Note 4 - Real Estate

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Real Estate Disclosure [Text Block]

4. Real Estate

Acquisitions

During the nine months ended September 30, 2022, the Company acquired the following operating properties, through direct asset purchases (in thousands):

Property Name	Location	Month Acquired	Purchase Price		GLA*
Ranchos San Marcos Parcel	San Marcos, CA	Jan-22	$	2,407		6
Columbia Crossing Parcel	Columbia, MD	Feb-22		16,239		60
Oak Forest Parcel	Houston, TX	Jun-22		3,846		4
Devon Village (1)	Devon, PA	Jun-22		733		-
Fishtown Crossing	Philadelphia, PA	Jul-22		39,291		133
Carman’s Plaza	Massapequa, NY	Jul-22		51,423		195
Pike Center (1)	Rockville, MD	Jul-22		21,850		-
			$	135,789		398

* Gross leasable area ("GLA")

(1) Land parcel

The purchase price for these acquisitions was allocated to real estate and related intangible assets and liabilities acquired, as applicable, in accordance with our accounting policies for asset acquisitions. The purchase price allocation for properties acquired during the nine months ended September 30, 2022, is as follows (in thousands): 

	Allocation as of September 30, 2022			Weighted Average Amortization Period (in Years)
Land	$	64,480			n/a
Building		58,800			50.0
Building improvements		4,480			45.0
Tenant improvements		4,963			6.9
Solar panels		2,308			20.0
In-place leases		7,249			6.4
Above-market leases		199			3.8
Below-market leases		(6,690	)		14.2
Net assets acquired	$	135,789

During the nine months ended September 30, 2021, the Company acquired the following operating properties, through direct asset purchases (in thousands):

			Purchase Price
Property Name	Location	Month Acquired	Cash		Other Consideration*		Total		GLA
Distribution Center #1	Lancaster, CA	Jan-21	$	58,723	$	11,277	$	70,000		927
Distribution Center #2	Woodland, CA	Jan-21		27,589		6,411		34,000		508
			$	86,312	$	17,688	$	104,000		1,435

* Consists of the fair value of the assets acquired which exceeded the purchase price upon closing. The transaction was a sale-leaseback with the seller which resulted in the recognition of a prepayment of rent of $17.7 million in accordance with ASC 842, Leases at closing. The prepayment of rent was amortized over the initial term of the lease through Revenues from rental properties, net on the Company's Condensed Consolidated Statements of Income.

The two distribution centers were purchased through a TRS of the Company during January 2021, and they were subsequently sold in June 2021 and are included in the Dispositions disclosure below. Included in the Company's Condensed Consolidated Statements of Income is $3.2 million in total revenues from the date of acquisition through the date of disposition for these two operating properties.

Included in the Company’s Condensed Consolidated Statements of Income is $3.2 million in total revenues from the date of acquisition through September 30, 2022 and 2021, respectively, for operating properties acquired during each of the respective years.

Dispositions

The table below summarizes the Company’s disposition activity relating to consolidated operating properties and parcels for the nine months ended September 30, 2022 and 2021 (dollars in millions):

	Nine Months Ended September 30,
	2022		2021
Aggregate sales price (1)	$	172.2	$	156.6
Gain on sale of properties (2)	$	11.0	$	30.8
Number of properties sold		8		5
Number of parcels sold		10		9

(1) Includes $19.7 million of Internal Revenue Code 26 U.S.C. §1031 proceeds held in escrow through sale of real estate interests for the nine months ended September 30, 2022.

(2) Before noncontrolling interests of $3.0 million and taxes of $2.2 million, after utilization of net operating loss carryforwards, for the nine months ended September 30, 2021.

Impairments

During the nine months ended September 30, 2022, the Company recognized impairment charges related to adjustments to property carrying values of $21.8 million, before noncontrolling interests of $15.8 million. The Company’s estimated fair values of these assets were primarily based upon sales prices from signed contracts, which were less than the carrying value of the assets.