Rental Properties

12 Months Ended

Dec. 31, 2019

The following table summarizes the carrying amounts of real estate investments as of December 31, 2019 and 2018 (in thousands):



	2019			2018
Buildings and improvements	$	4,747,101		$	4,593,159
Furniture, fixtures & equipment	123,239			97,463
Land	1,290,181			1,190,568
Leasehold interests	26,041			26,041
	6,186,562			5,907,231
Accumulated depreciation	(989,254		)	(883,174		)
Total	$	5,197,308		$	5,024,057

Depreciation expense on real estate investments from continuing operations was $153.2 million, $133.7 million and $117.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Acquisitions and Development

During the year ended December 31, 2019, the Company completed the acquisition of real estate investments and lease related intangibles, as further discussed in Note 2, for Experiential properties totaling $451.9 million, that consisted of 26 theatre properties for approximately $426.5 million, one eat & play property for $1.4 million and two cultural properties for $24.0 million. The Company completed the acquisition of real estate investments and lease related intangibles for Education properties totaling $5.9 million that consisted of the acquisition of two early childhood education centers.

Additionally, during the year ended December 31, 2019, the Company had investment spending on build-to-suit development and redevelopment for Experiential properties totaling $146.2 million and Education properties totaling $38.6 million.

During the year ended December 31, 2019, the Company completed the construction of the Kartrite Resort and Indoor Waterpark in Sullivan County, New York. The indoor waterpark resort is being operated under a traditional REIT lodging structure and facilitated by a management agreement with an eligible independent contractor. The related operating revenue and expense are included in other income and other expense in the accompanying consolidated statements of income and comprehensive income for the year ended December 31, 2019. Additionally, during the year ended December 31, 2018, the Company completed the construction of the Resorts World Catskills common infrastructure. In June 2016, the Sullivan County Infrastructure Local Development Corporation issued $110.0 million of Series 2016 Revenue Bonds which funded a substantial portion of such construction costs. For the years ended December 31, 2018, 2017 and 2016, the Company received total reimbursements of $74.2 million of construction costs. During the year ended December 31, 2019, the Company received an additional reimbursement of $11.5 million.

During the year ended December 31, 2018, the Company completed the acquisitions real estate investments and lease related intangibles, as further discussed in Note 2, that consisted of two theatre properties for approximately $22.4 million, a fitness & wellness property for $7.8 million, a cultural property for $50.3 million, an experiential lodging property for $36.6 million and four early childhood education centers for $17.7 million.

Additionally, during the year ended December 31, 2018, the Company had investment spending on build-to-suit development and redevelopment for Experiential properties totaling $288.1 million and Education properties totaling $49.7 million.

Dispositions

During the year ended December 31, 2019, the Company completed the sale of all of its public charter school portfolio through the following transactions:

•

On November 22, 2019, the Company sold 47 public charter school related assets, classified as real estate investments, mortgage notes receivable and investment in direct financing leases, for net proceeds of approximately $449.6 million. The Company recognized an impairment on this public charter school portfolio sale of $21.4 million that included the write-off of non-cash straight-line rent and effective interest receivables totaling $24.8 million. See Note 4 for additional information related to the impairment.


•	The Company sold ten public charter schools pursuant to tenant purchase options for net proceeds totaling $138.5 million and recognized a combined gain on sale of $30.0 million.


•	The Company sold seven public charter schools (not as result of exercise of tenant purchase options) for net proceeds totaling $44.4 million and recognized a combined gain on sale of $1.9 million.


•	See Note 6 for details on repayments of mortgage notes receivable secured by public charter school properties during 2019.

Due to the Company's disposition of its remaining public charter school portfolio in 2019, the operating results of all public charter schools sold during 2019 have been classified within discontinued operations in the accompanying consolidated statements of income and comprehensive income for all periods presented. See Note 18 for further details on discontinued operations.

Additionally, during the year ended December 31, 2019, the Company sold one attraction property, one early childhood education center property and four land parcels for net proceeds totaling $21.9 million and sold one attraction property and received an $11.0 million cash payment and provided seller mortgage financing of $27.4 million. The Company recognized a combined gain on these sales of $4.2 million. See Note 6 for additional information on the seller mortgage note receivable.

During the year ended December 31, 2018, the Company completed the sale of four land parcels for net proceeds totaling $7.3 million. In connection with these sales, the Company recognized a gain on sale of $1.2 million.

Pursuant to a tenant purchase option, the Company completed the sale of one public charter school for net proceeds totaling $12.0 million and recognized a gain on sale of $1.9 million during the year ended December 31, 2018. Additionally, the Company also completed the sale of two early childhood education centers for net proceeds of $2.5 million. No gain or loss was recognized on these sales.

As further discussed in Note 7, during the year ended December 31, 2018, the Company also completed the sales of four public charter school properties leased to Imagine Schools, Inc. (Imagine).