Land and buildings leased to others, which are subject to operating leases, and real estate under construction, are summarized as follows (in thousands):



	June 30, 2020			December 31, 2019
Land	$	1,896,845		$	1,875,065
Buildings and improvements	8,242,592			7,828,439
Real estate under construction	64,802			69,604
Less: Accumulated depreciation	(1,072,469		)	(950,452		)
	$	9,131,770		$	8,822,656

During the six months ended June 30, 2020, the U.S. dollar strengthened against the euro, as the end-of-period rate for the U.S. dollar in relation to the euro decreased by 0.3% to $1.1198 from $1.1234. As a result of this fluctuation in foreign currency exchange rates, the carrying value of our Land, buildings and improvements subject to operating leases decreased by $45.5 million from December 31, 2019 to June 30, 2020.

In connection with changes in lease classifications due to modifications of the underlying leases, we reclassified 53 properties with an aggregate carrying value of $118.5 million from Net investments in direct financing leases to Land, buildings and improvements during the six months ended June 30, 2020 (Note 5).

Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements subject to operating leases was $62.1 million and $56.5 million for the three months ended June 30, 2020 and 2019, respectively, and $128.0 million and $111.7 million for the six months ended June 30, 2020 and 2019, respectively.

During the six months ended June 30, 2020, we entered into the following investments, which were deemed to be real estate asset acquisitions, at a total cost of $270.6 million, including land of $33.1 million, buildings of $193.3 million (including capitalized acquisition-related costs of $8.6 million), and net lease intangibles of $44.2 million (dollars in thousands):



Property Location(s)	Number of Properties	Date of Acquisition	Property Type	Total Capitalized Costs
Newark, United Kingdom ^(a)	1	1/6/2020	Warehouse	$	111,546
Aurora, Oregon ^(b)	1	1/24/2020	Industrial	28,755
Vojens, Denmark ^{(a) (c)}	1	1/31/2020	Warehouse	10,611
Kitzingen, Germany ^(a)	1	3/9/2020	Office	53,666
Knoxville, Tennessee	1	6/25/2020	Warehouse	66,045
				$	270,623

The acquired net lease intangibles are comprised of (i) in-place lease intangible assets totaling $36.0 million, which have a weighted-average expected life of 18.7 years and (ii) above-market rent intangible assets totaling $8.2 million, which have a weighted average expected life of 18.7 years.

During the six months ended June 30, 2020, we capitalized real estate under construction totaling $139.8 million. The number of construction projects in progress with balances included in real estate under construction was four and three as of June 30, 2020 and December 31, 2019, respectively. Aggregate unfunded commitments totaled approximately $109.2 million and $227.8 million as of June 30, 2020 and December 31, 2019, respectively.

During the six months ended June 30, 2020, we completed the following construction projects, at an aggregate cost of $140.0 million (dollars in thousands):

Property Location(s)

Primary Transaction Type

Number of Properties

Date of Completion

Property Type

Total Capitalized Costs ^(a)

Westborough, Massachusetts

Redevelopment

1/15/2020

Laboratory

53,060

San Antonio, Texas ^(b)

Build-to-Suit

6/25/2020

Industrial

78,726

Marktheidenfeld, Germany ^(c)

Expansion

6/30/2020

Warehouse

8,254

140,040

During the six months ended June 30, 2020, we committed $26.8 million (based on the exchange rate of the euro at June 30, 2020) to fund an expansion project for an existing tenant at a warehouse facility in Azambuja, Portugal, which we currently expect to complete in the third quarter of 2020.

During the six months ended June 30, 2020, we sold three properties, which were classified as Land, buildings and improvements subject to operating leases. As a result, the carrying value of our Land, buildings and improvements subject to operating leases decreased by $2.1 million from December 31, 2019 to June 30, 2020.

Lease income related to operating leases recognized and included in the consolidated statements of income is as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Lease income — fixed	$	236,997	$	222,057	$	475,965	$	437,175
Lease income — variable ^(a)	24,472		22,277		47,552		43,539
Total operating lease income ^(b)	$	261,469	$	244,334	$	523,517	$	480,714

In the second quarter of 2020, our lease of new office space in New York commenced, with a lease maturity date of March 2036. As a result, we capitalized an office lease right-of-use asset and corresponding operating lease liability, which had carrying values of $60.6 million and $60.7 million, respectively, as of June 30, 2020, and are included within Other assets, net and Accounts payable, accrued expenses and other liabilities, respectively, on our consolidated balance sheets.

At both June 30, 2020, and December 31, 2019, Land, buildings and improvements attributable to operating properties consisted of our investments in ten consolidated self-storage properties and one consolidated hotel. As of December 31, 2019, we reclassified another consolidated hotel to Assets held for sale, net and sold it in January 2020, as described below. Below is a summary of our Land, buildings and improvements attributable to operating properties (in thousands):



	June 30, 2020			December 31, 2019
Land	$	10,452		$	10,452
Buildings and improvements	72,884			72,631
Less: Accumulated depreciation	(12,593		)	(11,241		)
	$	70,743		$	71,842

Depreciation expense on our buildings and improvements attributable to operating properties was $0.7 million and $2.5 million for the three months ended June 30, 2020 and 2019, respectively, and $1.4 million and $5.3 million for the six months ended June 30, 2020 and 2019, respectively.



	June 30, 2020		December 31, 2019
Land, buildings and improvements	$	—	$	105,573
Accumulated depreciation and amortization	—		(1,563		)
Assets held for sale, net	$	—	$	104,010

At December 31, 2019, we had one hotel operating property classified as Assets held for sale, net, with an aggregate carrying value of $104.0 million. The property was sold in January 2020 (Note 14).