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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Emerging growth company
o
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June 30,
2017 |
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December 31,
2016 |
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Assets
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Investment properties:
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Land
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$
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1,141,172
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$
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1,191,403
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Building and other improvements
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4,023,200
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4,284,664
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Developments in progress
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28,254
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23,439
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5,192,626
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5,499,506
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Less accumulated depreciation
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(1,363,604
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)
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(1,443,333
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)
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Net investment properties
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3,829,022
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4,056,173
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Cash and cash equivalents
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28,003
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53,119
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Accounts and notes receivable (net of allowances of $6,938 and $6,886, respectively)
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71,588
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78,941
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Acquired lease intangible assets, net
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131,092
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142,015
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Assets associated with investment properties held for sale
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44,087
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30,827
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Other assets, net
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160,531
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91,898
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Total assets
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$
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4,264,323
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$
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4,452,973
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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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355,239
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$
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769,184
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Unsecured notes payable, net
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695,441
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695,143
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Unsecured term loans, net
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646,554
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447,598
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Unsecured revolving line of credit
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182,000
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86,000
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Accounts payable and accrued expenses
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65,093
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83,085
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Distributions payable
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38,318
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39,222
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Acquired lease intangible liabilities, net
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102,720
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105,290
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Liabilities associated with investment properties held for sale
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1,142
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864
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Other liabilities
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75,339
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74,501
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Total liabilities
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2,161,846
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2,300,887
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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 June 30, 2017
and December 31, 2016; liquidation preference $135,000
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5
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5
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Class A common stock, $0.001 par value, 475,000 shares authorized, 230,943 and 236,770
shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
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231
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237
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Additional paid-in capital
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4,853,680
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4,927,155
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Accumulated distributions in excess of earnings
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(2,752,648
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)
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(2,776,033
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)
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Accumulated other comprehensive income
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1,209
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722
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Total equity
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2,102,477
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2,152,086
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Total liabilities and equity
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$
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4,264,323
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$
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4,452,973
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Three Months Ended June 30,
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Six Months Ended June 30,
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2017
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2016
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2017
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2016
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Revenues
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Rental income
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$
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106,017
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$
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115,194
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$
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215,991
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$
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230,454
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Tenant recovery income
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29,524
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29,654
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60,310
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60,010
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Other property income
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1,798
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2,378
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4,731
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5,401
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Total revenues
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137,339
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147,226
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281,032
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295,865
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Expenses
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Operating expenses
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21,004
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20,092
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42,868
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43,153
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Real estate taxes
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21,487
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21,090
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43,366
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41,029
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Depreciation and amortization
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52,325
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53,443
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105,799
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106,839
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Provision for impairment of investment properties
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13,034
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4,142
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13,034
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6,306
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General and administrative expenses
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10,370
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10,773
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21,583
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22,179
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Total expenses
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118,220
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109,540
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226,650
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219,506
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Operating income
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19,119
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37,686
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54,382
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76,359
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Gain on extinguishment of debt
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—
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—
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—
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13,653
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Gain on extinguishment of other liabilities
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—
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6,978
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—
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6,978
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Interest expense
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(21,435
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(25,977
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(106,967
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(52,741
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)
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Other income, net
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451
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302
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456
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427
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(Loss) income from continuing operations
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(1,865
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)
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18,989
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(52,129
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)
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44,676
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Gain on sales of investment properties
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116,628
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9,613
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157,792
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31,352
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Net income
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114,763
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28,602
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105,663
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76,028
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Preferred stock dividends
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(2,363
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)
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(2,363
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(4,725
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)
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(4,725
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)
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Net income attributable to common shareholders
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$
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112,400
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$
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26,239
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$
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100,938
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$
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71,303
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Earnings per common share – basic and diluted
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Net income per common share attributable to common shareholders
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$
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0.48
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$
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0.11
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$
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0.43
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$
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0.30
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Net income
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$
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114,763
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$
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28,602
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$
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105,663
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$
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76,028
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Other comprehensive (loss) income:
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Net unrealized (loss) gain on derivative instruments (Note 9)
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(145
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)
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(510
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)
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487
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(477
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)
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Comprehensive income attributable to the Company
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$
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114,618
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$
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28,092
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$
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106,150
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$
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75,551
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Weighted average number of common shares outstanding – basic
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234,243
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236,716
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235,269
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236,647
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Weighted average number of common shares outstanding – diluted
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234,818
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236,902
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235,842
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236,781
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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) Income
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Total
Shareholders’
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, 2016
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5,400
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$
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5
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237,267
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$
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237
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$
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4,931,395
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$
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(2,776,215
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)
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$
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(85
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)
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$
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2,155,337
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Cumulative effect of accounting change
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—
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—
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—
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—
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17
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(17
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)
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—
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—
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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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76,028
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—
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76,028
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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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(477
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)
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(477
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)
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||||||
Distributions declared to preferred shareholders
($0.875 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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(4,725
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)
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—
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(4,725
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)
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||||||
Distributions declared to common shareholders
($0.33125 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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(78,631
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)
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|
—
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(78,631
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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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(2
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)
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—
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—
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(2
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)
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||||||
Issuance of restricted shares
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—
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|
—
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|
269
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|
—
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—
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|
—
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|
—
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|
—
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||||||
Stock-based compensation expense, net of forfeitures
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—
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|
—
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(6
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)
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—
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3,702
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—
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—
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3,702
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Shares withheld for employee taxes
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—
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—
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(147
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)
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—
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|
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(2,159
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)
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—
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—
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(2,159
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)
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Balance as of June 30, 2016
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5,400
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$
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5
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|
|
237,383
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|
$
|
237
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|
|
$
|
4,932,953
|
|
|
$
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(2,783,560
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)
|
|
$
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(562
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)
|
|
$
|
2,149,073
|
|
|
|
|
|
|
|
|
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|
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||||||||||||||
Balance as of January 1, 2017
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5,400
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|
|
$
|
5
|
|
|
236,770
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|
$
|
237
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|
|
$
|
4,927,155
|
|
|
$
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(2,776,033
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)
|
|
$
|
722
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|
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$
|
2,152,086
|
|
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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105,663
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|
|
—
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|
|
105,663
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|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
487
|
|
|
487
|
|
||||||
Distributions declared to preferred shareholders
($0.875 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,725
|
)
|
|
—
|
|
|
(4,725
|
)
|
||||||
Distributions declared to common shareholders
($0.33125 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(77,553
|
)
|
|
—
|
|
|
(77,553
|
)
|
||||||
Shares repurchased through share repurchase program
|
—
|
|
|
—
|
|
|
(6,024
|
)
|
|
(6
|
)
|
|
(75,691
|
)
|
|
—
|
|
|
—
|
|
|
(75,697
|
)
|
||||||
Issuance of restricted shares
|
—
|
|
|
—
|
|
|
285
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,549
|
|
|
—
|
|
|
—
|
|
|
3,549
|
|
||||||
Shares withheld for employee taxes
|
—
|
|
|
—
|
|
|
(88
|
)
|
|
—
|
|
|
(1,333
|
)
|
|
—
|
|
|
—
|
|
|
(1,333
|
)
|
||||||
Balance as of June 30, 2017
|
5,400
|
|
|
$
|
5
|
|
|
230,943
|
|
|
$
|
231
|
|
|
$
|
4,853,680
|
|
|
$
|
(2,752,648
|
)
|
|
$
|
1,209
|
|
|
$
|
2,102,477
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
105,663
|
|
|
$
|
76,028
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
105,799
|
|
|
106,839
|
|
||
Provision for impairment of investment properties
|
13,034
|
|
|
6,306
|
|
||
Gain on sales of investment properties
|
(157,792
|
)
|
|
(31,352
|
)
|
||
Gain on extinguishment of debt
|
—
|
|
|
(13,653
|
)
|
||
Gain on extinguishment of other liabilities
|
—
|
|
|
(6,978
|
)
|
||
Amortization of loan fees and debt premium and discount, net
|
5,871
|
|
|
3,187
|
|
||
Amortization of stock-based compensation
|
3,549
|
|
|
3,702
|
|
||
Premium paid in connection with defeasance of mortgages payable
|
59,968
|
|
|
—
|
|
||
Payment of leasing fees and inducements
|
(9,757
|
)
|
|
(5,967
|
)
|
||
Changes in accounts receivable, net
|
4,094
|
|
|
(1,655
|
)
|
||
Changes in accounts payable and accrued expenses, net
|
(15,577
|
)
|
|
(11,410
|
)
|
||
Changes in other operating assets and liabilities, net
|
11,388
|
|
|
834
|
|
||
Other, net
|
(63
|
)
|
|
893
|
|
||
Net cash provided by operating activities
|
126,177
|
|
|
126,774
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Changes in restricted escrows, net
|
17,662
|
|
|
1,769
|
|
||
Purchase of investment properties
|
(99,434
|
)
|
|
(261,877
|
)
|
||
Capital expenditures and tenant improvements
|
(31,629
|
)
|
|
(30,216
|
)
|
||
Proceeds from sales of investment properties
|
312,916
|
|
|
41,031
|
|
||
Investment in developments in progress
|
(8,612
|
)
|
|
—
|
|
||
Other, net
|
—
|
|
|
194
|
|
||
Net cash provided by (used in) investing activities
|
190,903
|
|
|
(249,099
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Principal payments on mortgages payable
|
(38,571
|
)
|
|
(12,679
|
)
|
||
Proceeds from unsecured term loans
|
200,000
|
|
|
—
|
|
||
Proceeds from unsecured revolving line of credit
|
474,000
|
|
|
325,000
|
|
||
Repayments of unsecured revolving line of credit
|
(378,000
|
)
|
|
(120,000
|
)
|
||
Payment of loan fees and deposits
|
(10
|
)
|
|
(6,043
|
)
|
||
Purchase of U.S. Treasury securities in connection with defeasance of mortgages payable
|
(439,403
|
)
|
|
—
|
|
||
Distributions paid
|
(83,182
|
)
|
|
(83,333
|
)
|
||
Shares repurchased through share repurchase program
|
(75,697
|
)
|
|
—
|
|
||
Other, net
|
(1,333
|
)
|
|
(2,256
|
)
|
||
Net cash (used in) provided by financing activities
|
(342,196
|
)
|
|
100,689
|
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(25,116
|
)
|
|
(21,636
|
)
|
||
Cash and cash equivalents, at beginning of period
|
53,119
|
|
|
51,424
|
|
||
Cash and cash equivalents, at end of period
|
$
|
28,003
|
|
|
$
|
29,788
|
|
(continued)
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Supplemental cash flow disclosure, including non-cash activities:
|
|
|
|
||||
Cash paid for interest, net of interest capitalized
|
$
|
41,017
|
|
|
$
|
46,695
|
|
Distributions payable
|
$
|
38,318
|
|
|
$
|
39,320
|
|
Accrued capital expenditures and tenant improvements
|
$
|
6,089
|
|
|
$
|
8,742
|
|
Accrued leasing fees and inducements
|
$
|
840
|
|
|
$
|
772
|
|
Accrued redevelopment costs
|
$
|
1,019
|
|
|
$
|
—
|
|
U.S. Treasury securities transferred in connection with defeasance of mortgages payable
|
$
|
439,403
|
|
|
$
|
—
|
|
Defeasance of mortgages payable
|
$
|
379,435
|
|
|
$
|
—
|
|
|
|
|
|
||||
Purchase of investment properties (after credits at closing):
|
|
|
|
||||
Net investment properties
|
$
|
(101,307
|
)
|
|
$
|
(257,157
|
)
|
Accounts receivable, acquired lease intangibles and other assets
|
(7,659
|
)
|
|
(25,049
|
)
|
||
Accounts payable, acquired lease intangibles and other liabilities
|
7,008
|
|
|
5,013
|
|
||
Deferred gain
|
2,524
|
|
|
—
|
|
||
Mortgages payable assumed, net
|
—
|
|
|
15,316
|
|
||
|
$
|
(99,434
|
)
|
|
$
|
(261,877
|
)
|
|
|
|
|
||||
Proceeds from sales of investment properties:
|
|
|
|
||||
Net investment properties
|
$
|
245,853
|
|
|
$
|
126,057
|
|
Accounts receivable, acquired lease intangibles and other assets
|
9,766
|
|
|
10,503
|
|
||
Accounts payable, acquired lease intangibles and other liabilities
|
(6,258
|
)
|
|
(3,276
|
)
|
||
Deferred gain
|
(676
|
)
|
|
—
|
|
||
Mortgage debt forgiven or assumed
|
—
|
|
|
(94,353
|
)
|
||
Gain on extinguishment of debt
|
—
|
|
|
13,653
|
|
||
Gain on sales of investment properties
|
157,792
|
|
|
31,352
|
|
||
Proceeds temporarily restricted related to potential Internal Revenue Code
Section 1031 tax-deferred exchanges
|
(93,561
|
)
|
|
(42,905
|
)
|
||
|
$
|
312,916
|
|
|
$
|
41,031
|
|
|
Wholly-owned
|
|
Retail operating properties (a)
|
132
|
|
Office properties
|
1
|
|
Total operating properties
|
133
|
|
|
|
|
Redevelopment properties
|
2
|
|
(a)
|
Excludes
four
wholly-owned operating properties classified as held for sale as of
June 30, 2017
.
|
Date
|
|
Property Name
|
|
Metropolitan
Statistical Area (MSA) |
|
Property Type
|
|
Square
Footage
|
|
Acquisition
Price
|
|
|||
January 13, 2017
|
|
Main Street Promenade (a)
|
|
Chicago
|
|
Multi-tenant retail
|
|
181,600
|
|
|
$
|
88,000
|
|
|
January 25, 2017
|
|
Boulevard at the Capital Centre –
Fee Interest (b)
|
|
Washington, D.C.
|
|
Fee interest (b)
|
|
—
|
|
|
2,000
|
|
|
|
February 24, 2017
|
|
One Loudoun Downtown –
Phase II (c)
|
|
Washington, D.C.
