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,
2018 |
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December 31,
2017 |
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Assets
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Investment properties:
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Land
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$
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1,041,593
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$
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1,066,705
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Building and other improvements
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3,570,680
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3,686,200
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Developments in progress
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21,300
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33,022
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4,633,573
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4,785,927
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Less accumulated depreciation
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(1,246,096
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)
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(1,215,990
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)
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Net investment properties
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3,387,477
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3,569,937
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Cash and cash equivalents
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29,125
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25,185
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Accounts and notes receivable (net of allowances of $7,211 and $6,567, respectively)
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71,745
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71,678
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Acquired lease intangible assets, net
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109,054
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122,646
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Assets associated with investment properties held for sale
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—
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3,647
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Other assets, net
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73,990
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125,171
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Total assets
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$
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3,671,391
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$
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3,918,264
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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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274,267
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$
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287,068
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Unsecured notes payable, net
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696,055
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695,748
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Unsecured term loans, net
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447,583
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547,270
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Unsecured revolving line of credit
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126,000
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216,000
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Accounts payable and accrued expenses
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62,168
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82,698
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Distributions payable
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36,363
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36,311
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Acquired lease intangible liabilities, net
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91,053
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97,971
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Other liabilities
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66,313
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69,498
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Total liabilities
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1,799,802
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2,032,564
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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, none issued or outstanding
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—
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—
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Class A common stock, $0.001 par value, 475,000 shares authorized,
219,550 and 219,237 shares issued and outstanding as of June 30, 2018
and December 31, 2017, respectively
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219
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219
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Additional paid-in capital
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4,576,752
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4,574,428
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Accumulated distributions in excess of earnings
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(2,710,081
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)
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(2,690,021
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)
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Accumulated other comprehensive income
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4,699
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1,074
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Total equity
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1,871,589
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1,885,700
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Total liabilities and equity
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$
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3,671,391
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$
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3,918,264
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Three Months Ended June 30,
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Six Months Ended June 30,
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2018
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2017
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2018
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2017
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Revenues
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Rental income
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$
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92,646
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$
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106,017
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$
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187,101
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$
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215,991
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Tenant recovery income
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25,183
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29,524
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53,273
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60,310
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Other property income
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1,335
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1,798
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3,632
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4,731
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Total revenues
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119,164
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137,339
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244,006
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281,032
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Expenses
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Operating expenses
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19,384
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21,004
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39,639
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42,868
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Real estate taxes
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17,701
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21,487
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38,169
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43,366
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Depreciation and amortization
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43,710
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52,325
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88,938
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105,799
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Provision for impairment of investment properties
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724
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13,034
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1,316
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13,034
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General and administrative expenses
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10,274
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10,370
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22,769
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21,583
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Total expenses
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91,793
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118,220
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190,831
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226,650
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Operating income
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27,371
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19,119
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53,175
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54,382
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Interest expense
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(16,817
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)
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(21,435
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(35,582
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)
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(106,967
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)
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Other income, net
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328
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451
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550
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456
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Income (loss) from continuing operations
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10,882
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(1,865
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18,143
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(52,129
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)
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Gain on sales of investment properties
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—
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116,628
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34,519
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157,792
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Net income
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10,882
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114,763
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52,662
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105,663
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Preferred stock dividends
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—
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(2,363
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)
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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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10,882
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$
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112,400
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$
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52,662
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$
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100,938
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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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0.05
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$
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0.48
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$
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0.24
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$
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0.43
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Net income
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$
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10,882
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$
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114,763
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$
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52,662
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$
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105,663
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Other comprehensive income (loss):
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||||||||
Net unrealized gain (loss) on derivative instruments (Note 9)
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859
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(145
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)
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3,613
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|
487
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Comprehensive income attributable to the Company
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$
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11,741
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$
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114,618
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$
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56,275
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$
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106,150
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Weighted average number of common shares outstanding – basic
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218,982
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234,243
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218,915
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235,269
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Weighted average number of common shares outstanding – diluted
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219,410
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234,818
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219,406
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235,842
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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
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, 2017
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5,400
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$
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5
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236,770
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$
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237
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$
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4,927,155
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$
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(2,776,033
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)
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$
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722
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$
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2,152,086
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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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105,663
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—
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105,663
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||||||
Other comprehensive 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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—
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|
487
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487
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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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(77,553
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)
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—
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(77,553
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)
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Issuance of restricted shares
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—
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—
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285
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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
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—
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—
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—
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—
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3,549
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—
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—
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3,549
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Shares withheld for employee taxes
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—
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—
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(88
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)
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—
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(1,333
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)
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—
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—
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(1,333
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)
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||||||
Balance as of June 30, 2017
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5,400
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$
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5
|
|
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230,943
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$
|
231
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|
$
|
4,853,680
|
|
|
$
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(2,752,648
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)
|
|
$
|
1,209
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|
|
$
|
2,102,477
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|
|
|
|
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|
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||||||||||||||
Balance as of January 1, 2018
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—
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$
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—
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219,237
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$
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219
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|
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$
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4,574,428
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|
|
$
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(2,690,021
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)
|
|
$
|
1,074
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$
|
1,885,700
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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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—
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(12
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)
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12
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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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—
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52,662
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|
|
—
|
|
|
52,662
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|
||||||
Other comprehensive income
|
—
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|
|
—
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|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,613
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|
|
3,613
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|
||||||
Distributions declared to common shareholders
($0.33125 per share)
|
—
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|
|
—
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|
|
—
|
|
|
—
|
|
|
—
|
|
|
(72,710
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)
|
|
—
|
|
|
(72,710
|
)
|
||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
59
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|
|
—
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|
|
—
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|
|
—
|
|
|
—
|
|
|
—
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|
||||||
Issuance of restricted shares
|
—
|
|
|
—
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|
382
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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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(12
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)
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—
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|
3,729
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|
—
|
|
|
—
|
|
|
3,729
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|
||||||
Shares withheld for employee taxes
|
—
|
|
|
—
|
|
|
(116
|
)
|
|
—
|
|
|
(1,405
|
)
|
|
—
|
|
|
—
|
|
|
(1,405
|
)
|
||||||
Balance as of June 30, 2018
|
—
|
|
|
$
|
—
|
|
|
219,550
|
|
|
$
|
219
|
|
|
$
|
4,576,752
|
|
|
$
|
(2,710,081
|
)
|
|
$
|
4,699
|
|
|
$
|
1,871,589
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
52,662
|
|
|
$
|
105,663
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
88,938
|
|
|
105,799
|
|
||
Provision for impairment of investment properties
|
1,316
|
|
|
13,034
|
|
||
Gain on sales of investment properties
|
(34,519
|
)
|
|
(157,792
|
)
|
||
Amortization of loan fees and debt premium and discount, net
|
1,780
|
|
|
5,871
|
|
||
Amortization of stock-based compensation
|
3,729
|
|
|
3,549
|
|
||
Premium paid in connection with defeasance of mortgages payable
|
—
|
|
|
59,968
|
|
||
Debt prepayment fees
|
974
|
|
|
4,545
|
|
||
Payment of leasing fees and inducements
|
(3,652
|
)
|
|
(9,757
|
)
|
||
Changes in accounts receivable, net
|
(1,520
|
)
|
|
4,094
|
|
||
Changes in accounts payable and accrued expenses, net
|
(19,554
|
)
|
|
(15,577
|
)
|
||
Changes in other operating assets and liabilities, net
|
3,287
|
|
|
11,383
|
|
||
Other, net
|
(4,738
|
)
|
|
(63
|
)
|
||
Net cash provided by operating activities
|
88,703
|
|
|
130,717
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of investment properties
|
—
|
|
|
(99,434
|
)
|
||
Capital expenditures and tenant improvements
|
(32,961
|
)
|
|
(31,629
|
)
|
||
Proceeds from sales of investment properties
|
187,125
|
|
|
404,996
|
|
||
Investment in developments in progress
|
(6,933
|
)
|
|
(8,612
|
)
|
||
Net cash provided by investing activities
|
147,231
|
|
|
265,321
|
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Principal payments on mortgages payable
|
(12,818
|
)
|
|
(38,571
|
)
|
||
Proceeds from unsecured term loans
|
—
|
|
|
200,000
|
|
||
Repayments of unsecured term loans
|
(100,000
|
)
|
|
—
|
|
||
Proceeds from unsecured revolving line of credit
|
196,000
|
|
|
474,000
|
|
||
Repayments of unsecured revolving line of credit
|
(286,000
|
)
|
|
(378,000
|
)
|
||
Payment of loan fees and deposits
|
(5,393
|
)
|
|
(10
|
)
|
||
Debt prepayment fees
|
(974
|
)
|
|
(4,545
|
)
|
||
Purchase of U.S. Treasury securities in connection with defeasance of mortgages payable
|
—
|
|
|
(439,403
|
)
|
||
Distributions paid
|
(72,658
|
)
|
|
(83,182
|
)
|
||
Shares repurchased through share repurchase program
|
—
|
|
|
(75,697
|
)
|
||
Other, net
|
(1,405
|
)
|
|
(1,333
|
)
|
||
Net cash used in financing activities
|
(283,248
|
)
|
|
(346,741
|
)
|
||
|
|
|
|
||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(47,314
|
)
|
|
49,297
|
|
||
Cash, cash equivalents and restricted cash, at beginning of period
|
86,335
|
|
|
82,349
|
|
||
Cash, cash equivalents and restricted cash, at end of period
|
$
|
39,021
|
|
|
$
|
131,646
|
|
(continued)
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Supplemental cash flow disclosure, including non-cash activities:
|
|
|
|
||||
Cash paid for interest, net of interest capitalized
|
$
|
34,179
|
|
|
$
|
41,017
|
|
Distributions payable
|
$
|
36,363
|
|
|
$
|
38,318
|
|
Accrued capital expenditures and tenant improvements
|
$
|
7,550
|
|
|
$
|
6,089
|
|
Accrued leasing fees and inducements
|
$
|
761
|
|
|
$
|
840
|
|
Accrued redevelopment costs
|
$
|
1,074
|
|
|
$
|
1,019
|
|
Developments in progress placed in service
|
$
|
9,355
|
|
|
$
|
—
|
|
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
|
)
|
Accounts receivable, acquired lease intangibles and other assets
|
—
|
|
|
(7,659
|
)
|
||
Accounts payable, acquired lease intangibles and other liabilities
|
—
|
|
|
7,008
|
|
||
Deferred gain
|
—
|
|
|
2,524
|
|
||
|
$
|
—
|
|
|
$
|
(99,434
|
)
|
|
|
|
|
||||
Proceeds from sales of investment properties:
|
|
|
|
||||
Net investment properties
|
$
|
148,448
|
|
|
$
|
245,853
|
|
Accounts receivable, acquired lease intangibles and other assets
|
10,999
|
|
|
8,280
|
|
||
Accounts payable, acquired lease intangibles and other liabilities
|
(6,841
|
)
|
|
(6,253
|
)
|
||
Deferred gain
|
—
|
|
|
(676
|
)
|
||
Gain on sales of investment properties
|
34,519
|
|
|
157,792
|
|
||
|
$
|
187,125
|
|
|
$
|
404,996
|
|
|
|
|
|
||||
Reconciliation of cash, cash equivalents and restricted cash reported on the Company’s
condensed consolidated balance sheets to such amounts shown in the Company’s
condensed consolidated statements of cash flows:
|
|
|
|
||||
Cash and cash equivalents, at beginning of period
|
$
|
25,185
|
|
|
$
|
53,119
|
|
Restricted cash, at beginning of period (included in “Other assets, net”)
|
61,150
|
|
|
29,230
|
|
||
Total cash, cash equivalents and restricted cash, at beginning of period
|
$
|
86,335
|
|
|
$
|
82,349
|
|
|
|
|
|
||||
Cash and cash equivalents, at end of period
|
$
|
29,125
|
|
|
$
|
28,003
|
|
Restricted cash, at end of period (included in “Other assets, net”)
|
9,896
|
|
|
103,643
|
|
||
Total cash, cash equivalents and restricted cash, at end of period
|
$
|
39,021
|
|
|
$
|
131,646
|
|
|
Property Count
|
|
Retail operating properties
|
105
|
|
Redevelopment projects:
|
|
|
Reisterstown Road Plaza
|
1
|
|
Circle East – redevelopment portion (a)
|
—
|
|
Carillon (b)
|
1
|
|
Total number of wholly-owned properties
|
107
|
|
(a)
|
This portion of the property was formerly known as Towson Circle and the operating portion, which was formerly known as Towson Square, is included within the property count for retail operating properties.
