Quarterly report pursuant to Section 13 or 15(d)

Real Estate Investments and Related Intangibles (Tables)

v3.24.3
Real Estate Investments and Related Intangibles (Tables)
 9 Months Ended
Sep. 30, 2024
Real Estate [Abstract]  
Schedule of Property Acquired
The following table presents the allocation of the purchase consideration and capitalized transaction costs to the assets acquired and liabilities assumed based on their relative fair values during the nine months ended September 30, 2024 (in thousands):
Real estate investment, at cost:
Land $ 12,250 
Building, fixtures and improvements 25,269 
Total real estate investment, at cost 37,519 
Acquired intangible assets:
Intangible lease asset 13,847 
Assumed intangible liabilities:
Below-market lease liability (16,632)
Net assets acquired $ 34,734 
Schedule of Property Dispositions
The following table summarizes the Company’s property dispositions during the periods indicated below (dollars in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Total dispositions —  2  1  2 
Aggregate gross sales price $ —  $ 14,050  $ 2,100  $ 14,050 
Gain on disposition of real estate assets $ —  $ 18  $ —  $ 18 
Property count —  2  —  2 
Impairments on disposition of real estate assets $ —  $ —  $ 20  $ — 
Property count —  —  1  — 
Schedule of Intangible Lease Assets and Liabilities
Intangible lease assets and liabilities consisted of the following as of the periods indicated below (in thousands, except weighted-average useful life):
Weighted-Average Useful Life (Years) September 30, 2024 December 31, 2023
Intangible lease assets:
In-place leases, net of accumulated amortization of $173,264 and $193,470, respectively
 9.0 $ 77,039  $ 103,997 
Leasing commissions, net of accumulated amortization of $4,253 and $3,033, respectively
 12.4 17,705  13,539 
Above-market lease assets, net of accumulated amortization of $12,671 and $10,372, respectively
 9.1 2,652  5,006 
Deferred lease incentives, net of accumulated amortization of $792 and $419, respectively
 11.0 4,105  3,822 
Total intangible lease assets, net $ 101,501  $ 126,364 
Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $25,083 and $23,176, respectively
 14.8 $ 21,328  $ 8,074 
Schedule of Future Amortization Expense of Intangible Lease Assets and Liabilities
The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of September 30, 2024 (in thousands):
Remainder of 2024 2025 2026 2027 2028 2029
In-place leases:
Total projected to be included in amortization expense $ 8,859  $ 22,537  $ 16,157  $ 8,262  $ 5,517  $ 2,797 
Leasing commissions:
Total projected to be included in amortization expense $ 486  $ 1,943  $ 1,939  $ 1,912  $ 1,692  $ 1,403 
Above-market lease assets:
Total projected to be deducted from rental revenue $ 609  $ 849  $ 680  $ 237  $ 115  $ 63 
Deferred lease incentives:
Total projected to be deducted from rental revenue $ 136  $ 527  $ 429  $ 405  $ 392  $ 381 
Below-market lease liabilities:
Total projected to be added to rental revenue $ 732  $ 2,147  $ 1,928  $ 1,766  $ 1,682  $ 1,500 
Schedule of Company's Investment in Joint Venture
The following is a summary of the Company’s investment in the Arch Street Joint Venture, as of and for the periods indicated below (dollars in thousands):
Ownership % (1)
Number of Properties Carrying Value of
Investment		 Equity in Loss, Net
Nine Months Ended
Investment September 30, 2024 September 30, 2024 December 31, 2023 September 30, 2024 September 30, 2023
Arch Street Joint Venture (2)
20% 6 $ 12,065  $ 13,549  $ (497) $ (326)
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(1)The Company’s ownership interest reflects its legal ownership interest. The Company’s legal ownership interest may, at times, not equal the Company’s economic interest because of various provisions in the joint venture agreement regarding capital contributions, distributions of cash flow based on capital account balances and allocations of profits and losses. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interest.
(2)The total carrying value of the Company’s investment in the Arch Street Joint Venture was greater than the underlying equity in net assets by less than $0.1 million and $0.4 million as of September 30, 2024 and December 31, 2023, respectively. This difference is related to a step up in the fair value of the investment in the Arch Street Joint Venture in connection with the Separation and the Distribution. The step up in fair value was allocated based on the underlying assets and liabilities of the Arch Street Joint Venture and is being amortized over the estimated useful lives of the respective assets and liabilities in accordance with the Company’s accounting policies.