Real Estate Assets

9 Months Ended

Sep. 30, 2021

Real Estate Assets

Real Estate Assets

4.    Real Estate Assets

Real estate assets consist of:

	Estimated
	Useful Lives	Sep. 30, 2021		Dec. 31, 2020
Land		$	47,290	$	33,084
Land improvements	10 to 30 years		47,483		45,827
Buildings and improvements	10 to 40 years		284,042		233,250
Tenant improvements	Shorter of useful life or terms of related lease		35,204		34,899
Machinery and equipment	3 to 20 years		10,958		10,958
Construction in progress			42,977		4,036
Development costs			3,749		5,106
			471,703		367,160
Accumulated depreciation			(127,888)		(124,839)
		$	343,815	$	242,321

The increase in construction in progress primarily relates to the site work and construction costs of an approximately 141,000 square foot industrial/logistics building in Charlotte, North Carolina (the “Charlotte Build-to-Suit”) on the Company’s 44 acre parcel of land in Charlotte. Subsequent to September 30, 2021, the Charlotte Build-to-Suit was completed and placed in service and the amount in construction in progress related to the Charlotte Build-to-Suit was reclassified into the appropriate asset categories.

Total depreciation expense related to real estate assets was as follows:

	For the Three Months Ended				For the Nine Months Ended
	Sep. 30, 2021		Sep. 30, 2020		Sep. 30, 2021		Sep. 30, 2020
Depreciation expense	$	3,322	$	3,008	$	9,225	$	8,958

On August 5, 2021, INDUS closed on the purchase of 2850 Interstate Drive (“2850 Interstate”), an approximately 139,500 square foot fully leased industrial/logistics building in Lakeland, Florida for $17,866, including acquisition costs. INDUS determined the fair value of the assets acquired approximated the purchase price, which was allocated to the real estate assets and intangible assets (see Note 9) on a relative fair value basis.

On June 28, 2021, INDUS, through a consolidated VIE, purchased 7800 Tuckaseegee Road (“7800 Tuckaseegee”), an approximately 395,000 square foot industrial/logistics building in Charlotte, North Carolina for $42,502, including acquisition costs. On May 12, 2021, INDUS, through a consolidated VIE, purchased 6355 Farm Bureau Road (“6355 Farm Bureau”), an approximately 128,000 square foot industrial/logistics building in the Lehigh Valley of Pennsylvania for $11,928, including acquisition costs. For both acquisitions, INDUS provided all of the funding to the VIEs for the purchases and determined the fair value of the assets acquired approximated the purchase price, which was allocated to the real estate assets and intangible assets (see Note 9) on a relative fair value basis. The acquisitions of 7800 Tuckaseegee and 6355 Farm Bureau were made utilizing Reverse 1031 Like-Kind Exchanges that were entered into at the time the properties were acquired. As such, as of September 30, 2021, these properties are in the possession of a qualified intermediary engaged to execute the Reverse 1031 Like-Kind Exchanges until the potential real estate sales transactions and the Reverse 1031 Like-Kind Exchanges are completed.

On April 13, 2021, INDUS closed on the purchase of an approximately 14 acre parcel of undeveloped land in Orlando, Florida (the “Jetport Land”) for a purchase price of $5,658, after transaction and entitlement costs. The Jetport Land is a replacement property as part of a Section 1031 Like-Kind Exchange (“1031 Like-Kind Exchange”) under the Code. INDUS acquired the Jetport Land utilizing $1,993 of proceeds from the sales of one of its office/flex buildings

and two smaller land parcels in November 2020. The balance of the purchase price for the Jetport Land was paid from the Company’s cash on hand. INDUS plans to construct two industrial/logistics buildings totaling approximately 195,000 square feet on the Jetport Land.

The purchase prices for acquisitions in the 2021 nine month period were allocated as follows:

	2850 Interstate		7800 Tuckaseegee		6355 Farm Bureau		Jetport Land	Total
Land	$	2,369	$	4,606	$	2,163	5,658	$	14,796
Land improvements		416		927		388	—		1,731
Buildings and improvements		14,703		35,947		10,036	—		60,686
Tenant improvements		48		200		132	—		380
Intangible assets		558		1,462		918	—		2,938
Intangible liabilities		(228)		(640)		(1,709)	—		(2,577)
	$	17,866	$	42,502	$	11,928	5,658	$	77,954

In the 2021 third quarter, INDUS recorded an impairment charge of $3,000 to reduce the carrying values of two of its office/flex properties in Windsor, Connecticut, based on management’s assessment of the current market prices for these properties.

See Note 11 for subsequent events related to INDUS’s real estate assets.

Real estate assets held for sale consist of:

	Sep. 30, 2021		Dec. 31, 2020
Land	$	338	$	505
Land improvements		4,232		269
Development costs		63		6,028
	$	4,633	$	6,802

The decrease in real estate assets held for sale in the 2021 nine month period reflected $6,645 for sales of real estate assets that closed and $35 that was reclassified from real estate assets held for sale into real estate assets partially offset by $4,511 that was reclassified from real estate assets into real estate assets held for sale as a result of these assets meeting the criteria to be classified as held for sale. The amounts remaining in real estate assets held for sale are related to sales that INDUS expects to close within the next nine to twelve months.