|
(b)
|
The Company has begun activities in anticipation of future redevelopment of this property, which was formerly known as Boulevard at the Capital Centre.
|
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
|
|
Carillon – Fee Interest
|
|
Washington, D.C.
|
|
Fee interest (b)
|
|
—
|
|
|
2,000
|
|
|
|
February 24, 2017
|
|
One Loudoun Downtown –
Phase II
|
|
Washington, D.C.
|
|
Additional phase of multi-tenant retail (c)
|
|
15,900
|
|
|
4,128
|
|
|
|
April 5, 2017
|
|
One Loudoun Downtown –
Phase III
|
|
Washington, D.C.
|
|
Additional phase of multi-tenant retail (c)
|
|
9,800
|
|
|
2,193
|
|
|
|
May 16, 2017
|
|
One Loudoun Downtown –
Phase IV
|
|
Washington, D.C.
|
|
Development rights (c)
|
|
—
|
|
|
3,500
|
|
|
|
|
|
|
|
|
|
|
|
207,300
|
|
|
$
|
99,821
|
|
(d)
|
(a)
|
This property was acquired through
two
consolidated VIEs 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 formerly known as Boulevard at the Capital Centre, which is 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
|
(c)
|
The Company acquired
three
additional phases, including the development rights for an additional
123
residential units for a total of
408
units, 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.
|
(d)
|
Acquisition price does not include capitalized closing costs and adjustments totaling
$2,334
.
|
|
|
Six Months Ended
June 30, 2017
|
||
Land
|
|
$
|
23,559
|
|
Building and other improvements, net
|
|
77,748
|
|
|
Acquired lease intangible assets (a)
|
|
7,343
|
|
|
Acquired lease intangible liabilities (b)
|
|
(5,477
|
)
|
|
Other liabilities
|
|
(1,076
|
)
|
|
Net assets acquired
|
|
$
|
102,097
|
|
(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
.
|
(b)
|
The weighted average amortization period for acquired lease intangible liabilities is
13 years
for acquisitions completed during the
six
months ended
June 30, 2017
.
|
Date
|
|
Property Name
|
|
Property Type
|
|
Square
Footage
|
|
Consideration
|
|
Aggregate
Proceeds, Net (a)
|
|
Gain
|
|||||||
January 19, 2018
|
|
Crown Theater
|
|
Single-user retail
|
|
74,200
|
|
|
$
|
6,900
|
|
|
$
|
6,350
|
|
|
$
|
2,952
|
|
February 15, 2018
|
|
Cranberry Square
|
|
Multi-tenant retail
|
|
195,200
|
|
|
23,500
|
|
|
23,163
|
|
|
10,174
|
|
|||
March 7, 2018
|
|
Rite Aid Store (Eckerd)–Crossville, TN
|
|
Single-user retail
|
|
13,800
|
|
|
1,800
|
|
|
1,768
|
|
|
157
|
|
|||
March 20, 2018
|
|
Home Depot Plaza (b)
|
|
Multi-tenant retail
|
|
135,600
|
|
|
16,250
|
|
|
15,873
|
|
|
—
|
|
|||
March 21, 2018
|
|
Governor's Marketplace
|
|
Multi-tenant retail
|
|
243,100
|
|
|
23,500
|
|
|
20,993
|
|
|
7,429
|
|
|||
March 28, 2018
|
|
Stony Creek I & Stony Creek II (c)
|
|
Multi-tenant retail
|
|
204,800
|
|
|
32,800
|
|
|
32,078
|
|
|
11,628
|
|
|||
April 19, 2018
|
|
CVS Pharmacy – Lawton, OK
|
|
Single-user retail
|
|
10,900
|
|
|
1,600
|
|
|
1,596
|
|
|
—
|
|
|||
May 31, 2018
|
|
Schaumburg Towers
|
|
Office
|
|
895,400
|
|
|
86,600
|
|
|
73,315
|
|
|
—
|
|
|||
|
|
|
|
|
|
1,773,000
|
|
|
$
|
192,950
|
|
|
$
|
175,136
|
|
|
$
|
32,340
|
|
(a)
|
Aggregate proceeds are net of transaction costs, as well as capital and tenant-related costs credited to the buyer at close, as applicable, and exclude
$169
of condemnation proceeds, which did not result in any additional gain recognition.
|
(b)
|
The Company repaid a
$10,750
mortgage payable in conjunction with the disposition of the property.
|
(c)
|
The terms of the disposition of Stony Creek I and Stony Creek II were negotiated as a single transaction.
|
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
|
|
|
3,348
|
|
|
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
|
|
|
22,723
|
|
|
10,007
|
|
|||
April 4, 2017
|
|
University Town Center (b)
|
|
Multi-tenant retail
|
|
57,500
|
|
|
14,700
|
|
|
14,590
|
|
|
9,128
|
|
|||
April 4, 2017
|
|
Edgemont Town Center (b)
|
|
Multi-tenant retail
|
|
77,700
|
|
|
19,025
|
|
|
18,857
|
|
|
8,995
|
|
|||
April 4, 2017
|
|
Phenix Crossing (b)
|
|
Multi-tenant retail
|
|
56,600
|
|
|
12,400
|
|
|
12,296
|
|
|
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 Town 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
|
|
|
21,639
|
|
|
10,286
|
|
|||
|
|
|
|
|
|
2,489,100
|
|
|
$
|
414,765
|
|
|
$
|
404,841
|
|
|
$
|
156,306
|
|
(a)
|
Aggregate proceeds are net of transaction costs, as well as capital and tenant-related costs credited to the buyer at close, as applicable, and exclude
$150
of condemnation proceeds, which did not result in any additional gain recognition.
|
(b)
|
As of
June 30,
2017, the following disposition proceeds were temporarily restricted related to 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 was classified as held for sale as of June 30, 2017 and was sold on December 15, 2017.
|
|
December 31, 2017
|
||
Assets
|
|
||
Land, building and other improvements
|
$
|
2,791
|
|
Less accumulated depreciation
|
(27
|
)
|
|
Net investment properties
|
2,764
|
|
|
Other assets
|
883
|
|
|
Assets associated with investment properties held for sale
|
$
|
3,647
|
|
|
|
||
Liabilities
|
|
||
Other liabilities
|
$
|
—
|
|
Liabilities associated with investment properties held for sale
|
$
|
—
|
|
|
Unvested
Restricted Shares |
|
Weighted Average
Grant Date Fair Value per Restricted Share |
|||
Balance as of January 1, 2018
|
496
|
|
|
$
|
14.81
|
|
Shares granted (a)
|
382
|
|
|
$
|
12.81
|
|
Shares vested
|
(345
|
)
|
|
$
|
14.64
|
|
Shares forfeited
|
(12
|
)
|
|
$
|
13.26
|
|
Balance as of June 30, 2018 (b)
|
521
|
|
|
$
|
13.50
|
|
(a)
|
Shares granted vest over periods ranging from
0.9 years
to
three years
in accordance with the terms of applicable award agreements.
|
(b)
|
As of
June 30, 2018
, total unrecognized compensation expense related to unvested restricted shares was
$3,984
, 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, 2018
|
555
|
|
|
$
|
14.60
|
|
RSUs granted (a)
|
291
|
|
|
$
|
14.36
|
|
Conversion of RSUs to common stock and restricted shares (b)
|
(141
|
)
|
|
$
|
14.10
|
|
RSUs ineligible for conversion
|
(56
|
)
|
|
$
|
15.36
|
|
RSUs eligible for future conversion as of June 30, 2018 (c)
|
649
|
|
|
$
|
14.54
|
|
(a)
|
Assumptions and inputs as of the grant dates included a weighted average risk-free interest rate of
2.04%
, 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 weighted average common stock dividend yield of
5.00%
. Subject to continued employment, in 2021, following the performance period which concludes on December 31, 2020, 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)
|
On February 5, 2018,
141
RSUs converted into
42
shares of common stock and
65
restricted shares that will vest on December 31, 2018, subject to continued employment through such date, after applying a conversion rate of
76%
based upon the Company’s Total Shareholder Return (TSR) relative to the TSRs of its peer companies, for the performance period that concluded on December 31, 2017. An additional
16
shares of common stock were also issued representing the dividends that would have been paid on the earned awards during the performance period.
|
(c)
|
As of
June 30, 2018
, total unrecognized compensation expense related to unvested RSUs was
$5,683
, which is expected to be amortized over a weighted average term of
2.7 years
.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||
|
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)
|
$
|
274,420
|
|
|
5.00
|
%
|
|
4.6
|
|
$
|
287,238
|
|
|
4.99
|
%
|
|
5.2
|
Premium, net of accumulated amortization
|
900
|
|
|
|
|
|
|
1,024
|
|
|
|
|
|
||||
Discount, net of accumulated amortization
|
(558
|
)
|
|
|
|
|
|
(579
|
)
|
|
|
|
|
||||
Capitalized loan fees, net of accumulated
amortization
|
(495
|
)
|
|
|
|
|
|
(615
|
)
|
|
|
|
|
||||
Mortgages payable, net
|
$
|
274,267
|
|
|
|
|
|
|
$
|
287,068
|
|
|
|
|
|
(a)
|
The fixed rate mortgages had interest rates ranging from
3.75%
to
8.00%
as of
June 30, 2018
and
December 31, 2017
.
