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Class A common stock, $0.001 par value, 475,000 shares authorized, 237,186 and 236,602
shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively
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237
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237
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Additional paid-in capital
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4,923,342
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4,922,864
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Accumulated distributions in excess of earnings
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(2,763,258
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)
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(2,734,688
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)
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Accumulated other comprehensive loss
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(632
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)
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(537
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)
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Total shareholders’ equity
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2,159,694
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2,187,881
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Noncontrolling interests
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1,494
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1,494
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Total equity
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2,161,188
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2,189,375
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Total liabilities and equity
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$
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4,993,210
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$
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4,803,860
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Three Months Ended March 31,
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2015
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2014
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Revenues:
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Rental income
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$
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119,788
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$
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117,531
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Tenant recovery income
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31,300
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29,748
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Other property income
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2,109
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1,912
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Total revenues
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153,197
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149,191
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Expenses:
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Property operating expenses
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25,695
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26,526
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Real estate taxes
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20,510
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18,414
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Depreciation and amortization
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54,676
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53,830
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Provision for impairment of investment properties
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—
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394
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General and administrative expenses
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10,992
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8,450
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Total expenses
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111,873
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107,614
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Operating income
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41,324
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41,577
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Gain on extinguishment of other liabilities
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—
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4,258
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Equity in loss of unconsolidated joint ventures, net
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—
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(778
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)
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Interest expense
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(34,045
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(31,863
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Other income, net
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1,225
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427
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Income from continuing operations
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8,504
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13,621
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Discontinued operations:
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Loss, net
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—
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(148
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Gain on sales of investment properties
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—
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655
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Income from discontinued operations
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—
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507
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Gain on sales of investment properties
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4,572
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—
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Net income
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13,076
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14,128
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Net income attributable to the Company
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13,076
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14,128
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Preferred stock dividends
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(2,362
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(2,362
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Net income attributable to common shareholders
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$
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10,714
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$
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11,766
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Earnings per common share — basic and diluted:
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Continuing operations
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$
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0.05
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$
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0.05
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Discontinued operations
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—
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—
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Net income per common share attributable to common shareholders
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$
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0.05
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$
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0.05
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Net income
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$
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13,076
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$
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14,128
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Other comprehensive loss:
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Net unrealized loss on derivative instruments (Note 9)
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(95
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)
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(18
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)
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Comprehensive income attributable to the Company
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$
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12,981
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$
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14,110
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Weighted average number of common shares outstanding — basic
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236,250
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236,151
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Weighted average number of common shares outstanding — diluted
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236,253
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236,153
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Preferred Stock
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Class A
Common Stock
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Additional
Paid-in
Capital
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Accumulated
Distributions
in Excess of
Earnings
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Accumulated
Other
Comprehensive
Loss
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Total
Shareholders’
Equity
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Noncontrolling
Interests
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Total
Equity
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Shares
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Amount
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Shares
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Amount
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Balance as of January 1, 2014
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5,400
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$
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5
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236,302
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$
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236
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$
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4,919,633
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$
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(2,611,796
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)
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$
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(738
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)
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$
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2,307,340
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$
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1,494
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$
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2,308,834
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Net income
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—
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—
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—
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—
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—
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14,128
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—
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14,128
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—
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14,128
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Other comprehensive loss
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—
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—
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—
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—
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—
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—
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(18
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(18
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—
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(18
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)
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Distributions declared to preferred shareholders ($0.4375 per share)
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—
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—
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—
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—
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—
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(2,362
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)
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—
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(2,362
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)
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—
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(2,362
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)
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Distributions declared to common shareholders ($0.165625 per share)
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—
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—
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—
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—
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—
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(39,181
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)
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—
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(39,181
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)
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—
