falsedesktopPHLD2020-09-30000147620420000081{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large accelerated filer\t☐\tAccelerated filer\t☐\nNon-accelerated filer\t☑\tSmaller reporting company\t☐\n\t\tEmerging growth company\t☐\n", "q10k_tbl_1": "PART I. FINANCIAL INFORMATION\t\t\nITEM 1.\tFINANCIAL STATEMENTS (CONDENSED AND UNAUDITED)\t2\n\tCONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30 2020 AND DECEMBER 31 2019\t2\n\tCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30 2020 AND 2019\t3\n\tCONSOLIDATED STATEMENTS OF EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30 2020 AND 2019\t4\n\tCONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30 2020 AND 2019\t5\n\tNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\t7\nITEM 2.\tMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\t20\nITEM 3.\tQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\t40\nITEM 4.\tCONTROLS AND PROCEDURES\t40\nPART II. OTHER INFORMATION\t\t\nITEM 1.\tLEGAL PROCEEDINGS\t41\nITEM 1A.\tRISK FACTORS\t41\nITEM 5.\tOTHER INFORMATION\t42\nITEM 6.\tEXHIBITS\t43\nSIGNATURES\t\t44\n", "q10k_tbl_2": "\tSeptember 30 2020\tDecember 31 2019\nASSETS\t\t\nInvestment in real estate:\t\t\nLand and improvements\t1547154\t1552562\nBuilding and improvements\t3220949\t3196762\nIn-place lease assets\t441670\t442729\nAbove-market lease assets\t65637\t65946\nTotal investment in real estate assets\t5275410\t5257999\nAccumulated depreciation and amortization\t(892090)\t(731560)\nNet investment in real estate assets\t4383320\t4526439\nInvestment in unconsolidated joint ventures\t39575\t42854\nTotal investment in real estate assets net\t4422895\t4569293\nCash and cash equivalents\t103910\t17820\nRestricted cash\t32888\t77288\nGoodwill\t29066\t29066\nOther assets net\t133014\t128690\nReal estate investment and other assets held for sale\t0\t6038\nTotal assets\t4721773\t4828195\nLIABILITIES AND EQUITY\t\t\nLiabilities:\t\t\nDebt obligations net\t2319003\t2354099\nBelow-market lease liabilities net\t105223\t112319\nEarn-out liability\t22000\t32000\nDerivative liabilities\t60615\t20974\nDeferred income\t14092\t15955\nAccounts payable and other liabilities\t93187\t124054\nTotal liabilities\t2614120\t2659401\nCommitments and contingencies (Note 8)\t0\t0\nEquity:\t\t\nPreferred stock $0.01 par value per share 10000 shares authorized zero shares issued and\t\t\noutstanding at September 30 2020 and December 31 2019\t0\t0\nCommon stock $0.01 par value per share 1000000 shares authorized 290466 and 289047\t\t\nshares issued and outstanding at September 30 2020 and December 31 2019 respectively\t2905\t2890\nAdditional paid-in capital (\"APIC\")\t2796655\t2779130\nAccumulated other comprehensive loss (\"AOCI\")\t(55630)\t(20762)\nAccumulated deficit\t(980534)\t(947252)\nTotal stockholders' equity\t1763396\t1814006\nNoncontrolling interests\t344257\t354788\nTotal equity\t2107653\t2168794\nTotal liabilities and equity\t4721773\t4828195\n", "q10k_tbl_3": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRevenues:\t\t\t\t\nRental income\t123298\t132715\t367418\t390605\nFees and management income\t2581\t2766\t7506\t9078\nOther property income\t816\t528\t2334\t1676\nTotal revenues\t126695\t136009\t377258\t401359\nOperating Expenses:\t\t\t\t\nProperty operating\t20835\t23296\t62226\t67095\nReal estate taxes\t17282\t18016\t50847\t53294\nGeneral and administrative\t9595\t11537\t30141\t38287\nDepreciation and amortization\t56095\t58477\t168692\t179020\nImpairment of real estate assets\t0\t35710\t0\t74626\nTotal operating expenses\t103807\t147036\t311906\t412322\nOther:\t\t\t\t\nInterest expense net\t(20388)\t(25309)\t(65317)\t(76151)\nGain on disposal of property net\t10734\t5048\t8616\t10903\nOther income (expense) net\t196\t1561\t9565\t(1476)\nNet income (loss)\t13430\t(29727)\t18216\t(77687)\nNet (income) loss attributable to noncontrolling interests\t(1646)\t3850\t(2251)\t10045\nNet income (loss) attributable to stockholders\t11784\t(25877)\t15965\t(67642)\nEarnings per common share:\t\t\t\t\nNet income (loss) per share attributable to stockholders - basic and diluted (Note 10)\t0.04\t(0.09)\t0.05\t(0.24)\nComprehensive income (loss):\t\t\t\t\nNet income (loss)\t13430\t(29727)\t18216\t(77687)\nOther comprehensive income (loss):\t\t\t\t\nChange in unrealized value on interest rate swaps\t5098\t(9731)\t(40013)\t(47737)\nComprehensive income (loss)\t18528\t(39458)\t(21797)\t(125424)\nNet (income) loss attributable to noncontrolling interests\t(1646)\t3850\t(2251)\t10045\nOther comprehensive (income) loss attributable to noncontrolling interests\t(653)\t1293\t5145\t6399\nComprehensive income (loss) attributable to stockholders\t16229\t(34315)\t(18903)\t(108980)\n", "q10k_tbl_4": "\tThree Months Ended September 30 2020 and 2019\t\t\t\t\t\t\t\n\tCommon Stock\t\tAPIC\tAOCI\tAccumulated Deficit\tTotal Stockholders' Equity\tNoncontrolling Interests\tTotal Equity\n\tShares\tAmount\t\t\t\nBalance at July 1 2019\t283770\t2838\t2718871\t(20538)\t(830358)\t1870813\t371213\t2242026\nDividend reinvestment plan (\"DRIP\")\t1475\t14\t16357\t0\t0\t16371\t0\t16371\nShare repurchases\t(1660)\t(17)\t(18193)\t0\t0\t(18210)\t0\t(18210)\nChange in unrealized value on interest rate swaps\t0\t0\t0\t(8438)\t0\t(8438)\t(1293)\t(9731)\nCommon distributions declared $0.17 per share\t0\t0\t0\t0\t(48062)\t(48062)\t0\t(48062)\nDistributions to noncontrolling interests\t0\t0\t0\t0\t0\t0\t(6978)\t(6978)\nShare-based compensation\t1\t0\t502\t0\t0\t502\t1674\t2176\nNet loss\t0\t0\t0\t0\t(25877)\t(25877)\t(3850)\t(29727)\nBalance at September 30 2019\t283586\t2835\t2717537\t(28976)\t(904297)\t1787099\t360766\t2147865\nBalance at July 1 2020\t290465\t2905\t2795434\t(60075)\t(991939)\t1746325\t341144\t2087469\nChange in unrealized value on interest rate swaps\t0\t0\t0\t4445\t0\t4445\t653\t5098\nShare-based compensation\t1\t0\t1036\t0\t0\t1036\t818\t1854\nOther\t0\t0\t185\t0\t(379)\t(194)\t(4)\t(198)\nNet income\t0\t0\t0\t0\t11784\t11784\t1646\t13430\nBalance at September 30 2020\t290466\t2905\t2796655\t(55630)\t(980534)\t1763396\t344257\t2107653\n", "q10k_tbl_5": "\tNine Months Ended September 30 2020 and 2019\t\t\t\t\t\t\t\n\tCommon Stock\t\tAPIC\tAOCI\tAccumulated Deficit\tTotal Stockholders' Equity\tNoncontrolling Interests\tTotal Equity\n\tShares\tAmount\t\t\t\nBalance at January 1 2019\t279803\t2798\t2674871\t12362\t(692573)\t1997458\t414911\t2412369\nDRIP\t4636\t45\t51284\t0\t0\t51329\t0\t51329\nShare repurchases\t(2806)\t(28)\t(30856)\t0\t0\t(30884)\t0\t(30884)\nChange in unrealized value on interest rate swaps\t0\t0\t0\t(41338)\t0\t(41338)\t(6399)\t(47737)\nCommon distributions declared $0.50 per share\t0\t0\t0\t0\t(144082)\t(144082)\t0\t(144082)\nDistributions to noncontrolling interests\t0\t0\t0\t0\t0\t0\t(21206)\t(21206)\nShare-based compensation\t65\t1\t1358\t0\t0\t1359\t4404\t5763\nConversion of noncontrolling interests\t1888\t19\t20880\t0\t0\t20899\t(20899)\t0\nNet loss\t0\t0\t0\t0\t(67642)\t(67642)\t(10045)\t(77687)\nBalance at