Property Acquisitions

3 Months Ended

Mar. 31, 2024

NOTE 12. — PROPERTY ACQUISITIONS

2024

During the three months ended March 31, 2024, we acquired fee simple interests in 22 properties for an aggregate purchase price of $85.3 million (including amounts funded in prior periods) as follows (in thousands):


					Purchase Price Allocation
Asset Type	Properties		Purchase Price		Land		Buildings & Improve- ments		In-Place Leases		Intangible/Market Lease Assets		Intangible/Market Lease Liabilities
Express tunnel car washes		12	$	61,011	$	13,262	$	41,869	$	6,386	$	—	$	(506	)
Convenience stores		1		7,592		2,496		4,394		702		—		—
Auto service centers		7		13,677		3,205		6,675		1,661		2,136		—
Drive-thru QSRs		2		3,046		523		2,050		473		—		—
		22	$	85,326	$	19,486	$	54,988	$	9,222	$	2,136	$	(506	)

In addition, as part of larger sale-leaseback transactions that included certain of the express tunnel car washes referenced above, we acquired 15 express tunnel car washes that were under construction for $45.8 million and committed to provide additional funding to our tenant during the construction period to complete the development of these properties. These 15 properties did not meet the criteria for sale-leaseback accounting and are accounted for as finance receivables. Accordingly, this initial investment and all subsequent fundings made during the construction period are recorded within notes and mortgages receivable on our consolidated balance sheets, and rental payments resulting from these investments are recorded within interest on notes and mortgages receivable on our consolidated statements of operations. At the end of the construction period, we will recognize the purchase of the assets, remove the finance receivables from our consolidated balance sheets, and begin to record rental income from the operating lease.

As of March 31, 2024, we advanced an additional $23.5 million and, in total, we funded $69.3 million related to these 15 properties. The construction for seven properties was completed as of March 31, 2024, of which six properties were completed during the three months ended March 31, 2024, and at the end of the construction period, we recognized the purchase of the assets, removed the finance receivables of $33.4 million, of which $29.7 million was related to the six properties completed during the three months ended March 31, 2024, recorded acquisitions, and began to record rental income from the operating leases.

This transaction also includes provisions that require us, upon the achievement by the tenant of certain financial performance targets within a defined period, to pay additional amounts to the tenant. Whether we will have to make any payments under these provisions is not probable or reasonably estimable at this time.

2023

During the three months ended March 31, 2023, we acquired fee simple interests in nine properties for an aggregate purchase price of $48.1 million (including amounts funded in prior periods) as follows (in thousands):


					Purchase Price Allocation
Asset Type	Properties		Purchase Price		Land		Buildings & Improve- ments		In-Place Leases		Intangible Market Lease Assets		Intangible Market Lease Liabilities
Express tunnel car washes		8	$	42,672	$	9,220	$	29,222	$	4,787	$	—	$	(557	)
Convenience stores		1		5,423		1,492		3,319		612		—		—
		9	$	48,095	$	10,712	$	32,541	$	5,399	$	—	$	(557	)