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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tier Reit, Inc. | NYSE:TIER | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 28.88 | 0 | 01:00:00 |
Maryland
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68-0509956
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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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5950 Sherry Lane, Suite 700, Dallas, Texas
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75225
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common stock, $.0001 par value per share
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New York Stock Exchange
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Large accelerated filer
ý
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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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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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market disruptions and economic conditions experienced by the U.S. economy or real estate industry as a whole and the local economic conditions in the markets in which our properties are located;
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our ability to renew expiring leases and lease vacant spaces at favorable rates or at all;
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the inability of tenants to continue paying their rent obligations due to bankruptcy, insolvency, or a general downturn in their businesses;
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•
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the availability of cash flow from operating activities to fund distributions and capital expenditures;
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our ability to raise capital in the future by issuing additional equity or debt securities, selling our assets, or otherwise to fund our future capital needs;
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the availability and terms of financing, including the impact of higher interest rates on the cost and/or availability of financing;
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our ability to strategically acquire, develop, or dispose of assets on favorable terms, or at all;
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our level of debt and the terms and limitations imposed on us by our debt agreements;
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our ability to retain our executive officers and other key personnel;
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•
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unfavorable changes in laws or regulations impacting our business or our assets; and
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factors that could affect our ability to qualify as a real estate investment trust for federal income tax purposes.
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lower the corporate income tax rate to 21% and lower Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”) withholding on certain capital gain dividends to 21%;
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provide noncorporate taxpayers with a deduction of up to 20% of certain income earned through partnerships and REITs for taxable years beginning before January 1, 2026;
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apply certain new limitations on net operating losses, which limitations may affect net operating losses generated by us or our taxable REIT subsidiaries (“TRSs”);
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expand the ability of businesses to deduct the cost of certain property investments in the year in which the property is purchased;
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impose new accounting rules that generally require us to recognize income items for federal income tax purposes no later than when we take the item into account for financial statement purposes, which may accelerate our recognition of certain income items;
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require a U.S. tax-exempt stockholder that is subject to tax on its unrelated business taxable income (“UBTI”) to separately compute its taxable income and loss for each unrelated trade or business activity for purposes of determining its UBTI; and
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generally lower tax rates for individuals and other noncorporate taxpayers for taxable years beginning before January 1, 2026, while limiting deductions such as miscellaneous itemized deductions and state and local tax deductions.
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the financial condition of our tenants may be adversely affected, which may result in us having to reduce rental rates in order to retain tenants;
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an increase in the number of bankruptcies or insolvency proceedings of our tenants and lease guarantors could delay our efforts to collect rent and any past due balances under the relevant leases, and ultimately could preclude collection of these sums;
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our ability to borrow on terms and conditions that we find acceptable may be limited, which could result in our investment operations generating lower overall economic returns and a reduced level of cash flow, which could potentially impact our ability to make distributions to our stockholders or pursue acquisition opportunities, among other things, and increase our interest expense;
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•
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the value of certain of our real estate assets may decrease below the amounts we paid for them, which would limit our ability to dispose of assets at attractive prices or to obtain debt financing secured by these assets; and
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the value and liquidity of short-term investments, if any, could be reduced as a result of the dislocation of the markets for our short-term investments and increased volatility in market rates for these investments or other factors.
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limiting our ability to borrow additional amounts for, among other things, working capital, capital expenditures, debt service requirements, execution of our business plan, or other purposes;
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limiting our ability to use operating cash flow in other areas of our business or to pay distributions;
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increasing our vulnerability to general adverse economic and industry conditions;
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limiting our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in governmental regulation;
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limiting our ability to fund capital expenditures, tenant improvements, and leasing commissions; and
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limiting our ability or increasing the costs to refinance our indebtedness.
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changes in the national, regional, and local economic climates, particularly in markets in which we have a concentration of properties;
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local office submarket conditions such as changes in the supply of, or demand for, space in properties similar to those that we own within a particular area;
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changes in the patterns of office use due to technological advances which may make telecommuting more prevalent;
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the attractiveness of our properties to potential tenants;
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changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive or otherwise reduce returns to stockholders;
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the financial stability of our tenants, including bankruptcies, financial difficulties, or lease defaults by our tenants;
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changes in operating costs and expenses, including costs for maintenance, insurance and real estate taxes, and our ability to control rents in light of such changes;
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the need to periodically fund the costs to repair, renovate, and re-lease space;
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earthquakes, tornadoes, hurricanes, and other natural disasters; civil unrest, terrorist acts, or acts of war; and public health emergencies, including the spread of infectious diseases, such as Ebola, any of which may result in uninsured or underinsured losses;
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changes in, or increased costs of compliance with, governmental regulations, including those governing usage, zoning, the environment, and taxes; and
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changes in accounting standards.
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we could become engaged in a dispute with any of our joint venture partners that might affect our ability to develop, finance, or operate a property and could lead to the sale of either party’s ownership interest or the property;
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we may not have sole decision-making authority with respect to the joint venture which could prevent us from taking actions that are in our best interests;
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our joint ventures may be subject to debt and any refinancing of such debt may require equity capital calls;
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our joint venture partners may default on their obligations necessitating that we fulfill their obligations ourselves;
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our joint venture partners may have different objectives than we have regarding the appropriate timing and terms of the development, sale, or refinancing of a property;
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our joint venture partners may be structured differently than us for tax purposes and this could create conflicts of interest;
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our joint venture partners may take actions that are not within our control, which could jeopardize our qualification as a REIT or the tax status of the joint venture, requiring us to pay taxes or subjecting properties owned by the joint venture to liabilities greater than those contemplated by the terms of the joint venture agreements;
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our joint venture partners may have competing interests in our markets that could create conflicts of interest; and
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our joint ventures may be unable to repay any amounts that we may loan to them.
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direct obligations issued by the U.S. Treasury;
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obligations issued or guaranteed by the U.S. government or its agencies;
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taxable municipal securities;
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obligations (including certificates of deposits) of banks and thrifts;
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commercial paper and other instruments consisting of short-term U.S. dollar denominated obligations issued by corporations and banks;
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repurchase agreements collateralized by corporate and asset-backed obligations;
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both registered and unregistered money market funds; and
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other highly rated short-term securities.
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disrupt the proper functioning of our networks and systems and therefore our operations and/or those of certain of our tenants;
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result in misstated financial reports, violations of loan covenants, missed reporting deadlines, and/or missed permitting deadlines;
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result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT;
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result in the unauthorized access to, and destruction, loss, theft, misappropriation, or release of proprietary, confidential, sensitive, or otherwise valuable information of ours or others, which others could use to compete against us or for disruptive, destructive, or otherwise harmful purposes and outcomes;
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result in our inability to maintain the building systems relied upon by our tenants for the efficient use of their leased space;
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require significant management attention and resources to remedy any damages that result;
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subject us to claims for breach of contract, damages, credits, penalties, or termination of leases or other agreements; or
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damage our reputation among our tenants and stockholders generally.
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actual or anticipated variations in our quarterly operating results or distributions;
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changes in our earnings estimates;
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publication of research reports about us or the real estate industry;
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increases in market interest rates that lead purchasers of our shares to demand a higher yield;
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changes in market valuations of similar companies;
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adverse market reaction to any additional debt we incur in the future;
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additions or departures of key management personnel;
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actions by institutional stockholders;
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speculation in the press or investment community;
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the realization of any of the other risk factors presented in this Annual Report on Form 10-K or in our other public filings;
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the extent of investor interest in our securities;
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the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate based companies;
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our underlying asset value;
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investor confidence in the stock and bond markets generally;
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changes in tax laws;
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future equity issuances or the perception that such equity issuances may occur;
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failure to meet earnings estimates;
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failure to maintain our status as a REIT; and
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general market, economic, and political conditions.
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any person who beneficially owns 10% or more of the voting power of the then outstanding voting stock of the corporation; or
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an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.
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80% of the votes entitled to be cast by holders of the then outstanding shares of voting stock of the corporation; and
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two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.
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one-tenth or more but less than one-third of all voting power;
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one-third or more but less than a majority of all voting power; or
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a majority or more of all voting power.
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we would not be allowed to deduct distributions paid to stockholders when computing our taxable income and we would no longer be required to make distributions to our stockholders;
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we would be subject to federal income tax (including any applicable alternative minimum tax for taxable years ending on or prior to December 31, 2017) on our taxable income at regular corporate rates;
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we would become subject to additional state income tax provisions and owe greater amounts of state income tax on our taxable income;
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we would be disqualified from being taxed as a REIT for the four years following the year during which we failed to qualify, unless entitled to relief under certain statutory provisions; and
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we may be required to borrow additional funds during unfavorable market conditions or sell some of our assets in order to pay corporate tax obligations.
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We are subject to tax on any undistributed income. We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year plus amounts retained for which federal income tax was paid are less than the sum of 85% of our ordinary income, 95% of our capital gain net income, and 100% of our undistributed income from prior years.
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If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.
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If we sell a property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax.
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We will be subject to a 100% penalty tax on certain amounts if the economic arrangements between our tenants, our taxable REIT subsidiaries, and us are not comparable to similar arrangements among unrelated parties.
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State laws may change so as to begin taxing REITs.
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we believe, although there can be no assurance that, all of our properties are adequately covered by insurance and suitable for their intended purposes;
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we have no current commitments for any material renovations, improvements, or development of our properties, except in accordance with planned budgets or anticipated insurance proceeds;
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our properties are located in markets where we are subject to competition in attracting new tenants and retaining current tenants; and
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depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the buildings, improvements, and related assets.
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Property Name
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Location
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Date Acquired/Completed
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Approximate
Rentable Square Footage (in thousands)
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Approximate % Leased
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Our
Ownership Interest
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Ownership Type
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||||
Operating office properties
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The Terrace Office Park
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Austin, TX
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06/2006
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619
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90.3
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%
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100.00
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%
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fee title
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Domain 2
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Austin, TX
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07/2015
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115
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100.0
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%
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100.00
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%
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fee title
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Domain 3
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Austin, TX
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07/2015
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179
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100.0
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%
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100.00
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%
|
|
fee title
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Domain 4
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Austin, TX
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07/2015
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153
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100.0
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%
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100.00
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%
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|
fee title
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Domain 7
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Austin, TX
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07/2015
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222
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|
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100.0
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%
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100.00
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%
|
|
fee title
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Domain 8 (1)
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Austin, TX
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07/2017
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291
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|
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100.0
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%
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50.00
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%
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joint venture
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5950 Sherry Lane
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Dallas, TX
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12/2014
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197
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|
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89.8
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%
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100.00
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%
|
|
fee title
|
|
Burnett Plaza
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Ft. Worth, TX
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02/2006
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1,025
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90.0
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%
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100.00
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%
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|
fee title
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Centreport Office Center
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Ft. Worth, TX
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06/2007
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133
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|
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85.0
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%
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100.00
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%
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|
fee title
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|
Legacy District One
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Plano, TX
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06/2017
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319
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100.0
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%
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100.00
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%
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|
fee title
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One BriarLake Plaza
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Houston, TX
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09/2008
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502
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|
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89.2
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%
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100.00
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%
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|
fee title
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Two BriarLake Plaza
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Houston, TX
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09/2014
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333
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|
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67.9
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%
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100.00
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%
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|
fee title
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One & Two Eldridge Place
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Houston, TX
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12/2006
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519
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72.6
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%
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100.00
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%
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fee title
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Three Eldridge Place
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Houston, TX
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11/2009
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305
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71.1
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%
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100.00
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%
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fee title
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Loop Central
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Houston, TX
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12/2007
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575
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83.8
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%
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100.00
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%
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fee title
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Bank of America Plaza
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Charlotte, NC
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10/2006
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891
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95.8
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%
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100.00
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%
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|
fee title
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Plaza at MetroCenter
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Nashville, TN
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12/2007
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361
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90.3
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%
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100.00
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%
|
|
fee title
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500 East Pratt (2)
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Baltimore, MD
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12/2007
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280
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92.9
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%
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100.00
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%
|
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leasehold
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Woodcrest Corporate Center
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Cherry Hill, NJ
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01/2006
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333
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99.1
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%
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100.00
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%
|
|
fee title
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111 Woodcrest
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Cherry Hill, NJ
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11/2007
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53
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84.9
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%
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100.00
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%
|
|
fee title
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|
Total operating office properties
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|
|
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7,405
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Non-operating property
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|
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||||||
Fifth Third Center (3)
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Columbus, OH
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12/2007
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331
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|
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50.5
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%
|
|
100.00
|
%
|
|
fee title
|
|
Total properties
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|
|
|
|
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7,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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||||
Development properties
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|
|
|
|
|
|
|
|
|
|
|
|
||||
Domain 11
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|
Austin, TX
|
|
|
|
324
|
|
|
98.0
|
%
|
|
100.00
|
%
|
|
fee title
|
|
Third + Shoal (1)
|
|
Austin, TX
|
|
|
|
345
|
|
|
73.0
|
%
|
|
47.50
|
%
|
|
joint venture
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(3)
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The non-recourse loan secured by Fifth Third Center is currently in default and we are working with the lender to dispose of this office property on their behalf.
