XML 45 R27.htm IDEA: XBRL DOCUMENT v3.6.0.2
Investment in Real Estate (Tables)
 12 Months Ended
Dec. 31, 2016
Real Estate [Abstract]  
Schedule of Real Estate Properties Acquired
The following table summarizes the information on our acquisitions completed in 2016 and 2015:
Property
 
Submarket
 
Date of Acquisition
 
Square Feet (unaudited)
 
Purchase Price(1) (in millions)
11601 Wilshire(2)
 
West Los Angeles
 
7/1/2016
 
500,475

 
$
311.0

Hill7(3)
 
South Lake Union
 
10/7/2016
 
285,680

 
179.8

Page Mill Hill(4)
 
Palo Alto
 
12/12/2016
 
182,676

 
150.0

Total acquisitions in 2016
 
 
 
 
 
968,831

 
640.8

 
 
 
 
 
 
 
 
 
EOP Acquisition(5)
 
Various
 
4/1/2015
 
8,201,456

 
3,815.7

4th & Traction
 
Downtown Los Angeles
 
5/22/2015
 
120,937

 
49.3

405 Mateo
 
Downtown Los Angeles
 
8/17/2015
 
83,285

 
40.0

Total acquisitions in 2015 
 
 
 
 
 
8,405,678

 
$
3,905.0

_____________ 
(1)
Represents purchase price before certain credits, prorations and closing costs.
(2)
Previously owned by an affiliate of Blackstone, the property has served as the Company’s corporate headquarters since its IPO. The Company funded this acquisition with proceeds from the unsecured revolving credit facility.
(3)
The Company purchased the property through a joint venture with the Canadian Pension Plan Investment Board. The Company owns 55% of the ownership interest in the consolidated joint venture. In conjunction with the acquisition, the joint venture closed a secured non-recourse loan in the amount of $101.0 million. Refer to Note 5 for details.
(4)
The Company funded this acquisition with proceeds from the unsecured revolving credit facility.
(5)
The EOP Acquisition consisted of 26 office assets and two development parcels located throughout the San Francisco Peninsula, Redwood Shores, Palo Alto, Silicon Valley and North San Jose submarkets.
Business Acquisition, Pro Forma Information
The table below shows the pro forma financial information (unaudited) for the years ended December 31, 2016 and 2015 as if the acquisitions in 2016 had completed as of January 1, 2015:
 
Year Ended December 31,
 
2016
 
2015
Total revenues
$
677,313

 
$
572,482

Net income (loss)
41,685

 
(21,652
)
Schedule of Business Acquisitions, by Acquisition
The following table represents the final aggregate purchase price accounting for each of the Company’s acquisitions completed in 2016:
 
11601 Wilshire
 
Hill7
 
Page Mill Hill
 
Total
Investment in real estate, net
$
292,382

 
$
173,967

 
$
131,402

 
$
597,751

Land interest(1)
7,836

 
—

 
—

 
7,836

Above-market leases(2)
167

 
—

 
307

 
474

Below-market ground leases(3)
212

 
—

 
12,125

 
12,337

Deferred leasing costs and in-place intangibles(4)
13,884

 
7,617

 
14,697

 
36,198

Below-market leases(5)
(6,562
)
 
(1,417
)
 
(8,636
)
 
(16,615
)
Net asset and liabilities assumed
$
307,919

 
$
180,167

 
$
149,895

 
$
637,981

_____________
(1)
Represents the fair value of the Company’s interest in the land which is included in investment in unconsolidated entities in the Consolidated Balance Sheets.
(2)
Represents weighted-average amortization period of 5.4 years.
(3)
Represents weighted-average amortization period of 33.2 years.
(4)
Represents weighted-average amortization period of 5.8 years.
(5)
Represents weighted-average amortization period of 6.4 years.
    
Included in the Company’s consolidated financial statements for the year ended December 31, 2016 were revenues and net loss totaling $14.0 million and $3.5 million, respectively, from the acquisitions completed in 2016.    

