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Investments in Real Estate (Tables) | 12 Months Ended
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Dec. 31, 2022
Real Estate [Abstract] |
Schedule of acquisitions | Below is a summary of our acquisitions for the year ended December 31, 2022 (unaudited):
| Number of Properties |  | Leasable Square Feet (in thousands, unaudited) |  | Investment ($ in millions) |  | Weighted Average Lease Term (Years) |  | Initial Weighted Average Cash Lease Yield (1)
Year ended December 31, 2022 (2) |  |  |  |  |  |  |  |  |
Acquisitions - U.S. | 990 |  |  | 15,774 |  |  | $ | 5,746.4 |  |  | 19.3 |  | 6.0 | %
Acquisitions - Europe | 94 |  |  | 11,179 |  |  | 2,441.3 |  |  | 8.9 |  | 6.0 | %
Total acquisitions | 1,084 |  |  | 26,953 |  |  | $ | 8,187.7 |  |  | 16.3 |  | 6.0 | %
Properties under development (3) | 217 |  |  | 5,500 |  |  | 807.6 |  |  | 15.0 |  | 5.3 | %
Total (4) | 1,301 |  |  | 32,453 |  |  | $ | 8,995.3 |  |  | 16.2 |  | 5.9 | %
(1)The initial weighted average cash lease yield for a property is generally computed as estimated contractual first year cash net operating income, which, in the case of a net leased property, is equal to the aggregate cash base rent for the first full year of each lease, divided by the total cost of the property. Since it is possible that a client could default on the payment of contractual rent, we cannot provide assurance that the actual return on the funds invested will remain at the percentages listed above. Contractual net operating income used in the calculation of initial weighted average cash yield includes approximately $10.5 million received as settlement credits as reimbursement of free rent periods for the year ended December 31, 2022. In the case of a property under development or expansion, the contractual lease rate is generally fixed such that rent varies based on the actual total investment in order to provide a fixed rate of return. When the lease does not provide for a fixed rate of return on a property under development or expansion, the initial weighted average cash lease yield is computed as follows: estimated cash net operating income (determined by the lease) for the first full year of each lease, divided by our projected total investment in the property, including land, construction and capitalized interest costs. (2)None of our investments during the year ended December 31, 2022 caused any one client to be 10% or more of our total assets at December 31, 2022. (3)Includes five U.K. development properties that represent an investment of £40.9 million during the year ended December 31, 2022, converted at the applicable exchange rate on the funding date. (4)Our clients occupying the new properties are 71.4% retail, 19.1% gaming, 6.5% industrial and 3.0% other property types (including 2.7% agricultural and 0.3% office) based on rental revenue. Approximately 23% of the rental revenue generated from acquisitions during the year ended December 31, 2022 is from our investment grade rated clients, their subsidiaries or affiliated companies. Below is a summary of our acquisitions for the year ended December 31, 2021 (information is unaudited and excludes properties assumed on November 1, 2021 in conjunction with our merger with VEREIT):
| Number of Properties |  | Leasable Square Feet (in thousands, unaudited) |  | Investment ($ in millions) |  | Weighted Average Lease Term (Years) |  | Initial Weighted Average Cash Lease Yield (1)
Year ended December 31, 2021 (2) |  |  |  |  |  |  |  |  |
Acquisitions - U.S. | 714 |  |  | 14,727 |  |  | $ | 3,608.6 |  |  | 14.1 |  | 5.5 | %
Acquisitions - Europe | 129 |  |  | 9,196 |  |  | 2,558.9 |  |  | 11.6 |  | 5.5 | %
Total acquisitions | 843 |  |  | 23,923 |  |  | $ | 6,167.5 |  |  | 13.1 |  | 5.5 | %
Properties under development (3) | 68 |  |  | 2,682 |  |  | 243.3 |  |  | 15.7 |  | 6.0 | %
Total (4) | 911 |  |  | 26,605 |  |  | $ | 6,410.8 |  |  | 13.2 |  | 5.5 | %
(1)Contractual net operating income used in the calculation of initial weighted average cash yield includes approximately $8.5 million received as settlement credits as reimbursement of free rent periods for the year ended December 31, 2021. (2)None of our investments during the year ended December 31, 2021 caused any one client to be 10% or more of our total assets at December 31, 2021. (3)Includes one U.K. development property that represents an investment of £7.0 million during the year ended December 31, 2021, converted at the applicable exchange rate on the funding date. (4) Our clients occupying the new properties are 83.6% retail and 16.4% industrial, based on rental revenue. Approximately 40% of the rental revenue generated from acquisitions during the year ended December 31, 2021, was from investment grade rated clients, their subsidiaries or affiliated companies.