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mortgages payable (a)
|
$
|
2,098
|
|
|
$
|
25,257
|
|
|
$
|
3,923
|
|
|
$
|
22,820
|
|
|
$
|
157,216
|
|
|
$
|
63,106
|
|
|
$
|
274,420
|
|
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
|
2,098
|
|
|
25,257
|
|
|
3,923
|
|
|
372,820
|
|
|
157,216
|
|
|
863,106
|
|
|
1,424,420
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate revolving line of credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126,000
|
|
|
—
|
|
|
126,000
|
|
|||||||
Total debt (d)
|
$
|
2,098
|
|
|
$
|
25,257
|
|
|
$
|
3,923
|
|
|
$
|
372,820
|
|
|
$
|
283,216
|
|
|
$
|
863,106
|
|
|
$
|
1,550,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Weighted average interest rate on debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate debt
|
5.09
|
%
|
|
7.29
|
%
|
|
4.62
|
%
|
|
3.56
|
%
|
|
5.00
|
%
|
|
3.91
|
%
|
|
4.00
|
%
|
|||||||
Variable rate debt (e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.14
|
%
|
|
—
|
|
|
3.14
|
%
|
|||||||
Total
|
5.09
|
%
|
|
7.29
|
%
|
|
4.62
|
%
|
|
3.56
|
%
|
|
4.17
|
%
|
|
3.91
|
%
|
|
3.93
|
%
|
(a)
|
Excludes mortgage premium of
$900
and discount of
$(558)
, net of accumulated amortization, as of
June 30, 2018
.
|
(b)
|
$250,000
of London Interbank Offered Rate (LIBOR)-based variable rate debt has been swapped to a fixed rate through
three
interest rate swaps. The swaps effectively convert
one-month floating rate LIBOR
to a fixed rate of
2.00%
through January 5, 2021. 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
$(793)
, net of accumulated amortization, as of
June 30, 2018
.
|
(d)
|
The weighted average years to maturity of consolidated indebtedness was
5.3 years
as of
June 30, 2018
. Total debt excludes capitalized loan fees of
$(6,064)
, net of accumulated amortization, as of
June 30, 2018
, which are included as a reduction to the respective debt balances.
|
(e)
|
Represents interest rates as of
June 30, 2018
.
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
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
|
|
|
|
(793
|
)
|
|
|
|
(853
|
)
|
|
|
||||
Capitalized loan fees, net of accumulated amortization
|
|
|
|
(3,152
|
)
|
|
|
|
(3,399
|
)
|
|
|
||||
|
|
Total
|
|
$
|
696,055
|
|
|
|
|
$
|
695,748
|
|
|
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||
|
|
Maturity Date
|
|
Balance
|
|
Interest
Rate
|
|
Balance
|
|
Interest
Rate |
||||||
Unsecured credit facility term loan due 2021 – fixed rate (a)
|
|
January 5, 2021
|
|
$
|
250,000
|
|
|
3.20
|
%
|
|
$
|
250,000
|
|
|
3.30
|
%
|
Unsecured credit facility term loan due 2018 – variable rate
|
|
May 11, 2018
|
|
—
|
|
|
—
|
%
|
|
100,000
|
|
|
2.93
|
%
|
||
Unsecured term loan due 2023 – fixed rate (b)
|
|
November 22, 2023
|
|
200,000
|
|
|
2.96
|
%
|
|
200,000
|
|
|
2.96
|
%
|
||
Subtotal
|
|
|
|
450,000
|
|
|
|
|
550,000
|
|
|
|
||||
Capitalized loan fees, net of accumulated amortization
|
|
|
|
(2,417
|
)
|
|
|
|
(2,730
|
)
|
|
|
||||
Term loans, net
|
|
|
|
$
|
447,583
|
|
|
|
|
$
|
547,270
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||||
Unsecured credit facility revolving line of credit –
variable rate (c)
|
|
April 22, 2022
|
|
$
|
126,000
|
|
|
3.14
|
%
|
|
$
|
216,000
|
|
|
2.92
|
%
|
(a)
|
$250,000
of
LIBOR
-based variable rate debt has been swapped to a fixed rate of
2.00%
plus a credit spread based on a leverage grid through January 5, 2021. As of
June 30, 2018
, the leverage grid ranged from
1.20%
to
1.70%
and the applicable credit spread was
1.20%
. As of
December 31, 2017
, the leverage grid ranged from
1.30%
to
2.20%
and the applicable credit spread was
1.30%
.
|
(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, 2018
and
December 31, 2017
.
|
(c)
|
Excludes capitalized loan fees, which are included in “Other assets, net” in the accompanying condensed consolidated balance sheets.
|
|
|
|
|
|
|
|
|
Leverage-Based Pricing
|
|
Investment Grade Pricing
|
||
Unsecured Credit Facility
|
|
Maturity Date
|
|
Extension Option
|
|
Extension Fee
|
|
Credit Spread
|
Facility Fee
|
|
Credit Spread
|
Facility Fee
|
$250,000 unsecured term loan
|
|
1/5/2021
|
|
N/A
|
|
N/A
|
|
1.20% - 1.70%
|
N/A
|
|
0.90% - 1.75%
|
N/A
|
$850,000 unsecured revolving line of credit
|
|
4/22/2022
|
|
2 six month
|
|
0.075%
|
|
1.05% - 1.50%
|
0.15% - 0.30%
|
|
0.825%-1.55%
|
0.125% - 0.30%
|
Term Loan Due 2023
|
|
Maturity Date
|
|
Leverage-Based Pricing
Credit Spread
|
|
Investment Grade 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
|
|
Maturity Date
|
|||
January 3, 2017
|
|
$
|
100,000
|
|
|
1.26
|
%
|
|
November 22, 2018
|
January 3, 2017
|
|
$
|
100,000
|
|
|
1.26
|
%
|
|
November 22, 2018
|
December 29, 2017
|
|
$
|
100,000
|
|
|
2.00
|
%
|
|
January 5, 2021
|
December 29, 2017
|
|
$
|
100,000
|
|
|
2.00
|
%
|
|
January 5, 2021
|
December 29, 2017
|
|
$
|
50,000
|
|
|
2.00
|
%
|
|
January 5, 2021
|
|
|
Number of Instruments
|
|
Notional
|
||||||||||
Interest Rate Derivatives
|
|
June 30, 2018
|
|
December 31, 2017
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||
Interest rate swaps
|
|
5
|
|
|
5
|
|
|
$
|
450,000
|
|
|
$
|
450,000
|
|
|
|
Fair Value
|
||||||
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
||||
Interest rate swaps
|
|
$
|
4,699
|
|
|
$
|
1,086
|
|
Derivatives in
Cash Flow
Hedging
Relationships
|
|
Amount of Gain
Recognized in Other
Comprehensive Income
on Derivative
|
|
Location of Gain
Reclassified from
Accumulated Other
Comprehensive Income
(AOCI) into Income
|
|
Amount of Gain
Reclassified from
AOCI into Income
|
|
Total Interest Expense
Presented in the Results
of Operations in which
the Effects of Cash Flow
Hedges are Recorded
|
||||||||||||||||||
|
|
Three Months
Ended
June 30, 2018
|
|
Six Months
Ended
June 30, 2018
|
|
|
|
Three Months
Ended
June 30, 2018
|
|
Six Months
Ended
June 30, 2018
|
|
Three Months
Ended
June 30, 2018
|
|
Six Months
Ended
June 30, 2018
|
||||||||||||
Interest rate swaps
|
|
$
|
(1,138
|
)
|
|
$
|
(3,805
|
)
|
|
Interest expense
|
|
$
|
(279
|
)
|
|
$
|
(192
|
)
|
|
$
|
16,817
|
|
|
$
|
35,582
|
|
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
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, 2017
|
|
Six Months
Ended
June 30, 2017
|
|
|
|
Three Months
Ended
June 30, 2017
|
|
Six Months
Ended
June 30, 2017
|
|
|
|
Three Months
Ended
June 30, 2017
|
|
Six Months
Ended
June 30, 2017
|
||||||||||||
Interest rate swaps
|
|
$
|
59
|
|
|
$
|
(413
|
)
|
|
Interest expense
|
|
$
|
(86
|
)
|
|
$
|
74
|
|
|
Other income, net
|
|
$
|
5
|
|
|
$
|
11
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
$
|
10,882
|
|
|
$
|
(1,865
|
)
|
|
$
|
18,143
|
|
|
$
|
(52,129
|
)
|
|
Gain on sales of investment properties
|
—
|
|
|
116,628
|
|
|
34,519
|
|
|
157,792
|
|
|
||||
Preferred stock dividends
|
—
|
|
|
(2,363
|
)
|
|
—
|
|
|
(4,725
|
)
|
|
||||
Net income attributable to common shareholders
|
10,882
|
|
|
112,400
|
|
|
52,662
|
|
|
100,938
|
|
|
||||
Earnings allocated to unvested restricted shares
|
(90
|
)
|
|
(88
|
)
|
|
(172
|
)
|
|
(178
|
)
|
|
||||
Net income attributable to common shareholders excluding
amounts attributable to unvested restricted shares
|
$
|
10,792
|
|
|
$
|
112,312
|
|
|
$
|
52,490
|
|
|
$
|
100,760
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Denominator for earnings per common share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
218,982
|
|
(a)
|
234,243
|
|
(b)
|
218,915
|
|
(a)
|
235,269
|
|
(b)
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Stock options
|
—
|
|
(c)
|
1
|
|
(c)
|
—
|
|
(c)
|
1
|
|
(c)
|
||||
RSUs
|
428
|
|
(d)
|
574
|
|
(e)
|
491
|
|
(d)
|
572
|
|
(e)
|
||||
Denominator for earnings per common share – diluted:
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of common and common equivalent
shares outstanding
|
219,410
|
|
|
234,818
|
|
|
219,406
|
|
|
235,842
|
|
|
(a)
|
Excludes
521
shares of unvested restricted common stock as of
June 30, 2018
, which equate to
529
and
551
shares, respectively, on a weighted average basis for the three and
six
months ended
June 30, 2018
. These shares will continue to be excluded from the computation of basic EPS until contingencies are resolved and the shares are released.
|
(b)
|
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 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
38
and
41
shares of common stock as of
June 30, 2018
and
2017
, respectively, at a weighted average exercise price of
$18.85
and
$19.25
, respectively. Of these totals, outstanding options to purchase
32
and
35
shares of common stock as of
June 30, 2018
and
2017
, respectively, at a weighted average exercise price of
$20.19
and
$20.55
, 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, 2018
, there were
649
RSUs eligible for future conversion upon completion of the performance periods (see Note 5 to the condensed consolidated financial statements), which equate to
649
and
667
RSUs, respectively, on a weighted average basis for the three and
six
months ended
June 30, 2018
. These contingently issuable shares are a component of calculating diluted EPS.
|
(e)
|
As of
June 30, 2017
, there were
644
RSUs eligible for future conversion upon completion of the performance periods, which equate to
644
and
641
RSUs, respectively, on a weighted average basis for the three and
six
months ended
June 30, 2017
. These contingently issuable shares are a component of calculating diluted EPS.
