DISPOSITIONS AND IMPAIRMENT CHARGES

6 Months Ended

Jun. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

DISPOSITIONS AND IMPAIRMENT CHARGES

The Company closed on the following disposition during the six months ended June 30, 2024 (dollars in thousands):

Date

Property Name

MSA

Property Type

Square
Footage

Sales Price

Gain (Loss)

May 31, 2024

Ashland & Roosevelt

Chicago

Multi-tenant retail

104,176

30,600

(1,230)

The Company closed on the following dispositions during the six months ended June 30, 2023 (dollars in thousands):


Date	Property Name	MSA	Property Type	Square Footage	Sales Price		Gain (Loss)
May 8, 2023	Kingwood Commons	Houston	Multi-tenant retail	158,172	$	27,350	$	4,740
June 8, 2023	Pan Am Plaza & Garage	Indianapolis	Land & garage	—	52,025		23,700

				158,172	$	79,375	$	28,440

As of June 30, 2024, we have classified City Center, a 362,278 square foot multi-tenant retail property in the New York MSA, as held for sale as the Company has committed to a plan to sell this asset and expects that the sale will be completed within one year. This property qualified for held-for-sale accounting treatment upon meeting all applicable GAAP criteria as of June 30, 2024, at which time depreciation and amortization were ceased. In addition, the assets and liabilities associated with this property are separately classified as held for sale in the accompanying consolidated balance sheet as of June 30, 2024. No properties qualified for held-for-sale accounting treatment as of December 31, 2023.

As of June 30, 2024, in connection with the preparation and review of the second quarter 2024 financial statements and in conjunction with classifying City Center as held for sale, we evaluated City Center for impairment and recorded a $66.2 million impairment charge due to changes in the facts and circumstances underlying the Company’s expected future hold period of the property. A shortening of the expected future hold period is considered an impairment indicator; therefore, we assessed the recoverability of City Center by comparing the carrying value of long-lived assets of $135.1 million as of June 30, 2024 to its estimated fair value of $69.6 million, which was determined using the income approach, less estimated selling costs of $0.7 million. The income approach involves discounting the estimated income stream and reversion (presumed sale) value of a property over an estimated hold period to a present value at a risk-adjusted rate. We used capitalization rates as a significant assumption in the valuation model, which are considered to be Level 3 inputs within the fair value hierarchy. We applied capitalization rates ranging from 6.0% to 15.0% to property income streams based upon the risk profile of the respective tenants and market rent of the leasable space. Based on this analysis, we recorded a $66.2 million non-cash impairment charge on City Center during the three months ended June 30, 2024.

The following table presents the assets and liabilities associated with City Center, the investment property classified as held for sale as of June 30, 2024 (in thousands):


	June 30, 2024
Assets


Net investment properties	$	67,984

Tenant and other receivables	2,522
Restricted cash and escrow deposits	225
Deferred costs, net	2,577
Prepaid and other assets	250
Assets associated with investment property held for sale	$	73,558

Liabilities

Accounts payable and accrued expenses	$	637
Deferred revenue and other liabilities	3,293
Liabilities associated with investment property held for sale	$	3,930

There were no discontinued operations for the six months ended June 30, 2024 and 2023 as none of the dispositions or planned dispositions represented a strategic shift that has had, or will have, a material effect on our operations or financial results.