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(39,181
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)
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||||||||
Issuance of common stock, net of offering costs
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—
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—
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—
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—
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(37
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)
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|
—
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|
|
—
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(37
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)
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—
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(37
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)
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Issuance of restricted common stock
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—
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—
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|
262
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|
1
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|
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—
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|
|
—
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—
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1
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|
—
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|
1
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Stock-based compensation expense, net of shares withheld for employee taxes and forfeitures
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—
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—
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|
—
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—
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|
589
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|
|
—
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|
|
—
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|
|
589
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|
|
—
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|
589
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||||||||
Balance as of March 31, 2014
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5,400
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$
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5
|
|
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236,564
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$
|
237
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$
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4,920,185
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$
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(2,639,211
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)
|
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$
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(756
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)
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$
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2,280,460
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|
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$
|
1,494
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|
|
$
|
2,281,954
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|
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||||||||||||||||||
Balance as of January 1, 2015
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5,400
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$
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5
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|
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236,602
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$
|
237
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|
|
$
|
4,922,864
|
|
|
$
|
(2,734,688
|
)
|
|
$
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(537
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)
|
|
$
|
2,187,881
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$
|
1,494
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$
|
2,189,375
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Net income
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—
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|
—
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|
|
—
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|
—
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|
|
—
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13,076
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|
|
—
|
|
|
13,076
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|
—
|
|
|
13,076
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||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(95
|
)
|
|
(95
|
)
|
|
—
|
|
|
(95
|
)
|
||||||||
Distributions declared to preferred shareholders ($0.4375 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,362
|
)
|
|
—
|
|
|
(2,362
|
)
|
|
—
|
|
|
(2,362
|
)
|
||||||||
Distributions declared to common shareholders ($0.165625 per share)
|
—
|
|
|
—
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|
|
—
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|
|
—
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|
|
—
|
|
|
(39,284
|
)
|
|
—
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(39,284
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)
|
|
—
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|
|
(39,284
|
)
|
||||||||
Issuance of common stock, net of offering costs
|
—
|
|
|
—
|
|
|
—
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|
|
—
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|
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(40
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
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||||||||
Issuance of restricted common stock
|
—
|
|
|
—
|
|
|
637
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock-based compensation expense, net of shares withheld for employee taxes and forfeitures
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
518
|
|
|
—
|
|
|
—
|
|
|
518
|
|
|
—
|
|
|
518
|
|
||||||||
Balance as of March 31, 2015
|
5,400
|
|
|
$
|
5
|
|
|
237,186
|
|
|
$
|
237
|
|
|
$
|
4,923,342
|
|
|
$
|
(2,763,258
|
)
|
|
$
|
(632
|
)
|
|
$
|
2,159,694
|
|
|
$
|
1,494
|
|
|
$
|
2,161,188
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
13,076
|
|
|
$
|
14,128
|
|
Adjustments to reconcile net income to net cash provided by operating activities
(including discontinued operations):
|
|
|
|
||||
Depreciation and amortization
|
54,676
|
|
|
53,830
|
|
||
Provision for impairment of investment properties
|
—
|
|
|
394
|
|
||
Gain on sales of investment properties
|
(4,572
|
)
|
|
(655
|
)
|
||
Gain on extinguishment of other liabilities
|
—
|
|
|
(4,258
|
)
|
||
Amortization of loan fees and debt premium and discount, net
|
992
|
|
|
1,599
|
|
||
Amortization of stock-based compensation
|
1,369
|
|
|
589
|
|
||
Premium paid in connection with defeasance of mortgages payable
|
2,604
|
|
|
—
|
|
||
Equity in loss of unconsolidated joint ventures, net
|
—
|
|
|
778
|
|
||
Distributions on investments in unconsolidated joint ventures
|
—
|
|
|
755
|
|
||
Payment of leasing fees and inducements
|
(1,539
|
)
|
|
(2,277
|
)
|
||
Changes in accounts receivable, net
|
10,286
|
|
|
5,945
|
|
||
Changes in accounts payable and accrued expenses, net
|
(12,714
|
)
|
|
(10,808
|
)
|
||
Changes in other operating assets and liabilities, net
|
6,356
|
|
|
(1,164
|
)
|
||
Other, net
|
593
|
|
|
(705
|
)
|
||
Net cash provided by operating activities
|
71,127
|
|
|
58,151
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Changes in restricted escrows, net
|
17,673
|
|
|
1,499
|
|
||
Purchase of investment properties
|
(316,200
|
)
|
|
(28,324
|
)
|
||
Capital expenditures and tenant improvements
|
(10,946
|
)
|
|
(9,558
|
)
|
||
Proceeds from sales of investment properties
|
35,343
|
|
|
9,204
|
|
||
Investment in developments in progress
|
(380
|
)
|
|
(1,441
|
)
|
||
Investment in unconsolidated joint ventures
|
—
|
|
|
(25
|
)
|
||
Other, net
|
(25
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(274,535
|
)
|
|
(28,645
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from mortgages payable
|
322
|
|
|
1,622
|
|
||
Principal payments on mortgages payable
|
(71,505
|
)
|
|
(50,114
|
)
|
||
Proceeds from unsecured notes payable
|
248,815
|
|
|
—
|
|
||
Proceeds from unsecured credit facility
|
335,000
|
|
|
101,000
|
|
||
Repayments of unsecured credit facility
|
(300,000
|
)
|
|
(36,000
|
)
|
||
Payment of loan fees and deposits, net
|
(1,812
|
)
|
|
—
|
|
||
Purchase of Treasury securities in connection with defeasance of mortgages payable
|
(12,379
|
)
|
|
—
|
|
||
Distributions paid
|
(41,549
|
)
|
|
(41,500
|
)
|
||
Other, net
|
(881
|
)
|
|
(37
|
)
|
||
Net cash provided by (used in) financing activities
|
156,011
|
|
|
(25,029
|
)
|
||
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents
|
(47,397
|
)
|
|
4,477
|
|
||
Cash and cash equivalents, at beginning of period
|
112,292
|
|
|
58,190
|
|
||
Cash and cash equivalents, at end of period
|
$
|
64,895
|
|
|
$
|
62,667
|
|
(continued)
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Supplemental cash flow disclosure, including non-cash activities:
|
|
|
|
||||
Cash paid for interest
|
$
|
24,662
|
|
|
$
|
26,813
|
|
Distributions payable
|
$
|
39,284
|
|
|
$
|
39,181
|
|
Accrued capital expenditures and tenant improvements
|
$
|
4,474
|
|
|
$
|
5,217
|
|
Accrued leasing fees and inducements
|
$
|
533
|
|
|
$
|
338
|
|
Accrued development expenditures
|
$
|
133
|
|
|
$
|
429
|
|
Treasury securities transferred in connection with defeasance of mortgages payable
|
$
|
12,379
|
|
|
$
|
—
|
|
Defeasance of mortgages payable
|
$
|
9,775
|
|
|
$
|
—
|
|
|
|
|
|
||||
Purchase of investment properties (after credits at closing):
|
|
|
|
||||
Land, building and other improvements, net
|
$
|
(308,728
|
)
|
|
$
|
(28,112
|
)
|
Accounts receivable, acquired lease intangible and other assets
|
(34,929
|
)
|
|
(1,492
|
)
|
||
Accounts payable, acquired lease intangible and other liabilities
|
27,457
|
|
|
1,280
|
|
||
|
$
|
(316,200
|
)
|
|
$
|
(28,324
|
)
|
|
|
|
|
||||
Proceeds from sales of investment properties:
|
|
|
|
||||
Land, building and other improvements, net
|
$
|
30,582
|
|
|
$
|
8,079
|
|
Accounts receivable, acquired lease intangible and other assets
|
207
|
|
|
494
|
|
||
Accounts payable, acquired lease intangible and other liabilities
|
(50
|
)
|
|
(24
|
)
|
||
Deferred gain
|
32
|
|
|
—
|
|
||
Gain on sales of investment properties
|
4,572
|
|
|
655
|
|
||
|
$
|
35,343
|
|
|
$
|
9,204
|
|
|
Wholly-owned
|
|
Consolidated
Joint Ventures (a)
|
||
Operating properties (b)
|
216
|
|
|
—
|
|
Development properties
|
2
|
|
|
1
|
|
(a)
|
The Company has a
50%
ownership interest in
one
LLC.
|
(b)
|
Excludes
one
wholly-owned property classified as held for sale as of
March 31, 2015
.
|
Date
|
|
Property Name
|
|
Metropolitan
Statistical Area
(MSA)
|
|
Property Type
|
|
Square
Footage
|
|
Acquisition
Price
|
|||
January 8, 2015
|
|
Downtown Crown
|
|
Washington, D.C.
|
|
Multi-tenant retail
|
|
258,000
|
|
|
$
|
162,785
|
|
January 23, 2015
|
|
Merrifield Town Center
|
|
Washington, D.C.
|
|
Multi-tenant retail
|
|
85,000
|
|
|
56,500
|
|
|
January 23, 2015
|
|
Fort Evans Plaza II
|
|
Washington, D.C.
|
|
Multi-tenant retail
|
|
229,000
|
|
|
65,000
|
|
|
February 19, 2015
|
|
Cedar Park Town Center
|
|
Austin
|
|
Multi-tenant retail
|
|
179,000
|
|
|
39,057
|
|
|
March 24, 2015
|
|
Lake Worth Towne Crossing - Parcel (a)
|
|
Dallas
|
|
Land
|
|
—
|
|
|
400
|
|
|
|
|
|
|
|
|
|
|
751,000
|
|
|
$
|
323,742
|
|
(a)
|
The Company acquired a parcel located at its Lake Worth Towne Crossing multi-tenant retail operating property.
|
Date
|
|
Property Name
|
|
MSA
|
|
Property Type
|
|
Square
Footage
|
|
Acquisition
Price
|
|||
February 27, 2014
|
|
Heritage Square
|
|
Seattle
|
|
Multi-tenant retail
|
|
53,100
|
|
|
$
|
18,022
|
|
February 27, 2014
|
|
Bed Bath & Beyond Plaza - Fee Interest (a)
|
|
Miami
|
|
Ground lease interest
|
|
—
|
|
|
10,350
|
|
|
|
|
|
|
|
|
|
|
53,100
|
|
|
$
|
28,372
|
|
(a)
|
The Company acquired the fee interest in an existing wholly-owned multi-tenant retail operating property located in Miami, Florida, which was previously subject to a ground lease with a third party. In conjunction with this transaction, the Company reversed a straight-line ground rent liability of
$4,258
, which is presented in “Gain on extinguishment of other liabilities” in the accompanying consolidated statements of operations and other comprehensive income.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Land
|
|
$
|
102,487
|
|
|
$
|
16,727
|
|
Building and other improvements
|
|
206,241
|
|
|
11,385
|
|
||
Acquired lease intangible assets (a)
|
|
33,631
|
|
|
1,492
|
|
||
Acquired lease intangible liabilities (b)
|
|
(18,617
|
)
|
|
(1,232
|
)
|
||
Net assets acquired
|
|
$
|
323,742
|
|
|
$
|
28,372
|
|
(a)
|
The weighted average amortization period for acquired lease intangible assets is
16 years
and
six years
for acquisitions completed during the
three
months ended
March 31, 2015
and
2014
, respectively.
|
(b)
|
The weighted average amortization period for acquired lease intangible liabilities is
20 years
and
12 years
for acquisitions completed during the
three
months ended
March 31, 2015
and
2014
, respectively.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Total revenues
|
|
$
|
154,484
|
|
|
$
|
153,847
|
|
Net income
|
|
$
|
12,990
|
|
|
$
|
13,252
|
|
Net income attributable to common shareholders
|
|
$
|
10,628
|
|
|
$
|
10,890
|
|
Earnings per common share — basic and diluted
|
|
|
|
|
||||
Net income per common share attributable to common shareholders
|
|
$
|
0.04
|
|
|
$
|
0.05
|
|
Weighted average number of common shares outstanding — basic
|
|
236,250
|
|
|
236,151
|
|
Date
|
|
Property Name
|
|
Property Type
|
|
Square
Footage
|
|
Consideration
|
|
Aggregate
Proceeds, Net (a)
|
|
Gain
|
|||||||
January 20, 2015
|
|
Aon Hewitt East Campus
|
|
Single-user office
|
|
343,000
|
|
|
$
|
17,233
|
|
|
$
|
16,495
|
|
|
$
|
—
|
|
February 27, 2015
|
|
Promenade at Red Cliff
|
|
Multi-tenant retail
|
|
94,500
|
|
|
19,050
|
|
|
18,848
|
|
|
4,572
|
|
|||
|
|
|
|
|
|
437,500
|
|
|
$
|
36,283
|
|
|
$
|
35,343
|
|
|
$
|
4,572
|
|
(a)
|
Aggregate proceeds are net of transaction costs.
|
Date
|
|
Property Name
|
|
Property Type
|
|
Square
Footage
|
|
Consideration
|
|
Aggregate
Proceeds, Net (a)
|
|
Gain
|
|||||||
March 11, 2014
|
|
Riverpark Phase IIA
|
|
Single-user retail
|
|
64,300
|
|
|
$
|
9,269
|
|
|
$
|
9,204
|
|
|
$
|
655
|
|
(a)
|
Aggregate proceeds are net of transaction costs.