|
|
|
June 30, 2018
|
|
June 30, 2017
|
|
||
Number of properties for which indicators of impairment were identified
|
|
2
|
|
|
7
|
|
(a)
|
Less: number of properties for which an impairment charge was recorded
|
|
—
|
|
|
2
|
|
|
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
|
|
|
Remaining properties for which indicators of impairment were identified but no
impairment charge was considered necessary
|
|
2
|
|
|
3
|
|
|
|
|
|
|
|
|
||
Weighted average percentage by which the projected undiscounted cash flows exceeded
its respective carrying value for each of the remaining properties (b)
|
|
38
|
%
|
|
11
|
%
|
|
(a)
|
Includes
five
properties which have subsequently been sold as of
June 30, 2018
.
|
(b)
|
Based upon the estimated holding period for each asset where an undiscounted cash flow analysis was performed.
|
(a)
|
The Company recorded an impairment charge on March 31, 2018 based upon the terms and conditions of an executed sales contract. This property was classified as held for sale as of March 31, 2018 and was sold on May 31, 2018, at which time 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. The property was sold on April 19, 2018.
|
(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 and was sold on December 15, 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 and was sold on August 4, 2017.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Derivative asset
|
$
|
4,699
|
|
|
$
|
4,699
|
|
|
$
|
1,086
|
|
|
$
|
1,086
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
274,267
|
|
|
$
|
279,680
|
|
|
$
|
287,068
|
|
|
$
|
298,635
|
|
Unsecured notes payable, net
|
$
|
696,055
|
|
|
$
|
670,042
|
|
|
$
|
695,748
|
|
|
$
|
693,823
|
|
Unsecured term loans, net
|
$
|
447,583
|
|
|
$
|
455,242
|
|
|
$
|
547,270
|
|
|
$
|
552,555
|
|
Unsecured revolving line of credit
|
$
|
126,000
|
|
|
$
|
126,000
|
|
|
$
|
216,000
|
|
|
$
|
216,222
|
|
|
Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Derivative asset
|
$
|
—
|
|
|
$
|
4,699
|
|
|
$
|
—
|
|
|
$
|
4,699
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Derivative asset
|
$
|
—
|
|
|
$
|
1,086
|
|
|
$
|
—
|
|
|
$
|
1,086
|
|
|
Fair Value
|
|
|
||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Provision for
Impairment (a)
|
||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment properties
|
$
|
—
|
|
|
$
|
74,250
|
|
(b)
|
$
|
—
|
|
|
$
|
74,250
|
|
|
$
|
50,077
|
|
(a)
|
Excludes impairment charges recorded on investment properties sold prior to
December 31, 2017
.
|
(b)
|
Represents the fair value of the Company’s Schaumburg Towers and Home Depot Plaza investment properties. The estimated fair value of Schaumburg Towers was based on an expected sales price of
$87,600
from a bona fide purchase offer, determined to be a Level 2 input, which contemplates historically deferred maintenance and capital requirements. The estimated fair value of
$58,000
as of September 30, 2017, the date the asset was measured at fair value, reflects (i) capital expenditures expected to be incurred by the Company prior to sale and (ii) tenant-related costs expected to be credited to the buyer at close. The estimated fair value of Home Depot Plaza of
$16,250
as of December 31, 2017, the date the asset was measured at fair value, was based upon the expected sales price for an executed sales contract and determined to be a Level 2 input.
|
|
Fair Value
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
June 30, 2018
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
279,680
|
|
|
$
|
279,680
|
|
Unsecured notes payable, net
|
$
|
234,853
|
|
|
$
|
—
|
|
|
$
|
435,189
|
|
|
$
|
670,042
|
|
Unsecured term loans, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
455,242
|
|
|
$
|
455,242
|
|
Unsecured revolving line of credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
126,000
|
|
|
$
|
126,000
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Mortgages payable, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
298,635
|
|
|
$
|
298,635
|
|
Unsecured notes payable, net
|
$
|
243,183
|
|
|
$
|
—
|
|
|
$
|
450,640
|
|
|
$
|
693,823
|
|
Unsecured term loans, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
552,555
|
|
|
$
|
552,555
|
|
Unsecured revolving line of credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
216,222
|
|
|
$
|
216,222
|
|
•
|
closed on the first phase of the sale of a land parcel, which included rights to develop
eight
residential units, at One Loudoun Downtown, a multi-tenant retail operating property located in Ashburn, Virginia, for a sales price of
$1,800
. The sale of land will occur in
three
phases and will include the rights to develop a total of
30
residential units for a total sales price of
$6,800
;
|
•
|
entered into a development joint venture agreement for the expansion of pads G and H at One Loudoun Downtown. The project encompasses the construction of
378
residential units and up to
80,000
square feet of commercial space. The joint venture facilitates the construction and management of the residential units and construction of a portion of the commercial space, which will be delivered to the Company once complete; and
|
•
|
declared the cash dividend for the third quarter of
2018
of
$0.165625
per share on its outstanding Class A common stock, which will be paid on October 10, 2018 to Class A common shareholders of record at the close of business on September 25, 2018.
|
•
|
economic, business and financial conditions, and changes in our industry and changes in the real estate markets in particular;
|
•
|
economic and other developments in 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)
|
||||
Retail operating portfolio:
|
|
|
|
|
|
|
|
|
||||
Multi-tenant retail
|
|
|
|
|
|
|
|
|
||||
Neighborhood and community centers
|
|
61
|
|
|
9,798
|
|
|
91.8
|
%
|
|
93.4
|
%
|
Power centers
|
|
26
|
|
|
5,512
|
|
|
92.0
|
%
|
|
93.0
|
%
|
Lifestyle centers and mixed-use properties
|
|
15
|
|
|
3,796
|
|
|
92.0
|
%
|
|
94.0
|
%
|
Total multi-tenant retail
|
|
102
|
|
|
19,106
|
|
|
91.9
|
%
|
|
93.4
|
%
|
Single-user retail
|
|
3
|
|
|
356
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Total retail operating portfolio
|
|
105
|
|
|
19,462
|
|
|
92.0
|
%
|
|
93.5
|
%
|
Redevelopment projects:
|
|
|
|
|
|
|
|
|
||||
Reisterstown Road Plaza
|
|
1
|
|
|
|
|
|
|
|
|||
Circle East – redevelopment portion (b)
|
|
—
|
|
|
|
|
|
|
|
|||
Carillon (c)
|
|
1
|
|
|
|
|
|
|
|
|||
Total number of wholly-owned properties
|
|
107
|
|
|
|
|
|
|
|
(a)
|
Includes leases signed but not commenced.
|
(b)
|
This portion of the property was formerly known as Towson Circle and the operating portion, which was formerly known as Towson Square, is included in lifestyle centers and mixed-use properties within the property count for our retail operating portfolio.
|
(c)
|
We have begun activities in anticipation of future redevelopment of this property, which was formerly known as Boulevard at the Capital Centre.
|
Date
|
|
Property Name
|
|
Property Type
|
|
Square
Footage
|
|
Consideration
|
|||
January 19, 2018
|
|
Crown Theater
|
|
Single-user retail
|
|
74,200
|
|
|
$
|
6,900
|
|
February 15, 2018
|
|
Cranberry Square
|
|
Multi-tenant retail
|
|
195,200
|
|
|
23,500
|
|
|
March 7, 2018
|
|
Rite Aid Store (Eckerd) – Crossville, TN
|
|
Single-user retail
|
|
13,800
|
|
|
1,800
|
|
|
March 20, 2018
|
|
Home Depot Plaza
|
|
Multi-tenant retail
|
|
135,600
|
|
|
16,250
|
|
|
March 21, 2018
|
|
Governor's Marketplace
|
|
Multi-tenant retail
|
|
243,100
|
|
|
23,500
|
|
|
March 28, 2018
|
|
Stony Creek I & Stony Creek II
|
|
Multi-tenant retail
|
|
204,800
|
|
|
32,800
|
|
|
April 19, 2018
|
|
CVS Pharmacy – Lawton, OK
|
|
Single-user retail
|
|
10,900
|
|
|
1,600
|
|
|
May 31, 2018
|
|
Schaumburg Towers
|
|
Office
|
|
895,400
|
|
|
86,600
|
|
|
|
|
|
|
|
|
1,773,000
|
|
|
$
|
192,950
|
|
Property Type/Market
|
|
Number of
Properties
|
|
Annualized
Base Rent
(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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Top 25 MSAs (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dallas
|
|
19
|
|
|
$
|
82,147
|
|
|
24.4
|
%
|
|
$
|
22.33
|
|
|
3,938
|
|
|
20.6
|
%
|
|
93.4
|
%
|
|
94.0
|
%
|
New York
|
|
9
|
|
|
35,447
|
|
|
10.5
|
%
|
|
28.49
|
|
|
1,292
|
|
|
6.8
|
%
|
|
96.3
|
%
|
|
96.8
|
%
|
||
Washington, D.C.
|
|
8
|
|
|
34,746
|
|
|
10.3
|
%
|
|
27.48
|
|
|
1,384
|
|
|
7.2
|
%
|
|
91.4
|
%
|
|
95.2
|
%
|
||
Chicago
|
|
8
|
|
|
28,884
|
|
|
8.6
|
%
|
|
23.28
|
|
|
1,358
|
|
|
7.1
|
%
|
|
91.4
|
%
|
|
92.8
|
%
|
||
Seattle
|
|
8
|
|
|
21,156
|
|
|
6.3
|
%
|
|
15.59
|
|
|
1,477
|
|
|
7.7
|
%
|
|
91.9
|
%
|
|
92.7
|
%
|
||
Atlanta
|
|
9
|
|
|
18,603
|
|
|
5.5
|
%
|
|
13.70
|
|
|
1,513
|
|
|
7.9
|
%
|
|
89.7
|
%
|
|
92.3
|
%
|
||
Houston
|
|
9
|
|
|
15,167
|
|
|
4.5
|
%
|
|
14.69
|
|
|
1,141
|
|
|
6.0
|
%
|
|
90.5
|
%
|
|
92.7
|
%
|
||
Baltimore
|
|
4
|
|
|
13,365
|
|
|
4.0
|
%
|
|
17.28
|
|
|
865
|
|
|
4.5
|
%
|
|
89.4
|
%
|
|
90.1
|
%
|
||
San Antonio
|
|
3
|
|
|
12,558
|
|
|
3.7
|
%
|
|
17.55
|
|
|
721
|
|
|
3.8
|
%
|
|
99.2
|
%
|
|
100.0
|
%
|
||
Phoenix
|
|
3
|
|
|
10,051
|
|
|
3.0
|
%
|
|
17.48
|
|
|
632
|
|
|
3.3
|
%
|
|
91.0
|
%
|
|
93.4
|
%
|
||
Los Angeles
|
|
1
|
|
|
5,284
|
|
|
1.6
|
%
|
|
28.24
|
|
|
255
|
|
|
1.3
|
%
|
|
73.4
|
%
|
|
73.4
|
%
|
||
Riverside
|
|
1
|
|
|
4,607
|
|
|
1.4
|
%
|
|
15.76
|
|
|
292
|
|
|
1.5
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
||
St. Louis
|
|
1
|
|
|
4,110
|
|
|
1.2
|
%
|
|
9.62
|
|
|
453
|
|
|
2.4
|
%
|
|
94.3
|
%
|
|
94.3
|
%
|
||
Charlotte
|
|
1
|
|
|
2,885
|
|
|
0.9
|
%
|
|
13.76
|
|
|
320
|
|
|
1.7
|
%
|
|
65.6
|
%
|
|
75.3
|
%
|
||
Tampa
|
|
1
|
|
|
2,379
|
|
|
0.7
|
%
|
|
19.52
|
|
|
126
|
|
|
0.7
|
%
|
|
97.0
|
%
|
|
97.0
|
%
|
||
Subtotal
|
|
85
|
|
|
291,389
|
|
|
86.6
|
%
|
|
20.13
|
|
|
15,767
|
|
|
82.5
|
%
|
|
91.8
|
%
|
|
93.3
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-Top 25 MSAs (b)
|
|
17
|
|
|
45,236
|
|
|
13.4
|
%
|
|
14.69
|
|
|
3,339
|
|
|
17.5
|
%
|
|
92.2
|
%
|
|
93.9
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Multi-Tenant Retail
|
|
102
|
|
|
336,625
|
|
|
100.0
|
%
|
|
19.18
|
|
|
19,106
|
|
|
100.0
|
%
|
|
91.9
|
%
|
|
93.4
|
%
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Single-User Retail
|
|
3
|
|
|
8,950
|
|
|
|
|
25.19
|
|
|
356
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total Retail
Operating Portfolio (c)
|
|
105
|
|
|
$
|
345,575
|
|
|
|
|
$
|
19.29
|
|
|
19,462
|
|
|
|
|
92.0
|
%
|
|
93.5
|
%
|
(a)
|
Excludes $11,282 of multi-tenant retail ABR and 1,123 square feet of multi-tenant retail GLA attributable to (i) Reisterstown Road Plaza, which is in active redevelopment, (ii) the redevelopment portion of Circle East, which is in active redevelopment and (iii) Carillon, where we have begun activities in anticipation of future redevelopment, which are located in the Washington, D.C. and Baltimore metropolitan statistical areas (MSAs). Including these amounts, 87.0% of our multi-tenant retail ABR and 83.5% of our multi-tenant retail GLA is located in the top 25 MSAs.