|
|
Additional phase of multi-tenant retail (c)
|
|
15,900
|
|
|
4,128
|
|
|
|
April 5, 2017
|
|
One Loudoun Downtown –
Phase III (c)
|
|
Washington, D.C.
|
|
Additional phase of multi-tenant retail (c)
|
|
9,800
|
|
|
2,193
|
|
|
|
May 16, 2017
|
|
One Loudoun Downtown –
Phase IV (c)
|
|
Washington, D.C.
|
|
Development rights (c)
|
|
—
|
|
|
3,500
|
|
|
|
|
|
|
|
|
|
|
|
207,300
|
|
|
$
|
99,821
|
|
(d)
|
(a)
|
This property was acquired through a consolidated VIE and was used to facilitate an Internal Revenue Code Section 1031 tax-deferred exchange (1031 Exchange).
|
(b)
|
The wholly-owned multi-tenant retail operating property located in Largo, Maryland was previously subject to an approximately
70
acre long-term ground lease with a third party. The Company completed a transaction whereby it received the fee interest in approximately
50
acres of the underlying land in exchange for which (i) the Company paid
$1,939
and (ii) the term of the ground lease with respect to the remaining approximately
20
acres was shortened to
nine months
. The Company derecognized building and improvements of
$11,347
related to the remaining ground lease, recognized the fair value of land received of
$15,200
and recorded a deferred gain of
$2,524
. The deferred gain will be recognized upon the expiration of the remaining ground lease. The total number of properties in the Company’s portfolio was not affected by this transaction.
|
(c)
|
The Company acquired
three
additional phases, including the development rights for an additional
123
multi-family units for a total of
408
, at its One Loudoun Downtown multi-tenant retail operating property, which were accounted for as asset acquisitions. The total number of properties in the Company’s portfolio was not affected by these transactions. The remaining phases at One Loudoun Downtown, representing an aggregate gross purchase price of up to
$25,700
, are expected to close during the third quarter of 2017 as the seller completes construction on stand-alone buildings at the property.
|
(d)
|
Acquisition price does not include capitalized closing costs and adjustments totaling
$2,334
.
|
Date
|
|
Property Name
|
|
MSA
|
|
Property Type
|
|
Square
Footage
|
|
Acquisition
Price
|
|||
January 15, 2016
|
|
Shoppes at Hagerstown (a)
|
|
Hagerstown
|
|
Multi-tenant retail
|
|
113,000
|
|
|
$
|
27,055
|
|
January 15, 2016
|
|
Merrifield Town Center II (a)
|
|
Washington, D.C.
|
|
Multi-tenant retail
|
|
76,000
|
|
|
45,676
|
|
|
March 29, 2016
|
|
Oak Brook Promenade (b)
|
|
Chicago
|
|
Multi-tenant retail
|
|
183,200
|
|
|
65,954
|
|
|
April 1, 2016
|
|
The Shoppes at Union Hill (c)
|
|
New York
|
|
Multi-tenant retail
|
|
91,700
|
|
|
63,060
|
|
|
April 29, 2016
|
|
Ashland & Roosevelt – Fee Interest (d)
|
|
Chicago
|
|
Ground lease interest (d)
|
|
—
|
|
|
13,850
|
|
|
May 5, 2016
|
|
Tacoma South (b)
|
|
Seattle
|
|
Multi-tenant retail
|
|
230,700
|
|
|
39,400
|
|
|
June 15, 2016
|
|
Eastside (b)
|
|
Dallas
|
|
Multi-tenant retail
|
|
67,100
|
|
|
23,842
|
|
|
|
|
|
|
|
|
|
|
761,700
|
|
|
$
|
278,837
|
|
(a)
|
These properties were acquired as a
two
-property portfolio. Merrifield Town Center II also contains
62,000
square feet of storage space for a total of
138,000
square feet.
|
(b)
|
These properties were acquired through consolidated VIEs and were used to facilitate 1031 Exchanges.
|
(c)
|
In conjunction with the acquisition, the Company assumed mortgage debt with a principal balance of
$15,971
and an interest rate of
3.75%
that matures in 2031.
|
(d)
|
The Company acquired the fee interest in an existing wholly-owned multi-tenant retail operating property located in Chicago, Illinois, which was previously subject to a ground lease with a third party. In conjunction with this transaction, the Company reversed the straight-line ground rent liability of
$6,978
, which is reflected as “Gain on extinguishment of other liabilities” in the accompanying condensed consolidated statements of operations and other comprehensive (loss) income.
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Land
|
|
$
|
23,559
|
|
|
$
|
84,720
|
|
Building and other improvements, net
|
|
77,748
|
|
|
172,437
|
|
||
Acquired lease intangible assets (a)
|
|
7,343
|
|
|
25,016
|
|
||
Acquired lease intangible liabilities (b)
|
|
(5,477
|
)
|
|
(3,991
|
)
|
||
Other liabilities
|
|
(1,076
|
)
|
|
—
|
|
||
Mortgages payable, net
|
|
—
|
|
|
(15,316
|
)
|
||
Net assets acquired
|
|
$
|
102,097
|
|
|
$
|
262,866
|
|
(a)
|
The weighted average amortization period for acquired lease intangible assets is
six years
for acquisitions completed during the
six
months ended
June 30, 2017
and
2016
.
|
(b)
|
The weighted average amortization period for acquired lease intangible liabilities is
13 years
and
11 years
for acquisitions completed during the
six
months ended
June 30, 2017
and
2016
, respectively.
|
|
|
Three Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2016
|
||||
Total revenues
|
|
$
|
147,813
|
|
|
$
|
300,126
|
|
Net income
|
|
$
|
28,559
|
|
|
$
|
74,975
|
|
Net income attributable to common shareholders
|
|
$
|
26,196
|
|
|
$
|
70,250
|
|
Earnings per common share – basic and diluted
|
|
|
|
|
||||
Net income per common share attributable to common shareholders
|
|
$
|
0.11
|
|
|
$
|
0.30
|
|
Weighted average number of common shares outstanding – basic
|
|
236,716
|
|
|
236,647
|
|
Date
|
|
Property Name
|
|
Property Type
|
|
Square
Footage
|
|
Consideration
|
|
Aggregate
Proceeds, Net (a)
|
|
Gain
|
|||||||
January 27, 2017
|
|
Rite Aid Store (Eckerd),
Culver Rd. – Rochester, NY
|
|
Single-user retail
|
|
10,900
|
|
|
$
|
500
|
|
|
$
|
332
|
|
|
$
|
—
|
|
February 21, 2017
|
|
Shoppes at Park West
|
|
Multi-tenant retail
|
|
63,900
|
|
|
15,383
|
|
|
15,261
|
|
|
7,569
|
|
|||
March 7, 2017
|
|
CVS Pharmacy – Sylacauga, AL (b)
|
|
Single-user retail
|
|
10,100
|
|
|
3,700
|
|
|
16
|
|
|
1,651
|
|
|||
March 8, 2017
|
|
Rite Aid Store (Eckerd) –
Kill Devil Hills, NC
|
|
Single-user retail
|
|
13,800
|
|
|
4,297
|
|
|
4,134
|
|
|
1,857
|
|
|||
March 15, 2017
|
|
Century III Plaza – Home
Depot (c)
|
|
Single-user parcel
|
|
131,900
|
|
|
17,519
|
|
|
17,344
|
|
|
4,487
|
|
|||
March 16, 2017
|
|
Village Shoppes at Gainesville
|
|
Multi-tenant retail
|
|
229,500
|
|
|
41,750
|
|
|
41,380
|
|
|
14,107
|
|
|||
March 24, 2017
|
|
Northwood Crossing (b)
|
|
Multi-tenant retail
|
|
160,000
|
|
|
22,850
|
|
|
4
|
|
|
10,007
|
|
|||
April 4, 2017
|
|
University Town Center (b)
|
|
Multi-tenant retail
|
|
57,500
|
|
|
14,700
|
|
|
(5
|
)
|
|
9,128
|
|
|||
April 4, 2017
|
|
Edgemont Town Center (b)
|
|
Multi-tenant retail
|
|
77,700
|
|
|
19,025
|
|
|
(28
|
)
|
|
8,995
|
|
|||
April 4, 2017
|
|
Phenix Crossing (b)
|
|
Multi-tenant retail
|
|
56,600
|
|
|
12,400
|
|
|
(28
|
)
|
|
5,699
|
|
|||
April 27, 2017
|
|
Brown’s Lane
|
|
Multi-tenant retail
|
|
74,700
|
|
|
10,575
|
|
|
10,318
|
|
|
3,408
|
|
|||
May 9, 2017
|
|
Rite Aid Store (Eckerd) – Greer, SC
|
|
Single-user retail
|
|
13,800
|
|
|
3,050
|
|
|
2,961
|
|
|
830
|
|
|||
May 9, 2017
|
|
Evans Towne Centre
|
|
Multi-tenant retail
|
|
75,700
|
|
|
11,825
|
|
|
11,419
|
|
|
5,226
|
|
|||
May 25, 2017
|
|
Red Bug Village
|
|
Multi-tenant retail
|
|
26,200
|
|
|
8,100
|
|
|
7,767
|
|
|
2,184
|
|
|||
May 26, 2017
|
|
Wilton Square
|
|
Multi-tenant retail
|
|
438,100
|
|
|
49,300
|
|
|
48,503
|
|
|
19,630
|
|
|||
May 30, 2017
|
|
Town Square Plaza
|
|
Multi-tenant retail
|
|
215,600
|
|
|
28,600
|
|
|
26,459
|
|
|
3,412
|
|
|||
May 31, 2017
|
|
Cuyahoga Falls Market Center
|
|
Multi-tenant retail
|
|
76,400
|
|
|
11,500
|
|
|
11,101
|
|
|
1,300
|
|
|||
June 5, 2017
|
|
Plaza Santa Fe II
|
|
Multi-tenant retail
|
|
224,200
|
|
|
35,220
|
|
|
33,506
|
|
|
16,136
|
|
|||
June 6, 2017
|
|
Rite Aid Store (Eckerd)–Columbia, SC
|
|
Single-user retail
|
|
13,400
|
|
|
3,250
|
|
|
3,163
|
|
|
1,046
|
|
|||
June 16, 2017
|
|
Fox Creek Village
|
|
Multi-tenant retail
|
|
107,500
|
|
|
24,825
|
|
|
24,415
|
|
|
12,470
|
|
|||
June 29, 2017
|
|
Cottage Plaza
|
|
Multi-tenant retail
|
|
85,500
|
|
|
23,050
|
|
|
22,685
|
|
|
8,039
|
|
|||
June 29, 2017
|
|
Magnolia Square
|
|
Multi-tenant retail
|
|
116,000
|
|
|
16,000
|
|
|
15,692
|
|
|
4,866
|
|
|||
June 29, 2017
|
|
Cinemark Seven Bridges
|
|
Single-user retail
|
|
70,200
|
|
|
15,271
|
|
|
14,948
|
|
|
3,973
|
|
|||
June 29, 2017
|
|
Low Country Village I & II (b)
|
|
Multi-tenant retail
|
|
139,900
|
|
|
22,075
|
|
|
(67
|
)
|
|
10,286
|
|
|||
|
|
|
|
|
|
2,489,100
|
|
|
$
|
414,765
|
|
|
$
|
311,280
|
|
|
$
|
156,306
|
|
(a)
|
Aggregate proceeds are net of transaction costs and proceeds temporarily restricted related to potential 1031 Exchanges and exclude
$150
of condemnation proceeds, which did not result in any additional gain recognition.
|
(b)
|
The following disposition proceeds are temporarily restricted related to potential 1031 Exchanges and are included in “Other assets, net” in the accompanying condensed consolidated balance sheets:
|
Property Name
|
|
Proceeds
Temporarily
Restricted
|
||
CVS Pharmacy – Sylacauga, AL
|
|
$
|
3,332
|
|
Northwood Crossing
|
|
22,719
|
|
|
University Town Center
|
|
14,595
|
|
|
Edgemont Town Center
|
|
18,885
|
|
|
Phenix Crossing
|
|
12,324
|
|
|
Low Country Village I & II
|
|
21,706
|
|
|
|
|
$
|
93,561
|
|
(c)
|
The Company disposed of the Home Depot parcel at Century III Plaza, an existing
284,100
square foot multi-tenant retail operating property. The remaining portion of Century III Plaza is classified as held for sale as of June 30, 2017.
|
Date
|
|
Property Name
|
|
Property Type
|
|
Square
Footage
|
|
Consideration
|
|
Aggregate
Proceeds, Net (a)
|
|
Gain
|
|||||||
February 1, 2016
|
|
The Gateway (b)
|
|
Multi-tenant retail
|
|
623,200
|
|
|
$
|
75,000
|
|
|
$
|
(795
|
)
|
|
$
|
3,868
|
|
February 10, 2016
|
|
Stateline Station
|
|
Multi-tenant retail
|
|
142,600
|
|
|
17,500
|
|
|
17,210
|
|
|
4,253
|
|
|||
March 30, 2016
|
|
Six Property Portfolio (c)
|
|
Single-user retail
|
|
230,400
|
|
|
35,413
|
|
|
12
|
|
|
13,618
|
|
|||
April 20, 2016
|
|
CVS Pharmacy – Oklahoma City, OK
|
|
Single-user retail
|
|
10,900
|
|
|
4,676
|
|
|
4,608
|
|
|
1,764
|
|
|||
June 2, 2016
|
|
Rite Aid Store (Eckerd) – Canandaigua, NY & Tim Horton Donut Shop (d)
|
|
Single-user retail
|
|
16,600
|
|
|
5,400
|
|
|
5,333
|
|
|
1,444
|
|
|||
June 15, 2016
|
|
Academy Sports – Midland, TX (e)
|
|
Single-user retail
|
|
61,200
|
|
|
5,541
|
|
|
17
|
|
|
2,220
|
|
|||
June 23, 2016
|
|
Four Rite Aid Portfolio (f)
|
|
Single-user retail
|
|
45,400
|
|
|
15,934
|
|
|
14,646
|
|
|
2,287
|
|
|||
|
|
|
|
|
|
1,130,300
|
|
|
$
|
159,464
|
|
|
$
|
41,031
|
|
|
$
|
29,454
|
|
(a)
|
Aggregate proceeds are net of transaction costs and proceeds temporarily restricted related to potential 1031 Exchanges.