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Assets
|
|
|
|
||||
Land, building and other improvements
|
$
|
4,972
|
|
|
$
|
36,020
|
|
Accumulated depreciation
|
(58
|
)
|
|
(5,358
|
)
|
||
Net investment properties
|
4,914
|
|
|
30,662
|
|
||
Other assets
|
127
|
|
|
2,978
|
|
||
Assets associated with investment properties held for sale
|
$
|
5,041
|
|
|
$
|
33,640
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Mortgage payable
|
$
|
—
|
|
|
$
|
8,075
|
|
Other liabilities
|
320
|
|
|
128
|
|
||
Liabilities associated with investment properties held for sale
|
$
|
320
|
|
|
$
|
8,203
|
|
|
Unvested
Restricted
Shares
|
|
Weighted Average
Grant Date Fair
Value per
Restricted Share
|
|||
Balance as of January 1, 2015
|
396
|
|
|
$
|
14.26
|
|
Shares granted (a)
|
637
|
|
|
$
|
16.02
|
|
Shares vested
|
(162
|
)
|
|
$
|
14.03
|
|
Balance as of March 31, 2015
|
871
|
|
|
$
|
15.59
|
|
(a)
|
Shares granted vest ratably over periods ranging from one to
three years
in accordance with the terms of applicable award documents.
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||||
|
Aggregate
Principal
Balance
|
|
Weighted
Average
Interest Rate
|
|
Weighted
Average Years
to Maturity
|
|
Aggregate
Principal
Balance
|
|
Weighted
Average
Interest Rate
|
|
Weighted
Average Years
to Maturity
|
||||||
Fixed rate mortgages payable (a)
|
$
|
1,542,858
|
|
|
6.01
|
%
|
|
3.9
|
|
$
|
1,616,063
|
|
|
6.03
|
%
|
|
4.0
|
Variable rate construction loan (b)
|
15,222
|
|
|
2.44
|
%
|
|
0.6
|
|
14,900
|
|
|
2.44
|
%
|
|
0.8
|
||
Mortgages payable
|
1,558,080
|
|
|
5.97
|
%
|
|
3.9
|
|
1,630,963
|
|
|
5.99
|
%
|
|
3.9
|
||
Premium, net of accumulated amortization
|
3,218
|
|
|
|
|
|
|
3,972
|
|
|
|
|
|
||||
Discount, net of accumulated amortization
|
(342
|
)
|
|
|
|
|
|
(470
|
)
|
|
|
|
|
||||
Mortgages payable, net
|
$
|
1,560,956
|
|
|
|
|
|
|
$
|
1,634,465
|
|
|
|
|
|
(a)
|
Includes
$8,070
and
$8,124
of variable rate mortgage debt that was swapped to a fixed rate as of
March 31, 2015
and
December 31, 2014
, respectively, and excludes mortgages payable of
$8,075
associated with
one
investment property classified as held for sale as of
December 31, 2014
. The fixed rate mortgages had interest rates ranging from
3.35%
to
8.00%
as of
March 31, 2015
and
December 31, 2014
, respectively.
|
(b)
|
The variable rate construction loan bears interest at a floating rate of London Interbank Offered Rate (LIBOR) plus
2.25%
.
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgages payable (a)
|
$
|
305,135
|
|
|
$
|
67,703
|
|
|
$
|
321,090
|
|
|
$
|
12,376
|
|
|
$
|
501,308
|
|
|
$
|
335,246
|
|
|
$
|
1,542,858
|
|
Unsecured credit facility - fixed rate portion of term loan (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|||||||
Unsecured notes payable (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
|
500,000
|
|
|||||||
Total fixed rate debt
|
305,135
|
|
|
67,703
|
|
|
321,090
|
|
|
312,376
|
|
|
501,308
|
|
|
835,246
|
|
|
2,342,858
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction loan
|
15,222
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,222
|
|
|||||||
Unsecured credit facility
|
—
|
|
|
—
|
|
|
35,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
185,000
|
|
|||||||
Total variable rate debt
|
15,222
|
|
|
—
|
|
|
35,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
200,222
|
|
|||||||
Total debt (d)
|
$
|
320,357
|
|
|
$
|
67,703
|
|
|
$
|
356,090
|
|
|
$
|
462,376
|
|
|
$
|
501,308
|
|
|
$
|
835,246
|
|
|
$
|
2,543,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Weighted average interest rate on debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate debt
|
5.39
|
%
|
|
5.06
|
%
|
|
5.53
|
%
|
|
2.18
|
%
|
|
7.50
|
%
|
|
4.51
|
%
|
|
5.11
|
%
|
|||||||
Variable rate debt (e)
|
2.44
|
%
|
|
—
|
|
|
1.68
|
%
|
|
1.63
|
%
|
|
—
|
|
|
—
|
|
|
1.70
|
%
|
|||||||
Total
|
5.25
|
%
|
|
5.06
|
%
|
|
5.15
|
%
|
|
2.00
|
%
|
|
7.50
|
%
|
|
4.51
|
%
|
|
4.84
|
%
|
(a)
|
Includes
$8,070
of variable rate mortgage debt that was swapped to a fixed rate as of
March 31, 2015
. Excludes mortgage premium of
$3,218
and discount of
$(342)
, net of accumulated amortization, which was outstanding as of
March 31, 2015
.
|
(b)
|
$300,000
of LIBOR-based variable rate debt has been swapped to a fixed rate through February 24, 2016. The swap effectively converts
one-month floating rate LIBOR
to a fixed rate of
0.53875%
over the term of the swap.
|
(c)
|
Excludes discount of
$(1,178)
, net of accumulated amortization, which was outstanding as of
March 31, 2015
.
|
(d)
|
As of
March 31, 2015
, the weighted average years to maturity of consolidated indebtedness was
4.7 years
.
|
(e)
|
Represents interest rates as of
March 31, 2015
.
|
Unsecured Notes Payable
|
|
Maturity Date
|
|
Principal Balance
|
|
Interest Rate/
Weighted Average
Interest Rate
|
|||
Senior notes - 4.12% Series A due 2021
|
|
June 30, 2021
|
|
$
|
100,000
|
|
|
4.12
|
%
|
Senior notes - 4.58% Series B due 2024
|
|
June 30, 2024
|
|
150,000
|
|
|
4.58
|
%
|
|
Senior notes - 4.00% due 2025
|
|
March 15, 2025
|
|
250,000
|
|
|
4.00
|
%
|
|
|
|
|
|
500,000
|
|
|
4.20
|
%
|
|
Discount, net of accumulated amortization
|
|
|
|
(1,178
|
)
|
|
|
||
|
|
Total
|
|
$
|
498,822
|
|
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||
Unsecured Credit Facility
|
|
Maturity Date
|
|
Balance
|
|
Interest Rate/
Weighted Average
Interest Rate
|
|
Balance
|
|
Interest Rate/
Weighted Average Interest Rate |
||||||
Term loan - fixed rate portion (a)
|
|
May 11, 2018
|
|
$
|
300,000
|
|
|
1.99
|
%
|
|
$
|
300,000
|
|
|
1.99
|
%
|
Term loan - variable rate portion
|
|
May 11, 2018
|
|
150,000
|
|
|
1.63
|
%
|
|
150,000
|
|
|
1.62
|
%
|
||
Revolving line of credit - variable rate
|
|
May 12, 2017 (b)
|
|
35,000
|
|
|
1.68
|
%
|
|
—
|
|
|
1.67
|
%
|
||
|
|
Total
|
|
$
|
485,000
|
|
|
1.86
|
%
|
|
$
|
450,000
|
|
|
1.87
|
%
|
(a)
|
$300,000
of the term loan has been swapped to a fixed rate of
0.53875%
plus a margin based on a leverage grid ranging from
1.45%
to
2.00%
through February 24, 2016. The applicable margin was
1.45%
as of
March 31, 2015
and
December 31, 2014
.
