Investments in real estate (Notes)

12 Months Ended

Dec. 31, 2022

Our consolidated investments in real estate, including real estate assets classified as held for sale as described in Note 18 – “Assets classified as held for sale” to our consolidated financial statements, consisted of the following as of December 31, 2022 and 2021 (in thousands):


	December 31,
	2022		2021
Rental properties:
Land (related to rental properties)	$	4,284,731	$	3,782,182
Buildings and building improvements	18,605,627		16,312,402
Other improvements	2,677,763		2,109,884
Rental properties	25,568,121		22,204,468
Development and redevelopment projects	8,715,335		6,528,640
Gross investments in real estate – North America	34,283,456		28,733,108
Less: accumulated depreciation – North America	(4,349,780)		(3,766,758)
Net investments in real estate – North America	29,933,676		24,966,350
Net investments in real estate – Asia	11,764		14,319
Investments in real estate	$	29,945,440	$	24,980,669

Acquisitions

Our real estate asset acquisitions during the year ended December 31, 2022 consisted of the following (dollars in thousands):


		Square Footage
Market	Number of Properties	Future Development	Operating With Future Development/Redevelopment	Operating	Purchase Price
Greater Boston	5	277,997	664,832	265,965	$	788,292
San Francisco Bay Area	5	610,000	723,953	70,000	564,000
San Diego	5	1,287,000	234,874	—	231,380
Seattle	—	869,000	—	—	87,608
Research Triangle	4	1,925,000	69,485	—	179,428
Texas	11	51,038	1,197,071	—	508,400
Other	12	1,644,994	646,132	381,760	459,344
Year ended December 31, 2022	42	6,665,029	3,536,347	717,725	$	2,818,452	(1)

(1)Represents the aggregate contractual purchase price of our acquisitions, which differs from purchases of real estate in our consolidated statements of cash flows due to the timing of payment, closing costs, and other acquisition adjustments such as prorations of rents and expenses.

Based upon our evaluation of each acquisition, we determined that substantially all of the fair value related to each acquisition was concentrated in a single identifiable asset or a group of similar identifiable assets, or was associated with a land parcel with no operations. Accordingly, each transaction did not meet the definition of a business and therefore was accounted for as an asset acquisition. In each of these transactions, we allocated the total consideration for each acquisition to the individual assets and liabilities acquired on a relative fair value basis.

During the year ended December 31, 2022, we acquired 42 properties for an aggregate purchase price of $2.8 billion. In connection with our acquisitions, we recorded in-place lease assets aggregating $180.5 million and below-market lease liabilities in which we are the lessor aggregating $156.1 million. As of December 31, 2022, the weighted-average amortization period remaining on our in-place leases and below-market leases acquired during the year ended December 31, 2022 was 7.4 years and 12.2 years, respectively, and 9.7 years in total.

Acquired below-market leases

The balances of acquired below-market tenant leases existing as of December 31, 2022 and 2021, and related accumulated amortization, classified in accounts payable, accrued expenses, and other liabilities in our consolidated balance sheets as of December 31, 2022 and 2021 were as follows (in thousands):


	December 31,
	2022		2021
Acquired below-market leases	$	730,441	$	579,267
Accumulated amortization	(312,785)		(237,682)
	$	417,656	$	341,585

For the years ended December 31, 2022, 2021, and 2020, we recognized in rental revenues approximately $78.0 million, $57.7 million, and $57.8 million, respectively, related to the amortization of acquired below-market leases existing as of the end of each respective year.

The weighted-average amortization period of the value of acquired below-market leases existing as of December 31, 2022 was approximately 6.4 years, and the estimated annual amortization of the value of acquired below-market leases as of December 31, 2022 is as follows (in thousands):


Year	Amount
2023	$	77,462
2024	67,889
2025	45,468
2026	34,061
2027	33,711
Thereafter	159,065
Total	$	417,656

Acquired in-place leases

The balances of acquired in-place leases, and related accumulated amortization, classified in other assets in our consolidated balance sheets as of December 31, 2022 and 2021 were as follows (in thousands):


	December 31,
	2022		2021
Acquired in-place leases	$	1,150,690	$	987,213
Accumulated amortization	(535,052)		(377,341)
	$	615,638	$	609,872

Amortization for these intangible assets, classified in depreciation and amortization expense in our consolidated statements of operations, was approximately $169.5 million, $146.6 million, and $105.4 million for the years ended December 31, 2022, 2021, and 2020, respectively. The weighted-average amortization period of the value of acquired in-place leases was approximately 8.5 years, and the estimated annual amortization of the value of acquired in-place leases as of December 31, 2022 is as follows (in thousands):


