4. Non-Controlling Interest

Non-Controlling Interest in Consolidated Entities

We consolidate our Operating Partnership. Interests in the Operating Partnership represented by OP units that are owned by other limited partners are included in non-controlling interest on our consolidated balance sheets. As of December 31, 2013, the Operating Partnership had 16,954,117 OP units outstanding, of which 97.3% were owned by us and 2.7% were owned by other limited partners. The outstanding OP units held by outside limited partners are redeemable for cash, or at our option, for a like number of shares of our common stock.

In January 2014, we agreed to not exercise our right under the Operating Partnership agreement to deliver shares of our common stock in lieu of cash upon a request for redemption of OP units held by limited partners and instead we will redeem such OP units for cash until such time that we have an effective registration statement covering the OP units held by certain limited partners. As a result, we will report the non-controlling interest outside of equity beginning January 1, 2014.

The following is an analysis of the controlling and non-controlling interest from April 23, 2013, the date of the IPO, to December 31, 2013 (amounts in thousands):

Allocation of Profit and Loss and Cash Distributions prior to April 23, 2013

All profits, losses and cash distributions of the Predecessor were allocated based on the percentages as follows:

Upon the completion of the IPO, the Preferred Units and Common Units were exchanged for shares of our common stock or OP units in the Operating Partnership, or for certain unit holders, were redeemed for cash.