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


	March 31, 2022		December 31, 2021
Land	$	2,168,530	$	2,151,327
Buildings and improvements	9,664,500		9,525,858
Real estate under construction	115,198		114,549
Less: Accumulated depreciation	(1,497,655)		(1,448,020)
	$	10,450,573	$	10,343,714

During the three months ended March 31, 2022, 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 2.0% to $1.1101 from $1.1326. 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 $78.0 million from December 31, 2021 to March 31, 2022.

In connection with a change in lease classification due to termination of the underlying lease, we reclassified one property with an aggregate carrying value of $17.3 million from Net investments in direct financing leases and loans receivable to Land, buildings and improvements during the three months ended March 31, 2022 (Note 5).

Depreciation expense, including the effect of foreign currency translation, on our buildings and improvements subject to operating leases was $72.0 million and $67.0 million for the three months ended March 31, 2022 and 2021, respectively.

During the three months ended March 31, 2022, we entered into the following investments, which were deemed to be real estate asset acquisitions (dollars in thousands):


Property Location(s)	Number of Properties	Date of Acquisition	Property Type	Total Capitalized Costs
Pleasant Prairie, Wisconsin	1	1/10/2022	Industrial	$	20,024
Various, Spain (a)	26	2/3/2022	Funeral Home	146,364
Various, Denmark (a) (b)	8	2/11/2022	Retail	33,976
Laval, Canada (a)	1	2/18/2022	Industrial	21,459
Chattanooga, Tennessee (c)	1	3/4/2022	Warehouse	43,198
	37			$	265,021

(b)We also entered into purchase agreements to acquire three additional retail facilities leased to this tenant totaling $10.6 million (based on the exchange rate of the Danish krone at March 31, 2022), which is expected to be completed in 2022.

(c)We also committed to fund an additional $22.8 million for an expansion at the facility, which is expected to be completed in the second quarter of 2023.

The aggregate purchase price allocation for investments disclosed above is as follows (dollars in thousands):


	Total Capitalized Costs
Land	$	39,919
Buildings and improvements	196,710
Intangibles:
In-place lease (weighted-average expected life of 23.9 years)	31,771
Below-market rent (expected life of 6.8 years)	(3,379)
	$	265,021

During the three months ended March 31, 2022, we capitalized real estate under construction totaling $25.9 million. The number of construction projects in progress with balances included in real estate under construction was six as of both March 31, 2022 and December 31, 2021. Aggregate unfunded commitments totaled approximately $53.8 million and $55.3 million as of March 31, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022, we completed the following construction projects (dollars in thousands):

Property Location(s)

Primary Transaction Type

Number of Properties

Date of Completion

Property Type

Total Capitalized Costs (a)

Hurricane, Utah

Expansion

3/8/2022

Warehouse

20,517

Breda, Netherlands (a)

Expansion

3/18/2022

Warehouse

4,721

25,238

During the three months ended March 31, 2022, we committed to fund a build-to-suit project for an outdoor advertising structure in Mount Laurel, New Jersey, for an aggregate amount of $2.1 million. We currently expect to complete the project in the third quarter of 2022.

Capitalized interest incurred during construction was $0.7 million for both the three months ended March 31, 2022 and 2021, which reduces Interest expense in the consolidated statements of income.

During the three months ended March 31, 2022, we sold four 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 $7.0 million from December 31, 2021 to March 31, 2022.

2022 — For the three months ended March 31, 2022, lease termination income and other on our consolidated statements of income included: (i) lease termination income of $8.2 million received from a tenant; (ii) other lease-related settlements totaling $4.7 million; and (iii) income from a parking garage attached to one of our net-leased properties totaling $0.6 million.

2021 — For the three months ended March 31, 2021, lease termination income and other on our consolidated statements of income included: (i) lease-related settlements totaling $0.8 million; and (ii) income from a parking garage attached to one of our net-leased properties totaling $0.5 million.

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


	Three Months Ended March 31,
	2022		2021
Lease income — fixed	$	276,141	$	257,327
Lease income — variable (a)	31,584		27,338
Total operating lease income	$	307,725	$	284,665

(a)Includes (i) rent increases based on changes in the U.S. Consumer Price Index and other comparable indices and (ii) reimbursements for property taxes, insurance, and common area maintenance services.

At both March 31, 2022 and December 31, 2021, Land, buildings and improvements attributable to operating properties consisted of our investments in ten consolidated self-storage properties and one consolidated hotel. Below is a summary of our Land, buildings and improvements attributable to operating properties (in thousands):


	March 31, 2022		December 31, 2021
Land	$	10,452	$	10,452
Buildings and improvements	73,216		73,221
Less: Accumulated depreciation	(17,368)		(16,750)
	$	66,300	$	66,923

Depreciation expense on our buildings and improvements attributable to operating properties was $0.7 million for both the three months ended March 31, 2022 and 2021.


	March 31, 2022		December 31, 2021
Land, buildings and improvements	$	—	$	10,628
Accumulated depreciation and amortization	—		(2,359)
Assets held for sale, net	$	—	$	8,269

At December 31, 2021, we had two properties classified as Assets held for sale, net, with an aggregate carrying value of $8.3 million. These properties were sold in the first quarter of 2022.