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EX-10.2 - TERM LOAN - COLUMBIA PROPERTY TRUST, INC.ex102termloan.htm
EX-31.2 - CERTIFICATION - COLUMBIA PROPERTY TRUST, INC.cxp2015q3_ex312.htm
EX-10.3 - BRIDGE LOAN - COLUMBIA PROPERTY TRUST, INC.ex103bridgeloan.htm
EX-32.1 - CERTIFICATION - COLUMBIA PROPERTY TRUST, INC.cxp2015q3_ex321.htm
EX-10.1 - TERM LOAN & REVOLVING CREDIT FACILITY - COLUMBIA PROPERTY TRUST, INC.ex101termloanlineofcredit.htm
EX-31.1 - CERTIFICATION - COLUMBIA PROPERTY TRUST, INC.cxp2015q3_ex311.htm

 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 __________________________________ 
FORM 10-Q
 __________________________________ 
(Mark One)
x
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the quarterly period ended September 30, 2015
OR
o
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from ______ to ______
Commission file number 001-36113
COLUMBIA PROPERTY TRUST, INC.
(Exact name of registrant as specified in its charter)
  __________________________________
Maryland
 
20-0068852
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification Number)
One Glenlake Parkway, Suite 1200
Atlanta, GA 30328
(Address of principal executive offices)
(Zip Code)
(404) 465-2200
(Registrant's telephone number, including area code)

(Former name, former address, and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
  Yes  x  No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act (check one).
Large accelerated filer
x 
Accelerated filer
o
Non-accelerated filer
o (Do not check if a smaller reporting company)
Smaller reporting company
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  o    No  x

Number of shares outstanding of the registrant's
only class of common stock, as of October 23, 2015: 124,363,587 shares
 
 
 
 
 



FORM 10-Q
COLUMBIA PROPERTY TRUST, INC.
TABLE OF CONTENTS
 
Page No.
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.




Page 2


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q of Columbia Property Trust, Inc. ("Columbia Property Trust," "the Company," "we," "our," or "us") other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the U.S. Securities and Exchange Commission ("SEC"). We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Any such forward-looking statements are subject to risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual conditions, our ability to accurately anticipate results expressed in such forward-looking statements, including our ability to generate positive cash flow from operations, make distributions to stockholders, and maintain the value of our real estate properties, may be significantly hindered. See Item 1A in Columbia Property Trust's Annual Report on Form 10-K for the year ended December 31, 2014 for a discussion of some of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements. The risk factors described in our Annual Report are not the only ones we face, but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also harm our business.


Page 3


PART I.
FINANCIAL INFORMATION
ITEM 1.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The information furnished in the accompanying consolidated balance sheets, and related consolidated statements of operations, comprehensive income, equity, and cash flows, reflects all normal and recurring adjustments that are, in management's opinion, necessary for a fair and consistent presentation of the aforementioned financial statements. The accompanying consolidated financial statements should be read in conjunction with the condensed notes to Columbia Property Trust's financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q, and with Columbia Property Trust's Annual Report on Form 10-K filed for the year ended December 31, 2014. Columbia Property Trust's results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the operating results expected for the full year.



Page 4


COLUMBIA PROPERTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per-share amounts) 
 
(Unaudited)
 
September 30,
2015
 
December 31,
2014
Assets:
 
 
 
Real estate assets, at cost:
 
 
 
Land
$
1,056,275

 
$
785,101

Buildings and improvements, less accumulated depreciation of $648,405 and $660,098, as of September 30, 2015 and December 31, 2014, respectively
3,322,241

 
3,026,431

Intangible lease assets, less accumulated amortization of $266,454 and $313,822, as of
September 30, 2015 and December 31, 2014, respectively
280,049

 
247,068

Construction in progress
45,623

 
17,962

Total real estate assets
4,704,188

 
4,076,562

Cash and cash equivalents
44,823

 
149,790

Tenant receivables, net of allowance for doubtful accounts of $1 and $3 as of
September 30, 2015 and December 31, 2014
10,818

 
6,945

Straight-line rent receivable
112,750

 
116,489

Prepaid expenses and other assets
29,636

 
52,143

Deferred financing costs, less accumulated amortization of $17,494 and $15,205, as of
September 30, 2015 and December 31, 2014, respectively
13,719

 
8,426

Intangible lease origination costs, less accumulated amortization of $181,420 and $219,626, as of September 30, 2015 and December 31, 2014, respectively
87,710

 
105,528

Deferred lease costs, less accumulated amortization of $39,845 and $36,589, as of
September 30, 2015 and December 31, 2014, respectively
99,035

 
102,995

Investment in development authority bonds
120,000

 
120,000

Total assets
$
5,222,679

 
$
4,738,878

Liabilities:
 
 
 
Line of credit, term loans, and notes payable
$
1,659,387

 
$
1,430,884

Bonds payable, net of discounts of $1,096 and $818, as of September 30, 2015 and
December 31, 2014, respectively
598,904

 
249,182

Accounts payable, accrued expenses, and accrued capital expenditures
110,103

 
106,276

Deferred income
25,232

 
24,753

Intangible lease liabilities, less accumulated amortization of $83,736 and $84,935, as of
September 30, 2015 and December 31, 2014, respectively
66,753

 
74,305

Obligations under capital leases
120,000

 
120,000

Total liabilities
2,580,379

 
2,005,400

Commitments and Contingencies (Note 6)

 

Equity:
 
 
 
Common stock, $0.01 par value, 225,000,000 shares authorized, 124,510,229 and 124,973,304 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively
1,245

 
1,249

Additional paid-in capital
4,591,204

 
4,601,808

Cumulative distributions in excess of earnings
(1,945,731
)
 
(1,867,611
)
Cumulative other comprehensive loss
(4,418
)
 
(1,968
)
Total equity
2,642,300

 
2,733,478

Total liabilities and equity
$
5,222,679

 
$
4,738,878

See accompanying notes.


Page 5


COLUMBIA PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per-share amounts)
 
(Unaudited)
 
(Unaudited)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Rental income
$
107,011

 
$
104,938

 
$
332,736

 
$
309,326

Tenant reimbursements
22,627

 
23,861

 
77,395

 
70,528

Hotel income
6,941

 
6,732

 
18,898

 
17,298

Other property income
1,140

 
1,450

 
4,357

 
5,754

 
137,719

 
136,981

 
433,386

 
402,906

Expenses:
 
 
 
 
 
 
 
Property operating costs
46,538

 
41,144

 
144,375

 
118,956

Hotel operating costs
5,331

 
5,039

 
15,069

 
13,869

Asset and property management fees
472

 
682

 
1,372

 
1,646

Depreciation
32,441

 
29,980

 
100,261

 
87,453

Amortization
20,276

 
19,476

 
67,233

 
58,218

Impairment loss on real estate assets

 

 

 
14,982

General and administrative
6,797

 
7,836

 
21,921

 
23,194

Acquisition expenses
1,680

 
7,996

 
3,675

 
14,098

 
113,535

 
112,153

 
353,906

 
332,416

Real estate operating income
24,184

 
24,828

 
79,480

 
70,490

Other income (expense):
 
 
 
 
 
 
 
Interest expense
(22,012
)
 
(19,273
)
 
(66,261
)
 
(56,043
)
Interest and other income
1,808

 
1,803

 
5,448

 
5,415

Loss on interest rate swaps
(1,102
)
 
(28
)
 
(1,110
)
 
(363
)
Loss on early extinguishment of debt
(2,672
)
 

 
(3,149
)
 

 
(23,978
)
 
(17,498
)
 
(65,072
)
 
(50,991
)
Income from continuing operations before income tax expense, and gain on sale of real estate
206

 
7,330

 
14,408

 
19,499

Income tax expense
(245
)
 
(409
)
 
(140
)
 
(416
)
Income (loss) from continuing operations before gain on sale of real estate
(39
)

6,921


14,268


19,083

Gain on sale of real estate assets
20,182

 
18,607

 
20,182

 
18,607

Income from continuing operations
20,143


25,528


34,450


37,690

Discontinued operations:
 
 
 
 
 
 
 
Operating loss from discontinued operations

 
(540
)
 

 
(303
)
Loss on disposition of discontinued operations

 

 

 
(978
)
Loss from discontinued operations

 
(540
)
 

 
(1,281
)
Net income
$
20,143


$
24,988


$
34,450


$
36,409

Per-share information – basic:

 

 
 
 
 
Income from continuing operations
$
0.16

 
$
0.20

 
$
0.28

 
$
0.30

Loss from discontinued operations
$
0.00

 
$
0.00

 
$
0.00

 
$
(0.01
)
Net income
$
0.16

 
$
0.20

 
$
0.28

 
$
0.29

Weighted-average common shares outstanding – basic
124,359

 
124,863

 
124,359

 
124,858

Per-share information – diluted:
 
 
 
 
 
 
 
Income from continuing operations
$
0.16

 
$
0.20

 
$
0.28

 
$
0.30

Loss from discontinued operations
$
0.00

 
$
0.00

 
$
0.00

 
$
(0.01
)
Net income
$
0.16

 
$
0.20

 
$
0.28

 
$
0.29

Weighted-average common shares outstanding – diluted
124,460

 
124,938

 
124,445

 
124,921

Dividends per share
$
0.30

 
$
0.30

 
$
0.90

 
$
0.90


See accompanying notes.