|
(b)
|
The Company has a
one year
extension option on the unsecured revolving line of credit, which it may exercise as long as it is in compliance with the terms of the unsecured credit agreement and it pays an extension fee equal to
0.15%
of the commitment amount being extended.
|
|
|
Number of Instruments
|
|
Notional
|
||||||||||
Interest Rate Derivatives
|
|
March 31,
2015 |
|
December 31,
2014 |
|
March 31,
2015 |
|
December 31,
2014 |
||||||
Interest rate swaps
|
|
2
|
|
|
2
|
|
|
$
|
308,070
|
|
|
$
|
308,124
|
|
|
|
Fair Value
|
||||||
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
||||
Interest rate swaps
|
|
$
|
632
|
|
|
$
|
562
|
|
|
Three Months Ended March 31,
|
|
||||||
|
2015
|
|
2014
|
|
||||
Numerator:
|
|
|
|
|
||||
Income from continuing operations
|
$
|
8,504
|
|
|
$
|
13,621
|
|
|
Gain on sales of investment properties
|
4,572
|
|
|
—
|
|
|
||
Preferred stock dividends
|
(2,362
|
)
|
|
(2,362
|
)
|
|
||
Income from continuing operations attributable to common shareholders
|
10,714
|
|
|
11,259
|
|
|
||
Income from discontinued operations
|
—
|
|
|
507
|
|
|
||
Net income attributable to common shareholders
|
10,714
|
|
|
11,766
|
|
|
||
Distributions paid on unvested restricted shares
|
(66
|
)
|
|
(25
|
)
|
|
||
Net income attributable to common shareholders excluding
amounts attributable to unvested restricted shares
|
$
|
10,648
|
|
|
$
|
11,741
|
|
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
||||
Denominator for earnings per common share — basic:
|
|
|
|
|
||||
Weighted average number of common shares outstanding
|
236,250
|
|
(a)
|
236,151
|
|
(b)
|
||
Effect of dilutive securities — stock options
|
3
|
|
(c)
|
2
|
|
(c)
|
||
Denominator for earnings per common share — diluted:
|
|
|
|
|
||||
Weighted average number of common and common equivalent shares outstanding
|
236,253
|
|
|
236,153
|
|
|
(a)
|
Excludes
871
shares of unvested restricted common stock, which equate to
611
shares on a weighted average basis for the three months ended
March 31, 2015
. These shares will continue to be excluded from the computation of basic EPS until contingencies are resolved and the shares are released.
|
(b)
|
Excludes
414
shares of unvested restricted common stock, which equate to
264
shares on a weighted average basis for the three months ended
March 31, 2014
. These shares will continue to be excluded from the computation of basic EPS until contingencies are resolved and the shares are released.
|
(c)
|
There were outstanding options to purchase
64
and
78
shares of common stock as of
March 31, 2015
and
2014
, respectively, at a weighted average exercise price of
$19.32
and
$19.10
, respectively. Of these totals, outstanding options to purchase
54
and
64
shares of common stock as of
March 31, 2015
and
2014
, respectively, at a weighted average exercise price of
$20.72
and
$20.71
, respectively, have been excluded from the common shares used in calculating diluted earnings per share as including them would be anti-dilutive.
|
|
|
March 31, 2015
|
|
March 31, 2014
|
|
||
Number of properties for which indicators of impairment were identified
|
|
6
|
|
|
12
|
|
(a)
|
Less: Number of properties for which an impairment charge was recorded
|
|
—
|
|
|
1
|
|
|
Less: Number of properties that were held for sale as of the date the analysis was performed
for which indicators of impairment were identified but no impairment charge was recorded
|
|
1
|
|
(b)
|
—
|
|
|
Remaining properties for which indicators of impairment were identified
|
|
5
|
|
|
11
|
|
|
|
|
|
|
|
|
||
Weighted average percentage by which the projected undiscounted cash flows exceeded
its respective carrying value for each of the remaining properties (c)
|
|
66
|
%
|
|
19
|
%
|
|
(a)
|
Includes
seven
properties which were subsequently sold or classified as held for sale as of
March 31, 2015
.
|
(b)
|
Hartford Insurance Building was classified as held for sale as of
March 31, 2015
. This property was not considered impaired based upon the executed sales contract and it was sold on April 7, 2015 with an anticipated gain on sale of approximately
$860
.
|
(c)
|
Based upon the estimated holding period for each asset where an undiscounted cash flow analysis was performed.
|
(a)
|
The Company recorded an impairment charge based upon the terms and conditions of an executed sales contract for this property, which was sold on April 1, 2014.
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
1,560,956
|
|
|
$
|
1,679,271
|
|
|
$
|
1,634,465
|
|
|
$
|
1,749,671
|
|
Unsecured notes payable, net
|
$
|
498,822
|
|
|
$
|
519,560
|
|
|
$
|
250,000
|
|
|
$
|
258,360
|
|
Unsecured credit facility
|
$
|
485,000
|
|
|
$
|
487,205
|
|
|
$
|
450,000
|
|
|
$
|
451,502
|
|
Derivative liability
|
$
|
632
|
|
|
$
|
632
|
|
|
$
|
562
|
|
|
$
|
562
|
|
|
Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
March 31, 2015
|
|
|
|
|
|
|
|
||||||||
Derivative liability
|
$
|
—
|
|
|
$
|
632
|
|
|
$
|
—
|
|
|
$
|
632
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Derivative liability
|
$
|
—
|
|
|
$
|
562
|
|
|
$
|
—
|
|
|
$
|
562
|
|
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Provision for
Impairment (a)
|
||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment properties
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,500
|
|
(b)
|
$
|
86,500
|
|
|
$
|
59,352
|
|
Investment properties -
held for sale
(c)
|
$
|
—
|
|
|
$
|
17,233
|
|
|
$
|
—
|
|
|
$
|
17,233
|
|
|
$
|
563
|
|
(a)
|
Excludes impairment charges recorded on investment properties sold prior to
December 31, 2014
.
|
(b)
|
Represents the fair values of the Company’s Shaw’s Supermarket, The Gateway, Hartford Insurance Building and Citizen’s Property Insurance Building investment properties. The estimated fair values of Shaw’s Supermarket and The Gateway of
$3,100
and
$75,400
, respectively, were determined using the income approach. The income approach involves discounting the estimated income stream and reversion (presumed sale) value of a property over an estimated holding period to a present value at a risk-adjusted rate. Discount rates, growth assumptions and terminal capitalization rates utilized in this approach are derived from property-specific information, market transactions and other industry data. The terminal capitalization rate and discount rate are significant inputs to this valuation. The following were the key Level 3 inputs used in estimating the fair value of Shaw’s Supermarket and The Gateway as of September 30, 2014.
|
|
|
2014
|
||
|
|
Low
|
|
High
|
Rental growth rates
|
|
Varies (i)
|
|
Varies (i)
|
Operating expense growth rates
|
|
1.39%
|
|
3.70%
|
Discount rates
|
|
8.25%
|
|
9.50%
|
Terminal capitalization rates
|
|
7.50%
|
|
8.50%
|
(c)
|
Represents an impairment charge recorded during the three months ended December 31, 2014 for Aon Hewitt East Campus, which was classified as held for sale as of December 31, 2014. Such charge, calculated as the expected sales price from the executed sales contract less estimated transaction costs as compared to the Company’s carrying value of its investment, was determined to be a Level 2 input. The estimated transaction costs totaling
$738
are not reflected as a reduction to the fair value disclosed in the table above but were included in the calculation of the impairment charge.
