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Real Estate | 9 Months Ended
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Sep. 30, 2024
Acquisition And Disposition Of Properties And Discontinued Operations [Abstract] |
Real Estate | 2. Rea l Estate The Company’s consolidated real estate is comprised of the following for the periods presented (in thousands):
|  | September 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Buildings and improvements |  | $ | 3,121,177 |  |  | $ | 3,128,650 |
Tenant improvements |  |  | 291,401 |  |  |  | 257,955 |
Land |  |  | 854,487 |  |  |  | 872,228 |
Construction in progress |  |  | 21,212 |  |  |  | 23,250 |
Right-of-use assets - finance leases (Note 11) |  |  | 61,366 |  |  |  | 58,637 |
Total |  |  | 4,349,643 |  |  |  | 4,340,720 |
Less: Accumulated depreciation and amortization |  |  | (899,068 | ) |  |  | (823,439 | )
Operating real estate, net |  |  | 3,450,575 |  |  |  | 3,517,281 |
Real estate under development |  |  | 109,778 |  |  |  | 94,799 |
Net investments in real estate |  | $ | 3,560,353 |  |  | $ | 3,612,080 |
Acquisitions During the nine months ended September 30, 2024, the Company acquired the following retail properties (dollars in thousands):
Property and Location |  | Percent Acquired |  | Date of Acquisition |  | Purchase Price (a) |
2024 Acquisitions |  |  |  |  |  |  |
Core |  |  |  |  |  |  |
Bleecker Street Portfolio (4 assets) - New York, NY |  | 100% |  | September 19, 2024 |  | $ | 20,347 |
1718 N. Henderson Avenue (Land Parcel) - Dallas, TX |  | 100% |  | September 19, 2024 |  |  | 1,063 |
Subtotal Core |  |  |  |  |  |  | 21,410 |
Investment Management |  |  |  |  |  |  |
Walk at Highwoods Preserve - Tampa, FL |  | 100% |  | July 3, 2024 |  | $ | 30,793 |
Total 2024 Acquisitions |  |  |  |  |  | $ | 52,203 |
(a) Purchase price includes capitalized transaction costs. For the nine months ended September 30, 2024, the Company capitalized $0.5 million of acquisition costs in connection with the 2024 Acquisitions, which are included in Net investments in real estate on the Condensed Consolidated Statements of Operations. Purchase Price Allocations The purchase prices for the 2024 Acquisitions (excluding any properties that were acquired in development) were allocated to the acquired assets and assumed liabilities based on their estimated relative fair values at the dates of acquisition. The following table summarizes the allocation of the purchase price of properties acquired during the nine months ended September 30, 2024 (in thousands):
|  | Land |  |  | Buildings and improvements |  |  | Intangible assets |  |  | Right-of-use asset |  |  | Lease liability |  |  | Intangible liabilities |  | Other assets, net |  |  | Net assets acquired |
Bleecker Street Portfolio (4 assets) |  | $ | 4,962 |  |  | $ | 10,460 |  |  | $ | 3,695 |  |  | $ | 2,729 |  |  | $ | (1,071 | ) |  | $ | (428 | ) | $ | — |  |  | $ | 20,347 |
The Walk at Highwoods |  |  | 9,730 |  |  |  | 17,053 |  |  |  | 8,631 |  |  |  | — |  |  |  | — |  |  |  | (4,621 | ) |  | — |  |  | $ | 30,793 |
Total |  | $ | 14,692 |  |  | $ | 27,513 |  |  | $ | 12,326 |  |  | $ | 2,729 |  |  | $ | (1,071 | ) |  | $ | (5,049 | ) | $ | — |  |  | $ | 51,140 |
The Company determines the fair value of the individual components of real estate asset acquisitions primarily through calculating the “as-if vacant” value of a building, using an income approach, which relies significantly upon internally determined assumptions. The Company has determined that these estimates primarily rely on Level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the “as-if vacant” value for acquisition activity during the nine months ended September 30, 2024 as follows:
|  | 2024 |
|  | Low |  | High |
Exit Capitalization Rate |  |  | 6.50 | % |  | 8.00 | %
Discount Rate |  |  | 8.50 | % |  | 10.00 | %
Annual net rental rate per square foot on acquired buildings |  | $ | 17.00 |  | $ | 330.00 |
Annual net rental rate per square foot on acquired master lease |  | $ | 29.11 |  | $ | — |
The estimate of the portion of the “as-if vacant” value that is allocated to the land underlying the acquired real estate relies on Level 3 inputs and is primarily determined by reference to recent comparable transactions. Dispositions During the nine months ended September 30, 2024, the Company disposed of the following properties and other real estate investments:
Property and Location |  | Owner |  | Date Sold |  | Sale Price |  |  | Gain (Loss) on Sale |
2024 Dispositions |  |  |  |  |  |  |  |  |  |
2208-2216 Fillmore Street - San Francisco, CA |  | Fund IV |  | April 3, 2024 |  | $ | 9,777 |  |  | $ | 1,239 |
2207 Fillmore Street - San Francisco, CA |  | Fund IV |  | April 3, 2024 |  |  | 4,283 |  |  |  | 1,130 |
Shops at Grand - Queens, NY |  | Core |  | May 16, 2024 |  |  | 48,250 |  |  |  | (2,213 | )
Canton Marketplace (Outparcel) - Canton, GA |  | Fund V |  | June 28, 2024 |  |  | 2,200 |  |  |  | 601 |
Total 2024 Dispositions (a) |  |  |  |  |  | $ | 64,510 |  |  | $ | 757 |