|
(b)
|
The property was disposed of through a lender-directed sale in full satisfaction of the Company’s
$94,353
mortgage obligation. Immediately prior to the disposition, the lender reduced the Company’s loan obligation to
$75,000
which was assumed by the buyer in connection with the disposition. Along with the loan reduction, the lender received the balance of the restricted escrows that they held and the rights to unpaid accounts receivable and forgave accrued interest, resulting in a net gain on extinguishment of debt of
$13,653
.
|
(c)
|
Portfolio consists of the following properties: (i) Academy Sports – Houma, LA, (ii) Academy Sports – Port Arthur, TX, (iii) Academy Sports – San Antonio, TX, (iv) CVS Pharmacy – Moore, OK, (v) CVS Pharmacy – Saginaw, TX and (vi) Rite Aid Store (Eckerd) – Olean, NY. As of
June 30, 2016
, disposition proceeds of
$34,973
were temporarily restricted related to 1031 Exchanges and are included in “Other assets, net” in the accompanying condensed consolidated balance sheets.
|
(d)
|
The terms of the disposition of Rite Aid Store (Eckerd) – Canandaigua, NY and Tim Horton Donut Shop – Canandaigua, NY were negotiated as a single transaction.
|
(e)
|
As of
June 30, 2016
, disposition proceeds of
$5,383
were temporarily restricted related to a 1031 Exchange and are included in “Other assets, net” in the accompanying condensed consolidated balance sheets.
|
(f)
|
Portfolio consists of the following properties: (i) Rite Aid Store (Eckerd) – Cheektowaga, NY, (ii) Rite Aid Store (Eckerd), W. Main St. – Batavia, NY, (iii) Rite Aid Store (Eckerd), Union Rd. – West Seneca, NY and (iv) Rite Aid Store (Eckerd) – Greece, NY.
|
Property Name
|
|
Property Location
|
|
Property Type
|
|
Square Footage
|
|
Century III Plaza, excluding the Home Depot parcel
|
|
West Mifflin, Pennsylvania
|
|
Multi-tenant retail
|
|
152,200
|
|
Lakepointe Towne Center
|
|
Lewisville, Texas
|
|
Multi-tenant retail
|
|
196,600
|
|
Irmo Station
|
|
Irmo, South Carolina
|
|
Multi-tenant retail
|
|
99,400
|
|
Boulevard Plaza
|
|
Pawtucket, Rhode Island
|
|
Multi-tenant retail
|
|
111,100
|
|
|
|
|
|
|
|
559,300
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Land, building and other improvements
|
$
|
54,396
|
|
|
$
|
45,395
|
|
Less accumulated depreciation
|
(11,852
|
)
|
|
(15,769
|
)
|
||
Net investment properties
|
42,544
|
|
|
29,626
|
|
||
Other assets
|
1,543
|
|
|
1,201
|
|
||
Assets associated with investment properties held for sale
|
$
|
44,087
|
|
|
$
|
30,827
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Other liabilities
|
$
|
1,142
|
|
|
$
|
864
|
|
Liabilities associated with investment properties held for sale
|
$
|
1,142
|
|
|
$
|
864
|
|
|
Unvested
Restricted
Shares
|
|
Weighted Average
Grant Date
Fair Value per
Restricted Share
|
|||
Balance as of January 1, 2017
|
542
|
|
|
$
|
15.28
|
|
Shares granted (a)
|
285
|
|
|
$
|
14.60
|
|
Shares vested
|
(271
|
)
|
|
$
|
15.45
|
|
Balance as of June 30, 2017 (b)
|
556
|
|
|
$
|
14.85
|
|
(a)
|
Shares granted vest over periods ranging from
one year
to
three years
in accordance with the terms of applicable award agreements.
|
(b)
|
As of
June 30, 2017
, total unrecognized compensation expense related to unvested restricted shares was
$4,574
, which is expected to be amortized over a weighted average term of
1.4 years
.
|
|
Unvested
RSUs
|
|
Weighted Average
Grant Date
Fair Value
per RSU
|
|||
RSUs eligible for future conversion as of January 1, 2017
|
391
|
|
|
$
|
14.02
|
|
RSUs granted (a)
|
253
|
|
|
$
|
15.52
|
|
RSUs eligible for future conversion as of June 30, 2017 (b)
|
644
|
|
|
$
|
14.61
|
|
(a)
|
Assumptions and inputs as of the grant date included a risk-free interest rate of
1.50%
, the Company’s historical common stock performance relative to the peer companies within the National Association of Real Estate Investment Trusts (NAREIT) Shopping Center Index and the Company’s common stock dividend yield of
4.32%
. In 2020, following the performance period which concludes on December 31, 2019, one-third of the RSUs that are earned will convert into shares of common stock and two-thirds will convert into restricted shares with a
one year
vesting term.
|
(b)
|
As of
June 30, 2017
, total unrecognized compensation expense related to unvested RSUs was
$6,105
, which is expected to be amortized over a weighted average term of
2.7 years
.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||
|
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)
|
$
|
355,389
|
|
|
5.22
|
%
|
|
4.9
|
|
$
|
773,395
|
|
|
6.31
|
%
|
|
4.2
|
Premium, net of accumulated amortization
|
1,223
|
|
|
|
|
|
|
1,437
|
|
|
|
|
|
||||
Discount, net of accumulated amortization
|
(601
|
)
|
|
|
|
|
|
(622
|
)
|
|
|
|
|
||||
Capitalized loan fees, net of accumulated
amortization
|
(772
|
)
|
|
|
|
|
|
(5,026
|
)
|
|
|
|
|
||||
Mortgages payable, net
|
$
|
355,239
|
|
|
|
|
|
|
$
|
769,184
|
|
|
|
|
|
(a)
|
The fixed rate mortgages had interest rates ranging from
3.75%
to
8.00%
as of
June 30, 2017
and
December 31, 2016
.
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgages payable (a)
|
$
|
27,157
|
|
|
$
|
5,065
|
|
|
$
|
65,352
|
|
|
$
|
3,923
|
|
|
$
|
22,820
|
|
|
$
|
231,072
|
|
|
$
|
355,389
|
|
Fixed rate term loans (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
200,000
|
|
|
450,000
|
|
|||||||
Unsecured notes payable (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
600,000
|
|
|
700,000
|
|
|||||||
Total fixed rate debt
|
27,157
|
|
|
5,065
|
|
|
65,352
|
|
|
3,923
|
|
|
372,820
|
|
|
1,031,072
|
|
|
1,505,389
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate term loan and
revolving line of credit
|
—
|
|
|
200,000
|
|
|
—
|
|
|
182,000
|
|
|
—
|
|
|
—
|
|
|
382,000
|
|
|||||||
Total debt (d)
|
$
|
27,157
|
|
|
$
|
205,065
|
|
|
$
|
65,352
|
|
|
$
|
185,923
|
|
|
$
|
372,820
|
|
|
$
|
1,031,072
|
|
|
$
|
1,887,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Weighted average interest rate on debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate debt
|
4.18
|
%
|
|
5.49
|
%
|
|
7.45
|
%
|
|
4.62
|
%
|
|
2.73
|
%
|
|
4.08
|
%
|
|
3.90
|
%
|
|||||||
Variable rate debt (e)
|
—
|
|
|
2.61
|
%
|
|
—
|
|
|
2.58
|
%
|
|
—
|
|
|
—
|
|
|
2.59
|
%
|
|||||||
Total
|
4.18
|
%
|
|
2.68
|
%
|
|
7.45
|
%
|
|
2.62
|
%
|
|
2.73
|
%
|
|
4.08
|
%
|
|
3.64
|
%
|
(a)
|
Excludes mortgage premium of
$1,223
and discount of
$(601)
, net of accumulated amortization, as of
June 30, 2017
.
|
(b)
|
$250,000
of London Interbank Offered Rate (LIBOR)-based variable rate debt has been swapped to a fixed rate through
two
interest rate swaps. The swaps effectively convert
one-month floating rate LIBOR
to a weighted average fixed rate of
0.67%
through December 31, 2017. In addition,
$200,000
of LIBOR-based variable rate debt has been swapped to a fixed rate through
two
interest rate swaps. The swaps effectively convert
one-month floating rate LIBOR
to a fixed rate of
1.26%
through November 22, 2018.
|
(c)
|
Excludes discount of
$(912)
, net of accumulated amortization, as of
June 30, 2017
.
|
(d)
|
The weighted average years to maturity of consolidated indebtedness was
5.3 years
as of
June 30, 2017
. Total debt excludes capitalized loan fees of
$(7,865)
, net of accumulated amortization, as of
June 30, 2017
, which are included as a reduction to the respective debt balances.
|
(e)
|
Represents interest rates as of
June 30, 2017
.
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
Unsecured Notes Payable
|
|
Maturity Date
|
|
Principal Balance
|
|
Interest Rate/
Weighted Average
Interest Rate
|
|
Principal Balance
|
|
Interest Rate/
Weighted Average
Interest Rate
|
||||||
Senior notes – 4.12% due 2021
|
|
June 30, 2021
|
|
$
|
100,000
|
|
|
4.12
|
%
|
|
$
|
100,000
|
|
|
4.12
|
%
|
Senior notes – 4.58% due 2024
|
|
June 30, 2024
|
|
150,000
|
|
|
4.58
|
%
|
|
150,000
|
|
|
4.58
|
%
|
||
Senior notes – 4.00% due 2025
|
|
March 15, 2025
|
|
250,000
|
|
|
4.00
|
%
|
|
250,000
|
|
|
4.00
|
%
|
||
Senior notes – 4.08% due 2026
|
|
September 30, 2026
|
|
100,000
|
|
|
4.08
|
%
|
|
100,000
|
|
|
4.08
|
%
|
||
Senior notes – 4.24% due 2028
|
|
December 28, 2028
|
|
100,000
|
|
|
4.24
|
%
|
|
100,000
|
|
|
4.24
|
%
|
||
|
|
|
|
700,000
|
|
|
4.19
|
%
|
|
700,000
|
|
|
4.19
|
%
|
||
Discount, net of accumulated amortization
|
|
|
|
(912
|
)
|
|
|
|
(971
|
)
|
|
|
||||
Capitalized loan fees, net of accumulated amortization
|
|
|
|
(3,647
|
)
|
|
|
|
(3,886
|
)
|
|
|
||||
|
|
Total
|
|
$
|
695,441
|
|
|
|
|
$
|
695,143
|
|
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
|
|
Maturity Date
|
|
Balance
|
|
Interest
Rate
|
|
Balance
|
|
Interest
Rate |
||||||
$250,000 unsecured credit facility term loan – fixed rate (a)
|
|
January 5, 2021
|
|
$
|
250,000
|
|
|
1.97
|
%
|
|
$
|
250,000
|
|
|
1.97
|
%
|
$200,000 unsecured credit facility term loan – variable rate
|
|
May 11, 2018
|
|
200,000
|
|
|
2.61
|
%
|
|
200,000
|
|
|
2.22
|
%
|
||
$200,000 unsecured term loan due 2023 – fixed rate (b)
|
|
November 22, 2023
|
|
200,000
|
|
|
2.96
|
%
|
|
—
|
|
|
—
|
%
|
||
Subtotal
|
|
|
|
650,000
|
|
|
|
|
450,000
|
|
|
|
||||
Capitalized loan fees, net of accumulated amortization
|
|
|
|
(3,446
|
)
|
|
|
|
(2,402
|
)
|
|
|
||||
Term loans, net
|
|
|
|
$
|
646,554
|
|
|
|
|
$
|
447,598
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Revolving line of credit – variable rate (c)
|
|
January 5, 2020
|
|
$
|
182,000
|
|
|
2.58
|
%
|
|
$
|
86,000
|
|
|
2.12
|
%
|
(a)
|
$250,000
of
LIBOR
-based variable rate debt has been swapped to a weighted average fixed rate of
0.67%
plus a credit spread based on a leverage grid ranging from
1.30%
to
2.20%
through December 31, 2017. The applicable credit spread was
1.30%
as of
June 30, 2017
and
December 31, 2016
.
|
(b)
|
$200,000
of
LIBOR
-based variable rate debt has been swapped to a fixed rate of
1.26%
plus a credit spread based on a leverage grid ranging from
1.70%
to
2.55%
through November 22, 2018. The applicable credit spread was
1.70%
as of
June 30, 2017
.
|
(c)
|
Excludes capitalized loan fees, which are included in “Other assets, net” in the accompanying condensed consolidated balance sheets.