|
|
Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
March 31, 2015
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,679,271
|
|
|
$
|
1,679,271
|
|
Unsecured notes payable, net
|
$
|
252,285
|
|
|
$
|
—
|
|
|
$
|
267,275
|
|
|
$
|
519,560
|
|
Unsecured credit facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
487,205
|
|
|
$
|
487,205
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,749,671
|
|
|
$
|
1,749,671
|
|
Unsecured notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
258,360
|
|
|
$
|
258,360
|
|
Unsecured credit facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
451,502
|
|
|
$
|
451,502
|
|
•
|
drew
$60,000
on its unsecured revolving line of credit and used the proceeds to:
|
•
|
acquire Tysons Corner, a
38,000
square foot multi-tenant retail property located in Vienna, Virginia, for a gross purchase price of
$31,556
; and
|
•
|
repay a mortgage payable with a principal balance of
$21,684
and an interest rate of
8.00%
;
|
•
|
closed on the disposition of Hartford Insurance Building, a
97,400
square foot single-user office property located in Maple Grove, Minnesota, for a sales price of
$6,015
with an anticipated gain on sale of approximately
$860
; and
|
•
|
closed on the disposition of Rasmussen College, a
26,700
square foot single-user office property located in Brooklyn Park, Minnesota, for a sales price of
$4,800
with an anticipated gain on sale of approximately
$1,334
.
|
•
|
economic, business and financial conditions, and changes in our industry and changes in the real estate markets in particular;
|
•
|
economic and other developments in the state of Texas, where we have a high concentration of properties;
|
•
|
our business strategy;
|
•
|
our projected operating results;
|
•
|
rental rates and/or vacancy rates;
|
•
|
frequency and magnitude of defaults on, early terminations of or non-renewal of leases by tenants;
|
•
|
interest rates or operating costs;
|
•
|
real estate and zoning laws and changes in real property tax rates;
|
▪
|
real estate valuations, potentially resulting in impairment charges;
|
•
|
our leverage;
|
•
|
our ability to generate sufficient cash flows to service our outstanding indebtedness;
|
•
|
our ability to obtain necessary outside financing;
|
•
|
the availability, terms and deployment of capital;
|
•
|
general volatility of the capital and credit markets and the market price of our Class A common stock;
|
•
|
risks generally associated with real estate acquisitions, dispositions and redevelopment, including the impact of construction delays and cost overruns;
|
•
|
our ability to identify properties to acquire and complete acquisitions;
|
•
|
our ability to successfully operate acquired properties;
|
•
|
our ability to effectively manage growth;
|
•
|
composition of members of our senior management team;
|
•
|
our ability to attract and retain qualified personnel;
|
•
|
our ability to make distributions to our shareholders;
|
•
|
our ability to continue to qualify as a real estate investment trust (REIT);
|
•
|
governmental regulations, tax laws and rates and similar matters;
|
•
|
our compliance with laws, rules and regulations;
|
•
|
environmental uncertainties and exposure to natural disasters;
|
•
|
insurance coverage; and
|
•
|
the likelihood or actual occurrence of terrorist attacks in the U.S.
|
Property Type
|
|
Number of
Properties
|
|
GLA
(in thousands)
|
|
Occupancy
|
|
Percent Leased
Including Leases
Signed (a)
|
||||
Operating portfolio:
|
|
|
|
|
|
|
|
|
||||
Multi-tenant retail
|
|
|
|
|
|
|
|
|
||||
Power centers
|
|
61
|
|
|
15,008
|
|
|
94.1
|
%
|
|
95.5
|
%
|
Neighborhood and community centers
|
|
90
|
|
|
10,725
|
|
|
92.2
|
%
|
|
94.3
|
%
|
Lifestyle centers and mixed-use properties
|
|
11
|
|
|
4,186
|
|
|
89.2
|
%
|
|
90.1
|
%
|
Total multi-tenant retail
|
|
162
|
|
|
29,919
|
|
|
92.7
|
%
|
|
94.3
|
%
|
Single-user retail
|
|
50
|
|
|
1,358
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Total retail operating portfolio
|
|
212
|
|
|
31,277
|
|
|
93.0
|
%
|
|
94.5
|
%
|
Office
|
|
4
|
|
|
1,033
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Total operating portfolio (b)
|
|
216
|
|
|
32,310
|
|
|
93.3
|
%
|
|
94.7
|
%
|
(a)
|
Includes leases signed but not commenced.
|
(b)
|
Excludes one single-user office property classified as held for sale as of
March 31, 2015
.
|
|
|
Number of
Leases
Signed
|
|
GLA Signed
(in thousands)
|
|
New
Contractual
Rent per Square
Foot (PSF) (a)
|
|
Prior
Contractual
Rent PSF (a)
|
|
% Change
over Prior
Annualized
Base Rent
(ABR) (a)
|
|
Weighted
Average
Lease Term
|
|
Tenant
Allowances
PSF
|
||||||||||
Comparable Renewal Leases
|
|
89
|
|
|
488
|
|
|
$
|
16.99
|
|
|
$
|
16.17
|
|
|
5.1
|
%
|
|
4.60
|
|
|
$
|
0.94
|
|
Comparable New Leases
|
|
13
|
|
|
76
|
|
|
$
|
15.56
|
|
|
$
|
12.59
|
|
|
23.6
|
%
|
|
7.95
|
|
|
$
|
26.10
|
|
Non-Comparable New and
Renewal Leases (b)
|
|
37
|
|
|
201
|
|
|
$
|
18.36
|
|
|
n/a
|
|
|
n/a
|
|
|
8.08
|
|
|
$
|
42.39
|
|
|
Total
|
|
139
|
|
|
765
|
|
|
$
|
16.80
|
|
|
$
|
15.69
|
|
|
7.1
|
%
|
|
5.87
|
|
|
$
|
14.35
|
|
(a)
|
Total excludes the impact of Non-Comparable New and Renewal Leases.
|
(b)
|
Includes leases signed on units that were vacant for over 12 months, leases signed without fixed rental payments and leases signed where the previous and the current lease do not have a consistent lease structure.
|
•
|
the addition of seven investment properties acquired during the fourth quarter of 2013;
|
•
|
one same store investment property classified as held for sale as of March 31, 2015;
|
•
|
one investment property that was impaired below its debt balance during 2014; and
|
•
|
one investment property where we have begun activities in anticipation of a redevelopment, which we expect to have a significant impact to property NOI during 2015.