September 30 2019\t283586\t2835\t2717537\t(28976)\t(904297)\t1787099\t360766\t2147865\nBalance at January 1 2020\t289047\t2890\t2779130\t(20762)\t(947252)\t1814006\t354788\t2168794\nDRIP\t1436\t14\t15926\t0\t0\t15940\t0\t15940\nShare repurchases\t(288)\t(3)\t(2697)\t0\t0\t(2700)\t0\t(2700)\nChange in unrealized value on interest rate swaps\t0\t0\t0\t(34868)\t0\t(34868)\t(5145)\t(40013)\nCommon distributions declared $0.17 per share\t0\t0\t0\t0\t(48809)\t(48809)\t0\t(48809)\nDistributions to noncontrolling interests\t0\t0\t0\t0\t0\t0\t(7105)\t(7105)\nShare-based compensation\t109\t2\t2508\t0\t0\t2510\t1336\t3846\nConversion of noncontrolling interests\t168\t2\t1859\t0\t0\t1861\t(1861)\t0\nOther\t(6)\t0\t(71)\t0\t(438)\t(509)\t(7)\t(516)\nNet income\t0\t0\t0\t0\t15965\t15965\t2251\t18216\nBalance at September 30 2020\t290466\t2905\t2796655\t(55630)\t(980534)\t1763396\t344257\t2107653\n", "q10k_tbl_6": "\tNine Months Ended September 30\t\n\t2020\t2019\nCASH FLOWS FROM OPERATING ACTIVITIES:\t\t\nNet income (loss)\t18216\t(77687)\nAdjustments to reconcile net income (loss) to net cash provided by operating activities:\t\t\nDepreciation and amortization of real estate assets\t164288\t174501\nImpairment of real estate assets\t0\t74626\nDepreciation and amortization of corporate assets\t4404\t4519\nNet amortization of above- and below-market leases\t(2394)\t(3266)\nAmortization of deferred financing expenses\t3739\t3758\nAmortization of debt and derivative adjustments\t2154\t6007\nGain on disposal of property net\t(8616)\t(10903)\nChange in fair value of earn-out liability\t(10000)\t(7500)\nStraight-line rent\t(3131)\t(7024)\nShare-based compensation\t3846\t5971\nOther impairment charges\t0\t9661\nOther\t1497\t1223\nChanges in operating assets and liabilities:\t\t\nOther assets net\t(11089)\t858\nAccounts payable and other liabilities\t(5669)\t1138\nNet cash provided by operating activities\t157245\t175882\nCASH FLOWS FROM INVESTING ACTIVITIES:\t\t\nReal estate acquisitions\t(23014)\t(49880)\nCapital expenditures\t(40772)\t(48079)\nProceeds from sale of real estate\t48276\t86159\nReturn of investment in unconsolidated joint ventures\t1949\t2498\nNet cash used in investing activities\t(13561)\t(9302)\nCASH FLOWS FROM FINANCING ACTIVITIES:\t\t\nNet change in credit facility\t0\t(73359)\nProceeds from mortgages and loans payable\t0\t60000\nPayments on mortgages and loans payable\t(37778)\t(7973)\nDistributions paid net of DRIP\t(49083)\t(92484)\nDistributions to noncontrolling interests\t(9406)\t(20616)\nRepurchases of common stock\t(5211)\t(30178)\nOther\t(516)\t(208)\nNet cash used in financing activities\t(101994)\t(164818)\nNET INCREASE IN CASH CASH EQUIVALENTS AND RESTRICTED CASH\t41690\t1762\nCASH CASH EQUIVALENTS AND RESTRICTED CASH:\t\t\nBeginning of period\t95108\t84304\nEnd of period\t136798\t86066\nRECONCILIATION TO CONSOLIDATED BALANCE SHEETS:\t\t\nCash and cash equivalents\t103910\t29516\nRestricted cash\t32888\t56550\nCash cash equivalents and restricted cash at end of period\t136798\t86066\n", "q10k_tbl_7": "\t2020\t2019\nSUPPLEMENTAL CASH FLOW DISCLOSURE INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES:\t\t\nCash paid for interest\t59906\t66811\nRight-of-use (\"ROU\") assets obtained in exchange for new lease liabilities\t551\t1444\nAccrued capital expenditures\t3587\t3036\nChange in distributions payable\t(16214)\t269\nChange in distributions payable - noncontrolling interests\t(2301)\t590\nChange in accrued share repurchase obligation\t(2511)\t706\nDistributions reinvested\t15940\t51329\n", "q10k_tbl_8": "Standard\tDescription\tDate of Adoption\tEffect on the Financial Statements or Other Significant Matters\nAccounting Standards Update (\"ASU\") 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ASU 2018-19 Financial Instruments - Credit Losses (Topic 326): Codification Improvements ASU 2019-05 Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief ASU 2019-11 Codification Improvements to Topic 326 Financial Instruments - Credit Losses ASU 2020-02 Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842)\tThe amendments in this update replaced the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. It clarified that receivables arising from operating leases are not within the scope of Accounting Standards Codification (\"ASC\") Topic 326. Instead impairment of receivables arising from operating leases will be accounted for in accordance with Topic 842. It also allowed election of the fair value option on certain financial instruments.\tJanuary 1 2020\tThe adoption of this standard did not have a material impact on our consolidated financial statements. The majority of our financial instruments result from operating lease transactions which are not within the scope of this standard.\nASU 2018-17 Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities\tThis ASU amended two aspects of the related-party guidance in Topic 810: (1) added an elective private-company scope exception to the variable interest entity guidance for entities under common control and (2) indirect interests held through related parties in common control arrangements will be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.\tJanuary 1 2020\tThe adoption of this standard did not have a material impact on our consolidated financial statements.\nASU 2019-04 Codification Improvements to Topic 326 Financial Instruments-Credit Losses Topic 815 Derivatives and Hedging and Topic 825 Financial Instruments\tThis ASU amended a variety of topics improving certain aspects of previously issued ASUs including ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and ASU 2017-12 Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.\tJanuary 1 2020\tThe adoption of this standard did not have a material impact on our consolidated financial statements.\nASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting\tThis ASU contains practical expedients for reference rate reform related activities that impact debt leases derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.\tMarch 12 2020\tWe have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.