XML 22 R9.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Real Estate and Intangible Assets | 6 Months Ended
--- | ---
Jun. 30, 2017
Real Estate [Abstract] |
Real Estate and Intangible Assets | Real Estate and Intangible Assets Real Estate The following table sets forth the components of our investments in real estate as of June 30, 2017 and December 31, 2016 excluding real estate held for sale as of June 30, 2017 and December 31, 2016 (dollars in thousands):
|  | June 30, 2017 |  | December 31, 2016
Real estate: |  |  |  |
Land |  | $ | 104,300 |  |  | $ | 104,719 |
Building and improvements |  | 660,354 |  |  | 662,661 |
Tenant improvements |  | 54,375 |  |  | 54,369 |
Accumulated depreciation |  | (139,303 | ) |  | (131,661 | )
Real estate, net |  | $ | 679,726 |  |  | $ | 690,088 |
Real estate depreciation expense on building and tenant improvements was $6.4 million and $12.8 million for the three and six months ended June 30, 2017, respectively, and $5.9 million and $11.8 million for the three and six months ended June 30, 2016, respectively. Acquisitions Acquisitions during the six months ended June 30, 2016 were accounted for as business combinations in accordance with Accounting Standards Codification (“ASC”) 805 “Business Combinations” (“ASC 805”), as there was a prior leasing history on the property. The fair value of all assets acquired and liabilities assumed were determined in accordance with ASC 805, and all acquisition-related costs were expensed as incurred. Commencing in the fourth quarter of 2016, we early adopted Accounting Standards Update (“ASU”) 2017-01, “Clarifying the Definition of a Business” (“ASU 2017-01”), which narrows the scope of transactions that would be accounted under ASC 805. Under ASU 2017-01, if substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the grouping is not a business, and rather an asset acquisition. Beginning in the fourth quarter 2016, acquisitions have been deemed an asset acquisition when evaluated under the new guidance, and all acquisition-related costs have been capitalized. We acquired one property during each of the six months ended June 30, 2017 and 2016, which is summarized below (dollars in thousands):
Six Months Ended |  | Square Footage |  | Lease Term |  | Purchase Price |  | Acquisition Expenses |  | Annualized GAAP Rent |  | Debt Issued or Assumed |
June 30, 2017 | (1) | 60,016 |  |  | 8.5 Years |  | $ | 15,697 |  |  | $ | 247 |  | (3) | $ | 1,680 |  |  | $ | 11,179 |  | (4)
June 30, 2016 | (2) | 107,062 |  |  | 6.0 Years |  | $ | 17,000 |  |  | $ | 105 |  |  | $ | 1,393 |  |  | $ | 9,900 |  |
(1) On June 22, 2017 we acquired a 60,016 square foot property in Conshohocken, Pennsylvania for $15.7 million. We assumed $11.2 million of mortgage debt. The annualized GAAP rent on the 8.5 year lease is $1.7 million. (2) On May 26, 2016 we acquired a 107,062 square foot property in Salt Lake City, Utah for $17.0 million. We borrowed $9.9 million to fund the acquisition. The annualized GAAP rent on the 6.0 year lease is $1.4 million. (3) We early adopted ASU 2017-01. As a result, we treated our Conshohocken, Pennsylvania acquisition as an asset acquisition rather than a business combination. As a result of this treatment, we capitalized $0.2 million of acquisition costs that would otherwise have been expensed under business combination treatment. (4) We assumed an interest rate swap in connection with the assumed debt, in which we will pay our counterparty a fixed interest rate of 1.80%, and receive a variable interest rate of one month LIBOR from our counterparty. Our interest expense exposure is fixed at 3.55%. The interest rate swap had a fair value of $0.04 million upon the date of assumption, and subsequently increased in value to $0.2 million at June 30, 2017. We have elected to treat this interest rate swap as a cash flow hedge, and all changes in fair market value will be recorded to accumulated other comprehensive income on the condensed consolidated balance sheets. We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the six months ended June 30, 2017 and 2016 as follows (dollars in thousands):
Business Combinations |  |  |  |
|  | Six months ended June 30, 2017 |  | Six months ended June 30, 2016
Acquired assets and liabilities |  | Purchase price |  | Purchase price
Land |  | $ | — |  |  | $ | 3,008 |
Building and improvements |  | — |  |  | 8,973 |
Tenant Improvements |  | — |  |  | 1,685 |
In-place Leases |  | — |  |  | 1,352 |
Leasing Costs |  | — |  |  | 337 |
Customer Relationships |  | — |  |  | 1,675 |
Above Market Leases |  | — |  |  | — |
Below Market Leases |  | — |  |  | (30 | )
Total Purchase Price |  | $ | — |  |  | $ | 17,000 |
Asset Acquisitions |  |  |  |
|  | Six months ended June 30, 2017 |  | Six months ended June 30, 2016
Acquired assets and liabilities |  | Purchase price |  | Purchase price
Land |  | $ | 1,996 |  |  | $ | — |
Building |  | 9,975 |  |  | — |
Tenant Improvements |  | 905 |  |  | — |
In-place Leases |  | 1,690 |  |  | — |
Leasing Costs |  | 464 |  |  | — |
Customer Relationships |  | 1,256 |  |  | — |
Below Market Leases |  | (1,030 | ) |  | — |
Discount on Assumed Debt |  | 399 |  |  | — |
Fair Value of Interest Rate Swap Assumed |  | 42 |  |  | — |
Total Purchase Price |  | $ | 15,697 |  |  | $ | — |
Total Purchase Price on all Acquisitions |  | $ | 15,697 |  |  | $ | 17,000 |
Below is a summary of the total revenue and earnings (loss) recognized on the one asset acquisition treated as a business combination completed during the six months ended June 30, 2016 (dollars in thousands):