Year	Amount
2023	$	133,737
2024	99,034
2025	76,530
2026	61,745
2027	49,987
Thereafter	194,605
Total	$	615,638

Sales of real estate assets and impairment charges

Our completed dispositions of and sales of partial interests in real estate assets during the year ended December 31, 2022 consisted of the following (dollars in thousands):


									Gain on Sale of Real Estate		Consideration in Excess of Book Value(1)
Property	Submarket/Market	Date of Sale	Interest Sold		RSF	Sales Price

Three months ended March 31, 2022:
100 Binney Street	Cambridge/Inner Suburbs/Greater Boston	3/30/22	70	%	432,931	$	713,228		N/A		$	413,615
Three months ended June 30, 2022:
300 Third Street	Cambridge/Inner Suburbs/Greater Boston	6/27/22	70	%	131,963	166,485			N/A		113,020
Alexandria Park at 128, 285 Bear Hill Road, 111 and 130 Forbes Boulevard, and 20 Walkup Drive	Route 128 and Route 495/Greater Boston	6/8/22	100	%	617,043	334,397			$	202,325	N/A
Other						47,800			11,894		N/A
						548,682			214,219		113,020
Three months ended September 30, 2022:
1450 Owens Street	Mission Bay/San Francisco Bay Area	7/1/22	20	%	191,000	25,039			N/A		10,083
341 and 343 Oyster Point Boulevard, 7000 Shoreline Court, and Shoreway Science Center	South San Francisco and Greater Stanford/San Francisco Bay Area	9/15/22	100	%	330,379	383,635			223,127		N/A
3215 Merryfield Row	Torrey Pines/San Diego	9/1/22	70	%	170,523	149,940			N/A		42,214
Summers Ridge Science Park	Sorrento Mesa/San Diego	9/15/22	70	%	316,531	159,600			N/A		65,097
7330 and 7360 Carroll Road	Sorrento Mesa/San Diego	9/15/22	100	%	84,442	59,476			35,463		N/A
Other	Various					182,696			65,109		N/A
						960,386			323,699		117,394
Year ended December 31, 2022						$	2,222,296	(2)	$	537,918	$	644,029

(1)Relates to sales of partial interests in real estate assets over which we retained control and therefore continue to consolidate. We recognized the difference between the consideration received and the book value of partial interests sold in additional paid-in capital, with no gain or loss recognized in earnings.

(2)Represents the aggregate contractual sales price of our sales, which differs from proceeds from sales of real estate and contributions from and sales of noncontrolling interests in our consolidated statements of cash flows under “Investing activities” and “Financing activities,” respectively, primarily due to the timing of payment, closing costs, and other sales adjustments such as prorations of rents and expenses.

During the year ended December 31, 2022, we completed dispositions of and sales of partial interests in real estate assets for an aggregate sales price of $2.2 billion, as described below.

•We completed dispositions of real estate assets for sales prices aggregating $1.0 billion and recognized gains on sales of real estate aggregating $537.9 million within our consolidated statements of operations.

•We completed sales of partial interests in real estate assets for an aggregate sales price of $1.2 billion, where these partial interest sales resulted in proceeds in excess of book values aggregating $644.0 million. We accounted for our sales of partial interests as equity transactions, with the excess recognized in additional paid-in capital within our consolidated statements of changes in stockholders’ equity and no gain or loss recognized in earnings since we continue to consolidate the resulting real estate joint ventures. For more detail, refer to the “Formation of consolidated real estate joint ventures and sales of partial interests” section in Note 4 – “Consolidated and unconsolidated real estate joint ventures” to our consolidated financial statements.

Impairment charges

During the year ended December 31, 2022, we recognized impairment charges aggregating $65.0 million, as detailed below:

•Impairment charges aggregating $44.1 million, which consisted of write-offs of pre-acquisition costs, including the $38.3 million write-off of our entire investment in a future development project aggregating over 600,000 RSF in one of our existing submarkets in California. This impairment was recognized upon our decision to no longer proceed with this project as a result of a deteriorated macroeconomic environment that negatively impacted the financial outlook for this project.

•Impairment charges aggregating $20.9 million to reduce the carrying amounts of 10 properties and a land parcel located in multiple submarkets to their respective estimated fair values, less costs to sell, upon their classification as held for sale. We expect to sell these real estate assets in 2023. Refer to Note 18 – “Assets classified as held for sale” to our consolidated financial statements for additional information.