Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2019

Acquisitions and dispositions for the periods presented were completed in accordance with our strategy to reposition our investment concentration among the markets in which we operate and to increase our overall investments in quality industrial projects. Transaction costs related to asset acquisitions are capitalized and transaction costs related to business combinations and dispositions are expensed.

Acquisitions

We paid cash of $146.6 million and $208.9 million for asset acquisitions during the nine months ended September 30, 2019 and 2018, respectively.

We acquired four properties during the nine months ended September 30, 2019. We determined that these four properties did not meet the definition of a business and, accordingly, we accounted for them as asset acquisitions as opposed to business combinations.

The following table summarizes amounts recognized for each major class of assets (in thousands) for these acquisitions during the nine months ended September 30, 2019:



Real estate assets	$	140,030
Lease related intangible assets	9,331
Fair value of acquired net assets	$	149,361

The leases in the acquired properties had a weighted average remaining life at acquisition of approximately 6.3 years.

Fair Value Measurements

We determine the fair value of the individual components of real estate asset acquisitions primarily through calculating the "as-if vacant" value of a building, using an income approach, which relies significantly upon internally determined assumptions. We have determined that these estimates primarily rely upon level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the "as-if vacant" value for acquisition activity during the nine months ended September 30, 2019 are as follows:



	Low	High
Exit capitalization rate	4.23%	5.26%
Net rental rate per square foot	$5.90	$15.60

Capitalized acquisition costs were insignificant and the fair value of the four properties acquired during the nine months ended September 30, 2019 was substantially the same as the cost of acquisition.

Dispositions

Dispositions of buildings and undeveloped land generated net cash proceeds of $379.8 million and $434.6 million during the nine months ended September 30, 2019 and 2018, respectively.

In September 2019, we completed the sale of 18 non-strategic industrial properties for $217.5 million in proceeds and recorded a gain on sale of $146.3 million. These properties totaled 4.1 million square feet and were located in primarily Midwest markets. Additionally, during the nine months ended September 30, 2019, we collected $145.0 million of principal on notes receivable primarily related to the sale of our medical office portfolio (the "Medical Office Portfolio Disposition") during 2017. The number of buildings sold, as well as their classification between continuing and discontinued operations, is disclosed in Note 12.