|
(b)
|
Top 25 MSAs and Non-Top 25 MSAs are determined by the United States Census Bureau and ranked based on the most recently available population estimates.
|
(c)
|
Excludes 15 residential units.
|
|
|
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)
|
|
Weighted
Average
Lease Term
|
|
Tenant
Allowances
PSF
|
||||||||||
Comparable Renewal Leases
|
|
171
|
|
|
1,050
|
|
|
$
|
21.78
|
|
|
$
|
20.68
|
|
|
5.3
|
%
|
|
4.4
|
|
|
$
|
1.50
|
|
Comparable New Leases
|
|
18
|
|
|
88
|
|
|
$
|
22.12
|
|
|
$
|
20.08
|
|
|
10.2
|
%
|
|
7.7
|
|
|
$
|
32.70
|
|
Non-Comparable New and
Renewal Leases (b)
|
|
36
|
|
|
188
|
|
|
$
|
18.83
|
|
|
N/A
|
|
|
N/A
|
|
|
7.6
|
|
|
$
|
47.44
|
|
|
Total
|
|
225
|
|
|
1,326
|
|
|
$
|
21.80
|
|
|
$
|
20.63
|
|
|
5.7
|
%
|
|
5.0
|
|
|
$
|
10.07
|
|
(a)
|
Total excludes the impact of Non-Comparable New and Renewal Leases.
|
(b)
|
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.
|
•
|
entered into our fifth amended and restated unsecured credit agreement (Unsecured Credit Agreement) with a syndicate of financial institutions to provide for an unsecured credit facility aggregating $1,100,000, consisting of an $850,000 unsecured revolving line of credit and a $250,000 unsecured term loan (collectively, the Unsecured Credit Facility);
|
•
|
repaid the remaining $100,000 of our unsecured term loan due 2018 in conjunction with the execution of the Unsecured Credit Agreement;
|
•
|
repaid $90,000, net of borrowings, on our unsecured revolving line of credit; and
|
•
|
repaid a $10,750 mortgage payable in conjunction with the disposition of the related property and made scheduled principal payments of
$2,068
related to amortizing loans.
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Revenues
|
|
|
|
|
|
||||||
Rental income
|
$
|
92,646
|
|
|
$
|
106,017
|
|
|
$
|
(13,371
|
)
|
Tenant recovery income
|
25,183
|
|
|
29,524
|
|
|
(4,341
|
)
|
|||
Other property income
|
1,335
|
|
|
1,798
|
|
|
(463
|
)
|
|||
Total revenues
|
119,164
|
|
|
137,339
|
|
|
(18,175
|
)
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Operating expenses
|
19,384
|
|
|
21,004
|
|
|
(1,620
|
)
|
|||
Real estate taxes
|
17,701
|
|
|
21,487
|
|
|
(3,786
|
)
|
|||
Depreciation and amortization
|
43,710
|
|
|
52,325
|
|
|
(8,615
|
)
|
|||
Provision for impairment of investment properties
|
724
|
|
|
13,034
|
|
|
(12,310
|
)
|
|||
General and administrative expenses
|
10,274
|
|
|
10,370
|
|
|
(96
|
)
|
|||
Total expenses
|
91,793
|
|
|
118,220
|
|
|
(26,427
|
)
|
|||
|
|
|
|
|
|
||||||
Operating income
|
27,371
|
|
|
19,119
|
|
|
8,252
|
|
|||
|
|
|
|
|
|
||||||
Interest expense
|
(16,817
|
)
|
|
(21,435
|
)
|
|
4,618
|
|
|||
Other income, net
|
328
|
|
|
451
|
|
|
(123
|
)
|
|||
Income (loss) from continuing operations
|
10,882
|
|
|
(1,865
|
)
|
|
12,747
|
|
|||
Gain on sales of investment properties
|
—
|
|
|
116,628
|
|
|
(116,628
|
)
|
|||
Net income
|
10,882
|
|
|
114,763
|
|
|
(103,881
|
)
|
|||
Preferred stock dividends
|
—
|
|
|
(2,363
|
)
|
|
2,363
|
|
|||
Net income attributable to common shareholders
|
$
|
10,882
|
|
|
$
|
112,400
|
|
|
$
|
(101,518
|
)
|
•
|
a $116,628 decrease in gain on sales of investment properties related to the sales of two investment properties, representing approximately 906,300 square feet of GLA, during the three months ended
June 30, 2018
compared to the sales of 17 investment properties, representing approximately 1,869,000 square feet of GLA, during the three months ended
June 30, 2017
; and
|
•
|
a $13,371 decrease in rental income primarily consisting of a $15,500 decrease in base rent, which resulted from the operating properties sold during 2017 and 2018 along with our redevelopments, partially offset by an increase from the operating properties acquired during 2017 and growth from our same store portfolio;
|
•
|
a $12,310 decrease 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 $724 and $13,034 for the three months ended
June 30, 2018
and
2017
, respectively;
|
•
|
an $8,615 decrease in depreciation and amortization primarily due to the investment properties sold during 2017; and
|
•
|
a $4,618 decrease in interest expense primarily consisting of:
|
•
|
a $2,261 prepayment penalty incurred during the three months ended
June 30, 2017
related to the repayment of a mortgage payable. No such prepayment penalty was incurred during the three months ended
June 30, 2018
;
|
•
|
a $1,352 decrease in interest on mortgages payable due to a reduction in mortgage debt; and
|
•
|
a $1,048 decrease in term loan interest due to the repayment of a $100,000 variable-rate term loan in April 2018.
|
•
|
the removal of one same store investment property sold during the three months ended
June 30, 2018
.
|
•
|
properties acquired after December 31, 2016;
|
•
|
Reisterstown Road Plaza, which is in active redevelopment;
|
•
|
the redevelopment portion of Circle East, which is in active redevelopment;
|
•
|
Carillon, where we have begun activities in anticipation of future redevelopment;
|
•
|
properties that were sold or held for sale in 2017 and 2018, including Schaumburg Towers; and
|
•
|
the net income from our wholly-owned captive insurance company.
