Investments (Tables)
|
3 Months Ended |
Mar. 31, 2019 |
|---|
| Real Estate [Abstract] |
|
| Summary of Real Estate and Loan Activity |
During the three months ended March 31, 2019, the Company had the following owned real estate activity, net of accumulated depreciation and amortization (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | Number of Properties | | Dollar Amount of Investments | | Held in Use | | Held for Sale | | Total | | Held in Use | | Held for Sale | | Total | Gross balance, December 31, 2018 | 1,459 |
| | 3 |
| | 1,462 |
| | $ | 5,054,524 |
| | $ | 22,064 |
| | $ | 5,076,588 |
| Acquisitions/improvements (1)(2) | 22 |
| | — |
| | 22 |
| | 179,842 |
| | — |
| | 179,842 |
| Dispositions of real estate (3)(4) | (6 | ) | | (1 | ) | | (7 | ) | | (19,229 | ) | | (12,669 | ) | | (31,898 | ) | Transfers to Held for Sale | (15 | ) | | 15 |
| | — |
| | (107,723 | ) | | 107,723 |
| | — |
| Transfers from Held for Sale | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Impairments | — |
| | — |
| | — |
| | 334 |
| | (4,026 | ) | | (3,692 | ) | Write-off of gross lease intangibles | — |
| | — |
| | — |
| | (2,431 | ) | | — |
| | (2,431 | ) | Gross balance, March 31, 2019 | 1,460 |
| | 17 |
| | 1,477 |
| | 5,105,317 |
| | 113,092 |
| | 5,218,409 |
| Accumulated depreciation | | | | | | | (636,780 | ) | | (14,665 | ) | | (651,445 | ) | Accumulated amortization | | | | | | | (104,412 | ) | | (4,088 | ) | | (108,500 | ) | Net balance, March 31, 2019 (5) | | | | | | | $ | 4,364,125 |
| | $ | 94,339 |
| | $ | 4,458,464 |
|
(1) Includes investments of $18.3 million in revenue producing capitalized expenditures, as well as $1.3 million of non-revenue producing capitalized expenditures as of March 31, 2019. (2) The acquisition of 20 properties were completed as sales-lease back transactions, representing $147.2 million of investment, during the three months ended March 31, 2019. (3) For the three months ended March 31, 2019, the total (loss) gain on disposal of assets for properties held in use and held for sale was $2.8 million and $5.9 million, respectively. (4) Includes one deed-in-lieu properties with a real estate investment of $0.8 million that were transferred to the lender during the three months ended March 31, 2019. | | (5) | Reconciliation of total owned investments to the accompanying consolidated balance sheet at March 31, 2019 is as follows: |
| | | | | Held in Use land and buildings, net of accumulated depreciation | $ | 4,167,515 |
| Intangible lease assets, net | 291,095 |
| Real estate assets under direct financing leases, net | 20,320 |
| Real estate assets held for sale, net | 94,339 |
| Intangible lease liabilities, net | (114,805 | ) | Net balance | $ | 4,458,464 |
|
During the three months ended March 31, 2019, the Company had the following loan activity: | | | | | | | | | | | | | | | | | Mortgage Loans | | Other Notes | | | | Properties | | Investment | | Investment | | Total Investment | Principal, December 31, 2018 | 52 |
| | $ | 42,660 |
| | $ | 2,082 |
| | $ | 44,742 |
| Acquisitions | — |
| | — |
| | — |
| | — |
| Dispositions | — |
| | — |
| | — |
| | — |
| Principal payments and payoffs | (1 | ) | | (3,604 | ) | | (26 | ) | | (3,630 | ) | Allowance for loan losses | — |
| | — |
| | — |
| | — |
| Principal, March 31, 2019 | 51 |
| | $ | 39,056 |
| | $ | 2,056 |
| | $ | 41,112 |
|
|
| Schedule of Operating Lease Income |
The following table summarizes the components of rental income recognized on these operating leases in the accompanying consolidated statements of operations (in thousands): | | | | | | | | | | Three Months Ended
March 31, | | 2019 | | 2018 | Base cash rent | $ | 96,799 |
| | $ | 150,447 |
| Variable cash rent (including reimbursables) | 3,638 |
| | 5,530 |
| Straight-line rent, net of bad debt expense (1) | 2,907 |
| | 4,900 |
| Amortization of above- and below- market lease intangibles, net (2) | 723 |
| | 1,153 |