|
|
|
|
|
|
|
|
|
Leverage-Based Pricing
|
|
Ratings-Based Pricing
|
||
Unsecured Credit Facility
|
|
Maturity Date
|
|
Extension Option
|
|
Extension Fee
|
|
Credit Spread
|
Unused Fee
|
|
Credit Spread
|
Facility Fee
|
$250,000 unsecured term loan
|
|
1/5/2021
|
|
N/A
|
|
N/A
|
|
1.30% - 2.20%
|
N/A
|
|
0.90% - 1.75%
|
N/A
|
$200,000 unsecured term loan
|
|
5/11/2018
|
|
2 one year
|
|
0.15%
|
|
1.45% - 2.20%
|
N/A
|
|
1.05% - 2.05%
|
N/A
|
$750,000 unsecured revolving line of credit
|
|
1/5/2020
|
|
2 six month
|
|
0.075%
|
|
1.35% - 2.25%
|
0.15% - 0.25%
|
|
0.85% - 1.55%
|
0.125% - 0.30%
|
Term Loan Due 2023
|
|
Maturity Date
|
|
Leverage-Based Pricing
Credit Spread
|
|
Ratings-Based Pricing
Credit Spread
|
$200,000 unsecured term loan
|
|
11/22/2023
|
|
1.70% – 2.55%
|
|
1.50% – 2.45%
|
Effective Date
|
|
Notional
|
|
Fixed
Interest Rate
|
|
Termination Date
|
|||
March 1, 2016
|
|
$
|
100,000
|
|
|
0.66
|
%
|
|
December 31, 2017
|
May 16, 2016
|
|
$
|
150,000
|
|
|
0.67
|
%
|
|
December 31, 2017
|
January 3, 2017
|
|
$
|
100,000
|
|
|
1.26
|
%
|
|
November 22, 2018
|
January 3, 2017
|
|
$
|
100,000
|
|
|
1.26
|
%
|
|
November 22, 2018
|
|
|
Number of Instruments
|
|
Notional
|
||||||||||
Interest Rate Derivatives
|
|
June 30, 2017
|
|
December 31, 2016
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||
Interest rate swaps
|
|
4
|
|
|
2
|
|
|
$
|
450,000
|
|
|
$
|
250,000
|
|
|
|
Fair Value
|
||||||
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
||||
Interest rate swaps
|
|
$
|
1,219
|
|
|
$
|
743
|
|
Derivatives in
Cash Flow
Hedging
Relationships
|
|
Amount of Loss (Gain)
Recognized in Other
Comprehensive Income
on Derivative
(Effective Portion)
|
|
Location of
(Gain) Loss
Reclassified from
Accumulated Other
Comprehensive Income (AOCI)
into Income
(Effective Portion)
|
|
Amount of (Gain) Loss
Reclassified from
AOCI into Income
(Effective Portion)
|
|
Location of Loss
Recognized in
Income on Derivative
(Ineffective Portion
and Amount
Excluded from
Effectiveness Testing)
|
|
Amount of Loss
Recognized in Income
on Derivative
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing)
|
||||||||||||||||||
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
|
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||
2017
|
|
$
|
59
|
|
|
$
|
(413
|
)
|
|
Interest expense
|
|
$
|
(86
|
)
|
|
$
|
74
|
|
|
Other income, net
|
|
$
|
5
|
|
|
$
|
11
|
|
2016
|
|
$
|
634
|
|
|
$
|
687
|
|
|
Interest expense
|
|
$
|
124
|
|
|
$
|
210
|
|
|
Other income, net
|
|
$
|
3
|
|
|
$
|
3
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
(Loss) income from continuing operations
|
$
|
(1,865
|
)
|
|
$
|
18,989
|
|
|
$
|
(52,129
|
)
|
|
$
|
44,676
|
|
|
Gain on sales of investment properties
|
116,628
|
|
|
9,613
|
|
|
157,792
|
|
|
31,352
|
|
|
||||
Preferred stock dividends
|
(2,363
|
)
|
|
(2,363
|
)
|
|
(4,725
|
)
|
|
(4,725
|
)
|
|
||||
Net income attributable to common shareholders
|
112,400
|
|
|
26,239
|
|
|
100,938
|
|
|
71,303
|
|
|
||||
Distributions paid on unvested restricted shares
|
(88
|
)
|
|
(110
|
)
|
|
(178
|
)
|
|
(240
|
)
|
|
||||
Net income attributable to common shareholders excluding
amounts attributable to unvested restricted shares
|
$
|
112,312
|
|
|
$
|
26,129
|
|
|
$
|
100,760
|
|
|
$
|
71,063
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Denominator for earnings per common share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
234,243
|
|
(a)
|
236,716
|
|
(b)
|
235,269
|
|
(a)
|
236,647
|
|
(b)
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock options
|
1
|
|
(c)
|
2
|
|
(c)
|
1
|
|
(c)
|
2
|
|
(c)
|
||||
RSUs
|
574
|
|
(d)
|
184
|
|
(e)
|
572
|
|
(d)
|
132
|
|
(e)
|
||||
Denominator for earnings per common share – diluted:
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of common and common equivalent
shares outstanding
|
234,818
|
|
|
236,902
|
|
|
235,842
|
|
|
236,781
|
|
|
(a)
|
Excludes
556
shares of unvested restricted common stock as of
June 30, 2017
, which equate to
536
and
550
shares, respectively, on a weighted average basis for the three and
six
months ended
June 30, 2017
. These shares will continue to be excluded from the computation of basic EPS until contingencies are resolved and the shares are released.
|
(b)
|
Excludes
607
shares of unvested restricted common stock as of
June 30, 2016
, which equate to
649
and
687
shares, respectively, on a weighted average basis for the three and
six
months ended
June 30, 2016
. These shares were excluded from the computation of basic EPS as the contingencies remained and the shares had not been released as of the end of the reporting period.
|
(c)
|
There were outstanding options to purchase
41
and
53
shares of common stock as of
June 30, 2017
and
2016
, respectively, at a weighted average exercise price of
$19.25
and
$19.39
, respectively. Of these totals, outstanding options to purchase
35
and
45
shares of common stock as of
June 30, 2017
and
2016
, respectively, at a weighted average exercise price of
$20.55
and
$20.74
, respectively, have been excluded from the common shares used in calculating diluted EPS as including them would be anti-dilutive.
|
(d)
|
As of
June 30, 2017
, there were
644
RSUs eligible for future conversion upon completion of the performance periods (see Note 5 to the condensed consolidated financial statements), which equate to
644
and
641
RSUs on a weighted average basis for the three and
six
months ended
June 30, 2017
, respectively. These contingently issuable shares are included in diluted EPS based on the weighted average number of shares that would be outstanding during the period, if any, assuming
June 30, 2017
was the end of the contingency periods.
|
(e)
|
As of
June 30, 2016
, there were
391
RSUs eligible for future conversion upon completion of the performance periods, which equate to
411
and
344
RSUs on a weighted average basis for the three and
six
months ended
June 30, 2016
, respectively. These contingently issuable shares are included in diluted EPS based on the weighted average number of shares that would have been outstanding during the period, if any, assuming
June 30, 2016
was the end of the contingency periods.
|
|
|
June 30, 2017
|
|
June 30, 2016
|
|
||
Number of properties for which indicators of impairment were identified
|
|
7
|
|
(a)
|
6
|
|
(b)
|
Less: number of properties for which an impairment charge was recorded
|
|
2
|
|
|
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
|
|
2
|
|
|
2
|
|
|
Remaining properties for which indicators of impairment were identified but no impairment
charge was considered necessary
|
|
3
|
|
|
3
|
|
|
|
|
|
|
|
|
||
Weighted average percentage by which the projected undiscounted cash flows exceeded
its respective carrying value for each of the remaining properties (c)
|
|
11
|
%
|
|
70
|
%
|
|
(a)
|
Includes
two
properties which were sold subsequent to
June 30, 2017
.
|
(b)
|
Includes
three
properties which have subsequently been sold as of
June 30, 2017
.
|
(c)
|
Based upon the estimated holding period for each asset where an undiscounted cash flow analysis was performed.
|
Property Name
|
|
Property Type
|
|
Impairment Date
|
|
Square
Footage
|
|
Provision for
Impairment of
Investment
Properties
|
|||
Century III Plaza, excluding the Home Depot parcel (a)
|
|
Multi-tenant retail
|
|
June 30, 2017
|
|
152,200
|
|
|
$
|
3,076
|
|
Lakepointe Towne Center (b)
|
|
Multi-tenant retail
|
|
June 30, 2017
|
|
196,600
|
|
|
9,958
|
|
|
|
|
|
|
|
|
|
|
$
|
13,034
|
|
|
|
|
Estimated fair value of impaired properties as of impairment date
|
$
|
22,500
|
|
(a)
|
The Company recorded an impairment charge based upon the terms and conditions of a bona fide purchase offer. This property was classified as held for sale as of June 30, 2017. The Home Depot parcel of Century III Plaza was sold on March 15, 2017.
|
(b)
|
The Company recorded an impairment charge based upon the terms and conditions of an executed sales contract. This property was classified as held for sale as of June 30, 2017.
|
Property Name
|
|
Property Type
|
|
Impairment Date
|
|
Square
Footage
|
|
Provision for
Impairment of
Investment
Properties
|
|||
South Billings Center (a)
|
|
Development
|
|
March 31, 2016
|
|
—
|
|
|
$
|
2,164
|
|
Mid-Hudson Center (b)
|
|
Multi-tenant retail
|
|
June 30, 2016
|
|
235,600
|
|
|
4,142
|
|
|
|
|
|
|
|
|
|
|
$
|
6,306
|
|
|
|
|
Estimated fair value of impaired properties as of impairment date
|
$
|
30,500
|
|
(a)
|
An impairment charge was recorded on March 31, 2016 based upon the terms and conditions of an executed sales contract, which was subsequently terminated. The property, which was not under active development, was sold on December 16, 2016 and additional impairment was recognized pursuant to the terms and conditions of an executed sales contract.
|
(b)
|
The Company recorded an impairment charge based upon the terms and conditions of an executed sales contract. This property was classified as held for sale as of June 30, 2016 and was sold on July 21, 2016.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Derivative asset
|
$
|
1,219
|
|
|
$
|
1,219
|
|
|
$
|
743
|
|
|
$
|
743
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
355,239
|
|
|
$
|
373,975
|
|
|
$
|
769,184
|
|
|
$
|
833,210
|
|
Unsecured notes payable, net
|
$
|
695,441
|
|
|
$
|
692,274
|
|
|
$
|
695,143
|
|
|
$
|
679,212
|
|
Unsecured term loans, net
|
$
|
646,554
|
|
|
$
|
650,273
|
|
|
$
|
447,598
|
|
|
$
|
450,421
|
|
Unsecured revolving line of credit
|
$
|
182,000
|
|
|
$
|
182,231
|
|
|
$
|
86,000
|
|
|
$
|
86,130
|
|
|
Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Derivative asset
|
$
|
—
|
|
|
$
|
1,219
|
|
|
$
|
—
|
|
|
$
|
1,219
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Derivative asset
|
$
|
—
|
|
|
$
|
743
|
|
|
$
|
—
|
|
|
$
|
743
|
|
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Provision for
Impairment (a)
|
||||||||||
June 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment properties –
held for sale
|
$
|
—
|
|
|
$
|
22,500
|
|
(b)
|
$
|
—
|
|
|
$
|
22,500
|
|
|
$
|
13,034
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment properties
|
$
|
—
|
|
|
$
|
500
|
|
(c)
|
$
|
10,600
|
|
(d)
|
$
|
11,100
|
|
|
$
|
13,227
|
|
(a)
|
Excludes impairment charges recorded on investment properties sold prior to
June 30, 2017
and December 31, 2016, respectively.
|
(b)
|
Represents the fair values of the Company’s Century III Plaza and Lakepointe Towne Center investment properties. The estimated fair value of Century III Plaza of
$12,000
was based upon the expected sales price from a bona fide purchase offer and determined to be a Level 2 input. The estimated fair value of Lakepointe Towne Center of
$10,500
was based upon the expected sales price from an executed sales contract and determined to be a Level 2 input.
|
(c)
|
Represents the fair value of the Company’s Rite Aid Store (Eckerd), Culver Rd. investment property. The estimated fair value of Rite Aid Store (Eckerd), Culver Rd. was based upon the expected sales price from a bona fide purchase offer and determined to be a Level 2 input.
|
(d)
|
Represents the fair values of the Company’s Crown Theater and Saucon Valley Square investment properties. The estimated fair values of Crown Theater and Saucon Valley Square of
$4,000
and
$6,600
, 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 financial and 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 values of Crown Theater as of December 31, 2016 and Saucon Valley Square as of September 30, 2016, the date the assets were measured at fair value:
|
|
|
2016
|
||
|
|
Low
|
|
High
|
Rental revenue growth rates
|
|
Varies (i)
|
|
Varies (i)
|
Operating expense growth rates
|
|
3.10%
|
|
18.02%
|
Discount rates
|
|
9.35%
|
|
10.00%
|
Terminal capitalization rates
|
|
8.35%
|
|
9.50%
|
(i)
|
Since cash flow models are established at the tenant level, projected rental revenue growth rates fluctuate over the course of the estimated holding period based upon the timing of lease rollover, amount of available space and other property and space-specific factors.
|
|
Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
373,975
|
|
|
$
|
373,975
|
|
Unsecured notes payable, net
|
$
|
244,308
|
|
|
$
|
—
|
|
|
$
|
447,966
|
|
|
$
|
692,274
|
|
Unsecured term loans, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
650,273
|
|
|
$
|
650,273
|
|
Unsecured revolving line of credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
182,231
|
|
|
$
|
182,231
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
833,210
|
|
|
$
|
833,210
|
|
Unsecured notes payable, net
|
$
|
234,700
|
|
|
$
|
—
|
|
|
$
|
444,512
|
|
|
$
|
679,212
|
|
Unsecured term loans, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
450,421
|
|
|
$
|
450,421
|
|
Unsecured revolving line of credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,130
|
|
|
$
|
86,130
|
|
•
|
closed on the acquisition of New Hyde Park Shopping Center, a
32,300
square foot multi-tenant retail property located in New Hyde Park, New York, for a gross purchase price of
$22,075
;
|
•
|
closed on the disposition of Boulevard Plaza, a
111,100
square foot multi-tenant retail operating property located in Pawtucket, Rhode Island, which was classified as held for sale as of June 30, 2017, for a sales price of
$14,300
with an anticipated gain on sale;
|
•
|
closed on the disposition of Irmo Station, a
99,400
square foot multi-tenant retail operating property located in Irmo, South Carolina, which was classified as held for sale as of June 30, 2017, for a sales price of
$16,027
with an anticipated gain on sale;
|
•
|
closed on the disposition of Hickory Ridge, a
380,600
square foot multi-tenant retail operating property located in Hickory, North Carolina, for a sales price of
$44,020
with an anticipated gain on sale;
|
•
|
declared the cash dividend for the third quarter of
2017
for its
7.00%
Series A cumulative redeemable preferred stock. The dividend of
$0.4375
per preferred share will be paid on October 2, 2017 to preferred shareholders of record at the close of business on September 21, 2017; and
|
•
|
declared the cash dividend for the third quarter of
2017
of
$0.165625
per share on its outstanding Class A common stock, which will be paid on October 10, 2017 to Class A common shareholders of record at the close of business on September 26, 2017.