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Year of Lease Expiration
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Number of Leases Expiring (1)
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Rentable
Square Feet
Expiring
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Annualized
Rent (2)
|
|
Percentage of Rentable Square Feet
|
|
Percentage of Annualized Expiring Rent
|
|
2018
|
|
45
|
|
314
|
|
$9,214
|
|
4%
|
|
4%
|
|
2019
|
|
45
|
|
657
|
|
$23,241
|
|
9%
|
|
11%
|
|
2020
|
|
42
|
|
803
|
|
$26,233
|
|
12%
|
|
12%
|
|
2021
|
|
47
|
|
885
|
|
$27,987
|
|
13%
|
|
13%
|
|
2022
|
|
30
|
|
430
|
|
$16,860
|
|
6%
|
|
8%
|
|
2023
|
|
25
|
|
606
|
|
$22,944
|
|
9%
|
|
10%
|
|
2024
|
|
12
|
|
493
|
|
$19,793
|
|
7%
|
|
9%
|
|
2025
|
|
22
|
|
185
|
|
$7,401
|
|
3%
|
|
3%
|
|
2026
|
|
15
|
|
852
|
|
$31,935
|
|
12%
|
|
14%
|
|
2027
|
|
6
|
|
423
|
|
$17,967
|
|
6%
|
|
8%
|
(1)
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Leases with an expiration on the last day of the year are considered leased at the last day of the year (i.e., expiring on the first day of the following year).
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(2)
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Represents the cash rental rate of base rents, including tenant reimbursements, in the final month prior to the expiration multiplied by 12, without consideration of tenant contraction or termination rights. Tenant reimbursements generally include payment of real estate taxes, operating expenses, and common area maintenance and utility charges.
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|
Share Price High
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Share Price Low
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Distributions declared per share of
common stock
|
First Quarter 2017
|
$18.80
|
|
$16.67
|
|
$0.18
|
Second Quarter 2017
|
$18.61
|
|
$15.96
|
|
$0.18
|
Third Quarter 2017
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$19.50
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$16.67
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$0.18
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Fourth Quarter 2017
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$20.72
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$18.83
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$0.18
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|
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First Quarter 2016
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$15.60
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$12.52
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$0.18
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Second Quarter 2016
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$16.66
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|
$13.29
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$0.18
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Third Quarter 2016
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$17.81
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$15.07
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$0.18
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Fourth Quarter 2016
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$17.44
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$14.06
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$0.18
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Plan Category
|
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights (1)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights (2)
|
|
Number of securities remaining
available for future issuance
under equity compensation
plans
|
||
Equity compensation plans approved by security holders - 2015 Equity Incentive Plan (3)
|
|
89,212
|
|
|
N/A
|
|
1,659,308
|
|
Equity compensation plans approved by security holders - 2005 Equity Incentive Plan (4)
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
Equity compensation plans not approved by security holders
|
|
N/A
|
|
|
N/A
|
|
N/A
|
|
Total
|
|
89,212
|
|
|
N/A
|
|
1,659,308
|
|
(1)
|
Includes restricted stock units issued to independent directors and a target number of restricted stock units granted to employees under our long-term incentive program, which are subject to vesting based on our total stockholder return on an absolute basis during a measurement period.
|
(2)
|
Restricted stock units are not included in the weighted-average exercise price calculation because there is no exercise price associated with restricted stock units.
|
(3)
|
Excludes 114,564 shares of restricted stock with restrictions that lapse from December 2018 to May 2020.
|
(4)
|
Excludes 66,227 shares of restricted stock with restrictions that lapse in January 2018 and January 2019.
|
|
Period Ending
|
|||||||||||
Index
|
07/23/15
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
||||
TIER REIT, Inc.
|
$
|
100.00
|
|
$
|
82.81
|
|
$
|
102.37
|
|
$
|
124.90
|
|
S&P 500
|
$
|
100.00
|
|
$
|
98.20
|
|
$
|
109.94
|
|
$
|
133.94
|
|
Russell 2000
|
$
|
100.00
|
|
$
|
91.87
|
|
$
|
111.44
|
|
$
|
127.77
|
|
SNL U.S. REIT Equity
|
$
|
100.00
|
|
$
|
104.79
|
|
$
|
114.10
|
|
$
|
123.56
|
|
|
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum number of shares that may yet be purchased under the plans or programs
|
October 2017
|
|
—
|
|
—
|
|
not applicable
|
|
not applicable
|
November 2017
|
|
—
|
|
—
|
|
not applicable
|
|
not applicable
|
December 2017
|
|
39,914
|
|
$20.39
|
|
not applicable
|
|
not applicable
|
As of December 31
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Total assets
|
|
$
|
1,581,138
|
|
|
$
|
1,552,540
|
|
|
$
|
1,864,891
|
|
|
$
|
2,203,802
|
|
|
$
|
2,429,491
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes payable, net
|
|
$
|
794,538
|
|
|
$
|
826,783
|
|
|
$
|
1,071,571
|
|
|
$
|
1,186,704
|
|
|
$
|
1,483,633
|
|
Other liabilities
|
|
109,029
|
|
|
105,241
|
|
|
115,501
|
|
|
228,938
|
|
|
142,599
|
|
|||||
Series A Convertible Preferred Stock
|
|
—
|
|
|
—
|
|
|
2,700
|
|
|
4,626
|
|
|
2,700
|
|
|||||
Stockholders’ equity
|
|
676,803
|
|
|
618,546
|
|
|
673,617
|
|
|
782,589
|
|
|
799,732
|
|
|||||
Noncontrolling interests (1)
|
|
768
|
|
|
1,970
|
|
|
1,502
|
|
|
945
|
|
|
827
|
|
|||||
Total liabilities and equity
|
|
$
|
1,581,138
|
|
|
$
|
1,552,540
|
|
|
$
|
1,864,891
|
|
|
$
|
2,203,802
|
|
|
$
|
2,429,491
|
|
Year Ended December 31
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Rental revenue
|
|
$
|
216,461
|
|
|
$
|
242,818
|
|
|
$
|
282,365
|
|
|
$
|
288,067
|
|
|
$
|
289,071
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss from continuing operations before gains
|
|
(22,237
|
)
|
|
(51,629
|
)
|
|
(95,430
|
)
|
|
(74,855
|
)
|
|
(57,083
|
)
|
|||||
Discontinued operations (2)
|
|
—
|
|
|
—
|
|
|
16,790
|
|
|
59,327
|
|
|
56,964
|
|
|||||
Gain on sale of assets
|
|
92,396
|
|
|
22,176
|
|
|
44,477
|
|
|
—
|
|
|
16,102
|
|
|||||
Gain on remeasurement of investment in unconsolidated entities
|
|
14,168
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
|
84,327
|
|
|
(29,453
|
)
|
|
(34,163
|
)
|
|
(15,528
|
)
|
|
15,983
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noncontrolling interests in continuing operations
|
|
(41
|
)
|
|
36
|
|
|
159
|
|
|
132
|
|
|
60
|
|
|||||
Noncontrolling interests in discontinued operations
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(120
|
)
|
|
(491
|
)
|
|||||
Dilution (accretion) of Series A Convertible Preferred Stock
|
|
—
|
|
|
—
|
|
|
1,926
|
|
|
(1,926
|
)
|
|
—
|
|
|||||
Net income (loss) attributable to common stockholders
|
|
$
|
84,286
|
|
|
$
|
(29,417
|
)
|
|
$
|
(32,108
|
)
|
|
$
|
(17,442
|
)
|
|
$
|
15,552
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by (used in) operating activities
|
|
$
|
60,416
|
|
|
$
|
51,303
|
|
|
$
|
(3,880
|
)
|
|
$
|
25,140
|
|
|
$
|
45,151
|
|
Cash provided by investing activities
|
|
$
|
163,979
|
|
|
$
|
230,137
|
|
|
$
|
200,242
|
|
|
$
|
138,952
|
|
|
$
|
424,609
|
|
Cash used in financing activities
|
|
$
|
(224,478
|
)
|
|
$
|
(282,007
|
)
|
|
$
|
(240,168
|
)
|
|
$
|
(204,831
|
)
|
|
$
|
(451,557
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Continuing operations
|
|
$
|
1.76
|
|
|
$
|
(0.62
|
)
|
|
$
|
(1.00
|
)
|
|
$
|
(1.54
|
)
|
|
$
|
(0.82
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.34
|
|
|
1.19
|
|
|
1.13
|
|
|||||
Basic income (loss) per common share
|
|
$
|
1.76
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted income (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Continuing operations
|
|
$
|
1.75
|
|
|
$
|
(0.62
|
)
|
|
$
|
(1.00
|
)
|
|
$
|
(1.54
|
)
|
|
$
|
(0.82
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.34
|
|
|
1.19
|
|
|
1.13
|
|
|||||
Diluted income (loss) per common share
|
|
$
|
1.75
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Distributions declared to common stockholders
per share
|
|
$
|
0.72
|
|
|
$
|
0.72
|
|
|
$
|
0.54
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of properties (3)
|
|
21
|
|
|
30
|
|
|
36
|
|
|
37
|
|
|
38
|
|
|||||
Total rentable square feet (3)
|
|
7,736
|
|
|
10,435
|
|
|
12,381
|
|
|
14,304
|
|
|
15,501
|
|
(1)
|
Noncontrolling interests reflect the proportionate interest not owned by us of certain of our real estate properties, limited partnership interests in Tier OP held by third parties, and restricted stock units issued to our independent directors.
|
(2)
|
Effective January 1, 2015, we adopted Financial Accounting Standards Board (“FASB”) guidance that changes the criteria for reporting a discontinued operation. This adoption impacts the comparability of our financial statements as disposals of individual operating properties generally no longer qualify as discontinued operations.
|
(3)
|
Reflects all properties owned at the end of each year. This number includes properties held for sale and excludes properties under development.
