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Lease Intangibles
 9 Months Ended
Sep. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Lease Intangibles

6. Lease Intangibles

Upon acquisitions of real estate (Note 2), the Company assesses the fair value of acquired assets (including land, buildings and improvements, and identified intangibles such as above- and below-market leases, including below-market options and acquired in-place leases) and assumed liabilities. The lease intangibles are amortized over the remaining terms of the respective leases, including option periods where applicable.

Intangible assets and liabilities are included in Other assets, net and Accounts payable and other liabilities (Note 5) on the consolidated balance sheet and summarized as follows (in thousands):

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

Gross Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net Carrying
Amount

 

 

Gross Carrying
Amount

 

 

Accumulated
Amortization

 

 

Net Carrying
Amount

 

Amortizable Intangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In-place lease intangible assets

 

$

276,187

 

 

$

(185,871

)

 

$

90,316

 

 

$

268,335

 

 

$

(171,856

)

 

$

96,479

 

Above-market rent

 

 

21,071

 

 

 

(15,869

)

 

 

5,202

 

 

 

19,188

 

 

 

(14,935

)

 

 

4,253

 

 

 

$

297,258

 

 

$

(201,740

)

 

$

95,518

 

 

$

287,523

 

 

$

(186,791

)

 

$

100,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortizable Intangible Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Below-market rent

 

$

(170,555

)

 

$

92,960

 

 

$

(77,595

)

 

$

(164,923

)

 

$

88,951

 

 

$

(75,972

)

Above-market ground lease

 

 

(671

)

 

 

254

 

 

 

(417

)

 

 

(671

)

 

 

209

 

 

 

(462

)

 

 

$

(171,226

)

 

$

93,214

 

 

$

(78,012

)

 

$

(165,594

)

 

$

89,160

 

 

$

(76,434

)

 

During the nine months ended September 30, 2021, the Company acquired in-place lease intangible assets of $16.8 million, above-market rents of $2.0 million, and below-market rents of $13.0 million with weighted-average useful lives of 6.1, 4.0, and 31.4 years, respectively. During the nine months ended September 30, 2021, the Company wrote-off in-place lease intangible assets of $9.4 million and below-market rent of $6.5 million related to disposed properties (Note 2).

 

During the year ended December 31, 2020, the Company acquired in-place lease intangible assets of $21.0 million, above-market rents of $2.0 million, and below-market rents of $4.6 million with weighted-average useful lives of 4.9, 5.8, and 20.2 years, respectively.

Amortization of in-place lease intangible assets is recorded in depreciation and amortization expense and amortization of above-market rent and below-market rent is recorded as a reduction to and increase to rental income, respectively, in the consolidated statements of operations. Amortization of above-market ground leases are recorded as a reduction to rent expense in the consolidated statements of operations.

The scheduled amortization of acquired lease intangible assets and assumed liabilities as of September 30, 2021 is as follows (in thousands):

 

Years Ending December 31,

 

Net Increase in
Lease Revenues

 

 

Increase to
Amortization

 

 

Reduction of
Rent Expense

 

 

Net (Expense) Income

 

2021 (Remainder)

 

$

1,557

 

 

$

(6,494

)

 

$

15

 

 

$

(4,922

)

2022

 

 

5,849

 

 

 

(21,736

)

 

 

58

 

 

 

(15,829

)

2023

 

 

5,404

 

 

 

(16,515

)

 

 

58

 

 

 

(11,053

)

2024

 

 

5,280

 

 

 

(11,313

)

 

 

58

 

 

 

(5,975

)

2025

 

 

4,807

 

 

 

(8,021

)

 

 

58

 

 

 

(3,156

)

Thereafter

 

 

49,496

 

 

 

(26,237

)

 

 

170

 

 

 

23,429

 

Total

 

$

72,393

 

 

$

(90,316

)

 

$

417

 

 

$

(17,506

)