\n", "q10k_tbl_9": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRental income related to fixed lease payments(1)\t94511\t97328\t285572\t289318\nRental income related to variable lease payments\t31781\t33626\t94278\t93105\nStraight-line rent amortization(2)\t1772\t2548\t3103\t7055\nAmortization of lease assets\t802\t1032\t2367\t3230\nLease buyout income\t664\t632\t972\t1088\nAdjustments for collectability(2)(3)\t(6232)\t(2451)\t(18874)\t(3191)\nTotal rental income\t123298\t132715\t367418\t390605\n", "q10k_tbl_10": "Year\tAmount\nRemaining 2020\t98238\n2021\t364782\n2022\t330635\n2023\t282988\n2024\t227052\nThereafter\t594574\nTotal\t1898269\n", "q10k_tbl_11": "Balance Sheet Information\tBalance Sheet Location\tSeptember 30 2020\tDecember 31 2019\nROU assets net - operating leases(1)\tInvestment in Real Estate\t3895\t7613\nROU assets net - operating and finance leases\tOther Assets Net\t1998\t2111\nOperating lease liability\tAccounts Payable and Other Liabilities\t5880\t9453\nFinance lease liability\tDebt Obligations Net\t240\t443\n", "q10k_tbl_12": "\tNine Months Ended September 30\t\n\t2020\t2019\nNumber of properties sold(1)\t6\t10\nNumber of outparcels sold\t0\t1\nProceeds from sale of real estate\t48276\t86159\nGain on sale of properties net(2)\t9915\t12369\n", "q10k_tbl_13": "\tNine Months Ended\t\t\t\n\tSeptember 30 2020\t\tSeptember 30 2019\t\n\tFair Value\tWeighted-Average Useful Life\tFair Value\tWeighted-Average Useful Life\nIn-place leases\t1682\t16\t4736\t11\nAbove-market leases\t120\t5\t825\t8\nBelow-market leases\t(1882)\t26\t(2097)\t16\n", "q10k_tbl_14": "\tSeptember 30 2020\tDecember 31 2019\nOther assets net:\t\t\nDeferred leasing commissions and costs\t40465\t38738\nDeferred financing expenses\t13971\t13971\nOffice equipment ROU assets and other\t21772\t19430\nCorporate intangible assets\t4883\t4883\nTotal depreciable and amortizable assets\t81091\t77022\nAccumulated depreciation and amortization\t(43565)\t(35055)\nNet depreciable and amortizable assets\t37526\t41967\nAccounts receivable net(1)\t50384\t46125\nAccounts receivable - affiliates\t622\t728\nDeferred rent receivable\t32179\t29291\nDerivative assets\t0\t2728\nPrepaid expenses and other\t12303\t7851\nTotal other assets net\t133014\t128690\n", "q10k_tbl_15": "\tInterest Rate(1)\tSeptember 30 2020\tDecember 31 2019\nRevolving credit facility(2)\tLIBOR + 1.40%\t0\t0\nTerm loans(3)\t2.58% - 4.59%\t1622500\t1652500\nSecured loan facilities\t3.35% - 3.52%\t395000\t395000\nMortgages\t3.45% - 7.91%\t317148\t324578\nFinance lease liability\t\t240\t443\nAssumed market debt adjustments net\t\t(1419)\t(1218)\nDeferred financing expenses net\t\t(14466)\t(17204)\nTotal\t\t2319003\t2354099\n", "q10k_tbl_16": "\tSeptember 30 2020\tDecember 31 2019\nAs to interest rate:(1)\t\t\nFixed-rate debt\t1754388\t2122021\nVariable-rate debt\t580500\t250500\nTotal\t2334888\t2372521\nAs to collateralization:\t\t\nUnsecured debt\t1622500\t1652500\nSecured debt\t712388\t720021\nTotal\t2334888\t2372521\nWeighed-average interest rate(1)\t3.1%\t3.4%\n", "q10k_tbl_17": "\tSeptember 30 2020\tDecember 31 2019\nCount\t6\t9\nNotional amount\t1042000\t1402000\nFixed LIBOR\t1.3% - 2.9%\t0.8% - 2.9%\nMaturity date\t2021 - 2025\t2020 - 2025\n", "q10k_tbl_18": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nAmount of loss recognized in other comprehensive income on derivatives\t(45)\t(9193)\t(51575)\t(44398)\nAmount of loss (gain) reclassified from AOCI into interest expense\t5143\t(538)\t11562\t(3339)\n", "q10k_tbl_19": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nNumerator:\t\t\t\t\nNet income (loss) attributable to stockholders - basic\t11784\t(25877)\t15965\t(67642)\nNet income (loss) attributable to convertible OP units(1)\t1646\t(3893)\t2251\t(10319)\nNet income (loss) - diluted\t13430\t(29770)\t18216\t(77961)\nDenominator:\t\t\t\t\nWeighted-average shares - basic\t290465\t283827\t290295\t282714\nOP units(1)\t42742\t42783\t42792\t43356\nDilutive restricted stock awards\t356\t0\t393\t0\nAdjusted weighted-average shares - diluted\t333563\t326610\t333480\t326070\nEarnings per common share:\t\t\t\t\nBasic and diluted income (loss) per share\t0.04\t(0.09)\t0.05\t(0.24)\n", "q10k_tbl_20": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nRecurring fees(1)\t1233\t1669\t3631\t4890\nTransactional revenue and reimbursements(2)\t719\t606\t2109\t2655\nInsurance premiums(3)\t629\t491\t1766\t1533\nTotal fees and management income\t2581\t2766\t7506\t9078\n", "q10k_tbl_21": "\tSeptember 30 2020\t\tDecember 31 2019\t\n\tRecorded Principal Balance(1)\tFair Value\tRecorded Principal Balance(1)\tFair Value\nTerm loans\t1609291\t1602032\t1636470\t1656765\nSecured portfolio loan facilities\t391011\t404971\t390780\t399054\nMortgages(2)\t318701\t330159\t326849\t337614\nTotal\t2319003\t2337162\t2354099\t2393433\n", "q10k_tbl_22": "\tSeptember 30 2020\t\t\tDecember 31 2019\t\t\n\tLevel 1\tLevel 2\tLevel 3\tLevel 1\tLevel 2\tLevel 3\nRecurring\t\t\t\t\t\t\nDerivative assets(1)\t0\t0\t0\t0\t2728\t0\nDerivative liabilities(1)\t0\t(60615)\t0\t0\t(20974)\t0\nEarn-out liability\t0\t0\t(22000)\t0\t0\t(32000)\nNonrecurring\t\t\t\t\t\t\nImpaired real estate assets net(2)\t0\t0\t0\t0\t280593\t0\nImpaired corporate intangible asset net(3)\t0\t0\t0\t0\t0\t4401\n", "q10k_tbl_23": "\tEarn-Out Liability\nBalance at December 31 2019\t32000\nChange in fair value recognized in Other Income (Expense) Net\t(10000)\nBalance at September 30 2020\t22000\n", "q10k_tbl_24": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019\t2020\t2019\nImpairment of real estate assets\t0\t35710\t0\t74626\n", "q10k_tbl_25": "\tSeptember 30 2020\tSeptember 30 2019\nNumber of properties\t283\t294\nNumber of states\t31\t32\nTotal square feet (in thousands)\t31731\t33203\nLeased % of rentable square feet:\t\t\nTotal portfolio spaces\t95.3%\t95.0%\nAnchor spaces\t98.3%\t98.1%\nInline spaces\t89.5%\t89.2%\nAverage remaining lease term (in years)(1)\t4.5\t4.7\n% ABR from grocery-anchored properties\t97.0%\t96.0%\n", "q10k_tbl_26": "\tSeptember 30 2020\t\t\t\nJoint Venture\tOwnership Percentage\tNumber of Properties\tABR(1)\tGLA(2)\nNecessity Retail Partners\t20%\t6\t10330\t698\nGrocery Retail Partners I\t15%\t17\t24740\t1905\nGrocery Retail Partners II\t10%\t3\t3841\t312\n", "q10k_tbl_27": "\tSeptember 30 2020\nEssential Retail and Services:\t\nGrocery\t35.9%\nBanks\t2.4%\nDollar stores\t2.3%\nPet supply\t2.2%\nMedical\t1.8%\nHardware/Automotive\t1.6%\nWine beer and liquor\t1.3%\nPharmacy\t1.0%\nOther essential\t2.8%\nTotal essential retail and services(1)\t51.3%\nRestaurants:\t\nQuick service\t9.5%\nFull service\t5.9%\nTotal restaurants\t15.4%\nOther Retail and Services:\t\nServices\t16.3%\nSoft goods\t12.7%\nFitness\t3.2%\nEntertainment\t1.1%\nTotal other retail and services\t33.3%\nTotal ABR\t100.0%\n", "q10k_tbl_28": "\tSeptember 30 2020\t\t\t\t\nNeighbor(1)\tABR\t% of ABR\tLeased Square Feet\t% of Leased Square Feet\tNumber of Locations(2)\nKroger\t27281\t7.0%\t3467\t11.3%\t65\nPublix\t22021\t5.6%\t2241\t7.3%\t56\nAhold Delhaize\t17496\t4.5%\t1278\t4.2%\t25\nAlbertsons-Safeway\t16579\t4.2%\t1588\t5.2%\t30\nWalmart\t8932\t2.3%\t1770\t5.8%\t13\nGiant Eagle\t8147\t2.1%\t823\t2.7%\t12\nTJX Companies\t4979\t1.3%\t428\t1.4%\t15\nSprouts Farmers Market\t4885\t1.2%\t334\t1.1%\t11\nDollar Tree\t4047\t1.0%\t423\t1.4%\t44\nRaley's\t3884\t1.0%\t253\t0.8%\t4\nSUPERVALU\t3455\t0.9%\t376\t1.2%\t7\nSubway Group\t3052\t0.8%\t125\t0.4%\t90\nSchnuck's\t3025\t0.8%\t329\t1.1%\t5\nAnytime Fitness Inc.\t2694\t0.7%\t179\t0.6%\t38\nSoutheastern Grocers\t2626\t0.7%\t291\t0.9%\t8\nSave Mart\t2619\t0.7%\t309\t1.0%\t6\nLowe's\t2407\t0.6%\t371\t1.2%\t4\nKohl's Corporation\t2255\t0.6%\t365\t1.2%\t4\nFood 4 Less (PAQ)\t2215\t0.6%\t118\t0.4%\t2\nPetco Animal Supplies Inc.