Page 6


COLUMBIA PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)

 
(Unaudited)
 
(Unaudited)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
Net income
$
20,143

 
$
24,988

 
$
34,450

 
$
36,409

Settlement of interest rate swap
1,102

 

 
1,102

 

Market value adjustments to interest rate swaps
(4,147
)
 
850

 
(3,552
)
 
1,061

Comprehensive income
$
17,098

 
$
25,838

 
$
32,000

 
$
37,470


See accompanying notes.




Page 7


COLUMBIA PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014 (UNAUDITED)
(in thousands, except per-share amounts)

 
Stockholders' Equity
 
Common Stock
 
Additional
Paid-In
Capital
 
Cumulative
Distributions
in Excess of
Earnings
 
Cumulative
Other
Comprehensive
Income (Loss)
 
Total
Equity
 
Shares
 
Amount
 
 
 
 
Balance, December 31, 2014
124,973

 
$
1,249

 
$
4,601,808

 
$
(1,867,611
)
 
$
(1,968
)
 
$
2,733,478

Redemptions of common stock
(570
)
 
(5
)
 
(12,802
)
 

 

 
(12,807
)
Common stock issued to employees and directors, and amortized (net of amounts withheld for income taxes)
107

 
1

 
2,198

 

 

 
2,199

Distributions to common stockholders ($0.90 per share)

 

 

 
(112,570
)
 

 
(112,570
)
Net income

 

 

 
34,450

 

 
34,450

Settlement of interest rate swap

 

 

 

 
1,102

 
1,102

Market value adjustment to interest rate swaps

 

 

 

 
(3,552
)
 
(3,552
)
Balance, September 30, 2015
124,510

 
$
1,245

 
$
4,591,204

 
$
(1,945,731
)
 
$
(4,418
)
 
$
2,642,300

 
Stockholders' Equity
 
Common Stock
 
Additional
Paid-In
Capital
 
Cumulative
Distributions
in Excess of
Earnings
 
Cumulative
Other
Comprehensive
Income (Loss)
 
Total
 Equity
 
Shares
 
Amount
 
 
 
 
Balance, December 31, 2013
124,830

 
$
1,248

 
$
4,600,166

 
$
(1,810,284
)
 
$
(3,307
)
 
$
2,787,823

Common stock issued to employees and directors, and amortized
(net of amounts withheld for income taxes)
139

 
1

 
1,197

 

 

 
1,198

Distributions to common stockholders ($0.90 per share)

 

 

 
(112,471
)
 

 
(112,471
)
Net income

 

 

 
36,409

 

 
36,409

Market value adjustment to interest rate swap

 

 

 

 
1,061

 
1,061

Balance, September 30, 2014
124,969

 
$
1,249

 
$
4,601,363

 
$
(1,886,346
)
 
$
(2,246
)
 
$
2,714,020

See accompanying notes.


Page 8


COLUMBIA PROPERTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
(Unaudited)
 
Nine Months Ended
September 30,
 
2015
 
2014
Cash Flows from Operating Activities:
 
 
 
Net income
$
34,450

 
$
36,409

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Straight-line rental income
(11,300
)
 
(7,366
)
Depreciation
100,261

 
87,453

Amortization
59,880

 
56,087

Impairment loss on real estate assets

 
14,982

Noncash interest expense
3,138

 
2,297

Loss on early extinguishment of debt
3,149

 

Gain on interest rate swaps
(1,532
)
 
(3,624
)
Gain on sale of real estate
(20,182
)
 
(17,629
)
Stock-based compensation expense
2,925

 
1,511

Changes in assets and liabilities, net of acquisitions:
 
 
 
Increase in tenant receivables, net
(3,205
)
 
(1,533
)
Decrease in prepaid expenses and other assets
377

 
2,252

Increase (decrease) in accounts payable and accrued expenses
6,539

 
(4,195
)
Increase in deferred income
479

 
4,482

Net cash provided by operating activities
174,979

 
171,126

Cash Flows from Investing Activities:
 
 
 
Net proceeds from the sale of real estate
422,125

 
131,028

Real estate acquisitions
(1,062,031
)
 
(335,986
)
Capital improvements
(64,086
)
 
(41,615
)
Deferred lease costs paid
(15,403
)
 
(12,057
)
Net cash used in investing activities
(719,395
)
 
(258,630
)
Cash Flows from Financing Activities:
 
 
 
Financing costs paid
(9,607
)
 
(1,482
)
Costs paid to prepay debt and settle interest rate swap
(3,165
)
 

Proceeds from lines of credit and notes payable
1,854,000

 
283,000

Repayments of lines of credit and notes payable
(1,625,187
)
 
(134,965
)
Proceeds from issuance of bonds payable
349,507

 

Distributions paid to stockholders
(112,570
)
 
(112,471
)
Redemptions of common stock
(13,529
)
 

Net cash provided by financing activities
439,449

 
34,082

Net decrease in cash and cash equivalents
(104,967
)
 
(53,422
)
Cash and cash equivalents, beginning of period
149,790

 
99,855

Cash and cash equivalents, end of period
$
44,823

 
$
46,433

See accompanying notes.


Page 9


COLUMBIA PROPERTY TRUST, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2015
(unaudited)
1.
Organization
Columbia Property Trust, Inc. ("Columbia Property Trust") (NYSE: CXP) is a Maryland corporation that operates as a real estate investment trust ("REIT") for federal income tax purposes and owns and operates commercial real estate properties. Columbia Property Trust was incorporated in 2003, commenced operations in 2004, and conducts business primarily through Columbia Property Trust Operating Partnership, L.P. ("Columbia Property Trust OP"), a Delaware limited partnership. Columbia Property Trust is the general partner and sole owner of Columbia Property Trust OP and possesses full legal control and authority over its operations. Columbia Property Trust OP acquires, develops, owns, leases, and operates real properties directly, through wholly owned subsidiaries, or through joint ventures. References to Columbia Property Trust, "we," "us," or "our" herein shall include Columbia Property Trust and all subsidiaries of Columbia Property Trust, direct and indirect.
Columbia Property Trust typically invests in high-quality, income-generating office properties. As of September 30, 2015, Columbia Property Trust owned 28 office properties and one hotel, which includes 41 operational buildings comprising approximately 14.2 million square feet of commercial space, located in 12 states. As of September 30, 2015, the office properties were approximately 93.3% leased.
2.
Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements of Columbia Property Trust have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, the statements for these unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of a full year's results. Columbia Property Trust's consolidated financial statements include the accounts of Columbia Property Trust, Columbia Property Trust OP, and any variable interest entity in which Columbia Property Trust or Columbia Property Trust OP was deemed the primary beneficiary. With respect to entities that are not variable interest entities, Columbia Property Trust's consolidated financial statements also include the accounts of any entity in which Columbia Property Trust, Columbia Property Trust OP, or their subsidiaries own a controlling financial interest and any limited partnership in which Columbia Property Trust, Columbia Property Trust OP, or their subsidiaries own a controlling general partnership interest. All intercompany balances and transactions have been eliminated in consolidation. For further information, refer to the financial statements and footnotes included in Columbia Property Trust's Annual Report on Form 10-K for the year ended December 31, 2014 (the "2014 Form 10-K").
Fair Value Measurements
Columbia Property Trust estimates the fair value of its assets and liabilities (where currently required under GAAP) consistent with the provisions of Accounting Standard Codification ("ASC") 820, Fair Value Measurements ("ASC 820"). Under this standard, fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date. While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures provides the following fair value technique parameters and hierarchy, depending upon availability:
Level 1 – Assets or liabilities for which the identical term is traded on an active exchange, such as publicly traded instruments or futures contracts.
Level 2 – Assets and liabilities valued based on observable market data for similar instruments.
Level 3 – Assets or liabilities for which significant valuation assumptions are not readily observable in the market. Such assets or liabilities are valued based on the best available data, some of which may be internally developed. Significant assumptions may include risk premiums that a market participant would consider.


