View Filing Data

Description

Date of Adoption

Effect on the Financial Statements or Other Significant Matters

ASU 2016-02, Leases (Topic 842);

ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842;

ASU 2018-10, Codification Improvements to Topic 842, Leases; and

ASU 2018-11, Leases (Topic 842): Targeted Improvements

These updates amend existing guidance by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Early adoption is permitted as of the original effective date.

January 1, 2019

We are currently evaluating the impact the adoption of these standards will have on our consolidated financial statements. We have identified areas within our accounting policies we believe could be impacted by the new standard. This standard impacts the lessor’s ability to capitalize certain costs related to leasing, which will result in a reduction in the amount of execution costs currently being capitalized in connection with leasing activities and an increase to our Property Operating expenses. The standard will also require new disclosures within the accompanying notes to the consolidated financial statements.

We expect to adopt the practical expedients available for implementation under the standard. By adopting these practical expedients, we will not be required to reassess (i) whether an expired or existing contract meets the definition of a lease; (ii) the lease classification at the adoption date for existing leases; and (iii) whether the costs previously capitalized as initial direct costs would continue to be amortized. This allows us to continue to account for our leases where we are the lessee as operating leases, however, any new or renewed leases may be classified as financing leases. We currently have fewer than 50 leases of this type. We also expect to recognize right of use assets and lease liability on our consolidated balance sheets related to certain leases where we are the lessee.

In July 2018, the FASB issued ASU 2018-11. The update allows lessors to use a practical expedient to account for non-lease components and related lease components as a single lease component instead of accounting for them separately, if certain conditions are met. We expect to utilize this practical expedient.

We will continue to evaluate the effect the adoption of these ASUs will have on our consolidated financial statements. However, we currently believe that the adoption will not have a material impact for operating leases where we are a lessor and will continue to record revenues from rental properties for our operating leases on a straight-line basis. We are still evaluating the impact for leases where we are the lessee.

Print Document View Excel Document

Document and Entity Information - shares shares in Millions	9 Months Ended
Document and Entity Information - shares shares in Millions	Sep. 30, 2018	Oct. 31, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018
Entity Registrant Name	Phillips Edison & Company, Inc.
Entity Central Index Key	0001476204
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		184.0

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Investment in real estate:
Land and improvements	$ 1,115,232	$ 1,121,590
Building and improvements	2,253,804	2,263,381
Acquired in-place lease assets	308,575	313,432
Acquired above-market lease assets	53,161	53,524
Total investment in real estate assets	3,730,772	3,751,927
Accumulated depreciation and amortization	(576,976)	(462,025)
Total investment in real estate assets, net	3,153,796	3,289,902
Cash and cash equivalents	6,111	5,716
Restricted cash	27,828	21,729
Accounts receivable - affiliates	6,365	6,102
Corporate intangible assets, net	46,400	55,100
Goodwill	29,066	29,085
Other assets, net	148,443	118,448
Total assets	3,418,009	3,526,082
Liabilities:
Debt obligations, net	1,842,947	1,806,998
Acquired below-market lease liabilities, net of accumulated amortization of $33,976 and $27,388, respectively	82,235	90,624
Accounts payable – affiliates	1,014	1,359
Accounts payable and other liabilities	152,464	148,419
Total liabilities	2,078,660	2,047,400
Commitments and contingencies (Note 9)	0	0
Equity:
Preferred stock, $0.01 par value per share, 10,000 shares authorized, zero shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	0	0
Common stock, $0.01 par value per share, 1,000,000 shares authorized, 183,694 and 185,233 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	1,837	1,852
Additional paid-in capital	1,613,375	1,629,130
Accumulated other comprehensive income (“AOCI”)	33,602	16,496
Accumulated deficit	(721,017)	(601,238)
Total stockholders’ equity	927,797	1,046,240
Noncontrolling interests	411,552	432,442
Total equity	1,339,349	1,478,682
Total liabilities and equity	$ 3,418,009	$ 3,526,082

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Acquired below-market lease intangibles, accumulated amortization	$ 33,976	$ 27,388
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued and outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued and outstanding	183,694,000	185,233,000

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Rental income	$ 71,770	$ 53,165	$ 216,072	$ 157,425
Tenant recovery income	23,884	17,052	67,878	50,442
Fees and management income	8,974	0	26,823	0
Other property income	271	407	1,498	911
Total revenues	104,899	70,624	312,271	208,778
Expenses:
Property operating	19,276	10,882	54,292	32,611
Real estate taxes	12,873	10,723	39,346	31,136
General and administrative	13,579	8,914	37,490	25,904
Termination of affiliate arrangements	0	5,454	0	5,454
Depreciation and amortization	45,692	28,650	138,504	84,481
Impairment of real estate assets	16,757	0	27,696	0
Total expenses	108,177	64,623	297,328	179,586
Other:
Interest expense, net	(17,336)	(10,646)	(51,166)	(28,537)
Transaction expenses	0	(3,737)	0	(9,760)
Gain on sale of property, net	4,571	0	5,556	0
Other (expense) income, net	(224)	6	(1,513)	642
Net loss	(16,267)	(8,376)	(32,180)	(8,463)
Net loss attributable to noncontrolling interests	3,039	144	6,001	144
Net loss attributable to stockholders	$ (13,228)	$ (8,232)	$ (26,179)	$ (8,319)
Earnings per common share:
Net loss per share - basic and diluted	$ (0.07)	$ (0.04)	$ (0.14)	$ (0.05)
Weighted-average common shares outstanding:
Basic	183,699	183,843	184,676	183,402
Diluted	228,152	186,492	229,129	186,141
Comprehensive loss:
Net loss	$ (16,267)	$ (8,376)	$ (32,180)	$ (8,463)
Other comprehensive loss:
Change in unrealized gain (loss) on interest rate swaps	2,869	49	21,212	(741)
Comprehensive loss	(13,398)	(8,327)	(10,968)	(9,204)
Net loss attributable to noncontrolling interests	3,039	144	6,001	144
Other comprehensive loss attributable to noncontrolling interests	(517)	0	(1,101)	0
Comprehensive loss attributable to stockholders	$ (10,876)	$ (8,183)	$ (6,068)	$ (9,060)

Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	AOCI	Accumulated Deficit	Total Stockholders' Equity	Noncontrolling Interest
Balance, shares at Dec. 31, 2016		185,062
Balance, value at Dec. 31, 2016	$ 1,224,787	$ 1,851	$ 1,627,098	$ 11,916	$ (439,484)	$ 1,201,381	$ 23,406
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share repurchases, shares		(4,471)
Share repurchases, value	(45,602)	$ (45)	(45,557)			(45,602)
Dividend reinvestment plan (DRIP), shares		3,546
Dividend reinvestment plan (DRIP), value	36,171	$ 35	36,136			36,171
Change in unrealized gain on interest rate swaps	(741)			(741)		(741)
Common distributions declared, $0.50 per share	(92,037)				(92,037)	(92,037)
Distributions to noncontrolling interests	(1,384)						(1,384)
Share-based compensation, shares		3
Share-based compensation, value	40		40			40
Redemption of noncontrolling interest	(4,179)						(4,179)
Net loss	(8,463)				(8,319)	(8,319)	(144)
Balance, shares at Sep. 30, 2017		184,140
Balance, value at Sep. 30, 2017	1,108,592	$ 1,841	1,617,717	11,175	(539,840)	1,090,893	17,699
Balance, shares at Dec. 31, 2017		185,233
Balance, value at Dec. 31, 2017	$ 1,478,682	$ 1,852	1,629,130	16,496	(601,238)	1,046,240	432,442
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share repurchases, shares	(4,500)	(4,511)
Share repurchases, value	$ (49,634)	$ (45)	(49,589)			(49,634)
Dividend reinvestment plan (DRIP), shares		2,967
Dividend reinvestment plan (DRIP), value	32,691	$ 30	32,661			32,691
Change in unrealized gain on interest rate swaps	21,212			17,106		17,106	4,106
Common distributions declared, $0.50 per share	(93,600)				(93,600)	(93,600)
Distributions to noncontrolling interests	(21,379)						(21,379)
Share-based compensation, shares		5
Share-based compensation, value	3,713		1,329			1,329	2,384
Other	(156)		(156)			(156)
Net loss	(32,180)				(26,179)	(26,179)	(6,001)
Balance, shares at Sep. 30, 2018		183,694
Balance, value at Sep. 30, 2018	$ 1,339,349	$ 1,837	$ 1,613,375	$ 33,602	$ (721,017)	$ 927,797	$ 411,552

Consolidated Statements of Equity (Parenthetical) - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Statement of Stockholders' Equity [Abstract]
Common distributions declared, per share	$ 0.50	$ 0.50

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (32,180)	$ (8,463)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	125,990	83,200
Impairment of real estate assets	27,696	0
Depreciation and amortization of corporate assets	11,137	0
Amortization of deferred financing expense	3,615	3,572
Net amortization of above- and below-market leases	(2,967)	(972)
Gain on sale of property, net	(5,556)	0
Change in fair value of contingent liability	1,500	0
Straight-line rent	(3,544)	(2,913)
Share-based compensation	3,713	0
Other	846	(927)
Changes in operating assets and liabilities:
Other assets	(10,468)	(12,193)
Accounts receivable and payable – affiliates	(608)	1
Accounts payable and other liabilities	2,862	6,217
Net cash provided by operating activities	122,036	67,522
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions	(31,252)	(111,740)
Capital expenditures	(29,341)	(22,505)
Proceeds from sale of real estate	44,338	1,137
Net cash used in investing activities	(16,255)	(133,108)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in credit facility	(6,000)	202,000
Proceeds from mortgages and loans payable	65,000	0
Payments on mortgages and loans payable	(24,751)	(64,287)
Payments of deferred financing expenses	(782)	(2,510)
Distributions paid, net of DRIP	(61,125)	(56,226)
Distributions to noncontrolling interests	(21,377)	(1,262)
Repurchases of common stock	(50,252)	(44,682)
Redemption of noncontrolling interests	0	(4,179)
Net cash (used in) provided by financing activities	(99,287)	28,854
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	6,494	(36,732)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
Beginning of period	27,445	49,946
End of period	33,939	13,214
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS
Cash, cash equivalents, and restricted cash at end of the period	27,445	49,946
SUPPLEMENTAL CASH FLOW DISCLOSURE, INCLUDING NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cash paid for interest	49,157	26,461
Fair value of assumed debt	0	30,832
Capital leases	739	0
Accrued capital expenditures	2,881	3,560
Change in distributions payable	(216)	(360)
Change in accrued share repurchase obligation	(618)	920
Distributions reinvested	$ 32,691	$ 36,171

Organization

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

1. ORGANIZATION

Phillips Edison & Company, Inc. (“we,” the “Company,” “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, is the sole general partner of the Operating Partnership.

We invest primarily in well-occupied, grocery-anchored, neighborhood and community shopping centers that have a mix of creditworthy national and regional 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 certain non-traded, publicly registered real estate investment trusts (“REITs”) and private funds (“Managed Funds”). The Managed Funds include Phillips Edison Grocery Center REIT II, Inc. (“REIT II”), Phillips Edison Grocery Center REIT III, Inc. (“PECO III”), Phillips Edison Limited Partnership (“PELP”), and Necessity Retail Partners (“NRP”).

As of September 30, 2018, we owned fee simple interests in 233 real estate properties.

In July 2018 we entered into an Agreement and Plan of Merger (“Merger Agreement”) pursuant to which, subject to the satisfaction or waiver of certain conditions, we will merge with REIT II, and we will continue as the surviving corporation (“Merger”). To complete the proposed Merger, we will issue 2.04 shares of our common stock in exchange for each issued and outstanding share of REIT II common stock, subject to closing adjustments. For a more detailed discussion, see Note 3.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

Other than those noted below, there have been no changes to our significant accounting policies during the nine months ended September 30, 2018. For a full summary of our accounting policies, refer to our 2017 Annual Report on Form 10-K filed with the SEC on March 30, 2018.

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, 2017, which are included in our 2017 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, 2018, 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.

Income Taxes—Our consolidated financial statements include the operations of one wholly owned subsidiary that has jointly elected to be treated as a Taxable REIT Subsidiary (“TRS”) and is subject to U.S. federal, state, and local income taxes at regular corporate tax rates. As of September 30, 2018 and December 31, 2017, a full valuation allowance was recorded for the entire amount of the net deferred tax asset. During the three and nine months ended September 30, 2018, no income tax expense or benefit was reported as we recorded a full valuation allowance for our net deferred tax asset.

Newly Adopted and Recently Issued Accounting Pronouncements—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
ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting	This update clarifies guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting.	January 1, 2018	The adoption of this standard did not have a material impact on our consolidated financial statements. We will apply the guidance to any future modifications of share-based compensation awards.
ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)	This update amends existing guidance in order to provide consistency in accounting for the derecognition of a nonfinancial asset.	January 1, 2018	We did not record any cumulative adjustment in connection with the adoption of the new pronouncement. We determined that these changes did not have any impact on our consolidated financial statements.
ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350)	This update amends existing guidance in order to simplify impairment testing for goodwill. It is effective for annual reporting periods beginning after January 1, 2021, but early adoption is permitted.	January 1, 2018	We elected to adopt this standard as of January 1, 2018. The adoption of this standard did not have any impact on our consolidated financial statements.
ASU 2016-15, Statement of Cash Flows (Topic 230); ASU 2016-18, Statement of Cash Flows (Topic 230)	These updates address the presentation of eight specific cash receipts and cash payments on the statement of cash flows, as well as clarify the classification and presentation of restricted cash on the statement of cash flows.	January 1, 2018	We adopted these ASUs by applying a retrospective transition method which requires a restatement of our consolidated statement of cash flows for all periods presented.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)	This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it also applies to certain other transactions such as the sale of real estate or equipment. Expanded quantitative and qualitative disclosures are also required for contracts subject to ASU 2014-09.	January 1, 2018	Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, the adoption of this standard did not have a material impact on our rental or reimbursement revenue. However, the standard does apply to a majority of our fees and management income. We have evaluated the impact of this standard on our fees and management income; it did not have a material impact on our revenue recognition, but we have provided additional disclosures around fees and management revenue. We adopted this guidance on a modified retrospective basis.

