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Note 3 - Real Estate | 9 Months Ended
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Sep. 30, 2023
Notes to Financial Statements |
Real Estate Disclosure [Text Block] | 3. Real Estate Acquisitions During the nine months ended September 30, 2023, the Company acquired the following operating properties, through direct asset purchases or consolidation due to change in control resulting from the purchase of additional interests in certain operating properties held in an unconsolidated joint venture (in thousands):
|  |  |  | Purchase Price |
Property Name | Location | Month Acquired |  | Cash |  |  | Debt |  |  | Other |  |  | Total |  |  | GLA* |
Portfolio (2 properties) (1) | Various | Jan-23 |  | $ | 69,130 |  |  | $ | 19,637 |  |  | $ | 13,019 |  |  | $ | 101,786 |  |  |  | 342 |
Crossroads Plaza Parcel | Cary, NC | Jan-23 |  |  | 2,173 |  |  |  | - |  |  |  | - |  |  |  | 2,173 |  |  |  | 5 |
Northridge Shopping Center Parcel | Arvada, CO | Jan-23 |  |  | 728 |  |  |  | - |  |  |  | - |  |  |  | 728 |  |  |  | 57 |
Stafford Marketplace Parcel (2) | Stafford, VA | Feb-23 |  |  | - |  |  |  | - |  |  |  | 12,527 |  |  |  | 12,527 |  |  |  | 87 |
Tustin Heights (1) | Tustin, CA | Mar-23 |  |  | 26,501 |  |  |  | 17,550 |  |  |  | 4,910 |  |  |  | 48,961 |  |  |  | 137 |
Marlton Plaza Parcel | Cherry Hill, NJ | Jul-23 |  |  | 529 |  |  |  | - |  |  |  | - |  |  |  | 529 |  |  |  | - |
Stonebridge at Potomac Town Center | Woodbridge, VA | Aug-23 |  |  | 169,840 |  |  |  | - |  |  |  | 1,667 |  |  |  | 171,507 |  |  |  | 504 |
|  |  |  | $ | 268,901 |  |  | $ | 37,187 |  |  | $ | 32,123 |  |  | $ | 338,211 |  |  |  | 1,132 |
* Gross leasable area ("GLA")
(1) | Other includes the Company’s previously held equity investments in the Prudential Investment Program and net gains on change in control. The Company evaluated these transactions pursuant to the FASB’s Consolidation guidance and as a result, recognized gains on change in control of interest of $7.7 million, in aggregate, resulting from the fair value adjustments associated with the Company’s previously held equity interests, which are included in Equity in income of joint ventures, net on the Condensed Consolidated Statements of Income. The Company previously held an ownership interest of 15.0% in these property interests. See Footnote 4 of the Notes to the Company’s Condensed Consolidated Financial Statements.
(2) | During March 2023, the Company received a parcel as consideration resulting from the exercise of a termination option of an operating lease.
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 |
| (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/consolidated during the nine months ended September 30, 2023 and 2022, is as follows (in thousands):
|  | Allocation as of September 30, 2023 |  |  | Weighted Average Amortization Period (in Years) |  |  | Allocation as of September 30, 2022 |  |  | Weighted Average Amortization Period (in Years) |
Land |  | $ | 103,836 |  |  |  | n/a |  |  | $ | 64,480 |  |  |  | n/a |
Building |  |  | 161,667 |  |  |  | 50.0 |  |  |  | 58,800 |  |  |  | 50.0 |
Building improvements |  |  | 22,282 |  |  |  | 45.0 |  |  |  | 4,480 |  |  |  | 45.0 |
Tenant improvements |  |  | 22,475 |  |  |  | 6.4 |  |  |  | 4,963 |  |  |  | 6.9 |
Solar panels |  |  | - |  |  |  | n/a |  |  |  | 2,308 |  |  |  | 20.0 |
In-place leases |  |  | 47,290 |  |  |  | 5.3 |  |  |  | 7,249 |  |  |  | 6.4 |
Above-market leases |  |  | 4,981 |  |  |  | 6.7 |  |  |  | 199 |  |  |  | 3.8 |
Below-market leases |  |  | (25,129 | ) |  |  | 21.6 |  |  |  | (6,690 | ) |  |  | 14.2 |
Other assets |  |  | 1,777 |  |  |  | n/a |  |  |  | - |  |  |  | n/a |
Other liabilities |  |  | (968 | ) |  |  | n/a |  |  |  | - |  |  |  | n/a |
Net assets acquired |  | $ | 338,211 |  |  |  |  |  |  | $ | 135,789 |  |  |  |  |
Included in the Company’s Condensed Consolidated Statements of Income is $12.2 million and $3.2 million in total revenues from the date of acquisition through September 30, 2023 and 2022, respectively, for operating properties acquired/consolidated 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, 2023 and 2022 (dollars in millions):
|  | Nine Months Ended September 30, |
|  | 2023 |  |  | 2022 |
Aggregate sales price/gross fair value (1) (2) (3) |  | $ | 175.0 |  |  | $ | 172.2 |
Gain on sale of properties (4) |  | $ | 52.4 |  |  | $ | 11.0 |
Number of properties sold |  |  | 4 |  |  |  | 8 |
Number of parcels sold/deconsolidated (1) |  |  | 11 |  |  |  | 10 |
| (1) | During 2023, the Company contributed a land parcel and related entitlements, located in Admore, PA, into a preferred equity investment with a gross value of $19.6 million. As a result, the Company no longer consolidates this land parcel and has a non-controlling interest in this investment. See Footnote 5 of the Notes to the Condensed Consolidated Financial Statements for preferred equity investment disclosure.
| (2) | During 2023, the Company provided as a lender seller financing of $25.0 million related to the sale of an operating property located in Gresham, OR. See Footnote 9 of the Notes to the Condensed Consolidated Financial Statements for mortgage receivable loan disclosure.
| (3) | 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.
| (4) | Before noncontrolling interests of $1.6 million and taxes of $1.5 million for the nine months ended September 30, 2023.
Impairments During the nine months ended September 30, 2023, the Company recognized aggregate impairment charges of $14.0 million related to adjustments to property carrying values for properties which the Company is marketing for sale as part of its select capital recycling program and, as such, has adjusted the anticipated hold period for such properties. The Company’s estimated fair values of these properties were primarily based upon estimated sales prices from signed contracts or letters of intent from third party offers. See Footnote 13 to the Notes to the Condensed Consolidated Financial Statements for fair value disclosure.

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