Page 10


Real Estate Assets
Columbia Property Trust is required to make subjective assessments as to the useful lives of its depreciable assets. Columbia Property Trust considers the period of future benefit of the asset to determine the appropriate useful lives. These assessments have a direct impact on net income. The estimated useful lives of its assets by class are as follows:
Buildings
  
40 years
Building and site improvements
  
5-25 years
Tenant improvements
  
Shorter of economic life or lease term
Intangible lease assets
  
Lease term
Evaluating the Recoverability of Real Estate Assets
Columbia Property Trust continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets, of both operating properties and properties under construction, in which Columbia Property Trust has an ownership interest, either directly or through investments in joint ventures, may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets and related intangible assets and liabilities may not be recoverable, Columbia Property Trust assesses the recoverability of these assets and liabilities by determining whether the respective carrying values will be recovered through the estimated undiscounted future operating cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying values, Columbia Property Trust adjusts the carrying value of the real estate assets and related intangible assets and liabilities to the estimated fair values, pursuant to the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognizes an impairment loss. Estimated fair values are calculated based on the following information, in order of preference, depending upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of future cash flows, including estimated salvage value. Certain of Columbia Property Trust's assets may be carried at more than an amount that could be realized in a current disposition transaction. Columbia Property Trust has determined that there is no impairment in the carrying values of our real estate assets and related intangible assets for the nine months ended September 30, 2015.
Projections of expected future operating cash flows require that Columbia Property Trust estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. The subjectivity of assumptions used in the future cash flow analysis, including discount rates, could result in an incorrect assessment of the property's fair value and could result in the misstatement of the carrying value of Columbia Property Trust's real estate assets and related intangible assets and liabilities and net income.
In the first quarter of 2014, Columbia Property Trust revised its investment strategy for the 160 Park Avenue Building in Florham Park, New Jersey, to sell the property to a user in the near term. As a result, management reduced its intended holding period for the building and reevaluated the property's carrying value as of March 31, 2014, pursuant to the accounting policy outlined above. Columbia Property Trust concluded that the 160 Park Avenue Building was not recoverable and reduced its carrying value to reflect its fair value, estimated based on recently quoted market prices (Level 2), by recording an impairment loss of approximately $13.6 million in the first quarter of 2014. The sale of the 160 Park Avenue Building closed on June 4, 2014, for $10.2 million, exclusive of transaction costs.
In the second quarter of 2014, Columbia Property Trust decided to pursue a near-term sale of the 200 South Orange Building in Orlando, Florida, in connection with exiting this market. As a result, management reduced its intended holding period for the building and reevaluated the property's carrying value in the second quarter of 2014. In connection with negotiating the terms of the sale, Columbia Property Trust reduced the carrying value of the 200 South Orange Building to reflect fair value, estimated based on an approximate net contract price of $18.4 million (Level 1), by recording an impairment loss of $1.4 million in the second quarter of 2014. The sale of the 200 South Orange Building closed on June 30, 2014, for $18.4 million, net of transaction costs.
Assets Held for Sale
Columbia Property Trust classifies assets as held for sale according to ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets ("ASC 360"). According to ASC 360, assets are considered held for sale when the following criteria are met:
Management, having the authority to approve the action, commits to a plan to sell the property.


Page 11


The property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such property.
An active program to locate a buyer and other actions required to complete the plan to sell the property have been initiated.
The sale of the property is probable, and transfer of the property is expected to qualify for recognition as a completed sale, within one year.
The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value.
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
At such time that a property is determined to be held for sale, its carrying amount is reduced to the lower of its depreciated book value or its estimated fair value, less costs to sell, and depreciation is no longer recognized. As of September 30, 2015, none of Columbia Property Trust's properties met the criteria to be classified as held for sale in the accompanying balance sheet.
Intangible Assets and Liabilities Arising from In-Place Leases where Columbia Property Trust Is the Lessor
Upon the acquisition of real properties, Columbia Property Trust allocates the purchase price of properties to tangible assets, consisting of land, building, site improvements, and identified intangible assets and liabilities, including the value of in-place leases, based in each case on Columbia Property Trust's estimate of their fair values in accordance with ASC 820 (see Fair Value Measurements section above for additional detail).
When calculating the intangible assets and liabilities for above-market and below-market tenant and ground leases where we are either the lessor or the lessee, the difference between the contractual rental rates and our estimate of market rental rates is measured over a period equal to the remaining non-cancelable term of the leases, including significantly below market renewal options for which exercise of the renewal option appears to be reasonably assured. The remaining term of leases with renewal options at terms significantly below market reflect the assumed exercise of such below market renewal options and assume the amortization period would coincide with the extended lease term.
As of September 30, 2015 and December 31, 2014, Columbia Property Trust had the following gross intangible in-place lease assets and liabilities (in thousands):
 
 
Intangible Lease Assets
 
Intangible
Lease
Origination
Costs
 
Intangible
Below-Market
In-Place Lease
Liabilities
 
Above-Market
In-Place
Lease Assets
 
Absorption
Period Costs
 
September 30, 2015
Gross
$
53,525

 
$
352,062

 
$
269,130

 
$
150,489

 
Accumulated Amortization
(40,019
)
 
(209,404
)
 
(181,420
)
 
(83,736
)
 
Net
$
13,506

 
$
142,658

 
$
87,710

 
$
66,753

December 31, 2014
Gross
$
79,805

 
$
370,412

 
$
325,154

 
$
159,240

 
Accumulated Amortization
(61,619
)
 
(237,084
)
 
(219,626
)
 
(84,935
)
 
Net
$
18,186

 
$
133,328

 
$
105,528

 
$
74,305

For the three and nine months ended September 30, 2015 and 2014, Columbia Property Trust recognized the following amortization of intangible lease assets and liabilities (in thousands):
 
Intangible Lease Assets
 
Intangible
Lease
Origination
Costs
 
Intangible
Below-Market
In-Place Lease
Liabilities
Above-Market
In-Place
Lease Assets
 
Absorption
Period Costs
 
For the three months ended September 30, 2015
$
823

 
$
10,926

 
$
6,728

 
$
4,634

For the three months ended September 30, 2014
$
1,333

 
$
8,979

 
$
8,232

 
$
3,754

For the nine months ended September 30, 2015
$
3,578

 
$
35,724

 
$
23,006

 
$
15,190

For the nine months ended September 30, 2014
$
4,039

 
$
26,230

 
$
25,105

 
$
10,613



Page 12


The remaining net intangible assets and liabilities, as of September 30, 2015, will be amortized as follows (in thousands):
 
Intangible Lease Assets
 
Intangible
Lease
Origination
Costs
 
Intangible
Below-Market
In-Place Lease
Liabilities
Above-Market
In-Place
Lease Assets
 
Absorption
Period Costs
 
For the remainder of 2015
$
823

 
$
11,360

 
$
5,741

 
$
4,393

For the years ending December 31:
 
 
 
 
 
 
 
2016
2,953

 
33,892

 
20,601

 
14,319

2017
1,750

 
21,693

 
14,763

 
9,270

2018
1,004

 
15,694

 
10,644

 
7,234

2019
998

 
13,742

 
9,636

 
6,557

2020
996

 
11,754

 
8,515

 
5,363

Thereafter
4,982

 
34,523

 
17,810

 
19,617

 
$
13,506

 
$
142,658

 
$
87,710

 
$
66,753

Intangible Assets and Liabilities Arising from In-Place Leases where Columbia Property Trust Is the Lessee
In-place ground leases where Columbia Property Trust is the lessee may have value associated with effective contractual rental rates that are above or below market rates at the time of execution or assumption. Such values are calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place lease and (ii) management's estimate of fair market lease rates for the corresponding in-place lease at the time of execution or assumption, measured over a period equal to the remaining non-cancelable terms of the leases, including significantly below-market options for which exercise of the renewal option appears to be reasonably assured. The capitalized above-market and below-market in-place lease values are recorded as intangible lease liabilities and assets, respectively, and are amortized as an adjustment to property operating cost over the remaining term of the respective leases. Columbia Property Trust had gross below-market lease assets of approximately $140.9 million and $110.7 million as of September 30, 2015 and December 31, 2014, respectively, and recognized amortization of these assets of approximately $0.6 million and $0.5 million for the three months ended September 30, 2015 and 2014, respectively, and approximately $1.9 million and $1.6 million for the nine months ended September 30, 2015 and 2014, respectively.
As of September 30, 2015, the remaining net below-market lease assets will be amortized as follows (in thousands):
For the remainder of 2015
$
637

For the years ending December 31:
 
2016
2,549

2017
2,549

2018
2,549

2019
2,549

2020
2,549

Thereafter
110,502

 
$
123,884

Prepaid Expenses and Other Assets
Prepaid expenses and other assets primarily include earnest money deposits, escrow accounts held by lenders to pay future real estate taxes, insurance and tenant improvements, notes receivable, non-tenant receivables, prepaid taxes, insurance and operating costs, certain corporate assets, hotel inventory, and deferred tax assets. Prepaid expenses and other assets will be expensed as incurred. As of December 31, 2014, prepaid expenses and other assets included $27.0 million of earnest money deposits paid in 2014 for the January 2015 property acquisitions described in Note 3, Real Estate Transactions. These deposits were applied to the purchase prices at closing.