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
Percentage
|
|||||||
Operating revenues:
|
|
|
|
|
|
|
|
|||||||
Same store investment properties (201 properties):
|
|
|
|
|
|
|
|
|||||||
Rental income
|
$
|
104,691
|
|
|
$
|
101,634
|
|
|
$
|
3,057
|
|
|
3.0
|
|
Tenant recovery income
|
26,891
|
|
|
26,268
|
|
|
623
|
|
|
2.4
|
|
|||
Other property income
|
1,041
|
|
|
839
|
|
|
202
|
|
|
24.1
|
|
|||
Other investment properties:
|
|
|
|
|
|
|
|
|||||||
Rental income
|
13,823
|
|
|
13,600
|
|
|
223
|
|
|
|
||||
Tenant recovery income
|
4,409
|
|
|
3,480
|
|
|
929
|
|
|
|
||||
Other property income
|
934
|
|
|
943
|
|
|
(9
|
)
|
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Same store investment properties (201 properties):
|
|
|
|
|
|
|
|
|||||||
Property operating expenses
|
(20,318
|
)
|
|
(21,983
|
)
|
|
1,665
|
|
|
7.6
|
|
|||
Real estate taxes
|
(17,726
|
)
|
|
(16,564
|
)
|
|
(1,162
|
)
|
|
(7.0
|
)
|
|||
Other investment properties:
|
|
|
|
|
|
|
|
|||||||
Property operating expenses
|
(4,583
|
)
|
|
(3,636
|
)
|
|
(947
|
)
|
|
|
||||
Real estate taxes
|
(2,784
|
)
|
|
(1,850
|
)
|
|
(934
|
)
|
|
|
||||
NOI from continuing operations:
|
|
|
|
|
|
|
|
|||||||
Same store investment properties
|
94,579
|
|
|
90,194
|
|
|
4,385
|
|
|
4.9
|
|
|||
Other investment properties
|
11,799
|
|
|
12,537
|
|
|
(738
|
)
|
|
|
||||
Total NOI from continuing operations
|
106,378
|
|
|
102,731
|
|
|
3,647
|
|
|
3.6
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Other income (expense):
|
|
|
|
|
|
|
|
|||||||
Straight-line rental income, net
|
1,012
|
|
|
1,943
|
|
|
(931
|
)
|
|
|
||||
Amortization of acquired above and below market lease intangibles, net
|
451
|
|
|
512
|
|
|
(61
|
)
|
|
|
||||
Amortization of lease inducements
|
(189
|
)
|
|
(158
|
)
|
|
(31
|
)
|
|
|
||||
Lease termination fees
|
134
|
|
|
105
|
|
|
29
|
|
|
|
||||
Straight-line ground rent expense
|
(934
|
)
|
|
(1,022
|
)
|
|
88
|
|
|
|
||||
Amortization of acquired ground lease intangibles
|
140
|
|
|
140
|
|
|
—
|
|
|
|
||||
Depreciation and amortization
|
(54,676
|
)
|
|
(53,830
|
)
|
|
(846
|
)
|
|
|
||||
Provision for impairment of investment properties
|
—
|
|
|
(394
|
)
|
|
394
|
|
|
|
||||
General and administrative expenses
|
(10,992
|
)
|
|
(8,450
|
)
|
|
(2,542
|
)
|
|
|
||||
Gain on extinguishment of other liabilities
|
—
|
|
|
4,258
|
|
|
(4,258
|
)
|
|
|
||||
Equity in loss of unconsolidated joint ventures, net
|
—
|
|
|
(778
|
)
|
|
778
|
|
|
|
||||
Interest expense
|
(34,045
|
)
|
|
(31,863
|
)
|
|
(2,182
|
)
|
|
|
||||
Other income, net
|
1,225
|
|
|
427
|
|
|
798
|
|
|
|
||||
Total other expense
|
(97,874
|
)
|
|
(89,110
|
)
|
|
(8,764
|
)
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Income from continuing operations
|
8,504
|
|
|
13,621
|
|
|
(5,117
|
)
|
|
|
||||
Discontinued operations:
|
|
|
|
|
|
|
|
|||||||
Loss, net
|
—
|
|
|
(148
|
)
|
|
148
|
|
|
|
||||
Gain on sales of investment properties
|
—
|
|
|
655
|
|
|
(655
|
)
|
|
|
||||
Income from discontinued operations
|
—
|
|
|
507
|
|
|
(507
|
)
|
|
|
||||
Gain on sales of investment properties
|
4,572
|
|
|
—
|
|
|
4,572
|
|
|
|
||||
Net income
|
13,076
|
|
|
14,128
|
|
|
(1,052
|
)
|
|
|
||||
Net income attributable to the Company
|
13,076
|
|
|
14,128
|
|
|
(1,052
|
)
|
|
|
||||
Preferred stock dividends
|
(2,362
|
)
|
|
(2,362
|
)
|
|
—
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
10,714
|
|
|
$
|
11,766
|
|
|
$
|
(1,052
|
)
|
|
|
•
|
rental income increased
$3,057
primarily due to an increase of $1,514 from occupancy growth, $970 from contractual rent increases and $699 from re-leasing spreads;
|
•
|
total operating expenses, net of tenant recovery income, decreased $1,126 primarily as a result of a decrease in certain non-recoverable property operating expenses, partially offset by an increase in bad debt expense.
|
•
|
a $4,258 gain on extinguishment of other liabilities recognized during the three months ended March 31, 2014 related to the acquisition of the fee interest in one of our existing investment properties that was previously subject to a ground lease with a third party. The amount recognized represents the reversal of a straight-line ground rent liability associated with the ground lease;
|
•
|
a $2,542 increase in general and administrative expenses primarily consisting of an increase in compensation expense, including bonuses and amortization of restricted stock awards, of $2,409; and
|
•
|
a $2,182 increase in interest expense primarily consisting of:
|
•
|
$3,303 in interest on our unsecured notes payable, which were issued in June 2014 and March 2015; and
|
•
|
a $1,081 increase in prepayment penalties and defeasance premiums;
|
•
|
a $1,446 decrease in interest on mortgages payable due to the repayment of mortgage debt; and
|
•
|
a $616 increase in the amortization of mortgage premium resulting from the assumption of mortgages payable in connection with the dissolution of our MS Inland unconsolidated joint venture during the second quarter of 2014.
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Net income attributable to common shareholders
|
$
|
10,714
|
|
|
$
|
11,766
|
|
Depreciation and amortization
|
54,401
|
|
|
54,243
|
|
||
Provision for impairment of investment properties
|
—
|
|
|
394
|
|
||
Gain on sales of investment properties
|
(4,572
|
)
|
|
(655
|
)
|
||
FFO
|
$
|
60,543
|
|
|
$
|
65,748
|
|
|
|
|
|
||||
Impact on earnings from the early extinguishment of debt, net
|
2,786
|
|
|
1,680
|
|
||
Provision for hedge ineffectiveness
|
(25
|
)
|
|
(13
|
)
|
||
Gain on extinguishment of other liabilities
|
—
|
|
|
(4,258
|
)
|
||
Other (a)
|
(1,000
|
)
|
|
(115
|
)
|
||
Operating FFO
|
$
|
62,304
|
|
|
$
|
63,042
|
|
(a)
|
Consists of settlement and easement proceeds, which are included in “Other income, net” in the condensed consolidated statements of operations and other comprehensive income.
|
|
SOURCES
|
|
|
USES
|
▪
|
Operating cash flow
|
|
|
Short-Term:
|
▪
|
Cash and cash equivalents
|
|
▪
|
Tenant allowances and leasing costs
|
▪
|
Available borrowings under our unsecured revolving
|
|
▪
|
Improvements made to individual properties that are not
|
|
line of credit
|
|
|
recoverable through common area maintenance charges to tenants
|
▪
|
Proceeds from asset dispositions
|
|
▪
|
Debt repayment requirements
|
▪
|
Proceeds from capital markets transactions
|
|
▪
|
Distribution payments
|
|
|
|
▪
|
Acquisitions
|
|
|
|
|
|
|
|
|
|
Long-Term:
|
|
|
|
▪
|
Major redevelopment, renovation or expansion activities
|
|
|
|
▪
|
New development
|
Debt
|
|
Aggregate
Principal
Amount
|
|
Weighted
Average
Interest Rate
|
|
Maturity Date
|
|
Weighted
Average Years
to Maturity
|
|||
Fixed rate mortgages payable (a)
|
|
$
|
1,542,858
|
|
|
6.01
|
%
|
|
Various
|
|
3.9 years
|
Variable rate construction loan
|
|
15,222
|
|
|
2.44
|
%
|
|
November 2, 2015
|
|
0.6 years
|
|
Total mortgages payable
|
|
1,558,080
|
|
|
5.97
|
%
|
|
|
|
3.9 years
|
|
Premium, net of accumulated amortization
|
|
3,218
|
|
|
|
|
|
|
|
||
Discount, net of accumulated amortization
|
|
(342
|
)
|
|
|
|
|
|
|
||
Total mortgages payable, net
|
|
1,560,956
|
|
|
|
|
|
|
|
||
Unsecured notes payable:
|
|
|
|
|
|
|
|
|
|||
Senior notes - 4.12% Series A due 2021
|
|
100,000
|
|
|
4.12
|
%
|
|
June 30, 2021
|
|
6.3 years
|
|
Senior notes - 4.58% Series B due 2024
|
|
150,000
|
|
|
4.58
|
%
|
|
June 30, 2024
|
|
9.3 years
|
|
Senior notes - 4.00% due 2025
|
|
250,000
|
|
|
4.00
|
%
|
|
March 15, 2025
|
|
10.0 years
|
|
Subtotal
|
|
500,000
|
|
|
4.20
|
%
|
|
|
|
9.0 years
|
|
Discount, net of accumulated amortization
|
|
(1,178
|
)
|
|
|
|
|
|
|
||
Total unsecured notes payable, net
|
|
498,822
|
|
|
|
|
|
|
|
||
Unsecured credit facility:
|
|
|
|
|
|
|
|
|
|||
Fixed rate portion of term loan (b)
|
|
300,000
|
|
|
1.99
|
%
|
|
May 11, 2018
|
|
3.1 years
|
|
Variable rate portion of term loan
|
|
150,000
|
|
|
1.63
|
%
|
|
May 11, 2018
|
|
3.1 years
|
|
Variable rate revolving line of credit (c)
|
|
35,000
|
|
|
1.68
|
%
|
|
May 12, 2017
|
|
2.1 years
|
|
Total unsecured credit facility
|
|
485,000
|
|
|
1.86
|
%
|
|
|
|
3.0 years
|
|
|
|
|
|
|
|
|
|
|
|||
Total consolidated indebtedness, net
|
|
$
|
2,544,778
|
|
|
4.84
|
%
|
|
|
|
4.7 years
|
(a)
|
Includes
$8,070
of variable rate mortgage debt that was swapped to a fixed rate as of
March 31, 2015
.