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net income attributable to common shareholders
|
$
|
10,882
|
|
|
$
|
112,400
|
|
|
$
|
(101,518
|
)
|
Adjustments to reconcile to Same Store NOI:
|
|
|
|
|
|
||||||
Preferred stock dividends
|
—
|
|
|
2,363
|
|
|
(2,363
|
)
|
|||
Gain on sales of investment properties
|
—
|
|
|
(116,628
|
)
|
|
116,628
|
|
|||
Depreciation and amortization
|
43,710
|
|
|
52,325
|
|
|
(8,615
|
)
|
|||
Provision for impairment of investment properties
|
724
|
|
|
13,034
|
|
|
(12,310
|
)
|
|||
General and administrative expenses
|
10,274
|
|
|
10,370
|
|
|
(96
|
)
|
|||
Interest expense
|
16,817
|
|
|
21,435
|
|
|
(4,618
|
)
|
|||
Straight-line rental income, net
|
(1,401
|
)
|
|
(919
|
)
|
|
(482
|
)
|
|||
Amortization of acquired above and below market lease intangibles, net
|
(2,354
|
)
|
|
(549
|
)
|
|
(1,805
|
)
|
|||
Amortization of lease inducements
|
246
|
|
|
259
|
|
|
(13
|
)
|
|||
Lease termination fees, net
|
1,692
|
|
|
(510
|
)
|
|
2,202
|
|
|||
Straight-line ground rent expense
|
579
|
|
|
677
|
|
|
(98
|
)
|
|||
Amortization of acquired ground lease intangibles
|
(140
|
)
|
|
(140
|
)
|
|
—
|
|
|||
Other income, net
|
(328
|
)
|
|
(451
|
)
|
|
123
|
|
|||
NOI
|
80,701
|
|
|
93,666
|
|
|
(12,965
|
)
|
|||
NOI from Other Investment Properties
|
(4,452
|
)
|
|
(18,241
|
)
|
|
13,789
|
|
|||
Same Store NOI
|
$
|
76,249
|
|
|
$
|
75,425
|
|
|
$
|
824
|
|
|
Three Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Same Store NOI:
|
|
|
|
|
|
||||||
Base rent
|
$
|
82,405
|
|
|
$
|
81,656
|
|
|
$
|
749
|
|
Percentage and specialty rent
|
725
|
|
|
558
|
|
|
167
|
|
|||
Tenant recovery income
|
23,946
|
|
|
23,629
|
|
|
317
|
|
|||
Other property operating income
|
1,101
|
|
|
949
|
|
|
152
|
|
|||
|
108,177
|
|
|
106,792
|
|
|
1,385
|
|
|||
|
|
|
|
|
|
||||||
Property operating expenses
|
14,747
|
|
|
14,880
|
|
|
(133
|
)
|
|||
Bad debt expense, net
|
258
|
|
|
(140
|
)
|
|
398
|
|
|||
Real estate taxes
|
16,923
|
|
|
16,627
|
|
|
296
|
|
|||
|
31,928
|
|
|
31,367
|
|
|
561
|
|
|||
|
|
|
|
|
|
||||||
Same Store NOI
|
$
|
76,249
|
|
|
$
|
75,425
|
|
|
$
|
824
|
|
|
Six Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Revenues
|
|
|
|
|
|
||||||
Rental income
|
$
|
187,101
|
|
|
$
|
215,991
|
|
|
$
|
(28,890
|
)
|
Tenant recovery income
|
53,273
|
|
|
60,310
|
|
|
(7,037
|
)
|
|||
Other property income
|
3,632
|
|
|
4,731
|
|
|
(1,099
|
)
|
|||
Total revenues
|
244,006
|
|
|
281,032
|
|
|
(37,026
|
)
|
|||
|
|
|
|
|
|
||||||
Expenses
|
|
|
|
|
|
||||||
Operating expenses
|
39,639
|
|
|
42,868
|
|
|
(3,229
|
)
|
|||
Real estate taxes
|
38,169
|
|
|
43,366
|
|
|
(5,197
|
)
|
|||
Depreciation and amortization
|
88,938
|
|
|
105,799
|
|
|
(16,861
|
)
|
|||
Provision for impairment of investment properties
|
1,316
|
|
|
13,034
|
|
|
(11,718
|
)
|
|||
General and administrative expenses
|
22,769
|
|
|
21,583
|
|
|
1,186
|
|
|||
Total expenses
|
190,831
|
|
|
226,650
|
|
|
(35,819
|
)
|
|||
|
|
|
|
|
|
||||||
Operating income
|
53,175
|
|
|
54,382
|
|
|
(1,207
|
)
|
|||
|
|
|
|
|
|
||||||
Interest expense
|
(35,582
|
)
|
|
(106,967
|
)
|
|
71,385
|
|
|||
Other income, net
|
550
|
|
|
456
|
|
|
94
|
|
|||
Income (loss) from continuing operations
|
18,143
|
|
|
(52,129
|
)
|
|
70,272
|
|
|||
Gain on sales of investment properties
|
34,519
|
|
|
157,792
|
|
|
(123,273
|
)
|
|||
Net income
|
52,662
|
|
|
105,663
|
|
|
(53,001
|
)
|
|||
Preferred stock dividends
|
—
|
|
|
(4,725
|
)
|
|
4,725
|
|
|||
Net income attributable to common shareholders
|
$
|
52,662
|
|
|
$
|
100,938
|
|
|
$
|
(48,276
|
)
|
•
|
a $123,273 decrease in gain on sales of investment properties related to the sales of nine investment properties, representing approximately 1,773,000 square feet of GLA, and the sale of air rights at the redevelopment portion of Circle East during the
six
months ended
June 30, 2018
compared to the sales of 23 investment properties and a single-user parcel 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
; and
|
•
|
a $28,890 decrease in rental income primarily consisting of a $32,576 decrease in base rent, which resulted from the operating properties sold during 2017 and 2018 along with our redevelopments, partially offset by an increase from the operating properties acquired during 2017 and growth from our same store portfolio;
|
•
|
a $71,385 decrease in interest expense primarily consisting of:
|
•
|
a $63,539 decrease in prepayment penalties and defeasance premiums and a $4,078 decrease 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; and
|
•
|
a $2,778 decrease in interest on mortgages payable due to a reduction in mortgage debt;
|
•
|
a $16,861 decrease in depreciation and amortization primarily due to the investment properties sold during 2017; and
|
•
|
an $11,718 decrease 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 $1,316 and $13,034 for the
six
months ended
June 30, 2018
and
2017
, respectively.
|
|
Six Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net income attributable to common shareholders
|
$
|
52,662
|
|
|
$
|
100,938
|
|
|
$
|
(48,276
|
)
|
Adjustments to reconcile to Same Store NOI:
|
|
|
|
|
|
||||||
Preferred stock dividends
|
—
|
|
|
4,725
|
|
|
(4,725
|
)
|
|||
Gain on sales of investment properties
|
(34,519
|
)
|
|
(157,792
|
)
|
|
123,273
|
|
|||
Depreciation and amortization
|
88,938
|
|
|
105,799
|
|
|
(16,861
|
)
|
|||
Provision for impairment of investment properties
|
1,316
|
|
|
13,034
|
|
|
(11,718
|
)
|
|||
General and administrative expenses
|
22,769
|
|
|
21,583
|
|
|
1,186
|
|
|||
Interest expense
|
35,582
|
|
|
106,967
|
|
|
(71,385
|
)
|
|||
Straight-line rental income, net
|
(3,880
|
)
|
|
(1,260
|
)
|
|
(2,620
|
)
|
|||
Amortization of acquired above and below market lease intangibles, net
|
(3,208
|
)
|
|
(1,280
|
)
|
|
(1,928
|
)
|
|||
Amortization of lease inducements
|
487
|
|
|
582
|
|
|
(95
|
)
|
|||
Lease termination fees, net
|
673
|
|
|
(2,122
|
)
|
|
2,795
|
|
|||
Straight-line ground rent expense
|
1,245
|
|
|
1,363
|
|
|
(118
|
)
|
|||
Amortization of acquired ground lease intangibles
|
(280
|
)
|
|
(280
|
)
|
|
—
|
|
|||
Other income, net
|
(550
|
)
|
|
(456
|
)
|
|
(94
|
)
|
|||
NOI
|
161,235
|
|
|
191,801
|
|
|
(30,566
|
)
|
|||
NOI from Other Investment Properties
|
(8,264
|
)
|
|
(40,787
|
)
|
|
32,523
|
|
|||
Same Store NOI
|
$
|
152,971
|
|
|
$
|
151,014
|
|
|
$
|
1,957
|
|
|
Six Months Ended June 30,
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Same Store NOI:
|
|
|
|
|
|
||||||
Base rent
|
$
|
164,539
|
|
|
$
|
162,913
|
|
|
$
|
1,626
|
|
Percentage and specialty rent
|
1,820
|
|
|
1,965
|
|
|
(145
|
)
|
|||
Tenant recovery income
|
50,095
|
|
|
48,090
|
|
|
2,005
|
|
|||
Other property operating income
|
2,230
|
|
|
1,896
|
|
|
334
|
|
|||
|
218,684
|
|
|
214,864
|
|
|
3,820
|
|
|||
|
|
|
|
|
|
||||||
Property operating expenses
|
30,074
|
|
|
30,084
|
|
|
(10
|
)
|
|||
Bad debt expense
|
756
|
|
|
516
|
|
|
240
|
|
|||
Real estate taxes
|
34,883
|
|
|
33,250
|
|
|
1,633
|
|
|||
|
65,713
|
|
|
63,850
|
|
|
1,863
|
|
|||
|
|
|
|
|
|
||||||
Same Store NOI
|
$
|
152,971
|
|
|
$
|
151,014
|
|
|
$
|
1,957
|
|
•
|
base rent increased $1,626 primarily due to an increase of $1,183 from contractual rent changes and $840 from re-leasing spreads, partially offset by $403 from higher rent abatements; and
|
•
|
property operating expenses and real estate taxes, net of tenant recovery income, decreased $382 primarily due to decreases in certain non-recoverable property operating expenses, partially offset by higher net recoverable property operating expenses and real estate taxes, a lower net positive impact from the common area maintenance reconciliation process and lower net real estate tax refunds in 2018.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income attributable to common shareholders
|
$
|
10,882
|
|
|
$
|
112,400
|
|
|
$
|
52,662
|
|
|
$
|
100,938
|
|
Depreciation and amortization of depreciable real estate
|
43,415
|
|
|
51,911
|
|
|
88,365
|
|
|
104,990
|
|
||||
Provision for impairment of investment properties
|
724
|
|
|
13,034
|
|
|
1,316
|
|
|
13,034
|
|
||||
Gain on sales of depreciable investment properties
|
—
|
|
|
(116,628
|
)
|
|
(32,340
|
)
|
|
(157,792
|
)
|
||||
FFO attributable to common shareholders
|
$
|
55,021
|
|
|
$
|
60,717
|
|
|
$
|
110,003
|
|
|
$
|
61,170
|
|
|
|
|
|
|
|
|
|
||||||||
FFO attributable to common shareholders per common share
outstanding – diluted
|
$
|
0.25
|
|
|
$
|
0.26
|
|
|
$
|
0.50
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
||||||||
FFO attributable to common shareholders
|
$
|
55,021
|
|
|
$
|
60,717
|
|
|
$
|
110,003
|
|
|
$
|
61,170
|
|
Impact on earnings from the early extinguishment of debt, net
|
24
|
|
|
2,312
|
|
|
1,052
|
|
|
68,669
|
|
||||
Provision for hedge ineffectiveness
|
—
|
|
|
5
|
|
|
—
|
|
|
11
|
|
||||
Gain on sale of non-depreciable investment property
|
—
|
|
|
—
|
|
|
(2,179
|
)
|
|
—
|
|
||||
Impact on earnings from executive separation (a)
|
—
|
|
|
—
|
|
|
1,737
|
|
|
—
|
|
||||
Other (b)
|
16
|
|
|
(149
|
)
|
|
223
|
|
|
(19
|
)
|
||||
Operating FFO attributable to common shareholders
|
$
|
55,061
|
|
|
$
|
62,885
|
|
|
$
|
110,836
|
|
|
$
|
129,831
|
|
|
|
|
|
|
|
|
|
||||||||
Operating FFO attributable to common shareholders per
common share outstanding – diluted
|
$
|
0.25
|
|
|
$
|
0.27
|
|
|
$
|
0.51
|
|
|
$
|
0.55
|
|
(a)
|
Reflected as an increase to “General and administrative expenses” in the accompanying condensed consolidated statements of operations and other comprehensive income (loss).
|
(b)
|
Primarily consists of the impact on earnings from litigation involving the Company, including actual or anticipated settlement and associated legal costs, which are included in “Other income, net” in the accompanying condensed consolidated statements of operations and other comprehensive income (loss).