Page 13


Interest Rate Swap Agreements
Columbia Property Trust enters into interest rate swap contracts to mitigate its interest rate risk on the related financial instruments. Columbia Property Trust does not enter into derivative or interest rate swap transactions for speculative purposes; however, certain of its derivatives may not qualify for hedge accounting treatment. Columbia Property Trust records the fair value of its interest rate swaps either as prepaid expenses and other assets or as accounts payable, accrued expenses, and accrued capital expenditures. Changes in the fair value of the effective portion of interest rate swaps that are designated as cash flow hedges are recorded as other comprehensive income, while changes in the fair value of the ineffective portion of a cash flow hedge, if any, is recognized currently in earnings. All changes in the fair value of interest rate swaps that do not qualify for hedge accounting treatment are recorded as gain (loss) on interest rate swaps. Amounts received or paid under interest rate swap agreements are recorded as interest expense for contracts that qualify for hedge accounting treatment and as gain (loss) on interest rate swaps for contracts that do not qualify for hedge accounting treatment.
The following tables provide additional information related to Columbia Property Trust's interest rate swaps (in thousands):
 
 
 
 
Estimated Fair Value as of
Instrument Type
 
Balance Sheet Classification
 
September 30,
2015
 
December 31,
2014
Derivatives designated as hedging instruments:
 
 
 
 
 
 
Interest rate contracts
 
Accounts payable
 
$
(4,418
)
 
$
(1,968
)
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
Interest rate contracts
 
Accounts payable
 

 
$
(2,633
)
Fair value of interest rate swaps
 
 
 
$
(4,418
)
 
$
(4,601
)

Columbia Property Trust applied the provisions of ASC 820 in recording its interest rate swaps at fair value. The fair values of the interest rate swaps, classified under Level 2, were determined using a third-party proprietary model that is based on prevailing market data for contracts with matching durations, current and anticipated London Interbank Offered Rate ("LIBOR") information, and reasonable estimates about relevant future market conditions. Columbia Property Trust has determined that the fair value, as determined by the third party, is reasonable.
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
Market value adjustment to interest rate swaps designated as hedging instruments and included in other comprehensive income
$
(4,147
)
 
$
850

 
$
(3,552
)
 
$
1,061

Loss on interest rate swap recognized through earnings
$
(1,102
)
 
$
(28
)
 
$
(1,110
)
 
$
(363
)
In July 2015, Columbia Property Trust paid $1.1 million to settle the interest rate swap on the $450 Million Term Loan, which is reflected in earnings. See Note 4, Line of Credit, Term Loans, and Notes Payable, for additional details. During the periods presented, there was no other hedge ineffectiveness required to be recognized into earnings on the interest rate swaps that qualified for hedge accounting treatment.
Income Taxes
Columbia Property Trust has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), and has operated as such beginning with its taxable year ended December 31, 2003. To qualify as a REIT, Columbia Property Trust must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its REIT taxable income, as defined by the Code, to its stockholders. As a REIT, Columbia Property Trust generally is not subject to income tax on income it distributes to stockholders. Columbia Property Trust's stockholder distributions typically exceed its taxable income due to the inclusion of noncash expenses, such as depreciation, in taxable income. As a result, Columbia Property Trust typically does not incur federal income taxes other than as described in the following paragraph. Columbia Property Trust is, however, subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in the accompanying consolidated financial statements.


Page 14


Columbia Property Trust TRS, LLC ("Columbia Property Trust TRS"), Columbia KCP TRS, LLC ("Columbia KCP TRS"), and Columbia Energy TRS, LLC ("Columbia Energy TRS") (collectively, the "TRS Entities") are wholly owned subsidiaries of Columbia Property Trust, are organized as Delaware limited liability companies, and operate, among other things, office properties that Columbia Property Trust does not intend to hold long term and a full-service hotel. Columbia Property Trust has elected to treat the TRS Entities as taxable REIT subsidiaries. Columbia Property Trust may perform certain additional, noncustomary services for tenants of its buildings through the TRS Entities; however, any earnings related to such services are subject to federal and state income taxes. In addition, for Columbia Property Trust to continue to qualify as a REIT, Columbia Property Trust must limit its investments in taxable REIT subsidiaries to 25% of the value of the total assets. The TRS Entities' deferred tax assets and liabilities represent temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on the enacted rates expected to be in effect when the temporary differences reverse. If applicable, Columbia Property Trust records interest and penalties related to uncertain tax positions as general and administrative expense in the accompanying consolidated statements of operations.
Common Stock Repurchase Program
Columbia Property Trust's board of directors has authorized the repurchase of up to an aggregate of $200 million of its common stock, par value $0.01, through September 4, 2017 (the "Stock Repurchase Program"). Columbia Property Trust expects to acquire shares primarily through open market transactions, subject to market conditions and other factors. As of September 30, 2015, $187.2 million remains available for repurchases under the Stock Repurchase Program. Common stock repurchases are charged against equity as incurred, and the repurchased shares are retired.
Recent Accounting Pronouncements
In September 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2015-16, Simplifying the Accounting for Measurement – Prior Period Adjustments ("ASU 2015-16"), which eliminates the requirement to retrospectively account for adjustments made to provisional amounts recognized in a real estate acquisition at the acquisition date, rather the cumulative impact of any adjustment should be recognized in the reporting period in which the adjustment is identified. ASU 2015-16 will be effective for Columbia Property Trust beginning on January 1, 2016. Columbia Property Trust does not expect the adoption of ASU 2015-16 to have a material impact on its financial statements and disclosures.
In April 2015, the FASB issued Accounting Standards Update 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), which requires deferred financing costs to be presented on the balance sheet as a direct deduction of the carrying amount of the related debt. In August 2015, the FASB issued Accounting Standards Update 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements ("ASU 2015-15"), which allows for deferred financing costs associated with line of credit agreements, which may not have an outstanding balance, to continue to be presented as an asset. ASU 2015-03 and ASU 2015-15 will be effective retrospectively for Columbia Property Trust beginning on January 1, 2016, and early adoption is permitted. We expect the implementation of ASU 2015-03 and ASU 2015-15 to impact our balance sheet presentation by requiring a portion of deferred financing costs, currently reported as an asset, to be reflected as a reduction to line of credit, term loans, and notes payable, a liability, for all periods presented.
In February 2015, the FASB issued Accounting Standards Update 2015-02, Amendments to the Consolidation Analysis ("ASU 2015-02"), which requires the reevaluation of certain legal entities for consolidation, including limited partnerships, variable interest entities ("VIEs"), and reporting entities that are involved with VIEs. ASU 2015-02 will be effective retrospectively for Columbia Property Trust beginning on January 1, 2016, and early adoption is permitted. Columbia Property Trust does not expect the adoption of ASU 2015-02 to have a material impact on its financial statements and disclosures.
In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements – Going Concern ("ASU 2014-15"), which provides guidance about the responsibility of management to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures if necessary. ASU 2014-15 will be effective prospectively for Columbia Property Trust beginning on January 1, 2017, and early adoption is permitted. Columbia Property Trust does not expect the adoption of ASU 2014-15 to have a material impact on its financial statements and disclosures.
In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which establishes a comprehensive model to account for revenue arising from contracts with customers. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB's Accounting Standards Codification, including real estate leases. ASU 2014-09 will require companies to perform a five-step analysis of transactions to determine when and how revenue is recognized. ASU 2014-09 will be effective retrospectively for Columbia Property Trust beginning on January 1, 2018, and early adoption is permitted beginning January 1, 2017. We do not believe that ASU 2014-09 will have a material impact on our financial statements and disclosures.


