Note 3 – Real Estate Investments

Real Estate Portfolio

As of June 30, 2018, the Company owned 481 properties, with a total gross leasable area of approximately 9.3 million square feet. Net Real Estate Investments totaled $1.3 billion as of June 30, 2018. As of December 31, 2017, the Company owned 436 properties, with a total gross leasable area of approximately 8.7 million square feet. Net Real Estate Investments totaled $1.2 billion as of December 31, 2017.

Acquisitions

During the three months ended June 30, 2018, the Company purchased 23 retail net lease assets for approximately $101.0 million, which includes acquisition and closing costs. These properties are located in 16 states and are leased for a weighted average lease term of approximately 12.4 years.

During the six months ended June 30, 2018, the Company purchased 53 retail net lease assets for approximately $199.8 million, which includes acquisition and closing costs. These properties are located in 23 states and are leased for a weighted average lease term of approximately 13.0 years.

The aggregate acquisitions for the six months ended June 30, 2018 were allocated $47.2 million to land, $98.3 million to buildings and improvements, and $54.3 million to lease intangibles. The acquisitions were all cash purchases and there were no contingent considerations associated with these acquisitions.

None of the Company’s acquisitions during the first six months of 2018 caused any new or existing tenant to comprise 10% or more of our total assets or generate 10% or more of our total annualized base rent at June 30, 2018.

Developments

During the second quarter of 2018, construction continued or commenced on five development and Partner Capital Solutions (“PCS”) projects with anticipated total project costs of approximately $16.8 million. The projects consist of the Company’s first PCS project with ALDI in Chickasha, Oklahoma; the Company’s second project with Burger King franchisee TOMS King in Aurora, Illinois; the Company’s first project with Burlington Coat Factory in Nampa, Idaho; and two development projects with Mister Car Wash.

During the six months ended June 30, 2018, the Company had 10 development or PCS projects completed or under construction. Anticipated total costs for those projects are approximately $51.6 million and include the following completed or commenced projects:

Tenant	Location	Lease Structure	Lease Term	Actual or Anticipated Rent Commencement	Status
Mister Car Wash	Urbandale, IA	Build-to-Suit	20 years	Q1 2018	Completed
Mister Car Wash	Bernalillo, NM	Build-to-Suit	20 years	Q1 2018	Completed
Burger King(1)	North Ridgeville, OH	Build-to-Suit	20 years	Q1 2018	Completed
Art Van Furniture	Canton, MI	Build-to-Suit	20 years	Q1 2018	Completed
Camping World	Grand Rapids, MI	Build-to-Suit	20 years	Q2 2018	Completed
ALDI	Chickasha, OK	Build-to-Suit	10 years	Q3 2018	Under Construction
Burger King(1)	Aurora, IL	Build-to-Suit	20 years	Q3 2018	Under Construction
Burlington Coat Factory	Nampa, ID	Build-to-Suit	15 years	Q3 2018	Under Construction
Mister Car Wash	Orlando, FL	Build-to-Suit	20 years	Q4 2018	Under Construction
Mister Car Wash	Tavares, FL	Build-to-Suit	20 years	Q4 2018	Under Construction

Notes:

(1) Franchise restaurant operated by TOMS King, LLC.

Dispositions

During the three months ended June 30, 2018, the Company sold five properties for net proceeds of $10.6 million and the Company recorded a net gain of $2.4 million.

During the six months ended June 30, 2018, the Company sold 10 properties for net proceeds of $26.7 million and the Company recorded a net gain of $6.0 million (net of any expected losses on real estate held for sale). In addition, a tenant exercised its option to purchase a store which had previously been ground leased from the Company. The option to purchase was exercised for net proceeds of $3.9 million and the Company recorded a net gain of $1.0 million.

Provision for Impairment

The Company reviews long-lived assets, including intangible assets, for possible impairment when certain events or changes in circumstances indicates that the carrying amount of the asset may not be recoverable through operations. Events or changes in circumstances may include significant changes in real estate market conditions and an expectation to sell assets before the end of the previously estimated life. Impairments are measured to the extent the current book value exceeds the estimated fair value of the asset less disposition costs for any assets classified as held for sale. During the three and six months ended June 30, 2018, the Company recognized provisions for impairment of $1.2 million. There were no provisions for impairment for the three and six months ended June 30, 2017.

The valuation of impaired assets is determined using valuation techniques including discounted cash flow analysis, analysis of recent comparable sales transactions, and purchase offers received from third parties, which are Level 3 inputs. The Company may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.