|
|
Renewal
|
|
Expansion
|
|
New
|
|
Total
|
||||
Square feet leased
|
918,000
|
|
|
62,000
|
|
|
312,000
|
|
|
1,292,000
|
|
Weighted average lease term (in years)
|
5.5
|
|
|
5.8
|
|
|
7.6
|
|
|
6.0
|
|
Increase in weighted average net rental rates per square foot per year (1)
|
$3.80
|
|
$6.86
|
|
$6.35
|
|
$4.51
|
||||
% increase in rental rates per square foot per year
|
33
|
%
|
|
34
|
%
|
|
41
|
%
|
|
35
|
%
|
Leasing cost per square foot per year (2)
|
$2.90
|
|
$6.02
|
|
$7.78
|
|
$4.71
|
(1)
|
Weighted average net rental rates are calculated as the straight-lined fixed base rental amount paid by a tenant under the terms of their related lease agreements, less any portion of that base rent used to offset real estate taxes, utility charges, and other operating expenses incurred in connection with the leased space, weighted for the relative square feet under the lease. Increase reflects change in net rental rates from the lease previously occupying the specific space.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
|
$
|
84,327
|
|
|
$
|
(29,453
|
)
|
|
$
|
(34,163
|
)
|
Noncontrolling interests
|
|
(41
|
)
|
|
36
|
|
|
129
|
|
|||
Dilution of Series A Convertible Preferred Stock
|
|
—
|
|
|
—
|
|
|
1,926
|
|
|||
Adjustments (1):
|
|
|
|
|
|
|
||||||
Real estate depreciation and amortization from consolidated properties
|
|
94,296
|
|
|
111,122
|
|
|
122,230
|
|
|||
Real estate depreciation and amortization from unconsolidated properties
|
|
1,377
|
|
|
8,258
|
|
|
6,985
|
|
|||
Real estate depreciation and amortization - noncontrolling interests
|
|
—
|
|
|
(6
|
)
|
|
(20
|
)
|
|||
Impairment of depreciable real estate assets
|
|
5,250
|
|
|
8,977
|
|
|
132
|
|
|||
Gain on sale of depreciable real estate
|
|
(99,109
|
)
|
|
(22,236
|
)
|
|
(63,263
|
)
|
|||
Gain on remeasurement of investment in unconsolidated entities
|
|
(14,168
|
)
|
|
—
|
|
|
—
|
|
|||
Taxes associated with sale of depreciable real estate
|
|
—
|
|
|
(88
|
)
|
|
1,259
|
|
|||
Noncontrolling interests
|
|
6
|
|
|
(78
|
)
|
|
(116
|
)
|
|||
FFO attributable to common stockholders
|
|
71,938
|
|
|
76,532
|
|
|
35,099
|
|
|||
Acquisition expenses
|
|
—
|
|
|
—
|
|
|
1,863
|
|
|||
Severance charges
|
|
451
|
|
|
1,025
|
|
|
—
|
|
|||
Tender offer and listing costs
|
|
—
|
|
|
—
|
|
|
5,526
|
|
|||
Interest rate hedge ineffectiveness income (2)
|
|
(253
|
)
|
|
(572
|
)
|
|
—
|
|
|||
Loss on early extinguishment of debt
|
|
545
|
|
|
—
|
|
|
21,606
|
|
|||
Default interest (3)
|
|
2,443
|
|
|
2,468
|
|
|
980
|
|
|||
BHT Advisors termination fee and HPT Management buyout fee
|
|
—
|
|
|
—
|
|
|
10,301
|
|
|||
Noncontrolling interests
|
|
(2
|
)
|
|
(2
|
)
|
|
(70
|
)
|
|||
Dilution of Series A Convertible Preferred Stock
|
|
—
|
|
|
—
|
|
|
(1,926
|
)
|
|||
FFO attributable to common stockholders, excluding certain items
|
|
$
|
75,122
|
|
|
$
|
79,451
|
|
|
$
|
73,379
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding - basic
|
|
47,538
|
|
|
47,406
|
|
|
48,960
|
|
|||
Weighted average common shares outstanding - diluted (4)
|
|
47,883
|
|
|
47,819
|
|
|
49,148
|
|
|||
Net income (loss) per common share - diluted (4)
|
|
$
|
1.75
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.66
|
)
|
FFO per common share - diluted
|
|
$
|
1.50
|
|
|
$
|
1.60
|
|
|
$
|
0.71
|
|
FFO, excluding certain items, per common share - diluted
|
|
$
|
1.57
|
|
|
$
|
1.66
|
|
|
$
|
1.49
|
|
(1)
|
Includes our pro rata share of consolidated and unconsolidated amounts and the adjustments of continuing operations, as well as discontinued operations.
|
(2)
|
Interest rate swaps are adjusted to fair value through other comprehensive income (loss). However, because our interest rate swaps do not have a LIBOR
|
(3)
|
We have a non-recourse loan in default which subjects us to incur default interest at a rate that is 500 basis points higher than the stated interest rate. Although there can be no assurance, we anticipate that when this property is sold or when ownership of this property is conveyed to the lender, this default interest will be forgiven.
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2017
|
|
2016
|
||||
Same Store Revenue:
|
|||||||||
|
Rental revenue
|
$
|
170,997
|
|
|
$
|
173,005
|
|
|
|
|
Less:
|
|
|
|
||||
|
|
Lease termination fees
|
(463
|
)
|
|
(1,504
|
)
|
||
|
|
|
170,534
|
|
|
171,501
|
|
||
|
|
|
|
|
|
||||
Same Store Expenses:
|
|
|
|
||||||
|
|
Property operating expenses (less tenant improvement demolition costs)
|
44,872
|
|
|
46,375
|
|
||
|
|
Real estate taxes
|
28,463
|
|
|
29,154
|
|
||
|
|
Property management fees
|
91
|
|
|
192
|
|
||
|
Property Expenses
|
73,426
|
|
|
75,721
|
|
|||
Same Store NOI - consolidated properties
|
97,108
|
|
|
95,780
|
|
||||
Same Store NOI - unconsolidated properties (at ownership %)
|
5,394
|
|
|
3,605
|
|
||||
Same Store NOI
|
$
|
102,502
|
|
|
$
|
99,385
|
|
||
|
|
|
|
||||||
Increase in Same Store NOI
|
3.1
|
%
|
|
|
|||||
|
|
|
|
||||||
Same Store NOI - consolidated properties
|
$
|
97,108
|
|
|
$
|
95,780
|
|
||
|
|
Less:
|
|
|
|
||||
|
|
Straight-line rent revenue adjustment
|
(5,558
|
)
|
|
(5,269
|
)
|
||
|
|
Amortization of above- and below-market rents, net
|
(2,586
|
)
|
|
(4,101
|
)
|
||
Same Store Cash NOI - consolidated properties
|
88,964
|
|
|
86,410
|
|
||||
Same Store Cash NOI - unconsolidated properties (at ownership %)
|
4,418
|
|
|
3,225
|
|
||||
Same Store Cash NOI
|
$
|
93,382
|
|
|
$
|
89,635
|
|
||
|
|
|
|
||||||
Increase in Same Store Cash NOI
|
4.2
|
%
|
|
|
|||||
|
|
|
|
||||||
Reconciliation of net income (loss) to Same Store NOI and Same Store Cash NOI
|
|
|
|
||||||
|
Net income (loss)
|
$
|
84,327
|
|
|
$
|
(29,453
|
)
|
|
|
|
Adjustments:
|
|
|
|
||||
|
|
Interest expense
|
33,576
|
|
|
43,257
|
|
||
|
|
Asset impairment losses
|
5,250
|
|
|
8,977
|
|
||
|
|
Tenant improvement demolition costs
|
267
|
|
|
722
|
|
||
|
|
General and administrative
|
21,446
|
|
|
23,649
|
|
||
|
|
Depreciation and amortization
|
94,754
|
|
|
111,830
|
|
||
|
|
Interest and other income
|
(1,359
|
)
|
|
(1,169
|
)
|
||
|
|
Loss on early extinguishment of debt
|
545
|
|
|
—
|
|
||
|
|
Provision for income taxes
|
468
|
|
|
655
|
|
||
|
|
Equity in operations of investments
|
(6,399
|
)
|
|
(2,569
|
)
|
||
|
|
Gain on sale of assets
|
(92,396
|
)
|
|
(22,176
|
)
|
||
|
|
Gain on remeasurement of investment in unconsolidated entities
|
(14,168
|
)
|
|
—
|
|
||
|
|
Net operating income of non-same store properties
|
(28,740
|
)
|
|
(36,439
|
)
|
||
|
|
Lease termination fees
|
(463
|
)
|
|
(1,504
|
)
|
||
|
|
Same Store NOI - unconsolidated properties (at ownership %)
|
5,394
|
|
|
3,605
|
|
||
Same Store NOI
|
102,502
|
|
|
99,385
|
|
||||
|
|
Straight-line rent revenue adjustment
|
(5,558
|
)
|
|
(5,269
|
)
|
||
|
|
Amortization of above- and below-market rents, net
|
(2,586
|
)
|
|
(4,101
|
)
|
||
|
|
Cash NOI adjustments - unconsolidated properties (at ownership %)
|
(976
|
)
|
|
(380
|
)
|
||
Same Store Cash NOI
|
$
|
93,382
|
|
|
$
|
89,635
|
|
|
|
|
Year Ended December 31,
|
||||||
|
|
|
2016
|
|
2015
|
||||
Same Store Revenue:
|
|||||||||
|
Rental revenue
|
$
|
188,228
|
|
|
$
|
190,059
|
|
|
|
|
Less:
|
|
|
|
||||
|
|
Lease termination fees
|
(1,443
|
)
|
|
(3,471
|
)
|
||
|
|
|
186,785
|
|
|
186,588
|
|
||
|
|
|
|
|
|
||||
Same Store Expenses:
|
|||||||||
|
|
Property operating expenses (less tenant improvement demolition costs)
|
53,337
|
|
|
52,782
|
|
||
|
|
Real estate taxes
|
27,786
|
|
|
25,069
|
|
||
|
|
Property management fees
|
517
|
|
|
3,208
|
|
||
|
Property Expenses
|
81,640
|
|
|
81,059
|
|
|||
Same Store NOI - consolidated properties
|
105,145
|
|
|
105,529
|
|
||||
Same Store NOI - unconsolidated properties (at ownership %)
|
10,273
|
|
|
9,736
|
|
||||
Same Store NOI
|
$
|
115,418
|
|
|
$
|
115,265
|
|
||
|
|
|
|
||||||
Increase in Same Store NOI
|
0.1
|
%
|
|
|
|||||
|
|
|
|
|
|||||
Same Store NOI - consolidated properties
|
$
|
105,145
|
|
|
$
|
105,529
|
|
||
|
|
Less:
|
|
|
|
||||
|
|
Straight-line rent revenue adjustment
|
(4,951
|
)
|
|
(6,187
|
)
|
||
|
|
Amortization of above- and below-market rents, net
|
(3,357
|
)
|
|
(5,486
|
)
|
||
Same Store Cash NOI consolidated properties
|
96,837
|
|
|
93,856
|
|
||||
Same Store Cash NOI - unconsolidated properties (at ownership %)
|
9,264
|
|
|
8,787
|
|
||||
Same Store Cash NOI
|
$
|
106,101
|
|
|
$
|
102,643
|
|
||
|
|
|
|
||||||
Increase in Same Store Cash NOI
|
3.4
|
%
|
|
|
|||||
|
|
|
|
||||||
Reconciliation of net loss to Same Store NOI and Same Store Cash NOI
|
|
|
|
||||||
|
Net loss
|
$
|
(29,453
|
)
|
|
$
|
(34,163
|
)
|
|
|
|
Adjustments:
|
|
|
|
||||
|
|
Interest expense
|
43,257
|
|
|
57,454
|
|
||
|
|
Asset impairment losses
|
8,977
|
|
|
132
|
|
||
|
|
Tenant improvement demolition costs
|
722
|
|
|
358
|
|
||
|
|
General and administrative
|
23,649
|
|
|
44,941
|
|
||
|
|
Depreciation and amortization
|
111,830
|
|
|
122,731
|
|
||
|
|
Interest and other income
|
(1,169
|
)
|
|
(810
|
)
|
||
|
|
Loss on early extinguishment of debt
|
—
|
|
|
21,502
|
|
||
|
|
Provision for income taxes
|
655
|
|
|
1,507
|
|
||
|
|
Equity in operations of investments
|
(2,569
|
)
|
|
(3,982
|
)
|
||
|
|
Income from discontinued operations
|
—
|
|
|
(1,407
|
)
|
||
|
|
Gain on sale of discontinued operations
|
—
|
|
|
(15,383
|
)
|
||
|
|
Gain on sale of assets
|
(22,176
|
)
|
|
(44,477
|
)
|
||
|
|
Net operating income of non-same store properties
|
(27,135
|
)
|
|
(39,403
|
)
|
||
|
|
Lease termination fees
|
(1,443
|
)
|
|
(3,471
|
)
|
||
|
|
Same Store NOI - unconsolidated properties (at ownership %)
|
10,273
|
|
|
9,736
|
|
||
Same Store NOI
|
115,418
|
|
|
115,265
|
|
||||
|
|
Straight-line rent revenue adjustment
|
(4,951
|
)
|
|
(6,187
|
)
|
||
|
|
Amortization of above- and below-market rents, net
|
(3,357
|
)
|
|
(5,486
|
)
|
||
|
|
Cash NOI adjustments - unconsolidated properties (at ownership %)
|
(1,009
|
)
|
|
(949
|
)
|
||
Same Store Cash NOI
|
$
|
106,101
|
|
|
$
|
102,643
|
|
|
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||||
Notes payable principal (1)
|
|
$
|
801,339
|
|
|
$
|
84,678
|
|
|
$
|
301,589
|
|
|
$
|
1,670
|
|
|
$
|
72,402
|
|
|
$
|
275,000
|
|
|
$
|
66,000
|
|
Interest (2)
|
|
95,394
|
|
|
28,188
|
|
|
26,599
|
|
|
17,015
|
|
|
15,536
|
|
|
7,815
|
|
|
241
|
|
|||||||
Tenant improvement commitments
|
|
15,324
|
|
|
15,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Leasing commission commitments
|
|
1,005
|
|
|
1,005
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Operating leases
|
|
20,626
|
|
|
1,715
|
|
|
1,289
|
|
|
1,110
|
|
|
852
|
|
|
565
|
|
|
15,095
|
|
|||||||
Total
|
|
$
|
933,688
|
|
|
$
|
130,910
|
|
|
$
|
329,477
|
|
|
$
|
19,795
|
|
|
$
|
88,790
|
|
|
$
|
283,380
|
|
|
$
|
81,336
|
|
/s/ Deloitte & Touche LLP
|
|
Dallas, Texas
|
February 12, 2018
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3
|
|
|
|
3.4
|
|
|
|
3.5
|
|
|
|
3.6
|
|
|
|
3.7
|
|
|
|
3.8
|
|
|
|
4.1
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
10.12
|
|
|
|
10.13
|
|
|
|
10.14
|
|
|
|
10.15
|
|
|
|
10.16
|
|
|
|
10.17
|
|
|
|
10.18
|
|
|
|
10.19
|
|
|
|
10.20
|
|
|
|
10.21
|
|
|
|
10.22
|
|
|
|
10.23
|
|
|
|
10.24
|
|
|
|
10.25
|
|
|
|
10.26
|
|
|
|
10.27
|
|
|
|
10.28
|
|
|
|
10.29
|
|
|
10.30
|
|
|
|
10.31
|
|
|
|
10.32
|
|
|
|
10.33
|
|
|
|
10.34
|
|
|
|
10.35
|
|
|
|
10.36
|
|
|
|
10.37
|
|
|
|
10.38
|
|
|
|
10.39
|
|
|
|
10.40
|
|
|
|
10.41
|
|
|
|
10.42
|
|
|
|
10.43
|
|
|
|
10.44
|
|
|
|
10.45
|
|
|
|
10.46
|
|
|
|
10.47
|
|
|
21.1
|
|
|
23.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1*
|
|
|
101
|
|
The following financial information from TIER REIT, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to Consolidated Financial Statements, and (vi) Financial Statement Schedules.