|
(b)
|
Reflects $300,000 of variable rate debt that matures in May 2018 and is swapped to a fixed rate of 0.53875% plus a margin based on a leverage grid ranging from 1.45% to 2.00% through February 2016. The applicable margin was 1.45% as of
March 31, 2015
.
|
(c)
|
We have a one year extension option on the unsecured revolving line of credit, which we may exercise as long as we are in compliance with the terms of the unsecured credit agreement and we pay an extension fee equal to 0.15% of the commitment amount being extended.
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgages payable (a)
|
$
|
305,135
|
|
|
$
|
67,703
|
|
|
$
|
321,090
|
|
|
$
|
12,376
|
|
|
$
|
501,308
|
|
|
$
|
335,246
|
|
|
$
|
1,542,858
|
|
|
$
|
1,664,049
|
|
Unsecured credit facility - fixed rate portion of term loan (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
301,395
|
|
||||||||
Unsecured notes payable (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500,000
|
|
|
500,000
|
|
|
519,560
|
|
||||||||
Total fixed rate debt
|
305,135
|
|
|
67,703
|
|
|
321,090
|
|
|
312,376
|
|
|
501,308
|
|
|
835,246
|
|
|
2,342,858
|
|
|
2,485,004
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Construction loan
|
15,222
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,222
|
|
|
15,222
|
|
||||||||
Unsecured credit facility
|
—
|
|
|
—
|
|
|
35,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
185,000
|
|
|
185,810
|
|
||||||||
Total variable rate debt
|
15,222
|
|
|
—
|
|
|
35,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
200,222
|
|
|
201,032
|
|
||||||||
Total debt (d)
|
$
|
320,357
|
|
|
$
|
67,703
|
|
|
$
|
356,090
|
|
|
$
|
462,376
|
|
|
$
|
501,308
|
|
|
$
|
835,246
|
|
|
$
|
2,543,080
|
|
|
$
|
2,686,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average interest rate on debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate debt
|
5.39
|
%
|
|
5.06
|
%
|
|
5.53
|
%
|
|
2.18
|
%
|
|
7.50
|
%
|
|
4.51
|
%
|
|
5.11
|
%
|
|
|
|||||||||
Variable rate debt (e)
|
2.44
|
%
|
|
—
|
|
|
1.68
|
%
|
|
1.63
|
%
|
|
—
|
|
|
—
|
|
|
1.70
|
%
|
|
|
|||||||||
Total
|
5.25
|
%
|
|
5.06
|
%
|
|
5.15
|
%
|
|
2.00
|
%
|
|
7.50
|
%
|
|
4.51
|
%
|
|
4.84
|
%
|
|
|
(a)
|
Includes
$8,070
of variable rate mortgage debt that was swapped to a fixed rate as of
March 31, 2015
. Excludes mortgage premium of
$3,218
and discount of
$(342)
, net of accumulated amortization, which was outstanding as of
March 31, 2015
.
|
(b)
|
$300,000 of LIBOR-based variable rate debt has been swapped to a fixed rate through February 24, 2016. The swap effectively converts one-month floating rate LIBOR to a fixed rate of 0.53875% over the term of the swap.
|
(c)
|
Excludes discount of
$(1,178)
, net of accumulated amortization, which was outstanding as of
March 31, 2015
.
|
(d)
|
As of
March 31, 2015
, the weighted average years to maturity of consolidated indebtedness was
4.7 years
.
|
(e)
|
Represents interest rates as of
March 31, 2015
.
|
Location
|
|
Property Name
|
|
Our
Ownership
Percentage
|
|
Carrying Value
|
|
Construction
Loan Balance
|
||||
Henderson, Nevada
|
|
Green Valley Crossing
|
|
50.0%
|
|
$
|
3,445
|
|
(a)
|
$
|
15,222
|
|
Billings, Montana
|
|
South Billings Center
|
|
100.0%
|
|
5,154
|
|
|
—
|
|
||
Nashville, Tennessee
|
|
Bellevue Mall
|
|
100.0%
|
|
23,524
|
|
(b)
|
—
|
|
||
Henderson, Nevada
|
|
Lake Mead Crossing
|
|
100.0%
|
|
10,860
|
|
|
—
|
|
||
|
|
|
|
|
|
$
|
42,983
|
|
(c)
|
$
|
15,222
|
|
(a)
|
The carrying value represents the portion of the property under development and excludes $26,407 of costs, net of accumulated depreciation, previously placed in service. The construction loan encumbers the entire property, including the portion placed in service as well as the portion currently under development.
|
(b)
|
The carrying value represents the portion of the property under development and excludes $3,056 of land.
|
(c)
|
There is no income attributable to developments in progress.
|
|
|
Number of
Assets Sold
|
|
Square
Footage
|
|
Consideration
|
|
Aggregate
Proceeds, Net (a)
|
|
Mortgage Debt
Extinguished (b)
|
||||||||
2015 Dispositions (through March 31, 2015)
|
|
2
|
|
|
437,500
|
|
|
$
|
36,283
|
|
|
$
|
35,343
|
|
|
$
|
9,775
|
|
2014 Dispositions
|
|
24
|
|
|
2,490,100
|
|
|
$
|
322,989
|
|
|
$
|
314,377
|
|
|
$
|
9,713
|
|
(a)
|
Represents total consideration net of transaction costs.
|
(b)
|
Excludes mortgages payable repaid prior to disposition transactions.
|
|
|
Number of
Assets Acquired
|
|
Square
Footage
|
|
Acquisition
Price
|
|
Pro Rata
Acquisition
Price (a)
|
|
Mortgage
Debt
|
|
Pro Rata
Mortgage
Debt (a)
|
||||||||||
2015 Acquisitions (b)
|
|
5
|
|
|
751,000
|
|
|
$
|
323,742
|
|
|
$
|
323,742
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2014 Acquisitions (c)
|
|
11
|
|
|
1,339,400
|
|
|
$
|
348,061
|
|
|
$
|
289,561
|
|
|
$
|
141,698
|
|
|
$
|
113,358
|
|
(a)
|
Includes amounts associated with the 2014 acquisition of our partner’s 80% ownership interest in our MS Inland unconsolidated joint venture as well as acquisitions from unaffiliated third parties.
|
(b)
|
2015 acquisitions include the purchase of a land parcel at our Lake Worth Towne Crossing multi-tenant retail operating property. The total number of properties in our portfolio was not affected by this transaction.
|
(c)
|
2014 acquisitions include the purchase of the following: 1) the fee interest in our Bed Bath & Beyond Plaza multi-tenant retail operating property that was previously subject to a ground lease with a third party, 2) a single-user outparcel located at our Southlake Town Square multi-tenant retail operating property that was subject to a ground lease with us prior to the transaction, and 3) a parcel located at our Lakewood Town Center multi-tenant retail operating property. The total number of properties in our portfolio was not affected by these transactions.