Page 15


3.
Real Estate Transactions
During 2014 and the nine months ended September 30, 2015, Columbia Property Trust acquired the following properties (in thousands):
 
 
315 Park Avenue
South Building
 
1881 Campus Commons Building
 
116 Huntington
Avenue Building
 
229 West 43rd Street Building
 
221 Main Street Building
 
650 California Street Building
Location
 
New York, NY

 
Reston, VA

 
Boston, MA

 
New York, NY

 
San Francisco, CA

 
San Francisco, CA

Date Acquired
 
January 7, 2015

 
January 7, 2015

 
January 8, 2015

 
August 4, 2015

 
April 22, 2014

 
September 9, 2014

Purchase price:
 
 
 
 
 
 
 
 
 
 
 
 
Land
 
$
119,633

 
$
7,179

 
$

 
$
207,233

 
$
60,509

 
$
75,384

Building and improvements
 
232,598

 
49,273

 
108,383

 
265,952

 
161,853

 
221,135

Intangible lease assets
 
16,912

 
4,643

 
7,907

 
27,039

 
12,776

 
19,306

Intangible below market ground lease assets
 

 

 
30,244

 

 

 

Intangible lease origination costs
 
4,148

 
1,603

 
2,669

 
10,059

 
3,475

 
4,290

Intangible below market lease liability
 
(7,487
)
 
(97
)
 
(1,878
)
 

 
(10,323
)
 
(9,908
)
Total purchase price
 
$
365,804

 
$
62,601

 
$
147,325

 
$
510,283

 
$
228,290

 
$
310,207

The purchase price for the 229 West 43rd Street Building includes allocations based upon preliminary estimates of the fair value of the assets and liabilities acquired. These allocations may be adjusted in the future upon finalization of these preliminary estimates. See Note 2, Summary of Significant Accounting Policies, for a discussion of the estimated useful life for each asset class.
2015 Acquisitions
The January 2015 acquisitions of the 315 Park Avenue South Building, the 1881 Campus Commons Building, and the 116 Huntington Avenue Building were funded with proceeds from the issuance of $350.0 million of bonds payable due in 2025, proceeds from the Revolving Credit Facility, and cash on hand.
Portfolio Acquisition - 315 Park Avenue South Building & 1881 Campus Commons Building
On January 7, 2015, Columbia Property Trust acquired a portfolio of two assets, which included 315 Park Avenue South, a 328,000-square-foot office building in New York, New York (the "315 Park Avenue South Building") and 1881 Campus Commons, a 244,000-square-foot office building in Reston, Virginia (the "1881 Campus Commons Building"). This portfolio was acquired for $436.0 million, exclusive of transaction costs and purchase price adjustments.
As of the acquisition date, the 315 Park Avenue South Building was 94.9% leased to nine tenants, including Credit Suisse (74%). For the period from January 7, 2015 to September 30, 2015, Columbia Property Trust recognized revenues of $18.8 million and a net loss of $4.8 million from the 315 Park Avenue South Building. The net loss includes acquisition expenses of $1.2 million.
As of the acquisition date, the 1881 Campus Commons Building was 78.0% leased to 15 tenants, including SOS International (15%) and Siemens (12%). For the period from January 7, 2015 to September 30, 2015, Columbia Property Trust recognized revenues of $4.6 million and a net loss of $1.6 million from the 1881 Campus Commons Building. The net loss includes acquisition expenses of $0.5 million.
116 Huntington Avenue Building
On January 8, 2015, Columbia Property Trust acquired a 271,000-square-foot office building in Boston, Massachusetts (the "116 Huntington Avenue Building"), for $152.0 million, inclusive of capital credits. As of the acquisition date, the 116 Huntington Avenue Building was 78.0% leased to 17 tenants, including American Tower (21%), GE Healthcare (13%), and Brigham and Women's (12%). For the period from January 8, 2015 to September 30, 2015, Columbia Property Trust recognized revenues of $8.3 million and a net loss of $0.6 million from the 116 Huntington Avenue Building. The net loss includes acquisition expenses of $0.3 million.
229 West 43rd Street Building
On August 4, 2015, Columbia Property Trust acquired the 481,000-square-foot office portion of the 229 West 43rd Street building, a 16-story,732,000-square-foot building located in the Times Square sub-market of Manhattan in New York, New York (the "229


Page 16


West 43rd Street Building"), for $516.0 million, exclusive of transaction costs and purchase price adjustments. This acquisition was funded with the $300 Million Bridge Loan and borrowings on the Revolving Credit Facility, as described in Note 4, Line of Credit, Term Loans, and Notes Payable. As of the acquisition date, the 229 West 43rd Street Building was 98% leased to nine tenants, including Yahoo! (40%), Snapchat (13%), Collective, Inc. (12%), and MongoDB (10%). For the period from August 4, 2015 to September 30, 2015, Columbia Property Trust recognized revenues of $5.5 million and net income of $0.4 million from the 229 West 43rd Street Building. The net income includes acquisition expenses of $1.7 million.
2014 Acquisitions
221 Main Street Building
On April 22, 2014, Columbia Property Trust acquired the 221 Main Street Building, a 378,000-square-foot office building in San Francisco, California, for $228.8 million, exclusive of closing costs. The acquisition was funded with a $73.0 million assumed mortgage note, $116.0 million of borrowings on the Revolving Credit Facility, and cash on hand. As of the acquisition date, the 221 Main Street Building was 82.8% leased to 40 tenants, including DocuSign, Inc. (16%). Columbia Property Trust recognized revenues of $7.9 million and a net loss of $9.4 million from the 221 Main Street Building acquisition for the period from April 22, 2014 to September 30, 2014. The net loss includes acquisition expenses of $6.1 million.
650 California Street Building
On September 9, 2014, Columbia Property Trust acquired the 650 California Street Building, a 477,000 square foot office building in San Francisco, California, for $310.2 million, exclusive of transaction costs. The acquisition was funded with a $130.0 million assumed mortgage note, $118.0 million of borrowings on the Revolving Credit Facility, and cash on hand. As of the acquisition date, the 650 California Street Building was 88.1% leased to 18 tenants, including Littler Mendelson (24%), Credit Suisse (13%), and Goodby Silverstein (11%). Columbia Property Trust recognized revenues of $1.3 million and a net loss of $8.3 million from the 650 California Street Building acquisition for the period from September 9, 2014 to September 30, 2014. The net loss includes acquisition expenses of $8.0 million.
Proforma Financial Information
The following unaudited pro forma statements of operations presented for the three and nine months ended September 30, 2015 and 2014, have been prepared for Columbia Property Trust to give effect to the acquisitions of the 315 Park Avenue South Building, the 1881 Campus Commons Building, the 116 Huntington Avenue Building, the 229 West 43rd Street Building, the 221 Main Street Building, and the 650 California Street Building as if the acquisitions occurred on January 1, 2014. The following unaudited pro forma financial results for Columbia Property Trust have been prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had these acquisitions been consummated as of January 1, 2014 (in thousands).
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
Revenues
$
140,225

 
$
152,628

 
$
450,020

 
$
454,665

Net income (loss)
$
21,534

 
$
17,641

 
$
36,183

 
$
(1,841
)
Net income (loss) per share - basic
$
0.17

 
$
0.14

 
$
0.29

 
$
(0.02
)
Net income (loss) per share - diluted
$
0.17

 
$
0.14

 
$
0.29

 
$
(0.02
)


Page 17


2015 Dispositions
During the nine months ended September 30, 2015, Columbia Property Trust closed on the following transactions:
11 Property Sale
On July 1, 2015, Columbia Property Trust sold 11 properties to an unaffiliated third party for $433.3 million, exclusive of closing costs (the "11 Property Sale"), which resulted in a gain of $20.2 million. The proceeds for 10 of the properties were available on July 1, 2015, and the remaining proceeds were available on August 3, 2015. For the period from January 1, 2015 through July 1, the aggregate net income, excluding the gain on sale, for the properties included in the 11 Property Sale was $6.5 million; and for the nine months ended September 30, 2014, the net income for the properties included in the 11 Property Sale was $9.4 million. The following properties comprise the 11 Property Sale:
170 Park Avenue
Bannockburn Lake III
Acxiom
180 Park Avenue
544 Lakeview
215 Diehl Road
Robbins Road
Highland Landmark III
1580 West Nursery
550 King Street
The Corridors III
 
2014 Dispositions
During the nine months ended September 30, 2014, Columbia Property Trust disposed of the following properties:
160 Park Avenue Building
On June 4, 2014, Columbia Property Trust closed on the sale of the 160 Park Avenue Building in Florham Park, New Jersey, for $10.2 million, exclusive of transaction costs. Columbia Property Trust recognized an impairment loss of $13.6 million related to this building in the first quarter of 2014, as further described in Note 2, Significant Accounting Policies.
200 South Orange Building
On June 30, 2014, Columbia Property Trust closed on the sale of the 200 South Orange Building in Orlando, Florida, for $18.8 million, exclusive of transaction costs. This transaction resulted in a $1.4 million impairment loss (see Note 2, Summary of Significant Accounting Policies, for additional details).
7031 Columbia Gateway Drive Building
On July 1, 2014, Columbia Property Trust closed on the sale of the 7031 Columbia Gateway Drive Building in Columbia, Maryland, for $59.5 million, exclusive of transaction costs, yielding a gain on sale of real estate assets of $7.8 million in the third quarter of 2014.
9 Technology Drive Building
On August 22, 2014, Columbia Property Trust closed on the sale of the 9 Technology Drive Building in Westborough, Massachusetts, for $47.0 million, exclusive of purchase price adjustments and transaction costs, yielding a gain on sale of real estate assets of $10.8 million in the third quarter of 2014.