|
*
|
|
In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certification will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|
|
TIER REIT, Inc.
|
|||
|
|
|
|
|
Dated:
|
February 12, 2018
|
By:
|
/s/ Scott W. Fordham
|
|
|
|
Scott W. Fordham
|
||
|
|
Chief Executive Officer, President, and Director
|
February 12, 2018
|
/s/ Scott W. Fordham
|
|
Scott W. Fordham
|
|
Chief Executive Officer, President, and Director
|
|
(Principal Executive Officer)
|
|
|
February 12, 2018
|
/s/ Dallas E. Lucas
|
|
Dallas E. Lucas
|
|
Chief Financial Officer and Treasurer
|
|
(Principal Financial Officer and
Principal Accounting Officer)
|
|
|
February 12, 2018
|
/s/ Richard I. Gilchrist
|
|
Richard I. Gilchrist
|
|
Chairman of the Board of Directors
|
|
|
February 12, 2018
|
/s/ R. Kent Griffin, Jr.
|
|
R. Kent Griffin, Jr.
|
|
Director
|
|
|
February 12, 2018
|
/s/ Thomas M. Herzog
|
|
Thomas M. Herzog
|
|
Director
|
|
|
February 12, 2018
|
/s/ Dennis J. Martin
|
|
Dennis J. Martin
|
|
Director
|
|
|
February 12, 2018
|
/s/ Gregory J. Whyte
|
|
Gregory J. Whyte
|
|
Director
|
|
Page
|
|
|
Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Statement Schedules
|
|
|
|
|
|
/s/ Deloitte & Touche LLP
|
|
Dallas, Texas
|
February 12, 2018
|
|
We have served as the Company's auditor since 2005.
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
|
|
|
||
Real estate
|
|
|
|
|
|
|
||
Land
|
|
$
|
139,951
|
|
|
$
|
143,537
|
|
Land held for development
|
|
45,059
|
|
|
45,059
|
|
||
Buildings and improvements, net
|
|
1,061,418
|
|
|
1,043,641
|
|
||
Real estate under development
|
|
29,525
|
|
|
17,961
|
|
||
Total real estate
|
|
1,275,953
|
|
|
1,250,198
|
|
||
Cash and cash equivalents
|
|
13,800
|
|
|
14,884
|
|
||
Restricted cash
|
|
8,510
|
|
|
7,509
|
|
||
Accounts receivable, net
|
|
81,129
|
|
|
71,459
|
|
||
Prepaid expenses and other assets
|
|
28,112
|
|
|
25,305
|
|
||
Investments in unconsolidated entities
|
|
31,852
|
|
|
76,813
|
|
||
Deferred financing fees, net
|
|
1,387
|
|
|
2,395
|
|
||
Lease intangibles, net
|
|
87,047
|
|
|
61,844
|
|
||
Other intangible assets, net
|
|
—
|
|
|
9,787
|
|
||
Assets associated with real estate held for sale
|
|
53,348
|
|
|
32,346
|
|
||
Total assets
|
|
$
|
1,581,138
|
|
|
$
|
1,552,540
|
|
|
|
|
|
|
||||
Liabilities and equity
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||
Notes payable, net
|
|
$
|
794,538
|
|
|
$
|
826,783
|
|
Accounts payable and accrued liabilities
|
|
81,166
|
|
|
74,458
|
|
||
Acquired below-market leases, net
|
|
17,942
|
|
|
6,886
|
|
||
Distributions payable
|
|
—
|
|
|
8,601
|
|
||
Other liabilities
|
|
7,567
|
|
|
14,353
|
|
||
Obligations associated with real estate held for sale
|
|
2,354
|
|
|
943
|
|
||
Total liabilities
|
|
903,567
|
|
|
932,024
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
Equity
|
|
|
|
|
|
|
||
Preferred stock, $.0001 par value per share; 17,500,000 shares authorized at December 31, 2017 and 2016, respectively, none outstanding
|
|
—
|
|
|
—
|
|
||
Convertible stock, $.0001 par value per share; 1,000 shares authorized, none outstanding
|
|
—
|
|
|
—
|
|
||
Common stock, $.0001 par value per share; 382,499,000 shares authorized, 47,623,324 and 47,473,218 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
|
5
|
|
|
5
|
|
||
Additional paid-in capital
|
|
2,609,540
|
|
|
2,606,098
|
|
||
Cumulative distributions and net loss attributable to common stockholders
|
|
(1,936,960
|
)
|
|
(1,986,515
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
4,218
|
|
|
(1,042
|
)
|
||
Stockholders’ equity
|
|
676,803
|
|
|
618,546
|
|
||
Noncontrolling interests
|
|
768
|
|
|
1,970
|
|
||
Total equity
|
|
677,571
|
|
|
620,516
|
|
||
Total liabilities and equity
|
|
$
|
1,581,138
|
|
|
$
|
1,552,540
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Rental revenue
|
|
$
|
216,461
|
|
|
$
|
242,818
|
|
|
$
|
282,365
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|||
Property operating expenses
|
|
55,921
|
|
|
72,603
|
|
|
89,158
|
|
|||
Interest expense
|
|
33,576
|
|
|
43,257
|
|
|
57,454
|
|
|||
Real estate taxes
|
|
34,264
|
|
|
36,297
|
|
|
40,134
|
|
|||
Property management fees
|
|
232
|
|
|
917
|
|
|
5,028
|
|
|||
Asset impairment losses
|
|
5,250
|
|
|
8,977
|
|
|
132
|
|
|||
General and administrative
|
|
21,446
|
|
|
23,649
|
|
|
44,941
|
|
|||
Depreciation and amortization
|
|
94,754
|
|
|
111,830
|
|
|
122,731
|
|
|||
Total expenses
|
|
245,443
|
|
|
297,530
|
|
|
359,578
|
|
|||
Interest and other income
|
|
1,359
|
|
|
1,169
|
|
|
810
|
|
|||
Loss on early extinguishment of debt
|
|
(545
|
)
|
|
—
|
|
|
(21,502
|
)
|
|||
Loss from continuing operations before income taxes, equity in operations of investments, and gains
|
|
(28,168
|
)
|
|
(53,543
|
)
|
|
(97,905
|
)
|
|||
Provision for income taxes
|
|
(468
|
)
|
|
(655
|
)
|
|
(1,507
|
)
|
|||
Equity in operations of investments
|
|
6,399
|
|
|
2,569
|
|
|
3,982
|
|
|||
Loss from continuing operations before gains
|
|
(22,237
|
)
|
|
(51,629
|
)
|
|
(95,430
|
)
|
|||
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|||
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
1,407
|
|
|||
Gain on sale of discontinued operations
|
|
—
|
|
|
—
|
|
|
15,383
|
|
|||
Discontinued operations
|
|
—
|
|
|
—
|
|
|
16,790
|
|
|||
Gain on sale of assets
|
|
92,396
|
|
|
22,176
|
|
|
44,477
|
|
|||
Gain on remeasurement of investment in unconsolidated entities
|
|
14,168
|
|
|
—
|
|
|
—
|
|
|||
Net income (loss)
|
|
84,327
|
|
|
(29,453
|
)
|
|
(34,163
|
)
|
|||
Noncontrolling interests in continuing operations
|
|
(41
|
)
|
|
36
|
|
|
159
|
|
|||
Noncontrolling interests in discontinued operations
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||
Dilution of Series A Convertible Preferred Stock
|
|
—
|
|
|
—
|
|
|
1,926
|
|
|||
Net income (loss) attributable to common stockholders
|
|
$
|
84,286
|
|
|
$
|
(29,417
|
)
|
|
$
|
(32,108
|
)
|
|
|
|
|
|
|
|
||||||
Basic weighted average common shares outstanding
|
|
47,537,758
|
|
|
47,405,564
|
|
|
48,960,393
|
|
|||
Diluted weighted average common shares outstanding
|
|
47,882,642
|
|
|
47,405,564
|
|
|
48,960,393
|
|
|||
|
|
|
|
|
|
|
||||||
Basic income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
1.76
|
|
|
$
|
(0.62
|
)
|
|
$
|
(1.00
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.34
|
|
|||
Basic income (loss) per common share
|
|
$
|
1.76
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.66
|
)
|
|
|
|
|
|
|
|
||||||
Diluted income (loss) per common share:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
1.75
|
|
|
$
|
(0.62
|
)
|
|
$
|
(1.00
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.34
|
|
|||
Diluted income (loss) per common share
|
|
$
|
1.75
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.66
|
)
|
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
84,286
|
|
|
$
|
(29,417
|
)
|
|
$
|
(48,868
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
16,760
|
|
|||
Net income (loss) attributable to common stockholders
|
|
$
|
84,286
|
|
|
$
|
(29,417
|
)
|
|
$
|
(32,108
|
)
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
84,327
|
|
|
$
|
(29,453
|
)
|
|
$
|
(34,163
|
)
|
Other comprehensive income (loss): unrealized gain (loss) on interest rate derivatives
|
|
5,262
|
|
|
2,824
|
|
|
(3,077
|
)
|
|||
Dilution of Series A Convertible Preferred Stock
|
|
—
|
|
|
—
|
|
|
1,926
|
|
|||
Comprehensive income (loss)
|
|
89,589
|
|
|
(26,629
|
)
|
|
(35,314
|
)
|
|||
Comprehensive (income) loss attributable to noncontrolling interests
|
|
(43
|
)
|
|
30
|
|
|
134
|
|
|||
Comprehensive income (loss) attributable to common stockholders
|
|
$
|
89,546
|
|
|
$
|
(26,599
|
)
|
|
$
|
(35,180
|
)
|
|
|
|
|
|
|
|
Cumulative
Distributions
and
Net Loss Attributable to Common Stockholders
|
|
|
|
|
|
|
|||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
|
||||||||||||||||
|
Number of Shares
|
|
Par Value
|
|
|
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
Balance at January 1, 2015
|
49,877
|
|
|
$
|
5
|
|
|
$
|
2,645,927
|
|
|
$
|
(1,862,555
|
)
|
|
$
|
(788
|
)
|
|
$
|
945
|
|
|
$
|
783,534
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,034
|
)
|
|
—
|
|
|
(129
|
)
|
|
(34,163
|
)
|
||||||
Unrealized loss on interest rate derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,072
|
)
|
|
(5
|
)
|
|
(3,077
|
)
|
||||||
Share based compensation, net
|
148
|
|
|
—
|
|
|
3,687
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
3,718
|
|
||||||
Redemption of common stock
|
(2,663
|
)
|
|
—
|
|