\t2104\t0.4%\t127\t0.3%\t11\n\t144703\t37.0%\t15195\t49.5%\t450\n", "q10k_tbl_29": "\tThree Months Ended September 30\t\tFavorable (Unfavorable) Change\t\n(Dollars in thousands)\t2020\t2019\t$\t%\nRevenues:\t\t\t\t\nRental income\t123298\t132715\t(9417)\t(7.1)%\nFee and management income\t2581\t2766\t(185)\t(6.7)%\nOther property income\t816\t528\t288\t54.5%\nTotal revenues\t126695\t136009\t(9314)\t(6.8)%\nOperating Expenses:\t\t\t\t\nProperty operating expenses\t(20835)\t(23296)\t2461\t10.6%\nReal estate tax expenses\t(17282)\t(18016)\t734\t4.1%\nGeneral and administrative expenses\t(9595)\t(11537)\t1942\t16.8%\nDepreciation and amortization\t(56095)\t(58477)\t2382\t4.1%\nImpairment of real estate assets\t0\t(35710)\t35710\tNM\nTotal operating expenses\t(103807)\t(147036)\t43229\t29.4%\nOther:\t\t\t\t\nInterest expense net\t(20388)\t(25309)\t4921\t19.4%\nGain on disposal of property net\t10734\t5048\t5686\t112.6%\nOther income net\t196\t1561\t(1365)\t(87.4)%\nNet income (loss)\t13430\t(29727)\t43157\t145.2%\nNet (income) loss attributable to noncontrolling interests\t(1646)\t3850\t(5496)\t(142.8)%\nNet income (loss) attributable to stockholders\t11784\t(25877)\t37661\t145.5%\n", "q10k_tbl_30": "\tThree Months Ended September 30\t\n\t2020\t2019\nInterest on revolving credit facility net\t260\t227\nInterest on term loans net\t11195\t16409\nInterest on secured debt\t7308\t5780\nNon-cash amortization and other\t1625\t2893\nInterest expense net\t20388\t25309\nWeighted-average interest rate as of end of period\t3.1%\t3.5%\nWeighted-average term (in years) as of end of period\t4.3\t4.3\n", "q10k_tbl_31": "\tThree Months Ended September 30\t\n\t2020\t2019\nEquity in net income of unconsolidated joint ventures\t133\t1550\nTransaction and acquisition expenses\t(152)\t(120)\nFederal state and local income tax expense\t(173)\t(176)\nOther\t388\t307\nOther income net\t196\t1561\n", "q10k_tbl_32": "\tNine Months Ended September 30\t\tFavorable (Unfavorable) Change\t\n(Dollars in thousands)\t2020\t2019\t$\t%\nRevenues:\t\t\t\t\nRental income\t367418\t390605\t(23187)\t(5.9)%\nFee and management income\t7506\t9078\t(1572)\t(17.3)%\nOther property income\t2334\t1676\t658\t39.3%\nTotal revenues\t377258\t401359\t(24101)\t(6.0)%\nOperating Expenses:\t\t\t\t\nProperty operating expenses\t(62226)\t(67095)\t4869\t7.3%\nReal estate tax expenses\t(50847)\t(53294)\t2447\t4.6%\nGeneral and administrative expenses\t(30141)\t(38287)\t8146\t21.3%\nDepreciation and amortization\t(168692)\t(179020)\t10328\t5.8%\nImpairment of real estate assets\t0\t(74626)\t74626\tNM\nTotal operating expenses\t(311906)\t(412322)\t100416\t24.4%\nOther:\t\t\t\t\nInterest expense net\t(65317)\t(76151)\t10834\t14.2%\nGain on disposal of property net\t8616\t10903\t(2287)\t(21.0)%\nOther income (expense) net\t9565\t(1476)\t11041\tNM\nNet income (loss)\t18216\t(77687)\t95903\t123.4%\nNet (income) loss attributable to noncontrolling interests\t(2251)\t10045\t(12296)\t(122.4)%\nNet income (loss) attributable to stockholders\t15965\t(67642)\t83607\t123.6%\n", "q10k_tbl_33": "\tNine Months Ended September 30\t\n\t2020\t2019\nInterest on revolving credit facility net\t1455\t1648\nInterest on term loans net\t35611\t47113\nInterest on secured debt\t21973\t17319\nNon-cash amortization and other\t6278\t10071\nInterest expense net\t65317\t76151\nWeighted-average interest rate as of end of period\t3.1%\t3.5%\nWeighted-average term (in years) as of end of period\t4.3\t4.3\n", "q10k_tbl_34": "\tNine Months Ended September 30\t\n\t2020\t2019\nChange in fair value of earn-out liability\t10000\t7500\nEquity in (loss) income of unconsolidated joint ventures\t(506)\t574\nTransaction and acquisition expenses\t(211)\t(396)\nFederal state and local income tax expense\t(382)\t(517)\nOther impairment charges\t0\t(9661)\nOther\t664\t1024\nOther income (expense) net\t9565\t(1476)\n", "q10k_tbl_35": "\tTotal Deals(1)\t\tInline Deals(1)(2)\t\n\t2020\t2019\t2020\t2019\nNew leases:\t\t\t\t\nNumber of leases\t111\t98\t110\t95\nSquare footage (in thousands)\t302\t370\t287\t276\nABR (in thousands)\t5181\t5635\t5023\t4595\nABR per square foot\t17.15\t15.24\t17.49\t16.67\nCost per square foot of executing new leases(3)\t27.25\t18.08\t26.01\t20.40\nNumber of comparable leases(4)\t34\t33\t34\t31\nComparable rent spread(5)\t8.2%\t12.6%\t8.2%\t7.6%\nWeighted-average lease term (in years)\t6.6\t7.6\t6.3\t6.6\nRenewals and options:\t\t\t\t\nNumber of leases\t119\t148\t101\t126\nSquare footage (in thousands)\t1035\t1053\t244\t271\nABR (in thousands)\t12473\t10361\t4993\t5403\nABR per square foot\t12.06\t9.84\t20.45\t19.90\nABR per square foot prior to renewals\t11.56\t9.46\t19.16\t18.38\nPercentage increase in ABR per square foot\t4.3%\t4.0%\t6.7%\t8.3%\nCost per square foot of executing renewals and options(3)\t2.42\t2.28\t4.60\t4.32\nNumber of comparable leases(4)\t87\t110\t82\t101\nComparable rent spread(5)\t4.1%\t2.7%\t6.4%\t11.0%\nWeighted-average lease term (in years)\t4.8\t4.5\t4.2\t4.0\nPortfolio retention rate(6)\t90.4%\t88.7%\t74.9%\t74.8%\n", "q10k_tbl_36": "\tTotal Deals\t\tInline Deals\t\n\t2020\t2019\t2020\t2019\nNew leases:\t\t\t\t\nNumber of leases\t259\t305\t245\t294\nSquare footage (in thousands)\t881\t1086\t627\t755\nABR (in thousands)\t13778\t15980\t11038\t12779\nABR per square foot\t15.63\t14.71\t17.62\t16.93\nCost per square foot of executing new leases\t23.25\t23.64\t25.89\t25.93\nNumber of comparable leases\t79\t106\t78\t102\nComparable rent spread\t9.7%\t13.9%\t9.7%\t11.2%\nWeighted-average lease term (in years)\t7.7\t7.6\t6.6\t6.7\nRenewals and options:\t\t\t\t\nNumber of leases\t354\t470\t309\t426\nSquare footage (in thousands)\t2749\t2457\t702\t906\nABR (in thousands)\t31135\t30490\t14498\t19268\nABR per square foot\t11.33\t12.41\t20.64\t21.26\nABR per square foot prior to renewals\t10.74\t11.55\t18.94\t19.19\nPercentage increase in ABR per square foot\t5.4%\t7.4%\t9.0%\t10.7%\nCost per square foot of executing renewals and options\t2.40\t2.64\t4.24\t4.57\nNumber of comparable leases\t263\t362\t252\t345\nComparable rent spread\t7.4%\t8.4%\t9.9%\t12.0%\nWeighted-average lease term (in years)\t4.9\t4.7\t4.0\t4.4\nPortfolio retention rate\t82.7%\t86.6%\t70.5%\t77.3%\n", "q10k_tbl_37": "\tThree Months Ended September 30\t\tFavorable (Unfavorable)\t\tNine Months Ended September 30\t\tFavorable (Unfavorable)\t\n\t2020\t2019\t Change\t% Change\t2020\t2019\t Change\t% Change\nRevenues:\t\t\t\t\t\t\t\t\nRental income(1)\t86574\t89281\t(2707)\t\t261061\t268046\t(6985)\t\nTenant recovery income\t29964\t31425\t(1461)\t\t88283\t87369\t914\t\nOther property income\t786\t493\t293\t\t2243\t1549\t694\t\nTotal revenues\t117324\t121199\t(3875)\t(3.2)%\t351587\t356964\t(5377)\t(1.5)%\nOperating expenses:\t\t\t\t\t\t\t\t\nProperty operating expenses\t16865\t16940\t75\t\t51681\t50979\t(702)\t\nReal estate taxes\t16975\t17167\t192\t\t50161\t50417\t256\t\nTotal operating expenses\t33840\t34107\t267\t0.8%\t101842\t101396\t(446)\t(0.4)%\nTotal Same-Center NOI\t83484\t87092\t(3608)\t(4.1)%\t249745\t255568\t(5823)\t(2.3)%\n", "q10k_tbl_38": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019(1)\t2020\t2019(1)\nNet income (loss)\t13430\t(29727)\t18216\t(77687)\nAdjusted to exclude:\t\t\t\t\nFees and management income\t(2581)\t(2766)\t(7506)\t(9078)\nStraight-line rental income(2)\t(1800)\t(2573)\t(3164)\t(7105)\nNet amortization of above- and below-market leases\t(811)\t(1042)\t(2394)\t(3266)\nLease buyout income\t(664)\t(632)\t(972)\t(1088)\nGeneral and administrative expenses\t9595\t11537\t30141\t38287\nDepreciation and amortization\t56095\t58477\t168692\t179020\nImpairment of real estate assets\t0\t35710\t0\t74626\nInterest expense net\t20388\t25309\t65317\t76151\nGain on disposal of property net\t(10734)\t(5048)\t(8616)\t(10903)\nOther (income) expense net\t(196)\t(1561)\t(9565)\t1476\nProperty operating expenses related to fees and management income\t1058\t2328\t2586\t5154\nNOI for real estate investments\t83780\t90012\t252735\t265587\nLess: Non-same-center NOI(3)\t(296)\t(2920)\t(2990)\t(10019)\nTotal Same-Center NOI\t83484\t87092\t249745\t255568\n", "q10k_tbl_39": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2020\t2019(1)\t2020\t2019(1)\nCalculation of FFO Attributable to Stockholders and Convertible Noncontrolling Interests\t\t\t\t\nNet income (loss)\t13430\t(29727)\t18216\t(77687)\nAdjustments:\t\t\t\t\nDepreciation and amortization of real estate assets\t54579\t57331\t164288\t174501\nImpairment of real estate assets\t0\t35710\t0\t74626\nGain on disposal of property net\t(10734)\t(5048)\t(8616)\t(10903)\nAdjustments related to unconsolidated joint ventures\t166\t(1814)\t1760\t292\nFFO attributable to the Company\t57441\t56452\t175648\t160829\nAdjustments attributable to noncontrolling interests not convertible into common stock\t0\t(43)\t0\t(274)\nFFO attributable to stockholders and convertible noncontrolling interests\t57441\t56409\t175648\t160555\nCalculation of Core FFO\t\t\t\t\nFFO attributable to stockholders and convertible noncontrolling interests\t57441\t56409\t175648\t160555\nAdjustments:\t\t\t\t\nDepreciation and amortization of corporate assets\t1516\t1146\t4404\t4519\nChange in fair value of earn-out liability\t0\t0\t(10000)\t(7500)\nAmortization of unconsolidated joint venture basis differences\t546\t1181\t1267\t1878\nOther impairment charges\t0\t0\t0\t9661\nTransaction and acquisition expenses\t152\t120\t211\t396\nOther\t0\t157\t73\t157\nCore FFO\t59655\t59013\t171603\t169666\nFFO Attributable to Stockholders and Convertible Noncontrolling Interests per share and Core FFO per share\t\t\t\t\nWeighted-average common shares outstanding - diluted(2)\t333563\t326983\t333480\t326429\nFFO attributable to stockholders and convertible noncontrolling interests per share - diluted\t0.17\t0.17\t0.53\t0.49\nCore FFO per share - diluted\t0.18\t0.18\t0.51\t0.52\n", "q10k_tbl_40": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\tYear Ended\n\t2020\t2019\t2020\t2019\t2019\nCalculation of EBITDAre\t\t\t\t\t\nNet income (loss)\t13430\t(29727)\t18216\t(77687)\t(72826)\nAdjustments:\t\t\t\t\t\nDepreciation and amortization\t56095\t58477\t168692\t179020\t236870\nInterest expense net\t20388\t25309\t65317\t76151\t103174\nGain on disposal of property net\t(10734)\t(5048)\t(8616)\t(10903)\t(28170)\nImpairment of real estate assets\t0\t35710\t0\t74626\t87393\nFederal state and local tax expense\t173\t176\t382\t517\t785\nAdjustments related to unconsolidated joint ventures\t594\t(1131)\t3162\t2398\t2571\nEBITDAre\t79946\t83766\t247153\t244122\t329797\nCalculation of Adjusted EBITDAre\t\t\t\t\t\nEBITDAre\t79946\t83766\t247153\t244122\t329797\nAdjustments:\t\t\t\t\t\nChange in fair value of earn-out liability\t0\t0\t(10000)\t(7500)\t(7500)\nOther impairment charges\t0\t0\t0\t9661\t9661\nTransaction and acquisition expenses\t152\t120\t211\t396\t598\nAmortization of unconsolidated joint venture basis differences\t546\t1181\t1267\t1878\t2854\nAdjusted EBITDAre\t80644\t85067\t238631\t248557\t335410\n", "q10k_tbl_41": "\tSeptember 30 2020\tDecember 31 2019\nTotal debt obligations gross\t2334888\t2372521\nWeighted-average interest rate at end of period\t3.1%\t3.4%\nWeighted-average term (in years) at end of period\t4.3\t5.0\nRevolving credit facility capacity\t500000\t500000\nRevolving credit facility availability(1)\t490404\t489805\nRevolving credit facility maturity(2)\tOctober 2021\tOctober 2021\n", "q10k_tbl_42": "\tSeptember 30 2020\tDecember 31 2019\nNet debt:\t\t\nTotal debt excluding market adjustments and deferred financing expenses\t2379355\t2421520\nLess: Cash and cash equivalents\t105270\t18376\nNet debt\t2274085\t2403144\nEnterprise value:\t\t\nNet debt\t2274085\t2403144\nTotal equity value(1)\t2914940\t3682161\nTotal enterprise value\t5189025\t6085305\n", "q10k_tbl_43": "\tSeptember 30 2020\tDecember 31 2019\nNet debt to Adjusted EBITDAre - annualized:\t\t\nNet debt\t2274085\t2403144\nAdjusted EBITDAre - annualized(1)\t325484\t335410\nNet debt to Adjusted EBITDAre - annualized\t7.0x\t7.2x\nNet debt to total enterprise value\t\t\nNet debt\t2274085\t2403144\nTotal enterprise value\t5189025\t6085305\nNet debt to total enterprise value\t43.8%\t39.5%\n", "q10k_tbl_44": "\tNine Months Ended September 30\t\n\t2020\t2019\nNumber of properties sold\t6\t10\nNumber of outparcels sold\t0\t1\nGLA\t525\t1178\nProceeds from the sale of real estate\t48276\t86159\nGain on sale of property net(1)\t9915\t12369\n", "q10k_tbl_45": "\tNine Months Ended September 30\t\t\t\n\t2020\t2019\t Change\t% Change\nNet cash provided by operating activities\t157245\t175882\t(18637)\t(10.6)%\nNet cash used in investing activities\t(13561)\t(9302)\t(4259)\t45.8%\nNet cash used in financing activities\t(101994)\t(164818)\t62824\t(38.1)%\n", "q10k_tbl_46": "Ex.\tDescription\n3.1\tFifth Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on August 10 2020)\n14.1\tCode of Business Conduct and Ethics*\n31.1\tCertification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*\n31.2\tCertification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*\n32.1\tCertification of Principal Executive Officer pursuant to 18 U.S.C. 1350 as created by Section 906 of the Sarbanes-Oxley Act of 2002*\n32.2\tCertification of Principal Financial Officer pursuant to 18 U.S.C. 1350 as created by Section 906 of the Sarbanes -Oxley Act of 2002*\n101.INS\tInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document\n101.SCH\tInline XBRL Taxonomy Extension Schema Document\n101.CAL\tInline XBRL Taxonomy Extension Calculation Linkbase Document\n101.DEF\tInline XBRL Taxonomy Definition Linkbase Document\n101.LAB\tInline XBRL Taxonomy Extension Label Linkbase Document\n101.PRE\tInline XBRL Taxonomy Extension Presentation Linkbase Document\n104\tCover Page Interactive Data File (formatted as inline XBRL and contained in exhibit 101)\n"}{"bs": "q10k_tbl_2", "is": "q10k_tbl_3", "cf": "q10k_tbl_6"}None
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedSeptember 30, 2020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number:000-54691
PHILLIPS EDISON & COMPANY, INC.
