INTANGIBLE LEASE ASSETS AND LIABILITIES

6 Months Ended

Jun. 30, 2021

INTANGIBLE LEASE ASSETS AND LIABILITIES

INTANGIBLE LEASE ASSETS AND LIABILITIES

NOTE 11. INTANGIBLE LEASE ASSETS AND LIABILITIES

Intangible assets and liabilities consist of the value of above-market and below-market leases, the value of in-place leases, and the value of leasing costs, based in each case on their fair values. Intangible assets and liabilities consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands):

	As of
	June 30, 2021		December 31, 2020
Intangible Lease Assets:
Value of In-Place Leases	$	55,416	$	44,558
Value of Above Market In-Place Leases		19,184		10,604
Value of Intangible Leasing Costs		16,338		13,285
Sub-total Intangible Lease Assets		90,938		68,447
Accumulated Amortization		(19,468)		(18,271)
Sub-total Intangible Lease Assets—Net		71,470		50,176
Intangible Lease Liabilities (included in accrued and other liabilities):
Value of Below Market In-Place Leases		(36,403)		(36,817)
Sub-total Intangible Lease Liabilities		(36,403)		(36,817)
Accumulated Amortization		13,944		12,654
Sub-total Intangible Lease Liabilities—Net		(22,459)		(24,163)
Total Intangible Assets and Liabilities—Net	$	49,011	$	26,013

During the six months ended June 30, 2021, the value of in-place leases increased by $10.9 million, the value of above-market in-place leases increased by $8.6 million, the value of intangible leasing costs increased by $3.1 million, and the value of below-market in-place leases increased by $0.4 million. Such increases reflect 2021 acquisitions, net of 2021 dispositions and the transference of two single-tenant outparcels transferred to held for sale as of June 30, 2021. Net accumulated amortization increased by $0.01 million, for a net increase during the six months ended June 30, 2021 of $23.0 million.

As of June 30, 2021 and December 31, 2020, $18.7 million and $19.9 million, respectively, of the total below market in-place lease value is related to Wells Fargo Raleigh, which was acquired on November 18, 2015.

The following table reflects the net amortization of intangible assets and liabilities during the three and six months ended June 30, 2021 and 2020 (in thousands):

	Three Months Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Amortization Expense	$	1,935	$	2,136	$	3,762	$	4,017
Increase to Income Properties Revenue		(338)		(444)		(734)		(918)
Net Amortization of Intangible Assets and Liabilities	$	1,597	$	1,692	$	3,028	$	3,099

The estimated future amortization expense (income) related to net intangible assets and liabilities is as follows (in thousands):

Year Ending December 31,	Future Amortization Amount		Future Accretion to Income Property Revenue		Net Future Amortization of Intangible Assets and Liabilities
Remainder of 2021	$	4,563	$	(377)	$	4,186
2022		8,911		(782)		8,129
2023		8,797		(759)		8,038
2024		8,785		(662)		8,123
2025		6,616		(618)		5,998
2026 and thereafter		17,799		(3,262)		14,537
Total	$	55,471	$	(6,460)	$	49,011

As of June 30, 2021, the weighted average amortization period of total intangible assets and liabilities was 8.4 years and 13.0 years, respectively.