|
(50,841
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,841
|
)
|
||||||
Contributions by noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,325
|
|
|
1,325
|
|
||||||
Distributions declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Common stock ($0.54 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,126
|
)
|
|
—
|
|
|
—
|
|
|
(26,126
|
)
|
||||||
Series A Convertible Preferred Stock
($0.54 per share) |
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
(48
|
)
|
||||||
Dilution of Series A Convertible Preferred Stock
|
—
|
|
|
—
|
|
|
1,926
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,926
|
|
||||||
Purchase operating partnership units
|
—
|
|
|
—
|
|
|
(506
|
)
|
|
—
|
|
|
—
|
|
|
(617
|
)
|
|
(1,123
|
)
|
||||||
Balance at December 31, 2015
|
47,362
|
|
|
$
|
5
|
|
|
$
|
2,600,193
|
|
|
$
|
(1,922,721
|
)
|
|
$
|
(3,860
|
)
|
|
$
|
1,502
|
|
|
$
|
675,119
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,417
|
)
|
|
—
|
|
|
(36
|
)
|
|
(29,453
|
)
|
||||||
Unrealized gain on interest rate derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,818
|
|
|
6
|
|
|
2,824
|
|
||||||
Share based compensation, net
|
111
|
|
|
—
|
|
|
3,205
|
|
|
—
|
|
|
—
|
|
|
304
|
|
|
3,509
|
|
||||||
Contributions by noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|
221
|
|
||||||
Distributions declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Common stock ($0.72 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,377
|
)
|
|
—
|
|
|
—
|
|
|
(34,377
|
)
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
(27
|
)
|
||||||
Cancellation of Series A Preferred Stock
|
—
|
|
|
—
|
|
|
2,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,700
|
|
||||||
Balance at December 31, 2016
|
47,473
|
|
|
$
|
5
|
|
|
$
|
2,606,098
|
|
|
$
|
(1,986,515
|
)
|
|
$
|
(1,042
|
)
|
|
$
|
1,970
|
|
|
$
|
620,516
|
|
Cumulative effect of a change in accounting principle
|
—
|
|
|
—
|
|
|
290
|
|
|
(290
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2016 (restated)
|
47,473
|
|
|
$
|
5
|
|
|
$
|
2,606,388
|
|
|
$
|
(1,986,805
|
)
|
|
$
|
(1,042
|
)
|
|
$
|
1,970
|
|
|
$
|
620,516
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
84,286
|
|
|
—
|
|
|
41
|
|
|
84,327
|
|
||||||
Unrealized gain on interest rate derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,260
|
|
|
2
|
|
|
5,262
|
|
||||||
Share based compensation, net
|
150
|
|
|
—
|
|
|
3,152
|
|
|
—
|
|
|
—
|
|
|
(216
|
)
|
|
2,936
|
|
||||||
Contributions by noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
488
|
|
|
488
|
|
||||||
Distributions declared:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Common stock ($0.72 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,441
|
)
|
|
—
|
|
|
—
|
|
|
(34,441
|
)
|
||||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
(17
|
)
|
||||||
Deconsolidation of investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,500
|
)
|
|
(1,500
|
)
|
||||||
Balance at December 31, 2017
|
47,623
|
|
|
$
|
5
|
|
|
$
|
2,609,540
|
|
|
$
|
(1,936,960
|
)
|
|
$
|
4,218
|
|
|
$
|
768
|
|
|
$
|
677,571
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
84,327
|
|
|
$
|
(29,453
|
)
|
|
$
|
(34,163
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Asset impairment losses
|
|
5,250
|
|
|
8,977
|
|
|
132
|
|
|||
Gain on sale of assets
|
|
(92,396
|
)
|
|
(22,176
|
)
|
|
(44,477
|
)
|
|||
Gain on remeasurement of investment in unconsolidated entities
|
|
(14,168
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sale of discontinued operations
|
|
—
|
|
|
—
|
|
|
(15,383
|
)
|
|||
Loss on early extinguishment of debt
|
|
109
|
|
|
—
|
|
|
614
|
|
|||
Hedge ineffectiveness income from derivatives
|
|
(253
|
)
|
|
(572
|
)
|
|
—
|
|
|||
Amortization of restricted shares and units
|
|
4,079
|
|
|
4,159
|
|
|
4,975
|
|
|||
Depreciation and amortization
|
|
94,754
|
|
|
111,830
|
|
|
122,731
|
|
|||
Amortization of lease intangibles
|
|
(275
|
)
|
|
(2,015
|
)
|
|
(1,978
|
)
|
|||
Amortization of above- and below-market rent
|
|
(3,895
|
)
|
|
(4,255
|
)
|
|
(5,842
|
)
|
|||
Amortization of deferred financing and mark-to-market costs
|
|
3,444
|
|
|
3,106
|
|
|
3,683
|
|
|||
Equity in operations of investments
|
|
(6,399
|
)
|
|
(2,569
|
)
|
|
(3,982
|
)
|
|||
Ownership portion of fees from unconsolidated entities
|
|
409
|
|
|
562
|
|
|
497
|
|
|||
Distributions from investments
|
|
9,108
|
|
|
739
|
|
|
871
|
|
|||
Change in accounts receivable
|
|
(9,055
|
)
|
|
(8,892
|
)
|
|
(8,180
|
)
|
|||
Change in prepaid expenses and other assets
|
|
(697
|
)
|
|
852
|
|
|
2,260
|
|
|||
Change in lease commissions
|
|
(15,907
|
)
|
|
(10,614
|
)
|
|
(17,068
|
)
|
|||
Change in other lease intangibles
|
|
(432
|
)
|
|
(852
|
)
|
|
(1,149
|
)
|
|||
Change in other intangible assets
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|||
Change in accounts payable and accrued liabilities
|
|
(842
|
)
|
|
3,627
|
|
|
(8,337
|
)
|
|||
Change in other liabilities
|
|
3,255
|
|
|
(1,051
|
)
|
|
2,432
|
|
|||
Change in payables to related parties
|
|
—
|
|
|
—
|
|
|
(1,516
|
)
|
|||
Cash provided by (used in) operating activities
|
|
60,416
|
|
|
51,303
|
|
|
(3,880
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|||
Escrow deposits
|
|
(13,350
|
)
|
|
(19,000
|
)
|
|
—
|
|
|||
Return of investments
|
|
25,784
|
|
|
17,331
|
|
|
4,786
|
|
|||
Purchase of ground lease
|
|
—
|
|
|
—
|
|
|
(7,200
|
)
|
|||
Purchases of real estate
|
|
(93,011
|
)
|
|
—
|
|
|
(178,184
|
)
|
|||
Investments in unconsolidated entities
|
|
(19,667
|
)
|
|
(3,956
|
)
|
|
(39,173
|
)
|
|||
Capital expenditures for real estate
|
|
(33,688
|
)
|
|
(48,603
|
)
|
|
(70,856
|
)
|
|||
Capital expenditures for real estate under development
|
|
(30,550
|
)
|
|
(11,088
|
)
|
|
(2,555
|
)
|
|||
Proceeds from sale of discontinued operations
|
|
—
|
|
|
—
|
|
|
59,715
|
|
|||
Proceeds from sale of assets
|
|
328,461
|
|
|
295,453
|
|
|
433,709
|
|
|||
Cash provided by investing activities
|
|
163,979
|
|
|
230,137
|
|
|
200,242
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|||
Financing costs
|
|
(1,972
|
)
|
|
(885
|
)
|
|
(5,915
|
)
|
|||
Proceeds from notes payable
|
|
196,000
|
|
|
173,000
|
|
|
779,905
|
|
|||
Payments on notes payable
|
|
(374,792
|
)
|
|
(419,294
|
)
|
|
(943,667
|
)
|
|||
Payments on capital lease obligations
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||
Redemptions of common stock
|
|
—
|
|
|
—
|
|
|
(50,841
|
)
|
|||
Transfer of common stock
|
|
(1,143
|
)
|
|
(650
|
)
|
|
(1,257
|
)
|
|||
Purchase of operating partnership units
|
|
—
|
|
|
—
|
|
|
(1,123
|
)
|
|||
Distributions paid to common stockholders
|
|
(43,034
|
)
|
|
(34,359
|
)
|
|
(17,549
|
)
|
|||
Distributions paid to Series A Convertible Preferred stockholders
|
|
—
|
|
|
(2
|
)
|
|
(4
|
)
|
|||
Distributions paid to noncontrolling interests
|
|
(25
|
)
|
|
(38
|
)
|
|
(30
|
)
|
|||
Contributions from noncontrolling interests
|
|
488
|
|
|
221
|
|
|
325
|
|
|||
Cash used in financing activities
|
|
(224,478
|
)
|
|
(282,007
|
)
|
|
(240,168
|
)
|
|||
Net change in cash, cash equivalents, and restricted cash
|
|
(83
|
)
|
|
(567
|
)
|
|
(43,806
|
)
|
|||
Cash, cash equivalents, and restricted cash at beginning of period
|
|
22,393
|
|
|
22,960
|
|
|
66,766
|
|
|||
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
22,310
|
|
|
$
|
22,393
|
|
|
$
|
22,960
|
|
2018
|
$
|
3,466
|
|
2019
|
$
|
3,413
|
|
2020
|
$
|
3,465
|
|
2021
|
$
|
3,222
|
|
2022
|
$
|
2,779
|
|
|
|
|
|
Lease Intangibles
|
||||||||||||
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||
|
|
Buildings and Improvements
|
|
Other Lease Intangibles
|
|
Acquired Above-Market Leases
|
|
Acquired Below-Market Leases
|
||||||||
as of December 31, 2017
|
|
|
|
|
||||||||||||
Cost
|
|
$
|
1,514,544
|
|
|
$
|
146,926
|
|
|
$
|
4,857
|
|
|
$
|
(50,399
|
)
|
Less: accumulated depreciation and amortization
|
|
(453,126
|
)
|
|
(60,298
|
)
|
|
(4,438
|
)
|
|
32,457
|
|
||||
Net
|
|
$
|
1,061,418
|
|
|
$
|
86,628
|
|
|
$
|
419
|
|
|
$
|
(17,942
|
)
|
|
|
|
|
Lease Intangibles
|
||||||||||||
|
|
|
|
Assets
|
|
Liabilities
|
||||||||||
|
|
Buildings and Improvements
|
|
Other Lease Intangibles
|
|
Acquired Above-Market Leases
|
|
Acquired Below-Market Leases
|
||||||||
as of December 31, 2016
|
|
|
|
|
||||||||||||
Cost
|
|
$
|
1,579,157
|
|
|
$
|
131,618
|
|
|
$
|
5,005
|
|
|
$
|
(42,537
|
)
|
Less: accumulated depreciation and amortization
|
|
(535,516
|
)
|
|
(70,672
|
)
|
|
(4,107
|
)
|
|
35,651
|
|
||||
Net
|
|