|
•
|
economic, business and financial conditions, and changes in our industry and changes in the real estate markets in particular;
|
•
|
economic and other developments in our target markets 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;
|
•
|
bankruptcy or insolvency of a major tenant or a significant number of smaller tenants;
|
•
|
interest rates or operating costs;
|
•
|
real estate and zoning laws and changes in real property tax rates;
|
•
|
real estate valuations;
|
•
|
our leverage;
|
•
|
our ability to generate sufficient cash flows to service our outstanding indebtedness and make distributions to our shareholders;
|
•
|
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 and dispositions, including our ability to identify and pursue acquisition and disposition opportunities;
|
•
|
risks generally associated with redevelopment, including the impact of construction delays and cost overruns, our ability to lease redeveloped space and our ability to identify and pursue redevelopment opportunities;
|
•
|
composition of members of our senior management team;
|
•
|
our ability to attract and retain qualified personnel;
|
•
|
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
|
|
|
|
|
|
|
|
|
||||
Neighborhood and community centers
|
|
68
|
|
|
8,733
|
|
|
92.2
|
%
|
|
92.8
|
%
|
Power centers
|
|
43
|
|
|
10,080
|
|
|
94.6
|
%
|
|
96.1
|
%
|
Lifestyle centers and mixed-use properties
|
|
15
|
|
|
4,081
|
|
|
87.3
|
%
|
|
88.8
|
%
|
Total multi-tenant retail
|
|
126
|
|
|
22,894
|
|
|
92.4
|
%
|
|
93.5
|
%
|
Single-user retail
|
|
6
|
|
|
455
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Total retail operating portfolio
|
|
132
|
|
|
23,349
|
|
|
92.5
|
%
|
|
93.7
|
%
|
Office
|
|
1
|
|
|
895
|
|
|
13.6
|
%
|
|
46.1
|
%
|
Total operating portfolio (b)
|
|
133
|
|
|
24,244
|
|
|
89.6
|
%
|
|
91.9
|
%
|
(a)
|
Includes leases signed but not commenced.
|
(b)
|
Excludes four multi-tenant retail operating properties classified as held for sale as of
June 30, 2017
.
|
Date
|
|
Property Name
|
|
Metropolitan
Statistical Area (MSA)
|
|
Property Type
|
|
Square
Footage
|
|
Acquisition
Price
|
|||
January 13, 2017
|
|
Main Street Promenade
|
|
Chicago
|
|
Multi-tenant retail
|
|
181,600
|
|
|
$
|
88,000
|
|
January 25, 2017
|
|
Boulevard at the Capital Centre –
Fee Interest (a)
|
|
Washington, D.C.
|
|
Fee interest (a)
|
|
—
|
|
|
2,000
|
|
|
February 24, 2017
|
|
One Loudoun Downtown –
Phase II (b)
|
|
Washington, D.C.
|
|
Additional phase of multi-tenant retail (b)
|
|
15,900
|
|
|
4,128
|
|
|
April 5, 2017
|
|
One Loudoun Downtown –
Phase III (b)
|
|
Washington, D.C.
|
|
Additional phase of multi-tenant retail (b)
|
|
9,800
|
|
|
2,193
|
|
|
May 16, 2017
|
|
One Loudoun Downtown –
Phase IV (b)
|
|
Washington, D.C.
|
|
Development rights (b)
|
|
—
|
|
|
3,500
|
|
|
|
|
|
|
|
|
|
|
207,300
|
|
|
$
|
99,821
|
|
(a)
|
The wholly-owned multi-tenant retail operating property located in Largo, Maryland was previously subject to an approximately 70 acre long-term ground lease with a third party. We completed a transaction whereby we received the fee interest in approximately 50 acres of the underlying land in exchange for which (i) we paid $1,939 and (ii) the term of the ground lease with respect to the remaining approximately 20 acres was shortened to nine months. We derecognized building and improvements of $11,347 related to the remaining ground lease, recognized the fair value of land received of $15,200 and recorded a deferred gain of $2,524. The deferred gain will be recognized upon the expiration of the remaining ground lease. The total number of properties in our portfolio was not affected by this transaction.
|
(b)
|
We acquired three additional phases, including the development rights for an additional 123 multi-family units for a total of 408, at our One Loudoun Downtown multi-tenant retail operating property. The total number of properties in our portfolio was not affected by these transactions. The remaining phases at One Loudoun Downtown, representing an aggregate gross purchase price of up to $25,700, are expected to close during the third quarter of 2017 as the seller completes construction on stand-alone buildings at the property.
|
Date
|
|
Property Name
|
|
Property Type
|
|
Square
Footage
|
|
Consideration
|
|||
January 27, 2017
|
|
Rite Aid Store (Eckerd), Culver Rd. – Rochester, NY
|
|
Single-user retail
|
|
10,900
|
|
|
$
|
500
|
|
February 21, 2017
|
|
Shoppes at Park West
|
|
Multi-tenant retail
|
|
63,900
|
|
|
15,383
|
|
|
March 7, 2017
|
|
CVS Pharmacy – Sylacauga, AL (a)
|
|
Single-user retail
|
|
10,100
|
|
|
3,700
|
|
|
March 8, 2017
|
|
Rite Aid Store (Eckerd) – Kill Devil Hills, NC
|
|
Single-user retail
|
|
13,800
|
|
|
4,297
|
|
|
March 15, 2017
|
|
Century III Plaza – Home Depot (b)
|
|
Single-user parcel
|
|
131,900
|
|
|
17,519
|
|
|
March 16, 2017
|
|
Village Shoppes at Gainesville
|
|
Multi-tenant retail
|
|
229,500
|
|
|
41,750
|
|
|
March 24, 2017
|
|
Northwood Crossing (a)
|
|
Multi-tenant retail
|
|
160,000
|
|
|
22,850
|
|
|
April 4, 2017
|
|
University Town Center (a)
|
|
Multi-tenant retail
|
|
57,500
|
|
|
14,700
|
|
|
April 4, 2017
|
|
Edgemont Town Center (a)
|
|
Multi-tenant retail
|
|
77,700
|
|
|
19,025
|
|
|
April 4, 2017
|
|
Phenix Crossing (a)
|
|
Multi-tenant retail
|
|
56,600
|
|
|
12,400
|
|
|
April 27, 2017
|
|
Brown’s Lane
|
|
Multi-tenant retail
|
|
74,700
|
|
|
10,575
|
|
|
May 9, 2017
|
|
Rite Aid Store (Eckerd) – Greer, SC
|
|
Single-user retail
|
|
13,800
|
|
|
3,050
|
|
|
May 9, 2017
|
|
Evans Town Centre
|
|
Multi-tenant retail
|
|
75,700
|
|
|
11,825
|
|
|
May 25, 2017
|
|
Red Bug Village
|
|
Multi-tenant retail
|
|
26,200
|
|
|
8,100
|
|
|
May 26, 2017
|
|
Wilton Square
|
|
Multi-tenant retail
|
|
438,100
|
|
|
49,300
|
|
|
May 30, 2017
|
|
Town Square Plaza
|
|
Multi-tenant retail
|
|
215,600
|
|
|
28,600
|
|
|
May 31, 2017
|
|
Cuyahoga Falls Market Center
|
|
Multi-tenant retail
|
|
76,400
|
|
|
11,500
|
|
|
June 5, 2017
|
|
Plaza Santa Fe II
|
|
Multi-tenant retail
|
|
224,200
|
|
|
35,220
|
|
|
June 6, 2017
|
|
Rite Aid Store (Eckerd) – Columbia, SC
|
|
Single-user retail
|
|
13,400
|
|
|
3,250
|
|
|
June 16, 2017
|
|
Fox Creek Village
|
|
Multi-tenant retail
|
|
107,500
|
|
|
24,825
|
|
|
June 29, 2017
|
|
Cottage Plaza
|
|
Multi-tenant retail
|
|
85,500
|
|
|
23,050
|
|
|
June 29, 2017
|
|
Magnolia Square
|
|
Multi-tenant retail
|
|
116,000
|
|
|
16,000
|
|
|
June 29, 2017
|
|
Cinemark Seven Bridges
|
|
Single-user retail
|
|
70,200
|
|
|
15,271
|
|
|
June 29, 2017
|
|
Low Country Village I & II (a)
|
|
Multi-tenant retail
|
|
139,900
|
|
|
22,075
|
|
|
|
|
|
|
|
|
2,489,100
|
|
|
$
|
414,765
|
|
(a)
|
Disposition proceeds related to this property are temporarily restricted related to a potential 1031 Exchange. As of June 30, 2017, disposition proceeds totaling $93,561 are temporarily restricted and are included in “Other assets, net” in the accompanying condensed consolidated balance sheets.
|
(b)
|
We disposed of the Home Depot parcel at Century III Plaza, an existing 284,100 square foot multi-tenant retail operating property. The remaining portion of Century III Plaza is classified as held for sale as of June 30, 2017.
|
Property Type/Market
|
|
Number of
Properties
|
|
ABR (a)
|
|
% of Total
Multi-Tenant
Retail ABR (a)
|
|
ABR per
Occupied
Sq. Ft.
|
|
GLA
(in thousands) (a)
|
|
% of Total
Multi-Tenant
Retail GLA (a)
|
|
Occupancy
|
|
% Leased
Including
Signed
|
||||||||||
Multi-Tenant Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Target Markets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dallas, Texas
|
|
19
|
|
|
$
|
80,210
|
|
|
21.2
|
%
|
|
$
|
21.96
|
|
|
3,927
|
|
|
17.2
|
%
|
|
93.0
|
%
|
|
94.4
|
%
|
Washington, D.C. /
Baltimore, Maryland
|
|
13
|
|
|
49,327
|
|
|
13.0
|
%
|
|
22.32
|
|
|
2,643
|
|
|
11.5
|
%
|
|
83.6
|
%
|
|
84.7
|
%
|
||
New York, New York
|
|
8
|
|
|
33,891
|
|
|
9.0
|
%
|
|
27.79
|
|
|
1,260
|
|
|
5.5
|
%
|
|
96.8
|
%
|
|
97.8
|
%
|
||
Chicago, Illinois
|
|
7
|
|
|
25,537
|
|
|
6.8
|
%
|
|
22.98
|
|
|
1,257
|
|
|
5.5
|
%
|
|
88.4
|
%
|
|
91.8
|
%
|
||
Seattle, Washington
|
|
8
|
|
|
20,149
|
|
|
5.3
|
%
|
|
15.13
|
|
|
1,473
|
|
|
6.4
|
%
|
|
90.4
|
%
|
|
92.8
|
%
|
||
Atlanta, Georgia
|
|
9
|
|
|
19,108
|
|
|
5.1
|
%
|
|
13.20
|
|
|
1,513
|
|
|
6.6
|
%
|
|
95.7
|
%
|
|
95.7
|
%
|
||
Houston, Texas
|
|
9
|
|
|
15,317
|
|
|
4.0
|
%
|
|
14.18
|
|
|
1,141
|
|
|
5.0
|
%
|
|
94.7
|
%
|
|
94.9
|
%
|
||
San Antonio, Texas
|
|
3
|
|
|
12,232
|
|
|
3.2
|
%
|
|
17.14
|
|
|
723
|
|
|
3.2
|
%
|
|
98.7
|
%
|
|
100.0
|
%
|
||
Phoenix, Arizona
|
|
3
|
|
|
10,114
|
|
|
2.7
|
%
|
|
17.41
|
|
|
632
|
|
|
2.8
|
%
|
|
91.9
|
%
|
|
91.9
|
%
|
||
Austin, Texas
|
|
4
|
|
|
5,253
|
|
|
1.4
|
%
|
|
16.10
|
|
|
350
|
|
|
1.5
|
%
|
|
93.2
|
%
|
|
94.1
|
%
|
||
Subtotal
|
|
83
|
|
|
271,138
|
|
|
71.7
|
%
|
|
19.84
|
|
|
14,919
|
|
|
65.2
|
%
|
|
91.6
|
%
|
|
92.9
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Target – Top 50 MSAs
|
|
19
|
|
|
44,154
|
|
|
11.7
|
%
|
|
15.75
|
|
|
3,028
|
|
|
13.2
|
%
|
|
92.6
|
%
|
|
94.6
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Subtotal Target Markets
and Top 50 MSAs
|
|
102
|
|
|
315,292
|
|
|
83.4
|
%
|
|
19.14
|
|
|
17,947
|
|
|
78.4
|
%
|
|
91.8
|
%
|
|
93.2
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Target – Other
|
|
24
|
|
|
62,697
|
|
|
16.6
|
%
|
|
13.44
|
|
|
4,947
|
|
|
21.6
|
%
|
|
94.3
|
%
|
|
94.7
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Multi-Tenant Retail
|
|
126
|
|
|
377,989
|
|
|
100.0
|
%
|
|
17.87
|
|
|
22,894
|
|
|
100.0
|
%
|
|
92.4
|
%
|
|
93.5
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single-User Retail
|
|
6
|
|
|
10,669
|
|
|
|
|
23.45
|
|
|
455
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Retail
|
|
132
|
|
|
388,658
|
|
|
|
|
18.00
|
|
|
23,349
|
|
|
|
|
92.5
|
%
|
|
93.7
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Office
|
|
1
|
|
|
1,891
|
|
|
|
|
15.54
|
|
|
895
|
|
|
|
|
13.6
|
%
|
|
46.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Operating Portfolio (b)
|
|
133
|
|
|
$
|
390,549
|
|
|
|
|
$
|
17.98
|
|
|
24,244
|
|
|
|
|
89.6
|
%
|
|
91.9
|
%
|
(a)
|
Excludes $7,501 of multi-tenant retail ABR and 816 square feet of multi-tenant retail GLA attributable to our two active redevelopments, which are located in the Washington, D.C./Baltimore MSA. Including these amounts, 72.3% of our multi-tenant retail ABR and 66.4% of our multi-tenant retail GLA is located in our target markets.