Page 18


4.    Line of Credit, Term Loans, and Notes Payable
As of September 30, 2015 and December 31, 2014, Columbia Property Trust had the following line of credit, term loans, and notes payable indebtedness (excluding bonds payable; see Note 5, Bonds Payable) in thousands:
Facility
 
September 30,
2015
 
December 31,
2014
Market Square Buildings mortgage note
 
$
325,000

 
$
325,000

$300 Million Term Loan
 
300,000

 

$300 Million Bridge Loan
 
300,000

 

Revolving Credit Facility
 
264,000

 

$150 Million Term Loan
 
150,000

 

650 California Street Building mortgage note
 
129,395

 
130,000

221 Main Street Building mortgage note
 
73,000

 
73,000

263 Shuman Boulevard Building mortgage note
 
49,000

 
49,000

SanTan Corporate Center mortgage notes
 
39,000

 
39,000

One Glenlake Building mortgage note
 
29,992

 
32,074

$450 Million Term Loan
 

 
450,000

333 Market Street Building mortgage note
 

 
206,810

100 East Pratt Street Building mortgage note
 

 
105,000

215 Diehl Road Building mortgage note
 

 
21,000

Total indebtedness
 
$
1,659,387

 
$
1,430,884

Term Loans
On July 30, 2015, Columbia Property Trust replaced its $450 Million Term Loan, which had a maturity date of February 3, 2016, with two separate term loans. Columbia Property Trust entered into a $300 million unsecured, single-draw term loan (the "$300 Million Term Loan") with a syndicate of banks with J.P. Morgan Securities LLC and PNC Capital Markets LLC serving as joint lead arrangers and joint book runners. The $300 Million Term Loan matures on July 31, 2020. Columbia Property Trust also entered into a $150 million unsecured, single-draw term loan (the "$150 Million Term Loan") with a syndicate of banks with Wells Fargo Securities, LLC, U.S. Bank National Association, and Regions Capital Markets serving as joint lead arrangers and joint bookrunners. The $150 Million Term Loan matures on July 29, 2022.
The $300 Million Term Loan bears interest, at Columbia Property Trust's option, at LIBOR, plus an applicable margin ranging from 0.90% to 1.75% for LIBOR Loans, or an alternate base rate, plus an applicable margin ranging from 0.00% to 0.75% for base rate loans, based on Columbia Property Trust's applicable credit rating. The $300 Million Term Loan and the Revolving Credit Facility, as described below, provide for four accordion options for an aggregate amount of up to $400 million, subject to certain conditions. The $150 Million Term Loan bears interest, at Columbia Property Trust's option, at LIBOR, plus an applicable margin ranging from 1.40% to 2.35% for LIBOR Loans, or a base rate, plus an applicable margin ranging from 0.40% to 1.35% for base rate loans, based on Columbia Property Trust's applicable credit rating. The interest rate on the $150 Million Term Loan has been effectively fixed at 3.52% with an interest rate swap agreement, which was designated as a cash flow hedge. The $150 Million Term Loan provides for four accordion options for an aggregate amount of $300 million, subject to certain conditions.
The $450 Million Term Loan bore interest at LIBOR, plus an applicable margin ranging from 1.15% to 1.95% for LIBOR Loans, or an alternate base rate, plus an applicable margin ranging from 0.15% to 0.95% for base rate loans, based on Columbia Property Trust's applicable credit rating. The interest rate on the $450 Million Term Loan was effectively fixed at 2.07% with an interest rate swap agreement, which was designated as a cash flow hedge. At the time the $450 Million Term Loan was replaced, the related interest rate swap was settled, resulting in a loss on interest rate swap of $1.1 million.
Revolving Credit Facility
On July 30, 2015, Columbia Property Trust amended its revolving credit facility (the "Revolving Credit Facility") with J.P. Morgan Securities LLC and PNC Capital Markets LLC serving as joint lead arrangers and joint book runners, to, among other things: (i) change the margins on the interest rate under the facility, as described below; (ii) extend the maturity date from August 2017 to July 2019 with two, six-month extension options; (iii) enable Columbia Property Trust to increase the Revolving Credit Facility


Page 19


and the $300 Million Term Loan, as described above, by an aggregate amount of up to $400 million on four occasions; and (iv) revise certain covenants under the facility.
The Revolving Credit Facility, as entered into on July 30, 2015, bears interest, at Columbia Property Trust's option, at LIBOR, plus an applicable margin ranging from 0.875% to 1.55% for LIBOR-based borrowings, or an alternate base rate, plus an applicable margin ranging from 0.00% to 0.55% for base rate borrowings, based on Columbia Property Trust's applicable credit rating. Previously, the applicable margin was a range from 1.00% to 1.70% for LIBOR-based borrowings or a range from 0.00% to 0.70% for base rate borrowings. Additionally, the per annum facility fee on the aggregate revolving commitment (used or unused) now ranges from 0.125% to 0.30%, also based on Columbia Property Trust's applicable credit rating. Prior to amendment, the per annum facility fee ranged from 0.15% to 0.35%.
$300 Million Bridge Loan
On August 4, 2015, Columbia Property Trust took out a $300.0 million, six-month, unsecured loan with a syndicate of banks led by JPMorgan Chase Bank, N.A. (the "$300 Million Bridge Loan") to finance a portion of the 229 West 43rd Street Building acquisition. At Columbia Property Trust's option, borrowings under the $300 Million Bridge Loan bear interest at either (i) an alternate base rate plus an applicable margin based on five stated pricing levels ranging from 0.00% to 0.75% or (ii) LIBOR plus an applicable margin based on five stated pricing levels ranging from 0.90% to 1.75%, in each case based on Columbia Property Trust's credit rating.
The $300 Million Bridge Loan matures on February 4, 2016, with a six-month extension at the option of Columbia Property Trust, and may be prepaid by Columbia Property Trust at any time without premium or penalty. In addition, amounts under the $300 Million Bridge Loan must be repaid by Columbia Property Trust with the net cash proceeds of certain financing activities and asset sales, including (i) the issuance of common or preferred equity securities, (ii) the incurrence of mortgage indebtedness on any property, (iii) the incurrence of unsecured indebtedness, or (iv) the sale of certain real estate assets or any equity interests.
Fair Value of Debt
The estimated fair value of Columbia Property Trust's line of credit and notes payable as of September 30, 2015 and December 31, 2014, was approximately $1,690.2 million and $1,465.2 million, respectively. Columbia Property Trust estimated the fair value of its Revolving Credit Facility (the "Revolving Credit Facility") by obtaining estimates for similar facilities from multiple market participants as of the respective reporting dates. Therefore, the fair values determined are considered to be based on observable market data for similar instruments (Level 2). The fair values of all other debt instruments were estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowing arrangements as of the respective reporting dates. The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized.
Debt Covenants
The $300 Million Term Loan, the $150 Million Term Loan, the Revolving Credit Facility, and the $300 Million Bridge Loan (collectively, the "Debt Facilities") contain representations and warranties, financial and other affirmative and negative covenants, events of defaults, and remedies typical for these types of facilities. The financial covenants in the Debt Facilities:
(a)
limit the ratio of secured debt to total asset value, as defined therein, to 40% or less;
(b)
require the fixed charge coverage ratio, as defined therein, to be at least 1.50:1.00;
(c)
limit the ratio of debt to total asset value, as defined therein, to 60% or less;
(d)
require the ratio of unencumbered adjusted net operating income, as defined therein, to unsecured interest expense, as defined therein, to be at least 1.66:1.00;
(e)
require the ratio of unencumbered asset value, as defined therein, to total unsecured debt, as defined therein, to be at least 1.75:1.00; and
(f)
require maintenance of certain minimum tangible net worth balances.
The $300 Million Bridge Loan also contains customary negative covenants applicable to Columbia Property Trust, Columbia Property Trust OP, and certain subsidiaries, including, among other things, restrictions on indebtedness, liens, restricted payments, sales of assets and transactions with affiliates, and customary events of default, including but not limited to, the nonpayment of principal or interest, material inaccuracy of representations and warranties, violations of covenants, cross-default to material indebtedness, bankruptcy and insolvency, and material adverse judgments. As of September 30, 2015, Columbia Property Trust believes it was in compliance with the restrictive financial covenants on its Debt Facilities and notes payable obligations.
Interest Paid and Capitalized