The following table provides a brief description of recent accounting pronouncements that could have a material effect on our consolidated financial statements:



Standard	Description	Date of Adoption	Effect on the Financial Statements or Other Significant Matters
ASU 2018-13, Fair Value Measurement (Topic 820)	This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. Early adoption is permitted.	January 1, 2020	We are currently evaluating the impact the adoption of these standards will have on our consolidated financial statements.
ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting	The amendments in this update expand the scope of Topic 718: Compensation—Stock Compensation to include share-based payment transactions for acquiring goods and services from non-employees, except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). This update is effective for public business entities for fiscal years beginning after December 15, 2018. Early adoption is permitted.	January 1, 2019	We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	The amendments in this update replace 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. This update is effective for public entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted after December 15, 2018.	January 1, 2020	We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

Reclassifications—The following line items on our consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2017, were reclassified:


•	Unrealized (Loss) Gain on Derivatives and Reclassification of Derivative Loss to Interest Expense were combined to Change in Unrealized Gain (Loss) on Interest Rate Swaps.


•	Acquisition Expenses were combined to General and Administrative.

The following line items on our consolidated statements of cash flows for the nine months ended September 30, 2017 were reclassified:


•	Net Loss (Gain) on Write-off of Unamortized Capitalized Leasing Commissions, Market Debt Adjustments, and Deferred Financing Expense was combined to Other.

REIT II Merger

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

REIT II Merger

3. PROPOSED MERGER WITH REIT II

In July 2018, we entered into the Merger Agreement, pursuant to which we will merge with REIT II in a 100% stock transaction valued at approximately $1.9 billion. This proposed Merger will create a portfolio of approximately 320 grocery-anchored shopping centers encompassing more than 36 million square feet in established trade areas across 33 states.

To complete the proposed Merger, we will issue 2.04 shares of our common stock in exchange for each issued and outstanding share of REIT II common stock, which is equivalent to $22.54 based on our most recent estimated net asset value per share (“EVPS”) of $11.05. The exchange ratio is based on a thorough review of the relative valuation of each entity, including factoring in our growing investment management business as well as each company’s transaction costs. REIT II’s outstanding debt of approximately $800 million is expected to be refinanced or assumed by us at closing under the terms of the Merger Agreement.

The Merger Agreement provides certain termination rights for REIT II and us. In connection with the termination of the Merger Agreement, under certain specified circumstances, REIT II may be required to pay us a termination fee of $31.7 million and we may be required to pay REIT II a termination fee of $75.6 million. The Merger Agreement provided REIT II with a 30-day go-shop period pursuant to which they could solicit, receive, evaluate, and enter into negotiations with respect to alternative proposals from third-parties. The go-shop period ended during the third quarter.

On a pro forma basis, upon completion of the Merger, we estimate that our continuing stockholders will own approximately 71% of the issued and outstanding shares of the combined company on a fully diluted basis (determined as if each Operating Partnership unit (“OP unit”) were exchanged for one share of our common stock), and former REIT II stockholders will own approximately 29% of the issued and outstanding shares of the combined company on a fully diluted basis (determined as if each OP unit were exchanged for one share of our common stock).

After consideration of all applicable factors pursuant to the business combination accounting rules under ASC 805, Business Combinations, including the application of a screen test to evaluate if substantially all the fair value of the acquired properties is concentrated in a single asset or group of similar assets, we have concluded that the Merger will be treated as an asset acquisition under GAAP. As of September 30, 2018, we have deferred for capitalization $2.8 million in costs related to the merger.

4. PELP ACQUISITION

On October 4, 2017, we completed a transaction to acquire certain real estate assets, the third-party investment management business, and the captive insurance company of PELP in a stock and cash transaction (“PELP transaction”). Under the terms of this transaction, the following consideration was given in exchange for the contribution of PELP’s ownership interests in 76 shopping centers, its third-party investment management business, and its captive insurance company (in thousands):



	Amount
Fair value of OP units issued	$	401,630
Debt assumed:
Corporate debt	432,091
Mortgages and notes payable	72,649
Cash payments	30,420
Fair value of earn-out	38,000
Total consideration	974,790
PELP debt repaid by the Company on the transaction date	(432,091		)
Net consideration	$	542,699

We issued 39.4 million OP units with an estimated fair value per unit of $10.20 at the time of the transaction. Certain of our executive officers who received OP units as part of the PELP transaction entered into an agreement which provides that they will not transfer their OP units for either two or three years following the closing. The remaining holders of the OP units are subject to the terms of exchange for shares of common stock outlined in the Operating Partnership’s Third Amended and Restated Agreement of Limited Partnership (“Partnership Agreement”) (see Note 10). The terms of the PELP transaction included an earn-out structure with an opportunity for up to an additional 12.5 million OP units to be issued. For more detail regarding this earn-out, see Note 14.

Immediately following the closing of the PELP transaction, our stockholders owned approximately 80.6% and former PELP stockholders owned approximately 19.4% of the combined company.

Assets Acquired and Liabilities Assumed—The PELP transaction was accounted for using the acquisition method of accounting under ASC 805, Business Combinations, which requires, among other things, the assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. The preliminary fair market value of the assets acquired and liabilities assumed was based on a valuation report prepared by a third-party valuation specialist that was subject to management’s review and approval. The following table summarizes the purchase price allocation based on that report (in thousands):



	Amount
Assets:
Land and improvements	$	269,140
Building and improvements	574,173
Intangible lease assets	93,506
Cash	5,930
Accounts receivable and other assets	42,426
Management contracts	58,000
Goodwill	29,066
Total assets acquired	1,072,241
Liabilities:
Accounts payable and other liabilities	48,342
Acquired below-market leases	49,109
Total liabilities acquired	97,451
Net assets acquired	$	974,790

The allocation of the purchase price was based on management’s assessment, which may change in the future as more information becomes available and could have an impact on the unaudited pro forma financial information presented below. Subsequent adjustments made to the purchase price allocation upon the completion of our fair value assessment process will not exceed one year from the acquisition date. The allocation of the purchase price above required a significant amount of judgment and represented management’s best estimate of the fair value as of the acquisition date.

Intangible Assets and Liabilities—The fair value and weighted-average amortization periods for the intangible assets and liabilities acquired in the PELP transaction as of the transaction date were as follows (dollars in thousands, useful life in years):



	Fair Value			Weighted-Average Useful Life
Management contracts	$	58,000		5
Acquired in-place leases	83,305			9
Acquired above-market leases	10,201			7
Acquired below-market leases	(49,109		)	13

Goodwill—In connection with the PELP transaction, we recorded goodwill of $29.1 million as a result of the consideration exceeding the fair value of the net assets acquired. Goodwill represents the estimated future benefits arising from other assets acquired that could not be individually identified and separately recognized. We do not expect that the goodwill will be deductible for tax purposes. The goodwill recorded represents our management structure and its ability to generate additional opportunities for revenue and raise additional funds, and therefore the full amount of goodwill was allocated to the Investment Management segment, which comprises one reporting unit. For more information about each of our reporting segments, see Note 15.

Results of Operations—The consolidated net assets and results of operations of PELP’s contributions were included in the consolidated financial statements from the transaction date going forward and resulted in the following impact to Revenue and Net Loss for the three and nine months ended September 30, 2018 (in thousands):



	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Revenue	$	20,943		$	63,894
Net loss	(16,464		)	(24,999		)

Acquisition Costs—We incurred approximately $17.0 million of costs related to the PELP transaction, $9.8 million of which was incurred during the nine months ended September 30, 2017, and was recorded as Transaction Expenses on the consolidated statements of operations. No costs related to the PELP transaction were recorded in 2018.

Pro Forma Results (Unaudited)—The following unaudited pro forma information summarizes selected financial information from our combined results of operations, as if the PELP transaction had occurred on January 1, 2016. These results contain certain nonrecurring adjustments, such as the elimination of transaction expenses incurred related to the PELP transaction and the elimination of intercompany activity related to creating an internalized management structure. This pro forma information is presented for informational purposes only, and may not be indicative of what actual results of operations would have been had the PELP transaction occurred at the beginning of the period, nor does it purport to represent the results of future operations.



(in thousands)	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Pro forma revenues	$	98,679	$	300,133
Pro forma net income attributable to stockholders	799		2,063

PELP Acquisition

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

PELP Acquisition

3. PROPOSED MERGER WITH REIT II

4. PELP ACQUISITION



	Amount
Fair value of OP units issued	$	401,630
Debt assumed:
Corporate debt	432,091
Mortgages and notes payable	72,649
Cash payments	30,420
Fair value of earn-out	38,000
Total consideration	974,790
PELP debt repaid by the Company on the transaction date	(432,091		)
Net consideration	$	542,699

Immediately following the closing of the PELP transaction, our stockholders owned approximately 80.6% and former PELP stockholders owned approximately 19.4% of the combined company.



	Amount
Assets:
Land and improvements	$	269,140
Building and improvements	574,173
Intangible lease assets	93,506
Cash	5,930
Accounts receivable and other assets	42,426
Management contracts	58,000
Goodwill	29,066
Total assets acquired	1,072,241
Liabilities:
Accounts payable and other liabilities	48,342
Acquired below-market leases	49,109
Total liabilities acquired	97,451
Net assets acquired	$	974,790



	Fair Value			Weighted-Average Useful Life
Management contracts	$	58,000		5
Acquired in-place leases	83,305			9
Acquired above-market leases	10,201			7
Acquired below-market leases	(49,109		)	13



	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Revenue	$	20,943		$	63,894
Net loss	(16,464		)	(24,999		)



(in thousands)	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Pro forma revenues	$	98,679	$	300,133
Pro forma net income attributable to stockholders	799		2,063

Real Estate Activity

9 Months Ended

Sep. 30, 2018

Real Estate Investments, Net [Abstract]

Real Estate Acquisitions

5. REAL ESTATE ACTIVITY

Acquisitions—During the nine months ended September 30, 2018, we acquired two grocery-anchored shopping centers. The first quarter acquisition closed out the Internal Revenue Code (“IRC”) Section 1031 like-kind exchange outstanding at December 31, 2017. We also acquired one land parcel adjacent to a property we currently own for $0.7 million. During the nine months ended September 30, 2017, we acquired six grocery-anchored shopping centers. All of the 2017 and 2018 acquisitions were classified as asset acquisitions. As such, most acquisition-related costs were capitalized and are included in the total purchase prices shown below. Our real estate assets acquired during the nine months ended September 30, 2018, were as follows (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Shoppes of Lake Village

Leesburg, FL

Publix

2/26/2018

8,423

71.3

Sierra Vista Plaza

Murrieta, CA

Stater Brothers⁽¹⁾

9/28/2018

22,151

81.0


⁽¹⁾	Stater Brothers is in a portion of the shopping center that we do not own.

During the nine months ended September 30, 2017, we acquired the following real estate assets (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Atwater Marketplace

Atwater, CA

Save Mart

2/10/2017

15,041

94.6

Rocky Ridge Station

Roseville, CA

Sprouts

4/18/2017

37,271

⁽¹⁾

96.3

Greentree Station

Racine, WI

Pick ‘n Save

5/5/2017

12,309

90.3

Titusville Station

Titusville, FL

Publix

6/15/2017

13,817

71.7

Sierra Station

Corona, CA

Ralph’s

6/20/2017

29,137

⁽¹⁾

94.0

Hoffman Village Station

Hoffman Estates, IL

Mariano’s

9/5/2017

34,910

93.1


⁽¹⁾	The purchase price includes the fair value of debt assumed as part of the acquisition.

The fair value at acquisition and weighted-average useful life for in-place, above-market, and below-market lease intangibles acquired as part of the above transactions during the nine months ended September 30, 2018 and 2017, are as follows (dollars in thousands, weighted-average useful life in years):



	2018				2017
	Fair Value			Weighted-Average Useful Life	Fair Value			Weighted-Average Useful Life
Acquired in-place leases	$	2,319		6	$	13,647		13
Acquired above-market leases	200			5	1,012			7
Acquired below-market leases	(1,299		)	14	(3,703		)	19

Dispositions—During the nine months ended September 30, 2018, we sold five grocery-anchored shopping centers for $45.6 million resulting in a gain of $5.6 million. We had no dispositions during the nine months ended September 30, 2017.

Impairment of Real Estate Assets—During the three and nine months ended September 30, 2018, we recognized impairment charges totaling $16.8 million and $27.7 million, respectively. The impairments were associated with certain anticipated property dispositions where the net book value exceeded the estimated fair value, as well as certain properties that we determined to be impaired following the identification of potential operational impairment indicators. Our estimated fair value was based upon the contracted price to sell, the marketed price for disposition, or comparable market assets when neither of the first two inputs were available. We have applied reasonable estimates and judgments in determining the level of impairments recognized. We did not recognize any impairments in 2017.

Other Assets, Net

9 Months Ended

Sep. 30, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets, Net

6. OTHER ASSETS, NET

The following is a summary of Other Assets, Net outstanding as of September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018			December 31, 2017
Other assets, net:
Deferred leasing commissions and costs	$	33,491		$	29,055
Deferred financing costs	13,971			13,971
Office equipment, including capital lease assets, and other	13,117			10,308
Total depreciable and amortizable assets	60,579			53,334
Accumulated depreciation and amortization	(23,678		)	(17,121		)
Net depreciable and amortizable assets	36,901			36,213
Accounts receivable, net	37,025			41,211
Deferred rent receivable, net	21,594			18,201
Derivative asset	37,708			16,496
Prepaid expenses	8,015			4,232
Investment in affiliates	903			902
Other	6,297			1,193
Total other assets, net	$	148,443		$	118,448

Debt Obligations

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Debt Obligations

7. DEBT OBLIGATIONS

The following is a summary of the outstanding principal balances and interest rates, which include the effect of derivative financial instruments, on our debt obligations as of September 30, 2018 and December 31, 2017 (dollars in thousands):



	Interest Rate	September 30, 2018			December 31, 2017
Revolving credit facility⁽¹⁾	LIBOR + 1.40%	$	55,568		$	61,569
Term loans⁽²⁾	2.51% - 3.93%	1,205,000			1,140,000
Secured loan facility due 2026	3.55%	175,000			175,000
Secured loan facility due 2027	3.52%	195,000			195,000
Mortgages and other⁽³⁾	3.75% - 7.91%	222,205			246,217
Assumed market debt adjustments, net⁽⁴⁾		4,211			5,254
Deferred financing costs⁽⁵⁾		(14,037		)	(16,042		)
Total		$	1,842,947		$	1,806,998


⁽¹⁾	The gross borrowings and payments under our revolving credit facility were $219.0 million and $225.0 million, respectively, during the nine months ended September 30, 2018. The revolving credit facility has a capacity of $500 million and matures in October 2021, with additional options to extend the maturity to October 2022.

⁽²⁾

We have six term loans with maturities ranging from 2019 to 2024. The $100 million term loan due in 2019 has options to extend the maturity to 2021. We will consider options for refinancing the loan or exercising the option upon maturity. As of September 30, 2018, the availability on our revolving credit facility exceeded the balance on the loan. The $175 million term loan due in 2020 has options to extend its maturity to 2021. We executed a $65 million delayed draw in January 2018 on one of our term loans that originated in October 2017.


⁽³⁾	Due to the non-recourse nature of our fixed-rate mortgages, the assets and liabilities of the properties securing such mortgages are neither available to pay the debts of the consolidated property-holding limited liability companies, nor do they constitute obligations of such consolidated limited liability companies as of September 30, 2018 and December 31, 2017.


⁽⁴⁾	Net of accumulated amortization of $4.0 million and $3.7 million as of September 30, 2018 and December 31, 2017, respectively.


⁽⁵⁾	Net of accumulated amortization of $7.9 million and $5.4 million as of September 30, 2018 and December 31, 2017, respectively.

As of September 30, 2018 and December 31, 2017, the weighted-average interest rate, including the effect of derivative financial instruments, for all of our debt obligations was 3.5% and 3.4%, respectively.

The allocation of total debt between fixed- and variable-rate as well as between secured and unsecured, excluding market debt adjustments and deferred financing costs, as of September 30, 2018 and December 31, 2017, is summarized below (in thousands):



	September 30, 2018		December 31, 2017
As to interest rate:⁽¹⁾
Fixed-rate debt	$	1,584,205	$	1,608,217
Variable-rate debt	268,568		209,569
Total	$	1,852,773	$	1,817,786
As to collateralization:
Unsecured debt	$	1,261,180	$	1,202,476
Secured debt	591,593		615,310
Total	$	1,852,773	$	1,817,786


⁽¹⁾	Includes the effects of derivative financial instruments (see Notes 8 and 14).

Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

8. DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives—We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposure to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into interest rate swaps to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings.

Cash Flow Hedges of Interest Rate Risk—Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The change in the fair value of derivatives designated, and that qualify, as cash flow hedges is recorded in AOCI and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2018 and 2017, such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. The ineffectiveness previously reported in earnings for the period ended September 30, 2017, was adjusted to reflect application of the provisions of ASU 2017-12, Derivatives and Hedging (Topic 815), as of the beginning of 2017. This adjustment was not material.

Amounts reported in AOCI related to these derivatives will be reclassified to Interest Expense, Net as interest payments are made on the variable-rate debt. During the next twelve months, we estimate that an additional $8.8 million will be reclassified from Other Comprehensive Income (“OCI”) as a decrease to Interest Expense, Net. The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of September 30, 2018 and December 31, 2017 (notional amount in thousands):



Count	Fixed LIBOR	Maturity Date	Notional Amount
6	1.2% - 2.2%	2019-2024	$	992,000

The table below details the location of the gain or loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2018 and 2017 (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Amount of gain (loss) recognized in OCI on derivative⁽¹⁾	$	4,061		$	(179	)	$	23,107		$	(1,944	)
Amount of (gain) loss reclassified from AOCI into interest expense⁽¹⁾	(1,192		)	228			(1,895		)	1,203


⁽¹⁾	Increases in gains are solely driven from changes in LIBOR and LIBOR futures.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. COMMITMENTS AND CONTINGENCIES

Litigation—We are involved in various claims and litigation matters arising in the ordinary course of business, some of which involve claims for damages. Many of these matters are covered by insurance, although they may nevertheless be subject to deductibles or retentions. Although the ultimate liability for these matters cannot be determined, based upon information currently available, we believe the resolution of such claims and litigation will not have a material adverse effect on our consolidated financial statements.

Environmental Matters—In connection with the ownership and operation of real estate, we may potentially be liable for costs and damages related to environmental matters. In addition, we may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property, and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify us against future remediation costs. We also carry environmental liability insurance on our properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which we may be liable. We are not aware of any environmental matters which we believe are reasonably likely to have a material effect on our consolidated financial statements.

Equity

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Equity

10. EQUITY

On May 9, 2018, our board of directors (“Board”) increased the EVPS of our common stock to $11.05 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of March 31, 2018. We engaged a third-party valuation firm to provide a calculation of the range in EVPS of our common stock as of March 31, 2018, which reflected certain balance sheet assets and liabilities as of that date. Previously, on November 8, 2017, our Board increased the EVPS of our common stock to $11.00 from $10.20 based substantially on the estimated market value of our portfolio of real estate properties and our third-party investment management business as of October 5, 2017, the first full business day after the closing of the PELP transaction.

Shares of our common stock are issued under the Dividend Reinvestment Plan (the “DRIP”) and redeemed under the Share Repurchase Program (“SRP”), as discussed below, at the same price as the EVPS in effect at the time of issuance or redemption.

Dividend Reinvestment Plan—The DRIP allows stockholders to invest distributions in additional shares of our common stock. Stockholders who elect to participate in the DRIP, and who are subject to U.S. federal income taxation laws, will incur a tax liability on an amount equal to the fair value on the relevant distribution date of the shares of our common stock purchased with reinvested distributions, even though such stockholders have elected not to receive the distributions in cash. In connection with the proposed Merger (see Note 3), the DRIP was temporarily suspended for the month of July 2018; therefore, all DRIP participants received their July 2018 distribution in cash rather than in stock. The DRIP plan resumed in August 2018, with the distribution paid in September 2018.

Share Repurchase Program—Our SRP provides an opportunity for stockholders to have shares of common stock repurchased, subject to certain restrictions and limitations. The Board reserves the right, in its sole discretion, at any time and from time to time, to reject any request for repurchase. Further, the cash available for repurchases on any particular date will generally be limited to the proceeds from the DRIP during the preceding four fiscal quarters, less amounts already used for repurchases since the beginning of that period. In connection with the Merger, the SRP was also temporarily suspended for the month of July 2018 and resumed in August 2018.

During the nine months ended September 30, 2018, repurchase requests surpassed the funding limits under the SRP. Approximately 4.5 million shares of our common stock were repurchased under the SRP during the nine months ended September 30, 2018. Repurchase requests in connection with a stockholder’s death, “qualifying disability,” or “determination of incompetence” were completed in full. The remaining repurchase requests that were in good order were fulfilled on a pro rata basis. Due to the program's funding limits, no funds will be available for the remainder of 2018. However, we will continue to fulfill repurchases sought upon a stockholder's death, “qualifying disability,” or “determination of incompetence” in accordance with the terms of the SRP.

In connection with the proposed Merger, the combined company will be required to reset its share repurchase queue. As a result, all SRP requests currently on file will be canceled on the date the Merger closes. All stockholders wishing to participate in the SRP after the Merger must submit a new SRP form to the transfer agent, DST, after the Merger to be included in the next standard repurchase of the combined company. All standard repurchase requests must be on file and in good order to be included for next standard repurchase of the combined company, which is expected to be in July 2019. At that time, should the demand for standard redemptions exceed the funding available for repurchases, the combined company is expected to make pro-rata redemptions. Following that standard repurchase, standard repurchase requests that are on file with the combined company and in good order that have not been fully executed (due to pro-rata redemptions), will remain on file for future redemptions.

Convertible Noncontrolling Interests—As part of the PELP transaction, we issued 39.4 million OP units that are classified as Noncontrolling Interests. Prior to the PELP transaction, the Operating Partnership also issued limited partnership units that were designated as Class B units for asset management services provided by our former advisor. Upon closing of the PELP transaction, all outstanding Class B units vested and were converted to OP units.

Under the terms of the Partnership Agreement, OP unit holders may elect to exchange OP units. The Operating Partnership controls the form of the redemption, and may elect to exchange OP units for shares of our common stock, provided that the OP units have been outstanding for at least one year. As the form of redemption for OP units is within our control, the OP units outstanding as of September 30, 2018 and December 31, 2017, are classified as Noncontrolling Interests within permanent equity on our consolidated balance sheets. The cumulative distributions that have been paid on OP units are included in Distributions to Noncontrolling Interests on the consolidated statements of equity. There were 44.5 million OP units outstanding as of September 30, 2018 and December 31, 2017.

Nonconvertible Noncontrolling Interests—In addition to partnership units of the Operating Partnership, Noncontrolling Interests also includes a 25% ownership share of one of our subsidiaries who provides advisory services, which was not significant to our results.

Earnings Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share

11. EARNINGS PER SHARE

We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing Net Loss Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity.

OP units held by limited partners other than us are considered to be participating securities because they contain non-forfeitable rights to dividends or dividend equivalents, and have the potential to be exchanged for an equal number of shares of our common stock in accordance with the terms of the Partnership Agreement.

The impact of OP units on basic and diluted EPS has been calculated using the two-class method whereby earnings are allocated to the OP units based on dividends declared and the units’ participation rights in undistributed earnings. The effects of the two-class method on basic and diluted EPS were immaterial to the consolidated financial statements as of September 30, 2018 and 2017.

The following table provides a reconciliation of the numerator and denominator of the earnings per share calculations for the three and nine months ended September 30, 2018 and 2017 (in thousands, except per share amounts):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Numerator:
Net loss attributable to stockholders - basic	$	(13,228	)	$	(8,232	)	$	(26,179	)	$	(8,319	)
Net loss attributable to convertible OP units⁽¹⁾	(3,180		)	(144		)	(6,270		)	(144		)
Net loss attributable to stockholders and convertible noncontrolling interests - diluted	$	(16,408	)	$	(8,376	)	$	(32,449	)	$	(8,463	)
Denominator:
Weighted-average shares - basic	183,699			183,843			184,676			183,402
OP units⁽¹⁾	44,453			2,649			44,453			2,739
Adjusted weighted-average shares - diluted	228,152			186,492			229,129			186,141
Earnings per common share:
Net loss attributable to stockholders - basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.14	)	$	(0.05	)

⁽¹⁾ OP units include units previously issued for asset management services provided under our former advisory agreement (see Note 13), as well as units issued as part of the PELP transaction (Note 4), all of which are convertible into common stock. The Operating Partnership loss attributable to these OP units, which is included as a component of Net Income Attributable to Noncontrolling Interests on the consolidated statements of operations, has been added back in the numerator as these OP units were included in the denominator for all years presented.

As of September 30, 2018, approximately 1.0 million unvested restricted stock awards granted to employees and directors were outstanding. These securities were anti-dilutive and, as a result, were excluded from the weighted-average common shares used to calculate diluted EPS. The unvested restricted stock awards outstanding at September 30, 2017, were immaterial. There were 2.7 million unvested Class B units outstanding as of September 30, 2017. As these units were unvested, they were not included in the diluted earnings per share calculation. We had no unvested Class B units outstanding as of September 30, 2018.

Revenue Recognition and Related Party Revenue

9 Months Ended

Sep. 30, 2018

Revenue Recognition and Related Party Revenue

12. REVENUE RECOGNITION AND RELATED PARTY REVENUE

Effective January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers, using the modified retrospective approach. The majority of our revenue is lease revenue derived from our Owned Real Estate segment (see Note 15). We record these amounts as Rental Income and Tenant Recovery Income on the consolidated statements of operations. These revenue amounts are excluded from the scope of ASU 2014-09, as they are accounted for under Topic 840, Leases.

Fee revenues from our Investment Management segment are earned by providing services to the Managed Funds. These fees are within the scope of ASU 2014-09 and are recorded as Fees and Management Income on the consolidated statements of operations. Additional immaterial revenue is recorded as Other Property Income on the consolidated statements of operations. The adoption of ASU 2014-09 did not result in any retrospective adjustments to prior periods as our previous revenue recognition policies aligned with the updated guidance.

The Investment Management segment provides services to Managed Funds that are considered related parties. These services primarily include asset acquisition and disposition services, asset management, operating and leasing of properties, construction management, and other general and administrative responsibilities. These services are currently provided under two types of contracts: advisory agreements and property management agreements. Advisory agreements have a duration of one year and are renewed annually at the discretion of the respective boards, but can be terminated upon notice by either party. Property management agreements include both property management agreements and master services agreements, which we have determined should be evaluated as a single agreement for revenue recognition under GAAP. Property management agreements have no defined term, but can be canceled by either party upon 30 days’ notice.

Summarized below is all fee and management revenue for the Investment Management segment. The revenue includes the fees and reimbursements earned by us from the Managed Funds for the three and nine months ended September 30, 2018, and other revenues that are not in the scope of ASC 606, Revenue from Contracts with Customers, but are included in this table for the purpose of disclosing all related party revenues (in thousands):



	Three Months Ended September 30, 2018						Nine Months Ended September 30, 2018
	REIT II		Other Parties		Total		REIT II		Other Parties		Total
Advisory revenue:
Acquisition fees	$	—	$	379	$	379	$	162	$	635	$	797
Asset management fees	3,084		342		3,426		9,212		917		10,129
Other advisory fees and reimbursements	143		146		289		796		305		1,101
Total advisory revenue	3,227		867		4,094		10,170		1,857		12,027

Property Management and Services revenue:
Property management fees	1,977		345		2,322		6,181		1,061		7,242
Leasing commissions	1,192		245		1,437		3,703		659		4,362
Construction management fees	308		42		350		511		175		686
Other property management fees and reimbursements	155		88		243		577		331		908
Total property management and services revenue	3,632		720		4,352		10,972		2,226		13,198

Other revenue:
Insurance premiums⁽¹⁾	90		437		527		277		1,320		1,597
Non-operating property revenue	—		138		138		—		408		408
Total fees and management income	$	6,949	$	2,162	$	9,111	$	21,419	$	5,811	$	27,230


⁽¹⁾	Insurance premium income from other parties was from third parties not affiliated with us.

Because the PELP transaction occurred in October 2017, no fee and management income was earned during the nine months ended September 30, 2017.

Advisory Agreements—Under our advisory agreements, we earn revenue for managing day-to-day activities and implementing the investment strategy for the Managed Funds. The wide variety of duties as the advisor within these contracts makes determining the performance obligations within the contracts a matter of judgment. We have concluded that each of the separately disclosed fee types in the below table represents a separate performance obligation within the contract.

Due to the nature of the services being provided under the Advisory Agreements, each performance obligation within the contract has a variable component. Therefore when we determine the transaction price for the contract we are required to constrain our estimate to an amount that is not probable of significant revenue reversal. For the acquisition and disposition services, compensation only occurs if the transaction takes place, and the amount of compensation is dependent upon the contract price for the transaction. Property acquisition and disposition fees are recognized when we satisfy a performance obligation by acquiring a property or transferring control of a property. These fees are billed subsequent to the acquisition or sale of the property and payment is due thereafter.