|
(b)
|
Excludes four multi-tenant retail operating properties classified as held for sale as of
June 30, 2017
.
|
|
|
Number of
Leases
Signed
|
|
GLA Signed
(in thousands)
|
|
New
Contractual
Rent per Square
Foot (PSF) (a)
|
|
Prior
Contractual
Rent PSF (a)
|
|
% Change
over Prior
ABR (a) (b)
|
|
Weighted
Average
Lease Term
|
|
Tenant
Allowances
PSF
|
||||||||||
Comparable Renewal Leases
|
|
195
|
|
|
945
|
|
|
$
|
20.45
|
|
|
$
|
19.13
|
|
|
6.9
|
%
|
|
4.7
|
|
|
$
|
1.30
|
|
Comparable New Leases
|
|
18
|
|
|
116
|
|
|
$
|
23.71
|
|
|
$
|
18.87
|
|
|
25.6
|
%
|
|
8.7
|
|
|
$
|
42.90
|
|
Non-Comparable New and
Renewal Leases (c)
|
|
48
|
|
|
202
|
|
|
$
|
17.24
|
|
|
N/A
|
|
|
N/A
|
|
|
7.2
|
|
|
$
|
31.41
|
|
|
Total
|
|
261
|
|
|
1,263
|
|
|
$
|
20.80
|
|
|
$
|
19.10
|
|
|
8.9
|
%
|
|
5.5
|
|
|
$
|
9.93
|
|
(a)
|
Total excludes the impact of Non-Comparable New and Renewal Leases.
|
(b)
|
Excluding the impact from one lease within our non-target portfolio, combined comparable re-leasing spreads were approximately 9.8% and comparable renewal re-leasing spreads were approximately 7.8% over previous rental rates for the
six
months ended
June 30, 2017
.
|
(c)
|
Includes (i) leases signed on units that were vacant for over 12 months, (ii) leases signed without fixed rental payments and (iii) leases signed where the previous and the current lease do not have a consistent lease structure.
|
•
|
defeased the IW JV portfolio of mortgages payable, which had an outstanding principal balance of $379,435 and an interest rate of 7.50%, and incurred a defeasance premium and associated fees totaling $60,198;
|
•
|
received funding in the amount of $200,000 on a seven-year unsecured term loan;
|
•
|
entered into two agreements to swap a total of $200,000 of London Interbank Offered Rate (LIBOR)-based variable rate debt to a fixed interest rate of 1.26% through November 22, 2018;
|
•
|
borrowed $96,000, net of repayments, on our unsecured revolving line of credit;
|
•
|
repaid $36,186 of mortgages payable and made scheduled principal payments of $2,385 related to amortizing loans; and
|
•
|
repurchased 6,024 shares of our common stock at an average price per share of $12.55 for a total of $75,697, resulting in $165,462 remaining available under our $250,000 common stock repurchase program.
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Revenues
|
|
|
|
|
|
||||||
Rental income
|
$
|
106,017
|
|
|
$
|
115,194
|
|
|
$
|
(9,177
|
)
|
Tenant recovery income
|
29,524
|
|
|
29,654
|
|
|
(130
|
)
|
|||
Other property income
|
1,798
|
|
|
2,378
|
|
|
(580
|
)
|
|||
Total revenues
|
137,339
|
|
|
147,226
|
|
|
(9,887
|
)
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Operating expenses
|
21,004
|
|
|
20,092
|
|
|
912
|
|
|||
Real estate taxes
|
21,487
|
|
|
21,090
|
|
|
397
|
|
|||
Depreciation and amortization
|
52,325
|
|
|
53,443
|
|
|
(1,118
|
)
|
|||
Provision for impairment of investment properties
|
13,034
|
|
|
4,142
|
|
|
8,892
|
|
|||
General and administrative expenses
|
10,370
|
|
|
10,773
|
|
|
(403
|
)
|
|||
Total expenses
|
118,220
|
|
|
109,540
|
|
|
8,680
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
19,119
|
|
|
37,686
|
|
|
(18,567
|
)
|
|||
|
|
|
|
|
|
||||||
Gain on extinguishment of other liabilities
|
—
|
|
|
6,978
|
|
|
(6,978
|
)
|
|||
Interest expense
|
(21,435
|
)
|
|
(25,977
|
)
|
|
4,542
|
|
|||
Other income, net
|
451
|
|
|
302
|
|
|
149
|
|
|||
(Loss) income from continuing operations
|
(1,865
|
)
|
|
18,989
|
|
|
(20,854
|
)
|
|||
Gain on sales of investment properties
|
116,628
|
|
|
9,613
|
|
|
107,015
|
|
|||
Net income
|
114,763
|
|
|
28,602
|
|
|
86,161
|
|
|||
Preferred stock dividends
|
(2,363
|
)
|
|
(2,363
|
)
|
|
—
|
|
|||
Net income attributable to common shareholders
|
$
|
112,400
|
|
|
$
|
26,239
|
|
|
$
|
86,161
|
|
•
|
a $107,015 increase in gain on sales of investment properties related to the sales of 17 investment properties, representing approximately 1,869,000 square feet of GLA, during the three months ended
June 30, 2017
compared to the sales of eight investment properties and one outparcel, representing approximately 134,100 square feet of GLA, during the three months ended
June 30, 2016
; and
|
•
|
a $4,542 decrease in interest expense primarily consisting of:
|
•
|
a $10,836 decrease in interest on mortgages payable due to a reduction in mortgage debt;
|
•
|
a $2,261 increase in prepayment penalties;
|
•
|
a $2,080 increase in interest from our 4.08% senior unsecured notes due 2026 and our 4.24% senior unsecured notes due 2028 (Notes Due 2026 and 2028), which were issued in September and December 2016, respectively; and
|
•
|
a $1,498 increase in interest on our Term Loan Due 2023, which funded in January 2017;
|
•
|
a $9,177 decrease in rental income primarily consisting of a $9,368 decrease in base rent, which resulted from the operating properties sold during 2016 and 2017 or classified as held for sale as of
June 30, 2017
, along with our one remaining office property and our redevelopment properties, partially offset by an increase from the operating properties acquired during 2016 and 2017 and growth from our same store portfolio;
|
•
|
an $8,892 increase in provision for impairment of investment properties. Based on the results of our evaluations for impairment (see Notes 12 and 13 to the accompanying condensed consolidated financial statements), we recognized impairment charges of $13,034 and $4,142 for the three months ended
June 30, 2017
and
2016
, respectively; and
|
•
|
a $6,978 gain on extinguishment of other liabilities recognized during the three months ended June 30, 2016 related to the acquisition of the fee interest in Ashland & Roosevelt, 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 the straight-line ground rent liability associated with the ground lease. No such gain was recorded during the three months ended June 30, 2017.
|
•
|
the removal of 14 same store investment properties sold during the three months ended
June 30, 2017
; and
|
•
|
the removal of three same store investment properties classified as held for sale as of
June 30, 2017
. Century III Plaza, which is also classified as held for sale as of
June 30, 2017
, did not impact the number of same store properties as it was classified as held for sale as of March 31, 2017.
|
•
|
properties acquired after December 31, 2015;
|
•
|
our one remaining office property;
|
•
|
three properties where we have begun redevelopment and/or activities in anticipation of future redevelopment;
|
•
|
properties that were sold or held for sale in 2016 and 2017;
|
•
|
the net income from our wholly-owned captive insurance company; and
|
•
|
the historical ground rent expense related to an existing same store investment property that was subject to a ground lease with a third party prior to our acquisition of the fee interest on April 29, 2016.
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Net income attributable to common shareholders
|
$
|
112,400
|
|
|
$
|
26,239
|
|
|
$
|
86,161
|
|
Adjustments to reconcile to Same Store NOI:
|
|
|
|
|
|
||||||
Preferred stock dividends
|
2,363
|
|
|
2,363
|
|
|
—
|
|
|||
Gain on sales of investment properties
|
(116,628
|
)
|
|
(9,613
|
)
|
|
(107,015
|
)
|
|||
Depreciation and amortization
|
52,325
|
|
|
53,443
|
|
|
(1,118
|
)
|
|||
Provision for impairment of investment properties
|
13,034
|
|
|
4,142
|
|
|
8,892
|
|
|||
General and administrative expenses
|
10,370
|
|
|
10,773
|
|
|
(403
|
)
|
|||
Gain on extinguishment of other liabilities
|
—
|
|
|
(6,978
|
)
|
|
6,978
|
|
|||
Interest expense
|
21,435
|
|
|
25,977
|
|
|
(4,542
|
)
|
|||
Straight-line rental income, net
|
(919
|
)
|
|
(800
|
)
|
|
(119
|
)
|
|||
Amortization of acquired above and below market lease intangibles, net
|
(549
|
)
|
|
(395
|
)
|
|
(154
|
)
|
|||
Amortization of lease inducements
|
259
|
|
|
321
|
|
|
(62
|
)
|
|||
Lease termination fees
|
(510
|
)
|
|
(1,027
|
)
|
|
517
|
|
|||
Straight-line ground rent expense
|
677
|
|
|
764
|
|
|
(87
|
)
|
|||
Amortization of acquired ground lease intangibles
|
(140
|
)
|
|
(140
|
)
|
|
—
|
|
|||
Other income, net
|
(451
|
)
|
|
(302
|
)
|
|
(149
|
)
|
|||
NOI
|
93,666
|
|
|
104,767
|
|
|
(11,101
|
)
|
|||
NOI from Other Investment Properties
|
(12,455
|
)
|
|
(24,990
|
)
|
|
12,535
|
|
|||
Same Store NOI
|
$
|
81,211
|
|
|
$
|
79,777
|
|
|
$
|
1,434
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Same Store NOI:
|
|
|
|
|
|
||||||
Base rent
|
$
|
88,041
|
|
|
$
|
86,806
|
|
|
$
|
1,235
|
|
Percentage and specialty rent
|
490
|
|
|
802
|
|
|
(312
|
)
|
|||
Tenant recovery income
|
24,562
|
|
|
23,992
|
|
|
570
|
|
|||
Other property operating income
|
874
|
|
|
809
|
|
|
65
|
|
|||
|
113,967
|
|
|
112,409
|
|
|
1,558
|
|
|||
|
|
|
|
|
|
||||||
Property operating expenses
|
15,229
|
|
|
15,319
|
|
|
(90
|
)
|
|||
Bad debt expense
|
(29
|
)
|
|
90
|
|
|
(119
|
)
|
|||
Real estate taxes
|
17,556
|
|
|
17,223
|
|
|
333
|
|
|||
|
32,756
|
|
|
32,632
|
|
|
124
|
|
|||
|
|
|
|
|
|
||||||
Same Store NOI
|
$
|
81,211
|
|
|
$
|
79,777
|
|
|
$
|
1,434
|
|
•
|
base rent and percentage and specialty rent increased by a net of $923 primarily due to an increase of $672 from contractual rent changes and $571 from re-leasing spreads, partially offset by a decrease of $312 from percentage and specialty rent;
|
•
|
property operating expenses and real estate taxes, net of tenant recovery income, decreased $327 primarily due to a positive impact from the common area maintenance reconciliation process; and
|
•
|
bad debt expense decreased $119.
