Acquisitions and Dispositions

9 Months Ended

Sep. 30, 2020

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 $85.5 million and $146.6 million for building acquisitions during the nine months ended September 30, 2020 and September 30, 2019, respectively.

We acquired five properties during the nine months ended September 30, 2020. We determined that these 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 and liabilities (in thousands) for these acquisitions during the nine months ended September 30, 2020:


Real estate assets	$	115,257
Lease related intangible assets	4,890
Total acquired assets	120,147
Secured debt	25,455
Below market lease liability	8,079
Other liabilities	371
Total assumed liabilities	33,905
Fair value of acquired net assets	$	86,242

The leases in the acquired properties had a weighted average remaining life at acquisition of approximately 6.9 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, 2020 are as follows:


	Low	High
Exit capitalization rate	4.7%	5.5%
Net rental rate per square foot	$7.50	$11.04

Capitalized acquisition costs were insignificant and the fair value of the five properties acquired during the nine months ended September 30, 2020 was substantially the same as the cost of acquisition.

Dispositions

Dispositions of buildings and undeveloped land generated net cash proceeds of $55.7 million and $379.8 million during the nine months ended September 30, 2020 and 2019, respectively. The number of buildings sold, as well as their classification between continuing and discontinued operations, is disclosed in Note 12.

During the nine months ended September 30, 2020, we collected the remaining $110.0 million of principal on our outstanding notes receivable, which was related to the sale of our medical office portfolio during 2017.