• Filing Date: 2019-03-08
  • Form Type: 10-K
  • Description: Annual report
v3.10.0.1
Business Acquisitions
12 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]  
Business Acquisitions
Note 7 — 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 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 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 14 — “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 5 — “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 the other member and pay $2,064 in cash in 2016, plus an additional $200 in January 2017 upon the execution of one lease agreement. 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 in 2016 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.