Page 20


During the nine months ended September 30, 2015 and 2014, Columbia Property Trust made interest payments totaling approximately $43.4 million and $40.9 million, respectively, of which approximately $0.4 million was capitalized during the nine months ended September 30, 2015, and no interest was capitalized during the nine months ended September 30, 2014.
Debt Repayments
On January 6, 2015, Columbia Property Trust entered into a $300 million, six-month, unsecured loan to finance a portion of the real estate assets purchased in January 2015. On March 12, 2015, Columbia Property Trust fully repaid the loan with proceeds from the 2025 Bonds Payable, as described in Note 5, Bonds Payable, at which time Columbia Property Trust recognized a loss on early extinguishment of debt of $0.5 million as a result of writing off the unamortized deferred financing costs. The loan was set to mature on July 6, 2015.
On June 1, 2015, Columbia Property Trust repaid the mortgage note for the 333 Market Street Building for $206.5 million and the related interest rate swap agreement expired. The maturity date for the 333 Market Street Building mortgage note was July 1, 2015.
On July 1, 2015, in connection with the 11 Property Sale, Columbia Property Trust repaid the mortgage note for the 215 Diehl Road Building, one of the properties included in the 11 Property Sale, for $21.0 million. As a result, Columbia Property Trust recognized a loss on early extinguishment of debt of $2.1 million, primarily as a result of a prepayment premium. The maturity date for the 215 Diehl Road Building mortgage note was July 1, 2017.
On July 13, 2015, Columbia Property Trust repaid the $105.0 million mortgage note on the 100 East Pratt Street Building at par. The maturity date for the 100 East Pratt Street Building mortgage note was June 11, 2017.
5.    Bonds Payable
In March 2015, Columbia Property Trust OP issued $350.0 million of ten-year, unsecured 4.150% senior notes at 99.859% of their face value (the "2025 Bonds Payable"), which are guaranteed by Columbia Property Trust. Columbia Property Trust OP received proceeds from the 2025 Bonds Payable, net of fees, of $347.2 million. The 2025 Bonds Payable require semi-annual interest payments in April and October based on a contractual annual interest rate of 4.150%. In the accompanying consolidated balance sheets, the 2025 Bonds Payable are shown net of the initial issuance discount of approximately $0.5 million, which will be amortized to interest expense over the term of the 2025 Bonds Payable using the effective interest method. The principal amount of the 2025 Bonds Payable is due and payable on the maturity date, April 1, 2025.
In 2011, Columbia Property Trust OP issued $250.0 million of seven-year, unsecured 5.875% senior notes at 99.295% of their face value (the "2018 Bonds Payable"), which are guaranteed by Columbia Property Trust. Columbia Property Trust OP received proceeds from the 2018 Bonds Payable, net of fees, of $246.7 million. The 2018 Bonds Payable require semi-annual interest payments in April and October based on a contractual annual interest rate of 5.875%, which is subject to adjustment in certain circumstances. In the accompanying consolidated balance sheets, the 2018 Bonds Payable are shown net of the initial issuance discount of approximately $1.8 million, which is amortized to interest expense over the term of the 2018 Bonds Payable using the effective interest method. The principal amount of the 2018 Bonds Payable is due and payable on the maturity date, April 1, 2018.
Interest payments of $7.3 million were made on the 2018 Bonds Payable during the nine months ended September 30, 2015 and 2014, respectively. The first interest payment on the 2025 Bonds Payable will be made in October 2015. Columbia Property Trust is subject to substantially similar covenants under the 2025 Bonds Payable and the 2018 Bonds Payable. As of September 30, 2015, Columbia Property Trust believes it was in compliance with the restrictive covenants on the 2025 Bonds Payable and the 2018 Bonds Payable.
As of September 30, 2015, the estimated fair value of the 2025 Bonds Payable and the 2018 Bonds Payable was approximately $602.4 million. As of December 31, 2014, the estimated fair value of the 2018 Bonds Payable was $250.6 million. The fair value of the 2025 Bonds Payable and the 2018 Bonds Payable was estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowings as the 2025 Bonds Payable and the 2018 Bonds Payable arrangements as of the respective reporting dates (Level 2). The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized.


Page 21


6.
Commitments and Contingencies
Commitments Under Existing Lease Agreements
Certain lease agreements include provisions that, at the option of the tenant, may obligate Columbia Property Trust to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. As of September 30, 2015, no such options have been exercised that have not been materially satisfied.
Litigation
Columbia Property Trust is subject to various legal proceedings, claims, and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any reasonably possible loss relating to these matters using the latest information available. Columbia Property Trust records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, Columbia Property Trust accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, Columbia Property Trust accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, Columbia Property Trust discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, Columbia Property Trust discloses the nature and estimate of the possible loss of the litigation. Columbia Property Trust does not disclose information with respect to litigation where the possibility of an unfavorable outcome is considered to be remote. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business, or financial condition of Columbia Property Trust. Columbia Property Trust is not currently involved in any legal proceedings of which management would consider the outcome to be reasonably likely to have a material adverse effect on the results of operations, liquidity, or financial condition of Columbia Property Trust.
7.
Stockholders' Equity
Long-Term Incentive Plan
Columbia Property Trust maintains a long-term incentive plan that provides for grants of stock to be made to certain employees and independent directors of Columbia Property Trust (the "LTIP"). Columbia Property Trust's shareholders approved the LTIP in July 2013, and a total of 2,000,000 shares are authorized and reserved for issuance under the LTIP.
On January 21, 2015, Columbia Property Trust granted 123,187 shares of common stock to employees, net of 11,368 shares withheld to settle the related tax liability, under the LTIP (the "2014 LTIP Employee Grant"), of which 25% vested upon grant, and the remaining shares will vest ratably, with the passage of time, on January 31, 2016, 2017, and 2018. Employees will receive quarterly dividends related to their entire grant, including the unvested shares, on each dividend payment date. A summary of the activity for the employee stock grants under the LTIP for the nine months ended September 30, 2015 follows:
 
 
For the Nine Months Ended
September 30, 2015
 
 
Shares
(in thousands)
 
Weighted-Average
Grant-Date
Fair Value(1)
Unvested shares - beginning of period
 
104

 
$
24.82

Granted
 
123

 
$
24.40

Vested
 
(74
)
 
$
24.60

Forfeited
 
(2
)
 
$
24.56

Unvested shares - end of period(2)
 
151

 
$
24.59

(1) 
Columbia Property Trust determined the weighted-average grant-date fair value using the market closing price on the date of the respective grants.
(2) 
As of September 30, 2015, we expect approximately 143,000 of the 151,000 unvested shares to ultimately vest, assuming a forfeiture rate of 5.0%, which was determined based on peer company data, adjusted for the specifics of the LTIP.


Page 22


During the nine months ended September 30, 2015 and 2014, Columbia Property Trust paid quarterly installments of the independent directors' annual equity retainers by granting shares to the independent directors, which vested at the time of grant. A summary of these grants, made under the LTIP, follows:
Date of Grant
 
Shares
 
Grant-Date Fair Value
2015 Director Grants:
 
 
 
 
January 2, 2015
 
5,850

 
$
25.75

April 1, 2015
 
4,995

 
$
27.16

July 1, 2015
 
4,144

 
$
24.84

October 1, 2015
 
4,571

 
$
23.40

2014 Director Grants:
 
 
 
 
January 21, 2014
 
3,344

 
$
24.82

April 1, 2014
 
2,968

 
$
27.22

July 1, 2014
 
3,016

 
$
25.78

October 1, 2014
 
4,960

 
$
23.89

For the three and nine months ended September 30, 2015 and 2014, Columbia Property Trust incurred the stock-based compensation expense related to the following events (in thousands):
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2015
 
2014
 
2015
 
2014
Amortization of unvested LTIP awards
$
381

 
$
185

 
$
1,308

 
$
645

Future employee awards(1)
412

 
225

 
1,228

 
624

Issuance of shares to independent directors
103

 
78

 
389

 
242

Total stock-based compensation expense
$
896

 
$
488

 
$
2,925

 
$
1,511

(1)
These future employee awards relate to service during the period, to be granted in January of the subsequent year, with 25% vesting on the date of grant, and the remaining 75% vesting ratably on January 31st of each of the following three years.
These expenses are included in general and administrative expenses in the accompanying consolidated statements of operations. As of September 30, 2015 and December 31, 2014, there was $2.5 million and $1.7 million, respectively, of unrecognized compensation costs related to unvested awards under the LTIP. This amount will be amortized over the respective vesting period, ranging from one to three years at the time of grant.


