• Filing Date: 2017-02-22
  • Form Type: 10-K
  • Description: Annual report
v3.6.0.2
Business Acquisitions
12 Months Ended
Dec. 31, 2016
Business Combinations [Abstract]  
Business Acquisitions

Note 6 — Business Acquisitions

Sorrento Hills Village - Sorrento, Florida

On August 16, 2016, the Company’s wholly owned subsidiary, Greenleaf Capital, LLC, assigned the right to purchase the developed property in the ADC Arrangement to its subsidiary, Sorrento PBX, LLC. Sorrento PBX simultaneously exercised the purchase option and acquired the property from Sorrento Retail Investments, LLC. The acquired assets included a retail shopping center and appurtenant facilities in Sorrento, Florida as well as existing tenant lease agreements to use the property. The acquisition is part of the Company’s strategic plan to diversify its operations and investment portfolio. The purchase price was $12,250, which was determined using a predetermined capitalization rate and the projected net operating income of the property. The Company recognized a $2,071 gain on bargain purchase, resulting primarily from a favorable fair value at the date of acquisition as compared with the Company’s purchase price. The Company relied on an independent appraisal report, which is based on the weighted results of two valuation approaches, in determining the estimated fair values of the significant assets acquired. This acquisition was financed in part by the proceeds from the issuance of a 3.75% promissory note. See Note 13 — “Long-Term Debt” for additional information.

The table below presents an allocation of the purchase price to the net assets acquired based on their fair values at the acquisition date:

 

Identifiable assets acquired and liabilities assumed:

  

Cash

   $ 194   

Land

     1,600   

Land improvements

     3,045   

Buildings

     7,120   

Intangibles

     2,580   

Tenant improvements

     76   

Building improvement

     29   

Other assets

     33   

Other liabilities

     (356
  

 

 

 

Total net assets acquired

     14,321   

Less: Gain on bargain purchase

     (2,071
  

 

 

 

Purchase price

   $ 12,250   
  

 

 

 

Pineda Landings - Melbourne, Florida

With regard to the 90% equity interest in FMKT MGA distributed by FMJV as described in Investment in Unconsolidated Joint Venture in Note 4 — “Investments,” the transaction was accounted for as a business step acquisition resulting in the assets acquired and liabilities assumed being recorded at fair value. Immediately following FMJV’s distribution of the 90% equity interest, the Company elected to purchase the remaining 10% noncontrolling interest from FMKT Sponsor, LLC and pay $2,064 in cash, plus an additional $200 upon the execution of one lease agreement that was not finalized as of the acquisition date. That lease agreement was executed in January 2017. The Company funded the consideration paid with $871 of its own cash and $1,193 of additional borrowing from FMKT MGA’s revolving credit facility.

The table below presents the fair values of the net assets acquired at the acquisition date:

 

Identifiable assets acquired and liabilities assumed:

  

Cash

   $ 502   

Land

     2,857   

Land improvements

     4,671   

Buildings

     5,480   

Intangibles

     2,619   

Tenant improvements

     403   

Building improvement

     403   

Other property and equipment

     17   

Other assets

     940   

Construction loan

     (8,214

Other liabilities

     (550
  

 

 

 

Total net assets acquired

     9,128   

Less:Carrying value of 90% equity method investment

     (2,859

Gain on remeasurement of previously held interest

     (4,005

Payable to the 10% joint venture partner

     (200
  

 

 

 

Cash paid to the 10% joint venture partner

   $ 2,064   
  

 

 

 

Subsequent to the acquisition date, the Company incurred an impairment loss of $388 resulting from the write-down of lease intangibles and other assets associated with the unexpected closure of one tenant’s business at this property.

The acquired businesses, in aggregate, contributed $426 of rental income and $460 of net loss to the Company for the period from the acquisition date to December 31, 2016. Pro forma results of operations are not presented as the effects of the acquisition were not material to the Company’s consolidated results of operations.