(Exact name of registrant as specified in its charter)
Maryland
27-1106076
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
11501 Northlake Drive, Cincinnati, Ohio
45249
(Address of principal executive offices)
(Zip Code)
(513)554-1110
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
None
None
None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☑
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
As of November 2, 2020, there were 290.5 million outstanding shares of common stock of the Registrant.
Real estate investment and other assets held for sale
—
6,038
Total assets
$
4,721,773
$
4,828,195
LIABILITIES AND EQUITY
Liabilities:
Debt obligations, net
$
2,319,003
$
2,354,099
Below-market lease liabilities, net
105,223
112,319
Earn-out liability
22,000
32,000
Derivative liabilities
60,615
20,974
Deferred income
14,092
15,955
Accounts payable and other liabilities
93,187
124,054
Total liabilities
2,614,120
2,659,401
Commitments and contingencies (Note 8)
—
—
Equity:
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and
outstanding at September 30, 2020 and December 31, 2019
—
—
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 290,466 and 289,047
shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
2,905
2,890
Additional paid-in capital (“APIC”)
2,796,655
2,779,130
Accumulated other comprehensive loss (“AOCI”)
(55,630)
(20,762)
Accumulated deficit
(980,534)
(947,252)
Total stockholders’ equity
1,763,396
1,814,006
Noncontrolling interests
344,257
354,788
Total equity
2,107,653
2,168,794
Total liabilities and equity
$
4,721,773
$
4,828,195
See notes to consolidated financial statements.
2
PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(Condensed and Unaudited)
(In thousands, except per share amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Revenues:
Rental income
$
123,298
$
132,715
$
367,418
$
390,605
Fees and management income
2,581
2,766
7,506
9,078
Other property income
816
528
2,334
1,676
Total revenues
126,695
136,009
377,258
401,359
Operating Expenses:
Property operating
20,835
23,296
62,226
67,095
Real estate taxes
17,282
18,016
50,847
53,294
General and administrative
9,595
11,537
30,141
38,287
Depreciation and amortization
56,095
58,477
168,692
179,020
Impairment of real estate assets
—
35,710
—
74,626
Total operating expenses
103,807
147,036
311,906
412,322
Other:
Interest expense, net
(20,388)
(25,309)
(65,317)
(76,151)
Gain on disposal of property, net
10,734
5,048
8,616
10,903
Other income (expense), net
196
1,561
9,565
(1,476)
Net income (loss)
13,430
(29,727)
18,216
(77,687)
Net (income) loss attributable to noncontrolling interests
(1,646)
3,850
(2,251)
10,045
Net income (loss) attributable to stockholders
$
11,784
$
(25,877)
$
15,965
$
(67,642)
Earnings per common share:
Net income (loss) per share attributable to stockholders - basic and diluted (Note 10)
$
0.04
$
(0.09)
$
0.05
$
(0.24)
Comprehensive income (loss):
Net income (loss)
$
13,430
$
(29,727)
$
18,216
$
(77,687)
Other comprehensive income (loss):
Change in unrealized value on interest rate swaps
5,098
(9,731)
(40,013)
(47,737)
Comprehensive income (loss)
18,528
(39,458)
(21,797)
(125,424)
Net (income) loss attributable to noncontrolling interests
(1,646)
3,850
(2,251)
10,045
Other comprehensive (income) loss attributable to noncontrolling interests
(653)
1,293
5,145
6,399
Comprehensive income (loss) attributable to stockholders
$
16,229
$
(34,315)
$
(18,903)
$
(108,980)
See notes to consolidated financial statements.
3
PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(Condensed and Unaudited)
(In thousands, except per share amounts)
Three Months Ended September 30, 2020 and 2019
Common Stock
APIC
AOCI
Accumulated Deficit
Total Stockholders’ Equity
Noncontrolling Interests
Total Equity
Shares
Amount
Balance at July 1, 2019
283,770
$
2,838
$
2,718,871
$
(20,538)
$
(830,358)
$
1,870,813
$
371,213
$
2,242,026
Dividend reinvestment plan (“DRIP”)
1,475
14
16,357
—
—
16,371
—
16,371
Share repurchases
(1,660)
(17)
(18,193)
—
—
(18,210)
—
(18,210)
Change in unrealized value on interest rate swaps
—
—
—
(8,438)
—
(8,438)
(1,293)
(9,731)
Common distributions declared, $0.17
per share
—
—
—
—
(48,062)
(48,062)
—
(48,062)
Distributions to noncontrolling interests
—
—
—
—
—
—
(6,978)
(6,978)
Share-based compensation
1
—
502
—
—
502
1,674
2,176
Net loss
—
—
—
—
(25,877)
(25,877)
(3,850)
(29,727)
Balance at September 30, 2019
283,586
$
2,835
$
2,717,537
$
(28,976)
$
(904,297)
$
1,787,099
$
360,766
$
2,147,865
Balance at July 1, 2020
290,465
$
2,905
$
2,795,434
$
(60,075)
$
(991,939)
$
1,746,325
$
341,144
$
2,087,469
Change in unrealized value on interest rate swaps
—
—
—
4,445
—
4,445
653
5,098
Share-based compensation
1
—
1,036
—
—
1,036
818
1,854
Other
—
—
185
—
(379)
(194)
(4)
(198)
Net income
—
—
—
—
11,784
11,784
1,646
13,430
Balance at September 30, 2020
290,466
$
2,905
$
2,796,655
$
(55,630)
$
(980,534)
$
1,763,396
$
344,257
$
2,107,653
Nine Months Ended September 30, 2020 and 2019
Common Stock
APIC
AOCI
Accumulated Deficit
Total Stockholders’ Equity
Noncontrolling Interests
Total Equity
Shares
Amount
Balance at January 1, 2019
279,803
$
2,798
$
2,674,871
$
12,362
$
(692,573)
$
1,997,458
$
414,911
$
2,412,369
DRIP
4,636
45
51,284
—
—
51,329
—
51,329
Share repurchases
(2,806)
(28)
(30,856)
—
—
(30,884)
—
(30,884)
Change in unrealized value on interest rate swaps
—
—
—
(41,338)
—
(41,338)
(6,399)
(47,737)
Common distributions declared, $0.50
per share
—
—
—
—
(144,082)
(144,082)
—
(144,082)
Distributions to noncontrolling interests
—
—
—
—
—
—
(21,206)
(21,206)
Share-based compensation
65
1
1,358
—
—
1,359
4,404
5,763
Conversion of noncontrolling interests
1,888
19
20,880
—
—
20,899
(20,899)
—
Net loss
—
—
—
—
(67,642)
(67,642)
(10,045)
(77,687)
Balance at September 30, 2019
283,586
$
2,835
$
2,717,537
$
(28,976)
$
(904,297)
$
1,787,099
$
360,766
$
2,147,865
Balance at January 1, 2020
289,047
$
2,890
$
2,779,130
$
(20,762)
$
(947,252)
$
1,814,006
$
354,788
$
2,168,794
DRIP
1,436
14
15,926
—
—
15,940
—
15,940
Share repurchases
(288)
(3)
(2,697)
—
—
(2,700)
—
(2,700)
Change in unrealized value on interest rate swaps
—
—
—
(34,868)
—
(34,868)
(5,145)
(40,013)
Common distributions declared, $0.17
per share
—
—
—
—
(48,809)
(48,809)
—
(48,809)
Distributions to noncontrolling interests
—
—
—
—
—
—
(7,105)
(7,105)
Share-based compensation
109
2
2,508
—
—
2,510
1,336
3,846
Conversion of noncontrolling interests
168
2
1,859
—
—
1,861
(1,861)
—
Other
(6)
—
(71)
—
(438)
(509)
(7)
(516)
Net income
—
—
—
—
15,965
15,965
2,251
18,216
Balance at September 30, 2020
290,466
$
2,905
$
2,796,655
$
(55,630)
$
(980,534)
$
1,763,396
$
344,257
$
2,107,653
See notes to consolidated financial statements.