|  | For the three months ended June 30, |  | For the six months ended June 30,
|  | 2016 |  | 2016
Rental Revenue |  | $ | 139 |  |  | $ | 139 |
Earnings (Loss) |  | (121 | ) |  | (121 | )
Pro Forma The following table reflects pro-forma consolidated statements of operations as if the business combinations completed through June 30, 2017, were completed as of January 1, 2016, and the business combinations completed in 2016, were completed as of January 1, 2015. The pro-forma earnings for the three and six months ended June 30, 2017 and 2016 were adjusted to assume that the acquisition-related costs were incurred as of the beginning of the comparative period (dollars in thousands, except per share amounts):
|  | For the three months ended June 30, |  | For the six months ended June 30,
|  | 2016 (1)
|  | (unaudited)
Operating Data: |  |  |  |
Total operating revenue |  | $ | 21,965 |  |  | $ | 44,349 |
Total operating expenses |  | (13,768 | ) |  | (27,566 | )
Other expenses, net |  | (7,157 | ) |  | (14,847 | )
Net income |  | 1,040 |  |  | 1,936 |
Dividends attributable to preferred and senior common stock |  | (1,514 | ) |  | (2,794 | )
Net loss attributable to common stockholders |  | $ | (474 | ) |  | $ | (858 | )
Share and Per Share Data: |  |  |  |
Basic and diluted loss per share of common stock - pro forma |  | $ | (0.02 | ) |  | $ | (0.04 | )
Basic and diluted loss per share of common stock - actual |  | $ | (0.03 | ) |  | $ | (0.05 | )
Weighted average shares outstanding-basic and diluted |  | 22,684,391 |  |  | 22,614,838 |
(1) Pro-forma results for the three and six months ended June 30, 2017 are identical to actual results on the condensed consolidated statement of operations because we did not complete an asset acquisition treated as a business combination for the three and six months ended June 30, 2017. Significant Real Estate Activity on Existing Assets During the six months ended June 30, 2017 and 2016, we executed one and three leases, respectively, which are aggregated below (dollars in thousands):
Six Months Ended |  | Aggregate Square Footage |  | Weighted Average Lease Term |  | Aggregate Annualized GAAP Rent |  | Aggregate Tenant Improvement |  | Aggregate Leasing Commissions
June 30, 2017 |  | 83,662 |  |  | 11.3 years |  | 1,683 |  |  | 1,020 |  |  | 445 |
June 30, 2016 |  | 67,085 |  |  | 5.7 years | (1) | 322 |  |  | 69 |  |  | 166 |
(1) Weighted average lease term is weighted according to the annualized GAAP rent earned by each lease. These leases have terms ranging from 5.2 years to 7.2 years. Intangible Assets The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of June 30, 2017 and December 31, 2016, excluding real estate held for sale as of June 30, 2017 and December 31, 2016 (in thousands):
|  | June 30, 2017 |  | December 31, 2016
|  | Lease Intangibles |  | Accumulated Amortization |  | Lease Intangibles |  | Accumulated Amortization
In-place leases |  | $ | 71,149 |  |  | $ | (30,343 | ) |  | $ | 71,482 |  |  | $ | (28,182 | )
Leasing costs |  | 49,051 |  |  | (20,712 | ) |  | 48,000 |  |  | (18,599 | )
Customer relationships |  | 50,252 |  |  | (18,362 | ) |  | 50,252 |  |  | (17,400 | )
|  | $ | 170,452 |  |  | $ | (69,417 | ) |  | $ | 169,734 |  |  | $ | (64,181 | )
|  | Deferred Rent Receivable/(Liability) |  | Accumulated (Amortization)/Accretion |  | Deferred Rent Receivable/(Liability) |  | Accumulated (Amortization)/Accretion
Above market leases |  | $ | 10,601 |  |  | $ | (7,551 | ) |  | $ | 10,479 |  |  | $ | (7,296 | )
Below market leases and deferred revenue |  | (24,207 | ) |  | 9,626 |  |  | (21,606 | ) |  | 8,959 |
|  | $ | (13,606 | ) |  | $ | 2,075 |  |  | $ | (11,127 | ) |  | $ | 1,663 |
Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $3.5 million and $7.0 million for the three and six months ended June 30, 2017, respectively, and $3.3 million and $6.6 million for the three and six months ended June 30, 2016, respectively, and is included in depreciation and amortization expense in the condensed consolidated statement of operations. Total amortization related to above-market lease values was $0.1 million and $0.3 million for the three and six months ended June 30, 2017, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2016, respectively, and is included in rental revenue in the condensed consolidated statement of operations. Total amortization related to below-market lease values was $0.3 million and $0.7 million for the three and six months ended June 30, 2017, respectively, and $0.2 million and $0.5 million for the three and six months ended June 30, 2016, respectively, and is included in rental revenue in the condensed consolidated statement of operations. The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the six months ended June 30, 2017 and 2016 were as follows:
Intangible Assets & Liabilities |  | 2017 |  | 2016
In-place leases |  | 8.5 |  | 6.1
Leasing costs |  | 8.5 |  | 6.1
Customer relationships |  | 13.5 |  | 9.1
Below market leases |  | 8.5 |  | 6.1
All intangible assets & liabilities |  | 9.8 |  | 6.9

X
- Definition Real Estate and Intangible Assets Disclosure [Text Block] + References No definition available. + Details
Name: | good_RealEstateAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | good_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_RealEstateAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration