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Real Estate Investments and Related Intangibles (Tables)

6 Months Ended

Jun. 30, 2020

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):



	Six Months Ended June 30,
	2020		2019
Real estate investments, at cost:
Land	$	19,953	$	40,460
Buildings, fixtures and improvements	95,728		135,182
Total tangible assets	115,681		175,642
Acquired intangible assets:
In-place leases and other intangibles ⁽¹⁾	15,739		24,817
Above-market leases⁽²⁾	15,701		—
Total purchase price of assets acquired	$	147,121	$	200,459

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(1)	The weighted average amortization period for acquired in-place leases and other intangibles is 18.1 years and 15.8 years for 2020 Acquisitions and 2019 Acquisitions, respectively.

(2)

The weighted average amortization period for acquired above-market leases is 20.1 years for 2020 Acquisitions.

Schedule of Intangible Assets

Intangible lease assets and liabilities of the Company consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands, except weighted-average useful life):



	Weighted-Average Useful Life	June 30, 2020		December 31, 2019
Intangible lease assets:
In-place leases and other intangibles, net of accumulated amortization of $787,231 and $748,689, respectively	16.1	$	788,686	$	854,196
Leasing commissions, net of accumulated amortization of $6,409 and $6,027, respectively	7.5	18,790		17,808
Above-market lease assets and deferred lease incentives, net of accumulated amortization of $120,510 and $112,438, respectively	16.8	170,205		165,483
Total intangible lease assets, net		$	977,681	$	1,037,487

Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $106,116 and $99,315, respectively	19.2	$	130,208	$	143,583

Schedule of Intangible Liabilities

Intangible lease assets and liabilities of the Company consisted of the following as of June 30, 2020 and December 31, 2019 (amounts in thousands, except weighted-average useful life):



	Weighted-Average Useful Life	June 30, 2020		December 31, 2019
Intangible lease assets:
In-place leases and other intangibles, net of accumulated amortization of $787,231 and $748,689, respectively	16.1	$	788,686	$	854,196
Leasing commissions, net of accumulated amortization of $6,409 and $6,027, respectively	7.5	18,790		17,808
Above-market lease assets and deferred lease incentives, net of accumulated amortization of $120,510 and $112,438, respectively	16.8	170,205		165,483
Total intangible lease assets, net		$	977,681	$	1,037,487

Intangible lease liabilities:
Below-market leases, net of accumulated amortization of $106,116 and $99,315, respectively	19.2	$	130,208	$	143,583

Schedule of Amortization Expense and Adjustments to Rental Income

The following table provides the projected amortization expense and adjustments to rental revenue related to the intangible lease assets and liabilities for the next five years as of June 30, 2020 (in thousands):



	Remainder of 2020		2021		2022		2023		2024		2025
In-place leases and other intangibles:
Total projected to be included in amortization expense	$	57,571	$	107,490	$	93,814	$	83,671	$	73,403	$	61,429
Leasing commissions:
Total projected to be included in amortization expense	1,317		2,461		2,360		2,085		1,867		1,599
Above-market lease assets and deferred lease incentives:
Total projected to be deducted from rental revenue	9,962		19,519		18,708		17,764		16,393		14,921
Below-market lease liabilities:
Total projected to be included in rental revenue	8,320		14,947		13,255		12,533		10,686		9,467

Investment in Unconsolidated Joint Ventures

The following is a summary of the Company’s investments in unconsolidated joint ventures as of June 30, 2020 and December 31, 2019 and for the six months ended June 30, 2020 and 2019 (dollar amounts in thousands):



			Carrying Amount of Investment				Equity in Income
			Carrying Amount of Investment				Six Months Ended
Investment	Ownership % ⁽¹⁾	Number of Properties	June 30, 2020		December 31, 2019		June 30, 2020		June 30, 2019
Faison JV Bethlehem GA ⁽²⁾	90%	1	$	41,076	$	40,416	$	1,197	$	1,035
Industrial Partnership⁽³⁾	20%	6	35,257		28,409		347		(30		)
Office Partnership ⁽⁴⁾	20%	3	9,967		—		199		—

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(1)

The Company’s ownership interest 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 capital contributions, 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 investment was greater than the underlying equity in net assets by $4.6 million and $4.7 million as of June 30, 2020 and December 31, 2019, respectively. This difference relates to a purchase price allocation of goodwill and a step up in fair value of the investment asset acquired in connection with mergers. The step up in fair value was allocated to the individual investment asset and is being amortized in accordance with the Company’s depreciation policy.


(3)	During the six months ended June 30, 2020, the Company made a capital contribution to the industrial partnership, in anticipation of the acquisition of a property.

(4)

During the six months ended June 30, 2020, the office partnership acquired one property from a third party for a purchase price of $33.1 million.