Real Estate Investments (Tables)

3 Months Ended

Mar. 31, 2017

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table presents the allocation of the fair values of the assets acquired and liabilities assumed during the periods presented (in thousands):



	Three Months Ended March 31,
	2017			2016
Real estate investments, at cost:
Land	$	24,107		$	4,215
Buildings, fixtures and improvements	59,261			14,555
Total tangible assets	83,368			18,770
Acquired intangible assets:
In-place leases	15,916			1,182
Above-market leases	2,815			—
Assumed intangible liabilities:
Below-market leases	(185		)	—
Total purchase price of assets acquired	$	101,914		$	19,952

Schedule of Future Minimum Operating Lease Base Rent Payments

The following table presents future minimum base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes among other items (in thousands):



	Future Minimum Operating Lease Base Rent Payments		Future Minimum Direct Financing Lease Payments ⁽¹⁾
April 1, 2017 - December 31, 2017	$	812,431	$	2,599
2018	1,086,126		3,016
2019	1,049,422		2,397
2020	1,013,348		2,023
2021	971,437		1,899
Thereafter	6,300,003		3,993
Total	$	11,232,767	$	15,927

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(1)	29 properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties.

The following table reflects the minimum base rent payments due from the Company over the next five years and thereafter for certain ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations (in thousands):



	Future Minimum Base Rent Payments
	Ground Leases		Office Leases
April 1, 2017 - December 31, 2017	$	10,575	$	3,283
2018	13,832		4,298
2019	13,789		4,359
2020	13,317		4,381
2021	12,738		4,367
Thereafter	211,630		8,415
Total	$	275,881	$	29,103

Schedule of Future Minimum Direct Financing Lease Payments



	Future Minimum Operating Lease Base Rent Payments		Future Minimum Direct Financing Lease Payments ⁽¹⁾
April 1, 2017 - December 31, 2017	$	812,431	$	2,599
2018	1,086,126		3,016
2019	1,049,422		2,397
2020	1,013,348		2,023
2021	971,437		1,899
Thereafter	6,300,003		3,993
Total	$	11,232,767	$	15,927

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(1)	29 properties are subject to direct financing leases and, therefore, revenue is recognized as direct financing lease income on the discounted cash flows of the lease payments. Amounts reflected are the minimum base rental cash payments due to the Company under the lease agreements on these respective properties.

Schedule of Capital Leased Assets

The components of the Company’s net investment in direct financing leases as of March 31, 2017 and December 31, 2016 are as follows (in thousands):



	March 31, 2017			December 31, 2016
Future minimum lease payments receivable	$	15,927		$	17,147
Unguaranteed residual value of property	23,700			27,450
Unearned income	(4,718		)	(5,142		)
Net investment in direct financing leases	$	34,909		$	39,455

Summary of Unconsolidated Joint Ventures

The following is a summary of the Company’s percentage ownership and carrying amount related to each of the Unconsolidated Joint Ventures as of March 31, 2017 (dollar amounts in thousands):



Name of Joint Venture	Partner	Ownership % ⁽¹⁾	Carrying Amount of Investment ⁽²⁾
Cole/Mosaic JV South Elgin IL, LLC	Affiliate of Mosaic Properties and Development, LLC	50%	$	5,839
Cole/Faison JV Bethlehem GA, LLC	Faison-Winder Investors, LLC	90%	35,119
			$	40,958

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(1)

The Company’s ownership interest in this table reflects its legal ownership interest. Legal ownership may, at times, not equal the Company’s economic interest in the listed properties because of various provisions in certain joint venture agreements regarding distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, the Company’s actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with its legal ownership interests.

(2)

The total carrying amount of the investments is greater than the underlying equity in net assets by $6.3 million. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment assets acquired in connection with the Cole Merger. The step up in fair value was allocated to the individual investment assets and is being amortized in accordance with the Company’s depreciation policy.