|
|
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
|
▪
|
Proceeds from asset dispositions
|
▪
|
Distribution payments
|
|
|
▪
|
Redevelopment, renovation or expansion activities
|
|
|
▪
|
New development
|
|
|
▪
|
Repurchases of our common stock
|
Debt
|
|
Aggregate
Principal
Amount
|
|
Weighted
Average
Interest Rate
|
|
Maturity Date
|
|
Weighted
Average Years
to Maturity
|
|||
Fixed rate mortgages payable (a)
|
|
$
|
274,420
|
|
|
5.00
|
%
|
|
Various
|
|
4.6 years
|
|
|
|
|
|
|
|
|
|
|||
Unsecured notes payable:
|
|
|
|
|
|
|
|
|
|||
Senior notes – 4.12% due 2021
|
|
100,000
|
|
|
4.12
|
%
|
|
June 30, 2021
|
|
3.0 years
|
|
Senior notes – 4.58% due 2024
|
|
150,000
|
|
|
4.58
|
%
|
|
June 30, 2024
|
|
6.0 years
|
|
Senior notes – 4.00% due 2025
|
|
250,000
|
|
|
4.00
|
%
|
|
March 15, 2025
|
|
6.7 years
|
|
Senior notes – 4.08% due 2026
|
|
100,000
|
|
|
4.08
|
%
|
|
September 30, 2026
|
|
8.3 years
|
|
Senior notes – 4.24% due 2028
|
|
100,000
|
|
|
4.24
|
%
|
|
December 28, 2028
|
|
10.5 years
|
|
Total unsecured notes payable (a)
|
|
700,000
|
|
|
4.19
|
%
|
|
|
|
6.8 years
|
|
|
|
|
|
|
|
|
|
|
|||
Unsecured credit facility:
|
|
|
|
|
|
|
|
|
|||
Term loan due 2021 – fixed rate (b)
|
|
250,000
|
|
|
3.20
|
%
|
|
January 5, 2021
|
|
2.5 years
|
|
Revolving line of credit – variable rate
|
|
126,000
|
|
|
3.14
|
%
|
|
April 22, 2022 (c)
|
|
3.8 years
|
|
Total unsecured credit facility (a)
|
|
376,000
|
|
|
3.18
|
%
|
|
|
|
3.0 years
|
|
|
|
|
|
|
|
|
|
|
|||
Term Loan Due 2023 – fixed rate (a) (d)
|
|
200,000
|
|
|
2.96
|
%
|
|
November 22, 2023
|
|
5.4 years
|
|
|
|
|
|
|
|
|
|
|
|||
Total consolidated indebtedness
|
|
$
|
1,550,420
|
|
|
3.93
|
%
|
|
|
|
5.3 years
|
(a)
|
Fixed rate mortgages payable excludes mortgage premium of
$900
, discount of
$(558)
and capitalized loan fees of
$(495)
, net of accumulated amortization, as of
June 30, 2018
. Unsecured notes payable excludes discount of
$(793)
and capitalized loan fees of
$(3,152)
, net of accumulated amortization, as of
June 30, 2018
. Term loans exclude capitalized loan fees of
$(2,417)
, net of accumulated amortization, as of
June 30, 2018
. 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 London Interbank Offered Rate (LIBOR)-based variable rate debt that has been swapped to a fixed rate of 2.00% plus a credit spread based on a leverage grid ranging from 1.20% to 1.70% through January 5, 2021. The applicable credit spread was 1.20% as of
June 30, 2018
.
|
(c)
|
We have 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 0.075% of the commitment amount being extended.
|
(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, 2018
.
|
|
|
|
|
|
|
|
|
Leverage-Based Pricing
|
|
Investment Grade Pricing
|
||
Unsecured Credit Facility
|
|
Maturity Date
|
|
Extension Option
|
|
Extension Fee
|
|
Credit Spread
|
Facility Fee
|
|
Credit Spread
|
Facility Fee
|
$250,000 unsecured term loan
|
|
1/5/2021
|
|
N/A
|
|
N/A
|
|
1.20% - 1.70%
|
N/A
|
|
0.90% - 1.75%
|
N/A
|
$850,000 unsecured revolving line of credit
|
|
4/22/2022
|
|
2 six month
|
|
0.075%
|
|
1.05% - 1.50%
|
0.15% - 0.30%
|
|
0.825%-1.55%
|
0.125% - 0.30%
|
Term Loan Due 2023
|
|
Maturity Date
|
|
Leverage-Based Pricing
Credit Spread
|
|
Investment Grade Pricing
Credit Spread
|
$200,000 unsecured term loan
|
|
11/22/2023
|
|
1.70% – 2.55%
|
|
1.50% – 2.45%
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgages payable (a)
|
$
|
2,098
|
|
|
$
|
25,257
|
|
|
$
|
3,923
|
|
|
$
|
22,820
|
|
|
$
|
157,216
|
|
|
$
|
63,106
|
|
|
$
|
274,420
|
|
|
$
|
279,680
|
|
Fixed rate term loans (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|
200,000
|
|
|
450,000
|
|
|
455,242
|
|
||||||||
Unsecured notes payable (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
—
|
|
|
600,000
|
|
|
700,000
|
|
|
670,042
|
|
||||||||
Total fixed rate debt
|
2,098
|
|
|
25,257
|
|
|
3,923
|
|
|
372,820
|
|
|
157,216
|
|
|
863,106
|
|
|
1,424,420
|
|
|
1,404,964
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Variable rate revolving line of credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126,000
|
|
|
—
|
|
|
126,000
|
|
|
126,000
|
|
||||||||
Total debt (d)
|
$
|
2,098
|
|
|
$
|
25,257
|
|
|
$
|
3,923
|
|
|
$
|
372,820
|
|
|
$
|
283,216
|
|
|
$
|
863,106
|
|
|
$
|
1,550,420
|
|
|
$
|
1,530,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average interest rate on debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed rate debt
|
5.09
|
%
|
|
7.29
|
%
|
|
4.62
|
%
|
|
3.56
|
%
|
|
5.00
|
%
|
|
3.91
|
%
|
|
4.00
|
%
|
|
|
|||||||||
Variable rate debt (e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.14
|
%
|
|
—
|
|
|
3.14
|
%
|
|
|
|||||||||
Total
|
5.09
|
%
|
|
7.29
|
%
|
|
4.62
|
%
|
|
3.56
|
%
|
|
4.17
|
%
|
|
3.91
|
%
|
|
3.93
|
%
|
|
|
(a)
|
Excludes mortgage premium of
$900
and discount of
$(558)
, net of accumulated amortization, as of
June 30, 2018
.
|
(b)
|
$250,000 of LIBOR-based variable rate debt has been swapped to a fixed rate through three interest rate swaps. The swaps effectively convert one-month floating rate LIBOR to a fixed rate of 2.00% through January 5, 2021. 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
$(793)
, net of accumulated amortization, as of
June 30, 2018
.
|
(d)
|
The weighted average years to maturity of consolidated indebtedness was
5.3 years
as of
June 30, 2018
. Total debt excludes capitalized loan fees of
$(6,064)
, net of accumulated amortization, as of
June 30, 2018
, which are included as a reduction to the respective debt balances.
|
(e)
|
Represents interest rates as of
June 30, 2018
.
|
|
|
Number of
Properties Sold (a)
|
|
Square
Footage
|
|
Consideration
|
|
Aggregate
Proceeds, Net (b)
|
|
Debt
Extinguished
|
|
||||||||
2018 Dispositions (through June 30, 2018)
|
|
9
|
|
|
1,773,000
|
|
|
$
|
192,950
|
|
|
$
|
175,136
|
|
|
$
|
10,750
|
|
|
2017 Dispositions
|
|
47
|
|
|
5,810,700
|
|
|
$
|
917,808
|
|
|
$
|
896,301
|
|
|
$
|
27,353
|
|
(c)
|
(a)
|
2018 dispositions include the disposition of Crown Theater, which was classified as held for sale as of December 31, 2017. 2017 dispositions include the dispositions of CVS Pharmacy – Sylacauga, AL and Century III Plaza, including the Home Depot parcel, both of which were classified as held for sale as of December 31, 2016.
|
(b)
|
Represents total consideration net of transaction costs, as well as capital and tenant-related costs credited to the buyer at close, as applicable. 2017 dispositions include proceeds of $54,087, which were temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges as of December 31, 2017.
|
(c)
|
Excludes $214,505 of mortgages payable repayments or defeasances completed prior to disposition of the respective property for the year ended December 31, 2017.
|
|
|
Number of
Assets Acquired
|
|
Square
Footage
|
|
Acquisition
Price
|
|
Mortgage
Debt
|
||||||
2017 Acquisitions (a)
|
|
10
|
|
|
443,800
|
|
|
$
|
202,915
|
|
|
$
|
—
|
|
(a)
|
2017 acquisitions include the purchase of the following: 1) the fee interest in our Carillon multi-tenant retail property which was previously subject to a ground lease with a third party, 2) the remaining five phases under contract, including the development rights for additional residential units, at our One Loudoun Downtown multi-tenant retail operating property that was acquired in phases as the seller completed construction on stand-alone buildings at the property and 3) a multi-tenant retail outparcel located at our Southlake Town Square multi-tenant retail operating property. The total number of properties in our portfolio was not affected by these transactions.
|
|
|
Six Months Ended June 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
Change
|
||||||
Net cash provided by operating activities
|
|
$
|
88,703
|
|
|
$
|
130,717
|
|
|
$
|
(42,014
|
)
|
Net cash provided by investing activities
|
|
147,231
|
|
|
265,321
|
|
|
(118,090
|
)
|
|||
Net cash used in financing activities
|
|
(283,248
|
)
|
|
(346,741
|
)
|
|
63,493
|
|
|||
(Decrease) increase in cash, cash equivalents and restricted cash
|
|
(47,314
|
)
|
|
49,297
|
|
|
(96,611
|
)
|
|||
Cash, cash equivalents and restricted cash, at beginning of period
|
|
86,335
|
|
|
82,349
|
|
|
|
||||
Cash, cash equivalents and restricted cash, at end of period
|
|
$
|
39,021
|
|
|
$
|
131,646
|
|
|
|
•
|
a $30,566 decrease in NOI, consisting of a decrease in NOI from properties that were sold or held for sale in 2017 and 2018 and other properties not included in our same store portfolio of $32,523, partially offset by an increase in Same Store NOI of $1,957; and
|
•
|
ordinary course fluctuations in working capital accounts;
|
•
|
a $6,105 decrease in cash paid for leasing fees and inducements;
|
•
|
a $3,267 decrease in cash paid for interest, excluding debt prepayment fees; and
|
•
|
an $1,873 decrease in cash bonuses paid.
|
•
|
a $217,871 decrease in proceeds from the sales of investment properties; and
|
•
|
a $1,332 increase in capital expenditures and tenant improvements;
|
•
|
a $99,434 decrease in cash paid to purchase investment properties; and
|
•
|
a $1,679 decrease in investment in developments in progress.
|
•
|
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 $75,697 decrease in cash paid to repurchase common shares through our common share repurchase program;
|
•
|
a $25,753 decrease in principal payments on mortgages payable;
|
•
|
a $10,524 decrease in distributions paid as a result of a decrease in common shares outstanding due to the repurchase of common shares through our share repurchase program during 2017 and the redemption of our 7.00% Series A cumulative preferred stock in December 2017; and
|
•
|
a $3,571 decrease in debt prepayment fees;
|
•
|
a $200,000 decrease in proceeds from the issuance of unsecured term loans related to the funding of the Term Loan Due 2023 in January 2017;
|
•
|
a $186,000 decrease in net proceeds from our unsecured revolving line of credit;
|
•
|
the $100,000 repayment of our unsecured term loan due 2018 during the
six
months ended
June 30, 2018
; and
|
•
|
a $5,383 increase in the payment of loan fees and deposits.
|
•
|
closed on the first phase of the sale of a land parcel, which included rights to develop eight residential units, at One Loudoun Downtown, a multi-tenant retail operating property located in Ashburn, Virginia, for a sales price of $1,800. The sale of land will occur in three phases and will include the rights to develop a total of 30 residential units for a total sales price of $6,800;
|
•
|
entered into a development joint venture agreement for the expansion of pads G and H at One Loudoun Downtown. The project encompasses the construction of 378 residential units and up to 80,000 square feet of commercial space. The joint venture facilitates the construction and management of the residential units and construction of a portion of the commercial space, which will be delivered to us once complete; and
|
•
|
declared the cash dividend for the third quarter of 2018 of $0.165625 per share on our outstanding Class A common stock, which will be paid on October 10, 2018 to Class A common shareholders of record at the close of business on September 25, 2018.
