Real Estate Investments

9 Months Ended

Sep. 30, 2021

Real Estate Investments, Net [Abstract]

Real Estate InvestmentsThere were no real estate assets acquired or liabilities assumed during the three and nine months ended September 30, 2021 or 2020. Also, there were no dispositions of real estate during the three and nine months ended September 30, 2021 or 2020. However, the Company is evaluating its options for its 421 W. 54th Street - Hit Factory property, which includes marketing the property for sale. As no buyer has been identified for the property, it does not qualify to be classified as held for sale on the consolidated balance sheet as of September 30, 2021. However, during the third quarter of 2021, the Company recorded an impairment charge of $0.4 million for this property as it was determined that the carrying value exceeded the Company’s most recent estimate of the fair market value of the property as of September 30, 2021.

Significant Tenants

As of September 30, 2021 and December 31, 2020, there were no tenants whose annualized rental income on a straight-line basis, based on leases commenced, represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis.

The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangibles and amortization and accretion of above- and below-market lease assets and liabilities, net, for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
In-place leases (1)	$	1,848	$	2,569	$	4,714	$	6,567
Other intangibles	177		291		760		874
Total included in depreciation and amortization	$	2,025	$	2,860	$	5,474	$	7,441

Above-market lease intangibles	$	262	$	369	$	800	$	939
Below-market lease liabilities	(642)		(936)		(1,644)		(3,783)
Total included in revenue from tenants	$	(380)	$	(567)	$	(844)	$	(2,844)

Below-market ground lease, included in property operating expenses	$	12	$	12	$	37	$	37

During the nine months ended September 30, 2021, in connection with three leases that were terminated during the third quarter of 2021, the Company wrote off approximately $0.7 million of in-place lease intangibles related to one of the leases that was terminated, which was included in depreciation and amortization expense in the consolidated statement of operations. Additionally, in connection with the same lease terminations, the Company wrote off approximately $0.2 million of below-market lease intangibles for nine months ended September 30, 2021, which was included in revenue from tenants in the consolidated statement of operations.

During the three and nine months ended September 30, 2020, in connection with 3 leases that were terminated during the third quarter of 2020, the Company wrote off approximately $3.2 million of in-place lease intangibles, which was included in depreciation and amortization expense in the consolidated statement of operations. Additionally, in connection with the same lease terminations, the Company wrote off approximately $1.9 million of below-market lease intangibles and $0.2 million of above-market lease intangibles during the three and nine months ended September 30, 2020, which was included in revenue from tenants in the consolidated statement of operations.

In addition, during the nine months ended September 30, 2020, in connection with a lease that was terminated during the second quarter of 2020, the Company also wrote off approximately $0.6 million of in-place lease intangibles, which was included in depreciation and amortization expense in the consolidated statement of operations, and $2.3 million of below-market lease intangibles, which was included in revenue from tenants in the consolidated statement of operations.

The following table provides the projected amortization expense and adjustments to revenues for the next five years as of September 30, 2021:


(In thousands)	2021 (remainder)		2022		2023		2024		2025
In-place leases	$	1,297	$	4,592	$	3,354	$	2,603	$	1,469
Other intangibles	177		708		708		708		708
Total to be included in depreciation and amortization	$	1,474	$	5,300	$	4,062	$	3,311	$	2,177

Above-market lease assets	$	262	$	974	$	825	$	495	$	206
Below-market lease liabilities	(454)		(1,657)		(1,427)		(1,397)		(1,024)
Total to be included in revenue from tenants	$	(192)	$	(683)	$	(602)	$	(902)	$	(818)

Write-off of Deferred Leasing Commissions

In January 2021, the Company’s former tenant, Knotel, filed for bankruptcy and all leases with the Company were terminated effective January 31, 2021. As a result of these terminations, the Company wrote-off $1.3 million of deferred leasing costs in the first quarter of 2021, which are included in depreciation and amortization expense in our consolidated statement of operations for the nine months ended September 30, 2021.