Segment Reporting

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

As of June 30, 2023, the Company concluded it operates in two reportable segments consistent with its current management internal financial reporting purposes: single-tenant properties and multi-tenant properties. The Company evaluates performance and make resource allocations based on its two business segments.

Net Operating Income

The Company evaluates the performance of the combined properties in each segment based on net operating income (“NOI”). NOI is defined as total revenues from tenants, less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net (loss) income. The Company uses NOI to assess and compare property level performance and to make decisions concerning the operation of the properties. The Company believes that NOI is useful as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net (loss) income.

NOI excludes certain components from net (loss) income in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by the Company may not be comparable to NOI reported by other REITs that define NOI differently. The Company believes that in order to facilitate a clear understanding of the Company’s operating results, NOI should be compared with net (loss) income prepared in accordance with GAAP and as

presented in the Company’s consolidated financial statements. NOI should not be considered as an alternative to net (loss) income as an indication of the Company’s performance or to cash flows as a measure of the Company’s liquidity or ability to pay distributions.

The following tables reconcile the segment activity to consolidated net loss attributable to common stockholders for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended June 30, 2023						Three Months Ended June 30, 2022
(In thousands)	Single-Tenant Properties		Multi-Tenant Properties		Consolidated		Single-Tenant Properties		Multi-Tenant Properties		Consolidated
Revenue from tenants	$	41,124	$	65,576	$	106,700	$	55,886	$	61,043	$	116,929
Property operating expense	4,007		21,075		25,082		4,049		23,471		27,520
NOI	$	37,117	$	44,501	81,618		$	51,837	$	37,572	89,409
Asset management fees to related parties					(7,972)						(8,296)
Impairments of real estate investments					—						(58,954)
Merger, transaction and other costs					(4,931)						(206)
Equity-based compensation					(3,519)						(3,523)
Settlement costs					(8,800)						—
General and administrative					(14,744)						(8,390)
Depreciation and amortization					(59,466)						(46,573)
Gains on sales of real estate investments					5,471						13,438
Interest expense					(35,945)						(28,329)
Other income					596						944
Net loss attributable to non-controlling interests					61						58
Allocation for preferred stock					(5,837)						(5,837)
Net loss attributable to common stockholders					$	(53,468)					$	(56,259)

	Six Months Ended June 30, 2023						Six Months Ended June 30, 2022
(In thousands)	Single-Tenant Properties		Multi-Tenant Properties		Consolidated		Single-Tenant Properties		Multi-Tenant Properties		Consolidated
Revenue from tenants	$	87,289	$	133,005	$	220,294	$	109,169	$	102,703	$	211,872
Property operating expense	8,457		43,538		51,995		7,974		38,685		46,659
NOI	$	78,832	$	89,467	168,299		$	101,195	$	64,018	165,213
Asset management fees to related parties					(15,928)						(16,122)
Impairments of real estate investments					—						(64,896)
Merger, transaction and other costs					(5,496)						(485)
Settlement costs					(8,800)						—
Equity-based compensation					(7,086)						(7,021)
General and administrative					(25,236)						(15,223)
Depreciation and amortization					(113,648)						(84,261)
Gains on sales of real estate investments					17,263						67,007
Interest expense					(70,620)						(52,069)
Other income					623						962
Gain on non-designated derivatives					—						2,250
Net loss (income) attributable to non-controlling interests					78						(6)
Allocation for preferred stock					(11,674)						(11,674)
Net loss attributable to common stockholders					$	(72,225)					$	(16,325)

The following table reconciles real estate investments, net by segment to consolidated total assets as of the periods presented:

(In thousands)	June 30, 2023		December 31, 2022
ASSETS
Investments in real estate, net:
Single-tenant properties	$	1,682,118	$	1,880,418
Multi-tenant properties	2,400,560		2,442,945
Total investments in real estate, net	4,082,678		4,323,363
Cash and cash equivalents	59,172		70,795
Restricted cash	23,373		17,956
Deferred costs, net	25,050		22,893
Straight-line rent receivable	59,890		66,657
Operating lease right-of-use assets	17,587		17,839
Prepaid expenses and other assets	67,510		66,551
Total assets	$	4,335,260	$	4,586,054

The following table reconciles capital expenditures by reportable business segment, excluding corporate non-real estate expenditures, for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2023 (1)		2022		2023 (1)		2022
Single-tenant properties	$	628	$	467	$	668	$	675
Multi-tenant properties	10,365		1,295		12,898		4,544
Total capital expenditures	$	10,993	$	1,762	$	13,566	$	5,219

(1)Excludes $6.4 million of accrued capital expenditures as of December 31, 2022, which was paid in the six months ended June 30, 2023.