The following table summarizes the fee structure for our advisory agreements:



Fee Type	Performance Obligation Satisfied	Timing of Payment	Revenue Recognition
Acquisition Fee	Point in time (upon close of transaction)	In cash upon close of transaction	Revenue is recognized based on a percentage of the contract purchase price, including acquisition expenses and any debt.
Disposition Fee	Point in time (upon close of transaction)	In cash upon completion	Revenue is recognized based on a percentage of the contract sales price.
Asset Management Fee and Subordinated Participation	Over time	Monthly, in cash and/or ownership units	Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each reporting period based on a percentage of the cost of assets under management or the applicable NAV.

In addition to the fees listed above, our management company contracts include the potential for additional revenues if certain market conditions are in place or certain events take place. We have not recognized revenue related to these fees, nor will we until it is no longer highly probable that there would be a material reversal of revenue.

Property Management Agreements—Under our property management agreements, we earn revenue for managing day-to-day activities at the properties of the Managed Funds, for which we receive a distinct fee based on a set percentage of gross cash receipts each month. Under the property management agreements, we also serve as a leasing agent to the Managed Funds. For each new lease, lease renewal, and expansion we receive a distinct fee in the form of a leasing commission. Leasing commissions are recognized at lease execution and are dependent on the terms of the lease. Additionally, we assist in overseeing the construction of various improvements for Managed Funds, for which we receive a distinct fee based on a set percentage of total project cost calculated upon completion of construction. Because both parties in these contracts can cancel upon 30 days’ notice without penalties, their term is considered month-to-month.

The wide variety of duties as the property manager within these contracts makes determining the performance obligations within the contracts a matter of judgment. We have concluded that each of the separately disclosed fee types in the contracts, property management, leasing, and construction management, represents a separate performance obligation within the contract.

Due to the nature of the services being provided under the property management agreements, each performance obligation within the contract has a variable consideration component. However, due to the month-to-month term of these contracts, any uncertainty regarding the amounts to be earned over the contract term is resolved by the end of that month. As a result, we can reliably calculate the amount of the consideration to be recognized with regards to each performance obligation each month.

All property management agreements have terms as follows:



Fee	Performance Obligation Satisfied	Timing of Payment	Revenue Recognition
Property Management	Over time	In cash, monthly	Revenue is recognized based on a percentage of monthly cash receipts at each property.
Leasing Commissions	Point in time	In cash upon completion	Revenue is recognized based on a percentage of the contractual payments to be received per the terms of the lease and occurs when the lease is executed.
Construction Management	Point in time	In cash upon completion	Revenue is recognized based on a percentage of the cost of the construction project. Revenue recognition occurs upon completion of the contract (in the case of a normal capital improvement) or upon the tenant taking possession (in the case of a tenant improvement).

Both the advisory agreements and property management agreements have an original duration of one year or less, and we utilize the practical expedient applicable to such contracts and have not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period nor when we expect to recognize this revenue. Due to the duration of the contracts, we have also utilized the practical expedient and made no adjustment to contract consideration for the effects of financing components.

Related Party Receivables—Summarized below is the detail of our outstanding receivable balance from related parties as of September 30, 2018 and December 31, 2017, respectively (in thousands):



	September 30, 2018				December 31, 2017
	REIT II		Other Parties		REIT II		Other Parties
Contract receivables:
Advisory	$	109	$	171	$	256	$	51
Property management and services	1,178		188		1,264		128
Total contract receivables	1,287		359		1,520		179
Other	119		4,473		72		4,331
Total	$	1,406	$	4,832	$	1,592	$	4,510

Organizational and Offering Costs—Under the terms of the advisory agreement, we have incurred organizational and offering costs related to PECO III, all of which currently are recorded in Accounts Receivable - Affiliates on the consolidated balance sheets. We have charged PECO III organizational and offering costs related to both its private placement and public offering, which were approximately $4.2 million and $2.0 million as of September 30, 2018 and December 31, 2017, respectively.

During the public offering period for PECO III we will receive a contingent advisor payment of 2.15% of the contract purchase price of each property or other real estate investment it acquires. This reimbursement is intended to allow us to recoup a portion of the dealer manager fees and organizational and offering expenses advanced by PECO III’s advisor, in which we have a 75% interest. Therefore, this reimbursement shall not exceed the amount of organizational and offering expenses and dealer manager fees outstanding at the time of closing for the acquired property.

The initial $4.5 million we may incur to fund organizational and offering expenses related to the PECO III public offering, shall be retained by PECO III until the termination of its public offering, at which time such amount shall be paid.

Related Party Expense

9 Months Ended

Sep. 30, 2018

Related Party Transactions

13. RELATED PARTY EXPENSE

Economic Dependency—Prior to the completion of the PELP transaction, we were dependent on Phillips Edison NTR LLC (“PE-NTR”), Phillips Edison & Company Ltd. (the “Property Manager”), and their respective affiliates for certain services that were essential to us, including asset acquisition and disposition decisions, asset management, operating and leasing of our properties, and other general and administrative responsibilities. Upon closing of the transaction in October 2017, our management structure became internalized and our relationship with PE-NTR and the Property Manager was acquired. As a result, we no longer pay the fees listed below and had no outstanding unpaid amounts related to those fees as of September 30, 2018 or December 31, 2017.

Advisory Agreement—PE-NTR and a previous advisor were entitled to specified fees and expenditure reimbursements for certain services, including managing our day-to-day activities and implementing our investment strategy under advisory agreements, as follows:


•	Asset management and subordinated participation fee paid out monthly in cash and/or Class B units;


•	Acquisition fee based on the cost of investments acquired/originated;


•	Acquisition expenses reimbursed related to selecting, evaluating, and acquiring assets; and


•	Disposition fee paid for substantial assistance in connection with the sale of a property.

Summarized below are the fees earned by and the expenses reimbursable for the three and nine months ended September 30, 2017 (in thousands):



	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Acquisition fees⁽¹⁾	$	294	$	1,344
Due diligence fees⁽¹⁾	370		583
Asset management fees⁽²⁾	5,071		15,388
OP unit distributions⁽³⁾	448		1,373
Class B unit distributions⁽⁴⁾	482		1,393
Disposition fees	—		19
Total	$	6,665	$	20,100


⁽¹⁾	The majority of acquisition and due diligence fees are capitalized and allocated to the related investment in real estate assets on the consolidated balance sheets based on the acquisition-date fair values of the respective assets and liabilities acquired.


⁽²⁾	Asset management fees are presented in General and Administrative on the consolidated statements of operations.


⁽³⁾	Distributions are presented as Distributions to Noncontrolling Interests on the consolidated statements of equity.


⁽⁴⁾	The distributions paid to holders of unvested Class B units are presented in General and Administrative on the consolidated statements of operations.

Property Management Agreement—Prior to the completion of the PELP transaction in October 2017, all of our real properties were managed and leased by the Property Manager, which was wholly-owned by PELP. The Property Manager was entitled to the following specified fees and expenditure reimbursements:


•	Property management fee based on monthly gross cash receipts from the properties managed;


•	Leasing commissions paid for leasing services rendered with respect to a particular property;


•	Construction management costs paid for construction management services rendered with respect to a particular property; and


•	Other expenses and reimbursement incurred by the Property Manager on our behalf.

Summarized below are the fees earned by and the expenses reimbursable to the Property Manager for the three and nine months ended September 30, 2017 (in thousands):



	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Property management fees⁽¹⁾	$	2,717	$	7,986
Leasing commissions⁽²⁾	1,677		6,077
Construction management fees⁽²⁾	683		1,367
Other fees and reimbursements⁽³⁾	2,409		6,030
Total	$	7,486	$	21,460


⁽¹⁾	The property management fees are included in Property Operating on the consolidated statements of operations.


⁽²⁾	Leasing commissions paid for leases with terms less than one year were expensed immediately and included in Depreciation and Amortization on the consolidated statements of operations. Leasing commissions paid for leases with terms greater than one year, and construction management fees, were capitalized and amortized over the life of the related leases or assets.


⁽³⁾	Other fees and reimbursements are included in Property Operating and General and Administrative on the consolidated statements of operations based on the nature of the expense.

Other Related Party Matters—Under the terms of the advisory agreement, we have incurred organizational and offering costs related to PECO III. A portion of those costs were incurred by Griffin Capital Corporation (“Griffin sponsor”), a co-sponsor of PECO III. The Griffin sponsor owns a 25% interest and we own a 75% interest in PECO III’s advisor. As such, $1.0 million of the receivable we have from PECO III is reimbursable to the Griffin sponsor and is recorded in Accounts Payable - Affiliates on the consolidated balance sheets.

Upon completion of the PELP transaction, we assumed PELP’s obligation as the limited guarantor for up to $200 million, capped at $50 million in most instances, of NRP’s debt. Our guarantee is limited to being the non-recourse carveout guarantor and the environmental indemnitor.

Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

14. FAIR VALUE MEASUREMENTS

The following describes the methods we use to estimate the fair value of our financial and nonfinancial assets and liabilities:

Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, and Accounts Payable—We consider the carrying values of these financial instruments to approximate fair value because of the short period of time between origination of the instruments and their expected realization.

Real Estate Investments—The purchase prices of the investment properties, including related lease intangible assets and liabilities, were allocated at estimated fair value based on Level 3 inputs, such as discount rates, capitalization rates, comparable sales, replacement costs, income and expense growth rates, and current market rents and allowances as determined by management.

Debt Obligations—We estimate the fair value of our debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by our lenders using Level 3 inputs. The discount rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assuming the debt is outstanding through maturity and considering the debt’s collateral (if applicable). We have utilized market information, as available, or present value techniques to estimate the amounts required to be disclosed.

The following is a summary of borrowings as of September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018		December 31, 2017
Fair value	$	1,812,086	$	1,765,151
Recorded value⁽¹⁾	1,856,984		1,823,040


⁽¹⁾	Recorded value does not include deferred financing costs of $14.0 million and $16.0 million as of September 30, 2018 and December 31, 2017, respectively.

Recurring Fair Value Measurements—Our earn-out liability and interest rate swaps are measured and recognized at fair value on a recurring basis. The fair value measurements of those assets and liabilities as of September 30, 2018 and December 31, 2017, were as follows (in thousands):



	September 30, 2018							December 31, 2017
	Level 1		Level 2		Level 3			Level 1		Level 2			Level 3
Interest rate swaps-term loans⁽¹⁾	$	—	$	37,708	$	—		$	—	$	16,496		$	—
Interest rate swap-mortgage note⁽¹⁾	—		—		—			—		(61		)	—
Earn-out liability⁽²⁾	—		—		(39,500		)	—		—			(38,000		)


⁽¹⁾	We record derivative assets in Other Assets, Net and derivative liabilities in Accounts Payable and Other Liabilities on our consolidated balance sheets.


⁽²⁾	The estimated fair value of the earn-out is presented in Accounts Payable and Other Liabilities on the consolidated balance sheets. We will continue to estimate the fair value of this earn-out liability at each reporting date during the contingency period and record any changes on our consolidated statements of operations.

Earn-out—The terms of the PELP transaction include an earn-out structure with an opportunity for up to an additional 12.5 million OP units to be issued to PELP as additional consideration if certain milestones are achieved. The milestones are related to a liquidity event for our stockholders and fundraising targets in PECO III, of which PELP was a co-sponsor.

We estimate the fair value of this liability using weighted-average probabilities of likely outcomes. These estimates require us to make various assumptions about future share prices, timing of liquidity events, equity raise projections, and other items that are unobservable and are considered Level 3 inputs in the fair value hierarchy. In calculating the fair value of this liability, we have determined that the most likely range of potential outcomes includes a possibility of no additional OP units issued as well as up to 6 million out of the maximum 12.5 million units being issued.

Derivative Instruments—As of September 30, 2018 and December 31, 2017, we had interest rate swaps that fixed LIBOR on portions of our unsecured term loan facilities. For a more detailed discussion of these cash flow hedges, see Note 8.

All interest rate swap agreements are measured at fair value on a recurring basis. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

To comply with the provisions of ASC 820, Fair Value Measurement, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Although we determined that the significant inputs used to value our derivatives fell within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our counterparties and our own credit risk utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties. However, as of September 30, 2018 and December 31, 2017, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Nonrecurring Fair Value Measurements—Our real estate assets are measured and recognized at fair value on a nonrecurring basis dependent upon when we determine an impairment has occurred. In 2018 we impaired real estate assets that were under contract, being actively marketed for sale, or had other impairment indicators. We determined that these valuations fall under Level 2 of the fair value hierarchy. One real estate asset impaired during the second quarter of 2018 was sold in the third quarter. The fair value measurement was based on the contractual sales price, which was determined to be $5.3 million. We did not have any impaired real estate assets as of December 31, 2017.

The fair value measurement of our impaired real estate assets recorded as of September 30, 2018, was as follows (in thousands):



	September 30, 2018
	Level 1		Level 2		Level 3
Impaired real estate assets	$	—	$	37,575	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Segment Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Segment Information

15. SEGMENT INFORMATION

As of September 30, 2018, we operated through two business segments: Owned Real Estate and Investment Management. Prior to the completion of the PELP transaction in October 2017, we only operated through the Owned Real Estate segment. As a result, we did not report any segment disclosures for the three and nine months ended September 30, 2017. We generate revenues and Segment Profit as follows:

•

Owned Real Estate: Our business objective is to own and operate well-occupied grocery-anchored shopping centers that generate cash flows to support distributions to our shareholders with the potential for capital appreciation. We typically invest in neighborhood shopping centers (generally containing less than 125,000 leasable square feet) located in attractive demographic markets throughout the United States where our management believes our fully integrated operating platform can add value. Through this segment, we own a diversified portfolio of shopping centers subject to long-term net leases with creditworthy tenants in the grocery, retail, restaurant, and service industries. As of September 30, 2018, we owned 233 properties.

•

Investment Management: Through this segment, we are responsible for managing the day-to-day affairs of the Managed Funds, identifying and making acquisitions and investments on their behalf, maintaining and operating their real properties, and recommending an approach for providing investors of the Managed Funds with liquidity. We generate revenues by providing asset management and property management services, such as revenues from leasing, acquisition, construction, and disposition services (see Note 12).