|
|
|
Notional
Amount
|
|
Maturity Date
|
|
Fair Value of
Derivative Asset
|
||||
Fixed rate portion of Unsecured Credit Facility
|
|
$
|
250,000
|
|
|
January 5, 2021
|
|
$
|
3,974
|
|
Term Loan Due 2023
|
|
200,000
|
|
|
November 22, 2018
|
|
725
|
|
||
|
|
$
|
450,000
|
|
|
|
|
$
|
4,699
|
|
(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, 2018 to April 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
264,057
|
|
May 1, 2018 to May 31, 2018
|
|
4
|
|
|
$
|
11.46
|
|
|
—
|
|
|
$
|
264,057
|
|
June 1, 2018 to June 30, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
264,057
|
|
Total
|
|
4
|
|
|
$
|
11.46
|
|
|
—
|
|
|
$
|
264,057
|
|
(a)
|
As disclosed on the Forms 8-K dated December 15, 2015 and December 14, 2017, represents the amount outstanding under our $500,000 common stock repurchase program, which has no scheduled expiration date.
|
Exhibit No.
|
|
Description
|
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
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, 2018 and December 31, 2017, (ii) Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the Three-Month Periods and Six-Month Periods Ended June 30, 2018 and 2017, (iii) Condensed Consolidated Statements of Equity for the Six-Month Periods Ended June 30, 2018 and 2017, (iv) Condensed Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 2018 and 2017, and (v) Notes to Condensed Consolidated Financial Statements.
|
By:
|
/s/ STEVEN P. GRIMES
|
|
|
|
Steven P. Grimes
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
Date:
|
August 1, 2018
|
|
|
By:
|
/s/ JULIE M. SWINEHART
|
|
|
|
Julie M. Swinehart
|
|
Executive Vice President,
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial Officer and
|
|
Principal Accounting Officer)
|
Date:
|
August 1, 2018
|
(a)
|
The definition of “Capitalization Rate” in Section 1.1 thereof is hereby amended and restated in its entirety as follows:
|
(b)
|
The definition of “Existing KB/WF Agreement” in Section 1.1 is hereby amended and restated in its entirety as follows:
|
(c)
|
The definition of “LIBOR Base Rate” in Section 1.1 thereof is hereby amended and restated in its entirety as follows:
|
(d)
|
The definition of “Total Asset Value” in Section 1.1 thereof is hereby amended and restated in its entirety as follows:
|
(e)
|
The following new definition is added to Section 1.1 in the appropriate alphabetical order:
|
(f)
|
Section 3.3 of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
3.3.
|
Availability of Types of Advances; Inability to Determine Rates
.
|
(g)
|
Section 7.5 of the Loan Agreement is hereby amended and restated in its entirety as follows:
|
7.5.
|
Failure of the Borrower or any other member of the Consolidated Group to pay when due any Recourse Indebtedness with respect to which the aggregate recourse liability exceeds $50,000,000 (any such Recourse Indebtedness in excess of such limit being referred to herein as “Material Indebtedness”); or the default by the Borrower or any other member of the Consolidated Group in the performance of any term, provision or condition contained in any agreement, or any other event shall occur or condition exist, which causes, or permits, any such Material Indebtedness to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the stated maturity thereof.
|
(h)
|
Section 8.2(c) of the Loan Agreement is hereby amended to insert the following sentence at the end of the last textual paragraph thereof:
|
(a)
|
The Administrative Agent shall have received each of the following, in form and substance satisfactory to the Administrative Agent:
|
(i)
|
counterparts of this Amendment executed by each of the parties hereto;
|
(ii)
|
a Compliance Certificate dated as of the date hereof for the Borrower’s fiscal quarter ending December 31, 2017 signed by the chief executive officer, chief financial officer or treasurer of the Borrower;
|
(iii)
|
a certificate signed by an officer of the Borrower, setting forth in reasonable detail the calculation of the Unencumbered Pool Value as of the date hereof;
|
(iv)
|
the articles of incorporation of the Borrower certified as of a date not earlier than fifteen (15) days prior to the date hereof by the Maryland;
|
(v)
|
a certificate of good standing with respect to the Borrower issued as of a date not earlier than fifteen (15) days prior to the date hereof by the Secretary of State of Maryland;
|
(vi)
|
copies certified by the Secretary or Assistant Secretary (or other individual performing similar functions) of the Borrower of the by-laws of the Borrower (except that, if any such document delivered to the Administrative Agent pursuant to the Loan Agreement has not been modified or amended since the Closing Date and remains in full force and effect, a certificate so stating may be delivered in lieu of delivery of another copy of such document);
|
(vii)
|
such evidence as Administrative Agent may reasonably require to verify that Borrower has taken all necessary corporate action to
|
(viii)
|
evidence that all fees, expenses and reimbursement amounts due and payable to the Administrative Agent and any of the Lenders, including, without limitation, the fees and expenses of counsel to the Administrative Agent, have been paid; and
|
(ix)
|
copy of the duly executed Existing KB/WF Agreement.
|
(b)
|
In the good faith and reasonable judgment of the Administrative Agent:
|
(i)
|
there shall not have occurred or become known to the Administrative Agent or any of the Lenders any event, condition, situation or status since the date of the information contained in the financial and business projections, budgets, pro forma data and forecasts concerning the Borrower most recently delivered to the Administrative Agent and the Lenders prior to the date hereof that has had or could reasonably be expected to result in a Material Adverse Effect;
|
(ii)
|
no litigation, action, suit, investigation or other arbitral, administrative or judicial proceeding shall be pending or threatened in writing which could reasonably be expected to (A) result in a Material Adverse Effect or (B) restrain or enjoin, impose materially burdensome conditions on, or otherwise materially and adversely affect, the ability of the Borrower to fulfill its obligations under this Amendment and the Loan Documents to which it is a party;
|
(iii)
|
the Borrower shall have received all approvals, consents and waivers, and shall have made or given all necessary filings and notices as shall be required to consummate the transactions contemplated hereby without the occurrence of any default under, conflict with or violation of (A) any applicable law or (B) any material agreement, document or instrument to which the Borrower is a party or by which it or its respective properties is bound; and
|
(iv)
|
the Borrower shall have provided all information requested by the Administrative Agent and each Lender in order to comply with applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the Patriot Act.
|
(a)
|
All representations and warranties (subject in all cases to all materiality qualifiers and other exceptions in such representations and warranties) made in the Loan Agreement are true and correct on and as of the date hereof, except to the extent that such representations and warranties expressly refer to an earlier date (in which case such representations and warranties shall have been true and correct on and as of such earlier date) and except for changes in factual circumstances not prohibited under the Loan Documents.
|
(b)
|
There exists no Default or Unmatured Default.
|
(c)
|
This Amendment has been duly authorized, executed and delivered by Borrower so as to constitute the legal, valid and binding obligations of Borrower, enforceable in accordance with its terms, except as the same may be limited by insolvency, bankruptcy, reorganization or other laws relating to or affecting the enforcement of creditors’ rights or by general equitable principles.
|
(d)
|
No consent, approval, order or authorization of, or registration or filing with, any third party (other than any required filing with the Securities and Exchange Commission, which the Borrower agrees to file in a timely manner) is required in connection with the execution, delivery and carrying out of this Amendment or, if required, has been obtained.
|
(a)
|
The Borrower confirms that the Obligations remain outstanding without defense, set off, counterclaim, discount or charge of any kind as of the date of this Amendment. Except as expressly provided herein, this Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of any Loan Document, a waiver of any Unmatured Default or Default under any Loan Document, or a waiver or release of any of the Lenders’ or the Administrative Agent's rights and remedies (all of which are hereby reserved).
|
(b)
|
Without in any way establishing a course of dealing by the Administrative Agent or any Lender, the Borrower hereby ratifies, confirms and reaffirms its obligations under the Amended Loan Agreement and the other Loan Documents to which it is a party and each and every such Loan Document executed by the undersigned in connection with the Loan Agreement remains in full force and effect and is hereby ratified, confirmed and reaffirmed. This Amendment is not intended to and shall not constitute a novation.
|
|
BORROWER:
|
|
|
|
|
|
|
|
RETAIL PROPERTIES OF AMERICA, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ JULIE M. SWINEHART
|
|
|
Name:
|
Julie M. Swinehart
|
|
|
Title:
|
EVP, CFO & Treasurer
|
|
|
ADMINISTRATIVE AGENT AND LENDERS:
|
||
|
|
|
|
|
CAPITAL ONE, NATIONAL ASSOCIATION, as
|
||
|
Administrative Agent and as a Lender
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ FREDERICK H. DENECKE
|
|
|
|
Name: Frederick H. Denecke
|
|
|
|
Title: Senior Vice President
|
|
|
PNC BANK, NATIONAL ASSOCIATION, as a
|
||
|
Lender
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ JOEL DALSON
|
|
|
|
Print Name: Joel Dalson
|
|
|
|
Title: Senior Vice President
|
|
|
TD BANK, N.A., as a Lender
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ RORY DESMOND
|
|
|
|
Print Name: Rory Desmond
|
|
|
|
Title: Vice President
|
|
|
REGIONS BANK, as a Lender
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ MICHAEL EVANS
|
|
|
|
Print Name: Michael Evans
|
|
|
|
Title: Senior Vice President
|
|
|
BRANCH BANKING & TRUST COMPANY, as a
|
||
|
Lender
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ KENNETH M. BLACKWELL
|
|
|
|
Print Name: Kenneth M. Blackwell
|
|
|
|
Title: Senior Vice President
|
|
RETAIL PROPERTIES OF AMERICA, INC.
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ STEVEN P. GRIMES
|
|
Date:
|
July 30, 2018
|
|
|
|
|
|
Title:
|
CEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTIVE
|
|
|
|
|
/s/ JULIE M. SWINEHART
|
|
Date:
|
July 30, 2018
|
EMPLOYEE
|
|
RETAIL PROPERTIES OF
AMERICA, INC.
|
||
|
|
By:
|
|
|
|
|
|
|
|
Date:
|
|
|
Date:
|
|
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
|
|
Chief Executive Officer
|
|
|
Date:
|
August 1, 2018
|
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/ JULIE M. SWINEHART
|
|
|
|
Julie M. Swinehart
|
|
Executive Vice President,
|
|
Chief Financial Officer and Treasurer
|
|
|
Date:
|
August 1, 2018
|
(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
|
|
Chief Executive Officer
|
|
|
Date:
|
August 1, 2018
|
|
|
By:
|
/s/ JULIE M. SWINEHART
|
|
|
|
Julie M. Swinehart
|
|
Executive Vice President,
|
|
Chief Financial Officer and Treasurer
|
|
|
Date:
|
August 1, 2018
|