Schedule allocation of acquisitions | The acquisitions during the year ended December 31, 2022, which had no associated contingent consideration, were allocated as follows (in millions):
Year ended December 31, 2022 | Acquisitions - USD (1) |  | Acquisitions - Sterling |  |  |  |  | Acquisitions - Euro
Land (2) | $ | 1,568.6 |  |  | £ | 640.5 |  |  |  |  |  | € | 118.0 |
Buildings and improvements | 3,853.6 |  |  | 663.0 |  |  |  |  |  | 156.8 |
Lease intangible assets (3) | 458.6 |  |  | 247.8 |  |  |  |  |  | 51.1 |
Other assets (4) | 634.1 |  |  | 203.0 |  |  |  |  |  | 5.4 |
Lease intangible liabilities (5) | (94.9) |  |  | (60.1) |  |  |  |  |  | — |
Other liabilities (6) | (46.0) |  |  | (4.9) |  |  |  |  |  | — |
| $ | 6,374.0 |  |  | £ | 1,689.3 |  |  |  |  |  | € | 331.3 |
(1)Included in USD-denominated acquisitions was an investment of $1.7 billion into a single property in the gaming industry. The acquisition was allocated as (i) $419.5 million to land, (ii) $1.28 billion to buildings and improvements, (iii) $13.2 million of right-of-use assets accounted for as operating leases included in 'Other assets' and (iv) $9.3 million of lease liabilities under operating leases included in 'Other liabilities'. (2)Sterling-denominated land includes £42.5 million of right of use assets under long-term ground leases. (3)The weighted average amortization period for acquired lease intangible assets is 11.6 years. (4)USD-denominated other assets consists of $585.7 million of financing receivables with above-market terms and $32.8 million of right-of-use assets accounted for as finance leases, and $15.6 million of right of use assets under ground leases. Sterling-denominated other assets consists of £12.2 million of financing receivables with above-market terms, £188.4 million of right-of-use assets accounted for as finance leases and £2.4 million of right-of-use assets accounted for as operating leases. Euro-denominated other assets consists entirely of financing receivables with above-market terms. (5)The weighted average amortization period for acquired lease intangible liabilities is 14.2 years. (6)USD-denominated other liabilities consists of $28.0 million of deferred rent on certain below-market leases, $11.5 million of lease liabilities under ground leases, and $8.6 million of lease liabilities under financing leases. Sterling-denominated other liabilities consists of £2.4 million of lease liabilities under operating leases and £2.5 million of deferred rent on certain below-market leases. The acquisitions during the year ended December 31, 2021, which had no associated contingent consideration, were allocated as follows (in millions):
Year ended December 31, 2021 | Acquisitions - USD |  | Acquisitions - Sterling |  | Acquisitions - Euro
Land (1) | $ | 1,054.4 |  |  | £ | 438.9 |  |  | € | 106.2 |
Buildings and improvements | 1,802.6 |  |  | 888.0 |  |  | 173.4 |
Lease intangible assets (2) | 547.8 |  |  | 248.9 |  |  | 34.9 |
Other assets (3) | 530.2 |  |  | 40.4 |  |  | 21.9 |
Lease intangible liabilities (4) | (91.6) |  |  | (7.1) |  |  | — |
Other liabilities (5) | (127.6) |  |  | (0.3) |  |  | (16.0) |
| $ | 3,715.8 |  |  | £ | 1,608.9 |  |  | € | 320.4 |
(1) Sterling-denominated land includes £8.2 million of right of use assets under long-term ground leases. (2) The weighted average amortization period for acquired lease intangible assets is 12.7 years. (3) USD-denominated other assets consists of $179.7 million of financing receivables with above-market terms, $85.0 million of right-of-use assets accounted for as finance leases, $5.8 million in investments in sales-type leases, and $259.7 million of right of use assets under ground leases. Sterling-denominated other assets consists of £7.2 million of financing receivables with above-market terms and £33.2 million of right-of-use assets accounted for as finance leases. Euro-denominated other assets consists entirely of financing receivables with above-market terms. (4) The weighted average amortization period for acquired lease intangible liabilities is 15.9 years. (5) USD-denominated other liabilities consists of $26.9 million of deferred rent on certain below-market leases, $67.4 million of lease liabilities under ground leases and $33.3 million of lease liabilities under financing leases. Sterling-denominated other liabilities consists entirely of a mortgage premium. Euro-denominated other liabilities consists entirely of deferred rent on certain below-market leases.