Our chief operating decision makers rely primarily on Segment Profit and similar measures to make decisions regarding allocating resources and assessing segment performance. We allocate certain operating expenses, such as employee-related costs and benefits, to our segments. Items not directly attributable to our Owned Real Estate or Investment Management segments are allocated to corporate general and administrative expenses, which is a reconciling item. The table below compares Segment Profit for each of our operating segments and reconciles total Segment Profit to Net Loss for the three and nine months ended September 30, 2018 (in thousands):



	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	Owned Real Estate			Investment Management			Total			Owned Real Estate			Investment Management			Total
Total revenues	$	95,788		$	9,111		$	104,899		$	285,041		$	27,230		$	312,271
Property operating expenses	(15,940		)	(3,336		)	(19,276		)	(45,442		)	(8,850		)	(54,292		)
Real estate tax expenses	(12,698		)	(175		)	(12,873		)	(38,737		)	(609		)	(39,346		)
General and administrative expenses	(588		)	(3,540		)	(4,128		)	(1,817		)	(9,599		)	(11,416		)
Segment profit	$	66,562		$	2,060		68,622			$	199,045		$	8,172		207,217
Corporate general and administrative expenses							(9,451		)							(26,074		)
Depreciation and amortization							(45,692		)							(138,504		)
Impairment of real estate assets							(16,757		)							(27,696		)
Interest expense, net							(17,336		)							(51,166		)
Gain on sale of property, net							4,571									5,556
Other loss, net							(224		)							(1,513		)
Net loss							(16,267		)							(32,180		)

Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

16. SUBSEQUENT EVENTS

Distributions—Distributions paid to stockholders and OP unit holders of record subsequent to September 30, 2018, were as follows (in thousands, except distribution rate):



Month	Date of Record	Distribution Rate	Date Distribution Paid	Gross Amount of Distribution Paid		Distribution Reinvested through the DRIP		Net Cash Distribution
September	9/17/2018	$0.05583344	10/1/2018	$	12,691	$	3,817	$	8,874
October	10/15/2018	$0.05583344	11/1/2018	12,701		3,787		8,914

In November 2018, our board of directors authorized distributions for December 2018, as well as January and February 2019 to the stockholders of record at the close of business on December 17, 2018, January 15, 2019, and February 15, 2019, respectively, equal to a monthly amount of $0.05583344 per share of common stock. OP unit holders will receive distributions at the same rate as common stockholders.

Acquisitions—Subsequent to September 30, 2018, we acquired the following property (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Contractual Purchase Price

Square Footage

Leased % of Rentable Square Feet at Acquisition

Wheat Ridge Marketplace

Wheat Ridge, CO

Safeway

10/3/2018

$ 18,750⁽¹⁾

103,438

90.5


⁽¹⁾	The purchase price includes debt assumed as part of the acquisition.

Joint Ventures with Northwestern Mutual—On November 2, 2018, PECO (through our direct and indirect subsidiaries) and The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) entered into a definitive agreement pursuant to which we will contribute or sell our ownership interests in 17 grocery-anchored shopping centers, valued at approximately $368 million, to a new joint venture. Northwestern Mutual will acquire an 85% interest in the joint venture and we will retain a 15% interest and will continue to provide asset and property management services to the joint venture. We expect to use the proceeds received from this transaction to pay down outstanding debt, fund redevelopment projects, and further expand our portfolio of grocery-anchored shopping centers. As a part of this transaction, the joint venture will also assume our $175 million loan facility due in 2026.

On November 2, 2018, PECO III and Northwestern Mutual entered into a similar definitive agreement to a new joint venture. We will continue to provide asset and property management services to this PECO III joint venture.

We expect to close both joint venture transactions during the fourth quarter of 2018.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include our accounts and those of our majority-owned subsidiaries. All intercompany balances and transactions are eliminated upon consolidation.

Income Taxes

Newly Adopted and Recently Issued Accounting Pronouncements

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
ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting	This update clarifies guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting.	January 1, 2018	The adoption of this standard did not have a material impact on our consolidated financial statements. We will apply the guidance to any future modifications of share-based compensation awards.
ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)	This update amends existing guidance in order to provide consistency in accounting for the derecognition of a nonfinancial asset.	January 1, 2018	We did not record any cumulative adjustment in connection with the adoption of the new pronouncement. We determined that these changes did not have any impact on our consolidated financial statements.
ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350)	This update amends existing guidance in order to simplify impairment testing for goodwill. It is effective for annual reporting periods beginning after January 1, 2021, but early adoption is permitted.	January 1, 2018	We elected to adopt this standard as of January 1, 2018. The adoption of this standard did not have any impact on our consolidated financial statements.
ASU 2016-15, Statement of Cash Flows (Topic 230); ASU 2016-18, Statement of Cash Flows (Topic 230)	These updates address the presentation of eight specific cash receipts and cash payments on the statement of cash flows, as well as clarify the classification and presentation of restricted cash on the statement of cash flows.	January 1, 2018	We adopted these ASUs by applying a retrospective transition method which requires a restatement of our consolidated statement of cash flows for all periods presented.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)	This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it also applies to certain other transactions such as the sale of real estate or equipment. Expanded quantitative and qualitative disclosures are also required for contracts subject to ASU 2014-09.	January 1, 2018	Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, the adoption of this standard did not have a material impact on our rental or reimbursement revenue. However, the standard does apply to a majority of our fees and management income. We have evaluated the impact of this standard on our fees and management income; it did not have a material impact on our revenue recognition, but we have provided additional disclosures around fees and management revenue. We adopted this guidance on a modified retrospective basis.

The following table provides a brief description of recent accounting pronouncements that could have a material effect on our consolidated financial statements:



Standard	Description	Date of Adoption	Effect on the Financial Statements or Other Significant Matters
ASU 2018-13, Fair Value Measurement (Topic 820)	This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. Early adoption is permitted.	January 1, 2020	We are currently evaluating the impact the adoption of these standards will have on our consolidated financial statements.
ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting	The amendments in this update expand the scope of Topic 718: Compensation—Stock Compensation to include share-based payment transactions for acquiring goods and services from non-employees, except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). This update is effective for public business entities for fiscal years beginning after December 15, 2018. Early adoption is permitted.	January 1, 2019	We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	The amendments in this update replace 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. This update is effective for public entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted after December 15, 2018.	January 1, 2020	We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

Reclassifications

The following line items on our consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2017, were reclassified:


•	Unrealized (Loss) Gain on Derivatives and Reclassification of Derivative Loss to Interest Expense were combined to Change in Unrealized Gain (Loss) on Interest Rate Swaps.


•	Acquisition Expenses were combined to General and Administrative.

The following line items on our consolidated statements of cash flows for the nine months ended September 30, 2017 were reclassified:


•	Net Loss (Gain) on Write-off of Unamortized Capitalized Leasing Commissions, Market Debt Adjustments, and Deferred Financing Expense was combined to Other.

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

Earnings Per Share Earnings Per Share (Policies)	9 Months Ended
Earnings Per Share Earnings Per Share (Policies)	Sep. 30, 2018
Earnings Per Share [Abstract]
Earnings Per Share, Policy	We use the two-class method of computing earnings per share (“EPS”), which is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends declared (whether paid or unpaid). Under the two-class method, basic EPS is computed by dividing Net Loss Attributable to Stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS reflects the potential dilution that could occur from share equivalent activity.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

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
ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting	This update clarifies guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting.	January 1, 2018	The adoption of this standard did not have a material impact on our consolidated financial statements. We will apply the guidance to any future modifications of share-based compensation awards.
ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)	This update amends existing guidance in order to provide consistency in accounting for the derecognition of a nonfinancial asset.	January 1, 2018	We did not record any cumulative adjustment in connection with the adoption of the new pronouncement. We determined that these changes did not have any impact on our consolidated financial statements.
ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350)	This update amends existing guidance in order to simplify impairment testing for goodwill. It is effective for annual reporting periods beginning after January 1, 2021, but early adoption is permitted.	January 1, 2018	We elected to adopt this standard as of January 1, 2018. The adoption of this standard did not have any impact on our consolidated financial statements.
ASU 2016-15, Statement of Cash Flows (Topic 230); ASU 2016-18, Statement of Cash Flows (Topic 230)	These updates address the presentation of eight specific cash receipts and cash payments on the statement of cash flows, as well as clarify the classification and presentation of restricted cash on the statement of cash flows.	January 1, 2018	We adopted these ASUs by applying a retrospective transition method which requires a restatement of our consolidated statement of cash flows for all periods presented.
ASU 2014-09, Revenue from Contracts with Customers (Topic 606)	This update outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it also applies to certain other transactions such as the sale of real estate or equipment. Expanded quantitative and qualitative disclosures are also required for contracts subject to ASU 2014-09.	January 1, 2018	Our revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, the adoption of this standard did not have a material impact on our rental or reimbursement revenue. However, the standard does apply to a majority of our fees and management income. We have evaluated the impact of this standard on our fees and management income; it did not have a material impact on our revenue recognition, but we have provided additional disclosures around fees and management revenue. We adopted this guidance on a modified retrospective basis.

The following table provides a brief description of recent accounting pronouncements that could have a material effect on our consolidated financial statements:



Standard	Description	Date of Adoption	Effect on the Financial Statements or Other Significant Matters
ASU 2018-13, Fair Value Measurement (Topic 820)	This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of the FASB’s disclosure framework project. Early adoption is permitted.	January 1, 2020	We are currently evaluating the impact the adoption of these standards will have on our consolidated financial statements.
ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting	The amendments in this update expand the scope of Topic 718: Compensation—Stock Compensation to include share-based payment transactions for acquiring goods and services from non-employees, except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). This update is effective for public business entities for fiscal years beginning after December 15, 2018. Early adoption is permitted.	January 1, 2019	We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	The amendments in this update replace 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. This update is effective for public entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted after December 15, 2018.	January 1, 2020	We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements.

PELP Acquisition (Tables)

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition

Under the terms of this transaction, the following consideration was given in exchange for the contribution of PELP’s ownership interests in 76 shopping centers, its third-party investment management business, and its captive insurance company (in thousands):



	Amount
Fair value of OP units issued	$	401,630
Debt assumed:
Corporate debt	432,091
Mortgages and notes payable	72,649
Cash payments	30,420
Fair value of earn-out	38,000
Total consideration	974,790
PELP debt repaid by the Company on the transaction date	(432,091		)
Net consideration	$	542,699

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the purchase price allocation based on that report (in thousands):



	Amount
Assets:
Land and improvements	$	269,140
Building and improvements	574,173
Intangible lease assets	93,506
Cash	5,930
Accounts receivable and other assets	42,426
Management contracts	58,000
Goodwill	29,066
Total assets acquired	1,072,241
Liabilities:
Accounts payable and other liabilities	48,342
Acquired below-market leases	49,109
Total liabilities acquired	97,451
Net assets acquired	$	974,790

Our real estate assets acquired during the nine months ended September 30, 2018, were as follows (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Shoppes of Lake Village

Leesburg, FL

Publix

2/26/2018

8,423

71.3

Sierra Vista Plaza

Murrieta, CA

Stater Brothers⁽¹⁾

9/28/2018

22,151

81.0


⁽¹⁾	Stater Brothers is in a portion of the shopping center that we do not own.

During the nine months ended September 30, 2017, we acquired the following real estate assets (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Atwater Marketplace

Atwater, CA

Save Mart

2/10/2017

15,041

94.6

Rocky Ridge Station

Roseville, CA

Sprouts

4/18/2017

37,271

⁽¹⁾

96.3

Greentree Station

Racine, WI

Pick ‘n Save

5/5/2017

12,309

90.3

Titusville Station

Titusville, FL

Publix

6/15/2017

13,817

71.7

Sierra Station

Corona, CA

Ralph’s

6/20/2017

29,137

⁽¹⁾

94.0

Hoffman Village Station

Hoffman Estates, IL

Mariano’s

9/5/2017

34,910

93.1


⁽¹⁾	The purchase price includes the fair value of debt assumed as part of the acquisition.

Subsequent to September 30, 2018, we acquired the following property (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Contractual Purchase Price

Square Footage

Leased % of Rentable Square Feet at Acquisition

Wheat Ridge Marketplace

Wheat Ridge, CO

Safeway

10/3/2018

$ 18,750⁽¹⁾

103,438

90.5


⁽¹⁾	The purchase price includes debt assumed as part of the acquisition.

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The fair value and weighted-average amortization periods for the intangible assets and liabilities acquired in the PELP transaction as of the transaction date were as follows (dollars in thousands, useful life in years):



	Fair Value			Weighted-Average Useful Life
Management contracts	$	58,000		5
Acquired in-place leases	83,305			9
Acquired above-market leases	10,201			7
Acquired below-market leases	(49,109		)	13



	2018				2017
	Fair Value			Weighted-Average Useful Life	Fair Value			Weighted-Average Useful Life
Acquired in-place leases	$	2,319		6	$	13,647		13
Acquired above-market leases	200			5	1,012			7
Acquired below-market leases	(1,299		)	14	(3,703		)	19

Business Combination, Results of Operations

The consolidated net assets and results of operations of PELP’s contributions were included in the consolidated financial statements from the transaction date going forward and resulted in the following impact to Revenue and Net Loss for the three and nine months ended September 30, 2018 (in thousands):



	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Revenue	$	20,943		$	63,894
Net loss	(16,464		)	(24,999		)

Business Acquisition, Pro Forma Information

The following unaudited pro forma information summarizes selected financial information from our combined results of operations, as if the PELP transaction had occurred on January 1, 2016. These results contain certain nonrecurring adjustments, such as the elimination of transaction expenses incurred related to the PELP transaction and the elimination of intercompany activity related to creating an internalized management structure. This pro forma information is presented for informational purposes only, and may not be indicative of what actual results of operations would have been had the PELP transaction occurred at the beginning of the period, nor does it purport to represent the results of future operations.



(in thousands)	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Pro forma revenues	$	98,679	$	300,133
Pro forma net income attributable to stockholders	799		2,063

Real Estate Activity (Tables)

9 Months Ended

Sep. 30, 2018

Real Estate Investments, Net [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the purchase price allocation based on that report (in thousands):



	Amount
Assets:
Land and improvements	$	269,140
Building and improvements	574,173
Intangible lease assets	93,506
Cash	5,930
Accounts receivable and other assets	42,426
Management contracts	58,000
Goodwill	29,066
Total assets acquired	1,072,241
Liabilities:
Accounts payable and other liabilities	48,342
Acquired below-market leases	49,109
Total liabilities acquired	97,451
Net assets acquired	$	974,790

Our real estate assets acquired during the nine months ended September 30, 2018, were as follows (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Shoppes of Lake Village

Leesburg, FL

Publix

2/26/2018

8,423

71.3

Sierra Vista Plaza

Murrieta, CA

Stater Brothers⁽¹⁾

9/28/2018

22,151

81.0


⁽¹⁾	Stater Brothers is in a portion of the shopping center that we do not own.