$
|
1,043,641
|
|
|
$
|
60,946
|
|
|
$
|
898
|
|
|
$
|
(6,886
|
)
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||
Cash and cash equivalents
|
|
$
|
13,800
|
|
|
$
|
14,884
|
|
|
$
|
12,248
|
|
Restricted cash
|
|
8,510
|
|
|
7,509
|
|
|
10,712
|
|
|||
Total cash, cash equivalents, and restricted cash
|
|
$
|
22,310
|
|
|
$
|
22,393
|
|
|
$
|
22,960
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Straight-line rental revenue receivable
|
|
$
|
57,372
|
|
|
$
|
68,287
|
|
Insurance receivable
|
|
18,826
|
|
|
—
|
|
||
Tenant receivables
|
|
4,221
|
|
|
5,047
|
|
||
Non-tenant receivables
|
|
893
|
|
|
691
|
|
||
Allowance for doubtful accounts
|
|
(183
|
)
|
|
(2,566
|
)
|
||
Total
|
|
$
|
81,129
|
|
|
$
|
71,459
|
|
|
|
Date of Sale
|
|
|
|
Rentable Square Footage (unaudited)
|
|
Contract Sales Price
|
|
Proceeds from Sale
|
|||||
Property Name
|
|
|
Location
|
|
|
|
|||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|||||
Buena Vista Plaza
|
|
01/18/17
|
|
Burbank, CA
|
|
115
|
|
|
$
|
52,500
|
|
|
$
|
47,498
|
|
Three Parkway
|
|
03/01/17
|
|
Philadelphia, PA
|
|
561
|
|
|
95,000
|
|
|
91,876
|
|
||
Eisenhower I (1)
|
|
03/13/17
|
|
Tampa, FL
|
|
130
|
|
|
31,400
|
|
|
30,742
|
|
||
Third + Shoal (2)
|
|
03/31/17
|
|
Austin, TX
|
|
N/A
|
|
|
14,955
|
|
|
14,525
|
|
||
Louisville Portfolio (3)
|
|
06/26/17
|
|
Louisville, KY
|
|
678
|
|
|
71,500
|
|
|
67,042
|
|
||
|
|
|
|
|
|
1,484
|
|
|
$
|
265,355
|
|
|
$
|
251,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2016
|
|
|
|
|
|
|
|
|
|
|
|||||
Lawson Commons
|
|
03/01/16
|
|
St. Paul MN
|
|
436
|
|
|
$
|
68,430
|
|
|
$
|
60,931
|
|
FOUR40
|
|
06/17/16
|
|
Chicago, IL
|
|
1,041
|
|
|
191,000
|
|
|
189,072
|
|
||
Hurstbourne Business Center (4)
|
|
09/30/16
|
|
Louisville, KY
|
|
418
|
|
|
41,000
|
|
|
39,777
|
|
||
801 Thompson
|
|
10/27/16
|
|
Rockville, MD
|
|
51
|
|
|
4,900
|
|
|
4,614
|
|
||
Other
|
|
|
|
|
|
—
|
|
|
—
|
|
|
1,059
|
|
||
|
|
|
|
|
|
1,946
|
|
|
$
|
305,330
|
|
|
$
|
295,453
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|||||
One and Two Chestnut Place
|
|
03/06/15
|
|
Worcester, MA
|
|
218
|
|
|
$
|
14,000
|
|
|
$
|
11,631
|
|
United Plaza
|
|
04/23/15
|
|
Philadelphia, PA
|
|
617
|
|
|
114,554
|
|
|
114,983
|
|
||
1650 Arch Street
|
|
04/23/15
|
|
Philadelphia, PA
|
|
553
|
|
|
76,290
|
|
|
76,573
|
|
||
1325 G Street (5) (6)
|
|
06/30/15
|
|
Washington, D.C.
|
|
307
|
|
|
152,000
|
|
|
145,520
|
|
||
Colorado Building (5)
|
|
06/30/15
|
|
Washington, D.C.
|
|
128
|
|
|
50,000
|
|
|
43,916
|
|
||
Domain LMN (land)
|
|
07/24/15
|
|
Austin, TX
|
|
—
|
|
|
22,000
|
|
|
22,000
|
|
||
Domain K (multifamily property)
|
|
10/16/15
|
|
Austin, TX
|
|
—
|
|
|
15,000
|
|
|
15,000
|
|
||
Domain A (land)
|
|
12/16/15
|
|
Austin, TX
|
|
—
|
|
|
4,250
|
|
|
4,086
|
|
||
|
|
|
|
|
|
1,823
|
|
|
$
|
448,094
|
|
|
$
|
433,709
|
|
(1)
|
We may be entitled to receive an additional
$3.0 million
subject to certain future events.
|
(2)
|
We sold a
50%
interest in the entity that owns a
95%
interest in the Third + Shoal development property.
|
(3)
|
The Louisville Portfolio consists of
five
properties located in Louisville, Kentucky.
|
(4)
|
Hurstbourne Business Center is comprised of Hurstbourne Park and Hurstbourne Place, both office buildings, and Hurstbourne Plaza, a retail center.
|
(5)
|
On June 30, 2015, our 1325 G Street and Colorado Building properties were each sold to entities in which we acquired a noncontrolling
10%
interest and the properties were deconsolidated.
|
|
|
Date of Disposal
|
|
|
|
Rentable Square Footage (unaudited)
|
|
Contract Sales Price
|
|
Proceeds from Sale (1)
|
|||||
Property Name
|
Location
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|||||
250 West Pratt
|
|
03/19/15
|
|
Baltimore, MD
|
|
368
|
|
|
$
|
63,500
|
|
|
$
|
55,229
|
|
Fifth Third Center
|
|
04/07/15
|
|
Cleveland, OH
|
|
508
|
|
|
$
|
52,750
|
|
|
4,486
|
|
|
|
|
|
|
|
|
876
|
|
|
|
|
|
$
|
59,715
|
|
(1)
|
Proceeds from sale are reduced by approximately
$47.1 million
of debt that was assumed by the purchaser.
|
|
Assets acquired and liabilities assumed
|
|
Assets sold subsequent to acquisition
|
|
Net
|
||||||
Land
|
$
|
16,868
|
|
|
$
|
(4,087
|
)
|
|
$
|
12,781
|
|
Land held for development (1)
|
74,682
|
|
|
(22,000
|
)
|
|
52,682
|
|
|||
Building and improvements
|
57,324
|
|
|
—
|
|
|
57,324
|
|
|||
Prepaid expenses and other assets
|
15,000
|
|
|
(15,000
|
)
|
|
—
|
|
|||
Lease intangibles
|
12,070
|
|
|
—
|
|
|
12,070
|
|
|||
Investment in Domain 2 & Domain 7
|
26,784
|
|
|
—
|
|
|
26,784
|
|
|||
Accrued liabilities
|
(1,800
|
)
|
|
—
|
|
|
(1,800
|
)
|
|||
Acquired below-market leases
|
(2,741
|
)
|
|
—
|
|
|
(2,741
|
)
|
|||
Total
|
$
|
198,187
|
|
|
$
|
(41,087
|
)
|
|
$
|
157,100
|
|
(1)
|
On August 28, 2015, we contributed a wholly-owned tract of land valued at approximately
$14.0 million
to an unconsolidated entity in which we own a
50%
interest.
|
|
December 31, 2015
|
||
|
|||
Rental revenue
|
$
|
288,304
|
|
Loss from continuing operations
|
$
|
(49,346
|
)
|
Net loss attributable to common stockholders
|
$
|
(30,498
|
)
|
Basic and diluted weighted average common shares outstanding
|
48,960
|
|
|
Basic and diluted loss per common share
|
$
|
(0.62
|
)
|
(1)
|
On January 4, 2017, we acquired our unrelated third party’s
50.16%
interest in Domain Junction LLC increasing our ownership interest to
100%
, and these properties were consolidated.
|
(2)
|
All major decisions for this entity are made by the other owner. The ownership interest above represents our legal ownership. The economic ownership percentage may differ due to achievement of specified investment return thresholds as provided in the joint venture agreement.
|
(3)
|
We have evaluated our investments in unconsolidated entities in order to determine if they are VIEs. Based on our assessment, we have identified each of these entities as a VIE, but we are not the primary beneficiary, as we do not have the power to direct the activities that most significantly impact the economic performance of these entities. For these VIEs in which we are not deemed to be the primary beneficiary, we continue to account for them using the equity method. The maximum amount of exposure to loss with respect to these VIEs is the carrying amount of our investment and to the extent that we guarantee debt. As of December 31, 2017, TIER OP had guaranteed
50%
of the construction loan of 208 Nueces Street, LLC, as discussed below. At December 31, 2017, these VIEs have total assets of approximately
$172.3 million
and total liabilities of approximately
$125.1 million
. At December 31, 2016, our VIEs had total assets of approximately
$353.5 million
and total liabilities of approximately
$262.8 million
.
|
(4)
|
On March 31, 2017, we sold a
50%
interest in the entity that owns a
95%
interest in Third + Shoal, resulting in this property being deconsolidated as control of this property is now shared.
|
(5)
|
On April 27, 2017, the Colorado Building and 1325 G Street were sold for a combined contract sales price of
$259.0 million
(at
100%
).
|
(6)
|
On January 17, 2017, we sold substantially all of our noncontrolling investment in 1301 Chestnut Associates, L.P. At December 31, 2017, our remaining
1.1%
interest is accounted for using the cost method and is included in “prepaid expenses and other assets” on our consolidated balance sheet.
|
(7)
|
Our investments in unconsolidated entities at December 31, 2017 and 2016, include basis adjustments that total approximately
$9.4 million
and
$7.2 million
, respectively. These amounts represent the aggregate difference between our historical cost basis and our equity basis reflected at the joint venture level, which is typically amortized over the life of the related assets and liabilities. Basis differences occur from impairment of investments and upon the transfer of assets that were previously owned by us into a joint venture. In addition, certain acquisition, transaction, and other costs may not be reflected in the net assets at the joint venture level.
|
Principal payments due in:
|
|
||
2018
|
$
|
84,678
|
|
2019
|
301,589
|
|
|
2020
|
1,670
|
|
|
2021
|
72,402
|
|
|
2022
|
275,000
|
|
|
Thereafter
|
66,000
|
|
|
Less: unamortized debt issuance costs (1)
|
(6,801
|
)
|
|
Total
|
$
|
794,538
|
|
(1)
|
Excludes approximately
$1.4 million
of unamortized debt issuance costs associated with the revolving line of credit because these costs are presented as an asset on our consolidated balance sheets.