| Total rental income | $ | 104,067 |
| | $ | 162,030 |
|
| | (1) | As a result of the Company's adoption of ASU 2016-02 on January 1, 2019, the Company reclassified bad debt expense to rental income on a prospective basis. See Note 2 for additional detail. |
| | (2) | Excludes amortization of in-place leases of $6.7 million and $10.0 million for the three months ended March 31, 2019 and 2018, respectively, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. |
|
| Schedule of Minimum Future Contractual Rent to be Received from Operating Lease |
Scheduled minimum future contractual rent to be received under the remaining non-cancelable term of these operating leases (including contractual fixed rent increases occurring on or after April 1, 2019) at March 31, 2019 are as follows (in thousands): | | | | | | March 31,
2019 | Remainder of 2019 | $ | 286,400 |
| 2020 | 378,963 |
| 2021 | 360,762 |
| 2022 | 340,377 |
| 2023 | 319,112 |
| Thereafter | 2,304,511 |
| Total future minimum rentals | $ | 3,990,125 |
|
|
| Schedule of Lease Intangible Assets and Liabilities, Net of Accumulated Amortization |
The following table details lease intangible assets and liabilities, net of accumulated amortization (in thousands): | | | | | | | | | | March 31,
2019 | | December 31,
2018 | In-place leases | $ | 370,592 |
| | $ | 381,143 |
| Above-market leases | 68,704 |
| | 62,902 |
| Less: accumulated amortization | (148,201 | ) | | (149,582 | ) | Intangible lease assets, net | $ | 291,095 |
| | $ | 294,463 |
| | | | | Below-market leases | $ | 158,594 |
| | $ | 167,527 |
| Less: accumulated amortization | (43,789 | ) | | (47,365 | ) | Intangible lease liabilities, net | $ | 114,805 |
| | $ | 120,162 |
|
|
| Schedule of Components of Real Estate Investments Held Under Direct Financing Leases |
The components of real estate investments held under direct financing leases were as follows (in thousands): | | | | | | | | | | March 31,
2019 | | December 31,
2018 | Minimum lease payments receivable | $ | 5,025 |
| | $ | 5,390 |
| Estimated residual value of leased assets | 20,097 |
| | 20,097 |
| Unearned income | (4,802 | ) | | (5,198 | ) | Real estate assets under direct financing leases, net | $ | 20,320 |
| | $ | 20,289 |
|
|
| Schedule of Minimum Future Contractual Rent to be Received from Direct Financing Leases |
Scheduled minimum future payments to be received under the remaining non-cancelable term of these direct financing leases at March 31, 2019 are as follows (in thousands): | | | | | | March 31,
2019 | Remainder of 2019 | $ | 878 |
| 2020 | 578 |
| 2021 | 527 |
| 2022 | 541 |
| 2023 | 554 |
| Thereafter | 1,947 |
| Total future minimum rentals | $ | 5,025 |
|
|
| Schedule of Loans Receivable, Net of Premium and Allowance for Loan Losses |
The following table details loans receivable, net of premiums, discounts and allowance for loan losses (dollars in thousands): | | | | | | | | | | March 31,
2019 | | December 31,
2018 | Mortgage loans - principal | $ | 39,056 |
| | $ | 42,660 |
| Mortgage loans - premiums, net of amortization | 2,112 |
| | 2,527 |
| Allowance for loan losses | — |
| | — |
| Mortgages loans, net | 41,168 |
| | 45,187 |
| Other notes receivable - principal | 2,056 |
| | 2,082 |
| Other notes receivable - discounts, net of amortization | (209 | ) | | (225 | ) | Allowance for loan losses | — |
| | — |
| Other notes receivable, net | 1,847 |
| | 1,857 |
| Total loans receivable, net | $ | 43,015 |
| | $ | 47,044 |
|
|
| Summary of Total Impairment Losses Recognized |
The following table summarizes total impairment losses recognized in the accompanying consolidated statements of operations (in thousands): | | | | | | | | | | Three Months Ended March 31, | | 2019 | | 2018 | Real estate and intangible asset impairment | $ | 3,692 |
| | $ | 14,585 |
| Recovery of loans receivable, previously impaired | — |
| | (16 | ) | Total impairment loss | $ | 3,692 |
| | $ | 14,569 |
|
|