|
|
Six Months Ended June 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Revenues
|
|
|
|
|
|
||||||
Rental income
|
$
|
215,991
|
|
|
$
|
230,454
|
|
|
$
|
(14,463
|
)
|
Tenant recovery income
|
60,310
|
|
|
60,010
|
|
|
300
|
|
|||
Other property income
|
4,731
|
|
|
5,401
|
|
|
(670
|
)
|
|||
Total revenues
|
281,032
|
|
|
295,865
|
|
|
(14,833
|
)
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Operating expenses
|
42,868
|
|
|
43,153
|
|
|
(285
|
)
|
|||
Real estate taxes
|
43,366
|
|
|
41,029
|
|
|
2,337
|
|
|||
Depreciation and amortization
|
105,799
|
|
|
106,839
|
|
|
(1,040
|
)
|
|||
Provision for impairment of investment properties
|
13,034
|
|
|
6,306
|
|
|
6,728
|
|
|||
General and administrative expenses
|
21,583
|
|
|
22,179
|
|
|
(596
|
)
|
|||
Total expenses
|
226,650
|
|
|
219,506
|
|
|
7,144
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
54,382
|
|
|
76,359
|
|
|
(21,977
|
)
|
|||
|
|
|
|
|
|
||||||
Gain on extinguishment of debt
|
—
|
|
|
13,653
|
|
|
(13,653
|
)
|
|||
Gain on extinguishment of other liabilities
|
—
|
|
|
6,978
|
|
|
(6,978
|
)
|
|||
Interest expense
|
(106,967
|
)
|
|
(52,741
|
)
|
|
(54,226
|
)
|
|||
Other income, net
|
456
|
|
|
427
|
|
|
29
|
|
|||
(Loss) income from continuing operations
|
(52,129
|
)
|
|
44,676
|
|
|
(96,805
|
)
|
|||
Gain on sales of investment properties
|
157,792
|
|
|
31,352
|
|
|
126,440
|
|
|||
Net income
|
105,663
|
|
|
76,028
|
|
|
29,635
|
|
|||
Preferred stock dividends
|
(4,725
|
)
|
|
(4,725
|
)
|
|
—
|
|
|||
Net income attributable to common shareholders
|
$
|
100,938
|
|
|
$
|
71,303
|
|
|
$
|
29,635
|
|
•
|
a $126,440 increase in gain on sales of investment properties related to the sales of 23 investment properties and a single-user parcel located at an existing multi-tenant retail operating property, representing approximately 2,489,100 square feet of GLA, during the
six
months ended
June 30, 2017
compared to the sales of 16 investment properties and one outparcel, representing approximately 1,130,300 square feet of GLA, during the
six
months ended
June 30, 2016
;
|
•
|
a $54,226 increase in interest expense primarily consisting of:
|
•
|
a $64,515 increase in prepayment penalties and defeasance premiums and a $3,343 increase in capitalized loan fee write-offs primarily related to the defeasance of the IW JV portfolio of mortgages payable during the
six
months ended
June 30, 2017
, which resulted in a defeasance premium and associated fees totaling $60,198 and the write-off of $4,003 of capitalized loan fees;
|
•
|
a $4,160 increase in interest from our 4.08% senior unsecured notes due 2026 and our 4.24% senior unsecured notes due 2028 (Notes Due 2026 and 2028), which were issued in September and December 2016, respectively; and
|
•
|
a $2,946 increase in interest on our Term Loan Due 2023, which funded in January 2017;
|
•
|
a $22,033 decrease in interest on mortgages payable due to a reduction in mortgage debt;
|
•
|
a $14,463 decrease in rental income primarily consisting of a $14,335 decrease in base rent, which resulted from the operating properties sold during 2016 and 2017 or classified as held for sale as of
June 30, 2017
, along with our one
|
•
|
a $13,653 gain on extinguishment of debt recognized during the
six
months ended
June 30, 2016
associated with the disposition of The Gateway through a lender-directed sale in full satisfaction of our mortgage obligation. No such gain was recorded during the
six
months ended
June 30, 2017
;
|
•
|
a $6,978 gain on extinguishment of other liabilities recognized during the
six
months ended
June 30, 2016
related to the acquisition of the fee interest in Ashland & Roosevelt, 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 the straight-line ground rent liability associated with the ground lease. No such gain was recorded during the
six
months ended
June 30, 2017
; and
|
•
|
a $6,728 increase in provision for impairment of investment properties. Based on the results of our evaluations for impairment (see Notes 12 and 13 to the accompanying condensed consolidated financial statements), we recognized impairment charges of $13,034 and $6,306 for the
six
months ended
June 30, 2017
and
2016
, respectively.
|
|
Six Months Ended June 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Net income attributable to common shareholders
|
$
|
100,938
|
|
|
$
|
71,303
|
|
|
$
|
29,635
|
|
Adjustments to reconcile to Same Store NOI:
|
|
|
|
|
|
||||||
Preferred stock dividends
|
4,725
|
|
|
4,725
|
|
|
—
|
|
|||
Gain on sales of investment properties
|
(157,792
|
)
|
|
(31,352
|
)
|
|
(126,440
|
)
|
|||
Depreciation and amortization
|
105,799
|
|
|
106,839
|
|
|
(1,040
|
)
|
|||
Provision for impairment of investment properties
|
13,034
|
|
|
6,306
|
|
|
6,728
|
|
|||
General and administrative expenses
|
21,583
|
|
|
22,179
|
|
|
(596
|
)
|
|||
Gain on extinguishment of debt
|
—
|
|
|
(13,653
|
)
|
|
13,653
|
|
|||
Gain on extinguishment of other liabilities
|
—
|
|
|
(6,978
|
)
|
|
6,978
|
|
|||
Interest expense
|
106,967
|
|
|
52,741
|
|
|
54,226
|
|
|||
Straight-line rental income, net
|
(1,260
|
)
|
|
(1,828
|
)
|
|
568
|
|
|||
Amortization of acquired above and below market lease intangibles, net
|
(1,280
|
)
|
|
(971
|
)
|
|
(309
|
)
|
|||
Amortization of lease inducements
|
582
|
|
|
552
|
|
|
30
|
|
|||
Lease termination fees
|
(2,122
|
)
|
|
(2,685
|
)
|
|
563
|
|
|||
Straight-line ground rent expense
|
1,363
|
|
|
1,680
|
|
|
(317
|
)
|
|||
Amortization of acquired ground lease intangibles
|
(280
|
)
|
|
(280
|
)
|
|
—
|
|
|||
Other income, net
|
(456
|
)
|
|
(427
|
)
|
|
(29
|
)
|
|||
NOI
|
191,801
|
|
|
208,151
|
|
|
(16,350
|
)
|
|||
NOI from Other Investment Properties
|
(28,948
|
)
|
|
(48,404
|
)
|
|
19,456
|
|
|||
Same Store NOI
|
$
|
162,853
|
|
|
$
|
159,747
|
|
|
$
|
3,106
|
|
|
Six Months Ended June 30,
|
|
|
||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
Same Store NOI:
|
|
|
|
|
|
||||||
Base rent
|
$
|
175,787
|
|
|
$
|
173,126
|
|
|
$
|
2,661
|
|
Percentage and specialty rent
|
1,890
|
|
|
2,134
|
|
|
(244
|
)
|
|||
Tenant recovery income
|
49,926
|
|
|
48,738
|
|
|
1,188
|
|
|||
Other property operating income
|
1,773
|
|
|
1,622
|
|
|
151
|
|
|||
|
229,376
|
|
|
225,620
|
|
|
3,756
|
|
|||
|
|
|
|
|
|
||||||
Property operating expenses
|
30,975
|
|
|
31,908
|
|
|
(933
|
)
|
|||
Bad debt expense
|
531
|
|
|
442
|
|
|
89
|
|
|||
Real estate taxes
|
35,017
|
|
|
33,523
|
|
|
1,494
|
|
|||
|
66,523
|
|
|
65,873
|
|
|
650
|
|
|||
|
|
|
|
|
|
||||||
Same Store NOI
|
$
|
162,853
|
|
|
$
|
159,747
|
|
|
$
|
3,106
|
|
•
|
base rent and percentage and specialty rent increased by a net of $2,417 primarily due to an increase of $1,353 from contractual rent changes and $1,156 from re-leasing spreads, partially offset by a decrease of $244 from percentage and specialty rent; and
|
•
|
property operating expenses and real estate taxes, net of tenant recovery income, decreased $627 primarily due to a positive impact from the common area maintenance reconciliation process in addition to decreases in certain non-recoverable and net recoverable property operating expenses, partially offset by increases in net real estate taxes resulting from higher real estate tax assessments.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income attributable to common shareholders
|
$
|
112,400
|
|
|
$
|
26,239
|
|
|
$
|
100,938
|
|
|
$
|
71,303
|
|
Depreciation and amortization of depreciable real estate
|
51,911
|
|
|
53,100
|
|
|
104,990
|
|
|
106,194
|
|
||||
Provision for impairment of investment properties
|
13,034
|
|
|
4,142
|
|
|
13,034
|
|
|
4,142
|
|
||||
Gain on sales of depreciable investment properties
|
(116,628
|
)
|
|
(9,613
|
)
|
|
(157,792
|
)
|
|
(31,352
|
)
|
||||
FFO attributable to common shareholders
|
$
|
60,717
|
|
|
$
|
73,868
|
|
|
$
|
61,170
|
|
|
$
|
150,287
|
|
|
|
|
|
|
|
|
|
||||||||
FFO attributable to common shareholders per common share outstanding
|
$
|
0.26
|
|
|
$
|
0.31
|
|
|
$
|
0.26
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
||||||||
FFO attributable to common shareholders
|
$
|
60,717
|
|
|
$
|
73,868
|
|
|
$
|
61,170
|
|
|
$
|
150,287
|
|
Impact on earnings from the early extinguishment of debt, net
|
2,312
|
|
|
4
|
|
|
68,669
|
|
|
(12,842
|
)
|
||||
Provision for hedge ineffectiveness
|
5
|
|
|
3
|
|
|
11
|
|
|
3
|
|
||||
Provision for impairment of non-depreciable investment property
|
—
|
|
|
—
|
|
|
—
|
|
|
2,164
|
|
||||
Gain on extinguishment of other liabilities
|
—
|
|
|
(6,978
|
)
|
|
—
|
|
|
(6,978
|
)
|
||||
Other (a)
|
(149
|
)
|
|
(184
|
)
|
|
(19
|
)
|
|
(184
|
)
|
||||
Operating FFO attributable to common shareholders
|
$
|
62,885
|
|
|
$
|
66,713
|
|
|
$
|
129,831
|
|
|
$
|
132,450
|
|
|
|
|
|
|
|
|
|
||||||||
Operating FFO attributable to common shareholders
per common share outstanding
|
$
|
0.27
|
|
|
$
|
0.28
|
|
|
$
|
0.55
|
|
|
$
|
0.56
|
|
(a)
|
Primarily consists of the impact on earnings from actual or anticipated settlement of litigation involving the Company, including associated legal costs, which are included in “Other income, net” in the accompanying condensed consolidated statements of operations and other comprehensive (loss) income.
|
|
SOURCES
|
|
USES
|
▪
|
Operating cash flow
|
▪
|
Tenant allowances and leasing costs
|
▪
|
Cash and cash equivalents
|
▪
|
Improvements made to individual properties, certain of which are not
|
▪
|
Available borrowings under our unsecured revolving
|
|
recoverable through common area maintenance charges to tenants
|
|
line of credit
|
▪
|
Acquisitions
|
▪
|
Proceeds from capital markets transactions
|
▪
|
Debt repayments and defeasances
|
▪
|
Proceeds from asset dispositions
|
▪
|
Distribution payments
|
|
|
▪
|
Redevelopment, renovation or expansion activities
|
|
|
▪
|
New development
|
|
|
▪
|
Repurchases of our common stock
|
|
|
▪
|
Redemption of our preferred stock
|
Debt
|
|
Aggregate
Principal
Amount
|
|
Weighted
Average
Interest Rate
|
|
Maturity Date
|
|
Weighted
Average Years
to Maturity
|
|||
Fixed rate mortgages payable (a)
|
|
$
|
355,389
|
|
|
5.22
|
%
|
|
Various
|
|
4.9 years
|
|
|
|
|
|
|
|
|
|
|||
Unsecured notes payable:
|
|
|
|
|
|
|
|
|
|||
Senior notes – 4.12% due 2021
|
|
100,000
|
|
|
4.12
|
%
|
|
June 30, 2021
|
|
4.0 years
|
|
Senior notes – 4.58% due 2024
|
|
150,000
|
|
|
4.58
|
%
|
|
June 30, 2024
|
|
7.0 years
|
|
Senior notes – 4.00% due 2025
|
|
250,000
|
|
|
4.00
|
%
|
|
March 15, 2025
|
|
7.7 years
|
|
Senior notes – 4.08% due 2026
|
|
100,000
|
|
|
4.08
|
%
|
|
September 30, 2026
|
|
9.3 years
|
|
Senior notes – 4.24% due 2028
|
|
100,000
|
|
|
4.24
|
%
|
|
December 28, 2028
|
|
11.5 years
|
|
Total unsecured notes payable (a)
|
|
700,000
|
|
|
4.19
|
%
|
|
|
|
7.8 years
|
|
|
|
|
|
|
|
|
|
|
|||
Unsecured credit facility:
|
|
|
|
|
|
|
|
|
|||
Term loan – fixed rate (b)
|
|
250,000
|
|
|
1.97
|
%
|
|
January 5, 2021
|
|
3.5 years
|
|
Term loan – variable rate (c)
|
|
200,000
|
|
|
2.61
|
%
|
|
May 11, 2018 (c)
|
|
0.9 years
|
|
Revolving line of credit – variable rate (c)
|
|
182,000
|
|
|
2.58
|
%
|
|
January 5, 2020 (c)
|
|
2.5 years
|
|
Total unsecured credit facility (a)
|
|
632,000
|
|
|
2.35
|
%
|
|
|
|
2.4 years
|
|
|
|
|
|
|
|
|
|
|
|||
Term Loan Due 2023 – fixed rate (a) (d)
|
|
200,000
|
|
|
2.96
|
%
|
|
November 22, 2023
|
|
6.4 years
|
|
|
|
|
|
|
|
|
|
|
|||
Total consolidated indebtedness
|
|
$
|
1,887,389
|
|
|
3.64
|
%
|
|
|
|
5.3 years
|
(a)
|
Fixed rate mortgages payable excludes mortgage premium of
$1,223
, discount of
$(601)
and capitalized loan fees of
$(772)
, net of accumulated amortization, as of
June 30, 2017
. Unsecured notes payable excludes discount of
$(912)
and capitalized loan fees of
$(3,647)
, net of accumulated amortization, as of
June 30, 2017
. Term loans exclude capitalized loan fees of
$(3,446)
, net of accumulated amortization, as of
June 30, 2017
. Capitalized loan fees related to the revolving line of credit are included in “Other assets, net” in the accompanying condensed consolidated balance sheets.
|
(b)
|
Reflects $250,000 of LIBOR-based variable rate debt that has been swapped to a weighted average fixed rate of 0.67% plus a credit spread based on a leverage grid ranging from 1.30% to 2.20% through December 31, 2017. The applicable credit spread was 1.30% as of
June 30, 2017
.
|
(c)
|
We have two one year extension options on the term loan due 2018 and two six-month extension options on the 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% for the term loan and 0.075% of the commitment amount being extended for the revolving line of credit.
|
(d)
|
Reflects $200,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 1.26% plus a credit spread based on a leverage grid ranging from 1.70% to 2.55% through November 22, 2018. The applicable credit spread was 1.70% as of
June 30, 2017
.