The table below shows the pro forma financial information (unaudited) for the years ended December 31, 2016 and 2015 as if the acquisitions in 2016 had completed as of January 1, 2015:
 
Year Ended December 31,
 
2016
 
2015
Total revenues
$
677,313

 
$
572,482

Net income (loss)
41,685

 
(21,652
)


The following table represents the final purchase price accounting for each of the Company’s acquisitions completed in 2015:
 
EOP Northern California Portfolio
 
4th & Traction
 
405 Mateo
 
Total
Consideration paid
 
 
 
 
 
 
 
Cash consideration
$
1,715,346

 
$
49,250

 
$
40,000

 
$
1,804,596

Common stock
87

 
—

 
—

 
87

Additional paid-in capital
285,358

 
—

 
—

 
285,358

Non-controlling common units in the Operating Partnership
1,814,936

 
—

 
—

 
1,814,936

Total consideration
3,815,727

 
49,250

 
40,000

 
3,904,977

Allocation of consideration paid
 
 
 
 
 
 
 
Investment in real estate, net
3,610,039

 
49,250

 
40,000

 
3,699,289

Above-market leases(1)
28,759

 
—

 
—

 
28,759

Below-market ground leases(2)
52,065

 
—

 
—

 
52,065

Deferred leasing costs and in-place intangibles(3)
225,431

 
—

 
—

 
225,431

Below-market leases(4)
(99,472
)
 
—

 
—

 
(99,472
)
Above-market ground leases(5)
(1,095
)
 
—

 
—

 
(1,095
)
Total consideration paid
$
3,815,727

 
$
49,250

 
$
40,000

 
$
3,904,977

_____________
(1)
Represents weighted-average amortization period of 3.0 years.
(2)
Represents weighted-average amortization period of 27.7 years.
(3)
Represents weighted-average amortization period of 3.6 years.
(4)
Represents weighted-average amortization period of 4.3 years.
(5)
Represents weighted-average amortization period of 25.4 years.
Disposal Group, Not Discontinued Operations  
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Schedule of Real Estate Held for Sale
The following table summarizes the properties sold in 2016, 2015 and 2014. These properties were considered non-strategic to the Company’s portfolio:
Property
 
Date of Disposition
 
Square Feet (unaudited)
 
Sales Price(1) (in millions)
Bayhill Office Center
 
1/14/2016
 
554,328

 
$
215.0

Patrick Henry Drive
 
4/7/2016
 
70,520

 
19.0

One Bay Plaza
 
6/1/2016
 
195,739

 
53.4

12655 Jefferson
 
11/4/2016
 
100,756

 
80.0

Total dispositions in 2016(2)
 
 
 
921,343

 
$
367.4

 
 
 
 
 
 
 
First Financial
 
3/6/2015
 
223,679

 
$
89.0

Bay Park Plaza
 
9/29/2015
 
260,183

 
90.0

Total dispositions in 2015(3)
 
 
 
483,862

 
$
179.0

 
 
 
 
 
 
 
Tierrasanta
 
7/16/2014
 
112,300

 
$
19.5

Total disposition in 2014
 
 
 
112,300

 
$
19.5

_____________ 
(1)
Represents gross sales price before certain credits, prorations and closing costs.
(2)
Excludes the sale of an option to acquire land at 9300 Culver on December 6, 2016.
(3)
Excludes the disposition of 45% interest in 1455 Market Street office property on January 7, 2015.
Discontinued Operations, Held-for-sale  
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Schedule of Real Estate Held for Sale
The following table summarizes the components of assets and liabilities associated with real estate held for sale as of:
 
 
December 31, 2016
 
December 31, 2015
ASSETS
 
 
 
 
Investment in real estate, net
 
$
32,601

 
$
344,202

Straight-line rent receivables, net
 
777

 
2,641

Deferred leasing costs and lease intangible assets, net
 
1,945

 
15,968

Other
 
1,285

 
699

Assets associated with real estate held for sale
 
$
36,608

 
$
363,510

 
 
 
 
 
LIABILITIES
 
 
 
 
Accounts payable and accrued liabilities
 
$
2,918

 
$
4,578

Lease intangible liabilities, net
 
27

 
10,233

Other
 
861

 
2,764

Liabilities associated with real estate held for sale
 
$
3,806

 
$
17,575