|
|
|
|
|
Basis of Fair Value Measurements
|
||||||||||||
|
|
|
|
Quoted Prices In Active Markets for Identical Items (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
|
|
Total Fair Value
|
|
|
|
|||||||||||
|
|
|
|
|
||||||||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
$
|
5,045
|
|
|
$
|
—
|
|
|
$
|
5,045
|
|
|
$
|
—
|
|
Liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
$
|
1,182
|
|
|
$
|
—
|
|
|
$
|
1,182
|
|
|
$
|
—
|
|
Liabilities
|
|
$
|
(1,652
|
)
|
|
$
|
—
|
|
|
$
|
(1,652
|
)
|
|
$
|
—
|
|
|
|
|
|
Basis of Fair Value Measurements
|
|
|
||||||||||||||
|
|
Fair Value
of Assets at Impairment
|
|
Quoted Prices
In Active
Markets for
Identical Items
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
Losses
|
||||||||||
for the year ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Real estate
|
|
$
|
69,353
|
|
|
$
|
—
|
|
|
$
|
69,353
|
|
|
$
|
—
|
|
|
$
|
(5,250
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
for the year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate held for sale
|
|
$
|
9,309
|
|
|
$
|
—
|
|
|
$
|
4,570
|
|
|
$
|
4,739
|
|
|
$
|
(8,977
|
)
|
|
|
Fair Value of Assets at Impairment
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range
|
||
Real estate on which impairment losses were recognized
|
|
$
|
4,739
|
|
|
Discounted Cash Flow
|
|
Discount rate
|
|
12.0%
|
|
|
|
|
|
|
Terminal capitalization rate
|
|
9.5%
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Notes payable
|
|
$
|
801,339
|
|
|
$
|
805,786
|
|
|
$
|
834,131
|
|
|
$
|
837,878
|
|
Less: unamortized debt issuance costs
|
|
(6,801
|
)
|
|
|
|
(7,348
|
)
|
|
|
||||||
Notes payable, net
|
|
$
|
794,538
|
|
|
|
|
$
|
826,783
|
|
|
|
Type/Description
|
|
Notional Value
|
|
Index
|
|
Strike Rate
|
|
Effective Date
|
|
Maturity Date
|
||
Interest rate swap - cash flow hedge
|
|
$
|
125,000
|
|
|
one-month LIBOR
|
|
1.6775%
|
|
12/31/14
|
|
10/31/19
|
Interest rate swap - cash flow hedge
|
|
$
|
125,000
|
|
|
one-month LIBOR
|
|
1.6935%
|
|
04/30/15
|
|
10/31/19
|
Interest rate swap - cash flow hedge
|
|
$
|
125,000
|
|
|
one-month LIBOR
|
|
1.7615%
|
|
06/30/15
|
|
05/31/22
|
Interest rate swap - cash flow hedge
|
|
$
|
150,000
|
|
|
one-month LIBOR
|
|
1.7695%
|
|
06/30/15
|
|
05/31/22
|
Derivatives designated as hedging instruments:
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest rate swaps
|
$
|
5,045
|
|
|
$
|
1,182
|
|
|
$
|
—
|
|
|
$
|
(1,652
|
)
|
|
|
Amount of loss reclassified from OCI into income (effective portion)
for the Year Ended December 31,
|
||||||||||
Location
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest expense (1)
|
|
$
|
3,457
|
|
|
$
|
6,650
|
|
|
$
|
5,381
|
|
Total
|
|
$
|
3,457
|
|
|
$
|
6,650
|
|
|
$
|
5,381
|
|
(1)
|
Increases in fair value as a result of accrued interest associated with our swap transactions are recorded in accumulated OCI and subsequently reclassified into income. Such amounts are shown net in the statements of changes in equity and offset dollar for dollar.
|
|
Amount recognized in income on derivatives
(ineffective portion and amount excluded from
effectiveness testing)
for the Year Ended December 31,
|
|||||||||||
Location
|
2017
|
|
2016
|
|
2015
|
|||||||
Interest expense (1)
|
$
|
(253
|
)
|
|
$
|
(572
|
)
|
|
$
|
—
|
|
(1)
|
Represents the portion of the change in fair value of our interest rate swaps as (income) or expense attributable to the mismatch between an interest rate floor on our hedged debt and no floor on the index rate in our interest rate swaps which causes hedge ineffectiveness.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||
|
Units
|
|
Weighted Average Price per unit
|
|
Units
|
|
Weighted Average Price per unit
|
||||||
Outstanding at the beginning of the year
|
39,255
|
|
|
$
|
16.45
|
|
|
28,705
|
|
|
$
|
18.29
|
|
Issued
|
19,672
|
|
|
$
|
17.03
|
|
|
18,275
|
|
|
$
|
15.05
|
|
Converted
|
(39,255
|
)
|
|
$
|
16.45
|
|
|
(7,725
|
)
|
|
$
|
19.96
|
|
Outstanding at the end of the year (1)
|
19,672
|
|
|
$
|
17.03
|
|
|
39,255
|
|
|
$
|
16.45
|
|
(1)
|
As of
December 31, 2017
,
none
of the RSUs held by our independent directors are vested.
|
Assumption
|
|
Value
|
Expected volatility
|
|
24%-26%
|
Risk-free interest rate
|
|
1.15%-1.53%
|
Expected term
|
|
35 months
|
Expected dividend yield
|
|
3.7%-4.5%
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||
|
Shares
|
|
Weighted Average Price per share
|
|
Shares
|
|
Weighted Average Price per share
|
||||||
Outstanding at the beginning of the year
|
246,805
|
|
|
$
|
20.74
|
|
|
281,905
|
|
|
$
|
22.46
|
|
Issued
|
122,852
|
|
|
$
|
17.89
|
|
|
119,747
|
|
|
$
|
15.19
|
|
Forfeiture
|
(20,089
|
)
|
|
$
|
17.53
|
|
|
(11,789
|
)
|
|
$
|
19.42
|
|
Restrictions lapsed
|
(168,777
|
)
|
|
$
|
19.34
|
|
|
(143,058
|
)
|
|
$
|
19.59
|
|
Outstanding at the end of the year
|
180,791
|
|
|
$
|
20.47
|
|
|
246,805
|
|
|
$
|
20.74
|
|
|
|
|
Common
Stockholders
|
|
Noncontrolling
Interests
|
||||||
|
Total
|
|
|
||||||||
2017
|
|
|
|
|
|
||||||
1st Quarter
|
$
|
8,611
|
|
|
$
|
8,606
|
|
|
$
|
5
|
|
2nd Quarter
|
8,616
|
|
|
8,611
|
|
|
5
|
|
|||
3rd Quarter
|
8,616
|
|
|
8,612
|
|
|
4
|
|
|||
4th Quarter
|
8,615
|
|
|
8,612
|
|
|
3
|
|
|||
Total
|
$
|
34,458
|
|
|
$
|
34,441
|
|
|
$
|
17
|
|
|
|
|
|
|
|
||||||
2016
|
|
|
|
|
|
|
|
|
|||
1st Quarter
|
$
|
8,600
|
|
|
$
|
8,594
|
|
|
$
|
6
|
|
2nd Quarter
|
8,601
|
|
|
8,594
|
|
|
7
|
|
|||
3rd Quarter
|
8,602
|
|
|
8,595
|
|
|
7
|
|
|||
4th Quarter
|
8,601
|
|
|
8,594
|
|
|
7
|
|
|||
Total
|
$
|
34,404
|
|
|
$
|
34,377
|
|
|
$
|
27
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to common stockholders
|
|
$
|
84,286
|
|
|
$
|
(29,417
|
)
|
|
$
|
(32,108
|
)
|
Less: net income allocated to participating securities
|
|
(510
|
)
|
|
—
|
|
|
—
|
|
|||
Numerator for basic net income (loss) per share
|
|
$
|
83,776
|
|
|
$
|
(29,417
|
)
|
|
$
|
(32,108
|
)
|
Add: undistributed net income allocated to participating securities
|
|
300
|
|
|
—
|
|
|
—
|
|
|||
Less: undistributed net income re-allocated to participating securities
|
|
(298
|
)
|
|
—
|
|
|
—
|
|
|||
Numerator for diluted net income (loss) per share
|
|
$
|
83,778
|
|
|
$
|
(29,417
|
)
|
|
$
|
(32,108
|
)
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding - basic
|
|
47,538
|
|
|
47,406
|
|
|
48,960
|
|
|||
Effect of dilutive securities
|
|
345
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding - diluted
|
|
47,883
|
|
|
47,406
|
|
|
48,960
|
|
|||
|
|
|
|
|
|
|
||||||
Basic net income (loss) per common share
|
|
$
|
1.76
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.66
|
)
|
Diluted net income (loss) per common share
|
|
$
|
1.75
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.66
|
)
|
|
|
|
|
|
|
|
||||||
Securities excluded from weighted average common shares
outstanding-diluted because their effect would be anti-dilutive
|
|
25
|
|
|
457
|
|
|
213
|
|
Year
|
|
Amount
|
||
2018
|
|
$
|
136,363
|
|
2019
|
|
126,739
|
|
|
2020
|
|
113,766
|
|
|
2021
|
|
91,932
|
|
|
2022
|
|
79,794
|
|
|
Thereafter
|
|
256,458
|
|
|
Total
|
|
$
|
805,052
|
|
Year
|
|
Amount
|
||
2018
|
|
$
|
1,715
|
|
2019
|
|
1,289
|
|
|
2020
|
|
1,110
|
|
|
2021
|
|
852
|
|
|
2022
|
|
565
|
|
|
Thereafter
|
|
15,095
|
|
|
Total
|
|
$
|
20,626
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Interest paid, net of amounts capitalized
|
$
|
24,430
|
|
|
$
|
38,059
|
|
|
$
|
54,608
|
|
Income taxes paid
|
$
|
404
|
|
|
$
|
2,085
|
|
|
$
|
1,024
|
|
Non-cash investing activities:
|
|
|
|
|
|
|
|
|
|||
Property and equipment additions in accounts payable and accrued liabilities
|
$
|
16,352
|
|
|
$
|
13,295
|
|
|
$
|
8,906
|
|
Amortization of deferred financing fees in building and improvements, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
240
|
|
Escrow deposit applied to purchases of real estate
|
$
|
14,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Sale of real estate and lease intangibles to unconsolidated joint venture
|
$
|
13,804
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition of controlling interest in unconsolidated entity
|
$
|
9,770
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued insurance receivable for property damages
|
$
|
15,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Contribution of land to non wholly-owed entity
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,002
|
|
Liabilities assumed through the purchase of real estate
|
$
|
3,267
|
|
|
$
|
—
|
|
|
$
|
1,800
|
|
Non-cash financing activities:
|
|
|
|
|
|
|
|
|
|||
Accrual for distributions declared
|
$
|
—
|
|
|
$
|
8,601
|
|
|
$
|
8,596
|
|
Mortgage notes assumed by purchaser
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
47,074
|
|
Mortgage notes assumed by the Company (1)
|
$
|
146,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cancellation of Series A Convertible Preferred Stock
|
$
|
—
|
|
|
$
|
2,700
|
|
|
$
|
—
|
|
Dilution of Series A Convertible Preferred Stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,926