(a) During the nine months ended September 30, 2024, the Company recorded a $1.2 million loss related to a Fund IV property that was sold in 2019 in connection with a post-closing dispute. On May 16, 2024, the Company sold a 95% interest in the Shops at Grand property located in Queens, NY for $48.3 million and retained a 5% ownership interest through an investment in a newly formed joint venture which was fair valued at $2.4 million. As a result of the transaction, the Company deconsolidated the property and accounted for its interest under the equity method of accounting effective May 16, 2024 as it no longer controls the investment (Note 4). The Company recognized a loss on deconsolidation of $2.2 million related to transaction costs, which is included in the Loss on disposition of properties in the Condensed and Consolidated Statements of Operations. Properties Held for Sale At September 30, 2024, the Company had one Investment Management property held for sale with assets totaling $35.9 million and liabilities totaling $5.4 million, related to the property Walk at Highwoods Preserve, which the Company acquired on July 3, 2024. The Company has classified this asset 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. Assets and liabilities of the properties held for sale consisted of the following:
|  | September 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Assets |  |  |  |  |  |
Building and improvements |  | $ | 17,063 |  |  | $ | 12,562 |
Tenant improvements |  | $ | 34 |  |  | $ | 1,010 |
Land |  |  | 9,730 |  |  |  | 3,380 |
Real estate, intangible assets |  |  | 8,631 |  |  |  | — |
Less: Accumulated depreciation and amortization |  |  | — |  |  |  | (5,895 | )
Other |  |  | 420 |  |  |  | — |
|  | $ | 35,878 |  |  | $ | 11,057 |
Liabilities |  |  |  |  |  |
Real estate, intangible assets |  | $ | 4,621 |  |  |  | — |
Accounts payable and other liabilities |  |  | 814 |  |  |  | — |
|  | $ | 5,435 |  |  | $ | — |
The Company had one property classified as held for sale as of December 31, 2023, which was transferred to Investments in real estate, at cost during the first quarter of 2024, as the Company no longer believes it is probable the asset will be disposed within the next twelve months. Real Estate Under Development Real estate under development represents the Company’s consolidated properties that have not yet been placed into service while undergoing substantial development or construction. Development activity for the Company’s consolidated properties comprised the following during the periods presented (dollars in thousands):
|  | January 1, 2024 |  |  | Nine Months Ended September 30, 2024 |  |  | September 30, 2024 |
|  | Number of Properties |  |  | Carrying Value |  |  | Transfers In |  |  | Capitalized Costs |  |  | Transfers Out |  |  | Number of Properties |  |  | Carrying Value |
Core |  |  | 2 |  |  | $ | 66,083 |  |  | $ | 1,063 |  |  | $ | 12,067 |  |  | $ | — |  |  |  | 3 |  |  |  | 79,213 |
Fund III |  |  | 1 |  |  |  | 28,716 |  |  |  | — |  |  |  | 1,849 |  |  |  | — |  |  |  | 1 |  |  |  | 30,565 |
Total |  |  | 3 |  |  | $ | 94,799 |  |  | $ | 1,063 |  |  | $ | 13,916 |  |  | $ | — |  |  |  | 4 |  |  | $ | 109,778 |
The number of properties in the table above refers to projects comprising the entire property under development; however, certain projects represent a portion of a property. As of September 30, 2024, consolidated development projects included: portions of the Henderson Avenue Portfolio in the Core Portfolio, and Broad Hollow Commons in Fund III. During the nine months ended September 30, 2024, the Company acquired one development land parcel at Henderson Avenue (Note 2); the Company did not place any assets into service. Construction in progress pertains to construction activity at the Company’s operating properties that are in service and continue to operate during the construction period.

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- Definition Acquisition and disposition of properties and discontinued operations. + References No definition available. + Details
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- Definition The entire disclosure for certain real estate investment financial statements, real estate investment trust operating support agreements, real estate owned, retail land sales, time share transactions, as well as other real estate related disclosures. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 974 -SubTopic 720 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477728/974-720-50-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 976 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/976/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 978 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/978/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 970 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/970/tableOfContent Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 972 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/972/tableOfContent Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 974 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/974/tableOfContent + Details
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