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Lease Intangible Assets and Liabilities
6 Months Ended
Jun. 30, 2019
Real Estate [Abstract]  
Lease Intangible Assets and Liabilities

Note 3 – Lease Intangible Assets and Liabilities

Lease intangible assets (acquired in-place leases, above-market leases and below-market ground leases) and liabilities (acquired below-market leases), net of accumulated amortization, were $96.3 million and $11.9 million, respectively, as of June 30, 2019 and $123.7 million and $12.3 million, respectively, as of December 31, 2018.  The following table summarizes the Company’s lease intangible assets and liabilities (in thousands):

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

 

 

Accumulated

 

 

 

 

 

Lease Intangible Assets

 

Asset

 

 

Amortization

 

 

Balance

 

In-place leases, net

 

$

253,198

 

 

$

(160,355

)

 

$

92,843

 

Above-market leases, net

 

 

7,126

 

 

 

(3,637

)

 

 

3,489

 

Total

 

$

260,324

 

 

$

(163,992

)

 

$

96,332

 

 

 

 

Gross

 

 

Accumulated

 

 

 

 

 

Lease Intangible Liabilities

 

Liability

 

 

Amortization

 

 

Balance

 

Below-market leases, net

 

$

16,816

 

 

$

(4,963

)

 

$

11,853

 

Total

 

$

16,816

 

 

$

(4,963

)

 

$

11,853

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

 

 

Accumulated

 

 

 

 

 

Lease Intangible Assets

 

Asset

 

 

Amortization

 

 

Balance

 

In-place leases, net

 

$

266,897

 

 

$

(158,235

)

 

$

108,662

 

Below-market ground leases, net

 

 

11,766

 

 

 

(710

)

 

 

11,056

 

Above-market leases, net

 

 

8,338

 

 

 

(4,400

)

 

 

3,938

 

Total

 

$

287,001

 

 

$

(163,345

)

 

$

123,656

 

 

 

 

Gross

 

 

Accumulated

 

 

 

 

 

Lease Intangible Liabilities

 

Liability

 

 

Amortization

 

 

Balance

 

Below-market leases, net

 

$

19,720

 

 

$

(7,439

)

 

$

12,281

 

Total

 

$

19,720

 

 

$

(7,439

)

 

$

12,281

 

 

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in additional rental income of $0.1  million and $0.2 million for the three months ended June 30, 2019, and June 30, 2018, respectively and $0.2 million and $0.5 million for the six months ended June 30, 2019 and June 30, 2018, respectively. Future amortization of these intangibles is estimated to increase rental income as set forth below (in thousands):

 

Remainder of 2019

 

$

254

 

2020

 

 

326

 

2021

 

 

171

 

2022

 

 

141

 

2023

 

 

199

 

 

Amortization of an acquired below-market ground lease resulted in additional property expense of $51 thousand for each of the three months ended June 30, 2019, and June 30, 2018, respectively, and $0.1 million for the six months ended June 30, 2019 and June 30, 2018, respectively. Future amortization of the below-market ground lease is estimated to increase property expenses as set forth below (in thousands):

 

Remainder of 2019

 

$

101

 

2020

 

 

203

 

2021

 

 

203

 

2022

 

 

203

 

2023

 

 

203

 

 

Amortization of acquired in-place leases resulted in additional depreciation and amortization expense of $5.0 million and $35.2 million for the three months ended June 30, 2019 and June 30, 2018, respectively and $15.3 million and $53.3 million for the six months ended June 30, 2019 and June 30, 2018, respectively. Future estimated amortization of acquired in-place leases is set forth below (in thousands):

 

Remainder of 2019

 

$

7,806

 

2020

 

 

14,344

 

2021

 

 

13,808

 

2022

 

 

13,500

 

2023

 

 

12,683