|
|
|
Three Months Ended March 31,
|
||||||||||
|
|
2015
|
|
2014
|
|
Impact
|
||||||
Cash provided by operating activities
|
|
$
|
71,127
|
|
|
$
|
58,151
|
|
|
$
|
12,976
|
|
Cash used in investing activities
|
|
(274,535
|
)
|
|
(28,645
|
)
|
|
(245,890
|
)
|
|||
Cash provided by (used in) financing activities
|
|
156,011
|
|
|
(25,029
|
)
|
|
181,040
|
|
|||
(Decrease) increase in cash and cash equivalents
|
|
(47,397
|
)
|
|
4,477
|
|
|
(51,874
|
)
|
|||
Cash and cash equivalents, at beginning of period
|
|
112,292
|
|
|
58,190
|
|
|
|
||||
Cash and cash equivalents, at end of period
|
|
$
|
64,895
|
|
|
$
|
62,667
|
|
|
|
•
|
a $3,728 increase in NOI (including an increase in NOI from continuing operations of $3,647);
|
•
|
a $2,151 reduction in cash paid for interest;
|
•
|
a $738 decrease in cash paid for leasing fees and inducements; and
|
•
|
ordinary course fluctuations in working capital accounts.
|
•
|
a $287,876 increase in cash paid to purchase investment properties;
|
•
|
a $16,174 net change in restricted escrow activity, of which $21,010 relates to acquisition deposits made in 2014 in connection with 2015 acquisition activity; and
|
•
|
a $26,139 increase in proceeds from the sales of investment properties.
|
•
|
a $248,815 increase in proceeds from the issuance of unsecured notes in an underwritten public offering in 2015;
|
•
|
a $30,000 decrease in net proceeds from our Unsecured Credit Facility;
|
•
|
a $21,391 increase in principal payments on mortgages payable; and
|
•
|
the purchase of $12,379 of Treasury securities in connection with defeasance of mortgages payable during the three months ended March 31, 2015.
|
•
|
drew $60,000 on our unsecured revolving line of credit and used the proceeds to:
|
•
|
acquire Tysons Corner, a 38,000 square foot multi-tenant retail property located in Vienna, Virginia, for a gross purchase price of $31,556; and
|
•
|
repay a mortgage payable with a principal balance of $21,684 and an interest rate of 8.00%;
|
•
|
closed on the disposition of Hartford Insurance Building, a 97,400 square foot single-user office property located in Maple Grove, Minnesota, for a sales price of $6,015 with an anticipated gain on sale of approximately $860; and
|
•
|
closed on the disposition of Rasmussen College, a 26,700 square foot single-user office property located in Brooklyn Park, Minnesota, for a sales price of $4,800 with an anticipated gain on sale of approximately $1,334.
|
|
|
Notional
Amount
|
|
Termination Date
|
|
Fair Value of
Derivative
Liability
|
||||
Fixed rate portion of unsecured credit facility
|
|
$
|
300,000
|
|
|
February 24, 2016
|
|
$
|
513
|
|
Heritage Towne Crossing
|
|
8,070
|
|
|
September 30, 2016
|
|
119
|
|
||
|
|
$
|
308,070
|
|
|
|
|
$
|
632
|
|
(a)
|
Not applicable.
|
(b)
|
Not applicable.
|
(c)
|
Issuer Purchases of Equity Securities
|
Period
|
|
Total number
of shares of Class A common stock purchased |
|
Average price
paid per share of Class A
common stock
|
|
Total number of
shares purchased as part of publicly announced plans or programs |
|
Maximum number
(or approximate dollar value) of shares that may yet be purchased under the plans or programs |
|||
January 1, 2015 to January 31, 2015
|
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
N/A
|
February 1, 2015 to February 28, 2015
|
|
48,400
|
|
|
$
|
16.06
|
|
|
N/A
|
|
N/A
|
March 1, 2015 to March 31, 2015
|
|
4,656
|
|
|
$
|
15.73
|
|
|
N/A
|
|
N/A
|
Total
|
|
53,056
|
|
|
$
|
16.03
|
|
|
N/A
|
|
N/A
|
Exhibit No.
|
|
Description
|
|
|
|
4.1
|
|
Indenture, dated March 12, 2015, by and between Retail Properties of America, Inc., as issuer, and U.S. Bank National Association, as trustee (Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 12, 2015).
|
4.2
|
|
First Supplemental Indenture, dated March 12, 2015, by and between Retail Properties of America, Inc., as issuer, and U.S. Bank National Association, as trustee (Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on March 12, 2015).
|
4.3
|
|
Form of 4.00% Senior Notes due 2025 (Incorporated herein by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on March 12, 2015).
|
10.1
|
|
Amendment to Retention Agreement dated February 19, 2015 by and between Registrant and Steven P. Grimes (filed herewith).
|
10.2
|
|
Amendment to Retention Agreement dated February 19, 2015 by and between Registrant and Angela M. Aman (filed herewith).
|
10.3
|
|
Amendment to Retention Agreement dated February 19, 2015 by and between Registrant and Niall J. Byrne (filed herewith).
|
10.4
|
|
Amendment to Retention Agreement dated February 19, 2015 by and between Registrant and Shane C. Garrison (filed herewith).
|
10.5
|
|
Amendment to Retention Agreement dated February 19, 2015 by and between Registrant and Dennis K. Holland (filed herewith).
|
31.1
|
|
Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
|
31.2
|
|
Certification of Executive Vice President, Chief Financial Officer and Treasurer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
|
32.1
|
|
Certification of President and Chief Executive Officer and Executive Vice President, Chief Financial Officer and Treasurer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 (furnished herewith).
|
101
|
|
Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014, (ii) Condensed Consolidated Statements of Operations and Other Comprehensive Income for the Three-Month Periods Ended March 31, 2015 and 2014, (iii) Condensed Consolidated Statements of Equity for the Three-Month Periods Ended March 31, 2015 and 2014, (iv) Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2015 and 2014, and (v) Notes to Condensed Consolidated Financial Statements.
|
By:
|
/s/ STEVEN P. GRIMES
|
|
|
|
|
|
Steven P. Grimes
|
|
|
President and Chief Executive Officer
|
|
|
|
|
Date:
|
May 5, 2015
|
|
|
|
|
By:
|
/s/ ANGELA M. AMAN
|
|
|
|
|
|
Angela M. Aman
|
|
|
Executive Vice President,
|
|
|
Chief Financial Officer and Treasurer (Principal Financial Officer)
|
|
|
|
|
Date:
|
May 5, 2015
|
|
|
|
|
By:
|
/s/ JULIE M. SWINEHART
|
|
|
|
|
|
Julie M. Swinehart
|
|
|
Senior Vice President and Corporate Controller (Principal Accounting Officer)
|
|
|
|
|
Date:
|
May 5, 2015
|
|
By:
|
/s/ Dennis K. Holland
|
|
Date:
|
2/19/15
|
|
Executive Vice President,
|
|
|
|
|
General Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
|
|
/s/ Steven P. Grimes
|
|
Date:
|
2/19/15
|
|
Steven P. Grimes
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven P. Grimes
|
|
Date:
|
2/19/15
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
|
|
/s/ Angela M. Aman
|
|
Date:
|
2/19/15
|
|
Angela M. Aman
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven P. Grimes
|
|
Date:
|
2/19/15
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
|
|
/s/ Niall J. Byrne
|
|
Date:
|
2/19/15
|
|
Niall J. Byrne
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven P. Grimes
|
|
Date:
|
2/19/15
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
|
|
/s/ Shane C. Garrison
|
|
Date:
|
2/19/15
|
|
Shane C. Garrison
|
|
|
|
|
|
|
|
|
By:
|
/s/ Steven P. Grimes
|
|
Date:
|
2/19/15
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
|
|
/s/ Dennis K. Holland
|
|
Date:
|
2/19/15
|
|
Dennis K. Holland
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Retail Properties of America, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ STEVEN P. GRIMES
|
|
|
|
Steven P. Grimes
|
|
President and Chief Executive Officer
|
|
|
Date:
|
May 5, 2015
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Retail Properties of America, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ ANGELA M. AMAN
|
|
|
|
Angela M. Aman
|
|
Executive Vice President,
|
|
Chief Financial Officer and Treasurer
|
|
|
Date:
|
May 5, 2015
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
By:
|
/s/ STEVEN P. GRIMES
|
|
|
|
Steven P. Grimes
|
|
President and Chief Executive Officer
|
|
|
Date:
|
May 5, 2015
|
|
|
By:
|
/s/ ANGELA M. AMAN
|
|
|
|
Angela M. Aman
|
|
Executive Vice President,
|
|
Chief Financial Officer and Treasurer
|
|
|
Date:
|
May 5, 2015
|