Schedule of future impact related to amortization of above-market, below-market and in-place lease intangibles | The following table presents the estimated impact during the next five years and thereafter related to the amortization of the above-market and below-market lease intangibles and the amortization of the in-place lease intangibles at December 31, 2022 (dollars in thousands):
| Net increase (decrease) to rental revenue |  | Increase to amortization expense
2023 | $ | (56,782) |  |  | $ | 589,541 |
2024 | (50,525) |  |  | 522,895 |
2025 | (43,963) |  |  | 451,177 |
2026 | (36,100) |  |  | 402,028 |
2027 | (27,926) |  |  | 348,289 |
Thereafter | 341,053 |  |  | 1,600,757 |
Totals | $ | 125,757 |  |  | $ | 3,914,687 |
Schedule of properties sold | The following table summarizes our properties sold during the periods indicated below, excluding our proportionate share of net proceeds from the disposition of properties by our unconsolidated industrial partnerships for 2022 and 2021 and the properties disposed from the spin-off of office properties to Orion in November 2021 (dollars in millions):
|  |  | Years ended December 31,
|  |  |  |  | 2022 |  | 2021 |  | 2020
Number of properties |  |  |  |  | 168 |  |  | 154 |  |  | 126 |
Net sales proceeds |  |  |  |  | $ | 434.9 |  |  | $ | 250.3 |  |  | $ | 262.5 |
Gain on sales of real estate |  |  |  |  | $ | 102.7 |  |  | $ | 55.8 |  |  | $ | 76.2 |
These property sales do not represent a strategic shift that will have a major effect on our operations and financial results, and therefore do not require presentation as discontinued operations.
Schedule of investment in unconsolidated entities | The following is a summary of our investments in unconsolidated entities as of December 31, 2022 (in thousands):
| Ownership % (1) |  | Number of Properties |  | Carrying Amount of Investment as of | Equity in income and impairment of investment in unconsolidated entities for the year ended(2)
Investment(2) | As of December 31, 2022 |  | December 31, 2022 | December 31, 2021 |  | December 31, 2022 | December 31, 2021 | December 31, 2020
Industrial Partnerships | 20 | % |  | — |  | $ | — |  | $ | 140,967 |  |  | $ | (6,448) |  | $ | 1,106 |  | $ | — |
(1) Our ownership interest reflects legal ownership interest. Legal ownership may, at times, not equal our economic interest in the listed properties because of various provisions in certain entity agreements regarding capital contributions, distributions of cash flow based on capital account balances, allocations of profits and losses and payments of preferred returns. As a result, our actual economic interest (as distinct from its legal ownership interest) in certain of the properties could fluctuate from time to time and may not wholly align with legal ownership interests. (2) All seven assets held by our industrial partnerships were sold during the year ended December 31, 2022. As the portion of the net proceeds applied to our investment basis that we expected to receive at closing was less than our $121.4 million carrying amount of investment in unconsolidated entities, we recognized an other than temporary impairment of $8.5 million during the year ended December 31, 2022. The other than temporary impairments are included in 'Equity in income and impairment of investment in unconsolidated entities' in the consolidated statements of income and comprehensive income for the periods presented.

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