4
PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(Condensed and Unaudited)
(In thousands)
Nine Months Ended September 30,
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
18,216
$
(77,687)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of real estate assets
164,288
174,501
Impairment of real estate assets
—
74,626
Depreciation and amortization of corporate assets
4,404
4,519
Net amortization of above- and below-market leases
(2,394)
(3,266)
Amortization of deferred financing expenses
3,739
3,758
Amortization of debt and derivative adjustments
2,154
6,007
Gain on disposal of property, net
(8,616)
(10,903)
Change in fair value of earn-out liability
(10,000)
(7,500)
Straight-line rent
(3,131)
(7,024)
Share-based compensation
3,846
5,971
Other impairment charges
—
9,661
Other
1,497
1,223
Changes in operating assets and liabilities:
Other assets, net
(11,089)
858
Accounts payable and other liabilities
(5,669)
1,138
Net cash provided by operating activities
157,245
175,882
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions
(23,014)
(49,880)
Capital expenditures
(40,772)
(48,079)
Proceeds from sale of real estate
48,276
86,159
Return of investment in unconsolidated joint ventures
1,949
2,498
Net cash used in investing activities
(13,561)
(9,302)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in credit facility
—
(73,359)
Proceeds from mortgages and loans payable
—
60,000
Payments on mortgages and loans payable
(37,778)
(7,973)
Distributions paid, net of DRIP
(49,083)
(92,484)
Distributions to noncontrolling interests
(9,406)
(20,616)
Repurchases of common stock
(5,211)
(30,178)
Other
(516)
(208)
Net cash used in financing activities
(101,994)
(164,818)
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
41,690
1,762
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Beginning of period
95,108
84,304
End of period
$
136,798
$
86,066
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents
$
103,910
$
29,516
Restricted cash
32,888
56,550
Cash, cash equivalents, and restricted cash at end of period
$
136,798
$
86,066
5
PHILLIPS EDISON & COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(Condensed and Unaudited)
(In thousands)
2020
2019
SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid for interest
$
59,906
$
66,811
Right-of-use (“ROU”) assets obtained in exchange for new lease liabilities
551
1,444
Accrued capital expenditures
3,587
3,036
Change in distributions payable
(16,214)
269
Change in distributions payable - noncontrolling interests
(2,301)
590
Change in accrued share repurchase obligation
(2,511)
706
Distributions reinvested
15,940
51,329
See notes to consolidated financial statements.
6
Phillips Edison & Company, Inc.
Notes to Consolidated Financial Statements
(Condensed and Unaudited)
1. ORGANIZATION
Phillips Edison & Company, Inc. (“we,” the “Company,” “PECO,” “our,” or “us”) was formed as a Maryland corporation in October 2009. Substantially all of our business is conducted through Phillips Edison Grocery Center Operating Partnership I, L.P., (the “Operating Partnership”), a Delaware limited partnership formed in December 2009. We are a limited partner of the Operating Partnership, and our wholly-owned subsidiary, Phillips Edison Grocery Center OP GP I LLC (the “General Partner”), is the sole general partner of the Operating Partnership.
We are a real estate investment trust (“REIT”) that invests primarily in well-occupied, grocery-anchored, neighborhood and community shopping centers that have a mix of creditworthy national, regional, and local retailers that sell necessity-based goods and services in strong demographic markets throughout the United States. In addition to managing our own shopping centers, our third-party investment management business provides comprehensive real estate and asset management services to three institutional joint ventures, in which we have a partial ownership interest, and one private fund (collectively, the “Managed Funds”) as of September 30, 2020.
As of September 30, 2020, we wholly-owned 283 real estate properties. Additionally, we owned a 20% equity interest in Necessity Retail Partners (“NRP”), a joint venture that owned six properties; a 15% interest in Grocery Retail Partners I LLC (“GRP I”), a joint venture that owned 17 properties; and a 10% interest in Grocery Retail Partners II LLC (“GRP II”), a joint venture that owned three properties.
On October 1, 2020, GRP I acquired GRP II. Our ownership in the combined entity was adjusted upon consummation of the transaction, and we own approximately a 14% equity interest in GRP I as a result of the acquisition.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Set forth below is a summary of the significant accounting estimates and policies that management believes are important to the preparation of our consolidated interim financial statements. Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by management. For example, significant estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, and other fair value measurement assessments required for the preparation of the consolidated financial statements. As a result, these estimates are subject to a degree of uncertainty.
During the first quarter of 2020, a novel coronavirus (“COVID-19”) began spreading globally, with the outbreak being classified as a pandemic by the World Health Organization on March 11, 2020. Because of the adverse economic conditions that exist as a result of the impacts of the COVID-19 pandemic, it is possible that the estimates and assumptions that have been utilized in the preparation of the consolidated financial statements could change significantly. Specifically, as it relates to our business, the current economic situation resulted in temporary tenant closures at our shopping centers, often as a result of “stay-at-home” government mandates which limited travel and movement of the general public to essential activities only and required all non-essential businesses to close.
Temporary closures of tenant spaces at our centers peaked in April and have significantly decreased as states reduced or removed restrictions on business operations and the travel and movement of the general public. Certain tenants remain temporarily closed, have since closed after reopening, are limiting the number of customers allowed in their stores, or have modified their operations in other ways that may impact their profitability, either as a result of government mandates or self-elected efforts to reduce the spread of COVID-19. Some states and localities have temporarily reinstated certain mandates in response to increasing reported cases of COVID-19. These actions could result in increased permanent store closings and could reduce the demand for leasing space in our shopping centers and result in a decline in occupancy and rental revenues in our real estate portfolio. All of this activity impacts our estimates around the collectability of revenue and valuation of real estate assets, goodwill and other intangible assets, and certain liabilities, among others.
There were no changes to our significant accounting policies during the nine months ended September 30, 2020. For a full summary of our accounting policies, refer to our 2019 Annual Report on Form 10-K filed with the SEC on March 12, 2020.
Basis of Presentation and Principles of Consolidation—The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Readers of this Quarterly Report on Form 10-Q should refer to our audited consolidated financial statements for the year ended December 31, 2019, which are included in our 2019 Annual Report on Form 10-K. In the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited consolidated financial statements for the periods presented have been included in this Quarterly Report. Our results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the operating results expected for the full year.
The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation.
Leases—Lease receivables are reviewed continually to determine whether or not it is probable that we will realize all amounts owed to us for each of our tenants (i.e., whether a tenant is deemed to be a credit risk). If we determine that the tenant is not a credit risk, no reserve or reduction of revenue is recorded, except in the case of disputed charges. If we determine that the
7
tenant is a credit risk, revenue for that tenant is recorded on a cash basis, including any amounts relating to straight-line rent receivables and/or receivables for recoverable expenses. The COVID-19 pandemic has increased the uncertainty of collecting rents from a number of our tenants.
In our efforts to maximize collections in the near term while also supporting our tenants as they operate through this pandemic, we have begun negotiating rent relief primarily in the form of payment plans and deferrals on rent and recovery charges, which allow for changes in the timing of payments, but not the total amount of consideration due to us under the lease. In a limited number of instances, we may also agree to waive certain charges due to us under the lease; for additional details, please refer to Note 3.
Income Taxes—Our consolidated financial statements include the operations of wholly-owned subsidiaries that have jointly elected to be treated as Taxable REIT Subsidiaries and are subject to U.S. federal, state, and local income taxes at regular corporate tax rates. We recognized an insignificant amount of federal, state, and local income tax expense for the three and nine months ended September 30, 2020 and 2019, and we retain a full valuation allowance for our deferred tax asset. All income tax amounts are included in Other Income (Expense), Net on the consolidated statements of operations and comprehensive income (loss) (“consolidated statements of operations”).
Recently Issued and Newly Adopted Accounting Pronouncements—In response to the COVID-19 pandemic, the Financial Accounting Standards Board (“FASB”) issued interpretive guidance addressing the accounting treatment for lease concessions attributable to the pandemic. Under this guidance, entities may elect to account for such lease concessions consistent with how they would be accounted for under ASC Topic 842, Leases, (“ASC 842”) if the enforceable rights and obligations for the lease concessions already existed within the lease agreement, regardless of whether such enforceable rights and obligations are explicitly outlined within the lease. This accounting treatment may only be applied if (1) the lease concessions were granted as a direct result of the pandemic, and (2) the total cash flows under the modified lease are less than or substantially the same as the cash flows under the original lease agreement. As a result, entities that make this election will not have to analyze each lease to determine whether enforceable rights and obligations for concessions exist within the contract, and may elect not to account for these concessions as lease modifications within the scope of ASC 842.
Some concessions will provide a deferral of payments, which may affect the timing of cash receipts without substantively impacting the total consideration per the original lease agreement. The FASB has stated that there are multiple acceptable methods to account for deferrals under the interpretive guidance:
•Account for the concession as if no changes to the lease contract were made, increasing the lease receivable as payments accrue and continuing to recognize income; or
•Account for deferred lease payments as variable lease payments.
We have elected not to account for any qualifying lease concessions granted as a result of the COVID-19 pandemic as lease modifications and will account for any qualifying concessions granted as if no changes to the lease contract were made. This will result in an increase to the related lease receivable as payments accrue while we continue to recognize rental income. We will, however, assess the impact of any such concessions on estimated collectability of the related lease payments and will reflect any adjustments as necessary as an offset to Rental Income on the consolidated statements of operations.