During the nine months ended September 30, 2017, we acquired the following real estate assets (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Atwater Marketplace

Atwater, CA

Save Mart

2/10/2017

15,041

94.6

Rocky Ridge Station

Roseville, CA

Sprouts

4/18/2017

37,271

⁽¹⁾

96.3

Greentree Station

Racine, WI

Pick ‘n Save

5/5/2017

12,309

90.3

Titusville Station

Titusville, FL

Publix

6/15/2017

13,817

71.7

Sierra Station

Corona, CA

Ralph’s

6/20/2017

29,137

⁽¹⁾

94.0

Hoffman Village Station

Hoffman Estates, IL

Mariano’s

9/5/2017

34,910

93.1


⁽¹⁾	The purchase price includes the fair value of debt assumed as part of the acquisition.

Subsequent to September 30, 2018, we acquired the following property (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Contractual Purchase Price

Square Footage

Leased % of Rentable Square Feet at Acquisition

Wheat Ridge Marketplace

Wheat Ridge, CO

Safeway

10/3/2018

$ 18,750⁽¹⁾

103,438

90.5


⁽¹⁾	The purchase price includes debt assumed as part of the acquisition.

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination



	Fair Value			Weighted-Average Useful Life
Management contracts	$	58,000		5
Acquired in-place leases	83,305			9
Acquired above-market leases	10,201			7
Acquired below-market leases	(49,109		)	13



	2018				2017
	Fair Value			Weighted-Average Useful Life	Fair Value			Weighted-Average Useful Life
Acquired in-place leases	$	2,319		6	$	13,647		13
Acquired above-market leases	200			5	1,012			7
Acquired below-market leases	(1,299		)	14	(3,703		)	19

Other Assets, Net (Tables)

9 Months Ended

Sep. 30, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

The following is a summary of Other Assets, Net outstanding as of September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018			December 31, 2017
Other assets, net:
Deferred leasing commissions and costs	$	33,491		$	29,055
Deferred financing costs	13,971			13,971
Office equipment, including capital lease assets, and other	13,117			10,308
Total depreciable and amortizable assets	60,579			53,334
Accumulated depreciation and amortization	(23,678		)	(17,121		)
Net depreciable and amortizable assets	36,901			36,213
Accounts receivable, net	37,025			41,211
Deferred rent receivable, net	21,594			18,201
Derivative asset	37,708			16,496
Prepaid expenses	8,015			4,232
Investment in affiliates	903			902
Other	6,297			1,193
Total other assets, net	$	148,443		$	118,448

Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt Obligations



	Interest Rate	September 30, 2018			December 31, 2017
Revolving credit facility⁽¹⁾	LIBOR + 1.40%	$	55,568		$	61,569
Term loans⁽²⁾	2.51% - 3.93%	1,205,000			1,140,000
Secured loan facility due 2026	3.55%	175,000			175,000
Secured loan facility due 2027	3.52%	195,000			195,000
Mortgages and other⁽³⁾	3.75% - 7.91%	222,205			246,217
Assumed market debt adjustments, net⁽⁴⁾		4,211			5,254
Deferred financing costs⁽⁵⁾		(14,037		)	(16,042		)
Total		$	1,842,947		$	1,806,998


⁽¹⁾	The gross borrowings and payments under our revolving credit facility were $219.0 million and $225.0 million, respectively, during the nine months ended September 30, 2018. The revolving credit facility has a capacity of $500 million and matures in October 2021, with additional options to extend the maturity to October 2022.

⁽²⁾


⁽³⁾	Due to the non-recourse nature of our fixed-rate mortgages, the assets and liabilities of the properties securing such mortgages are neither available to pay the debts of the consolidated property-holding limited liability companies, nor do they constitute obligations of such consolidated limited liability companies as of September 30, 2018 and December 31, 2017.


⁽⁴⁾	Net of accumulated amortization of $4.0 million and $3.7 million as of September 30, 2018 and December 31, 2017, respectively.


⁽⁵⁾	Net of accumulated amortization of $7.9 million and $5.4 million as of September 30, 2018 and December 31, 2017, respectively.

Schedule of Long-term Debt Instruments, Alternative



	September 30, 2018		December 31, 2017
As to interest rate:⁽¹⁾
Fixed-rate debt	$	1,584,205	$	1,608,217
Variable-rate debt	268,568		209,569
Total	$	1,852,773	$	1,817,786
As to collateralization:
Unsecured debt	$	1,261,180	$	1,202,476
Secured debt	591,593		615,310
Total	$	1,852,773	$	1,817,786


⁽¹⁾	Includes the effects of derivative financial instruments (see Notes 8 and 14).

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives

The following is a summary of our interest rate swaps that were designated as cash flow hedges of interest rate risk as of September 30, 2018 and December 31, 2017 (notional amount in thousands):



Count	Fixed LIBOR	Maturity Date	Notional Amount
6	1.2% - 2.2%	2019-2024	$	992,000

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Amount of gain (loss) recognized in OCI on derivative⁽¹⁾	$	4,061		$	(179	)	$	23,107		$	(1,944	)
Amount of (gain) loss reclassified from AOCI into interest expense⁽¹⁾	(1,192		)	228			(1,895		)	1,203


⁽¹⁾	Increases in gains are solely driven from changes in LIBOR and LIBOR futures.

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Numerator:
Net loss attributable to stockholders - basic	$	(13,228	)	$	(8,232	)	$	(26,179	)	$	(8,319	)
Net loss attributable to convertible OP units⁽¹⁾	(3,180		)	(144		)	(6,270		)	(144		)
Net loss attributable to stockholders and convertible noncontrolling interests - diluted	$	(16,408	)	$	(8,376	)	$	(32,449	)	$	(8,463	)
Denominator:
Weighted-average shares - basic	183,699			183,843			184,676			183,402
OP units⁽¹⁾	44,453			2,649			44,453			2,739
Adjusted weighted-average shares - diluted	228,152			186,492			229,129			186,141
Earnings per common share:
Net loss attributable to stockholders - basic and diluted	$	(0.07	)	$	(0.04	)	$	(0.14	)	$	(0.05	)

Revenue Recognition and Related Party Revenue (Tables)

9 Months Ended

Sep. 30, 2018

Fees Earned By and Expenses Reimbursable from Managed Funds



	Three Months Ended September 30, 2018						Nine Months Ended September 30, 2018
	REIT II		Other Parties		Total		REIT II		Other Parties		Total
Advisory revenue:
Acquisition fees	$	—	$	379	$	379	$	162	$	635	$	797
Asset management fees	3,084		342		3,426		9,212		917		10,129
Other advisory fees and reimbursements	143		146		289		796		305		1,101
Total advisory revenue	3,227		867		4,094		10,170		1,857		12,027

Property Management and Services revenue:
Property management fees	1,977		345		2,322		6,181		1,061		7,242
Leasing commissions	1,192		245		1,437		3,703		659		4,362
Construction management fees	308		42		350		511		175		686
Other property management fees and reimbursements	155		88		243		577		331		908
Total property management and services revenue	3,632		720		4,352		10,972		2,226		13,198

Other revenue:
Insurance premiums⁽¹⁾	90		437		527		277		1,320		1,597
Non-operating property revenue	—		138		138		—		408		408
Total fees and management income	$	6,949	$	2,162	$	9,111	$	21,419	$	5,811	$	27,230


⁽¹⁾	Insurance premium income from other parties was from third parties not affiliated with us.

Fee Structure, Advisory Agreements

The following table summarizes the fee structure for our advisory agreements:



Fee Type	Performance Obligation Satisfied	Timing of Payment	Revenue Recognition
Acquisition Fee	Point in time (upon close of transaction)	In cash upon close of transaction	Revenue is recognized based on a percentage of the contract purchase price, including acquisition expenses and any debt.
Disposition Fee	Point in time (upon close of transaction)	In cash upon completion	Revenue is recognized based on a percentage of the contract sales price.
Asset Management Fee and Subordinated Participation	Over time	Monthly, in cash and/or ownership units	Because each increment of service is distinct, although substantially the same, revenue is recognized at the end of each reporting period based on a percentage of the cost of assets under management or the applicable NAV.

Fee Structure, Management Agreements

All property management agreements have terms as follows:



Fee	Performance Obligation Satisfied	Timing of Payment	Revenue Recognition
Property Management	Over time	In cash, monthly	Revenue is recognized based on a percentage of monthly cash receipts at each property.
Leasing Commissions	Point in time	In cash upon completion	Revenue is recognized based on a percentage of the contractual payments to be received per the terms of the lease and occurs when the lease is executed.
Construction Management	Point in time	In cash upon completion	Revenue is recognized based on a percentage of the cost of the construction project. Revenue recognition occurs upon completion of the contract (in the case of a normal capital improvement) or upon the tenant taking possession (in the case of a tenant improvement).

Receivables, Related Party

Summarized below is the detail of our outstanding receivable balance from related parties as of September 30, 2018 and December 31, 2017, respectively (in thousands):



	September 30, 2018				December 31, 2017
	REIT II		Other Parties		REIT II		Other Parties
Contract receivables:
Advisory	$	109	$	171	$	256	$	51
Property management and services	1,178		188		1,264		128
Total contract receivables	1,287		359		1,520		179
Other	119		4,473		72		4,331
Total	$	1,406	$	4,832	$	1,592	$	4,510

Related Party Expense (Tables)

9 Months Ended

Sep. 30, 2018

Advisor Transactions

Summarized below are the fees earned by and the expenses reimbursable for the three and nine months ended September 30, 2017 (in thousands):



	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Acquisition fees⁽¹⁾	$	294	$	1,344
Due diligence fees⁽¹⁾	370		583
Asset management fees⁽²⁾	5,071		15,388
OP unit distributions⁽³⁾	448		1,373
Class B unit distributions⁽⁴⁾	482		1,393
Disposition fees	—		19
Total	$	6,665	$	20,100


⁽¹⁾	The majority of acquisition and due diligence fees are capitalized and allocated to the related investment in real estate assets on the consolidated balance sheets based on the acquisition-date fair values of the respective assets and liabilities acquired.


⁽²⁾	Asset management fees are presented in General and Administrative on the consolidated statements of operations.


⁽³⁾	Distributions are presented as Distributions to Noncontrolling Interests on the consolidated statements of equity.


⁽⁴⁾	The distributions paid to holders of unvested Class B units are presented in General and Administrative on the consolidated statements of operations.

Property Manager Transactions

Summarized below are the fees earned by and the expenses reimbursable to the Property Manager for the three and nine months ended September 30, 2017 (in thousands):



	Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017
Property management fees⁽¹⁾	$	2,717	$	7,986
Leasing commissions⁽²⁾	1,677		6,077
Construction management fees⁽²⁾	683		1,367
Other fees and reimbursements⁽³⁾	2,409		6,030
Total	$	7,486	$	21,460


⁽¹⁾	The property management fees are included in Property Operating on the consolidated statements of operations.


⁽²⁾	Leasing commissions paid for leases with terms less than one year were expensed immediately and included in Depreciation and Amortization on the consolidated statements of operations. Leasing commissions paid for leases with terms greater than one year, and construction management fees, were capitalized and amortized over the life of the related leases or assets.


⁽³⁾	Other fees and reimbursements are included in Property Operating and General and Administrative on the consolidated statements of operations based on the nature of the expense.

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Inputs, Liabilities, Quantitative Information

The following is a summary of borrowings as of September 30, 2018 and December 31, 2017 (in thousands):



	September 30, 2018		December 31, 2017
Fair value	$	1,812,086	$	1,765,151
Recorded value⁽¹⁾	1,856,984		1,823,040


⁽¹⁾	Recorded value does not include deferred financing costs of $14.0 million and $16.0 million as of September 30, 2018 and December 31, 2017, respectively.

Fair Value, Liabilities Measured on Recurring Basis

The fair value measurements of those assets and liabilities as of September 30, 2018 and December 31, 2017, were as follows (in thousands):



	September 30, 2018							December 31, 2017
	Level 1		Level 2		Level 3			Level 1		Level 2			Level 3
Interest rate swaps-term loans⁽¹⁾	$	—	$	37,708	$	—		$	—	$	16,496		$	—
Interest rate swap-mortgage note⁽¹⁾	—		—		—			—		(61		)	—
Earn-out liability⁽²⁾	—		—		(39,500		)	—		—			(38,000		)


⁽¹⁾	We record derivative assets in Other Assets, Net and derivative liabilities in Accounts Payable and Other Liabilities on our consolidated balance sheets.


⁽²⁾	The estimated fair value of the earn-out is presented in Accounts Payable and Other Liabilities on the consolidated balance sheets. We will continue to estimate the fair value of this earn-out liability at each reporting date during the contingency period and record any changes on our consolidated statements of operations.

Fair Value Measurements, Nonrecurring

The fair value measurement of our impaired real estate assets recorded as of September 30, 2018, was as follows (in thousands):



	September 30, 2018
	Level 1		Level 2		Level 3
Impaired real estate assets	$	—	$	37,575	$	—

Segment Information (Tables)

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The table below compares Segment Profit for each of our operating segments and reconciles total Segment Profit to Net Loss for the three and nine months ended September 30, 2018 (in thousands):



	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
	Owned Real Estate			Investment Management			Total			Owned Real Estate			Investment Management			Total
Total revenues	$	95,788		$	9,111		$	104,899		$	285,041		$	27,230		$	312,271
Property operating expenses	(15,940		)	(3,336		)	(19,276		)	(45,442		)	(8,850		)	(54,292		)
Real estate tax expenses	(12,698		)	(175		)	(12,873		)	(38,737		)	(609		)	(39,346		)
General and administrative expenses	(588		)	(3,540		)	(4,128		)	(1,817		)	(9,599		)	(11,416		)
Segment profit	$	66,562		$	2,060		68,622			$	199,045		$	8,172		207,217
Corporate general and administrative expenses							(9,451		)							(26,074		)
Depreciation and amortization							(45,692		)							(138,504		)
Impairment of real estate assets							(16,757		)							(27,696		)
Interest expense, net							(17,336		)							(51,166		)
Gain on sale of property, net							4,571									5,556
Other loss, net							(224		)							(1,513		)
Net loss							(16,267		)							(32,180		)

Subsequent Events (Tables)

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Distributions to Stockholders and OP Unit Holders

Distributions paid to stockholders and OP unit holders of record subsequent to September 30, 2018, were as follows (in thousands, except distribution rate):



Month	Date of Record	Distribution Rate	Date Distribution Paid	Gross Amount of Distribution Paid		Distribution Reinvested through the DRIP		Net Cash Distribution
September	9/17/2018	$0.05583344	10/1/2018	$	12,691	$	3,817	$	8,874
October	10/15/2018	$0.05583344	11/1/2018	12,701		3,787		8,914

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table summarizes the purchase price allocation based on that report (in thousands):



	Amount
Assets:
Land and improvements	$	269,140
Building and improvements	574,173
Intangible lease assets	93,506
Cash	5,930
Accounts receivable and other assets	42,426
Management contracts	58,000
Goodwill	29,066
Total assets acquired	1,072,241
Liabilities:
Accounts payable and other liabilities	48,342
Acquired below-market leases	49,109
Total liabilities acquired	97,451
Net assets acquired	$	974,790

Our real estate assets acquired during the nine months ended September 30, 2018, were as follows (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Shoppes of Lake Village

Leesburg, FL

Publix

2/26/2018

8,423

71.3

Sierra Vista Plaza

Murrieta, CA

Stater Brothers⁽¹⁾

9/28/2018

22,151

81.0


⁽¹⁾	Stater Brothers is in a portion of the shopping center that we do not own.