|
|
Financing costs in accounts payable and accrued liabilities
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unrealized gain on interest rate derivatives
|
$
|
5,262
|
|
|
$
|
2,824
|
|
|
$
|
—
|
|
Unrealized loss on interest rate derivatives
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,077
|
|
Contributions from noncontrolling interests
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
2015
|
||
Rental revenue
|
$
|
4,615
|
|
Expenses
|
|
|
|
Property operating expenses
|
1,734
|
|
|
Interest expense
|
720
|
|
|
Real estate taxes
|
633
|
|
|
Property management fees
|
121
|
|
|
Total expenses
|
3,208
|
|
|
Income from discontinued operations
|
1,407
|
|
|
Gain on sale of discontinued operations
|
15,383
|
|
|
Discontinued operations
|
$
|
16,790
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Land
|
|
$
|
—
|
|
|
$
|
5,481
|
|
Buildings and improvements, net of approximately $29.0 million and $11.8 million in accumulated depreciation at December 31, 2017 and 2016, respectively
|
|
45,396
|
|
|
24,837
|
|
||
Accounts receivable and other assets
|
|
3,335
|
|
|
665
|
|
||
Lease intangibles, net of approximately $5.6 million and $2.1 million in accumulated amortization at December 31, 2017 and 2016, respectively
|
|
2,830
|
|
|
1,363
|
|
||
Other intangible assets, net of approximately $1.2 million in accumulated amortization at December 31, 2017
|
|
1,787
|
|
|
—
|
|
||
Assets associated with real estate held for sale
|
|
$
|
53,348
|
|
|
$
|
32,346
|
|
|
|
|
|
|
||||
Acquired below-market leases, net of approximately $1.3 million and $0.2 million in accumulated amortization at December 31, 2017 and 2016, respectively
|
|
$
|
364
|
|
|
$
|
44
|
|
Other liabilities
|
|
1,990
|
|
|
899
|
|
||
Obligations associated with real estate held for sale
|
|
$
|
2,354
|
|
|
$
|
943
|
|
2017 Quarters Ended
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Rental revenue
|
|
$
|
56,363
|
|
|
$
|
54,552
|
|
|
$
|
50,920
|
|
|
$
|
54,626
|
|
Income (loss) before gains
|
|
$
|
(6,690
|
)
|
|
$
|
2,772
|
|
|
$
|
(8,051
|
)
|
|
$
|
(10,268
|
)
|
Gain on sale of assets
|
|
90,750
|
|
|
1,262
|
|
|
—
|
|
|
384
|
|
||||
Gain on remeasurement of investment in
unconsolidated entities
|
|
14,168
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
|
$
|
98,228
|
|
|
$
|
4,034
|
|
|
$
|
(8,051
|
)
|
|
$
|
(9,884
|
)
|
Net income (loss) attributable to common stockholders
|
|
$
|
98,171
|
|
|
$
|
4,031
|
|
|
$
|
(8,041
|
)
|
|
$
|
(9,875
|
)
|
Weighted average shares outstanding - basic
|
|
47,511
|
|
|
47,536
|
|
|
47,550
|
|
|
47,554
|
|
||||
Weighted average shares outstanding - diluted
|
|
47,806
|
|
|
47,875
|
|
|
47,550
|
|
|
47,554
|
|
||||
Basic income (loss) per common share
|
|
$
|
2.05
|
|
|
$
|
0.08
|
|
|
$
|
(0.17
|
)
|
|
$
|
(0.21
|
)
|
Diluted income (loss) per common share
|
|
$
|
2.04
|
|
|
$
|
0.08
|
|
|
$
|
(0.17
|
)
|
|
$
|
(0.21
|
)
|
2016 Quarters Ended
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Rental revenue
|
|
$
|
68,478
|
|
|
$
|
64,267
|
|
|
$
|
55,998
|
|
|
$
|
54,075
|
|
Loss before gain on sale of assets
|
|
$
|
(18,462
|
)
|
|
$
|
(14,371
|
)
|
|
$
|
(11,805
|
)
|
|
$
|
(6,991
|
)
|
Gain on sale of assets
|
|
5,739
|
|
|
5,010
|
|
|
10,777
|
|
|
650
|
|
||||
Net loss
|
|
$
|
(12,723
|
)
|
|
$
|
(9,361
|
)
|
|
$
|
(1,028
|
)
|
|
$
|
(6,341
|
)
|
Net loss attributable to common stockholders
|
|
$
|
(12,707
|
)
|
|
$
|
(9,352
|
)
|
|
$
|
(1,025
|
)
|
|
$
|
(6,333
|
)
|
Basic and diluted weighted average common shares outstanding
|
|
47,390
|
|
|
47,406
|
|
|
47,413
|
|
|
47,414
|
|
||||
Basic and diluted loss per common share
|
|
$
|
(0.27
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.13
|
)
|
Allowance for Doubtful Accounts
|
|
Balance at
Beginning
of Year
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Write-offs/Payments/Other
|
|
Balance at End
of Year
|
||||||||||
Year to date December 31, 2017
|
|
$
|
2,566
|
|
|
$
|
183
|
|
|
$
|
—
|
|
|
$
|
(2,566
|
)
|
|
$
|
183
|
|
Year to date December 31, 2016
|
|
$
|
4,713
|
|
|
$
|
878
|
|
|
$
|
851
|
|
|
$
|
(3,876
|
)
|
|
$
|
2,566
|
|
Year to date December 31, 2015
|
|
$
|
1,201
|
|
|
$
|
791
|
|
|
$
|
2,946
|
|
|
$
|
(225
|
)
|
|
$
|
4,713
|
|
TIER REIT, Inc.
|
||||||||||||||||||||||||||||||
Real Estate and Accumulated Depreciation
|
||||||||||||||||||||||||||||||
Schedule III
|
||||||||||||||||||||||||||||||
December 31, 2017
|
||||||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Gross amount
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
Initial cost
|
|
Costs capitalized
|
|
at which
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
Building and
|
|
subsequent
|
|
carried at
|
|
Accumulated
|
|
Year of
|
|
Date
|
||||||||||||
Property Name
|
|
Location
|
|
Encumbrances
|
|
Land (1)
|
|
Improvements
|
|
to acquisition (2)
|
|
close of period (3)
|
|
depreciation
|
|
construction
|
|
acquired
|
||||||||||||
Woodcrest Corporate Center
|
|
Cherry Hill, NJ
|
|
—
|
|
|
5,927
|
|
|
49,977
|
|
|
7,060
|
|
|
62,964
|
|
|
27,270
|
|
|
1960
|
|
01/2006
|
||||||
Burnett Plaza
|
|
Ft. Worth, TX
|
|
—
|
|
|
6,239
|
|
|
157,171
|
|
|
28,259
|
|
|
191,669
|
|
|
84,618
|
|
|
1983
|
|
02/2006
|
||||||
The Terrace Office Park
|
|
Austin, TX
|
|
—
|
|
|
17,330
|
|
|
124,551
|
|
|
21,959
|
|
|
163,840
|
|
|
65,833
|
|
|
1997-2002
|
|
06/2006
|
||||||
Bank of America Plaza
|
|
Charlotte, NC
|
|
—
|
|
|
26,656
|
|
|
185,215
|
|
|
57,027
|
|
|
268,898
|
|
|
94,502
|
|
|
1974
|
|
10/2006
|
||||||
One & Two Eldridge Place
|
|
Houston, TX
|
|
—
|
|
|
6,605
|
|
|
89,506
|
|
|
8,379
|
|
|
104,490
|
|
|
43,471
|
|
|
1984/86
|
|
12/2006
|
||||||
Centreport Office Center
|
|
Ft. Worth, TX
|
|
—
|
|
|
3,175
|
|
|
12,917
|
|
|
(6,130
|
)
|
|
9,962
|
|
|
3,695
|
|
|
1999
|
|
06/2007
|
||||||
111 Woodcrest
|
|
Cherry Hill, NJ
|
|
—
|
|
|
1,000
|
|
|
5,417
|
|
|
(827
|
)
|
|
5,590
|
|
|
2,113
|
|
|
1964
|
|
11/2007
|
||||||
Fifth Third Center
|
|
Columbus, OH
|
|
48,177
|
|
|
3,500
|
|
|
54,242
|
|
|
(18,623
|
)
|
|
39,119
|
|
|
7,998
|
|
|
1928
|
|
12/2007
|
||||||
Plaza at MetroCenter
|
|
Nashville, TN
|
|
—
|
|
|
3,341
|
|
|
35,333
|
|
|
(1,410
|
)
|
|
37,264
|
|
|
10,672
|
|
|
1985
|
|
12/2007
|
||||||
Loop Central
|
|
Houston, TX
|
|
—
|
|
|
11,653
|
|
|
86,587
|
|
|
(26,404
|
)
|
|
71,836
|
|
|
5,586
|
|
|
1980-1982
|
|
12/2007
|
||||||
One BriarLake Plaza
|
|
Houston, TX
|
|
77,162
|
|
|
9,602
|
|
|
119,660
|
|
|
14,858
|
|
|
144,120
|
|
|
50,662
|
|
|
2000
|
|
09/2008
|
||||||
Two BriarLake Plaza
|
|
Houston, TX
|
|
—
|
|
|
2,446
|
|
|
81,748
|
|
|
1,888
|
|
|
86,082
|
|
|
10,704
|
|
|
2012-2014
|
|
12/2009
|
||||||
Three Eldridge Place
|
|
Houston ,TX
|
|
—
|
|
|
3,090
|
|
|
62,181
|
|
|
1,281
|
|
|
66,552
|
|
|
24,328
|
|
|
2009
|
|
12/2006-
11/2009
|
||||||
5950 Sherry Lane
|
|
Dallas, TX
|
|
—
|
|
|
10,002
|
|
|
50,876
|
|
|
6,556
|
|
|
67,434
|
|
|
8,373
|
|
|
1999
|
|
12/2014
|
||||||
Domain 2
|
|
Austin, TX
|
|
—
|
|
|
4,598
|
|
|
48,258
|
|
|
25
|
|
|
52,881
|
|
|
1,926
|
|
|
2014
|
|
07/2015-1/2017
|
||||||
Domain 3
|
|
Austin, TX
|
|
—
|
|
|
6,781
|
|
|
32,923
|
|
|
1,744
|
|
|
41,448
|
|
|
3,203
|
|
|
1975/2001
|
|
07/2015
|
||||||
Domain 4
|
|
Austin, TX
|
|
—
|
|
|
5,988
|
|
|
24,401
|
|
|
3,936
|
|
|
34,325
|
|
|
2,589
|
|
|
1968/2001
|
|
07/2015
|
||||||
Domain 7
|
|
Austin, TX
|
|
—
|
|
|
8,866
|
|
|
87,105
|
|
|
34
|
|
|
96,005
|
|
|
3,486
|
|
|
2015
|
|
07/2015-1/2017
|
||||||
Domain 11
|
|
Austin, TX
|
|
—
|
|
|
8,230
|
|
|
—
|
|
|
21,208
|
|
|
29,438
|
|
|
—
|
|
|
N/A
|
|
07/2015
|
||||||
Legacy District One
|
|
Plano, TX
|
|
66,000
|
|
|
5,100
|
|
|
104,941
|
|
|
6
|
|
|
110,047
|
|
|
2,097
|
|
|
2012
|
|
06/2017
|
||||||
Land held for development
|
|
Plano, TX
|
|
—
|
|
|
6,380
|
|
|
—
|
|
|
3,162
|
|
|
9,542
|
|
|
—
|
|
|
N/A
|
|
06/2015
|
||||||
Land held for development
|
|
Austin, TX
|
|
—
|
|
|
30,449
|
|
|
—
|
|
|
5,124
|
|
|
35,573
|
|
|
—
|
|
|
N/A
|
|
07/2015
|
||||||
Totals (4)
|
|
|
|
$
|
191,339
|
|
|
$
|
186,958
|
|
|
$
|
1,413,009
|
|
|
$
|
129,112
|
|
|
$
|
1,729,079
|
|
|
$
|
453,126
|
|
|
|
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||
Real Estate:
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of the year
|
$
|
1,785,714
|
|
|
$
|
2,139,712
|
|
|
$
|
2,326,195
|
|
Acquisitions/improvements
|
258,955
|
|
|
64,721
|
|
|
184,326
|
|
|||
Assets disposed/written-off
|
(315,590
|
)
|
|
(418,719
|
)
|
|
(370,809
|
)
|
|||
Balance at end of the year
|
$
|
1,729,079
|
|
|
$
|
1,785,714
|
|
|
$
|
2,139,712
|
|
Accumulated depreciation:
|
|
|
|
|
|
|
|
|
|||
Balance at beginning of the year
|
$
|
535,516
|
|
|
$
|
566,464
|
|
|
$
|
557,429
|
|
Depreciation expense
|
77,585
|
|
|
90,682
|
|
|
99,131
|
|
|||
Assets disposed/written-off
|
(159,975
|
)
|
|
(121,630
|
)
|
|
(90,096
|
)
|
|||
Balance at end of the year
|
$
|
453,126
|
|
|
$
|
535,516
|
|
|
$
|
566,464
|
|
1 Year Tier Reit Inc. Chart |
1 Month Tier Reit Inc. Chart |
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