Lease Intangibles

3 Months Ended

Mar. 31, 2022

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):

	March 31, 2022									December 31, 2021
	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount			Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Amortizable Intangible Assets
In-place lease intangible assets	$	307,162		$	(193,941	)	$	113,221		$	290,819		$	(189,981	)	$	100,838
Above-market rent		24,584			(16,357	)		8,227			24,191			(16,111	)		8,080
	$	331,746		$	(210,298	)	$	121,448		$	315,010		$	(206,092	)	$	108,918
Amortizable Intangible Liabilities
Below-market rent	$	(179,108	)	$	95,703		$	(83,405	)	$	(171,245	)	$	94,871		$	(76,374	)
Above-market ground lease		(671	)		282			(389	)		(671	)		267			(404	)
	$	(179,779	)	$	95,985		$	(83,794	)	$	(171,916	)	$	95,138		$	(76,778	)

During the three months ended March 31, 2022, the Company:

•acquired in-place lease intangible assets of $20.7 million, above-market rents of $0.7 million, and below-market rents of $10.1 million with weighted-average useful lives of 6.8, 7.4, and 14.0 years, respectively (Note 2).

During the year ended December 31, 2021, the Company:

•acquired in-place lease intangible assets of $34.7 million, above-market rents of $5.3 million, and below-market rents of $16.3 million with weighted-average useful lives of 5.8, 5.4, and 27.7 years, respectively (Note 2); and

•derecognized in-place lease intangible assets of $2.2 million and below-market rent of $4.4 million, of which the Company's share was $1.7 million and $3.0 million, respectively, related to disposed properties (Note 2). In addition, the Company recorded accelerated amortization related to in-place lease intangible assets of $1.6 million and below-market rents of $3.6 million, of which the Company's share was $1.1 million and $3.1 million, respectively, related to notification of tenant non-renewals and early tenant lease terminations.
 

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 income. Amortization of above-market ground leases are recorded as a reduction to rent expense in the consolidated statements of income.

The scheduled amortization of acquired lease intangible assets and assumed liabilities as of March 31, 2022 is as follows (in thousands):

Years Ending December 31,	Net Increase in Lease Revenues		Increase to Amortization			Reduction of Rent Expense		Net (Expense) Income
2022 (Remainder)	$	4,294	$	(21,928	)	$	44	$	(17,590	)
2023		5,427		(23,144	)		58		(17,659	)
2024		5,359		(17,123	)		58		(11,706	)
2025		4,937		(12,372	)		58		(7,377	)
2026		4,831		(9,839	)		58		(4,950	)
Thereafter		50,330		(28,815	)		113		21,628
Total	$	75,178	$	(113,221	)	$	389	$	(37,654	)