Page 23


8.     Supplemental Disclosures of Noncash Investing and Financing Activities
Outlined below are significant noncash investing and financing activities for the nine months ended September 30, 2015 and 2014 (in thousands): 
 
Nine Months Ended
September 30,
 
2015
 
2014
Investments in real estate funded with other assets
$
27,000

 
$
3,807

Other assets assumed at acquisition
$
7,785

 
$
2,493

Other liabilities assumed at acquisition
$
4,765

 
$
2,004

Notes payable assumed at acquisition
$

 
$
203,000

Discount on issuance of bonds payable
$
494

 
$

Amortization of net (premiums) discounts on debt
$
(94
)
 
$
270

Market value adjustments to interest rate swaps that qualify for hedge accounting treatment
$
(3,552
)
 
$
1,061

Accrued capital expenditures and deferred lease costs
$
16,444

 
$
16,808

Accrued deferred financing costs
$
2

 
$
31

Common stock issued to employees and directors, and amortized (net of amounts withheld for income taxes)
$
2,925

 
$
1,197

 
9.
Discontinued Operations
As a result of implementing Accounting Standards Update 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components on an Entity ("ASU 2014-08") effective April 1, 2014, beginning in the second quarter of 2014, the operating results for properties sold are included in continuing operations. Properties sold prior to implementing ASU 2014-08 are included in discontinued operations in the accompanying consolidated statements of operations for all periods presented.
Columbia Property Trust sold 18 properties for $521.5 million in November 2013, resulting in a net loss of $0.4 million (the "18 Property Sale"). The activity for the three and nine months ended September 30, 2014, relates to post-closing adjustments and true ups related to this 18 Property Sale.
 
For the
Three Months Ended
September 30, 2014
 
For the
Nine Months Ended
September 30, 2014
Revenues:
 
 
 
Rental income
$

 
$
4

Tenant reimbursements
15

 
115

 
15

 
119

Expenses:
 
 
 
Property operating costs
7

 
(258
)
Asset and property management fees

 
7

General and administrative
548

 
676

Total expenses
555

 
425

Operating loss
(540
)
 
(306
)
Other income (expense):
 
 
 
Interest and other income

 
3

Operating loss from discontinued operations
(540
)
 
(303
)
Loss on disposition of discontinued operations

 
(978
)
Loss from discontinued operations
$
(540
)

$
(1,281
)


Page 24


10.    Earnings Per Share
For the three and nine months ended September 30, 2015 and 2014, the basic and diluted earnings-per-share computations, net income, and income from continuing operations have been reduced for the dividends paid on unvested shares related to unvested awards under the LTIP and future employee awards, which relate to service in the current period and will be granted in January of the subsequent year. The following table reconciles the numerator for the basic and diluted earnings-per-share computations shown on the consolidated statements of income for the three and nine months ended September 30, 2015 and 2014, respectively (in thousands):
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2015
 
2014
 
2015
 
2014
Net income
 
$
20,143

 
$
24,988

 
$
34,450

 
$
36,409

Distributions paid on unvested shares
 
(45
)
 
(32
)
 
(139
)
 
(96
)
Net income used to calculate basic and diluted earnings per share
 
$
20,098

 
$
24,956


$
34,311


$
36,313

The following table reconciles the denominator for the basic and diluted earnings per-share computations shown on the consolidated statements of income for the three and nine months ended September 30, 2015 and 2014, respectively (in thousands):
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2015
 
2014
 
2015
 
2014
Weighted-average common shares - basic
 
124,359

 
124,863

 
124,359

 
124,858

Plus incremental weighted-average shares from time-vested conversions, less assumed share repurchases:
 
 
 
 
 
 
 
 
Previously granted LTIP awards, unvested
 
37

 
29

 
28

 
26

Future LTIP awards for 2015
 
64

 
46

 
58

 
37

Weighted-average common shares - diluted
 
124,460

 
124,938

 
124,445

 
124,921

11.     Financial Information for Parent Guarantor, Issuer Subsidiary, and Non-Guarantor Subsidiaries
The 2025 Bonds Payable and the 2018 Bonds Payable (see Note 5, Bonds Payable) were issued by Columbia Property Trust OP, and are guaranteed by Columbia Property Trust. In accordance with SEC Rule 3-10(c), Columbia Property Trust includes herein condensed consolidating financial information in lieu of separate financial statements of the subsidiary issuer (Columbia Property Trust OP), as defined in the bond indentures, because all of the following criteria are met:
(1)
The subsidiary issuer (Columbia Property Trust OP) is 100% owned by the parent company guarantor (Columbia Property Trust);
(2)
The guarantee is full and unconditional; and
(3)
No other subsidiary of the parent company guarantor (Columbia Property Trust) guarantees the 2025 Bonds Payable or the 2018 Bonds Payable.
Columbia Property Trust uses the equity method with respect to its investment in subsidiaries included in its condensed consolidating financial statements. Set forth below are Columbia Property Trust's condensed consolidating balance sheets as of September 30, 2015 and December 31, 2014 (in thousands), as well as its condensed consolidating statements of operations and its condensed consolidating statements of comprehensive income for the three and nine months ended September 30, 2015 and 2014 (in thousands); and its condensed consolidating statements of cash flows for the nine months ended September 30, 2015 and 2014 (in thousands).


Page 25


Condensed Consolidating Balance Sheets (in thousands)
 
As of September 30, 2015
 
Columbia Property Trust
(Parent)
(Guarantor)
 
Columbia
 Property
Trust OP 
(the Issuer)
 
Non-
Guarantors
 
Consolidating
adjustments
 
Columbia Property Trust
(Consolidated)
Assets:
 
 
 
 
 
 
 
 
 
Real estate assets, at cost:
 
 
 
 
 
 
 
 
 
Land
$

 
$
6,241

 
$
1,050,034

 
$

 
$
1,056,275

Buildings and improvements, net

 
29,438

 
3,292,803

 

 
3,322,241

Intangible lease assets, net

 

 
280,049

 

 
280,049

Construction in progress

 
304

 
45,319

 

 
45,623

Total real estate assets

 
35,983

 
4,668,205

 

 
4,704,188

Cash and cash equivalents
2,520

 
12,409

 
29,894

 

 
44,823

Investment in subsidiaries
2,322,592

 
1,923,790

 

 
(4,246,382
)
 

Tenant receivables, net of allowance

 
12

 
10,806

 

 
10,818

Straight-line rent receivable

 
1,228

 
111,522

 

 
112,750

Prepaid expenses and other assets
317,188

 
261,796

 
24,292

 
(573,640
)
 
29,636

Deferred financing costs, net

 
11,840

 
1,879

 

 
13,719

Intangible lease origination costs, net

 

 
87,710

 

 
87,710

Deferred lease costs, net

 
1,654

 
97,381

 

 
99,035

Investment in development authority bonds

 

 
120,000

 

 
120,000

Total assets
$
2,642,300

 
$
2,248,712

 
$
5,151,689

 
$
(4,820,022
)
 
$
5,222,679

Liabilities:
 
 
 
 
 
 
 
 
 
Line of credit, term loans, and notes payable
$

 
$
1,014,000

 
$
1,216,558

 
$
(571,171
)
 
$
1,659,387

Bonds payable, net

 
598,904

 

 

 
598,904

Accounts payable, accrued expenses, and accrued capital expenditures

 
23,727

 
86,376

 

 
110,103

Due to affiliates

 
26

 
2,443

 
(2,469
)
 

Deferred income

 
249

 
24,983

 

 
25,232

Intangible lease liabilities, net

 

 
66,753

 

 
66,753

Obligations under capital leases

 

 
120,000

 

 
120,000

Total liabilities

 
1,636,906

 
1,517,113

 
(573,640
)
 
2,580,379

Equity:
 
 
 
 
 
 
 
 
 
Total equity
2,642,300

 
611,806

 
3,634,576

 
(4,246,382
)
 
2,642,300

Total liabilities and equity
$
2,642,300

 
$
2,248,712

 
$
5,151,689

 
$
(4,820,022
)
 
$
5,222,679






Page 26


Condensed Consolidating Balance Sheets (in thousands)
 
As of December 31, 2014
 
Columbia Property Trust
(Parent)
(Guarantor)
 
Columbia
Property
Trust OP 
(the Issuer)
 
Non-
Guarantors
 
Consolidating
adjustments
 
Columbia Property Trust
(Consolidated)
Assets:
 
 
 
 
 
 
 
 
 
Real estate assets, at cost:
 
 
 
 
 
 
 
 
 
Land
$

 
$
6,241

 
$
778,860

 
$

 
$
785,101

Building and improvements, net

 
29,899

 
2,996,532

 

 
3,026,431

Intangible lease assets, net

 

 
247,068

 

 
247,068

Construction in progress

 
433

 
17,529

 

 
17,962

Total real estate assets

 
36,573

 
4,039,989

 

 
4,076,562

Cash and cash equivalents
119,488

 
10,504

 
19,798

 

 
149,790

Investment in subsidiaries
2,409,941

 
2,120,018

 

 
(4,529,959
)
 

Tenant receivables, net of allowance

 
246

 </