During the nine months ended September 30, 2017, we acquired the following real estate assets (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Purchase Price

Leased % of Rentable Square Feet at Acquisition

Atwater Marketplace

Atwater, CA

Save Mart

2/10/2017

15,041

94.6

Rocky Ridge Station

Roseville, CA

Sprouts

4/18/2017

37,271

⁽¹⁾

96.3

Greentree Station

Racine, WI

Pick ‘n Save

5/5/2017

12,309

90.3

Titusville Station

Titusville, FL

Publix

6/15/2017

13,817

71.7

Sierra Station

Corona, CA

Ralph’s

6/20/2017

29,137

⁽¹⁾

94.0

Hoffman Village Station

Hoffman Estates, IL

Mariano’s

9/5/2017

34,910

93.1


⁽¹⁾	The purchase price includes the fair value of debt assumed as part of the acquisition.

Subsequent to September 30, 2018, we acquired the following property (dollars in thousands):

Property Name

Location

Anchor Tenant

Acquisition Date

Contractual Purchase Price

Square Footage

Leased % of Rentable Square Feet at Acquisition

Wheat Ridge Marketplace

Wheat Ridge, CO

Safeway

10/3/2018

$ 18,750⁽¹⁾

103,438

90.5


⁽¹⁾	The purchase price includes debt assumed as part of the acquisition.

Organization (Details)	Jul. 17, 2018	Sep. 30, 2018 property
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of real estate properties owned		233
Business combination consideration transferred equity interests issued ratio	2.04

REIT II Merger (Details) $ / shares in Units, $ in Thousands, ft² in Millions		3 Months Ended		9 Months Ended
	Jul. 17, 2018 USD ($) ft² $ / shares	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Noncash or Part Noncash Acquisitions [Line Items]
Number of real estate properties, post merger	320
Business combination, post merger transaction, net rentable area \| ft²	36
Number of states in which surviving entity operates	33
Business combination consideration transferred equity interests issued ratio	2.04
Business acquisition share value per share of acquiree \| $ / shares	$ 22.54
Business acquisition, share price \| $ / shares	$ 11.05
Business combination, contingent consideration, receivable	$ 31,700
business combination, contingent consideration, payable	$ 75,600
Business acquisition percentage of voting interests retained by acquirer	71.00%
Acquisition related costs		$ 0	$ 3,737	$ 0	$ 9,760
REIT II
Noncash or Part Noncash Acquisitions [Line Items]
Net consideration	$ 1,900,000
Mortgages and notes payable	$ 800,000
Noncontrolling interest, ownership percentage	29.00%
Acquisition related costs				$ 2,800

PELP Acquisition Transfer of Consideration (Details) $ / shares in Units, $ in Thousands, shares in Millions		3 Months Ended			9 Months Ended		12 Months Ended
	Oct. 04, 2017 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) property	Dec. 31, 2017 shares	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) property	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	May 09, 2018 $ / shares	Nov. 08, 2017 $ / shares	Nov. 07, 2017 $ / shares
Business Acquisition [Line Items]
Number of real estate properties \| property		233			233
Fair value per unit \| $ / shares								$ 11.05	$ 11.00	$ 10.20
Acquisition related costs		$ 0		$ 3,737	$ 0	$ 9,760
Phillips Edison Limited Partnership
Business Acquisition [Line Items]
Number of real estate properties	76
Fair value of OP units issued	$ 401,630
Corporate debt	432,091
Mortgages and notes payable	72,649
Cash payments	30,420
Fair value of earn-out	38,000
Total consideration	974,790
PELP debt repaid by the Company on the transaction date	(432,091)
Net consideration	$ 542,699
PELP transaction, OP units issued and issuable, shares \| shares	39.4		39.4
Fair value per unit \| $ / shares	$ 10.20
Post-transaction shareholder ownership percentage	80.60%
Post-transaction PELP shareholder ownership percentage	19.40%
Acquisition related costs						$ 9,800	$ 17,000
Phillips Edison Limited Partnership \| OP Units
Business Acquisition [Line Items]
PELP transaction, OP units issued and issuable, shares \| shares	12.5		12.5

PELP Acquisition Business Combination, Assets Acquired and Liabilities Assumed (Details) - Phillips Edison Limited Partnership $ in Thousands	Oct. 04, 2017 USD ($)
Business Acquisition [Line Items]
Land and improvements	$ 269,140
Building and improvements	574,173
Intangible lease assets	93,506
Cash	5,930
Accounts receivable and other assets	42,426
Management contracts	58,000
Goodwill	29,066
Total assets acquired	1,072,241
Accounts payable and other liabilities	48,342
Acquired below-market leases	49,109
Total liabilities acquired	97,451
Net assets acquired	$ 974,790

PELP Acquisition Business Acquisition, Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands		9 Months Ended
	Oct. 04, 2017	Sep. 30, 2018	Sep. 30, 2017
Acquired In-Place Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired finite-lived intangible assets and liabilities, weighted average useful life		6 years	13 years
Acquired Above-Market Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired finite-lived intangible assets and liabilities, weighted average useful life		5 years	7 years
Acquired Below-Market Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired finite-lived intangible assets and liabilities, weighted average useful life		14 years	19 years
Phillips Edison Limited Partnership
Acquired Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 29,066
Phillips Edison Limited Partnership \| Management Contracts
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, fair value	$ 58,000
Acquired finite-lived intangible assets and liabilities, weighted average useful life	5 years
Phillips Edison Limited Partnership \| Acquired In-Place Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, fair value	$ 83,305
Acquired finite-lived intangible assets and liabilities, weighted average useful life	9 years
Phillips Edison Limited Partnership \| Acquired Above-Market Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets, fair value	$ 10,201
Acquired finite-lived intangible assets and liabilities, weighted average useful life	7 years
Phillips Edison Limited Partnership \| Acquired Below-Market Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired below market Lease	$ (49,109)
Acquired finite-lived intangible assets and liabilities, weighted average useful life	13 years

PELP Acquisition Business Combination, Revenues and Net Income (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018
Business Combinations [Abstract]
Revenues	$ 20,943	$ 63,894
Net loss	$ (16,464)	$ (24,999)

PELP Acquisition Business Combination, Pro Forma Information (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Business Combinations [Abstract]
Pro forma revenues	$ 98,679	$ 300,133
Pro forma net income attributable to stockholders	$ 799	$ 2,063

Real Estate Activity Acquisitions (Details) $ in Thousands									9 Months Ended
Real Estate Activity Acquisitions (Details) $ in Thousands	Sep. 28, 2018 USD ($)	Feb. 26, 2018 USD ($)	Sep. 05, 2017 USD ($)	Jun. 20, 2017 USD ($)	Jun. 15, 2017 USD ($)	May 05, 2017 USD ($)	Apr. 18, 2017 USD ($)	Feb. 10, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Real Estate Properties [Line Items]
Number of real estate acquisitions									2	6
Unit of acquired land parcel									1
Acquired In-Place Leases
Real Estate Properties [Line Items]
Fair Value, acquired intangible lease assets									$ 2,319	$ 13,647
Weighted-Average Useful Life, acquired intangible leases									6 years	13 years
Acquired Above-Market Leases
Real Estate Properties [Line Items]
Fair Value, acquired intangible lease assets									$ 200	$ 1,012
Weighted-Average Useful Life, acquired intangible leases									5 years	7 years
Acquired Below-Market Leases
Real Estate Properties [Line Items]
Fair Value, acquired intangible lease liabilities									$ (1,299)	$ (3,703)
Weighted-Average Useful Life, acquired intangible leases									14 years	19 years
Shoppes of Lake Village
Real Estate Properties [Line Items]
Purchase price		$ 8,423
Leased % of Rentable Square Feet at Acquisition		71.30%
Land Parcel
Real Estate Properties [Line Items]
Purchase price		$ 700
Sierra Visa Plaza
Real Estate Properties [Line Items]
Purchase price	$ 22,151			$ 29,137
Leased % of Rentable Square Feet at Acquisition	81.00%			94.00%
Atwater Marketplace
Real Estate Properties [Line Items]
Purchase price								$ 15,041
Leased % of Rentable Square Feet at Acquisition								94.60%
Rocky Ridge Station
Real Estate Properties [Line Items]
Purchase price							$ 37,271
Leased % of Rentable Square Feet at Acquisition							96.30%
Greentree Station
Real Estate Properties [Line Items]
Purchase price						$ 12,309
Leased % of Rentable Square Feet at Acquisition						90.30%
Titusville Station
Real Estate Properties [Line Items]
Purchase price					$ 13,817
Leased % of Rentable Square Feet at Acquisition					71.70%
Hoffman Village Station
Real Estate Properties [Line Items]
Purchase price			$ 34,910
Leased % of Rentable Square Feet at Acquisition			93.10%

Real Estate Activity Dispositions and Impairments (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Real Estate Investments, Net [Abstract]
Number of real estate dispositions			5	0
Proceeds from sale of real estate shopping centers			$ 45,600
Gain on sale of property	$ 4,571	$ 0	5,556	$ 0
Impairment of Real Estate	$ 16,757	$ 0	$ 27,696	$ 0

Other Assets, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Deferred leasing commissions and costs	$ 33,491	$ 29,055
Deferred financing costs	13,971	13,971
Office equipment, including capital lease assets, and other	13,117	10,308
Total depreciable and amortizable assets	60,579	53,334
Accumulated depreciation and amortization	(23,678)	(17,121)
Net depreciable and amortizable assets	36,901	36,213
Accounts receivable, net	37,025	41,211
Deferred rent receivable, net	21,594	18,201
Derivative asset	37,708	16,496
Prepaid expenses	8,015	4,232
Investment in affiliates	903	902
Other	6,297	1,193
Total other assets, net	$ 148,443	$ 118,448

Debt Obligations (Details) - USD ($) $ in Thousands	9 Months Ended
Debt Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Outstanding principal balance	$ 1,852,773	$ 1,817,786
Assumed market debt adjustments, net	4,211	5,254
Deferred financing costs, net	(14,037)	(16,042)
Total	1,842,947	1,806,998
Gross borrowings	65,000
Accumulated amortization, assumed debt adjustment	4,000	3,700
Accumulated amortization, deferred finance costs	$ 7,900	$ 5,400
Weighted-average interest rate on debt	3.50%	3.40%
Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit variable rate base	LIBOR
LIne of credit - interest spread	1.40%
Outstanding principal balance	$ 55,568	$ 61,569
Gross borrowings	219,000
Gross payments	225,000
Borrowing capacity, amount	500,000
Term Loans
Debt Instrument [Line Items]
Outstanding principal balance	$ 1,205,000	1,140,000
Term Loans \| Minimum
Debt Instrument [Line Items]
Interest rate	2.51%
Term Loans \| Maximum
Debt Instrument [Line Items]
Interest rate	3.93%
Secured term loan 2027
Debt Instrument [Line Items]
Interest rate	3.52%
Outstanding principal balance	$ 195,000	195,000
Secured term loan 2026
Debt Instrument [Line Items]
Interest rate	3.55%
Outstanding principal balance	$ 175,000	175,000
Mortgages and Other
Debt Instrument [Line Items]
Outstanding principal balance	$ 222,205	$ 246,217
Mortgages and Other \| Minimum
Debt Instrument [Line Items]
Interest rate	3.75%
Mortgages and Other \| Maximum
Debt Instrument [Line Items]
Interest rate	7.91%
Term Loan Due 2019
Debt Instrument [Line Items]
Outstanding principal balance	$ 100,000
Term Loan Due 2020
Debt Instrument [Line Items]
Outstanding principal balance	$ 175,000

Debt Obligations (Details) - Debt Obligations - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Disclosure [Abstract]
Fixed-rate debt	$ 1,584,205	$ 1,608,217
Variable-rate debt	268,568	209,569
Unsecured debt	1,261,180	1,202,476
Secured debt	591,593	615,310
Total	$ 1,852,773	$ 1,817,786

Derivatives and Hedging Activities (Details) $ in Thousands	3 Months Ended		9 Months Ended
Derivatives and Hedging Activities (Details) $ in Thousands	Sep. 30, 2018 USD ($) Debt_Instrument	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Debt_Instrument	Sep. 30, 2017 USD ($)	Dec. 31, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) recognized in OCI on derivative(1)	$ 4,061	$ (179)	$ 23,107	$ (1,944)
Amount of (gain) loss reclassified from AOCI into interest expense(1)	$ (1,192)	$ 228	(1,895)	$ 1,203
Interest Rate Swap \| Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments, gain (loss) reclassification from OCI to income, estimated net amount to be transferred			$ 8,800
Count \| Debt_Instrument	6		6
Derivative, notional amount	$ 992,000		$ 992,000
Interest Rate Swap \| Designated as Hedging Instrument \| Minimum
Derivative Instruments, Gain (Loss) [Line Items]
Fixed LIBOR	1.20%		1.20%		1.20%
Interest Rate Swap \| Designated as Hedging Instrument \| Maximum
Derivative Instruments, Gain (Loss) [Line Items]
Fixed LIBOR	2.20%		2.20%		2.20%