|
|
|
|
|
|
|
|
|
Leverage-Based Pricing
|
|
Ratings-Based Pricing
|
||
Unsecured Credit Facility
|
|
Maturity Date
|
|
Extension Option
|
|
Extension Fee
|
|
Credit Spread
|
Unused Fee
|
|
Credit Spread
|
Facility Fee
|
$250,000 unsecured term loan
|
|
1/5/2021
|
|
N/A
|
|
N/A
|
|
1.30% - 2.20%
|
N/A
|
|
0.90% - 1.75%
|
N/A
|
$200,000 unsecured term loan
|
|
5/11/2018
|
|
2 one year
|
|
0.15%
|
|
1.45% - 2.20%
|
N/A
|
|
1.05% - 2.05%
|
N/A
|
$750,000 unsecured revolving line of credit
|
|
1/5/2020
|
|
2 six month
|
|
0.075%
|
|
1.35% - 2.25%
|
0.15% - 0.25%
|
|
0.85% - 1.55%
|
0.125% - 0.30%
|
Term Loan Due 2023
|
|
Maturity Date
|
|
Leverage-Based Pricing
Credit Spread
|
|
Ratings-Based Pricing
Credit Spread
|
$200,000 unsecured term loan
|
|
11/22/2023
|
|
1.70% – 2.55%
|
|
1.50% – 2.45%
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgages payable (a)
|
$
|
27,157
|
|
|
$
|
5,065
|
|
|
$
|
65,352
|
|
|
$
|
3,923
|
|
|
$
|
22,820
|
|
|
$
|
231,072
|
|
|
$
|
355,389
|
|
|
$
|
373,975
|
|
Fixed rate term loans (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
200,000
|
|
|
450,000
|
|
|
450,000
|
|
||||||||
Unsecured notes payable (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
600,000
|
|
|
700,000
|
|
|
692,274
|
|
||||||||
Total fixed rate debt
|
27,157
|
|
|
5,065
|
|
|
65,352
|
|
|
3,923
|
|
|
372,820
|
|
|
1,031,072
|
|
|
1,505,389
|
|
|
1,516,249
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Variable rate term loan and
revolving line of credit
|
—
|
|
|
200,000
|
|
|
—
|
|
|
182,000
|
|
|
—
|
|
|
—
|
|
|
382,000
|
|
|
382,504
|
|
||||||||
Total debt (d)
|
$
|
27,157
|
|
|
$
|
205,065
|
|
|
$
|
65,352
|
|
|
$
|
185,923
|
|
|
$
|
372,820
|
|
|
$
|
1,031,072
|
|
|
$
|
1,887,389
|
|
|
$
|
1,898,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average interest rate on debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate debt
|
4.18
|
%
|
|
5.49
|
%
|
|
7.45
|
%
|
|
4.62
|
%
|
|
2.73
|
%
|
|
4.08
|
%
|
|
3.90
|
%
|
|
|
|||||||||
Variable rate debt (e)
|
—
|
|
|
2.61
|
%
|
|
—
|
|
|
2.58
|
%
|
|
—
|
|
|
—
|
|
|
2.59
|
%
|
|
|
|||||||||
Total
|
4.18
|
%
|
|
2.68
|
%
|
|
7.45
|
%
|
|
2.62
|
%
|
|
2.73
|
%
|
|
4.08
|
%
|
|
3.64
|
%
|
|
|
(a)
|
Excludes mortgage premium of
$1,223
and discount of
$(601)
, net of accumulated amortization, as of
June 30, 2017
.
|
(b)
|
$250,000 of LIBOR-based variable rate debt has been swapped to a fixed rate through two interest rate swaps. The swaps effectively convert one-month floating rate LIBOR to a weighted average fixed rate of 0.67% through December 31, 2017. In addition, $200,000 of LIBOR-based variable rate debt has been swapped to a fixed rate through two interest rate swaps. The swaps effectively convert one-month floating rate LIBOR to a fixed rate of 1.26% through November 22, 2018.
|
(c)
|
Excludes discount of
$(912)
, net of accumulated amortization, as of
June 30, 2017
.
|
(d)
|
The weighted average years to maturity of consolidated indebtedness was
5.3 years
as of
June 30, 2017
. Total debt excludes capitalized loan fees of
$(7,865)
, net of accumulated amortization, as of
June 30, 2017
, which are included as a reduction to the respective debt balances.
|
(e)
|
Represents interest rates as of
June 30, 2017
.
|
|
|
Number of
Properties Sold (a)
|
|
Square
Footage
|
|
Consideration
|
|
Aggregate
Proceeds, Net (b)
|
|
Debt
Extinguished
|
|
||||||||
2017 Dispositions (through June 30, 2017)
|
|
24
|
|
|
2,489,100
|
|
|
$
|
414,765
|
|
|
$
|
311,280
|
|
|
$
|
—
|
|
(c)
|
2016 Dispositions
|
|
46
|
|
|
3,013,900
|
|
|
$
|
540,362
|
|
|
$
|
448,216
|
|
|
$
|
94,353
|
|
(c) (d)
|
(a)
|
2017 dispositions include the disposition of CVS Pharmacy – Sylacauga and the Home Depot parcel at Century III Plaza, both of which were classified as held for sale as of December 31, 2016. 2016 dispositions include the disposition of one development property, which was not under active development.
|
(b)
|
Represents total consideration net of transaction costs and proceeds temporarily restricted related to potential 1031 Exchanges. 2017 dispositions exclude proceeds of $93,561 which are temporarily restricted related to potential 1031 Exchanges.
|
(c)
|
Excludes $101,482 and $10,695 of mortgages payable repayments or defeasances completed prior to disposition of the respective property for the
six
months ended
June 30, 2017
and year ended December 31, 2016, respectively.
|
(d)
|
Represents The Gateway’s outstanding mortgage payable prior to the lender-directed sale of the property. Immediately prior to the disposition, the lender reduced our loan obligation to $75,000 which was assumed by the buyer in connection with the disposition. Along with the loan reduction, the lender received the balance of the restricted escrows that they held and the rights to unpaid accounts receivable and forgave accrued interest, resulting in a net gain on extinguishment of debt of $13,653.
|
|
|
Number of
Assets Acquired
|
|
Square
Footage
|
|
Acquisition
Price
|
|
Mortgage
Debt
|
||||||
2017 Acquisitions (through June 30, 2017) (a)
|
|
5
|
|
|
207,300
|
|
|
$
|
99,821
|
|
|
$
|
—
|
|
2016 Acquisitions (b)
|
|
9
|
|
|
1,102,300
|
|
|
$
|
408,308
|
|
|
$
|
15,971
|
|
(a)
|
2017 acquisitions include the purchase of the following: 1) the fee interest in our Boulevard at the Capital Centre multi-tenant retail operating property that was previously subject to a ground lease with a third party and 2) three additional phases, including the development rights for additional multi-family units, at our One Loudoun Downtown multi-tenant retail operating property that is being acquired in phases as the seller completes construction on stand-alone buildings at the property. The total number of properties in our portfolio was not affected by these transactions.
|
(b)
|
2016 acquisitions include the purchase of the following: 1) the fee interest in our Ashland & Roosevelt multi-tenant retail operating property that was previously subject to a ground lease with a third party and 2) the anchor space improvements at our Woodinville Plaza multi-tenant retail operating property that was previously subject to a ground lease with us. The total number of properties in our portfolio was not affected by these transactions.
|
|
|
Six Months Ended June 30,
|
||||||||||
|
|
2017
|
|
2016
|
|
Change
|
||||||
Net cash provided by operating activities
|
|
$
|
126,177
|
|
|
$
|
126,774
|
|
|
$
|
(597
|
)
|
Net cash provided by (used in) investing activities
|
|
190,903
|
|
|
(249,099
|
)
|
|
440,002
|
|
|||
Net cash (used in) provided by financing activities
|
|
(342,196
|
)
|
|
100,689
|
|
|
(442,885
|
)
|
|||
Decrease in cash and cash equivalents
|
|
(25,116
|
)
|
|
(21,636
|
)
|
|
(3,480
|
)
|
|||
Cash and cash equivalents, at beginning of period
|
|
53,119
|
|
|
51,424
|
|
|
|
||||
Cash and cash equivalents, at end of period
|
|
$
|
28,003
|
|
|
$
|
29,788
|
|
|
|
•
|
a $16,350 decrease in NOI, consisting of a decrease in NOI from properties that were sold or held for sale in 2016 and 2017 and other properties not included in our same store portfolio of $19,456, partially offset by an increase in Same Store NOI of $3,106; and
|
•
|
a $3,790 increase in cash paid for leasing fees and inducements;
|
•
|
a $5,678 decrease in cash paid for interest;
|
•
|
a $758 decrease in cash bonuses paid; and
|
•
|
ordinary course fluctuations in working capital accounts.
|
•
|
a $271,885 increase in proceeds from the sales of investment properties;
|
•
|
a $162,443 decrease in cash paid to purchase investment properties; and
|
•
|
a $15,893 net change in restricted escrow activity;
|
•
|
an $8,612 increase in investment in developments in progress; and
|
•
|
a $1,413 increase in capital expenditures and tenant improvements.
|
•
|
the $439,403 purchase of U.S. Treasury securities in connection with defeasance of the IW JV portfolio of mortgages payable during the
six
months ended
June 30, 2017
;
|
•
|
a $109,000 decrease in net proceeds from our unsecured revolving line of credit;
|
•
|
$75,697 paid in 2017 to repurchase common shares through our share repurchase program; and
|
•
|
a $25,892 increase in principal payments on mortgages payable;
|
•
|
$200,000 of proceeds from the Term Loan Due 2023, which funded in January 2017; and
|
•
|
a $6,033 decrease in the payment of loan fees and deposits.
|
•
|
closed on the acquisition of New Hyde Park Shopping Center, a 32,300 square foot multi-tenant retail property located in New Hyde Park, New York, for a gross purchase price of $22,075;
|
•
|
closed on the disposition of Boulevard Plaza, a 111,100 square foot multi-tenant retail operating property located in Pawtucket, Rhode Island, which was classified as held for sale as of June 30, 2017, for a sales price of $14,300 with an anticipated gain on sale;
|
•
|
closed on the disposition of Irmo Station, a 99,400 square foot multi-tenant retail operating property located in Irmo, South Carolina, which was classified as held for sale as of June 30, 2017, for a sales price of $16,027 with an anticipated gain on sale;
|
•
|
closed on the disposition of Hickory Ridge, a 380,600 square foot multi-tenant retail operating property located in Hickory, North Carolina, for a sales price of $44,020 with an anticipated gain on sale;
|
•
|
declared the cash dividend for the third quarter of 2017 for our 7.00% Series A cumulative redeemable preferred stock. The dividend of $0.4375 per preferred share will be paid on October 2, 2017 to preferred shareholders of record at the close of business on September 21, 2017; and
|
•
|
declared the cash dividend for the third quarter of 2017 of $0.165625 per share on our outstanding Class A common stock, which will be paid on October 10, 2017 to Class A common shareholders of record at the close of business on September 26, 2017.
|
|
|
Notional
Amount
|
|
Termination Date
|
|
Fair Value of
Derivative Asset
|
||||
Fixed rate portion of Unsecured Credit Facility
|
|
$
|
250,000
|
|
|
December 31, 2017
|
|
$
|
742
|
|
Term Loan Due 2023
|
|
200,000
|
|
|
November 22, 2018
|
|
477
|
|
||
|
|
$
|
450,000
|
|
|
|
|
$
|
1,219
|
|
(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 (a)
|
||||||
April 1, 2017 to April 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
241,159
|
|
May 1, 2017 to May 31, 2017
|
|
3,686
|
|
|
$
|
12.83
|
|
|
3,686
|
|
|
$
|
193,791
|
|
June 1, 2017 to June 30, 2017
|
|
2,338
|
|
|
$
|
12.10
|
|
|
2,338
|
|
|
$
|
165,462
|
|
Total
|
|
6,024
|
|
|
$
|
12.55
|
|
|
6,024
|
|
|
$
|
165,462
|
|
(a)
|
As disclosed on the Form 8-K dated December 15, 2015, represents the amount outstanding under our $250,000 common stock repurchase program, which has no scheduled expiration date.
|
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
|
Sixth Amended and Restated Bylaws of the Registrant (Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on July 20, 2012).
|
3.2
|
|
Amendment No. 1 to the Sixth Amended and Restated Bylaws of the Registrant, dated February 11, 2014 (Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 12, 2014).
|
3.3
|
|
Amendment No. 2 to the Sixth Amended and Restated Bylaws of the Registrant, dated May 25, 2017 (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 June 30, 2017 and December 31, 2016, (ii) Condensed Consolidated Statements of Operations and Other Comprehensive (Loss) Income for the Three-Month Periods and Six-Month Periods Ended June 30, 2017 and 2016, (iii) Condensed Consolidated Statements of Equity for the Six-Month Periods Ended June 30, 2017 and 2016, (iv) Condensed Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 2017 and 2016, and (v) Notes to Condensed Consolidated Financial Statements.
|
By:
|
/s/ STEVEN P. GRIMES
|
|
|
|
|
|
Steven P. Grimes
|
|
|
President and Chief Executive Officer
|
|
Date:
|
August 2, 2017
|
|
|
|
|
By:
|
/s/ HEATH R. FEAR
|
|
|
|
|
|
Heath R. Fear
|
|
|
Executive Vice President,
|
|
|
Chief Financial Officer and Treasurer (Principal Financial Officer)
|
|
Date:
|
August 2, 2017
|
|
|
|
|
By:
|
/s/ JULIE M. SWINEHART
|
|
|
|
|
|
Julie M. Swinehart
|
|
|
Senior Vice President and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
|
Date:
|
August 2, 2017
|
|
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:
|
August 2, 2017
|
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/ HEATH R. FEAR
|
|
|
|
Heath R. Fear
|
|
Executive Vice President,
|
|
Chief Financial Officer and Treasurer
|
|
|
Date:
|
August 2, 2017
|
(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:
|
August 2, 2017
|
|
|
By:
|
/s/ HEATH R. FEAR
|
|
|
|
Heath R. Fear
|
|
Executive Vice President,
|
|
Chief Financial Officer and Treasurer
|
|
|
Date:
|
August 2, 2017
|