8
The following table provides a brief description of newly adopted accounting pronouncements and their effect on our consolidated financial statements:
Standard
Description
Date of Adoption
Effect on the Financial Statements or Other Significant Matters
Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
The amendments in this update replaced the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. It clarified that receivables arising from operating leases are not within the scope of Accounting Standards Codification (“ASC”) Topic 326. Instead, impairment of receivables arising from operating leases will be accounted for in accordance with Topic 842. It also allowed election of the fair value option on certain financial instruments.
January 1, 2020
The adoption of this standard did not have a material impact on our consolidated financial statements. The majority of our financial instruments result from operating lease transactions, which are not within the scope of this standard.
ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities
This ASU amended two aspects of the related-party guidance in Topic 810: (1) added an elective private-company scope exception to the variable interest entity guidance for entities under common control and (2) indirect interests held through related parties in common control arrangements will be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests.
January 1, 2020
The adoption of this standard did not have a material impact on our consolidated financial statements.
ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments
This ASU amended a variety of topics, improving certain aspects of previously issued ASUs, including ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.
January 1, 2020
The adoption of this standard did not have a material impact on our consolidated financial statements.
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
This ASU contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.
March 12, 2020
We have elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
Reclassifications—The following line item on our consolidated balance sheet as of December 31, 2019 was reclassified to conform to current year presentation:
•Corporate Intangible Assets, Net was included in Other Assets, Net.
The following line item on our consolidated statement of operations for the nine months ended September 30, 2019 was reclassified to conform to current year presentation:
•Other Impairment Charges was included in Other Income (Expense), Net.
The following line item on our consolidated statement of cash flows for the nine months ended September 30, 2019 was reclassified to conform to current year presentation:
•Payments of Deferred Financing Expenses was included in Payments on Mortgages and Loans Payable.
9
3. LEASES
Lessor—The majority of our leases are largely similar in that the leased asset is retail space within our properties, and the lease agreements generally contain similar provisions and features, without substantial variations. All of our leases are currently classified as operating leases. Lease income related to our operating leases was as follows for the three and nine months ended September 30, 2020 and 2019 (dollars in thousands):
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
2020
2019
Rental income related to fixed lease payments(1)
$
94,511
$
97,328
$
285,572
$
289,318
Rental income related to variable lease payments
31,781
33,626
94,278
93,105
Straight-line rent amortization(2)
1,772
2,548
3,103
7,055
Amortization of lease assets
802
1,032
2,367
3,230
Lease buyout income
664
632
972
1,088
Adjustments for collectability(2)(3)
(6,232)
(2,451)
(18,874)
(3,191)
Total rental income
$
123,298
$
132,715
$
367,418
$
390,605
(1)Includes rental income related to fixed lease payments before assessing for collectability.
(2)Includes revenue adjustments for non-creditworthy tenants.
(3)Contains general reserves; excludes reserves for straight-line rent amortization.
Approximate future fixed contractual lease payments to be received under non-cancelable operating leases in effect as of September 30, 2020, assuming no new or renegotiated leases or option extensions on lease agreements, are as follows (in thousands):
Year
Amount
Remaining 2020
$
98,238
2021
364,782
2022
330,635
2023
282,988
2024
227,052
Thereafter
594,574
Total
$
1,898,269
During the nine months ended September 30, 2020, we executed payment plans with our tenants agreeing to defer approximately $3.7 million in rent and related charges, and we granted rent abatements totaling approximately $1.3 million. These payment plans and rent abatements represented 0.9% and 0.3% of our wholly-owned portfolio’s annualized base rent (“ABR”), respectively, and the weighted-average term over which we expect to receive payment on executed payment plans is approximately eight months. For the three and nine months ended September 30, 2020, we had $5.2 million and $20.0 million, respectively, in billings that will not be recognized as revenue until cash is collected or the tenant resumes regular payments and/or is considered creditworthy. These amounts include the estimated impact of tenants who have filed for bankruptcy.
No single tenant comprised 10% or more of our aggregate ABR as of September 30, 2020. As of September 30, 2020, our real estate investments in Florida and California represented 12.3% and 10.6% of our ABR, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse weather or economic events, including the impact of the COVID-19 pandemic, in the Florida and California real estate markets.
Lessee—Lease assets and liabilities, grouped by balance sheet line where they are recorded, consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):
Balance Sheet Information
Balance Sheet Location
September 30, 2020
December 31, 2019
ROU assets, net - operating leases(1)
Investment in Real Estate
$
3,895
$
7,613
ROU assets, net - operating and finance leases
Other Assets, Net
1,998
2,111
Operating lease liability
Accounts Payable and Other Liabilities
5,880
9,453
Finance lease liability
Debt Obligations, Net
240
443
(1)During the nine months ended September 30, 2020, one of our acquisitions was land upon which one of our shopping centers is situated that was previously subject to a ground lease in which the lessor controlled an option requiring us to purchase the land subject to the lease. Our valuation of the ROU asset and lease liability as of December 31, 2019 for this ground lease reflected the assumption that the lessor would exercise this option and that we would purchase the underlying land asset.
10
4. REAL ESTATE ACTIVITY
Property Sales—The following table summarizes our real estate disposition activity (dollars in thousands):
Nine Months Ended September 30,
2020
2019
Number of properties sold(1)
6
10
Number of outparcels sold
—
1
Proceeds from sale of real estate
$
48,276
$
86,159
Gain on sale of properties, net(2)
9,915
12,369
(1)We retained certain outparcels of land associated with one of our property dispositions during the nine months ended September 30, 2020, and as a result, this property is still included in our total property count.
(2)The gain on sale of properties, net does not include miscellaneous write-off activity, which is also recorded in Gain on Disposal of Property, Net on the consolidated statements of operations.
Subsequent to September 30, 2020, we sold one outparcel for approximately $1.1 million.
Impairment of Real Estate Assets—During the three and nine months ended September 30, 2020, we did not recognize any impairment charges. During the three and nine months ended September 30, 2019, we recognized impairment charges totaling $35.7 million and $74.6 million, respectively. The impairments were associated with certain anticipated property dispositions where the net book value exceeded the estimated fair value. Our estimated fair value was based upon the contracted price to sell or the marketed price for disposition, less estimated costs to sell. We applied reasonable estimates and judgments in determining the amount of impairment recognized.
Acquisitions—During the nine months ended September 30, 2020, we acquired one property and two parcels of land for a total of $23.0 million. Both parcels of land are adjacent to shopping centers that we own. During the nine months ended September 30, 2019, we acquired one property and one outparcel for a total of $49.9 million.
The fair value and weighted-average useful life at acquisition for lease intangibles acquired as part of acquisitions in the nine months ended September 30, 2020 and 2019 are as follows (dollars in thousands, weighted-average useful life in years):
Nine Months Ended
September 30, 2020
September 30, 2019
Fair Value
Weighted-Average Useful Life
Fair Value
Weighted-Average Useful Life
In-place leases
$
1,682
16
$
4,736
11
Above-market leases
120
5
825
8
Below-market leases
(1,882)
26
(2,097)
16
Subsequent to September 30, 2020, we purchased one property for approximately $18.4 million.
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5. OTHER ASSETS, NET
The following is a summary of Other Assets, Net outstanding as of September 30, 2020 and December 31, 2019, excluding amounts related to assets classified as held for sale (in thousands):
September 30, 2020
December 31, 2019
Other assets, net:
Deferred leasing commissions and costs
$
40,465
$
38,738
Deferred financing expenses
13,971
13,971
Office equipment, ROU assets, and other
21,772
19,430
Corporate intangible assets
4,883
4,883
Total depreciable and amortizable assets
81,091
77,022
Accumulated depreciation and amortization
(43,565)
(35,055)
Net depreciable and amortizable assets
37,526
41,967
Accounts receivable, net(1)
50,384
46,125
Accounts receivable - affiliates
622
728
Deferred rent receivable
32,179
29,291
Derivative assets
—
2,728
Prepaid expenses and other
12,303
7,851
Total other assets, net
$
133,014
$
128,690
(1)Net of $7.1 million and $6.9 million of general reserves for uncollectible amounts. Receivables that were removed for tenants considered to be non-creditworthy were $23.4 million and $6.9 million as of September 30, 2020 and December 31, 2019, respectively.
6. DEBT OBLIGATIONS
The following is a summary of the outstanding principal balances and interest rates, which include the effect of derivative financial instruments, for our debt obligations as of September 30, 2020 and December 31, 2019 (dollars in thousands):