Equity (Details) - $ / shares shares in Millions		3 Months Ended	9 Months Ended
Equity (Details) - $ / shares shares in Millions	Oct. 04, 2017	Dec. 31, 2017	Sep. 30, 2018	Jun. 30, 2018	May 09, 2018	Nov. 08, 2017	Nov. 07, 2017
Stockholders' Equity Note [Abstract]
Share price					$ 11.05	$ 11.00	$ 10.20
Stock repurchased, shares			4.5
OP units outstanding, shares		44.5
Subsidiaries
Class of Stock [Line Items]
Noncontrolling interest, ownership percentage			25.00%	25.00%
Phillips Edison Limited Partnership
Stockholders' Equity Note [Abstract]
Share price	$ 10.20
Class of Stock [Line Items]
Business combination, number of shares of OP units issued	39.4	39.4
Noncontrolling interest, ownership percentage	19.40%

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Numerator:
Net (loss) income attributable to stockholders - basic	$ (13,228)	$ (8,232)	$ (26,179)	$ (8,319)
Net (loss) income attributable to convertible OP units	(3,180)	(144)	(6,270)	(144)
Net (loss) income - diluted	$ (16,408)	$ (8,376)	$ (32,449)	$ (8,463)
Denominator:
Weighted-average shares - basic	183,699,000	183,843,000	184,676,000	183,402,000
OP units	44,453,000	2,649,000	44,453,000	2,739,000
Adjusted weighted-average shares - diluted	228,152,000	186,492,000	229,129,000	186,141,000
Earnings per common share:
Net loss attributable to stockholders - basic and diluted	$ (0.07)	$ (0.04)	$ (0.14)	$ (0.05)
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Class B units unvested	0	2,700,000	0	2,700,000
Stock Compensation Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Unvested restricted stock awards, granted	1,000,000		1,000,000

Revenue Recognition and Related Party Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Related Party Transaction [Line Items]
Revenues	$ 104,899	$ 70,624	$ 312,271	$ 208,778
REIT II
Related Party Transaction [Line Items]
Insurance premiums	90		277
Non-operating property revenue	0		0
Revenues	6,949		21,419
Other Parties
Related Party Transaction [Line Items]
Insurance premiums	437		1,320
Non-operating property revenue	138		408
Revenues	2,162		5,811
Investment Management
Related Party Transaction [Line Items]
Insurance premiums	527		1,597
Non-operating property revenue	138		408
Revenues	9,111		27,230
Advisory Revenue \| REIT II
Related Party Transaction [Line Items]
Revenue from related parties	3,227		10,170
Advisory Revenue \| REIT II \| Acquisition Fees
Related Party Transaction [Line Items]
Revenue from related parties	0		162
Advisory Revenue \| REIT II \| Asset Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	3,084		9,212
Advisory Revenue \| REIT II \| Other Advisory Fees and Other Reimbursements
Related Party Transaction [Line Items]
Revenue from related parties	143		796
Advisory Revenue \| Other Parties
Related Party Transaction [Line Items]
Revenue from related parties	867		1,857
Advisory Revenue \| Other Parties \| Acquisition Fees
Related Party Transaction [Line Items]
Revenue from related parties	379		635
Advisory Revenue \| Other Parties \| Asset Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	342		917
Advisory Revenue \| Other Parties \| Other Advisory Fees and Other Reimbursements
Related Party Transaction [Line Items]
Revenue from related parties	146		305
Advisory Revenue \| Investment Management
Related Party Transaction [Line Items]
Revenue from related parties	4,094		12,027
Advisory Revenue \| Investment Management \| Acquisition Fees
Related Party Transaction [Line Items]
Revenue from related parties	379		797
Advisory Revenue \| Investment Management \| Asset Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	3,426		10,129
Advisory Revenue \| Investment Management \| Other Advisory Fees and Other Reimbursements
Related Party Transaction [Line Items]
Revenue from related parties	289		1,101
Property Management and Services Revenue \| REIT II
Related Party Transaction [Line Items]
Revenue from related parties	3,632		10,972
Property Management and Services Revenue \| REIT II \| Property Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	1,977		6,181
Property Management and Services Revenue \| REIT II \| Leasing Commissions
Related Party Transaction [Line Items]
Revenue from related parties	1,192		3,703
Property Management and Services Revenue \| REIT II \| Construction Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	308		511
Property Management and Services Revenue \| REIT II \| Other Property Management Fees and Reimbursements
Related Party Transaction [Line Items]
Revenue from related parties	155		577
Property Management and Services Revenue \| Other Parties
Related Party Transaction [Line Items]
Revenue from related parties	720		2,226
Property Management and Services Revenue \| Other Parties \| Property Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	345		1,061
Property Management and Services Revenue \| Other Parties \| Leasing Commissions
Related Party Transaction [Line Items]
Revenue from related parties	245		659
Property Management and Services Revenue \| Other Parties \| Construction Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	42		175
Property Management and Services Revenue \| Other Parties \| Other Property Management Fees and Reimbursements
Related Party Transaction [Line Items]
Revenue from related parties	88		331
Property Management and Services Revenue \| Investment Management
Related Party Transaction [Line Items]
Revenue from related parties	4,352		13,198
Property Management and Services Revenue \| Investment Management \| Property Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	2,322		7,242
Property Management and Services Revenue \| Investment Management \| Leasing Commissions
Related Party Transaction [Line Items]
Revenue from related parties	1,437		4,362
Property Management and Services Revenue \| Investment Management \| Construction Management Fees
Related Party Transaction [Line Items]
Revenue from related parties	350		686
Property Management and Services Revenue \| Investment Management \| Other Property Management Fees and Reimbursements
Related Party Transaction [Line Items]
Revenue from related parties	$ 243		$ 908

Revenue Recognition and Related Party Revenue Related Party Receivable (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Related Party Transaction [Line Items]
Accounts receivable - affiliates	$ 6,365		$ 6,102
Subsidiaries
Related Party Transaction [Line Items]
Noncontrolling interest, ownership percentage by parent	75.00%	75.00%
REIT II
Related Party Transaction [Line Items]
Accounts receivable - affiliates	$ 1,406		1,592
Other Parties
Related Party Transaction [Line Items]
Accounts receivable - affiliates	4,832		4,510
PECO III
Related Party Transaction [Line Items]
Organization and offering costs incurred on behalf of affiliate	4,200		2,000
Contingent advisor payment holdback	$ 4,500
PECO III \| Contingent Advisor Payment
Related Party Transaction [Line Items]
Contingent advisory revenue, rate	2.15%
Contractual Receivable \| REIT II
Related Party Transaction [Line Items]
Accounts receivable - affiliates	$ 1,287		1,520
Contractual Receivable \| REIT II \| Advisory Agreement
Related Party Transaction [Line Items]
Accounts receivable - affiliates	109		256
Contractual Receivable \| REIT II \| Property Management and Services Revenue
Related Party Transaction [Line Items]
Accounts receivable - affiliates	1,178		1,264
Contractual Receivable \| Other Parties
Related Party Transaction [Line Items]
Accounts receivable - affiliates	359		179
Contractual Receivable \| Other Parties \| Advisory Agreement
Related Party Transaction [Line Items]
Accounts receivable - affiliates	171		51
Contractual Receivable \| Other Parties \| Property Management and Services Revenue
Related Party Transaction [Line Items]
Accounts receivable - affiliates	188		128
Non-Contractual Receivable \| REIT II
Related Party Transaction [Line Items]
Accounts receivable - affiliates	119		72
Non-Contractual Receivable \| Other Parties
Related Party Transaction [Line Items]
Accounts receivable - affiliates	$ 4,473		$ 4,331

Related Party Expense Related Party Transactions (Details) - Advisor - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Related Party Transaction [Line Items]
Related party expense	$ 0	$ 5,454	$ 0	$ 5,454
Advisory Agreement
Related Party Transaction [Line Items]
Related party expense		6,665		20,100
Advisory Agreement \| Acquisition Fees
Related Party Transaction [Line Items]
Related party expense		294		1,344
Advisory Agreement \| Due Diligence Fees
Related Party Transaction [Line Items]
Related party expense		370		583
Advisory Agreement \| Asset Management Fees
Related Party Transaction [Line Items]
Related party expense		5,071		15,388
Advisory Agreement \| OP Units Distribution
Related Party Transaction [Line Items]
Related party expense		448		1,373
Advisory Agreement \| Class B Units Distribution
Related Party Transaction [Line Items]
Related party expense		482		1,393
Advisory Agreement \| Disposition fee
Related Party Transaction [Line Items]
Related party expense		$ 0		$ 19

Related Party Expense Related Party Transactions (Details) - Property Manager - USD ($) $ in Thousands	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Related party expense	$ 0		$ 5,454		$ 0	$ 5,454
Due to affiliate	$ 1,014				$ 1,014		$ 1,359
Subsidiaries
Related Party Transaction [Line Items]
Noncontrolling interest, ownership percentage	25.00%	25.00%		25.00%	25.00%
Noncontrolling interest, ownership percentage by parent	75.00%	75.00%		75.00%	75.00%
Property Manager
Related Party Transaction [Line Items]
Related party expense		$ 7,486		$ 21,460
Property Manager \| Property Management Fees
Related Party Transaction [Line Items]
Related party expense		2,717		7,986
Property Manager \| Leasing Commissions
Related Party Transaction [Line Items]
Related party expense		1,677		6,077
Property Manager \| Construction Management Fees
Related Party Transaction [Line Items]
Related party expense		683		1,367
Property Manager \| Other Fees and Reimbursements
Related Party Transaction [Line Items]
Related party expense		2,409		6,030
Necessity Retail Partners
Related Party Transaction [Line Items]
Guarantorship maximum exposure		$ 200,000		200,000
Guarantorship expected exposure				$ 50,000

Fair Value Measurements (Details) - Mortgages and Loans Payable - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Recorded value	$ 1,856,984	$ 1,823,040
Deferred financing costs	14,037	16,042
Fair Value, Inputs, Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value	$ 1,812,086	$ 1,765,151

Fair Value Measurements (Details) - Recurring Fair Value Measurements - USD ($) $ in Thousands, shares in Millions		3 Months Ended	9 Months Ended
	Oct. 04, 2017	Dec. 31, 2017	Sep. 30, 2018
Fair Value, Assets (Liabilities) Measured on Recurring Basis
PELP transaction, OP units issued and issuable, value, maximum			$ 6,000
Phillips Edison Limited Partnership
Fair Value, Assets (Liabilities) Measured on Recurring Basis
PELP transaction, OP units issued and issuable, shares	39.4	39.4
OP Units \| Phillips Edison Limited Partnership
Fair Value, Assets (Liabilities) Measured on Recurring Basis
PELP transaction, OP units issued and issuable, shares	12.5	12.5
Fair Value, Inputs, Level 2 \| Interest Rate Swap \| Designated as Hedging Instrument
Fair Value, Assets (Liabilities) Measured on Recurring Basis
Interest rate swaps-term loans		$ 16,496	37,708
Interest rate swap-mortgage note		(61)	0
Fair Value, Inputs, Level 3
Fair Value, Assets (Liabilities) Measured on Recurring Basis
Earn-out liability		$ (38,000)	$ (39,500)

Fair Value Measurements (Details) - Nonrecurring Fair Value Measurements $ in Thousands	Sep. 30, 2018 USD ($)
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired real estate asset	$ 37,575

Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
Segment Information (Details) $ in Thousands	Sep. 30, 2018 USD ($) property	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) property	Sep. 30, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of real estate properties owned \| property	233		233
Total revenue	$ 104,899	$ 70,624	$ 312,271	$ 208,778
Property operating expenses	(19,276)	(10,882)	(54,292)	(32,611)
Real estate tax expenses	(12,873)	(10,723)	(39,346)	(31,136)
General and administrative expenses	(4,128)		(11,416)
Segment profit	68,622		207,217
Corporate general and administrative expenses	(9,451)		(26,074)
Depreciation and amortization	(45,692)	(28,650)	(138,504)	(84,481)
Impairment of real estate assets	(16,757)	0	(27,696)	0
Interest expense, net	(17,336)	(10,646)	(51,166)	(28,537)
Gain on sale of property, net	4,571	0	5,556	0
Other expense, net	(224)	6	(1,513)	642
Net loss	(16,267)	$ (8,376)	(32,180)	$ (8,463)
Owned Real Estate
Segment Reporting Information [Line Items]
Total revenue	95,788		285,041
Property operating expenses	(15,940)		(45,442)
Real estate tax expenses	(12,698)		(38,737)
General and administrative expenses	(588)		(1,817)
Segment profit	66,562		199,045
Investment Management
Segment Reporting Information [Line Items]
Total revenue	9,111		27,230
Property operating expenses	(3,336)		(8,850)
Real estate tax expenses	(175)		(609)
General and administrative expenses	(3,540)		(9,599)
Segment profit	$ 2,060		$ 8,172

Subsequent Events (Details) - Distributions - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	9 Months Ended
	Nov. 01, 2018	Oct. 01, 2018	Nov. 30, 2018	Sep. 30, 2018	Sep. 30, 2017
Subsequent Event [Line Items]
Distribution rate				$ 0.50	$ 0.50
Distributions reinvested				$ 32,691	$ 36,171
Net cash distribution				$ 61,125	$ 56,226
Subsequent Event \| Dividend Declared
Subsequent Event [Line Items]
Distribution rate	$ 0.05583344	$ 0.05583344	$ 0.05583344
Subsequent Event \| Dividend Paid
Subsequent Event [Line Items]
Gross amount of distribution paid	$ 12,701	$ 12,691
Distributions reinvested	3,787	3,817
Net cash distribution	$ 8,914	$ 8,874

Subsequent Events (Details) - Acquisitions $ in Thousands	Oct. 03, 2018 USD ($) ft²	Jul. 17, 2018 ft²
Subsequent Event [Line Items]
Square footage		36,000,000
Real Estate \| Subsequent Event
Subsequent Event [Line Items]
Contractual purchase price \| $	$ 18,750
Square footage	103,438
Leased percentage of rentable square feet at acquisition	90.50%

Subsequent Events (Details) - Joint Ventures with Northwestern Mutual $ in Millions	Nov. 02, 2018 USD ($)	Sep. 30, 2018 property
Schedule of Equity Method Investments [Line Items]
Number of real estate properties \| property		233
Northwestern Mutual Joint Venture \| Corporate Joint Venture \| Subsequent Event
Schedule of Equity Method Investments [Line Items]
Number of real estate properties	17
Equity Method Investment, Summarized Financial Information, Assets	$ 368
Equity Method Investment Third Party Ownership Percentage	85.00%
Equity method Investment, ownership percentage	15.00%
Equity Method Investment, Summarized Financial Information, Noncurrent Liabilities	$ 175